-----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, Mg0zi+UBMFcp/Hq1nHCYkvxA9KhL2R6nQSQp/Nh0USEXfqwTyEpwJO3Q3SSE4Hq5 JFm0FMlq02MxY+4zzp8L4Q== 0001125282-06-001578.txt : 20061012 0001125282-06-001578.hdr.sgml : 20061012 20060310201328 ACCESSION NUMBER: 0001125282-06-001578 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20060313 DATE AS OF CHANGE: 20060331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN EXPRESS RECEIVABLES FINANCING CORP II CENTRAL INDEX KEY: 0000949349 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 133854638 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-130508-03 FILM NUMBER: 06680724 BUSINESS ADDRESS: STREET 1: WORLD FINANCIAL CENTER STREET 2: AMERICAN EXPRESS TOWER 200 VESEY ST CITY: NEW YORK STATE: NY ZIP: 10285 BUSINESS PHONE: 2126402000 MAIL ADDRESS: STREET 1: WORLD FINANCIAL CENTER STREET 2: AMERICAN EXPRESS TOWER 200 VESEY ST CITY: NEW YORK STATE: NY ZIP: 10285 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST CENTRAL INDEX KEY: 0001003509 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-130508-01 FILM NUMBER: 06680722 BUSINESS ADDRESS: STREET 1: 6985 UNION PARK CENTER CITY: MIDVALE STATE: UT ZIP: 84047 BUSINESS PHONE: 8015655000 MAIL ADDRESS: STREET 1: 4315 SOUTH 2700 WEST CITY: SALT LAKE CITY STATE: UT ZIP: 84184 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN EXPRESS RECEIVABLES FINANCING CORP III LLC CENTRAL INDEX KEY: 0001283434 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-130508 FILM NUMBER: 06680725 BUSINESS ADDRESS: STREET 1: 4135 SOUTH 2700 WEST CITY: SALT LAKE CITY STATE: UT ZIP: 84184 BUSINESS PHONE: 8015655023 MAIL ADDRESS: STREET 1: 4135 SOUTH 2700 WEST CITY: SALT LAKE CITY STATE: UT ZIP: 84184 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN EXPRESS RECEIVABLES FINANCING CORP IV LLC CENTRAL INDEX KEY: 0001283435 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-130508-02 FILM NUMBER: 06680723 BUSINESS ADDRESS: STREET 1: 4135 SOUTH 2700 WEST CITY: SALT LAKE CITY STATE: UT ZIP: 84184 BUSINESS PHONE: 8015655023 MAIL ADDRESS: STREET 1: 4135 SOUTH 2700 WEST CITY: SALT LAKE CITY STATE: UT ZIP: 84184 S-3/A 1 b409067_s3a.txt FORM S-3/A AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 10, 2006 REGISTRATION NOS. 333-130508, 333-130508-01, 333-130508-02 AND 333-130508-03 =============================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- AMENDMENT NO. 3 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------- AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST (Issuing Entity in respect of the Certificates)
AMERICAN EXPRESS AMERICAN EXPRESS AMERICAN EXPRESS RECEIVABLES FINANCING RECEIVABLES FINANCING RECEIVABLES FINANCING CORPORATION II CORPORATION III LLC CORPORATION IV LLC
(DEPOSITORS) (Exact Names of Registrants as Specified in Their Respective Charters)
DELAWARE DELAWARE DELAWARE (State or Other Jurisdiction of (State or Other Jurisdiction of (State or Other Jurisdiction of Organization) Organization) Organization) 13-3854638 20-0942395 20-0942445 (I.R.S. Employer Identification (I.R.S. Employer Identification (I.R.S. Employer Identification Number) Number) Number) 200 VESEY STREET, ROOM 138 4315 SOUTH 2700 WEST, ROOM 1300 4315 SOUTH 2700 WEST, ROOM 1300 MAIL STOP 01-31-12 MAIL STOP 02-01-04 MAIL STOP 02-01-58 NEW YORK, NEW YORK 10285 SALT LAKE CITY, UTAH 84184 SALT LAKE CITY, UTAH 84184 (212) 640-2000 (801) 945-2030 (801) 945-2068
Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrants' Principal Executive Office LOUISE M. PARENT, ESQ. EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL AMERICAN EXPRESS COMPANY 200 VESEY STREET NEW YORK, NEW YORK 10285 (212) 640-2000 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) Copies To: CAROL SCHWARTZ, ESQ. GROUP COUNSEL ALAN M. KNOLL, ESQ. AMERICAN EXPRESS COMPANY ORRICK, HERRINGTON & SUTCLIFFE LLP 200 VESEY STREET 666 FIFTH AVENUE NEW YORK, NEW YORK 10285 NEW YORK, NEW YORK 10103 (212) 640-2000 (212) 506-5077 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 this Form is a registration statement filed pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. |_| If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. |_|
CALCULATION OF REGISTRATION FEE - ---------------------------------------------------------------------------------------------------------------------------------- TITLE OF SECURITIES PROPOSED MAXIMUM PROPOSED MAXIMUM TO BE REGISTERED AMOUNT TO BE AGGREGATE PRICE PER AGGREGATE OFFERING AMOUNT OF REGISTERED(A)(B) CERTIFICATE(C) PRICE(C) REGISTRATION FEE - ---------------------------------------------------------------------------------------------------------------------------------- Certificates.................................. $1,000,000 100% $1,000,000 $107 - ----------------------------------------------------------------------------------------------------------------------------------
(a) With respect to any securities 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 securities 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 security is first offered. (c) Estimated solely for the purpose of calculating the registration fee. 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 SUBSEQUENTLY BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. =============================================================================== INTRODUCTORY NOTE This Registration Statement includes: o a representative form of prospectus supplement to the base prospectus relating to the offering by American Express Credit Account Master Trust of a series of asset-backed certificates; and o a form of base prospectus relating to asset-backed certificates of American Express Credit Account Master Trust. FORM OF PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED [______], 200[_] [AMERICAN EXPRESS LOGO] AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST ISSUING ENTITY AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION II AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION III LLC AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION IV LLC DEPOSITORS AND TRANSFERORS AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC. SERVICER AMERICAN EXPRESS CENTURION BANK AMERICAN EXPRESS BANK, FSB SPONSORS SERIES 200[_]-[_] $[_________] CLASS A FLOATING RATE ASSET BACKED CERTIFICATES $[_________] CLASS B FLOATING RATE ASSET BACKED CERTIFICATES THE ISSUING ENTITY WILL ISSUE-
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 Monthly First interest payment date [_______________] [_______________] Expected final payment date [_______________] [_______________] Legal final maturity [_______________] [_______________] Price to public [____________] (______)% [____________] (______)% Underwriting discount [____________] (______)% [____________] (______)% Proceeds to transferors [____________] (______)% [____________] (______)%
The primary assets of the issuing entity are receivables generated in a portfolio of designated consumer revolving credit accounts or features and, in the future, may include other charge or credit accounts or features or products. 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 issuing entity is also issuing a collateral interest in the amount of $[_________] that is subordinated to 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 SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THE CERTIFICATES OR DETERMINED THAT THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Underwriters [A CO.] [B CO.] [C CO.] [__________], 200[_] - -------------------------------------------------------------------------------- CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE [_] 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 GOVERNMENTAL AGENCY. THE CERTIFICATES WILL REPRESENT INTERESTS IN THE ISSUING ENTITY ONLY AND WILL NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF AMERICAN EXPRESS COMPANY OR ANY OF ITS AFFILIATES. THIS PROSPECTUS SUPPLEMENT MAY BE USED TO OFFER AND SELL THE CERTIFICATES ONLY IF ACCOMPANIED BY THE PROSPECTUS. - -------------------------------------------------------------------------------- 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 SEC 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 jurisdiction where the offer or sale is prohibited. IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS We provide information to you about the certificates in two separate documents that progressively provide more detail: (a) the accompanying prospectus, which provides general information about each series of certificates which may be issued by the American Express Credit Account Master Trust, some of which may not apply to your series of certificates, and (b) this prospectus supplement, which describes the specific terms of your series of certificates. This prospectus supplement may be used to offer and sell the Class A certificates and the Class B certificates only if accompanied by the prospectus. You should rely only on the information in this prospectus supplement and the accompanying prospectus, 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 do not claim the accuracy of the information in this prospectus supplement or the accompanying prospectus as of any date other than the dates stated on their respective covers. 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 in the accompanying prospectus provide the pages on which these captions are located. Part 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" on page S-[__] in this prospectus supplement and on page [__] in the accompanying prospectus. i TRANSACTION SUMMARY Issuing Entity: American Express Credit Account Master Trust Depositors and Transferors: American Express Receivables Financing Corporation II, American Express Receivables Financing Corporation III LLC and American Express Receivables Financing Corporation IV LLC Sponsors and Originators: American Express Centurion Bank and American Express Bank, FSB Servicer: American Express Travel Related Services Company, Inc. Trustee: The Bank of New York Series Issuance Date: [__________], 200[_] Servicing Fee Rate: 2.00% per year Clearance and Settlement: DTC/Clearstream/Euroclear Primary Trust Assets: Receivables generated in a portfolio of designated American Express(R) credit card and Sign & Travel(R)/Extended Payment Option revolving credit accounts or features* Group: Group II Principal Sharing Series: Yes Excess Allocation Series: Yes
CLASS A CLASS B ------- ------- Principal Amount: $[_________] $[_________] Percentage of Series:** [____]% [____]% Anticipated Ratings:*** (Moody's/Standard & Poor's) Aaa/AAA A1/A Credit Enhancement: Subordination of Class B and Subordination of collateral collateral interest interest Certificate Rate: One-month LIBOR plus [___]% One-month LIBOR plus [___]% per year per year Interest Accrual Method: Actual/360 Actual/360 Distribution Dates: Monthly (15th) Monthly (15th) Certificate Rate Index Reset Date: Two London business days Two London business days before each distribution date before each distribution date First Distribution Date: [_________________] [_________________] Approximate end of Revolving Period and commencement of Accumulation Period (subject to adjustment): [______________] [______________] Expected Final Payment Date: [______________] [______________] Legal Final Maturity: [______________] [______________] ERISA eligibility (investors are Yes, subject to important No, subject to important cautioned to consult with their considerations described considerations described counsel): under "ERISA Considerations" under "ERISA Considerations" in this prospectus supplement in this prospectus supplement and the accompanying and the accompanying prospectus prospectus Debt for United States Federal Yes, subject to important Yes, subject to important Income Tax Purposes (investors considerations described considerations described are cautioned to consult with under "Tax Matters" in the under "Tax Matters" in the their counsel): accompanying prospectus accompanying prospectus
- --------------- * American Express(R) and Sign & Travel(R) are federally registered servicemarks of American Express Company and its affiliates. ** The percentage of Series 200[_]-[_] comprised by the collateral interest is [___]%. *** It is a condition to issuance of the Series 200[_]-[_] certificates that at least one of these ratings be obtained. ii TABLE OF CONTENTS
PAGE ---- Summary of Series Terms ............................................ S-1 Introduction........................................................ S-14 Maturity Considerations............................................. S-14 The Trust Portfolio................................................. S-17 General........................................................... S-17 Loss and Delinquency Experience................................... S-18 Revenue Experience................................................ S-19 Payment Rates..................................................... S-20 The Receivables..................................................... S-21 Series Provisions................................................... S-24 Interest Payments................................................. S-24 Principal Payments................................................ S-26 Subordination of the Class B Certificates and the Collateral Interest...................................... S-28 Allocation Percentages............................................ S-28 Principal Funding Account......................................... S-29 Reserve Account................................................... S-30 Reallocation of Cash Flows........................................ S-31
PAGE ---- Application of Collections........................................ S-33 Defaulted Receivables; Investor Charge-Offs....................... S-36 Paired Series..................................................... S-38 Pay-Out Events.................................................... S-39 Servicing Compensation and Payment of Expenses.................... S-41 Optional Repurchase............................................... S-41 Series Termination................................................ S-42 Reports........................................................... S-42 ERISA Considerations................................................ S-43 Class A Certificates.............................................. S-43 Class B Certificates.............................................. S-43 The Department of Labor Authorization ............................ S-44 Consultation with Counsel ........................................ S-44 Underwriting........................................................ S-45 Annex I............................................................. A-I-1 Annex II............................................................ A-II-1
iii SUMMARY OF SERIES TERMS THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION ABOUT THE CERTIFICATES AND DOES NOT CONTAIN ALL THE INFORMATION THAT YOU NEED TO CONSIDER IN MAKING YOUR INVESTMENT DECISION. YOU SHOULD CAREFULLY READ THIS ENTIRE DOCUMENT AND THE ACCOMPANYING PROSPECTUS BEFORE YOU PURCHASE ANY CERTIFICATES. RISK FACTORS Investment in the Series 200[_]-[_] certificates involves certain risks. You should consider carefully the risk factors beginning on page [__] of the accompanying prospectus. OFFERED SECURITIES American Express Credit Account Master Trust is offering: $[_________] of Class A certificates; and $[_________] of Class B certificates. In this document, references to Series 200[_]-[_] certificates include only the Class A certificates and Class B certificates and references to Series 200[_]-[_] include the Series 200[_]-[_] certificates and the collateral interest. ONLY THE CLASS A CERTIFICATES AND THE CLASS B CERTIFICATES ARE OFFERED BY THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. Beneficial interests in the Series 200[_]-[_] certificates may be purchased in minimum denominations of $[1,000] and integral multiples of $1,000. The Series 200[_]-[_] certificates are expected to be issued on [________], 200[_]. DISTRIBUTION DATES Distribution dates for the Series 200[_]-[_] certificates will commence [________], 200[_] 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 Series 200[_]-[_] 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. LIBOR for each interest period will be determined on the second business day before the beginning of that interest period. LIBOR for the initial interest period, however, will be determined two business days before the issuance date of the Series 200[_]-[_] certificates. For calculating LIBOR only, a business day is any day that U.S. dollar deposits are transacted in the London interbank market. LIBOR will be the rate appearing on Telerate Page 3750 as of 11:00 a.m., London time, on that date for deposits in U.S. dollars for a one-month period. If that rate does not appear on Telerate Page 3750, the servicer will request four prime banks (selected by the servicer) in the London interbank market to provide quotations of their rates for U.S. dollar deposits for a one-month period, at approximately 11:00 a.m., London time, on that day. LIBOR will then be the average of those rates. However, if less than two rates are provided, LIBOR will be the average of the rates for loans in U.S. S-1 dollars to leading European banks for a one-month period offered by four major banks (selected by the servicer) in New York City, at approximately 11:00 a.m., New York City time, on that day. Interest on the Class A certificates and the Class B certificates for any distribution date will be calculated as follows: Number of days in Rate for Principal amount interest period interest at end of prior month x --------------- x period 360 You may obtain the interest rate for the current period and immediately preceding period by telephoning the trustee at (212) 815-6258. See "Series Provisions--Interest Payments" in this prospectus supplement for a description of how and when LIBOR will be determined and for a discussion of the determination of amounts available to pay interest. No payment of interest will be made on the Class B certificates until the required payment of interest has been made on the Class A certificates. See "--Credit Enhancement" and "Series Provisions--Subordination of the Class B Certificates and the Collateral Interest" in this prospectus supplement. PRINCIPAL Principal of the Series 200[_]-[_] certificates is expected to be paid in full on the [______] distribution date, which is the expected final payment date. On approximately [________], we are scheduled to begin accumulating collections of principal receivables for payment to you, but we may begin accumulating at a later date. Although the Series 200[_]-[_] certificates are expected to be paid on the date noted above, principal may be paid earlier or later. There is no penalty 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. No principal will be paid on the Class B certificates until the Class A certificates are paid in full. The final payment of principal and interest on the Series 200[_]-[_] certificates will be made no later than the [_______] distribution date. See "Maturity Considerations" and "Series Provisions--Allocation Percentages" and "--Principal Payments" in this prospectus supplement for a discussion of the determination of amounts available to pay principal. THE COLLATERAL INTEREST At the same time the Series 200[_]-[_] 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 Series 200[_]-[_] 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 the Class A certificates and the Class B certificates. The collateral interest is not offered by this prospectus supplement and the accompanying prospectus. S-2 CREDIT ENHANCEMENT Subordination of the Class B certificates provides credit enhancement for the Class A certificates. Subordination of the collateral interest provides credit enhancement for both the Class A certificates and the Class B certificates. If, on any distribution date, there are insufficient funds available to make required Class A certificate payments, certain funds that would otherwise be used to make required collateral interest and Class B certificate payments will be used to make required Class A certificate payments, and the collateral invested amount and the Class B invested amount will be reduced accordingly. Similarly, if on any distribution date, there are insufficient funds available to make required Class B certificate payments, certain funds that would otherwise be used to make required collateral interest payments will be used to make required Class B certificate payments, and the collateral invested amount will be reduced accordingly. The collateral invested amount and the Class B invested amount must be reduced to zero before the Class A invested amount will suffer any loss of principal. The collateral invested amount must be reduced to zero before the Class B invested amount will suffer any loss of principal. Credit enhancement for the Series 200[_]-[_] certificates is for the benefit of Series 200[_]-[_] only and you are not entitled to the benefits of any 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 for a description of the events which may lead to a reduction of the Class A invested amount, the Class B invested amount and the collateral invested amount. [LETTER OF CREDIT], [CASH COLLATERAL GUARANTY OR ACCOUNT], [SURETY BOND OR INSURANCE POLICY], [DERIVATIVE AGREEMENT], [SUPPLEMENTAL CREDIT ENHANCEMENT AGREEMENT], [SUPPLEMENTAL LIQUIDITY AGREEMENT] [The trust may obtain a letter of credit to serve as an additional source of funds to pay [principal of or interest] on the [Class [_]]/[Series 200[_]-[_]] certificates.] [The trust may obtain a cash collateral guaranty or account to serve as an additional source of funds to pay [principal of or interest] on the[Class [_]]/[Series 200[_]-[_]] certificates.] [The trust may obtain a surety bond or insurance policy to serve as an additional source of funds to pay [principal of or interest] on the [Class [_]]/[Series 200[_]-[_]] certificates.] [The trust will enter into a derivative agreement to serve as an additional source of funds to pay [principal of or interest] on the [Class [_]]/[Series 200[_]-[_]] certificates.] [The trust will enter into a supplemental [credit enhancement] [liquidity] agreement as an additional source of funds to pay [principal of or interest on] the [Class [_]]/[Series 200[_]-[_]] certificates.] [DERIVATIVE COUNTERPARTY] [The derivative counterparty under the derivative agreement is [_]. The derivative counterparty is a [state/country of incorporation] corporation and was incorporated in [_]. The derivative counterparty provides a wide range of business and banking S-3 services, including [description of services and general character]. The long-term credit rating assigned to the derivative counterparty by Moody's is currently "[_]" and by Standard & Poor's is currently "[_]." The short-term credit rating assigned to the derivative counterparty by Moody's is currently "[_]" and by Standard & Poor's is currently "[_]." [Describe the operation and material terms of any derivative agreement, including limits on amount and timing of payments. Describe material provisions regarding the substitution of the derivative counterparty.] Based on a reasonable good faith estimate of maximum probable exposure, the significance percentage of the derivative agreement is [less than 10%].] OTHER INTERESTS IN THE TRUST OTHER SERIES OF CERTIFICATES The trust has issued other series of certificates and expects to issue additional series. You can review a summary of each series previously issued and currently outstanding under the caption "Annex I: Other Series" included at the end of this prospectus supplement. Future series will be issued without prior notice to, or review or consent by, you or any other certificateholder. THE TRANSFEROR INTEREST The interest in the trust not represented by your series or by any other series is the transferors' interest. The transferors' interest does not provide credit enhancement for your series or any other series. THE TRUST PORTFOLIO The primary assets of the trust are receivables in designated consumer American Express(R) credit card and Sign & Travel(R)/Extended Payment Option revolving credit accounts or features and, in the future, may include other charge or credit accounts or features or products.* The receivables consist of principal receivables and finance charge receivables. The following information is as of [_______________]: o Total receivables in the trust: $[___________] o Principal receivables in the trust: $[______] o Finance charge receivables in the trust: $[______] o Accounts designated to the trust: [________] o Account billing addresses: generally all 50 states plus the District of Columbia and Puerto Rico See "The Trust Portfolio" in this prospectus supplement, and "Centurion's and FSB's Revolving Credit Businesses" and "The Accounts" in the accompanying prospectus. S-4 KEY PARTIES AND OPERATING DOCUMENTS - ----------------------- ----------------------- American Express American Express Centurion Bank Bank FSB (Sponsor) (Sponsor) - ----------------------- ----------------------- | | | | | | Receivables Receivables Receivables <---- Purchase | | Agreements | | | | - ----------------------- ----------------------- ----------------------- American Express American Express American Express Receivables Financing Receivables Financing Receivables Financing Corporation III Corporation IV Corporation II* (Transferor and (Transferor and (Transferor and Depositor) Depositor) Depositor) - ----------------------- ----------------------- ----------------------- | | | | | | | | | | | | Pooling and Receivables Transferor Receivables Transferor <---- Servicing Interest Interest Agreement | | | | | | | | | | | | ---------------------------------------------- American Express Credit Pooling and Account Master Trust <---- Servicing (Issuing Entity) Agreement ---------------------------------------------- | - ----------------- | American | Express Travel ------------------- Related Services Series Company, Inc. 200[_]-[_] (Servicer) ------------------- - ----------------- | | | The Bank of | | | <---- Series 200[_]-[_] New York | | | Supplement (Trustee) Class A Class B Collateral - ----------------- certificates certificates Interest | | | | | | ------------------ Certificateholders ------------------ * American Express Receivables Financing Corporation II does not currently transfer any receivables to the issuing entity and it is not expected to do so in the future. S-5 COLLECTIONS BY THE SERVICER The servicer will collect payments on the receivables, will deposit (or cause to be deposited) those collections in the collection account and will keep track of those collections that are finance charge receivables and those that are principal receivables. ALLOCATIONS TO YOU AND YOUR SERIES The following discussion is a simplified description of certain allocation provisions and is qualified by the full descriptions of these provisions in this prospectus supplement and the accompanying prospectus. Each month, the servicer will allocate collections of finance charge receivables, collections of principal receivables and the amount of principal receivables that are not collected and are written off as uncollectible, called the defaulted amount. Set forth below, is a brief description of how these finance charge collections, principal collections and the defaulted amount are allocated to you and your series, addressed in four steps. Allocations of finance charge collections involve each of Steps 1, 2, 3 and 4. However, allocations of principal collections and the defaulted amount involve only Steps 1, 2 and 4. You are entitled to receive payments of interest and principal based upon allocations 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, (b) the Class B invested amount and (c) the collateral invested amount. The Class A invested amount, the Class B invested amount and the collateral invested amount will initially equal the outstanding principal amount of the Class A certificates, the Class B certificates and the collateral interest. The invested amount of a series or class will decline, however, as a result of principal payments and may decline if the defaulted amount is not covered by collections of finance charges allocated to your series or for other reasons. If the invested amount of your series or class declines, amounts allocated and available for payment to you will be reduced. For a description of the events which may lead to these reductions, see "Series Provisions--Reallocation of Cash Flows" in this prospectus supplement. STEP 1: ALLOCATIONS AMONG SERIES Finance Charge Collections, Principal Collections and the Defaulted Amount: Each month, the servicer will allocate finance charge collections, principal collections and the defaulted amount among: o your series, based on the size of its invested amount at that time (which is initially $[_________], but may be reduced); and o other outstanding series, based on the sizes of their respective invested amounts at that time. STEP 2: ALLOCATIONS WITHIN YOUR SERIES Finance Charge Collections, Principal Collections and the Defaulted Amount: Finance charge collections, principal collections and the defaulted amount that are allocated to your series in Step 1 will then be further allocated, based on varying percentages, between: - --------------- * American Express(R) and Sign & Travel(R) are federally registered servicemarks of American Express Company and its affiliates. S-6 o your series, based on the size of its invested amount; and o the holders of the transferor certificates, which will receive the remainder of these finance charge collections, principal collections and the defaulted amount. STEP 3: REALLOCATIONS AMONG SERIES Finance Charge Collections: Collections of finance charge receivables allocated to the Series 200[_]-[_] certificates and the collateral interest in Step 2 will then be combined with the collections of finance charge receivables allocated to any other series in group II. Group II is a group of series which share finance charge collections pro rata, based upon the relative size of the required payments to each series in group II as compared to the total required payments of all series in group II. See "The Pooling and Servicing Agreement Generally--Reallocations Among Different Series Within a Reallocation Group" in the accompanying prospectus. Series 200[_]-[_] will be the [________] outstanding series issued by the trust in group II. Any issuance of a new series in group II may reduce or increase the amount of finance charge collections allocated to your series. STEP 4: FINAL ALLOCATIONS AMONG CLASS A, CLASS B AND THE COLLATERAL INTEREST Finance Charge Collections, Principal Collections and the Defaulted Amount: The finance charge collections reallocated in Step 3, together with the principal collections and the defaulted amount allocated in Step 2, will then be further allocated, based on varying percentages, among: o the Class A certificates, based on the Class A invested amount (which is initially $[_________], but may be reduced); o the Class B certificates, based on the Class B invested amount (which is initially $[________], but may be reduced); and o the collateral interest, based on the collateral invested amount (which is initially $[________], but may be reduced). See "Series Provisions--Allocation Percentages" in this prospectus supplement and "The Pooling and Servicing Agreement Generally--Reallocations Among Different Series Within a Reallocation Group" in the accompanying prospectus. APPLICATION OF COLLECTIONS FINANCE CHARGE COLLECTIONS AND EXCESS SPREAD Each month, collections of finance charge receivables allocated to the Class A certificates, the Class B certificates and the collateral interest, and the excess spread that may remain, will generally be applied as follows: S-7 - ----------------------------- ----------------------------- ----------------------------- Finance charge collections Finance charge collections Finance charge collections and other amounts allocated and other amounts allocated and other amounts allocated to the Class A certificates to the Class B certificates to the collateral interest - ----------------------------- ----------------------------- ----------------------------- | | | | | | | | | - ----------------------------- ----------------------------- ----------------------------- Interest due on the Class Interest due on the Class Collateral interest's A certificates B certificates portion of the servicing - ----------------------------- ----------------------------- fee Class A's portion of the Class B's portion of the (if TRS is not the servicer) servicing fee servicing fee ----------------------------- (if TRS is not the servicer) (if TRS is not the servicer) | - ----------------------------- ----------------------------- | Class A's portion of the | | defaulted amount | | - ----------------------------- | | | | | | | | | | | - -------------------------------------------------------------------------------------------- Excess Spread and Excess Finance Charge Collections From Other Series - -------------------------------------------------------------------------------------------- ------------------------------------------------------------------------ First: ---> Deficiencies to the Class A certificates | ------------------------------------------------------------------------ | | ------------------------------------------------------------------------ Second: ---> Deficiencies to the Class B certificates | ------------------------------------------------------------------------ | | ------------------------------------------------------------------------ Third: ---> Interest due on the collateral interest | ------------------------------------------------------------------------ | | ------------------------------------------------------------------------ Fourth: ---> Deficiencies to the servicer | ------------------------------------------------------------------------ | | ------------------------------------------------------------------------ Fifth: ---> Reductions of the collateral invested amount | ------------------------------------------------------------------------ | | ------------------------------------------------------------------------ Sixth: ---> Reserve account | ------------------------------------------------------------------------ | | ------------------------------------------------------------------------ Seventh: ---> Other amounts to the holder of the collateral interest ------------------------------------------------------------------------
See "Series Provisions--Application of Collections--Excess Spread; Excess Finance Charge Collections" in this prospectus supplement. S-8 PRINCIPAL COLLECTIONS Each month, your series' share of principal collections will generally be applied as follows: Available Principal Collections - --------------------------- ---------------------------- -------------------- During the revolving period: During the controlled During the early accumulation period: amortization period: - --------------------------- ---------------------------- -------------------- | | | | | | | | | | --------------------------- First, Class A | Principal funding account invested amount | --------------------------- | | | | | | | | | Second, Class B | First, Class A invested amount | invested amount | | | | | | | | | Third, collateral | Second, Class B invested amount | invested amount | | | | | | | | | | | Third, collateral | | invested amount | | | | | | | | ---------------------------- | |--------------- Shared principal collections----------- ---------------------------- | | | Principal shortfalls of other principal sharing series | | | or | | | Holders of the Special funding transferors' interest account S-9 See "Maturity Considerations," "Series Provisions--Principal Payments" and "--Application of Collections" in this prospectus supplement. FEES AND EXPENSES PAYABLE FROM COLLECTIONS o Fees and expenses payable from collections of finance charge receivables -- 2.0% of invested amount paid to the servicer as described below. SERVICING FEE The servicer is entitled to receive a monthly servicing fee as compensation for its servicing activities and as reimbursement for any expenses incurred by it as servicer. For each month, the servicing fee will equal one-twelfth of the product of: o 2.00% per year; and o the invested amount for the related monthly period. The servicing fee will be allocated among the transferor interest and the certificateholders. REVOLVING PERIOD The revolving period begins on the closing date and ends on the day before the commencement of the controlled accumulation period or, if earlier, the early amortization period. During the revolving period, no principal payments will be made to or for the benefit of the Series 200[_]-[_] certificateholders or the holder of the collateral interest. Unless a pay-out event has occurred, the controlled accumulation period is scheduled to begin at the close of business on the last day of the [_____] monthly period, but may be delayed as described herein. [PREFUNDING PERIOD Provide the prefunding amount in the prefunding account, the date by which the invested amount is expected to equal the aggregate principal amount of the certificates and any other information required by Item 1103(a)(5) of Regulation AB.] PAY-OUT EVENTS Certain adverse events called pay-out events might lead to the end of the revolving period or controlled accumulation period and the start of an early amortization period. The pay-out events for your series are described in "Series Provisions--Pay- Out Events" in this prospectus supplement. In addition, see "Description of the Certificates--Pay-Out Events and Reinvestment Events" in the accompanying prospectus for a discussion of the consequences of an insolvency or receivership of any transferor. REALLOCATED INVESTOR FINANCE CHARGE COLLECTIONS Collections of finance charge receivables allocated to each series in group II will be combined and will be available for certain required payments to all series in group II. These amounts will be reallocated pro rata, based on the size of the required payment for each of the series in group II as compared with the total required payments for all of the series in group II. See "The Pooling and Servicing Agreement Generally--Reallocations Among Different Series Within a Reallocation Group" and "Risk Factors--Issuances of additional series by the trust may adversely affect your certificates" in the accompanying prospectus. S-10 SHARED PRINCIPAL COLLECTIONS Your series will be included in a group of series designated as "principal sharing series." To the extent that collections of principal receivables allocated to your series are not needed to make payments or deposits to a trust account for the benefit of your series, these collections will be applied to cover principal payments for other principal sharing series, if any. Any reallocation for this purpose will not reduce the invested amount for your series. In addition, you may receive the benefits of collections of principal receivables and certain other amounts allocated to other principal sharing series. However, there can be no assurance that the trust will issue additional principal sharing series designated to share collections of principal receivables with your series. See "The Pooling and Servicing Agreement Generally--Sharing of Principal Collections Among Principal Sharing Series" in the accompanying prospectus. EXCESS FINANCE CHARGE COLLECTIONS Your series will be included in a group of series designated as "excess allocation series." To the extent that collections of finance charge receivables allocable to your series exceed the amount necessary to make required payments for your series payable from collections of finance charge receivables, such excess collections may be applied to cover shortfalls of collections of finance charge receivables allocable to other excess allocation series. In addition, you may receive the benefits of collections of finance charge receivables allocated to other excess allocation series designated to share collections of finance charge receivables with your series. However, there can be no assurance that the trust will issue additional excess allocation series designated to share collections of finance charge receivables with your series. See "The Pooling and Servicing Agreement Generally--Sharing of Excess Finance Charge Collections Among Excess Allocation Series" in the accompanying prospectus. OPTIONAL REPURCHASE So long as a transferor is the servicer or an affiliate of the servicer, that transferor will have the option to repurchase your Series 200[_]-[_] certificates when the invested amount for your series has been reduced to 5% or less of the initial invested amount for your series. See "Series Provisions--Optional Repurchase" in this prospectus supplement. SERIES TERMINATION If on the distribution date which is two months prior to the Series 200[_]-[_] termination date, the invested amount 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 200[_]-[_] termination date. The servicer will sell such receivables on the Series 200[_]-[_] 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 to Series 200[_]-[_]. See "Series Provisions--Series Termination" in this prospectus supplement. REGISTRATION The Series 200[_]-[_] certificates will be in book-entry form and will be registered in S-11 the name of Cede & Co., as the nominee of The Depository Trust Company. Except in limited circumstances, you will not receive a definitive certificate representing your interest. See "Description of the Certificates--Definitive Certificates" in the accompanying prospectus. You may elect to hold your Series 200[_]-[_] certificates through DTC, in the United States, or Clearstream, Luxembourg or the Euroclear System in Europe. See "Description of the Certificates--Book-Entry Registration" in the accompanying prospectus. TAX STATUS Subject to important considerations described under "Tax Matters" in the accompanying prospectus, Orrick, Herrington & Sutcliffe LLP, as special tax counsel to the transferors, 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 "Tax Matters" in the accompanying prospectus for additional information concerning the application of federal income tax laws. ERISA CONSIDERATIONS Subject to important considerations described under "ERISA Considerations" in this prospectus supplement and the accompanying prospectus, the Class A certificates are eligible for purchase by persons investing assets of employee benefit plans or individual retirement accounts. For 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 insurance companies investing assets solely of their general accounts. CERTIFICATE RATINGS At issuance, the Class A certificates must be rated by at least one of the following nationally recognized rating agencies: Moody's: Aaa Standard & Poor's: AAA At issuance, the Class B certificates must be rated by at least one of the following nationally recognized rating agencies: Moody's: A1 Standard & Poor's: A A rating addresses the likelihood of the payment of interest on a certificate when due and the ultimate payment of principal of that certificate by its legal maturity date. A rating does not address the likelihood of payment of principal of a certificate on its expected final payment date. In addition, a rating does not address the possibility of an early payment or acceleration of a certificate, which could be caused by an early amortization event or an event of default. A rating is not a recommendation to buy, sell or hold certificates and may be subject to revision or withdrawal at any time by the assigning rating agency. A rating is based on each rating agency's independent evaluation of the receivables and the availability of any credit enhancement for the certificates. A rating, or a change or withdrawal of a rating, by one rating agency will not necessarily correspond to a rating, or a change or withdrawal of a rating, from any other rating agency. You will not be notified if S-12 any of the ratings of these Series 200[__]-[__] certificates changes. See "Risk Factors--If the ratings of the certificates are lowered or withdrawn, their market value could decrease" in the accompanying prospectus. EXCHANGE LISTING [An application will be made to list the Series 200[_]-[_] certificates on the EuroMTF of the Luxembourg Stock Exchange. We cannot guarantee that the application for the listing will be accepted. You should consult with Deutsche Bank Luxembourg S.A., the Luxembourg listing agent, for the Series 200[_]-[_] certificates, Boulevard Konrad Adenauer 2, Luxembourg, phone number 352-4212- 2643 to determine whether or not the Series 200[_]-[_] certificates are listed on the Luxembourg Stock Exchange.] S-13 INTRODUCTION The following provisions of this prospectus supplement contain more detailed information concerning the certificates offered hereby. The certificates will be issued by the trust pursuant to the terms of a pooling and servicing agreement dated as of May 16, 1996, as amended and restated as of April 16, 2004, as amended from time to time, among American Express Travel Related Services Company, Inc., as servicer, American Express Receivables Financing Corporation II, American Express Receivables Financing Corporation III LLC and American Express Receivables Financing Corporation IV LLC, as transferors, and The Bank of New York, as trustee. On or about [__________________], the trust will issue $[_________] of Class A Series 200[_]-[_] Floating Rate Asset Backed Certificates and $[________] of Class B Series 200[_]-[_] Floating Rate Asset Backed Certificates. In addition, the trust will issue a specified undivided Collateral Interest in the Trust Assets in the initial amount of $[________] which will be subordinated to the Series 200[_]-[_] certificates as described herein. For purposes of this prospectus supplement, the Collateral Interest shall be deemed to be the "collateral invested amount" for all purposes under the accompanying prospectus. MATURITY CONSIDERATIONS The pooling and servicing agreement and the Series 200[_]-[_] supplement for this series provide that the Class A certificateholders will not receive payments of principal until the Expected Final Payment Date, or earlier in the event of a Pay-Out Event which results in the commencement of the Early Amortization Period. Class A certificateholders will receive payments of principal on each Special Payment Date until the Class A Invested Amount has been paid in full or the Series 200[_]-[_] Termination Date has occurred. The Class B certificateholders will not begin to receive payments of principal until the final principal payment on the Class A certificates has been made. The holder of the Collateral Interest will not begin to receive payments of principal until the final principal payment on the Class B certificates has been made. On each Distribution Date during the Controlled Accumulation Period, amounts equal to the least of: (a) Available Principal Collections (see "Series Provisions--Principal Payments" in this prospectus supplement) for the related Monthly Period on deposit in the Collection Account, (b) the Controlled Deposit Amount, and (c) the sum of the Class A Adjusted Invested Amount and the Class B Adjusted Invested Amount will be deposited in the Principal Funding Account for Series 200[_]-[_] held by the trustee until the Expected Final Payment Date or the first Special Payment Date. See "Series Provisions--Principal Payments" in this prospectus supplement for a discussion of the circumstances under which the commencement of the Controlled Accumulation Period may be delayed. Subject to satisfaction of the Rating Agency Condition, the transferors may, at or after the time at which the Controlled Accumulation Period begins for Series 200[_]-[_], cause the trust S-14 to issue another series (or some portion thereof, to the extent that the full principal amount of such other series is not otherwise outstanding at such time) as a paired series with respect to Series 200[_]-[_] to be used to finance the increase in the Transferor Amount caused by the accumulation of principal in the Principal Funding Account with respect to Series 200[_]-[_]. 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 series may vary from time to time (whether or not a Pay-Out Event occurs with respect to Series 200[_]-[_]), 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 the Series 200[_]- [_] certificates will vary from the terms of such other series, the Pay-Out Events or Reinvestment Events with respect to such other series will vary from the Pay-Out Events with respect to Series 200[_]-[_] and may include Pay-Out Events or Reinvestment Events which are unrelated to the status of the transferors or the servicer or the receivables, such as Pay-Out Events or Reinvestment Events related to the continued availability and rating of certain providers of series enhancement to such other series. If a Pay-Out Event or Reinvestment Event does occur with respect to any such paired series prior to the payment in full of the Series 200[_]-[_] certificates and the Collateral Interest, the final payment of principal to the Series 200[_]-[_] certificateholders and the holder of the Collateral Interest may be delayed. Should a Pay-Out Event occur with respect to the Series 200[_]-[_] certificates and the Collateral Interest and the Early Amortization Period begin, any amount on deposit: (a) in the Principal Funding Account will be paid to the Series 200[_]-[_] certificateholders on the first Special Payment Date, and the Series 200[_]- [_] certificateholders and the holder of the Collateral Interest will be entitled to receive Available Principal Collections on each Distribution Date with respect to such Early Amortization Period as described herein until the Class A Invested Amount, the Class B Invested Amount and the Collateral Invested Amount are paid in full or until the Series 200[_]-[_] Termination Date occurs, and (b) in the Special Funding Account will be released and treated as Shared Principal Collections to the extent needed to cover principal payments due to or for the benefit of any series, including Series 200[_]-[_], entitled to the benefits of Shared Principal Collections. See "Description of the Certificates--Pay-Out Events and Reinvestment Events" in the accompanying prospectus and "Series Provisions--Pay-Out Events" in this prospectus supplement. The ability of the Series 200[_]-[_] certificateholders and the holder of the Collateral Interest to receive payments of principal on the Expected Final Payment Date depends on the payment rates of the receivables, the amount of outstanding receivables, 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 of the receivables may vary because, among other things, account holders may fail to make required minimum payments, 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 account holders and due to changes in any terms of incentive programs in which account holders participate. See the table entitled "Account Holder Monthly Payment Rates of the Trust Portfolio" under "The Trust Portfolio--Payment Rates" in this prospectus supplement. The transferors cannot S-15 predict, and no assurance can be given, as to the account holders' monthly payment rates that will actually occur in any future period, as to the actual rate of payment of principal of the Series 200[_]-[_] certificates and the Collateral Interest or whether the terms of any subsequently issued series might have an impact on the amount or timing of any such payment of principal. See "Risk Factors--Payment patterns of account holders may not be consistent over time and variations in these payment patterns may result in reduced payment of principal, or receipt of payment of principal earlier or later than expected" and "The Pooling and Servicing Agreement Generally--Sharing of Principal Collections Among Principal Sharing Series" in the accompanying prospectus. 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 availability of other sources of credit, legal factors, general economic conditions and spending and borrowing habits of individual account holders. There can be no assurance that collections of principal receivables with respect to the Trust Portfolio, and thus the rate at which Series 200[_]-[_] certificateholders and the holder of the Collateral Interest could expect to receive payments of principal on the Series 200[_]- [_] certificates and the Collateral Interest during an Early Amortization Period or the rate at which the Principal Funding Account could be funded during the Controlled Accumulation Period, will be similar to the historical experience set forth in the table entitled "Account Holder Monthly Payment Rates of the Trust Portfolio" under "The Trust Portfolio--Payment Rates" in this prospectus supplement. As described under "Series Provisions--Principal Payments" in this prospectus supplement, the transferors may shorten the Controlled 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 Class A Invested Amount and the Class B Invested Amount on the Expected Final Payment Date. In addition, the trust, as a master trust, has issued, and from time to time may issue, additional series, and 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 Series 200[_]-[_] certificateholders. Further, if a Pay-Out Event occurs and the Early Amortization Period begins, the average life and maturity of the Class A certificates and the Class B certificates could be significantly reduced, thereby reducing the anticipated yield on such certificates. Due to the reasons set forth above, there can be no assurance that deposits in the Principal Funding Account will be made on or prior to the Expected Final Payment Date in an amount equal to the sum of the Class A Invested Amount and the Class B Invested Amount or that the actual number of months elapsed from the date of issuance of the Class A certificates and Class B certificates to their respective final distribution dates will equal the expected number of months. See "Risk Factors--Payment patterns of account holders may not be consistent over time and variations in these payment patterns may result in reduced payment of principal, or receipt of payment of principal earlier or later than expected" in the accompanying prospectus. S-16 THE TRUST PORTFOLIO GENERAL The primary assets of the trust are receivables generated from time to time in a portfolio of designated American Express credit cards and Sign & Travel/ Extended Payment Option consumer revolving credit accounts or features and, in the future, may include other charge or credit accounts or products. The accounts in the Trust Portfolio were selected from the Total Portfolio based upon the eligibility criteria specified in the purchase agreements and the pooling and servicing agreement applied with respect to the accounts as of their selection date. See "The Pooling and Servicing Agreement Generally--Conveyance of Receivables," "--Addition of Accounts or Participation Interests" and "Risk Factors--Addition of accounts to the trust may decrease the credit quality of the assets securing the repayment of your certificates. If this occurs, your receipt of payments of principal and interest may be reduced, delayed or accelerated" in the accompanying prospectus for a discussion of those eligibility criteria. Subject only to these criteria and any applicable regulatory guidelines, the account owners have the discretion to select the accounts in the Total Portfolio for addition to the Trust Portfolio. The account owners have in the past considered, and may in the future consider, factors such as product type, tenure of an account and interest rate applicable to an account in determining the accounts to be added to the Trust Portfolio. Set forth below is certain information with respect to the Trust Portfolio. See "Centurion's and FSB's Revolving Credit Businesses" and "The Accounts" in the accompanying prospectus. The Trust Portfolio's yield, loss, delinquency and payment rate is comprised of segments which may, when taken individually, have yield, loss, delinquency and payment rate characteristics different from those of the overall Trust Portfolio. There can be no assurance that the yield, loss, delinquency and payment rate experience relating to the receivables in the Trust Portfolio will be comparable to the historical experience relating to the receivables in the Trust Portfolio set forth below. LOSS AND DELINQUENCY EXPERIENCE The following tables set forth the loss and delinquency experience for the Trust Portfolio for each of the periods shown. The loss and delinquency rates at any time reflect, among other factors, the quality of the Trust Portfolio, the average seasoning of the accounts, the success of the account owners' collection efforts, the product mix of the Trust Portfolio and general economic conditions. S-17 The following table sets forth the loss experience for the Trust Portfolio for each indicated period. Total gross charge-offs include charge-offs of principal receivables only, and do not include any charge-offs of finance charge and fee receivables or the amount of any reductions in principal receivables due to a rebate, refund, error, fraudulent charge or other miscellaneous adjustment described under "The Pooling and Servicing Agreement Generally--Defaulted Receivables; Rebates and Fraudulent Charges." If finance charge and fee receivables that have been charged-off were included in total gross charge-offs, total gross charge-offs would be higher as an absolute number and as a percentage of the average principal receivables outstanding during the periods indicated. Recoveries are collections received in respect of charged-off accounts in the Trust Portfolio during the period indicated in the following table. Total recoveries for each indicated period include recoveries of principal, finance charges and certain fees for that period. Under the pooling and servicing agreement, recoveries are treated as collections of finance charge receivables. Total net charge-offs are an amount equal to total gross charge-offs minus total recoveries, each for the applicable period. Average principal receivables outstanding for each indicated period is the average of the month-end principal receivables balance for that period. We cannot provide any assurance that the loss experience for the receivables in the Trust Portfolio in the future will be similar to the historical experience set forth below. LOSS EXPERIENCE OF THE TRUST PORTFOLIO (DOLLARS IN THOUSANDS)
[___] MONTHS YEAR ENDED DECEMBER 31, ENDED ---------------------------------- [___] 2006 2005 2004 2003 2002 2001 ------------ ---- ---- ---- ---- ---- Average Principal Receivables Outstanding .................................... $ $ $ $ $ $ Total Gross Charge-Offs ...................................................... $ $ $ $ $ $ Total Recoveries ............................................................. $ $ $ $ $ $ -- -- -- -- -- -- Total Net Charge-Offs ........................................................ $ $ $ $ $ $ == == == == == == Total Gross Charge-Offs as a Percentage of Average Principal Receivables Outstanding................................................................. %(1) Total Recoveries as a Percentage of Average Principal Receivables Outstanding %(1) % % % % % -- -- -- -- -- -- Total Net Charge-Offs as a Percentage of Average Principal Receivables Outstanding................................................................. %(1) % % % % % == == == == == == Number of Accounts Experiencing a Loss(2) .................................... N/A N/A Number of Accounts Experiencing a Recovery(2) ................................ N/A N/A Average Net Loss per Account Experiencing a Loss(2)(3) ....................... N/A N/A
(1) This percentage is an annualized figure. (2) Information for periods prior to January 1, 2003 is not available. (3) Calculated as Net Charge-Offs divided by Number of Accounts Experiencing a Loss. S-18 The following tables set forth the delinquency experience for the Trust Portfolio for each indicated period. With respect to the "Average Receivables Delinquent as a Percentage of the Trust Portfolio" table below, the average receivables delinquent is the average of the month-end delinquent amounts, while the average receivables outstanding is the average of month-end receivables balances, each for the applicable period. With respect to the "Average Number of Delinquent Accounts as a Percentage of the Trust Portfolio" table below, the average number of delinquent accounts is the average of the month-end delinquent accounts, while the average number of outstanding accounts is the average of total month-end accounts, each for the applicable period. We cannot provide any assurance that the delinquency experience for the receivables in the Trust Portfolio in the future will be similar to the historical experience set forth below. AVERAGE RECEIVABLES DELINQUENT AS A PERCENTAGE OF THE TRUST PORTFOLIO (DOLLARS IN THOUSANDS)
YEAR ENDED DECEMBER 31, [___] MONTHS ENDED -------------------------------------------------------------------------- [____] 2006 2005 2004 2003 ---------------------- ---------------------- ---------------------- ---------------------- PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF AVERAGE AVERAGE AVERAGE AVERAGE DOLLAR RECEIVABLES DOLLAR RECEIVABLES DOLLAR RECEIVABLES DOLLAR RECEIVABLES AMOUNT OUTSTANDING AMOUNT OUTSTANDING AMOUNT OUTSTANDING AMOUNT OUTSTANDING ------ ------------- ------ ------------- ------ ------------- ------ ------------- Average Receivables Outstanding ............ $ % $ % $ % $ % Average Receivables Delinquent: 31 to 60 Days .......... $ % $ % $ % $ % 61 to 90 Days .......... $ % $ % $ % $ % 91 to 120 Days ......... $ % $ % $ % $ % 121 to 150 Days ........ $ % $ % $ % $ % 151 Days or More ....... $ % $ % $ % $ % ---- ---- ----- ---- ------ ---- ------- ---- Total.................... $ % $ % $ % $ % ==== ==== ===== ==== ====== ==== ======= ==== YEAR ENDED DECEMBER 31, ------------------------------------------------ 2002 2001 ---------------------- ---------------------- PERCENTAGE OF PERCENTAGE OF AVERAGE AVERAGE DOLLAR RECEIVABLES DOLLAR RECEIVABLES AMOUNT OUTSTANDING AMOUNT OUTSTANDING ------ ------------- ------ ------------- Average Receivables Outstanding ............ $ % $ % Average Receivables Delinquent: 31 to 60 Days .......... $ % $ % 61 to 90 Days .......... $ % $ % 91 to 120 Days ......... $ % $ % 121 to 150 Days ........ $ % $ % 151 Days or More ....... $ % $ % ---- ----- ----- ----- Total.................... $ % $ % ==== ===== ====== ======
AVERAGE NUMBER OF DELINQUENT ACCOUNTS AS A PERCENTAGE OF THE TRUST PORTFOLIO
YEAR ENDED DECEMBER 31, [___] MONTHS ENDED ------------------------------------------------------ [____] 2006 2005 2004 ------------------------- ------------------------- ------------------------- PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF NUMBER OF TOTAL NUMBER NUMBER OF TOTAL NUMBER NUMBER OF TOTAL NUMBER ACCOUNTS OF ACCOUNTS ACCOUNTS OF ACCOUNTS ACCOUNTS OF ACCOUNTS --------- ------------- --------- ------------- --------- ------------- Average Number of Accounts Outstanding ... % % % Average Number of Accounts Delinquent: 31 to 60 Days .......... % % % 61 to 90 Days .......... % % % 91 to 120 Days ......... % % % 121 to 150 Days ........ % % % 151 Days or More ....... % % % ---- ---- ----- ----- ----- ----- Total.................... % % % ==== ==== ===== ===== ===== ===== YEAR ENDED DECEMBER 31, ------------------------------------------------------------------------------------ 2003 2002 2001 -------------------------- -------------------------- -------------------------- PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF NUMBER OF TOTAL NUMBER NUMBER OF TOTAL NUMBER NUMBER OF TOTAL NUMBER ACCOUNTS OF ACCOUNTS ACCOUNTS OF ACCOUNTS ACCOUNTS OF ACCOUNTS --------- ------------- --------- ------------- --------- ------------- Average Number of Accounts Outstanding ... % % % Average Number of Accounts Delinquent: 31 to 60 Days .......... % % % 61 to 90 Days .......... % % % 91 to 120 Days ......... % % % 121 to 150 Days ........ % % % 151 Days or More ....... % % % ------ --- ---- ---- ----- ---- Total.................... % % % ====== === ==== ==== ===== ====
REVENUE EXPERIENCE The following table sets forth the revenue experience for the Trust Portfolio from total finance charge and fee collections for each indicated period. Total finance charge and fee collections set forth in the table below include periodic finance charges, cash advance fees, annual membership fees, other fees, discount option yield (for periods prior to March 26, 2004), Issuer Rate Fees (for periods on and after March 26, 2004) and recoveries on charged-off accounts. S-19 Under the pooling and servicing agreement, recoveries on charged-off accounts are treated as collections of finance charge receivables. Until March 26, 2004, the transferors transferred receivables to the trust at a discount of 2.0%. As of the close of business on March 26, 2004, the transferors reduced the discount percentage to 0.0% and, since that time, the transferors have transferred to the trust all Issuer Rate Fees allocable to the receivables arising in accounts comprising the Trust Portfolio. See "The Pooling and Servicing Agreement Generally--Discount Option" and "Centurion's and FSB's Revolving Credit Businesses--Issuer Rate Fees" in the accompanying prospectus. There can be no assurance that the revenues for the Trust Portfolio in the future will be similar to the historical experience of the Trust Portfolio set forth below. Revenue experience from total finance charge and fee collections results from dividing total finance charges and fee collections by the average principal receivables outstanding. The average principal receivables outstanding for each indicated period is the average of the month-end principal receivables balances for that period. REVENUE EXPERIENCE OF THE TRUST PORTFOLIO (DOLLARS IN THOUSANDS)
[__] MONTHS YEAR ENDED DECEMBER 31, ENDED ---------------------------------- [___] 2006 2005 2004 2003 2002 2001 ----------- ---- ---- ---- ---- ---- Average Principal Receivables Outstanding ..................................... $ $ $ $ $ $ Total Finance Charge and Fee Collections ...................................... $ $ $ $ $ $ Total Finance Charge and Fee Collections as a Percentage of Average Principal Receivables Outstanding...................................................... %(1) % % % % %
- --------------- (1) This percentage is an annualized figure. The historical revenue figures for the Trust Portfolio shown in the table above include interest on purchases and cash advances and fees collected from holders of the accounts during the applicable month. Revenues from finance charges and fees collected will be affected by numerous factors, including the periodic finance charges on the receivables, the amount of fees paid by account holders, the percentage of account holders who pay off their balances in full each month and do not incur periodic finance charges on purchases and change in the level of delinquencies on the receivables. Revenues related to finance charges and fees also depend on the types of charges and fees assessed by the account owners on the accounts in the Trust Portfolio. Accordingly, revenues will be affected by future changes in the types of charges and fees assessed on the accounts and other factors. See "Certain Legal Aspects of the Receivables--Consumer Protection Laws" in the accompanying prospectus. None of the servicer, any account owner or any of their respective affiliates has any basis to predict how any future changes in the use of the accounts by account holders or in the terms of accounts may affect the revenue for the Trust Portfolio. S-20 PRINCIPAL PAYMENT RATES The following table sets forth the highest and lowest account holder monthly principal payment rates for the Trust Portfolio during any month in the period shown and the average account holder monthly principal payment rates for all months during each period shown, calculated as the percentage equivalent of a fraction. The monthly principal payment rates are calculated as the amount of principal payments from account holders (excluding recoveries on charged-off receivables) as posted to the accounts during the applicable month divided by the aggregate amount of principal receivables outstanding as of the beginning of the applicable month. In addition, as of the month ended [______], 20[__], and with regard to the prior month's statements only, [__]% of the accounts in the Trust Portfolio made the minimum payment under the terms of the related account agreement, and [__]% of the accounts in the Trust Portfolio had account holders that paid their full balance under the terms of the related account agreement. See "Centurion's and FSB's Revolving Credit Businesses--Billing and Payments" in the accompanying prospectus for a description of how minimum payments are calculated. ACCOUNT HOLDER MONTHLY PRINCIPAL PAYMENT RATES OF THE TRUST PORTFOLIO
[__] MONTHS YEAR ENDED DECEMBER 31, ENDED ---------------------------------- [___] 2006 2005 2004 2003 2002 2001 ----------- ---- ---- ---- ---- ---- Lowest Month .................................................................. % % % % % % Highest Month ................................................................. % % % % % % Monthly Average ............................................................... % % % % % %
THE RECEIVABLES As of [________], 200[_], the receivables in the accounts included in the Trust Portfolio totaled $[_______], comprised of $[_____] of principal receivables and $[_____] of finance charge receivables. The following tables, together with the paragraph under "--Composition by Geographic Distribution," summarize the Trust Portfolio by various criteria as of [______], 200[_]. Because the future composition of the Trust Portfolio may change over time, these tables are not necessarily indicative of the composition of the Trust Portfolio at any time subsequent to [______], 200[_]. COMPOSITION BY ACCOUNT BALANCE TRUST PORTFOLIO
PERCENTAGE PERCENTAGE OF TOTAL OF TOTAL ACCOUNT BALANCE RANGE NUMBER OF NUMBER OF RECEIVABLES RECEIVABLES --------------------- ACCOUNTS ACCOUNTS OUTSTANDING OUTSTANDING --------- ---------- ------------ ------------ Credit Balance ........................................................... Zero Balance ............................................................. $1 to $1,000 ............................................................. $1,001 to $5,000 ......................................................... $5,001 to 10,000 ......................................................... $10,001 or More .......................................................... Total ................................................................
S-21 The average account balance as of [___], [___] was $[___] for all accounts and $[___] for all accounts other than accounts with a zero balance as of that date. COMPOSITION BY CREDIT LIMIT TRUST PORTFOLIO
PERCENTAGE PERCENTAGE OF TOTAL OF TOTAL CREDIT LIMIT RANGE NUMBER OF NUMBER OF RECEIVABLES RECEIVABLES ------------------ ACCOUNTS ACCOUNTS OUTSTANDING OUTSTANDING --------- ---------- ----------- ----------- Less than $1,000 .......................................................... $1,001 to $5,000 ........................................................... $5,001 to $10,000 .......................................................... $10,001 to $15,000 ......................................................... $15,001 to $20,000 ......................................................... $20,001 to $25,000 ......................................................... $25,001 or More(1) ......................................................... Total (Credit Card) .................................................... No Pre-Set Spending Limit (Sign & Travel Accounts) ......................... Total .................................................................. Grand Total ...........................................................
- --------------- (1) The maximum credit limit is $100,000. COMPOSITION BY PERIOD OF DELINQUENCY TRUST PORTFOLIO
PERCENTAGE PERCENTAGE PERIOD OF DELINQUENCY OF TOTAL OF TOTAL (DAYS CONTRACTUALLY DELINQUENT) NUMBER OF NUMBER OF RECEIVABLES RECEIVABLES -------------------------------- ACCOUNTS ACCOUNTS OUTSTANDING OUTSTANDING ---------- ---------- --------------- ----------- Current to 30 days ................................................... 31 to 60 Days ......................................................... 61 to 90 Days ......................................................... 91 Days to 120 Days ................................................... 121 Days to 150 Days .................................................. 151 Days or More ...................................................... Total .............................................................
S-22 COMPOSITION BY ACCOUNT AGE TRUST PORTFOLIO
PERCENTAGE PERCENTAGE OF TOTAL OF TOTAL ACCOUNT AGE NUMBER OF NUMBER OF RECEIVABLES RECEIVABLES ----------- ACCOUNTS ACCOUNTS OUTSTANDING OUTSTANDING --------- ---------- ----------- ----------- Not More than 11 Months .................................................... 12 Months to 17 Months ..................................................... 18 Months to 23 Months ..................................................... 24 Months to 35 Months ..................................................... 36 Months to 47 Months ..................................................... 48 Months to 59 Months ..................................................... 60 Months to 71 Months ..................................................... 72 Months or More .......................................................... Total ..................................................................
COMPOSITION BY GEOGRAPHIC DISTRIBUTION TRUST PORTFOLIO As of [______], 200[_], approximately [___]%, [___]%, [___]%, [___]% and [___]% of the receivables related to account holders having billing addresses in [California, New York, Florida, Texas and New Jersey], respectively. Not more than [_]% of the receivables related to account holders having billing addresses in any other single state. COMPOSITION BY STANDARDIZED CREDIT SCORE TRUST PORTFOLIO The following table sets forth the composition of the Trust Portfolio as of [___], [___] by FICO(R)* score ranges. To the extent available, FICO scores are obtained at origination and monthly thereafter. A FICO score is a measurement determined by Fair Isaac Corporation using information collected by the major credit bureaus to assess consumer credit risk. FICO risk scores rank-order consumers according to the likelihood that their credit obligations will be paid in accordance with the terms of their accounts. Although Fair Isaac Corporation discloses only limited information about the variables it uses to assess credit risk, those variables likely include, but are not limited to, debt level, credit history, payment patterns (including delinquency experience), and level of utilization of available credit. FICO scores of an individual may change over time, depending on the conduct of the individual, including the individual's usage of his or her available credit and changes in credit score technology used by Fair Isaac Corporation. FICO scores are based on independent, third-party information, the accuracy of which we cannot verify. The account owners do not use standardized credit scores, such as a FICO score, alone to determine the amount of charges that should be approved on a credit card account. Rather, a FICO score is only one of many factors used by Centurion and FSB, as account owners, to assess an individual's credit and default risk. In connection with their underwriting and authorization decisions, the account owners use proprietary scoring models, which they generally have found to be more accurate predictors of credit and default risk than any single S-23 - --------------- * FICO(R) is a federally registered servicemark of Fair, Isaac & Company. standardized credit score such as FICO. The use of proprietary models also enables an account owner to extend credit to an account holder with a lower FICO score without changing the account owner's risk tolerance than would be the case if the account owner relied solely on FICO. See "Centurion's and FSB's Revolving Credit Business--Underwriting and Authorization Procedures" in the accompanying prospectus. The FICO scores presented below should not be used alone as a method of forecasting whether account holders will make payments in accordance with the terms of their accounts. References to "Receivables Outstanding" in the following table include both finance charge receivables and principal receivables. Because the future composition of the Trust Portfolio may change over time, this table is not necessarily indicative of the composition of the Trust Portfolio at any specific time in the future. COMPOSITION BY STANDARDIZED CREDIT SCORE(1) TRUST PORTFOLIO
PERCENTAGE OF TOTAL FICO SCORE RANGE RECEIVABLES RECEIVABLES ---------------- OUTSTANDING OUTSTANDING ----------- ------------- Less than 560 ................................... $ % 560 - 659 ....................................... $ % 660 - 699 ....................................... $ % 700 - 759 ....................................... $ % 760 and above ................................... $ % Refreshed FICO Unavailable ...................... $ % Total ........................................... $ %
- --------------- (1) Standardized Credit Score defined as the FICO score in the most recent Monthly Period. STATIC POOL INFORMATION Static pool information regarding the performance of the receivables in the Total Portfolio is provided in Annex II to this prospectus supplement, which forms an integral part of this prospectus supplement. All static pool information regarding the performance of those receivables in Annex II for periods prior to January 1, 2006 will not form a part of this prospectus supplement, the accompanying prospectus or the registration statement relating to the certificates. SERIES PROVISIONS The Series 200[_]-[_] certificates and the Collateral Interest will be issued pursuant to the pooling and servicing agreement and the Series 200[_]- [_] supplement specifying the principal terms of the certificates, the forms of which have been filed as exhibits to the registration statement of which the prospectus and this prospectus supplement are a part. The following summary describes certain terms applicable to the Series 200[_]-[_] certificates and the Collateral Interest. Reference should be made to the prospectus for additional information concerning the Series 200[_]-[_] certificates, the Collateral Interest and the pooling and servicing agreement. See "The Pooling and Servicing Agreement Generally" in the accompanying prospectus. S-24 INTEREST PAYMENTS Interest on the Class A certificates and the Class B certificates will accrue from the closing date on the outstanding principal balances of the Class A certificates and the Class B certificates at the Class A certificate rate and Class B certificate rate, respectively. Interest will be distributed on each Distribution Date, beginning [__________], 200[_], to the Series 200[_]-[_] certificateholders in whose names the Series 200[_]-[_] certificates were registered on the relevant Record 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 closing date) to but excluding such Distribution Date. On each Distribution Date, interest due to the Class A certificateholders will be equal to the product of: (i) the actual number of days in the related Interest Period divided by 360, (ii) the Class A certificate rate for that Interest Period, and (iii) the outstanding principal balance of the Class A certificates as of the preceding Record Date (or, in the case of the first Distribution Date, as of the closing date). For the first Distribution Date, however, interest on the Class A certificates will equal the interest accrued on the initial principal amount of the Class A certificates at the Class A certificate rate for the initial Interest Period. Interest due on the Class A certificates but not paid on any Distribution Date will be payable on the next succeeding Distribution Date together with additional interest on such amount at the Class A certificate rate plus 2% per year. Such additional interest shall accrue on the same basis as interest on the Class A certificates, and shall accrue from the Distribution Date such overdue interest became due, to but excluding the Distribution Date on which such additional interest is paid. The Class A certificates will bear interest from and including the closing date to but excluding [__________], 200[_], and during each Interest Period thereafter, at the rate of [___]% per year above LIBOR prevailing on the related LIBOR Determination Date with respect to each such period. On each Distribution Date, Class A Outstanding Monthly Interest due but not paid to the Class A certificateholders and any Class A Additional Interest will be paid, to the extent funds are available, to the Class A certificateholders. Payments to the Class A certificateholders in respect of interest on the Class A certificates 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 holders of the Class A certificates for such Monthly Period are insufficient to pay such interest, Excess Spread and Excess Finance Charge Collections allocated to Series 200[_]-[_] 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. On each Distribution Date, interest due to the Class B certificateholders will be equal to the product of: (i) the actual number of days in the related Interest Period divided by 360, S-25 (ii) the Class B certificate rate for that Interest Period, and (iii) the outstanding principal balance of the Class B certificates as of the preceding Record Date (or, in the case of the first Distribution Date, as of the closing date). For the first Distribution Date, however, interest on the Class B certificates will equal the interest accrued on the initial principal amount of the Class B certificates at the Class B certificate rate for the initial Interest Period. Interest due on the Class B certificates but not paid on any Distribution Date will be payable on the next succeeding Distribution Date together with additional interest on such amount at the Class B certificate rate plus 2% per year. Such additional interest shall accrue on the same basis as interest on the Class B certificates, and shall accrue from the Distribution Date such overdue interest became due, to but excluding the Distribution Date on which such additional interest is paid. The Class B certificates will bear interest from and including the closing date to but excluding [_________], 200[_], and during each Interest Period thereafter, at the rate of [__]% per year above LIBOR prevailing on the related LIBOR Determination Date with respect to each such period. On each Distribution Date, Class B Outstanding Monthly Interest due but not paid to the Class B certificateholders and any Class B Additional Interest will be paid, to the extent funds are available, to the Class B certificateholders. Payments to the Class B certificateholders in respect of interest on the Class B certificates 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 holders of the Class B certificates for such Monthly Period are insufficient to pay such interest, Excess Spread and Excess Finance Charge Collections allocated to Series 200[_]-[_] 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. Interest will accrue on the Collateral Interest at the Collateral Minimum Interest Rate from the closing date. Interest will be distributed on each Distribution Date, beginning [___________], 200[_], to the holder of the Collateral Interest in an amount equal to the product of: (i) the actual number of days in the related Interest Period divided by 360, (ii) the Collateral Minimum Interest Rate for that Interest Period, and (iii) the Collateral Initial Invested Amount minus the aggregate amount of principal payments made to the holder of the Collateral Interest on all prior Distribution Dates (or, in the case of the first Distribution Date, as of the closing date). For the first Distribution Date, however, interest on the Collateral Interest will accrue on the Collateral Initial Invested Amount at the Collateral Minimum Interest Rate for the initial Interest Period. The Collateral Interest will also provide for additional interest as provided herein and in the Series 200[_]-[_] supplement. S-26 The Class A certificate rate, the Class B certificate rate and the Collateral Minimum Interest Rate applicable to the then current and immediately preceding interest periods may be obtained by telephoning the trustee at its corporate trust office at (212) 815-6258. PRINCIPAL PAYMENTS The Revolving Period begins on the closing date and ends on the day before the commencement of the Controlled Accumulation Period or, if earlier, the Early Amortization Period. During the Revolving Period, no principal payments will be made to or for the benefit of the Series 200[_]-[_] certificateholders or the holder of the Collateral Interest. Unless a Pay-Out Event has occurred, the Controlled Accumulation Period is scheduled to begin at the close of business on the last day of the [_____] Monthly Period, but may be delayed as described herein, and ends on the earliest to occur of: (a) the commencement of an Early Amortization Period, (b) the payment in full of the Invested Amount and (c) the Expected Final Payment Date. During the Controlled Accumulation Period (on or prior to the Expected Final Payment Date), principal will be deposited in the Principal Funding Account as described below and on the Expected Final Payment Date will be distributed to Class A certificateholders up to the Class A Invested Amount and then to Class B certificateholders up to the Class B Invested Amount. On each Distribution Date with respect to the Controlled Accumulation Period, the trustee will deposit in the Principal Funding Account an amount equal to the least of: (a) Available Principal Collections on deposit in the Collection Account with respect to such Distribution Date, (b) the Controlled Deposit Amount for such Distribution Date and (c) the sum of the Class A Adjusted Invested Amount and the Class B Adjusted Invested Amount, until the amount on deposit in the Principal Funding Account equals the sum of the Class A Invested Amount and the Class B Invested Amount. Amounts on deposit in the Principal Funding Account will be paid to the Class A certificateholders and, if the amount on deposit in the Principal Funding Account exceeds the Class A Invested Amount, to the Class B certificateholders on the Expected Final Payment Date. No principal payments will be made in respect of the Collateral Invested Amount until the final principal payment has been made to the Class A certificateholders and the Class B certificateholders. The Controlled Accumulation Period is scheduled to begin at the close of business on the last day of the [_______] Monthly Period. However, the date on which the Controlled Accumulation Period actually begins may be delayed if--after making a calculation prescribed by the pooling and servicing agreement--the servicer determines, in effect, that enough Shared Principal Collections are expected to be available for your series from principal sharing series that will be in their revolving periods during the Controlled Accumulation Period to delay the start of the Controlled Accumulation Period, without affecting the payment in full of the certificates of your series by the Expected Final Payment Date. This calculation S-27 will take into account the then-current principal payment rate on the accounts and the principal amount of principal sharing series that are entitled to share principal with Series 200[_]-[_]. If the beginning of your series' Controlled Accumulation Period is delayed and then a Pay-Out Event or Reinvestment Event occurs with respect to any outstanding principal sharing series, your series' Controlled Accumulation Period will start on (i) the first day of the Monthly Period immediately succeeding the date on which the Pay-Out Event or Reinvestment Event occurred or, if sooner, (ii) the date on which the Controlled Accumulation Period is then scheduled to start. If a Pay-Out Event with respect to Series 200[_]-[_] occurs during the Controlled Accumulation Period, the Early Amortization Period will commence and any amount on deposit in the Principal Funding Account will be paid first to the Class A certificateholders on the first Special Payment Date and then, after the Class A Invested Amount is paid in full, to the Class B certificateholders. If, on the Expected Final Payment Date, monies on deposit in the Principal Funding Account are insufficient to pay the Class A Invested Amount and the Class B Invested Amount or if there are insufficient collections of principal receivables to pay the Collateral Invested Amount, a Pay-Out Event will occur and the Early Amortization Period will commence. On each Distribution Date with respect to the Early Amortization Period until the Class A Invested Amount has been paid in full or the Series 200[_]- [_] Termination Date occurs, the holders of the Class A certificates will be entitled to receive Available Principal Collections in an amount up to the Class A Invested Amount. After payment in full of the Class A Invested Amount, the holders of the Class B certificates will be entitled to receive, on each Distribution Date, Available Principal Collections until the earlier of the date the Class B Invested Amount is paid in full and the Series 200[_]-[_] Termination Date. After payment in full of the Class B Invested Amount, the holder of the Collateral Interest will be entitled to receive, on each Distribution Date, Available Principal Collections until the earlier of the date the Collateral Invested Amount is paid in full and the Series 200[_]-[_] Termination Date. SUBORDINATION OF THE CLASS B CERTIFICATES AND THE COLLATERAL INTEREST 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 otherwise 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. If the Collateral Invested Amount is reduced to zero, holders of the Class B certificates will bear directly the credit and other risks associated with their interest in the trust. To the extent the Class B Invested Amount is reduced, the percentage of collections of finance charge receivables allocated to the Class B certificateholders in subsequent Monthly Periods will be reduced. Moreover, to the extent the amount of such reduction in the Class B Invested Amount is not reimbursed, the amount of principal distributable to the Class B certificateholders will be reduced. If the Class B Invested S-28 Amount is reduced to zero, the Class A certificateholders will bear directly the credit and other risks associated with their undivided interest in the trust. In the event of a reduction in the Class A Invested Amount, the Class B Invested Amount or the Collateral Invested Amount, the amount of principal and interest available to fund payments with respect to the Class A certificates and the Class B certificates will be decreased. See "--Allocation Percentages," "--Reallocation of Cash Flows" and "--Application of Collections--Excess Spread; Excess Finance Charge Collections" below. ALLOCATION PERCENTAGES Pursuant to the pooling and servicing agreement, the servicer will allocate among Series 200[_]-[_] and all other series outstanding all collections of finance charge receivables and principal receivables and the Defaulted Amount with respect to such Monthly Period as described under "The Pooling and Servicing Agreement Generally--Allocations" in the accompanying prospectus and, with respect to Series 200[_]-[_] specifically, as described below. Pursuant to the pooling and servicing agreement, during each Monthly Period, the servicer will allocate to Series 200[_]-[_] its Series Allocable Finance Charge Collections, Series Allocable Principal Collections and Series Allocable Defaulted Amount. The Series Allocable Finance Charge Collections and the Series Allocable Defaulted Amount for Series 200[_]-[_] with respect to any Monthly Period will be allocated to the Series 200[_]-[_] certificates and the Collateral Interest based on the Floating Allocation Percentage and the remainder of such Series Allocable Finance Charge Collections and Series Allocable Defaulted Amount will be allocated to the interest of the holders of the transferor certificates. Investor Finance Charge Collections (which for any Monthly Period is equal to the product of the Floating Allocation Percentage and the Series Allocable Finance Charge Collections) will be reallocated among all series, including Series 200[_]-[_], in the second group of series known as Group II as set forth in "The Pooling and Servicing Agreement Generally--Reallocations Among Different Series Within a Reallocation Group" in the accompanying prospectus. Reallocated Investor Finance Charge Collections allocated to Series 200[_]-[_] and the Investor Default Amount will be further allocated among the Class A certificateholders, the Class B certificateholders and the holder of the Collateral Interest in accordance with the Class A Floating Percentage, the Class B Floating Percentage and the Collateral Floating Percentage, respectively. Series Allocable Principal Collections for Series 200[_]-[_] will be allocated to the Series 200[_]-[_] certificates and the Collateral Interest based on the Principal Allocation Percentage and the remainder of such Series Allocable Principal Collections will be allocated to the holders of the transferor certificates. Such principal collections so allocated to the Series 200[_]-[_] certificates and the Collateral Interest will be further allocated to the Class A certificateholders, the Class B certificateholders and the holder of the Collateral Interest based on the Class A Principal Percentage, the Class B Principal Percentage and the Collateral Principal Percentage, respectively. S-29 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 Series 200[_]-[_] certificateholders. During the Controlled Accumulation Period, the servicer will transfer collections in respect of principal receivables allocated to Series 200[_]- [_], Shared Principal Collections allocated to Series 200[_]-[_] 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 below under "--Application of Collections." Unless a Pay-Out Event has occurred and the Early Amortization Period has begun with respect to Series 200[_]-[_], 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 through the following Distribution Date by the trustee at the direction of the servicer in Eligible Investments. On each Distribution Date with respect to the Controlled Accumulation Period, the interest and other investment income (net of investment expenses and losses) earned on such investments will be withdrawn from the Principal Funding Account and will be treated as a portion of Class A Available Funds. If such investments with respect to any such Distribution Date yield less than the Covered Amount, such shortfall will be funded from Class A Available Funds (including a withdrawal from the Reserve Account, if necessary, as described below under "--Reserve Account") and from Class B Available Funds. 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, an Eligible Deposit Account for the benefit of the Class A certificateholders, the Class B certificateholders and the holder of the Collateral Interest. The Reserve Account is established to assist with the subsequent distribution of interest on the Class A certificates as provided in this prospectus supplement during the Controlled 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 Charge Collections allocated to Series 200[_]-[_] (in the order of priority described below under "--Application of Collections--Payment of Interest, Fees and Other Items") to increase the amount on deposit in the Reserve Account (to the extent such amount is less than the Required Reserve Account Amount). In addition, on each such Distribution Date, the transferors will have the option, but will not be required, to make a deposit in the Reserve Account to the extent that the amount on deposit in the Reserve Account, after giving effect to any Excess Spread and Excess Finance Charge Collections allocated and available to be deposited in the Reserve Account on such Distribution Date, is less than the Required Reserve Account Amount. 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 shall distribute such excess to the holder of the Collateral Interest. S-30 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 investment expenses and losses) 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 allocable to Series 200[_]-[_]. On or before each Distribution Date with respect to the Controlled Accumulation Period (on or prior to the Expected Final Payment date) and on the first Special Payment Date (if such Special Payment Date occurs on or prior to the Expected Final 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 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 for such Distribution Date or Special Payment Date exceeds the investment earnings (net of losses and investment expenses), if any, in the Principal Funding Account for the related Distribution 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. The Reserve Account will be terminated following the earliest to occur of: (a) the termination of the trust pursuant to the pooling and servicing agreement, (b) the date on which the Invested Amount is paid in full, and (c) if the Controlled Accumulation Period has not commenced, the occurrence of a Pay-Out Event with respect to Series 200[_]-[_] or, if the Controlled Accumulation Period has commenced, the earlier of the first Special Payment Date and the Expected Final 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 holder of the Collateral Interest. Any amounts withdrawn from the Reserve Account and distributed to the holder of the Collateral Interest 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: S-31 o Excess Spread and Excess Finance Charge Collections allocated to Series 200[_]-[_] and available for such purpose will be used to fund the Class A Required Amount for the related Distribution Date; o if such Excess Spread and Excess Finance Charge Collections 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 o if Reallocated Principal Collections for the related Monthly Period, together with Excess Spread and Excess Finance Charge Collections allocated to Series 200[_]-[_], 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 with respect to 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" below. Reductions of the Class A Invested Amount and Class B Invested Amount will thereafter be reimbursed and the Class A Invested Amount and Class B Invested Amount increased on each Distribution Date by the amount, if any, of Excess Spread and Excess Finance Charge Collections allocable to Series 200[_]-[_] and available to reimburse such reductions. See "Application of Collections--Excess Spread; Excess Finance Charge Collections" below. 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. 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: S-32 o Excess Spread and Excess Finance Charge Collections allocated to Series 200[_]-[_] 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; o if such Excess Spread and Excess Finance Charge Collections are insufficient to fund 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 o 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 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 in the Class B Invested Amount may have the effect of slowing or reducing the return of principal and interest to the Class B certificateholders. In 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" below. 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 the Class A Available Funds, Class B Available Funds and Collateral Available Funds 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) if TRS or an affiliate of TRS is no longer the servicer, an amount equal to the Class A Servicing Fee for such Distribution Date, plus the amount of any Class A Servicing Fee previously due but not distributed to the servicer on a prior Distribution Date, will be distributed to the servicer; (iii) an amount equal to the Class A Investor Default Amount for such Distribution Date will be treated as a portion of Available Principal Collections for such Distribution Date; and S-33 (iv) the balance, if any, shall constitute Excess Spread and shall be allocated and distributed as described under "--Excess Spread; Excess Finance Charge Collections" below. (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; (ii) if TRS or an affiliate of TRS is no longer the servicer, an amount equal to the Class B Servicing Fee for such Distribution Date, plus the amount of any Class B Servicing Fee previously due but not distributed to the servicer on a prior Distribution Date, will be distributed to the servicer; and (iii) the balance, if any, shall constitute Excess Spread and shall be allocated and distributed as described under "--Excess Spread; Excess Finance Charge Collections" below. (C) an amount equal to the Collateral Available Funds will be distributed in the following priority: (i) if TRS or an affiliate of TRS is no longer the servicer, an amount equal to the Collateral Interest Servicing Fee for such Distribution Date, plus the amount of any Collateral Interest Servicing Fee previously due but not distributed to the servicer on a prior Distribution Date, will be paid to the servicer; and (ii) the balance, if any, will constitute a portion of Excess Spread and will be allocated and distributed as described under "--Excess Spread; Excess Finance Charge Collections" below. EXCESS SPREAD; EXCESS FINANCE CHARGE COLLECTIONS. On each Distribution Date, the trustee, acting pursuant to the servicer's instructions, will apply Excess Spread and Excess Finance Charge Collections allocated to Series 200[_]-[_] 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 Charge Collections allocated to Series 200[_]-[_], such Excess Spread and Excess Finance Charge Collections will be applied: o 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, o 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 S-34 o 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 will be treated as a portion of Available Principal Collections for such Distribution Date as described under "--Payments of Principal" in this prospectus supplement; (c) an amount equal to the interest accrued with respect to the aggregate outstanding principal balance of the Class B certificates not otherwise distributed to the Class B certificateholders on such Distribution Date will accrue at the Class B certificate rate and be paid to Class B certificateholders, except that any such interest previously due but not paid will accrue at the Class B certificate rate plus 2% per year; (d) 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 applied first, to pay shortfalls in the payment of amounts described in clause (B)(i) under "--Payment of Interest, Fees and Other Items" in this prospectus supplement, and second, to pay shortfalls in the payment of amounts described in clause (B)(ii) under "--Payment of Interest, Fees and Other Items" in this prospectus supplement and then (II) treated up to the Class B Investor Default Amount, as a portion of Available Principal Collections for such Distribution Date; (e) an amount equal to the aggregate amount by which the Class B Invested Amount has been reduced pursuant to clauses (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 Principal Collections for such Distribution Date; (f) an amount equal to Collateral Minimum Monthly Interest for such Distribution Date, plus the amount of any Collateral Minimum Monthly Interest previously due but not distributed to the holder of the Collateral Interest on a prior Distribution Date and any Collateral Additional Interest will be distributed to the holder of the Collateral Interest; (g) an amount equal to the Monthly Servicing Fee due but not paid to the servicer on such Distribution Date or a prior Distribution Date shall be paid to the servicer; (h) an amount equal to the Collateral Default Amount shall be treated as a portion of Available Principal Collections for such Distribution Date; (i) 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 Principal Collections for such Distribution Date; (j) on each Distribution Date from and after the date on which the Reserve Account is funded, but prior to the date on which the Reserve Account terminates as described under "--Reserve Account" above, an amount up to the excess, if any, of the Required Reserve S-35 Account Amount over the Available Reserve Account Amount shall be deposited into the Reserve Account; and (k) the balance, if any, will be distributed to the holder of the Collateral Interest. PAYMENTS OF PRINCIPAL. On each Distribution Date, the trustee, acting pursuant to the servicer's instructions, will distribute Available Principal Collections (see "--Principal Payments" above) on deposit in the Collection Account in the following priority: (i) on each Distribution Date with respect to the Revolving Period, all such Available Principal Collections will be treated as Shared Principal Collections and applied as described under "The Pooling and Servicing Agreement Generally--Sharing of Principal Collections Among Principal Sharing Series" in the accompanying prospectus; (ii) on each Distribution Date with respect to the Controlled Accumulation Period, all such Available Principal Collections will be distributed or deposited in the following priority: (A) an amount equal to the lesser of (x) the Controlled Deposit Amount and (y) the sum of the Class A Adjusted Invested Amount and the Class B Adjusted Invested Amount will be deposited in the Principal Funding Account; (B) for each Distribution Date beginning on the Distribution Date on which the Class B Invested Amount is paid in full, an amount up to the Collateral Invested Amount will be paid to the holder of the Collateral Interest; and (C) for each Distribution Date, the balance, if any, of Available Principal Collections not applied pursuant to paragraphs (A) and (B) (as applicable) above will be treated as Shared Principal Collections and applied as described under "The Pooling and Servicing Agreement Generally--Sharing of Principal Collections Among Principal Sharing Series" in the accompanying prospectus; and (iii) on each Distribution Date with respect to the Early Amortization Period, all such Available Principal Collections will be distributed as follows: (A) an amount up to the Class A Adjusted Invested Amount will be distributed to the Class A certificateholders; (B) for each Distribution Date beginning on the Distribution Date on which the Class A Invested Amount is paid in full, an amount up to the Class B Adjusted Invested Amount will be distributed to the Class B certificateholders; (C) for each Distribution Date beginning on the Distribution Date on which the Class B Invested Amount is paid in full, an amount up to the Collateral Invested Amount will be distributed to the holder of the Collateral Interest; and (D) for each Distribution Date, the balance, if any, of Available Principal Collections not applied pursuant to paragraphs (A), (B) and (C) (as applicable) above will be treated as Shared Principal Collections and applied as described under "The Pooling and Servicing Agreement Generally--Sharing of Principal Collections Among Principal Sharing Series" in the accompanying prospectus. S-36 DEFAULTED RECEIVABLES; INVESTOR CHARGE-OFFS On each Determination Date, the servicer will calculate the Investor Default Amount for the related Distribution Date. An amount equal to the Class A Investor Default Amount for each Distribution Date will be paid from Class A Available Funds, Excess Spread and Excess Finance Charge Collections allocated to Series 200[_]-[_] and from Reallocated Principal Collections, if applicable, and applied as described above in "--Application of Collections--Payment of Interest, Fees and Other Items." An amount equal to the Class B Investor Default Amount for each Distribution Date will be paid from Excess Spread and Excess Finance Charge Collections allocated to Series 200[_]-[_] and from Reallocated Principal Collections allocable to the Collateral Invested Amount, if applicable, and applied as described above in "--Application of Collections--Excess Spread; Excess Finance Charge Collections." CLASS A INVESTOR CHARGE-OFFS On each Distribution Date, if the Class A Required Amount for such Distribution Date exceeds the sum of (i) Excess Spread and Excess Finance Charge Collections allocable to Series 200[_]-[_] and (ii) 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 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 of the Class B Invested Amount with respect to such Distribution Date as described above. A reduction in the Class A Invested Amount as described in the preceding sentence is a "Class A Investor Charge-Off." Such Class A Investor Charge-Offs will reduce the amounts allocable and available for payment and may have the effect of slowing or reducing the return of principal to your series. 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 Charge Collections allocable to Series 200[_]-[_] available for such purpose as described above under "--Application of Collections--Excess Spread; Excess Finance Charge Collections." REDUCTIONS IN CLASS B INVESTED AMOUNT AND COLLATERAL INVESTED AMOUNT On each Distribution Date, if the Class B Required Amount for such Distribution Date exceeds the sum of (i) Excess Spread and Excess Finance Charge Collections allocable to S-37 Series 200[_]-[_] and not required to pay the Class A Required Amount or reimburse Class A Investor Charge-Offs, and (ii) 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, but not by more than the Class B Investor Default Amount for such Distribution Date. In the event that such reduction would cause the Collateral Invested Amount to be a negative number, the Collateral Invested Amount will be reduced to zero, and the Class B Invested Amount will be reduced by the amount by which the Collateral Invested Amount would have been reduced below zero, but not by more than the excess, if any, of the Class B Investor Default Amount for such Distribution Date over the amount of such reduction, if any, of the Collateral Invested Amount for such Distribution Date. A reduction in the Class B Invested Amount as described in the preceding sentence is a "Class B Investor Charge-Off." The Class B Invested Amount will also be reduced by the amount of Reallocated Principal Collections in excess of the Collateral Invested Amount and the amount of any portion of the Class B Invested Amount allocated to the Class A certificates to avoid a reduction in the Class A Invested Amount. Any reductions in the Class B Invested Amount will reduce the amounts allocable and available for payment and may have the effect of slowing or reducing the return of principal to your series. The Class B Invested Amount will thereafter be increased on any Distribution Date (but not by an amount in excess of the amount of such reductions in the Class B Invested Amount) by the amount of Excess Spread and Excess Finance Charge Collections allocable to Series 200[_]-[_] available for such purpose as described above under "--Application of Collections--Excess Spread; Excess Finance Charge Collections." On each Distribution Date, if the Collateral Default Amount for such Distribution Date exceeds the amount of Excess Spread and Excess Finance Charge Collections allocated to Series 200[_]-[_] which is allocated and available to fund such amount as described above under "--Application of Collections--Excess Spread; Excess Finance Charge Collections," the Collateral Invested Amount will be reduced by the amount of such excess but not by more than the lesser of the Collateral Default Amount and the Collateral Invested Amount for such Distribution Date. A reduction in the Collateral Invested Amount as described in the preceding sentence is a "Collateral Charge-Off." The Collateral Interest will also be reduced by the amount of Reallocated Principal Collections and the amount of any portion of the Collateral Invested Amount allocated to the Class A certificates to avoid a reduction in the Class A Invested Amount or to the Class B certificates to avoid a reduction in the Class B Invested Amount. Any reductions in the Collateral Invested Amount will reduce the amounts allocable and available for payment and may have the effect of slowing or reducing the amount of payments to your series. The Collateral Invested Amount will thereafter be increased on any Distribution Date (but not by an amount in excess of the amount of such reductions in the Collateral Invested Amount) by the amount of Excess Spread and Excess Finance Charge Collections allocated to Series 200[_]-[_] allocated and available for that purpose as described above under "--Application of Collections--Excess Spread; Excess Finance Charge Collections." PAIRED SERIES Series 200[_]-[_] may be paired with one or more other series (each called a "paired series") at or after the commencement of the Controlled Accumulation Period if the Rating S-38 Agency Condition is satisfied. As funds are accumulated in the Principal Funding Account, the invested amount in the trust of such paired series will increase by up to a corresponding amount. Upon payment in full of the Series 200[_]-[_] certificates, 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 will have been increased by an amount up to an aggregate amount equal to the Invested Amount paid to or deposited for the benefit of the Series 200[_]-[_] certificateholders after the Series 200[_]- [_] certificates were paired with the paired series. The issuance of a paired series will be subject to the conditions described under "The Pooling and Servicing Agreement Generally--New Issuances" in the prospectus. There can be no assurance, however, that the terms of any paired series might not have an impact on the timing or amount of payments received by the Series 200[_]-[_] certificateholders. See "Risk Factors--Issuances of additional series by the trust may adversely affect your certificates" and "The Pooling and Servicing Agreement Generally--Paired Series" in the accompanying prospectus. PAY-OUT EVENTS The Pay-Out Events with respect to the Series 200[_]-[_] certificates and the Collateral Interest will include each of the following: (a) the occurrence of an insolvency event (as such term is defined in the prospectus) with respect to any transferor or other holder of the Original Transferor Certificate; (b) the trust becomes an "investment company" within the meaning of the Investment Company Act of 1940, as amended; (c) a failure on the part of any transferor: (i) to make any payment or deposit required under the pooling and servicing agreement or the Series 200[_]-[_] supplement within five Business Days after the day such payment or deposit is required to be made; or (ii) to observe or perform any other covenant or agreement of such transferor set forth in the pooling and servicing agreement or the Series 200[_]-[_] supplement, which failure has a material adverse effect on the Series 200[_]- [_] certificateholders or the holder of the Collateral Interest and which continues unremedied for a period of 60 days after written notice; (d) any representation or warranty made by any transferor in the pooling and servicing agreement or the Series 200[_]-[_] supplement or any information required to be given by any transferor to the trustee to identify the accounts proves to have been incorrect in any material respect when made or delivered and continues to be incorrect in any material respect for a period of 60 days after written notice and as a result of which the interests of the Series 200[_]-[_] certificateholders and the holder of the Collateral Interest are materially and adversely affected; provided, however, that a Pay-Out Event shall not be deemed to occur thereunder if a transferor has repurchased the related receivables or all such receivables, if applicable, during such period (or such longer period as the trustee may specify not to exceed an additional 60 days) in accordance with the provisions of the pooling and servicing agreement; (e) a failure by a transferor to convey receivables in additional accounts or participation interests to the trust within five Business Days after the day on which it is S-39 required to convey such receivables or participation interests pursuant to the pooling and servicing agreement or the Series 200[_]-[_] supplement; (f) the occurrence of any Servicer Default which would have an adverse effect; (g) a reduction of the average Series Adjusted Portfolio Yield for any three consecutive Monthly Periods to a rate less than the average of the Base Rates for such three Monthly Periods; (h) the failure to pay in full the Class A Invested Amount, the Class B Invested Amount and the Collateral Invested Amount on the Expected Final Payment Date; (i) any transferor is unable for any reason to transfer receivables to the trust in accordance with the pooling and servicing agreement or the Series 200[_]-[_] supplement; and (j) the occurrence of an insolvency event as defined in the related purchase agreement relating to any account owner; or (k) any account owner is unable for any reason to transfer receivables to the related transferor in accordance with the related purchase agreement; In the case of any event described above in subparagraph (c), (d) or (f), after the applicable grace period, if any, set forth in such subparagraphs, either the trustee or the holders of Series 200[_]-[_] certificates and the Collateral Interest evidencing more than 50% of the aggregate unpaid principal amount of Series 200[_]-[_] certificates and the Collateral Interest by notice then given in writing to the transferors and the servicer (and to the trustee if given by the Series 200[_]-[_] certificateholders and the holder of the Collateral Interest) may declare that a Pay-Out Event has occurred with respect to Series 200[_]-[_] as of the date of such notice, and, in the case of any event described in subparagraph (b), (e), (g) or (h), a Pay-Out Event shall occur with respect to Series 200[_]-[_] without any notice or other action on the part of the trustee immediately upon the occurrence of such event. In the case of any event described in subparagraph (a), (i), (j) or (k), a Pay-Out Event shall occur with respect to Series 200[_]-[_] without any notice or other action on the part of the trustee, the Series 200[_]-[_] certificateholders or the holder of the Collateral Interest immediately upon the occurrence of such event (or, in the case of clause (y) below, immediately following the expiration of the 60-day grace period), but only to the extent that: (x) as of the date of such event, the average of the Monthly Receivables Percentage for the immediately preceding three Monthly Periods is equal to or greater than 10%, or (y) as of the date of such event, the average of the Monthly Receivables Percentage for the immediately preceding three Monthly Periods is less than 10%, and within 60 days following the occurrence of the related insolvency event or inability to transfer receivables, the aggregate amount of principal receivables outstanding in the trust does not at least equal the Required Minimum Principal Balance (without giving effect to principal receivables attributable to the transferor or the account owner with respect to which the insolvency event or the inability to transfer receivables has occurred). If the proceeds of any sale of the receivables following the occurrence of an insolvency event with respect to a transferor, as described in the accompanying prospectus under "Description of the Certificates--Pay-Out Events and Reinvestment Events," allocated to the Class A Invested Amount and the proceeds of any collections on the receivables in the S-40 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 or the holder of the Collateral Interest. See "Certain Legal Aspects of the Receivables--Certain Matters Relating to Bankruptcy, Conservatorship and Receivership" in the accompanying prospectus for a discussion of the impact of recent federal legislation on the trustee's ability to liquidate the receivables. SERVICING COMPENSATION AND PAYMENT OF EXPENSES The share of the Servicing Fee allocable to Series 200[_]-[_] 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. The share of the Monthly Servicing Fee allocable to the Class A certificateholders 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 Servicing Fee Rate, and (c) the Servicing Base Amount. The share of the Monthly Servicing Fee allocable to the Class B certificateholders 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 Servicing Fee Rate, and (c) the Servicing Base Amount. The share of the Monthly Servicing Fee allocable to the holder of the Collateral Interest for any Distribution Date, called the Collateral Interest Servicing Fee, shall be equal to one-twelfth of the product of: (a) the Collateral Floating Percentage, (b) the Servicing Fee Rate, and (c) the Servicing Base Amount. The remainder of the Servicing Fee shall be paid by the holders of the transferor certificates or the certificateholders of other series (as provided in the related supplements). In no event will the trust, the trustee, the Series 200[_]-[_] certificateholders or the holder of the Collateral Interest be liable for the share of the Servicing Fee to be paid by the holders of the transferor certificates or the certificateholders of any other series. OPTIONAL REPURCHASE So long as a transferor is the servicer or an affiliate of the servicer, on any Distribution Date occurring on or after the date that the sum of the Class A Invested Amount, the Class B Invested Amount and the Collateral Invested Amount is reduced to $[________] (5% of the initial outstanding aggregate principal amount of the Class A certificates, the Class B S-41 certificates and the Collateral Interest) or less, that transferor will have the option to repurchase the Class A certificateholders' interest, the Class B certificateholders' interest and the Collateral Interest. The purchase price will be equal to the sum of the Adjusted Invested Amount and accrued and unpaid interest on the Class A certificates, the Class B certificates and the Collateral Interest (and accrued and unpaid interest with respect to interest amounts that were due but not paid on such Distribution Date or any prior Distribution Date) 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 next following such day. Such proceeds will be allocated first to pay amounts due to the Class A certificateholders, then, to pay amounts due to the Class B certificateholders and finally, to pay amounts due to the holder of the Collateral Interest. Following any such repurchase, the Receivables will be assigned to the transferors and the Class A certificateholders, the Class B certificateholders and the holder of the Collateral Interest will have no further rights with respect thereto. In the event that the transferors fail for any reason to deposit the aggregate purchase price for such receivables, the trust will continue to hold the receivables and payments will continue to be made to the Class A certificateholders, Class B certificateholders and the holder of the Collateral Interest as described herein. SERIES TERMINATION If on the Distribution Date which is two months prior to the Series 200[_]- [_] 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 200[_]-[_] Termination Date (after giving effect to all distributions required to be made on the Series 200[_]-[_] Termination Date other than from the proceeds of the sale). No transferor, any affiliate thereof, any agent thereof or any other party consolidated with such transferor for purposes of United States generally accepted accounting principles will be entitled to participate in such bidding process or to purchase the receivables; provided, however, that, to the extent the holder of the Collateral Interest is not a transferor, an affiliate thereof, an agent thereof or any other party consolidated with a transferor for purposes of United States generally accepted accounting principles, the holder of the Collateral Interest may participate in such bidding process. 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 200[_]-[_] Termination Date for distribution to the Series 200[_]-[_] certificateholders and the holder of the Collateral Interest. The servicer will sell such receivables on the Series 200[_]-[_] 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 200[_]-[_] Termination Date for distribution to the Series 200[_]-[_] certificateholders and the holder of the Collateral Interest) to Series 200[_]-[_]. S-42 REPORTS No later than the second Business Day prior to each Distribution Date, the servicer will forward to the trustee, the paying agent, the transferors, each Rating Agency and the holder of the Collateral Interest, a monthly report prepared by the servicer setting forth certain information with respect to 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 such 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 the preceding Monthly Period; (c) the Series Allocation Percentage, the Floating Allocation Percentage, the Class A Floating Percentage, the Class B Floating Percentage and the Collateral Floating Percentage and the Principal Allocation Percentage, the Class A Principal Percentage, the Class B Principal Percentage and the Collateral Principal Percentage; (d) the amount of collections of principal receivables and finance charge receivables processed during the related Monthly Period and the portion thereof allocated to the interest of the holders of the Series 200[_]-[_] certificates and the holder of the Collateral Interest; (e) the aggregate outstanding balance of accounts that were 31, 61 and 91 days or more delinquent as of the end of such Monthly Period; (f) the Class A Investor Default Amount, the Class B Investor Default Amount and the Collateral Default Amount and the Defaulted Amount with respect to the related Distribution Date; (g) the aggregate amount, if any, of Class A Investor Charge-Offs, Class B Investor Charge-Offs, any reductions in the Class B Invested Amount pursuant to clauses (iii), (iv) and (v) of the definition of Class B Invested Amount, 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 and any Class A Investor Charge-Offs, Class B Investor Charge- Offs or Collateral Charge-Offs reimbursed on the related Monthly Period, for such Monthly Period; (h) the Monthly Servicing Fee, Class A Servicing Fee, Class B Servicing Fee and Collateral Interest Servicing Fee for such Monthly Period; (i) the Series Adjusted Portfolio Yield for such Monthly Period; (j) the Base Rate for such Monthly Period; (k) Reallocated Principal Collections; and (1) Shared Principal Collections. ERISA CONSIDERATIONS CLASS A CERTIFICATES Subject to the considerations described below and in the accompanying prospectus, the Class A certificates may be purchased by, on behalf of, or with "plan assets" of any Plan. Any S-43 Plan fiduciary that proposes to cause a Plan to acquire any of the Class A certificates should consult with its counsel with respect to the potential consequences of the Plan's acquisition and ownership of such Class A certificates under ERISA and the Internal Revenue Code. See "ERISA Considerations" in the accompanying prospectus. CLASS B CERTIFICATES The Class B certificates may not be acquired or held by, on behalf of, or with "plan assets" of any Plan other than insurance companies investing solely assets of their general accounts. 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, and is not acquiring the Class B certificates with "plan assets" of, 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 DEPARTMENT OF LABOR AUTHORIZATION The Department of Labor has authorized the trust 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 (i) 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 Centurion, RFC II or any of their affiliates is the sponsor; and (ii) 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 the conditions described in "ERISA Considerations" in the accompanying prospectus are satisfied. The transferors 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 that are within the control of the investors, will be met. CONSULTATION WITH COUNSEL In light of the foregoing fiduciaries or other persons contemplating purchasing the Class A certificates on behalf of or with "plan assets" of any Plan should consult their own counsel regarding whether the trust's assets represented by the Class A certificates would be considered "plan assets," the consequences that would apply if the trust's assets were considered "plan assets," and the availability of exemptive relief from the prohibited transaction rules. 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 Class A 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 the "Risk Factors" and other factors discussed in the accompanying prospectus. S-44 UNDERWRITING Subject to the terms and conditions set forth in the underwriting agreement among the transferors, American Express Centurion Bank, American Express Bank, FSB, the underwriters of the Class A certificates named below and the underwriters of the Class B certificates named below, the transferors have agreed to cause the trust to sell to the underwriters, and the underwriters have agreed to purchase, the principal amount of the Class A certificates and Class B certificates set forth opposite their names:
AGGREGATE PRINCIPAL AMOUNT UNDERWRITERS OF THE CLASS A CERTIFICATES OF CLASS A CERTIFICATES ---------------------------------------- -------------------------- [A Co.]........................................... $ [B Co.]........................................... [C Co.]........................................... ------------ Total............................................ $ ============
AGGREGATE PRINCIPAL AMOUNT UNDERWRITERS OF THE CLASS B CERTIFICATES OF CLASS B CERTIFICATES ---------------------------------------- -------------------------- [A Co.]........................................... $ [B Co.]........................................... [C Co.]........................................... ----------- Total............................................ $ ===========
The underwriting agreement provides that the obligation of the Class A underwriters to pay for and accept delivery of the Class A certificates and the obligation of the Class B underwriters to pay for and accept delivery of the Class B certificates are subject to the approval of certain legal matters by their counsel and to certain other conditions. All of the Series 200[_]-[_] certificates offered hereby will be issued if any are issued. Offering expenses are estimated to be $[______]. The Class A underwriters propose initially to offer the Class A certificates to the public at the price set forth on the cover page hereof and to certain dealers at such price less concessions not in excess of [___]% of the principal amount of the Class A certificates. The 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 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 the price set forth on the cover page hereof and to certain dealers at such price less concessions not in excess of [___]% of the principal amount of the Class B certificates. The 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 and other selling terms may be changed by the Class B underwriters. Each underwriter of these Series 200[_]-[_] certificates has agreed that: o it has complied and will comply with all applicable provisions of the Financial Services and Markets Act 2000, or the FSMA, with respect to anything done by it in relation to S-45 the Series 200[_]-[_] certificates in, from or otherwise involving the United Kingdom; and o it has only and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of any Series 200[_]-[_] certificates in circumstances in which Section 21(1) of the FSMA does not apply to the trust. The underwriters may engage in over-allotment transactions, stabilizing transactions, syndicate covering transactions and penalty bids with respect to the Series 200[_]-[_] certificates in accordance with Regulation M under the Securities 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 Series 200[_]-[_] certificates so long as the stabilizing bids do not exceed a specified maximum. Syndicate covering transactions involve purchases of the Series 200[_]-[_] 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 Series 200[_]-[_] certificates originally sold by such syndicate member are purchased in a syndicate covering transaction. Such over- allotment transactions, stabilizing transactions, syndicate-covering transactions and penalty bids may cause the prices of the Series 200[_]-[_] certificates to be higher than they would be in the absence of such transactions. Neither the transferors nor any of 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. In the ordinary course of their respective businesses, the underwriters and their respective affiliates have engaged and may in the future engage in investment banking or commercial banking transactions with the transferors, TRS, Centurion, FSB or any of their affiliates. Centurion, on behalf of itself and RFC III, and FSB, on behalf of itself and RFC IV, 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. S-46 GLOSSARY OF DEFINED TERMS "ADJUSTED INVESTED AMOUNT" for any date of determination means the sum of the Class A Adjusted Invested Amount and the Class B Adjusted Invested Amount and the Collateral Invested Amount as of such date. "AVAILABLE PRINCIPAL COLLECTIONS" means, with respect to any Monthly Period, an amount equal to the sum of: (i) the Principal Allocation Percentage of the Series Allocation Percentage of all collections of principal receivables received during such Monthly Period (minus certain Reallocated Principal Collections used to fund the Class A Required Amount and the Class B Required Amount), (ii) any Shared Principal Collections with respect to other principal sharing series that are allocated to Series 200[_]-[_], and (iii) certain other amounts which pursuant to the Series 200[_]-[_] supplement are to be treated as Available Principal Collections with respect to the related Distribution Date. "AVAILABLE RESERVE ACCOUNT AMOUNT" means, on each Distribution 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) and the Required Reserve Account Amount for such Distribution Date. "BASE RATE" means, for any Monthly Period, the annualized percentage equivalent (which percentage shall never exceed 100%) of a fraction: o the numerator of which is equal to the sum of the Class A Monthly Interest, the Class B Monthly Interest (calculated as if the Class B Invested Amount equals the outstanding principal balance of the Class B certificates), the Collateral Minimum Monthly Interest and the Monthly Servicing Fee for the Series 200[_]-[_] certificates and for the Collateral Interest for the related Distribution Date, and o the denominator of which is the Invested Amount as of the last day of the preceding Monthly Period. "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 banking institutions in New York, New York or any other state in which the principal executive offices of Centurion, FSB, any other account owner or the trustee are located, are authorized or are obligated by law or executive order to be closed. "CLASS A ADDITIONAL INTEREST" means an amount paid on each Distribution Date, if applicable, equal to the product of: (i) the actual number of days in the related Interest Period divided by 360, (ii) the Class A certificate rate for that Interest Period plus 2.0% per year, and S-47 (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 Class A Invested Amount minus the funds on deposit in the Principal Funding Account (up to the Class A Invested Amount) on such date. "CLASS A AVAILABLE FUNDS" means, with respect to any Monthly Period, an amount equal to the sum of: (i) the Class A Floating Percentage of Reallocated Investor Finance Charge Collections allocated to the Series 200[_]-[_] certificates and the Collateral Interest with respect to such Monthly Period (including any investment earnings and certain other amounts that are to be treated as collections of finance charge receivables allocable to Series 200[_]-[_] in accordance with the pooling and servicing agreement and the Series 200[_]- [_] supplement), (ii) if such Monthly Period relates to a Distribution Date with respect to the Controlled Accumulation Period, the Class A Floating Percentage of net investment earnings, if any, in the Principal Funding Account for such Distribution Date, and (iii) amounts, if any, to be withdrawn from the Reserve Account that must be included in Class A Available Funds pursuant to the Series 200[_]-[_] supplement with respect to the related Distribution Date. "CLASS A FLOATING PERCENTAGE" means, with respect to any Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: o 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, with respect to the first Monthly Period, the Class A Initial Invested Amount), and o the denominator of which is equal to the Adjusted Invested Amount as of the close of business on such day (or, with respect to 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. S-48 "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 Distribution Date. "CLASS A MONTHLY INTEREST" means, for any Distribution Date, an amount equal to the product of: (i) the actual number of days in the related Interest Period divided by 360, (ii) the Class A certificate rate in effect for that Interest Period, and (iii) the outstanding principal amount of the Class A certificates as of the preceding Record Date; provided, however, that 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 initial Interest Period. "CLASS A OUTSTANDING MONTHLY INTEREST" means, for any Distribution Date, the amount of Class A Monthly Interest previously due but not paid to Class A certificateholders on a prior Distribution Date. "CLASS A PRINCIPAL PERCENTAGE" means, with respect to any Monthly Period: o during the Revolving Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: (i) the numerator of which is the Class A Invested Amount as of the last day of the immediately preceding Monthly Period (or, with respect to the first Monthly Period, the Class A Initial Invested Amount), and (ii) the denominator of which is the Invested Amount as of such day (or, with respect to the first Monthly Period, the Initial Invested Amount), and o during the Controlled Accumulation Period or the Early Amortization Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: (i) the numerator of which is the Class A Invested Amount as of the end of the Revolving Period, and (ii) the denominator of which is the Invested Amount as of such 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) if TRS or an affiliate is no longer the servicer, the Class A Servicing Fee for the related Distribution Date and any unpaid Class A Servicing Fee, plus S-49 (v) the Class A Investor Default Amount, if any, for the related Distribution Date, minus (vi) Class A Available Funds for the related Monthly Period. "CLASS A SERVICING FEE" has the meaning described in "Series Provisions--Servicing Compensation and Payment of Expenses" in this prospectus supplement. "CLASS B ADDITIONAL INTEREST" means an amount paid on each Distribution Date, if applicable, equal to the product of: (i) the actual number of days in the related Interest Period divided by 360, (ii) the Class B certificate rate for that Interest Period plus 2.0% per year, 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 Class B Invested Amount minus the funds on deposit in the Principal Funding Account (up to the Class B Invested Amount) on such date. "CLASS B AVAILABLE FUNDS" means, with respect to any Monthly Period, an amount equal to the sum of: (i) the Class B Floating Percentage of Reallocated Investor Finance Charge Collections allocated to the Series 200[_]-[_] certificates and the Collateral Interest with respect to such Monthly Period (including any investment earnings and certain other amounts that are to be treated as collections of finance charge receivables allocable to Series 200[_]-[_] in accordance with the pooling and servicing agreement and the Series 200[_]- [_] supplement), and (ii) if such Monthly Period relates to a Distribution Date with respect to the Controlled Accumulation Period, the Class B Floating Percentage of net investment earnings, if any, in the Principal Funding Account for such Distribution Date. "CLASS B FLOATING PERCENTAGE" means, with respect to any Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: o 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, with respect to the first Monthly Period, the Class B Initial Invested Amount), and o the denominator of which is equal to the Adjusted Invested Amount as of the close of business on such day (or, with respect to 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 S-50 (iii) the aggregate amount of Class B Investor Charge-Offs for all prior Distribution Dates, 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 with respect to such Distribution Dates (excluding any Reallocated Principal Collections that have resulted in a reduction of the Collateral Invested Amount), minus (v) an amount equal to the amount by which the Class B Invested Amount has been reduced to cover 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 Charge Collections allocated to Series 200[_]-[_] 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--Reductions in Class B Invested Amount and Collateral Invested Amount" 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 Distribution Date. "CLASS B MONTHLY INTEREST" means, for any Distribution Date, an amount equal to the product of: (i) the actual number of days in the related Interest Period divided by 360, (ii) the Class B certificate rate in effect for that Interest Period, and (iii) the Class B Invested Amount as of the preceding Record Date; provided, however, that 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 initial Interest Period. "CLASS B OUTSTANDING MONTHLY INTEREST" means, for any Distribution Date, the amount of Class B Monthly Interest previously due but not paid to Class B certificateholders on a prior Distribution Date. "CLASS B PRINCIPAL PERCENTAGE" means, with respect to any Monthly Period: o during the Revolving Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: (i) the numerator of which is the Class B Invested Amount as of the last day of the immediately preceding Monthly Period (or, with respect to the first Monthly Period, the Class B Initial Invested Amount), and S-51 (ii) the denominator of which is the Invested Amount as of such day (or, with respect to the first Monthly Period, the Initial Invested Amount), and o during the Controlled Accumulation Period or the Early Amortization Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: (i) the numerator of which is the Class B Invested Amount as of the end of the Revolving Period, and (ii) the denominator of which is the Invested Amount as of such day. "CLASS B REQUIRED AMOUNT" means, for any Determination Date, the amount equal to: (i) Class B Monthly Interest for the related Distribution Date, plus (ii) any Class B Outstanding Monthly Interest, plus (iii) any Class B Additional Interest, plus (iv) if TRS or an affiliate is no longer the servicer, the Class B Servicing Fee for the related Distribution Date and any unpaid Class B Servicing Fee, plus (v) the Class B Investor Default Amount, if any, for the related Distribution Date, minus (vi) Class B Available Funds 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 ADDITIONAL INTEREST" means, for any Distribution Date, additional interest on Collateral Minimum Monthly Interest due but not paid to the holder of the Collateral Interest on a prior Distribution Date at a rate equal to the Collateral Minimum Interest Rate. "COLLATERAL AVAILABLE FUNDS" means, for any Monthly Period, an amount equal to the Collateral Floating Percentage of Reallocated Investor Finance Charge Collections (including any investment earnings and certain other amounts that are to be treated as collections of finance charge receivables allocable to Series 200[_]-[_] in accordance with the pooling and servicing agreement and the Series 200[_]-[_] supplement). "COLLATERAL CHARGE-OFF" has the meaning described in "Series Provisions--Defaulted Receivables; Investor Charge-Offs--Reductions in Class B Invested Amount and Collateral Invested Amount" in this prospectus supplement. "COLLATERAL DEFAULT AMOUNT" means, with respect to any Distribution Date, the product of the Investor Default Amount for such Distribution Date and the Collateral Floating Percentage. "COLLATERAL FLOATING PERCENTAGE" means, with respect to any Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: S-52 o the numerator of which is equal to the Collateral Invested Amount as of the close of business on the last day of the preceding Monthly Period (or, with respect to the first Monthly Period, the Collateral Initial Invested Amount), and o the denominator of which is equal to the Adjusted Invested Amount as of the close of business on such day (or, with respect to the first Monthly Period, the Initial Invested Amount). "COLLATERAL INITIAL INVESTED AMOUNT" means $[_______]. "COLLATERAL INTEREST" means an uncertificated interest in the trust assets that is subordinated to, and serves as credit enhancement for, the Series 200[_]-[_] certificates. "COLLATERAL INTEREST SERVICING FEE" has the meaning described in "Series Provisions--Servicing Compensation and Payment of Expenses" in this prospectus supplement. "COLLATERAL INVESTED AMOUNT" for any date of determination means an amount equal to: (i) the Collateral Initial Invested Amount, minus (ii) the amount of principal payments made to the holder of the Collateral Interest on or prior to such date, minus (iii) the aggregate amount of Collateral Charge-Offs for all prior Distribution Dates, minus (iv) the aggregate amount of Reallocated Principal Collections for all prior Distribution Dates, minus (v) an amount equal to the amount by which the Collateral Invested Amount has been reduced to cover the Class A Investor Default Amount and the Class B 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 Charge Collections allocated to Series 200[_]-[_] 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 Collateral Invested Amount may not be reduced below zero. "COLLATERAL MINIMUM INTEREST RATE" means an annual rate specified in the agreement among RFC II, RFC III, RFC IV, TRS and the holder of the Collateral Interest relating to the transfer of the Collateral Interest from RFC II, RFC III and RFC IV to the holder of the Collateral Interest, which rate will not exceed LIBOR for one-month United States dollar deposits, determined as of the related LIBOR Determination Date, plus [__]%. "COLLATERAL MINIMUM MONTHLY INTEREST" means, for any Distribution Date, an amount equal to the product of: (i) the actual number of days in the related Interest Period divided by 360, S-53 (ii) the Collateral Minimum Interest Rate in effect for that Interest Period, and (iii) the Collateral Initial Invested Amount minus the aggregate amount of principal payments made to the holder of the Collateral Interest on all prior Distribution Dates. "COLLATERAL PRINCIPAL PERCENTAGE" means, with respect to any Monthly Period: o during the Revolving Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: (i) the numerator of which is the Collateral Invested Amount as of the last day of the immediately preceding Monthly Period (or, with respect to the first Monthly Period, the Collateral Initial Invested Amount), and (ii) the denominator of which is the Invested Amount as of such day (or, with respect to the first Monthly Period, the Initial Invested Amount), and o during the Controlled Accumulation Period or the Early Amortization Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: (i) the numerator of which is the Collateral Invested Amount as of the end of the Revolving Period, and (ii) the denominator of which is the Invested Amount as of such day. "CONTROLLED ACCUMULATION AMOUNT" means $[_________]; provided, however, that, if the start of the Controlled Accumulation Period is delayed and, therefore, the length of the Controlled Accumulation Period is shortened as described under "Series Provisions--Principal Payments" in this prospectus supplement, the Controlled Accumulation Amount may be different for each Distribution Date for the Controlled Accumulation Period and will be determined by the servicer in accordance with the Series 200[_]-[_] supplement based on the principal payment rates for the accounts and on the invested amounts of other principal sharing series that are scheduled to be in their revolving periods and able to create Shared Principal Collections during the Controlled Accumulation Period. "CONTROLLED DEPOSIT AMOUNT" means, for any Distribution Date relating to the Controlled Accumulation Period, an amount equal to the sum of the Controlled Accumulation Amount for such Distribution Date and any Deficit Controlled Accumulation Amount for the immediately preceding Distribution Date. "COVERED AMOUNT" means, for any Distribution Date with respect to the Controlled Accumulation Period or the first Special Payment Date, if such Special Payment Date occurs prior to the payment in full of the Class A Invested Amount, an amount equal to the sum of: (i) the product of: (a) the actual number of days in the related Interest Period divided by 360, (b) the Class A certificate rate in effect for that Interest Period, and S-54 (c) the aggregate amount on deposit in the Principal Funding Account, if any, as of the preceding Distribution Date that is allocable to the principal of the Class A certificates, plus (ii) the product of: (a) the actual number of days in the related Interest Period divided by 360, (b) the Class B certificate rate in effect for that Interest Period, and (c) the aggregate amount on deposit in the Principal Funding Account, if any, as of the preceding Distribution Date that is allocable to the principal of the Class B certificates. "DEFICIT CONTROLLED ACCUMULATION AMOUNT" means: (a) on the first Distribution Date for the Controlled Accumulation Period, the excess, if any, of the Controlled Accumulation Amount for such Distribution Date over the amount deposited in the Principal Funding Account on such Distribution Date, and (b) on each subsequent Distribution Date for the Controlled Accumulation Period, the excess, if any, of the Controlled Deposit Amount for such subsequent Distribution Date over the amount deposited in the Principal Funding Account on such subsequent Distribution Date. "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. "EXPECTED FINAL PAYMENT DATE" means the [_________] Distribution Date. "FLOATING ALLOCATION PERCENTAGE" means, with respect to any Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: o the numerator of which is the Adjusted Invested Amount as of the last day of the preceding Monthly Period (or, with respect to the first Monthly Period, the Initial Invested Amount), and o the denominator of which is the product of: (i) the sum of the total amount of the principal receivables in the trust as of such day (or, with respect to the first Monthly Period, the total amount of principal receivables in the trust on the closing date) and the principal amount on deposit in the Special Funding Account, and (ii) the Series Allocation Percentage for such Monthly Period. 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 and decreased by the aggregate amount of principal receivables in Additional Accounts removed from the trust during such Monthly Period, as though such receivables had been added to or removed from, as the case may be, the trust as of the first day of such Monthly Period. S-55 "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 closing date to but excluding the [___________] Distribution Date. "INVESTED AMOUNT" for any date of determination means an amount equal to the sum of the Class A Invested Amount as of such date, the Class B Invested Amount as of such date and the Collateral Invested Amount as of such date. "INVESTOR DEFAULT AMOUNT" means, for any Distribution Date, the product of (i) the Floating Allocation Percentage for the related Monthly Period and (ii) the Series Allocable Defaulted Amount for such Monthly Period. "LIBOR" means, as of any LIBOR Determination Date, the rate for deposits in United States dollars for a one-month 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 in the London interbank market for a one-month period (commencing on the first day of the relevant Interest Period). The servicer will request the principal London office of each of the reference banks to provide a quotation of its rate. If at least two quotations are provided, the rate for that LIBOR Determination Date will be the arithmetic mean of such quotations. If fewer than two quotations are provided, the rate for that LIBOR Determination Date will be the arithmetic mean of the rates quoted by major banks in New York City, selected by the servicer, at approximately 11:00 a.m., New York City time, on that day for loans in United States dollars to leading European banks for a one-month period (commencing on the first day of the relevant Interest Period). If the banks selected by the servicer are not quoting rates as provided in the immediately preceding sentence, LIBOR for such Interest Period will be LIBOR for the immediately preceding Interest Period. "LIBOR DETERMINATION DATE" means, for each of the Class A certificate rate, the Class B certificate rate and the Collateral Minimum Interest Rate, (i) for the initial Interest Period, the second London business day prior to the closing 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 RECEIVABLES PERCENTAGE" means, for any day, the percentage equivalent of a fraction: o the numerator of which is an amount equal to the sum of the aggregate amount of principal receivables outstanding in the trust attributable to the transferor or the account owner with respect to which an insolvency event has occurred or to the transferor that is unable to transfer receivables to the trust, and o the denominator of which is an amount equal to the sum of the aggregate amount of principal receivables outstanding in the trust, S-56 in each case as of the last day of the immediately preceding Monthly Period. "MONTHLY SERVICING FEE" has the meaning described in "Series Provisions--Servicing Compensation and Payment of Expenses" in this prospectus supplement. "PRINCIPAL ALLOCATION PERCENTAGE" means, with respect to any Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: o the numerator of which is: (i) during the Revolving Period, the Series Adjusted Invested Amount for Series 200[_]-[_] as of the last day of the immediately preceding Monthly Period (or, with respect to the first Monthly Period, the Initial Invested Amount), and (ii) during the Controlled Accumulation Period or the Early Amortization Period, the Series Adjusted Invested Amount for Series 200[_]-[_] as of the last day of the Revolving Period, and o the denominator of which is the product 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 Special Funding Account as of such last day (or, with respect to the first Monthly Period, as of the closing date), and (ii) the Series Allocation Percentage for Series 200[_]-[_] as of the last day of the immediately preceding Monthly Period. 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 and decreased by the aggregate amount of principal receivables in Additional Accounts removed from the trust during such Monthly Period, as though such receivables had been added to or removed from, as the case may be, the trust as of the first day of such Monthly Period. Because the Series 200[_]-[_] certificates are subject to being paired with a future series, if a Pay-Out Event or a Reinvestment Event occurs with respect to a paired series during the Controlled Accumulation Period for Series 200[_]-[_], the transferors may, by written notice 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 transferors shall have received written notice from each Rating Agency that such designation will satisfy the Rating Agency Condition and shall have delivered copies of each such written notice to the servicer and the trustee. In addition, each transferor 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 transferor, such designation will not cause a Pay-Out Event or an event that, after the giving of notice or lapse of time, would constitute a Pay-Out Event, to occur with respect to Series 200[_]-[_]. "PRINCIPAL FUNDING ACCOUNT" means the account established as described under "Series Provisions--Principal Funding Account" in this prospectus supplement. S-57 "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 Charge Collections allocated to Series 200[_]-[_] and available for such purpose have been used to fund the Class A Required Amount and the Class B Required Amount. "RECORD DATE" means, for any Distribution Date, the last day of the calendar month immediately preceding that Distribution Date. "REQUIRED RESERVE ACCOUNT AMOUNT" for any Distribution Date on or after the Reserve Account must be funded will be equal to: (i) [__]% of the Class A 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 transferors, provided that the holder of the Collateral Interest shall have consented to such designation and such designation satisfies the Rating Agency Condition. "SERIES 200[_]-[_]" means the series of Class A certificates, Class B certificates and Collateral Interest, the terms of which are described in this prospectus supplement and the accompanying prospectus. "SERIES 200[_]-[_] TERMINATION DATE" means the [_________] Distribution Date. "SERIES ADJUSTED INVESTED AMOUNT" means, with respect to Series 200[_]-[_], for any Monthly Period, the Initial Invested Amount for Series 200[_]-[_], less the excess, if any, of all reductions in the Invested Amount (other than any reductions occasioned by payments of principal to the Series 200[_]-[_] certificateholders or to the holder of the Collateral Interest) as of the last day of the preceding Monthly Period over the aggregate amount of any reimbursement of such reductions as of such last day. "SERIES ADJUSTED PORTFOLIO YIELD" means, for any Monthly Period, the annualized percentage equivalent of a fraction: o the numerator of which is equal to: (i) Reallocated Investor Finance Charge Collections (including any investment earnings and certain other amounts that are to be treated as collections of finance charge receivables allocable to Series 200[_]-[_] in accordance with the pooling and servicing agreement) for such Monthly Period, plus (ii) the amount of investment earnings, if any, in the Principal Funding Account for the related Distribution Date, plus (iii) any Excess Finance Charge Collections that are allocated to Series 200[_]-[_], plus (iv) the amount of funds withdrawn from the Reserve Account and which are required to be deposited into the Collection Account and included as Class A Available Funds for the Distribution Date for such Monthly Period, minus S-58 (v) the Investor Default Amount for the Distribution Date for such Monthly Period, and o the denominator of which is the Invested Amount as of the last day of the preceding Monthly Period. "SERIES ALLOCABLE FINANCE CHARGE COLLECTIONS," "SERIES ALLOCABLE PRINCIPAL COLLECTIONS" and "SERIES ALLOCABLE DEFAULTED AMOUNT" mean, with respect to Series 200[_]-[_], for any Monthly Period, the product of (i) the Series Allocation Percentage for Series 200[_]-[_] and (ii) the amount of collections of finance charge receivables deposited in the Collection Account, the amount of collections of principal receivables deposited in the Collection Account and the amount of all Defaulted Amounts with respect to such Monthly Period, respectively. "SERIES ALLOCATION PERCENTAGE" means, with respect to Series 200[_]-[_], for any Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction, the numerator of which is the Series Adjusted Invested Amount for Series 200[_]-[_] as of the last day of the immediately preceding Monthly Period and the denominator of which is the Trust Adjusted Invested Amount. "SERIES REQUIRED TRANSFEROR AMOUNT" for any date of determination means [_]% of the Invested Amount. "SERVICING BASE AMOUNT" means, for any Distribution Date, (i) the Adjusted Invested Amount as of the last day of the Monthly Period preceding such Distribution Date, minus (ii) the product of the amount, if any, on deposit in the Special Funding Account as of the last day of the Monthly Period preceding such Distribution Date and the Series Allocation Percentage with respect to such Monthly Period. "SERVICING FEE RATE" means 2.0% per year. "TELERATE PAGE 3750" means the display page currently so designated on the Moneyline Telerate Service (or such other page as may replace that page on that service for the purpose of displaying comparable rates or prices). "TRUST PORTFOLIO" means certain accounts selected from the Total Portfolio and designated for the trust based on the eligibility criteria specified in the purchase agreements and the pooling and servicing agreement. S-59 [This page intentionally left blank] ANNEX I OTHER SERIES The information provided in this Annex I is an integral part of the prospectus supplement. The table below sets forth the principal characteristics of all other series issued by the trust and currently outstanding. [The total Invested Amount for all outstanding series is $[__________].] SERIES 2001-2 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$250,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$216,250,000 Class A Certificate Rate. . . . . . . . . . . . . . . . . . . . .5.53% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $15,000,000 Class B Certificate Rate. . . . . . . . . . . . . . . . . . . . .5.83% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$19,270,834.34 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . . March 1, 2005 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $18,750,000 Enhancement for the Class A and Class B Certificates. . . . Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . .March 2006 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . .March 23, 2001 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Group I SERIES 2001-3 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$750,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$618,750,000 Class A Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.13% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $60,000,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.38% per year Controlled Accumulation Amount (subject to adjustment). . . . . . . $56,562,500 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . . March 1, 2005 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $71,250,000 Enhancement for the Class A and Class B Certificates. . . . Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . .March 2006 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . . April 3, 2001 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II A-I-1 SERIES 2001-4 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$725,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$598,125,000 Class A Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.13% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $58,000,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.38% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$54,677,083.34 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . . April 1, 2005 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $68,875,000 Enhancement for the Class A and Class B Certificates. . . . Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . .April 2006 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . .April 19, 2001 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II SERIES 2001-5 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$500,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$412,500,000 Class A Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.18% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $40,000,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.45% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$37,708,333.34 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . . April 1, 2007 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $47,500,000 Enhancement for the Class A and Class B Certificates. . . . Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . .April 2008 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . . . May 9, 2001 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II A-I-2 SERIES 2001-6 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$700,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$577,500,000 Class A Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.12% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $56,000,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.35% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$52,791,666.67 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . . . May 1, 2005 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $66,500,000 Enhancement for the Class A and Class B Certificates. . . . Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . . .May 2006 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . . June 12, 2001 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II SERIES 2001-7 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$650,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$536,250,000 Class A Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.12% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $52,000,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.36% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$49,020,833.34 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . . .July 1, 2005 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $61,750,000 Enhancement for the Class A and Class B Certificates. . . . Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . . July 2006 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . August 21, 2001 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II A-I-3 SERIES 2002-1 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$920,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$759,000,000 Class A Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.11% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $73,600,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.40% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$69,383,333.34 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . .February 1, 2006 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $87,400,000 Enhancement for the Class A and Class B Certificates. . . . Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . February 2007 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . February 21, 2002 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II SERIES 2002-2 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$940,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$775,500,000 Class A Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.11% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $75,200,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.39% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$70,891,666.67 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . . April 1, 2006 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $89,300,000 Enhancement for the Class A and Class B Certificates. . . . Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . .April 2007 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . .April 25, 2002 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II A-I-4 SERIES 2002-3 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$920,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$759,000,000 Class A Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.11% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $73,600,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.38% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$69,383,333.34 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . . . May 1, 2006 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $87,400,000 Enhancement for the Class A and Class B Certificates. . . . Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . . .May 2007 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . . .May 16, 2002 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II SERIES 2002-5 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$600,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$495,000,000 Class A Certificate Rate. . . . . . . . . ..One-Month LIBOR plus 0.17% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $48,000,000 Class B Certificate Rate. . . . . . . . . ..One-Month LIBOR plus 0.45% per year Controlled Accumulation Amount (subject to adjustment). . . . . . . $45,250,000 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . . .July 1, 2008 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . ..2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $57,000,000 Enhancement for the Class A and Class B Certificates. . . . Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . . July 2009 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . . July 17, 2002 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II A-I-5 SERIES 2002-6 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$720,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$594,000,000 Class A Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.14% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $57,600,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.45% per year Controlled Accumulation Amount (subject to adjustment). . . . . . . $54,300,000 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . .August 1, 2006 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $68,400,000 Enhancement for the Class A and Class B Certificates. . . . Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . August 2007 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . August 15, 2002 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II SERIES 2003-1 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$920,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$759,000,000 Class A Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.11% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $73,600,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.40% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$69,383,333.34 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . .February 1, 2007 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $87,400,000 Enhancement for the Class A and Class B Certificates. . . . Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . February 2008 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . February 20, 2003 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II A-I-6 SERIES 2003-2 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . .$1,100,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$907,500,000 Class A Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.11% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $88,000,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.37% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$82,958,333.34 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . . March 1, 2007 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . .$104,500,000 Enhancement for the Class A and Class B Certificates. . . . Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . .March 2008 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . . April 2, 2003 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II SERIES 2003-3 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$750,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$618,750,000 Class A Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.11% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $60,000,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.35% per year Controlled Accumulation Amount (subject to adjustment). . . . . . . $58,562,500 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . . April 1, 2007 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $71,250,000 Enhancement for the Class A and Class B Certificates. . . . Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . .April 2008 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . . . May 7, 2003 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II A-I-7 SERIES 2003-4 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$680,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$588,200,000 Class A Certificate Rate. . . . . . . . . . . . . . . . . . . . .1.69% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $40,800,000 Class B Certificate Rate. . . . . . . . . . . . . . . . . . . . .1.90% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$52,416,666.67 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . . .June 1, 2005 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $51,000,000 Enhancement for the Class A and Class B Certificates. . . . Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . . June 2006 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . . June 18, 2003 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Group I SERIES 2004-1 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$800,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$668,000,000 Class A Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.08% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . .$ 60,000,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.25% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$60,666,666.67 Approximate Commencement of Controlled Accumulation Period (subject to adjustment). . . . . . . . . . . . . . . . .February 1, 2008 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $72,000,000 Enhancement for the Class A and Class B Certificates.Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . February 2009 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . . March 1, 2004 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II A-I-8 SERIES 2004-2 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$400,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$334,000,000 Class A Certificate Rate. . . . . . . . . . One-month LIBOR plus 0.17% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $30,000,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.37% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$30,333,333.34 Approximate Commencement of Controlled Accumulation Period (subject to adjustment). . . . . . . . . . . . . . . . . . . May 1, 2013 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $36,000,000 Enhancement for the Class A and Class B Certificates.Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . . .May 2014 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . . .June 2, 2004 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II SERIES 2004-3 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$600,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$522,000,000 Class A Certificate Rate. . . . . . . . . . . . . . . . . . . . .4.35% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $30,000,000 Class B Certificate Rate. . . . . . . . . . . . . . . . . . . . .4.55% per year Controlled Accumulation Amount (subject to adjustment). . . . . . . $46,000,000 Approximate Commencement of Controlled Accumulation Period (subject to adjustment). . . . . . . . . . . . . . . . . . . May 1, 2008 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $48,000,000 Enhancement for the Class A and Class B Certificates.Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . . .May 2009 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . . .June 2, 2004 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Group I A-I-9 SERIES 2004-4 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . .$1,100,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$918,500,000 Class A Certificate Rate. . . . . . . . . . One-month LIBOR plus 0.09% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $82,500,000 Class B Certificate Rate. . . . . . . . . . One-month LIBOR plus 0.28% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$83,416,666.67 Approximate Commencement of Controlled Accumulation Period (subject to adjustment). . . . . . . . . . . . . . . . . .August 1, 2008 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $99,000,000 Enhancement for the Class A and Class B Certificates.Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . August 2009 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . August 17, 2004 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II SERIES 2004-5 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . .$1,000,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$835,000,000 Class A Certificate Rate. . . . . . . . . . One-month LIBOR plus 0.09% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $75,000,000 Class B Certificate Rate. . . . . . . . . . One-month LIBOR plus 0.25% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$75,833,333.34 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . September 1, 2008 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $90,000,000 Enhancement for the Class A and Class B Certificates.Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . .September 2009 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . .September 23, 2004 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II A-I-10 SERIES 2005-1 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$600,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$501,000,000 Class A Certificate Rate. . . . . . . . . . One-month LIBOR plus 0.03% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $45,000,000 Class B Certificate Rate. . . . . . . . . . One-month LIBOR plus 0.12% per year Controlled Accumulation Amount (subject to adjustment). . . . . . . $45,500,000 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . . March 1, 2009 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $54,000,000 Enhancement for the Class A and Class B Certificates.Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . .March 2010 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . .March 24, 2005 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II SERIES 2005-2 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$600,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$501,000,000 Class A Certificate Rate. . . . . . . . . . One-month LIBOR plus 0.10% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $45,000,000 Class B Certificate Rate. . . . . . . . . . One-month LIBOR plus 0.28% per year Controlled Accumulation Amount (subject to adjustment). . . . . . . $45,500,000 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . . March 1, 2014 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $54,000,000 Enhancement for the Class A and Class B Certificates.Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . .March 2015 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . .March 24, 2005 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II A-I-11 SERIES 2005-3 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$700,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$584,500,000 Class A Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.00% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $52,500,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.14% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$53,083,333.34 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . . .June 1, 2007 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $63,000,000 Enhancement for the Class A and Class B Certificates.Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . . June 2008 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . . June 17, 2005 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II SERIES 2005-4 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$500,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$417,500,000 Class A Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.07% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $37,500,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.25% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$37,916,666.67 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . . .June 1, 2011 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $45,000,000 Enhancement for the Class A and Class B Certificates.Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . . June 2012 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . . June 17, 2005 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II A-I-12 SERIES 2005-5 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . .$1,100,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$918,500,000 Class A Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.04% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $82,500,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.18% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$83,416,666.67 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . . .July 1, 2009 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $99,000,000 Enhancement for the Class A and Class B Certificates.Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . . July 2010 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . . July 21, 2005 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II SERIES 2005-6 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$700,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$584,500,000 Class A Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.00% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $52,500,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.14% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$53,083,333.34 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . .August 1, 2007 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $63,000,000 Enhancement for the Class A and Class B Certificates.Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . August 2008 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . August 18, 2005 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II A-I-13 SERIES 2005-7 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$700,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$584,500,000 Class A Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.07% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $52,500,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.27% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$53,083,333.34 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . .August 1, 2011 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $63,000,000 Enhancement for the Class A and Class B Certificates.Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . . August 2012 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . . August 18, 2005 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II SERIES 2005-8 Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$500,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$417,500,000 Class A Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.03% per year Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $37,500,000 Class B Certificate Rate. . . . . . . . . . One-Month LIBOR plus 0.17% per year Controlled Accumulation Amount (subject to adjustment). . . . . .$37,916,666.67 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . .November 1, 2009 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $45,000,000 Enhancement for the Class A and Class B Certificates.Collateral Invested Amount Other enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . November 2010 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . November 22, 2005 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II A-I-14 SERIES 2006-A Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$700,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$584,500,000 Class A Certificate Rate. . . . . . . . . . . . . . . . . . . . . Floating Rate Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $52,500,000 Class B Certificate Rate. . . . . . . . . . . . . . . . . . . . . Floating Rate Controlled Accumulation Amount (subject to adjustment). . . . . .$53,083,333.34 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . January 1, 2008 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $63,000,000 Enhancement for the Class A and Class B Certificates.Collateral Invested Amount Other Enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . .January 2009 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . February 15, 2006 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II SERIES 2006-B Initial Invested Amount . . . . . . . . . . . . . . . . . . . . . .$700,000,000 Class A Initial Invested Amount . . . . . . . . . . . . . . . . . .$584,500,000 Class A Certificate Rate. . . . . . . . . . . . . . . . . . . . . Floating Rate Class B Initial Invested Amount . . . . . . . . . . . . . . . . . . $52,500,000 Class B Certificate Rate. . . . . . . . . . . . . . . . . . . . . Floating Rate Controlled Accumulation Amount (subject to adjustment). . . . . .$53,083,333.34 Approximate Commencement of Controlled Accumulation Period (subject to adjustment) . . . . . . . . . . . . . . . . . . . . January 1, 2010 Annual Servicing Fee Percentage . . . . . . . . . . . . . . . . . 2.0% per year Collateral Initial Invested Amount. . . . . . . . . . . . . . . . . $63,000,000 Enhancement for the Class A and Class B Certificates.Collateral Invested Amount Other Enhancement for the Class A Certificates. . .Subordination of the Class B Certificates Expected Final Payment Date . . . . . . . . . . .January 2011 Distribution Date Series Issuance Date. . . . . . . . . . . . . . . . . . . . . February 15, 2006 Principal Sharing Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Excess Allocation Series. . . . . . . . . . . . . . . . . . . . . . . . . . Yes Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Group II A-I-15 ANNEX II STATIC POOL INFORMATION The information in this Annex II forms an integral part of the prospectus supplement. The following tables present charge-off, delinquency, payment rate and revenue experience of the Total Portfolio. The Total Portfolio is comprised of American Express credit cards and Sign & Travel/Extended Payment Option consumer revolving credit accounts or features owned by Centurion and FSB. Data is presented in separate increments based on the year of origination of the accounts, each an "Origination Segment." Data is presented for accounts that were originated in 2001 or thereafter. Data for origination years prior to 2001 is not presented, since such data is not available and could not be obtained without unreasonable effort or expense. As of [_____], [___], the accounts reflected in the following tables had receivables outstanding that were approximately [__]% of the total receivables outstanding in the Total Portfolio at such date. As used in the tables, the date of origination is generally either the date the account became effective or was first used. The account aging shows activity through the indicated age of the account (e.g., 0-12 months, 13-24 months), which is referred to in this Annex II as the "performance period." In the following tables, highlighted data is based on a full 12 months of activity for all accounts in the applicable Origination Segment and, therefore, will not change in future disclosures. The data that is not highlighted will change in future disclosures and, in some cases, will reflect activity in an account for less than 12 full months, depending on when the account is originated and when the data for that disclosure is generated. For periods prior to January 1, 2006, activity in a particular account for a particular month reflects activity that occurred within such account's monthly billing cycle, resulting in different end dates during a month for which activity is presented, since there are ten different monthly billing cycles. For periods after January 1, 2006, activity in all accounts reflects activity in the relevant Monthly Period. As a result of this change, for accounts whose monthly billing cycle end date was prior to December 25, 2005, data will not be presented for those days subsequent to such account's monthly billing cycle end date and December 25, 2005, the first date in the January 2006 Monthly Period. Because the Trust Portfolio is only a portion of the Total Portfolio, the actual performance of the receivables in the Trust Portfolio may be different from the performance reflected in the tables below. There can be no assurance that the performance of receivables in the future will be similar to the historical experience set forth below. GROSS CHARGE-OFF RATE OF THE TOTAL PORTFOLIO AS OF DATE: ________________
0-12 13-24 25-36 37-48 49-60 >=61 ORIGINATION YEAR MONTHS MONTHS MONTHS MONTHS MONTHS MONTHS ------ ------ ------ ------ ------ ------ 2006 ORIGINATION ......................................................... % 2005 ORIGINATION ......................................................... % % 2004 ORIGINATION ......................................................... % % % 2003 ORIGINATION ......................................................... % % % % 2002 ORIGINATION ......................................................... % % % % % 2001 ORIGINATION ......................................................... % % % % % %
A-II-1 [The data will also be presented in graphical format.] Total gross charge-offs for any Origination Segment include charge-offs of principal, finance charges and certain fees, but do not include the amount of any reductions in principal receivables due to a rebate, refund, error, fraudulent charge or other miscellaneous adjustment described under "The Pooling and Servicing Agreement Generally--Defaulted Receivables; Rebates and Fraudulent Charges" in the accompanying base prospectus. The gross charge-off rate, which is an annualized percentage, results from dividing total gross charge-offs by the average month-end receivables for each month in the applicable performance period, which is referred to in this Annex II as the "average receivables outstanding." Historical data for total gross charge-offs as reported with respect to the Trust Portfolio (i) unlike the calculation of total gross charge-offs above, does not include charge-offs of finance charges or fee receivables and (ii) is calculated using the average principal receivables outstanding instead of the average receivables outstanding. As a result, there are limitations to any comparison of the historical data presented in this prospectus supplement and the static pool data presented in the table above. NET CHARGE-OFF RATE OF THE TOTAL PORTFOLIO AS OF DATE: ________________
0-12 13-24 25-36 37-48 49-60 >=61 ORIGINATION YEAR MONTHS MONTHS MONTHS MONTHS MONTHS MONTHS ------ ------ ------ ------ ------ ------ 2006 ORIGINATION ......................................................... % 2005 ORIGINATION ......................................................... % % 2004 ORIGINATION ......................................................... % % % 2003 ORIGINATION ......................................................... % % % % 2002 ORIGINATION ......................................................... % % % % % 2001 ORIGINATION ......................................................... % % % % % %
[The data will also be presented in graphical format.] Total net charge-offs for any Origination Segment are an amount equal to total gross charge-offs minus total recoveries. The net charge-off rate, which is an annualized percentage, results from dividing total net charge-offs by the average receivables outstanding. Historical data for total net charge-offs as reported with respect to the Trust Portfolio in this prospectus supplement is calculated using the average principal receivables outstanding instead of the average receivables outstanding. As a result, there are limitations to any comparison of the historical data presented in this prospectus supplement and the static pool data presented in the tables above. A-II-2 30 DAYS+ DELINQUENCY RATE OF THE TOTAL PORTFOLIO AS OF DATE: ________________
0-12 13-24 25-36 37-48 49-60 >=61 ORIGINATION YEAR MONTHS MONTHS MONTHS MONTHS MONTHS MONTHS ------ ------ ------ ------ ------ ------ 2006 ORIGINATION ......................................................... % 2005 ORIGINATION ......................................................... % % 2004 ORIGINATION ......................................................... % % % 2003 ORIGINATION ......................................................... % % % % 2002 ORIGINATION ......................................................... % % % % % 2001 ORIGINATION ......................................................... % % % % % %
[The data will also be presented in graphical format.] The 30 Days+ Delinquency Rate (i.e., accounts 31 days or more delinquent) is the result of dividing the average of the month-end delinquent amounts for each month in the applicable performance period by the average receivables outstanding. ACCOUNT HOLDER MONTHLY PAYMENT RATE OF THE TOTAL PORTFOLIO AS OF DATE: ________________
0-12 13-24 25-36 37-48 49-60 >=61 ORIGINATION YEAR MONTHS MONTHS MONTHS MONTHS MONTHS MONTHS ------ ------ ------ ------ ------ ------ 2006 ORIGINATION ......................................................... % 2005 ORIGINATION ......................................................... % % 2004 ORIGINATION ......................................................... % % % 2003 ORIGINATION ......................................................... % % % % 2002 ORIGINATION ......................................................... % % % % % 2001 ORIGINATION ......................................................... % % % % % %
[The data will also be presented in graphical format.] The monthly payment rate results from dividing total collections received (excluding recoveries on charged-off receivables) during each month by that month's opening total receivables balance. Historical data for the monthly principal payment rate as reported with respect to the Trust Portfolio (i) unlike the calculation of monthly payment rate above includes collections of principal receivables only and (ii) is calculated using that month's opening principal receivables balance. As a result, there are limitations to any comparison of the historical data presented in this prospectus supplement and the static pool data presented in the table above. A-II-3 REVENUE EXPERIENCE OF THE TOTAL PORTFOLIO AS OF DATE: ________________
0-12 13-24 25-36 37-48 49-60 >=61 ORIGINATION YEAR MONTHS MONTHS MONTHS MONTHS MONTHS MONTHS ------ ------ ------ ------ ------ ------ 2006 ORIGINATION ......................................................... % 2005 ORIGINATION ......................................................... % % 2004 ORIGINATION ......................................................... % % % 2003 ORIGINATION ......................................................... % % % % 2002 ORIGINATION ......................................................... % % % % % 2001 ORIGINATION ......................................................... % % % % % %
[The data will also be presented in graphical format.] The percentages set forth above, which are annualized percentages, result from dividing total finance charges and fees billed by the average receivables outstanding. Total finance charges and fees billed include periodic finance charges, cash advance fees, annual membership fees, other fees and Issuer Rate Fees. Historical data for revenue experience as reported with respect to the Trust Portfolio (i) unlike the calculation of total finance charges and fees billed above which is based on the related amounts posted to accounts, is calculated based on the related amounts collected on the accounts including recoveries, (ii) is calculated using discount option yield for periods prior to March 26, 2004 and using Issuer Rate Fees for periods after the close of business on March 26, 2004 and (iii) is calculated using the average principal receivables outstanding instead of the average receivables outstanding. As a result, there are limitations to any comparison of the historical data presented in this prospectus supplement and the static pool data presented in the table above. A-II-4 SUBJECT TO COMPLETION, DATED [_____], [_____] Prospectus AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST ISSUING ENTITY AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION II AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION III LLC AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION IV LLC DEPOSITORS AND TRANSFERORS AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC. SERVICER AMERICAN EXPRESS CENTURION BANK AMERICAN EXPRESS BANK, FSB SPONSORS ASSET BACKED CERTIFICATES THE ISSUING ENTITY-- o may periodically issue asset backed certificates in one or more series with one or more classes; and o will own-- -receivables in a portfolio of consumer charge or revolving credit accounts; -payments due on those receivables; and -other property described in this prospectus and in the accompanying prospectus supplement. THE CERTIFICATES-- o will represent interests in the issuing entity and will be paid only from the trust assets; o offered with this prospectus will be rated in one of the four highest rating categories by at least one nationally recognized rating organization; o may have one or more forms of enhancement; and o will be issued as part of a designated series which may include one or more classes of certificates and enhancement. THE CERTIFICATEHOLDERS-- o will receive interest and principal payments from a varying percentage of credit card account collections. NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THE CERTIFICATES OR DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. [________], 200[_] CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE [__] IN THIS PROSPECTUS. A certificate is not a deposit and neither the certificates nor the underlying accounts or receivables are insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. The certificates will represent interests in the issuing entity only and will not represent interests in or obligations of American Express Company or any of its affiliates. This prospectus may be used to offer and sell any series of certificates only if accompanied by the prospectus supplement for that series. The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. The prospectus is not an offer to sell these securities and is not seeking an offer to buy these securities in any jurisdiction where the offer and sale is not permitted. IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT We provide information to you about the certificates in two separate documents that progressively provide more detail: (a) this prospectus, which provides general information about each series of certificates which may be issued by the American Express Credit Account Master Trust, some of which may not apply to your series of certificates, and (b) the accompanying prospectus supplement, which describes the specific terms of your series of certificates, including: o the timing of interest and principal payments; o information about the receivables; o information about credit enhancement, if any, for each class; o the ratings for each class; and o the method for selling the certificates. 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 do not claim the accuracy of the information in this prospectus or the accompanying prospectus supplement as of any date other than the dates stated on their respective covers. We include cross-references in this prospectus and in 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 contain defined terms. You can find a listing of the pages where defined terms in this prospectus are defined under the caption "Glossary of Defined Terms" beginning on page [_] in this prospectus. ------------------- i TABLE OF CONTENTS
PAGE ---- Prospectus Summary ..................................................... 1 Risk Factors ........................................................... 8 Use of Proceeds ........................................................ 21 The Issuing Entity ..................................................... 21 Centurion's and FSB's Revolving Credit Businesses ...................... 23 General ............................................................... 23 Underwriting and Authorization Procedures .......................................................... 24 Billing and Payments .................................................. 25 Collection Efforts .................................................... 26 Issuer Rate Fees ...................................................... 27 RFC II, RFC III, RFC IV, Credco, Centurion, FSB and TRS ................................................ 29 RFC II ................................................................ 29 RFC III ............................................................... 29 RFC IV ................................................................ 30 Centurion ............................................................. 30 FSB ................................................................... 31 TRS ................................................................... 31 Merger or Consolidation of a Transferor or the Servicer ............................................ 32 Assumption of a Transferor's Obligations ........................................................... 32 The Accounts ........................................................... 33 Description of the Certificates ........................................ 35 General ............................................................... 35 Book-Entry Registration ............................................... 35 Definitive Certificates ............................................... 40 Interest .............................................................. 40 Principal ............................................................. 41 Pay-Out Events and Reinvestment Events .............................................................. 43
PAGE ---- Servicing Compensation and Payment of Expenses ................................................. 45 The Pooling and Servicing Agreement Generally ............................................................. 45 Conveyance of Receivables ............................................. 45 Representations and Warranties ........................................ 45 The Transferor Certificates; Additional Transferors .............................................. 48 Additions of Accounts or Participation Interests ............................................. 49 Removal of Accounts ................................................... 50 Discount Option ....................................................... 50 Premium Option ........................................................ 52 Indemnification ....................................................... 53 Collection and Other Servicing Procedures .......................................................... 53 Outsourcing of Servicing .............................................. 54 New Issuances ......................................................... 56 Collection Account .................................................... 57 Deposits in Collection Account ........................................ 57 Allocations ........................................................... 59 Groups of Series ...................................................... 59 Reallocations Among Different Series Within a Reallocation Group ............................................................... 59 Sharing of Excess Finance Charge Collections Among Excess Allocation Series ................................................... 62 Sharing of Principal Collections Among Principal Sharing Series ...................................... 62 Paired Series ......................................................... 63 Special Funding Account ............................................... 63 Funding Period ........................................................ 64
ii
PAGE ---- Defaulted Receivables; Rebates and Fraudulent Charges .............................................. 65 Credit Enhancement .................................................... 65 Servicer Covenants .................................................... 69 Certain Matters Regarding the Servicer ............................................................ 70 Servicer Default ...................................................... 70 Evidence as to Compliance ............................................. 71 Amendments ............................................................ 72 Defeasance ............................................................ 74 List of Certificateholders ............................................ 75 The Trustee ........................................................... 75 Description of the Purchase Agreements ............................................................ 77 Sale of Receivables ................................................... 77 Representations and Warranties ........................................ 78 Repurchase Obligations ................................................ 78 Reassignment of Other Receivables ......................................................... 79 Amendments ............................................................ 80 Termination ........................................................... 80 Certain Legal Aspects of the Receivables ........................................................... 80
PAGE ---- Certain Regulatory Matters ............................................ 80 Consumer Protection Laws .............................................. 81 Recent Litigation ..................................................... 82 Tax Matters ............................................................ 82 Federal Income Tax Consequences--General ............................................... 82 Treatment of theCertificates as Debt .................................. 82 Description of Opinions ............................................... 83 Treatment of the Trust ................................................ 84 Taxation of Interest Income of U.S. Certificate Owners .................................................... 86 Sale or Exchange of Certificates ...................................... 87 Foreign Certificate Owners ............................................ 87 Backup Withholding and Information Reporting ............................................... 88 State and Local Taxation .............................................. 89 ERISA Considerations ................................................... 89 Plan of Distribution ................................................... 93 Legal Matters .......................................................... 94 Reports to Certificateholders .......................................... 94 Where You Can Find More Information ........................................................... 94 Glossary of Defined Terms .............................................. 96
iii PROSPECTUS SUMMARY THIS SUMMARY DOES NOT CONTAIN ALL OF THE INFORMATION YOU MAY NEED TO MAKE AN INFORMED INVESTMENT DECISION. YOU SHOULD READ THE ENTIRE PROSPECTUS AND ANY SUPPLEMENT TO THIS PROSPECTUS BEFORE YOU PURCHASE ANY CERTIFICATES. THE ACCOMPANYING SUPPLEMENT TO THIS PROSPECTUS MAY SUPPLEMENT DISCLOSURE IN THIS PROSPECTUS. RISK FACTORS Investment in the certificates involves risks. You should consider carefully the risk factors beginning on page [__] in this prospectus. THE ISSUING ENTITY American Express Credit Account Master Trust is the issuing entity of the certificates. It was formed in 1996 pursuant to a pooling and servicing agreement. This agreement, as it has been amended and restated as of April 16, 2004 and as further amended from time to time, is among American Express Travel Related Services Company, Inc., as servicer, American Express Receivables Financing Corporation II, American Express Receivables Financing Corporation III LLC and American Express Receivables Financing Corporation IV LLC, as transferors, and The Bank of New York, as trustee. We refer to the American Express Credit Account Master Trust as the "trust" or the "issuing entity." The trust is a master trust under which multiple series of certificates may be issued. The trust issues each series 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 offering. ACCOUNT OWNERS AND SPONSORS The receivables owned by the trust will arise in designated credit or charge accounts owned by American Express Centurion Bank, American Express Bank, FSB or any of their affiliates. CENTURION American Express Centurion Bank, a Utah industrial bank, owns credit card and other credit or charge accounts from which receivables are transferred to American Express Receivables Financing Corporation III LLC. American Express Receivables Financing Corporation III LLC may then, subject to certain conditions, add those receivables to the trust. See "The Pooling and Servicing Agreement Generally--Additions of Accounts or Participation Interests" and "Description of the Purchase Agreements." We refer to American Express Centurion Bank as "Centurion." FSB American Express Bank, FSB, a federal savings bank, owns credit card and other credit or charge accounts from which receivables are transferred to American Express Receivables Financing Corporation IV LLC. American Express Receivables Financing Corporation IV LLC may then, subject to certain conditions, add those receivables to the trust. See "The Pooling and Servicing Agreement Generally--Additions of Accounts or Participation Interests" and "Description of the Purchase Agreements." 1 We refer to American Express Bank, FSB as "FSB" and, together with Centurion, the "account owners." DEPOSITORS AND TRANSFERORS American Express Receivables Financing Corporation III LLC is a limited liability company formed under the laws of the State of Delaware on March 11, 2004. It is a wholly-owned subsidiary of Centurion. RFC III purchases from Centurion receivables arising in credit card and other credit or charge accounts owned by Centurion. RFC III may then, subject to certain conditions, add those receivables to the trust. See "Description of the Purchase Agreements" in this prospectus. American Express Receivables Financing Corporation III LLC structures the issuing entity's transactions. Its address is 4315 South 2700 West, Room 1300, 02-01-04, Salt Lake City, Utah 84184 and its phone number is (801) 945-2030. American Express Receivables Financing Corporation IV LLC is a limited liability company formed under the laws of the State of Delaware on March 11, 2004. It is a wholly-owned subsidiary of FSB. RFC IV purchases from FSB receivables arising in credit card and other credit or charge accounts owned by FSB. RFC IV may then, subject to certain conditions, add those receivables to the trust. See "Description of the Purchase Agreements" in this prospectus. American Express Receivables Financing Corporation IV LLC structures the issuing entity's transactions. Its address is 4315 South 2700 West, Room 1300, 02-01-58, Salt Lake City, Utah 84184 and its phone number is (801) 945-2068. American Express Receivables Financing Corporation II, or RFC II, is a Delaware corporation incorporated under the laws of the State of Delaware on August 7, 1995 and is a wholly-owned subsidiary of American Express Travel Related Services Company, Inc. Currently, RFC II does not transfer any receivables to the trust and we do not expect that RFC II will do so in the future. We refer to American Express Receivables Financing Corporation II as "RFC II," a "depositor" or a "transferor." We refer to American Express Receivables Financing Corporation III LLC as "RFC III," a "depositor" or a "transferor." We refer to American Express Receivables Financing Corporation IV LLC as "RFC IV," a "depositor" or a "transferor." RFC II, RFC III and RFC IV collectively are referred to as the "transferors." SERVICER American Express Travel Related Services Company, Inc. is the servicer of the trust. As servicer, it is responsible for servicing, managing and making collections on the receivables in the trust. See "Transaction Parties--Servicer" and "The Pooling and Servicing Agreement Generally--Collection and Other Servicing Procedures" in this prospectus. American Express Travel Related Services Company, Inc. has outsourced certain functions to affiliated and unaffiliated third parties, but it remains responsible for the overall servicing process. For information about certain affiliated and unaffiliated third party vendors that provide these services, including Amex Card Services Company, Centurion and FSB, see "The Pooling and Servicing Agreement Generally--Collection and Other Servicing Procedures" in this prospectus. In limited cases, the servicer may resign or be removed, and either the trustee or a third party may be appointed as the new servicer. See "The Pooling and Servicing 2 Agreement Generally--Servicer Default" in this prospectus. The servicer receives a servicing fee from the trust, and each series is obligated to pay a portion of that fee. See the related prospectus supplement for a description of the monthly servicing fee allocated to each series of certificates. We refer to American Express Travel Related Services Company, Inc. as "TRS" or the "servicer." TRUSTEE The Bank of New York, a New York banking corporation, is the trustee of the trust and each series of certificates issued by the trust. Its address is 101 Barclay Street, Floor 8 West, New York, New York 10286, Attention: Asset- Backed Securities Unit. Its telephone number is (212) 815-6258. Under the terms of the pooling and servicing agreement, the role of the trustee is limited. See "The Pooling and Servicing Agreement Generally--The Trustee" in this prospectus. TRUST ASSETS The transferors have designated to the trust selected consumer American Express(R)* credit card and Sign & Travel(R)*/Extended Payment Option revolving credit accounts or features, and have sold to the trust the receivables in such accounts or features. Certificateholders will not be notified of any changes to the composition of the assets in the trust due to additions or removals of receivables. However, monthly reports containing certain information relating to the certificates and the collateral securing the certificates will be filed with the Securities and Exchange Commission. These reports will not be sent to certificateholders. See "Where You Can Find More Information" in this prospectus for information as to how these reports may be accessed. Subject only to the eligibility criteria established in the purchase agreements and the pooling and servicing agreement, the account owners have the discretion to select the accounts to be designated to the trust. 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 trust's primary 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's assets also include or may include: o funds collected on the receivables; o monies and investments in the trust's bank accounts; o the right to receive certain issuer rate fees attributed to the receivables; o recoveries (net of collection expenses) and proceeds of credit insurance policies relating to the receivables; and o credit enhancement that varies from one series to another and, within a series, may vary from one class to another. Additional assets may be transferred to the trust as described under "The Pooling and Servicing Agreement Generally--Additions of Accounts or Participation Interests" in this prospectus. The transferors may add additional receivables or participation - --------------- * American Express(R) and Sign & Travel(R) are federally registered servicemarks of American Express Company and its affiliates. 3 interests to the trust at any time without limitation, provided that the receivables are eligible receivables, the transferors reasonably believe that the addition will not result in an adverse effect, and the rating agencies confirm the ratings on the outstanding certificates. Under certain limited circumstances, the transferors may be obligated to add additional receivables or participation interests to the trust if required to maintain the required minimum principal balance. The transferors may also remove receivables that previously were transferred to the trust as described in "The Pooling and Servicing Agreement Generally--Removal of Accounts" in this prospectus, provided that o the transferors reasonably believe that the removal will not result in an adverse effect, o the rating agencies confirm the ratings on the outstanding certificates, o the receivables subject to removal are selected randomly, and o only one removal occurs each month. If a transferor breaches certain representations and warranties relating to the eligibility of receivables included in the trust, however, that transferor may be required to remove immediately those receivables from the trust. Finally, on the date when any receivable in an account is charged off as uncollectible, the trust automatically transfers those receivables back to the applicable transferor. 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. We cannot assure you that the terms of any future series might not have an impact on the timing or amount of payments received by a certificateholder. THE TRANSFEROR INTEREST The interest in the trust not represented by your series or by any other series is the transferors' interest, which is held by the transferors. The transferors' interest may be held either in certificated form represented by the transferor certificates or in uncertificated form. Any reference in this prospectus to the transferor certificates means the transferors' interest as held in either certificated or uncertificated form. The transferors' interest does not provide credit enhancement for your series or any other series. COLLECTIONS BY THE SERVICER The servicer receives collections on the receivables, deposits (or causes to be deposited) those collections in the collection account and keeps track of those collections for finance charge receivables and principal receivables. The servicer then allocates those collections as summarized below. ALLOCATION OF TRUST ASSETS The trust assets are allocated among the series of certificates outstanding and the transferors' interest. The servicer allocates o collections of finance charge receivables and principal receivables and o principal receivables in accounts written off as uncollectible, to each series based on varying percentages. 4 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 "The Pooling and Servicing Agreement Generally--Allocations" in this prospectus. INTEREST PAYMENTS ON THE CERTIFICATES Each certificate entitles the holder to receive payments of interest as described in the accompanying 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, method 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 accompanying 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, known as the revolving period, during which the trust will not pay or accumulate principal for payment to the certificateholders. During the revolving period, the trust will pay available principal to the holders of the transferor certificates or to certificateholders of other series. The revolving period for a series begins on the series cut-off date described in the accompanying 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 a combination of the following periods in which: o principal is accumulated in specified amounts per month and paid on a scheduled date; o principal is paid in fixed amounts at scheduled intervals; o principal is accumulated in varying amounts each month based on the amount of principal receivables collected following certain adverse events and paid on a scheduled date; and o principal is paid in varying amounts each month based on the amount of principal receivables collected following certain adverse events. PRINCIPAL ACCUMULATION AND AMORTIZATION PERIODS The time at which principal payments will begin and the period over which principal payments will be made will vary from one series to another and within a series from one class to another. The principal payment provisions for each series and 5 class will be included in the accompanying prospectus supplement. EARLY ACCUMULATION AND AMORTIZATION PERIODS If a pay-out event has occurred with respect to a series, either an early accumulation period or an early amortization period will begin. In that case, the trust will either deposit available principal in a trust account for payment on the expected final payment date or pay all available principal to the certificateholders of that series on each distribution date. If the series has more than one class, each class may have a different priority for these payments. A pay-out event may affect more than one series. For a detailed discussion of the pay-out events, see "Description of the Certificates--Pay-Out Events and Reinvestment Events" in this prospectus and "Series Provisions--Pay-Out Events" in the accompanying prospectus supplement. REALLOCATED INVESTOR FINANCE CHARGE COLLECTIONS The certificates of a series may be included in a group, called a "reallocation group," that reallocates collections of receivables and other amounts or obligations among the series in that group. Collections of finance charge receivables which would otherwise be allocated to each series in the reallocation group will instead be combined and will be available for certain required payments to all series in that group. Any issuance of a new series in a reallocation group may reduce or increase the amount of finance charge collections allocated to any other series of certificates in that group. For a more detailed discussion, see "The Pooling and Servicing Agreement Generally--Reallocations Among Different Series Within a Reallocation Group" and "Risk Factors--Issuances of additional series by the trust may adversely affect your certificates" in this prospectus. SHARED EXCESS FINANCE CHARGE COLLECTIONS Any series may be included in a group called an excess allocation group. If specified in the accompanying prospectus supplement, 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 excess allocation group. See "The Pooling and Servicing Agreement Generally--Sharing of Excess Finance Charge Collections Among Excess Allocation Series" in this prospectus. SHARED PRINCIPAL COLLECTIONS If specified in the accompanying prospectus supplement, to the extent that collections of principal receivables allocated to any series are not needed for that series, those collections may be applied to cover principal payments for other series in the same principal sharing group. See "The Pooling and Servicing Agreement Generally--Sharing of Principal Collections Among Principal Sharing Series" in this prospectus. CREDIT ENHANCEMENT Each class of a series may be entitled to credit enhancement. Credit enhancement for the certificates of any class may take the form of one or more of the following: 6 o subordination o insurance policy o letter of credit o spread account o derivative agreement arrangement o collateral interest o cash collateral guaranty or account o surety bond o maturity liquidity agreement o supplemental credit enhancement or liquidity agreement The type, characteristics and amount of any credit enhancement will be: o based on several factors, including the characteristics of the receivables and accounts at the time a series of certificates is issued; and o established based on the requirements of the rating agencies. See "The Pooling and Servicing Agreement Generally--Credit Enhancement" and "Risk Factors" in this prospectus. 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 "Tax Matters" in this prospectus. CERTIFICATE RATINGS Any certificate offered by this prospectus and the 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--If the ratings of the certificates are lowered or withdrawn, their market value could decrease" in this prospectus. 7 RISK FACTORS You should consider the following factors before you decide whether or not to purchase the certificates. THERE IS NO PUBLIC MARKET FOR THE CERTIFICATES. AS A RESULT, YOU MAY BE UNABLE TO SELL YOUR CERTIFICATES OR THE PRICE OF THE CERTIFICATES MAY SUFFER. The underwriters may assist in resales of the certificates but they are not required to do so. A secondary market for any certificates may not develop. If a secondary market does develop, it might not continue or it might not be sufficiently liquid to allow you to resell any of your certificates. In addition, some certificates have a more limited trading market and experience more price volatility. There may be a limited number of buyers when you decide to sell those certificates. This may affect the price you receive for the certificates or your ability to sell the certificates. You should not purchase certificates unless you understand and know you can bear the investment risks. SOME INTERESTS COULD HAVE PRIORITY OVER THE TRUSTEE'S INTEREST IN THE RECEIVABLES, WHICH COULD CAUSE DELAYED OR REDUCED PAYMENTS TO YOU. Representations and warranties are made that the trustee has a perfected interest in the receivables. If any of these representations and warranties were found not to be true, however, payments to you could be delayed or reduced. In addition, the transaction documents permit certain tax liens to have priority over the trustee's perfected interest in the receivables. If any of these tax liens were to arise, you could suffer a loss on your investment. Furthermore, if a conservator or receiver for either bank or a bankruptcy trustee for TRS were to argue that any of its administrative expenses relate to the receivables or the transaction documents, those expenses could be paid from collections on the receivables before the trustee receives any payments, which could result in losses on your investment. THE TRUSTEE MAY NOT HAVE A PERFECTED INTEREST IN COLLECTIONS COMMINGLED BY THE SERVICER OR ANY SUBSERVICER WITH ITS OWN FUNDS, WHICH COULD CAUSE DELAYED OR REDUCED PAYMENTS TO YOU. The servicer is obligated to deposit collections into the collection account no later than the second business day after the date of processing for those collections. In the event that certain conditions are met, however, the servicer is permitted to hold all collections received during a monthly period and to make only a single deposit 8 of those collections on the following distribution date. See "The Pooling and Servicing Agreement Generally--Deposits in Collection Account." All collections that the servicer is permitted to hold are commingled with its other funds or the funds of a subservicer and used for its own benefit. The trustee may not have a perfected interest in these amounts, and thus payments to you could be delayed or reduced if the servicer or any subservicer were to become bankrupt. THE CONSERVATORSHIP, RECEIVERSHIP, BANKRUPTCY, OR INSOLVENCY OF CENTURION, FSB, TRS, A TRANSFEROR, THE TRUST, OR ANY OF THEIR AFFILIATES COULD RESULT IN ACCELERATED, DELAYED, OR REDUCED PAYMENTS TO YOU. Centurion is a Utah industrial bank and FSB is a federal savings bank, and the deposits of each bank are insured by the Federal Deposit Insurance Corporation (FDIC). If certain events occur relating to either bank's financial condition or the propriety of its actions, the FDIC may be appointed as conservator or receiver for that bank. Prior to April 16, 2004, Centurion treated its transfer of the receivables to the trustee as a sale for accounting purposes. From and after April 16, 2004, Centurion treats its transfer of the receivables to RFC III as a sale and FSB treats its transfer of receivables to RFC IV as a sale. Arguments may be made, however, that any of these transfers constitutes only the grant of a security interest under applicable law. Nevertheless, the FDIC has issued a regulation surrendering certain rights to reclaim, recover, or recharacterize a financial institution's transfer of financial assets such as the receivables if o the transfer involved a securitization of the financial assets and meets specified conditions for treatment as a sale under relevant accounting principles; o the financial institution received adequate consideration for the transfer; o the parties intended that the transfer constitute a sale for accounting purposes; and o 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. Each bank's transfer of the receivables is intended to satisfy all of these conditions. 9 If a condition required under the FDIC's regulation were found not to have been met, however, the FDIC could seek to reclaim, recover, or recharacterize the transfer of the receivables by Centurion or FSB. The FDIC may not be subject to an express time limit in deciding whether to take these actions, and a delay by the FDIC in making a decision could result in losses on your investment. If the FDIC were successful in any of these actions, moreover, you may not be entitled under applicable law to the full amount of your damages. Even if the conditions set forth in the regulation were satisfied and the FDIC did not reclaim, recover, or recharacterize the transfer of the receivables by Centurion or FSB, payments to you could be delayed or reduced if either bank entered conservatorship or receivership. For instance, the FDIC may request a stay of any action to enforce the transaction documents or the certificates. The FDIC also may require that its claims process be followed before payments on the receivables are released. The delay caused by any of these actions could result in losses to you. The FDIC, moreover, may have the power to choose whether or not the terms of the transaction documents will continue to apply. Thus, regardless of what the transaction documents provide, the FDIC could o prevent or limit the commencement of an early amortization period or a rapid accumulation period, or instead do the opposite and require those to commence; o prevent or limit the early liquidation of the receivables and the termination of the trust, or instead do the opposite and require those to occur; or o prevent or limit the continued transfer of receivables, or instead do the opposite and require those to continue. If any of these events were to occur, payments to you could be delayed or reduced. You also may suffer a loss if the FDIC were to argue that any term of the transaction documents violates applicable regulatory requirements. RFC III is a wholly-owned subsidiary of Centurion. RFC IV is a wholly-owned subsidiary of FSB. Certain banking laws and regulations may apply not only to Centurion and FSB but to their subsidiaries as well. If RFC III or RFC IV were found to have violated any of these laws or regulations, you could suffer a loss on your investment. Arguments also may be made that the FDIC's rights and powers extend to RFC III, RFC IV, and the trust and that, as a 10 consequence, the FDIC could repudiate or otherwise directly affect the rights of certificateholders under the transaction documents. If the FDIC were to take this position, losses to you could result. In addition, no assurance can be given that the FDIC would not attempt to exercise control over the receivables or the other assets of RFC III, RFC IV, or the trust on an interim or a permanent basis. If this were to occur, payments to you could be delayed or reduced. RFC III, RFC IV, and the trust have been established so as to minimize the risk that any of them would become insolvent or enter bankruptcy. Nevertheless, each of them may be eligible to file for bankruptcy, and no assurance can be given that the risk of insolvency or bankruptcy has been eliminated. If RFC III, RFC IV, or the trust were to become insolvent or were to enter bankruptcy, you could suffer a loss on your investment. Risks also exist that, if RFC III, RFC IV, or the trust were to enter bankruptcy, any of the others and their assets (including the receivables) would be treated as part of the bankruptcy estate. If TRS or any of its affiliates were to become a debtor in a bankruptcy case, the court could exercise control over the receivables or the other assets of RFC III, RFC IV, or the trust on an interim or a permanent basis. If this were to occur, payments to you could be delayed or reduced. The court, moreover, may have the power to choose whether or not the terms of the transaction documents will continue to apply. Thus, regardless of what the transaction documents provide, the court could o authorize TRS to stop servicing the receivables or to stop providing administrative services for RFC III or RFC IV; o prevent the appointment of a successor servicer for the trust or the appointment of a successor administrator for RFC III or RFC IV; o alter the terms on which TRS continues to service the receivables or to provide administrative services for RFC III or RFC IV, including the amount of fees paid to TRS; o prevent or limit the commencement of an early amortization period or a rapid accumulation period, or instead do the opposite and require those to commence; o prevent or limit the early liquidation of the receivables and the termination of the trust, or instead do the opposite and require those to occur; or o prevent or limit the continued transfer of receivables, or instead do the opposite and require those to continue. 11 If any of these events were to occur, payments to you could be delayed or reduced. You also may suffer a loss if the FDIC were to argue that any term of the transaction documents violates applicable regulatory requirements. Regardless of any decision made by the FDIC or ruling made by a court, moreover, the mere fact that the Centurion, FSB, TRS, RFC III, RFC IV, the trust, or any of their affiliates has become insolvent or entered conservatorship, receivership, or bankruptcy could have an adverse effect on the value of the receivables and on the liquidity and value of the certificates. Prior to April 16, 2004, Centurion transferred receivables to Credco, which in turn transferred receivables to RFC II, which then transferred receivables to the trustee. Although the agreements that effected these transfers remain in place and although RFC II is still a transferor under the pooling and servicing agreement, the parties do not expect that future transfers of receivables will be made in this manner. No assurance can be given, however, that this expectation will not change or that the parties will not resume such transfers of receivables. If this were to occur, risks similar to those described above would exist with respect to these parties and these transfers, and payments to you could be delayed or reduced for similar reasons. REGULATORY ACTION COULD RESULT IN LOSSES. Centurion is regulated and supervised by the Utah Department of Financial Institutions and the FDIC. FSB is regulated and supervised by the Office of Thrift Supervision. These regulatory authorities, and possibly others, have broad powers of enforcement with respect to the banks and their affiliates. If any of these regulatory authorities were to conclude that an obligation under the transaction documents were an unsafe or unsound practice or violated any law, regulation, written condition, or agreement applicable to a bank or its affiliates, that authority may have the power to order that bank or the related affiliate to rescind the transaction document, to refuse to perform the obligation, to amend the terms of the obligation, or to take any other action determined by that authority to be appropriate. In addition, that bank or the related affiliate probably would not be liable to you for contractual damages for complying with such an order, and you would be unlikely to have any recourse against the regulatory authority. Therefore, if such an order were issued, payments to you could be delayed or reduced. In one case of which the banks are aware, the regulatory authority ordered the financial institution to immediately resign as servicer and to cease performing its duties as servicer within approximately 12 120 days, to immediately withhold and segregate funds from collections for payment of its servicing fee (notwithstanding the priority of payments in the securitization documents and the perfected security interest of the relevant trust in those funds), and to increase its servicing fee percentage above that which was specified in the securitization documents. CHANGES TO CONSUMER PROTECTION LAWS MAY IMPEDE COLLECTION EFFORTS OR REDUCE COLLECTIONS, WHICH MAY RESULT IN ACCELERATION OF OR REDUCTION IN PAYMENT ON YOUR CERTIFICATES. Credit card receivables that do not comply with consumer protection laws may not be valid or enforceable under their terms against the obligors of those credit card receivables. Federal and state consumer protection laws regulate the creation and enforcement of consumer loans, including credit card receivables. The United States Congress and the states could further regulate the credit card and consumer credit industry in ways that make it more difficult for the servicer or the account owners to collect payments on the receivables or that reduce the finance charges and other fees that Centurion, FSB or their affiliates can charge on revolving credit card account balances, resulting in reduced collections. For example, if Centurion, FSB or their affiliates were required to reduce their finance charges and other fees, resulting in a corresponding decrease in the effective yield of revolving credit card accounts, a pay out event could occur and could result in an acceleration of payment or reduced payment on your certificates. See "Description of the Certificates--Pay-Out Events and Reinvestment Events" and "Certain Legal Aspects of the Receivables--Consumer Protection Laws." Each of the transferors, Centurion and FSB makes representations and warranties about its compliance with legal requirements. Each of the transferors also makes certain representations and warranties in the pooling and servicing 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 transferors or the servicer, as the case may be, must accept reassignment of receivables affected by the breach. CHANGES TO FEDERAL OR STATE BANKRUPTCY OR DEBTOR LAWS MAY IMPEDE COLLECTION EFFORTS OR ALTER TIMING AND AMOUNT OF COLLECTIONS, WHICH MAY RESULT IN ACCELERATION OR REDUCTION IN PAYMENT OF YOUR CERTIFICATES. 13 If an account holder sought protection under federal or state bankruptcy or debtor relief laws, a court could reduce or discharge completely the account holder's obligations to repay amounts due on its revolving credit card account. As a result, the related credit card receivables arising in that credit card account would be written off as uncollectible. You could suffer a loss if no funds were available from credit enhancement or other sources and collections of finance charge receivables allocated to the certificates to cover the applicable defaulted amount. See "The Pooling and Servicing Agreement Generally--Defaulted Receivables; Rebates and Fraudulent Charges" in this prospectus. PAYMENT PATTERNS OF ACCOUNT HOLDERS MAY NOT BE CONSISTENT OVER TIME AND VARIATIONS IN THESE PAYMENT PATTERNS MAY RESULT IN REDUCED PAYMENT OF PRINCIPAL, OR RECEIPT OF PAYMENT OF PRINCIPAL EARLIER OR LATER THAN EXPECTED. 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 account holder 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 an account owner, a transferor 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. Centurion's and FSB's 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 elsewhere 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 an amortization or an accumulation period. One development which affects the level of finance charge collections is the increased convenience use of credit cards. Convenience use means that the customers pay their account balances in full on or prior to the due date. The customer, therefore, avoids all finance charges on his account. This decreases the effective yield on the accounts and could cause an early payment of your certificates. THE ACCOUNT OWNERS MAY NOT BE ABLE TO GENERATE NEW RECEIVABLES, OR THE TRANSFERORS MAY NOT BE ABLE TO DESIGNATE NEW ACCOUNTS TO THE TRUST WHEN REQUIRED BY THE POOLING AND SERVICING AGREEMENT. 14 THIS COULD RESULT IN AN ACCELERATION OF OR REDUCTION ON PAYMENTS ON YOUR CERTIFICATES. The trust's ability to make payments on the certificates will be impaired if sufficient new receivables are not generated by Centurion or FSB, as applicable. We do not guarantee that new receivables will be created, that any receivables will be added to the trust or that receivables will be repaid at a particular time or with a particular pattern. The pooling and servicing agreement requires that the balance of principal receivables in the trust not fall below a specified level. If the level of principal receivables does fall below the required level, an early payment of your certificates could occur. To maintain the level of principal receivables in the trust, the transferors periodically add receivables through the designation of additional accounts for inclusion in the trust. There is no guarantee that the transferors will have enough receivables to add to the trust. If the transferors are not able to add additional accounts when required, an early payment of your certificates will occur. See "Maturity Considerations" in the accompanying prospectus supplement. 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 and attitudes towards incurring debt, 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, terrorist acts against the United States or other nations, the commencement of hostilities between the United States and a foreign nation or nations or natural disasters could have a direct impact on the timing and amount of payments on your certificates. We cannot predict how any of these or other factors will affect repayment patterns or card use and, consequently, the timing and amount of payments on your series. Any reductions in the amount or timing of interest or principal payments will reduce the amount available for distribution on the certificates. COMPETITION IN THE CREDIT CARD INDUSTRY MAY RESULT IN A DECLINE IN CENTURION'S OR FSB'S ABILITY TO GENERATE NEW RECEIVABLES. THIS 15 MAY RESULT IN THE PAYMENT OF PRINCIPAL EARLIER OR LATER THAN THE EXPECTED FINAL PAYMENT DATE, OR IN REDUCED AMOUNTS. The credit card industry is highly competitive. The American Express-branded proprietary credit card programs operated by American Express and its affiliates encounter substantial and intense competition. As a card issuer, American Express competes in the United States with financial institutions (such as Citibank, Bank of America, JPMorgan Chase, MBNA and Capital One Financial) that are members of the VISA(R)* and/ or MasterCard(R)* associations and that issue general purpose credit cards, primarily under revolving credit plans, on one or both of those systems, and the Morgan Stanley affiliate that issues the Discover Card on the Discover Business Services network. Limited competition also exists from businesses that issue their own cards or otherwise extend credit to their customers, such as retailers and airline associations, although these cards are not generally substitutes for general purpose cards because of their limited acceptance. As a result of continuing consolidations among banking and financial services companies and credit card portfolio acquisitions by major card issuers, there are now a smaller number of significant issuers, and the largest issuers have continued to grow using their greater resources, economies of scale and brand recognition to compete. Competing card issuers offer a variety of products and services to attract cardholders, including premium cards with enhanced services or lines of credit, airline frequent flyer program mileage credits, cash rebates and other reward or rebate programs, "teaser" promotional interest rates for both credit card acquisition and balance transfers, and co-branded arrangements with partners that offer benefits to cardholders. - --------------- * VISA(R) and MasterCard(R) are federally registered trademarks of VISA U.S.A., Inc. and MasterCard International Incorporated, respectively. 16 Most financial institutions that offer demand deposit accounts also issue debit cards to permit depositors to access their funds. Use of debit cards for point-of-sale purchases has grown as most financial institutions have replaced ATM cards with general purpose debit cards bearing either the VISA or MasterCard logo. As a result, the volume of transactions made with debit cards in the United States has continued to increase significantly and, in the United States, has grown more rapidly than credit and charge card transactions. The principal competitive factors that affect the card- issuing business are: o the features and the quality of the services, including rewards programs, provided to cardmembers; o the number, spending characteristics and credit performance of cardmembers; o the quantity and quality of the establishments that accept a card; o the cost of cards to cardmembers; o the pricing, payment and other card account terms and conditions; o the number and quality of other payment instruments available to cardmembers; o the nature and quality of expense management data capture and reporting capability; o the success of targeted marketing and promotional campaigns; o reputation and brand recognition; o the ability of issuers to implement operational and cost efficiencies; and o the quality of customer service. American Express-branded cards are issued on the American Express network. As a network, TRS competes with other charge and credit card networks, including, among others, VISA, MasterCard, Diners Club(R) (which, in the United States, has been folded into the network operated by MasterCard), Discover(R), a business unit of Morgan Stanley (primarily in the United States), and JCB Co., Ltd. (primarily in Asia). The competitive nature of the credit card industry may result in a reduced amounts of finance charge receivables collected and available to pay interest on the certificates. This competition also may affect Centurion's and FSB's ability to originate new accounts and generate new receivables. Such events could cause a pay-out event to occur and an early payment of your certificates. See "Description of the Certificates--Pay-Out Events and Reinvestment Events" in this prospectus. CHANGES IN CO-BRANDING ARRANGEMENTS MAY AFFECT THE PERFORMANCE OF THE TRUST'S RECEIVABLES AND CARDHOLDER USAGE, AND, CONSEQUENTLY, THE TIMING AND AMOUNT OF PAYMENTS ON YOUR SERIES. 17 Centurion and FSB enter into co-branding arrangements with certain unaffiliated retail and services companies. Under these arrangements, participating cardholders earn "points" or other benefits, such as frequent flyer miles, hotel loyalty points and cash back, that may be redeemed with the co-branding partner. These arrangements are entered into for a fixed period, generally ranging from five to ten years, and will terminate in accordance with their terms unless extended or renewed at the option of the parties. Currently, the two largest co-branding arrangements are with Delta Air Lines and Costco Wholesale. If one or more of Centurion's or FSB's significant co- branding arrangements were to experience reduced volume or termination for any reason, including a general decline in the business of any of its co-branding partners, it could affect the performance of the trust's receivables, including repayment patterns, and cardholder usage of the co-branded accounts. Centurion and FSB cannot predict what effect, if any, changes in a significant co-branding arrangement would have on the performance of the trust's receivables or cardholder usage and, consequently, the timing and amount of payments on your series. Any reductions in the amount or timing of interest or principal payments on these receivables will reduce the amount available for distribution on the certificates of your series. CENTURION AND FSB MAY CHANGE THE TERMS OF THE CREDIT CARD ACCOUNTS IN A WAY THAT REDUCES OR SLOWS COLLECTIONS. THESE CHANGES MAY RESULT IN REDUCED, ACCELERATED OR DELAYED PAYMENTS TO YOU. As owners of the accounts, Centurion and FSB retain the right to change various credit card account terms (including finance charges and other fees it charges and the required minimum monthly payment). A pay-out event could occur if Centurion or FSB, as applicable, reduced the finance charges and other fees it charges, and a corresponding decrease in finance charges resulted. In addition, changes in the credit card 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. Neither Centurion nor FSB will reduce the interest rate it charges on the receivables or other fees if that action would result in a pay-out event, unless it 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, based on its good faith assessment of its business competition. Neither Centurion nor FSB has restrictions on its ability to change the terms of the credit card accounts except as described above or in the accompanying prospectus supplement. Changes in relevant law, changes in the marketplace or prudent business practices could 18 cause Centurion or FSB, as applicable, to change credit card account terms. CREDIT CARD RATES MAY DECLINE WITHOUT A CORRESPONDING CHANGE IN THE AMOUNTS NEEDED TO PAY THE CERTIFICATES, WHICH COULD RESULT IN A DELAY OR REDUCTION IN PAYMENTS OF YOUR CERTIFICATES. Some accounts may have finance charges set at variable rate based on a designated index (for example, the prime rate). A series or class of certificates may bear interest either at a fixed rate or at a floating rate based on a different index. If the rate charged on the accounts declines, collections of finance charge receivables may be reduced without a corresponding reduction in the amounts payable as interest on the certificates and other amounts paid from collections of finance charge receivables. This could result in delayed or reduced principal and interest payments to you. IF THE RATINGS OF THE CERTIFICATES ARE LOWERED OR WITHDRAWN, THEIR MARKET VALUE COULD DECREASE. The initial rating of a certificate addresses the likelihood of the payment of interest on that certificate when due and the ultimate payment of principal of that certificate by its legal maturity date. The ratings do not address the likelihood of the payment of principal of a certificate on its expected final payment date. In addition, the ratings do not address the likelihood of early payment or acceleration of a certificate, which could be caused by a pay-out event. The ratings of the certificates are not a recommendation to buy, hold or sell the certificates. The ratings of the certificates may be lowered or withdrawn entirely at any time by the applicable rating agency without notice from Centurion, FSB, TRS or the transferors to certificateholders of such change in rating. The market value of the certificates could decrease if the ratings are lowered or withdrawn. 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 notice to you and without your prior review or consent. Before the trust can issue a new series, each rating agency that has 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. 19 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 and servicing agreement and directing a reassignment of the entire portfolio of accounts. See "The Pooling and Servicing Agreement Generally--Groups of Series" in this prospectus. ADDITION OF ACCOUNTS TO THE TRUST MAY DECREASE THE CREDIT QUALITY OF THE ASSETS SECURING THE REPAYMENT OF YOUR CERTIFICATES. IF THIS OCCURS, YOUR RECEIPT OF PAYMENTS OF PRINCIPAL AND INTEREST MAY BE REDUCED, DELAYED OR ACCELERATED. The assets of the trust change every day. The transferors may choose, or may be required, to add receivables to the trust. The accounts from which these receivables arise may have different terms and conditions from the accounts already designated to the trust. For example, the new accounts may have higher or lower fees or interest rates or different payment terms. We cannot guarantee that new accounts will be of the same credit quality as the accounts currently or historically designated to the trust. If the credit quality of the assets in the trust were to deteriorate, the trust's ability to make payments on the certificates could be adversely affected. See "The Pooling and Servicing Agreement Generally--Additions of Accounts or Participation Interests" in this prospectus. ANY AMOUNTS IN A PREFUNDING ACCOUNT THAT ARE NOT INVESTED IN RECEIVABLES MAY RESULT IN AN EARLY RETURN OF PRINCIPAL AND MAY CREATE A REINVESTMENT RISK FOR YOU. The transferors may, in connection with any series, create a prefunding account and deposit a portion of the proceeds of the series into the account. Moneys in the account will be invested in additional principal receivables. Any money in the prefunding account not used by a specific date, however, must be paid to the holders of the certificates of that series. This payment will result in an early return of principal. In such an event, the transferors do not expect to pay a prepayment penalty or premium. If you receive an early payment of principal at a time when prevailing interest rates are relatively low, you may not be able to reinvest the proceeds in a comparable security with an effective interest rate equivalent to that of your certificates. 20 USE OF PROCEEDS The net proceeds from the sale of the asset backed certificates of any series offered hereby, before the deduction of expenses, will be paid to the transferors. Unless otherwise specified in the related prospectus supplement, RFC III will use these proceeds to purchase additional receivables from Centurion or for its general company purposes, including repayment of loans made from time to time by Centurion to RFC III and RFC IV will use these proceeds to purchase additional receivables from FSB or for its general company purposes, including repayment of loans made from time to time by FSB to RFC IV. Each of Centurion and FSB will use such amounts received from RFC III or RFC IV, respectively, for general corporate purposes. THE ISSUING ENTITY American Express Credit Account Master Trust, also referred to as the issuing entity or the trust, was formed in 1996 pursuant to a pooling and servicing agreement. This pooling and servicing agreement, as amended and restated as of January 1, 2006, and as otherwise amended from time to time, is among American Express Travel Related Services Company, Inc., or TRS, as servicer, RFC II, RFC III and RFC IV, as transferors, and The Bank of New York, as trustee. The trust does not have any officers or directors. As permitted by the pooling and servicing agreement, the pooling and servicing agreement was amended and restated as of April 16, 2004 (the "substitution date") to substitute RFC III as transferor in place of Centurion. In addition, the pooling and servicing agreement was amended to designate FSB as an account owner and RFC IV as a transferor. Pursuant to the pooling and servicing agreement, RFC III and RFC IV have assumed the obligations of a transferor of the trust. RFC II remains as a transferor and TRS remains as the servicer. At the time of such substitution and amendment, Centurion entered into a purchase agreement with RFC III and FSB entered into a purchase agreement with RFC IV. Under the purchase agreements, each of Centurion and FSB sold its existing right, title and interest in, and on an ongoing basis will sell, the receivables in the designated accounts to RFC III and RFC IV, respectively. RFC III and RFC IV, as transferors under the pooling and servicing agreement, in turn transfer the receivables to the trust. The trust, as a master trust, previously has issued other series of asset backed certificates and expects to issue additional series from time to time. The trust's activities are limited to: o acquiring and holding the receivables and the other trust assets and the proceeds from these assets; o issuing certificates; o making payments on the certificates; and o engaging in other activities that are necessary or incidental to accomplish these limited purposes. Consequently, 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 21 with the laws of the State of New York. The fiscal year for the trust will end on December 31 of each year. Each transferor, being Centurion and RFC II prior to the substitution date and being RFC II, RFC III and RFC IV and any additional transferor on and after the substituton date, has conveyed and will convey 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 account holders 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, Issuer Rate 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 the receivables, all monies and other property on deposit in certain accounts maintained for the benefit of the certificateholders and 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, participation interests and related property conveyed to the trustee pursuant to an assignment, the right to receive Issuer Rate Fees attributed to the receivables, all monies on deposit in the Collection Account, the Special Funding Account and in certain accounts maintained for the benefit of the certificateholders, any series enhancements, and all of each transferor's legal rights and remedies under the purchase agreements. Uniform Commercial Code financing statements have been and will be filed, to the extent appropriate, to perfect the ownership or security interests of the trust and the trustee described herein. The pooling and servicing agreement provides that, subject to certain limitations and conditions, trust assets may also include participation interests in receivables. Pursuant to the pooling and servicing agreement, a transferor will have the right (subject to certain limitations and conditions set forth therein), and in some circumstances will be obligated, to designate from time to time additional eligible accounts to be included as accounts and to transfer to the trust all receivables of such additional accounts, whether such receivables are then existing or thereafter created, or to transfer to the trust participations in receivables instead. See "The Pooling and Servicing Agreement Generally--Additions of Accounts or Participation Interests" in this prospectus. A transferor also has the right (subject to certain limitations and conditions) to require the trustee to reconvey all receivables in accounts designated by that transferor for removal, whether such receivables are then existing or thereafter created. Once an account is removed, receivables existing under that account are not transferred to the trust. See "The Pooling and Servicing Agreement Generally--Removal of Accounts" in this prospectus. Throughout the term of the trust, the accounts from which the receivables arise will be the accounts designated on the Initial Cut-Off Date plus any Additional Accounts minus any accounts that have been removed. With respect to each series of certificates issued by the trust, the transferors will represent and warrant that, as of the related selection dates, such receivables meet certain eligibility requirements. The accompanying prospectus supplement will provide certain information about the trust portfolio as of the date specified. Such information will include, but not be limited to, the amount of principal receivables, the amount of finance charge receivables, the range of 22 principal balances of the accounts and the average thereof, the range of credit limits of the accounts and the average thereof, the range of ages of the accounts and the average thereof, and delinquency statistics relating to the accounts. CENTURION'S AND FSB'S REVOLVING CREDIT BUSINESSES GENERAL The receivables transferred to the trust are certain receivables generated from transactions made by persons who are holders of consumer American Express revolving credit card accounts issued by Centurion or FSB, whether branded "Optima" Card accounts, "Blue" from American Express or otherwise, and Sign & Travel/Extended Payment Option revolving credit accounts or features. Cards issued by Centurion and FSB are currently accepted worldwide, and may be used for the purchase of merchandise and services. The Sign & Travel/Extended Payment Option is currently available only to holders of American Express Card, American Express Gold Card, Platinum Card and Centurion Card accounts. Extended Payment Option is also available to certain business account holders, and, in the future, Sign & Travel may also be available to these account holders. Subject to certain conditions, the transferors may convey to the trust receivables arising in charge or credit accounts or other charge or credit products that may be of a type not currently included as accounts. Such accounts and products may be originated, underwritten, used or collected in a different manner than the accounts described below and may differ with respect to loss and delinquency experience, revenue experience and historical payment rates. Such accounts and products may also have different terms than the accounts described below and may be subject to different servicing, charge-off and collection practices. Consequently, the addition to the trust of receivables arising in such accounts or from such products could have the effect of reducing the Portfolio Yield. American Express Credit Card Accounts. The American Express credit card accounts are accessed primarily by use of the credit cards and may be used to purchase merchandise and services from participating service establishments, to transfer balances from other credit accounts or to obtain cash advances through check access or from automated teller machines. The American Express credit card account was first offered in early 1987 and branded as the "Optima Card." American Express credit card accounts originated by Centurion and FSB are primarily generated by direct mail solicitations, telemarketing to prospects and Internet channels. Offers are made to existing cardmembers having a credit history with a charge card account and to non-cardmembers. In addition, Centurion and FSB offer American Express credit card accounts that are originated under affinity or co-branded programs between one of the issuing American Express banks and certain unaffiliated entities. Centurion and FSB also distribute unsolicited or "Take-One" applications and runs print advertisements and radio and television advertisements for American Express credit card accounts and has a toll free telephone number for requests for information and applications. Receivables are also generated by soliciting the transfer of account balances from competitors' accounts. Sign & Travel/Extended Payment Option Accounts. The Sign & Travel/Extended Payment Option accounts are features currently associated with charge card accounts. Prior to 1994, all cardmembers had access to Sign & Travel accounts. Since 1994, only qualified cardmembers who have been charge card account holders in good standing, usually for at least one year, have been invited to obtain a Sign & Travel account. A cardmember may use the 23 Sign & Travel account for certain travel-related purchases and may access the Sign & Travel account by indicating to the travel product merchant or to TRS the preference to have such travel items billed to the Sign & Travel account. In addition, all foreign charges will automatically be billed to the Sign & Travel account. In addition, selected cardmembers are invited to enroll in the Sign & Travel Express service that automatically bills eligible travel purchases to the cardmember's Sign & Travel Account. Selected cardmembers may also use this feature to repay over time certain other designated charges. Currently this capability is offered only with respect to merchandise purchases on the charge card account above a designated amount, usually $200. This feature is referred to as the "Extended Payment Option." The predecessor to the Sign & Travel account was established in 1965 as a closed-end credit account and was changed to an open-end credit account in 1983. UNDERWRITING AND AUTHORIZATION PROCEDURES American Express Credit Card Accounts. Centurion and FSB use two types of approval processes in determining whether to open an American Express credit card account: the "pre-screened process" and the "full application process." The pre-screened process involves determining in advance that a person will qualify for an American Express credit card account. The applicable issuing bank determines the minimum credit criteria required for a consumer to receive an offer. These criteria were developed from proprietary risk models and commercially available risk evaluation scores. Credit bureaus provide Centurion and FSB with the credit attributes, scores, and encrypted names and addresses of persons passing the minimum criteria. Centurion and FSB then screen out persons with prior American Express delinquencies and incidents of fraud, and use proprietary risk and response modeling to finalize the solicitation pool. FSB may also determine the eligibility of such persons to receive an offer based on such person's activities (e.g., membership in a rewards program, holding credit cards, magazine or newspaper subscriptions, and college enrollment). Additional screening is conducted on applicants who reply to pre-screened offers. The full application process is used for evaluation of unsolicited and non- pre-screened applications. The primary sources of these applications are the "inbound" telemarketing program that features a toll-free telephone number, Internet channels and, on a limited basis, direct mail and the American Express "Take One" boxes located in a variety of public establishments. The full application process entails receiving a completed application, evaluating the application using proprietary scoring models and credit bureau information, screening out prior American Express delinquencies and incidents of fraud, and verifying that the information on the application is both accurate and provided by the true applicant. In addition to the credit review performed in connection with origination of accounts, Centurion and FSB have established credit authorization procedures applicable to American Express credit card account utilizations. Utilizations of such American Express credit card accounts are subject to authorization at the time of such utilization based upon the cardmember's past spending and payment activity, experience with other creditors and personal resources. Certain utilizations, such as purchases indicating out-of-pattern spending, initial utilizations on new accounts and charges to non-current accounts, are subject to closer credit scrutiny. The credit limits for American Express credit card accounts generally range from $500 to $15,000, although the credit limits applicable to certain American Express credit card accounts may be as high as $100,000. 24 Sign & Travel/Extended Payment Option Accounts. Centurion or FSB, as appropriate, extends the right to access a Sign & Travel/Extended Payment Option account to qualified cardmembers after they have been charge card account holders in good standing for one year. There is no preset spending limit on these accounts. However, utilizations of the Sign & Travel/Extended Payment Option account are subject to approval through a credit authorization process similar to credit authorization procedures applicable to the American Express credit card account. BILLING AND PAYMENTS The accounts owned by Centurion and FSB have various billing and payment structures, including various annual fees and monthly finance charges. Each account holder is subject to an agreement governing the terms and conditions of the American Express credit card account and the Sign & Travel/Extended Payment Option, as applicable. Pursuant to each such agreement, Centurion or FSB, as applicable, reserves the right to add, change or terminate any terms, conditions, services or features of the account (including increasing or decreasing monthly finance charges, fees or minimum payments or changing the order in which payments made by account holders will be applied to satisfy amounts owing by account holders). Such changes are subject to the requirements of applicable laws and to certain limitations in the pooling and servicing agreement described herein. Any announced increase in the formula used to calculate the annual percentage rate, or APR, or other change making the terms of an account more stringent, generally becomes effective on a designated future date. American Express Credit Card Accounts. Generally, an American Express credit card account holder is charged (i) an annual fee of $0.00 to $135.00, (ii) finance charges on merchandise and services purchased and on cash advances based on variable APRs equal to the prime rate as published in The Wall Street Journal plus a spread ranging from 1.99% to 12.99%, depending on the cardmember's tenure, spending and payment patterns and type of product (and variable default rates equal to the prime rate plus a spread of 21.99%) (some products have fixed standard APRs currently ranging from 9.99% - 15.99%), (iii) amounts payable for certain uses of the American Express credit card, including the standard network fee of 3% on cash advances obtained through an automated teller machine, with a $5.00 minimum charge, and a 1% fee for obtaining American Express Travelers Cheques, and (iv) if applicable, insufficient funds fees, late fees, overlimit fees and other fees. American Express credit card accounts are billed on a cycle basis. Generally, American Express credit card account holders must make a minimum payment equal to the sum of (i) any amount that is past due, (ii) any overlimit fees added to the account during the applicable billing period and (iii) the greatest of (a) $15 or, if the balance is less than $15, such balance, (b) 1/50th of the new balance (excluding any overlimit fee added to the account during the applicable billing period) and (c) current billed finance charges, plus an additional $15 if the amount of current billed finance charges is greater than the amount specified in clause (a) or (b). Payments on the American Express credit card accounts are currently generally applied, in order of application, to balances in respect of finance charges and fees, cash advances, and merchandise and services. Certain introductory APRs are also made available to cardholders with select acquisition promotions. Sign & Travel/Extended Payment Option Accounts. There are no annual fee or other fees imposed for the use of the Sign & Travel/Extended Payment Option accounts except for a monthly finance charge, based on an APR, on the outstanding balance on the Sign & Travel/ 25 Extended Payment Option accounts. The APR for the Sign & Travel/Extended Payment Option account balances is a variable rate equal to the prime rate plus 9.99%. Sign & Travel/Extended Payment Option accounts not in good standing are assessed interest at variable default rates equal to the prime rate plus a spread of 21.99%. The Sign & Travel/Extended Payment Option accounts are billed on a cycle basis at the same time as the obligor's charge card account. Generally, Sign & Travel/Extended Payment Option account holders must make a monthly minimum payment equal to the greater of (a) $20.00 or, if the balance is less than $20.00, such balance, (b) 1/50th of the new balance or (c) current billed finance charges, plus any amount which is past due (plus an additional $15 if the amount of current billed finance charges is greater than the amount specified in clause (a) or (b)). Currently, payments made on the charge card or Sign & Travel/Extended Payment Option accounts are generally applied first, to past due Sign & Travel/ Extended Payment Option account balances, second, to past due charge card account balances, third, to current Sign & Travel/Extended Payment Option account minimum payments, fourth, to current charge card account balances, and finally, to outstanding Sign & Travel/Extended Payment Option account balances. Each minimum monthly payment is applied first to finance charges and then to the appropriate principal balance designated in the preceding sentence. After the incorporation of a Sign & Travel/Extended Payment Option Accounts into the multifunctional product referred to under "--General--Sign & Travel/Extended Payment Option Accounts" above, it is expected that payments made on such product shall be applied first to the pay-in-full feature, and then to the revolving features. It is expected that the lower rate-bearing features will be paid off prior to the higher rate-bearing features. COLLECTION EFFORTS Efforts to collect delinquent American Express credit card accounts and Sign & Travel/Extended Payment Option accounts are made by the appropriate issuing bank, TRS and collection agencies and attorneys retained by such issuing bank. Under current practice, Centurion and FSB include a request for payment of overdue amounts on all billing statements upon delinquency. Each of Centurion and FSB uses its proprietary risk evaluation systems to determine the appropriate collection strategy. Account holders that are considered a high risk may be contacted by either a letter or a telephone call when the account becomes delinquent or sooner based on a number of factors, including the account holder's tenure and the amount owed in relation to prior spending and payment behavior. An account is generally considered to be delinquent if the minimum payment specified in the account holder's most recent billing statement is not received by the next statement cycle date. If it is determined that the account holder is unable to pay the outstanding balance, the account is "pre-empted"--i.e., the card is cancelled, credit privileges are revoked, and more intensive collection action is initiated. For all other account holders, credit privileges are generally cancelled no later than 90 days from initial billing. For both the pre-empted accounts and those reaching the 90-day status, attorney demand letters may also be sent. If an account remains delinquent, it may be sent to collection agencies who continue with telephone calls, letters and telegrams. Legal action may be instituted. Centurion and FSB, respectively, may enter into arrangements with account holders to extend or otherwise change payment schedules to maximize collections. In the future, each of Centurion and FSB may sell its rights to certain collections to its affiliates or collection agencies. 26 Generally, it is Centurion's and FSB's practices to cause the receivables in an account to be charged off no later than the date on which such account becomes six contractual payments past due (i.e., approximately 180 days delinquent), although charge-offs may be made earlier in some circumstances, such as confirmed bankruptcies. The credit evaluation, servicing, charge-off and collection practices of Centurion and FSB may change over time in accordance with its business judgment and applicable law. ISSUER RATE FEES Centurion and FSB, in their capacities as issuers of American Express cards, receive certain fees (referred to in this prospectus and the accompanying prospectus supplement as "Issuer Rate Fees"), collected by the American Express network, in connection with account holder charges for merchandise and services. These Issuer Rate Fees are individually negotiated directly between Centurion or FSB, as applicable, and TRS, and may change from time to time. The amount of Issuer Rate Fees included in finance charge collections for each Monthly Period during calendar year 20[__], as a percentage of total finance charge collections for each such Monthly Period, ranged from a high of [__]% to a low of [__]%. Issuer Rate Fees payable to Centurion and FSB will be allocated and sold to RFC III and RFC IV, respectively, for each month in an amount equal to the sum of: o the product of: o the rate at which Issuer Rate Fees accrued to Centurion or FSB, as applicable, during the second preceding Monthly Period on credit accounts owned by Centurion or FSB, as applicable, multiplied by o a fraction, o the numerator of which is the aggregate amount of cardholder charges in all credit accounts owned by Centurion or FSB, as applicable, excluding balance transfer transactions, purchases made by convenience checks, cash advances, certain ineligible products and services offered by TRS or any affiliate or subsidiary thereof, and all other transactions on which Issuer Rate Fees did not accrue to Centurion or FSB, as applicable, in each case with respect to such Monthly Period, and o the denominator of which is the aggregate amount of cardholder charges in all credit accounts owned by Centurion or FSB, as applicable, with respect to such Monthly Period, multiplied by o new principal receivables that arose during such Monthly Period in the accounts that constitute credit accounts, plus o the product of: o the rate at which Issuer Rate Fees accrued to Centurion or FSB, as applicable, during the second preceding Monthly Period on charge accounts or lines of credit owned by Centurion or FSB, as applicable, multiplied by o a fraction, o the numerator of which is the aggregate amount of obligor charges on all charge accounts or lines of credit owned by Centurion or FSB, as applicable, excluding balance transfer transactions, purchases made by convenience checks, cash advances, certain ineligible products and services offered by TRS 27 or any affiliate or subsidiary thereof, and all other transactions on which Issuer Rate Fees did not accrue to Centurion or FSB, as applicable, in each case with respect to such Monthly Period, and o the denominator of which is the aggregate amount of obligor charges on all charge accounts or lines of credit owned by Centurion or FSB, as applicable, with respect to such Monthly Period, multiplied by o new principal receivables that arose during such Monthly Period in the accounts that constitute charge accounts or lines of credit. This calculation represents an estimate of the actual Issuer Rate Fees payable to Centurion and FSB from time to time in respect of the receivables and may be greater or less than the actual amount of Issuer Rate Fees so payable. Each of Centurion and FSB will be required, pursuant to the terms of the related purchase agreement, to transfer to RFC III and RFC IV, respectively, and RFC III and RFC IV will in turn be required, pursuant to the terms of the pooling and servicing agreement, to transfer to the trust for the benefit of the certificateholders, these Issuer Rate Fees. Issuer Rate Fees, if any, will be included in collections of finance charge receivables pursuant to the pooling and servicing agreement for purposes of determining the amount of finance charge collections and allocating such collections and payments to the certificates. Issuer Rate Fees, if any, will also 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 of certificates. RFC II, RFC III, RFC IV, CENTURION, FSB AND TRS RFC II RFC II, a depositor and transferor, was incorporated under the laws of the State of Delaware on August 7, 1995. All of its outstanding common stock is owned by TRS. TRS is a wholly owned subsidiary of American Express Company, a publicly-held corporation engaged principally, through its subsidiaries, in providing travel related services, investors diversified financial services and international banking services throughout the world. RFC II was organized for the limited purpose of issuing securities of the type offered hereby, purchasing, holding, owning and selling receivables and any activities incidental to and necessary or convenient for the accomplishment of such purposes. Neither TRS, as stockholder of RFC II, nor RFC II's board of directors, intends to change the business purpose of RFC II. Currently, RFC II does not transfer any receivables to the trust and we do not expect that RFC II will do so in the future. RFC II's executive offices are located at 200 Vesey Street, Room 138, New York, New York 10285-4405, and its telephone number is (212) 640-2357. RFC III RFC III, a depositor and transferor, was formed under the laws of the State of Delaware on March 11, 2004. Its sole member is Centurion. RFC III was formed for the limited purpose of issuing securities of the type offered hereby, purchasing, holding, owning and selling receivables and any activities incidental to and necessary or convenient for the accomplishment of such purposes. Neither Centurion, as sole member of RFC III, nor RFC III's board of directors, intends to change the business purpose of RFC III. Since its formation, RFC III has been engaged in these activities solely as (i) the purchaser of receivables from Centurion pursuant to the related purchase agreement, (ii) a transferor of 28 receivables to the issuing entity pursuant to the pooling and servicing agreement, (iii) the holder of the Transferors' Interest in the issuing entity and (iv) a transferor that executes underwriting, subscription and purchase agreements in connection with each issuance of certificates. RFC III may also act as a depositor for other master trusts or other securitization special purpose entities affiliated with Centurion, but has not done so to date. A description of RFC III's obligations as a transferor of the receivables to the trust can be found in "The Pooling and Servicing Agreement Generally--Conveyance of Receivables," "--Representations and Warranties," "--Addition of Accounts or Participation Interests" and "--Removal of Accounts" in this prospectus. RFC III was initially capitalized by a cash contribution from Centurion. Pursuant to a revolving credit agreement, RFC III may borrow funds from Centurion for the sole purpose of purchasing receivables from Centurion under the related purchase agreement. Under the revolving credit agreement, payments from RFC III are due only to the extent that those funds are not required for any other purpose and so long as the payment will not cause RFC III to default under the pooling and servicing agreement. RFC III's executive offices are located at 4315 South 2700 West, Room 1300, 02-01-04, Salt Lake City, Utah 84184, and its telephone number is (801) 945- 2030. RFC IV RFC IV, a depositor and transferor, was formed under the laws of the State of Delaware on March 11, 2004. Its sole member is FSB. RFC IV was formed for the limited purpose of issuing securities of the type offered hereby, purchasing, holding, owning and selling receivables and any activities incidental to and necessary or convenient for the accomplishment of such purposes. Neither FSB, as sole member of RFC IV, nor RFC IV's board of directors, intends to change the business purpose of RFC IV. Since its formation, RFC IV has been engaged in these activities solely as (i) the purchaser of receivables from FSB pursuant to the related purchase agreement, (ii) a transferor of receivables to the issuing entity pursuant to the pooling and servicing agreement, (iii) the holder of the Transferors' Interest in the issuing entity and (iv) a transferor that executes underwriting, subscription and purchase agreements in connection with each issuance of certificates. RFC IV may also act as a depositor for other master trusts or other securitization special purpose entities affiliated with FSB, but has not done so to date. A description of RFC IV's obligations as a transferor of the receivables to the trust can be found in "The Pooling and Servicing Agreement Generally--Conveyance of Receivables," "--Representations and Warranties," "--Additions of Accounts or Participation Interests" and "--Removal of Accounts" in this prospectus. RFC IV was initially capitalized by a cash contribution from FSB. Pursuant to a revolving credit agreement, RFC IV may borrow funds from FSB for the sole purpose of purchasing receivables from FSB under the related purchase agreement. Under the revolving credit agreement, payments from RFC IV are due only to the extent that those funds are not required for any other purpose and so long as the payment will not cause RFC IV to default under the pooling and servicing agreement. RFC IV's executive offices are located at 4315 South 2700 West, Room 1300, 02-01-58, Salt Lake City, Utah 84184, and its telephone number is (801) 945- 2068. 29 CENTURION Centurion is a sponsor of the trust and, as such, organizes and initiates the asset-backed securities transactions of the trust. Centurion also is an account owner of certain consumer credit or charge card accounts or features, the receivables of which are included in the trust. See "Centurion's and FSB's Revolving Credit Businesses" in this prospectus. In addition, on behalf of TRS as servicer, Centurion performs limited servicing functions with respect to receivables in the trust. See "The Pooling and Servicing Agreement Generally--Collection and Other Servicing Procedures" in this prospectus for a description of certain matters relating to the servicing functions provided by Centurion. Centurion has been involved in the securitization of consumer credit card receivables since 1996, when it formed the trust. In addition, Centurion is an account owner of certain charge accounts, the receivables of which are included in the American Express Issuance Trust, which securitizes consumer, small business and, in the future, commercial charge receivables. The American Express Issuance Trust was formed in 2005, but Centurion has been involved in the securitization of consumer charge receivables since 1998 when it was added as a transferor to the American Express Master Trust. Centurion is an industrial bank incorporated under Utah laws in 1987. It received FDIC insurance in 1989. Its principal office is located at 4315 South 2700 West, Salt Lake City, Utah 84184, and its telephone number is (801) 945- 5000. Centurion is a wholly-owned subsidiary of TRS. Centurion is the surviving company of a 1996 merger with an affiliated bank which was also named American Express Centurion Bank. Prior to the merger, the affiliated bank was one of the transferors. In connection with the merger, Centurion assumed all of the rights and obligations of the affiliated bank with respect to the accounts owned by it. FSB FSB is a sponsor of the trust and, as such, organizes and initiates the asset-backed securities transactions of the trust. FSB also is an account owner of certain consumer credit or charge card accounts or features, the receivables of which are included in the trust. See "Centurion's and FSB's Revolving Credit Businesses" in this prospectus. In addition, on behalf of TRS as servicer, FSB performs limited servicing functions with respect to receivables in the trust. See "The Pooling and Servicing Agreement Generally--Collection and Other Servicing Procedures" in this prospectus for a description of certain matters relating to the servicing functions provided by FSB. FSB has been involved in the securitization of consumer credit card receivables since 2004, when it was added as an account owner. In addition, FSB is an account owner of certain charge accounts, the receivables of which are included in the American Express Issuance Trust, which securitizes consumer, small business and, in the future, commercial charge receivables. FSB was chartered by the Office of Thrift Supervision under the laws of the United States of America as a federal savings bank in 2000 and received FDIC insurance in 2000. Its principal office is located at 4315 South 2700 West, Salt Lake City, Utah 84184, and its telephone number is (801) 945-3000. FSB is a wholly-owned subsidiary of TRS. 30 In December 2003, FSB and certain of its affiliates received OTS approval to, among other things, transfer ownership of FSB from American Express Financial Corporation to TRS, relocate its headquarters from Minneapolis, Minnesota to Salt Lake City, Utah, and amend its business plan to permit FSB to offer certain credit, charge and consumer lending products, small business loans, mortgages and mortgage-related products and a transactional Internet site. The implementation of the changes to FSB's business plan began in the first quarter of 2004 with the transfer of certain credit card and charge accounts from Centurion to FSB. TRS TRS, a company incorporated under the laws ofthe State of New York on May 3, 1982, is a wholly owned subsidiary of American Express Company and the direct parent company of Centurion, FSB, RFC II and Credco. TRS, directly or through its subsidiaries, provides a variety of products and services, including the Charge Card Accounts, consumer loans, American Express(R) Travelers Cheques, corporate and consumer travel products and services, magazine publishing, database marketing and management and insurance. TRS' principal office is located at 200 Vesey Street, New York, New York 10285-4405, and its telephone number is (212) 640-2000. MERGER OR CONSOLIDATION OF A TRANSFEROR OR THE SERVICER The pooling and servicing agreement provides that a transferor may not consolidate with or merge into, or sell all or substantially all of its assets as an entirety to, any other entity unless: (i) the surviving entity is organized under the laws of the United States of America, any state thereof or the District of Columbia; (ii) the surviving entity, the transferors and the trustee shall have entered into a supplement to the pooling and servicing agreement providing for the entity's assumption of the applicable transferor's obligations under the pooling and servicing agreement; (iii) the applicable transferor shall have delivered to the trustee: (a) an officer's certificate and an opinion of counsel regarding the enforceability of such assumption agreement against the surviving entity; and (b) a Tax Opinion; (iv) all filings required to perfect the trustee's interest in the receivables to be conveyed by the surviving entity shall have been duly made and copies thereof shall have been delivered to the trustee; (v) the trustee shall have received an opinion of counsel with respect to clause (iv) above and certain other matters specified in the pooling and servicing agreement; and (vi) if the surviving entity is not subject to Title 11 of the United States Code, the applicable transferor shall have delivered notice to each Rating Agency of the transfer and assumption of such transferor's obligations by the surviving entity. If the surviving entity is not subject to Title 11 of the United States Code, the applicable transferor shall have delivered the notice described above and the 31 transferors shall have received notice that the Rating Agency Condition has been satisfied. Under the pooling and servicing agreement, the servicer may not consolidate with or merge into, or sell all or substantially all of its assets as an entirety to, any other entity unless, among other things: (i) the surviving entity is an eligible servicer under the pooling and servicing agreement; (ii) the surviving entity is a corporation organized and existing under the laws of the United States of America, any state thereof or the District of Columbia; and (iii) in a supplement to the pooling and servicing agreement, the surviving entity expressly assumes the servicer's obligations under such agreement. ASSUMPTION OF A TRANSFEROR'S OBLIGATIONS The pooling and servicing agreement permits a transfer of all or a portion of a transferor's credit or charge accounts and the receivables arising thereunder. This transfer may include all (but not less than all) of the accounts and such transferor'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 and servicing agreement or relating to the transactions contemplated thereby, to another entity that may or may not be affiliated with that transferor. Pursuant to the pooling and servicing agreement, each transferor is permitted to assign, convey, and transfer these assets and obligations to such other entity, without the consent or approval or any certificateholders, if the following conditions, among others, are satisfied: (i) the assuming entity is organized under the laws of the United States of America, any state thereof or the District of Columbia; (ii) the assuming entity, the transferors and the trustee shall have entered into a supplement to the pooling and servicing agreement providing for the entity's assumption of the applicable transferor's obligations under the pooling and servicing agreement; (iii) the applicable transferor shall have delivered to the trustee (a) an officer's certificate and an opinion of counsel regarding the enforceability of such assumption agreement against the assuming entity; and (b) a Tax Opinion; (iv) all filings required to perfect the trustee's interest in the receivables to be conveyed by the assuming entity shall have been duly made and copies thereof shall have been delivered to the trustee; (v) the trustee shall have received an opinion of counsel with respect to clause (iv) above and certain other matters specified in the pooling and servicing agreement; and (vi) if the assuming entity is not subject to Title 11 of the United States Code, the applicable transferor shall have delivered notice to each Rating Agency of the 32 transfer and assumption of such transferor's obligations by the surviving entity. If the assuming entity is not subject to Title 11 of the United States Code, the applicable transferor shall have delivered the notice described above and the transferors shall have received notice that the Rating Agency Condition has been satisfied. The pooling and servicing agreement provides that the transferors, the surviving entity and the trustee may enter into amendments to that agreement to permit the transfer and assumption described above without the consent of any certificateholders. After any permitted transfer and assumption, the assuming entity will be considered to be a "transferor" for all purposes hereof, and the applicable transferor will have no further liability or obligation under the pooling and servicing agreement. THE ACCOUNTS The receivables have arisen or will arise in certain revolving credit accounts that have been selected from the Total Portfolio, in each case, on the basis of criteria set forth in the purchase agreements and the pooling and servicing agreement. An account in the Total Portfolio must be an Eligible Account to be selected for inclusion in the portfolio of accounts, the receivables of which will be owned by the trust. The accounts include and may include all related accounts that satisfy certain conditions set forth in the pooling and servicing agreement or are originated as a result of (a) a credit or charge card being lost or stolen or (b) the conversion of an account into another type of Eligible Account. Accounts which relate to bankrupt obligors or certain charged-off receivables may be designated as accounts provided that the amount of principal receivables in any such account is deemed to be zero for purposes of all allocations under the pooling and servicing agreement. Pursuant to the pooling and servicing agreement, in certain circumstances, the transferors will be obligated (subject to certain limitations and conditions) to designate, from time to time, eligible accounts to be included as accounts, the receivables of which will ultimately be conveyed to the trust. Neither RFC III nor RFC IV owns accounts. If either RFC III or RFC IV is required to designate accounts to the trust, it may give notice of the required addition to Centurion or FSB, as applicable. Under the applicable purchase agreement, Centurion or FSB will be obligated to designate accounts as requested. In addition, Centurion or FSB, as applicable, may, with the consent of RFC III or RFC IV, as applicable, designate accounts and sell the receivables in those accounts to RFC III or RFC IV, as applicable. See "The Purchase Agreements" in this prospectus. Such accounts designated for the trust must meet the eligibility criteria set forth in the purchase agreements and the pooling and servicing agreement as of the applicable selection date. Under the pooling and servicing agreement, each transferor also has the right to convey participation interests to the trust subject to the conditions described in the pooling and servicing agreement. See "The Pooling and Servicing Agreement Generally--Additions of Accounts or Participation Interests" in this prospectus for a more detailed discussion of the circumstances and manner in which the receivables arising in Additional Accounts or participation interests will be conveyed to the trust. As of each date with respect to which any transferor transfers any receivables arising in Additional Accounts or participation interests, such transferor will represent and warrant to the trust that such receivables or participation interests, if any, meet the eligibility requirements set 33 forth in the purchase agreements and the pooling and servicing agreement. See "The Pooling and Servicing Agreement Generally--Conveyance of Receivables" in this prospectus. The eligibility of accounts is assessed only on the applicable selection date, while the eligibility of receivables is assessed only on the applicable selection date (in the case of receivables then existing in Additional Accounts on such date) or as of the date of creation (in the case of new receivables arising in an account). Accordingly, there can be no assurance that all of such accounts, receivables and participation interests will continue to meet the eligibility requirements as of any subsequent date, including any subsequent series closing date. Subject to certain limitations and restrictions, the transferors may also designate certain accounts or participation interests, if any, for removal from the trust, in which case such participation interests or the receivables of the removed accounts will be reassigned to the transferors. Throughout the term of the trust, the receivables in the trust will consist of receivables generated under the accounts (including Additional Accounts) and participation interests, if any. Such receivables will not include the receivables generated under removed accounts or removed participation interests. Centurion and FSB transfer to RFC III and RFC IV, respectively, and RFC III and RFC IV in turn transfer to the trust, the Issuer Rate Fees. Pursuant to the pooling and servicing agreement, these Issuer Rate Fees are treated as collections of finance charge receivables. See "Centurion's and FSB's Revolving Credit Businesses--Issuer Rate Fees" above. DESCRIPTION OF THE CERTIFICATES GENERAL The certificates will be issued from time to time pursuant to the pooling and servicing agreement and a related supplement substantially in the forms filed as exhibits to the registration statement of which this prospectus is a part. The trustee will provide a copy of the pooling and servicing agreement and the related supplement (without exhibits or schedules) to certificateholders on written request. The following summary describes certain terms of the pooling and servicing agreement and the related supplement and is qualified in its entirety by reference to the pooling and servicing agreement and the related supplement. The certificates will evidence undivided beneficial interests in the trust assets allocated to such certificates, representing the right to receive from such trust assets funds up to (but not in excess of) the amounts required to make payments of interest and principal in the manner described below. Unless otherwise stated in the related prospectus supplement, the certificates will be available for purchase in minimum denominations of $1,000 and integral multiples thereof in book-entry form. Payments of interest and principal will be made on each related interest payment date to the certificateholders in whose names the certificates were registered on the last day of the calendar month preceding such interest payment date, known as the record date, unless otherwise specified in the related prospectus supplement. BOOK-ENTRY REGISTRATION The certificates offered by this prospectus and the accompanying prospectus supplement will be delivered in book-entry form. This means that, except in the limited circumstances 34 described in "--Definitive Certificates" below, purchasers of certificates will not be entitled to have the certificates registered in their names. Furthermore, these purchasers will not be entitled to receive physical delivery of the certificates in definitive paper form. Instead, upon issuance, all the certificates of a class will be represented by one or more fully registered permanent global certificates, without interest coupons. Each global certificate will be deposited with a securities depository named The Depository Trust Company and will be registered in the name of its nominee, Cede & Co. No global certificate representing book-entry certificates may be transferred except as a whole by DTC to a nominee of DTC, or by a nominee of DTC to another nominee of DTC. Thus, DTC or its nominee will be the only registered holder of the certificates and will be considered the sole representative of the beneficial owners of certificates for purposes of the pooling and servicing agreement. The registration of the global certificates in the name of Cede & Co. will not affect beneficial ownership and is performed merely to facilitate subsequent transfers. The book-entry system, which is also the system through which most publicly traded common stock is held, is used because it eliminates the need for physical movement of securities. The laws of some jurisdictions, however, may require some purchasers to take physical delivery of their certificates in definitive form. These laws may impair the ability to own or transfer book-entry certificates. Purchasers of certificates in the United States may hold interests in the global certificates through DTC, either directly, if they are participants in that system--such as a bank, brokerage house or other institution that maintains securities accounts for its customers with DTC or its nominee--or otherwise indirectly through a participant in DTC. Purchasers of certificates in Europe may hold interests in the global certificates through Clearstream, Luxembourg or through Euroclear Bank S.A./N.V., as operator of the Euroclear system. Because DTC will be the only registered owner of the global certificates, Clearstream, Luxembourg and Euroclear will hold positions through their respective U.S. depositories, which in turn will hold positions on the books of DTC. As long as the certificates are in book-entry form, they will be evidenced solely by entries on the books of DTC, its participants and any indirect participants. DTC will maintain records showing: o the ownership interests of its participants, including the U.S. depositories; and o all transfers of ownership interests between its participants. The participants and indirect participants, in turn, will maintain records showing: o the ownership interests of their customers, including indirect participants, that hold the certificates through those participants; and o all transfers between these persons. Thus, each beneficial owner of a book-entry certificate will hold its certificate indirectly through a hierarchy of intermediaries, with DTC at the "top" and the beneficial owner's own securities intermediary at the "bottom." The trust, the trustee and their agents will not be liable for the accuracy of, and are not responsible for maintaining supervising or reviewing DTC's records or any participant's 35 records relating to book-entry certificates. The trust, the trustee and their agents also will not be responsible or liable for payments made on account of the book-entry certificates. Until definitive certificates are issued to the beneficial owners as described under "--Definitive Certificates" in this prospectus, all references to "holders" of certificates means DTC. The trust, the trustee and any paying agent or transfer agent and registrar may treat DTC as the absolute owner of the certificates for all purposes. Beneficial owners of book-entry certificates should realize that the trust will make all distributions of principal and interest on the certificates to DTC and will send all required reports and notices solely to DTC as long as DTC is the registered holder of the certificates. DTC and the participants are generally required by law to receive and transmit all distributions, notices and directions from the trustee to the beneficial owners through the chain of intermediaries. Similarly, the trustee will accept notices and directions solely from DTC. Therefore, in order to exercise any rights of a holder of certificates under the pooling and servicing agreement, each person owning a beneficial interest in the certificates must rely on the procedures of DTC and, in some cases, Clearstream, Luxembourg or Euroclear. If the beneficial owner is not a participant in that system, then it must rely on the procedures of the participant through which that person owns its interest. DTC has advised the trust that it will take actions under the pooling and servicing agreement only at the direction of its participants, which in turn will act only at the direction of the beneficial owners. Some of these actions, however, may conflict with actions it takes at the direction of other participants and beneficial owners. Notices and other communications by DTC to participants, by participants to indirect participants, and by participants and indirect participants to beneficial owners will be governed by arrangements among them. Beneficial owners of book-entry certificates should also realize that book- entry certificates may be more difficult to pledge because of the lack of a physical certificate. Beneficial owners may also experience delays in receiving distributions on their certificates since distributions will initially be made to DTC and must be transferred through the chain of intermediaries to the beneficial owner's account. THE DEPOSITORY TRUST COMPANY DTC is a limited-purpose trust company organized under the New York Banking Law and is a "banking institution" within the meaning of the New York Banking Law. DTC is also 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 under Section 17A of the Securities Exchange Act of 1934, as amended. DTC was created to hold securities deposited by its participants and to facilitate the clearance and settlement of securities transactions among its participants through electronic book-entry changes in accounts of the participants, thus eliminating the need for physical movement of securities. DTC is owned by a number of its participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. The rules applicable to DTC and its participants are on file with the SEC. 36 CLEARSTREAM, LUXEMBOURG Clearstream, Luxembourg is registered as a bank in Luxembourg and is regulated by the Banque Centrale du Luxembourg, the Luxembourg Central Bank, which supervises Luxembourg banks. Clearstream, Luxembourg holds securities for its customers and facilitates the clearance and settlement of securities transactions by electronic book-entry transfers between their accounts. Clearstream, Luxembourg provides various services, including safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream, Luxembourg also deals with domestic securities markets in over 30 countries through established depository and custodial relationships. Clearstream, Luxembourg has established an electronic bridge with Euroclear in Brussels to facilitate settlement of trades between Clearstream, Luxembourg and Euroclear. Clearstream, Luxembourg currently accepts over 110,000 securities issues on its books. Clearstream, Luxembourg's customers are worldwide financial institutions including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations. Clearstream, Luxembourg's U.S. customers are limited to securities brokers and dealers and banks. Currently, Clearstream, Luxembourg has approximately 2,000 customers located in over 80 countries, including all major European countries, Canada, and the United States. Indirect access to Clearstream, Luxembourg is available to other institutions that clear through or maintain a custodial relationship with an account holder of Clearstream, Luxembourg. Euroclear was created in 1968 to hold securities for participants of Euroclear and to clear and settle transactions between Euroclear participants through simultaneous electronic book-entry delivery against payment. This system eliminates the need for physical movement of securities and any risk from lack of simultaneous transfers of securities and cash. Euroclear includes various other services, including securities lending and borrowing and interfaces with domestic markets in several countries. The Euroclear operator is Euroclear Bank, S.A./N.V. The Euroclear operator conducts all operations. All Euroclear securities clearance accounts and Euroclear cash accounts are accounts with the Euroclear operator. The Euroclear operator establishes policy for Euroclear on behalf of Euroclear participants. Euroclear participants include banks, including central banks, securities brokers and dealers and other professional financial intermediaries and may include the underwriters. Indirect access to Euroclear 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 Terms and Conditions govern transfers of securities and cash within Euroclear, withdrawals of securities and cash from Euroclear, and receipts of payments with respect to securities in Euroclear. All securities in Euroclear are held on a fungible basis without attribution of specific securities to specific securities clearance accounts. The Euroclear operator acts under the Terms and Conditions only on behalf of Euroclear participants, and has no record of or relationship with persons holding through Euroclear participants. This information about DTC, Clearstream, Luxembourg and Euroclear has been provided by each of them for informational purposes only and is not intended to serve as a representation, warranty or contract modification of any kind. 37 DISTRIBUTIONS ON BOOK-ENTRY CERTIFICATES The trust will make distributions of principal of and interest on book-entry certificates to DTC. These payments will be made in immediately available funds by the trust's paying agent, The Bank of New York, at the office of the paying agent in New York City that the trust designates for that purpose. In the case of principal payments, the global certificates must be presented to the paying agent in time for the paying agent to make those payments in immediately available funds in accordance with its normal payment procedures. Upon receipt of any payment of principal of or interest on a global certificate, DTC will immediately credit the accounts of its participants on its book-entry registration and transfer system. DTC will credit those accounts with payments in amounts proportionate to the participants' respective beneficial interests in the stated principal amount of the global certificate as shown on the records of DTC. Payments by participants to beneficial owners of book-entry certificates will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of those participants. Distributions on book-entry certificates held beneficially through Clearstream, Luxembourg will be credited to cash accounts of Clearstream, Luxembourg customers in accordance with its rules and procedures, to the extent received by its U.S. depository. Distribution on book-entry certificates held beneficially through Euroclear will be credited to the cash accounts of Euroclear participants in accordance with the Terms and Conditions, to the extent received by its U.S. depository. In the event definitive certificates are issued, distributions of principal of and interest on definitive certificates will be made directly to the holders of the definitive certificates in whose names the definitive certificates were registered at the close of business on the related Record Date. GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES Initial settlement for the certificates will be made in immediately available funds. Secondary market trading between DTC participants will occur in the ordinary way in accordance with DTC's rules and will be settled in immediately available funds using DTC's Same-Day Funds Settlement System. Secondary market trading between Clearstream, Luxembourg customers and/or Euroclear participants will occur in the ordinary way in accordance with the applicable rules and operating procedures of Clearstream, Luxembourg and Euroclear. Such secondary market trading will be settled using the procedures applicable to conventional eurobonds in immediately available funds. Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through Clearstream, Luxembourg customers or Euroclear participants, on the other, will be effected in DTC in accordance with DTC's rules on behalf of the relevant European international clearing system by the U.S. depositories. However, cross-market transactions of this type will require delivery of instructions to the relevant European international clearing system by the counterparty in that 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 38 instructions to its U.S. depository to take action to effect final settlement on its behalf by delivering or receiving certificates in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Clearstream, Luxembourg customers and Euroclear participants may not deliver instructions directly to DTC. Because of time-zone differences, credits to certificates in Clearstream, Luxembourg or Euroclear as a result of a transaction with a DTC participant will be made during subsequent securities settlement processing and will be credited the business day following a DTC settlement date. The credits to or any transactions in the certificates settled during processing will be reported to the relevant Euroclear participants or Clearstream, Luxembourg customers on that business day. Cash received in Clearstream, Luxembourg or Euroclear as a result of sales of certificates by or through a Clearstream, Luxembourg 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, Luxembourg or Euroclear cash account only as of the business day following settlement in DTC. Although DTC, Clearstream, Luxembourg and Euroclear have agreed to these procedures in order to facilitate transfers of certificates among participants of DTC, Clearstream, Luxembourg and Euroclear, they are under no obligation to perform or continue to perform these procedures and these procedures may be discontinued at any time. DEFINITIVE CERTIFICATES Beneficial owners of book-entry certificates may exchange those certificates for definitive certificates registered in their name only if: o DTC is unwilling or unable to continue as depository for the global certificates or ceases to be a registered "clearing agency" and the trust is unable to find a qualified replacement for DTC; o the transferors, at their option, elect to terminate the book-entry system through DTC; or o after the occurrence of a servicer default, certificate owners evidencing not less than 50% of the unpaid outstanding principal amount of the certificates advise the trustee and DTC that the continuation of a book- entry system is no longer in the best interests of those certificate owners. If any of these three events occurs, DTC is required to notify the beneficial owners through the chain of intermediaries that the definitive certificates are available. The appropriate global certificate will then be exchangeable in whole for definitive certificates in registered form of like tenor and of an equal aggregate stated principal amount, in specified denominations. Definitive certificates will be registered in the name or names of the person or persons specified by DTC in a written instruction to the registrar of the certificates. DTC may base its written instruction upon directions it receives from its participants. Thereafter, the holders of the definitive certificates will be recognized as the "holders" of the certificates under the pooling and servicing agreement. Definitive certificates will be transferable and exchangeable at the offices of the transfer agent and registrar, which will initially be the trustee. No service charge will be imposed for any registration of transfer or exchange, but the transfer agent and registrar may require 39 payment of a sum sufficient to cover any tax or other governmental charge imposed in connection with that registration. INTEREST Interest will accrue on the certificates of a series or class offered hereby at the per year 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 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 or Early Accumulation Period begins for such series, interest will thereafter 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) may 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. Any earnings (net of losses and investment expenses) on funds in an interest funding account will be paid to, or at the direction of, the transferors except as otherwise specified in any supplement. 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 that series. Generally, the principal for a series will be scheduled to be paid either (a) in full on an expected date specified in the related prospectus supplement, in which case such series will have a Controlled Accumulation Period as described below or (b) in installments commencing on a date specified in the related prospectus supplement, in which case such series generally will have a Controlled Amortization Period as described below. If a series has more than one class of certificates, each class may have a different method of paying principal, a different expected final payment date or a different principal commencement date. The payment of principal on the certificates of a series or class may begin earlier than the applicable expected final payment date or principal commencement date, and the final principal payment with respect to the certificates of a series or class may be made later than the applicable expected final payment date or other expected date, if a Pay-Out Event or Reinvestment Event occurs with respect to such series or class. See "Risk Factors--Payment patterns of account holders may not be consistent over time and variations in these payment patterns may result in reduced payment of principal, or receipt of payment of principal earlier or later than expected" in this 40 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 invested amount of that series will: o if that series is a principal sharing series, be treated as Shared Principal Collections and will be distributed to, or for the benefit of, the certificateholders of other series in the same group; or o if that series is not a principal sharing series, be paid to the holders of the Transferor Certificates or deposited into the Special Funding Account, as more fully described in the related prospectus supplement. The certificates of any series may have a Controlled Accumulation Period. During the Controlled Accumulation Period for a series, collections of principal receivables and certain other amounts allocable to that series (including Shared Principal Collections, if any) will be deposited on each Distribution Date in a principal funding account established for the benefit of the certificateholders of that series and used to make principal distributions to the certificateholders of that series when due on the expected final payment date. The amount to be deposited in a principal funding account for any series 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 a Controlled 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 with respect to deposits of principal into the principal funding accounts. The certificates of any series may have a Controlled Amortization Period. During the Controlled Amortization Period for a series, collections of principal receivables and certain other amounts allocable to that series (including Shared Principal Collections, if any) will be used on each Distribution Date to make principal distributions to any class of certificateholders then scheduled to receive those distributions. The amount to be distributed on any Distribution Date to certificateholders of any series offered by this prospectus may, but will not necessarily, be limited to a controlled amortization amount specified in the related prospectus supplement plus any existing controlled amortization amounts arising from prior Distribution Dates. If a series has more than one class of certificates that has a Controlled Amortization Period, 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 so specified and under the conditions set forth in the related prospectus supplement for a series having a Controlled Accumulation Period, the certificates of that series may have an Early Accumulation Period. During the Early Accumulation Period for a series, collections of principal receivables and certain other amounts allocable to that series (including Shared Principal Collections, if any) will be deposited on each Distribution Date in a principal funding account and used to make distributions of principal to the certificateholders of that series on the expected final payment date. See "Series Provisions--Pay-Out Events" in the 41 accompanying prospectus supplement for a discussion of the events that might lead to the commencement of the Early Accumulation Period for a series. The certificates of any series may have an Early Amortization Period. During the Early Amortization Period, collections of principal receivables and certain other amounts allocable to that series (including Shared Principal Collections, if any) will be distributed monthly as principal payments to the applicable certificateholders, beginning with the first Special Payment Date. During the Early Amortization Period for a series, distributions of principal to certificateholders of that series will not be limited to any controlled accumulation amount or controlled amortization amount. In addition, upon the start of the Early Amortization Period for a series, any funds on deposit in a principal funding account for that series will be paid to the certificateholders of the relevant class or series on the first Special Payment Date. See "Series Provisions--Pay-Out Events" in the accompanying prospectus supplement for a discussion of the events that might lead to the commencement 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 a deposit account 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 a Controlled Accumulation Period or Early Accumulation Period with respect thereto, such class may be subject to a maturity liquidity facility or a deposit account 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. PAY-OUT EVENTS AND REINVESTMENT EVENTS The Revolving Period for a series will continue until the start of the Controlled Amortization Period or the Controlled Accumulation Period, unless a Pay-Out Event or Reinvestment Event occurs. A Pay-Out Event may include, but is not required to include and is not limited to: o certain events of bankruptcy, insolvency, liquidation, receivership, or conservatorship relating to a transferor or holder of the original transferor certificate; o the trust becoming an "investment company" within the meaning of the Investment Company Act of 1940, as amended; o a transferor's failure to make any payment or deposit on the date required in the pooling and servicing agreement (or within the applicable grace period); o the breach of certain other covenants, representations or warranties contained in the pooling and servicing agreement, after any applicable notice and cure period (and, if so specified in the related supplement, only to the extent that such breach has a material adverse effect on the related certificateholders); o the failure by the transferors to convey receivables under Additional Accounts to the trust when required by the pooling and servicing agreement; 42 o a reduction in the series adjusted portfolio yield below the rates, and for the period, specified in the related prospectus supplement; and o any Servicer Default occurs. An Early Amortization Period for a series will begin on the day on which a Pay-Out Event occurs or is deemed to occur. Monthly distributions of principal to the certificateholders of that series will begin on the Special Payment Date in the Monthly Period following the Monthly Period in which such Pay-Out Event occurred. Any amounts then on deposit in a principal funding account or an interest funding account for that series will be distributed on that first Special Payment Date to the relevant certificateholders. 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 by this prospectus, will be described in the related prospectus supplement. A particular series may have no Pay-Out Events or only limited Pay-Out Events, but may have Reinvestment Events. A Reinvestment Event may include all or some of the events that constitute Pay-Out Events for other series. The Early Accumulation Period for a series will begin on the day on which a Reinvestment Event occurs or is deemed to have occurred. If a series has more than one class of certificates, each class may have different Reinvestment Events (or may only have Pay-Out Events) which, in the case of any series of certificates offered by this prospectus, will be described in the related prospectus supplement. In addition to the consequences of a Pay-Out Event or Reinvestment Event discussed above, if an insolvency event occurs, the transferors immediately will stop transferring principal receivables to the trust. They also will promptly notify the trustee of the insolvency event. So long as any series issued prior to April 16, 2004 is outstanding, within 15 days of the insolvency event, 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 unless instructions otherwise are received within a specified period from holders of more than 50% of the invested amount of each series of certificates issued and outstanding (or, for any series with two or more classes of certificates, 50% of the invested amount of each class, which may include a collateral invested amount) to the effect that such persons disapprove of the liquidation of receivables. The trustee will 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 proceeds from the sale, disposition or liquidation or the receivables will be treated as collections on the receivables and applied as provided above and in each prospectus supplement. An "insolvency event" shall occur if any transferor or other holder of the original transferor certificate shall consent to or fail to object to the appointment of a conservator or receiver or liquidator or trustee in any insolvency, bankruptcy, receivership, conservatorship, liquidation, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to such transferor or other holder or of or relating to all or substantially all of such transferor's or other holder's property, or a court or agency or supervisory authority having jurisdiction in the premises shall issue, or enter against such transferor or other holder a decree or order for the appointment of a conservator or receiver or liquidator or trustee in any insolvency, bankruptcy, receivership, conservatorship, liquidation, readjustment of debt, marshaling of assets and liabilities or similar proceedings or for the winding-up or liquidation of such transferor's or other holder's affairs; or any such transferor or other holder shall admit 43 in writing its inability, or shall be unable, to pay its debts generally as they become due, file a petition to take advantage of any applicable insolvency, bankruptcy, reorganization, liquidation, receivership, or conservatorship statute, make any assignment for the benefit of its creditors or voluntarily suspend payment of its obligations; or a proceeding shall have been instituted against such transferor or other holder by a court having jurisdiction in the premises seeking a decree or order for relief in respect of any such person in an involuntary case under any bankruptcy, insolvency, reorganization or liquidation statute, or for the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official, of such transferor or other holder or for any substantial part of such transferor's or other holder's property, or for the liquidation and winding up of such transferor's or other holder's affairs and, if instituted against such transferor or other holder, any such proceeding shall continue undismissed or unstayed and in effect for a period of 60 consecutive days, or any of the actions sought in such proceeding shall occur. If the only Pay-Out Event or Reinvestment Event to occur with respect to any series is the bankruptcy, insolvency, liquidation receivership or conservatorship of a transferor, the trustee may not be permitted to suspend transfers of receivables to the trust, and the instructions to sell the receivables may not be given effect. 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. The share of the Servicing Fee allocable to each series of certificates on any Distribution Date generally will be equal to one-twelfth of the product of: (i) the applicable servicing fee percentage for that series; and (ii) the invested amount of that series for the related Monthly Period. The Servicing Fee will be allocated among the transferors' interest, certificateholders of that series and, if any, the holder of the collateral interest of that series. The servicer will pay from its servicing compensation certain expenses incurred in connection with servicing the receivables including, without limitation, payment of the fees and disbursements of the trustee, paying agent, transfer agent and registrar and independent accountants. THE POOLING AND SERVICING AGREEMENT GENERALLY CONVEYANCE OF RECEIVABLES On the first series closing date: o Credco sold and assigned to RFC II, for sale and assignment by RFC II to the trust, Credco's interest in all receivables in the accounts existing at the applicable cut-off date, all Recoveries allocable to the trust, and the proceeds of all of the foregoing, and o the transferors at the time assigned to the trust their respective interests in the receivables in the accounts existing at the applicable cut-off date, all receivables thereafter created from time to time under the accounts, all Recoveries allocable to the trust and the proceeds of all of the foregoing. 44 From time to time, RFC III and RFC IV may assign to the trust the receivables in designated Additional Accounts existing at the close of business on the applicable cut-off-date. To the extent that Credco owns any receivables arising in any designated Additional Accounts, it may assign those receivables to RFC II, and RFC II may then assign those receivables to the trust. In addition, each of RFC II, RFC III and RFC IV may assign to the trust its interest in participations, all insurance proceeds, all Recoveries allocable to the trust, and the proceeds of all of the foregoing. REPRESENTATIONS AND WARRANTIES Under the pooling and servicing agreement, RFC II, RFC III and RFC IV make representations and warranties to the trust about the receivables, to the effect, among other things, that: (i) as of each applicable selection date, each account was an Eligible Account; (ii) as of each applicable selection date, each of the receivables then existing in the accounts was an Eligible Receivable; and (iii) as of the date of creation of any new receivable, such receivable is an Eligible Receivable. If a transferor materially breaches any representation and warranty described in this paragraph, and such breach remains uncured for 60 days (or such longer period as to which the servicer and the trustee agree) after the earlier to occur of the discovery of the breach by such transferor and receipt of written notice of the breach by such transferor, and the breach has a material adverse effect on the certificateholders' interest in such receivable, all of the Ineligible Receivables will be reassigned to such transferor on the terms and conditions set forth below. In such case, the account will no longer be included as an account in the trust portfolio. An Ineligible Receivable will be reassigned to the related transferor on or before the Monthly Period in which such reassignment obligation arises by the servicer deducting the portion of such Ineligible Receivable that is a principal receivable from the aggregate amount of principal receivables used to calculate the Transferor Amount. In the event that the exclusion of an Ineligible Receivable from the calculation of the Transferor Amount would cause the Transferor Amount to be less than the Required Transferor Amount, on the Distribution Date following the Monthly Period in which such reassignment obligation arises, such transferor will make a deposit into the Special Funding Account in immediately available funds in an amount equal to the amount by which the Transferor Amount would be reduced below the Required Transferor Amount. The reassignment of any Ineligible Receivable to the related transferor, and the obligation of such transferor to make deposits into the Special Funding Account as described in the preceding paragraph, is the sole remedy respecting any breach of the representations and warranties described in the preceding paragraphs with respect to such receivable available to the certificateholders or the trustee on behalf of the certificateholders. Each transferor will also make representations and warranties to the trust to the effect, among other things, that, as of each series closing date: (i) it is a corporation or a limited liability company, as applicable; 45 (ii) it has the authority to consummate the transactions contemplated by the pooling and servicing agreement and each supplement; and (iii) the pooling and servicing agreement and each supplement constitute: (a) a valid, binding and enforceable agreement of such transferor and (b) a valid sale, transfer and assignment to the trust of all right, title and interest of such transferor 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) and in recoveries or the grant of a first-priority perfected security interest under the applicable UCC in such receivables and the proceeds thereof (including proceeds in any of the accounts established for the benefit of the certificateholders) and in Recoveries, which is effective as to each receivable then existing on such date. In the event of a material breach of any of the representations and warranties described in the above paragraphs that has a material adverse effect on the certificateholders' interest in the receivables or the availability of the proceeds thereof to the trust (which determination will be made without regard to whether funds are then available pursuant to any series enhancement), either the trustee or certificateholders holding certificates evidencing not less than 50% of the aggregate unpaid principal amount of all outstanding certificates, by written notice to the transferors and the servicer (and to the trustee if given by the certificateholders), may direct the related transferor to accept the reassignment of the receivables in the trust within 60 days of such notice, or within such longer period specified in such notice. Such transferor will be obligated to accept the reassignment of such 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, and (ii) any material adverse effect caused by such breach shall have been cured. The price for such reassignment will be an amount equal to the sum of the amounts specified therefor with respect to each series in the related supplement. The payment of such reassignment price in immediately available funds will be considered a payment in full of the certificateholders' interest and such funds will be distributed upon presentation and surrender of the certificates. If the trustee or certificateholders give a notice as provided above, the obligation of the related transferor to make any such deposit will constitute the sole remedy respecting a breach of the representations and warranties available to certificateholders or the trustee on behalf of certificateholders. See "Description of the Purchase Agreements-- Representations and Warranties" in this prospectus. On each series closing date, the trustee will authenticate and deliver one or more certificates representing the series or class of certificates, in each case against payment to the transferors of the net proceeds of the sale of the certificates. In the case of the first series closing date, the trustee delivered the transferor certificate, representing the transferors' interest. 46 In connection with each transfer of receivables to the trust, the computer records relating to such receivables will be marked to indicate that those receivables have been conveyed to the trust. In addition, the trustee will be provided with a computer file or a microfiche list containing a true and complete list showing for each account, as of the applicable cut-off date: (i) its account number and (ii) except in the case of new accounts and the list delivered on the substitution date, the aggregate amount of receivables in such account. The transferors, Centurion, FSB and Credco will retain and will not deliver to the trustee any other records or agreements relating to the accounts or the receivables, as applicable. 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 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 transferor or the trust. Each transferor has filed and is required to file UCC financing statements for the transfer of the receivables to the trust meeting the requirements of applicable state law. See "Certain Legal Aspects of the Receivables" in this prospectus. It is not required or anticipated that the trustee will make any initial or periodic general examination of the receivables or any records relating to the receivables for the purpose of establishing the presence or absence of defects, the compliance by Credco, Centurion, FSB and the transferors of their respective 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 and servicing agreement, any supplement or for any other purpose. The servicer, however, will deliver to the trustee on or before March 31 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. THE TRANSFEROR CERTIFICATES; ADDITIONAL TRANSFERORS The pooling and servicing agreement provides that the transferors may exchange a portion of the original transferor certificate for a Supplemental Certificate for transfer or assignment to a person designated by the transferors upon the execution and delivery of a supplement to the pooling and servicing agreement (which supplement shall be subject to the amendment section of the pooling and servicing agreement to the extent that it amends any of the terms of the pooling and servicing agreement; see "--Amendments"); provided that prior to such transfer or assignment: (a) the Rating Agency Condition is satisfied, (b) each transferor shall have delivered to the trustee an officer's certificate to the effect that such transferor reasonably believes that such transfer or assignment will not, based on the facts known to such officer at the time of such certification, have an adverse effect, (c) the transferors shall have delivered to the trustee a Tax Opinion with respect to such transfer or assignment, 47 (d) the aggregate amount of principal receivables in the trust as of the date of such transfer or assignment will be greater than the Required Minimum Principal Balance as of such date, and (e) the transferors or other holders of the original transferor certificate as of the date of such transfer or assignment shall have a remaining interest in the trust of not less than, in the aggregate, 2% of the total amount of principal receivables and funds on deposit in the Special Funding Account, the principal funding account and any other similar account. The primary purpose for such a transfer would be to convey an interest in the original transferor certificate to another person. Any transfer or assignment of a Supplemental Certificate is subject to the condition set forth in (c) above. If an affiliate of the transferors owns Eligible Accounts, the receivables of which are eligible for transfer to the trust, the transferors may wish to designate such affiliate to be included as a "transferor" under the pooling and servicing agreement (by means of an amendment to the pooling and servicing agreement that will not require the consent of any certificateholder; see "-- Amendments" below). In connection with the designation of an additional transferor, the transferors will surrender the transferor certificate to the trustee in exchange for a newly issued transferor certificate modified to reflect such additional transferor's interest in the Transferors' Interest; provided, however, that: (i) the conditions set forth in clauses (a), (c) and (e) in the preceding paragraph with respect to a transfer of a Supplemental Certificate shall have been satisfied with respect to such designation and transfer, and (ii) any applicable conditions described in "--Additions of Accounts or Participation Interests" below shall have been satisfied with respect to the transfer of receivables or participation interests by any additional transferor to the trust. Following the inclusion of an additional transferor, the additional transferor will be treated in the same manner as a transferor, and each additional transferor generally will have the same obligations and rights as a transferor described herein. ADDITIONS OF ACCOUNTS OR PARTICIPATION INTERESTS Under the pooling and servicing agreement, the transferors (without independent verification of their authority) may designate from time to time Additional Accounts to be included as accounts in the trust. Subject only to the eligibility requirements in the purchase agreements and the pooling and servicing agreement and applicable regulatory guidelines, the account owners have the discretion to select the accounts from the Total Portfolio for addition to the Trust Portfolio. In connection with any such designation, the transferors will convey to the trust all of their respective interests in all receivables arising from those Additional Accounts. The conveyance by any transferor is subject to the following conditions, among others: o each such Additional Account must be an Eligible Account, and o except for the addition of new accounts, (a) the selection of the Additional Accounts is done in a manner which the relevant transferor reasonably believes will not result in an adverse effect, and (b) the Rating Agency Condition will have been satisfied. 48 The transferors will be obligated to designate Additional Accounts (to the extent available) if the aggregate amount of principal receivables in the trust at the end of any Monthly Period is less than the Required Minimum Principal Balance as of the end of that Monthly Period. Instead of adding Additional Accounts, the transferors may convey participation interests to the trust. Any Additional Accounts designated to the trust will be selected from accounts owned by Centurion or FSB. Therefore, if Additional Accounts are to be designated, a transferor shall, under the applicable purchase agreement, request that Centurion or FSB, as applicable, designate accounts which qualify as Eligible Accounts to such transferor. Such transferor will then designate such accounts to the trust. Each Additional Account must be an Eligible Account as of the applicable selection date. Because Additional Accounts or participation interests may be created after the initial selection date and may not have been a part of Centurion's portfolio of accounts as of the initial selection date, they may not be of the same credit quality as the initial accounts. The Additional Accounts or participation interests may have been originated at a later date using credit, origination or underwriting criteria different from those which were applied to the initial accounts. Furthermore, they may have been acquired from another revolving credit issuer or entity that had different credit, origination or underwriting criteria. Consequently, the performance of such Additional Accounts or participation interests may be better or worse than the performance of the initial accounts. REMOVAL OF ACCOUNTS On any day of any Monthly Period, the transferors (without independent verification of their authority) may, but shall not be obligated to, acquire all receivables and proceeds thereof with respect to removed accounts and participation interests. The removal could occur for a number of reasons, including a determination by the transferors that the trust contains more receivables than the transferors are obligated to retain in the trust under the pooling and servicing agreement and any applicable supplements and a determination that the transferors do not desire to obtain additional financing through the trust at such time. The transferors are permitted to designate and require reassignment of the receivables from removed accounts and participation interests upon satisfaction of the conditions listed in the pooling and servicing agreement, including: o delivery by the transferors to the trustee of a computer file or microfiche list containing a true and complete list of all removed accounts, such accounts to be identified by, among other things, account number and their aggregate amount of receivables; o the delivery by each transferor to the trustee of an officer's certificate to the effect that, in the reasonable belief of such transferor, (i) no selection procedure believed by such transferor to be materially adverse to, or materially beneficial to, the interests of the certificateholders or such transferor was utilized in removing the removed accounts from among any pool of accounts of a similar type, (ii) such removal will not have an adverse effect, and (iii) such removal will not result in the occurrence of a Pay-Out Event or a Reinvestment Event; 49 o at least eight Business Days prior to the removal, the transferors shall have delivered written notice of the removal to each Rating Agency and the trustee; and o the Rating Agency Condition shall have been satisfied with respect to such removal. In addition, the transferors' designation of any account as a removed account shall be random, unless the removed accounts are accounts (i) originated or acquired under a specific affinity agreement, private label agreement, merchant agreement, co-branding agreement or other program which is co-owned, operated or promoted, provided that such agreement has terminated in accordance with the terms therein or (ii) being removed due to other circumstances caused by requirements of agreements in which the right to such removed accounts or control thereof is determined by a party or parties to such agreements other than the transferors, any affiliate of the transferors or any agent of the transferors. DISCOUNT OPTION The pooling and servicing agreement provides that the transferors may at any time and from time to time designate a fixed or variable percentage, known as the discount percentage, of the amount of principal receivables existing and arising in all or any specified portion of the accounts on and after the date such designation becomes effective to be treated as finance charge receivables, which will be called discount receivables. Although there can be no assurance that the transferors will do so, such designation may occur because the transferors 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 collections of finance charge receivables or to avoid the occurrence of a Pay-Out Event or Reinvestment Event relating to the reduction of the average yield on the portfolio of accounts in the trust, if the related supplement provides for such a Pay-Out Event or Reinvestment Event. The existence of discount receivables will result in an increase in the amount of collections of finance charge receivables, a reduction in the balance of principal receivables outstanding and a reduction in the Transferor Amount. After any such designation, pursuant to the pooling and servicing agreement, the transferors may, without notice to or consent of the certificateholders, from time to time increase, reduce or withdraw the percentage of receivables subject to such designation. The transferors must provide 30 days prior written notice to the servicer, the trustee, each Rating Agency and any provider of Series Enhancement of any such designation or increase, reduction or withdrawal. Such designation or increase, reduction or withdrawal will become effective on the date specified therein only if o each transferor delivers to the trustee and certain providers of series enhancement a certificate of an authorized officer of that transferor to the effect that, based on the facts known to that transferor at the time, such designation or increase, reduction or withdrawal will not at the time of its occurrence cause a Pay-Out Event or Reinvestment Event or an event that, with notice or the lapse of time or both, would constitute a Pay-Out Event or Reinvestment Event, to occur with respect to any series, o the Rating Agency Condition is satisfied with respect to such designation or increase, reduction or withdrawal, and o only in the case of a reduction or withdrawal of the discount percentage, the transferors will have 50 (i) delivered to the trustee an opinion of counsel to the effect that such reduction of the percentage of discount receivables will not adversely affect the tax characterization as debt of any certificates of any outstanding series or class that were characterized as debt at the time of their issuance and (ii) in certain circumstances, obtained the prior written consent of each provider of series enhancement entitled to consent thereto. On the Date of Processing of any collections on or after the date the exercise of the discount option takes effect, the product of: o the discount percentage then in effect, and o collections of receivables with respect to the accounts on or after the date such option is exercised that otherwise would be principal receivables, will be deemed collections of finance charge receivables and will be applied accordingly, unless otherwise provided in the related prospectus supplement. On the first series closing date, the transferors at the time designated an initial discount percentage equal to 2.0%. As of the close of business on March 26, 2004, the transferors reduced the discount percentage to 0.0%. Any increase, reduction or withdrawal of such discount percentage will be made in accordance with the conditions described in the preceding paragraphs. PREMIUM OPTION The pooling and servicing agreement provides that the transferors may at any time and from time to time designate a specified fixed or variable percentage, known as the premium percentage, of the amount of finance charge receivables existing arising in all or any specified portion of the accounts existing on and after the date such designation becomes effective to be treated as principal receivables, which will be called premium receivables. Although there can be no assurance that the transferors will exercise the option to designate premium receivables, the transferors may do so if, among other things, the transferors determine that the exercise of such option is needed to cover shortfalls of the principal receivables available to make scheduled principal payments on the certificates or scheduled deposits into the principal funding account, as applicable, or to avoid the occurrence of a Pay- Out Event or a Reinvestment Event relating to the existence of such shortfalls. Any such designation would result in an increase in the amount of collections of principal receivables and a lower yield on the portfolio with respect to collections of finance charge receivables than would otherwise occur. After any such designation, pursuant to the pooling and servicing agreement, the transferors may, without notice to or consent of the certificateholders, from time to time increase, reduce or withdraw the premium percentage. The transferors must provide 30 days prior written notice to the servicer, the trustee, each Rating Agency and any provider of series enhancement of any such designation or increase, reduction or withdrawal. Such designation or increase, reduction or withdrawal will become effective on the date specified therein only if: o each transferor delivers to the trustee and certain providers of series enhancement a certificate of an authorized officer of that transferor to the effect that, based on the facts known to that transferor at the time, such designation or increase, reduction or withdrawal will not at the time of its occurrence cause a Pay-Out Event or 51 Reinvestment Event or an event that, with notice or the lapse of time or both, would constitute a Pay-Out Event or Reinvestment Event, to occur with respect to any series, o the Rating Agency Condition will have been satisfied with respect to such designation or increase, reduction or withdrawal, o in the case of a designation or increase of the premium percentage, the transferors will have delivered to the trustee an opinion of counsel to the effect that such designation or increase of the premium percentage will not adversely affect the tax characterization as debt of any certificates of any outstanding series or class that were characterized as debt at their time of issuance, and o in certain circumstances, the transferors will have obtained the prior written consent of each provider of series enhancement entitled to consent thereto. On the Date of Processing of any collections on or after the date the exercise of the premium option takes effect, the product of: o the premium percentage then in effect and o collections of receivables with respect to the accounts on or after the date such option is exercised that otherwise would be finance charge receivables, will be deemed collections of principal receivables and will be applied accordingly, unless otherwise provided in the related supplement. INDEMNIFICATION The pooling and servicing 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 certain of the servicer's actions or omissions with respect to the trust pursuant to the pooling and servicing agreement. Under the pooling and servicing agreement, each transferor has agreed to be liable directly to an injured party for the entire amount of any liabilities of the trust (other than those incurred by a certificateholder in the capacity of an investor in the certificates of any series) arising out of or based on each of the arrangements created by the pooling and servicing agreement and the actions of each transferor taken pursuant thereto as though the pooling and servicing agreement created a partnership under the New York Uniform Partnership Act in which each transferor was a general partner. Except as provided in the two preceding paragraphs, the pooling and servicing agreement provides that neither the transferors nor the servicer nor any of their respective 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 pursuant to the pooling and servicing agreement. However, neither the transferors nor the servicer 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 duties or by reason of reckless disregard of its obligations and duties thereunder. In addition, the pooling and servicing 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 and servicing agreement. The servicer may, in its 52 sole discretion, undertake any such legal action which it may deem necessary or desirable for the benefit of certificateholders with respect to the pooling and servicing agreement and the rights and duties of the parties thereto and the interests of the certificateholders thereunder. COLLECTION AND OTHER SERVICING PROCEDURES TRS has been servicing credit card accounts since 1987 and charge card accounts since 1958 when American Express began offering such accounts. TRS has been the servicer for the trust since the trust's formation in 1996. It has been servicing securitized consumer charge card receivables since 1992 in its capacity as the servicer of the American Express Master Trust. TRS currently is the servicer of the American Express Issuance Trust and, in the future, may be the servicer of other master trusts or other securitization special purpose entities. Pursuant to the pooling and servicing agreement, the servicer, whether acting itself or through one or more subservicers, is responsible for servicing, collecting, enforcing and administering the receivables in accordance with customary and usual procedures for servicing similar credit or charge receivables. Servicing activities to be performed by the servicer include collecting and recording payments, communicating with account holders, investigating payment delinquencies, evaluating the increase of credit limits and the issuance of credit cards and credit accounts, providing billing and tax records to account holders 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 and servicing agreement, maintaining the agreements, documents and files relating to the accounts and receivables as custodian for the trust and providing related data processing and reporting services for certificateholders and on behalf of the trustee. If TRS were to become a debtor in a bankruptcy case, a Servicer Default would occur and TRS could be removed as servicer for the trust and a successor servicer would be appointed. See "The Pooling and Servicing Agreement Generally--Servicer Default" in this prospectus for more information regarding the appointment of a successor servicer. OUTSOURCING OF SERVICING Pursuant to the pooling and servicing agreement, TRS, 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 and servicing agreement, the applicable account guidelines and the applicable account agreements. TRS has outsourced certain of its servicing functions by contracting with affiliated and unaffiliated third parties. Pursuant to a sub-servicing agreement, TRS has contracted with Amex Card Services Company, a Delaware corporation that is a wholly-owned subsidiary of TRS, to act as subservicer and to perform certain servicing activities consisting of credit authorization, card fulfillment and replacement, credit operations and collections, customer servicer and operation of telephone service centers, fraud services, customer billing and remittance processing. Amex Card Services Company also provides these services with respect to receivables that have not been securitized through the issuing entity. TRS also has contracted with Centurion and FSB to perform certain limited servicing functions with respect to the receivables arising in the accounts owned by each of Centurion and FSB, consisting of 53 collecting and depositing or causing to be deposited into the collection account payments received in respect of such receivables and, when appropriate, charging off as uncollectible such receivables. The performance of certain servicing functions has been outsourced by TRS and its affiliates to third party vendors. Functions that are performed by outside vendors include card production and fulfillment, card replacement, contacting of customers to collect delinquent and charged-off balances, responding to telephone service center inquiries, front end processing of customer disputes, data entry and imaging and remittance processing. Among other functions, TRS and its affiliates identify areas of risk, design, develop and implement models to minimize financial exposure and maximize customer spending, develop credit underwriting policies and procedures, underwrite and re-underwrite accounts and formulate risk management and credit criteria. The logic and rules inherent in the systems used by outside vendors to route customer inquiries and to make decisions about accounts are developed by TRS and its affiliates. Third party vendors are required to follow detailed account management procedures and policies of TRS in connection with any decisions made with respect to accounts with respect to which they provide services. TRS and its affiliates regularly audit and assess the performance of third party vendors to measure vendor quality and compliance. All third party vendors are required to comply with the account owners' security and information protection requirements. Decisions to retain a third party vendor are based on cost, the ability of third parties to provide greater flexibility to TRS and its affiliates, experience, financial stability and various other factors. Regulus West LLC TRS' proprietary facilities conduct paper payment remittance processing services. Since 1999, Regulus West LLC, a Delaware limited liability company, also has performed paper payment remittance processing services pursuant to an agreement with TRS. Regulus provides these services at three locations in the United States. Regulus also provides disaster recovery services to TRS. As a remittance processor, Regulus is responsible for, among other services, transmitting payment information to TRS, which TRS in turn uses to update its obligor records. Regulus also is responsible for encoding and processing the remittance checks received by TRS at these locations. Regulus is required to perform the services in accordance with service levels and procedures prescribed by TRS, and TRS regularly monitors Regulus' performance and compliance with TRS' standards. Regulus may not subcontract any of its duties to any third party without the prior consent of TRS, which TRS may withhold in its sole discretion. TRS has also reserved the right to perform for itself or have a third party perform any of the services performed by Regulus. Regulus West LLC is a wholly owned subsidiary of Regulus Group LLC, a remittance processing and print distribution company founded in 1995 and headquartered in Napa, California. Regulus has provided remittance processing services to banks, credit card issuers, telecommunications carriers, utilities and insurance companies since its formation. Regulus is one of the largest retail remittance processors in the United States, processing more than 45 million payments per month. In connection with the remittance processing conducted by TRS at its proprietary facility, TRS also has outsourced to a vendor in India the responsibility to manually review and balance paper remittances that cannot be handled by TRS' automatic payment matching equipment. 54 Notwithstanding any such delegation or outsourcing, the servicer will continue to be liable for all of its obligations under the transfer and servicing agreement. In certain circumstances, however, TRS could be relieved of its duties as servicer upon the assumption of such duties by another entity. See "--Servicer Default" in this prospectus. TRS and its affiliates retain the right to change various terms and conditions of the agreements with the third party vendors, and retain the right to change the third party vendors themselves. These changes may be the result of several different factors, including but not limited to: expiration of the servicing contract with the vendor, customer satisfaction, vendor quality and financial strength, compliance with required service levels, adherence to data protection and privacy requirements, adherence to security standards and requirements, performance and skill evaluations, risk management policies, and cost considerations. Accordingly, third party vendors who provide services to TRS, its affiliates and its cardmembers may change from time to time, and certificateholders will not be notified of any change. Similarly, to the extent that the terms and conditions are altered for agreements with third party vendors, certificateholders will not be given notice of those changes. If an affiliated or unaffiliated third party performing certain outsourced or delegated functions were to enter bankruptcy or become insolvent, then the servicing of the accounts in the Total Portfolio could be delayed and payments on your certificates could be accelerated, delayed or reduced. [If an additional unaffiliated servicer will service 10% or more, but less than 20%, of the pool assets, provide information contemplated in Item 1108(a)(2)(iii) of Regulation AB.] [If an additional master servicer, affiliated servicer or other material servicer upon whose responsibilities the performance of the receivables in the trust is materially dependant will service the receivables in the trust, or if an unaffiliated servicer will service 20% or more of the pool assets, provide information contemplated in Item 1108(a)(3) of Regulation AB.] NEW ISSUANCES The pooling and servicing agreement provides that, pursuant to one or more supplements, the transferors may cause the trust to issue one or more 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 transferors, the servicer, the trustee or the trust is required or intends to provide prior notice to, or obtain the consent of, any certificateholder of any other series issued prior to the issuance of a new series. The transferors 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 purchasers or placement agents, in fixed-price offerings or in negotiated transactions or otherwise. The transferors intend to offer, from time to time, additional series. Each issuance of a new series will have the effect of decreasing the Transferor Amount to the extent of the initial invested amount of such new series. The pooling and servicing agreement provides that the transferors may designate principal terms such that each series has a Controlled Accumulation Period or a Controlled Amortization Period that may have a different length and begin on a different date than such periods for any other series. Further, one or more series may be in their Controlled Accumulation Period or Controlled Amortization Period while other series are not. Moreover, 55 each series may have the benefits of series enhancement issued by enhancement providers different from the providers of Series Enhancement with respect to any other series. Under the pooling and servicing agreement, the trustee shall hold any such Series Enhancement only on behalf of the certificateholders of the series to which such Series Enhancement relates. With respect to each such Series Enhancement, the transferors may deliver a different form of Series Enhancement agreement. The transferors also have the option under the pooling and servicing agreement to vary among series the terms upon which a series may be repurchased by the transferors or remarketed to other investors. There is no limit to the number of new issuances the transferors may cause under the pooling and servicing agreement. The trust will terminate only as provided in the pooling and servicing agreement. There can be no assurance that the terms of any series might not have an impact on the timing and amount of payments received by a certificateholder of another series. Under the pooling and servicing agreement and pursuant to a supplement, a new issuance may only occur upon the satisfaction of certain conditions. The obligation of the trustee to authenticate the certificates of such new series and to execute and deliver the related supplement is subject to the satisfaction of the following conditions: o on or before the fifth day immediately preceding the date upon which the new issuance is to occur, the transferors will give to the trustee, the servicer and each Rating Agency written notice of such new issuance and the date upon which the new issuance is to occur; o the transferors will deliver to the trustee the related supplement, specifying the terms of the series; o the transferors will deliver to the trustee any related Series Enhancement agreement; o the Rating Agency Condition will be satisfied with respect to the new issuance; o each transferor will deliver to the trustee and certain providers of Series Enhancement an officer's certificate of that transferor to the effect that such issuance will not have an adverse effect; o the transferors will deliver to the trustee, each Rating Agency and certain providers of Series Enhancement a Tax Opinion; o the transferors or other holders of the original transferor certificate shall have a remaining interest in the trust of not less than 2% of the total amount of principal receivables and funds on deposit in the Special Funding Account and the principal funding account; and o the aggregate amount of principal receivables plus the principal amount of any participation interest shall be greater than the Required Minimum Principal Balance as of the date upon which the new issuance is to occur after giving effect to such 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. The Collection Account, which is maintained with The Bank of New York, bears a designation clearly indicating that the funds deposited therein are held for the benefit of the certificateholders of each series. If at any time the Collection Account is no 56 longer an Eligible Deposit Account, the Collection Account must be moved so that it will again be qualified as an Eligible Deposit Account. Funds on deposit in the Collection Account generally will be invested in Eligible Investments. Any earnings (net of losses and investment expenses) on funds in the Collection Account will be paid to the transferors. 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 and servicing agreement and any supplement. DEPOSITS IN COLLECTION ACCOUNT The servicer, no later than two Business Days after each Date of Processing, will deposit all collections received with respect to the receivables in each Monthly Period into the Collection Account. It will then make the deposits and payments to the accounts and parties shown below on the date of such deposit. For as long as TRS or an affiliate of TRS remains the servicer under the pooling and servicing agreement and any of: (i) the servicer maintains a short-term credit rating (which may be an implied rating) of not less than P-1 from Moody's and A-1 from S&P (or such other rating below P-1 or A-1, as the case may be, which is acceptable to such Rating Agency), which is currently the case, or (ii) the servicer obtains a guarantee with respect to its deposit and payment obligations under the pooling and servicing agreement (in form and substance satisfactory to the Rating Agencies) from a guarantor having a short-term credit rating of not less than P-1 from Moody's and A-1 from S&P (or such other rating below P-1 or A-1, as the case may be, which is acceptable to such Rating Agency), or (iii) the Rating Agency Condition will have been satisfied despite the servicer's inability to satisfy the rating requirement specified in clause (i) above, and for five Business Days following any such reduction of any such rating or failure to satisfy the conditions specified in clause (ii) or (iii) above, the servicer need not deposit collections into the Collection Account on the day indicated in the preceding sentence. Instead it may use for its own benefit such collections until the Business Day immediately preceding the related Distribution Date. On that Business Day, the servicer will make such deposits in an amount equal to the net amount of such deposits and withdrawals which would have been made had the conditions of this sentence not applied. On each Determination Date, the servicer will calculate the amounts to be allocated to the certificateholders of each class or series and the holders of the transferor certificates as described herein in respect of collections of receivables received with respect to the preceding Monthly Period. With respect to the certificateholders' interest, if the net amount in respect of finance charge receivables to be deposited into the Collection Account on any transfer date exceeds the sum of the interest payments due to certificateholders for the related Distribution Date, the Defaulted Amount and the Servicing Fee, plus certain amounts payable with respect to any Series Enhancement, then the servicer may deduct the Servicing Fee and, during the Revolving Period, the Defaulted Amount (which will be distributed to the transferors, but not 57 in an amount exceeding the Transferors' Interest in principal receivables on such day, after giving effect to any new receivables transferred to the trust on such day) from the net amount to be deposited into the Collection Account. In addition, on each Distribution Date with respect to any Controlled Amortization Period or Controlled Accumulation Period, the servicer may deduct the amount of any Shared Principal Collections not required to cover principal shortfalls (which will be distributed to the transferors, but not in an amount exceeding the Transferors' Interest in principal receivables on such day, after giving effect to any new receivables transferred to the trust on such day) from the net amount to be deposited into the collection account. The trustee may not have a perfected security interest in collections held by the servicer that are commingled with other funds of the servicer or used by the servicer in the event of the bankruptcy, insolvency, liquidation, conservatorship or receivership of the servicer or, in certain circumstances, the lapse of certain time periods. On the day any such deposit is made into the Collection Account, the servicer will withdraw from the Collection Account and pay to the transferors to the extent not deducted from collections as described above, (i) an amount equal to the excess, if any, of the aggregate amount of such deposits in respect of principal receivables treated as Shared Principal Collections for all series over the aggregate amount of Principal Shortfalls for all series and, without duplication, (ii) the aggregate amount of Series Allocable Principal Collections for all outstanding series to be paid to the transferors with respect to such date. Any amounts in respect of principal receivables not distributed to the transferors on any day because the Transferor Amount does not exceed zero on such day (after giving effect to any principal receivables transferred to the trust on such day) shall be deposited into the Special Funding Account. ALLOCATIONS Pursuant to the pooling and servicing agreement, during each Monthly Period the servicer will allocate to each outstanding series its Series Allocable Finance Charge Collections, Series Allocable Principal Collections and Series Allocable Defaulted Amount. The servicer will then allocate amounts initially allocated to a particular series between the certificateholders' interest and the Transferors' Interest for such Monthly Period as follows: (a) Series Allocable Finance Charge Collections and the Series Allocable Defaulted Amount will at all times be allocated to the invested amount of a series based on the Floating Allocation Percentage of such series; and (b) Series Allocable Principal Collections will at all times be allocated to the invested amount of such series based on the Principal Allocation Percentage of such series. Amounts not allocated to the invested amount of any series as described above will be allocated to the Transferors' Interest. GROUPS OF SERIES The certificates of a series may be included in a Reallocation Group. Collections of finance charge receivables allocable to each series in a Reallocation Group will be aggregated and made available for certain required payments for all series in such group. Consequently, the 58 issuance of new series in such group may have the effect of reducing or increasing the amount of collections of finance charge receivables allocable to the certificates of other series in such group. See "Risk Factors-- Issuances of additional series by the trust may adversely affect your certificates" in this prospectus. The prospectus supplement with respect to a series offered hereby will specify whether such series will be included in a Reallocation Group or another type of group, whether any previously issued series have been included in such a group and whether any such series or any previously issued series may be removed from such a group. REALLOCATIONS AMONG DIFFERENT SERIES WITHIN A REALLOCATION GROUP Group Investor Finance Charge Collections. Any series offered hereby may, if so specified in the related prospectus supplement, be included in a Reallocation Group. Other series issued in the future may also be included in such Reallocation Group. For each Monthly Period, the servicer will calculate the Group Investor Finance Charge Collections for a particular Reallocation Group and, on the following Distribution Date, will allocate such amount among the certificateholders' interest (including any collateral invested amount) for all series in such group in the following priority: (i) Group Investor Monthly Interest; (ii) Group Investor Default Amount; (iii) Group Investor Monthly Fees; (iv) Group Investor Additional Amounts; and (v) the balance pro rata among each series in such group based on the current invested amount of each such series. In the case of clauses (i), (ii), (iii) and (iv) above, if the amount of Group Investor Finance Charge Collections is not sufficient to cover each such amount in full, the amount available will be allocated among the series in such group pro rata based on the claim that each series has under the applicable clause. This means, for example, that if the amount of Group Investor Finance Charge Collections is not sufficient to cover Group Investor Monthly Interest, each series in such group will share such amount pro rata and any other series in such group with a claim with respect to monthly interest, overdue monthly interest and interest on such overdue monthly interest, if applicable, which is larger than the claim for such amounts for any other series in such group offered hereby (due to a higher certificate rate) will receive a proportionately larger allocation. The chart that follows demonstrates the manner in which collections of finance charge receivables are allocated and reallocated among series in such a group. The chart assumes that the trust has issued three series (Series 1, 2 and 3), and that each such series is in its Revolving Period. In Step 1, total collections of finance charge receivables are allocated among the three series based on the Series Allocation Percentage for each series. The amounts allocated to each series pursuant to Step I are referred to as "Series Allocable Finance Charge Collections." See "--Allocations" above. 59 In Step 2, the amount of Investor Finance Charge Collections is determined by multiplying Series Allocable Finance Charge Collections for each series by the applicable floating allocation percentages. See "--Allocations" above. Investor Finance Charge Collections for all series in a particular Reallocation Group (or Group Investor Finance Charge Collections) are pooled as shown above in Step 3 for reallocation to each such series as shown in Step 4. In Step 4, Group Investor Finance Charge Collections are reallocated to each series in such group as described above based on the respective claim of each series with respect to interest payable on the certificates or collateral invested amount (if any) of such series, the Defaulted Amount allocable to the certificateholders' interest of such series and the monthly servicing fee and certain other amounts with respect to such series. The excess is allocated pro rata among the series in such group based on each series' respective invested amounts. 60 ---------------------------------------------------------------------------- American Express Credit Account Master Trust Finance Charge Collections ---------------------------------------------------------------------------- | | | ---------------------------------------------------------------------------- | | | | | | | | | -------------------------- -------------------------- -------------------------- Series 1 Series 2 Series 3 Series Allocable Finance Series Allocable Finance Series Allocable Finance Step Charge Collections (based Charge Collections (based Charge Collections (based 1 upon the Series Allocation upon the Series Allocation upon the Series Allocation Percentage) Percentage) Percentage) -------------------------- -------------------------- -------------------------- | | | | | | | | | | | | | | | | | | -------------- ------------------- -------------- ------------------- -------------- ------------------- Transferors' Investor Finance Transferors' Investor Finance Transferors' Investor Finance Step Finance Charge Charge Collections Finance Charge Charge Collections Finance Charge Charge Collections 2 Collections (based upon the Collections (based upon the Collections (based upon the Floating Allocation Floating Allocation Floating Allocation Percentage) Percentage) Percentage) -------------- ------------------- -------------- ------------------- -------------- ------------------- | | | | | | Step -------------------------------------------------------------------------------------------- 3 Group ------- Investor Finance Charge Collections | -------------------------------------------------------------------------------------------- | |--------------------------------------------------- | | | ---------------------------------|--------------------------------- Step | | | | 4 | -------------------------------------------------------------------------------------------- | Series 1 Series 2 Series 3 | Investor Monthly Interest Investor Monthly Interest Investor Monthly Interest | -------------------------------------------------------------------------------------------- | |--------------------------------------------------- | | | ---------------------------------|--------------------------------- | | | | | -------------------------------------------------------------------------------------------- | Series 1 Series 2 Series 3 | Investor Default Amount Investor Default Amount Investor Default Amount | -------------------------------------------------------------------------------------------- | |--------------------------------------------------- | | | ---------------------------------|--------------------------------- | | | | | -------------------------------------------------------------------------------------------- | Series 1 Series 2 Series 3 | Investor Monthly Fees Investor Monthly Fees Investor Monthly Fees | -------------------------------------------------------------------------------------------- | |--------------------------------------------------- | | ---------------------------------|--------------------------------- | | | | | -------------------------------------------------------------------------------------------- | Series 1 Series 2 Series 3 | Investor Additional Amounts Investor Additional Amounts Investor Additional Amounts | -------------------------------------------------------------------------------------------- | |--------------------------------------------------- | ---------------------------------|--------------------------------- | | | -------------------------------------------------------------------------------------------- Series 1 Series 2 Series 3 Balance based upon Balance based upon Balance based upon Investor Amount Investor Amount Investor Amount --------------------------------------------------------------------------------------------
61 SHARING OF EXCESS FINANCE CHARGE COLLECTIONS AMONG EXCESS ALLOCATION SERIES The prospectus supplement for any series offered by this prospectus will designate whether that series is an Excess Allocation Series. If a series is an Excess Allocation Series, collections on finance charge receivables and Excess Finance Charge Collections may be applied to cover any shortfalls with respect to amounts payable from collections of finance charge receivables allocable to any other Excess Allocation Series pro rata based upon the amount of the shortfall, if any, with respect to each other Excess Allocation Series. The sharing of Excess Finance Charge Collections among Excess Allocation Series will stop if each transferor delivers to the trustee a certificate of an authorized representative to the effect that, in the reasonable belief of that transferor, the continued sharing of Excess Finance Charge Collections among Excess Allocation Series would have adverse regulatory implications with respect to the transferors or any account owner. Following the delivery by the transferors of any such certificates, there will be no further sharing of Excess Finance Charge Collections among such series in any such group. In all cases, any Excess Finance Charge Collections remaining after covering shortfalls with respect to all outstanding Excess Allocation Series will be paid to the holders of the transferor certificates. While any series offered hereby may be designated as an Excess Allocation Series, there can be no assurance that: o any other series will be designated as an Excess Allocation Series, o there will be any Excess Finance Charge Collections for any such other series for any Monthly Period, o any agreement relating to any Series Enhancement will not be amended in such a manner as to increase payments to the providers of Series Enhancement and thereby decrease the amount of Excess Finance Charge Collections available from such series, or o a transferor will not at any time deliver a certificate as described above. Although the transferors believe that, based upon applicable rules and regulations as currently in effect, the sharing of Excess Finance Charge Collections among Excess Allocation Series will not have adverse regulatory implications for them, or any account owner, there can be no assurance that this will continue to be true in the future. SHARING OF PRINCIPAL COLLECTIONS AMONG PRINCIPAL SHARING SERIES The prospectus supplement for any series offered by this prospectus will designate whether a series is a principal sharing series. If a series is a principal sharing series, collections of principal receivables for any Monthly Period allocated to the certificateholders' interest of any such series 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 in respect of principal). The servicer will determine the amount of collections of principal receivables for any Monthly Period (plus 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." The servicer will allocate the Shared Principal Collections to cover any principal distributions to certificateholders and deposits to principal funding accounts for any principal 62 sharing series that are either scheduled or permitted and that have not been covered out of collections of principal receivables and certain other amounts allocable to the certificateholders' interest of such series. If principal shortfalls exceed Shared Principal Collections for any Monthly Period, Shared Principal Collections will be allocated pro rata among the applicable 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 holders of the transferor certificates; provided that: o such Shared Principal Collections will be distributed to the holders of the transferor certificates only to the extent that the Transferor Amount is greater than the Required Transferor Amount, and o in certain circumstances described below under "--Special Funding Account," such Shared Principal Collections will be deposited in the Special Funding Account. Any such reallocation of collections of principal receivables 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 with respect to any Monthly Period or that any other series will be designated as a principal sharing series. PAIRED SERIES If so provided in the prospectus supplement for a series offered by this prospectus, a series of certificates may be paired with another series issued by the trust. As the invested amount of the series having a paired series is reduced, the invested amount in the trust of the paired series will increase by an equal amount. If a Pay-Out Event or Reinvestment 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 or Controlled Accumulation Period, the Series Allocation Percentage and the Principal Allocation Percentage for the series having a paired series and the Series Allocation Percentage and the Principal Allocation Percentage for the paired series will be reset as provided in the related prospectus supplement. In addition, the Early Amortization Period or Early Accumulation Period for such series could be lengthened. SPECIAL FUNDING ACCOUNT If, on any date, the Transferor Amount is less than or equal to the Required Transferor Amount, the servicer will not distribute to the holders of the transferor certificates any collections of principal receivables allocable to a series or a group that otherwise would be distributed to such holders. Instead it will deposit such funds in an Eligible Deposit Account, called the Special 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. The Special Funding Account will bear a designation clearly indicating that the funds deposited therein are held for the benefit of the certificateholders of each series. So long as no series is in a Controlled Accumulation Period, Early Accumulation Period, Controlled Amortization Period or Early Amortization Period, funds on deposit in the Special Funding Account will be withdrawn and paid to the holders of the transferor certificates on any Distribution Date to the extent that, after giving effect to such payment, the Transferor Amount exceeds the Required Transferor Amount on such date. If a Controlled Accumulation Period, Early Accumulation Period, Controlled Amortization Period or Early Amortization 63 Period starts and is continuing for any series, however, any funds on deposit in the Special Funding Account will be released, deposited in the Collection Account and treated as collections of principal receivables to the extent needed to make principal payments due to or for the benefit of the certificateholders of such series, but only to the extent that doing so would not cause the Transferor Amount to be less than the Required Transferor Amount. If the transferors determine that by decreasing the amount on deposit in the Special Funding Account, one or more series for which the related supplements permit partial amortization, may be prevented from experiencing a Pay-Out Event due to the insufficiency of yield, funds on deposit in the Special Funding Account may be applied to each such series (on a pro rata basis according to each series' invested amount) to reduce the invested amount thereof. Such reduction would enable that series to avoid a yield insufficiency Pay-Out Event, but may be done only to the extent that it would not cause the Transferor Amount to be less than the Required Transferor Amount. The transferors, at their option, may instruct the trustee to deposit to the Special Funding Account any Shared Principal Collections that would otherwise be payable to the holders of the transferor certificates in accordance with the foregoing. Funds on deposit in the Special 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 Special Funding Account during any Monthly Period will be withdrawn from the Special Funding Account and treated as collections of finance charge receivables for that Monthly Period. 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 the such deficiency, called the Prefunding Amount, will be held in a prefunding account pending the transfer of additional principal receivables to the trust or pending the reduction of the invested amounts of other series issued by the trust. The related prospectus supplement will specify the initial invested amount for such series, the aggregate principal amount of the certificates of such series and the date by which the invested amount is expected to equal the aggregate principal amount of the certificates. The invested amount will increase as receivables are delivered to the trust or as the invested amounts of other series of the trust are reduced. The invested amount may also decrease due to the occurrence of a Pay- Out Event for that series. During the Funding Period, funds on deposit in the prefunding account for a series of certificates will be withdrawn and paid to the transferors to the extent of any increases in the invested amount. If the invested amount does not for any reason equal the aggregate principal amount of the certificates 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. 64 If so specified in the related prospectus supplement, moneys 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. 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 in respect of interest on the certificates of the related series in the manner specified in the related prospectus supplement. DEFAULTED RECEIVABLES; REBATES AND FRAUDULENT CHARGES Receivables in any account will be charged off as uncollectible in accordance with the account guidelines and the servicer's customary and usual policies and procedures for servicing charge and other credit account receivables comparable to the receivables. The current policy of Centurion and FSB is to charge off the receivables in an account when the account is six contractual payments past due (i.e., approximately 180 days delinquent) or sooner if the death or bankruptcy of the account holder has been confirmed. This policy may change in the future to conform with regulatory requirements and applicable law. If the servicer adjusts downward the amount of any principal receivable (other than Ineligible Receivables that have been, or are to be, reassigned to a transferor) because of a rebate, refund, counterclaim, defense, error, fraudulent charge or counterfeit charge to an account holder, or such principal receivable was created in respect of merchandise that was refused or returned by an account holder, or if the servicer otherwise adjusts downward the amount of any principal receivable without receiving collections therefor or charges off such amount as uncollectible, the Transferor Amount--and not the investors' interests--will be reduced by the amount of the adjustment. Furthermore, in the event that the exclusion of any such receivables would cause the Transferor Amount at such time to be less than the Required Transferor Amount, the transferors will be required to pay an amount equal to such deficiency into the Special Funding Account. CREDIT ENHANCEMENT AND OTHER SUPPORT GENERAL For any series, credit enhancement may be provided with respect to one or more classes thereof. The credit enhancement for one or more classes of a series offered by this prospectus may include a letter of credit, cash collateral guaranty, cash collateral account, collateral interest, surety bond, insurance policy, spread account, guaranteed rate agreement, maturity liquidity facility, tax protection agreement, interest rate swap agreement, interest rate cap agreement, or any combination of the foregoing. Credit enhancement may also be provided to a class or classes of a series by subordination provisions that require distributions of principal or interest be made with respect to the certificates of such class or classes before distributions are made to one or more classes of such series. Any form of credit enhancement may 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 related prospectus supplement, the credit enhancement, if any, for a 65 series will not provide protection 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 such losses. 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 by this prospectus, the related prospectus supplement will include a description of: o the amount payable under such credit enhancement, o any conditions to payment thereunder not otherwise described in this prospectus, o 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 o 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: o a brief description of its principal business activities, o its principal place of business, place of incorporation or the jurisdiction under which it is chartered or licensed to do business, o if applicable, the identity of regulatory agencies that exercise primary jurisdiction over the conduct of its business, and o its total assets, and its stockholders' 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 or Reinvestment Events for that series. In such event, 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 collateral invested amount. [If an entity or group of affiliated entities providing credit enhancement will be liable or contingently liable for payments representing 10% or more, but less than 20%, of the cash flow supporting any offered class, provide information contemplated in Item 1114(b)(1) and (b)(2)(i) of Regulation AB.] [If an entity or group of affiliated entities providing credit enhancement will be liable or contingently liable for payments representing 20% or more of the cash flow supporting any offered class, provide information contemplated in Item 1114(b)(1) and (b)(2)(ii) of Regulation AB.] SUBORDINATION One or more classes of certificates offered by this prospectus may be subordinated to one or more other classes of certificates. If so specified in the related prospectus supplement, the rights of the holders of the subordinated certificates to receive distributions of principal and/or 66 interest on any payment date will be subordinated to the rights of the holders of the certificates that are senior to such 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 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 the 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 letter of credit issuer will be obligated to honor drawings under a 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 The certificates of any class or series offered by this prospectus may have the benefit of a cash collateral guaranty secured by the deposit of cash or certain permitted investments in a cash collateral account. A cash collateral guaranty or a cash collateral account for a class or series may be fully or partially funded on the related series closing date and the funds on deposit therein will be invested in Eligible Investments. The amount available to be withdrawn from a cash collateral guaranty or a cash collateral account will be the lesser of the amount on deposit in the cash collateral guaranty or the cash collateral account and an amount specified in the related prospectus supplement. The related prospectus supplement will set forth the circumstances under which such withdrawals will be made from the cash collateral guaranty or the cash collateral account. COLLATERAL INTEREST Support for a series of certificates or one or more classes thereof may be provided initially by an uncertificated, subordinated interest in the trust known as the collateral interest, in an amount initially equal to a percentage of the certificates of such series specified in such prospectus supplement. References to collateral invested amounts herein include collateral interests, if any. INSURANCE POLICY OR SURETY BOND Insurance for a series or class of certificates offered by this prospectus may be provided by one or more insurance companies. Such insurance will guarantee, for one or more classes of the related series, distributions of interest or principal in the manner and amount specified in the related prospectus supplement. 67 A surety bond may be purchased for the benefit of the holders of any series or class of certificates offered by this prospectus to assure distributions of interest or principal for 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 assist with the subsequent distributions of interest and principal on the certificates of such class or series in the manner specified in the related prospectus supplement. MATURITY LIQUIDITY FACILITY Support for a series or one or more classes thereof may be provided by a maturity liquidity facility, which is a financial contract that generally provides that sufficient principal will be available to retire the certificates of such class or series at a certain date. TAX PROTECTION AGREEMENT The trustee, on behalf of the trust, may enter into one or more tax protection agreements for the benefit of a class or series, pursuant to which, and as more fully described in the related prospectus supplement, the provider of such agreement will make payments to the trust in the event any withholding taxes are imposed on payments of interest or principal to the certificateholders of the related series or class. DERIVATIVE AGREEMENTS Some certificates may have the benefits of one or more derivative agreements, which may be a currency swap, interest rate swap, a cap (obligating a derivative counterparty to pay all interest in excess of a specified percentage rate), a collar (obligating a derivative counterparty to pay all interest below a specified percentage rate and above a higher specified percentage rate) or a guaranteed investment contract (obligating a derivative counterparty to pay a guaranteed rate of return over a specified period) with various counterparties. In general, the trust will receive payments from counterparties to the derivative agreements in exchange for the trust's payments to them, to the extent required under the derivative agreements. The specific terms of a derivative agreement applicable to a series or class of certificates and a description of the related counterparty will be included in the related prospectus supplement. The banks or any of their affiliates may be counterparties to a derivative agreement. [If the certificates of a series or class have the benefit of a derivative agreement, provide information contemplated in Item 1115(a) of Regulation AB.] [If the aggregate significance percentage related to any entity or group of affiliated entities providing derivative instruments is 10% or more, but less than 20%, provide information contemplated in Item 1115(b)(1) of Regulation AB.] [If the aggregate significance percentage related to any entity or group of affiliated entities providing derivative instruments is 20% or more, provide information contemplated in Item 1115(b)(2) of Regulation AB.] 68 SUPPLEMENTAL CREDIT ENHANCEMENT AGREEMENTS AND SUPPLEMENTAL LIQUIDITY AGREEMENTS Some certificates may have the benefit of one or more additional forms of credit enhancement agreements--referred to herein as "supplemental credit enhancement agreements"--such as letters of credit, cash collateral guarantees or accounts, surety bonds or insurance policies with various credit enhancement providers. In addition, some certificates may have the benefit of one or more forms of supplemental liquidity agreements--referred to herein as "supplemental liquidity agreements"--such as a liquidity facility with various liquidity providers. The specific terms of any supplemental credit enhancement agreement or supplemental liquidity agreement applicable to a series or class of certificates and a description of the related provider will be included in the related prospectus supplement for a series or class of certificates. The banks or any of their affiliates may be providers of any supplemental credit enhancement agreement or supplemental liquidity agreement. SERVICER COVENANTS In the pooling and servicing agreement, the servicer has agreed as to each receivable and related account that it will: (a) duly fulfill all obligations on its part to be fulfilled under or in connection with the receivables or the related accounts, and will maintain in effect all qualifications required in order to service the receivables or accounts, the failure to comply with which would have a material adverse effect on the certificateholders; (b) not authorize any rescission or cancellation of the receivables except as ordered by a court of competent jurisdiction or other governmental authority; (c) take no action to impair the rights of the trustee in the receivables or the related accounts; and (d) not reschedule, revise or defer payments due on the receivables except in accordance with its guidelines for servicing receivables. Under the terms of the pooling and servicing agreement, if the servicer discovers, or receives written notice from the trustee, that: o any covenant of the servicer set forth in clauses (a) through (d) above has not been complied with in all material respects and o such noncompliance has not been cured within 60 days (or such longer period as may be agreed to by the trustee and the transferors) thereafter and has a material adverse effect on the certificateholders' interest in such receivables, then all receivables in the related account will be assigned and transferred to the servicer and the account will no longer be included as an account in the trust portfolio. Such assignment and transfer will be made when the servicer deposits an amount equal to the amount of such receivables in the Collection Account on the Business Day preceding the Distribution Date following the Monthly Period during which such obligation arises. This transfer and assignment to the servicer constitutes the sole remedy available to the certificateholders if such covenant or warranty of the servicer is not satisfied and the trust's interest in any such assigned receivables will be automatically assigned to the servicer. 69 CERTAIN MATTERS REGARDING THE SERVICER The servicer may not resign from its obligations and duties under the pooling and servicing agreement except: (i) upon determination that the performance of such obligations and duties is no longer permissible under applicable law or (ii) if such obligations and duties are assumed by an entity that has satisfied the Rating Agency Condition. No such resignation will become effective until the trustee or a successor to the servicer has assumed the servicer's obligations and duties under the pooling and servicing agreement. Notwithstanding the foregoing, the servicer may assign part or all of its obligations and duties as servicer under the pooling and servicing agreement if such assignment satisfies the Rating Agency Condition. TRS may assign or delegate all or part of its rights, duties and obligations as servicer to Centurion within the next two years. Any person into which, in accordance with the pooling and servicing 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 the servicer under the pooling and servicing 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 certificates, by written notice to the servicer (and to the trustee if given by the certificateholders), may terminate all of the rights and obligations of the servicer, as servicer, under the pooling and servicing agreement. The trustee will appoint a new servicer. Any such termination and appointment is called a service transfer. If the only Servicer Default is bankruptcy-, insolvency-, receivership-, or conservatorship-related, however, the bankruptcy trustee, the receiver or the conservator for the servicer or the servicer itself as debtor-in-possession may have the power to prevent the trustee or certificateholders from appointing a successor servicer. See "Risk Factors--The conservatorship, receivership, bankruptcy, or insolvency of Centurion, FSB, TRS, a transferor, the trust, or any of their affiliates could result in accelerated, delayed, or reduced payments to you." The rights and interest of the transferors under the pooling and servicing agreement in the Transferors' Interest will not be affected by any termination notice or service transfer. If, within 60 days of receipt of a termination notice, the trustee does not receive any bids from eligible servicers but receives an officer's certificate from each transferor to the effect that the servicer cannot in good faith cure the Servicer Default which gave rise to the termination notice, then the trustee shall, except when the Servicer Default is caused by certain events of bankruptcy, insolvency, conservatorship or receivership of the servicer, offer the transferors a right of first refusal to purchase the certificateholders' interest on the Distribution Date in the next calendar month. The purchase price for the certificateholders' interest will be equal to the sum of the amounts specified therefor for each outstanding series in the related prospectus supplement, and for any certificates offered hereby, in such prospectus supplement. The trustee will, as promptly as possible, appoint a successor servicer. The successor servicer may be Centurion, FSB, the trustee or an entity which, at the time of its appointment 70 as successor servicer, (1) services a portfolio of charge or credit accounts, (2) is legally qualified and has the capacity to service the trust, (3) has, in the sole determination of the trustee, demonstrated the ability to service professionally and competently a portfolio of similar accounts in accordance with high standards of skill and care, (4) is qualified to use the software that is then being used to service the accounts or obtains the right to use or has its own software which is adequate to perform its duties under the pooling and servicing agreement and other securitization agreements and (5) has a net worth of at least $50,000,000 as of the end of its most recent fiscal quarter. The successor servicer shall accept its appointment by written instrument acceptable to the trustee. The successor servicer is entitled to compensation out of collections; however, that compensation will not be in excess of the servicing fee. See "Description of the Certificates--Servicing Compensation and Payment of Expenses" in this prospectus for a discussion of the monthly servicing fee. Because TRS, as servicer, has significant responsibilities with respect to the servicing of the receivables, the trustee may have difficulty finding a suitable successor servicer. Potential successor servicers may not have the capacity to adequately perform the duties required of a successor servicer or may not be willing to perform such duties for the amount of the servicing fee currently payable under the pooling and servicing agreement. 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 and servicing agreement will be vested in the trustee. The Bank of New York, the trustee, does not have credit card operations. If The Bank of New York is automatically appointed as successor servicer, it may not have the capacity to perform the duties required of a successor servicer and current servicing compensation under the pooling and servicing agreement may not be sufficient to cover its actual costs and expenses of servicing the accounts. Prior to any service transfer, the trustee will seek to obtain bids from potential servicers meeting certain eligibility requirements set forth in the pooling and servicing agreement to serve as a successor servicer for servicing compensation not in excess of the Servicing Fee plus any amounts payable to the transferors pursuant to the pooling and servicing agreement. EVIDENCE AS TO COMPLIANCE The fiscal year for the trust will end on December 31 of each year. The servicer will file with the SEC an annual report on Form 10-K on behalf of the trust 90 days after the end of its fiscal year. The servicer will deliver to the trustee and, if required, file with the SEC as part of an annual report on Form 10-K filed on behalf of the trust, the following documents: o a report regarding its assessment of compliance during the preceding fiscal year with all applicable servicing criteria set forth in relevant SEC regulations with respect to asset-backed securities transactions taken as a whole involving the servicer that are backed by the same types of assets as those backing the certificates; o with respect to each assessment report described immediately above, a report by a registered public accounting firm that attests to, and reports on, the assessment made by the asserting party, as set forth in relevant SEC regulations; and o a servicer compliance certificate, signed by an authorized officer of the servicer, to the effect that: 71 (i) a review of the servicer's activities during the reporting period and of its performance under the pooling and servicing agreement has been made under such officer's supervision. (ii) to the best of such officer's knowledge, based on such review, the servicer has fulfilled all of its obligations under the pooling and servicing agreement in all material respects throughout the reporting period or, if there has been a failure to fulfill any such obligation in any material respect, specifying each such failure known to such officer and the nature and status thereof. The servicer's obligation to deliver any servicing assessment report or attestation report and, if required, to file the same with the SEC, is limited to those reports prepared by the servicer and, in the case of reports prepared by any other party, those reports actually received by the servicer. Copies of all statements, certificates and reports furnished to the trustee may be obtained by a request in writing delivered to the trustee. Except as described above or as described in this prospectus or the related prospectus supplement, there will not be any independent verification that any duty or obligation to be performed by any transaction party - including the servicer - has been performed by that party. AMENDMENTS The pooling and servicing agreement and any supplement may be amended from time to time, including in connection with: o the issuance of a Supplemental Certificate, o the addition to the trust of a participation interest, o the designation of additional transferors, o the addition to the trust of receivables arising from charge or credit accounts other than the revolving credit accounts, or o to change the definition of Monthly Period, Determination Date or Distribution Date. Amendments to the pooling and servicing agreement and any supplement may be made by agreement of the trustee, the transferors and the servicer without the consent of the certificateholders of any series, so long as: o the Rating Agency Condition shall have been satisfied, o each transferor delivers to the trustee an officer's certificate to the effect that such amendment will not have an adverse effect, and o such amendment will not effect a change in the permitted activities of the trust except for those changes necessary for compliance with accounting requirements or tax requirements or required to cure any ambiguity or correct or supplement any provision contained in the pooling and servicing agreement or any supplement which may be defective or inconsistent with any provisions thereof. The pooling and servicing agreement or any supplement also may be amended by the trustee, the transferors and the servicer: (a) in the case of a change in the permitted activities of the trust which is not materially adverse to holders of certificates, with the consent of certificateholders evidencing not less 72 than 50% of the aggregate unpaid principal amount of the certificates of each outstanding series affected by such change, unless such change is necessary for compliance with accounting requirements or tax requirements or required to cure any ambiguity or correct or supplement any provision contained in the pooling and servicing agreement or any supplement which may be defective or inconsistent with any provisions thereof, and (b) in all other cases with the consent of the certificateholders evidencing not less than 66 2/3% of the aggregate unpaid principal amount of the certificates of all affected series for which the transferors have not delivered an officer's certificate stating that there will be no adverse effect, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the pooling and servicing agreement or any supplement or of modifying in any manner the rights of certificateholders. No such amendment specified in clause (b) above, however, may: o reduce in any manner the amount of, or delay the timing of, deposits or distributions on any certificate without the consent of each certificateholder, o change the definition or the manner of calculating the certificateholders' interest or the invested amount without the consent of each certificateholder, o reduce the percentage required to consent to any such amendment without the consent of each certificateholder, or o 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 amendment to the pooling and servicing agreement (other than an amendment described in the first paragraph), the trustee will furnish written notice of the substance of such amendment to each certificateholder. Notwithstanding the foregoing, any supplement executed in connection with the issuance of one or more new series of certificates will not be considered an amendment to the pooling and servicing agreement. It is a condition to any such amendment that the Rating Agency Condition be satisfied. The amendments which the transferors may make without the consent of certificateholders may include, without limitation, the elimination of any sale of receivables and subsequent termination of the trust upon the occurrence of an insolvency event. See "Certain Legal Aspects of the Receivables--Certain Matters Relating to Bankruptcy, Conservatorship and Receivership" in this prospectus. In addition to being subject to amendment pursuant to the provisions described above, the pooling and servicing agreement and the related supplement may be amended by the transferors without the consent of the servicer, the trustee or any certificateholder to account for the transfer of assets as sales in accordance with FASB Statement No. 140, including providing for the transfer of receivables from Centurion or FSB to a bankruptcy-remote special purpose entity and from that entity to the trust. Promptly after the effectiveness of any such amendment, the transferors shall deliver a copy of such amendment to each of the servicer, the trustee, each Rating Agency and any other party entitled to receive it pursuant to the relevant 73 supplement. Furthermore, such amendment shall be subject to the delivery by the transferors of a Tax Opinion. DEFEASANCE Only if so expressly provided in the applicable supplement, then pursuant to the pooling and servicing agreement, the transferors may terminate their substantive obligations in respect of a series or the pooling and servicing 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 the defeased series and available to purchase additional receivables) monies or Eligible Investments sufficient to make all remaining scheduled interest and principal payments on the defeased series on the dates scheduled for such payments and to pay all amounts owing to any provider of Series Enhancement. To achieve that end, the transferors have the right to use collections on receivables to purchase Eligible Investments rather than additional receivables. Prior to the first exercise of their right to substitute monies or Eligible Investments for receivables, the transferors shall deliver (i) to the trustee an opinion of counsel with respect to such deposit and termination of obligations to the effect that, for federal income tax purposes, such action would not cause the trust to be deemed to be an association (or publicly traded partnership) taxable as a corporation; and (ii) to the servicer and the trustee written notice from each Rating Agency that the Rating Agency Condition shall have been satisfied. In addition, the transferors must comply with certain other requirements set forth in the pooling and servicing agreement, including requirements that the transferors deliver: o 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 o to the trustee and certain providers of Series Enhancement an officer's certificate stating that, based on the facts known to such officer at the time, in the reasonable opinion of the transferors, such deposit and termination of obligations will not at the time of its occurrence cause a Pay-Out Event or a Reinvestment Event or an event that, after the giving of notice or the lapse of time would constitute a Pay-Out Event or a Reinvestment Event, to occur with respect to any series. If the transferors discharge their substantive obligations in respect of the defeased series, any Series Enhancement for the affected series may no longer be available to make payments with respect to that series. Upon the making of any deposit described in the preceding paragraph, the certificateholders of the defeased series could recognize taxable gain for federal income tax purposes to the extent that the value of the affected certificates exceeds the tax basis therein, but in no event would be allowed to deduct a taxable loss for such purposes. LIST OF CERTIFICATEHOLDERS Upon written request of any holder or group of holders of certificates of any series or of all outstanding series of record holding certificates evidencing not less than 10% of the aggregate 74 unpaid principal amount of the certificates of such series or all series, as applicable, the trustee will afford such holder or holders of certificates access during business hours to the current list of certificateholders of such series or of all outstanding series, as the case may be, for purposes of communicating with other holders of certificates with respect to their rights under the pooling and servicing agreement. See "Description of the Certificates--Book-Entry Registration" and "--Definitive Certificates" in this prospectus. The pooling and servicing agreement will not provide for any annual or other meetings of certificateholders. THE TRUSTEE The Bank of New York, a New York banking corporation, is the trustee under the pooling and servicing agreement. The corporate trust department of The Bank of New York is located at 101 Barclay Street, Floor 8 West, Attention: Corporate Trust Administration--Asset Backed Securities, New York, New York 10286. The Bank of New York has and currently is serving as trustee for numerous securitization transactions and programs involving pools of credit card receivables. The transferors, the servicer, the account owners and their respective affiliates may from time to time enter into normal banking and trustee relationships with the trustee and its affiliates. The trustee or the transferors may hold certificates in their own names; however, any certificates so held shall not be entitled to participate in any decisions made or instructions given to the trustee by the certificateholders as a group. In addition, for purposes of meeting the legal requirements of certain local jurisdictions, the trustee shall have the power to appoint, with the consent of the transferors (who shall not unreasonably withhold their consent), 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. Under the terms of the pooling and servicing agreement, the servicer agrees to pay to the trustee reasonable compensation for performance of its duties under the pooling and servicing agreement. The trustee has agreed to perform only those duties specifically set forth in the pooling and servicing agreement. Many of the duties of the trustee are described in "The Pooling and Servicing Agreement Generally" and throughout this prospectus and the related prospectus supplement. Under the terms of the pooling and servicing agreement, the trustee's limited responsibilities include the following: o to deliver to certificateholders of record certain notices, reports and other documents received by the trustee, as required under the pooling and servicing agreement; o to authenticate, deliver, cancel and otherwise administer the investor certificates; o to remove and reassign ineligible receivables and accounts from the trust; o to establish and maintain necessary trust accounts and to maintain accurate records of activity in those accounts; o to serve as the initial transfer agent, paying agent and registrar, and, if its resigns these duties, to appoint a successor transfer agent, paying agent and register; o to invest funds in the trust accounts at the direction of the servicer; 75 o to represent the certificateholders in interactions with clearing agencies and other similar organizations; o to distribute and transfer funds at the direction of the servicer, as applicable, in accordance with the terms of the pooling and servicing agreement; o to file with the appropriate party all documents necessary to protect the rights and interests of the certificateholders; o to enforce the rights of the certificateholders against the servicer, if necessary; o to notify the certificateholders and other parties, to sell the receivables, and to allocate the proceeds of such sale, in the event of the termination of the trust; and o to perform certain other administrative functions identified in the pooling and servicing agreement. In addition to the responsibilities described above, the trustee has the discretion to require the transferors or the servicer, as applicable, to cure a potential Pay-Out Event and to declare a Pay-Out Event. See "--Pay-Out Events and Reinvestment Events." In the event that a transferor becomes insolvent, if any series of investor certificates issued on or prior to April 16, 2004 is outstanding, the trustee shall: (1) notify the certificateholders of the insolvency, (2) dispose of the receivables in a commercially reasonable manner, and (3) allocate the proceeds of such sale. See "--Pay Out Events and Reinvestment Events." If a servicer default occurs, in addition to the responsibilities described above, the trustee may be required to appoint a successor servicer or to take over servicing responsibilities under the pooling and servicing agreement. See "--Servicer Default." In addition, if a servicer default occurs, the trustee, in its discretion, may proceed to protect its rights or the rights of the investor certificateholders under the pooling and servicing agreement by a suit, action or other judicial proceeding. The trustee is not liable for any errors of judgment as long as the errors are made in good faith and the trustee was not negligent. The trustee may resign at any time, and it may be forced to resign if the trustee fails to meet the eligibility requirements specified in the pooling and servicing agreement. The holders of a majority of investor certificates have the right to direct the time, method or place of conducting any proceeding for any remedy available to the trustee under the pooling and servicing agreement. DESCRIPTION OF THE PURCHASE AGREEMENTS The following summarizes the material terms of the RFC III purchase agreement, which is the receivables purchase agreement between Centurion and RFC III, and the RFC IV purchase agreement, which is the receivables purchase agreement between FSB and RFC IV. We refer to the RFC III purchase agreement and the RFC IV purchase agreement collectively as the "purchase agreements" and we refer to RFC III and RFC IV individually as the "purchaser" and collectively as the "purchasers." Forms of the purchase agreements are filed as exhibits to this registration statement, of which this prospectus is a part. 76 SALE OF RECEIVABLES Centurion and FSB are the owners of the accounts which contain the receivables that are purchased by RFC III and RFC IV, respectively, pursuant to the respective purchase agreement and then transferred by RFC III and RFC IV to the trust. In connection with the sale of receivables to RFC III and RFC IV, respectively, each of Centurion and FSB has: o filed appropriate UCC financing statements to evidence the sale to the respective purchaser and to perfect the right, title and interest of such purchaser in those receivables; and o indicated in its books and records (including any related computer files) that the receivables have been sold by it to the respective purchaser. Pursuant to the applicable purchase agreement, Centurion and FSB, respectively: o sold all of its right, title and interest, if any, in the receivables existing in the initial accounts at the close of business on the substitution date and in the receivables thereafter arising in those accounts, in each case including all Issuer Rate Fees, insurance proceeds and Recoveries allocable to such receivables, all monies due or to become due, all amounts received or receivable, all collections and all proceeds, each as it relates to such receivables; and o will, from time to time, at the request of the respective purchaser, designate Additional Accounts and sell to the respective purchaser all of its right, title and interest in the receivables existing in the additional accounts on the applicable addition cut-off date and in the receivables arising thereafter in those accounts, in each case including all Issuer Rate Fees, insurance proceeds, Recoveries, all monies due or to become due, all amounts received or receivable, all collections and all proceeds, each as it relates to such receivables. Under each purchase agreement, the allocated Issuer Rate Fees for each calendar month is to be paid by Centurion or FSB, as applicable, to the respective purchaser in the second following calendar month. For each calendar month, the allocated Issuer Rate Fees will be an amount equal to the sum of (i) the product of (A) the rate at which Issuer Rate Fees accrued to Centurion or FSB, as applicable, during the second preceding Monthly Period on credit accounts owned by Centurion or FSB, as applicable, multiplied by (B) a fraction, (I) the numerator of which is the aggregate amount of cardholder charges in all credit accounts owned by Centurion or FSB, as applicable, excluding balance transfer transactions, purchases made by convenience checks, cash advances, certain ineligible products and services offered by TRS or any affiliate or subsidiary thereof, and all other transactions on which Issuer Rate Fees did not accrue to Centurion or FSB, as applicable, in each case with respect to such Monthly Period, and (II) the denominator of which is the aggregate amount of cardholder charges in all credit accounts owned by Centurion or FSB, as applicable, with respect to such Monthly Period, multiplied by (C) new principal receivables that arose during such Monthly Period in the accounts that constitute credit accounts, plus (ii) the product of (A) the rate at which Issuer Rate Fees accrued to Centurion or FSB, as applicable, during the second preceding Monthly Period on charge accounts or lines of credit owned by Centurion or FSB, as applicable, multiplied by (B) a fraction, (I) the numerator of which is the aggregate amount of obligor charges on all charge accounts or lines of credit owned by Centurion or FSB, as applicable, excluding balance transfer transactions, purchases made by convenience checks, cash 77 advances, certain ineligible products and services offered by TRS or any affiliate or subsidiary thereof, and all other transactions on which Issuer Rate Fees did not accrue to Centurion or FSB, as applicable, in each case with respect to such Monthly Period, and (II) the denominator of which is the aggregate amount of obligor charges on all charge accounts or lines of credit owned by Centurion or FSB, as applicable, with respect to such Monthly Period, multiplied by (C) new principal receivables that arose during such Monthly Period in the accounts that constitute charge accounts or lines of credit. Pursuant to the pooling and servicing agreement, each of RFC III and RFC IV has assigned all of its right, title and interest in the respective purchase agreement, including its right to enforce the agreement against Centurion or FSB, as applicable, to the trustee. REPRESENTATIONS AND WARRANTIES In each purchase agreement, Centurion or FSB, respectively, represents and warrants to the respective purchaser that, among other things: o it is validly existing in good standing under the applicable laws of the applicable jurisdiction and has full power and authority to own its properties and conduct its business; o its execution and delivery of the purchase agreement and its performance of the transactions contemplated by that agreement will not conflict with or result in any breach of any of the terms of any material agreement to which it is a party or by which its properties are bound and will not conflict with or violate any requirements of law applicable to it; and o all governmental authorizations, consents, orders, approvals, registrations or declarations required to be obtained by it in connection with its execution and delivery of, and its performance of the applicable purchase agreement, have been obtained. REPURCHASE OBLIGATIONS In each purchase agreement, each of Centurion and FSB, respectively, makes the following representations and warranties, among others: o as of the applicable cut-off date with respect to the accounts, the list of accounts and information concerning the accounts provided by it is accurate and complete in all material respects, with certain permitted exceptions; o each receivable conveyed by it to the respective purchaser has been conveyed free and clear of any lien or encumbrance, except liens permitted by the applicable purchase agreement; o all governmental authorizations, consents, orders, approvals, registrations or declarations required to be obtained, effected or given by it in connection with the conveyance of receivables to the respective purchaser have been duly obtained, effected or given and are in full force and effect; o as of each applicable selection date, each account was an Eligible Account; o as of each applicable selection date, each of the receivables then existing in the accounts was an Eligible Receivable; 78 o as of the date of creation of any new receivable, such receivable is an Eligible Receivable; and o no selection procedures reasonably believed by it to be materially adverse to the interests of the respective purchaser have been used in selecting the accounts. The purchase agreements provide that if Centurion or FSB, as applicable, breaches any of the representations and warranties described above and, as a result, the respective purchaser is required under the pooling and servicing agreement to accept a reassignment of the related Ineligible Receivables transferred to the trust by such purchaser, then Centurion or FSB, as applicable, will accept reassignment of such Ineligible Receivables and pay to the respective purchaser an amount equal to the unpaid balance of such Ineligible Receivables. See "- Representations and Warranties" in this prospectus. REASSIGNMENT OF OTHER RECEIVABLES Each of Centurion and FSB, as applicable, also represents and warrants in the respective purchase agreement that (a) such purchase agreement and any supplemental conveyance each constitutes a legal, valid and binding obligation of Centurion or FSB, as applicable, and (b) such purchase agreement and any supplemental conveyance constitute a valid sale to the respective purchaser of all right, title and interest of Centurion or FSB, as applicable, of the receivables, including all Issuer Rate Fees, insurance proceeds, Recoveries, all monies due or to become due, all amounts received or receivable, all collections and all proceeds, each as it relates to such receivables, and that the sale is perfected under the applicable UCC. If a representation described in (a) or (b) of the preceding sentence is not true and correct in any material respect and as a result of the breach the respective purchaser is required under the pooling and servicing agreement to accept a reassignment of all of the receivables previously sold by Centurion or FSB, as applicable, pursuant to such purchase agreement, Centurion or FSB, as applicable, will accept a reassignment of those receivables. See "--Representations and Warranties" in this prospectus. If Centurion or FSB, as applicable, is required to accept such reassignment, Centurion or FSB, as applicable, will pay to the respective purchaser an amount equal to the unpaid balance of the reassigned receivables. AMENDMENTS The purchase agreements may be amended by Centurion or FSB, as applicable, and the respective purchaser without consent of any investor certificateholders. No amendment, however, may be effective unless: o written confirmation has been received by such purchaser from each rating agency that the amendment will not result in the reduction, qualification or withdrawal of the respective ratings of each rating agency for any certificates issued by the trust; and o Centurion or FSB, as applicable, will certify to the respective purchaser that it reasonably believes that the amendment will not cause a Pay-Out Event. TERMINATION The purchase agreements will not terminate at least until the earlier of (a) the termination of the trust pursuant to the pooling and servicing agreement and (b) an amendment to the pooling and servicing agreement to replace RFC III with an affiliate of RFC III as a transferor under the pooling and servicing agreement or to replace RFC IV with an affiliate of RFC IV as 79 a transferor under the pooling and servicing agreement, as applicable. Nevertheless, if a receiver or conservator is appointed for either of Centurion or FSB or certain other liquidation, bankruptcy, insolvency or other similar events occur, Centurion or FSB, as the case may be, will cease to transfer receivables to the respective purchaser and promptly give notice of that event to such purchaser and the trustee, unless the receiver, conservator or bankruptcy court instructs otherwise. CERTAIN LEGAL ASPECTS OF THE RECEIVABLES CERTAIN REGULATORY MATTERS The operations and financial condition of Centurion and FSB are subject to extensive regulation and supervision under federal and state law. The appropriate banking regulatory authorities, including the FDIC, have broad enforcement powers over Centurion and FSB. These enforcement powers may adversely affect the operation and financial condition of the trust and your rights under the pooling and servicing agreement prior to the appointment of a receiver or conservator. If United States federal bank regulatory authorities supervising any bank were to find that any obligation of such bank or an affiliate under a securitization or other agreement, or any activity of such bank or affiliate, constituted an unsafe or unsound practice or violated any law, rule, regulation or written condition or agreement applicable to the related bank or affiliate, such federal bank regulatory authorities have the power under the FDIA to order such bank or affiliate, among other things, to rescind such agreement or contract, refuse to perform that obligation, terminate the activity, amend the terms of such obligation or take such other action as such regulatory authorities determine to be appropriate. In such an event, the related bank or affiliate may not be liable to you for contractual damages for complying with such an order and no recourse may be available against the relevant regulatory authority. Recently, after the Office of the Comptroller of the Currency found that a national bank was, contrary to safe and sound banking practices, receiving inadequate servicing compensation under its securitization agreements, that bank agreed to a consent order with the OCC. Such consent order required that bank, among other things, to immediately resign as servicer and to cease performing its duties as servicer within approximately 120 days, to immediately withhold and segregate funds from collections for payment of its servicing fee (notwithstanding the priority of payments in the securitization agreements and the perfected security interest of the relevant trust in those funds) and to increase its servicing fee percentage above that which was originally agreed upon in its securitization agreements. While Centurion, FSB and their affiliates have no reason to believe that any obligation of Centurion, FSB or an affiliate under the securitization agreements is unsafe or unsound or violative of any law, rule or regulation applicable to them, there can be no assurance that any such regulatory authority would not conclude otherwise in the future. If such a bank regulatory authority did reach such a conclusion, and ordered Centurion, FSB or an affiliate to rescind or amend the securitization agreements, payments to you could be delayed or reduced. CONSUMER PROTECTION LAWS The relationship of the consumer and the provider of consumer credit is extensively regulated by federal and state consumer protection laws. With respect to credit accounts issued by Centurion and FSB, the most significant federal laws include the federal Truth-in-Lending, 80 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 account holder liability for unauthorized use, prohibit certain discriminatory practices in extending credit, and regulate practices followed in collections. In addition, account holders are entitled under these laws to have payments and credits applied to the revolving credit account promptly and to request prompt resolution of billing errors. The trust may be liable for certain violations of consumer protection laws that apply to the receivables, either as assignee from the transferors with respect to obligations arising before transfer of the receivables to the trust or as the party directly responsible for obligations arising after the transfer. In addition, an account holder may be entitled to assert such violations by way of set-off against the obligation to pay the amount of receivables owing. All receivables that were not created in compliance in all material respects with the requirements of such laws (if such noncompliance has a material adverse effect on the certificateholders' interest therein) will be reassigned to the transferors. The servicer has also agreed in the pooling and servicing agreement to indemnify the trust, among other things, for any liability arising from such violations caused by its servicing activities. 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 and Servicing Agreement Generally--Representations and Warranties" in this prospectus. The Servicemembers Civil Relief Act allows individuals on active duty in the military to cap the interest rate and fees 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. Currently, some accountholders with outstanding balances have been placed on active duty in the military, and more may be placed on active duty in the future. Application of federal and state bankruptcy and debtor relief laws would affect the interests of the certificateholders if such laws result in any receivables being charged off as uncollectible. See "The Pooling and Servicing Agreement Generally--Defaulted Receivables; Rebates and Fraudulent Charges" in this prospectus. RECENT LITIGATION American Express Company and its affiliates (collectively, "American Express"), including the servicer and the account owners, are, from time to time, subject to various pending or threatened legal proceedings arising out of their card origination, servicing and merchant network services activities. The potential effect of these lawsuits on the certificates issued by the trust cannot be predicted at this time. American Express has been named in a number of purported class actions in which the plaintiffs allege an unlawful antitrust tying arrangement between American Express' charge cards, on the one hand, and its credit cards and debit cards, on the other, in violation of various state and federal laws. The plaintiffs in these actions seek injunctive relief and an unspecified amount of damages. American Express filed a motion to dismiss all of the actions that were filed prior to April 30, 2004 pending in the Southern District of New York and, with respect to one case pending in California, to stay the action pending resolution of the motion to dismiss. A decision on the motion is pending. American Express filed a motion to dismiss an action filed in the Southern District of New York subsequent to April 30, 2004, and on July 1, 2005, the Court denied this motion. American Express has also been named in purported class actions alleging that American 81 Express' policy prohibiting merchants from imposing restrictions on the use of American Express cards that are not imposed equally on other forms of payment violates U.S. antitrust laws. The suits seek injunctive relief. American Express has moved to dismiss the complaint in one of the actions and has not yet been served in the other action. TAX MATTERS FEDERAL INCOME TAX CONSEQUENCES--GENERAL The following is a discussion of material federal income tax consequences relating to the investment in a certificate offered hereunder. Additional federal income tax considerations relevant to a particular series may be set forth in the related prospectus supplement. 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. Further, certificate owners should be aware that this summary and the opinions contained herein may not be able to be relied upon to avoid any income tax penalties that may be imposed with respect to the certificates. Each prospective certificate owner is urged to consult its own tax adviser in determining the federal, state, local and foreign income and any other tax consequences of the purchase, ownership and disposition of a certificate. For purposes of this discussion, "U.S. person" means a citizen or resident of the United States, a corporation or partnership organized in or under the laws of the United States, any state thereof, or any political subdivision of either (including the District of Columbia), or an estate or trust the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source. The term "U.S. certificate owner" means any U.S. Person and any other person to the extent that the income attributable to its interest in a certificate is effectively connected with that person's conduct of a U.S. trade or business. TREATMENT OF THE CERTIFICATES AS DEBT The transferors express in the pooling and servicing agreement the intent that for federal, state and local income and franchise tax purposes, the certificates will be debt secured by the receivables. The transferors, by entering into the pooling and servicing agreement, and each investor, by the acceptance of a beneficial interest in a certificate, will agree to treat the certificates as debt for federal, state and local income and franchise tax purposes. However, the pooling and servicing agreement generally refers to the transfer of receivables as a "sale," and because different criteria are used in determining the non-tax accounting treatment of the transaction, the transferors will treat the pooling and servicing agreement for certain non-tax accounting purposes as causing a transfer of an ownership interest in the receivables and not as creating a debt obligation. A basic premise of federal income tax law is that the economic substance of a transaction generally determines its tax consequences. The form 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 IRS 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. 82 The determination of whether the economic substance of a purchase of an interest in property is instead a loan secured by the transferred property has been made by the IRS and the courts on the basis of numerous factors designed to determine whether the transferor 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 federal income tax counsel to the transferors ("Special Tax Counsel"), is of the opinion that, under current law as in effect on the series closing date, although no transaction closely comparable to that contemplated herein 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. DESCRIPTION OF OPINIONS As more fully described in this "Tax Matters" section, Special Tax Counsel is of the opinion generally to the effect that the trust will not be subject to federal income tax, and further that the certificates will be characterized as debt for United States federal income tax purposes. Additionally, Special Tax Counsel is of the opinion generally to the effect that the statements set forth in this section, to the extent that they constitute matters of law or legal conclusions, are correct in all material respects. Special Tax Counsel has not been asked to opine on any other federal income tax matter, and the balance of this discussion does not purport to set forth any opinion of Special Tax Counsel concerning any other particular federal income tax matter. For example, the discussion of original issue discount below is a general discussion of federal income tax consequences relating to an investment in certificates that are treated as having original issue discount, which discussion Special Tax Counsel opines is correct in all material respects as described above; however, that discussion does not set forth any opinion as to whether any particular series of certificates will be treated as having original issue discount. Additionally, those matters as to which Special Tax Counsel renders opinions should be understood to be subject to the additional considerations in the discussions relating to those opinions set forth below. Special Tax Counsel has not been asked to, and does not, render any opinion regarding the state or local income tax consequences of the purchase, ownership and disposition of a beneficial interest in the certificates. See "--State and Local Tax Consequences" below. This description of the substance of the opinions rendered by Special Tax Counsel is not intended as a substitute for an investor's review of the remainder of this discussion of income tax consequences, or for consultation with its own advisors or tax return preparer. TREATMENT OF THE TRUST GENERAL The pooling and servicing agreement permits the issuance of certificates and certain other interests (including any collateral interest) in the trust, 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 83 certificates and other interests (other than the original transferor certificate) in the trust were characterized as debt, the trust might be characterized as a security arrangement for debt collateralized by the receivables and issued directly by the transferors (or other holders of the original transferor certificate). Under such a view, the trust would be disregarded for federal income tax purposes. Alternatively, if some of the transferor certificate, the certificates and other interests in the trust were characterized as equity therein, the trust might be characterized as a separate entity owning the receivables, issuing its own debt, and jointly owned by the transferors (or other holders of the original transferor certificate) and any other holders of equity interests in the trust. However, special federal income tax counsel is of the opinion that, under current law as in effect on the series closing date, any such entity constituted by the trust will not be an association or publicly traded partnership taxable as a corporation. POSSIBLE TREATMENT OF THE TRUST AS A PARTNERSHIP OR A PUBLICLY TRADED PARTNERSHIP Although, as described above, special federal income tax counsel is of the opinion that the certificates will properly be treated as debt for federal income tax purposes and that the trust will not be treated as an association or publicly traded partnership taxable as a corporation, such opinion does not bind the IRS and thus no assurance can be given that such treatment will prevail. Further, such opinion is made with respect to current law, which is subject to change. If the IRS were to contend successfully that some or all of the transferor certificates, the certificates or any other interests in the trust (including any collateral interest) were equity in the trust for federal income tax purposes, all or a portion of the trust could be classified as a partnership or as a publicly traded partnership taxable as a corporation for such purposes. Because special federal income tax counsel is of the opinion that the certificates will be characterized as debt for federal income tax purposes and because any holder of an interest in a collateral interest will agree to treat that interest as debt for 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 period. If the trust were classified as a publicly traded partnership, whether by reason of the treatment of publicly offered certificates as equity or by reason of 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 84 market" or its "substantial equivalent." The transferors 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 transferors. As a result, there can be no assurance that the measures the transferors 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 transferors (or the holders of the original transferor 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 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 transferors 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 and servicing agreement were treated in whole or in part as a publicly traded partnership taxable as a corporation, that entity would be subject to federal income tax at corporate tax rates on its taxable income generated by ownership of the related receivables. That tax could result in reduced distributions to certificate owners. No distributions from the trust would be deductible in computing the taxable income of the corporation, except to the extent that any certificates were treated as debt of the corporation and distributions to the related certificate owners were treated as payments of interest thereon. In addition, distributions to certificate owners not treated as holding debt would be dividend income to the extent of the current and accumulated earnings and profits of the corporation (and certificate owners may not be entitled to any dividends received deduction in respect of 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. 85 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 somewhat in advance of the receipt of cash attributable to that income. In general, a certificate will be treated as having original issue discount to the extent that its "stated redemption price" exceeds its "issue price," if such excess equals or exceeds 0.25 percent multiplied by the weighted average life of the certificate (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 IRS could take the position based on Treasury regulations that none of the interest payable on a certificate is "unconditionally payable" and hence that all of 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 should consult their own tax advisers concerning the impact to them in their particular circumstances. MARKET DISCOUNT A U.S. certificate owner who purchases an interest in a certificate at a discount that exceeds any unamortized original issue discount may be subject to the "market discount" rules of Sections 1276 through 1278 of the Internal Revenue Code. These rules provide, in part, that gain on the sale or other disposition of a certificate and partial principal payments on a certificate are treated as ordinary income to the extent of accrued market discount. The market discount rules also provide for deferral of interest deductions with respect to debt incurred to purchase or carry a certificate that has market discount. MARKET PREMIUM A U.S. certificate owner who purchases an interest in a certificate at a premium may elect to offset the premium against interest income over the remaining term of the certificate in accordance with the provisions of Section 171 of the Internal Revenue Code. SALE OR EXCHANGE OF CERTIFICATES Upon a disposition of an interest in a certificate, a U.S. certificate owner generally will recognize gain or loss equal to the difference between the amount realized on the disposition and the U.S. certificate owner's adjusted basis in its interest in the certificate. A taxable exchange of a certificate could also occur as a result of the transferors' substitution of money or investments for receivables. See "The Pooling and Servicing Agreement Generally--Defeasance" in this prospectus. 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 principal payments 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 86 the certificate was held as a capital asset. Capital losses generally may be used only to offset capital gains. FOREIGN CERTIFICATE OWNERS Under United States federal income tax law now in effect, payment of interest by the trust to a certificate owner who, for United States federal income tax purposes, is a nonresident alien individual or a foreign corporation (a "foreign person"), generally will be considered "portfolio interest" and generally will not be subject to U.S. federal income tax and withholding tax, provided the interest is not effectively connected with the conduct of a trade or business within the United States by the foreign person, 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 transferor 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 transferors (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 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 original transferor certificate other than the transferors 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 generally 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 generally must be accompanied by a 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. If interest is not portfolio interest, then it will be subject to United States federal income and withholding tax at a rate of 30 percent, unless reduced or eliminated under an applicable tax treaty or interest is effectively connected with the conduct of a trade or business within the United States and, in either case, the appropriate statement has been provided. 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. 87 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, (ii) in the case of gain representing accrued interest, the conditions for exemption from withholding described above are satisfied, and (iii) such gain is not effectively connected with the conduct of a trade or business in the United States by the foreign person. Certain exceptions may be applicable, and an individual foreign person is cautioned to consult a tax advisor. If the certificates were treated as an interest in a partnership, the recharacterization could cause a non-U.S. certificate owner to be treated as engaged in a trade or business in the United States. In that event, the non- U.S. certificate owner would be required to file a federal income tax return and, in general, would be subject to U.S. federal income tax (including the branch profits tax) on its net income from the partnership. Further, certain withholding obligations apply with respect to income allocable or distributions made to a foreign partner. That withholding may be at a rate as high as the highest applicable marginal rate. 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. 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. 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 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 that appropriate proof is provided under rules established by the IRS. Furthermore, certain penalties may be imposed by the IRS 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 IRS 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 88 tax law. Each investor is cautioned to consult its own tax advisor regarding state and 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 a Plan 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 government 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. Moreover, additional prohibited transactions could arise if the trust assets were deemed to constitute "plan assets" of any Plan that owned certificates. The Department of Labor has issued a final regulation, referred to as the plan asset regulation, concerning the definition of what constitutes "plan assets" of a Plan subject to ERISA or Section 4975 of the Internal Revenue Code. Under the plan asset regulation, the assets and properties of corporations, partnerships and certain other entities in which a Plan makes an investment in an "equity interest" could be deemed to be "plan assets" of the Plan in certain circumstances. Accordingly, if Plans (or other entities whose assets include "plan assets") purchase certificates, the trust could be deemed to hold "plan assets" and result in non-exempt prohibited transactions, unless either of the following exceptions applies. The first exception applies to a "publicly-offered security." A publicly- offered security is a security that is: (i) freely transferable, (ii) part of a class of securities that is owned, immediately subsequent to the initial offering, by 100 or more investors who are independent of the issuer and of one another, and (iii) either is (A) part of a class of securities registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, or (B) sold to the Plan as part of an offering of securities to the public pursuant to an effective registration statement under the Securities Act of 1933, as amended, and the class of securities of which such security is a part is registered under the Exchange Act 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. 89 If so specified in the related prospectus supplement, a second exception may also be available. On July 16, 2000, the Department of Labor authorized Centurion and RFC II (as the transferors to the trust at the time) 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 Prohibited Transaction Class Exemption 96-62 relating to (i) 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 Centurion, RFC II or any of their affiliates is the sponsor; and (ii) the servicing, operation and management of such trust if, in either case, 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 if the conditions are met. Among the conditions that must be satisfied for the authorization to apply are the following: (a) 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; (b) 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; (c) 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 that have a maturity 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; (d) the trustee is not an affiliate of any member of the restricted group (as defined below); (e) 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 transferors 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 related supplement to the pooling and servicing agreement and reimbursement of the servicer's reasonable expenses in connection therewith; (f) the Plan investing in the senior certificates is an "accredited investor" as defined in Rule 501(a)(1) of Regulation D of the Securities Act; (g) 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 90 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; (h) 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; (i) to protect against fraud, chargebacks or other dilution of the receivables, the pooling and servicing agreement and the Rating Agencies require the transferors to maintain a transferors' interest of not less than 2% of the principal balance of the receivables contained in the trust; (j) each receivable is an Eligible Receivable, based on criteria of the Rating Agencies and as specified in the pooling and servicing agreement, and the pooling and servicing agreement requires that any change in the terms of the cardholder agreements must be made applicable to a comparable segment of accounts which are owned or serviced by Centurion, RFC II or any of their affiliates and are part of the same program or have the same or substantially similar characteristics. The pooling and servicing agreement complies with this condition by specifying that any such change either must be required by law, or, if not so required, must not have a material adverse effect on the trust or the certificateholders; (k) the pooling and servicing agreement must limit the number of receivables in newly originated accounts to be designated to the trust, without the Rating Agencies' prior written consent, to the following amounts: (i) 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 (ii) 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. The pooling and servicing agreement complies with this condition by specifying that the Rating Agencies' prior written consent is required for any designation of newly originated accounts to the trust. (l) the pooling and servicing agreement requires the transferors 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 (m) the pooling and servicing agreement requires the transferors 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 (i) a proposed transfer of receivables in newly originated accounts to the trust, or (ii) will have resulted from 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 and servicing 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 (ii) for any three-month period in which any transfers of newly originated accounts occurred only after receipt of prior rating agency confirmation pursuant to clause (i) above. This condition is complied with because the pooling and servicing agreement 91 currently in effect permits the transferors to transfer newly originated accounts to the trust only in compliance with clause (i) above. The trust also must meet the following requirements: (1) the corpus of the trust must consist only of receivables of the type which have been included in other investment pools; (2) certificates evidencing interests in 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 (3) certificates evidencing an interest in such other investment pools have been purchased by investors other than Plans for at least one year prior to any Plan's acquisition of 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: (1) 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; (2) 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; (3) the Plan's investment in senior certificates does not exceed 25% of all of the senior certificates outstanding after the acquisition; and (4) 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 transferors, any underwriter of the senior certificates, the trustee, the servicer, any obligor with respect to 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 DOL has designated this 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 DOL PTCE 95-60. Moreover, as discussed above, while (unless provided otherwise in the applicable prospectus supplement) special federal income tax counsel has given its opinion that the certificates will properly be treated as debt for federal income tax purposes, if any certificates are treated as equity interests in a partnership in which other certificates are debt, all or part of a tax-exempt investor's share of income from the certificates that are treated as equity could be 92 treated as unrelated debt-financed income under the Internal Revenue Code taxable to the investor. In light of the foregoing, fiduciaries of Plans (or other entities whose assets include "plan assets") considering the purchase of certificates should consult their own counsel as to whether the acquisition of such certificates would constitute or result in a prohibited transaction, whether trust assets which are represented by such certificates would be considered "plan assets," the consequences that would apply if the trust assets were considered "plan assets," the applicability of exemptive relief from the prohibited transaction rules under the two exceptions described above or otherwise and the applicability of the tax on unrelated business income and unrelated debt- financed income. PLAN OF DISTRIBUTION The transferors may sell certificates (a) through underwriters or dealers, (b) directly to one or more purchasers, or (c) 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 transferors 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. If underwriters are used in a sale of any certificates of a series offered hereby, 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, including by an underwriter directly to a trust or other special purpose funding vehicle. 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 transferors. Any remarketing firm will be identified and the terms of its agreement, if any, with the transferors 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 transferors or through agents designated by the transferors from time to time. Any agent involved in the offer or sale of certificates will be named, and any commissions payable by the transferors 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. 93 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. Agents and underwriters may be entitled under agreements entered into with the transferors to indemnification by the transferors against certain civil liabilities, including liabilities under the Securities Act, 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 affiliates or customers of, engage in transactions with, or perform services for, the transferors or their affiliates in the ordinary course of business. LEGAL MATTERS Certain legal matters relating to the certificates will be passed upon for Centurion, FSB and the trust by Kevin J. Cooper, Group Counsel of TRS, and certain legal matters relating to the certificates will be passed upon for RFC II, RFC III, RFC IV and the trust by Carol V. Schwartz, Group Counsel of American Express. Mr. Cooper and Ms. Schwartz each own or have the right to acquire a number of shares of common stock of American Express which in the aggregate is equal to less than .05% of the outstanding common stock of American Express. Certain other legal matters will be passed upon for the transferors and the trust by Orrick, Herrington & Sutcliffe LLP. Certain legal matters will be passed upon for the underwriters by Orrick, Herrington & Sutcliffe LLP. Certain legal matters relating to the federal tax consequences of the issuance of the certificates and certain other matters relating thereto will be passed upon for the transferors by Orrick, Herrington & Sutcliffe LLP. REPORTS TO CERTIFICATEHOLDERS Monthly reports containing information on the certificates and the collateral securing the certificates will be filed with the Securities and Exchange Commission to the extent required by the SEC. These reports will not be sent to certificateholders. See "Description of the Certificates--Book- Entry Registration" and "The Pooling and Servicing Agreement Generally-- Evidence as to Compliance" in this prospectus and "Series Provisions--Reports" in the accompanying prospectus supplement. 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 reports on Form 10- K, periodic reports on Form 10-D and current reports on Form 8-K. You may read and copy any reports, statements or other information we file at the SEC's public reference room at 100 F Street, N.E., 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 Web site (http://www.sec.gov). Our SEC filings may be located by using the SEC Central Index Key (CIK) for American Express Credit Account Master Trust, 0001003509. Reports that are filed with the SEC by the servicer pursuant to the Securities Exchange Act of 1934, as amended, may be accessed by any investor, free of charge, through an Internet Web site at http://[o]. In the event this Internet Web site is temporarily unavailable, TRS will 94 provide to investors electronic or paper copies of such reports free of charge upon request. For purposes of any electronic version of this prospectus, the URL in this paragraph is an inactive textual reference only. We have taken steps to ensure that the URL in this paragraph was inactive at the time we created any electronic version of this prospectus. 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 SEC reports and proxy materials filed by or on behalf of the trust until we terminate our offering of the certificates. As a recipient of this prospectus, you may request a copy of any document we incorporate by reference, except exhibits to the documents (unless the exhibits are specifically incorporated by reference), at no cost, by writing or calling us at: American Express Travel Related Services Company, Inc., 200 Vesey Street, New York, New York 10285-4405, Attention: Secretary; (212) 640- 5583. 95 GLOSSARY OF DEFINED TERMS "ADDITIONAL ACCOUNTS" are any accounts in the Total Portfolio that are designated to the trust pursuant to an addition. "AGGREGATE ADDITION ACCOUNTS" means revolving credit or other charge or credit accounts established pursuant to a revolving credit agreement or other charge or credit agreement, respectively, between an account owner and the person or persons obligated to make payments thereunder, excluding any merchant, which is designated by such account owner to be included as an account. "AVERAGE RATE" means, with respect to any group, the percentage equivalent of a decimal equal to the sum of the amounts for each outstanding series (or each class within a series consisting of more than one class) within such group obtained by multiplying (a) the certificate rate for such series or class (adjusted to take into account any payments received or payable pursuant to any interest rate agreements), and (b) a fraction: (i) the numerator of which is the aggregate unpaid principal amount of the certificates of such series or class, and (ii) the denominator of which is the aggregate unpaid principal amount of all certificates within such group. "BUSINESS DAY" is, unless otherwise indicated, any day other than a Saturday, a Sunday or a day on which banking institutions in New York, New York or any other state in which the principal executive offices of Centurion, FSB, any other account owner or the trustee are located are authorized or obligated by law or executive order to be closed. "COLLECTION ACCOUNT" means the account established as described under "The Pooling and Servicing Agreement Generally--Collection Account" in this prospectus. "CONTROLLED 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 commencement of the Early Amortization Period or, if so specified in the related prospectus supplement, an Early Accumulation Period for that series, (ii) payment in full of the certificates of that series or class, and (iii) the series termination date for that series. "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 commencement of the Early Amortization Period for that series, (ii) payment in full of the certificates of that series or class, and (iii) the series termination date for that series. "DATE OF PROCESSING" means, with respect to any transaction or receipt of collections, the Business Day after such transaction is first output, in written form pursuant to the 96 servicer's usual and customary data processing procedures, from the servicer's computer file of accounts comparable to the accounts (regardless of the effective date of recordation). "DEFAULTED AMOUNT," for any Monthly Period, will be an amount (not less than zero) equal to: (a) the amount of Defaulted Receivables for such Monthly Period, minus (b) the amount of any Defaulted Receivables with respect to which any transferor or the servicer becomes obligated to accept reassignment or assignment during such Monthly Period (unless an event relating to bankruptcy, receivership, liquidation, conservatorship or insolvency has occurred with respect to such transferor or the servicer, in which event the amount of such Defaulted Receivables will not be added to the sum so subtracted). "DEFAULTED RECEIVABLES," for any Monthly Period, are principal receivables that were charged off as uncollectible in such Monthly Period. "DETERMINATION DATE" will be, unless otherwise indicated, the earlier of the third Business Day and the fifth calendar day (or, if the fifth calendar day is not a Business Day, the immediately preceding Business Day) preceding the 15th day of each calendar month. "DISTRIBUTION DATE" will be, unless otherwise indicated, the 15th day of each month (or, if such 15th day is not a Business Day, the next Business Day). "EARLY ACCUMULATION PERIOD," for any applicable series or class of such series, begins on the day on which a Reinvestment Event for that series occurs or is deemed to occur and will continue until the earliest of: (i) the commencement of the Early Amortization Period for that series, (ii) payment in full of the invested amount of that series, and (iii) the series termination date for that series. "EARLY AMORTIZATION PERIOD," for any applicable series or class of such series, begins on the day on which a Pay-Out Event for that series occurs or is deemed to occur and will continue until the earlier of: (i) payment in full of the certificates of that series or class, and (ii) the series termination date for that series. "ELIGIBLE ACCOUNT" means each credit or charge account or line of credit (if, with respect to the line of credit, the full receivable balance is not due upon receipt of a monthly billing statement (excluding the billing statement with respect to the final payment of such balance) and the line of credit contains a code designation in the related securitization field as described in the Pooling and Servicing Agreement) owned by an account owner and its successors and permitted assignees which, as of the respective date of designation, is a credit or charge account or line of credit: (i) in existence and maintained by an account owner or such successors or assignees, (ii) is payable in United States dollars, 97 (iii) has not been sold or pledged to any other party except for any other account owner that has entered into a purchase agreement, a transferor or an additional transferor, (iv) does not have receivables which have been sold or pledged to any other party other than Credco pursuant to the Credco purchase agreement or a transferor, (v) except as provided below, has an account holder who has not been confirmed by the servicer in its computer files as being involved in any voluntary or involuntary bankruptcy proceeding, (vi) has an account holder who has provided as his or her most recent billing address an address located in the United States, its territories or possessions or Canada or a United States military address (provided, however, that, at any time, up to 3% of the accounts may have account holders who have provided as their most recent billing addresses, addresses outside of such jurisdictions), (vii) has not been identified as an account or product with respect to which the related card has been lost or stolen (if such account or product is a credit card or charge card account or product), (viii) does not have receivables that are Defaulted Receivables and does not have any receivables that have been identified by the servicer as having been incurred as a result of fraudulent use of any related credit card or charge card, and (ix) with respect to Aggregate Addition Accounts, certain other accounts or products which shall have satisfied the Rating Agency Condition. "ELIGIBLE DEPOSIT ACCOUNT" means either: (a) a segregated account with an Eligible Institution (other than any account owner), or (b) a segregated trust account with the corporate trust department of a depository institution (other than any account owner) organized under the laws of the United States or any one of the states thereof, including the District of Columbia (or any domestic branch of a foreign bank), and acting as a trustee for funds deposited in such account, so long as any of the unsecured, unguaranteed senior debt securities of such depository institution 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, 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 a long-term unsecured debt rating or certificate of deposit rating that is acceptable to each Rating Agency, and (ii) is a member of the FDIC; or (b) any other institution that is acceptable to each Rating Agency. 98 "ELIGIBLE INVESTMENT" means: (i) obligations fully guaranteed by the United States of America, (ii) demand deposits, time deposits or certificates of deposit of depository institutions or trust companies incorporated under the laws of the United States of America or any state thereof and subject to supervision and examination by federal or state banking or depository institution authorities; provided that, at the time of the trust's investment therein, the short-term debt of such depository institution or trust company shall be rated at least "A-1+" (or any other rating subject to receipt by the transferors, the servicer and the trustee of written notification from S&P that investments of such type at such other minimum rating will not result in S&P reducing or withdrawing its then existing rating of the certificates of any outstanding series or class with respect to which it is a Rating Agency) by S&P and shall be satisfactory to each other Rating Agency, (iii) commercial paper that, at the time of the trust's investment or a contractual commitment to invest therein, shall be rated at least "A- 1+" (or any other rating subject to receipt by the transferors, the servicer and the trustee of written notification from S&P that investments of such type at such other minimum rating will not result in S&P reducing or withdrawing its then existing rating of the certificates of any outstanding series or class with respect to which it is a Rating Agency) by S&P and shall be satisfactory to each other Rating Agency, (iv) demand deposits, time deposits or certificates of deposit which are fully insured by the FDIC having, at the time of the trust's investment therein, a rating satisfactory to each Rating Agency, (v) bankers' acceptances issued by any depository institution or trust company described in (ii) above, (vi) time deposits, other than as referred to in (iv) above (having maturities not later than the business day preceding the next distribution date), with an entity, the commercial paper of which shall be rated at least "A-1+" (or any other rating subject to receipt by the transferors, the servicer and the trustee of written notification from S&P that investments of such type at such other minimum rating will not result in S&P reducing or withdrawing its then existing rating of the certificates of any outstanding series or class with respect to which it is a Rating Agency) by S&P and shall be satisfactory to each other Rating Agency, (vii) only to the extent permitted by Rule 3a-7 under the Investment Company Act of 1940, as amended, (a) money market funds that, at the time of the trust's investment therein, shall be rated at least "AAA-m" or "AAAm-G" by S&P (or any other rating subject to receipt by the transferors, the servicer and the trustee of written notification from S&P that investments of such type at such other minimum rating will not result in S&P reducing or withdrawing its then existing rating of the certificates of any outstanding series or class with respect to which it is a Rating Agency) and shall be satisfactory to each other Rating Agency, and (viii) any other investment if the Rating Agency Condition has been satisfied; 99 provided, however, that Eligible Investments shall not include securities issued by, or other obligations of, any account owner; and provided further that no Eligible Investments shall be contrary to the status of the trust as a qualified special purpose entity under existing accounting literature. "ELIGIBLE RECEIVABLE" means each receivable: (a) that has arisen in an Eligible Account; (b) that was created in compliance in all material respects with all requirements of law applicable to the account owner of such Eligible Account and pursuant to an account agreement that complies in all material respects with all requirements of law applicable to such account owner, in either case, the failure to comply with which would have a material adverse effect on 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 in connection with the creation of such receivable or the execution, delivery and performance by such account owner of the account agreement pursuant to which such receivable was created, have been duly obtained, effected or given and are in full force and effect; (d) as to which at the time of the transfer of such receivable to the trust, a transferor or the trust will have good and marketable title thereto, free and clear of all liens (other than any lien for municipal or other local taxes of a transferor or an account owner if such taxes are not then due and payable or if such Transferor or such account owner 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) that has been the subject of either a valid transfer and assignment from a transferor to the trust of all of such transferor'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) that is the legal, valid and binding payment obligation of the obligor thereon, enforceable against such obligor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity); (g) that, at the time of transfer to the trust, has not been waived or modified except as permitted in accordance with the credit guidelines and which waiver or modification is reflected in the servicer's computer file of accounts; (h) that, at the time of transfer to the trust, is not subject to any right of rescission, setoff, counterclaim or any other defense (including defenses arising out of violations of usury laws) of the obligor, other than defenses arising out of applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights in general; 100 (i) as to which, at the time of transfer to the trust, the transferor thereof has satisfied all its obligations required to be satisfied by such time; (j) as to which, at the time of transfer to the trust, none of the transferors, Centurion, FSB, any other account owner or Credco, as the case may be, has taken any action which would impair, or omitted to take any action the omission of which would impair, the rights of the trust or the certificateholders therein; and (k) that constitutes either an "account" or a "general intangible" under and as defined in Article 9 of the UCC as then in effect in any state where the filing of a financing statement is then required to perfect the trust's interest in the receivables and the proceeds thereof. "EXCESS ALLOCATION SERIES" means any series that, as specified in the related prospectus supplement, is entitled to receive Excess Finance Charge Collections as more fully described under "The Pooling and Servicing Agreement Generally--Sharing of Excess Finance Charge Collections Among Excess Allocation Series" in this prospectus. "EXCESS FINANCE CHARGE COLLECTIONS" means collections of finance charge receivables and certain other amounts allocable to the certificateholders' interest of any Excess Allocation Series in excess of the amounts necessary to make required payments with respect to such series (including payments to the provider of any related Series Enhancement) that are payable out of collections of finance charge receivables. "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 closing date for that series and ending on a specified date before the start a Controlled Amortization Period or Controlled Accumulation Period for that series. "GROUP INVESTOR ADDITIONAL AMOUNTS" means, for any Distribution Date, the sum of the amounts determined with respect to each series in such group equal to: (a) an amount equal to the amount by which the invested amount of any class of certificates or any collateral invested amounts have been reduced as a result of investor charge-offs, subordination of principal collections and funding the investor default amount for any other class of certificates or collateral invested amounts of such series, and (b) if the related prospectus supplement so provides, the amount of interest at the applicable certificate rate that has accrued on the amount described in the preceding clause (a). "GROUP INVESTOR DEFAULT AMOUNT" means, for any Distribution Date, the sum of the amounts determined with respect to each series in such group equal to the product of: o the Series Allocable Defaulted Amount for such Distribution Date and o the applicable Floating Allocation Percentage for such Distribution Date. "GROUP INVESTOR FINANCE CHARGE COLLECTIONS" means, for any Distribution Date, the aggregate amount of Investor Finance Charge Collections for such Distribution Date for all series in such group. 101 "GROUP INVESTOR MONTHLY FEES" means, for any Distribution Date, the Servicing Fee payable monthly for each series in such group, any series enhancement fees and any other similar fees which are paid out of Reallocated Investor Finance Charge Collections for such series pursuant to the applicable prospectus supplement. "GROUP INVESTOR MONTHLY INTEREST" means, for any Distribution Date, the sum of the aggregate amount of monthly interest, including overdue monthly interest and interest on such overdue monthly interest, if applicable, for all series in such group for such Distribution Date. "INELIGIBLE RECEIVABLES" means all receivables with respect to an affected account that has been reassigned to the transferors as a result of a transferor's breach of certain representations and warranties described in "The Pooling and Servicing Agreement Generally--Representations and Warranties" in this prospectus. "INITIAL CUT-OFF DATE" means April 16, 2004. "INVESTOR FINANCE CHARGE COLLECTIONS," for any series, means the collections of finance charge receivables allocable to the invested amount (including any collateral invested amount) of that series. "ISSUER RATE FEES" has the meaning described in "Centurion's and FSB's Revolving Credit Businesses--Issuer Rate Fees" in this prospectus. "MONTHLY PERIOD" means the period beginning at the opening of business on the second day following the last day of the seventh billing cycle of the second preceding calendar month and ending at the close of business on the day following the last day of the seventh billing cycle of the immediately following month. The last day of each seventh monthly billing cycle generally occurs between the twenty-first (21st) day and the twenty-fifth (25th) day of each month. Therefore, the number of days in a monthly period generally may vary from a calendar month by up to four days. "PAY-OUT EVENT" with respect to a series are the events described in "Description of the Certificates--Pay-Out Events and Reinvestment Events" in this prospectus and any other events specified as such in the related prospectus supplement. "PLANS" mean 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. "PORTFOLIO YIELD" means, with respect to the trust as a whole and, with respect to any Monthly Period, the annualized percentage equivalent of a fraction: o the numerator of which is the aggregate of the sum of the Series Allocable Finance Charge Collections for all series during the immediately preceding Monthly Period calculated on a cash basis after subtracting therefrom the Series Allocable Defaulted Amount for all series for such Monthly Period and o the denominator of which is the total amount of principal receivables as of the last day of such immediately preceding Monthly Period. "PREFUNDING AMOUNT" has the meaning described in "The Pooling and Servicing Agreement Generally--Funding Period" in this prospectus. 102 "PRINCIPAL ALLOCATION PERCENTAGE" for any series will be determined as set forth in the related prospectus supplement. "RATING AGENCY" is a nationally recognized statistical rating organization selected by the transferors to rate a series or class of certificates. "RATING AGENCY CONDITION" means, with respect to any action, that each Rating Agency shall have notified the transferors, the servicer and the trustee in writing that such action will not result in a reduction or withdrawal of the then existing rating of any outstanding series or class with respect to which it is a Rating Agency. "REALLOCATED INVESTOR FINANCE CHARGE COLLECTIONS" means the amount of Group Investor Finance Charge Collections allocated to the certificateholders' interest (including any collateral invested amount) for a particular series offered by this prospectus. "REALLOCATION GROUP" means, for any series, the group of series that will be subject to reallocations of collections of receivables and other amounts or obligations among the series in that group. "RECOVERIES" means all amounts received (net of expenses of collection), including insurance proceeds, with respect to Defaulted Receivables, including the net proceeds of any sale of such Defaulted Receivables. "REINVESTMENT EVENT" with respect to a series are the events described in "Description of the Certificates--Pay-Out Events and Reinvestment Events" in this prospectus and any other events specified as such in the related prospectus supplement. "REQUIRED MINIMUM PRINCIPAL BALANCE," as of any date of determination, means the sum of the series invested amounts for all outstanding series plus the sum of the Series Required Transferor Amounts for each such series minus the amount on deposit in the Special Funding Account. The "series invested amount" will generally equal the initial invested amount for a series. "REQUIRED TRANSFEROR AMOUNT" means, at any time of determination, an amount equal to the sum of the Series Required Transferor Amounts for each outstanding series. "REVOLVING PERIOD," for any series of certificates, begins on the series closing date or another date as specified in the related prospectus supplement and continues until the earlier of: o the commencement of the Early Amortization Period or Early Accumulation Period for that series; and o the date specified in the related prospectus supplement as the end of the Revolving Period. "SERIES ADJUSTED INVESTED AMOUNT" means, for any series and for any Monthly Period: o the series invested amount for such series for that Monthly Period, less o the excess, if any, of the cumulative amount (calculated in accordance with the terms of the related supplement) of investor charge-offs allocable to the invested amount for such series as of the last day of the immediately preceding Monthly Period over the aggregate reimbursement of such investor charge-offs as of such last 103 day, or such lesser amount as may be provided in the prospectus supplement for such series. "SERIES ALLOCABLE FINANCE CHARGE COLLECTIONS," "SERIES ALLOCABLE PRINCIPAL COLLECTIONS" and "SERIES ALLOCABLE DEFAULTED AMOUNT" mean, for any series and for any Monthly Period, the product of: (a) the Series Allocation Percentage and (b) the amount of collections of finance charge receivables deposited in the Collection Account, the amount of collections of principal receivables deposited in the Collection Account and the amount of all Defaulted Amounts with respect to that Monthly Period, respectively. "SERIES ALLOCATION PERCENTAGE" means, for any series and for any Monthly Period, the percentage equivalent of a fraction: o the numerator of which is the Series Adjusted Invested Amount as of the last day of the immediately preceding Monthly Period, and o the denominator of which is the Trust Adjusted Invested Amount. "SERIES ENHANCEMENT" means any credit enhancement for the benefit of the certificateholders of a particular series or class of certificates. "SERIES REQUIRED TRANSFEROR AMOUNT" means, for any series, an amount specified in the prospectus supplement for that series. "SERVICER DEFAULT" refers to any of the following events: (a) failure by the servicer to make any payment, transfer or deposit, or to give instructions to the trustee to make any payment, transfer or deposit, on the date the servicer is required to do so under the pooling and servicing agreement or any supplement, which is not cured within a five Business Day grace period; (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 in the pooling and servicing agreement or any supplement which has an adverse effect and which continues unremedied for a period of 60 days after written notice, or the servicer assigns its duties under the pooling and servicing agreement, except as specifically permitted thereunder; (c) any representation, warranty or certification made by the servicer in the pooling and servicing agreement, any supplement or in any certificate delivered pursuant to the pooling and servicing agreement or any supplement proves to have been incorrect in any material respect when made, which has an adverse effect on the rights of the certificateholders of any series, and which material adverse effect continues for a period of 60 days after written notice; or (d) the occurrence of certain events of bankruptcy, insolvency, liquidation, receivership or conservatorship with respect to the servicer. Notwithstanding the foregoing, a delay in or failure of performance referred to under clause (a) above for a period of 10 Business Days after the applicable grace period or referred to under clauses (b) or (c) for a period of 60 Business Days after the applicable 104 grace period, will not constitute a Servicer Default if such delay or failure could not have been 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. Upon the occurrence of any such event, the servicer will not be relieved from using its best efforts to perform its obligations in a timely manner in accordance with the terms of the pooling and servicing agreement. The servicer must provide the trustee, the transferors and any provider of Series Enhancement prompt notice of such failure or delay by it, together with a description of its efforts to so perform its obligations. "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 "The Pooling and Servicing Agreement Generally--Sharing of Principal Collections Among Principal Sharing Series" in this prospectus. "SPECIAL FUNDING ACCOUNT" means the account established as described under "The Pooling and Servicing Agreement Generally--Special Funding Account" 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. "SUPPLEMENTAL CERTIFICATE" means any certificate that is received by the transferors in exchange for a portion of the Transferor Certificates. "TAX OPINION" means, with respect to any action, an opinion of counsel to the effect that, for federal income tax purposes, (a) such action will not adversely affect the tax characterization as debt of the certificates of any outstanding series or class that was characterized as debt at the time of its 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 or constitute an event in which gain or loss would be recognized by any certificateholder. "TOTAL PORTFOLIO" is the revolving credit account portfolio of consumer American Express credit card accounts and Sign & Travel accounts owned by Centurion and FSB and in the future may include other charge or credit accounts or products owned by Centurion, FSB or other account owners, including revolving credit features of the charge card accounts. "TRANSFEROR AMOUNT" means, at any time of determination, an amount equal to the sum of (i) the total aggregate amount of principal receivables in the trust and (ii) the amount on deposit in the Special Funding Account at such time minus the aggregate "Adjusted Invested Amounts" for all outstanding series (specified in the prospectus supplements related to the offering of such series) at such time. "TRANSFEROR CERTIFICATES" means, collectively, the original transferor certificate and any outstanding Supplemental Certificates. "TRUST ADJUSTED INVESTED AMOUNT" means, for any Monthly Period, the sum of the Series Adjusted Invested Amounts (as adjusted in any prospectus supplement) for all outstanding series. 105 [This page intentionally left blank] [This page intentionally left blank] [This page intentionally left blank] AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST ISSUING ENTITY SERIES 200[_]-[_] $[_________] CLASS A FLOATING RATE ASSET BACKED CERTIFICATES $[________] CLASS B FLOATING RATE ASSET BACKED CERTIFICATES AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION II AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION III LLC AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION IV LLC DEPOSITORS AND TRANSFERORS AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC. SERVICER AMERICAN EXPRESS CENTURION BANK AMERICAN EXPRESS BANK, FSB SPONSORS [GRAPHIC OMITTED] ------------------------ PROSPECTUS SUPPLEMENT ------------------------ UNDERWRITERS [A CO.] [B CO.] [C CO.] You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus. We have not authorized anyone to provide you with different information. We are not offering the Class A certificates or the Class B certificates in any state where the offer is not permitted. We do not claim the accuracy of the information in this prospectus supplement and the accompanying prospectus as of any date other than the dates stated on their respective covers. 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 or Class B certificates will deliver a prospectus supplement and prospectus, such delivery obligation generally may be satisfied through the filing of the prospectus supplement and prospectus with the Securities and Exchange Commission. 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 ................................................. $ 107** Printing and Engraving Expenses .................................. $ * Trustee's Fees and Expenses ...................................... $ * Legal Fees and Expenses .......................................... $ * Blue Sky Fees and Expenses ....................................... $ * Accountants' Fees and Expenses ................................... $ * Rating Agency Fees ............................................... $ * Miscellaneous Fees ............................................... $ * ----------- Total ......................................................... $ * ===========
- ------------------------- * To be filed by amendment ** Actual ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. American Express Receivables Financing Corporation II The American Express Receivables Financing Corporation II's Certificate of Incorporation provides for indemnification of directors and officers of American Express Receivables Financing Corporation II to the fullest extent permitted by Delaware law. Section 145 of the Delaware General Corporation Law provides, in substance, that Delaware corporations shall have the power, under specified circumstances, to indemnify their directors, officers, employees and agents in connection with actions, suits or proceedings brought against them by a third party or in the right of the corporation, by reason of the fact that they are or were such directors, officers, employees or agents, against expenses incurred in any such action, suit or proceeding. The Delaware General Corporation Law also provides that American Express Receivables Financing Corporation II may purchase insurance on behalf of any such director, officer, employee or agent. Article XII of American Express Receivables Financing Corporation II's Certificate of Incorporation provides that, to the extent that a director, officer, employee or agent of American Express Receivables Financing Corporation II has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, he or she shall be indemnified by American Express Receivables Financing Corporation II against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection therewith, without the necessity of any action being taken by American Express Receivables Financing Corporation II other than the determination, in good faith, that such defense has been successful. In all other cases wherein indemnification is provided by Article XII, unless ordered by a court, II-1 indemnification shall be made by RFC II only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he or she has met the applicable standard of conduct specified in Article XII. Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion or (iii) by the holders of a majority of the shares of capital stock of American Express Receivables Financing Corporation II entitled to vote thereon. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person seeking indemnification did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of American Express Receivables Financing Corporation II, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. Entry of a judgment by consent as part of a settlement shall not be deemed a final adjudication of liability for negligence or misconduct in the performance of duty, nor of any other issue or matter. Expenses incurred by an officer or director in defending any civil or criminal action, suit or proceeding may be paid by American Express Receivables Financing Corporation II in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of such director or officer to repay such amount unless it shall ultimately be determined that he or she is entitled to be indemnified by American Express Receivables Financing Corporation II. Expenses incurred by other employees or agents of American Express Receivables Financing Corporation II in defending any civil or criminal action, suit or proceeding may be paid by American Express Receivables Financing Corporation II upon such terms and conditions, if any, as the Board of Directors deems appropriate. No director shall be personally liable to American Express Receivables Financing Corporation II or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director. Notwithstanding the foregoing sentence, a director shall be liable to the extent provided by applicable law (i) for breach of the director's duty of loyalty to American Express Receivables Financing Corporation II or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the Delaware General Corporation Law or (iv) for any transaction from which the director derived an improper personal benefit. No amendment to or repeal of subparagraph (e) to Article XII of the Certificate of Incorporation shall apply to or have any effect on the liability or alleged liability of any director of American Express Receivables Financing Corporation II for or with respect to any acts or omissions of such director occurring prior to such amendment. The indemnification provided by Article XII of the Certificate of Incorporation shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any By-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a II-2 director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person. American Express Receivables Financing Corporation III LLC and American Express Receivables Financing Corporation IV LLC The Delaware Limited Liability Company Act gives Delaware limited liability companies broad powers to indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever. To the fullest extent permitted by the Delaware Limited Liability Company Act and in accordance with its Limited Liability Company Agreement, American Express Receivables Financing Corporation III LLC will indemnify any member, officer, director, employee or agent of American Express Receivables Financing Corporation III LLC who is, was or is threatened to be made a party to any proceeding (including a proceeding by or in the right of American Express Receivables Financing Corporation III LLC or by or on behalf of a member) by reason of the fact that he, she or it is or was a member, officer or director of American Express Receivables Financing Corporation III LLC, is or was acting on behalf of American Express Receivables Financing Corporation III LLC in good faith or is or was serving, at the request of American Express Receivables Financing Corporation III LLC, as a director, manager, officer, employee or agent of any other legal entity, or is a fiduciary of any employee benefit plan established at the direction of American Express Receivables Financing Corporation III LLC, against all liabilities and reasonable expenses incurred in the proceeding except such liabilities and expenses as are incurred because of such individual's gross negligence or willful misconduct. To the fullest extent permitted by the Delaware Limited Liability Company Act and in accordance with its Limited Liability Company Agreement, American Express Receivables Financing Corporation IV LLC will indemnify any member, officer, director, employee or agent of American Express Receivables Financing Corporation IV LLC who is, was or is threatened to be made a party to any proceeding (including a proceeding by or in the right of American Express Receivables Financing Corporation IV LLC or by or on behalf of a member) by reason of the fact that he, she or it is or was a member, officer or director of American Express Receivables Financing Corporation IV LLC, is or was acting on behalf of American Express Receivables Financing Corporation IV LLC in good faith or is or was serving, at the request of American Express Receivables Financing Corporation IV LLC, as a director, manager, officer, employee or agent of any other legal entity, or is a fiduciary of any employee benefit plan established at the direction of American Express Receivables Financing Corporation IV LLC, against all liabilities and reasonable expenses incurred in the proceeding except such liabilities and expenses as are incurred because of such individual's gross negligence or willful misconduct. Each underwriting agreement will generally provide that the underwriters will indemnify American Express Receivables Financing Corporation III LLC and American Express Receivables Financing Corporation IV LLC and their respective directors, officers, members and controlling parties against specified liabilities, including liabilities under the Securities Act of 1933, as amended, relating to certain information provided or actions taken by the underwriters. American Express Receivables Financing Corporation III LLC and American Express Receivables Financing Corporation III LLC have been advised that II-3 in the opinion of the Securities and Exchange Commission, this indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. ITEM 16. EXHIBITS.
EXHIBIT NUMBER DESCRIPTION ------ ----------- 1.1 Form of Underwriting Agreement (incorporated by reference to Exhibit 1.1 to Registration No. 333-113579). 3.1 Amended and Restated Limited Liability Company Agreement of American Express Receivables Financing Corporation III LLC (incorporated by reference to Exhibit 3.1 to Registration No. 333-113579). 3.2 Amended and Restated Limited Liability Company Agreement of American Express Receivables Financing Corporation IV LLC (incorporated by reference to Exhibit 3.2 to Registration No. 333-113579). 4.1 Pooling and Servicing Agreement, dated as of May 16, 1996, as amended and restated as of January 1, 2006, among American Express Receivables Financing Corporation III LLC, American Express Receivables Financing Corporation IV LLC and American Express Receivables Financing Corporation II, as Transferors, American Express Travel Related Services Company, Inc., as Servicer, and The Bank of New York, as Trustee and Securities Intermediary. 4.2 Form of Series Supplement, including form of Asset Backed Certificate (incorporated by reference to Exhibit 4.2 to Registration No. 333-113579). 4.3 Receivable Purchase Agreement, dated as of May 16, 1996, between American Express Credit Corporation and American Express Receivables Financing Corporation II (incorporated by reference to Exhibit 10.1 to Registration Statement No. 333-67567). 4.4 Receivables Purchase Agreement, dated as of April 16, 2004, between American Express Centurion Bank and American Express Receivables Financing Corporation III LLC (incorporated by reference to Exhibit 4.4 to Registration No. 333- 113579). 4.5 Receivables Purchase Agreement, dated as of April 16, 2004, between American Express Bank, FSB and American Express Receivables Financing Corporation IV LLC (incorporated by reference to Exhibit 4.5 to Registration No. 333-113579). 4.6 Amended and Restated Supplemental Servicing Agreement among American Express Travel Related Services Company, Inc., American Express Centurion Bank, American Express Bank, FSB, American Express Receivables Financing Corporation II, American Express Receivables Financing Corporation III LLC and American Express Receivables Financing Corporation IV LLC.* 4.7 Supplemental Servicing Agreement between American Express Travel Related Services Company, Inc. and Amex Card Services Company.* 4.8 Remittance Processing Services Agreement between American Express Travel Related Services Company, Inc. and Regulus West LLC.** 5.1 Opinion of American Express Receivables Financing Corporation II, American Express Receivables Financing Corporation III LLC and American Express Receivables Financing Corporation IV LLC with respect to legality.
II-4
EXHIBIT NUMBER DESCRIPTION ------ ----------- 8.1 Opinion of Orrick, Herrington & Sutcliffe LLP with respect to tax matters. 23.1 Consent of American Express Receivables Financing Corporation II (included in its opinion filed as Exhibit 5.1). 23.2 Consent of American Express Receivables Financing Corporation III LLC (included in its opinion filed as Exhibit 5.1). 23.3 Consent of American Express Receivables Financing Corporation IV LLC (included in its opinion filed as Exhibit 5.1). 23.4 Consent of Orrick, Herrington & Sutcliffe LLP (included in its opinion filed as Exhibit 8.1). 24.1 Powers of Attorney of American Express Receivables Financing Corporation II.*** 24.2 Powers of Attorney of American Express Receivables Financing Corporation III LLC.*** 24.3 Powers of Attorney of American Express Receivables Financing Corporation IV LLC.***
- --------------- * to be filed by amendment ** previously filed. Confidential information has been omitted and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Securities and Exchange Commission *** previously filed ITEM 17. UNDERTAKINGS (A) RULE 415 OFFERING. Each undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a posteffective 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 the 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 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; and II-5 (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) Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this registration statement; and (B) Provided further, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if this Registration Statement is for an offering of asset-backed securities on Form S-3 and the information required to be included in a post- effective amendment is provided pursuant to Item 1100(c) of Regulation AB. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That for the purpose of determining liability under the Securities Act of 1933 to any purchaser: If such registrant is relying on Rule 430B: (A) Each prospectus filed by such registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and (B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that II-6 is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. (5) That, for the purpose of determining liability of such registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: Each undersigned registrant undertakes that in a primary offering of securities of such undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, such undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: (i) Any preliminary prospectus or prospectus of such undersigned registrant relating to the offering required to be filed pursuant to Rule 424; (ii) Any free writing prospectus relating to the offering prepared by or on behalf of such undersigned registrant or used or referred to by such undersigned registrant; (iii) The portion of any other free writing prospectus relating to the offering containing material information about such undersigned registrant or its securities provided by or on behalf of such undersigned registrant; and (iv) Any other communication that is an offer in the offering made by such undersigned registrant to the purchaser. (B) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE. Each undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of such registrant's annual report pursuant to Section 13(a) or Section 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 herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (C) REQUEST FOR ACCELERATION OF EFFECTIVE DATE. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, each registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, such registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it II-7 is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (D) FILINGS REGARDING ASSET-BACKED SECURITIES INCORPORATING BY REFERENCE SUBSEQUENT EXCHANGE ACT DOCUMENTS BY THIRD PARTIES Each undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 of a third party that is incorporated by reference in the registration statement in accordance with Item 1100(c)(1) of Regulation AB 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. (E) FILINGS REGARDING ASSET-BACKED SECURITIES THAT PROVIDE CERTAIN INFORMATION THROUGH AN INTERNET WEB SITE Each undersigned registrant hereby undertakes that, except as otherwise provided by Item 1105 of Regulation AB, information provided in response to that Item pursuant to Rule 312 of Regulation S-T through the specified Internet address in the prospectus is deemed to be a part of the prospectus included in the registration statement. In addition, each undersigned registrant hereby undertakes to provide to any person without charge, upon request, a copy of the information provided in response to Item 1105 of Regulation AB pursuant to Rule 312 of Regulation S-T through the specified Internet address as of the date of the prospectus included in the registration statement if a subsequent update or change is made to the information. II-8 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3, reasonably believes that the security rating requirement contained in Transaction Requirement B.5 of Form S- 3 will be met by the time of sale of the securities registered hereunder and has duly caused this Amendment No. 3 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in New York, New York, on March 10, 2006. AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION II, acting solely in its capacity as a depositor of American Express Credit Account Master Trust By: /s/ Maureen Ryan ------------------------- Name: Maureen Ryan Title: President Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 3 to the Registration Statement has been signed on March 10, 2006 by the following persons in the capacities indicated.
SIGNATURE TITLE --------- ----- /s/ Maureen Ryan President and Director --------------------------------------------------------- (Principal Executive Officer) Maureen Ryan /s/ John D. Koslow* Vice President and Treasurer and Director --------------------------------------------------------- (Principal Financial Officer and John D. Koslow Principal Accounting Officer) /s/ Donald J. Puglisi* Director --------------------------------------------------------- Donald J. Puglisi *By: /s/ Maureen Ryan ------------------------- Name: Maureen Ryan Title: President
*Note: Powers of Attorney appointing Maureen A. Ryan, John D. Koslow and Carol V. Schwartz, 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-9 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3, reasonably believes that the security rating requirement contained in Transaction Requirement B.5 of Form S- 3 will be met by the time of sale of the securities registered hereunder and has duly caused this Amendment No. 3 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Salt Lake City, Utah, on March 10, 2006. AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION III LLC, acting solely in its capacity as a depositor of American Express Credit Account Master Trust By: /s/ Andrea J. Moss ----------------------------- Name: Andrea J. Moss Title: President Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 3 to the Registration Statement has been signed on March 10, 2006 by the following persons in the capacities indicated.
SIGNATURE TITLE --------- ----- /s/ Andrea J. Moss President and Director --------------------------------------------------------- (Principal Executive Officer) Andrea J. Moss /s/ Scott Godderidge Vice President and Treasurer and Director --------------------------------------------------------- (Principal Financial Officer and Scott Godderidge Principal Accounting Officer) /s/ Gregory F. Lavelle* Director --------------------------------------------------------- Gregory F. Lavelle *By: /s/ Maureen Ryan ----------------------------
*Note: Powers of Attorney appointing Maureen A. Ryan and Carol V. Schwartz, 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-10 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3, reasonably believes that the security rating requirement contained in Transaction Requirement B.5 of Form S- 3 will be met by the time of sale of the securities registered hereunder and has duly caused this Amendment No. 3 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Salt Lake City, Utah, on March 10, 2006. AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION IV LLC, acting solely in its capacity as a depositor of American Express Credit Account Master Trust By: /s/ Daniel L. Follett ----------------------------- Name: Daniel L. Follett Title: President Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 3 to the Registration Statement has been signed on March 10, 2006 by the following persons in the capacities indicated.
SIGNATURE TITLE --------- ----- /s/ Daniel L. Follett President --------------------------------------------------------- (Principal Executive Officer) Daniel L. Follett /s/ David T. Draper* Vice President and Treasurer --------------------------------------------------------- (Principal Financial Officer and David T. Draper Principal Accounting Officer) /s/ Lisa Lambert* Director --------------------------------------------------------- Lisa Lambert /s/ David L. Yowan* Director --------------------------------------------------------- David L. Yowan /s/ Ruth K. Lavelle* Director --------------------------------------------------------- Ruth K. Lavelle *By: /s/ Maureen Ryan ----------------------------
*Note: Powers of Attorney appointing Maureen A. Ryan, David L. Yowan and Carol V. Schwartz, 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-11 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION ------ ----------- 1.1 Form of Underwriting Agreement (incorporated by reference to Exhibit 1.1 to Registration Statement No. 333-113579). 3.1 Amended and Restated Limited Liability Company Agreement of American Express Receivables Financing Corporation III LLC (incorporated by reference to Exhibit 3.1 to Registration No. 333-113579). 3.2 Amended and Restated Limited Liability Company Agreement of American Express Receivables Financing Corporation IV LLC (incorporated by reference to Exhibit 3.2 to Registration No. 333-113579). 4.1 Pooling and Servicing Agreement, dated as of May 16, 1996, as amended and restated as of January 1, 2006, among American Express Receivables Financing Corporation III LLC, American Express Receivables Financing Corporation IV LLC and American Express Receivables Financing Corporation II, as Transferors, American Express Travel Related Services Company, Inc., as Servicer, and The Bank of New York, as Trustee and Securities Intermediary. 4.2 Form of Series Supplement, including form of Asset Backed Certificate (incorporated by reference to Exhibit 4.2 to Registration No. 333-113579). 4.3 Receivable Purchase Agreement, dated as of May 16, 1996, between American Express Credit Corporation and American Express Receivables Financing Corporation II (incorporated by reference to Exhibit 10.1 to Registration Statement No. 333-67567). 4.4 Receivables Purchase Agreement, dated as of April 16, 2004, between American Express Centurion Bank and American Express Receivables Financing Corporation III LLC (incorporated by reference to Exhibit 4.4 to Registration No. 333- 113579). 4.5 Receivables Purchase Agreement, dated as of April 16, 2004, between American Express Bank, FSB and American Express Receivables Financing Corporation IV LLC (incorporated by reference to Exhibit 4.5 to Registration No. 333-113579). 4.6 Amended and Restated Supplemental Servicing Agreement among American Express Travel Related Services Company, Inc., American Express Centurion Bank, American Express Bank, FSB, American Express Receivables Financing Corporation II, American Express Receivables Financing Corporation III LLC and American Express Receivables Financing Corporation IV LLC.* 4.7 Supplemental Servicing Agreement between American Express Travel Related Services Company, Inc. and Amex Card Services Company.* 4.8 Remittance Processing Services Agreement between American Express Travel Related Services Company, Inc. and Regulus West LLC.** 5.1 Opinion of American Express Receivables Financing Corporation II, American Express Receivables Financing Corporation III LLC and American Express Receivables Financing Corporation IV LLC with respect to legality.
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION ------ ----------- 8.1 Opinion of Orrick, Herrington & Sutcliffe LLP with respect to tax matters. 23.1 Consent of American Express Receivables Financing Corporation II (included in its opinion filed as Exhibit 5.1). 23.2 Consent of American Express Receivables Financing Corporation III LLC (included in its opinion filed as Exhibit 5.1). 23.3 Consent of American Express Receivables Financing Corporation IV LLC (included in its opinion filed as Exhibit 5.1). 23.4 Consent of Orrick, Herrington & Sutcliffe LLP (included in its opinion filed as Exhibit 8.1). 24.1 Powers of Attorney of American Express Receivables Financing Corporation II.*** 24.2 Powers of Attorney of American Express Receivables Financing Corporation III LLC.*** 24.3 Powers of Attorney of American Express Receivables Financing Corporation IV LLC.***
- --------------- * to be filed by amendment ** previously filed. Confidential information has been omitted and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Securities and Exchange Commission *** previously filed EX-4.1 2 b409067ex_4-1.txt EXHIBIT 4.1 EXHIBIT 4.1 ================================================================================ AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION III LLC, AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION IV LLC AND AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION II, AS TRANSFERORS, AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC., AS SERVICER, AND THE BANK OF NEW YORK, AS TRUSTEE AND AS SECURITIES INTERMEDIARY AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST POOLING AND SERVICING AGREEMENT DATED AS OF MAY 16, 1996, AS AMENDED AND RESTATED AS OF JANUARY 1, 2006 ================================================================================ TABLE OF CONTENTS
PAGE ARTICLE I DEFINITIONS................................................................................1 Section 1.01 Definitions.......................................................................1 Section 1.02 Other Definitional Provisions....................................................26 ARTICLE II CONVEYANCE OF RECEIVABLES.................................................................27 Section 2.01 Conveyance of Receivables........................................................27 Section 2.02 Acceptance by Trustee............................................................30 Section 2.03 Representations and Warranties of Each Transferor Relating to Such Transferor.......................................................................30 Section 2.04 Representations and Warranties of each Transferor Relating to the Agreement and any Supplement and the Receivables.................................32 Section 2.05 Reassignment of Ineligible Receivables...........................................34 Section 2.06 Reassignment of Certificateholders' Interest in Trust Portfolio..................35 Section 2.07 Covenants of each Transferor.....................................................36 Section 2.08 Additional Covenants of Each Transferor Regarding the Terms of the Accounts.........................................................................39 Section 2.09 Addition of Accounts.............................................................40 Section 2.10 Removal of Accounts and Participation Interests..................................44 Section 2.11 Account Allocations..............................................................46 Section 2.12 Discount Option..................................................................46 Section 2.13 Premium Option...................................................................47 ARTICLE III ADMINISTRATION AND SERVICING OF RECEIVABLES...............................................49 Section 3.01 Acceptance of Appointment and Other Matters Relating to the Servicer.............49 Section 3.02 Servicing Compensation...........................................................50 Section 3.03 Representations, Warranties and Covenants of the Servicer........................50 Section 3.04 Reports and Records for the Trustee..............................................52 Section 3.05 Annual Certificate of Servicer...................................................53 Section 3.06 Annual Servicing Report of Independent Public Accountants; Copies of Reports Available................................................................53 Section 3.07 Tax Treatment....................................................................53 Section 3.08 Notices to American Express Entities.............................................54 Section 3.09 Adjustments......................................................................54
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PAGE Section 3.10 Recoveries.......................................................................55 Section 3.11 Reports to the Commission........................................................55 ARTICLE IV RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION AND APPLICATION OF COLLECTIONS................56 Section 4.01 Rights of Certificateholders.....................................................56 Section 4.02 Establishment of Collection Account and Special Funding Account..................56 Section 4.03 Collections and Allocations......................................................59 Section 4.04 Shared Principal Collections.....................................................60 Section 4.05 Allocation of Trust Assets to Series or Groups...................................60 Section 4.06 Issuer Rate Fees.................................................................61 Section 4.07 Manner of Holding Trust Assets...................................................61 ARTICLE V DISTRIBUTIONS AND REPORTS TO CERTIFICATEHOLDERS...........................................63 ARTICLE VI THE CERTIFICATES..........................................................................64 Section 6.01 The Certificates.................................................................64 Section 6.02 Authentication of Certificates...................................................64 Section 6.03 New Issuances....................................................................65 Section 6.04 Registration of Transfer and Exchange of Certificates............................66 Section 6.05 Mutilated, Destroyed, Lost or Stolen Certificates................................69 Section 6.06 Persons Deemed Owners............................................................70 Section 6.07 Appointment of Paying Agent......................................................70 Section 6.08 Access to List of Registered Certificateholders' Names and Addresses.............71 Section 6.09 Authenticating Agent.............................................................71 Section 6.10 Book-Entry Certificates..........................................................72 Section 6.11 Notices to Clearing Agency.......................................................73 Section 6.12 Definitive Certificates..........................................................73 Section 6.13 Global Certificate; Exchange Date................................................74 Section 6.14 Meetings of Certificateholders...................................................75 Section 6.15 Uncertificated Classes...........................................................77 ARTICLE VII OTHER MATTERS RELATING TO EACH TRANSFEROR.................................................78
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PAGE Section 7.01 Liability of each Transferor.....................................................78 Section 7.02 Merger or Consolidation of, or Assumption of the Obligations of, a Transferor.......................................................................78 Section 7.03 Limitations on Liability of each Transferor......................................79 Section 7.04 Liabilities......................................................................79 Section 7.05 Assumption of a Transferor's Obligations.........................................79 Section 7.06 Expenses.........................................................................81 ARTICLE VIII OTHER MATTERS RELATING TO THE SERVICER....................................................82 Section 8.01 Liability of the Servicer........................................................82 Section 8.02 Merger or Consolidation of, or Assumption of the Obligations of, the Servicer.........................................................................82 Section 8.03 Limitation on Liability of the Servicer and Others...............................82 Section 8.04 Servicer Indemnification of the Trust and the Trustee............................83 Section 8.05 Resignation of the Servicer......................................................83 Section 8.06 Access to Certain Documentation and Information Regarding the Receivables........84 Section 8.07 Delegation of Duties.............................................................84 Section 8.08 Examination of Records...........................................................84 ARTICLE IX INSOLVENCY EVENTS.........................................................................85 Section 9.01 Rights upon the Occurrence of an Insolvency Event................................85 ARTICLE X SERVICER DEFAULTS.........................................................................87 Section 10.01 Servicer Defaults................................................................87 Section 10.02 Trustee To Act; Appointment of Successor.........................................89 ARTICLE XI THE TRUSTEE...............................................................................92 Section 11.01 Duties of Trustee................................................................92 Section 11.02 Certain Matters Affecting the Trustee............................................93 Section 11.03 Trustee Not Liable for Recitals in Certificates..................................95 Section 11.04 Trustee May Own Certificates.....................................................95 Section 11.05 The Servicer To Pay Trustee's Fees and Expenses..................................95 Section 11.06 Eligibility Requirements for Trustee.............................................96 Section 11.07 Resignation or Removal of Trustee................................................96
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PAGE Section 11.08 Successor Trustee................................................................96 Section 11.09 Merger or Consolidation of Trustee...............................................97 Section 11.10 Appointment of Co-Trustee or Separate Trustee....................................97 Section 11.11 Tax Returns......................................................................98 Section 11.12 Trustee May Enforce Claims Without Possession of Certificates....................99 Section 11.13 Suits for Enforcement............................................................99 Section 11.14 Rights of Certificateholders To Direct Trustee...................................99 Section 11.15 Representations and Warranties of Trustee.......................................100 Section 11.16 Maintenance of Office or Agency.................................................100 ARTICLE XII TERMINATION..............................................................................101 Section 12.01 Termination of Trust............................................................101 Section 12.02 Final Distribution..............................................................101 Section 12.03 Transferor's Termination Rights.................................................102 Section 12.04 Defeasance......................................................................102 ARTICLE XIII MISCELLANEOUS PROVISIONS.................................................................105 Section 13.01 Amendment; Waiver of Past Defaults..............................................105 Section 13.02 Protection of Right, Title and Interest to Trust................................107 Section 13.03 Limitation on Rights of Certificateholders......................................108 Section 13.06 Severability of Provisions......................................................110 Section 13.07 Certificates Nonassessable and Fully Paid.......................................110 Section 13.08 Further Assurances..............................................................110 Section 13.09 Nonpetition Covenant............................................................111 Section 13.10 No Waiver; Cumulative Remedies..................................................111 Section 13.11 Counterparts....................................................................111 Section 13.12 Third-Party Beneficiaries.......................................................111 Section 13.13 Actions by Certificateholders...................................................111 Section 13.14 Rule 144A Information...........................................................111 Section 13.15 Merger and Integration..........................................................112 Section 13.16 Headings........................................................................112
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PAGE Section 13.17 Fiscal Year.....................................................................112 Section 13.18 Force Majeure...................................................................112 ARTICLE XIV COMPLIANCE WITH REGULATION AB............................................................113 Section 14.01 Intent of the Parties; Reasonableness...........................................113 Section 14.02 Additional Representations and Warranties of the Trustee........................113 Section 14.03 Information to Be Provided by the Trustee.......................................113 Section 14.04 Report on Assessment of Compliance and Attestation..............................114 Section 14.05 Additional Representations and Warranties of the Servicer.......................115 Section 14.06 Information to Be Provided by the Servicer......................................115 Section 14.07 Report on Assessment of Compliance and Attestation..............................117 Section 14.08 Use of Subservicers and Servicing Participants..................................118
-v- EXHIBITS Exhibit A Form of Transferor Certificate Exhibit B Form of Assignment of Receivables in Additional Accounts Exhibit C Form of Reassignment of Receivables in Removed Accounts Exhibit D [Reserved] Exhibit E-1 Form of Opinion of Counsel with respect to Amendments Exhibit E-2 Form of Opinion of Counsel with respect to Accounts Exhibit E-3 Form of Annual Opinion of Counsel Exhibit F-1 Form of Certificate of Foreign Clearing Agency Exhibit F-2 Form of Alternate Certificate to be delivered to Foreign Clearing Agency Exhibit F-3 Form of Certificate to be delivered to Foreign Clearing Agency Exhibit G-1 Private Placement Legend Exhibit G-2 Representation Letter Exhibit G-3 ERISA Legend Exhibit H Form of Annual Certification Exhibit I Servicing Criteria to be Addressed in Assessment of Compliance Exhibit J Form of Annual Certification Exhibit K Servicing Criteria to be Addressed in Assessment of Compliance SCHEDULES Schedule 1 List of Accounts [Deemed Incorporated] POOLING AND SERVICING AGREEMENT, dated as of May 16, 1996, as amended and restated as of January 1, 2006, among (i) AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION II, a Delaware corporation, AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION III LLC, a Delaware limited liability company, and AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION IV LLC, a Delaware limited liability company, as Transferors; (ii) AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC., a New York corporation, as Servicer; and (iii) THE BANK OF NEW YORK, a New York banking corporation, as Trustee. WHEREAS, this Pooling and Servicing Agreement, dated as of May 16, 1996 (as amended and supplemented, the "Original Pooling Agreement"), was amended and restated on April 16, 2004, and as so amended and restated was among American Express Receivables Financing Corporation II, American Express Receivables Financing Corporation III LLC and American Express Receivables Financing Corporation IV LLC, as Transferors, American Express Travel Related Services Company, Inc., as Servicer, and The Bank of New York, as Trustee (the "Amended PSA"); WHEREAS, the parties hereto agree to and do hereby amend and restate the Amended PSA as of January 1, 2006, to read in its entirety as set forth herein. NOW, THEREFORE, in consideration of the mutual agreements herein contained, this Agreement is hereby amended and restated to read in its entirety as follows and each party agrees as follows for the benefit of the other parties and the Certificateholders: ARTICLE I DEFINITIONS Section 1.01 Definitions. Whenever used in this Agreement, the following words and phrases shall have the following meanings, and the definitions of such terms are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. "Account" shall mean (a) each Initial Account, (b) each Additional Account (but only from and after the Addition Date with respect thereto), (c) each Related Account and (d) each Transferred Account, but shall exclude (e) any Account, all the Receivables of which are either (i) after the Removal Date, removed by a Transferor pursuant to Section 2.10, (ii) reassigned to a Transferor pursuant to Section 2.05 or (iii) assigned and transferred to the Servicer pursuant to Section 3.03. "Account Agreement" shall mean, with respect to an Account, the agreement between an Account Owner and the Obligor governing the terms and conditions of such Account, as such agreement may be amended, modified or otherwise changed from time to time. "Account Owner" shall mean, with respect to an Account, Centurion Bank, FSB or any other entity that, pursuant to the Account Agreement related to such Account, is the issuer of the credit or charge cards related to, or the owner of, such Account; provided that the Transferors shall notify Standard & Poor's promptly following the designation of any Account Owner other than Centurion Bank or FSB. "Accumulation Period" shall mean, with respect to any Series, or any Class within a Series, a period following the Revolving Period, which shall be the controlled accumulation period, the principal accumulation period, the rapid accumulation period, the optional accumulation period, the limited accumulation period or other accumulation period, in each case as defined with respect to such Series in the related Supplement. "Act" shall mean the Securities Act of 1933, as amended. "Addition Cut-Off Date" shall mean (a) with respect to Aggregate Addition Accounts or Participation Interests, the date specified as such in the notice delivered with respect thereto pursuant to subsection 2.09(c) and (b) with respect to New Accounts, the later of the dates on which such New Accounts are originated or designated pursuant to subsection 2.09(d). "Addition Date" shall mean (a) with respect to Aggregate Addition Accounts, the date from and after which such Aggregate Addition Accounts are to be included as Accounts pursuant to subsection 2.09(a) or (b), (b) with respect to Participation Interests, the date from and after which such Participation Interests are to be included as assets of the Trust pursuant to subsection 2.09(a) or (b), and (c) with respect to New Accounts, the first Distribution Date following the calendar month in which such New Accounts are originated or designated pursuant to subsection 2.09(a) or (b). "Addition Selection Date" shall mean, for each Aggregate Addition, the date specified as such in the notice delivered with respect thereto pursuant to subsection 2.09(c). "Additional Account" shall mean each New Account and each Aggregate Addition Account. "Additional Transferor" shall have the meaning specified in subsection 2.09(g). "Adjusted Invested Amount" shall mean, with respect to any Series and for any date, an amount equal to the "Adjusted Invested Amount" as specified in the related Supplement. "Adverse Effect" shall mean, with respect to any action, that such action will (a) result in the occurrence of a Pay-Out Event or a Reinvestment Event or (b) materially adversely affect the amount or timing of distributions to be made to the Investor Certificateholders of any Series or Class pursuant to this Agreement and the related Supplement. "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" 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. 2 "Aggregate Addition" shall mean the designation of additional Eligible Accounts, other than New Accounts, to be included as Accounts or of Participation Interests to be included as Trust Assets pursuant to subsection 2.09(a) or (b). "Aggregate Addition Account" shall mean each Eligible Account designated pursuant to subsection 2.09(a) or (b) to be included as an Account and identified in the computer file or microfiche list delivered to the Trustee by a Transferor pursuant to Section 2.01 and subsection 2.09(h). "Aggregate Invested Amount" shall mean, as of any date of determination, the aggregate Adjusted Invested Amounts of all Series of Certificates issued and outstanding on such date of determination. "Agreement" shall mean the Original Pooling Agreement (i) as amended and restated by the Amended PSA and as further amended and restated by this Pooling and Servicing Agreement and (ii) with respect to each Series, as supplemented by each related Supplement, as the same may be further amended, supplemented or otherwise modified from time to time. "Amended PSA" shall have the meaning specified in the recitals of this Agreement. "American Express Credco" shall mean American Express Credit Corporation, a Delaware corporation, and its successors and permitted assigns. "Amortization Period" shall mean, with respect to any Series, or any Class within a Series, a period following the Revolving Period, which shall be the controlled amortization period, the principal amortization period, the early amortization period, the optional amortization period, the limited amortization period or other amortization period, in each case as defined with respect to such Series in the related Supplement. "Applicants" shall have the meaning specified in Section 6.08. "Appointment Date" shall have the meaning specified in subsection 9.02(a). "Assignment" shall have the meaning specified in subsection 2.09(h). "Authorized Newspaper" shall mean any newspaper or newspapers of general circulation 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 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. "Average Rate," unless otherwise provided in any Supplement, shall mean, as of any date of determination and with respect to any Group, the percentage equivalent of a decimal equal to the sum of the amounts for each outstanding Series (or each Class within any Series consisting of more than one Class) within such Group obtained by multiplying (a) the Certificate 3 Rate (reduced to take into account the payments received pursuant to any interest rate agreements net of any amounts payable under such agreements, or, if such agreements result in a net amount payable, increased by such net amount payable) for such Series or Class, by (b) a fraction, the numerator of which is the aggregate unpaid principal amount of the Investor Certificates of such Series or Class and the denominator of which is the aggregate unpaid principal amount of all Investor Certificates within such Group. "Bankruptcy Code" shall have the meaning specified in Section 7.02. "Bearer Certificates" shall have the meaning specified in Section 6.01. "Benefit Plan" shall have the meaning specified in subsection 6.04(c). "Book-Entry Certificates" shall mean Investor Certificates that are registered in the name of a Clearing Agency or a Foreign Clearing Agency, or the nominee of either such entity, ownership and transfers of which shall be made through book entries by such Clearing Agency or Foreign Clearing Agency as described in Section 6.10. "Business Day" shall mean (i) 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 any other State in which the principal executive offices of Centurion Bank, FSB, the Trustee, or any Account Owner, as the case may be, are located, are authorized or are obligated by law, executive order or governmental decree to be closed or (c) for purposes of any particular Series, any other day specified in the applicable Supplement and (ii) with respect to the determination of LIBOR, a London Business Day (as such term is defined in the related Supplement). "Cash Advance Fees" shall mean cash advance transaction fees and cash advance late fees, if any, as specified in any Account Agreement applicable to an Account. "Centurion Bank" shall mean American Express Centurion Bank, a Utah industrial bank, and its successors and permitted assigns. "Centurion Bank - RFC III Purchase Agreement" shall mean that certain Receivables Purchase Agreement, dated as of April 16, 2004, between Centurion Bank and RFC III, as the same may be, or may have been, amended, supplemented or otherwise modified from time to time. "Centurion Bank - RFC III Revolving Credit Agreement" shall mean the Revolving Credit Agreement by and between Centurion Bank and RFC III, dated as of April 16, 2004, as such agreement may be amended from time to time in accordance therewith, or any substantially similar agreement entered into between any lender and RFC III. "Certificate" shall mean any one of the Investor Certificates or the Transferor Certificates. "Certificateholder" or "Holder" shall mean an Investor Certificateholder or, if used with respect to the Transferors' Interest, a Person in whose name a Transferor Certificate is 4 registered or a Person in whose name ownership of an uncertificated interest in the Transferors' Interest is registered in the books and records of the Trust maintained by the Trustee. "Certificateholders' Interest" shall have the meaning specified in Section 4.01. For purposes of determining whether Holders of Investor Certificates evidencing a specified percentage of the Certificateholders' Interest have approved, consented or otherwise agreed to any action hereunder, such determination shall be made based on the percentage of the Invested Amount or Adjusted Invested Amount, as specified in the related Supplement, represented by such Investor Certificates. "Certificate Owner" shall mean, with respect to a Book-Entry Certificate, the Person who is the owner of a security entitlement with respect to 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 as a Clearing Agency Participant or as an indirect participant, in accordance with the rules of such Clearing Agency). "Certificate Rate" shall mean, as of any particular date of determination and with respect to any Series or Class, the certificate rate as of such date 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 transfers and exchanges thereof. "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 Exchange Act, and serving as clearing agency for a Series or Class of Book-Entry Certificates. "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. "Clearstream" shall mean Clearstream Bank, 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. "Code" shall mean the Internal Revenue Code of 1986, as amended. "Collection Account" shall have the meaning specified in Section 4.02. "Collections" shall mean 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 Account Agreement in effect from time to time and all other amounts specified by this 5 Agreement or any Supplement as constituting Collections. As specified in any Participation Interest Supplement, Collections shall include amounts received with respect to Participation Interests. With respect to any Monthly Period, all Issuer Rate Fees received with respect to the preceding Monthly Period and all Recoveries with respect to Receivables previously charged-off as uncollectible will be treated as Collections of Finance Charge Receivables. "Commission" shall have the meaning specified in subsection 3.01(b). "Companion Series" shall mean (i) each Series which has been paired with another Series (which Series may be prefunded or partially prefunded), such that the reduction of the Invested Amount or Adjusted Invested Amount of such Series results in the increase of the Invested Amount or Adjusted Invested Amount, respectively, of such other Series, as described in the related Supplements, and (ii) such other Series. "Corporate Trust Office" shall have the meaning specified in Section 11.16. "Coupon" shall have the meaning specified in Section 6.01. "Credco-Centurion Bank Purchase Agreement" shall mean, collectively, the Receivables Purchase Agreements, each dated as of October 1, 1987, between Centurion Bank and American Express Credco, as the same may be, or may have been, amended, supplemented or otherwise modified from time to time. "Credco-RFC II Purchase Agreement" shall mean that certain Receivables Purchase Agreement, dated as of May 16, 1996, between American Express Credco and RFC II, as the same may be, or may have been, amended, supplemented or otherwise modified from time to time. "Credit Guidelines" shall mean the respective policies and procedures of Centurion Bank, FSB or any other Account Owner, as the case may be, as such policies and procedures may be amended from time to time, (a) relating to the operation of its credit or charge business, as the case may be, which generally are applicable to its portfolio of similar accounts, including the policies and procedures for determining the creditworthiness of customers and the extension of credit or charge privileges to customers, and (b) relating to the maintenance of accounts and collection of related receivables. "Date of Processing" shall mean, with respect to any transaction or receipt of Collections, the Business Day after such transaction is first output, in written form under the Servicer's customary and usual practices, from the Servicer's computer file of accounts comparable to the Accounts (without regard to the effective date of recordation). "Defaulted Account" shall mean any Account that has Defaulted Receivables. "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 amount of any Defaulted Receivables of which a Transferor or the Servicer became obligated to accept reassignment or assignment in accordance with the terms of this Agreement during such Monthly Period; 6 provided, however, that, if an Insolvency Event occurs with respect to any Transferor, the amount of such Defaulted Receivables which are subject to reassignment to such Transferor 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 subsection 10.01(d) occur with respect to the Servicer, the amount of such Defaulted Receivables which are subject to 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 which are charged off as uncollectible in such Monthly Period in accordance with the Credit Guidelines and the Servicer's customary and usual servicing procedures for servicing accounts comparable to the Accounts. A Principal Receivable shall become a Defaulted Receivable on the Date of Processing on which such Principal Receivable is recorded as charged-off on the Servicer's computer file of Accounts. "Defeasance" shall have the meaning specified in subsection 12.04(a). "Defeased Series" shall have the meaning specified in subsection 12.04(a). "Definitive Certificates" shall have the meaning specified in Section 6.10. "Definitive Euro-Certificates" shall have the meaning specified in subsection 6.13(a). "Deposit Date" shall mean each day on which the Servicer deposits Collections in the Collection Account. "Depository Agreement" shall mean, with respect to any Series or Class of Book-Entry Certificates, the agreement among the Transferors, the Trustee and the Clearing Agency substantially in the form attached to the applicable Supplement. "Determination Date" shall mean, unless otherwise specified in the Supplement for a particular Series, the earlier of the third Business Day and the fifth calendar day (or if the fifth calendar day is not a Business Day, then the preceding Business Day) preceding each Distribution Date. "Discount Option Date" shall mean each date on which a Discount Percentage designated by the Transferors pursuant to Section 2.12 takes effect. "Discount Option Receivables" shall have the meaning specified in Section 2.12. The aggregate amount of Discount Option Receivables outstanding on any Date of Processing occurring on or after the Discount Option Date shall equal the sum of (a) the aggregate Discount Option Receivables at the end of the prior Date of Processing (which amount, prior to the Discount Option Date, shall be zero) plus (b) any new Discount Option Receivables created on such Date of Processing minus (c) any Discount Option Receivable Collections received on such Date of Processing. Discount Option Receivables created on any Date of Processing shall mean the product of the amount of any Principal Receivables created on such Date of Processing (without giving effect to the proviso in the definition of Principal Receivables) and the Discount Percentage. 7 "Discount Option Receivable Collections" shall mean on any Date of Processing occurring in any Monthly Period succeeding the Monthly Period in which the Discount Option Date occurs, the product of (a) the Discount Percentage and (b) Collections of Principal Receivables on such Date of Processing (without giving effect to the proviso in the definition of Principal Receivables). "Discount Percentage" shall mean the percentage, if any, designated from time to time by the Transferors pursuant to Section 2.11. "Distribution Date" shall mean, with respect to any Series, the fifteenth day of each calendar month or, if such fifteenth day is not a Business Day, the next succeeding Business Day, or the date otherwise specified in the applicable Supplement for such Series. "Dollars," "$" or "U.S. $" shall mean United States dollars. "Eligible Account" shall mean a credit or charge account or line of credit (if, with respect to the line of credit, the full receivable balance is not due upon receipt of a monthly billing statement (excluding the billing statement with respect to the final payment of such balance) and the line of credit contains a code designation in the related securitization field as described in Section 2.01) owned by Centurion Bank, in the case of the Initial Accounts on the selection date related to its date of designation as an "Account" under the Original Pooling Agreement, or Centurion Bank, FSB or any other Account Owner, in the case of Additional Accounts, that, with respect to an Initial Account, as of the selection date related to its date of designation as an "Account" under the Original Pooling Agreement or, with respect to an Additional Account, as of the Addition Selection Date, meets the following requirements: (a) is a credit or other charge account or line of credit (if, with respect to the line of credit, the full receivable balance is not due upon receipt of a monthly billing statement (excluding the billing statement with respect to the final payment of such balance) and the line of credit contains a code designation in the related securitization field as described in Section 2.01) in existence and maintained by Centurion Bank, FSB or such other Account Owner, as the case may be; (b) is payable in Dollars; (c) has an Obligor that has not been confirmed by the Servicer in its computer files as being involved in a voluntary or involuntary bankruptcy proceeding; (d) has an Obligor who has provided as his or her most recent billing address an address located in the United States or its territories or possessions or Canada or a United States military address; provided, however, that as of any date of determination, up to 3% of the Accounts (calculated by number of Accounts) may have Obligors who have provided as their billing addresses, addresses located outside of such jurisdictions; (e) if such account is a credit card or charge card account, has not been identified as an account with respect to which a related card has been lost or stolen; 8 (f) has not been sold or pledged to any other party except for any other Account Owner that has either entered into (or, on or prior to the Addition Date, will enter into) a Receivables Purchase Agreement or that is (or, on or prior to the Addition Date, will be) a Transferor; (g) does not have receivables that have been sold or pledged by Centurion Bank, FSB or any other Account Owner, as the case may be, to any Person other than American Express Credco or any Transferor; and (h) does not have receivables that are Defaulted Receivables or that have been identified by the Servicer as having been incurred as a result of the fraudulent use of a related credit or charge card. Notwithstanding the above requirements, Eligible Accounts may include accounts, the receivables of which have been written off, or with respect to which the Servicer has confirmed the related Obligor is bankrupt, in each case as of the selection dates related to their date of designation as "Accounts" under the Original Pooling Agreement, with respect to Initial Accounts, and as of the related Addition Selection Date, with respect to Additional Accounts; provided that (a) the balance of all receivables included in such accounts is reflected on the books and records of the related Account Owner (and is treated for purposes of this Agreement) as "zero" and (b) borrowing and charging privileges with respect to all such accounts have been canceled in accordance with the Credit Guidelines applicable thereto and will not be reinstated by the related Account Owner or the Servicer. "Eligible Deposit Account" shall mean either (a) a segregated account with an Eligible Institution (other than any Account Owner) or (b) a segregated trust account with the corporate trust department of a depository institution (other than any Account Owner) organized under the laws of the United States or any one of the states thereof, including the District of Columbia (or any domestic branch of a foreign bank), and acting as a trustee for funds deposited in such account, so long as any of the unsecured, unguaranteed senior debt securities of such depository institution shall have a credit rating from each Rating Agency in one of its generic credit rating categories that signifies investment grade. "Eligible Institution" shall mean the Trustee or any depository institution organized under the laws of the United States, any one of the states thereof or the District of Columbia (or any domestic branch of a foreign bank), which depository institution at all times (a) is a member of the FDIC and (b) has (i) a long-term unsecured debt rating acceptable to each Rating Agency or (ii) a certificate of deposit rating acceptable to the Rating Agency. Notwithstanding the previous sentence any institution the appointment of which satisfies the Rating Agency Condition shall be considered an Eligible Institution. If so qualified, the Servicer may be considered an Eligible Institution for the purposes of this definition. "Eligible Investments" shall mean negotiable instruments or investment property, or, in the case of deposits described below, deposit accounts held in the name of the Trustee in trust for the benefit of the Certificateholders, subject to the exclusive custody and control of the Trustee and for which the Trustee has sole signature authority, which evidence: 9 (a) direct obligations of, or obligations fully guaranteed as to timely payment 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, any state thereof or the District of Columbia (or domestic branches of foreign banks) and subject to supervision and examination by federal or state banking or depository institution authorities; provided that at the time of the Trust's investment or contractual commitment to invest therein, the short-term debt of such depository institution or trust company shall be rated at least "A-1+" by Standard & Poor's (or any other rating from Standard & Poor's, subject to receipt by the Transferors, the Servicer and the Trustee of written notification from Standard & Poor's that investments of such type at such other rating will not result in Standard & Poor's reducing or withdrawing its then existing rating of the Certificates of any outstanding Series or Class with respect to which it is a Rating Agency) and shall be satisfactory to each other Rating Agency; (c) commercial paper (having original or remaining maturities of no more than 30 days), that shall be rated, at the time of the Trust's investment or contractual commitment to invest therein, at least "A-1+" by Standard & Poor's (or any other rating from Standard & Poor's, subject to receipt by the Transferors, the Servicer and the Trustee of written notification from Standard & Poor's that investments of such type at such other rating will not result in Standard & Poor's reducing or withdrawing its then existing rating of the Certificates of any outstanding Series or Class with respect to which it is a Rating Agency) and shall be satisfactory to each other Rating Agency; (d) demand deposits, time deposits and certificates of deposit which are fully insured by the FDIC having, at the time of the Trust's investment therein, a rating satisfactory to the Rating Agency; (e) bankers' acceptances (having original maturities of no more than 365 days) issued by any depository institution or trust company referred to in clause (b) above; (f) time deposits (having maturities not later than the next Transfer Date) other than as referred to in clause (b) above, with a Person the commercial paper of which shall be rated at least "A-1+" by Standard & Poor's (or any other rating from Standard & Poor's, subject to receipt by the Transferors, the Servicer and the Trustee of written notification from Standard & Poor's that investments of such type at such other rating will not result in Standard & Poor's reducing or withdrawing its then existing rating of the Certificates of any outstanding Series or Class with respect to which it is a Rating Agency) and shall be satisfactory to each other Rating Agency; (g) only to the extent permitted by Rule 3a-7 under the Investment Company Act, (i) money market funds that shall be rated, at the time of the Trust's investment therein, at least "AAA-m" or "AAAm-G" by Standard & Poor's (or any other rating from Standard & Poor's, subject to receipt by the Transferors, the Servicer and the Trustee of written notification from Standard & Poor's that investments of such type at such other rating will not result in Standard & Poor's reducing or withdrawing its then existing rating of the Certificates of any 10 outstanding Series or Class with respect to which it is a Rating Agency) and in the highest rating category of each other Rating Agency (including any such fund for which the Trustee or any Affiliate of the Trustee is investment manager or advisor) or (ii) any other investment of a type or rating that satisfies the Rating Agency Condition; or (h) any other investments permitted by Rule 3a-7 of the Investment Company Act and approved in writing by each Rating Agency; provided that Eligible Investments shall not include securities issued by, or other obligations of, any Account Owner; and provided further that no Eligible Investments shall be contrary to the status of the Trust as a qualified special purpose entity under existing accounting literature. "Eligible Receivable" shall mean each Receivable: (a) that has arisen in an Eligible Account; (b) that was created in compliance in all material respects with all Requirements of Law applicable to the Account Owner of such Eligible Account and pursuant to an Account Agreement that complies in all material respects with all Requirements of Law applicable to such Account Owner, in either case, the failure to comply with which would have an Adverse Effect; (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 in connection with the creation of such Receivable or the execution, delivery and performance by such Account Owner of the Account Agreement pursuant to which such Receivable was created, have been duly obtained, effected or given and are in full force and effect; (d) as to which at the time of the transfer of such Receivable to the Trust, a Transferor or the Trust will have good and marketable title thereto, free and clear of all Liens (other than any Lien for municipal or other local taxes of a Transferor or an Account Owner if such taxes are not then due and payable or if such Transferor or such Account Owner 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) that has been the subject of either a valid transfer and assignment from a Transferor to the Trust of all such Transferor'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) that is the legal, valid and binding payment obligation of the Obligor thereon, enforceable against such Obligor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity); 11 (g) that, at the time of transfer to the Trust, has not been waived or modified except as permitted in accordance with the Credit Guidelines and which waiver or modification is reflected in the Servicer's computer file of accounts; (h) that, at the time of transfer to the Trust, is not subject to any right of rescission, setoff, counterclaim or any other defense (including defenses arising out of violations of usury laws) of the Obligor, other than defenses arising out of applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights in general; (i) as to which, at the time of transfer to the Trust, the Transferor thereof has satisfied all its obligations required to be satisfied by such time; (j) as to which, at the time of transfer to the Trust, none of the Transferors, Centurion Bank, FSB, any other Account Owner or American Express Credco, as the case may be, has taken any action which would impair, or omitted to take any action the omission of which would impair, the rights of the Trust or the Certificateholders therein; and (k) that constitutes either an "account" or a "general intangible" under and as defined in Article 9 of the UCC as then in effect in any state where the filing of a financing statement is then required to perfect the Trust's interest in the Receivables and the proceeds thereof. "Eligible Servicer" shall mean the Trustee, TRS or Centurion Bank or, if the Trustee, TRS or Centurion Bank is not acting as Servicer, an entity, the appointment of which shall satisfy the Rating Agency Condition, or an entity that, at the time of its appointment as Servicer, (a) is servicing a portfolio of credit accounts, (b) is legally qualified and has the capacity to service the Accounts, (c) in the sole determination of the Trustee, which determination shall be conclusive and binding, has demonstrated the ability to service professionally and competently a portfolio of similar accounts in accordance with high standards of skill and care, (d) is qualified to use the software that is then being used to service the Accounts or obtains the right to use or has its own software which is adequate to perform its duties under this Agreement 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. "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 Allocation Series" shall mean any Series that, pursuant to the Supplement related to such Series, is entitled to receive certain excess Collections of Finance Charge Receivables as more fully described in such Supplement. 12 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. "Exchange Date" shall mean, with respect to any Series, any date that is after the related Closing 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. "FDIC" shall mean the Federal Deposit Insurance Corporation or any successor. "Finance Charge Receivables" shall mean all amounts billed to the Obligors on any Account in respect of (i) all Periodic Rate Finance Charges, (ii) Cash Advance Fees, (iii) annual membership fees and annual service charges, (iv) Late Fees, (v) Overlimit Fees, (vi) Discount Option Receivables, if any, and (vii) any other fees with respect to the Accounts designated by the Transferors at any time and from time to time to be included as Finance Charge Receivables; provided, however, that after the Premium Option Date, Finance Charge Receivables on any Date of Processing shall mean the amount of Finance Charge Receivables as otherwise determined pursuant to this definition less the amount of Premium Option Receivables. Finance Charge Receivables shall also include (a) the interest portion of Participation Interests as shall be determined pursuant to, and only if so provided in, the applicable Participation Interest Supplement or Series Supplement, (b) any amounts designated to be Finance Charge Receivables pursuant to Section 4.05, (c) all Recoveries with respect to Receivables previously charged off as uncollectible and (d) the Issuer Rate Fees received with respect to the related Monthly Period. "Foreign Clearing Agency" shall mean Clearstream and the Euroclear Operator. "FSB" shall mean American Express Bank, FSB, a federal savings bank, and its successors and permitted assigns. "FSB - RFC IV Purchase Agreement" shall mean that certain Receivables Purchase Agreement, dated as of April 16, 2004, between FSB and RFC IV, as the same may be, or may have been, amended, supplemented or otherwise modified from time to time. "FSB - RFC IV Revolving Credit Agreement" shall mean the Revolving Credit Agreement by and between FSB and RFC IV, dated as of April 16, 2004, as such agreement may be amended from time to time in accordance therewith, or any substantially similar agreement entered into between any lender and RFC IV. "Global Certificate" shall have the meaning specified in subsection 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. "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. 13 "Holders of the Transferor Certificates" or "holders of the Transferor Certificates" shall mean the Holders of the Transferor Certificates or the Holders of any uncertificated interests in the Transferors' Interest. "Independent Director" shall have the meaning specified in subsection 2.07(h)(vii). "Ineligible Receivables" shall have the meaning specified in subsection 2.05(a). "Initial Account" shall mean each Optima(R) Card, Optima Line of Credit and Sign and Travel(R) credit account established pursuant to an Account Agreement between Centurion Bank or other Account Owner and any Person, which account is identified in the computer file or microfiche list delivered to the Trustee by the Transferors pursuant to Section 2.01 on the Substitution Date. "Initial Cut-Off Date" shall mean the close of business on April 16, 2004. "Insolvency Event" shall have the meaning specified in subsection 9.01(a). "Insolvency Proceeds" shall have the meaning specified in subsection 9.01(b). "Insurance Proceeds" shall mean all Insurance Proceeds as defined in the related Receivables Purchase Agreement that are paid to a Transferor as provided in the related Receivables Purchase Agreement. "Invested Amount" shall mean, with respect to any Series and for any date, an amount equal to the "Invested Amount," as specified in the related Supplement. "Investment Company Act" shall mean the Investment Company Act of 1940, as amended. "Investor Certificateholder" shall mean 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. "Investor Certificates" shall mean any certificated or uncertificated interest in the Trust designated as, or deemed to be, an "Investor Certificate" in the related Supplement. "Issuer Rate Fees" shall mean issuer rate fees paid to a Transferor pursuant to the related Receivables Purchase Agreement. "Late Fees" shall have the meaning specified in the Account Agreement applicable to each Account for late fees or similar terms. "LIBOR" for any Series shall have the meaning specified in the Supplement related to such Series. 14 "Lien" shall mean any security interest, mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, equity interest, encumbrance, lien (statutory or other), preference, participation interest, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including any conditional sale or other title retention agreement, or any financing lease having substantially the same economic effect as any of the foregoing; provided, however, that any assignment permitted by Section 7.02 or 7.05 and the lien created by this Agreement, the Original Pooling Agreement, the Amended PSA or any Receivables Purchase Agreement 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. "Monthly Period" shall mean, with respect to each Distribution Date, unless otherwise provided in a Supplement, the period (i) from and including the second day following the last day of the seventh billing cycle applicable to the Accounts ending during the second preceding calendar month and (ii) to and including the day following the last day of the seventh billing cycle applicable to the Accounts ending in the calendar month immediately preceding the calendar month in which such Distribution Date shall occur; provided, however, that the initial Monthly Period with respect to any Series will commence on the Closing Date with respect to such Series. "Moody's" shall mean Moody's Investors Service, Inc., or its successor. "New Account" shall mean each Optima Card(R) and Sign & Travel(R) account or other credit or charge account or line of credit (if, with respect to the line of credit, the full receivable balance is not due upon receipt of a monthly billing statement (excluding the billing statement with respect to the final payment of such balance) and the line of credit contains a code designation in the related securitization field as described in Section 2.01) established pursuant to an Account Agreement, which account or line of credit is designated pursuant to subsection 2.09(d) to be included as an Account and is identified in the computer file or microfiche list delivered to the Trustee by the Transferors pursuant to Section 2.01 and subsection 2.09(h). "Notices" shall have the meaning specified in subsection 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, but excluding any merchant. "Officer's Certificate" shall mean, unless otherwise specified in this Agreement, a certificate signed by the President, any Vice President or the Treasurer of a Transferor or the Servicer, as the case may be, or by the President, any Vice President or the financial controller (or an officer holding an office with equivalent or more senior responsibilities) of a Successor Servicer. "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. 15 "Original Pooling Agreement" shall have the meaning specified in the Recitals to this Agreement. "Original Transferor Certificate" shall mean, if the Transferors elect (i) to evidence their interests in the Transferors' Interest in certificated form pursuant to Section 6.01, the certificate executed by the Transferors 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 Exhibit A, or (ii) to have their interests in the Transferors' Interest be uncertificated pursuant to Section 6.01, such uncertificated interests. "Overlimit Fees" shall have the meaning specified in the Account Agreement applicable to each Account for overlimit fees or similar terms if such fees are provided for with respect to such Account. "Partial Amortization SFA Amounts" shall mean the amounts specified by the Transferors pursuant to Section 4.02 which are to be applied to the partial amortization of each Series as specified in the related Supplement. "Participation Interest Supplement" shall mean a Supplement entered into pursuant to subsection 2.09(a)(ii) or (b) in connection with the conveyance of Participation Interests to the Trust. "Participation Interests" shall have the meaning specified in subsection 2.09(a)(ii). "Paying Agent" shall mean any paying agent appointed pursuant to Section 6.07 and shall initially be the Trustee; provided that if the Supplement for a Series so provides, a separate or additional Paying Agent may be appointed with respect to such Series. "Pay-Out Event" shall mean, with respect to any Series, any Pay-Out Event specified in the Supplement related to such Series. "Periodic Rate Finance Charges" shall have the meaning specified in the Account Agreement applicable to each Account for finance charges (due to periodic rate) or any similar term. "Permitted Activities" means the primary activities of the Trust, which are: (a) holding Receivables transferred from the Transferors and the other assets of the Trust, including passive derivative financial instruments that pertain to beneficial interests issued or sold to parties other than the Transferors, their Affiliates or their agents; (b) issuing Certificates and other interests in the Trust Assets; (c) receiving Collections and making payments on such Certificates and interests in accordance with the terms of this Agreement and any Supplement; and 16 (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 person or entity, including any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, governmental entity or other entity of similar nature. "Portfolio Yield" shall mean with respect to the Trust as a whole and, with respect to any Monthly Period, the annualized percentage equivalent of a fraction (a) the numerator of which is the aggregate of the sum of the Series Allocable Finance Charge Collections for all Series during the immediately preceding Monthly Period calculated on a cash basis, after subtracting therefrom the Series Allocable Defaulted Amounts for all Series with respect to such Monthly Period and (b) the denominator of which is the total amount of Principal Receivables plus (without duplication) the then outstanding principal amount of any Participation Interests conveyed to the Trust, plus the amount of funds on deposit in the Special Funding Account, in each case, as of the last day of the immediately preceding Monthly Period; provided that, with respect to any Monthly Period in which an Aggregate Addition occurs or a removal of Accounts pursuant to Section 2.10 occurs, the amount of Principal Receivables and Participation Interests referred to in clause (b) shall be the average amount of Principal Receivables and Participation Interests in the Trust on each Business Day during such Monthly Period based upon the assumptions that (1) the aggregate amount of Principal Receivables in the Trust plus the then outstanding principal amount of any Participation Interests conveyed to the Trust at the end of the day on the last day of the prior Monthly Period is the aggregate amount of Principal Receivables and Participation Interests in the Trust on each Business Day of the period from and including the first day of such Monthly Period to but excluding the related Addition Date or Removal Date and (2) the aggregate amount of Principal Receivables in the Trust plus the then outstanding principal amount of any Participation Interests conveyed to the Trust at the end of the day on the related Addition Date or Removal Date is the aggregate amount of Principal Receivables and Participation Interests in the Trust on each Business Day of the period from and including the related Addition Date or Removal Date to and including the last day of such Monthly Period. "Premium Option Date" shall mean each date on which a Premium Percentage designated by the Transferors pursuant to Section 2.13 takes effect. "Premium Option Receivables" shall have the meaning specified in Section 2.13. The aggregate amount of Premium Option Receivables outstanding on any Date of Processing occurring on or after the Premium Option Date shall equal the sum of (a) the aggregate Premium Option Receivables at the end of the prior Date of Processing (which amount, prior to the Premium Option Date, shall be zero) plus (b) any new Premium Option Receivables created on such Date of Processing minus (c) any Premium Option Receivable Collections received on such Date of Processing. Premium Option Receivables created on any Date of Processing shall mean the product of the amount of any Finance Charge Receivables created on such Date of Processing (without giving effect to the proviso in the definition of Finance Charge Receivables) and the Premium Percentage. 17 "Premium Option Receivable Collections" shall mean on any Date of Processing occurring in any Monthly Period succeeding the Monthly Period in which the Premium Option Date occurs, the product of (a) the Premium Percentage and (b) Collections of Finance Charge Receivables on such Date of Processing (without giving effect to the proviso in the definition of Finance Charge Receivables). "Premium Percentage" shall mean the percentage, if any, designated from time to time by the Transferors pursuant to Section 2.13. "Principal Receivables" shall mean (i) all amounts charged by Obligors for merchandise and services and cash advances or otherwise borrowed by such Obligors under any line of credit existing under an Account, but shall not include Finance Charge Receivables or Defaulted Receivables plus (ii) Premium Option Receivables, if any; provided, however, that after the Discount Option Date, Principal Receivables on any Date of Processing thereafter shall mean Principal Receivables as otherwise determined pursuant to this definition minus the amount of any Discount Option Receivables. Principal Receivables shall also include the principal portion of Participation Interests as shall be determined pursuant to, and only if so provided in, the applicable Participation Interest Supplement or Series Supplement. 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 Transferor is unable to transfer as provided in Section 2.11 shall not be included in calculating the amount of Principal Receivables. "Principal Shortfalls" shall have the meaning specified in Section 4.04. "Principal Sharing Series" shall mean a Series that, pursuant to the Supplement therefor, is entitled to receive Shared Principal Collections. "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), the Invested Amount, the Series Invested Amount and the Required Series Transferor Amount; (iii) the Certificate Rate (or method for the determination thereof); (iv) the payment date or dates and the date or dates from which interest shall accrue; (v) the method for allocating Collections to Investor Certificateholders; (vi) the designation of any Series Accounts and the terms governing the operation of any such Series Accounts; (vii) the Servicing Fee; (viii) the issuer and terms of any form of Series Enhancements 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 a Transferor or remarketed to other investors; (x) the Series Termination Date; (xi) the number of Classes of Investor Certificates of such Series and, if 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 in bearer form and any limitations imposed thereon; (xiv) the priority of such Series with respect to any other Series; (xv) whether such Series will be part of a Group; (xvi) whether such Series will be a Principal Sharing Series; 18 (xvii) whether such Series will be an Excess Allocation Series; (xviii) the Distribution Date; and (xix) any other terms of such Series. "Rating Agency" shall mean, with respect to any outstanding Series or Class, each rating agency, as specified in the applicable Supplement, selected by the Transferors to rate the Investor Certificates of such Series or Class. "Rating Agency Condition" shall mean, with respect to any action, that each Rating Agency shall have notified the Transferors, the Servicer and the Trustee in writing that such action will not result in a reduction or withdrawal of the then existing rating of any outstanding Series or Class with respect to which it is a Rating Agency. "Reassignment" shall have the meaning specified in Section 2.10. "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 Finance Charge Receivables. Receivables that become Defaulted Receivables will cease to be included as Receivables as of the day on which they become Defaulted Receivables. "Receivables Purchase Agreements" shall mean (i) the FSB - RFC IV Purchase Agreement, (ii) the Centurion Bank - RFC III Purchase Agreement, (iii) the Credco - RFC II Purchase Agreement, (iv) the Credco - Centurion Bank Purchase Agreement and (v) any other receivables purchase agreement substantially in the form of any such agreement that may be entered into by RFC II, RFC III, RFC IV or an Additional Transferor and an Account Owner in the future, pursuant to which RFC II, RFC III, RFC IV or such Additional Transferor will acquire from such Account Owner Receivables for transfer, directly or indirectly, to the Trustee on behalf of the Trust, in each case, as the same may be amended, supplemented or otherwise modified from time to time. "Record Date" shall mean, with respect to any Distribution Date, the last day of the calendar month immediately preceding such Distribution Date unless otherwise specified for a Series in the applicable Supplement. "Recoveries" shall mean all Recoveries as defined in the related Receivables Purchase Agreement that are paid to a Transferor as provided in the related Receivables Purchase Agreement. "Registered Certificateholder" shall mean the Holder of a Registered Certificate. "Registered Certificates" shall have the meaning specified in Section 6.01. "Regulation AB" shall mean Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time. 19 "Reinvestment Event" shall mean, with respect to any Series, the meaning specified in the Supplement related to such Series. "Reinvestment Period" shall mean, if applicable, with respect to any Series, any Reinvestment Event specified in the Supplement related to such Series. "Related Account" shall mean an Account with respect to which a new account number has been issued by the applicable Account Owner or the Servicer (a)(i) resulting from a lost or stolen credit or charge card relating to such Account (if such Account is a credit or charge card account) or (ii) under circumstances not requiring the standard application and credit evaluation procedures under the Credit Guidelines applicable to such Account, and (b) that can be traced or identified by reference to or by way of Schedule 1 to this Agreement and the computer or other records of the applicable Account Owner or the Servicer. "Removal Date" shall have the meaning specified in Section 2.10. "Removed Accounts" shall have the meaning specified in Section 2.10. "Removed Participation Interests" shall have the meaning specified in Section 2.10. "Required Designation Date" shall have the meaning specified in subsection 2.09(a). "Required Minimum Principal Balance" shall mean, with respect to any date (a) the sum of the Series Invested Amounts for each Series outstanding on such date plus the sum of the Series Required Transferor Amounts for each Series outstanding on such date, minus (b) the Special Funding Amount. "Required Transferor Amount" shall mean, with respect to any date, an amount equal to the product of (A) the Required Transferor Percentage and (B) the aggregate amount of Principal Receivables. "Required Transferor Percentage" shall mean 7% or any other percentage specified in any Supplement; provided, however, that the Transferors may reduce the Required Transferor Percentage upon (x) 30 days' prior notice to the Trustee and each Rating Agency, (y) satisfaction of the Rating Agency Condition with respect thereto and (z) delivery to the Trustee of a certificate of a Vice President or more senior officer of each Transferor stating that such Transferor reasonably believes that such reduction will not, based on the facts known to such officer at the time of such certification, then or thereafter have an Adverse Effect; provided further that the Required Transferor Percentage shall not at any time be less than 2%. "Requirements of Law" shall mean any law, treaty, rule or regulation, or determination of an arbitrator or Governmental Authority, whether Federal, state or local (including, without limitation, usury laws, the Federal Truth in Lending Act and Regulation B and Regulation Z of the Board of Governors of the Federal Reserve System), and, when used with respect to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person. 20 "Responsible Officer" shall mean, when used with respect to the Trustee, any officer within the Corporate Trust Administration Department (or any successor group) of the Trustee, including any vice president, assistant vice president, trust officer or any other officer of the Trustee customarily performing functions similar to those performed by the persons who at the time shall be such officers or to whom any corporate trust matter is referred at the Corporate Trust Office because of such officer's knowledge of and familiarity with the particular subject. "Revolving Credit Agreements" shall mean (i) the Centurion Bank - RFC III Revolving Credit Agreement and (ii) the FSB - RFC IV Revolving Credit Agreement, in each case, as the same may be amended, supplemented or otherwise modified from time to time. "Revolving Period" shall mean, with respect to any Series, the period specified as such in the Supplement related to such Series. "RFC II" shall mean American Express Receivables Financing Corporation II, a Delaware corporation, and its successors and permitted assigns. "RFC III" shall mean American Express Receivables Financing Corporation III LLC, a Delaware limited liability company, and its successors and permitted assigns. "RFC IV" shall mean American Express Receivables Financing Corporation IV LLC, a Delaware limited liability company, and its successors and permitted assigns. "Sarbanes Certification" shall have the meaning specified in Section 14.04. "Securitization Transaction" shall mean any new issuance of Investor Certificates, pursuant to Section 6.03, whether publicly offered or privately placed, rated or unrated. "Series" shall mean any series of Investor Certificates issued pursuant to Section 6.03. "Series Account" shall mean any deposit, securities, trust, escrow or similar account maintained for the benefit of the Investor Certificateholders of any Series or Class, as specified in any Supplement. "Series Adjusted Invested Amount" shall mean, with respect to any Series and for any Monthly Period, the Series Invested Amount of such Series, after subtracting therefrom the excess, if any, of the cumulative amount (calculated in accordance with the terms of the related Supplement) of investor charge-offs, subordination of principal collections and funding of the investor default amount for any other Class of Investor Certificates of such Series or another Series allocable to the Invested Amount for such Series as of the last day of the immediately preceding Monthly Period over the aggregate reimbursement of such investor charge-offs, subordination of principal collections and funding of the investor default amount for any other Class of Investor Certificates of such Series or another Series as of such last day, or such lesser amount as may be provided in the Supplement for such Series. 21 "Series Allocable Defaulted Amount" shall mean, with respect to any Series and for any Monthly Period, the product of the Series Allocation Percentage and the Defaulted Amount with respect to such Monthly Period. "Series Allocable Finance Charge Collections" shall mean, with respect to any Series and for any Monthly Period, the product of the Series Allocation Percentage and the amount of Collections of Finance Charge Receivables deposited in the Collection Account for such Monthly Period. "Series Allocable Principal Collections" shall mean, with respect to any Series and for any Monthly Period, the product of the Series Allocation Percentage and the amount of Collections of Principal Receivables deposited in the Collection Account for such Monthly Period. "Series Allocation Percentage" shall mean, with respect to any Series and for any Monthly Period, the percentage equivalent of a fraction, the numerator of which is the Series Adjusted Invested Amount and the denominator of which is the Trust Adjusted Invested Amount. "Series Enhancement" shall mean the rights and benefits provided to the Trust or the Investor Certificateholders of any Series or Class pursuant to any letter of credit, surety bond, insurance policy, cash collateral guaranty, subordinated interest in the Trust Assets, cash collateral account, collateral interest, spread account, guaranteed rate agreement, maturity liquidity facility, tax protection agreement, interest rate swap agreement, interest rate cap agreement or other similar arrangement. The subordination of any Series or Class to another Series or Class shall be deemed to be a Series Enhancement. "Series Enhancer" shall mean the Person or Persons providing any Series Enhancement, other than (except to the extent otherwise provided with respect to any Series in the Supplement for such Series) the Investor Certificateholders of any Series or Class which is subordinated to another Series or Class. "Series Invested Amount" shall have, with respect to any Series, the meaning specified in the related Supplement. "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 Required Transferor Amount" shall have the meaning, with respect to any Series, as specified in the related Supplement. "Series Termination Date" shall mean, with respect to any Series, the termination date for such Series specified in the related Supplement. "Service Transfer" shall have the meaning specified in Section 10.01. 22 "Servicer" shall mean TRS, 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 Criteria" shall mean the "servicing criteria" set forth in Item 1122(d) of Regulation AB, as such may be amended from time to time. "Servicing Fee" shall mean, with respect to any Series, the servicing fee specified in the related Supplement. "Servicing Officer" shall mean any officer of the Servicer or an 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 Transferors and the Trustee by the Servicer, as such list may from time to time be amended. "Servicing Participant" shall mean the Servicer, any Subservicer or any Person that participates in any of the servicing functions specified in Item 1122(d) of Regulation AB with respect to the Receivables. For the avoidance of doubt, subject to Section 14.01, the term "Servicing Participant" shall not include the Trustee. "Servicing Party" shall have the meaning specified in Section 14.06(a). "Shared Principal Collections" shall have the meaning specified in Section 4.04. "Small Balances" shall have the meaning established in accordance with the Credit Guidelines. "Special Funding Account" shall have the meaning set forth in Section 4.02. "Special Funding Amount" shall mean the amount on deposit in the Special Funding Account. "Standard & Poor's" shall mean Standard & Poor's Ratings Services or its successor. "Subservicer" shall mean any Person that services the Receivables on behalf of the Servicer or any Subservicer and is responsible for the performance (whether directly or through Subservicers or Servicing Participants) of a substantial portion of the material servicing functions required to be performed by the Servicer under this Agreement or any Supplement that are identified in Item 1122(d) of Regulation AB. For the avoidance of doubt, subject to Section 14.01, the term "Subservicer" shall not include the Trustee. "Substitution Date" shall mean the close of business on April 16, 2004. "Successor Servicer" shall have the meaning specified in subsection 10.02(a). 23 "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, with respect to any Participation Interest, an amendment to this Agreement executed pursuant to Section 13.01, and, in either case, including all amendments thereof and supplements thereto. "Supplemental Certificate" shall have the meaning specified in Section 6.03. "Tax Opinion" shall mean, with respect to any action, an Opinion of Counsel to the effect that, for federal income tax purposes, (a) such action will not adversely affect the tax characterization as debt of the Investor Certificates of any outstanding Series or Class that was characterized as debt at the time of its issuance, (b) following such action the Trust will not be deemed to be an association (or publicly traded partnership) taxable as a corporation, (c) such action will not cause or constitute an event in which gain or loss would be recognized by any Investor Certificateholder and (d) except as is otherwise provided in a Supplement, in the case of Section 6.03(b)(vi), the Investor Certificates of the Series established pursuant to such Supplement will be properly characterized as debt. "Termination Notice" shall have the meaning specified in Section 10.01. "Termination Proceeds" shall have the meaning specified in subsection 12.02(c). "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 Restriction Event" shall have the meaning specified in Section 2.10. "Transferor Amount" shall mean on any date of determination an amount equal to (I) the sum of (A) the aggregate balance of Principal Receivables at the end of the day immediately prior to such date of determination and (B) the Special Funding Amount at the end of the day immediately prior to such date of determination minus (II) the Aggregate Invested Amount at the end of such day. "Transferor Certificates" shall mean, collectively, the Original Transferor Certificate and any outstanding Supplemental Certificates. "Transferors" shall mean (a) prior to the Substitution Date, Centurion Bank and RFC II and (b) on and after the Substitution Date, (i) RFC II, RFC III and RFC IV and (ii) any Additional Transferor or Transferors. References to "each Transferor" shall refer to each entity mentioned in the preceding sentence and, whenever the context may so require, references to "the Transferor" shall refer, collectively, to all of such entities. "Transferors' Interest" shall have the meaning specified in Section 4.01. "Transferred Account" shall mean each credit or charge account or line of credit (if, with respect to the line of credit, the full receivable balance is not due upon receipt of a 24 monthly billing statement (excluding the billing statement with respect to the final payment of such balance) and the line of credit contains a code designation as described in Article II) into which an Account shall be transferred provided that (i) such transfer was made in accordance with the Credit Guidelines and (ii) it can be traced or identified in the applicable Transferor's or Account Owner's computer files with the code identified in Article II or in the applicable Assignment as a Transferred Account into which an Account has been transferred by reference to or by way of the computer files or microfiche lists delivered to the Trustee pursuant to Article II. "TRS" shall mean American Express Travel Related Services Company, Inc., a New York corporation, and its successors and permitted assigns. "TRS Insolvency Event" shall mean any of the following events: (i) the consent by TRS to, or the failure by TRS to object to, the appointment of a bankruptcy trustee or conservator, receiver or liquidator in any bankruptcy proceeding or other insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to TRS or all or substantially all of TRS' property; (ii) the entering of a decree or order by a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a bankruptcy trustee or conservator, receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the winding-up, insolvency, bankruptcy, reorganization, conservatorship, receivership or liquidation of TRS' affairs, which decree or order shall have remained in force undischarged or unstayed for a period of 60 days; (iii) TRS' inability, or the admission by TRS in writing of TRS' inability, to pay its debts generally as its debts become due; (iv) the filing of any petition, the effect of which would cause TRS to take advantage of any applicable bankruptcy, insolvency or reorganization, receivership or conservatorship statute; (v) the making by TRS of an assignment for the benefit of TRS' creditors; (vi) the voluntary suspension by TRS of the payment of TRS' obligations; or (vii) the consent by TRS to, or the failure of TRS to object to, the filing of any petition described in clause (iv) above, or, if TRS shall have objected to the filing of any such petition, the failure of such petition to have been dismissed within 60 days of the filing thereof. "Trust" shall mean the American Express Credit Account Master Trust, the trust heretofore created and continued by this Agreement. "Trust Adjusted Invested Amount" shall mean, with respect to any Monthly Period, the aggregate Series Adjusted Invested Amounts as adjusted in any Supplement for all outstanding Series for such Monthly Period. "Trust Assets" shall have the meaning specified in Section 2.01. "Trust Excess Principal Collections" shall have the meaning specified in the applicable Supplement. "Trustee" shall mean The Bank of New York, a New York banking corporation, 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 any specified jurisdiction. 25 Section 1.02 Other Definitional Provisions. (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 as in effect on the date of this Agreement. 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 such terms under generally accepted accounting principles or regulatory accounting principles in the United States, the definitions contained in this Agreement or in any such certificate or other document shall control. (d) The agreements, representations and warranties of RFC II, RFC III, RFC IV and TRS in this Agreement in each of their respective capacities as Transferor and Servicer shall be deemed to be the agreements, representations and warranties of RFC II, RFC III, RFC IV and TRS solely in each such capacity for so long as RFC II, RFC III, RFC IV and TRS shall act in each such capacity under this Agreement. (e) For purposes of determining whether Holders of Investor Certificates evidencing a specified percentage of the Certificateholders' Interest have approved, voted on, consented or otherwise agreed to any action hereunder or under a related Supplement, any Investor Certificates owned by a Transferor, any Affiliate thereof, any agent thereof or any other party consolidated with such Transferor for purposes of United States generally accepted accounting principles shall be disregarded when making such determination. (f) Any reference to each Rating Agency shall only apply to any specific rating agency if such rating agency is then rating any outstanding Series. (g) Unless otherwise specified, references to any amount as on deposit or outstanding on any particular date shall mean such amount at the close of business on such day. (h) 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, subsection, Schedule or Exhibit are references to Sections, subsections, Schedules and Exhibits in or to this Agreement unless otherwise specified; and the term "including" means "including without limitation." [END OF ARTICLE I] 26 ARTICLE II CONVEYANCE OF RECEIVABLES Section 2.01 Conveyance of Receivables. By execution of this Agreement, each Transferor does hereby transfer, assign, set over and otherwise convey to the Trustee, on behalf of the Trust, for the benefit of the Certificateholders, without recourse except as provided herein, all of its right, title and interest, whether now owned or hereafter acquired, in, to and under the Receivables existing at the close of business on the Initial Cut-Off Date, in the case of Receivables arising in the Initial Accounts (including Related Accounts and Transferred Accounts with respect to such Initial Accounts), and at the close of business on each Addition Cut-Off Date, in the case of Receivables arising in the Additional Accounts (including Related Accounts and Transferred Accounts with respect to such Additional Accounts), and in each case thereafter created from time to time in such Accounts until the termination of the Trust, all Issuer Rate Fees and Recoveries allocable to the Trust as provided herein, all monies due and to become due and all amounts received with respect to all of the foregoing and all proceeds (including Insurance Proceeds and "proceeds" as defined in the UCC) thereof. Each Transferor does hereby further transfer, assign, set over and otherwise convey to the Trustee, on behalf of the Trust, all of its rights, remedies, powers, privileges and claims under or with respect to any related Receivables Purchase Agreement (whether arising pursuant to the terms of such Receivables Purchase Agreement or otherwise). Such property, together with all monies and other property on deposit in the Collection Account, the Series Accounts and the Special Funding Account, the rights of the Trustee on behalf of the Trust under this Agreement and any Supplement, the property conveyed to the Trustee on behalf of the Trust under any Participation Interest Supplement, any Series Enhancement and the right to receive Recoveries 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 Centurion Bank, FSB, any other Account Owner, American Express Credco, any Transferor, any Additional Transferor, the Servicer or any other Person in connection with the Accounts or the Receivables or under any agreement or instrument relating thereto, including any obligation to Obligors, merchants clearance systems or insurers. The foregoing transfer, assignment, set-over and other conveyance to the Trust shall be made to the Trustee, on behalf of the Trust, and each reference in this Agreement to such transfer, assignment, set-over and conveyance shall be construed accordingly. Each Transferor agrees to record and file, at its own expense, financing statements (and amendments thereto when applicable) with respect to the Trust Assets conveyed by such Transferor 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 transfer, assignment, set-over or other conveyance of its interest in such Trust Assets to the Trustee, and to deliver a file-stamped copy of each such financing statement or amendment or other evidence of such filing to the Trustee as soon as practicable after the Substitution Date, in the case of Trust Assets relating to the Initial Accounts, and (if any additional filing is so necessary) as soon as practicable after the applicable Addition Date, in the case of Trust Assets relating to Additional Accounts. The Trustee shall be under no obligation whatsoever to file such financing statements or amendments thereto or to make any other filing under the UCC in connection with such transfer, assignment, set-over or other conveyance. 27 Each Transferor further agrees, at its own expense, (a) on or prior to (i) the Substitution Date, in the case of the Initial Accounts, (ii) the applicable Addition Date, in the case of Additional Accounts, and (iii) the applicable Removal Date, in the case of Removed Accounts, to indicate in the appropriate computer files that Receivables created (or reassigned, in the case of Removed Accounts) in connection with the Accounts have been conveyed to the Trustee pursuant to this Agreement for the benefit of the Certificateholders (or conveyed to such Transferor or its designee in accordance with Section 2.10, in the case of Removed Accounts) by including (or deleting in the case of Removed Accounts) in the securitization field of such computer files, in the case of the Initial Accounts, the code "F," "G," "H," "I," "J," "L," "M," "N," "O," "P," "S," "T" or "V," or any other related code designations specified at the dates of their designation as "Accounts" under the Original Pooling Agreement and, in the case of Additional Accounts, a similar code designation that shall be specified in the Assignment related thereto, in each case, identifying each such account as an Account and (b) on or prior to (w) the date that is five Business Days after the Substitution Date, in the case of the Initial Accounts, (x) the date that is five Business Days after the applicable Addition Date, in the case of Aggregate Additions, (y) the date that is 90 days after the applicable Addition Date, in the case of New Accounts, and (z) the date that is five Business Days after the applicable Removal Date, in the case of Removed Accounts, to deliver to the Trustee a computer file or microfiche list containing a true and complete list of all such Accounts specifying for each such Account, as of the Initial Cut-Off Date, in the case of the Initial Accounts, the applicable Addition Cut-Off Date, in the case of Additional Accounts, and the applicable Removal Date, in the case of Removed Accounts, its account number and, other than in the case of New Accounts and the Initial Accounts, the aggregate amount outstanding in such Account. Each such file or list, as supplemented, from time to time, to reflect Related Accounts, Transferred Accounts, 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. Each Transferor further agrees not to alter the code referenced in this paragraph with respect to any Account during the term of this Agreement unless and until such Account becomes a Removed Account. The parties to this Agreement intend that the conveyance of Trust Assets pursuant to this Agreement constitute a sale, and not a secured borrowing, for accounting purposes. Nevertheless, this Agreement also shall constitute a security agreement under applicable law, and the Transferors hereby grant to the Trustee a first priority perfected security interest in all of their right, title and interest, whether now owned or hereafter acquired, in and to the Receivables and the other Trust Assets, and all money, accounts, general intangibles, chattel paper, instruments, documents, goods, investment property, deposit accounts, letters of credit and letter-of-credit rights consisting of, arising from or related to the Trust Assets, and all proceeds thereof, to secure their obligations hereunder. By executing this Agreement and any Receivables Purchase Agreement, the parties hereto and thereto do not intend to cancel, release or in any way impair the conveyance made by RFC II or Centurion Bank in their respective capacities as a "Transferor" under the Original Pooling Agreement. Without limiting the foregoing, the parties hereto acknowledge and agree as follows: 28 (a) The Trust created by and maintained under the Original Pooling Agreement and maintained under the Amended PSA shall continue to exist and be maintained under this Agreement. (b) All series of investor certificates issued under the Original Pooling Agreement and the Amended PSA shall constitute Series issued and outstanding under this Agreement, and any supplement existing in connection with such series shall constitute a Supplement executed hereunder. (c) All references to the Original Pooling Agreement or the Amended PSA in any other instruments or documents shall be deemed to constitute references to this Agreement. All references in such instruments or documents to Centurion Bank in its capacity as a "Transferor" of receivables and related assets under the Original Pooling Agreement shall be deemed to include reference to RFC III and RFC IV in such capacities hereunder. (d) Subject to clause (f) below, RFC III and RFC IV hereby agree to perform all obligations of Centurion Bank, in its capacity as a "Transferor," under or in connection with the Original Pooling Agreement (as amended and restated by the Amended PSA), any Supplements to the Original Pooling Agreement and any related Enhancement Agreements. RFC II shall remain as a Transferor under this Agreement on and after the Substitution Date and all references to "Transferor" shall include references to RFC II. (e) To the extent this Agreement requires that certain actions were to be taken as of a date prior to the date of the Amended PSA, RFC II's or Centurion Bank's, as applicable, taking of such action under the Original Pooling Agreement shall constitute satisfaction of such requirement. (f) All representations, warranties and covenants of RFC II or Centurion Bank, as applicable, made in Article II of the Original Pooling Agreement and in any Assignment of Additional Accounts with respect to receivables and related assets transferred to the Trustee prior to the Substitution Date, shall remain in full force and effect with respect to RFC II or Centurion Bank, as applicable. (g) If, through inadvertance, negligence or mistake, a Transferor indicates in its computer files that Receivables have been transferred, assigned, set over or otherwise conveyed to the Trustee, on behalf of the Trust, pursuant to this Agreement for the benefit of the Certificateholders, and the Servicer discovers that such Transferor, in fact at the time of such transfer, assignment, set over or conveyance, did not have any right, title or interest in such Receivables, then the Servicer shall cause the computer files of such Transferor to be corrected to reflect that such Receivables have in fact not been transferred and are not Trust Assets. Further, the Servicer shall correct, or cause to be corrected, as appropriate, all computer files and microfiche lists and all accounting entries, if any. The Transferor Amount shall also be adjusted downward by the amount of such Receivables in accordance with Section 3.09(a) and, if following the exclusion of such Receivables from the calculation of the Transferor Amount, the Transferor Amount would be less than the Required Transferor Amount, then the Transferors shall make a deposit into the Special Funding Account in accordance with Section 3.09(a). 29 Section 2.02 Acceptance by Trustee. (a) The Trustee hereby acknowledges its acceptance on behalf of the Trust of all right, title and interest to the Trust Assets conveyed to the Trustee 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 Transferors delivered to the Trustee the computer file or microfiche list relating to the Initial Accounts described in the third to last paragraph of Section 2.01. The Trustee shall maintain a copy of Schedule 1, as delivered from time to time, at the Corporate Trust Office. (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 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, (iii) in enforcing the rights of Certificateholders or (iv) to bona fide creditors or potential creditors of Centurion Bank, FSB, any other Account Owner, American Express Credco or any Transferor for the limited purpose of enabling any such creditor to identify Receivables or Accounts subject to this Agreement or the Receivables Purchase Agreements. The Trustee agrees to take such measures as shall be reasonably requested by any Account Owner or any Transferor to protect and maintain the security and confidentiality of such information and, in connection therewith, shall allow each Account Owner and each Transferor or their duly authorized representatives to inspect the Trustee's security and confidentiality arrangements from time to time during business hours. The Trustee shall provide the applicable Account Owner and the applicable Transferor with notice five Business Days prior to disclosure of any information of the type described in this subsection 2.02(b). (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. Section 2.03 Representations and Warranties of Each Transferor Relating to Such Transferor. Each Transferor hereby severally represents and warrants to the Trust (and agrees that the Trustee may rely on each such representation and warranty in accepting the Receivables in trust and in authenticating the Certificates) as of the Substitution Date and as of each Closing Date (but only if it was a Transferor on such date) that: (a) Organization and Good Standing. Such Transferor is a limited liability company or corporation validly existing under the laws of the jurisdiction of its organization or incorporation and has, in all material respects, full power and authority to own its properties and conduct its business as presently owned or conducted, and to execute, deliver and perform its obligations under this Agreement, each Receivables Purchase Agreement (if any) to which it is a party and each applicable Supplement and to execute and deliver to the Trustee the Certificates. (b) Due Qualification. Such Transferor is duly qualified to do business and is in good standing as a foreign limited liability company or a foreign corporation and has obtained all necessary licenses and approvals, in each jurisdiction in which failure to so qualify or to 30 obtain such licenses and approvals would (i) render any Account Agreement relating to an Account specified herein or any Receivable conveyed to the Trustee by such Transferor unenforceable by such Transferor, the Servicer or the Trustee and (ii) have a material adverse effect on the Investor Certificateholders; provided, however, that no Transferor makes any representation or warranty with respect to any qualification, license or approval that the Trustee would have to obtain to do business in any state in which the Trustee seeks to enforce any Receivable. (c) Due Authorization. The execution and delivery by such Transferor of this Agreement, each Supplement and each Receivables Purchase Agreement (if any) to which such Transferor is a party and the execution and delivery to the Trustee of the Certificates and the consummation by such Transferor of the transactions provided for in this Agreement, each Supplement and each such Receivables Purchase Agreement (if any) have been duly authorized by such Transferor by all necessary limited liability company or corporate action on the part of such Transferor. (d) No Conflict. The execution and delivery by such Transferor of this Agreement, each Supplement, and the Certificates, the performance by such Transferor of the transactions contemplated by this Agreement and each Supplement and the fulfillment by such Transferor of the terms hereof and thereof applicable to such Transferor, will not conflict with or violate any Requirements of Law applicable to such Transferor or conflict with, result in any breach of any of the material terms and provisions of, or constitute (with or without notice or lapse of time or both) a material default under, any indenture, contract, agreement, mortgage, deed of trust or other instrument to which such Transferor is a party or by which it or its properties are bound. (e) No Proceedings. There are no proceedings or investigations, pending or, to the best knowledge of such Transferor, threatened against such Transferor before any Governmental Authority (i) asserting the invalidity of this Agreement, any Supplement or the Certificates, (ii) seeking to prevent the issuance of any of the Certificates or the consummation 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 Transferor, would materially and adversely affect the performance by such Transferor of its obligations under this Agreement or any Supplement, (iv) seeking any determination or ruling that, in such Transferor's reasonable judgment, 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 or franchise tax attributes of the Trust under the United States Federal or any State income or franchise tax systems. (f) All Consents. All authorizations, consents, orders or approvals of or registrations or declarations with any Governmental Authority required to be obtained, effected or given by such Transferor in connection with the execution and delivery by such Transferor of this Agreement, each Supplement and the Certificates and the performance of the transactions contemplated by this Agreement and each Supplement by such Transferor have been duly obtained, effected or given and are in full force and effect. 31 Section 2.04 Representations and Warranties of each Transferor Relating to the Agreement and any Supplement and the Receivables. (a) Representations and Warranties. Each Transferor hereby severally represents and warrants to the Trust and the Trustee as of the Substitution Date, each subsequent Closing Date and, with respect to Additional Accounts, as of the related Addition Date (but only if it was a Transferor on such date) that: (i) each of the Receivables Purchase Agreements (if any) to which such Transferor is a party, this Agreement, each Supplement and, in the case of Additional Accounts, each related Assignment, constitutes a legal, valid and binding obligation of such Transferor, enforceable against such Transferor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally from time to time in effect or general principles of equity; (ii) as of the Initial Cut-Off Date with respect to Initial Accounts and as of the related Addition Cut-Off Date with respect to Additional Accounts, Schedule 1 to this Agreement, as supplemented to such date, is an accurate and complete listing in all material respects of all the Accounts specified herein as of the Initial Cut-Off Date or such Addition Cut-Off Date, as the case may be, and the information contained therein with respect to the identity of such Accounts and the Receivables existing thereunder is true and correct in all material respects as of the Initial Cut-Off Date or such Addition Cut-Off Date, as the case may be; (iii) each Receivable conveyed to the Trustee by such Transferor has been conveyed to the Trustee free and clear of any Lien (other than as permitted by clause (d) of the term "Eligible Receivable"); (iv) all authorizations, consents, orders or approvals of or registrations or declarations with any Governmental Authority required to be obtained, effected or given by such Transferor in connection with the conveyance by such Transferor 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 9-315 of the UCC, and further subject to any Liens permitted by clause (d) of the term "Eligible Receivable", each of this Agreement or, in the case of Additional Accounts, the related Assignment either constitutes a valid transfer and assignment to the Trustee of all right, title and interest of such Transferor in the Receivables conveyed to the Trustee by such Transferor and the proceeds thereof and Recoveries identified as relating to the Receivables conveyed to the Trustee by such Transferor which have become Defaulted Receivables, or it constitutes a grant of a first-priority "security interest" (as defined in the UCC) in such property to the Trustee, which, in the case of existing Receivables and the proceeds thereof and such Recoveries, is enforceable upon execution and delivery 32 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 and Recoveries thereof upon such creation. Upon the filing of the financing statements and, in the case of Receivables hereafter created and the proceeds and Recoveries thereof, upon the creation thereof, the Trustee shall have a first-priority perfected security or ownership interest in such property and proceeds; (vi) on the applicable Addition Selection Date, each related Additional Account is an Eligible Account; (vii) on the applicable Addition Selection Date, each Receivable then existing in the related Additional Accounts and conveyed to the Trustee by such Transferor is an Eligible Receivable; (viii) as of the date of the creation of any new Receivable in a related Account specified herein, such Receivable is an Eligible Receivable; and (ix) no selection procedures believed by such Transferor to be materially adverse to the interests of the Investor Certificateholders have been used in selecting such related Accounts. (b) Notice of Breach. The representations and warranties set forth in Section 2.03, this Section 2.04 and subsection 2.09(f) shall survive the transfers and assignments of the Trust Assets to the Trustee and the issuance of the Certificates. Upon discovery by any Transferor, the Servicer or the Trustee of a breach of any of the representations and warranties set forth in Section 2.03, this Section 2.04 or subsection 2.09(f), the party discovering such breach shall give notice to the other parties and to each Series Enhancer within three Business Days following such discovery; provided that the failure to give notice within three Business Days does not preclude subsequent notice. (c) Representations and Warranties of Each Transferor Relating to Security Interests. Each Transferor hereby makes the following representations and warranties with respect to the Receivables it conveys to the Trustee. Such representations and warranties shall survive until the termination of this Agreement and each shall speak as of the Substitution Date and, with respect to Receivables in Additional Accounts, as of the related Addition Date. None of the following shall be waived by any of the parties to this Agreement unless each Rating Agency shall have notified the Transferors, the Servicer and the Trustee in writing that such waiver will not result in a reduction or withdrawal of the rating of any outstanding Series or Class to which it is a Rating Agency. (a) This Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in favor of the Trustee in the Receivables described in Section 2.01 of this Agreement or in Section 3(a) of any Assignment (the "Collateral"), which security interest is prior to all other Liens except as otherwise permitted hereunder, and is enforceable as such against creditors of and purchasers from such Transferor. 33 (b) The Collateral constitutes "accounts" or "general intangibles" within the meaning of the applicable UCC. (c) At the time of its transfer of any Receivable to the Trustee pursuant to this Agreement or an Assignment, such Transferor owned and had good and marketable title to such Receivable free and clear of any lien, claim or encumbrance of any Person except as otherwise permitted hereunder. (d) Such Transferor has caused or will have caused, within ten (10) days of the initial execution of this Agreement and each Assignment, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the related Collateral granted to the Trustee pursuant to this Agreement or such Assignment. (e) Other than the security interest granted to the Trustee pursuant to this Agreement or an Assignment, such Transferor has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed the Collateral. Such Transferor has not authorized the filing of and is not aware of any financing statements against such Transferor that include a description of the Collateral other than any financing statement relating to the security interest granted to the Trustee pursuant to this Agreement or an Assignment or that has been terminated. Such Transferor is not aware of any judgment or tax lien filings against such Transferor. Section 2.05 Reassignment of Ineligible Receivables. (a) Reassignment of Receivables. In the event (i) any representation or warranty contained in subsection 2.04(a)(ii), (iii), (iv), (vi), (vii) or (viii) is not true and correct in any material respect as of the date specified therein with respect to any Receivable or the related Account and such breach has a material adverse effect on the Investor Certificateholders (which determination shall be made without regard to whether funds are then available pursuant to any Series Enhancement) unless cured within 60 days (or such longer period, not in excess of 120 days, as may be agreed to by the Trustee and the Servicer) after the earlier to occur of the discovery thereof by the Transferor that conveyed such Receivables to the Trust or receipt by such Transferor of written notice thereof given by the Trustee or the Servicer, or (ii) it is so provided in subsection 2.07(a) or 2.09(d)(iii) with respect to any Receivables conveyed to the Trust by such Transferor, then such Transferor shall accept reassignment of the Certificateholders' Interest in all Receivables in the related Account ("Ineligible Receivables") on the terms and conditions set forth in paragraph (b) below. (b) Price of Reassignment. The Servicer shall deduct the portion of such Ineligible Receivables reassigned to each Transferor which are Principal Receivables from the aggregate amount of the Principal Receivables used to calculate the Transferor Amount. In the event that, following the exclusion of such Principal Receivables from the calculation of the Transferor Amount, the Transferor Amount would be less than the Required Transferor Amount, not later than 1:00 P.M., New York City time, on the first Distribution Date following the 34 Monthly Period in which such reassignment obligation arises, the applicable Transferor shall make a deposit into the Special Funding Account in immediately available funds in an amount equal to the amount by which the Transferor Amount would be below the Required Transferor Amount (up to the amount of such Principal Receivables). Upon reassignment of any Ineligible Receivable, the Trustee, on behalf of the Trust, shall automatically and without further action sell, transfer, assign, set over and otherwise convey to the applicable Transferor or its designee, without recourse, representation or warranty, all the right, title and interest of the Trustee and the Trust in and to such Ineligible Receivable, all monies due or to become due and all proceeds thereof and such reassigned Ineligible Receivable shall be treated by the Trust as collected in full as of the date on which it was transferred. The obligation of each Transferor to accept reassignment of any Ineligible Receivables conveyed to the Trustee by such Transferor, and to make the deposits, if any, required to be made to the Special Funding Account as provided in this Section, shall constitute the sole remedy respecting the event giving rise to such obligation available to Certificateholders (or the Trustee on behalf of the Certificateholders) or any Series Enhancer. Notwithstanding any other provision of this subsection 2.05(b), a reassignment of an Ineligible Receivable in excess of the amount that would cause the Transferor Amount to be less than the Required Transferor Amount shall not occur if the applicable Transferor fails to make any deposit required by this subsection 2.05(b) with respect to such Ineligible Receivable. The Trustee shall execute such documents and instruments of transfer or assignment and take such other actions as shall reasonably be requested by the applicable Transferor to effect the conveyance of such Ineligible Receivables pursuant to this subsection 2.05(b), but only upon receipt of an Officer's Certificate from such Transferor certifying that all conditions set forth in this Section 2.05 have been satisfied. Section 2.06 Reassignment of Certificateholders' Interest in Trust Portfolio. In the event any representation or warranty of a Transferor set forth in subsection 2.03(a) or (c) or subsection 2.04(a)(i) or (v) is not true and correct in any material respect and such breach has a material adverse effect on the Investor Certificateholders (which determination shall be made without regard to whether funds are then available pursuant to any Series Enhancement), 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 Transferor and the Servicer (and to the Trustee if given by the Investor Certificateholders), may direct such Transferor to accept a reassignment of the Certificateholders' Interest in the Receivables and any Participation Interests conveyed to the Trust by such Transferor 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 120 days, as may be specified in such notice), and upon those conditions such Transferor shall be obligated to accept such reassignment on the terms set forth below; provided, however, that such Receivables will not be reassigned to such Transferor if, on any day prior to the end of such 60-day or longer period (i) the relevant representation and warranty shall then be true and correct in all material respects and (ii) such Transferor shall have delivered to the Trustee a certificate of an authorized officer describing the nature of such breach and the manner in which the relevant representation and warranty has become true and correct. The applicable Transferor shall deposit in the Collection Account in immediately available funds not later than 1:00 P.M., New York City time, on the first Transfer Date 35 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 to the Investor Certificateholders on such Distribution Date in accordance with the terms of each Supplement. If the Trustee or the Investor Certificateholders give notice directing the applicable Transferor to accept a reassignment of the Certificateholders' Interest in the Receivables as provided above, the obligation of such Transferor to accept such reassignment pursuant to this Section and to make the deposit required to be made to the Collection Account as provided in this paragraph shall constitute the sole remedy respecting an event of the type specified in the first sentence of this Section available to the Certificateholders (or the Trustee on behalf of the Certificateholders) or any Series Enhancer. Section 2.07 Covenants of each Transferor. Each Transferor hereby severally covenants that: (a) Receivables Not To Be Evidenced by Promissory Notes. Except in connection with its enforcement or collection of an Account, such Transferor will take no action to cause any Receivable conveyed by it to the Trustee to be evidenced by any instrument (as defined in the UCC) and if any such Receivable is so evidenced as a result of any action taken by such Transferor it shall be deemed to be an Ineligible Receivable in accordance with subsection 2.05(a) and shall be reassigned to such Transferor in accordance with subsection 2.05(b). (b) Security Interests. Except for the conveyances hereunder, such Transferor will not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist (except as permitted by clause (d) of the definition of the term "Eligible Receivable") any Lien on, any Receivable or Participation Interest conveyed by it to the Trust, whether now existing or hereafter created, or any interest therein, and such Transferor shall defend the right, title and interest of the Trustee in, to and under the Receivables and any Participation Interest, whether now existing or hereafter created, against all claims of third parties claiming through or under such Transferor. (c) Transferors' Interest. Except for (i) the conveyances hereunder, in connection with any transaction permitted by Section 7.02 or Section 7.05 and as provided in subsection 2.09(g) and Section 6.03 or (ii) conveyances with respect to which the Rating Agency Condition shall have been satisfied and a Tax Opinion shall have been delivered to the Trustee, such Transferor agrees not to transfer, sell, assign, exchange or otherwise convey or pledge, hypothecate or otherwise grant a security interest in, the Transferors' Interest represented by the Original Transferor Certificate or any Supplemental Certificate and any such attempted transfer, assignment, exchange, conveyance, pledge, hypothecation, grant or sale shall be void. Nothing contained in this subsection 2.07(c) shall be interpreted to prohibit or in any way limit any Transferor's ability to grant to another Person a participation interest in the Transferors' Interest upon the delivery to the Trustee of a Tax Opinion. (d) Delivery of Collections or Recoveries. In the event that such Transferor receives Collections or Recoveries, such Transferor agrees to pay the Servicer all such Collections and Recoveries as soon as practicable after receipt thereof. 36 (e) Notice of Liens. Such Transferor shall notify the Trustee and each Series Enhancer promptly after becoming aware of (except as permitted by clause (d) of the definition of the term "Eligible Receivable") any Lien on any Receivable or Participation Interest conveyed by it to the Trust other than the conveyances hereunder and under any Receivables Purchase Agreement to which such Transferor is a party. (f) Issuer Rate Fees. On or prior to each Determination Date, such Transferor shall notify the Servicer of the amount of Issuer Rate 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 Issuer Rate Fees paid to such Transferor pursuant to the relevant Receivables Purchase Agreement with respect to such Monthly Period. (g) Separate Corporate Existence. Such Transferor shall: (i) Maintain in full effect its existence, rights and franchises as a limited liability company under the laws of the state of its formation or as a corporation under the laws of the state of its incorporation and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement and the applicable Receivables Purchase Agreement and each other instrument or agreement necessary or appropriate to proper administration hereof and to permit and effectuate the transactions contemplated hereby. (ii) Except as provided herein, maintain its own deposit, securities and other account or accounts, separate from those of any Affiliate of such Transferor, with financial institutions. The funds of such Transferor will not be diverted to any other Person or for other than the company use of such Transferor, and, except as may be expressly permitted by this Agreement or the applicable Receivables Purchase Agreement, the funds of such Transferor shall not be commingled with those of any other Person. (iii) Ensure that, to the extent that it shares the same officers or other employees as any of its members or other Affiliates, the salaries of and the expenses related to providing benefits to such officers and other employees shall be fairly allocated among such entities, and each such entity shall bear its fair share of the salary and benefit costs associated with all such common officers and employees. (iv) Ensure that, to the extent that it jointly contracts with any of its members or other Affiliates to do business with vendors or service providers or to share overhead expenses, the costs incurred in so doing shall be allocated fairly among such entities, and each such entity shall bear its fair share of such costs. To the extent that such Transferor contracts or does business with vendors or service providers where the goods and services provided are partially for the benefit of any other Person, the costs incurred in so doing shall be fairly allocated to or among such entities for whose benefit the goods and services are provided, and each such entity shall bear its fair share of such costs. 37 (v) Ensure that all material transactions between such Transferor and any of its Affiliates shall be only on an arm's-length basis and shall not be on terms more favorable to either party than the terms that would be found in a similar transaction involving unrelated third parties. (vi) Maintain a principal executive and administrative office through which its business is conducted and a telephone number separate from those of its members and other Affiliates. To the extent that such Transferor and any of its members or other Affiliates have offices in contiguous space, there shall be fair and appropriate allocation of overhead costs (including rent) among them, and each such entity shall bear its fair share of such expenses. (vii) Conduct its affairs strictly in accordance with its certificate of formation and limited liability company agreement or its certificate of incorporation and bylaws and observe all necessary, appropriate and customary company formalities, including, but not limited to, holding all regular and special members' and directors' meetings appropriate to authorize all action, keeping separate and accurate minutes of such meetings, passing all resolutions or consents necessary to authorize actions taken or to be taken, and maintaining accurate and separate books, records and accounts, including, but not limited to, intercompany transaction accounts. Regular members' and directors' meetings shall be held at least annually. (viii) Ensure that its board of directors shall at all times include at least one Independent Director (for purposes hereof, "Independent Director" shall mean any member of the board of directors of such Transferor that is not and has not at any time been (x) an officer, agent, advisor, consultant, attorney, accountant, employee, member or shareholder of any Affiliate of such Transferor which is not a special purpose entity, (y) a director of any Affiliate of such Transferor other than an independent director of any Affiliate which is a special purpose entity or (z) a member of the immediate family of any of the foregoing). (ix) Ensure that decisions with respect to its business and daily operations shall be independently made by such Transferor (although the officer making any particular decision may also be an officer or director of an Affiliate of such Transferor) and shall not be dictated by an Affiliate of such Transferor. (x) Act solely in its own company name and through its own authorized officers and agents, and no Affiliate of such Transferor shall be appointed to act as agent of such Transferor. Such Transferor shall at all times use its own stationery and business forms and describe itself as a separate legal entity. (xi) Other than as provided in the relevant Revolving Credit Agreement, ensure that no Affiliate of such Transferor shall advance funds or loan money to such Transferor, and no Affiliate of such Transferor will otherwise guaranty debts of such Transferor. 38 (xii) Other than organizational expenses and as expressly provided herein, pay all expenses, indebtedness and other obligations incurred by it using its own funds. (xiii) Not enter into any guaranty, or otherwise become liable, with respect to or hold its assets or creditworthiness out as being available for the payment of any obligation of any Affiliate of such Transferor nor shall such Transferor make any loans to any Person. (xiv) Ensure that any financial reports required of such Transferor shall comply with generally accepted accounting principles and shall be issued separately from, but may be consolidated with, any reports prepared for any of its Affiliates so long as such consolidated reports contain footnotes describing the effect of the transactions between such Transferor and such Affiliate and also state that the assets of such Transferor are not available to pay creditors of the Affiliate. (xv) Ensure that at all times it is adequately capitalized to engage in the transactions contemplated in its certificate of formation and its limited liability company agreement or in its certificate of incorporation and bylaws. (h) RFC II hereby further covenants that: (i) Amendment of the Certificate of Incorporation. RFC II will not amend in any material respect its Certificate of Incorporation without providing each Rating Agency with notice no later than the fifth Business Day prior to such amendment (unless the right to such notice is waived by such Rating Agency) and satisfying the Rating Agency Condition. (ii) Other Indebtedness. RFC II shall not incur any additional debt, unless each Rating Agency is provided with notice no later than the fifth Business Day prior to the incurrence of such additional debt (unless the right to such notice is waived by each Rating Agency) and the Rating Agency Condition is satisfied with respect to the incurrence of such debt. Section 2.08 Additional Covenants of Each Transferor Regarding the Terms of the Accounts. Each Transferor, in its capacity as purchaser of Receivables from any Account Owner (each, a "Receivables Originator") or American Express Credco pursuant to a Receivables Purchase Agreement (if any) to which such Transferor is a party, hereby covenants that such Transferor will at all times enforce the covenants and agreements of such Receivables Originators or American Express Credco in such Receivables Purchase Agreements, including covenants to the effect set forth below only to the extent to which they are enforceable against such Receivables Originators or American Express Credco pursuant to such Receivables Purchase Agreements: (a) Periodic Rate Finance Charges. (i) Except (x) as otherwise required by any Requirements of Law or (y) as is deemed by Centurion Bank, FSB or other Account Owner, as the case may be, to be necessary in order for it to maintain its credit or charge business, as 39 applicable, or a program operated by such credit or charge business, as applicable, on a competitive basis based on a good faith assessment by it of the nature of the competition with respect to such credit or charge business or such program, such Receivables Originator shall not at any time take any action which would have the effect of reducing the Portfolio Yield to a level that could be reasonably expected to cause any Series to experience any Pay-Out Event or Reinvestment Event based on the insufficiency of the Portfolio Yield or any similar test and (ii) except as otherwise required by any Requirements of Law, such Receivables Originator shall not take any action which would have the effect of reducing the Portfolio Yield to be less than the then-current highest Average Rate for any Group. (b) Account Agreements and Guidelines. Subject to compliance with all Requirements of Law and paragraph (a) above, Centurion Bank, FSB or other Account Owner, as the case may be, may change the terms and provisions of the applicable Account Agreements or the applicable Credit Guidelines in any respect (including the calculation of the amount or the timing of charge-offs and the Periodic Rate Finance Charges to be assessed thereon). Notwithstanding the above, unless required by Requirements of Law or as permitted by paragraph (a) above, Centurion Bank, FSB or other Account Owner, as the case may be, will not take any action with respect to the applicable Account Agreements or the applicable Credit Guidelines, which, at the time of such action, Centurion Bank, FSB or other Account Owner, as the case may be, reasonably believes will have a material adverse effect on the rights of the Trust or the Investor Certificateholders. Each Transferor further covenants that it will not enter into any amendment to any Receivables Purchase Agreement to which it is a party, or enter into a new Receivables Purchase Agreement unless the Rating Agency Condition shall have been satisfied. Section 2.09 Addition of Accounts. (a) Required Additional Accounts. (i) If, as of the end of any Monthly Period, the total amount of Principal Receivables and the then outstanding principal amount of any Participation Interests theretofore conveyed to the Trust is less than the Required Minimum Principal Balance on such date, the Transferors shall on or prior to the close of business on the tenth Business Day of the next Monthly Period (the "Required Designation Date"), cause to be designated additional Eligible Accounts to be included as Accounts as of the Required Designation Date or any earlier date in a sufficient amount (or such lesser amount as shall represent all Eligible Accounts then available to the Transferors under the Receivables Purchase Agreements) such that, after giving effect to such addition, the aggregate principal balance of Principal Receivables, plus the then outstanding principal amount of any Participation Interests conveyed to the Trustee as of the close of business on the Addition Date, is at least equal to the Required Minimum Principal Balance on such date. (ii) Optional Participation Interests. In lieu of, or in addition to, causing the designation of Additional Accounts pursuant to clause (i) above, subject to the conditions specified in paragraph (c) below, the Transferors may (but shall not be required to) convey to the Trust participations (including 100% participations) representing undivided interests in a pool of assets primarily consisting of one or more of the following ("Participation Interests"): credit card 40 or other credit account receivables, charge card or other charge account receivables, consumer loan receivables (secured and unsecured), and/or any interests in any of the foregoing, including securities representing or backed by such receivables, and other self-liquidating financial assets including any "Eligible Assets" as such term is defined in Rule 3a-7 under the Investment Company Act (or any successor to such rule) and collections, together with all earnings, revenues, dividends, distributions, income, issues and profits thereon. The addition of Participation Interests in the Trust pursuant to this paragraph (a) or paragraph (b) below shall be effected by a Participation Interest Supplement, dated the applicable Addition Date and entered into pursuant to subsection 13.01(a). (iii) Any Additional Accounts or Participation Interests designated to be included as Trust Assets pursuant to clauses (i) or (ii) above may only be so included if (x) Standard & Poor's shall have notified the Transferors, the Servicer and the Trustee in writing that such addition will not result in a reduction or withdrawal of the then existing rating of any outstanding Series or Class with respect to which Standard & Poor's is a Rating Agency and (y) the applicable conditions specified in paragraph (c) below have been satisfied. (b) Permitted Aggregate Additions. Each Transferor may from time to time, at its sole discretion, subject to the conditions specified in paragraph (c) below, voluntarily cause the designation of additional Eligible Accounts to be included as Accounts and the related Receivables and any Participation Interests to be included as Trust Assets, in either case, as of the applicable Addition Date. (c) Conditions to Aggregate Additions. On the Addition Date with respect to any Aggregate Additions, the Trustee shall acquire the Receivables existing in Aggregate Addition Accounts (and such Aggregate Addition Accounts shall be deemed to be Accounts for purposes of this Agreement) as of the close of business on the applicable Addition Cut-Off Date or shall acquire such Participation Interests, subject to the satisfaction of the following conditions: (i) on or before the eighth Business Day immediately preceding the Addition Date, the applicable Transferor shall have given the Trustee, the Servicer and each Rating Agency notice (unless such notice requirement is otherwise waived) that the Aggregate Addition Accounts or Participation Interests will be included and specifying the applicable Addition Date, Addition Cut-Off Date and Addition Selection Date; (ii) all Aggregate Addition Accounts shall be Eligible Accounts; (iii) the applicable Transferor shall have delivered to the Trustee copies of UCC financing statements covering such Aggregate Addition Accounts, if necessary to perfect the Trustee's interest in the Receivables arising therein; 41 (iv) to the extent required by Section 4.03, the applicable Transferor shall have deposited in the Collection Account all Collections with respect to such Aggregate Addition Accounts since the Addition Cut-Off Date; (v) as of each of the Addition Cut-Off Date and the Addition Date, no Insolvency Event shall have occurred nor shall the transfer of the Receivables arising in the Aggregate Addition Accounts or of the Participation Interests to the Trust have been made in contemplation of the occurrence thereof; (vi) solely with respect to Aggregate Additions designated pursuant to subsection 2.09(b), the Rating Agency Condition shall have been satisfied; (vii) the applicable Transferor shall have delivered to the Trustee an Officer's Certificate of such Transferor, dated the Addition Date, confirming, to the extent applicable, the items set forth in clauses (ii) through (vi) above; (viii) the addition to the Trust of the Receivables arising in the Aggregate Addition Accounts or of the Participation Interests will not result in an Adverse Effect and, in the case of Aggregate Additions, the applicable Transferor shall have delivered to the Trustee an Officer's Certificate of such Transferor, dated the Addition Date, stating that such Transferor reasonably believes that the addition to the Trust of the Receivables arising in the Aggregate Addition Accounts or of the Participation Interests will not have an Adverse Effect; and (ix) the applicable Transferor shall have delivered to the Trustee and each Rating Agency an Opinion of Counsel, dated the Addition Date, in accordance with subsection 13.02(d)(ii) or (iv), as applicable. (d) New Accounts. (i) Each Transferor may from time to time, at its sole discretion, subject to and in compliance with the limitations specified in clause (ii) below and the conditions specified in paragraph (e) below, voluntarily designate newly originated Eligible Accounts to be included as New Accounts. For purposes of this paragraph, Eligible Accounts shall be deemed to include only credit or charge accounts of the same nature as those included as Initial Accounts or which have previously been included in any Aggregate Addition if the Assignment related to such Aggregate Addition expressly provides that such type of credit or charge account is permitted to be designated as a New Account. (ii) Unless and until each Rating Agency otherwise consents in writing, the Transferors shall not be permitted to designate New Accounts and, upon obtaining such consent, the number and balance of New Accounts designated with respect to any period designated by the Rating Agency shall not exceed the amounts designated by the Rating Agency. (iii) With respect to each semi-annual period in which New Accounts are added as Accounts, the failure of the applicable Transferor to deliver an 42 Opinion of Counsel substantially in the form of Exhibit E-2 (or, if the owner of the applicable Accounts has a long-term rating below "A" by Moody's or "AA-" by Standard & Poor's, such Opinion of Counsel shall be delivered quarterly, and if the long-term rating of the owner of the applicable Accounts is not rated by Moody's or Standard & Poor's or, if rated, is not rated at least "A-" by Standard & Poor's and in one of the generic categories of each other Rating Agency which signifies investment grade, such Opinion of Counsel shall be delivered monthly) with respect to the New Accounts included as Accounts shall result in all Receivables arising in the New Accounts to which such failure relates to be deemed to be Ineligible Receivables in accordance with subsection 2.05(a) and all such Receivables shall be reassigned to such Transferor in accordance with subsection 2.05(b). The opinion delivery requirement set forth in the immediately preceding sentence may be modified provided that the Rating Agency Condition is satisfied. (e) Conditions to Addition of New Accounts. On the Addition Date with respect to any New Accounts, at the direction of the Servicer, the Trustee, on behalf of the Trust, shall acquire the Receivables existing in such New Accounts (and such New Accounts shall be deemed to be Accounts for purposes of this Agreement) as of the close of business on the applicable Addition Cut-Off Date, subject to the satisfaction of the following conditions: (i) the New Accounts shall all be Eligible Accounts; (ii) the applicable Transferor shall have delivered to the Trustee copies of UCC financing statements covering such New Accounts, if necessary to perfect the Trustee's interest in the Receivables arising therein; (iii) to the extent required by Section 4.03, the applicable Transferor shall have deposited in the Collection Account all Collections with respect to such New Accounts since the Addition Cut-Off Date; (iv) as of each of the Addition Cut-Off Date and the Addition Date, no Insolvency Event shall have occurred nor shall the transfer to the Trustee of the Receivables arising in the New Accounts have been made in contemplation of the occurrence thereof; and (v) the addition of the Receivables arising in the New Accounts to the Trust will not result in the occurrence of a Pay-Out Event or a Reinvestment Event. (f) Representations and Warranties. Each Transferor conveying any Receivables in Additional Accounts or Participation Interests hereby represents and warrants to the Trust and the Trustee as of the related Addition Date as to the matters set forth in clauses (v) and (viii) of subsection 2.09(c) above and that, in the case of Additional Accounts, the list delivered pursuant to subsection 2.09(h) below is, as of the applicable Addition Cut-Off Date, true and complete in all material respects. 43 (g) Additional Transferors. A Transferor may designate Affiliates of such Transferor to be included as Transferors ("Additional Transferors") under this Agreement in an amendment hereto pursuant to subsection 13.01(a) and, in connection with such designation, such Transferor shall (i) if the Original Transferor Certificate is certificated, surrender the Original Transferor Certificate to the Trustee in exchange for a newly issued Original Transferor Certificate modified to reflect such Additional Transferor's interest in the Transferors' Interest or (ii) if the Original Transferor Certificate is uncertificated, direct the Trustee to register in the books and records of the Trust such Additional Transferor's interest in the Transferors' Interest; provided, however, that prior to any such designation of an Additional Transferor, the conditions set forth in clauses (iv) and (vi) of subsection 6.03(b) shall have been satisfied with respect thereto. (h) Delivery of Documents. In the case of the designation of Additional Accounts, the Transferor 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 date such file or list is required to be delivered pursuant to Section 2.01 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"), on the related Addition Date. In addition, in the case of the designation of New Accounts, the Transferor designating such Accounts shall deliver to the Trustee on the Addition Date an Officer's Certificate of such Transferor confirming, to the extent applicable, the items set forth in clauses (i) through (v) of subsection 2.09(e) above. Section 2.10 Removal of Accounts and Participation Interests. On any day of any Monthly Period, each Transferor 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 monies due or to become due and all amounts received thereafter with respect thereto and all proceeds thereof in or with respect to the Accounts specified herein (the "Removed Accounts") or Participation Interests conveyed to the Trust by such Transferor (the "Removed Participation Interests") (unless otherwise set forth in the applicable Participation Interest Supplement or Series Supplement), and designated for removal by the Transferor, upon satisfaction of the conditions in clauses (i), (iii), (iv) and (v) below: (i) on or before the eighth Business Day immediately preceding the Removal Date, such Transferor shall have given the Trustee, the Servicer, the Rating Agency and each Series Enhancer notice (unless such notice requirement is otherwise waived) of such removal and specifying the date for removal of the Removed Accounts and removed Participation Interests (the "Removal Date"); (ii) on or prior to the date that is five Business Days after the Removal Date, such Transferor shall amend 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 date notice of the Removal Date is given, its account number and the aggregate amount of Receivables outstanding in such Account; 44 (iii) such Transferor 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) the Rating Agency Condition shall have been satisfied with respect to the removal of the Removed Accounts and removed Participation Interests; (v) such Transferor shall have delivered to the Trustee an Officer's Certificate of such Transferor, dated the Removal Date, to the effect that such Transferor reasonably believes that (a) such removal will not have an Adverse Effect, (b) such removal will not result in the occurrence of a Pay-Out Event or a Reinvestment Event, and (c) no selection procedures believed by such Transferor to be materially adverse to, or materially beneficial to, the interests of the Investor Certificateholders have been used in selecting the Removed Accounts from among any pool of Accounts of a similar type. In addition to the terms and conditions contained in clauses (i)-(v) above, the Transferors' right to require the reassignment to them or their designees of all the Trustee's right, title and interest in, to and under the Receivables in Removed Accounts and Removed Participation Interests, shall be subject to the following restrictions: (a) Except for Removed Accounts described in clause (b) below, there shall be no more than one Removal Date in any Monthly Period and the Accounts to be designated as Removed Accounts shall be selected at random by the applicable Transferor; and (b) A Transferor may designate Removed Accounts as provided in and subject to the terms and conditions contained in this Section 2.10 without being subject to the restrictions set forth in clause (a) above if the Removed Accounts are Accounts (i) originated or acquired under a specific affinity agreement, private label agreement, merchant agreement, co-branding agreement or other program which is co-owned, operated or promoted, provided that such agreement has terminated in accordance with the terms therein or (ii) being removed due to other circumstances caused by requirements of agreements in which the right to such Removed Accounts or control thereof is determined by a party or parties to such agreements other than the Transferors, any Affiliate of the Transferors or any agent of the Transferors. Upon satisfaction of the above conditions, the Trustee shall execute and deliver to such Transferor 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 Transferor 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 Removed Participation Interests, all monies due and to become due and all amounts received with respect thereto and all proceeds thereof and any Insurance Proceeds relating thereto. The Trustee may conclusively rely on the Officer's Certificate delivered pursuant to this Section 2.10 and shall have no duty to make inquiries with regard to the matters set forth therein and shall incur no liability in so relying. 45 In addition to the foregoing, on the date when an Account becomes a Defaulted Account, the Trustee shall automatically and without further action or consideration transfer, set over and otherwise convey to the applicable Transferor with respect to such Account, without recourse, representation or warranty, all right, title and interest of the Trustee and the Trust in and to the Receivables in such Defaulted 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 Defaulted Account shall be applied as provided herein. Section 2.11 Account Allocations. In the event that any Transferor is unable for any reason to transfer Receivables to the Trustee in accordance with the provisions of this Agreement, including by reason of the application of the provisions of Section 9.01 or any order of any Governmental Authority (a "Transfer Restriction Event"), then, in any such event, (a) such Transferor agrees (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 Transferor's inability to transfer Receivables (up to an aggregate amount equal to the amount of Receivables transferred to the Trust by such Transferor in the Trust on such date), (b) such Transferor 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 Transferor's inability to transfer Receivables to the Trust which are written off as uncollectible in accordance with this Agreement shall continue to be allocated in accordance with Article IV and the terms of each Supplement. For the purpose of the immediately preceding sentence, such Transferor 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 the Trust as of the date of the occurrence of such event. If such Transferor and the Servicer are unable pursuant to any Requirements of Law to allocate Collections as described above, such Transferor 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 2.12 Discount Option. (a) The Transferors shall have the option to designate at any time and from time to time a percentage or percentages, which may be a fixed percentage or a variable percentage (the "Discount Percentage"), of all or any specified portion of Principal Receivables created after the Discount Option Date to be treated as Finance Charge Receivables ("Discount Option Receivables"). The Transferors shall also have the option of increasing, reducing or withdrawing the Discount Percentage, at any time and from time to time, on and after such 46 Discount Option Date. The Transferors shall provide to the Servicer, the Trustee and any Rating Agency 30 days' prior written notice of the Discount Option Date and any such designation or increase, reduction or withdrawal, and such designation, increase, reduction or withdrawal shall become effective on the Discount Option Date specified therefor upon satisfaction of the following conditions: (i) each Transferor shall have delivered to the Trustee and any Series Enhancer entitled thereto (if any) an Officer's Certificate of such Transferor certifying that, based upon facts known to such Transferor at such time, such designation, increase, reduction or withdrawal will not, at the time of its occurrence, cause a Pay-Out Event or a Reinvestment Event, or an event that, with notice or the lapse of time or both, would constitute a Pay-Out Event or a Reinvestment Event, to occur with respect to any Series; (ii) the Rating Agency Condition shall have been satisfied with respect to such designation, increase, reduction or withdrawal; and (iii) only in connection with a reduction or withdrawal of the Discount Percentage, the Transferors shall have caused an Opinion of Counsel to the effect described in clause (a) of the definition of "Tax Opinion" in Section 1.01 to have been delivered to the Trustee. Notwithstanding any of the foregoing conditions to the designation of the Discount Percentage, beginning on the Substitution Date, the initial Discount Percentage shall be 0.0%, and any Collections with respect to Discount Option Receivables in effect after the close of business on March 26, 2004 shall be treated as Collections of Principal Receivables. (b) After any Discount Option Date, Discount Option Receivable Collections (calculated using the Discount Percentage specified on such Discount Option Date) shall be treated as Collections of Finance Charge Receivables. Section 2.13 Premium Option. (a) The Transferors shall have the option to designate at any time and from time to time a percentage or percentages, which may be a fixed percentage or a variable percentage (the "Premium Percentage"), of all or any specified portion of Finance Charge Receivables created on and after the Premium Option Date to be treated as Principal Receivables ("Premium Option Receivables"). The Transferors shall also have the option of increasing, reducing or withdrawing the Premium Percentage, at any time and from time to time, on and after such Premium Option Date. The Transferors shall provide to the Servicer, the Trustee and any Rating Agency 30 days' prior written notice of the Premium Option Date and any such designation or increase, reduction or withdrawal, and such designation, increase, reduction or withdrawal shall become effective on the Premium Option Date specified therefor upon satisfaction of the following conditions: (i) each Transferor shall have delivered to the Trustee and any Series Enhancer entitled thereto (if any) an Officer's Certificate of such Transferor certifying that, based upon facts known to such Transferor at such time, such 47 designation, increase, reduction or withdrawal will not, at the time of its occurrence, cause a Pay-Out Event or a Reinvestment Event, or an event that, with notice or the lapse of time or both, would constitute a Pay-Out Event or a Reinvestment Event, to occur with respect to any Series; (ii) the Rating Agency Condition shall have been satisfied with respect to such designation, increase, reduction or withdrawal; and (iii) only in connection with the designation or any increase of the Premium Percentage, the Transferors shall have caused an Opinion of Counsel to the effect described in clause (a) of the definition of "Tax Opinion" in Section 1.01 to have been delivered to the Trustee. (b) After any Premium Option Date, Premium Option Receivable Collections (calculated using the Premium Percentage specified on such Premium Option Date) shall be treated as Collections of Principal Receivables. [END OF ARTICLE II] 48 ARTICLE III ADMINISTRATION AND SERVICING OF RECEIVABLES Section 3.01 Acceptance of Appointment and Other Matters Relating to the Servicer. (a) TRS has agreed to act, and has acted, as the Servicer under the Original Pooling Agreement and the Amended PSA, and TRS hereby agrees to act as the Servicer under this Agreement. The Certificateholders by their acceptance of the Certificates shall be deemed to consent to TRS acting as Servicer. (b) As agent for each Transferor and the Trust, the Servicer shall service and administer the Receivables and any Participation Interests, shall collect and deposit into the Collection Account payments due under the Receivables and any Participation Interests and shall charge-off as uncollectible Receivables, all in accordance with its customary and usual servicing procedures for servicing credit or charge receivables comparable to the Receivables and in accordance with the applicable Credit Guidelines. As agent for each Transferor and the Trust, the Servicer shall have full power and authority, acting alone or through any party properly designated by it hereunder, to do any and all things in connection with such servicing and administration which it may deem necessary or desirable. Without limiting the generality of the foregoing and subject to Section 10.01, the Servicer or its designee is hereby authorized and empowered, unless such power is revoked by the Trustee on account of the occurrence of a Servicer Default pursuant to Section 10.01, (i) to instruct the Trustee to make withdrawals and payments from the Collection Account, the Special Funding Account and any Series Account, as set forth in this Agreement or any Supplement, (ii) to take any action required or permitted under any Series Enhancement, as set forth in this Agreement or any Supplement, (iii) to execute and deliver, on behalf of the Trust for the benefit of the Certificateholders, any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Receivables and, after the delinquency of any Receivable and to the extent permitted under and in compliance with applicable Requirements of Law, to commence collection proceedings with respect to such Receivables and (iv) at the expense of the Transferors, 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 or reporting requirements or other laws or regulations. The Trustee shall furnish the Servicer with any documents necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder. (c) The Servicer shall not, and no Successor Servicer shall, 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 or such Successor Servicer, as the case may be, in connection with servicing other comparable receivables. (d) The Servicer shall comply with and perform its servicing obligations with respect to the Accounts and Receivables in accordance with the Account Agreements relating to 49 the Accounts and the applicable Credit Guidelines and all applicable rules and regulations affecting the Accounts and the Receivables, 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 servicing activities hereunder including all expenses related to enforcement of the Receivables, fees and disbursements of the Trustee (including the reasonable fees and expenses of its outside counsel) and independent accountants for the Servicer. 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 the Servicing Fee specified in any Supplement. Section 3.03 Representations, Warranties and Covenants of the Servicer. TRS, as initial Servicer, hereby makes, and any Successor Servicer by its appointment hereunder shall make, with respect to itself, on each Closing Date (and on the date of any such appointment), the following representations, warranties and covenants on which the Trustee shall be deemed to have relied in accepting the Receivables in trust and in authenticating the Certificates: (a) Organization and Good Standing. The Servicer is a corporation or other legal entity validly existing under the applicable law of the jurisdiction of its organization or incorporation and has, in all material respects, full power and authority to own its properties and conduct its servicing business as presently owned or conducted, and to execute, deliver and perform its obligations under this Agreement and each Supplement. (b) Due Qualification. The Servicer is duly qualified to do business and is in good standing as a foreign corporation or other foreign entity (or is exempt from such requirements) and has obtained all necessary licenses and approvals in each jurisdiction in which the servicing of the Receivables and any Participation Interests as required by this Agreement requires such qualification except where the failure to so qualify or obtain licenses or approvals would not have a material adverse effect on its ability to perform its obligations as Servicer under this Agreement. (c) Due Authorization. The execution, delivery, and performance by the Servicer of this Agreement and 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 action on the part 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 such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally from time to time in effect or by general principles of equity. (e) No Conflict. The execution and delivery of this Agreement and each Supplement by the Servicer, and the performance by the Servicer of the transactions contemplated by this Agreement and each Supplement and the fulfillment by the Servicer of the 50 terms hereof and thereof applicable to the Servicer, will not conflict with, violate or result in any breach of any of the material terms and provisions of, or constitute (with or without notice or lapse of time or both) a material default under, any indenture, contract, agreement, mortgage, deed of trust or other instrument to which the Servicer is a party or by which it or its properties are bound. (f) No Violation. The execution and delivery of this Agreement and each Supplement by the Servicer, 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 applicable to the Servicer will not conflict with or violate any Requirements of Law applicable to the Servicer. (g) No Proceedings. There are no proceedings or investigations pending or, to the best knowledge of the Servicer, threatened against the Servicer before any Governmental Authority seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any Supplement or seeking any determination or ruling that, in the reasonable judgment of the Servicer, would materially and adversely affect the performance by the Servicer of its obligations under this Agreement or any Supplement. (h) Compliance with Requirements of Law. The Servicer shall duly satisfy all obligations on its part to be fulfilled under or in connection with each Receivable and the related Account, if any, will maintain in effect all qualifications required under Requirements of Law in order to service properly each Receivable and the related Account, if any, and will comply in all material respects with all other Requirements of Law in connection with servicing each Receivable and the related Account the failure to comply with which would have an Adverse Effect. (i) No Rescission or Cancellation. The Servicer shall not authorize any rescission or cancellation of any Receivable except in accordance with the applicable Credit Guidelines or as ordered by a court of competent jurisdiction or other Governmental Authority. (j) Protection of Rights. The Servicer shall take no action which, nor omit to take any action the omission of which, would impair the rights of the Trustee in any Receivable, if any, nor shall it reschedule, revise or defer payments due on any Receivable except in accordance with the applicable Credit Guidelines, nor shall it sell any assets in the Trust except as provided in this Agreement or a related Supplement. (k) Receivables Not To Be Evidenced by Instruments. Except in connection with its enforcement or collection of an Account, the Servicer will take no action to cause any Receivable to be evidenced by any instrument (as defined in the UCC) and if any Receivable is so evidenced as a result of the Servicer's action, it shall be assigned to the Servicer as provided in this Section. (l) All Consents. All authorizations, consents, orders or approvals of or registrations or declarations with any Governmental Authority required to be obtained, effected or given by the Servicer in connection with the execution and delivery of this Agreement and each Supplement by the Servicer and the performance of the transactions contemplated by this 51 Agreement and each Supplement by the Servicer, have been duly obtained, effected or given and are in full force and effect. In the event (x) any of the representations, warranties or covenants of the Servicer contained in subsection 3.03(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 Trustee's interest in such Receivable (which determination shall be made without regard to whether funds are then available to any Investor Certificateholders pursuant to any Series 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 and the Transferors) of the earlier to occur of the discovery of such event by the Servicer, or receipt by the Servicer of notice of such event given by the Trustee or a Transferor, or (y) as provided in subsection 3.03(k) with respect to any Receivable, all Receivables in the Account or Accounts to which such event relates shall be assigned and transferred to the Servicer on the terms and conditions set forth below. 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. Upon each such assignment to the Servicer, the Trustee, on behalf of the Trust, shall automatically and without further action sell, transfer, assign, set over and otherwise convey to the Servicer, without recourse, representation or warranty, all right, title and interest of the Trustee and the Trust in and to such Receivables, all monies 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 and take such other actions as shall be reasonably requested by the Servicer to effect the conveyance of any such Receivables pursuant to this Section but only upon receipt of an Officer's Certificate of the Servicer that states that all conditions set forth in this section have been satisfied. The obligation of the Servicer to accept assignment of 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 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. For as long as deposits of Collections are required to be made daily by the Servicer pursuant to subsection 4.03(a), on each Business Day, the Servicer shall make or cause to be made available at the office of the Servicer for inspection by the Trustee or any Transferor 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 each Account 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 and the Transferors at the office of the Servicer on any Business Day any computer programs necessary to make such identification. The Trustee and the Transferors shall enter into such confidentiality agreements as the Servicer shall deem necessary to protect its interests. 52 (b) Monthly Servicer's Certificate. Not later than the second Business Day preceding each Distribution Date, the Servicer shall, with respect to each outstanding Series, deliver to the Trustee, the Transferors and each Rating Agency a certificate of a Servicing Officer in substantially the form set forth in the related Supplement. Section 3.05 Annual Certificate of Servicer. The Servicer shall deliver to the Trustee, the Transferors and each Rating Agency on or before the 90th day following the end of each fiscal year, beginning with the fiscal year ending December 31, 2006, the statement of compliance required under Item 1123 of Regulation AB with respect to such fiscal year, which statement will be in the form of an Officer's Certificate of the Servicer (with appropriate insertions) to the effect that (a) a review of the activities of the Servicer during such fiscal year and of its performance under this Agreement was made under the supervision of the officer signing such certificate and (b) to the best of such officer's knowledge, based on such review, the Servicer has fulfilled all its obligations under this Agreement in all material respects throughout such fiscal year or, if there has been a failure to fulfill any such obligation in any material respect, specifying each such failure known to such officer and the nature and status thereof; provided, however, that on or before March 31, 2006, the Servicer shall cause to be delivered the Officer's Certificate of the Servicer (with appropriate insertions) as was required to be delivered pursuant to, and in accordance with, Section 3.05 of the Amended PSA. Section 3.06 Annual Servicing Report of Independent Public Accountants; Copies of Reports Available. (a) On or before the 90th day following the end of each fiscal year, beginning with the fiscal year ending December 31, 2006, the Servicer shall cause a firm of nationally recognized independent public accountants (who may also render other services to the Servicer or a Transferor) to furnish to the Trustee, the Servicer, the Transferors and each Rating Agency each attestation report on assessments of compliance with the Servicing Criteria with respect to the Servicer or any affiliate thereof during the related fiscal year delivered by such accountants pursuant to Rule 13(a)-18 or Rule 15(d)-18 of the Exchange Act and Item 1122 of Regulation AB; provided, however, that on or before March 31, 2006, the Servicer shall cause to be furnished the reports as were required to be delivered pursuant to, and in accordance with, Section 3.06 of the Amended PSA. (b) A copy of each certificate and report provided pursuant to subsection 3.04(b), or Section 3.05 or 3.06 may be obtained by any Investor Certificateholder or Certificate Owner by a request in writing to the Trustee addressed to the Corporate Trust Office. Section 3.07 Tax Treatment. Except as otherwise specified in a Supplement with respect to a particular Series, the Transferors 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, (i) the Investor Certificates of each Series which are characterized as indebtedness at the time of their issuance will qualify as indebtedness secured by the Receivables and (ii) the Trust shall not be treated as an association or publicly traded partnership taxable as a corporation. Each of the Transferors, by entering into this Agreement, each of the Holders of the Transferor Certificates, by acquisition of its interest in the Transferors' Interest, and each Certificateholder, by the acceptance of any such Certificate (and each Certificate Owner, by its 53 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. Each Holder of such Investor Certificate agrees that it will cause any Certificate Owner acquiring an interest in a Certificate through it to comply with this Agreement as to treatment as indebtedness under applicable tax law, as described in this Section 3.07. Subject to Section 11.11, the Trustee shall treat the Trust as a security arrangement for federal income tax purposes and shall not file any federal income tax returns or obtain any federal employer identification number for the Trust. The provisions of this Agreement shall be construed in furtherance of the foregoing intended tax treatment. Section 3.08 Notices to American Express Entities. In the event that TRS is no longer acting as Servicer, any Successor Servicer also shall deliver or make available to Centurion Bank, FSB and TRS each certificate and report required to be provided thereafter pursuant to subsection 3.04(b) and Sections 3.05 and 3.06, as well as all information reasonably requested by Centurion Bank, FSB or TRS. Section 3.09 Adjustments. (a) If the Servicer adjusts downward the amount of any Receivable because of a rebate, refund, unauthorized charge or billing error to an account Obligor, because such Receivable was created in respect of merchandise which was refused or returned by an account Obligor, or because the Servicer or applicable Account Owner charges off as uncollectible Small Balances, or if the Servicer otherwise adjusts downward the amount of any Receivable without receiving Collections therefor or charging off such amount as uncollectible, then, in any such case (other than cases resulting from Servicer error), the amount of Principal Receivables used to calculate the Transferor Amount, the Transferors' Interest, and (unless otherwise specified) any other amount required herein or in any Supplement to be calculated by reference to the amount of Principal Receivables, will be reduced by the amount of the adjustment. Similarly, the amount of Principal Receivables used to calculate the Transferor Amount and (unless otherwise specified) any other amount required herein or in any Supplement to be calculated by reference to the amount of Principal Receivables will be reduced by the amount of the Trust's percentage of any Receivable which was discovered as having been created through a fraudulent or counterfeit charge or with respect to which the covenant contained in Section 2.07(b) was breached. Any adjustment required pursuant to either of the two 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 Transferor Amount, the Transferor Amount would be less than the Required Transferor Amount, not later than 1:00 P.M., New York City time, on the Distribution Date following the Monthly Period in which such adjustment obligation arises, the Transferors shall make a deposit into the Special Funding Account in immediately available funds in an amount equal to the amount by which the Transferor Amount would be less than the Required Transferor Amount, due to adjustments with respect to Receivables conveyed by such Transferors (up to the amount of such Principal Receivables). (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 54 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. Notwithstanding the first two sentences of this paragraph, adjustments made pursuant to this paragraph shall not require any change in any report previously delivered pursuant to subsection 3.04(a) or (b). Section 3.10 Recoveries. If at any time the Servicer cannot identify the Recoveries that relate to specific Defaulted Receivables, then the Servicer shall reasonably estimate, on or prior to each Determination Date, the amount of Recoveries to be attributed to such Defaulted Receivables. Section 3.11 Reports to the Commission. The Servicer shall, on behalf of the Trust and at the expense of the Transferors, cause to be filed with the Commission any periodic reports required to be filed under the provisions of the Exchange Act, and the rules and regulations of the Commission thereunder. The Transferors shall, at their expense, cooperate in any reasonable request of the Servicer in connection with such filings. [END OF ARTICLE III] 55 ARTICLE IV RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION AND APPLICATION OF 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 the Investor Certificates of such Series at the times and in the amounts specified in the related Supplement, the portion of Collections allocable to Investor Certificateholders of such Series pursuant to this Agreement and such Supplement, funds on deposit in the Collection Account and the Special Funding Account allocable to Certificateholders of 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, except as specifically set forth in the Supplement with respect thereto, 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 Transferor Certificates or, as the case may be, the uncertificated interests in the Transferors' Interest 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 any Supplement to be paid to the Transferors on behalf of all holders of the Transferor Certificates (the "Transferors' Interest"); provided, however, that if the Transferors elect to have their interests in the Transferors' Interest be uncertificated as provided in Section 6.01 hereof, then such uncertificated interests shall represent the Transferors' Interest; provided further, however, that the Transferor Certificates or, as the case may be, the uncertificated interests in the Transferors' Interest shall not represent any interest in the Collection Account, any Series Account or any Series Enhancement, except as specifically provided in this Agreement or any Supplement. Section 4.02 Establishment of Collection Account and Special 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 Trustee shall possess all right, title and interest in all monies, instruments, securities, documents, certificates of deposit and other property on deposit from time to time in the Collection Account and in all proceeds, earnings, income, revenue, dividends and distributions thereof for the benefit of the Certificateholders. 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 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 10 Business Days (or such longer period, not to exceed 30 calendar days, as to which each Rating Agency may consent) establish a new Collection Account meeting the 56 conditions specified above, transfer any monies, documents, instruments, investment property, financial assets, certificates of deposit and other property to such new Collection Account and from the date such new Collection Account is established, it shall be the "Collection Account." Pursuant to the authority granted to the Servicer in subsection 3.01(b), the Servicer shall have the power, revocable by the Trustee, to make withdrawals and payments from the Collection Account and to instruct the Trustee to make withdrawals and payments from the Collection Account for the purposes of carrying out the Servicer's or the Trustee's duties hereunder. The Servicer shall reduce deposits into the Collection Account payable by a Transferor on any Deposit Date to the extent that such Transferor is entitled to receive funds from the Collection Account on such Deposit Date, but only to the extent such reduction would not reduce the Transferor Amount to an amount less than the Required Transferor Amount. Funds on deposit in the Collection Account (other than investment earnings and amounts deposited pursuant to Sections 2.06, 9.01, 10.01 or 12.02) shall at the written 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 pursuant to Section 4.07. Investments of funds representing Collections collected during any Monthly Period shall be invested in Eligible Investments that will mature so that such funds will be available no later than the close of business on the next Transfer Date following such Monthly Period in amounts sufficient to the extent of such funds to make the required distributions on such Distribution Date. No such Eligible Investment shall be disposed of prior to its maturity; provided, however, that the Trustee shall sell, liquidate or dispose of any such Eligible Investment before its maturity, if, prior to the maturity of such Eligible Investment, a default occurs in the payment of principal, interest or any other amount with respect to such Eligible Investment; provided further, however, that the Servicer shall deliver prompt written notice to the Trustee of any such default; and provided further that, subject to Section 11.01, the Trustee will not in any way be held liable by reason of any insufficiency in such Collection Account resulting from any loss on any Eligible Investment included therein except for losses attributable to the Trustee's failure to make payments on such Eligible Investments issued by the Trustee, in its commercial capacity, in accordance with their terms. Unless directed by the Servicer, funds deposited in the Collection Account on a Transfer Date with respect to the immediately succeeding 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 the Transferors, except as otherwise specified in any Supplement. The Trustee shall bear no responsibility or liability for any losses resulting from investment or reinvestment of any funds in accordance with this Section 4.02. 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 "Special Funding Account"). The Trustee shall possess all right, title and interest in all monies, instruments, investment property, financial assets, documents, certificates of deposit and other property on deposit from time to time in the Special Funding Account and in all proceeds, dividends distributions, earnings, income and revenue thereof for the benefit of the Certificateholders. The Special 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 57 no right to otherwise deduct from, any funds held in the Special Funding Account for any amount owed to it by the Trustee, the Trust, any Certificateholder or any Series Enhancer. If, at any time, the Special Funding Account ceases to be an Eligible Deposit Account, the Trustee (or the Servicer on its behalf) shall within 10 Business Days (or such longer period, not to exceed 30 calendar days, as to which each Rating Agency may consent) establish a new Special Funding Account meeting the conditions specified above, transfer any monies, documents, instruments, securities, certificates of deposit and other property to such new Special Funding Account and from the date such new Special Funding Account is established, it shall be the "Special Funding Account." Funds on deposit in the Special Funding Account shall at the written 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 pursuant to Section 4.07. Funds on deposit in the Special Funding Account on any Distribution Date will be invested in Eligible Investments that will mature so that such funds will be available on the next Distribution Date. No such Eligible Investment shall be disposed of prior to its maturity; provided, however, that the Trustee shall sell, liquidate or dispose of any such Eligible Investment before its maturity, if, prior to the maturity of such Eligible Investment, a default occurs in the payment of principal, interest or any other amount with respect to such Eligible Investment and the Servicer has delivered written notice to the Trustee of such default; provided further, however, that the Servicer shall deliver prompt written notice to the Trustee of any such default; and provided further that, subject to Section 11.01, the Trustee will not in any way be held liable by reason of any insufficiency in such Special Funding Account resulting from any loss on any Eligible Investment included therein except for losses attributable to the Trustee's failure to make payments on such Eligible Investments issued by the Trustee, in its commercial capacity, in accordance with their terms. Unless directed by the Servicer, funds deposited in the Special Funding Account on a Transfer Date with respect to the immediately succeeding 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 Special Funding Account shall be treated as Collections of Finance Charge Receivables with respect to the last day of the related Monthly Period except as otherwise specified in the related Supplement. On each Business Day on which funds are on deposit in the Special Funding Account and on which no Series is in an Accumulation Period or Amortization Period, the Servicer shall determine the amount (if any) by which the Transferor Amount exceeds the Required Transferor Amount on such date and the Transferors may instruct the Trustee to withdraw any such excess from the Special Funding Account and pay such amount to the Holders of the Transferor Certificates; provided, however, that, (i) if an Accumulation Period or Amortization Period has commenced and is continuing with respect to one or more outstanding Series, any funds on deposit in the Special 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 each Supplement to the extent that doing so would not cause the Transferor Amount to be less than the Required Transferor Amount and (ii) if, at any time, the Transferors determine that, by decreasing the amount on deposit in the Special Funding Account, any Series then outstanding which is issued pursuant to a Supplement which permits partial amortization as provided in this Section 4.02 may be prevented from experiencing a Pay-Out Event based upon insufficiency of yield, the Servicer shall on the next succeeding Distribution Date instruct the Trustee in writing to apply funds on deposit in the Special Funding Account as "Partial 58 Amortization SFA Amounts" to such Series to reduce the Invested Amount thereof (or, if more than one such Series, to each such Series on a pro rata basis according to the Invested Amounts of such Series) in an amount such that the Special Funding Account is reduced to an amount that, based on the then current investment yield, (i) would not cause a yield insufficiency Pay-Out Event to occur for any Series that is then outstanding and (ii) would not cause the Transferor Amount to be less than the Required Transferor Amount. In addition, the Servicer shall instruct the Trustee in writing to apply funds on deposit in the Special Funding Account to each such Series on such pro rata basis as Partial Amortization SFA Amounts on any Distribution Date to the extent (subject to the limitations specified in the preceding sentence) the Transferors so determine in written instructions provided to the Servicer on or prior to the Determination Date preceding such Distribution Date. 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 as promptly as possible after the Date of Processing of such Collections, but in no event later than the second Business Day following the Date of Processing. Subject to the express terms of any Supplement, but notwithstanding anything else in this Agreement to the contrary, for so long as TRS or an Affiliate of TRS remains the Servicer and (i) maintains a short-term credit rating (which may be an implied rating) of not less than A-1 by Standard and Poor's and P-1 by Moody's (or such other rating below A-1 or P-1, as the case may be, which is satisfactory to such Rating Agency), (ii) obtains a guarantee with respect to the Servicer's deposit and payment obligations hereunder pursuant to a guaranty in form and substance acceptable to each Rating Agency provided the guarantor maintains a short-term credit rating of P-1 by Moody's and of A-1 by Standard & Poor's (or such other rating below P-1 or A-1, as the case may be, which is satisfactory to such Rating Agency), or (iii) the Rating Agency Condition will be satisfied despite the Servicer's inability to satisfy the rating requirement specified in clause (i) and for five Business Days following any reduction of any such rating or failure to satisfy the conditions specified in clause (ii) or (iii), 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 1:00 P.M., New York City time, on the Transfer Date following the Monthly Period with respect to which such deposit relates. 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 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 and (ii) if at any time prior to such Distribution Date the amount of Collections deposited or to be deposited in the Collection Account exceeds the amount required to be deposited pursuant to clause (i) above, the Servicer, on a daily or monthly basis, as directed by the Transferors, (x) will distribute to the Transferors any Collections not required to be so deposited as such Collections are collected or (y) will withdraw such excess from the Collection Account and distribute such excess to the Transferors. Subject to the immediately preceding sentence, the Servicer may retain its 59 Servicing Fee with respect to a Series and shall not be required to deposit it in the Collection Account. (b) Collections of Finance Charge Receivables, Principal Receivables and Defaulted Receivables will be allocated to each Series on the basis of the Series Allocable Finance Charge Collections of such Series, Series Allocable Principal Collections of such Series and Series Allocable Defaulted Amount of such Series and amounts so allocated to any Series will not, except as specified in the related Supplement, be available to the Investor Certificateholders of any other Series. Allocations of the foregoing amounts between the Certificateholders' Interest and the Transferors' Interest, among the Series and among the Classes in any Series, shall be set forth in the related Supplement or Supplements. Section 4.04 Shared Principal Collections. On each Distribution Date, (a) the Servicer shall allocate Shared Principal Collections (as described below) to each Principal Sharing Series pro rata, in proportion to the Principal Shortfalls, if any, with respect to such Series, and (b) the Servicer shall withdraw from the Collection Account and pay to the Holders of the Transferor Certificates (i) an amount equal to the excess, if any, of (x) the aggregate amount for all outstanding Series of Collections of Principal Receivables which the related Supplements specify are to be treated as "Shared Principal Collections" for such Distribution Date over (y) the aggregate amount for all outstanding Series which the related Supplements specify are "Principal Shortfalls" for such Series and for such Distribution Date and, without duplication, (ii) the aggregate amount for all outstanding Series of that portion of Series Allocable Principal Collections which the related Supplements specify are to be allocated and paid to the Holders of the Transferor Certificates with respect to such Distribution Date; provided, however, that, in the case of clauses (i) and (ii), if the Transferor Amount as of such Distribution Date (determined after giving effect to the Trust's percentage of any Principal Receivables or Participation Interests transferred to the Trust on such date) is less than the Required Transferor Amount, the Servicer will not distribute to the Holders of the Transferor Certificates any such amounts that otherwise would be distributed to the Holders of the Transferor Certificates, but shall deposit such funds in the Special Funding Account. The Transferors may, at their option, instruct the Trustee to deposit Shared Principal Collections which are otherwise payable to the Holders of the Transferor Certificates pursuant to the provisions set forth above into the Special Funding Account. Section 4.05 Allocation of Trust Assets to Series or Groups. To the extent so provided in the Supplement for any Series or in an amendment to this Agreement executed pursuant to subsection 13.01(a), Receivables conveyed to the Trust pursuant to Section 2.01 and Receivables or Participation Interests conveyed to the Trust pursuant to Section 2.09 or any Participation Interest Supplement, and all Collections received with respect thereto may be allocated or applied in whole or in part to one or more Series or Groups as may be provided in such Supplement or amendment; provided, however, that any such allocation or application shall be effective only upon satisfaction of the following conditions: (i) on or before the fifth Business Day immediately preceding such allocation, the Servicer shall have given the Transferors, the Trustee and each Rating Agency written notice of such allocation; 60 (ii) the Rating Agency Condition shall have been satisfied with respect to such allocation; and (iii) the Servicer shall have delivered to the Trustee an Officer's Certificate of the Servicer, dated the date of such allocation, to the effect that the Servicer reasonably believes that such allocation will not have an Adverse Effect. Any such Supplement or amendment may provide that (i) such allocation to one or more particular Series or Groups may terminate upon the occurrence of certain events specified therein and (ii) that upon the occurrence of any such event, such assets and any Collections with respect thereto, shall be reallocated to other Series or Groups or to all Series, all as shall be provided in such Supplement or amendment. Section 4.06 Issuer Rate Fees. Each Transferor shall be permitted to transfer to the Trust for inclusion as Trust Assets all or a portion of any interchange, merchant discount, issuer rate or other fees or charges derived from transactions relating to the Accounts. All of such interchange, merchant discount, issuer rate or other fees or charges shall be deemed to be, and shall be treated as, Finance Charge Receivables under this Agreement and each Supplement hereto. Section 4.07 Manner of Holding Trust Assets. Each Trust Asset that constitutes a security entitlement shall be held by the Trustee through a securities intermediary, which securities intermediary shall agree with the Trustee (and The Bank of New York, as the initial securities intermediary, hereby agrees with the Trustee) that (i) such investment property at all times shall be credited to a securities account of the Trustee, (ii) all property credited to such securities account shall be treated as a financial asset, (iii) such securities intermediary shall treat the Trustee as entitled to exercise the rights that comprise each financial asset credited to such securities account, (iv) such securities intermediary shall comply with entitlement orders originated by the Trustee without the further consent of any other Person, (v) such securities intermediary shall not agree with any Person other than the Trustee to comply with entitlement orders originated by any Person other than the Trustee, (vi) such securities account and all property credited thereto shall not be subject to any lien, security interest, right of set-off, or encumbrance in favor of such securities intermediary or any Person claiming through such securities intermediary (other than the Trustee), (vii) such agreement between such securities intermediary and the Trustee shall be governed by the laws of the State of New York and (viii) the State of New York shall be the securities intermediary's jurisdiction for purposes of the UCC. The Trustee shall maintain possession in the State of New York of each Trust Asset that constitutes money, an instrument, tangible chattel paper, or a certificated security, separate and apart from all other property held by the Trustee. The issuer of any Trust Asset that constitutes an uncertificated security shall register the Trustee as the registered owner of such uncertificated security. Any Trust Asset that constitutes a deposit account shall be established and maintained in the name of the Trustee by a bank, the jurisdiction of which for purposes of the UCC is the State of New York. Notwithstanding any other provision of this Agreement, the Trustee shall not hold any Trust Asset through an agent except as expressly permitted by this Section 4.07. Each term used in this Section 4.07 and defined in the New York UCC shall have the meaning set forth in the New York UCC. 61 [END OF ARTICLE IV] 62 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. The identity of the Certificateholders with respect to distributions and reports shall be determined according to the immediately preceding Record Date. [END OF ARTICLE V] 63 ARTICLE VI THE CERTIFICATES Section 6.01 The Certificates. The Investor Certificates of any Series or Class shall be issued in fully registered form (including any uncertificated Series or Class which is registered in the Certificate Register, the "Registered Certificates") unless the applicable Supplement provides, in accordance with then applicable laws, that such Certificates be issued in bearer form ("Bearer Certificates") with attached interest coupons and a special coupon (collectively the "Coupons"). Such Registered Certificates or Bearer Certificates, as the case may be, shall be substantially in the form of the exhibits with respect thereto attached to the applicable Supplement. The Transferors may elect at any time, by written notice to the Trustee, to have their interests in the Transferors' Interest be (i) uncertificated interests or (ii) evidenced by Transferor Certificates in registered form, substantially in the form of Exhibit A (which shall, upon issue, be executed and delivered by the Transferors to the Trustee for authentication and redelivery as provided in Section 6.02). If the Transferors elect to have their interests in the Transferors' Interest be uncertificated, they shall deliver to the Trustee for cancellation any Transferor Certificates previously issued and the Trustee shall register in the books and records of the Trust such uncertificated interests of the Transferors in the Transferors' Interest. If specified in any Supplement, the Investor Certificates of any Series or Class shall be issued upon initial issuance as one or more certificates evidencing the aggregate original principal amount of such Series or Class as described in Section 6.10. The Original Transferor Certificate, if certificated, shall be a single certificate and shall initially represent the entire Transferors' Interest. As of the Second Amendment Effective Date, the Transferors' interests in the Transferors' Interest shall be evidenced in uncertificated form, and the Trustee shall register in the books and records of the Trust such uncertificated interests of the Transferors in the Transferors' Interest. Each Certificate shall be executed by manual or facsimile signature on behalf of the Transferors by their respective Presidents, Vice Presidents or Chief Executive Officers or by attorneys-in-fact duly authorized to execute such Certificate on behalf of any such officers. 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 a Transferor 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 Transferor's 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 Transferors against payment to the Transferors of the purchase price therefor. The Trustee authenticated and delivered the Original Transferor Certificate to the Transferors simultaneously with the delivery of the Series 1996-1 Investor Certificates. If specified in the related Supplement for any Series or Class, the Trustee shall authenticate and 64 deliver outside the United States the Global Certificate that is issued upon original issuance thereof. Section 6.03 New Issuances. (a) The Transferors may from time to time direct the Trustee, on behalf of the Trust, to issue 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 Trustee shall execute the Supplement and the Transferors shall execute the Investor Certificates of such Series and deliver such Investor Certificates to the Trustee for authentication. In connection with the issuance of a new Series of Investor Certificates, the designation of an Additional Transferor pursuant to Section 2.09(g) or at any other time, each Transferor may surrender its Transferor Certificate to the Trustee, if applicable, in exchange for a newly issued Transferor Certificate and a new certificate (a "Supplemental Certificate"), the terms of which shall be defined in a supplement (a "Transferor Certificate Supplement") to this Agreement (which Transferor Certificate Supplement shall be subject to Section 13.01 to the extent that it amends any of the terms of this Agreement) to be delivered to or upon the order of such Transferor; provided, however, that if the Holders of the Transferor Certificates have elected to have their interests in the Transferors' Interest be uncertificated, then such uncertificated interests shall represent the Transferors' Interest before and immediately after the designation of such Additional Transferor pursuant to Section 2.09(g). The issuance of any such Investor Certificates or Supplemental Certificate shall be subject to satisfaction of the following conditions: (i) on or before the fifth day immediately preceding the Series Issuance Date, the surrender and exchange of the Transferor Certificates or the exchange of the uncertificated interests in the Transferors' Interest, as the case may be, such Transferor shall have given the Trustee, the Servicer and each Rating Agency notice (unless such notice requirement is otherwise waived) of such issuance and the Series Issuance Date, of such surrender and exchange of the Transferor Certificates or of such exchange of the uncertificated interests in the Transferors' Interest, as the case may be; (ii) such Transferor shall have delivered to the Trustee the related Supplement or Transferor Certificate Supplement, as applicable, in form satisfactory to the Trustee, executed by each party hereto (other than the Trustee and the Holder of the Supplemental Certificate, if any); (iii) such Transferor shall have delivered to the Trustee any related Enhancement Agreement executed by each of the parties thereto, other than the Trustee; 65 (iv) the Rating Agency Condition shall have been satisfied with respect to such issuance, such surrender and exchange of the Transferor Certificates or such exchange of the uncertificated interests in the Transferors' Interest, as the case may be; (v) such issuance, such surrender and exchange or such exchange, as the case may be, will not result in any Adverse Effect and such Transferor shall have delivered to the Trustee an Officer's Certificate of such Transferor, dated the Series Issuance Date, the date of such surrender and exchange or the date of such exchange, as the case may be, to the effect that such Transferor reasonably believes that such issuance, such surrender and exchange or such exchange, as the case may be, will not, based on the facts known to such officer at the time of such certification, have an Adverse Effect; (vi) the Transferors shall have delivered to the Trustee (with a copy to each Rating Agency) a Tax Opinion, dated the Series Issuance Date or the date of such surrender and exchange or such exchange, as the case may be, with respect to such issuance, such surrender and exchange or such exchange, respectively, and, in connection with any such exchange, after giving effect to such exchange, the Transferors or other Holders of the Original Transferor Certificate shall have a remaining interest in the Trust of not less than, in the aggregate, 2% of the total amount of Principal Receivables and funds on deposit in the Special Funding Account and the Principal Funding Account; and (vii) the aggregate amount of Principal Receivables plus the principal amount of any Participation Interest theretofore conveyed to the Trust as of the Series Issuance Date, the date of such surrender and exchange or the date of such exchange, as the case may be, shall be greater than the Required Minimum Principal Balance as of the Series Issuance Date or the date of such surrender and exchange, as the case may be, and after giving effect to such issuance, such surrender and exchange or such exchange, respectively. In addition, each Transferor agrees to provide notice of new issuances of Series of Investor Certificates as may be required by and in accordance with Item 1121(a)(14) of Regulation AB. Any Supplemental Certificate (or uncertificated interest) held by any Person, and any Investor Certificate held by any Transferor at any time after the date of its initial issuance, may be transferred or exchanged only upon the delivery to the Trustee of a Tax Opinion dated as of the date of such transfer or exchange, as the case may be, with respect to such transfer or exchange. Section 6.04 Registration of Transfer and Exchange of Certificates. (a) The Trustee shall cause to be kept at the Corporate Trust Office 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") 66 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 initially be the Trustee and any co-transfer agent and co-registrar chosen by the Transferors 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. Any reference in this Agreement to the Transfer Agent and Registrar shall include any co-transfer agent and registrar unless the context requires otherwise. The Transferors may revoke such appointment and remove any Transfer Agent and Registrar if the Transferors, after consultation with the Trustee, determine in their 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 30 days' notice to the Transferors, 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 Transferors have appointed a successor Transfer Agent and Registrar reasonably acceptable to the Trustee. Subject to subsection 6.04(c) below, upon surrender for registration of transfer or exchange 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, subject to subsection 6.04(c) below, 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). The preceding provisions of this Section notwithstanding, the Trustee or the Transfer Agent and Registrar, as the case may be, shall not be required to register the transfer of or exchange any Certificate for a period of 15 days preceding the due date for any payment with respect to the Certificate. 67 Whenever any Investor Certificates are so surrendered for exchange, the Transferors 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. 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 Transferors. 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 Transferors 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. The interest of any Investor Certificateholder in the Trust shall not be transferable other than through the transfer of an Investor Certificate, and except as provided in this Article VI, a Certificate shall not be transferable or divisible. (b) The Transfer Agent and Registrar will maintain at its expense in 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 or its territories and possessions). (c) (i) Registration of transfer of Investor Certificates containing a legend substantially to the effect set forth on Exhibit G-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 Title I of 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 Transferors, the Servicer 68 and the Trustee, an investment letter from the transferee, substantially in the form of the investment and ERISA representation letter attached hereto as Exhibit G-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 Transferor, 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 Transferors regarding such transfer and shall be entitled to receive instructions signed by an officer of each Transferor prior to registering any such transfer. The Transferors 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 G-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 Transferors, the Trustee will make available to any prospective purchaser of Investor Certificates who so requests, a copy of a letter provided to the Trustee by or on behalf of the Transferors 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 protected purchaser, the Transferors 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, 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 69 expenses of the Trustee and Transfer Agent and Registrar) connected therewith. Any duplicate Certificate issued pursuant to this Section 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, the Registrar, the Transferors and the Servicer 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, the Registrar, any Transferor, the Servicer nor any agent of any of them shall be affected by any notice to the contrary. Notwithstanding the foregoing, in determining whether the Holders of the requisite Investor Certificates have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Certificates owned by any Transferor, the Servicer, any other Holder of a Transferor Certificate 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 knows to be so owned shall be so disregarded. Certificates so owned which have been pledged in good faith shall not be disregarded and may be regarded as outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Certificates and that the pledgee is not the Transferor, the Servicer, any other Holder of a Transferor Certificate or any Affiliate thereof. None of the Transferor, the Servicer, the Trustee, the Registrar or the Paying Agent will have any responsibility or liability for any of the records relating to or on account of beneficial ownership in Book-Entry Certificates or for maintaining, supervising or reviewing records relating thereto. Section 6.07 Appointment of Paying Agent. The Paying Agent shall make distributions to Investor Certificateholders from the Collection Account or 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 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 initially be the Trustee and any co-paying agent chosen by the Transferors 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. In the event that any Paying Agent shall resign, the Trustee shall appoint a successor to act as Paying Agent. The Trustee shall act as Paying Agent until a successor is appointed. The Trustee shall cause each successor or additional Paying Agent to execute and deliver to the Trustee an instrument in which such successor or additional Paying Agent shall agree with the Trustee that 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 70 thereto until such sums shall be paid to such Investor Certificateholders. 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. 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, for so long as the Trustee shall act as Paying Agent. Any reference in this Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise. Section 6.08 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 Transferors, the Servicer or the Paying Agent, within five Business Days after receipt by the Trustee of a request therefor, a list in such form as the Transferors, 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 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 Business Days after the receipt of such application. Such list shall be as of a date no more than 45 days prior to the date of receipt of such Applicants' request. With respect to any Series of Registered Certificates, 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 Transferors 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 71 the Transferor. The Trustee may at any time terminate the agency of an authenticating agent by giving notice of termination to such authenticating agent and to the Transferor. Upon receiving such a notice of resignation or upon such a termination, or in case at any time an authenticating agent shall cease to be acceptable to the Trustee or the Transferor, the Trustee promptly may appoint a successor authenticating agent. Any successor authenticating agent upon acceptance of its appointment hereunder shall become 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 Transferor. The Transferors agree to pay to each authenticating agent from time to time reasonable compensation for its services under this Section. 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, the Certificates may have indorsed thereon, in lieu of the Trustee's certificate of authentication, an alternate certificate of authentication in substantially the following form: This is one of the Certificates described in the Pooling and Servicing Agreement. -------------------------------------- -------------------------------------- as Authenticating Agent for the Trustee By: ----------------------------------- Authorized Signatory 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 master Investor Certificates representing the Book-Entry Certificates, to be delivered to the Clearing Agency, by, or on behalf of, the Transferor. 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 shall be in full force and effect; 72 (b) the Transferor, 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 conflict with any other provisions of this Agreement, the provisions of this Section 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 Depository 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 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 Transferors advise the Trustee that the Clearing Agency is no longer willing or able to discharge properly its responsibilities under the Depository Agreement with respect to such Series or Class and the Trustee or the Transferors are unable to locate a qualified successor, (b) the Transferors, 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 Trustee shall authenticate and deliver such Definitive Certificates. Neither any Transferor 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 73 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 Transferors 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 Transferor, the Depositaries, and each Foreign Clearing Agency forthwith. Without unnecessary delay, but in any event not prior to the Exchange Date, the Transferors 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 Certificates attached to the related Supplement and having a minimum denomination of $500,000, which may be in temporary form if the Transferors so elect. The Transferors may elect to waive the $500,000 minimum denomination requirement. Upon any demand for exchange for Definitive Euro-Certificates in accordance with this paragraph, the Transferors 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 F-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 F-2 signed by the Manager which sold the relevant Certificates or (ii) in all other cases, the certificate in the form of Exhibit F-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 74 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 Transferors 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 indorsed 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 Transferors or the 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 Transferors 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 or any Receivables Purchase Agreement. 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 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 Transferor, 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 75 meeting may be adjourned for a period of not less than 10 days; in the absence of a quorum at any such meeting, such adjourned meeting may be further adjourned for a period of not less than 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 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 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 Transferors, executed by any bank, trust company or recognized securities dealer, wherever situated, satisfactory to the Transferors. 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 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. 76 (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 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 duplicates shall be delivered to the Servicer, the Transferors and 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. Section 6.15 Uncertificated Classes. Notwithstanding anything to the contrary contained in this Article VI or in Article XII, unless otherwise specified in any Supplement any provisions contained in this Article VI and in Article XII relating to the registration, form, execution, authentication, delivery, presentation, cancellation and surrender of Certificates shall not be applicable to any uncertificated Certificates. [END OF ARTICLE VI] 77 ARTICLE VII OTHER MATTERS RELATING TO EACH TRANSFEROR Section 7.01 Liability of each Transferor. Each Transferor shall be severally, and not jointly, liable for all obligations, covenants, representations and warranties of such Transferor arising under or related to this Agreement or any Supplement. Except as provided in the preceding sentence, each Transferor shall be liable only to the extent of the obligations specifically undertaken by it in its capacity as a Transferor. Section 7.02 Merger or Consolidation of, or Assumption of the Obligations of, a Transferor. (a) No Transferor shall dissolve, liquidate, consolidate with or merge into any other corporation or convey, transfer or sell its properties and assets substantially as an entirety to any Person (in each case, a "Surviving Entity") unless: (i) (x) the Surviving Entity is a corporation organized and existing under the laws of the United States of America or any State or the District of Columbia and shall expressly assume, by agreement supplemental hereto, executed and delivered to the Trustee (in form reasonably satisfactory to the Trustee) the performance of every covenant and obligation of such Transferor hereunder; and (y) such Transferor has delivered to the Trustee an Officer's Certificate of such Transferor and an Opinion of Counsel to the effect 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 the Surviving Entity enforceable against the 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; (ii) all UCC filings, if any, required to perfect the interest of the Trustee, on behalf of the Trust, in the Receivables to be conveyed by the Surviving Entity shall have been duly made and copies thereof shall have been delivered to the Trustee; (iii) the Trustee shall have received one or more Opinions of Counsel to the effect that (i) under the UCC, the transfer of Receivables by the Surviving Entity shall constitute either a sale of, or the granting of a security interest in, such Receivables by the Surviving Entity to the Trust, (ii) the condition specified in paragraph (ii) shall have been satisfied, and (iii) if the Surviving Entity shall be subject to the FDIA, the interest of the Trust in such Receivables should not be subject to avoidance by the FDIC if the FDIC were to become the receiver or conservator of the Surviving Entity; and (iv) if the Surviving Entity shall not be eligible as a debtor under Title 11 of the United States Code (the "Bankruptcy Code"), such Transferor shall have 78 delivered notice of such consolidation, merger, conveyance or transfer to each Rating Agency or, if the Surviving Entity shall be subject to the Bankruptcy Code, such Transferor shall have delivered notice to each Rating Agency (with copies to the Servicer and the Trustee) of such consolidation, merger, conveyance or transfer and the Rating Agency Condition shall have been satisfied; and (v) the Transferors shall have delivered to the Trustee and each Rating Agency a Tax Opinion, dated the date of such consolidation, merger, conveyance or transfer, with respect thereto. (b) The obligations of each Transferor hereunder shall not be assignable nor shall any Person succeed to the obligations of the Transferors 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 Transferor. Subject to Section 7.01, neither any Transferor nor any of the directors, officers, employees, incorporators or agents of any Transferor acting in such capacities shall be under any liability to the Trust, the Trustee, the Certificateholders, any Series Enhancer, the Servicer, any other Transferor or any other Person for any action taken or for refraining from the taking of any action in good faith in such capacities pursuant to this Agreement, it being expressly understood that such liability is expressly waived and released as a condition of, and consideration for, the execution of this Agreement and any Supplement and the issuance of the Certificates; provided, however, that this provision shall not protect any Transferor 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 Transferor and any director, officer, employee or agent of such Transferor may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person (other than such Transferor) respecting any matters arising hereunder. Section 7.04 Liabilities. Notwithstanding any provision of this Agreement (including, without limitation, Sections 7.03, 8.03, 8.04 and 13.07), by entering into this Agreement, each Transferor and any Holder of the Original Transferor Certificate 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 a Certificateholder in the capacity of an investor in the Certificates) arising out of or based on the arrangement created by this Agreement or the actions of the Servicer taken pursuant hereto (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) as though this Agreement created a partnership under the New York Uniform Partnership Act in which each Transferor and each such Holder 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 Transferor and each such Holder against and from any losses, claims, damages or liabilities of such Person as described in this Section arising from the actions or omissions of such Successor Servicer. Section 7.05 Assumption of a Transferor's Obligations. Notwithstanding the provisions of Section 7.02, each Transferor may assign, convey or transfer all of its right, title 79 and interest in, to and under the Receivables, the Accounts and the Participation Interests in which it has an interest and/or its interest in the Transferors' Interest (collectively, the "Assigned Assets"), together with all servicing functions and other obligations, if any, 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 Transferor, and such Transferor 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 Transferor and the Trustee shall have entered into a supplement to this Agreement or an assumption agreement (in form and substance reasonably satisfactory to the Trustee) (either, 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 Transferor shall have delivered to the Trustee an Officer's Certificate of such Transferor 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 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) all UCC filings required to perfect the interest of the Trustee, on behalf of the Trust, in the Receivables to be conveyed by the Assuming Entity shall have been duly made and copies thereof shall have been delivered to the Trustee; (c) (i) if the Assuming Entity shall not be eligible to be a debtor under the Bankruptcy Code, such Transferor shall have delivered notice of such transfer and assumption to each Rating Agency or (ii) if the Assuming Entity shall be eligible to be a debtor in a case under the Bankruptcy Code, such Transferor shall have delivered copies of each such written notice to the Servicer and the Trustee and the Rating Agency Condition shall have been satisfied; (d) the Trustee shall have received one or more Opinions of Counsel to the effect that (i) the transfer of such Receivables by the Assuming Entity shall constitute either a sale of, or the granting of a security interest in, such Receivables by the Assuming Entity to the Trust, (ii) the condition specified in paragraph (b) shall have been satisfied, and (iii) if the Assuming Entity shall be subject to the FDIA, the interest of the Trust in such Receivables should not be subject to avoidance by the FDIC if the FDIC were to become the receiver or conservator of the Assuming Entity; and (e) the Trustee shall have received a Tax Opinion. Upon such transfer to and assumption by the Assuming Entity, such Transferor shall surrender the Transferor Certificate, if applicable, evidencing its interest in the Trust to the Transfer Agent 80 and Registrar for registration of transfer and the Transfer Agent and Registrar shall issue a new Transferor Certificate, if applicable, in the name of the Assuming Entity (or, if applicable, register such Assuming Entity's uncertificated interest in the Transferors' Interest). Notwithstanding such assumption, such Transferor 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 Transferor prior to such transfer. Section 7.06 Expenses. The Transferors shall pay out of their own funds, without reimbursement, all expenses incurred in connection with the Trust, including the costs of filing any amendment to UCC financing statements, the costs and expenses relating to obtaining and maintaining the listing of any Investor Certificates on any stock exchange, and any stamp, documentary, excise, property (whether on real, personal or intangible property) or any similar tax levied on the Trust or the Trust's assets that are not expressly stated in this Agreement to be payable by the Trust or a Transferor. [END OF ARTICLE VII] 81 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, transfer or sell 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, transfer or sale 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 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 Transferors and the Trustee an Officer's Certificate of the Servicer and an Opinion of Counsel each stating that such consolidation, merger, conveyance, transfer or sale comply with this Section and that all conditions precedent herein provided for relating to such transaction have been complied with; (iii) the Servicer shall have given the Rating Agencies notice of such consolidation, merger or transfer of assets; and (b) 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 or shall be immediately thereafter an Eligible Servicer. Section 8.03 Limitation on Liability of the Servicer and Others. Except as provided in Section 8.04 and Section 11.05, 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, the Transferors 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, 82 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 Transferors (in the case of clause (a)) and the Trust and the Trustee from and against any loss, liability, expense, damage or injury arising out of or relating to any claims, actions or proceedings brought or asserted by third parties which are suffered or sustained by reason of (a) any acts or omissions of the Servicer with respect to the Trust pursuant to this Agreement or (b) the administration by the Trustee of the Trust (in the case of clause (a) or (b), other than such as shall arise from the negligence or willful misconduct of the Trustee or the Transferors, as applicable, or as may arise as a result of action taken by the Trustee at the request of the Investor Certificateholder or any federal, state or local income or franchise taxes (or any interest or penalties with respect thereto) required to be paid by the Trustee or the Investor Certificateholder in connection herewith to any taxing authority), including any judgment, award, settlement, reasonable attorneys' fees and other costs or expenses incurred in connection with the defense of any action, proceeding or claim. Indemnification pursuant to this Section shall not be payable from the Trust Assets, but shall be payable only from the assets of the Servicer. The provisions of this Section 8.04 shall survive termination of this Agreement and the resignation and removal of the Trustee. Section 8.05 Resignation of the Servicer. The Servicer shall not resign from the obligations and duties hereby imposed on it except (a) upon determination that (i) the performance of its duties hereunder is no longer permissible under applicable law and (ii) there is no reasonable action which the Servicer could take to make the performance of its duties hereunder permissible under applicable law or (b) upon the assumption, by an agreement supplemental hereto, executed and delivered to the Transferors and the Trustee, in form satisfactory to the Transferors and the Trustee, of the obligations and duties of the Servicer hereunder by any of its Affiliates or by any other entity the appointment of which shall have satisfied the Rating Agency Condition and, in either case, qualifies as an Eligible Servicer. Any determination permitting the resignation of the Servicer shall be evidenced as to clause (a) above by an Opinion of Counsel to such effect delivered to the Trustee and the Transferors. 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 hereof. If within 120 days of the date of the determination that the Servicer may no longer act as Servicer under clause (a) above 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 at the expense of the resigning Servicer to appoint any established institution qualifying as an Eligible Servicer as the Successor Servicer hereunder. The Trustee shall give prompt notice to each Rating Agency and each Series Enhancer upon the appointment of a Successor Servicer. Notwithstanding anything in this Agreement to the contrary, TRS or Centurion Bank, as Servicer, may assign part or all of its obligations and duties as Servicer under this Agreement to an Affiliate of TRS so long as TRS or Centurion Bank, as the case may be, shall have fully guaranteed the performance of such 83 obligations and duties under this Agreement and such assignment will not constitute a resignation. Section 8.06 Access to Certain Documentation and Information 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 or such procedures as the Servicer may deem reasonably necessary and (d) at reasonably accessible offices in the continental United States designated by the Servicer. Nothing in this Section shall derogate from the obligation of the Transferor, 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 as a result of such obligation shall not constitute a breach of this Section. Section 8.07 Delegation of Duties. Subject to Section 14.08, in the ordinary course of business, the Servicer may at any time delegate all or part of its duties hereunder with respect to the Accounts and the Receivables to any Person that agrees to conduct such duties in accordance with the applicable Credit Guidelines and this Agreement. Such delegation shall not relieve the Servicer of its liability and responsibility with respect to such duties, and shall not constitute a resignation within the meaning of Section 8.05. Section 8.08 Examination of Records. Each Transferor and the Servicer shall indicate generally 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 Transferor and the Servicer shall, prior to the sale or transfer to a third party of any receivable held in its custody, examine its computer records and other records to determine that such receivable is not, and does not include, a Receivable. [END OF ARTICLE VIII] 84 ARTICLE IX INSOLVENCY EVENTS Section 9.01 Rights upon the Occurrence of an Insolvency Event. (a) If any Transferor or any Holder of the Original Transferor Certificate shall consent to or fail to object to the appointment of a bankruptcy trustee or conservator, receiver or liquidator in any bankruptcy proceeding or other insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to such Transferor or such Holder of the Original Transferor Certificate of or relating to all or substantially all of such Person's respective property, or a decree or order of a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a bankruptcy trustee or conservator, receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the winding-up, insolvency, bankruptcy, reorganization, conservatorship, receivership or liquidation of such Person's respective affairs, shall have been entered against such Transferor or any Holder of the Original Transferor Certificate; or such Transferor or such Holder of the Original Transferor Certificate shall admit in writing its respective inability, or shall be unable, to pay its debts generally as they become due, or file a petition to take advantage of any applicable bankruptcy insolvency or reorganization, receivership or conservatorship statute, make an assignment for the benefit of its creditors or voluntarily suspend payment of its obligations; or such Transferor or Holder of the Transferor Certificate shall consent to, or fail to object to, the filing of any such petition, or, if such Transferor or Holder of the Original Transferor Certificate shall so object to the filing of any such petition, such petition shall not have been dismissed within 60 days of the filing thereof (any such act or occurrence being an "Insolvency Event"); then each Transferor shall on the day any such Insolvency Event occurs (the "Appointment Date"), immediately cease to transfer Principal Receivables to the Trust and shall promptly give notice to the Trustee and the Servicer 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, 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 Assets. Upon the Appointment Date, this Agreement and the Trust shall terminate, subject to the liquidation and dissolution procedures described below. So long as any Series issued prior to April 16, 2004 remains outstanding, within 15 days of the Appointment Day, the Trustee shall (i) publish a notice in an Authorized Newspaper that an Insolvency Event has occurred and that the Trustee intends to sell, dispose of or otherwise liquidate the Receivables and (ii) send written notice to the Investor Certificateholders describing the provisions of this Section 9.01 and requesting instructions from such Holders. Unless within 60 days from the day notice pursuant to clause (i) above is first published the Trustee shall have received written instructions from Holders of Investor Certificates evidencing more than 50% of the Invested Amount of each Series issued and outstanding (or, if any such Series has two or more Classes, each Class) to the effect that such Certificateholders disapprove of the liquidation of the Receivables and wish to continue having Principal Receivables transferred to the Trust as before such Insolvency Event, the Trustee shall 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 85 from any such conservator, receiver or liquidator of a Transferor that the terms and manner of any proposed sale, disposition or liquidation are commercially reasonable. The provisions of this Section 9.01 and any provisions in a Supplement regarding an Insolvency Event shall not be deemed to be mutually exclusive. (b) The proceeds from the sale, disposition or liquidation of the Receivables and any Participation Interests 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, allocating Insolvency Proceeds to Finance Charge Receivables and Principal Receivables in the same proportion as the amount of Finance Charge Receivables and Principal Receivables bear to one another on the prior Determination Date. The Insolvency Proceeds shall be allocated and distributed to Investor Certificateholders in accordance with the terms of each Supplement. [END OF ARTICLE IX] 86 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 to give notice to the Trustee to make such payment, transfer or deposit on or before the date occurring five Business Days after the date such payment, transfer or deposit or such instruction or notice is required to be made or given, as the case may be, under the terms of this Agreement or any Supplement; provided, however, that any such failure caused by a nonwillful act of the Servicer shall not constitute a Servicer Default if the Servicer promptly remedies such failure within five Business Days after receiving notice of such failure or otherwise becoming aware of such failure; (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 an Adverse Effect and which continues unremedied for a period of 60 days after the date on which 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 Holders of Investor Certificates evidencing not less than 50% of the aggregate unpaid principal amount of all Investor Certificates (or, with respect to any such failure that does not relate to all Series, 50% of the aggregate unpaid principal amount of all Series adversely affected by such failure); or the Servicer shall assign or delegate its duties under this Agreement, except as permitted by Sections 8.02 and 8.07; (c) any representation, warranty or certification made by the Servicer in this Agreement or any Supplement or in any certificate delivered pursuant to this Agreement or any Supplement shall prove to have been incorrect when made, which has an Adverse Effect on the rights of the Investor Certificateholders of any Series (which determination shall be made without regard to whether funds are then available pursuant to any Series Enhancement) and which Adverse Effect continues for a period of 60 days after the date on which notice thereof, requiring the same to be remedied, shall have been given to the Servicer by the Trustee, or to the Servicer and the Trustee by the Holders of Investor Certificates evidencing not less than 50% 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, 50% of the aggregate unpaid principal amount of all Series adversely affected by such representation, warranty or certification); or (d) the Servicer shall consent to the appointment of a bankruptcy trustee or conservator or receiver or liquidator in any bankruptcy proceeding or other 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 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 bankruptcy trustee or a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or the winding-up or liquidation 87 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 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 bankruptcy, insolvency or reorganization statute, make any assignment for the benefit of its creditors or voluntarily suspend payment of its obligations or such Transferor or Holder of the Transferor Certificate shall consent to, or fail to object to, the filing of any such petition, or, if such Transferor or Holder of the Original Transferor Certificate shall so object to the filing of any such petition, such petition shall not have been dismissed within 60 days of the filing thereof; 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 Investor Certificates, by notice then given to the Servicer (and to the Trustee 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; provided, however, if within 60 days of receipt of a Termination Notice the Trustee does not receive any bids from Eligible Servicers in accordance with subsection 10.02(c) to act as a Successor Servicer and receives Officers' Certificates of the Transferors to the effect that the Servicer cannot in good faith cure the Servicer Default which gave rise to the Termination Notice, the Trustee shall, except in the case of a Servicer Default set forth in subsection 10.01(d), grant the Transferors the right of first refusal to purchase the Certificateholders' Interest on the Distribution Date in the next calendar month. 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 Transferors shall notify the Trustee prior to the Record Date for the Distribution Date of the purchase if the Transferors are exercising such right of first refusal. If the Transferors exercise such right of first refusal, the Transferors shall deposit the purchase price into the Collection Account on such Distribution Date in immediately available funds. The purchase price shall be allocated and distributed to Investor Certificateholders in accordance with the terms of each Supplement. After receipt by the Servicer of a Termination Notice, and on the date that a Successor Servicer is 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 the Successor Servicer (a "Service Transfer"); and, without limitation, the Trustee is hereby authorized and empowered (upon the failure of the Servicer to cooperate) to execute and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, all documents and other instruments upon the failure of the Servicer to execute or deliver such documents or instruments, and to do and accomplish all other acts or things necessary or appropriate to effect the purposes of such Service Transfer. The 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. The Servicer shall within 20 88 Business Days 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 shall require the Servicer to disclose to the Successor Servicer information of any kind which the Servicer deems to be confidential, the Successor Servicer shall be required to enter into such licensing and confidentiality agreements as the Servicer shall deem reasonably necessary to protect its interests. Notwithstanding the foregoing, a delay in or failure of performance referred to in paragraph (a) above for a period of 10 Business Days after the applicable grace period or under paragraph (b) or (c) above for a period of 60 Business Days after the applicable grace period, shall not constitute a Servicer Default if such delay or failure could not be prevented by the exercise of reasonable diligence by the Servicer and such delay or failure was caused by an act of God or the public enemy, acts of declared or undeclared war, public disorder, rebellion or sabotage, epidemics, landslides, lightning, fire, hurricanes, earthquakes, floods or similar causes. The preceding sentence shall not relieve the Servicer from using all commercially reasonable efforts to perform its obligations in a timely manner in accordance with the terms of this Agreement and the Servicer shall provide the Trustee, each Transferor and any Series Enhancer with an Officer's Certificate of the Servicer giving prompt notice of such failure or delay by it, together with a description of its efforts so to 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 and the Transferors. The Transferors shall have the right to nominate to the Trustee the name of a potential successor servicer which nominee shall be selected by the Trustee as the Successor Servicer. In the event that a Successor Servicer has not been appointed or has not accepted its appointment at the time when the Servicer ceases to act as Servicer, the Trustee without further action shall automatically be appointed the Successor Servicer. The Trustee may delegate any of its servicing obligations to an Affiliate or agent in accordance with subsection 3.01(b) and Section 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 qualifying as an Eligible Servicer as the Successor Servicer hereunder. The Trustee shall give prompt notice to the Transferors, each Rating Agency and each Series Enhancer 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 89 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 or, as provided in subsection 10.02(a), the Successor Servicer nominated by the Transferors for servicing compensation not in excess of the aggregate Servicing Fees for all Series plus the sum of the amounts with respect to each Series and with respect to each Distribution Date equal to any Collections of Finance Charge Receivables allocable to Investor Certificateholders of such Series which are payable to the Holders of the Transferor Certificates after payment of all amounts owing to the Investor Certificateholders of such Series with respect to such Distribution Date or required to be deposited in the applicable Series Accounts with respect to such Distribution Date and any amounts required to be paid to any Series Enhancer for such Series with respect to such Distribution Date pursuant to the terms of any Enhancement Agreement; provided, however, that the Holders of the Transferor Certificates shall be responsible for payment of their portion of such aggregate Servicing Fees and all other such amounts in excess of such aggregate Servicing Fees. Each holder of any of the Transferor's Certificates agrees that, if TRS (or any Successor Servicer) is terminated as Servicer hereunder, the portion of the Collections in respect of Finance Charge Receivables that the Transferors are entitled to receive pursuant to this Agreement or any Supplement shall be reduced by an amount sufficient to pay the Transferors' share 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 Transferors and, without limitation, the Transferors 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 Transferors in effecting the termination of the responsibilities and rights of the Successor Servicer to conduct servicing of the Receivables. The Successor Servicer shall transfer its electronic records relating to the Receivables to the Transferors or their designee in such electronic form as it may reasonably request and shall transfer all other records, correspondence and documents to it in the manner and at such times as it shall reasonably request. To the extent that compliance with this Section shall require the Successor Servicer to disclose to the Transferors information of any kind which the Successor Servicer deems to be confidential, the Transferors 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 five Business Days after the Servicer becomes aware of any Servicer Default, the Servicer shall give notice thereof to the Transferors, the Trustee, each Rating Agency and each Series Enhancer and the Trustee shall give notice to the Investor Certificateholders. Upon any termination or appointment of a Successor Servicer pursuant to this Article, the Trustee shall give prompt notice thereof to the Investor Certificateholders. 90 [END OF ARTICLE X] 91 ARTICLE XI THE TRUSTEE Section 11.01 Duties of Trustee. (a) The Trustee, prior to the occurrence of a Servicer Default of which a Responsible Officer of the Trustee has actual knowledge 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 and no implied duties or covenants by the Trustee shall be read into this Agreement. If a Servicer Default to the actual knowledge of a Responsible Officer of the Trustee has occurred (which has not been cured or waived) the Trustee shall exercise such of the rights and powers vested in it by this Agreement and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (b) In the absence of bad faith or recklessness on its part, the Trustee may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, upon all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments furnished to the Trustee pursuant to this Agreement. 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 substantially conform to the requirements of this Agreement. The Trustee shall give prompt notice to each Transferor and the Servicer 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 Investor Certificateholders to take any action pursuant to this Agreement. If, within five Business Days, a Transferor or the Servicer shall not have cured such material lack of conformity, the Trustee shall provide notice thereof to the Investor Certificateholders. (c) Subject to subsection 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 willful misconduct; provided, however, that: (i) the Trustee shall not be liable for an error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (ii) the Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of the Holders of Investor Certificates evidencing 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 92 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 to comply with the obligations of the Servicer referred to in subsection 10.01(a) or (b) nor with knowledge of a Pay-Out Event or Reinvestment Event unless a Responsible Officer of the Trustee obtains actual knowledge of such failure or the Trustee receives notice of such failure or event from any Transferor, the Servicer or 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 the Investors Certificates of 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, 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 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 actions reasonably likely to impair the interests of the Trust in any Receivable now existing or hereafter created or to impair the value of any Receivable now existing or hereafter created. (f) Except as expressly provided in this Agreement, the Trustee shall have no power to vary the corpus of the Trust including by (i) accepting any substitute obligation for a Receivable initially assigned to the Trust under Section 2.01 or 2.09, (ii) adding any other investment, obligation or security to the Trust or (iii) withdrawing from the Trust any Receivables. (g) In the event that the Paying Agent or the Transfer Agent and Registrar shall fail to perform any obligation, duty or agreement in the manner or on the day required to be performed by the Paying Agent or the Transfer Agent and Registrar, as the case may be, under this Agreement, the Trustee shall be obligated promptly upon its knowledge thereof to perform such obligation, duty or agreement in the manner so required. 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, certificate, statement, instrument, Officer's Certificate, opinion, report, notice, request, consent, order, appraisal, approval, bond or other 93 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 of its choice and any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in accordance with such Opinion of Counsel; (c) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement, or to institute, conduct or defend any litigation hereunder or in relation hereto, at the request, order or direction of any of the Certificateholders, pursuant to the provisions of this Agreement, unless such Certificateholders shall have offered to the Trustee security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities which may be incurred therein or thereby; provided, however, that nothing contained herein shall relieve the Trustee of the obligations, upon the occurrence of a Servicer Default (which has not been cured or waived) 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 their exercise as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs; (d) the Trustee shall not be liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement; (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, appraisal, approval, bond or other paper or document believed by it to be genuine, unless requested in writing so to do by Holders of Investor Certificates evidencing more than 25% of the aggregate unpaid 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); provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses, or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Agreement, the Trustee may require indemnity reasonably satisfactory to it against such cost, expense, or liability as a condition to so proceed; (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; (g) except as may be required by subsection 11.01(a), the Trustee shall not be required to make any initial or periodic examination of any documents or records related to the Receivables or the Accounts for the purpose of establishing the presence or absence of defects, the compliance by the Transferors with their representations and warranties or for any other purpose; 94 (h) whether or not therein expressly so provided, every provision of this Agreement relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 11.02; (i) the Trustee shall have no liability with respect to the acts or omissions of the Servicer (except and to the extent the Servicer is the Trustee), including, acts or omissions in connection with the servicing, management or administration of Receivables; calculations made by the Servicer whether or not reported to the Trustee; and deposits into or withdrawals from any accounts or funds established pursuant to the terms of this Agreement; (j) in the event that the Trustee is also acting as Paying Agent or Transfer Agent and Registrar hereunder, the rights and protections afforded to the Trustee pursuant to this Article XI shall also be afforded to such Paying Agent, Transfer Agent and Registrar; and (k) the Trustee shall not be deemed to have notice of any Servicer Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Certificates and this Agreement. 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 or as to the perfection or priority of any security interest therein or as to the efficacy of the Trust. The Trustee shall not be accountable for the use or application by the Transferors of any of the Certificates or of the proceeds of such Certificates, or for the use or application of any funds paid to the Transferors 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 any restrictions that may otherwise be imposed by Section 406 of ERISA or Section 4975(e) of the Code, 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 shall pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Agreement or any Enhancement Agreement (including the reasonable fees and expenses of its agents, any co-trustee and counsel) except any such expense, disbursement or advance as shall arise from its negligence or bad faith and except 95 as provided in the following sentence. If the Trustee is appointed Successor Servicer pursuant to Section 10.02, the provisions of this Section shall not apply to expenses, disbursements and advances made or incurred by the Trustee in its capacity as Successor Servicer, which shall be paid out of the Servicing Fee. The Servicer's covenant to pay the expenses, disbursements and advances provided for in this Section 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 corporation organized and doing business under the laws of the United States or any state thereof authorized under such laws to exercise corporate trust powers, have a net worth of at least $50,000,000, be subject to supervision or examination by Federal or state authority and maintain any credit or deposit rating required by any Rating Agency (which shall be Baa3, in the case of Moody's unless otherwise notified, and BBB- in the case of Standard & Poor's unless otherwise notified) or any higher credit or deposit rating required in connection with the issuance of a particular Series. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then, for the purpose of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, 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 Transferors and the Servicer. Upon receiving such notice of resignation, the Transferors shall promptly appoint a successor trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee. (b) If at any time the Trustee shall cease to be eligible in accordance with the provisions of Section 11.06 and shall fail to resign after request therefor by the Transferors, or if at any time the Trustee shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or if a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Transferors may remove the Trustee and promptly appoint a successor trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee. (c) Any resignation or removal of the Trustee and appointment of successor trustee pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor trustee as provided in Section 11.08. Section 11.08 Successor Trustee. 96 (a) Any successor trustee appointed as provided in Section 11.07 shall execute, acknowledge and deliver to the Transferors, 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 obligations of its predecessor hereunder, with like effect as if originally named as Trustee herein. The predecessor Trustee shall deliver, at the expense of the Servicer, to the successor trustee all documents or copies thereof and statements held by it hereunder; and the Transferors 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 unless at the time of such acceptance such successor trustee shall be eligible under the provisions of Section 11.06. (c) Notwithstanding any other provisions herein, the appointment of a successor trustee shall not be effective unless the Rating Agency Condition shall have been satisfied. (d) Upon acceptance of appointment by a successor trustee as provided in this Section, such successor trustee shall provide notice of such succession hereunder to all Certificateholders and the Servicer shall provide such notice to each Rating Agency and each Series Enhancer. 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 Requirements of Law 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, subject to the prior written consent of the Transferors, which consent shall not be unreasonably withheld, 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, such powers, duties, obligations, rights and trusts as the Trustee may consider necessary or desirable. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 11.06 and no notice to Certificateholders of the appointment of any co-trustee or separate trustee shall be required under Section 11.08. 97 (b) Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions: (i) all rights, powers, duties and obligations conferred or imposed upon the Trustee shall be conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Trustee joining in such act) except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed (whether as Trustee hereunder or as Successor Servicer) 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 liable by reason of any act or omission of any other trustee hereunder; and (iii) the Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee. (c) Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article. 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 Transferors and 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 of 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 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 such tax returns and shall provide such tax returns to the Trustee for signature at least five days before such tax returns are due to be filed. 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 and shall deliver such information to the Trustee at least five days prior to the date it is 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 98 reasonably required in connection with the preparation of all tax returns of the Trust, and shall, upon request, execute such returns. The Servicer shall provide the Transferors with copies of all such tax returns. 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 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 11.01 and 11.14, proceed to protect and enforce its rights and the rights of the Certificateholders under this Agreement by suit, action or proceeding in equity or at law or otherwise, whether for the specific performance of any covenant or agreement contained in this Agreement or 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) 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. Section 11.14 Rights of Certificateholders To Direct Trustee. Except as otherwise provided in the applicable Supplement, 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; provided, however, that, subject to Section 11.01, the Trustee shall have the right to decline to follow any such direction if the Trustee after being advised by counsel determines that the action so directed may not lawfully be taken, or a Responsible Officer or Responsible Officers of the Trustee in good faith shall determine that the proceedings so directed would be illegal or involve it in personal liability or be unduly prejudicial to the rights of Investor 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 of the Investor Certificateholders. 99 Section 11.15 Representations and Warranties of Trustee. The Trustee represents and warrants that: (i) the Trustee is a banking corporation organized, existing and in good standing under the laws of the State of New York; (ii) 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; (iii) this Agreement and each Supplement has been duly executed and delivered by the Trustee; (iv) the Trustee satisfies the eligibility requirements prescribed by Section 11.06; and (v) the Trustee will not use any office, place of business, agents or employees of the Trustee in the State of Florida to act for, or on behalf of, the Trust or the Trustee (in its capacity as Trustee of the Trust), except to the extent that the Trustee first provides an opinion (at the sole expense of the Transferor) of counsel satisfactory to the Transferors and the Servicer stating that any such activities proposed to be carried on in Florida will not cause the Trust to be subject to any Florida income, franchise or property (including intangibles) tax. 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 in the State of New York. The Trustee maintains its Corporate Trust Office at 101 Barclay Street, Floor 8 West, New York, New York 10286, as such office and 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. [END OF ARTICLE XI] 100 ARTICLE XII TERMINATION Section 12.01 Termination of Trust. The Trust and the respective obligations and responsibilities of the Transferors, 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 Section 8.04 and subsection 12.02(b), upon the earlier of (i) May 1, 2030, (ii) at the option of the Transferors, the day following the Distribution Date on which the Invested Amount for each Series is zero and (iii) the time provided in Section 9.01. Section 12.02 Final Distribution. (a) The Servicer shall give the Transferors and the Trustee at least 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, 9.01 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 30 days prior to such Distribution Date). Such notice shall be accompanied by an Officer's Certificate of the Servicer 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 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, if certificated (and any excess shall be paid in accordance with the terms of any Enhancement Agreement). In the event that all such Investor Certificateholders shall not surrender their Investor Certificates for cancellation within six 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 101 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 Transferors any monies held by them for the payment of principal or interest that remains unclaimed for two years. After payment to the Transferor, Investor Certificateholders entitled to the money must look to the Transferors for payment as general creditors unless an applicable abandoned property law designates another Person. (c) In the event that the Invested Amount with respect to any Series is greater than zero on its Series Termination Date (after giving effect to deposits and distributions otherwise to be made on such Series Termination Date) the Trustee will sell or cause to be sold on such Series Termination Date an amount of Principal Receivables (or interests therein) equal to 100% of the Invested Amount with respect to such Series on such Series Termination Date plus related Finance Charge Receivables (after giving effect to such deposits and distributions); provided, however, that in no event shall such amount exceed the Series Allocation Percentage of Receivables with respect to such Series on such Series Termination Date. The proceeds (the "Termination Proceeds") from such sale shall be immediately deposited into the Collection Account for such Series. The Termination Proceeds shall be allocated and distributed to Investor Certificateholders of such Series in accordance with the terms of the applicable Supplement. Section 12.03 Transferor's Termination Rights. Upon the termination of the Trust pursuant to Section 12.01 and the surrender of the Transferor Certificates, if applicable, the Trustee shall sell, assign and convey to the Holders of the Transferor Certificates or any of their designees, without recourse, representation or warranty, all right, title and interest of the Trustee in the Receivables, whether then existing or thereafter created, all monies due or to become due and all amounts received with respect thereto (including all monies then held in the Collection Account or any Series Account) and all proceeds thereof, except for amounts held by the Trustee pursuant to subsection 12.02(b). The Trustee shall execute and deliver such instruments of transfer and assignment, in each case without recourse, as shall be reasonably requested by the Transferors to vest in the Holders of the Transferor Certificates or any of their designees all right, title and interest which the Trust had in the Receivables. Section 12.04 Defeasance. Notwithstanding anything to the contrary in this Agreement or any Supplement: (a) The Transferors may at their option be discharged from their obligations hereunder with respect to any Series or all outstanding Series (each, a "Defeased Series") on the date the applicable conditions set forth in subsection 12.04(c) are satisfied (a "Defeasance") but only if Defeasance is explicitly available to such Series in accordance with its related Supplement (it being understood that Defeasance shall not be available to such Series in any other case); provided, however, that the following rights, obligations, powers, duties and immunities shall survive with respect to each Defeased Series until otherwise terminated or discharged hereunder: (i) the rights of the Holders of Investor Certificates of the Defeased Series to receive, solely from the trust fund provided for in subsection 12.04(c), payments in respect of principal of and interest on such Investor Certificates when such payments are due; (ii) the 102 Transferors' 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 Registrar hereunder; and (iv) this Section 12.04. (b) Subject to subsection 12.04(c), the Transferors at their option may cause Collections allocated to each Defeased Series and available to acquire additional Receivables to be applied to purchase Eligible Investments rather than acquire additional Receivables. (c) The following shall be the conditions precedent to any Defeasance under subsection 12.04(a): (i) the Transferors irrevocably shall have deposited or caused to be deposited with the Trustee (such deposit to be made from other than the Transferors' or any Affiliate of the Transferors' funds), 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 equal to, 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 equal to, or (C) a combination thereof, in each case sufficient to pay and discharge (without relying on income or gain from reinvestment of such amount), 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 each 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 each Defeased Series; (ii) a statement from a firm of nationally recognized independent public accountants (who may also render other services to the Transferors) to the effect that such deposit is sufficient to pay the amounts specified in clause (i) above; (iii) 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 Transferors shall have delivered to the Trustee an Opinion of Counsel to the effect contemplated by clause (b) of the definition in Section 1.01 of the term "Tax Opinion" (the preparation and delivery of which shall not be at the expense of the Trustee) with respect to such deposit and termination of obligations, and an Opinion of Counsel to the effect that (A) 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 and (B) if the Transferors' long-term unsecured debt obligations are not rated at least P-3 or Baa3, respectively, by Moody's, such deposit and termination of obligations would not be a fraudulent conveyance (based in reliance on certain certificates to the effect that the Receivables and termination of obligations constitute fair value for consideration paid therefor and as to the solvency of the Transferors); 103 (iv) the Transferors shall have delivered to the Trustee an Officer's Certificate of the Transferors stating the Transferors reasonably believe 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 with respect to any Series or any event that, with the giving of notice or the lapse of time, would result in the occurrence of a Pay-Out Event with respect to any Series; and (v) the Rating Agency Condition shall have been satisfied and the Transferors shall have delivered copies of such written notice to the Servicer and the Trustee. [END OF ARTICLE XII] 104 ARTICLE XIII MISCELLANEOUS PROVISIONS Section 13.01 Amendment; Waiver of Past Defaults. (a) This Agreement may be amended by the parties hereto from time to time prior to, or in connection with, the issuance of the first Series of Investor Certificates hereunder without the requirement of any consents or the satisfaction of any conditions set forth below. This Agreement or any Supplement may be amended from time to time (including, without limitation, in connection with the issuance of a Supplemental Certificate, conveyance of a Participation Interest, allocation of assets pursuant to Section 4.06, the designation of an Additional Transferor, or to change the definition of Monthly Period, Determination Date or Distribution Date) by the Servicer, the Transferors and the Trustee, by a written instrument signed by each of them, without the consent of any of the Certificateholders; provided that (i) the Transferors shall have delivered to the Trustee Officer's Certificates of the Transferors, dated the date of any such amendment, stating that the Transferors reasonably believe that such amendment will not have an Adverse Effect and (ii) the Rating Agency Condition shall have been satisfied with respect to any such amendment; provided further that such action shall not effect a change in the Permitted Activities of the Trust except for those changes necessary for compliance with accounting requirements or tax requirements or required to cure any ambiguity or correct or supplement any provision contained in this Agreement or any Supplement which may be defective or inconsistent with any provisions thereof. (b) This Agreement or any Supplement may also be amended from time to time (including in connection with the issuance of a Supplemental Certificate) by the Servicer, the Transferors and the Trustee (A) in the case of a change in the Permitted Activities of the Trust which is not materially adverse to Holders of Investor Certificates, with the consent of Holders of Investor Certificates evidencing not less than 50% of the aggregated unpaid principal amount of the Investor Certificates of each outstanding Series affected by such change, unless such change is necessary for compliance with accounting requirements or tax requirements or required to cure any ambiguity or correct or supplement any provision contained in this Agreement or any Supplement which may be defective or inconsistent with any provisions thereof 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 affected Series for which the Transferors have not delivered Officer's Certificates stating that there is no Adverse Effect, 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 (changes in Pay-Out Events or Reinvestment Events that decrease the likelihood of the occurrence thereof shall not be considered delays in the timing of distributions for purposes of this clause) 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 105 amendment without the consent of each Investor Certificateholder or (iv) adversely affect the rating of any Series or Class by each 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 (which shall not be deemed to occur if the Rating Agency Condition shall have been satisfied with respect to such amendment). (c) Promptly after the execution of any such amendment or consent (other than an amendment pursuant to subsection 13.01(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. (d) It shall not be necessary for the consent of Investor Certificateholders under this Section 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) Notwithstanding anything in this Section (other than subsection (i) below) to the contrary, no amendment may be made to this Agreement or any Supplement which would adversely affect in any material respect the interests of any Series Enhancer without the consent of such Series Enhancer. (f) 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. (g) 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 or more Classes, of each Class (or, with respect to any default that does not relate to or affect 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 or more Classes, of each Class) may, on behalf of all Certificateholders, waive any default by the Transferors 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. (h) The Trustee may, but shall not be obligated to, enter into any such amendment which affects the Trustee's rights, duties or immunities under this Agreement or otherwise. In connection with the execution of any amendment hereunder, the Trustee shall be entitled to receive the Opinion of Counsel described in subsection 13.02(d). (i) [Reserved.] 106 (j) Additionally, this Agreement and any Supplement will be amended by the Transferors without the consent of the Servicer, the Trustee or any Investor Certificateholder to account for the transfer of assets as sales in accordance with FASB Statement No. 140 or any successor FASB statement; provided that the Transferors deliver a Tax Opinion on the date of such amendment. Promptly after the effectiveness of any amendment pursuant to this subsection, the Transferors shall deliver a copy of such amendment to each of the Servicer, the Trustee and each Rating Agency. (k) In the event that any Receivables Purchase Agreement provides for any vote or consent by any Investor Certificateholders in connection with an amendment of such Receivables Purchase Agreement, such Investor Certificateholders shall be given the opportunity to vote on or consent to such amendment, in accordance with the terms and conditions specified therein. In the event that any Receivables Purchase Agreement specifies any action to be taken by the Transferors, the Trustee or the Servicer, in connection with any amendment of such Receivables Purchase Agreement, the Transferors, the Trustee and the Servicer hereby agree to take such action in accordance with the terms and conditions therein. (l) Any supplemental agreement executed in accordance with the provisions of Section 7.02 or any Assumption Agreement executed in accordance with the provisions of Section 7.05 shall not be considered an amendment to this Agreement for the purposes of this Section 13.01. Section 13.02 Protection of Right, Title and Interest to Trust. (a) The Servicer shall cause this Agreement, all amendments and supplements hereto and all financing statements and amendments to financing 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 available following such recording, registration or filing. The Transferors 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 30 days after any Transferor makes any change in its name or its type or jurisdiction of organization, such Transferor 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 or ownership interest in the Receivables and the proceeds thereof. (c) Each Transferor and the Servicer shall 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 amendments to financing statement or of any new financing statement and 107 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 Transferor and the Servicer shall at all times maintain each office from which it services Receivables and its principal executive offices within the United States. The Trustee shall give each Transferor and the Servicer prompt notice of any change in the name of the Trustee or any change in the Trustee's address as shown on any financing statement filed in connection with the transactions contemplated by this Agreement or any Supplement if the address so shown ceases to be an address from which information concerning the Trustee's (on behalf of the Trust) security interest or ownership interest in the Receivables and the proceeds thereof can be obtained. The Transferors shall file such financing statements or amendments as may be necessary to continue the perfection of the Trust's security interest or ownership interest in the Receivables and the proceeds thereof. (d) The Servicer shall deliver to the Trustee (i) upon the execution and delivery of each amendment of this Agreement pursuant to Section 13.01 or any Supplement, an Opinion of Counsel to the effect specified in Exhibit E-1; (ii) on each date specified in subsection 2.09(c)(ix) with respect to Aggregate Additions to be designated as Accounts, an Opinion of Counsel substantially in the form of Exhibit E-2, (iii) semiannually, with respect to any New Accounts included as Accounts, an Opinion of Counsel substantially in the form of Exhibit E-2, (iv) on each Addition Date on which any Participation Interests are to be included in the Trust pursuant to subsection 2.09(a) or (b), an Opinion of Counsel covering the same substantive legal issues addressed by Exhibits E-1 and E-2 but conformed to the extent appropriate to relate to Participation Interests; (v) on or before March 31 of each year, beginning with March 31, 2005, an Opinion of Counsel substantially in the form of Exhibit E-3; and (vi) in connection with the occurrence of any event contemplated by Section 7.02 or Section 7.05, the Opinions of Counsel and the Tax Opinion specified therein. 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 Certificateholder's 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 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 108 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 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, 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 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 certified mail, return receipt requested, sent by facsimile transmission or sent by electronic mail (i) in the case of RFC II, to American Express Receivables Financing Corporation II, at American Express Tower, World Financial Center, Room 138, 200 Vesey Street, New York, NY 10285-4405, Attention: Secretary (facsimile no. (212) 619-9261), (ii) in the case of Centurion Bank, to American Express Centurion Bank, at 4315 South 2700 West, Salt Lake City, Utah 84184, Attention: President (facsimile no (801) 945-4075), (iii) in the case of RFC III, to American Express Receivables Financing Corporation III LLC, at 4315 South 2700 West, Room 1900, 02-01-50, Salt Lake City, Utah 84184, Attention: President (facsimile no. (801) 945-4045), with a copy to American Express Travel Related Services Company, Inc., as administrator, American Express Tower, World Financial Center, 200 Vesey Street, New York, New York 10285, Attention: General Counsel (facsimile no. (212) 619-7099), (iv) in the case of TRS, to American Express Travel Related Services Company, Inc., American Express Tower, 3 World Financial Center, 200 Vesey Street, New York, NY 10285, Attention: Treasurer (facsimile no. (212) 619-8693), (v) in the case of FSB, at American Express Bank, FSB, 4315 South 2700 West, Salt Lake City, Utah 84184, Attention: President (facsimile no. (801) 945-4050), (vi) in the case of RFC IV, to American Express Receivables Financing Corporation IV LLC, at 4315 South 2700 West, Room 1100, 02-01-56, Salt Lake City, Utah 84184, Attention: President (facsimile no. (801) 945-4060), 109 with a copy to American Express Travel Related Services Company, Inc., as administrator, American Express Tower, World Financial Center, 200 Vesey Street, New York, New York 10285, Attention: General Counsel (facsimile no. (212) 619-7099), (vii) in the case of the Trustee, the Paying Agent or Transfer Agent and Registrar, to The Bank of New York, 101 Barclay Street, Floor 8 West, New York, New York 10286, Attention: Asset-Backed Unit (facsimile no. (212) 815-2493, electronic mail address ccerilles@bankofny.com), (viii) in the case of Moody's, to Moody's Investors Service Inc. at 99 Church Street, New York, New York 10007, Attention: ABS Monitoring Department, 4th Floor (facsimile no. (212) 553-4600), (ix) in the case of Standard & Poor's, to Standard & Poor's Ratings Group at 55 Water Street, New York, New York 10041, Attention: Asset Backed Group (facsimile no. (212) 412-0323), and (x) to any other Person as specified in any Supplement; or, as to each party, at such other address, facsimile number or electronic mail address 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. Section 13.06 Severability of Provisions. If any one or more of the covenants, agreements, provisions or terms of this Agreement shall for any reason whatsoever be held invalid, then such 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 13.07 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 the Certificates upon authentication and delivery thereof by the Trustee pursuant to Section 6.02 are and shall be deemed fully paid. Section 13.08 Further Assurances. The Transferors 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 amendments to financing statements relating to the Receivables for filing under the provisions of the UCC of any applicable jurisdiction. 110 Section 13.09 Nonpetition Covenant. Notwithstanding any prior termination of this Agreement, the Investor Certificateholders, the Servicer, the Trustee, the Transferors, the Paying Agent, the Authenticating Agent, the Transfer Agent, the Registrar, the Series Enhancers 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 or any Transferor, acquiesce, petition or otherwise invoke or cause the Trust or the Transferors to invoke the process of any Governmental Authority for the purpose of commencing or sustaining a case against the Trust or any Transferor 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 Transferor or any substantial part of its property or ordering the winding-up or liquidation of the affairs of the Trust or any Transferor. Section 13.10 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 13.11 Counterparts. This Agreement may be executed in two or more counterparts (and by different parties on separate counterparts), each of which shall be an original, but all of which together shall constitute one and the same instrument. Section 13.12 Third-Party Beneficiaries. This Agreement will inure to the benefit of and be binding upon the parties hereto, the Certificateholders, any Series Enhancer and their respective successors and permitted assigns. Except as otherwise expressly provided in this Agreement (including Section 7.04), no other Person will have any right or obligation hereunder. Section 13.13 Actions by Certificateholders. (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, the Transferors or the Servicer in reliance thereon, whether or not notation of such action is made upon such Certificate. Section 13.14 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, each of the Transferors, 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 111 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 13.15 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 13.16 Headings. The headings herein are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof. Section 13.17 Fiscal Year. The fiscal year of the Trust will end on the last day of each calendar year. Section 13.18 Force Majeure. In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances. [END OF ARTICLE XIII] 112 ARTICLE XIV COMPLIANCE WITH REGULATION AB Section 14.01 Intent of the Parties; Reasonableness. The Transferors, the Servicer and the Trustee acknowledge and agree that the purpose of this Article XIV is to facilitate compliance by the Transferors with the provisions of Regulation AB and related rules and regulations of the Commission. The Transferor shall not exercise its right to request delivery of information or other performance under these provisions other than in good faith, or for purposes other than the Transferors' compliance with the Act, the Exchange Act and the rules and regulations of the Commission thereunder (or the provision in a private offering of disclosure comparable to that required under the Act). The Trustee acknowledges that interpretations of the requirements of Regulation AB may change over time, whether due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees to comply with requests made by the Transferors in good faith for delivery of information under these provisions on the basis of evolving interpretations of Regulation AB. The Trustee agrees to cooperate in good faith with any reasonable request by the Transferors for information regarding the Trustee which is required in order to enable the Transferors to comply with the provisions of Items 1103(a)(1), 1109(a), 1109(b), 1117, 1118, 1119 and 1122 of Regulation AB as it relates to the Trustee or to the Trustee's obligations under this Agreement or any Supplement. The Servicer agrees to cooperate in good faith with any reasonable request by the Transferors for information regarding the Servicer which is required in order to enable the Transferors to comply with the provisions of Items 1103(a)(1), 1105, 1108, 1117, 1118, 1119, 1121, 1122 and 1123 of Regulation AB as it relates to the Servicer or to the Servicer's obligations under this Agreement or any Supplement. Section 14.02 Additional Representations and Warranties of the Trustee. The Trustee shall be deemed to represent to the Transferors, as of the date on which information is provided to the Transferors under Section 14.03 that, except as disclosed in writing to the Transferors prior to such date to the best of its knowledge, but without independent investigation: (i) neither the execution, delivery and performance by the Trustee of this Agreement or any Supplement, the performance by the Trustee of its obligations under this Agreement or any Supplement nor the consummation of any of the transactions by the Trustee contemplated thereby, is in violation of any indenture, mortgage, bank credit agreement, note or bond purchase agreement, long-term lease, license or other agreement or instrument to which the Trustee is a party or by which it is bound, which violation would have a material adverse effect on the Trustee's ability to perform its obligations under this Agreement or any Supplement, or of any judgment or order applicable to the Trustee; and (ii) there are no proceedings pending or threatened against the Trustee in any court or before any governmental authority, agency or arbitration board or tribunal which, individually or in the aggregate, would have a material adverse effect on the right, power and authority of the Trustee to enter into this Agreement or any Supplement or to perform its obligations under this Agreement or any Supplement. Section 14.03 Information to Be Provided by the Trustee. The Trustee shall (i) on or before the fifth Business Day of each month, provide to the Transferors, in writing, such information regarding the Trustee as is requested for the purpose of compliance with Item 1117 113 of Regulation AB, and (ii) as promptly as practicable following notice to or discovery by the Trustee of any changes to such information, provide to the Transferors, in writing, such updated information. The Trustee shall (i) on or before the fifth Business Day of each January, April, July and October, provide to the Transferors such information regarding the Trustee as is requested for the purpose of compliance with Items 1103(a)(1), 1109(a), 1109(b), 1118 and 1119 of Regulation AB, and (ii) as promptly as practicable following notice to or discovery by the Trustee of any changes to such information, provide to the Transferors, in writing, such updated information. Such information shall include, at a minimum: (A) the Trustee's name and form of organization; (B) a description of the extent to which the Trustee has had prior experience serving as a Trustee for asset-backed securities transactions involving credit card receivables; (C) a description of any affiliation between the Trustee and any of the following parties to a Securitization Transaction, as such parties are identified to the Trustee by the Transferors in writing in advance of such Securitization Transaction: (1) the sponsor; (2) any depositor; (3) the issuing entity; (4) any servicer; (5) any trustee; (6) any originator; (7) any significant obligor; (8) any enhancement or support provider; and (9) any other material transaction party. In connection with the above-listed parties, a description of whether there is, and if so the general character of, any business relationship, agreement, arrangement, transaction or understanding that is entered into outside the ordinary course of business or is on terms other than would be obtained in an arm's length transaction with an unrelated third party, apart from the asset-backed securities transaction, that currently exists or that existed during the past two years and that is material to an investor's understanding of the asset-backed securities. Section 14.04 Report on Assessment of Compliance and Attestation. On or before the earlier of (a) March 1 and (b) 30 days prior to the date on which the Trust is required to file the report on Form 10-K in each calendar year, commencing in 2007, the Trustee shall: (i) deliver to the Transferors a report regarding the Trustee's assessment of compliance with the Servicing Criteria during the immediately preceding calendar year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such report shall be addressed to the Transferors or the Servicer, as 114 applicable, and signed by an authorized officer of the Trustee, and shall address each of the Servicing Criteria specified in Exhibit I or such criteria as mutually agreed upon by the Transferors and the Trustee; (ii) deliver to the Transferors a report of a registered public accounting firm reasonably acceptable to the Transferors that attests to, and reports on, the assessment of compliance made by the Trustee and delivered pursuant to the preceding paragraph. Such attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Act and the Exchange Act; and (iii) deliver to the Transferors and any other Person that will be responsible for signing the certification (a "Sarbanes Certification") required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) on behalf of the Trust or the Transferors with respect to a Securitization Transaction a certification substantially in the form attached hereto as Exhibit H or such form as mutually agreed upon by the Transferors and the Trustee. The Trustee acknowledges that the parties identified in clause (iii) above may rely on the certification provided by the Trustee pursuant to such clause in signing a Sarbanes Certification and filing such with the Commission. Section 14.05 Additional Representations and Warranties of the Servicer. The Servicer shall be deemed to represent to the Transferors, as of the date on which information is provided to the Transferors under Section 14.06 that, except as disclosed in writing to the Transferors prior to such date to the best of its knowledge: (i) the Servicer is not aware and has not received notice that any default, early amortization or other performance triggering event has occurred as to any other securitization due to any act or failure to act of the Servicer; (ii) the Servicer has not been terminated as servicer in a securitization involving credit card or charge card receivables, either due to a servicing default or to application of a servicing performance test or trigger; (iii) no material noncompliance with the applicable servicing criteria with respect to other securitizations of credit card receivables involving the Servicer as servicer has been disclosed or reported by the Servicer; (iv) no material changes to the Servicer's policies or procedures with respect to the servicing function it will perform under this Agreement and any Supplement have occurred during the three-year period immediately preceding the related Securitization Transaction; (v) there are no aspects of the Servicer's financial condition that could have a material adverse effect on the performance by the Servicer of its servicing obligations under this Agreement or any Supplement; and (vi) there are no material legal or governmental proceedings pending (or known to be contemplated) against the Servicer, any Subservicer or any unaffiliated third-party originator of Receivables. Section 14.06 Information to Be Provided by the Servicer. In connection with any Securitization Transaction, the Servicer shall (i) within five (5) Business Days following request by the Transferors, provide to the Transferors, in writing, the information specified in this Section, and (ii) as promptly as practicable following notice to or discovery by the Servicer of any changes to such information, provide to the Transferors, in writing, such updated information. 115 (a) If so requested by the Transferors, the Servicer shall provide to the Transferors such information regarding the Servicer and each Subservicer (each of the Servicer and each Subservicer, for purposes of this paragraph, a "Servicing Party"), as is requested for the purpose of compliance with Item 1108 of Regulation AB. Such information shall include, at a minimum: (A) the Servicing Party's name and form of organization; (B) a description of how long the Servicing Party has been servicing credit card receivables; a general discussion of the Servicing Party's experience in servicing assets of any type as well as a more detailed discussion of the Servicing Party's experience in, and procedures for, the servicing function it will perform under this Agreement and any Supplement; information regarding the size, composition and growth of the Servicing Party's portfolio of credit card accounts of a type similar to the Accounts and information on factors related to the Servicing Party that may be material, in the good faith judgment of the Transferors, to any analysis of the servicing of the Receivables or the related asset-backed securities, as applicable, including, without limitation: (1) whether any prior securitizations of credit card receivables involving the Servicing Party defaulted or experienced an early amortization or other performance triggering event because of servicing during the three-year period immediately preceding the related Securitization Transaction; (2) the extent of outsourcing the Servicing Party utilizes; (3) whether there has been previous disclosure of material noncompliance with the applicable servicing criteria with respect to other securitizations of credit card receivables involving the Servicing Party as a servicer during the three-year period immediately preceding the related Securitization Transaction; (4) whether the Servicing Party has been terminated as servicer in a securitization of credit card receivables, either due to a servicing default or to application of a servicing performance test or trigger; and (5) such other information as the Transferors may reasonably request for the purpose of compliance with Item 1108(b)(2) of Regulation AB; (C) a description of any material changes during the three-year period immediately preceding the related Securitization Transaction to the Servicing Party's policies or procedures with respect to the servicing function it will perform under this Agreement and any Supplement; (D) information regarding the Servicing Party's financial condition, to the extent that there is a material risk that an adverse financial event or 116 circumstance involving the Servicing Party could have a material adverse effect on the performance by the Servicing Party of its servicing obligations under this Agreement or any Supplement; (E) a description of the Servicing Party's processes and procedures designed to address any special or unique factors involved in servicing; (F) a description of the Servicing Party's processes for handling delinquencies, losses, bankruptcies and recoveries, such as sale of defaulted receivables; and (G) information as to how the Servicing Party defines or determines delinquencies and charge-offs, including the effect of any grace period, re-aging, restructuring, partial payments considered current or other practices with respect to delinquency and loss experience. (b) As a condition to the succession to the Servicer or any Subservicer as servicer or subservicer under this Agreement or any Supplement by any Person (i) into which the Servicer or such Subservicer may be merged or consolidated, or (ii) which may be appointed as a successor to the Servicer or such Subservicer, the Servicer shall provide to the Transferors at least fifteen (15) calendar days prior to the effective date of such succession or appointment, (x) written notice to the Transferors of such succession or appointment and (y) in writing and in form and substance reasonably satisfactory to the Transferors, all information reasonably requested by the Transferors in order to comply with its reporting obligation under Item 6.02 of Form 8-K with respect to any Series or Class. (c) In addition to such information as the Servicer is obligated to provide pursuant to other provisions of this Agreement and any Supplement, if so requested by the Transferors, the Servicer shall provide to the Transferors such information regarding the performance or servicing of the Receivables as is reasonably required to facilitate preparation of distribution reports in accordance with Item 1121 of Regulation AB. Such information shall be provided concurrently with the distribution reports otherwise required to be delivered monthly by the Servicer under this Agreement and any Supplement, commencing with the first such report due not less than ten (10) Business Days following such request. Section 14.07 Report on Assessment of Compliance and Attestation. (a) On or before the earlier of (a) March 1 and (b) 30 days prior to the date on which the Trust is required to file the report on Form 10-K in each calendar year, commencing in 2007, the Servicer shall: (i) deliver to the Transferors a report regarding the Servicer's assessment of compliance with the Servicing Criteria during the immediately preceding calendar year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such report shall be addressed to the Transferors and signed by an authorized officer of the Servicer, and shall address each of the Servicing Criteria specified in Exhibit K or such criteria as mutually agreed upon by the Transferors and the Servicer; 117 (ii) deliver to the Transferors a report of a registered public accounting firm reasonably acceptable to the Transferors that attests to, and reports on, the assessment of compliance made by the Servicer and delivered pursuant to the preceding paragraph. Such attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Act and the Exchange Act; (iii) cause each Servicing Participant to deliver to the Transferors an assessment of compliance and accountants' attestation as and when provided in paragraphs (i) and (ii) of this Section; and (iv) deliver to the Transferors and any other Person that will be responsible for signing the Sarbanes Certification on behalf of the Trust or the Transferors with respect to a Securitization Transaction a certification in the form attached hereto as Exhibit J. The Servicer acknowledges that the parties identified in clause (iv) above may rely on the certification provided by the Servicer pursuant to such clause in signing a Sarbanes Certification and filing such with the Commission. (b) Each assessment of compliance provided by a Subservicer pursuant to Section 14.07(a)(i) shall address each of the Servicing Criteria specified on a certification substantially in the form of Exhibit K hereto delivered to the Transferors upon reasonable request of the Transferors after the execution of this Agreement or, in the case of a Subservicer subsequently appointed as such, on or prior to the date of such appointment. An assessment of compliance provided by a Servicing Participant (other than the Servicer or any Subservicer) pursuant to Section 14.07(a)(iii) need not address any elements of the Servicing Criteria other than those specified by the Servicer pursuant to Section 14.08. Section 14.08 Use of Subservicers and Servicing Participants. The Servicer shall use its best efforts to hire or otherwise utilize only the services of Subservicers that agree to comply with the provisions of paragraph (a) of this Section. The Servicer shall use its best efforts to hire or otherwise utilize only the services of Servicing Participants, and shall use its best efforts to ensure that Subservicers hire or otherwise utilize only the services of Servicing Participants, to fulfill any of the obligations of the Servicer as servicer under this Agreement or any Supplement, if those Servicing Participants agree to comply with the provisions of paragraph (b) of this Section. (a) It shall not be necessary for the Servicer to seek the consent of the Transferors to the utilization of any Subservicer. The Servicer shall use its best efforts to cause any Subservicer used by the Servicer (or by any Subservicer) for the benefit of the Transferors to comply with the provisions of this Section and with Sections 3.05, 14.05, 14.06(c) and (d) and 14.07(a)(i) and (ii) of this Agreement to the same extent as if such Subservicer were the Servicer. The Servicer shall be responsible for obtaining from each Subservicer and delivering to the Transferors any servicer compliance statement required to be delivered by such Subservicer under Section 3.05, any assessment of compliance and attestation required to be delivered by such Subservicer under Section 14.07(a)(i) or (ii) and the certification, if any, required to be 118 delivered to the Person that will be responsible for signing the Sarbanes Certification under Section 14.07 as and when required to be delivered. (b) It shall not be necessary for the Servicer to seek the consent of the Transferors to the utilization of any Servicing Participant. The Servicer shall promptly upon request provide to the Transferors a written description (in form and substance satisfactory to the Transferors) of the role and function of each Servicing Participant utilized by the Servicer or any Subservicer, specifying (i) the identity of each such Servicing Participant and (ii) which elements of the Servicing Criteria will be addressed in assessments of compliance provided by each Servicing Participant. As a condition to the utilization of any Servicing Participant, the Servicer shall use its best efforts to cause any such Servicing Participant used by the Servicer (or by any Subservicer) for the benefit of the Transferors to comply with the provisions of Sections 14.07 of this Agreement to the same extent as if such Servicing Participant were the Servicer. The Servicer shall be responsible for obtaining from each Servicing Participant and delivering to the Transferors any assessment of compliance and attestation required to be delivered by such Servicing Participant under Section 14.07, in each case as and when required to be delivered. 119 IN WITNESS WHEREOF, the Transferors, the Servicer and the Trustee have caused this Pooling and Servicing Agreement to be duly executed by their respective officers as of the day and year first above written. AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION II, as a Transferor By: /s/ Maureen Ryan ---------------------------------------- Name: Maureen Ryan Title: President AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION III LLC, as a Transferor By: /s/ Andrea J. Moss ---------------------------------------- Name: Andrea J. Moss Title: President AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION IV LLC, as a Transferor By: /s/ Daniel L. Follett ---------------------------------------- Name: Daniel L. Follett Title: President AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC., as the Servicer By: /s/ David L. Yowan ---------------------------------------- Name: David L. Yowan Title: President THE BANK OF NEW YORK, as Trustee By: /s/ Catherine Cerilles --------------------------------------- Name: Catherine Cerilles Title: Assistant Vice President THE BANK OF NEW YORK, as Securities Intermediary By: /s/ Catherine Cerilles --------------------------------------- Name: Catherine Cerilles Title: Assistant Vice President EXHIBIT A FORM OF TRANSFEROR CERTIFICATE THIS TRANSFEROR CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS TRANSFEROR 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 TRANSFEROR 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 American Express Credit Account Master Trust TRANSFEROR CERTIFICATE THIS CERTIFICATE REPRESENTS AN INTEREST IN CERTAIN ASSETS OF THE AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST Evidencing an interest in a trust, the corpus of which consists primarily of an interest in receivables generated from time to time in the ordinary course of business in a portfolio of revolving credit card and other accounts transferred by American Express Receivables Financing Corporation II, a Delaware corporation ("RFC II"), American Express Receivables Financing Corporation III LLC, a Delaware limited liability company ("RFC III"), and American Express Receivables Financing Corporation IV LLC, a Delaware limited liability company ("RFC IV"), each as a transferor (together, the "Transferors"). (Not an interest in or obligation of the Transferors or any affiliate thereof) This certifies that RFC II, RFC III and RFC IV 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 May 16, 1996, as amended and restated as of January 1, 2006 (as amended and supplemented, the "Agreement"), among the Transferors, American Express Travel Related Services Company, Inc., as servicer (the "Servicer"), and The Bank of New York, a New York banking corporation, as trustee (the "Trustee"). The corpus of the Trust consists of (i) the Transferors' fractional undivided interest in a portfolio of certain receivables (the "Receivables") existing in the revolving credit card and other accounts identified under the Agreement from time to time (the "Accounts"), (ii) certain Receivables generated under the A-1 Accounts from time to time thereafter, (iii) certain 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, Special Funding Account and in the Series Accounts, (v) the benefits of any Series Enhancements issued and to be issued by Series Enhancers with respect to one or more Series of Investor Certificates and (vi) all other assets and interests constituting the Trust, including Recoveries and Issuer Rate Fees allocated to the Trust pursuant to the Agreement and any Supplement. 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 Transferors by virtue of the acceptance hereof assent and are bound. The Receivables consist of Principal Receivables which arise generally from the purchase of merchandise and services and amounts advanced to cardholders as cash advances and Finance Charge Receivables which arise generally from Periodic Finance Charges, Late Fees and other fees and charges with respect to the Accounts. This Certificate is the Transferor Certificate, which represents the Transferors' 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 Transferor Certificate at any time in the Receivables in the Trust shall not exceed the Transferors' Interest at such time. In addition to the Transferor 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 Transferors' Interest not allocated to the Transferors. This Transferor Certificate shall not represent any interest in the Collection Account, the Special Funding Account or the Series Accounts, except as expressly provided in the Agreement, or any Series Enhancements. Unless otherwise specified in a Supplement with respect to a particular Series the Transferors have entered into the Agreement, and this Certificate is issued, with the intention that, for federal, state and local income and franchise tax purposes, (i) the Investor Certificates of each Series which are characterized as indebtedness at the time of their issuance will qualify as indebtedness of the Transferors secured by the Receivables and (ii) the Trust shall not be treated as an association taxable as a corporation. The Transferors, by entering into the Agreement and by the acceptance of this Transferor Certificate, agree to treat the Investor Certificates for federal, state and local income and franchise tax purposes as indebtedness of the Transferors. 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) May 1, 2030, (ii) the day following the Distribution Date on which the Invested A-2 Amount and Enhancement Invested Amount for each Series is zero (provided the Transferors have delivered a written notice to the Trustee electing to terminate the Trust) and (iii) the time provided in Section 9.01 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-3 IN WITNESS WHEREOF, the Transferors have caused this Certificate to be duly executed. AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION II, as a Transferor By: ---------------------------- Name: Title: AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION III LLC, as a Transferor By: ---------------------------- Name: Title: AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION IV LLC, as a Transferor By: ---------------------------- Name: Title: Dated: [ , ] ---------- ---- -------- A-4 TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is the American Express Credit Account Master Trust Transferor Certificate described in the within-mentioned Agreement. - ---------------------------------------------------- , as Trustee By ----------------------------------------------- Authorized Signatory or By [ ], ---------------------------------------------- as Authenticating Agent for the Trustee By , ----------------------------------------------- Authorized Signatory A-5 EXHIBIT B FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL ACCOUNTS (As required by Section 2.09 of the Pooling and Servicing Agreement) ASSIGNMENT No. [__] OF RECEIVABLES IN ADDITIONAL ACCOUNTS, dated as of [__________], [____] (1)/, by and among AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION II, a Delaware corporation, AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION III LLC, a Delaware limited liability company, and AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION IV LLC, a Delaware limited liability company, as transferors (together, the "Transferors"), and THE BANK OF NEW YORK, a New York banking corporation not in its individual capacity but solely as trustee (the "Trustee"), pursuant to the Pooling and Servicing Agreement referred to below. WITNESSETH WHEREAS, the Transferors, the Trustee and American Express Travel Related Services Company, Inc., as the Servicer (the "Servicer"), are parties to the Pooling and Servicing Agreement, dated as of May 16, 1996, as amended and restated as of January 1, 2006 (as may be amended and supplemented from time to time, the "Agreement"); WHEREAS, pursuant to the Agreement, the Transferors wish to designate Additional Accounts to be included as Accounts and to convey the Receivables of such Additional Accounts, whether now existing or hereafter created, to the Trustee as part of the corpus of the Trust (as each such term is defined in the Agreement); and WHEREAS, the Trustee is willing to accept such designation and conveyance subject to the terms and conditions hereof. NOW, THEREFORE, the Transferors 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 Accounts" has the meaning set forth in Section 2. "Addition Date" shall mean, with respect to the Additional Accounts designated hereby, [________________], [________________]. "Addition Cut-Off Date" shall mean, with respect to the Additional Accounts designated hereby, [________________], [________________]. "Addition Selection Date" shall mean [(i)] for the added accounts with the code designation "[__]," the close of business on the cycle billing date for such added accounts - -------------------- (1) / To be dated as of the applicable Addition Date. B-1 occurring in the period beginning on the close of business on [_______], [_____], and ending at the close of business on [_______], [_____] [and (ii) for the added accounts with the code designation "[__]," the close of business on the cycle billing date for such added accounts occurring in the period beginning on the close of business on [_______], [_____] and ending at the close of business on [_______], [_____]]. 2. Designation of Additional Accounts. On or before the date hereof, the Transferors will deliver to the Trustee computer files, microfiche lists or printed lists containing a true and complete schedule identifying all Additional Accounts designated hereby by code designations "[__]" [and "[__]"] (the "Additional Accounts") and specifying for each Additional Account its account number and the aggregate amount of Receivables outstanding in such Additional Account on the Addition Cut-Off Date, which computer files or lists shall be marked as Schedule 1 hereto, shall be incorporated herein and made a part hereof, and shall supplement Schedule 1 to the Agreement. 3. Conveyance of Receivables. (a) The Transferors do hereby transfer, assign, set over and otherwise convey, without recourse except as set forth in the Agreement, to the Trustee, on behalf of the Trust, for the benefit of the Certificateholders, all their respective right, title and interest, whether now owned or hereafter acquired, in, to and under the Receivables existing in each of the Additional Accounts (including Related Accounts and Transferred Accounts with respect to such Additional Accounts) at the close of business on the Addition Cut-Off Date and thereafter created from time to time until the termination of the Trust, all monies due or to become due and all amounts received with respect thereto and all Collections (including allocable Recoveries and Issuer Rate Fees) and proceeds (including Insurance Proceeds and "proceeds" as defined in the UCC) thereof. 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 the Servicer, the Transferors or any other Person in connection with the Accounts, the Receivables or under any agreement or instrument relating thereto. (b) The Transferors agree to record and file, at their own expense, financing statements (and amendments to such financing statements when applicable) with respect to the Receivables existing as of the Addition Cut-Off Date and thereafter created in Additional Accounts, meeting the requirements of applicable state law in such manner and in such jurisdictions as are necessary to perfect, and maintain perfection of, the transfer, assignment, set-over or other conveyance of their interest in such Receivables to the Trust, and to deliver a file-stamped copy of each such financing statement or amendment 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 statements or amendments thereto or to make any other filing under the UCC in connection with such transfer and assignment. (c) The Transferors further agree, at their own expense, on or prior to the date of this Assignment, to indicate in the appropriate computer files that Receivables created in connection with the Additional Accounts designated hereby have been conveyed to the Trustee pursuant to the Agreement and this Assignment for the benefit of the Certificateholders by including in the securitization field of such computer files the code "[__]" [or "[__]," as applicable,] for each such Additional Account. B-2 (d) The parties hereto intend that each transfer of Receivables and other property pursuant to this Assignment constitute a sale, and not a secured borrowing, for accounting purposes. Nevertheless, the Transferors do hereby grant to the Trustee a security interest in all of their respective right, title and interest, whether now owned or hereafter acquired, in, to and under the Receivables existing in each of the Additional Accounts (including Related Accounts and Transferred Accounts with respect to such Additional Accounts) at the close of business on the Addition Cut-Off Date and thereafter created from time to time until the termination of the Trust, all monies due or to become due and all amounts received with respect thereto and all Collections (including allocable Recoveries and Issuer Rate Fees) and proceeds (including Insurance Proceeds and "proceeds" as defined in the UCC) thereof. This Assignment constitutes a security agreement under the UCC. 4. Acceptance by Trustee. The Trustee hereby acknowledges its acceptance on behalf of the Trust of all right, title and interest to the property conveyed to the Trustee 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 Transferors delivered to the Trustee the computer files or lists described in Section 2 of this Assignment. 5. Representations and Warranties of the Transferors. Each Transferor hereby severally 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 such Transferor, enforceable against such Transferor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity); (b) Eligibility of Accounts. As of the Addition Selection Date, each related Additional Account designated hereby is an Eligible Account and each Receivable then existing in each related Additional Account designated hereby is an Eligible Receivable; (c) Insolvency. As of the Addition Cut-Off Date and the Addition Date, no Insolvency Event with respect to such Transferor has occurred and the transfer by such Transferor of Receivables arising in the Additional Accounts to the Trust has not been made in contemplation of the occurrence thereof; (d) Pay-Out Event. Such Transferor reasonably believes that (A) the addition of the Receivables arising in the related Additional Accounts will not, based on the facts known to such Transferor, then or thereafter cause a Pay-Out Event to occur with respect to any Series and (B) no selection procedure was utilized by such Transferor which would result in the selection of Additional Accounts (from among the Eligible Accounts available to such B-3 Transferor) that would be materially adverse to the interests of the Investor Certificateholders of any Series as of the Addition Date; (e) Security Interest. This Assignment constitutes either a valid transfer and assignment to the Trustee of all right, title and interest, whether now owned or hereafter acquired, of such Transferor in the Receivables existing in each of the related Additional Accounts at the close of business on the Addition Cut-Off Date or thereafter created, all monies due or to become due and all amounts received with respect thereto and, to the extent set forth in the UCC in effect in the relevant state, the "proceeds" thereof, or it constitutes a valid and continuing security interest (as defined in the applicable UCC) in favor of the Trustee in such property, which security interest is prior to all other Liens (as defined in the Agreement) except as permitted under the Agreement, and is enforceable as such as against creditors of and purchasers from such Transferor. Upon the filing of the financing statements described in Section 3 of this Assignment and, in the case of the Receivables hereafter created and the proceeds thereof, upon the creation thereof, the Trustee shall have a first priority perfected security or ownership interest in such property, except for (i) Liens permitted under clause (d) of the definition of "Eligible Receivable" in the Agreement, (ii) the interests of the holders of the Transferor Certificates under the Agreement and (iii) the right to receive interest and investment earnings (net of losses and investment expenses) in respect of the Collection Account as provided in the Agreement or any Series Account if so provided in the applicable Supplement. The related Receivables described in Section 3 of this Assignment constitute "accounts" or "general intangibles" within the meaning of the applicable UCC; (f) Creation. At the time of its transfer of any Receivable to the Trustee pursuant to this Assignment, such Transferor owned and had good and marketable title to such Receivable, free and clear of any Lien (except as permitted under the Agreement), claim or encumbrance of any Person; (g) Perfection. Such Transferor has caused or will have caused, within ten (10) days of the initial execution of this Assignment, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Receivables granted by such Transferor to the Trustee pursuant to this Assignment; (h) Priority. Other than the security interest granted to the Trustee pursuant to this Assignment, such Transferor has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed the Receivables described in Section 3 of this Assignment. Such Transferor has not authorized the filing of and is not aware of any financing statement against such Transferor that includes a description of such Receivables other than any financing statement relating to the transfer and security interest granted to the Trustee pursuant to the Agreement or this Assignment or that has been terminated. Such Transferor is not aware of any judgment or tax lien filings against such Transferor; (i) No Conflict. The execution and delivery by such Transferor of this Assignment, the performance by such Transferor of the transactions contemplated by this Assignment and the fulfillment by such Transferor of the terms hereof applicable to such Transferor, will not conflict with or violate any Requirements of Law applicable to such B-4 Transferor or conflict with, result in any breach of any of the material terms and provisions of, or constitute (with or without notice or lapse of time or both) a material default under, any indenture, contract, agreement, mortgage, deed of trust or other instrument to which such Transferor 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 such Transferor, threatened against such Transferor 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 such Transferor, would materially and adversely affect the performance by such Transferor 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 approvals of any court or other governmental authority required to be obtained by such Transferor in connection with the execution and delivery of this Assignment by such Transferor and the performance of the transactions contemplated by this Assignment by such Transferor, have been obtained; and (l) List of Accounts. As of the Addition Date, to the best knowledge of the Transferors, the computer files or lists of Additional Accounts comply with the requirements of Section 2 hereof. The representations and warranties in clauses (e) through (h) above shall survive until the termination of the Agreement. Such representations and warranties speak as of the date of this Assignment and as of the Addition Date but shall not be waived by any of the parties to this Assignment unless each Rating Agency shall have notified the Transferors, the Servicer and the Trustee in writing that such waiver will not result in a reduction or withdrawal of the rating of any outstanding Series or Class to which it is a Rating Agency. 6. Ratification of Agreement. As 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. 7. 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. 8. 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-5 IN WITNESS WHEREOF, each Transferor and the Trustee have caused this Assignment to be duly executed by their respective officers as of the day and year first above written. AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION II, as a Transferor By: ----------------------------------- Name: Title: AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION III LLC, as a Transferor By: ----------------------------------- Name: Title: AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION IV LLC, as a Transferor By: ----------------------------------- Name: Title: B-6 THE BANK OF NEW YORK, not in its individual capacity, but solely as Trustee By: ------------------------------------ Name: Title: B-7 EXHIBIT C FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS (As required by Section 2.10 of the Pooling and Servicing Agreement) REASSIGNMENT No. [__] OF RECEIVABLES, dated as of [____________],(2)/ by and among AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION II, a Delaware corporation, AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION III LLC, a Delaware limited liability company, and AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION IV LLC, a Delaware limited liability company, as Transferors (each, a "Transferor" and, collectively, the "Transferors"), and THE BANK OF NEW YORK, a New York banking corporation not in its individual capacity but solely as trustee (the "Trustee"), pursuant to the Pooling and Servicing Agreement referred to below. WITNESSETH: WHEREAS, the Transferors, the Trustee and American Express Travel Related Services Company, Inc., as servicer, are parties to the Pooling and Servicing Agreement, dated as of May 16, 1996, as amended and restated as of January 1, 2006 (as may be otherwise amended and supplemented from time to time, the "Agreement"); WHEREAS, pursuant to the Agreement, [____], as a Transferor, wishes to remove from the Trust all Receivables owned by the Trustee in certain designated Accounts (the "Removed Accounts") and to cause the Trustee to reconvey to such Transferor all the Trustee's right, title and interest in, to and under the Receivables then existing and thereafter created, all monies due or to become due and all amounts received thereafter with respect thereto and all proceeds thereof in or with respect to such Removed Accounts, whether now existing or hereafter created; and WHEREAS, the Trustee on behalf of the Trust 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 Transferors 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, [________________], [_____]. "Removal Notice Date" shall mean, with respect to the Removed Accounts, [________________], [____]. - -------------------- (2) / To be dated as of the Removal Date. C-1 2. Designation of Removed Accounts. On or before the date that is five Business Days after the Removal Date, the relevant Transferor will deliver to the Trustee a computer file or microfiche list containing a true and complete list of the Removed Accounts, specifying for each such Removed Account, as of the Removal Notice Date, its account number and the aggregate amount of Receivables outstanding in such Removed Account, which computer file or microfiche list shall be marked as Schedule 1 hereto, shall be incorporated herein and made a part hereof, and shall supplement Schedule 1 to the Agreement. 3. Conveyance of Receivables. (a) The Trustee does hereby transfer, assign, set over and otherwise convey to such Transferor, without recourse, on and after the Removal Date, all right, title and interest of the Trustee 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 designated hereby, all monies due or to become due and all amounts received with respect thereto and all proceeds and Recoveries thereof. (b) In connection with such transfer, the Trustee agrees to execute and deliver to the Transferors on or prior to the date this Reassignment is delivered, applicable termination statements prepared by the Transferors 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 reassigned hereby and the proceeds thereof evidencing the release by the Trustee of its interest in the Receivables in the Removed Accounts, 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 Transferors. Each Transferor hereby severally 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 such Transferor enforceable against such Transferor, in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity); and (b) Pay Out Event. Such Transferor reasonably believes that (A) the removal of the Receivables existing in the related Removed Accounts will not, based on the facts known to such Transferor, then or thereafter cause a Pay Out Event to occur with respect to any Series and (B) no selection procedure was utilized by such Transferor which would result in a selection of Removed Accounts that would be materially adverse to the interests of the Investor Certificateholders of any Series as of the Removal Date. (c) List of Removed Accounts. The list of Removed Accounts delivered pursuant to Section 2.10 of the Agreement, as of the Removal Date, is true and complete in all material respects. C-2 5. Ratification of Agreement. As 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. 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. C-3 IN WITNESS WHEREOF, each Transferor and the Trustee have caused this Reassignment to be duly executed by their respective officers as of the day and year first above written. AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION II, as a Transferor By: ------------------------------------ Name: Title: AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION III LLC, as a Transferor By: ------------------------------------ Name: Title: AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION IV LLC, as a Transferor By: ------------------------------------ Name: Title: THE BANK OF NEW YORK, not in its individual capacity, but solely as Trustee By: ------------------------------------ Name: Title: C-4 EXHIBIT D [RESERVED] D-1 EXHIBIT E-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 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. (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 Transferors and constitutes the legal, valid and binding agreement of the Transferors, 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. The enforceability of the Transferors' 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. E-1-1 EXHIBIT E-2 FORM OF OPINION OF COUNSEL WITH RESPECT TO ACCOUNTS Provisions to be included in Opinion of Counsel to be delivered pursuant to subsection 13.02(d)(ii) or (iii) -------------------------------- The opinions 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. 1. The Pooling and Servicing Agreement creates in favor of the Trustee a security interest in the rights of the relevant Transferor in the Receivables identified in Schedule 1 to the Pooling and Servicing Agreement and the identifiable proceeds thereof. 2. The security interest described in the paragraph above is perfected and of first priority. E-2-1 EXHIBIT E-3 PROVISIONS TO BE INCLUDED IN ANNUAL OPINION OF COUNSEL The opinions 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. Unless otherwise indicated, all capitalized terms used herein shall have the meanings ascribed to them in the Pooling and Servicing Agreement and in the Assignment. 1. The security interest created by the Pooling and Servicing Agreement in favor of the Trustee in the rights of the relevant Transferor in the Receivables identified in Schedule 1 to the Pooling and Servicing Agreement and the identifiable proceeds thereof is perfected and of first priority. E-3-1 EXHIBIT F-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] AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST, Class [___] Series [200_-__] [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 May 16, 1996, as amended and restated as of January 1, 2006 (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. 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:(3)/ [Euroclear Bank S.A. / N.V., as operator of the Euroclear Systems](4)/ [Clearstream Banking, societe anonyme]2/ By: ---------------------------------------- - ------------------ (3) / To be dated on the Exchange Date. (4) / Delete the inappropriate reference. F-1-1 EXHIBIT F-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] AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST, Class [__] Series [200_-__] [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] 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, as amended. [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 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: F-2-1 [ ], By: ------------------------------- Authorized Officer F-2-2 EXHIBIT F-3 [FORM OF CERTIFICATE TO BE DELIVERED TO EUROCLEAR OR CLEARSTREAM BY A BENEFICIAL OWNER OF CERTIFICATES, OTHER THAN A QUALIFIED INSTITUTIONAL BUYER] AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST, Class [__] Series [200_-__] [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 on 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(c)(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. F-3-1 Dated:(5)/ By: --------------------------------------------- As, or an agent for, the beneficial owner(s) of the interest in the Certificates to which this certificate relates. - -------------------- (5) / This Certificate must be dated on the earlier 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. F-3-2 EXHIBIT G-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, 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 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). G-1-1 EXHIBIT G-2 [FORM OF UNDERTAKING LETTER] [Date] The Bank of New York 101 Barclay Street, Floor 8 West New York, New York 10286 Attention: Asset Backed Group American Express Receivables Financing Corporation II American Express Tower World Financial Center 200 Vesey Street, Room 138 New York, New York 10285 Attention: President American Express Receivables Financing Corporation III LLC [address] American Express Receivables Financing Corporation IV LLC [address] Re: Purchase of $ (6)/ principal amount of ------------------------- American Express Credit Account Master Trust Class [____] Series [20___-__] [Floating Rate] [___%] Asset Backed Certificates Ladies and Gentlemen: In connection with our purchase of the above-referenced 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; - -------------------- (6) / Not less than $250,000 minimum principal amount. G-2-1 (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 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 laws 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) (l) 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 years; or (c) the Certificates are sold in any other transaction that does not require registration under the 1933 Act and, if the Transferors, 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: G-2-2 "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 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)." The first paragraph of this legend may be removed if the Transferors, 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, as amended, or that is described in Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended, 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 May 16, 1996, as amended and restated as of January 1, 2006, among American Express Receivables Financing Corporation II, American Express Receivables Financing Corporation III LLC and American Express Receivables Financing Corporation IV LLC, each as transferor, American Express Travel Related Services Company, Inc., as servicer, and The Bank of New York, as trustee. Very truly yours, (Name of Purchaser) By: --------------------------- (Authorized Officer) G-2-3 EXHIBIT G-3 THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A BENEFIT PLAN (AS DEFINED BELOW).(7)/ - -------------------- (7) / The following text should be included in any Certificate in which the above legend appears: The [Certificates] may not be acquired by or for the account of any employee benefit plan, trust or account, including an individual retirement account, that is subject to the Employee Retirement Income Security Act of 1974, as amended, or that is described in Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended, or an entity whose underlying assets include plan assets by reason of a plan's investment in such entity (a "Benefit Plan"). By accepting and holding this Certificate, the Holder hereof shall be deemed to have represented and warranted that it is not a Benefit Plan. By acquiring any interest in this Certificate, the applicable Certificate Owner or Owners shall be deemed to have represented and warranted that it or they are not Benefit Plans. G-3-1 EXHIBIT H FORM OF ANNUAL CERTIFICATION Re: The Pooling and Servicing Agreement, dated as of May 16, 1996, as amended and restated as of January 1, 2006 (the "Agreement"), among American Express Receivables Financing Corporation II, American Express Receivables Financing Corporation III LLC and American Express Receivables Financing Corporation IV LLC, as transferors, American Express Travel Related Services Company, Inc., as servicer, and The Bank of New York, as trustee I, ________________________________, the _______________________ of THE BANK OF NEW YORK (the "Company"), certify to the Transferors, and their respective officers, with the knowledge and intent that they will rely upon this certification, that: (1) I have reviewed the report on assessment of the Company's compliance provided in accordance with Rules 13a-18 and 15d-18 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Item 1122 of Regulation AB (the "Servicing Assessment"), and the registered public accounting firm's attestation report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of Regulation AB (the "Attestation Report"), that were delivered by the Company to the Transferors pursuant to the Agreement (collectively, the "Company Information"); (2) To the best of my knowledge, the Company Information, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in the light of the circumstances under which such statements were made, not misleading with respect to the period of time covered by the Company Information; (3) To the best of my knowledge, all of the Company Information required to be provided by the Company under the Agreement has been provided to the Transferors; and (4) To the best of my knowledge, except as disclosed in the Servicing Assessment or the Attestation Report, the Company has fulfilled its obligations in all material respects under the Agreement. Date: ________________________ By: ________________________ Name: Title: H-1 EXHIBIT I SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE The assessment of compliance to be delivered by the Trustee shall address, at a minimum, the criteria identified as below as "Applicable Servicing Criteria":
- ------------------------------------------------------------------------------------------ ---------------------- APPLICABLE SERVICING SERVICING CRITERIA CRITERIA - ------------------------------------------------------------------------------------------ ---------------------- REFERENCE CRITERIA - -------------------- --------------------------------------------------------------------- ---------------------- - -------------------- --------------------------------------------------------------------- ---------------------- GENERAL SERVICING CONSIDERATIONS - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(1)(i) Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(1)(ii) If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party's performance and compliance with such servicing activities. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a back-up servicer for the credit card accounts or accounts are maintained. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements. - -------------------- --------------------------------------------------------------------- ---------------------- CASH COLLECTION AND ADMINISTRATION - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(2)(i) Payments on credit card accounts are deposited into the appropriate custodial bank accounts and related bank |X|(1) clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor or to |X| an investor are made only by authorized personnel. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(2)(iv) The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(2)(v) Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, "federally insured depository institution" with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized access. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements. - -------------------- --------------------------------------------------------------------- ----------------------
- -------------------- (1) Solely with regard to deposits made by the Trustee. I-1
- ------------------------------------------------------------------------------------------ ---------------------- APPLICABLE SERVICING SERVICING CRITERIA CRITERIA - ------------------------------------------------------------------------------------------ ---------------------- REFERENCE CRITERIA - -------------------- --------------------------------------------------------------------- ---------------------- - -------------------- --------------------------------------------------------------------- ---------------------- INVESTOR REMITTANCES AND REPORTING - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(3)(i) Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors' or the trustee's records as to the total unpaid principal balance and number of credit card accounts serviced by the Servicer. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(3)(ii) Amounts due to investors are allocated and remitted in accordance |X| with timeframes, distribution priority and other terms set forth in the transaction agreements. - -------------------- --------------------------------------------------------------------- ---------------------- Disbursements made to an investor are posted within two business days to the Servicer's investor records, or such other number of |X| 1122(d)(3)(iii) days specified in the transaction agreements. - -------------------- --------------------------------------------------------------------- ---------------------- Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or |X| 1122(d)(3)(iv) custodial bank statements. - -------------------- --------------------------------------------------------------------- ---------------------- POOL ASSET ADMINISTRATION - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(4)(i) Collateral or security on credit card accounts is maintained as |X| required by the transaction agreements or related asset pool documents. - -------------------- --------------------------------------------------------------------- ---------------------- Account and related documents are safeguarded as required by the |X| 1122(d)(4)(ii) transaction agreements - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(4)(iv) Payments on credit card accounts, including any payoffs, made in accordance with the related credit card accounts documents are posted to the Servicer's obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related asset pool documents. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(4)(v) The Servicer's records regarding the accounts and the accounts agree with the Servicer's records with respect to an obligor's unpaid principal balance. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's account (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(4)(viii) Records documenting collection efforts are maintained during the period a Account is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity's activities in monitoring delinquent Accounts including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment). - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(4)(ix) Adjustments to interest rates or rates of return for Accounts with variable rates are computed based on the related Account documents. - -------------------- --------------------------------------------------------------------- ----------------------
I-2
- ------------------------------------------------------------------------------------------ ---------------------- APPLICABLE SERVICING SERVICING CRITERIA CRITERIA - ------------------------------------------------------------------------------------------ ---------------------- REFERENCE CRITERIA - -------------------- --------------------------------------------------------------------- ---------------------- - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor's Account documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable Account documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related Accounts, or such other number of days specified in the transaction agreements. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(4)(xii) Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer's funds and not charged to the obligor, unless the late payment was due to the obligor's error or omission. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within two business days to the obligor's records maintained by the servicer, or such other number of days specified in the transaction agreements. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements. - -------------------- --------------------------------------------------------------------- ---------------------- 1122(d)(4)(xv) Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements. - -------------------- --------------------------------------------------------------------- ----------------------
[NAME OF TRUSTEE] Date: __________________________ By: ___________________________ Name: Title: I-3 EXHIBIT J FORM OF ANNUAL CERTIFICATION Re: The [ ] agreement dated as of [ ], 200[ ] (the "Agreement"), among [IDENTIFY PARTIES] I, ________________________________, the _______________________ of [NAME OF COMPANY] (the "Company"), certify to the Transferors, and its officers, with the knowledge and intent that they will rely upon this certification, that: (1) I have reviewed the report on assessment of the Company's compliance provided in accordance with Rules 13a-18 and 15d-18 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Item 1122 of Regulation AB (the "Servicing Assessment"), and the registered public accounting firm's attestation report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of Regulation AB (the "Attestation Report"), that were delivered by the Company to the Transferors pursuant to the Agreement (collectively, the "Company Information"); (2) To the best of my knowledge, the Company Information, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in the light of the circumstances under which such statements were made, not misleading with respect to the period of time covered by the Company Information; (3) To the best of my knowledge, all of the Company Information required to be provided by the Company under the Agreement has been provided to the Transferors; and (4) To the best of my knowledge, except as disclosed in the Servicing Assessment or the Attestation Report, the Company has fulfilled its obligations in all material respects under the Agreement. Date: ______________________ By: ______________________ Name: Title: J-1 EXHIBIT K SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE The assessment of compliance to be delivered by the [Servicer] [Subservicer] shall address, at a minimum, the criteria identified as below as "Applicable Servicing Criteria":
- --------------------------------------------------------------------------------------- -------------- ----------------- SERVICING CRITERIA APPLICABLE APPLICABLE SERVICING SERVICING CRITERIA FOR CRITERIA FOR A SERVICER SUBSERVICER - --------------------------------------------------------------------------------------- -------------- ----------------- REFERENCE CRITERIA - -------------------- ------------------------------------------------------------------ -------------- ----------------- - -------------------- ------------------------------------------------------------------ -------------- ----------------- GENERAL SERVICING CONSIDERATIONS - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(1)(i) Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(1)(ii) If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party's performance and compliance with such servicing activities. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a back-up servicer for the credit card accounts or accounts are maintained. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements. - -------------------- ------------------------------------------------------------------ -------------- ----------------- CASH COLLECTION AND ADMINISTRATION - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(2)(i) Payments on credit card accounts are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(2)(iv) The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(2)(v) Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, "federally insured depository institution" with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized access. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements. - -------------------- ------------------------------------------------------------------ -------------- -----------------
K-1
- --------------------------------------------------------------------------------------- -------------- ----------------- SERVICING CRITERIA APPLICABLE APPLICABLE SERVICING SERVICING CRITERIA FOR CRITERIA FOR A SERVICER SUBSERVICER - --------------------------------------------------------------------------------------- -------------- ----------------- REFERENCE CRITERIA - -------------------- ------------------------------------------------------------------ -------------- ----------------- - -------------------- ------------------------------------------------------------------ -------------- ----------------- INVESTOR REMITTANCES AND REPORTING - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(3)(i) Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors' or the trustee's records as to the total unpaid principal balance and number of credit card accounts serviced by the Servicer. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(3)(ii) Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(3)(iii) Disbursements made to an investor are posted within two business days to the Servicer's investor records, or such other number of days specified in the transaction agreements. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements. - -------------------- ------------------------------------------------------------------ -------------- ----------------- POOL ASSET ADMINISTRATION - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(4)(i) Collateral or security on credit card accounts is maintained as required by the transaction agreements or related asset pool documents. - -------------------- ------------------------------------------------------------------ -------------- ----------------- Account and related documents are safeguarded as required by the 1122(d)(4)(ii) transaction agreements - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(4)(iv) Payments on credit card accounts, including any payoffs, made in accordance with the related credit card accounts documents are posted to the Servicer's obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related asset pool documents. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(4)(v) The Servicer's records regarding the accounts and the accounts agree with the Servicer's records with respect to an obligor's unpaid principal balance. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's account (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(4)(viii) Records documenting collection efforts are maintained during the period a Account is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity's activities in monitoring delinquent Accounts including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment). - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(4)(ix) Adjustments to interest rates or rates of return for Accounts with variable rates are computed based on the related Account documents. - -------------------- ------------------------------------------------------------------ -------------- -----------------
K-2
- --------------------------------------------------------------------------------------- -------------- ----------------- SERVICING CRITERIA APPLICABLE APPLICABLE SERVICING SERVICING CRITERIA FOR CRITERIA FOR A SERVICER SUBSERVICER - --------------------------------------------------------------------------------------- -------------- ----------------- REFERENCE CRITERIA - -------------------- ------------------------------------------------------------------ -------------- ----------------- - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor's Account documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable Account documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related Accounts, or such other number of days specified in the transaction agreements. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(4)(xii) Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer's funds and not charged to the obligor, unless the late payment was due to the obligor's error or omission. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within two business days to the obligor's records maintained by the servicer, or such other number of days specified in the transaction agreements. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements. - -------------------- ------------------------------------------------------------------ -------------- ----------------- 1122(d)(4)(xv) Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements. - -------------------- ------------------------------------------------------------------ -------------- -----------------
[NAME OF [SERVICER] [SUBSERVICER] Date:_______________________________ By: _______________________________ Name: Title: K-3 SCHEDULE 1 List of Accounts [Delivered to Trustee] EX-5.1 3 b409067ex_5-1.txt EXHIBIT 5.1 Exhibit 5.1 [American Express letterhead] March 10, 2006 American Express Receivables Financing Corporation II 200 Vesey Street, Room 138 Mail Stop 01-31-12 New York, New York 10285 American Express Receivables Financing Corporation III LLC 4315 South 2700 West, Room 1300 Mail Stop 02-01-04 Salt Lake City, Utah 84184 American Express Receivables Financing Corporation IV LLC 4315 South 2700 West, Room 1300 Mail Stop 02-01-58 Salt Lake City, Utah 84184 Re: American Express Credit Account Master Trust, Registration Statement on Form S-3 Ladies and Gentlemen: I have acted as counsel to American Express Receivables Financing Corporation II, a Delaware corporation, American Express Receivables Financing Corporation III LLC, a Delaware limited liability company, and American Express Receivables Financing Corporation IV LLC, a Delaware limited liability company (the "Transferors"), in connection with the above-referenced Registration Statement on Form S-3 being filed concurrently herewith with the Securities and Exchange Commission (the "Registration Statement") under the Securities Act of 1933, as amended (the "Act"), relating to the proposed issuance and sale from time to time of Asset Backed Certificates (the "Certificates") of the American Express Credit Account Master Trust to which the Transferors will transfer receivables (the "Receivables") generated from time to time in a portfolio of designated credit accounts. The American Express Credit Account Master Trust was formed pursuant to the Pooling and Servicing Agreement, dated as of May 16, 1996, as amended and restated as of January 1, 2006 (as so amended and restated and as otherwise amended from time to time, the "Pooling Agreement") among the Transferors, American Express Travel Related Services Company, Inc., as Servicer (the "Servicer") and The Bank of New York, as trustee (the "Trustee"). The Certificates will be issued and delivered in accordance with the terms of a specified Series Supplement to the Pooling Agreement. I have examined such instruments, documents and records as I have deemed relevant and necessary for the purposes of the opinion expressed below. In my examination, I have assumed the authenticity of original documents and the genuineness of all signatures, the conformity to the originals of all documents submitted to me as copies, and the truth, accuracy and completeness of the information, representations and warranties contained in the records, documents, instruments and certificates I have reviewed. Based upon the foregoing, and subject to the qualification that I am admitted to the practice of law in the State of New York and do not purport to be expert in the laws of any jurisdiction other than the State of New York, I am of the opinion that, assuming the due execution and delivery of the Pooling Agreement and applicable Series Supplement thereto substantially in the form filed as an exhibit to the Registration Statement, upon the issuance, authentication, execution and delivery of the Certificates in accordance with the provisions of such Pooling Agreement and such Supplement, against payment therefor, and upon the sale of the Certificates in the manner described in the Registration Statement, any amendment thereto and the prospectus and prospectus supplement relating thereto, the Certificates will be legally issued, fully paid and non-assessable, and the holders of the Certificates will be entitled to the benefits of the Pooling Agreement, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium, or other laws relating to or affecting the rights of creditors generally and general principles of equity, including without limitation, concepts of materiality, reasonableness, good faith and fair dealing, and the possible unavailability of specific performance or injunctive relief, regardless of whether such enforceability is considered in a proceeding in equity or at law. I consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to me under the caption "Legal Matters" in the Prospectus included in the Registration Statement. In giving such consent, I do not admit that I am in the category of persons whose consent is required under Section 7 of the Act. Very truly yours, /s/ Carol V. Schwartz Carol V. Schwartz Group Counsel 2 EX-8.1 4 b409067ex_8-1.txt EXHIBIT 8.1 Exhibit 8.1 March 10, 2006 American Express Receivables Financing Corporation II 200 Vesey Street, Room 138 Mail Stop 01-31-12 New York, New York 10285 American Express Receivables Financing Corporation III LLC 4315 South 2700 West, Room 1300, 02-01-04 Salt Lake City, Utah 84184 American Express Receivables Financing Corporation IV LLC 4315 South 2700 West, Room 1300, 02-01-58 Salt Lake City, Utah 84184 Re: American Express Credit Account Master Trust, Registration Statement on Form S-3 Ladies and Gentlemen: We have acted as special counsel for American Express Receivables Financing Corporation II ("RFC II"), American Express Receivables Financing Corporation III LLC ("RFC III") and American Express Receivables Financing Corporation IV LLC ("RFC IV") in connection with the preparation of the Registration Statement on Form S-3 (the "Registration Statement"), which has been filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Act"), for the registration under the Act of Asset Backed Certificates (the "Certificates") representing an undivided interest in the American Express Credit Account Master Trust (the "Trust"). The Certificates are to be issued pursuant to the Pooling and Servicing Agreement, dated as of May 16, 1996, as amended and restated as of January 1, 2006, and as otherwise amended from time to time, among RFC II, RFC III, RFC IV, American Express Travel Related Services Company, Inc., as servicer, and The Bank of New York, as trustee. We hereby confirm that the statements set forth in the prospectus relating to the Certificates (the "Prospectus") forming a part of the Registration Statement under the headings "Prospectus Summary-Tax Status" and "Tax Matters," to the extent that they constitute matters of law or legal conclusions with respect thereto, are correct in all material respects and we hereby confirm the opinions set forth under such headings. As more fully described in the immediately succeeding paragraph, there can be no assurance, however, that contrary positions will not be taken by the Internal Revenue Service or that the law will not change. This opinion letter is based on the facts and circumstances set forth in the Prospectus and in the other documents reviewed by us. Our opinion as to the matters set forth herein could change with respect to a particular Series or Class of Certificates as a result of changes in facts and circumstances, changes in the terms of the documents reviewed by us, or changes in the law subsequent to the date hereof. As the Registration Statement contemplates Series and Classes of Certificates with numerous different characteristics, the particular characteristics of each Series or Class of Certificates must be considered in determining the applicability of this opinion to a particular Series of Class of Certificates. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. We also consent to the reference to Orrick, Herrington & Sutcliffe LLP under the captions "Legal Matters" and "Tax Matters" in the Prospectus. In giving such consent, we do not admit that we are "experts," within the meaning of the term used in the Act or the rules and regulations of the Securities and Exchange Commission issued thereunder, with respect to any part of the Registration Statement, including this opinion as an exhibit or otherwise. Very truly yours, /s/ Orrick, Herrington & Sutcliffe LLP Orrick, Herrington & Sutcliffe LLP -2- COVER 5 filename5.txt [American Express Company letterhead] March 10, 2006 VIA FACSIMILE & VIA DELIVERY Max A. Webb, Esquire, Assistant Director Office of Structured Finance, Transportation and Leisure Division of Corporation Finance Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549 Re: American Express Receivables Financing Corporation II American Express Receivables Financing Corporation III LLC American Express Receivables Financing Corporation IV LLC American Express Credit Account Master Trust Response to SEC Comment Letter dated March 1, 2006 File Nos. 333-130508; 01-03 ----------------------------------------------------------- Dear Mr. Webb: On behalf of American Express Receivables Financing Corporation II ("RFC II"), American Express Receivables Financing Corporation III LLC ("RFC III") and American Express Receivables Financing Corporation IV LLC ("RFC IV"), as depositors (the "Depositors") to the American Express Credit Account Master Trust (the "Trust" or the "Issuing Entity"), this letter responds to your letter dated March 1, 2006, providing comments to Amendment No. 1 to the Registration Statement on Form S-3 (the "Registration Statement") submitted on February 16, 2006, by the Depositors and the Issuing Entity. RFC II, RFC III, RFC IV, American Express Travel Related Services Company, Inc. ("TRS"), as servicer of the Trust, American Express Centurion Bank ("Centurion"), as sponsor and sole equity owner of RFC III, and American Express Bank, FSB ("FSB"), as sponsor and sole equity owner of RFC IV, are collectively referred to herein as "American Express." For your convenience, each of your comments has been reproduced below, followed by American Express' response. Enclosed with this letter is Amendment No. 3 to the Registration Statement on Form S-3 ("Amendment No. 3") dated March 10, 2006, marked to show all changes to the Registration Statement. All capitalized terms defined in the prospectus and used in the following responses without definition, have the meanings specified in Amendment No. 3. Unless otherwise specified, page numbers refer to pages in Amendment No. 3. GENERAL COMMENT 1: PLEASE CONFIRM THAT ALL MATERIAL TERMS TO BE INCLUDED IN THE FINALIZED AGREEMENTS WILL ALSO BE DISCLOSED IN THE FINAL RULE 424(b) PROSPECTUS, OR THAT FINALIZED AGREEMENTS WILL BE FILED SIMULTANEOUSLY WITH OR PRIOR TO THE FINAL PROSPECTUS. REFER TO ITEM 1100(f) OF REGULATION AB. Response: We confirm that we will disclose all material terms of the transaction agreements in the final Rule 424(b) prospectus. COMMENT 2: PLEASE ALSO CONFIRM THAT YOU WILL FILE UNQUALIFIED LEGAL AND TAX OPINIONS AT THE TIME OF EACH TAKEDOWN. Response: In connection with filing Amendment No. 3, we have filed unqualified legal and tax opinions as Exhibit 5.1 and Exhibit 8.1, respectively. Accordingly, we respectfully submit that the filing of separate opinions in connection with each takedown is unnecessary. COMMENT 3: PLEASE NOTE THAT A TAKEDOWN OFF OF A SHELF THAT INVOLVES ASSETS, STRUCTURAL FEATURES, CREDIT ENHANCEMENT OR OTHER FEATURES THAT WERE NOT DESCRIBED IN THE BASE PROSPECTUS WILL USUALLY REQUIRE EITHER A NEW REGISTRATION STATEMENT, IF TO INCLUDE ADDITIONAL ASSETS, OR A POST-EFFECTIVE AMENDMENT. REFER TO RULE 409 OF THE SECURITIES ACT, WHICH REQUIRES THAT THE REGISTRATION STATEMENT BE COMPLETE AT THE TIME OF EFFECTIVENESS, EXCEPT FOR INFORMATION THAT IS NOT KNOWN OR REASONABLY AVAILABLE. PLEASE CONFIRM FOR US THAT THE BASE PROSPECTUS INCLUDES ALL ASSETS, CREDIT ENHANCEMENTS OR OTHER STRUCTURAL FEATURES REASONABLY CONTEMPLATED TO BE INCLUDED IN AN ACTUAL TAKEDOWN. Response: We confirm that the base prospectus describes all assets, credit enhancements or other structural features reasonably contemplated to be included in an actual takedown. PROSPECTUS SUPPLEMENT THE TOTAL PORTFOLIO, PAGE S-17 GENERAL COMMENT 4: WE NOTE YOUR RESPONSE TO PRIOR COMMENT 6 AND REVISIONS MADE TO PAGE 65 OF THE BASE PROSPECTUS. PLEASE SIMILARLY REVISE TO DISCLOSE HOW BALANCE REDUCTIONS GRANTED FOR REFUNDS, RETURNS, FRAUDULENT CHARGES OR OTHER REASONS ARE APPLIED IN AN APPROPRIATE PLACE IN THIS SECTION OR CROSS REFERENCE. SIMILARLY REVISE IN "THE TRUST PORTFOLIO" SECTION BEGINNING ON PAGE S-21. Response: We have revised page S-18 of the prospectus supplement in response to Comment 4. 2 COMMENT 5: WE REISSUE PRIOR COMMENT 17. WE NOTE YOUR REVISION ON PAGE S-17 THAT "ACCOUNT OWNERS HAVE THE DISCRETION TO ESTABLISH THE METHOD AND CRITERIA" FOR SELECTION. ITEM 1111(a)(4), HOWEVER, REQUIRES DISCLOSURE OF SUCH METHOD OR CRITERIA. PLEASE REVISE TO PROVIDE BRACKETED LANGUAGE TO INDICATE THAT YOU WILL DISCLOSE SUCH METHOD OR CRITERIA PRIOR TO EACH TAKEDOWN. Response: The account owners select the accounts in their sole discretion, subject only to the eligibility criteria in the transaction documents and any applicable regulatory guidelines. The account owners have in the past considered, and may in the future consider, factors such as product type, tenure of an account and interest rate applicable to an account in determining the accounts to be added to the trust. We have revised the Registration Statement on page S-17 to disclose these considerations. LOSS AND DELINQUENCY EXPERIENCE, PAGE S-18 COMMENT 6: WE REISSUE PRIOR COMMENT 7. PLEASE PRESENT HISTORICAL DELINQUENCY AND LOSS INFORMATION THROUGH THE POINT OF CHARGE OFF. SIMILARLY, PLEASE REVISE THE TABLE FOR THE TRUST PORTFOLIO ON PAGE S-22. Response: We have revised pages S-17 to S-21 of the prospectus supplement in response to Comment 6 and to Comment 7 below to present historical delinquency, loss, revenue and payment rate experience for the trust portfolio and to expand the information presented regarding the trust's current delinquency information. Our disclosure includes historical and current delinquency information through the point of charge-off. We also have deleted the previously provided managed portfolio information on the basis that such information, in addition to the trust asset pool information now provided, is not material to investors. REVENUE EXPERIENCE, PAGE S-19 COMMENT 7: PLEASE PROVIDE SIMILAR DISCLOSURE OF REVENUE EXPERIENCE AND PAYMENT RATES WITH RESPECT TO THE ASSET POOL. PLEASE REFER TO ITEM 1111(b)(8) OF REGULATION AB. Response: Please see our response to Comment 6 above. 3 BASE PROSPECTUS DERIVATIVE AGREEMENTS, PAGE 68 COMMENT 8: WE NOTE YOUR RESPONSE TO PRIOR COMMENT 26 AND REISSUE IN PART. PLEASE DELETE THE REFERENCE TO "OTHER SWAP." IF YOU WANT TO ADD OTHER TYPES OF SWAPS, WE SUGGEST DOING SO IN A POST-EFFECTIVE AMENDMENT WITH FULL DISCLOSURE OF EACH TYPE. ALTERNATIVELY, REVISE TO INCLUDE THAT INFORMATION HERE. Response: We have revised pages 68 of the base prospectus in response to Comment 8 to delete the reference to "other swap". COMMENT 9: PLEASE DELETE THE REFERENCE TO "CREDIT DEFAULT SWAP." Response: We have revised pages 68 of the base prospectus in response to Comment 9 to delete the reference to "credit default swap". EXHIBIT 4.1 COMMENT 10: WHEN AVAILABLE, PLEASE PROVIDE US WITH A COPY OF YOUR UPDATED POOLING AND SERVICING AGREEMENT, MARKED TO SHOW CHANGES FROM THE PRIOR POOLING AND SERVICING AGREEMENT, INCLUDING ANY CHANGES MADE TO COMPLY WITH REGULATION AB. Response: In connection with filing Amendment No. 3, we have filed the amended and restated pooling and servicing agreement, which incorporates the following amendments: o Section 3.05 - Annual certificate of Servicer to be delivered no later than 60 days following the end of each fiscal year; certificate to cover matters listed in Item 1123 of Regulation AB. o Section 3.06 - Annual servicing report of independent public accountants to be delivered no later than 60 days following the end of each fiscal year; certificate to cover matters listed in Item 1122 of Regulation AB. o New Section - The parties agree to provide such additional information as may be reasonably requested to comply with Regulation AB. 4 If you have any questions or comments concerning this response, please do not hesitate to call the undersigned at 212-640-5714 or American Express' outside counsel, Michael Mitchell of Orrick, Herrington & Sutcliffe LLP at 202-339-8479 or Alan Knoll of Orrick at 212-506-5077. Sincerely, /s/ Carol V. Schwartz Carol V. Schwartz, Esq. cc: Rolaine S. Bancroft, Esq. Alan M. Knoll, Esq. Michael H. Mitchell, Esq. 5 -----END PRIVACY-ENHANCED MESSAGE-----