[EXECUTION COPY]
GOTTSCHALKS CREDIT RECEIVABLES CORPORATION
Depositor
GOTTSCHALKS INC.
Servicer
and
BANKERS TRUST COMPANY
Trustee
___________________________________
SERIES 1996-1 SUPPLEMENT
Dated as of November 1, 1996
to
POOLING AND SERVICING AGREEMENT
Dated as of March 30, 1994
___________________________________
GOTTSCHALKS CREDIT CARD MASTER TRUST
TABLE OF CONTENTS
Page
ARTICLE I
Creation of the Series 1996-1 Certificates. 1
SECTION 1.01. Designation. . . . . . . . . . . . . . 1
ARTICLE II
Definitions . . . . . . . .. 2
SECTION 2.01. Definitions. . . . . . . . . . . . . 2
ARTICLE III
Servicing Fee. . . . . . . . 14
SECTION 3.01. Servicing Compensation . . . . . . . 14
ARTICLE IV
Rights of Certificateholders and
Allocation and Application of Collections. .15
SECTION 4.01. Allocations and Distributions. . . . 15
SECTION 4.02. FBC Monthly Interest . . . . . . . . 24
SECTION 4.03. Determination of FBC Monthly Principal25
SECTION 4.04. Series Accounts. . . . . . . . . . . 25
SECTION 4.05. Capitalized Interest Account . . . . 27
SECTION 4.06. Retained Amount Account. . . . . . . 27
SECTION 4.07. Spread Account . . . . . . . . . . . 29
SECTION 4.08. FBC Deficiency Amount. . . . . . . . 30
SECTION 4.09. Investor Charge-Offs . . . . . . . . .30
ARTICLE V
Distributions and Reports to
Certificateholders. . . . . . . .31
SECTION 5.01. Distributions . . . . . . . . . . 31
SECTION 5.02. Reports and Statements to
Certificateholders . . . . . . . . . .32
ARTICLE VI
The Certificates . . . . . . . 33
SECTION 6.01. The Fixed Base Certificates . . . 33
SECTION 6.02. Transfer Restrictions . . . . . . 33
SECTION 6.03. The Subordinated Certificate. . . 34
ARTICLE VII
Early Amortization Events. . . . . .34
SECTION 7.01. Additional Early Amortization
Events. . . 34
SECTION 7.02. Waiver. . . . . . . . . . . . . . 36
ARTICLE VIII
Optional Repurchase . . . . . . 37
SECTION 8.01. Optional Repurchase . . . . . . . 37
ARTICLE IX
Final Distributions . . . . . . .37
SECTION 9.01. Final Distributions . . . . . . . 37
ARTICLE X
Miscellaneous Provisions . . . . . 40
SECTION 10.01. Ratification of Agreement. . . . . 40
SECTION 10.02. Counterparts . . . . . . . . . . . . 40
SECTION 10.03. GOVERNING LAW. . . . . . . . . . . . 40
EXHIBITS
EXHIBIT A-1 Form of Fixed Base Certificate
EXHIBIT A-2 Form of Subordinated Certificate
EXHIBIT B Form of Monthly Distribution
Statement
EXHIBIT C Form of Representation Letter
SCHEDULES
SCHEDULE I List of Accounts
SERIES 1996-1 SUPPLEMENT dated as of
October 31, 1996 (the "Series Supplement"), among
GOTTSCHALKS CREDIT RECEIVABLES CORPORATION, a Delaware
corporation, as Depositor, GOTTSCHALKS INC., a Delaware
corporation, as Servicer, and BANKERS TRUST COMPANY, a
New York banking corporation, not in its individual
capacity but solely as Trustee.
RECITALS
Section 6.03 of the Pooling and Servicing
Agreement, dated as of March 30, 1994, as amended by
Amendment No. 1 to Pooling and Servicing Agreement,
dated as of September 16, 1994, and Amendment No. 2 to
Pooling and Servicing Agreement, of even date herewith,
in each case, among the Depositor, the Servicer and the
Trustee (collectively, the "Agreement"), provides,
among other things, that the Depositor may from time to
time direct the Trustee to authenticate and deliver, on
behalf of the Trust, one or more new Series of Investor
Certificates representing fractional undivided
interests in the Trust and in connection therewith to
enter into Series Supplements with the Servicer and the
Trustee to provide for the issuance, authentication and
delivery of a new Series of Investor Certificates and
to specify the Principal Terms thereof. Pursuant to
this Series Supplement, the Depositor and the Trustee
on behalf of the Trust shall hereby create a new Series
of Investor Certificates and specify the Principal
Terms thereof.
ARTICLE I
Creation of the Series 1996-1 Certificates
SECTION 1.01. Designation. (a) There is
hereby created a Series of Investor Certificates to be
issued pursuant to the Agreement and this Series
Supplement to be known as the "Gottschalks Credit Card
Master Trust, Series 1996-1 Certificates". The Series
1996-1 Certificates will be issued in two certificated
Classes, the first of which shall be known as the
"6.79% Fixed Base Certificates, Series 1996-1"; and the
second of which shall be known as the "Subordinated
Certificate, Series 1996-1".
(b) In the event that any term or
provision contained herein shall conflict with or be
inconsistent with any term or provision contained in
the Agreement, the terms and provisions of this Series
Supplement shall govern.
ARTICLE II
Definitions
SECTION 2.01. Definitions. (a) Whenever
used in this Series Supplement, the following words and
phrases shall have the following meanings.
"Accelerated Amortization Election" a
written notice executed by the Holders of Certificates
representing more than 50% of the FBC Invested Amount
and delivered to the Depositor, the Servicer and the
Trustee no later than the earlier of (a) the six month
anniversary of the commencement of the Controlled
Amortization Period or (b) the commencement of the
Early Amortization Period, in either case, to the
effect that such Holders have elected to accelerate the
amortization of the FBC Invested Amount.
"Accelerated Payment" shall mean any FBC
Principal Collections that are paid to the Fixed Base
Certificateholders prior to the Expected Final Payment
Date due to the commencement of the Early Amortization
Period (a) on any date on or after August 31, 1997 or
(b) as a result of the occurrence of an Early
Amortization Event of the type described in Sections
7.01(a), (c), (e), (f), (g) or (j) hereof caused
directly or indirectly by (A) the imposition of a Block
Period, (B) the removal of Removed Accounts, (C) the
issuance of a new Series and/or the willful breach by
the Servicer (so long as the Servicer is Gottschalks)
of its obligations under the Agreement and this Series
Supplement.
"Advance Rate" shall mean 100% minus the
Required Subordination Percentage.
"Allocation Day" shall have the meaning
specified in Section 4.01(b) hereof.
"Applicable Interest Rate" shall mean, as
of any date of determination and for any Investor
Certificate, the per annum interest rate applicable to
such Investor Certificate as of such date.
"Base Rate" shall mean, as of any date of
determination, the sum of the weighted average of the
Applicable Interest Rate applied to the Invested Amount
of each Investor Certificate of any Series then
outstanding as of such date and a zero percent interest
rate applied to the Invested Amount of each
Subordinated Certificate of any Series then outstanding
as of such date plus the weighted average Senior
Servicing Fee Rate per annum plus 1% per annum.
"Calculation Agent" shall mean the Trustee
or any other Calculation Agent selected by the
Depositor which is reasonably acceptable to the
Trustee.
"Capitalized Interest Account" shall have
the meaning specified in Section 4.04(a) hereof.
"Certificates" shall mean, collectively,
the Fixed Base Certificates and the Subordinated
Certificate.
"Closing Date" shall mean October 31, 1996.
"Commitment Fee" shall mean as of any date
of determination and for any Investor Certificate of
any Series, the per annum rate of any commitment or
similar fee payable with respect to any such
Certificate as of such date from Finance Charge
Collections that are allocable to such Certificate.
"Controlled Amortization Period" shall
mean, unless the Early Amortization Period shall have
commenced prior thereto, the period commencing on the
day immediately following the last day of the FBC
Revolving Period, and ending upon the first to occur of
(a) the commencement of the Early Amortization Period,
(b) the payment in full to the Fixed Base
Certificateholders of the FBC Invested Amount and (c)
the Series Termination Date.
"Discounted Value" shall mean, with respect
to any Accelerated Payment, the amount obtained by
discounting all Remaining Scheduled Payments with
reference to such Accelerated Payment from their
respective scheduled due dates to the Distribution Date
on which such Accelerated Payment is to be paid in
accordance with accepted financial practice and at a
discount factor (applied on a monthly basis) equal to
the Reinvestment Yield with respect to such Accelerated
Payment.
"Early Amortization Event" shall mean for
the Series 1996-1 any Early Amortization Event
specified in Section 9.01 of the Agreement, together
with any additional Early Amortization Event specified
in Section 7.01 hereof.
"Exchangeable Holder's Percentage" shall
mean, (a) in the case of Series Finance Charge
Collections, 100% minus the Floating Allocation
Percentage, and (b) in the case of Series Principal
Collections, 100% minus (i) the Floating Allocation
Percentage, when used with respect to Series Principal
Collections during the FBC Revolving Period, or (ii)
the Fixed/Floating Allocation Percentage, when used
with respect to Series Principal Collections during the
Controlled Amortization Period and the Early
Amortization Period, provided that in any case the
Exchangeable Holder's Percentage shall not be less than
zero.
"Expected Final Payment Date" shall mean
the September 1999 Distribution Date.
"FBC Additional Interest" shall have the
meaning specified in Section 4.02 hereof.
"FBC Allocation Percentage" shall mean,
with respect to any Collection Period, the percentage
equivalent of a fraction, the numerator of which is the
FBC Invested Amount and the denominator of which is the
Required Series Pool Balance, in each case, as of the
first day of such Collection Period and after giving
effect to any distributions made as of such date.
"FBC Carryover Interest" shall mean, for
any Collection Period, an amount equal to the sum of
(a) the amount of any FBC Monthly Interest previously
due but not distributed on the Fixed Base Certificates
on a prior Distribution Date, (b) to the extent
permitted under applicable law, the amount of any FBC
Additional Interest to accrue during the Related
Interest Period and (c) the amount of any FBC
Additional Interest previously due but not distributed
on the Fixed Base Certificates on a prior Distribution
Date.
"FBC Component" shall mean, as of any time
of determination, either (a) in the case of the
Retained Amount Account, the amount set forth as of
such time on the ledger maintained by the Trustee in
accordance with Section 4.04(e) hereof as representing
the net balance of deposits made to the Retained Amount
Account pursuant to Sections 4.01(d)(i)(A)(2) and
4.01(d)(i)(B)(3) hereof less amounts withdrawn
therefrom in accordance with Section 4.06, or (b) in
the case of the Spread Account, the amount set forth as
of such time on the ledger maintained by the Trustee in
accordance with Section 4.04(e) hereof as representing
the net balance of deposits made to the Spread Account
pursuant to Section 4.01(c)(iv) hereof less amounts
withdrawn therefrom in accordance with Section 4.07
hereof.
"FBC Controlled Distribution Amount" shall
mean, with respect to any Distribution Date occurring
during the Controlled Amortization Period, (a) if no
Accelerated Amortization Election has been made, an
amount equal to one-twelfth (1/12th) of the principal
balance of the FBC Invested Amount as of the September
1998 Distribution Date (after giving effect to any
changes in the FBC Invested Amount occurring on or
prior to such date) or (b) if an Accelerated
Amortization Election has been made, an amount equal to
one-sixth (1/6th) of the principal balance of the FBC
Invested Amount as of the Distribution Date (after
giving effect to any changes in the FBC Invested Amount
occurring on or prior to such date) immediately
preceding the date on which such Accelerated
Amortization Election was made.
"FBC Deficiency Amount" shall have the
meaning specified in Section 4.08 hereof.
"FBC Interest Rate" shall mean, with
respect to any Interest Period and the Fixed Base
Certificates, a fixed interest rate per annum equal to
6.79%.
"FBC Interest Shortfall" shall have the
meaning specified in Section 4.02 hereof.
"FBC Invested Amount" shall mean, as of any
date of determination, an amount equal to (a) the
Initial FBC Invested Amount, minus, (b) the amount of
principal payments made to the Fixed Base
Certificateholders in respect of the FBC Invested
Amount prior to such date, and minus, (c) the amount,
if any, by which the aggregate amount of FBC Investor
Charge-Offs exceed the FBC Investor Charge-Offs
reimbursed pursuant to Section 4.09 hereof prior to
such date.
"FBC Investor Charge-Offs" shall have the
meaning specified in Section 4.09 hereof.
"FBC Monthly Interest" shall have the
meaning specified in Section 4.02 hereof.
"FBC Monthly Principal" shall have the
meaning specified in Section 4.03 hereof.
"FBC Principal Allocation Percentage" shall
mean, with respect to any Collection Period occurring
(a) prior to the commencement of the Controlled
Amortization Period or the Early Amortization Period,
the percentage equivalent of a fraction, the numerator
of which is the FBC Invested Amount and the denominator
of which is the Required Series Pool Balance, in each
case, as of the first day of such Collection Period and
after giving effect to any distributions made as of
such date, or (b) during the Controlled Amortization
Period or the Early Amortization Period, the percentage
equivalent of a fraction, the numerator of which is the
FBC Invested Amount as of the last day of the FBC
Revolving Period and the denominator of which is the
Required Series Pool Balance as of such last day.
"FBC Principal Collections" shall mean, for
any Allocation Day, an amount equal to the Series
Principal FBC Collections for such day minus the
product of (a) the amount of Series Principal
Collections distributed to the Holder of the
Exchangeable Certificate on such day in accordance with
Section 4.01(b)(ii) hereof and (b) the FBC Principal
Allocation Percentage in effect on such Allocation Day.
"FBC Revolving Period" shall mean the
period beginning at the opening of business on the
Closing Date and ending on the earlier of (a) the last
day of the Related Collection Period for the
Distribution Date that is to occur in September, 1998
and (b) the close of business on the Business Day
immediately preceding the day on which the Early
Amortization Period commences.
"Fixed Base Certificates" shall have the
meaning specified in Section 6.01 hereof.
"Fixed Base Certificateholder" shall mean,
with respect to any Fixed Base Certificate on any date,
the Person in whose name such Fixed Base Certificate is
registered on such date.
"Fixed/Floating Allocation Percentage"
shall mean, with respect to any Collection Period
during the Controlled Amortization Period and the Early
Amortization Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the
numerator of which is the Required Series Pool Balance
as of the last day of the FBC Revolving Period and the
denominator of which is the Series Pool Balance as of
the first day of the Collection Period in respect of
which the Fixed/Floating Allocation Percentage is being
determined and after giving effect to any distributions
made as of such date.
"Floating Allocation Percentage" shall
mean, with respect to any Collection Period, the
percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is
the Required Series Pool Balance and the denominator of
which is the Series Pool Balance, in each case, as of
the first day of such Collection Period; provided,
however, that, with respect to the first Collection
Period, the Floating Allocation Percentage shall mean
the percentage equivalent of a fraction, the numerator
of which is the sum of the Initial FBC Invested Amount
and the Initial Subordinated Invested Amount, and the
denominator of which is the Series Pool Balance as of
the Closing Date.
"Initial FBC Invested Amount" shall mean
$6,000,000.
"Initial Subordinated Invested Amount"
shall mean $1,142,858.
"Interest Period" shall mean, with respect
to any Distribution Date, the period from and including
the Distribution Date immediately preceding such
Distribution Date (or, in the case of the first
Distribution Date, from and including the Closing Date)
to but excluding such Distribution Date.
"Investor Default Amount" shall mean, with
respect to any Distribution Date, an amount equal to
the product of (a) the Defaulted Amount for the Related
Collection Period, (b) the Floating Allocation
Percentage for the Related Collection Period and (c)
the Series 1996-1 Allocation Percentage for the Related
Collection Period.
"Investor Finance Charge Collections" shall
mean, as of any Allocation Day, the product of (a) the
amount of Series Finance Charge Collections received
since the beginning of the preceding Business Day and
(b) the Floating Allocation Percentage for the then
current Collection Period.
"Investor Investment Proceeds" shall mean,
with respect to any Distribution Date, all interest and
other investment earnings (net of losses and investment
expenses) on funds on deposit in the Series Accounts,
together with an amount equal to the Series Allocation
Percentage of the interest and other investment
earnings on funds held in the Collection Account
credited as of such date to the Collection Account
pursuant to Section 4.02 of the Agreement.
"Investor Principal Collections" shall
mean, for any day or period, the sum of (a) the FBC
Principal Collections and (b) the Subordinated
Principal Collections, in each case, determined for
such day or period, as the case may be.
"Make Whole Premium" shall mean, with
respect to any Accelerated Payment, the excess, if any,
of the Discounted Value with respect to such
Accelerated Payment over such Accelerated Payment. The
Make Whole Premium shall never be less than zero.
"Minimum Depositor Interest" shall mean,
with respect to the Series 1996-1, the Subordinated
Invested Amount.
"Monthly Senior Servicing Fee" shall mean,
with respect to any Distribution Date, five-sixths
(5/6ths) of the Monthly Servicing Fee for the Related
Collection Period.
"Monthly Servicing Fee" shall have the
meaning specified in Section 3.01 hereof.
"Monthly Subordinated Servicing Fee" shall
mean, with respect to any Distribution Date, one-sixth
(1/6th) of the Monthly Servicing Fee for the Related
Collection Period.
"Portfolio Yield" shall mean, with respect
to any Collection Period, the annualized percentage
equivalent of a fraction (a) the numerator of which is
the amount of Finance Charge Collections allocated to
the Certificates of all Series that are outstanding
(other than the Exchageable Certificate) during such
Collection Period calculated on a cash basis, minus the
Default Amount allocable to the Certificates of all
Series that are outstanding (other than the Exchageable
Certificate) with respect to such Collection Period and
(b) the denominator of which is the Pool Balance
allocable to the Certificates of all Series that are
outstanding (other than the Exchageable Certificate) as
of the first day of such Collection Period.
"Preceding Collection Period" shall mean,
with respect to any Collection Period, the Collection
Period ended immediately prior to such first referenced
Collection Period.
"Projected Make Whole Premium" shall mean,
for purposes of allocating Investor Finance Charge
Collections only during a Collection Period, an assumed
calculation of the Make Whole Premium calculated as of
the first day of such Collection Period and assuming
that (a) the Accelerated Payment for such calculation
is equal to the highest aggregate monthly FBC Principal
Collections during the three immediately preceding
Collection Periods and (b) that the Reinvestment Yield
is equivalent to the Reinvestment Yield calculated as
of such first day.
"Reassignment Amount" shall mean, with
respect to any Distribution Date, after giving effect
to any deposits and distributions otherwise to be made
on such Distribution Date, the sum of (a) the FBC
Invested Amount on such Distribution Date, (b) accrued
and unpaid interest on the unpaid principal balance of
the Fixed Base Certificates (calculated on the basis of
the outstanding principal balance of the Fixed Base
Certificates at the FBC Interest Rate through the day
preceding such Distribution Date), and (c) the amount
of FBC Additional Interest, if any, for such
Distribution Date and any FBC Additional Interest
previously due but not distributed on the Fixed Base
Certificates on a prior Distribution Date.
"Reinvestment Yield" shall mean, with
respect to any Accelerated Payment, the yield to
maturity implied by (a) the yields reported, as of
10:00 a.m. New York City time on the Business Day next
preceding the Distribution Date on which such
Accelerated Payment is to be made, on the display
designated as "Page 678" on the Telerate Service (or
such other display as may replace Page 678 on the
Telerate Service) for actively traded U.S. Treasury
securities having a maturity equal or closest to the
Remaining Average Life of such Accelerated Payment as
of such Distribution Date, plus 0.5% per annum, or (b)
if such yields shall not be reported as of such time or
the yields reported as of such time shall not be
ascertainable, the Treasury Constant Maturity Series
yields reported, for the latest day for which such
yields shall have been so reported as of the Business
Day preceding the Distribution Date on which such
Accelerated Payment is to be made, in Federal Reserve
Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to
the Remaining Average Life of such Accelerated Payment
as of such Distribution Date, plus 0.5% per annum.
Such implied yield shall be determined, if necessary,
by (x) converting U.S. Treasury ▇▇▇▇ quotations to
bond-equivalent yields in accordance with accepted
financial practice and (y) interpolating linearly
between reported yields.
"Related Collection Period" shall mean,
with respect to (a) any Distribution Date, the
Collection Period ended on the second Business Day
preceding such Distribution Date and (b) any Allocation
Day, the Collection Period during which such Allocation
Day occurs.
"Related Distribution Date" shall mean,
with respect to any Collection Period or Allocation
Day, the Distribution Date following the end of such
Collection Period or Allocation Day.
"Related Interest Period" shall mean, with
respect to (a) any Distribution Date, the Interest
Period ended on the preceding day and (b) any
Collection Period, the Interest Period which commences
during such Collection Period.
"Remaining Average Life" shall mean, at any
time of determination after the commencement of the
Early Amortization Period, the number of years obtained
by dividing the then Remaining Dollar-Years of the
Fixed Base Certificates by the FBC Invested Amount at
such time. The term "Remaining Dollar-Years" means the
amount obtained by (a) multiplying (i) the amount of
each remaining payment with respect to the Fixed Base
Certificates, assuming that such payments are made in
the FBC Controlled Distribution Amounts (using the FBC
Invested Amount at the time the Early Amortization
Period commenced in order to calculate such FBC
Controlled Distribution Amounts) over the number of
months comprising the FBC Controlled Amortization
Period, by (ii) the number of years (calculated to the
nearest one-twelfth) which will elapse between the date
as of which the calculation is made and each
Distribution Date during the notional FBC Controlled
Amortization Period and (b) totalling all the products
obtained in clause (a).
"Remaining Scheduled Payments" shall mean,
with reference to any Accelerated Payment, the sum of
(a) all payments of interest thereon at the FBC
Interest Rate that would be due on or after the
Distribution Date on which such Accelerated Payment is
to be made if no payment of such Accelerated Payment
were made prior to the Expected Final Payment Date and
(b) the amount of such Accelerated Payment.
"Required Series Pool Balance" shall mean,
as of any date of determination, the sum of (a) the FBC
Invested Amount on such date and (b) the Subordinated
Invested Amount on such date.
"Required Subordination Percentage" shall
mean sixteen percent (16%).
"Retained Amount Account" shall have the
meaning specified in Section 4.04(a) hereof.
"Senior Investor Default Holdback Amount"
shall mean, with respect to (a) any Collection Period
(other than the initial Collection Period), the product
of (i) the greater of (A) the Investor Default Amount
which the Servicer reasonably anticipates for such
Collection Period or (B) the product of (1) the highest
default rate (i.e., a fraction, the numerator of which
is the Defaulted Amount for a Collection Period, and
the denominator of which is the aggregate Principal
Receivables owned by the Trust as of the last day of
such Collection Period) for any of the twelve
consecutive Collection Periods preceding such
Collection Period, (2) the aggregate amount of the
Principal Receivables owned by the Trust as of the
first day of such Collection Period, (3) the Series
Allocation Percentage for the Series 1996-1 for such
Collection Period, and (4) the Floating Allocation
Percentage for such Collection Period, and (ii) a
fraction the numerator of which is the FBC Invested
Amount and the denominator of which is the Required
Series Pool Balance, in each case, in effect for such
Collection Period and (b) the initial Collection
Period, $16,500.
"Senior Servicing Fee Rate" shall mean, (a)
with respect to the Certificates, two and one-half
percent (2.5%), and (b) with respect to the
Certficiates of any other Series, the servicing fee
rate paid to the Servicer from the first Finance Charge
Collections received during any Collection Period that
are allocated to the Certificates of that Series.
"Series Accounts" shall have the meaning
specified in Section 4.04(a) hereof.
"Series Default Amount" shall mean, with
respect to any Distribution Date, an amount equal to
the product of (a) the Defaulted Amount for the Related
Collection Period, and (b) the Series 1996-1 Allocation
Percentage for the Related Collection Period.
"Series Finance Charge Collections" shall
mean, with respect to the aggregate amount of Finance
Charge Collections deposited in the Collection Account
on any date, that portion allocated to the Series
1996-1 in accordance with Section 4.04 of the
Agreement.
"Series Issuance Date" shall mean October
31, 1996.
"Series 1996-1" shall mean the Series of
Investor Certificates and the Subordinated Certificate
created pursuant to this Series Supplement.
"Series 1996-1 Allocation Percentage" shall
mean, for any Collection Period, the Series Allocation
Percentage for the Series 1996-1 as calculated for such
Collection Period in accordance with the Agreement.
"Series Pool Balance" shall mean, as of any
date of determination, the product of (a) the Pool
Balance as of such date and (b) the Series 1996-1
Allocation Percentage for such date.
"Series Principal Collections" shall mean,
with respect to the aggregate amount of Principal
Collections received since the beginning of the
preceding Business Day, that portion allocated to the
Series 1996-1 in accordance with Section 4.04 of the
Agreement.
"Series Principal FBC Collections" shall
mean, for each Allocation Day, an amount equal to the
product of (a) the amount of the Series Principal
Collections received since the beginning of the
preceding Business Day and (b) the FBC Principal
Allocation Percentage in effect on such Allocation Day.
"Series Principal SC Collections" shall
mean, for each Allocation Day, an amount equal to the
product of (a) the amount of the Series Principal
Collections received since the beginning of the
preceding Business Day and (b) the Subordinated
Principal Allocation Percentage in effect on such
Allocation Day.
"Series Termination Date" shall mean the
March 2000 Distribution Date.
"Servicing Fee Rate" shall mean, with
respect to the Certificates, three percent (3%).
"Spread Account" shall have the meaning
specified in Section 4.04(a) hereof.
"Spread Requirement" shall mean, with
respect to any Collection Period, zero unless the
Portfolio Yield for the two preceding Collection
Periods was less than 0.5% per annum in excess of the
Base Rate for such preceding Collection Periods, in
which case "Spread Requirement" shall mean the amount,
if any, by which (a) the sum, for the Preceding
Collection Period, of the amounts, described in
Sections 4.01(c)(i) and 4.01(c)(ii) hereof exceeds (b)
the amount on deposit in the Spread Account at the
beginning of such Collection Period.
"Standby Servicer" shall mean Bankers Trust
Company or such other party as may be appointed by the
Trustee to stand ready to act as a Successor Servicer
in the event that Gottschalks is removed as Servicer.
"Subordinated Allocation Percentage" shall
mean, with respect to any Collection Period, the
percentage equivalent of a fraction the numerator of
which is the Subordinated Invested Amount and the
denominator of which is the Required Series Pool
Balance, in each case, as of the first day of such
Collection Period.
"Subordinated Certificate" shall have the
meaning specified in Section 6.03 hereof with respect
to the Series 1996-1.
"Subordinated Component" shall mean, as of
any time of determination, in the case of the Retained
Amount Account, the amount set forth as of such time on
the ledger maintained by the Trustee in accordance with
Section 4.04(e) hereof as representing the net balance
of deposits made to the Retained Amount Account
pursuant to Sections 4.01(d)(ii)(A)(4) and
4.01(d)(ii)(B)(4) hereof less amounts withdrawn
therefrom in accordance with Section 4.06.
"Subordinated Invested Amount" shall mean,
as of any date of determination, an amount equal to (a)
the Initial Subordinated Invested Amount, minus, (b)
the amount, if any, by which the aggregate amount of
Subordinated Investor Charge-Offs exceeds the
Subordinated Investor Charge-Offs reimbursed pursuant
to Sections 4.01(c)(vii), 4.01(d)(ii)(A)(3),
4.01(d)(ii)(B)(3) and 4.01(d)(ii)(C)(2) hereof prior to
such date, minus, (c) the amount of any reallocation of
Subordinated Principal Collections made pursuant to
Sections 4.01(d)(ii)(A)(1), 4.01(d)(ii)(B)(1) and
4.01(d)(ii)(C)(1) hereof prior to such date, plus, (d)
the amount of any reallocations made pursuant to
Section 4.01(e)(ii) prior to such date, and minus, (e)
the amount of principal payments made to the holder of
the Subordinated Certificate in respect of the
Subordinated Invested Amount pursuant to Sections
4.01(d)(ii)(C)(3), 9.01(b)(ii)(B), 9.01(c)(ii)(B) and
9.01(d)(ii)(B) prior to such date, provided that at no
time shall the Subordinated Invested Amount be less
than zero.
"Subordinated Investor Default Holdback
Amount" shall mean, with respect to (a) any Collection
Period (other than the initial Collection Period), the
product of (i) the greater of (A) the Investor Default
Amount which the Servicer reasonably anticipates for
such Collection Period or (B) the product of (1) the
highest default rate (i.e., a fraction, the numerator
of which is the Defaulted Amount for a Collection
Period, and the denominator of which is the aggregate
Principal Receivables owned by the Trust as of the last
day of such Collection Period) for any of the twelve
consecutive Collection Periods preceding such
Collection Period, (2) the aggregate amount of the
Principal Receivables owned by the Trust as of the
first day of such Collection Period, (3) the Series
Allocation Percentage for the Series 1996-1 for such
Collection Period, and (4) the Floating Allocation
Percentage for such Collection Period, and (ii) a
fraction, the numerator of which is the Subordinated
Invested Amount and the denominator of which is the
Required Series Pool Balance, in each case, in effect
for such Collection Period and (b) the initial
Collection Period, $3,000.
"Subordinated Investor Charge-Offs" shall
have the meaning specified in Section 4.09(b) hereof.
"Subordinated Principal Allocation
Percentage" shall mean, with respect to any Collection
Period occurring (a) prior to the commencement of the
Controlled Amortization Period or Early Amortization
Period, the percentage equivalent of a fraction, the
numerator of which is the Subordinated Invested Amount
and the denominator of which is the Required Series
Pool Balance, in each case, as of the first day of such
Collection Period, or (b) during the Controlled
Amortization Period or the Early Amortization Period,
the percentage equivalent of a fraction, the numerator
of which is the Subordinated Invested Amount as of the
last day of the FBC Revolving Period and the
denominator of which is the Required Series Pool
Balance as of such last day.
"Subordinated Principal Collections" shall
mean, for any Allocation Day, an amount equal to the
Series Principal SC Collections for such day minus the
product of (a) the amount of Series Principal
Collections distributed to the Holder of the
Exchangeable Certificate on such day in accordance with
Section 4.01(b)(ii) hereof and (b) the Subordinated
Principal Allocation Percentage in effect on such
Allocation Day.
"Subordinated Reduction" shall have the
meaning specified in Section 4.09(a) hereof.
"Subordinated Servicing Fee Rate" shall
mean, with respect to the Certificates, one-half of one
percent (0.5%).
(b) Notwithstanding anything to the
contrary in this Series Supplement or the Agreement,
the term "Rating Agency" shall mean, whenever used in
this Series Supplement or the Agreement with respect to
the Certificates, Duff & ▇▇▇▇▇▇ and Fitch.
(c) All capitalized terms used herein and
not otherwise defined herein have the meanings ascribed
to them in the Agreement. The definitions in this
Section 2.01 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.
(d) The words "hereof", "herein" and
"hereunder" and words of similar import when used in
this Series Supplement shall refer to this Series
Supplement as a whole and not to any particular
provision of this Series Supplement; references to any
Article, Section or Exhibit are references to Articles,
Sections and Exhibits in or to this Series Supplement
unless otherwise specified; and the term "including"
means "including without limitation".
(e) References herein to "Collections
received" shall be deemed to include Collections
received and processed as to principal and finance
charges and shall not include unprocessed Collections
(i.e., Collections which have been received but for
which the Servicer in the ordinary course of its
business has not yet identified in its computer records
the principal and finance charge components).
ARTICLE III
Servicing Fee
SECTION 3.01. Servicing Compensation. The
monthly servicing fee hereunder (the "Monthly Servicing
Fee") shall be payable to the Servicer, in arrears, on
each Distribution Date occurring prior to the earlier
of the first Distribution Date following the Series
Termination Date and the first Distribution Date on
which the FBC Invested Amount and the Subordinated
Invested Amount are both zero, in an amount equal to
the sum, for each day during the Related Interest
Period, of the product of (a) a fraction, the numerator
of which is the Servicing Fee Rate (expressed as a
decimal), and the denominator of which is 365 and (b)
the Required Series Pool Balance for such day;
provided, however, that with respect to the first
Distribution Date, the Monthly Servicing Fee shall be
equal to $8,900. In no event shall the Trust, the
Trustee, the Fixed Base Certificateholders or the
Holder of the Subordinated Certificate be liable for
any other servicing fee. The Monthly Servicing Fee
shall be payable to the Servicer solely to the extent
amounts are available for distribution in accordance
with the terms of this Series Supplement.
ARTICLE IV
Rights of Certificateholders and
Allocation and Application of Collections
SECTION 4.01. Allocations and
Distributions.
(a) General. Series Finance Charge
Collections, Series Principal Collections and Series
Default Amounts, as they relate to the Certificates and
the Exchangeable Certificate, shall be allocated and
distributed as set forth in this Article IV.
(b) Distribution of Collections to the
Holder of the Exchangeable Certificate. At the
beginning of each Business Day (an "Allocation Day"),
the Servicer shall cause the Trustee to withdraw from
the Collection Account and distribute to the Holder of
the Exchangeable Certificate (i) an amount equal to the
product of (A) the Exchangeable Holder's Percentage in
effect on such day and (B) the amount of Series Finance
Charge Collections received since the beginning of the
preceding Business Day, and (ii) an amount equal to the
product of (A) the Exchangeable Holder's Percentage in
effect on such day and (B) the amount of Series
Principal Collections received since the beginning of
the preceding Business Day. On each Distribution Date,
the Servicer shall allocate to the Holder of the
Exchangeable Certificate an amount equal to the product
of (x) the Exchangeable Holder's Percentage in effect
on such date and (y) the amount of Series Default
Amount for the Related Collection Period.
(c) Allocation of Investor Finance Charge
Collections. At the beginning of each Allocation Day,
the Servicer shall allocate Investor Finance Charge
Collections received since the beginning of the
preceding Business Day as follows and in the following
priorities (each priority to be satisfied daily before
allocations are made to any subsequent priority):
(i) first, unless an amount
equal to the Monthly Senior Servicing Fee for the
current Interest Period, plus any previously unpaid
Monthly Senior Servicing Fee (but only with respect to
the then current Servicer) is then on deposit in the
Collection Account and allocated therefor, Investor
Finance Charge Collections received since the beginning
of the preceding Business Day shall be retained in the
Collection Account until such amount is then on
deposit;
(ii) second, unless an amount
equal to the sum of the FBC Monthly Interest to accrue
during the Related Interest Period, plus the amount of
any FBC Carryover Interest for the Related Collection
Period is then on deposit in the Collection Account and
allocated therefor, Investor Finance Charge Collections
received since the beginning of the preceding Business
Day shall be retained in the Collection Account until
such amounts are then on deposit;
(iii) third, unless an amount
equal to the Senior Investor Default Holdback Amount
for the current Collection Period is then on deposit in
the Collection Account and allocated therefor, Investor
Finance Charge Collections received since the beginning
of the preceding Business Day shall be retained in the
Collection Account until such amount is then on
deposit;
(iv) fourth, unless the amount
then on deposit in the Spread Account is equal to the
Spread Requirement on such Allocation Day, Investor
Finance Charge Collections received since the beginning
of the preceding Business Day shall be withdrawn from
the Collection Account in an amount equal to such
insufficiency and shall be deposited in the Spread
Account;
(v) fifth, unless all
unreimbursed FBC Investor Charge-Offs as of such
Allocation Day have been reallocated as FBC Principal
Collections, Investor Finance Charge Collections
received since the beginning of the preceding Business
Day shall be reallocated as FBC Principal Collections
until the amounts reallocated equal all unreimbursed
FBC Investor Charge-Offs;
(vi) sixth, unless an amount
equal to the Subordinated Investor Default Holdback
Amount for the current Collection Period is then on
deposit in the Collection Account and allocated
therefor, Investor Finance Charge Collections deposited
in the Collection Account since the beginning of the
Preceding Business Day shall be retained in the
Collection Account until such amount is then on
deposit;
(vii) seventh, unless all
unreimbursed Subordinated Investor Charge-Offs as of
such Allocation Day have been reallocated as
Subordinated Principal Collections, Investor Finance
Charge Collections received since the beginning of the
preceding Business Day shall be reallocated as
Subordinated Principal Collections until the amounts
reallocated equal all unreimbursed Subordinated
Investor Charge-Offs;
(viii) eighth, if such
Allocation Day falls within an Early Amortization
Period which commenced (1) on any date on or after
August 31, 1997 or (2) as a result of the occurrence of
an Early Amortization Event of the type described in
Sections 7.01(a), (c), (e), (f), (g) or (j) hereof
caused directly or indirectly by (A) the imposition of
a Block Period, (B) the removal of Removed Accounts,
(C) the issuance of a new Series and/or the willful
breach by the Servicer (so long as the Servicer is
Gottschalks) of its obligations under the Agreement and
this Series Supplement, then, unless an amount equal to
the Projected Make Whole Premium for the Related
Collection Period (together with any Make Whole Premium
previously due but not paid on a prior Distribution
Date) is then on deposit in the Collection Account and
allocated therefor, Investor Finance Charge Collections
received since the beginning of the preceding Business
Day shall be retained in the Collection Account until
such amount is then on deposit and allocated therefor;
(ix) ninth, unless an amount
equal to the Monthly Subordinated Servicing Fee for the
current Interest Period, plus any previously unpaid
Monthly Subordinated Servicing Fee (but only with
respect to the current Servicer) is then on deposit in
the Collection Account and allocated therefor, Investor
Finance Charge Collections received since the beginning
of the preceding Business Day shall be retained in the
Collection Account until such amount is then on
deposit; and
(x) tenth, the balance, if
any, of the Investor Finance Charge Collections
received since the beginning of the preceding Business
Day (after making the allocations described in
paragraphs (i) through (ix) above) shall be distributed
to the Depositor for application in accordance with the
Receivables Purchase Agreement.
(d) Allocation of Principal Collections.
(i) At the beginning of each Allocation Day, the
Servicer shall allocate the FBC Principal Collections
for such day as follows and in the following priorities
(each priority to be satisfied daily before allocations
are made to any subsequent priority):
(A) if such Allocation Day occurs during
the FBC Revolving Period:
(1) first, unless the amount retained in
the Collection Account pursuant to Section
4.01(d)(ii)(A)(2) hereof (as of the preceding Business
Day), is equal to the amount of all unreimbursed FBC
Investor Charge-Offs, FBC Principal Collections
received since the beginning of the preceding Business
Day shall be retained in the Collection Account until
the sum of such amounts equals the amount of all
unreimbursed FBC Investor Charge-Offs;
(2) second, if pursuant to Section
4.06(a) hereof an amount is required to be deposited in
the Retained Amount Account on such day, FBC Principal
Collections received since the beginning of the
preceding Business Day in an amount equal to the lesser
of (x) the product of (1) the amount of such required
deposit and (2) the FBC Allocation Percentage for such
Allocation Day, and (y) the amount of FBC Principal
Collections received since the beginning of the
preceding Business Day shall be withdrawn from the
Collection Account and deposited in the Retained Amount
Account; and
(3) third, the balance, if any, of FBC
Principal Collections received since the beginning of
the preceding Business Day (after making the
allocations described in paragraphs (1) and (2) above)
shall be distributed to the Depositor for application
in accordance with the Receivables Purchase Agreement;
or
(B) if such Allocation Day occurs during
the Controlled Amortization Period:
(1) first, unless an amount equal to the
FBC Controlled Distribution Amount is then on deposit
in the Collection Account and allocated therefor, FBC
Principal Collections received since the beginning of
the preceding Business Day shall be retained in the
Collection Account until such amount is then on
deposit;
(2) second, unless the amount retained in
the Collection Account pursuant to Section
4.01(d)(ii)(B)(2) hereof (as of the preceding Business
Day), is equal to the amount of all unreimbursed FBC
Investor Charge-Offs, FBC Principal Collections
received since the beginning of the preceding Business
Day shall be retained in the Collection Account until
the sum of such amounts equals the amount of all
unreimbursed FBC Investor Charge-Offs;
(3) third, if pursuant to Section 4.06(a)
hereof an amount is required to be deposited in the
Retained Amount Account on such day, FBC Principal
Collections received since the beginning of the
preceding Business Day in an amount equal to the lesser
of (x) the product of (1) the amount of such required
deposit and (2) the FBC Allocation Percentage for such
Allocation Day, and (y) the amount of FBC Principal
Collections received since the beginning of the
preceding Business Day shall be withdrawn from the
Collection Account and deposited in the Retained Amount
Account; and
(4) fourth, the balance, if any, of FBC
Principal Collections received since the beginning of
the preceding Business Day (after making the
allocations described in paragraphs (1), (2) and (3)
above) shall be distributed to the Depositor for
application in accordance with the Receivables Purchase
Agreement; or
(C) if such Allocation Day occurs during
the Early Amortization Period:
(1) first, unless an amount equal to the
FBC Invested Amount is then on deposit in the
Collection Account and allocated therefor, FBC
Principal Collections received since the beginning of
the preceding Business Day shall be retained in the
Collection Account until such amount is then on
deposit; and
(2) second, the balance, if any, of FBC
Principal Collections received since the beginning of
the preceding Business Day (after making the allocation
described in paragraph (1) above) shall be distributed
to the Depositor for application in accordance with the
Receivables Purchase Agreement.
(ii) At the beginning of each Allocation
Day, the Servicer shall allocate the Subordinated
Principal Collections for such day as follows and in
the following priorities (each priority to be satisfied
daily before allocations are made to any subsequent
priority):
(A) if such Allocation Day occurs during
the FBC Revolving Period:
(1) first, on the last day of each
Collection Period, Subordinated Principal Collections
will be reallocated as Investor Finance Charge
Collections in the amount by which the product of (x)
the Investor Default Amount for such Collection Period
and (y) the FBC Allocation Percentage for such
Collection Period, exceeds the amount allocated to the
Senior Investor Default Holdback Amount pursuant to
Section 4.01(c)(iii);
(2) second, unless an amount equal to the
amount of all unreimbursed FBC Investor Charge-Offs is
then on deposit in the Collection Account and allocated
therefor, Subordinated Principal Collections received
since the beginning of the preceding Business Day shall
be retained in the Collection Account until the sum of
such amounts equals the amount of all unreimbursed FBC
Investor Charge-Offs;
(3) third, unless an amount equal to the
amount of all unreimbursed Subordinated Investor
Charge-Offs is then on deposit in the Collection
Account and allocated therefor, Subordinated Principal
Collections received since the beginning of the
preceding Business Day shall be retained in the
Collection Account until the sum of such amounts equals
the amount of all unreimbursed Subordinated Investor
Charge-Offs;
(4) fourth, if pursuant to Section
4.06(a) hereof an amount is required to be deposited in
the Retained Amount Account on such day, Subordinated
Principal Collections received since the beginning of
the preceding Business Day in an amount equal to the
lesser of (x) the product of (1) the amount of such
required deposit and (2) the Subordinated Principal
Allocation Percentage for such Allocation Day, and (y)
the amount of Subordinated Principal Collections
received since the beginning of the preceding Business
Day shall be withdrawn from the Collection Account and
deposited in the Retained Amount Account; and
(5) fifth, the balance, if any, of
Subordinated Principal Collections received since the
beginning of the preceding Business Day (after making
the allocations described in paragraphs (1), (2), (3)
and (4) above) shall be distributed to the Depositor
for application in accordance with the Receivables
Purchase Agreement; or
(B) if such Allocation Day occurs during
the Controlled Amortization Period:
(1) first, on the last day of each
Collection Period, Subordinated Principal Collections
will be reallocated as Investor Finance Charge
Collections in the amount by which the product of (x)
the Investor Default Amount for such Collection Period
and (y) the FBC Allocation Percentage for such
Collection Period, exceeds the amount allocated to the
Senior Investor Default Holdback Amount pursuant to
Section 4.01(c)(iii);
(2) second, unless an amount equal to the
amount of all unreimbursed FBC Investor Charge-Offs is
then on deposit in the Collection Account and allocated
therefor, Subordinated Principal Collections received
since the beginning of the preceding Business Day shall
be retained in the Collection Account until the sum of
such amounts equals the amount of all unreimbursed FBC
Investor Charge-Offs;
(3) third, unless an amount equal to the
amount of all unreimbursed Subordinated Investor
Charge-Offs is then on deposit in the Collection
Account and allocated therefor, Subordinated Principal
Collections received since the beginning of the
preceding Business Day shall be retained in the
Collection Account until the sum of such amounts equals
the amount of all unreimbursed Subordinated Investor
Charge-Offs;
(4) fourth, if pursuant to Section
4.06(a) hereof an amount is required to be deposited in
the Retained Amount Account on such day, Subordinated
Principal Collections received since the beginning of
the preceding Business Day shall be withdrawn from the
Collection Account in an amount equal to the lesser of
(x) the product of (1) the amount of such required
deposit and (2) the Subordinated Principal Allocation
Percentage for such Allocation Day, and (y) the amount
of Subordinated Principal Collections received since
the beginning of the preceding Business Day, and
deposited in the Retained Amount Account; and
(5) fifth, the balance, if any, of
Subordinated Principal Collections received since the
beginning of the preceding Business Day (after making
the allocations described in paragraphs (1), (2), (3)
and (4) above) shall be distributed to the Depositor
for application in accordance with the Receivables
Purchase Agreement; or
(C) if such Allocation Day occurs during
the Early Amortization Period:
(1) first, on the last day of each
Collection Period, Subordinated Principal Collections
will be reallocated as Investor Finance Charge
Collections in the amount by which the product of (x)
the Investor Default Amount for such Collection Period
and (y) the FBC Allocation Percentage for such
Collection Period, exceeds the amount allocated to the
Senior Investor Default Holdback Amount pursuant to
Section 4.01(c)(iii);
(2) second, unless an amount equal to the
amount of all unreimbursed FBC Investor Charge-Offs is
then on deposit in the Collection Account and allocated
therefor, Subordinated Principal Collections received
since the beginning of the preceding Business Day shall
be retained in the Collection Account until the sum of
such amounts equals the amount of all unreimbursed FBC
Investor Charge-Offs; and
(3) third, the balance, if any, of
Subordinated Principal Collections received since the
beginning of the preceding Business Day (after making
the allocations described in paragraphs (1) and (2)
above) (1) so long as the Subordinated Invested Amount
is greater than zero, shall be distributed to the
Depositor for application in accordance with the
Receivables Purchase Agreement, and (2) if the
Subordinated Invested Amount is zero, shall be
distributed to the Depositor.
(e) Investor Default Holdback Amounts.
On the last day of each Collection Period (other than
in the case of the first Collection Period), the
Servicer shall direct the Trustee to apply the Senior
Investor Default Holdback Amount and the Subordinated
Investor Default Holdback Amount retained in the
Collection Account during such Collection Period as
follows:
(i) an amount equal to the lesser of (A)
the Senior Investor Default Holdback Amount for such
Collection Period and (B) the product of the Investor
Default Amount for such Collection Period and the FBC
Allocation Percentage in effect for such Collection
Period, shall be reallocated as FBC Principal
Collections;
(ii) if any of the Senior Investor Default
Holdback Amount for such Collection Period remains in
the Collection Account after making the reallocation
described in paragraph (i) above, such remaining amount
shall be reallocated as Subordinated Principal
Collections and shall result in a corresponding
reinstatement of the Subordinated Invested Amount (to
the extent that any reduction has previously been made
to such amount);
(iii) an amount equal to the lesser of (A)
the Subordinated Investor Default Holdback Amount for
such Collection Period and (B) the product of the
Investor Default Amount for such Collection Period and
the Subordinated Allocation Percentage in effect for
such Collection Period shall be reallocated as
Subordinated Principal Collections; and
(iv) if any of the Subordinated Investor
Default Holdback Amount for such Collection Period
remains in the Collection Account after making the
reallocation described in paragraph (iii) above, such
remaining amount shall be distributed to the Depositor
for application in accordance with the Receivables
Purchase Agreement.
(f) Distributions. (i) On or before
each Determination Date, the Servicer shall provide
written directions to the Trustee directing the Trustee
to distribute to the Fixed Base Certificateholders on
the following Distribution Date from amounts on deposit
in the Collection Account:
(A) if such Determination Date occurs
during the FBC Revolving Period: (1) an amount equal to
the sum of the amounts, if any, retained in the
Collection Account during the Related Collection Period
in respect of the Fixed Base Certificates pursuant to
Section 4.01(c)(ii) and (2) an amount equal to the
lesser of the Projected Make Whole Premium for the
Related Collection Period and the Make Whole Premium
calculated as of such Determination Date; or
(B) if such Determination Date occurs
during the Controlled Amortization Period, an amount
equal to the sum of the amounts, if any, retained in
the Collection Account during the Related Collection
Period in respect of the Fixed Rate Certificates
pursuant to Sections 4.01(c)(ii) and 4.01(d)(i)(B)(1);
or
(C) if such Determination Date occurs
during the Early Amortization Period, an amount equal
to the sum of the amounts, if any, retained in the
Collection Account during the Related Collection Period
in respect of the Fixed Rate Certificates pursuant to
Sections 4.01(c)(ii) and 4.01(d)(i)(C)(1);
(ii) On or before each Determination Date,
the Servicer shall provide written directions to the
Trustee directing the Trustee to distribute to the
Servicer on the following Distribution Date from
amounts on deposit in the Collection Account, an amount
equal to the sum of the amounts, if any, retained in
the Collection Account during the Related Collection
Period pursuant to Sections 4.01(c)(i) and 4.01(c)(ix);
provided, however, so long as Gottschalks is the
Servicer, the Trustee shall first deduct from any
amount payable to the Servicer pursuant to this
paragraph (ii) an amount equal to $1,250 (plus any
prior payments of such amount which remain unpaid) as
payment for the fees of the Standby Servicer; and
(iii) On each Distribution Date, the
Servicer shall provide written instructions to the
Trustee directing the Trustee to distribute all amounts
retained in the Collection Account pursuant to Section
4.01(c) and Section 4.01(d) and not required for any
other purpose to the Depositor for application in
accordance with the Receivables Purchase Agreement.
(g) Other Amounts. The withdrawals to be
made from the Collection Account pursuant to this
Section 4.01 do not apply to deposits into the
Collection Account that do not represent Collections,
including payment of the purchase price for the
Certificates pursuant to Section 2.03 of the Agreement
and proceeds from the sale, disposition or liquidation
of Receivables pursuant to Section 9.02 or Section
12.02 of the Agreement.
SECTION 4.02. FBC Monthly Interest. The
amount of monthly interest ("FBC Monthly Interest")
distributable from the Collection Account (or, in the
case of the first Distribution Date, from the
Capitalized Interest Account) with respect to the Fixed
Base Certificates on any Distribution Date shall be an
amount equal to one-twelfth (1/12th) of the product of
(i) the FBC Invested Amount as of the close of business
on the first day of the Related Collection Period, and
(ii) the FBC Interest Rate; provided that in the case
of the initial Interest Period the FBC Monthly Interest
shall be $33,950. On the Determination Date preceding
each Distribution Date, the Servicer shall determine
the excess, if any, of (x) the sum of FBC Monthly
Interest for the Related Interest Period plus the
amount, if any, of the FBC Interest Shortfall which was
due but not paid on the prior Distribution Date over
(y) the amount which will be available to be
distributed to the Holders of the Fixed Base
Certificates on such Distribution Date in respect
thereof pursuant to this Series Supplement (such
excess, the "FBC Interest Shortfall"). If, on any
Distribution Date, the FBC Interest Shortfall is
greater than zero, then an additional amount ("FBC
Additional Interest") shall be payable as provided
herein with respect to Fixed Base Certificates on each
Distribution Date following such Distribution Date, to
but excluding the Distribution Date on which the FBC
Interest Shortfall is paid to the Holders of the Fixed
Base Certificates, in an amount equal to one-twelfth of
the product of (i) such FBC Interest Shortfall (or the
portion thereof which has not previously been paid to
Fixed Base Certificateholders) and (ii) the FBC
Interest Rate. Notwithstanding anything to the
contrary herein, FBC Additional Interest shall be paid
or distributed on Fixed Base Certificates only to the
extent permitted by applicable law.
SECTION Determination of FBC Monthly
Principal. The amount of monthly principal ("FBC
Monthly Principal") distributable from the Collection
Account with respect to the Fixed Base Certificates on
each Distribution Date during the FBC Revolving Period
shall be zero. The amount of FBC Monthly Principal
distributable from the Collection Account with respect
to the Fixed Base Certificates on each Distribution
Date during the Controlled Amortization Period or the
Early Amortization Period shall be equal to the FBC
Principal Collections (including Investor Finance
Charge Collections reallocated as FBC Principal
Collections) on deposit in the Collection Account on
such Distribution Date; provided, however, that the
amount of FBC Monthly Principal distributable to the
Holders of the Fixed Base Certificates on any
Distribution Date during the Controlled Amortization
Period or Early Amortization Period, as the case may,
shall in no event exceed the FBC Invested Amount in
effect on the Business Day preceding such Distribution
Date.
SECTION 4.04. Series Accounts. (a) The
Servicer, for the benefit of the Certificateholders,
shall establish and maintain in the name of the
Trustee, on behalf of the Trust, (i) an Eligible
Deposit Account (the "Capitalized Interest Account"),
which shall be identified as the "Capitalized Account
for Gottschalks Credit Card Master Trust, Series
1996-1", (ii) an Eligible Deposit Account (the
"Retained Amount Account"), which shall be identified
as the "Retained Amount Account for Gottschalks Credit
Card Master Trust, Series 1996-1", and (iii) an
Eligible Deposit Account (the "Spread Account"), which
shall be identified as the "Spread Account for
Gottschalks Credit Card Master Trust, Series 1996-1".
Each of the Capitalized Interest Account, the Retained
Amount Account and the Spread Account shall bear a
designation clearly indicating that the funds deposited
therein are held for the benefit of the
Certificateholders. The Capitalized Interest Account,
the Retained Amount Account and the Spread Account are
referred to herein individually as a "Series Account"
and collectively as "Series Accounts."
(b) At the written direction of the
Servicer, funds on deposit in any Series Account shall
be invested by the Trustee in Eligible Investments
selected by the Servicer that will mature no later than
the date on which such funds are expected to be
withdrawn from such Series Account. All such Eligible
Investments shall be held by the Trustee for the
benefit of the Certificateholders. All interest and
other investment earnings (net of losses and investment
expenses) of funds on deposit in the Series Accounts
shall be deposited in the Collection Account as Finance
Charge Collections.
(c) The Capitalized Interest Account
shall be maintained until all amounts on deposit
therein have been applied in accordance with Section
4.05 hereof. The Retained Amount Account shall be
maintained until all amounts on deposit therein have
been applied in accordance with Section 4.06(e) or (f)
hereof. The Spread Account shall be maintained until
all amounts on deposit therein have been applied in
accordance with Section 4.07(b) hereof.
(d) The Trustee shall possess all right,
title and interest in and to all funds on deposit from
time to time in, and all Eligible Investments credited
to, the Series Accounts and in all proceeds thereof.
Each Series Account shall be under the sole dominion
and control of the Trustee for the benefit of the
Certificateholders. If, at any time, any Series
Account ceases to be an Eligible Deposit Account the
Servicer shall within ten (10) Business Days (or such
longer period, not to exceed thirty (30) calendar days,
as to which each Rating Agency may consent) instruct
the Trustee to establish a new Series Account meeting
the conditions specified in subsection (a) above as an
Eligible Deposit Account and shall transfer any cash
and/or any investments to such new Series Account.
Neither the Depositor, the Servicer nor any person or
entity claiming by, through or under the Depositor, the
Servicer or any such person or entity shall have any
right, title or interest in, or any right to withdraw
any amount from, any Series Account, except as
expressly provided herein. Schedule 1 hereto, which is
hereby incorporated into and made part of this Series
Supplement, identifies the Series Accounts by setting
forth for each such account the account number of such
account, the account designation of such account and
the name of the institution with which such account has
been established. If a substitute Series Account is
established pursuant to this Section 4.04, the Servicer
shall provide to the Trustee an amended Schedule 1,
setting forth the relevant information for such
substitute Series Account.
(e) The Servicer shall maintain a ledger
for the Retained Amount Account and shall record in
such ledger the FBC Component and the Subordinated
Component of each deposit made by the Trustee to, and
each withdrawal by the Trustee from, the Retained
Amount Account. The Servicer shall also maintain a
ledger for the Spread Account and shall record in such
ledger each deposit made by the Trustee to, and
withdrawal by the Trustee from, the Spread Account.
(f) Pursuant to the authority granted to
the Servicer in Section 3.01(a) of the Agreement, the
Servicer shall have the power, revocable by the
Trustee, to instruct the Trustee to make withdrawals
and payments from the Series Accounts for the purposes
of carrying out the Servicer's or the Trustee's duties
hereunder.
SECTION 4.05. Capitalized Interest
Account. On the Closing Date, the Trustee shall
deposit in the Capitalized Interest Account from the
proceeds of the sale of the Fixed Base Certificates an
amount equal to the FBC Monthly Interest that will have
accrued and be due and payable to the Holders of the
Fixed Base Certificates on the first Distribution Date.
On the first Distribution Date, the Servicer shall
cause the Trustee to withdraw from the Capitalized
Interest Account for distribution to the Holders of the
Fixed Base Certificates an amount equal to the FBC
Monthly Interest that is due and payable on such
Distribution Date.
SECTION 4.06. Retained Amount Account.
The Servicer shall cause the Trustee to deposit amounts
in, and withdraw amounts from, the Retained Amount
Account as follows:
(a) If, at the close of business of the
Servicer on any Business Day prior to the commencement
of the Early Amortization Period, the Required Series
Pool Balance at such time exceeds the sum of (i) the
Series Pool Balance at such time and (ii) the balance
of the Retained Amount Account at such time, the
Servicer shall cause the Trustee to withdraw from the
Collection Account in accordance with Section 4.01(d)
and deposit in the Retained Amount Account on such day
an amount equal to the lesser of (x) such excess and
(y) if such day falls within (1) the FBC Revolving
Period, an amount equal to the sum of the maximum
amounts available on such day pursuant to Sections
4.01(d)(i)(A)(2) and 4.01(d)(ii)(A)(4) hereof; or (2)
the Controlled Amortization Period, an amount equal to
the sum of the maximum amounts available on such day
pursuant to Sections 4.01(d)(i)(B)(3) and
4.01(d)(ii)(B)(4) hereof.
(b) If, at the close of business of the
Servicer on any Business Day prior to the commencement
of the Early Amortization Period, the balance of the
Retained Amount Account is greater than zero, and the
sum of (i) the Series Pool Balance at such time and
(ii) the balance of the Retained Amount Account at such
time exceeds the Required Series Pool Balance, the
Servicer shall cause the Trustee to withdraw from the
Retained Amount Account for distribution to the
Depositor on such day an amount equal to the lesser of
(x) the amount of such difference and (y) the balance
of the Retained Amount Account. Any such withdrawal
shall, to the greatest extent possible, reduce (1) the
FBC Component of the Retained Amount Account by the
product of the FBC Allocation Percentage and the amount
of such withdrawal and (2) the Subordinated Component
of the Retained Amount Account by the product of the
Subordinated Allocation Percentage and the amount of
such withdrawal.
(c) If, at the close of business of the
Servicer on the last day of any Collection Period
occurring during the Controlled Amortization Period,
(i) the balance of the Retained Amount Account is
greater than zero (after first giving effect to any
deposit to, or withdrawal from, the Retained Amount
Account described in subsections (a) and (b) of this
Section 4.06) and (ii) the Servicer has determined on
such last day that the difference between the FBC
Controlled Amortization Amount and the amount of FBC
Principal Collections on deposit in the Collection
Account on such last day is greater than zero, the
Servicer shall cause the Trustee to withdraw from the
FBC Component of the Retained Amount Account for
deposit in the Collection Account as FBC Principal
Collections an amount equal to the lesser of (x) the
amount of such difference and (y) the balance of the
FBC Component of the Retained Amount Account.
(d) If, at the close of business of the
Servicer on the last day of any Collection Period
occurring prior to the commencement of the Early
Amortization Period, (i) the balance of the Retained
Amount Account is greater than zero (after first giving
effect to any deposit to, or withdrawals from, the
Retained Amount Account described in subsections (a),
(b) and (c) of this Section 4.06) and (ii) the Servicer
has determined on such last day that (A) a FBC Investor
Charge-Off will be required to be made on the Related
Distribution Date, and/or (B) one or more FBC Investor
Charge-Offs made on one or more prior Distribution
Dates has not been reimbursed, the Servicer shall cause
the Trustee to withdraw from such account for deposit
in the Collection Account as FBC Principal Collections
the following amounts (the first priority to be
satisfied before progressing to the second priority):
(x) first, an amount equal to the
lesser of (1) the sum of the amount of such FBC
Investor Charge-Off to be made and/or unreimbursed FBC
Investor Charge-Offs and (2) an amount equal to the
balance of the Subordinated Component of the Retained
Amount Account; and
(y) second, an amount equal to the
lesser of (1) the amount, if greater than zero, by
which the sum of the amount of such FBC Investor
Charge-Off to be made and/or unreimbursed FBC Investor
Charge-Offs exceeds the amount of the withdrawal, if
any, provided for in paragraph (x) immediately above,
and (2) an amount equal to the balance of the FBC
Component of the Retained Amount Account.
(e) If, at the close of business of the
Servicer on the last day of the first Collection Period
occurring during the Early Amortization Period, the
balance of the Retained Amount Account is greater than
zero, the Servicer shall cause the Trustee to withdraw
from the Retained Amount Account for deposit in the
Collection Account as FBC Principal Collections, the
balance of the FBC Component of the Retained Amount
Account. The balance, if any, of the Subordinated
Component of the Retained Amount Account at the
commencement of the Early Amortization Period will be
retained in the Retained Amount Account and shall be
applied to the extent necessary, to avoid FBC Investor
Charge-Offs or to reimburse unreimbursed FBC Investor
Charge-Offs.
(f) At the close of business of the
Servicer on the earlier of (i) the Series Termination
Date and (ii) the date on which the FBC Invested Amount
has been reduced to zero, the balance, if any,
remaining in the Retained Amount Account shall be
withdrawn and transferred to the Depositor for
application in accordance with the Receivables Purchase
Agreement.
SECTION 4.07. Spread Account. (a) If on
any Determination Date the Servicer determines that a
FBC Deficiency Amount exists, the Servicer shall cause
the Trustee to withdraw from the Spread Account and
deposit in the Collection Account an amount equal to
the lesser of (i) the amount of such FBC Deficiency
Amount and (ii) the balance of the Spread Account.
Amounts so deposited in the Collection Account shall be
set aside therein to cure (in whole or part) the amount
of any such FBC Deficiency Amount. In the event that a
withdrawal is made from the Spread Account on any
Determination Date and the amount of such withdrawal is
less than the FBC Deficiency Amount calculated on such
Determination Date, then the amount withdrawn shall be
applied in the following priority, first, against the
amounts described in Section 4.08(i)(A), second,
against the amounts described in Section 4.08(i)(B),
third, against the amounts described in Section
4.08(i)(C), and fourth, against the amounts described
in Section 4.08(i)(D).
(b) At the close of business of the
Servicer on the earlier of (i) the Series Termination
Date and (ii) the date on which the FBC Invested Amount
has been reduced to zero, the balance, if any,
remaining in the Spread Account shall be withdrawn and
transferred to the Depositor.
SECTION 4.08. FBC Deficiency Amount. On
each Determination Date, the Servicer shall determine
the amount (the "FBC Deficiency Amount"), if any, by
which (i) the sum of (A) the Monthly Senior Servicing
Fee for the Related Distribution Date, (B) the FBC
Monthly Interest for the Related Interest Period, (C)
all FBC Carryover Interest for the Related Interest
Period, and (D) the FBC Investor Default Amount, if
any, for the Related Collection Period, exceeds (ii)
the sum of (A) the Investor Finance Charge Collections
allocated to the Fixed Base Certificates during the
Related Collection Period pursuant to Section
4.01(c)(ii), (B) a pro rata portion (based on the FBC
Allocation Percentage) of the Investor Finance Charge
Collections retained in the Collection Account pursuant
to Section 4.01(c)(i) during the Related Collection
Period, (C) a pro rata portion (based on the FBC
Allocation Percentage) of the Investor Investment
Proceeds on deposit in the Collection Account on such
Determination Date, (D) the balance of the Spread
Account as of such Determination Date, (E) the FBC
Component of the balance of the Retained Amount Account
as of such Determination Date, and (F) the Collections
allocated to the Senior Investor Default Holdback
Amount for the Related Collection Period. In the event
the FBC Deficiency Amount for such Distribution Date is
greater than zero, the Servicer shall give the Trustee
written notice thereof on the date of computation.
SECTION 4.09. Investor Charge-Offs. (a)
FBC Investor Charge-Offs. If on a Distribution Date
(i) the FBC Deficiency Amount (after giving effect to
any deposits to the Collection Account made in
accordance with Sections 4.06(d) and 4.07(a) hereof)
for such Distribution Date exceeds the amount, if any,
by which (A) the FBC Investor Default Amount for the
Related Collection Period exceeds (B) the Senior
Investor Default Holdback Amount for the Related
Collection Period, then, the Subordinated Invested
Amount shall be reduced by the amount of such excess (a
"Subordinated Reduction"), but by no more than the FBC
Investor Default Amount for such Distribution Date. In
the event that a Subordinated Reduction would cause the
Subordinated Invested Amount to be a negative number,
the Subordinated Invested Amount shall instead be
reduced to zero, and the FBC Invested Amount shall be
reduced by the amount which the Subordinated Invested
Amount would have been reduced below zero, but by not
more than the FBC Investor Default Amount for such
Distribution Date (such reduction to the FBC Invested
Amount, a "FBC Investor Charge-Off"). FBC Investor
Charge-Offs shall be reimbursed and the FBC Invested
Amount shall thereafter be increased (but not by an
amount in excess of the aggregate FBC Investor
Charge-Offs) on any Distribution Date by the amount of
Investor Finance Charge Collections reallocated as FBC
Principal Collections for that purpose pursuant to
Section 4.01(c)(v), as well as from withdrawals from
the Retained Amount Account and from Subordinated
Principal Collections retained in the Collection
Account pursuant to Section 4.01(d)(ii)(A)(2) and
4.01(d)(ii)(B)(2) hereof.
(b) Subordinated Investor Charge-Offs.
Subordinated Reductions and amounts withdrawn from
Subordinated Principal Collections pursuant to Section
4.01(d)(ii)(A)(2) and 4.01(d)(ii)(B)(2) are
collectively referred to herein as "Subordinated
Investor Charge-Offs." Subordinated Investor
Charge-Offs will result in a reduction in the
Subordinated Invested Amount. Subordinated Investor
Charge-Offs shall be reimbursed and the Subordinated
Invested Amount increased (but not by an amount in
excess of the aggregate amount of Subordinated Investor
Charge-Offs) to the extent that Investor Finance Charge
Collections are reallocated as Subordinated Principal
Collections pursuant to Section 4.01(c)(vii) and
4.01(e)(iii) hereof.
ARTICLE V
Distributions and Reports to
Certificateholders
SECTION 5.01. Distributions. (a) On
each Distribution Date, the Trustee shall distribute to
the Certificateholders of record on the preceding
Record Date (other than as provided in Section 12.02 of
the Agreement respecting a final distribution) such
Certificateholder's pro rata share of the amounts
required to be distributed pursuant to Article IV
hereof and in accordance with the written direction of
the Servicer. Except as provided in Section 12.02 of
the Agreement with respect to a final distribution,
distributions to Certificateholders hereunder shall be
made by wire transfer in immediately available funds.
SECTION 5.02. Reports and Statements to
Certificateholders. (a)On each Determination Date, the
Servicer will provide the Trustee with a completed
Distribution Date Statement, substantially in the form
of Exhibit B hereto, and on each Distribution Date, the
Trustee shall forward to each Certificateholders such
statement.
(b) The Trustee shall maintain at its
Corporate Trust Office a copy of each statement
received by it pursuant to subsection (a) of this
Section 5.02. The Trustee shall make such statements
available for inspection by Certificateholders upon
reasonable notice at its Corporate Trust Office.
(c) On or before January 31 of each
calendar year, beginning with calendar year 1997, the
Trustee shall furnish or cause to be furnished to each
Person who at any time during the preceding calendar
year was a Certificateholder, a statement prepared by
the Servicer containing the information required to be
contained in the monthly statements to
Certificateholders described in subsection (a) of this
Section 5.02, as the case may be, aggregated for such
calendar year or the applicable portion thereof during
which such Person was a Certificateholder, together
with such other information as is required to be
provided by an issuer of indebtedness under the
Internal Revenue Code and such other customary
information as the Trustee or the Servicer deems
necessary to enable the Certificateholders to prepare
their tax returns. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent
that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of
the Internal Revenue Code as from time to time in
effect.
(d) Notwithstanding any other provision of
the Agreement or this Series Supplement to the
contrary, the Trustee and the Servicer shall promptly
deliver to the initial Holders of the Fixed Base
Certificates a copy of each notice, statement or other
document received or generated by it in connection with
this Series Supplement and/or the Agreement; provided,
however, that the Trustee shall not be required to
deliver to the initial Holders copies of notices,
statements or other documents received from the
Servicer and for which the Servicer is required to
deliver such notices, statements or other documents
directly to the Holders and vice versa.
ARTICLE VI
The Certificates
SECTION 6.01. The Fixed Base
Certificates. The Fixed Base Certificates will be
issued in registered form, substantially in the form of
Exhibit A-1, and shall upon issue, be executed and
delivered by the Depositor to the Trustee for
authentication (the "Fixed Base Certificates"). The
Trustee shall, upon the written request of the
Depositor, authenticate and deliver the Fixed Rate
Certificates to the Person or Persons designated in
such notice against receipt of the purchase price
therefor as provided in the Agreement.
SECTION 6.02. Transfer Restrictions.
The Trustee shall not authenticate and deliver to any
Person any Fixed Base Certificate unless it contains a
legend in substantially the following form:
"THIS CERTIFICATE (OR ITS PREDECESSOR) WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THIS CERTIFICATE HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAW OF ANY STATE AND MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
UNLESS REGISTERED PURSUANT TO OR EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT AND ANY OTHER
APPLICABLE SECURITIES LAW.
THE HOLDER OF THIS CERTIFICATE AGREES FOR THE
BENEFIT OF GOTTSCHALKS CREDIT RECEIVABLES CORPORATION
THAT NO RESALE OR OTHER TRANSFER OF THIS CERTIFICATE
MAY BE MADE WITHOUT THE PRIOR WRITTEN CONSENT OF
GOTTSCHALKS CREDIT RECEIVABLES CORPORATION. IN
ADDITION TO THE FOREGOING RESTRICTION, NO RESALE OR
OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE EXCEPT
(1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (2) IN A TRANSACTION EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS,
OR (3) TO GOTTSCHALKS CREDIT RECEIVABLES CORPORATION."
In addition to transfer restrictions contained in the
Agreement, the Trustee shall not be required to give
effect to any transfer of the Fixed Base Certificates
until such time as the proposed transferee thereof
delivers to the Trustee an investment representation
letter substantially in the form of Exhibit C attached
hereto.
SECTION 6.03. The Subordinated
Certificate. The Subordinated Certificate will be
issued in registered form, substantially in the form of
Exhibit A-2, and shall upon issue, be executed and
delivered by the Depositor to the Trustee for
authentication (the "Subordinated Certificate"). The
Trustee shall authenticate and deliver the Subordinated
Certificate to the Depositor simultaneously with its
delivery of the Fixed Base Certificates. The
Subordinated Certificate shall not be transferable.
ARTICLE VII
Early Amortization Events
SECTION 7.01. Additional Early
Amortization Events. If any one or more of the
following events shall occur:
(a) failure on the part of the Depositor
(i) to make any payment or deposit required to be made
by the Depositor by the terms of (A) the Agreement or
(B) this Series Supplement, on or before the date
occurring two Business Days after the date such payment
or deposit is required to be made herein or (ii) duly
to observe or perform in any material respect any
covenants or agreements of the Depositor set forth in
the Agreement or this Series Supplement, which failure
to observe or perform has a material adverse effect on
the Certificateholders and which continues unremedied
for a period of 30 days after the earlier of (A) the
date the Depositor has knowledge thereof and (B) the
date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the
Depositor by the Trustee, or to the Depositor and the
Trustee by the Holders of Certificates representing
more than 50% of the FBC Invested Amount, and continues
to affect materially and adversely the interests of the
Certificateholders for such period; or
(b) any representation or warranty made
by the Depositor in the Agreement or this Series
Supplement, or any information contained in a computer
file or microfiche list required to be delivered by the
Depositor pursuant to Section 2.01, 2.06 or 2.08 of the
Agreement, (i) shall prove to have been incorrect in
any material respect when made or when delivered, which
continues to be incorrect in any material respect for a
period of 30 days after the earlier of (A) the date the
Depositor has knowledge thereof and (B) the date on
which written notice of such failure, requiring the
same to be remedied, shall have been given to the
Depositor by the Trustee, or to the Depositor and the
Trustee by the Holders of Certificates representing
more than 50% of the FBC Invested Amount, and (ii) as a
result of which the interests of the Certificateholders
are materially and adversely affected and continue to
be materially and adversely affected for such period;
provided, however, that an Early Amortization Event
pursuant to this subsection 7.01(b) shall not be deemed
to have occurred hereunder if the Depositor has
accepted reassignment of or repurchased the related
Receivable, or all of such Receivables, if applicable,
during such period in accordance with the provisions of
the Agreement; or
(c) a Servicer Default occurs; or
(d) Gottschalks Inc. is replaced as the
Servicer; or
(e) for three consecutive Collection
Periods one and one-half percent (1.5%) or more of the
aggregate balance of all Eligible Receivables are more
than 90 days past due; or
(f) the average of the Portfolio Yield
for any three consecutive Collection Periods is reduced
to a rate which is less than the Base Rate; or
(g) for 60 consecutive days, the balance
in the Retained Amount Account shall exceed $375,000;
or
(h) the failure to pay the FBC Invested
Amount by the Expected Final Payment Date; or the
failure to pay the FBC Controlled Distribution Amount
on any Distribution Date during the Controlled
Amortization Period; or
(i) the Subordinated Invested Amount
shall be reduced to zero on a date on which the FBC
Invested Amount is greater than zero; or
(j) the Defaulted Amount (net of
Recoveries) as a percentage of the average Receivables
outstanding, on an annualized basis, exceeds seven
percent (7%), for a period of three consecutive
Collection Periods; or
(k) an Early Amortization Period for any
other Series shall commence; or
(l) the average of the monthly payment
rate (i.e., for any Collection Period, a fraction, the
numerator of which is the Investor Principal
Collections received during such Collection Period, and
the denominator of which is the Required Series Pool
Balance in effect for such Collection Period) for any
three consecutive Collection Periods shall be less than
10%; or
(m) the failure by Gottschalks Inc. at
any time to have available one or more working capital
credit facilities with an aggregate commitment of at
least $20,000,000 provided by one or more commercial
banks or other lending institutions; or
(n) Gottschalks Inc. shall have defaulted
in the payment of indebtedness for borrowed money in
excess of $500,000 beyond the period of grace provided
for in the agreement or instrument under which such
indebtedness was created or incurred, such indebtedness
shall have been declared due and payable, such
declaration shall not have been rescinded, revoked or
stayed and such declaration shall have remained in
effect for at least 30 days; or Gottschalks Inc. shall
have defaulted on one or more store leases, and the net
liquidated damages or other net actual losses thereon
shall have exceeded $2,000,000 in the aggregate for any
12 month period;
then, in the case of any event described in subsections
(a) or (b) of this Section 7.01, after the applicable
grace period, if any, set forth in such subsections,
either the Trustee or the Holders of Certificates
representing more than 50% of the FBC Invested Amount
by notice then given in writing to the Depositor and
the Servicer (and to the Trustee if given by
Certificateholders) may declare that an early
amortization event (an "Early Amortization Event") has
occurred as of the date of such notice, and, in the
case of any event described in subsections (c), (d),
(e), (f), (g), (h), (i), (j), (k), (l), (m) or (n) of
this Section 7.01, subject to applicable law, an Early
Amortization Event shall occur without any notice or
other action on the part of the Trustee or the
Certificateholders (except as otherwise provided in any
such subsection), immediately upon the occurrence of
such event.
SECTION 7.02. Waiver. Notwithstanding
the declaration or occurrence of an Early Amortization
Period, the Holders of Certificates representing 50% or
more of the FBC Invested Amount may, by written notice
to the Trustee, waive such Early Amortization Event.
Such waiver shall be binding upon all Fixed Base
Certificateholders and the other parties to this Series
Supplement. In the case of such a waiver, all parties
hereto and all such Certificateholders shall be
restored to their former positions and rights hereunder
and any such Early Amortization Period shall be deemed
not to be continuing; provided, however, this Section
7.02 shall not apply in the case of an Early
Amortization Event of the type described in Section
7.01(d).
ARTICLE VIII
Optional Repurchase
SECTION 8.01. Optional Repurchase. (a)
On any Distribution Date occurring after the date on
which the FBC Invested Amount is reduced to 10% or less
of the Initial FBC Invested Amount, the Depositor shall
have the option to purchase the entire amount of, but
not less than the entire amount of, the Certificates,
at a purchase price equal to the Reassignment Amount
for such Distribution Date.
(b) The Depositor shall give the Servicer
and the Trustee at least ten (10) days' prior written
notice of the Distribution Date on which the Depositor
intends to exercise such purchase option. Not later
than 12:00 noon, New York City time, on such
Distribution Date the Depositor shall deposit the
Reassignment Amount into the Collection Account in
immediately available funds. Such purchase option is
subject to payment in full of the Reassignment Amount.
The Reassignment Amount shall be distributed as set
forth in Section 9.01(b) hereof.
ARTICLE IX
Final Distributions
SECTION 9.01. Final Distributions. (a)
The amount to be paid by the Depositor to the
Collection Account with respect to the Certificates in
connection with a purchase of the Certificates pursuant
to Section 2.03 of the Agreement shall equal the
Reassignment Amount for the first Distribution Date
following the Collection Period in which the
reassignment obligation arises under the Agreement.
(b) Reassignment Amounts deposited into
the Collection Account pursuant to Section 8.01 of this
Series Supplement or Section 2.03 of the Agreement and
allocated to the Series 1996-1 Certificates, shall be
applied by the Trustee at the direction of the
Servicer, not later than 12:00 noon, New York City
time, on the Distribution Date on which such amounts
are deposited (or, if such date is not a Distribution
Date, on the immediately following Distribution Date)
as follows:
(i) Reassignment Amounts which constitute
Investor Finance Charge Collections shall be applied to
pay an amount up to the sum of (A) all accrued and
unpaid interest on the unpaid balance of the FBC
Invested Amount and (B) the FBC Carryover Interest due
on such Distribution Date and, if any amount remains
after the foregoing applications, such amount shall be
reallocated as Investor Principal Collections and
applied as provided in paragraph (ii) immediately
below; and
(ii) in the case of Reassignment Amounts
which constitute Investor Principal Collections: (A)
an amount equal to the product of such Investor
Principal Collections and the FBC Allocation Percentage
for such Distribution Date shall be applied to pay an
amount up to the FBC Invested Amount; (B) an amount
equal to the product of (x) such Investor Principal
Collections and (y) the Subordinated Allocation
Percentage for such Distribution Date shall be applied
to pay an amount up to the Subordinated Invested
Amount; and (C) any amount remaining after the
foregoing applications shall be distributed to the
Holder of the Exchangeable Certificate.
(c) Termination Proceeds deposited into
the Collection Account pursuant to Section 12.02(c) of
the Agreement and allocated to the Series 1996-1 and
the Certificates, shall be applied by the Trustee at
the direction of the Servicer, not later than 12:00
noon, New York City time, on the Distribution Date on
which such amounts are deposited (or, if such date is
not a Distribution Date, on the immediately following
Distribution Date) as follows:
(i) Termination Proceeds which constitute
Investor Finance Charge Collections shall be applied to
pay an amount up to the sum of (A) all accrued and
unpaid interest on the unpaid balance of the FBC
Invested Amount and (B) the FBC Carryover Interest due
on such Distribution Date and, if any amount remains
after the foregoing applications, such amount shall be
reallocated as Investor Principal Collections and
applied as provided in paragraph (ii) immediately
below; and
(ii) in the case of Termination Proceeds
which constitute Investor Principal Collections: (A)
an amount equal to the product of such Investor
Principal Collections and the FBC Allocation Percentage
for such Distribution Date shall be applied to pay an
amount up to the FBC Invested Amount; (B) an amount
equal to the product of (x) such Investor Principal
Collections and (y) the Subordinated Allocation
Percentage for such Distribution Date shall be applied
to pay an amount up to the Subordinated Invested
Amount; and (C) any amount remaining after the
foregoing applications shall be distributed to the
Holder of the Exchangeable Certificate.
(d) Liquidation Proceeds deposited into
the Collection Account pursuant to Section 9.02(b) of
the Agreement and allocated to the Series 1996-1
Certificates, shall be applied by the Trustee at the
direction of the Servicer, not later than 12:00 noon,
New York City time, on the Distribution Date on which
such amounts are deposited (or, if such date is not a
Distribution Date, on the immediately following
Distribution Date) as follows:
(i) Liquidation Proceeds which constitute
Investor Finance Charge Collections shall be applied to
pay an amount up to the sum of (A) all accrued and
unpaid interest on the unpaid balance of the FBC
Invested Amount and (B) the FBC Carryover Interest due
on such Distribution Date and, if any amount remains
after the foregoing applications, such amount shall be
reallocated as Investor Principal Collections and
applied as provided in paragraph (ii) immediately
below; and
(ii) in the case of Liquidation Proceeds
which constitute Investor Principal Collections: (A)
an amount equal to the product of such Investor
Principal Collections and the FBC Allocation Percentage
for such Distribution Date shall be applied to pay an
amount up to the FBC Invested Amount; (B) an amount
equal to the product of (x) such Investor Principal
Collections and (y) the Subordinated Allocation
Percentage for such Distribution Date shall be applied
to pay an amount up to the Subordinated Invested
Amount; and (C) any amount remaining after the
foregoing applications shall be distributed to the
Holder of the Exchangeable Certificate.
(e) Notwithstanding anything to the
contrary contained in this Series Supplement or the
Agreement, any distribution made pursuant to this
Section 9.01 shall be deemed to be a final distribution
pursuant to Section 12.02 of the Agreement with respect
to the Certificates.
(f) Notwithstanding Section 12.02 of the
Agreement, no Certificateholder shall be required to
surrender its Investor Certificate(s) in order to
receive its final distribution under the Agreement and
this Series Supplement.
ARTICLE X
Miscellaneous Provisions
SECTION 10.01. Ratification of
Agreement. As supplemented by this Series Supplement,
the Agreement is in all respects ratified and confirmed
and the Agreement as so supplemented by this Series
Supplement, shall be read, taken and construed as one
and the same instrument.
SECTION 10.02. Counterparts. This Series
Supplement may be executed in two or more counterparts,
each of which when so executed shall be deemed to be an
original, but all of which shall together constitute
but one and the same instrument.
SECTION 10.03. GOVERNING LAW. THIS SERIES
SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICTS OF LAW PROVISIONS, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.04. Rating Agency Notice. No
amendment or waiver with respect to any Early
Amortization Event shall be effective until such time
as the Rating Agencies have been notified.
IN WITNESS WHEREOF, the Depositor, the
Servicer and the Trustee have caused this Series
Supplement to be duly executed by their respective
officers as of the day and year first above written.
GOTTSCHALKS CREDIT RECEIVABLES
CORPORATION, as Depositor
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
Chief Financial Officer
of G.C.R.C.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
Chairman
GOTTSCHALKS INC., as
Servicer
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Senior Vice President/
Chief Financial Officer
BANKERS TRUST COMPANY, not in its
individual capacity but solely as Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Senior Vice President
SCHEDULE I
List of Series Accounts
Bankers Trust Company
ABA # ▇▇▇▇▇▇▇▇▇
ACCT: 01419647
REF: Gottschalks 1996-1
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Gottschalks Credit Card Master Trust Series 1996-1
Capitalized Interest Account: 21627
Gottschalks Credit Card Master Trust Series 1996-1
Retained Amount Account: 21626
Gottschalks Credit Card Master Trust Series 1996-1
Spread Account: 21625
