Document:

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                                                                    EXHIBIT 4.1

                                                                 EXECUTION COPY

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                            SERIES 2002-6 SUPPLEMENT
                           Dated as of August 15, 2002

                                       to

                         POOLING AND SERVICING AGREEMENT
                            Dated as of May 16, 1996

                                  $720,000,000

                            ------------------------

                  AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST

                                  Series 2002-6

                            ------------------------

                                      among

                         AMERICAN EXPRESS CENTURION BANK
              AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION II
                                 as Transferors

             AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.
                                   as Servicer

                                       And

                              THE BANK OF NEW YORK
                                   as Trustee
                on behalf of the Series 2002-6 Certificateholders

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                                TABLE OF CONTENTS
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ARTICLE I             Creation of the Series 2002-6 Certificates.................................................1
         Section 1.01.        Designation........................................................................1
ARTICLE II            Definitions................................................................................2
         Section 2.01.        Definitions........................................................................2
ARTICLE III           Servicing Fee.............................................................................13
         Section 3.01.        Servicing Compensation............................................................13
ARTICLE IV            Rights of Series 2002-6 Certificateholders and
                      Allocation and Application of Collections.................................................14
         Section 4.01.        Collections and Allocations.......................................................14
         Section 4.02.        Determination of Monthly Interest.................................................16
         Section 4.03.        Principal Funding Account; Controlled Accumulation Period.........................18
         Section 4.04.        Required Amount...................................................................19
         Section 4.05.        Application of Class A Available Funds, Class B Available
                              Funds, Collateral Available Funds and Available Principal Collections.............20
         Section 4.06.        Defaulted Amounts; Investor Charge-Offs...........................................22
         Section 4.07.        Excess Spread; Excess Finance Charge Collections..................................23
         Section 4.08.        Reallocated Principal Collections.................................................24
         Section 4.09.        Excess Finance Charge Collections.................................................25
         Section 4.10.        Reallocated Investor Finance Charge Collections...................................25
         Section 4.11.        Shared Principal Collections......................................................26
         Section 4.12.        Reserve Account...................................................................26
         Section 4.13.        Investment Instructions...........................................................28
         Section 4.14.        Determination of LIBOR............................................................28
ARTICLE V             Distributions and Reports to Series 2002-6 Certificateholders.............................29
         Section 5.01.        Distributions.....................................................................29
         Section 5.02.        Reports and Statements to Series 2002-6 Certificateholders........................30
ARTICLE VI            Pay-Out Events............................................................................30
         Section 6.01.        Pay-Out Events....................................................................30
ARTICLE VII           Optional Repurchase; Series Termination...................................................31
         Section 7.01.        Optional Repurchase...............................................................31
         Section 7.02.        Series Termination................................................................32

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                               TABLE OF CONTENTS
                                  (continued)

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ARTICLE VIII          Final Distributions.......................................................................32
         Section 8.01.        Sale of Receivables or Certificateholders' Interest pursuant to Section
                              2.06 or 10.01 of the Agreement and Section 7.01 or 7.02 of this Supplement........32
         Section 8.02.        Distribution of Proceeds of Sale, Disposition or Liquidation of the
                              Receivables pursuant to Section 9.01 of the Agreement.............................34
ARTICLE IX            Miscellaneous Provisions..................................................................35
         Section 9.01.        Ratification of Agreement.........................................................35
         Section 9.02.        Counterparts......................................................................35
         Section 9.03.        Governing Law.....................................................................35
         Section 9.04.        Certain Accounting Related Amendments.............................................35
         Section 9.05.        Additional Representations and Warranties of the Transferors......................35

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                                      -ii-

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                  SERIES 2002-6 SUPPLEMENT, dated as of August 15, 2002 (the
                  "Supplement"), among AMERICAN EXPRESS CENTURION BANK, a
                  Utah-chartered industrial loan company, and AMERICAN EXPRESS
                  RECEIVABLES FINANCING CORPORATION II, a Delaware corporation,
                  as Transferors, AMERICAN EXPRESS TRAVEL RELATED SERVICES
                  COMPANY, INC., a New York corporation, as Servicer, and THE
                  BANK OF NEW YORK, a banking corporation organized and existing
                  under the laws of the State of New York, not in its individual
                  capacity, but solely as Trustee.

                  Pursuant to the Pooling and Servicing Agreement, dated as of
May 16, 1996 (as amended and supplemented, the "Agreement"), among the
Transferors, the Servicer and the Trustee, the Transferors have created the
AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST (the "Trust"). Section 6.03 of the
Agreement provides that the Transferors may from time to time direct the Trustee
to authenticate one or more new Series of Investor Certificates representing
fractional undivided interests in the Trust. The Principal Terms of any new
Series are to be set forth in a Supplement to the Agreement.

                  Pursuant to this Supplement, the Transferors and the Trustee
shall create a new Series of Investor Certificates and specify the Principal
Terms thereof.

                                   ARTICLE I

                   Creation of the Series 2002-6 Certificates

                  Section 1.01. Designation.

                  (a) There is hereby created a Series of Investor Certificates
to be issued pursuant to the Agreement and this Supplement to be known as
"American Express Credit Account Master Trust, Series 2002-6." The Series 2002-6
Certificates shall be issued in two Classes, the first of which shall be known
as the "Class A Series 2002-6 Floating Rate Asset Backed Certificates" and the
second of which shall be known as the "Class B Series 2002-6 Floating Rate Asset
Backed Certificates." In addition, there is hereby created a third Class of
uncertificated interests in the Trust which shall be known as the "Collateral
Interest, Series 2002-6" and which shall be deemed to be "Investor Certificates"
for all purposes under the Agreement and this Supplement other than for purposes
of the definition of the term "Tax Opinion" in Section 1.01 of the Agreement.
The Collateral Interest shall be considered a Class of Series 2002-6 for all
purposes of the Agreement and this Supplement, including for purposes of voting
concerning the liquidation of the Trust pursuant to Section 9.01 of the
Agreement. The Collateral Interest Holder shall be deemed to be the Series
Enhancer for all purposes under the Agreement and this Supplement.

                  (b) Series 2002-6 shall be included in Group II and shall be a
Principal Sharing Series. Series 2002-6 shall be an Excess Allocation Series.
Series 2002-6 shall not be subordinated to any other Series. Notwithstanding any
provision in the Agreement or in this Supplement to the contrary, the first
Distribution Date with respect to Series 2002-6 shall be the September 2002
Distribution Date and the first Monthly Period shall begin on and include the
Closing Date and end on and include August 25, 2002.

                  (c) Except as expressly provided herein, the provisions of
Article VI and Article XII of the Agreement relating to the registration,
authentication, delivery, presentation, cancellation and surrender of Registered
Certificates shall not be applicable to the Collateral Interest.

                                       1
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                                   ARTICLE II

                                   Definitions

                  Section 2.01. Definitions.

                  (a) Whenever used in this Supplement, the following words and
phrases shall have the following meanings, and the definitions of such terms are
applicable to the singular as well as the plural forms of such terms and the
masculine as well as the feminine and neuter genders of such terms.

                  "Additional Interest" means, with respect to any Distribution
Date, the Class A Additional Interest, the Class B Additional Interest and the
Collateral Additional Interest for such Distribution Date.

                  "Adjusted Invested Amount" shall mean, with respect to any
date of determination, an amount equal to the Invested Amount less the Principal
Funding Account Balance on such date of determination.

                  "Available Principal Collections" shall mean, with respect to
any Monthly Period, an amount equal to the sum of (a) (i) an amount equal to the
Principal Allocation Percentage of Series 2002-6 Allocable Principal Collections
received during such Monthly Period minus (ii) the amount of Reallocated
Principal Collections with respect to such Monthly Period which pursuant to
Section 4.08 are required to fund the Required Amount for the related
Distribution Date, (b) any Shared Principal Collections with respect to other
Series that are allocated to Series 2002-6 in accordance with Section 4.04 of
the Agreement and Section 4.11 of this Supplement, and (c) any other amounts
which pursuant to Section 4.05 or 4.07 of this Supplement are to be treated as
Available Principal Collections with respect to the related Distribution Date.

                  "Available Reserve Account Amount" shall mean, with respect to
any Distribution Date, the lesser of (a) the amount on deposit in the Reserve
Account on such date (before giving effect to any deposit to be made to the
Reserve Account on such date) and (b) the Required Reserve Account Amount.

                  "Base Rate" shall mean, with respect to any Monthly Period,
the annualized percentage equivalent of a fraction, the numerator of which is
equal to the sum of the Class A Monthly Interest, the Class B Monthly Interest
(calculated as if the Class B Invested Amount equals the outstanding principal
balance of the Class B Certificates), the Collateral Monthly Interest and the
Monthly Servicing Fee with respect to the related Distribution Date and the
denominator of which is the Invested Amount as of the last day of the preceding
Monthly Period.

                  "Class A Additional Interest" shall have the meaning specified
in subsection 4.02(a).

                  "Class A Adjusted Invested Amount" shall mean, with respect to
any date of determination, an amount equal to the Class A Invested Amount less
the Principal Funding Account Balance (but not in excess of the Class A Invested
Amount) on such date.

                  "Class A Available Funds" shall mean, with respect to any
Monthly Period, an amount equal to the sum of (a) if such Monthly Period relates
to a Distribution Date with respect to the Controlled Accumulation Period, the
Class A Floating Percentage of Principal Funding Account Investment Proceeds, if
any, with respect to such Distribution Date, (b) the Class A Floating Percentage
of the Reallocated Investor Finance Charge Collections and (c) the amount of
funds, if any, to be withdrawn from the Reserve Account which, pursuant to
subsection 4.12(d), are required to be included in Class A Available Funds with
respect to such Distribution Date.

                                       2
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                  "Class A Certificate Rate" shall mean, for any Interest
Accrual Period with respect to the Class A Certificates, a per annum rate equal
to LIBOR plus 0.14%.

                  "Class A Certificateholder" shall mean the Person in whose
name a Class A Certificate is registered in the Certificate Register.

                  "Class A Certificates" shall mean any one of the Certificates
executed by the Transferors and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-l.

                  "Class A Floating Percentage" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is equal to the Class A Adjusted
Invested Amount as of the close of business on the last day of the preceding
Monthly Period and the denominator of which is equal to the Adjusted Invested
Amount as of such day; provided, however, that with respect to the first Monthly
Period, the Class A Floating Percentage shall mean the percentage equivalent of
a fraction, the numerator of which is the Class A Initial Invested Amount and
the denominator of which is the Initial Invested Amount.

                  "Class A Initial Invested Amount" shall mean $594,000,000.

                  "Class A Interest Shortfall" shall have the meaning specified
in subsection 4.02(a).

                  "Class A Invested Amount" shall mean, on any date of
determination, an amount equal to (a) the Class A Initial Invested Amount, minus
(b) the aggregate amount of principal payments made to the Class A
Certificateholders on or prior to such date, minus (c) the excess, if any, of
(i) the aggregate amount of Class A Investor Charge-Offs for all prior
Distribution Dates over (ii) Class A Investor Charge-Offs reimbursed pursuant to
subsection 4.07(b) prior to such date.

                  "Class A Investor Charge-Offs" shall have the meaning
specified in subsection 4.06(a).

                  "Class A Investor Default Amount" shall mean, with respect to
each Distribution Date, an amount equal to the product of (i) the Investor
Default Amount for the related Monthly Period and (ii) the Class A Floating
Percentage for such Monthly Period.

                  "Class A Monthly Interest" shall have the meaning specified in
subsection 4.02(a).

                  "Class A Principal Percentage" shall mean, with respect to any
Monthly Period (i) during the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Class A Invested Amount as of the last day of the immediately preceding Monthly
Period and the denominator of which is the Invested Amount as of such day and
(ii) during the Controlled Accumulation Period, the Early Amortization Period or
any Partial Amortization Period, the percentage equivalent (which percentage
shall never exceed 100%) of a fraction, the numerator of which is the Class A
Invested Amount as of the close of business on the date on which the Revolving
Period shall have terminated and the denominator of which is the Invested Amount
as of the close of business on the date on which the Revolving Period shall have
terminated; provided, however, that with respect to the first Monthly Period,
the Class A Principal Percentage shall mean the percentage equivalent of a
fraction, the numerator of which is the Class A Initial Invested Amount and
denominator of which is the Initial Invested Amount.

                  "Class A Required Amount" shall have the meaning specified in
subsection 4.04(a).

                  "Class A Servicing Fee" shall have the meaning specified in
Section 3.01.

                  "Class B Additional Interest" shall have the meaning specified
in subsection 4.02(b).

                                       3
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                  "Class B Adjusted Invested Amount" shall mean an amount equal
to the Class B Invested Amount less the positive difference, if any, between the
Principal Funding Account Balance and the Class A Invested Amount on such date.

                  "Class B Available Funds" shall mean, with respect to any
Monthly Period, an amount equal to the sum of (a) Class B Floating Percentage of
the Reallocated Investor Finance Charge Collections and (b) if such Monthly
Period relates to a Distribution Date with respect to the Controlled
Accumulation Period, the Class B Floating Percentage of the Principal Funding
Account Investment Proceeds, if any, with respect to such Distribution Date.

                  "Class B Certificate Rate" shall mean, for any Interest
Accrual Period with respect to the Class B Certificates, a per annum rate equal
to LIBOR plus 0.45%.

                  "Class B Certificateholder" shall mean the Person in whose
name a Class B Certificate is registered in the Certificate Register.

                  "Class B Certificates" shall mean any one of the Certificates
executed by the Transferors and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-2.

                  "Class B Floating Percentage" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is equal to the Class B Adjusted
Invested Amount as of the close of business on the last day of the preceding
Monthly Period and the denominator of which is equal to the Adjusted Invested
Amount as of the close of business on such day; provided, however, that with
respect to the first Monthly Period, the Class B Floating Percentage shall mean
the percentage equivalent of a fraction, the numerator of which is the Class B
Initial Invested Amount and the denominator of which is the Initial Invested
Amount.

                  "Class B Initial Invested Amount" shall mean $57,600,000.

                  "Class B Interest Shortfall" shall have the meaning specified
in subsection 4.02(b).

                  "Class B Invested Amount" shall mean, on any date of
determination, an amount equal to (a) the Class B Initial Invested Amount, minus
(b) the aggregate amount of principal payments made to the Class B
Certificateholders prior to such date, minus (c) the aggregate amount of Class B
Investor Charge-Offs for all prior Distribution Dates, minus (d) the amount of
Reallocated Principal Collections allocated on all prior Distribution Dates
pursuant to subsection 4.08(a) (excluding any Reallocated Principal Collections
that have resulted in a reduction in the Collateral Invested Amount pursuant to
Section 4.08), minus (e) an amount equal to the amount by which the Class B
Invested Amount has been reduced on all prior Distribution Dates pursuant to
subsection 4.06(a) and plus (f) the amount of Excess Spread and Excess Finance
Charge Collections allocated and available on all prior Distribution Dates
pursuant to subsection 4.07(e) for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (c), (d) and (e); provided, however, that the
Class B Invested Amount may not be reduced below zero.

                  "Class B Investor Charge-Offs" shall have the meaning
specified in subsection 4.06(b).

                  "Class B Investor Default Amount" shall mean, with respect to
each Distribution Date, an amount equal to the product of (i) the Investor
Default Amount for the related Monthly Period and (ii) the Class B Floating
Percentage for such Monthly Period.

                  "Class B Monthly Interest" shall have the meaning specified in
subsection 4.02(b).

                                       4
<PAGE>

                  "Class B Principal Percentage" shall mean, with respect to any
Monthly Period, (i) during the Revolving Period, the percentage equivalent
(which percentage shall never exceed 100%) of a fraction, the numerator of which
is the Class B Invested Amount as of the last day of the immediately preceding
Monthly Period and the denominator of which is the Invested Amount as of such
day and (ii) during the Controlled Accumulation Period, the Early Amortization
Period or any Partial Amortization Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Class B Invested Amount as of the close of business on the date on which the
Revolving Period shall have terminated and the denominator of which is the
Invested Amount as of the close of business on the date on which the Revolving
Period shall have terminated; provided, however, that with respect to the first
Monthly Period, the Class B Principal Percentage shall mean the percentage
equivalent of a fraction, the numerator of which is the Class B Initial Invested
Amount and the denominator of which is the Initial Invested Amount.

                  "Class B Required Amount" shall have the meaning set forth in
subsection 4.04(b).

                  "Class B Servicing Fee" shall have the meaning specified in
Section 3.01.

                  "Closing Date" shall mean August 15, 2002; provided that, for
purposes of determining the date on which the first Monthly Period begins, the
Closing Date shall be deemed to be the close of business on the last day of the
seventh billing cycle applicable to the Accounts ending in July 2002.

                  "Collateral Additional Interest" shall have the meaning
specified in subsection 4.02(c).

                  "Collateral Available Funds" shall mean with respect to any
Distribution Date, the Collateral Floating Percentage of Reallocated Investor
Finance Charge Collections with respect to the preceding Monthly Period.

                  "Collateral Charge-Offs" shall have the meaning specified in
subsection 4.06(c).

                  "Collateral Default Amount" shall mean, with respect to any
Distribution Date, the product of the Investor Default Amount for the related
Monthly Period and the Collateral Floating Percentage.

                  "Collateral Floating Percentage" shall mean, with respect to
any Distribution Date, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is equal to the Collateral
Invested Amount as of the close of business on the last day of the preceding
Monthly Period and the denominator of which is the Adjusted Invested Amount as
of the close of business on such last day; provided, however, that with respect
to the first Monthly Period, the Collateral Floating Percentage shall mean the
percentage equivalent of a fraction, the numerator of which is the Collateral
Initial Invested Amount and the denominator of which is the Initial Invested
Amount.

                  "Collateral Initial Invested Amount" shall mean $68,400,000.

                  "Collateral Interest" shall mean a fractional undivided
interest in the Trust which shall consist of the right to receive, to the extent
necessary to make the required payments to the Collateral Interest Holder under
this Supplement, the portion of Collections allocable thereto under the
Agreement and this Supplement and funds on deposit in the Collection Account
allocable thereto pursuant to the Agreement and this Supplement.

                  "Collateral Interest Holder" shall mean the entity so
designated in the Loan Agreement.

                  "Collateral Interest Shortfall" shall have the meaning
specified in subsection 4.02(c).

                                       5
<PAGE>

                  "Collateral Invested Amount" shall mean, when used with
respect to any date, an amount equal to (a) the Collateral Initial Invested
Amount, minus (b) the aggregate amount of principal payments made to the
Collateral Interest Holder prior to such date, minus (c) the aggregate amount of
Collateral Charge-Offs for all prior Distribution Dates pursuant to subsection
4.06(c), minus (d) the aggregate amount of Reallocated Principal Collections
allocated on all prior Distribution Dates pursuant to Section 4.08 allocable to
the Collateral Invested Amount, minus (e) an amount equal to the amount by which
the Collateral Invested Amount has been reduced on all prior Distribution Dates
pursuant to subsections 4.06(a) and (b), and plus (f) the amount allocated and
available on all prior Distribution Dates pursuant to subsection 4.07(i), for
the purpose of reimbursing amounts deducted pursuant to the foregoing clauses
(c), (d) and (e); provided, however, that the Collateral Invested Amount may not
be reduced below zero.

                  "Collateral Monthly Interest" shall have the meaning specified
in subsection 4.02(c).

                  "Collateral Principal Percentage" shall mean, with respect to
any Monthly Period, (i) during the Revolving Period, the percentage equivalent
(which percentage shall never exceed 100%) of a fraction, the numerator of which
is the Collateral Invested Amount as of the last day of the immediately
preceding Monthly Period and the denominator of which is the Invested Amount as
of such day and (ii) during the Controlled Accumulation Period, the Early
Amortization Period or any Partial Amortization Period, the percentage
equivalent (which percentage shall never exceed 100%) of a fraction, the
numerator of which is the Collateral Invested Amount as of the close of business
on the date on which the Revolving Period shall have terminated and the
denominator of which is the Invested Amount as of the close of business on the
date on which the Revolving Period shall have terminated; provided, however,
that with respect to the first Monthly Period, the Collateral Principal
Percentage shall mean the percentage equivalent of a fraction, the numerator of
which is the Collateral Initial Invested Amount and the denominator of which is
the Initial Invested Amount.

                  "Collateral Rate" shall mean the rate specified in the Loan
Agreement.

                  "Collateral Servicing Fee" shall have the meaning set forth in
Section 3.01.

                  "Controlled Accumulation Amount" shall mean, for any
Distribution Date with respect to the Controlled Accumulation Period,
$54,300,000; provided, however, that, if the Controlled Accumulation Period
Length is determined to be less than 12 months, the Controlled Accumulation
Amount for each Distribution Date with respect to the Controlled Accumulation
Period will be equal to (i) the product of (x) the sum of the Class A Initial
Invested Amount and the Class B Initial Invested Amount and (y) the Controlled
Accumulation Period Factor for the related Monthly Period divided by (ii) the
Required Accumulation Factor Number.

                  "Controlled Accumulation Period" shall mean, unless a Pay-Out
Event shall have occurred prior thereto, the period commencing at the close of
business on the last day of the July 2006 Monthly Period or such later date as
is determined in accordance with subsection 4.03(c) and ending on the first to
occur of (a) the commencement of the Early Amortization Period, (b) the payment
in full of the Invested Amount and (c) the Series 2002-6 Termination Date.

                  "Controlled Accumulation Period Factor" shall mean, for each
Monthly Period, a fraction, the numerator of which is equal to the sum of the
series invested amounts as of the last day of the prior Monthly Period of all
outstanding Series, and the denominator of which is equal to the sum (without
duplication) of (a) the Series Invested Amount as of the last day of the prior
Monthly Period, (b) the series invested amounts as of the last day of the prior
Monthly Period of all outstanding Series (other than Series 2002-6) that are not
expected to be in their revolving periods, and (c) the series invested amounts
as of the last day of the prior Monthly Period of all other outstanding Series
that are not Principal Sharing Series and are in their revolving periods.

                                       6
<PAGE>

                  "Controlled Accumulation Period Length" has the meaning
specified in subsection 4.03(c).

                  "Controlled Deposit Amount" shall mean, for any Distribution
Date with respect to the Controlled Accumulation Period, an amount equal to the
sum of the Controlled Accumulation Amount for such Distribution Date and any
Deficit Controlled Accumulation Amount for the immediately preceding
Distribution Date.

                  "Covered Amount" shall mean, for any Distribution Date with
respect to the Controlled Accumulation Period or the first Special Payment Date,
if such Special Payment Date occurs prior to the date the Class A Invested
Amount is paid in full, an amount equal to the sum of (x) with respect to the
Class A Certificates, the product of (i) the Class A Certificate Rate, (ii) a
fraction, the numerator of which is the actual number of days from and including
the prior Distribution Date to but excluding the then current Distribution Date
and the denominator of which is 360 and, (iii) the Principal Funding Account
Balance, if any, as of the preceding Distribution Date that is allocable to the
principal of the Class A Certificates and (y) with respect to the Class B
Certificates, the product of (i) the Class B Certificate Rate, (ii) a fraction,
the numerator of which is the actual number of days from and including the prior
Distribution Date to but excluding the then current Distribution Date and the
denominator of which is 360 and (iii) the Principal Funding Account Balance, if
any, as of the preceding Distribution Date that is allocable to the principal of
the Class B Certificates.

                  "Deficit Controlled Accumulation Amount" shall mean (a) on the
first Distribution Date with respect to the Controlled Accumulation Period, the
excess, if any, of the Controlled Accumulation Amount for such Distribution Date
over the amount deposited in the Principal Funding Account on such Distribution
Date and (b) on each subsequent Distribution Date with respect to the Controlled
Accumulation Period, the excess, if any, of the Controlled Deposit Amount for
such subsequent Distribution Date over the amount deposited in the Principal
Funding Account on such subsequent Distribution Date.

                  "Distribution Date" shall mean September 16, 2002, and the
15th day of each calendar month thereafter, or if such 15th day is not a
Business Day, the next succeeding Business Day.

                  "Early Amortization Period" shall mean the period commencing
at the close of business on the Business Day immediately preceding the day on
which a Pay-Out Event with respect to Series 2002-6 is deemed to have occurred,
and ending on the first to occur of (i) the payment in full of the Invested
Amount or (ii) the Series 2002-6 Termination Date.

                  "Excess Finance Charge Collections" shall mean collections of
Finance Charge Receivables and certain other amounts allocable to the
Certificateholders' Interest of any Excess Allocation Series in excess of the
amounts necessary to make required payments with respect to such series
(including payments to the provider of any related Series Enhancement) that are
payable out of collections of Finance Charge Receivables.

                  "Excess Spread" shall mean, with respect to any Distribution
Date, the sum of the amounts, if any, specified pursuant to subsections
4.05(a)(iv), 4.05(b)(iii) and 4.05(c)(ii) with respect to such Distribution
Date.

                  "Expected Final Payment Date" shall mean the August 2007
Distribution Date.

                  "Finance Charge Shortfall" shall have the meaning specified in
Section 4.09.

                                       7
<PAGE>

                  "Floating Allocation Percentage" shall mean, with respect to
any Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Adjusted Invested
Amount as of the last day of the preceding Monthly Period (or with respect to
the first Monthly Period, the Initial Invested Amount) and the denominator of
which is the product of (x) the Series 2002-6 Allocation Percentage with respect
to such Monthly Period and (y) the sum of (i) the total amount of Principal
Receivables in the Trust as of such day (or with respect to the first Monthly
Period, the total amount of Principal Receivables in the Trust on the Closing
Date) and (ii) the principal amount on deposit in the Special Funding Account as
of such last day (or with respect to the first Monthly Period, as of the Closing
Date); provided, however, that with respect to any Monthly Period in which an
Addition Date for an Aggregate Addition or a Removal Date occurs the amount in
(y)(i) above shall be (1) the aggregate amount of Principal Receivables in the
Trust at the end of the day on the last day of the prior Monthly Period for the
period from and including the first day of such Monthly Period to but excluding
the related Addition Date or Removal Date and (2) the aggregate amount of
Principal Receivables in the Trust at the end of the day on the related Addition
Date or Removal Date for the period from and including the related Addition Date
or Removal Date to and including the last day of such Monthly Period.

                  "Group II" shall mean Series 2002-6 and each other Series
specified in the related Supplement to be included in Group II.

                  "Group II Investor Additional Amounts" shall mean, with
respect to any Distribution Date, the sum of (a) Series 2002-6 Additional
Amounts for such Distribution Date and (b) for all other Series included in
Group II, the sum of (i) the aggregate net amount by which the Invested Amounts
of such Series have been reduced as a result of investor charge-offs,
subordination of principal collections and funding the investor default amounts
in respect of any Class or Series Enhancement interests of such Series as of
such Distribution Date and (ii) if the applicable Supplements so provide, the
aggregate unpaid amount of interest at the applicable certificate rates that has
accrued on the amounts described in the preceding clause (i) for such
Distribution Date.

                  "Group II Investor Default Amount" shall mean, with respect to
any Distribution Date, the sum of (a) the Investor Default Amount for such
Distribution Date and (b) the aggregate amount of the investor default amounts
for all other Series included in Group II for such Distribution Date.

                  "Group II Investor Finance Charge Collections" shall mean,
with respect to any Distribution Date, the sum of (a) Investor Finance Charge
Collections for such Distribution Date and (b) the aggregate amount of the
investor finance charge collections for all other Series included in Group II
for such Distribution Date.

                  "Group II Investor Monthly Fees" shall mean with respect to
any Distribution Date, the sum of (a) Series 2002-6 Monthly Fees for such
Distribution Date and (b) the aggregate amount of the servicing fees, investor
fees, fees payable to any Series Enhancer and any other similar fees, which are
payable out of reallocated investor finance charge collections pursuant to the
related Supplements, for all other Series included in Group II for such
Distribution Date.

                  "Group II Investor Monthly Interest" shall mean, with respect
to any Distribution Date, the sum of (a) Series 2002-6 Monthly Interest for such
Distribution Date and (b) the aggregate amount of monthly interest, including
overdue monthly interest and interest on such overdue monthly interest, if such
amounts are payable out of reallocated investor finance charge collections
pursuant to the related Supplements, for all other Series included in Group II
for such Distribution Date.

                  "Initial Invested Amount" shall mean $720,000,000.

                                       8
<PAGE>

                  "Interest Accrual Period" shall mean, with respect to any
Distribution Date, the period (a) 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) and (b) to but excluding
such Distribution Date.

                  "Invested Amount" shall mean, as of any date of determination,
an amount equal to the sum of (a) the Class A Invested Amount as of such date,
(b) the Class B Invested Amount as of such date and (c) the Collateral Invested
Amount as of such date.

                  "Investor Charge-Offs" shall mean Class A Investor
Charge-Offs, Class B Investor Charge-Offs and Collateral Charge-Offs.

                  "Investor Default Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) the Series 2002-6
Allocable Defaulted Amount for the related Monthly Period and (b) the Floating
Allocation Percentage for such Monthly Period.

                  "Investor Finance Charge Collections" shall mean with respect
to any Distribution Date, an amount equal to the product of (a) the Floating
Allocation Percentage for the related Monthly Period and (b) Series 2002-6
Allocable Finance Charge Collections deposited in the Collection Account for the
related Monthly Period.

                  "LIBOR" shall mean, for any Interest Accrual Period, a per
annum interest rate determined by the Trustee for such Interest Accrual Period
in accordance with the provisions of Section 4.14.

                  "LIBOR Determination Date" shall mean August 13, 2002 for the
period from the Closing Date to but excluding September 16, 2002, and for every
other Interest Accrual Period, the second London Business Day prior to the
commencement of such Interest Accrual Period.

                  "Loan Agreement" shall mean the agreement among the
Transferors, the Trustee, the Servicer and the Collateral Interest Holder, dated
as of the date hereof.

                  "London Business Day" shall mean any day on which dealings in
deposits in United States dollars are transacted in the London interbank market.

                  "Monthly Interest" means, with respect to any Distribution
Date, the Class A Monthly Interest, the Class B Monthly Interest and the
Collateral Monthly Interest for such Distribution Date.

                  "Monthly Servicing Fee" shall have the meaning specified in
subsection 3.01.

                  "Pay-Out Event" shall mean any Pay-Out Event specified in
Section 6.01.

                                       9
<PAGE>

                  "Principal Allocation Percentage" shall mean, with respect to
any day during a Monthly Period, the percentage equivalent (which percentage
shall never exceed 100%) of a fraction, the numerator of which is (a) during the
Revolving Period, the Series Adjusted Invested Amount for Series 2002-6 as of
the last day of the immediately preceding Monthly Period (or, in the case of the
first Monthly Period, the Initial Invested Amount) and (b) during the Controlled
Accumulation Period, the Early Amortization Period or any Partial Amortization
Period, the Series Adjusted Invested Amount for Series 2002-6 as of the close of
business on the date on which the Revolving Period shall have terminated and the
denominator of which is the product of (x) the sum of (i) the total amount of
Principal Receivables in the Trust as of the last day of the immediately
preceding Monthly Period (or with respect to the first Monthly Period, the total
amount of Principal Receivables in the Trust as of the Closing Date) and (ii)
the principal amount on deposit in the Special Funding Account as of such last
day (or with respect to the first Monthly Period, the Closing Date) and (y) the
Series 2002-6 Allocation Percentage as of the last day of the immediately
preceding Monthly Period; provided, however, that with respect to any Monthly
Period in which an Addition Date for an Aggregate Addition or a Removal Date
occurs the amount in (x)(i) above shall be (1) the aggregate amount of Principal
Receivables in the Trust at the end of the day on the last day of the prior
Monthly Period for the period from and including the first day of such Monthly
Period to but excluding the related Addition Date or Removal Date and (2) the
aggregate amount of Principal Receivables in the Trust at the end of the day on
the related Addition Date or Removal Date for the period from and including the
related Addition Date or Removal Date to and including the last day of such
Monthly Period; and provided further, that if after the commencement of the
Controlled Accumulation Period a Pay-Out Event occurs with respect to another
Series that was designated in the Supplement therefor as a Series that is a
"Paired Series" with respect to Series 2002-6, the Transferors may, by written
notice delivered to the Trustee and the Servicer, designate a different
numerator for the foregoing fraction, provided that (x) such numerator is not
less than the Adjusted Invested Amount as of the last day of the revolving
period for such Paired Series, (y) the Transferors shall have received written
notice from each Rating Agency that the Rating Agency Condition has been
satisfied with respect to such designation and shall have delivered copies of
each such written notice to the Servicer and the Trustee and (z) the Transferors
shall have delivered to the Trustee an Officer's Certificate to the effect that,
based on the facts known to such officer at such time, in the reasonable belief
of the Transferors, such designation will not cause a Pay-Out Event or an event
that, after the giving of notice or the lapse of time, would constitute a
Pay-Out Event, to occur with respect to Series 2002-6.

                  "Principal Funding Account" shall have the meaning specified
in subsection 4.03(a)(i).

                  "Principal Funding Account Balance" shall mean, with respect
to any date of determination during the Controlled Accumulation Period, the
principal amount, if any, on deposit in the Principal Funding Account on such
date of determination.

                  "Principal Funding Account Investment Proceeds" shall have the
meaning specified in subsection 4.03(a)(ii).

                  "Principal Funding Account Investment Shortfall" shall mean,
with respect to each Distribution Date during the Controlled Accumulation
Period, the amount, if any, by which the Principal Funding Account Investment
Proceeds are less than the Covered Amount.

                  "Reallocated Investor Finance Charge Collections" shall mean
that portion of Group II Investor Finance Charge Collections allocated to Series
2002-6 pursuant to Section 4.10.

                  "Reallocated Principal Collections" shall mean, with respect
to any Monthly Period, the product of (a) the Series 2002-6 Allocable Principal
Collections deposited in the Collection Account for such Monthly Period and (b)
the sum of the Class B Principal Percentage and the Collateral Principal
Percentage.

                  "Reassignment Amount" shall mean, with respect to any
Distribution Date, after giving effect to any deposits and distributions
otherwise to be made on such Distribution Date, the sum of (i) the Adjusted
Invested Amount on such Distribution Date, plus (ii) Monthly Interest for such
Distribution Date and any Monthly Interest previously due but not distributed to
the Series 2002-6 Certificateholders on a prior Distribution Date, plus (iii)
the amount of Additional Interest, if any, for such Distribution Date and any
Additional Interest previously due but not distributed to the Series 2002-6
Certificateholders on a prior Distribution Date.

                                       10
<PAGE>

                  "Reference Banks" shall mean four major banks in the London
interbank market selected by the Servicer.

                  "Required Accumulation Factor Number" shall be equal to a
fraction, rounded upwards to the nearest whole number, the numerator of which is
one and the denominator of which is equal to the lowest monthly principal
payment rate on the Accounts, expressed as a decimal, for the three months
preceding the date of such calculation.

                  "Required Amount" shall mean, with respect to any Monthly
Period, the sum of the Class A Required Amount and the Class B Required Amount.

                  "Required Collateral Invested Amount" shall mean (i) initially
$68,400,000 and (ii) on any Distribution Date thereafter, 9.50% of the sum of
the Class A Adjusted Invested Amount on such Distribution Date, the Class B
Adjusted Invested Amount on such Distribution Date (in each case after taking
into account payments to be made on such Distribution Date) and the Collateral
Invested Amount on such Distribution Date after taking into account any
adjustments made on such Distribution Date, but not less than $21,600,000;
provided, however, that (1) if either (a) there is a reduction in the Collateral
Invested Amount pursuant to clauses (c), (d) or (e) of the definition thereof
during the Controlled Accumulation Period or (b) a Pay-Out Event with respect to
the Series 2002-6 Certificates has occurred, the Required Collateral Invested
Amount for such Distribution Date thereafter shall equal the Required Collateral
Invested Amount for such Distribution Date immediately preceding such reduction
or Pay-Out Event, (2) in no event shall the Required Collateral Invested Amount
exceed the unpaid principal amount of the Series 2002-6 Certificates as of the
last day of the Monthly Period preceding such Distribution Date after taking
into account payments to be made on the related Distribution Date and (3) the
Required Collateral Invested Amount may be reduced to a lesser amount at any
time if the Rating Agency Condition is satisfied.

                  "Required Reserve Account Amount" shall mean, with respect to
any Distribution Date on or after the Reserve Account Funding Date, an amount
equal to (1) 0.50% of the Class A Invested Amount as of the preceding
Distribution Date (after giving effect to all changes therein on such date) or
(2) any other percentage (which may be 0%) of the Class A Invested Amount
designated by the Transferors, provided that if such percentage is less than the
percentage specified in clause (1) above, the Transferors shall have received
the prior written consent of the Collateral Interest Holder and written notice
from each Rating Agency that the Rating Agency Condition shall have been
satisfied with respect to such designation and shall have delivered copies of
each such written notice to the Servicer and the Trustee.

                  "Reserve Account" shall have the meaning specified in
subsection 4.12(a).

                  "Reserve Account Funding Date" shall mean the Distribution
Date which occurs not later than the earliest of (a) the Distribution Date with
respect to the Monthly Period that commences not later than three months prior
to the Distribution Date with respect to the first Monthly Period in the
Controlled Accumulation Period, (b) in the event that the average Excess Spread
Percentage for any three consecutive Monthly Periods ending in the August 2005
Monthly Period or any Monthly Period thereafter is less than 2%, the
Distribution Date with respect to such Monthly Period, (c) in the event that the
average Excess Spread Percentage for any three consecutive Monthly Periods
ending in the February 2006 Monthly Period or any Monthly Period thereafter is
less than 3%, the Distribution Date with respect to such Monthly Period and (d)
such earlier Distribution Date as the Transferors may determine by written
notice to the Trustee and the Servicer. For this purpose, the "Excess Spread
Percentage" for any Monthly Period shall be equal to the Series Adjusted
Portfolio Yield for such Monthly Period minus the Base Rate for such Monthly
Period.

                  "Reserve Account Surplus" shall mean, as of any date of
determination, the amount, if any, by which the amount on deposit in the Reserve
Account exceeds the Required Reserve Account Amount.

                                       11
<PAGE>

                  "Reserve Draw Amount" shall have the meaning specified in
subsection 4.12(c).

                  "Revolving Period" shall mean the period beginning at the
close of business on the Series Cut-Off Date and ending on the earlier of (a)
the close of business on the day immediately preceding the day the Controlled
Accumulation Period commences and (b) the close of business on the day
immediately preceding the day the Early Amortization Period commences.

                  "Series Adjusted Portfolio Yield" shall mean, with respect to
any Monthly Period, the annualized percentage equivalent of a fraction, (A) the
numerator of which is equal to (a) Reallocated Investor Finance Charge
Collections with respect to such Monthly Period, plus (b) the amount of any
Principal Funding Account Investment Proceeds for the related Distribution Date,
plus (c) provided that each Rating Agency has consented in writing to the
inclusion thereof in calculating the Series Adjusted Portfolio Yield, any Excess
Finance Charge Collections that are allocated to Series 2002-6 with respect to
such Monthly Period plus (d) the amount of funds, if any, withdrawn from the
Reserve Account which pursuant to subsection 4.12(d) are required to be included
as Class A Available Funds for the Distribution Date with respect to such
Monthly Period minus (e) the Investor Default Amount for the Distribution Date
with respect to such Monthly Period, and (B) the denominator of which is the
Invested Amount as of the last day of the preceding Monthly Period.

                  "Series Cut-Off Date" shall mean the close of business on
August 15, 2002.

                  "Series 2002-6" shall mean the Series of Certificates the
terms of which are specified in this Supplement.

                  "Series 2002-6 Additional Amounts" shall mean, with respect to
any Distribution Date, the sum of the amounts determined pursuant to subsections
4.07(b), (e) and (i) for such Distribution Date.

                  "Series 2002-6 Allocable Defaulted Amount" shall mean the
Series Allocable Defaulted Amount with respect to Series 2002-6.

                  "Series 2002-6 Allocable Finance Charge Collections" shall
mean the Series Allocable Finance Charge Collections with respect to Series
2002-6.

                  "Series 2002-6 Allocable Principal Collections" shall mean the
Series Allocable Principal Collections with respect to Series 2002-6.

                  "Series 2002-6 Allocation Percentage" shall mean the Series
Allocation Percentage with respect to Series 2002-6.

                  "Series 2002-6 Certificate" shall mean a Class A Certificate
or a Class B Certificate or the Collateral Interest.

                  "Series 2002-6 Certificateholder" shall mean a Class A
Certificateholder or a Class B Certificateholder or the Collateral Interest
Holder.

                  "Series 2002-6 Certificateholders' Interest" shall mean the
Certificateholders' Interest for Series 2002-6, including the Collateral
Interest.

                  "Series 2002-6 Monthly Fees" shall mean, with respect to any
Distribution Date, the amount determined pursuant to subsections 4.05(a)(ii),
(b)(ii) and (c)(i) and subsection 4.07(g).

                  "Series 2002-6 Monthly Interest" shall mean the amounts
determined pursuant to subsections 4.02(a), (b) and (c).

                                       12
<PAGE>

                  "Series 2002-6 Principal Shortfall" shall have the meaning
specified in Section 4.11.

                  "Series 2002-6 Termination Date" shall mean the March 2010
Distribution Date.

                  "Series Invested Amount" shall mean the Initial Invested
Amount.

                  "Series Required Transferor Amount" shall mean an amount equal
to 7% of the Invested Amount.

                  "Servicing Base Amount" shall have the meaning specified in
Section 3.01.

                  "Servicing Fee Rate" shall mean 2.0% per annum.

                  "Special Payment Date" shall mean each Distribution Date with
respect to the Early Amortization Period.

                  "Telerate Page 3750" shall mean the display page currently so
designated on the Moneyline Telerate Service (or such other page as may replace
that page on that service for the purpose of displaying comparable rates or
prices).

                  "Transferor Percentage" shall mean 100% minus (a) the Floating
Allocation Percentage, when used at any time with respect to Finance Charge
Receivables and Defaulted Receivables, or (b) the Principal Allocation
Percentage, when used at any time with respect to Principal Receivables.

                  (b) Notwithstanding anything to the contrary in this
Supplement or the Agreement, the term "Rating Agency" shall mean, whenever used
in this Supplement or the Agreement with respect to Series 2002-6, Moody's and
Standard & Poor's. As used in this Supplement and in the Agreement with respect
to Series 2002-6, "highest investment category" shall mean (i) in the case of
Standard & Poor's, AAA or A-1+, as applicable and (ii) in the case of Moody's,
Aaa or P-1, as applicable.

                  (c) Each capitalized term defined herein shall relate to the
Series 2002-6 Certificates and no other Series of Certificates issued by the
Trust, unless the context otherwise requires. All capitalized terms used herein
and not otherwise defined herein have the meanings ascribed to them in the
Agreement. In the event that any term or provision contained herein shall
conflict with or be inconsistent with any term or provision contained in the
Agreement, the terms and provisions of this Supplement shall govern.

                  (d) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Supplement shall refer to this Supplement as a
whole and not to any particular provision of this Supplement; references to any
Article, subsection, Section or Exhibit are references to Articles, subsections,
Sections and Exhibits in or to this Supplement unless otherwise specified; and
the term "including" means "including without limitation."

                                       13
<PAGE>
                                   ARTICLE III

                                  Servicing Fee

                  Section 3.01. Servicing Compensation. The share of the
Servicing Fee allocable to the Series 2002-6 Certificateholders with respect to
any Distribution Date (the "Monthly Servicing Fee") shall be equal to
one-twelfth of the product of (a) the Servicing Fee Rate and (b) (i) the
Adjusted Invested Amount as of the last day of the Monthly Period preceding such
Distribution Date minus (ii) the product of the amount, if any, on deposit in
the Special Funding Account as of the last day of the Monthly Period preceding
such Distribution Date and the Series 2002-6 Allocation Percentage with respect
to such Monthly Period (the amount calculated pursuant to this clause (b) is
referred to as the "Servicing Base Amount"). The share of the Monthly Servicing
Fee allocable to the Class A Certificateholders with respect to any Distribution
Date (the "Class A Servicing Fee") shall be equal to one-twelfth of the product
of (a) the Class A Floating Percentage, (b) the Servicing Fee Rate and (c) the
Servicing Base Amount. The share of the Monthly Servicing Fee allocable to the
Class B Certificateholders with respect to any Distribution Date (the "Class B
Servicing Fee") shall be equal to one-twelfth of the product of (a) the Class B
Floating Percentage, (b) the Servicing Fee Rate and (c) the Servicing Base
Amount. The share of the Monthly Servicing Fee allocable to the Collateral
Interest with respect to any Distribution Date (the "Collateral Servicing Fee")
shall be equal to one-twelfth of the product of the (a) Collateral Floating
Percentage, (b) the Servicing Fee Rate and (c) the Servicing Base Amount. The
remainder of the Servicing Fee shall be paid by the Holders of the Transferor
Certificates or the investor certificateholders of other Series (as provided in
the related Supplements) and in no event shall the Trust, the Trustee or the
Series 2002-6 Certificateholders be liable for the share of the Servicing Fee to
be paid by the Holders of the Transferor Certificates or the investor
certificateholders of any other Series. To the extent that the Class A Servicing
Fee, the Class B Servicing Fee and the Collateral Servicing Fee are not paid in
full pursuant to the preceding provisions of this Section 3.01, and Sections
4.05 and 4.07, they shall be paid by the Holders of the Transferor Certificates.

                                   ARTICLE IV

                 Rights of Series 2002-6 Certificateholders and
                    Allocation and Application of Collections

                  Section 4.01. Collections and Allocations.

                  (a) Allocations. Collections of Finance Charge Receivables and
Principal Receivables and Defaulted Receivables allocated to Series 2002-6
pursuant to Article IV of the Agreement (and, as described herein, Collections
of Finance Charge Receivables reallocated from other Series in Group II) shall
be allocated and distributed or reallocated as set forth in this Article.

                  (b) Payments to the Transferor. The Servicer shall on each
Deposit Date withdraw from the Collection Account and pay to the Holders of the
Transferor Certificates the following amounts:

                           (i) an amount equal to the Transferor Percentage for
                  the related Monthly Period of Series 2002-6 Allocable Finance
                  Charge Collections to the extent such amount is deposited in
                  the Collection Account; and

                           (ii) an amount equal to the Transferor Percentage for
                  the related Monthly Period of Series 2002-6 Allocable
                  Principal Collections deposited in the Collection Account, if
                  the Transferor Amount (determined after giving effect to any
                  Principal Receivables transferred to the Trust on such Deposit
                  Date) exceeds zero.

                  The withdrawals to be made from the Collection Account
pursuant to this subsection 4.01(b) do not apply to deposits into the Collection
Account that do not represent Collections, including payment of the purchase
price for the Certificateholders' Interest pursuant to Section 2.06 or 10.01 of
the Agreement, payment of the purchase price for the Series 2002-6
Certificateholders' Interest pursuant to Section 7.01 of this Supplement and
proceeds from the sale, disposition or liquidation of Receivables pursuant to
Section 9.01 or 12.02 of the Agreement.

                  (c) Allocations to the Series 2002-6 Certificateholders. The
Servicer shall, prior to the close of business on each Deposit Date, allocate to
the Series 2002-6 Certificateholders the following amounts as set forth below:

                                       14
<PAGE>

                           (i) Allocations of Finance Charge Collections. The
                  Servicer shall allocate to the Series 2002-6
                  Certificateholders and retain in the Collection Account for
                  application as provided herein an amount equal to the product
                  of (A) the Floating Allocation Percentage and (B) the Series
                  2002-6 Allocation Percentage and (C) the aggregate amount of
                  Collections of Finance Charge Receivables deposited in the
                  Collection Account on such Deposit Date.

                           (ii) Allocations of Principal Collections. The
                  Servicer shall allocate to the Series 2002-6
                  Certificateholders the following amounts as set forth below:

                                    (x) Allocations During the Revolving Period.
                           During the Revolving Period (A) an amount equal to
                           the product of (I) the sum of the Class B Principal
                           Percentage and the Collateral Principal Percentage
                           and (II) the Principal Allocation Percentage and
                           (III) the Series 2002-6 Allocation Percentage and
                           (IV) the aggregate amount of Collections of Principal
                           Receivables deposited in the Collection Account on
                           such Deposit Date, shall be allocated to the Series
                           2002-6 Certificateholders and retained in the
                           Collection Account until applied as provided herein
                           and (B) an amount equal to the product of (I) the
                           Class A Principal Percentage and (II) the Principal
                           Allocation Percentage and (III) the Series 2002-6
                           Allocation Percentage and (IV) the aggregate amount
                           of Collections of Principal Receivables deposited in
                           the Collection Account on such Deposit Date shall be
                           allocated to the Series 2002-6 Certificateholders
                           and, to the extent needed to make any distribution
                           pursuant to subsection 4.05(d)(i), deposited in the
                           Collection Account, and otherwise first, if any other
                           Principal Sharing Series is outstanding and in its
                           amortization period or accumulation period, retained
                           in the Collection Account for application, to the
                           extent necessary, as Shared Principal Collections on
                           the related Distribution Date, and second paid to the
                           Holders of the Transferor Certificates; provided,
                           however, that such amount to be paid to the Holders
                           of the Transferor Certificates on any Deposit Date
                           shall be paid to such Holders only if the Transferor
                           Amount on such Deposit Date is greater than the
                           Required Transferor Amount (after giving effect to
                           all Principal Receivables transferred to the Trust on
                           such day) and otherwise shall be deposited in the
                           Special Funding Account.

                                    (y) Allocations During the Controlled
                           Accumulation Period. During the Controlled
                           Accumulation Period (A) an amount equal to the
                           product of (I) the sum of the Class B Principal
                           Percentage and the Collateral Principal Percentage
                           and (II) the Principal Allocation Percentage and
                           (III) the Series 2002-6 Allocation Percentage and
                           (IV) the aggregate amount of Collections of Principal
                           Receivables deposited in the Collection Account on
                           such Deposit Date, shall be allocated to the Series
                           2002-6 Certificateholders and retained in the
                           Collection Account until applied as provided herein
                           and (B) an amount equal to the product of (I) the
                           Class A Principal Percentage and (II) the Principal
                           Allocation Percentage and (III) the Series 2002-6
                           Allocation Percentage and (IV) the aggregate amount
                           of Collections of Principal Receivables deposited in
                           the Collection Account on such Deposit Date (the
                           product specified in this clause (B) for any such
                           date is hereinafter referred to as a "Percentage
                           Allocation") shall be allocated to the Series 2002-6
                           Certificateholders and retained in the Collection
                           Account until applied as provided herein; provided,
                           however, that if the sum of such Percentage
                           Allocation and all preceding Percentage Allocations
                           with respect to the same Monthly Period exceeds the
                           Controlled Deposit Amount during the Controlled
                           Accumulation Period for the related Distribution
                           Date, then such excess shall not be treated as a
                           Percentage Allocation and shall be first, if any
                           other Principal Sharing Series is outstanding and in
                           its amortization period or accumulation period,
                           retained in the Collection Account for application,
                           to the extent necessary, as Shared Principal
                           Collections on the related Distribution Date, and
                           second paid to the Holders of the Transferor
                           Certificates only if the Transferor Amount on such
                           Deposit Date is greater than the Required Transferor
                           Amount (after giving effect to all Principal
                           Receivables transferred to the Trust on such day) and
                           otherwise shall be deposited in the Special Funding
                           Account.

                                       15
<PAGE>

                                    (z) Allocations During the Early
                           Amortization Period. During the Early Amortization
                           Period, an amount equal to the product of (A) the
                           Principal Allocation Percentage and (B) the Series
                           2002-6 Allocation Percentage and (C) the aggregate
                           amount of Collections of Principal Receivables
                           deposited in the Collection Account on such Deposit
                           Date, shall be allocated to the Series 2002-6
                           Certificateholders and retained in the Collection
                           Account until applied as provided herein; provided,
                           however, that after the date on which an amount of
                           such Collections equal to the Adjusted Invested
                           Amount has been deposited into the Collection Account
                           and allocated to the Series 2002-6
                           Certificateholders, the remainder that has not been
                           so deposited and allocated shall be first, if any
                           other Principal Sharing Series is outstanding and in
                           its amortization period or accumulation period,
                           retained in the Collection Account for application,
                           to the extent necessary, as Shared Principal
                           Collections on the related Distribution Date, and
                           second paid to the Holders of the Transferor
                           Certificates only if the Transferor Amount on such
                           date is greater than the Required Transferor Amount
                           (after giving effect to all Principal Receivables
                           transferred to the Trust on such day) and otherwise
                           shall be deposited in the Special Funding Account.

                  Section 4.02. Determination of Monthly Interest.

                  (a) The amount of monthly interest ("Class A Monthly
Interest") distributable from the Collection Account with respect to the Class A
Certificates on any Distribution Date shall be an amount equal to the product of
(i) a fraction, the numerator of which is the actual number of days in the
period from (and including) the immediately preceding Distribution Date (or in
the case of the first Distribution Date, the Closing Date) to (but excluding)
such Distribution Date and the denominator of which is 360, (ii) the Class A
Certificate Rate for such Distribution Date and (iii) the outstanding principal
balance of the Class A Certificates as of close of business on the immediately
preceding Record Date.

                  On the Determination Date preceding each Distribution Date,
the Servicer shall determine the excess, if any (the "Class A Interest
Shortfall"), of (x) the Class A Monthly Interest for such Distribution Date over
(y) the aggregate amount of funds allocated and available to pay such Class A
Monthly Interest on such Distribution Date. If the Class A Interest Shortfall
with respect to any Distribution Date is greater than zero, on each subsequent
Distribution Date until such Class A Interest Shortfall is fully paid, an
additional amount ("Class A Additional Interest") equal to the product of (i) a
fraction, the numerator of which is the actual number of days in the period from
(and including) the immediately preceding Distribution Date (or in the case of
the first Distribution Date, the Closing Date) to (but excluding) such
Distribution Date and the denominator of which is 360, (ii) the sum of (x) the
Class A Certificate Rate and (y) 2.0% per annum and (iii) such Class A Interest
Shortfall (or the portion thereof which has not been paid to the Class A
Certificateholders) shall be payable as provided herein with respect to the
Class A Certificates. Notwithstanding anything to the contrary herein, Class A
Additional Interest shall be payable or distributed to the Class A
Certificateholders only to the extent permitted by applicable law.

                                       16
<PAGE>

                  (b) The amount of monthly interest ("Class B Monthly
Interest") distributable from the Collection Account with respect to the Class B
Certificates on any Distribution Date shall be an amount equal to the product of
(i) a fraction, the numerator of which is the actual number of days in the
period from (and including) the immediately preceding Distribution Date (or in
the case of the first Distribution Date, the Closing Date) to (but excluding)
such Distribution Date and the denominator of which is 360, (ii) the Class B
Certificate Rate for such Distribution Date and (iii) the Class B Invested
Amount as of the close of business on the immediately preceding Record Date.

                  On the Determination Date preceding each Distribution Date,
the Servicer shall determine the excess, if any (the "Class B Interest
Shortfall"), of (x) the Class B Monthly Interest for such Distribution Date over
(y) the aggregate amount of funds allocated and available to pay such Class B
Monthly Interest on such Distribution Date. If the Class B Interest Shortfall
with respect to any Distribution Date is greater than zero, on each subsequent
Distribution Date until such Class B Interest Shortfall is fully paid, an
additional amount ("Class B Additional Interest") equal to the product of (i) a
fraction, the numerator of which is the actual number of days in the period from
(and including) the immediately preceding Distribution Date (or in the case of
the first Distribution Date, the Closing Date) to (but excluding) such
Distribution Date and the denominator of which is 360, (ii) the sum of (x) the
Class B Certificate Rate and (y) 2.0% per annum and (iii) such Class B Interest
Shortfall (or the portion thereof which has not been paid to the Class B
Certificateholders) shall be payable as provided herein with respect to the
Class B Certificates. Notwithstanding anything to the contrary herein, Class B
Additional Interest shall be payable or distributed to the Class B
Certificateholders only to the extent permitted by applicable law.

                  (c) The amount of monthly interest ("Collateral Monthly
Interest") distributable from the Collection Account with respect to the
Collateral Invested Amount on any Distribution Date shall be an amount equal to
the product of (i) (A) a fraction, the numerator of which is the actual number
of days in the period from (and including) the immediately preceding
Distribution Date (or in the case of the first Distribution Date, the Closing
Date) to (but excluding) such Distribution Date and the denominator of which is
360, (B) the Collateral Rate in effect with respect to the period from (and
including) the immediately preceding Distribution Date (or in the case of the
first Distribution Date, the Closing Date) to (but excluding) such Distribution
Date, and (ii) the Collateral Invested Amount as of the close of business on the
last day of the preceding Monthly Period; provided, however, with respect to the
first Distribution Date, Collateral Monthly Interest shall be equal to the
interest accrued on the Collateral Initial Invested Amount at the Collateral
Rate for the period from the Closing Date to but excluding the first
Distribution Date.

                  On the Determination Date preceding each Distribution Date,
the Servicer shall determine an amount (the "Collateral Interest Shortfall")
equal to (x) the aggregate Collateral Monthly Interest for such Distribution
Date minus (y) the aggregate amount of funds allocated and available to pay such
Collateral Monthly Interest on such Distribution Date. If the Collateral
Interest Shortfall with respect to any Distribution Date is greater than zero,
on each subsequent Distribution Date until such Collateral Interest Shortfall is
fully paid, an additional amount ("Collateral Additional Interest") shall be
payable as provided herein with respect to the Collateral Invested Amount equal
to the product of (i) (A) a fraction, the numerator of which is the actual
number of days in the period from (and including) the immediately preceding
Distribution Date to (but excluding) such Distribution Date and the denominator
of which is 360, (B) the Collateral Rate in effect during the period from (and
including) the immediately preceding Distribution Date to (but excluding) such
Distribution Date, and (ii) such Collateral Interest Shortfall (or the portion
thereof which has not been paid to the Collateral Interest Holder).
Notwithstanding anything to the contrary herein, Collateral Additional Interest
shall be payable or distributed to the Collateral Interest Holder only to the
extent permitted by applicable law.

                                       17
<PAGE>

                  Section 4.03. Principal Funding Account; Controlled
Accumulation Period.

                  (a) (i) The Servicer, for the benefit of the Series 2002-6
Certificateholders, shall establish and maintain in the name of the Trustee, on
behalf of the Trust, an Eligible Deposit Account (the "Principal Funding
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Series 2002-6 Certificateholders. The
Principal Funding Account shall initially be established with The Bank of New
York.

                      (ii) At the written direction of the Servicer, funds on
deposit in the Principal Funding Account shall be invested by the Trustee in
Eligible Investments selected by the Servicer. All such Eligible Investments
shall be held by the Trustee for the benefit of the Series 2002-6
Certificateholders; provided that on each Distribution Date all interest and
other investment income (net of losses and investment expenses) ("Principal
Funding Account Investment Proceeds") on funds on deposit therein shall be
applied as set forth in paragraph (iii) below. Funds on deposit in the Principal
Funding Account shall be invested in Eligible Investments that will mature so
that such funds will be available at the close of business on the Transfer Date
preceding the following Distribution Date. Unless the Servicer directs
otherwise, funds deposited in the Principal Funding Account on a Transfer Date
(which immediately precedes a Payment Date) upon the maturity of any Eligible
Investments are not required to be invested overnight. No such Eligible
Investment shall be disposed of prior to its maturity; provided, however, that
the Trustee may sell, liquidate or dispose of any such Eligible Investment
before its maturity, at the written direction of the Servicer, if such sale,
liquidation or disposal would not result in a loss of all or part of the
principal portion of such Eligible Investment or if, prior to the maturity of
such Eligible Investment, a default occurs in the payment of principal, interest
or any other amount with respect to such Eligible Investment.

                      (iii) On each Distribution Date with respect to the
Controlled Accumulation Period, the Servicer shall direct the Trustee in writing
to withdraw from the Principal Funding Account and deposit into the Collection
Account all Principal Funding Account Investment Proceeds then on deposit in the
Principal Funding Account and such Principal Funding Account Investment Proceeds
shall be treated as a portion of Class A Available Funds and Class B Available
Funds.

                      (iv) Reinvested interest and other investment income on
funds deposited in the Principal Funding Account shall not be considered to be
principal amounts on deposit therein for purposes of this Supplement.

                  (b) (i) The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Principal Funding
Account and in all proceeds thereof. The Principal Funding Account shall be
under the sole dominion and control of the Trustee for the benefit of the Series
2002-6 Certificateholders. If, at any time, the Principal Funding Account ceases
to be an Eligible Deposit Account, the Trustee (or the Servicer on its behalf)
shall within 10 Business Days (or such longer period, not to exceed 30 calendar
days, as to which each Rating Agency may consent) establish a new Principal
Funding Account meeting the conditions specified in paragraph (a)(i) above as an
Eligible Deposit Account and shall transfer any cash or any investments to such
new Principal Funding Account.

                      (ii) Pursuant to the authority granted to the Servicer in
subsection 3.01(b) of the Agreement, the Servicer shall have the power to make
withdrawals and payments or to instruct the Trustee to make withdrawals and
payments from the Principal Funding Account for the purposes of carrying out the
Servicer's or Trustee's duties hereunder. Pursuant to the authority granted to
the Paying Agent in Section 5.01 of this Supplement and Section 6.07 of the
Agreement, the Paying Agent shall have the power to withdraw funds from the
Principal Funding Account for the purpose of making distributions to the Series
2002-6 Certificateholders.

                                       18
<PAGE>

                  (c) The Controlled Accumulation Period is scheduled to
commence at the close of business on the last day of the July 2006 Monthly
Period; provided, however, that if the Controlled Accumulation Period Length
(which shall be determined as described below) is less than 12 months, the date
on which the Controlled Accumulation Period actually commences will be delayed
to the close of business on the last day of the month preceding the month that
is the number of months prior to the Expected Final Payment Date at least equal
to the Controlled Accumulation Period Length and, as a result, the number of
Monthly Periods in the Controlled Accumulation Period will at least equal the
Controlled Accumulation Period Length. On the Determination Date immediately
preceding the July 2006 Distribution Date, and on each Determination Date
thereafter that occurs prior to the Determination Date occurring in the Monthly
Period in which the Controlled Accumulation Period commences, the Servicer will
determine the "Controlled Accumulation Period Length" which will equal the
number of months such that the sum of the Controlled Accumulation Period Factors
for each month during such period will be equal to or greater than the Required
Accumulation Factor Number; provided, however, that the Controlled Accumulation
Period Length shall not be less than one month. Notwithstanding the foregoing,
if the Controlled Accumulation Period Length shall have been determined to be
less than 12 months and, after the date on which such determination is made, a
Pay-Out Event or Reinvestment Event (as those terms are defined in the
Supplement for such Series) shall occur with respect to any outstanding
Principal Sharing Series other than Series 2002-6, the Controlled Accumulation
Period will commence on the earlier of (i) the first day of the Monthly Period
immediately succeeding the date that such Pay-Out Event or Reinvestment Event
shall have occurred with respect to such Series and (ii) the date on which the
Controlled Accumulation Period is then scheduled to commence.

                  Section 4.04. Required Amount.

                  (a) With respect to each Distribution Date, on the related
Determination Date, the Servicer shall determine the amount (the "Class A
Required Amount"), if any, by which (x) the sum of (i) Class A Monthly Interest
for such Distribution Date, (ii) any Class A Monthly Interest previously due but
not paid to the Class A Certificateholders on a prior Distribution Date, (iii)
any Class A Additional Interest for such Distribution Date and (iv) any Class A
Additional Interest previously due but not paid to the Class A
Certificateholders on a prior Distribution Date, (v) if TRS or an Affiliate of
TRS is no longer the Servicer, the Class A Servicing Fee for such Distribution
Date, (vi) if TRS or an Affiliate of TRS is no longer the Servicer, any Class A
Servicing Fee previously due but not paid to the Servicer, and (vii) the Class A
Investor Default Amount, if any, for such Distribution Date exceeds (y) the
Class A Available Funds. In the event that the difference between (x) the Class
A Required Amount for such Distribution Date and (y) the amount of Excess Spread
and Excess Finance Charge Collections applied with respect thereto pursuant to
subsection 4.07(a) on such Distribution Date is greater than zero, the Servicer
shall give written notice to the Trustee of such excess Class A Required Amount
on the date of computation.

                  (b) With respect to each Distribution Date, on the related
Determination Date, the Servicer shall determine the amount (the "Class B
Required Amount"), if any, equal to the sum of (x) the amount, if any, by which
(A) the sum of (i) Class B Monthly Interest for such Distribution Date, (ii) any
Class B Monthly Interest previously due but not paid to the Class B
Certificateholders, (iii) Class B Additional Interest, if any, for such
Distribution Date, (iv) any Class B Additional Interest previously due but not
paid to the Class B Certificateholders on a prior Distribution Date, (v) if TRS
or an Affiliate of TRS is no longer the Servicer, the Class B Servicing Fee for
such Distribution Date and (vi) if TRS or an Affiliate of TRS is no longer the
Servicer, any Class B Servicing Fee previously due but not paid to the Servicer
exceeds (B) the Class B Available Funds and (y) the Class B Investor Default
Amount for such Distribution Date. In the event that the difference between (x)
the Class B Required Amount for such Distribution Date and (y) the amount of
Excess Spread and Excess Finance Charge Collections applied with respect thereto
pursuant to subsection 4.07(c) on such Distribution Date is greater than zero,
the Servicer shall give written notice to the Trustee of such excess Class B
Required Amount on the date of computation.

                                       19
<PAGE>

                  Section 4.05. Application of Class A Available Funds, Class B
Available Funds, Collateral Available Funds and Available Principal Collections.
The Servicer shall apply, or shall cause the Trustee to apply by written
instruction to the Trustee, on each Distribution Date, Class A Available Funds,
Class B Available Funds, Collateral Available Funds and Available Principal
Collections on deposit in the Collection Account with respect to such
Distribution Date to make the following distributions:

                  (a) On each Distribution Date, an amount equal to the Class A
Available Funds with respect to such Distribution Date will be distributed or
deposited in the following priority:

                           (i) an amount equal to Class A Monthly Interest for
                  such Distribution Date, plus the amount of any Class A Monthly
                  Interest previously due but not distributed to Class A
                  Certificateholders on a prior Distribution Date, plus the
                  amount of any Class A Additional Interest for such
                  Distribution Date and any Class A Additional Interest
                  previously due but not distributed to Class A
                  Certificateholders on a prior Distribution Date, shall be
                  distributed to the Paying Agent for payment to the Class A
                  Certificateholders;

                           (ii) if TRS or an Affiliate of TRS is no longer the
                  Servicer, an amount equal to the Class A Servicing Fee for
                  such Distribution Date, plus the amount of any Class A
                  Servicing Fee previously due but not distributed to the
                  Servicer on a prior Distribution Date, shall be distributed to
                  the Servicer (unless such amount has been netted against
                  deposits to the Collection Account in accordance with Section
                  4.03 of the Agreement);

                           (iii) an amount equal to the Class A Investor Default
                  Amount for such Distribution Date shall be treated as a
                  portion of Available Principal Collections for such
                  Distribution Date; and

                           (iv) the balance, if any, shall constitute Excess
                  Spread and shall be allocated and distributed or deposited as
                  set forth in Section 4.07.

                  (b) On each Distribution Date, an amount equal to the Class B
Available Funds with respect to such Distribution Date will be distributed or
deposited in the following priority:

                           (i) an amount equal to Class B Monthly Interest for
                  such Distribution Date, plus the amount of any Class B Monthly
                  Interest previously due but not distributed to Class B
                  Certificateholders on a prior Distribution Date, plus the
                  amount of any Class B Additional Interest for such
                  Distribution Date and any Class B Additional Interest
                  previously due but not distributed to Class B
                  Certificateholders on a prior Distribution Date, shall be
                  distributed to the Paying Agent for payment to the Class B
                  Certificateholders;

                           (ii) if TRS or an Affiliate of TRS is no longer the
                  Servicer, an amount equal to the Class B Servicing Fee for
                  such Distribution Date, plus the amount of any Class B
                  Servicing Fee previously due but not distributed to the
                  Servicer on a prior Distribution Date, shall be distributed to
                  the Servicer (unless such amount has been netted against
                  deposits to the Collection Account in accordance with Section
                  4.03 of the Agreement); and

                           (iii) the balance, if any, shall constitute Excess
                  Spread and shall be allocated and distributed or deposited as
                  set forth in Section 4.07.

                                       20
<PAGE>

                  (c) On each Distribution Date, an amount equal to the
Collateral Available Funds with respect to such Distribution Date will be
distributed or deposited in the following priority:

                           (i) if TRS or an Affiliate of TRS is no longer the
                  Servicer, an amount equal to the Collateral Servicing Fee for
                  such Distribution Date, plus the amount of any Collateral
                  Servicing Fee previously due but not distributed to the
                  Servicer on a prior Distribution Date, shall be distributed to
                  the Servicer (unless such amount has been netted against
                  deposits to the Collection Account in accordance with Section
                  4.03 of the Agreement); and

                           (ii) the balance, if any, shall constitute Excess
                  Spread and shall be allocated and distributed or deposited as
                  set forth in Section 4.07.

                  (d) On each Distribution Date with respect to the Revolving
Period, an amount equal to the Available Principal Collections deposited in the
Collection Account for the related Monthly Period shall be distributed in the
following order of priority:

                           (i) an amount equal to the excess, if any, of the
                  Collateral Invested Amount over the Required Collateral
                  Invested Amount shall be paid to the Collateral Interest
                  Holder for application in accordance with the Loan Agreement;
                  and

                           (ii) the balance of such Available Principal
                  Collections shall be treated as Shared Principal Collections
                  and applied in accordance with Section 4.04 of the Agreement.

                  (e) On each Distribution Date with respect to the Controlled
Accumulation Period, an amount equal to the Available Principal Collections
deposited in the Collection Account for the related Monthly Period shall be
distributed in the following order of priority:

                           (i) an amount equal to the lesser of (x) the
                  Controlled Deposit Amount and (y) the sum of the Class A
                  Adjusted Invested Amount and the Class B Adjusted Invested
                  Amount shall be deposited in the Principal Funding Account;

                           (ii) for each Distribution Date prior to the
                  Distribution Date on which the Class B Invested Amount is paid
                  in full, after giving effect to paragraph (i) above, an amount
                  equal to the balance, if any, of such Available Principal
                  Collections shall be paid to the Collateral Interest Holder
                  for application in accordance with the Loan Agreement to the
                  extent the Collateral Invested Amount exceeds the Required
                  Collateral Invested Amount;

                           (iii) for each Distribution Date beginning on the
                  Distribution Date on which the Class B Invested Amount shall
                  have been paid in full, an amount up to the Collateral
                  Invested Amount shall be paid to the Collateral Interest
                  Holder for application in accordance with the Loan Agreement;
                  and

                           (iv) the balance of such Available Principal
                  Collections shall be treated as Shared Principal Collections
                  and applied in accordance with Section 4.04 of the Agreement.

                  (f) On each Distribution Date with respect to the Early
Amortization Period, an amount equal to Available Principal Collections
deposited in the Collection Account for the related Monthly Period shall be
distributed or deposited in the following order of priority:

                                       21
<PAGE>

                           (i) an amount up to the Class A Adjusted Invested
                  Amount on such Distribution Date shall be deposited in the
                  Principal Funding Account for distribution to the Class A
                  Certificateholders;

                           (ii) for each Distribution Date beginning on the
                  Distribution Date on which the Class A Invested Amount is paid
                  in full, an amount up to the Class B Adjusted Invested Amount
                  on such Distribution Date shall be deposited in the Principal
                  Funding Account for distribution to the Class B
                  Certificateholders;

                           (iii) for each Distribution Date beginning on the
                  Distribution Date on which the Class B Invested Amount is paid
                  in full, an amount up to the Collateral Invested Amount on
                  such Distribution Date shall be paid to the Collateral
                  Interest Holder for application in accordance with the Loan
                  Agreement; and

                           (iv) for each Distribution Date, after giving effect
                  to paragraphs (i), (ii) and (iii) above, an amount equal to
                  the balance, if any, of such Available Principal Collections
                  will be treated as Shared Principal Collections and applied in
                  accordance with Section 4.04 of the Agreement.

                  Section 4.06. Defaulted Amounts; Investor Charge-Offs.

                  (a) On each Determination Date, the Servicer shall calculate
the Class A Investor Default Amount, if any, for the related Distribution Date.
If, on any Distribution Date, the Class A Required Amount for the related
Monthly Period exceeds the sum of (x) the amount of Reallocated Principal
Collections allocated to Series 2002-6 with respect to such Monthly Period and
(y) the amount of Excess Spread and the Excess Finance Charge Collections
allocable to Series 2002-6 with respect to such Monthly Period, the Collateral
Invested Amount, if any, will be reduced by the amount of such excess, but not
by more than the Class A Investor Default Amount for such Distribution Date. In
the event that such reduction would cause the Collateral Invested Amount to be a
negative number, the Collateral Invested Amount will be reduced to zero and the
Class B Invested Amount shall be reduced by the amount by which the Collateral
Invested Amount would have been reduced below zero, but not by more than the
excess, if any, of the Class A Investor Default Amount for such Distribution
Date over the amount of such reduction, if any, of the Collateral Invested
Amount with respect to such Distribution Date. In the event that such reduction
would cause the Class B Invested Amount to be a negative number, the Class B
Invested Amount shall be reduced to zero, and the Class A Invested Amount shall
be reduced by the amount by which the Class B Invested Amount would have been
reduced below zero, but not by more than the excess, if any, of the Class A
Investor Default Amount for such Distribution Date over the aggregate amount of
the reductions, if any, of the Collateral Invested Amount and the Class B
Invested Amount for such Distribution Date (a "Class A Investor Charge-Off").
Class A Investor Charge-Offs shall thereafter be reimbursed and the Class A
Invested Amount increased (but not by an amount in excess of the aggregate
unreimbursed Class A Investor Charge-Offs) on any Distribution Date by the
amount of Excess Spread and Excess Finance Charge Collections allocated and
available for that purpose pursuant to subsection 4.07(b). References to
"negative numbers" above shall be determined without regard to the requirement
that the Invested Amount of a Class not be reduced below zero.

                                       22
<PAGE>

                  (b) On each Determination Date, the Servicer shall calculate
the Class B Investor Default Amount, if any, for the related Distribution Date.
If, on any Distribution Date, the Class B Required Amount for such Distribution
Date exceeds the sum of (x) the amount of Excess Spread and Excess Finance
Charge Collections allocated to Series 2002-6 with respect to the related
Monthly Period which are allocated and available to pay such amount pursuant to
subsection 4.07(c) and (y) the Reallocated Principal Collections allocable to
the Collateral Interest and not required to pay the Class A Required Amount with
respect to such Distribution Date, then the Collateral Invested Amount shall be
reduced by the amount of such excess. In the event that such reduction would
cause the Collateral Invested Amount to be a negative number, the Collateral
Invested Amount shall be reduced to zero, and the Class B Invested Amount shall
be reduced by the amount by which the Collateral Invested Amount would have been
reduced below zero, but not by more than the excess, if any, of the Class B
Investor Default Amount for such Distribution Date over the amount of such
reduction, if any, of the Collateral Invested Amount with respect to such
Distribution Date (a "Class B Investor Charge-Off"). Class B Investor
Charge-Offs shall thereafter be reimbursed and the Class B Invested Amount
increased (but not by an amount in excess of the aggregate unreimbursed Class B
Investor Charge-Offs) on any Distribution Date by the amount of Excess Spread
and Excess Finance Charge Collections allocated and available for that purpose
pursuant to subsection 4.07(e). References to "negative numbers" above shall be
determined without regard to the requirement that the Invested Amount of a Class
not be reduced below zero.

                  (c) On each Determination Date, the Servicer shall calculate
the Collateral Default Amount. If on any Distribution Date the Collateral
Default Amount for the previous Monthly Period exceeds the amount of Excess
Spread and Excess Finance Charge Collections allocated to Series 2002-6 with
respect to the related Monthly Period which are allocated and available to pay
such amount pursuant to subsection 4.07(h), the Collateral Invested Amount will
be reduced by the amount of such excess but not by more than the lesser of the
Collateral Default Amount and the Collateral Invested Amount for such
Distribution Date (a "Collateral Charge-Off"). The Collateral Invested Amount
will be reimbursed after any reduction pursuant to this Section 4.06 on any
Distribution Date by the amount of Excess Spread and Excess Finance Charge
Collections allocated and available on such Distribution date for that purpose
as described under subsection 4.07(i).

                  Section 4.07. Excess Spread; Excess Finance Charge
Collections. The Servicer shall apply, or shall cause the Trustee to apply by
written instruction to the Trustee, on each Distribution Date, Excess Spread and
Excess Finance Charge Collections allocated to Series 2002-6 with respect to the
related Monthly Period, to make the following distributions or deposits in the
following order of priority:

                  (a) an amount equal to the Class A Required Amount, if any,
with respect to such Distribution Date shall be distributed by the Trustee to
fund the Class A Required Amount in accordance with, and in the priority set
forth in, subsections 4.05(a)(i), (ii) and (iii);

                  (b) an amount equal to the aggregate amount of Class A
Investor Charge-Offs which have not been previously reimbursed shall be treated
as a portion of Available Principal Collections for such Distribution Date;

                  (c) an amount equal to interest on the aggregate outstanding
principal balance of the Class B Certificates not otherwise distributed to the
Class B Certificateholders pursuant to Section 4.05(b)(i), at a rate per annum
equal to the Class B Certificate Rate, shall be distributed to the Class B
Certificateholders, except that interest previously due but not paid will accrue
interest at a rate per annum equal to the Class B Certificate Rate plus 2% per
annum;

                  (d) an amount equal to the Class B Required Amount, if any,
with respect to such Distribution Date will be (i) used to fund the Class B
Required Amount and be applied in accordance with subsection 4.05(b)(ii), and
then (ii) an amount up to the Class B Investor Default Amount will be treated
and applied as Available Principal Collections for such Distribution Date;

                  (e) an amount equal to the aggregate amount by which the Class
B Invested Amount has been reduced pursuant to clauses (c), (d) and (e) of the
definition of "Class B Invested Amount" in Section 2.01 of this Supplement (but
not in excess of the aggregate amount of such reductions which have not been
previously reimbursed) shall be treated as a portion of Available Principal
Collections for such Distribution Date;

                                       23
<PAGE>

                  (f) an amount equal to Collateral Monthly Interest for such
Distribution Date, plus the amount of any Collateral Monthly Interest previously
due but not distributed to the Collateral Interest Holder on a prior
Distribution Date, plus the amount of any Collateral Additional Interest for
such Distribution Date and any Collateral Additional Interest previously due but
not distributed to the Collateral Interest Holder on a prior Distribution Date,
shall be distributed to the Collateral Interest Holder for application in
accordance with the Loan Agreement;

                  (g) an amount equal to the Monthly Servicing Fee for such
Distribution Date that has not been paid to the Servicer and any Monthly
Servicing Fee due but not paid to the Servicer on a prior Distribution Date
shall be paid to the Servicer;

                  (h) an amount equal to the Collateral Default Amount, if any,
for such Distribution Date shall be treated as a portion of Available Principal
Collections for such Distribution Date;

                  (i) an amount equal to the aggregate amount by which the
Collateral Invested Amount has been reduced pursuant to clauses (c), (d) and (e)
of the definition of "Collateral Invested Amount" (but not in excess of the
aggregate amount of such reductions which have not been previously reimbursed)
shall be treated as a portion of Available Principal Collections for such
Distribution Date;

                  (j) on each Distribution Date from and after the Reserve
Account Funding Date, but prior to the date on which the Reserve Account
terminates pursuant to subsection 4.12(f), an amount up to the excess, if any,
of the Required Reserve Account Amount over the Available Reserve Account Amount
shall be deposited into the Reserve Account;

                  (k) an amount equal to the aggregate of any other amounts then
required to be applied pursuant to the Loan Agreement (to the extent such
amounts are required to be applied pursuant to the Loan Agreement out of Excess
Spread and Excess Finance Charge Collections) shall be distributed to the
Collateral Interest Holder for application in accordance with the Loan
Agreement; and

                  (l) the balance, if any, will constitute a portion of Excess
Finance Charge Collections for such Distribution Date and will be available for
allocation to other Series or to the Holders of the Transferor Certificates as
described in Section 4.05 of the Agreement.

                  Section 4.08. Reallocated Principal Collections. On each
Distribution Date, the Servicer shall apply, or shall cause the Trustee to
apply, Reallocated Principal Collections with respect to such Distribution Date,
to make the following distributions or deposits in the following order of
priority:

                  (a) an amount equal to the excess, if any, of (i) the Class A
Required Amount, if any, with respect to such Distribution Date over (ii) the
amount of Excess Spread and Excess Finance Charge Collections allocated to
Series 2002-6 with respect to the related Monthly Period shall be distributed by
the Trustee to fund any deficiency pursuant to and in the priority set forth in
subsections 4.05(a)(i), (ii) and (iii); and

                  (b) an amount equal to the excess, if any, of (i) the Class B
Required Amount, if any, with respect to such Distribution Date over (ii) the
amount of Excess Spread and Excess Finance Charge Collections allocated and
available to the Class B Certificates pursuant to subsections 4.07(c) and (d) on
such Distribution Date shall be applied first to fund any deficiency pursuant to
subsections 4.05(b)(i) and (ii) and then to fund any deficiency pursuant to and
in the priority set forth in subsections 4.07(c) and (d).

                                       24
<PAGE>

                  On each Distribution Date, the Collateral Invested Amount
shall be reduced by the amount of Reallocated Principal Collections for such
Distribution Date. In the event that such reduction would cause the Collateral
Invested Amount (after giving effect to any Collateral Charge-Offs for such
Distribution Date) to be a negative number, the Collateral Invested Amount
(after giving effect to any Collateral Charge-Offs for such Distribution Date)
shall be reduced to zero and the Class B Invested Amount shall be reduced by the
amount by which the Collateral Invested Amount would have been reduced below
zero. In the event that the reallocation of Reallocated Principal Collections
would cause the Class B Invested Amount (after giving effect to any Class B
Investor Charge-Offs for such Distribution Date) to be a negative number on any
Distribution Date, Reallocated Principal Collections shall be reallocated on
such Distribution Date in an aggregate amount not to exceed the amount which
would cause the Class B Invested Amount (after giving to any Class B Investor
Charge-Offs for such Distribution Date) to be reduced to zero. References to
"negative numbers" above shall be determined without regard to the requirement
that the Invested Amount of a Class not be reduced below zero.

                  Section 4.09. Excess Finance Charge Collections. Series 2002-6
shall be an Excess Allocation Series. Subject to Section 4.05 of the Agreement,
Excess Finance Charge Collections with respect to the Excess Allocation Series
for any Distribution Date will be allocated to Series 2002-6 in an amount equal
to the product of (x) the aggregate amount of Excess Finance Charge Collections
with respect to all the Excess Allocation Series for such Distribution Date and
(y) a fraction, the numerator of which is the Finance Charge Shortfall for
Series 2002-6 for such Distribution Date and the denominator of which is the
aggregate amount of Finance Charge Shortfalls for all the Excess Allocation
Series for such Distribution Date. The "Finance Charge Shortfall" for Series
2002-6 for any Distribution Date will be equal to the excess, if any, of (a) the
full amount required to be paid, without duplication, pursuant to subsections
4.05(a), 4.05(b) and 4.05(c) and subsections 4.07(a) through (k) on such
Distribution Date over (b) the sum of (i) the Reallocated Investor Finance
Charge Collections, (ii) if such Monthly Period relates to a Distribution Date
with respect to the Controlled Accumulation Period or Early Amortization Period,
the amount of Principal Funding Account Investment Proceeds, if any, with
respect to such Distribution Date and (iii) the amount of funds, if any, to be
withdrawn from the Reserve Account which, pursuant to subsection 4.12(d), are
required to be included in Class A Available Funds with respect to such
Distribution Date.

                  Section 4.10. Reallocated Investor Finance Charge Collections.

                  (a) That portion of Group II Investor Finance Charge
Collections for any Distribution Date equal to the amount of Reallocated
Investor Finance Charge Collections for such Distribution Date will be allocated
to Series 2002-6 and will be distributed as set forth in this Supplement.

                  (b) Reallocated Investor Finance Charge Collections with
respect to any Distribution Date shall equal the sum of (i) the aggregate amount
of Series 2002-6 Monthly Interest, Investor Default Amount, Series 2002-6
Monthly Fees and Series 2002-6 Additional Amounts for such Distribution Date and
(ii) that portion of excess Group II Investor Finance Charge Collections to be
included in Reallocated Investor Finance Charge Collections pursuant to
subsection (c) hereof; provided, however, that if the amount of Group II
Investor Finance Charge Collections for such Distribution Date is less than the
sum of (w) Group II Investor Monthly Interest, (x) Group II Investor Default
Amount, (y) Group II Investor Monthly Fees and (z) Group II Investor Additional
Amounts, then Reallocated Investor Finance Charge Collections shall equal the
sum of the following amounts for such Distribution Date:

                           (A) The product of (I) Group II Investor Finance
                  Charge Collections (up to the amount of Group II Investor
                  Monthly Interest) and (II) a fraction, the numerator of which
                  is Series 2002-6 Monthly Interest and the denominator of which
                  is Group II Investor Monthly Interest;

                           (B) the product of (I) Group II Investor Finance
                  Charge Collections less the amount of Group II Investor
                  Monthly Interest (up to the Group II Investor Default Amount)
                  and (II) a fraction, the numerator of which is the Investor
                  Default Amount and the denominator of which is the Group II
                  Investor Default Amount;

                                       25
<PAGE>

                           (C) the product of (I) Group II Investor Finance
                  Charge Collections less the amount of Group II Investor
                  Monthly Interest and the Group II Investor Default Amount (up
                  to Group II Investor Monthly Fees) and (II) a fraction, the
                  numerator of which is Series 2002-6 Monthly Fees and the
                  denominator of which is Group II Investor Monthly Fees; and

                           (D) the product of (I) Group II Investor Finance
                  Charge Collections less the sum of (i) Group II Investor
                  Monthly Interest, (ii) the Group II Investor Default Amount
                  and (iii) Group II Investor Monthly Fees and (II) a fraction,
                  the numerator of which is Series 2002-6 Additional Amounts and
                  the denominator of which is Group II Investor Additional
                  Amounts.

                  (c) If the amount of Group II Investor Finance Charge
Collections for such Distribution Date exceeds the sum of (i) Group II Investor
Monthly Interest, (ii) Group II Investor Default Amount, (iii) Group II Investor
Monthly Fees and (iv) Group II Investor Additional Amounts, then Reallocated
Investor Finance Charge Collections for such Distribution Date shall include an
amount equal to the product of (x) the amount of such excess and (y) a fraction,
the numerator of which is the Invested Amount as of the last day of the second
preceding Monthly Period (or, for Series 2002-6 only, with respect to the first
Distribution Date, as of the Closing Date) and the denominator of which is the
sum of such Invested Amount and the aggregate invested amounts for all other
Series included in Group II as of such last day (or, for Series 2002-6 only,
with respect to the first Distribution Date, as of the Closing Date).

                  Section 4.11. Shared Principal Collections. Subject to Section
4.04 of the Agreement, Shared Principal Collections for any Distribution Date
will be allocated to Series 2002-6 in an amount equal to the product of (x) the
aggregate amount of Shared Principal Collections with respect to all Principal
Sharing Series for such Distribution Date and (y) a fraction, the numerator of
which is the Series 2002-6 Principal Shortfall for such Distribution Date and
the denominator of which is the aggregate amount of Principal Shortfalls for all
the Series which are Principal Sharing Series for such Distribution Date. The
"Series 2002-6 Principal Shortfall" will be equal to (a) for any Distribution
Date with respect to the Revolving Period, zero, (b) for any Distribution Date
with respect to the Controlled Accumulation Period, the excess, if any, of the
Controlled Deposit Amount with respect to such Distribution Date over the amount
of Available Principal Collections for such Distribution Date (excluding any
portion thereof attributable to Shared Principal Collections), and (c) for any
Distribution Date with respect to the Early Amortization Period, the excess, if
any, of the Invested Amount over the amount of Available Principal Collections
for such Distribution Date (excluding any portion thereof attributable to Shared
Principal Collections).

                  Section 4.12. Reserve Account.

                  (a) The Servicer shall establish and maintain, in the name of
the Trustee, on behalf of the Trust, for the benefit of the Class A
Certificateholders and the Collateral Interest Holder, an Eligible Deposit
Account (the "Reserve Account") bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Class A
Certificateholders and the Collateral Interest Holder. The Reserve Account shall
initially be established with The Bank of New York. The Trustee shall possess
all right, title and interest in all funds on deposit from time to time in the
Reserve Account and in all proceeds thereof. The Reserve Account shall be under
the sole dominion and control of the Trustee for the benefit of the Class A
Certificateholders and the Collateral Interest Holder. If at any time the
Reserve Account ceases to be an Eligible Deposit Account, the Trustee (or the
Servicer on its behalf) shall within 10 Business Days (or such longer period,
not to exceed 30 calendar days, as to which each Rating Agency shall consent)
establish a new Reserve Account meeting the conditions specified above as an
Eligible Deposit Account, and shall transfer any cash or any investments to such
new Reserve Account. The Trustee, at the direction of the Servicer, shall (i)
make withdrawals from the Reserve Account from time to time in an amount up to
the Available Reserve Account Amount at such time, for the purposes set forth in
this Supplement, and (ii) on each Distribution Date (from and after the Reserve
Account Funding Date) prior to the termination of the Reserve Account make a
deposit into the Reserve Account in the amount specified in, and otherwise in
accordance with, subsection 4.07(j).

                                       26
<PAGE>

                  (b) Funds on deposit in the Reserve Account shall be invested
at the written direction of the Servicer by the Trustee in Eligible Investments.
Funds on deposit in the Reserve Account on any Transfer Date, after giving
effect to any withdrawals from the Reserve Account on such Transfer Date, shall
be invested in such investments that will mature so that such funds will be
available for withdrawal on or prior to the following Transfer Date. No such
Eligible Investment shall be disposed of prior to its maturity; provided,
however, that the Trustee may sell, liquidate or dispose of any such Eligible
Investment before its maturity, at the written direction of the Servicer, if
such sale, liquidation or disposal would not result in a loss of all or part of
the principal portion of such Eligible Investment or if, prior to the maturity
of such Eligible Investment, a default occurs in the payment of principal,
interest or any other amount with respect to such Eligible Investment. On each
Distribution Date, all interest and earnings (net of losses and investment
expenses) accrued since the preceding Distribution Date on funds on deposit in
the Reserve Account shall be retained in the Reserve Account (to the extent that
the Available Reserve Account Amount is less than the Required Reserve Account
Amount) and the balance, if any, shall be deposited in the Collection Account
and treated as collections of Finance Charge Receivables allocable to Series
2002-6. For purposes of determining the availability of funds or the balance in
the Reserve Account for any reason under this Supplement, except as otherwise
provided in the preceding sentence, investment earnings on such funds shall be
deemed not to be available or on deposit.

                  (c) On the Determination Date preceding each Distribution Date
with respect to the Controlled Accumulation Period and the first Special Payment
Date, the Servicer shall calculate the "Reserve Draw Amount" which shall be
equal to the excess, if any, of the Covered Amount with respect to such
Distribution Date or Special Payment Date over the Principal Funding Account
Investment Proceeds with respect to such Distribution Date or Special Payment
Date; provided, that such amount will be reduced to the extent that funds
otherwise would be available for deposit in the Reserve Account under subsection
4.07(j) with respect to such Distribution Date or Special Payment Date.

                  (d) In the event that for any Distribution Date the Reserve
Draw Amount is greater than zero, the Reserve Draw Amount, up to the Available
Reserve Account Amount, shall be withdrawn from the Reserve Account on the
related Transfer Date by the Trustee (acting in accordance with the instructions
of the Servicer), deposited into the Collection Account and included in Class A
Available Funds for such Distribution Date.

                  (e) In the event that the Reserve Account Surplus on any
Distribution Date, after giving effect to all deposits to and withdrawals from
the Reserve Account with respect to such Distribution Date, is greater than
zero, the Trustee, acting in accordance with the written instructions of the
Servicer, shall withdraw from the Reserve Account, and pay to the Collateral
Interest Holder for application in accordance with the Loan Agreement, an amount
equal to such Reserve Account Surplus.

                  (f) Upon the earliest to occur of (i) the day on which the
Invested Amount is paid in full to the Series 2002-6 Certificateholders, (ii) if
the Controlled Accumulation Period has not commenced, the occurrence of a
Pay-Out Event with respect to Series 2002-6, (iii) if the Controlled
Accumulation Period has commenced, the earlier of the first Special Payment Date
and the Expected Final Payment Date and (iv) the termination of the Trust
pursuant to the Agreement, the Trustee, acting in accordance with the
instructions of the Servicer, after the prior payment of all amounts owing to
the Class A Certificateholders which are payable from the Reserve Account as
provided herein, shall withdraw from the Reserve Account and pay to the
Collateral Interest Holder for application in accordance with the Loan Agreement
all amounts, if any, on deposit in the Reserve Account and the Reserve Account
shall be deemed to have terminated for purposes of this Supplement.

                                       27
<PAGE>

                  Section 4.13. Investment Instructions.

                  (a) Any investment instructions required to be given to the
Trustee pursuant to the terms hereof must be given to the Trustee no later than
10:30 a.m. (New York City time) on the date such investment is to be made. In
the event the Trustee receives such investment instruction later than such time,
the Trustee may, but shall have no obligation to, make such investment. In the
event the Trustee is unable to make an investment required in an investment
instruction received by the Trustee after 10:30 a.m. (New York City time) on
such day, such investment shall be made by the Trustee on the next succeeding
Business Day. In no event shall the Trustee be liable for any investment not
made pursuant to investment instructions received after 10:30 a.m. (New York
City time) on the day such investment is requested to be made.

                  (b) The Trustee shall hold each Eligible Investment that
constitutes investment property through a securities intermediary, which
securities intermediary shall agree with the Trustee that (i) such investment
property at all times shall be credited to a securities account of the Trustee,
(ii) all property credited to such securities account shall be treated as a
financial asset, (iii) such securities intermediary shall treat the Trustee as
entitled to exercise the rights that comprise each financial asset credited to
such securities account, (iv) such securities intermediary shall comply with
entitlement orders originated by the Trustee without the further consent of any
other person or entity, (v) such securities intermediary shall not agree with
any person or entity other than the Trustee to comply with entitlement orders
originated by any person or entity other than the Trustee, (vi) such securities
account and all property credited thereto shall not be subject to any lien,
security interest, right of set-off, or encumbrance in favor of such securities
intermediary or anyone claiming through such securities intermediary (other than
the Trustee), (vii) such agreement between such securities intermediary and the
Trustee shall be governed by the laws of the State of New York, and (viii) such
securities intermediary's jurisdiction for purposes of the Uniform Commercial
Code shall be the State of New York. The Trustee shall maintain possession of
each other Eligible Investment in the State of New York, separate and apart from
all other property held by the Trustee. Notwithstanding any other provision of
this Supplement, the Trustee shall not hold any Eligible Investment through an
agent except as expressly permitted by this Section 4.13(b). Each term used in
this Section 4.13(b) and defined in the New York Uniform Commercial Code shall
have the meaning set forth in the New York Uniform Commercial Code.

                  Section 4.14. Determination of LIBOR.

                  (a) On each LIBOR Determination Date, the Trustee will
determine LIBOR for the related Interest Accrual Period, which shall be the rate
for deposits in United States dollars for a period equal to one month
(commencing on the first day of such Interest Accrual Period) that appears on
Telerate Page 3750 as of 11:00 a.m., London time, on such date. Upon such
determination, the Trustee shall notify the Servicer of LIBOR for such LIBOR
Determination Date. If such rate does not appear on Telerate Page 3750, the rate
for the LIBOR Determination Date will be determined on the basis of the rates at
which deposits in United States dollars are offered by the Reference Banks at
approximately 11:00 a.m., London time, on that day to prime banks in the London
interbank market for a period equal to one month (commencing on the first day of
such Interest Accrual Period). The Servicer will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that LIBOR Determination
Date will be the arithmetic mean of the quotations. If fewer than two quotations
are provided as requested, the rate for that LIBOR Determination Date will be
the arithmetic mean of the rates quoted by major banks in New York City,
selected by the Servicer, at approximately 11:00 a.m., New York City time, on
that day for loans in United States dollars to leading European banks for a
period equal to one month (commencing on the first day of such Interest Accrual
Period). If the banks selected by the Servicer are not quoting rates as provided
in the immediately preceding sentence, LIBOR for such Interest Accrual Period
will be LIBOR in effect for the immediately preceding Interest Accrual Period.

                                       28
<PAGE>

                  (b) The Servicer shall determine, and promptly notify the
Trustee of, the Class A Certificate Rate and the Class B Certificate Rate for
the applicable Interest Accrual Period. The Class A Certificate Rate and Class B
Certificate Rate applicable to the then current and the immediately preceding
Interest Accrual Periods may be obtained by any Investor Certificateholder by
telephoning the Trustee at its Corporate Trust Office at (212) 815-6258.

                  (c) On each LIBOR Determination Date prior to 3:00 p.m., New
York City time, the Trustee shall send to the Servicer by facsimile,
notification of LIBOR for the following Interest Accrual Period.

                                   ARTICLE V

                          Distributions and Reports to
                        Series 2002-6 Certificateholders

                  Section 5.01. Distributions.

                  (a) On each Distribution Date, the Paying Agent shall
distribute to each Class A Certificateholder of record on the related Record
Date (other than as provided in Section 12.02 of the Agreement) such Class A
Certificateholder's pro rata share of the amounts held by the Paying Agent that
are allocated and available on such Distribution Date to pay interest on the
Class A Certificates pursuant to this Supplement.

                  (b) On each Special Payment Date and on the Expected Final
Payment Date, the Paying Agent shall distribute (in accordance with the
Certificate delivered by the Servicer pursuant to Section 3.04(b) of the
Agreement) to each Class A Certificateholder of record on the related Record
Date (other than as provided in Section 12.02 of the Agreement) such Class A
Certificateholder's pro rata share of the amounts on deposit in the Principal
Funding Account or otherwise held by the Paying Agent that are allocated and
available on such date to pay principal of the Class A Certificates pursuant to
this Supplement up to a maximum amount on any such date equal to the Class A
Invested Amount on such date (unless there has been an optional repurchase of
the Series 2002-6 Certificateholders' Interest pursuant to Section 10.01 of the
Agreement, in which event the foregoing limitation will not apply).

                  (c) On each Distribution Date, the Paying Agent shall
distribute (in accordance with the Certificate delivered by the Servicer
pursuant to Section 3.04(b) of the Agreement) to each Class B Certificateholder
of record on the related Record Date (other than as provided in Section 12.02 of
the Agreement) such Class B Certificateholder's pro rata share of the amounts
held by the Paying Agent that are allocated and available on such Distribution
Date to pay interest on the Class B Certificates pursuant to this Supplement.

                  (d) On each Special Payment Date, and on the Expected Final
Payment Date, the Paying Agent shall distribute (in accordance with the
Certificate delivered by the Servicer pursuant to Section 3.04(b) of the
Agreement) to each Class B Certificateholder of record on the related Record
Date (other than as provided in Section 12.02 of the Agreement) such Class B
Certificateholder's pro rata share of the amounts on deposit in the Principal
Funding Account or otherwise held by the Paying Agent that are allocated and
available on such date to pay principal of the Class B Certificates pursuant to
this Supplement up to a maximum amount on any such date equal to the Class B
Invested Amount on such date (unless there has been an optional repurchase of
the Series 2002-6 Certificateholders' Interest pursuant to Section 10.01 of the
Agreement, in which event the foregoing limitation will not apply).

                                       29
<PAGE>

                  (e) The distributions to be made pursuant to this Section 5.01
are subject to the provisions of Sections 2.06, 9.02, 10.01 and 12.02 of the
Agreement and Sections 8.01 and 8.02 of this Supplement.

                  (f) Except as provided in Section 12.02 of the Agreement with
respect to a final distribution, distributions to Series 2002-6
Certificateholders hereunder shall be made by check mailed to each Series 2002-6
Certificateholder at such Series 2002-6 Certificateholder's address appearing in
the Certificate Register without presentation or surrender of any Series 2002-6
Certificate or the making of any notation thereon; provided, however, that with
respect to Series 2002-6 Certificates registered in the name of a Clearing
Agency, such distributions shall be made to such Clearing Agency in immediately
available funds.

                  Section 5.02. Reports and Statements to Series 2002-6
Certificateholders.

                  (a) On each Distribution Date, the Paying Agent, on behalf of
the Trustee, shall forward to each Series 2002-6 Certificateholder a statement
substantially in the form of Exhibit C to this Supplement prepared by the
Servicer and delivered to the Paying Agent.

                  (b) Not later than each Determination Date, the Servicer shall
deliver to the Trustee, the Paying Agent, each Rating Agency and the Collateral
Interest Holder (i) a statement substantially in the form of Exhibit C to this
Supplement prepared by the Servicer and (ii) a certificate of a Servicing
Officer substantially in the form of Exhibit D.

                  (c) A copy of each statement or certificate provided pursuant
to paragraph (a) or (b) may be obtained by any Series 2002-6 Certificateholder
or any Certificate Owner thereof by a request in writing to the Servicer.

                  (d) On or before January 31 of each calendar year, beginning
with calendar year 2003, the Paying Agent, on behalf of the Trustee, shall
furnish or cause to be furnished to each Person who at any time during the
preceding calendar year was a Series 2002-6 Certificateholder, a statement
prepared by the Servicer containing the information which is required to be
contained in the statement to Series 2002-6 Certificateholders, as set forth in
paragraph (a) above aggregated for such calendar year or the applicable portion
thereof during which such Person was a Series 2002-6 Certificateholder, together
with other information as is required to be provided by an issuer of
indebtedness under the Code. Such obligation of the Servicer shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be provided by the Paying Agent pursuant to any requirements of the Code
as from time to time in effect.

                                   ARTICLE VI

                                 Pay-Out Events

                  Section 6.01. Pay-Out Events. If any one of the following
events shall occur with respect to the Series 2002-6 Certificates:

                  (a) the occurrence of an Insolvency Event relating to any
Transferor or other holder of the Original Transferor Certificate;

                  (b) the Trust becomes an investment company within the meaning
of the Investment Company Act;

                                       30
<PAGE>

                  (c) failure on the part of any Transferor (i) to make any
payment or deposit required by the terms of the Agreement or this Supplement on
or before the date occurring five Business Days after the date such payment or
deposit is required to be made therein or herein or (ii) duly to observe or
perform any other covenants or agreements of the Transferors set forth in the
Agreement or this Supplement, which failure has a material adverse effect on the
Series 2002-6 Certificateholders and which continues unremedied for a period of
60 days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to such Transferor by the Trustee, or
to the Transferors and the Trustee by any Holder of the Series 2002-6
Certificates;

                  (d) any representation or warranty made by any Transferor in
the Agreement or this Supplement, or any information contained in a computer
file or microfiche list required to be delivered by any Transferor pursuant to
Section 2.01 or subsection 2.08(f) of the Agreement shall prove to have been
incorrect in any material respect when made or when delivered, which continues
to be incorrect in any material respect for a period of 60 days after the date
on which written notice of such failure, requiring the same to be remedied,
shall have been given to such Transferor by the Trustee, or to such Transferor
and the Trustee by any Holder of the Series 2002-6 Certificates and as a result
of which the interests of the Series 2002-6 Certificateholders are materially
and adversely affected for such period; provided, however, that a Pay-Out Event
pursuant to this subsection 6.01(d) shall not be deemed to have occurred
hereunder if a Transferor has accepted reassignment of the related Receivable,
or all of such Receivables, if applicable, during such period (or such longer
period not to exceed an additional 60 days as the Trustee may specify) in
accordance with the provisions of the Agreement;

                  (e) a failure by a Transferor to convey Receivables in
Additional Accounts or Participation Interests to the Trust within five Business
Days after the day on which it is required to convey such Receivables or
Participation Interests pursuant to subsection 2.09(a) of the Agreement;

                  (f) any Servicer Default which would have an Adverse Effect
shall occur;

                  (g) the average Series Adjusted Portfolio Yield for any three
consecutive Monthly Periods is reduced to a rate which is less than the average
of the Base Rates for such period;

                  (h) the Class A Invested Amount and the Class B Invested
Amount shall not be paid in full on the Expected Final Payment Date; or

                  (i) a Transfer Restriction Event shall occur;

then, in the case of any event described in subparagraph (c), (d) or (f), after
the applicable grace period, if any, set forth in such subparagraphs, either the
Trustee or the Holders of Series 2002-6 Certificates evidencing more than 50% of
the aggregate unpaid principal amount of Series 2002-6 Certificates by notice
then given in writing to the Transferors and the Servicer (and to the Trustee if
given by the Series 2002-6 Certificateholders) may declare that a Pay-Out Event
has occurred with respect to Series 2002-6 as of the date of such notice, and,
in the case of any event described in subparagraph (a), (b), (e), (g), (h) or
(i), a Pay-Out Event shall occur with respect to Series 2002-6 without any
notice or other action on the part of the Trustee or the Series 2002-6
Certificateholders immediately upon the occurrence of such event.

                                       31
<PAGE>

                                  ARTICLE VII

                     Optional Repurchase; Series Termination

                  Section 7.01. Optional Repurchase.

                  (a) On any day occurring on or after the date on which the
Invested Amount is reduced to 5% or less of the Initial Invested Amount, the
Transferors shall have the option to purchase the Series 2002-6
Certificateholders' Interest, at a purchase price equal to (i) if such day is a
Distribution Date, the Reassignment Amount for such Distribution Date or (ii) if
such day is not a Distribution Date, the Reassignment Amount for the
Distribution Date following such day. If, on the date on which the Transferors
exercise such option, the long-term unsecured debt obligations of either
Transferor purchasing the Series 2002-6 Certificateholders' Interest is not
rated at least in the third highest rating category by the Rating Agency, such
Transferor shall deliver to the Trustee, with a copy to the Rating Agency, an
Officer's Certificate which shall have attached to it the relevant fraudulent
conveyance statute, if any, and set forth the factual basis for a conclusion
that the exercise of such optional repurchase would not constitute a fraudulent
conveyance of such Transferor.

                  (b) The Transferors shall give the Servicer and the Trustee at
least 30 days prior written notice of the date on which the Transferors intend
to exercise such purchase option. Not later than 12:00 noon, New York City time,
on such day the Transferors 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. Following the deposit of
the Reassignment Amount into the Collection Amount in accordance with the
foregoing, the Invested Amount for Series 2002-6 shall be reduced to zero and
the Series 2002-6 Certificateholders shall have no further interest in the
Receivables. The Reassignment Amount shall be distributed as set forth in
subsection 8.01(b).

                  Section 7.02. Series Termination.

                  (a) If, on the January 2010 Distribution Date, the Invested
Amount (after giving effect to all changes therein on such date) would be
greater than zero, the Servicer, on behalf of the Trustee, shall, within the
40-day period which begins on such Distribution Date, solicit bids for the sale
of Principal Receivables and the related Finance Charge Receivables (or
interests therein) in an amount equal to the Invested Amount at the close of
business on the last day of the Monthly Period preceding the Series 2002-6
Termination Date (after giving effect to all distributions required to be made
on the Series 2002-6 Termination Date, except pursuant to this Section 7.02).
Such bids shall require that such sale shall (subject to subsection 7.02(b))
occur on the Series 2002-6 Termination Date. The Transferors and the Collateral
Interest Holder shall be entitled to participate in, and to receive from the
Trustee a copy of each other bid submitted in connection with, such bidding
process. Each Transferor and its Affiliates shall be permitted to bid for the
Receivables and, in addition, shall have the right to match any bid and to
purchase the Receivables at such matched price if such matched price shall be
the highest bid price received by the Trustee.

                  (b) The Servicer, on behalf of the Trustee, shall sell such
Receivables (or interests therein) on the Series 2002-6 Termination Date to the
bidder who made the highest cash purchase offer. The proceeds of any such sale
shall be treated as Collections on the Receivables allocated to the Series
2002-6 Certificateholders pursuant to the Agreement and this Supplement;
provided, however, that the Servicer shall determine conclusively the amount of
such proceeds which are allocable to Finance Charge Receivables and the amount
of such proceeds which are allocable to Principal Receivables. During the period
from the January 2010 Distribution Date to the Series 2002-6 Termination Date,
the Servicer shall continue to collect payments on the Receivables and allocate
and deposit such Collections in accordance with the provisions of the Agreement
and the Supplements.

                                  ARTICLE VIII

                               Final Distributions

                  Section 8.01. Sale of Receivables or Certificateholders'
Interest pursuant to Section 2.06 or 10.01 of the Agreement and Section 7.01 or
7.02 of this Supplement.

                                       32
<PAGE>

                           (a) (i) The amount to be paid by the Transferors with
                  respect to Series 2002-6 in connection with a reassignment of
                  Receivables to the Transferors pursuant to Section 2.06 of the
                  Agreement shall equal the Reassignment Amount for the first
                  Distribution Date following the Monthly Period in which the
                  reassignment obligation arises under the Agreement.

                           (ii) The amount to be paid by the Transferors with
                  respect to Series 2002-6 in connection with a repurchase of
                  the Certificateholders' Interest pursuant to Section 10.01 of
                  the Agreement shall equal the sum of (x) the Reassignment
                  Amount for the Distribution Date of such repurchase and (y)
                  the sum of (A) the excess, if any, of (I) a price equivalent
                  to the average of bids quoted on the Record Date preceding the
                  date of repurchase or, if not a Business Day, on the next
                  succeeding Business Day by at least two recognized dealers
                  selected by the Trustee for the purchase by such dealers of a
                  security which is similar to the Class A Certificates with a
                  remaining maturity approximately equal to the remaining
                  maturity of the Class A Certificates and rated by each Rating
                  Agency in the rating category originally assigned to the Class
                  A Certificates over (II) the portion of the Reassignment
                  Amount attributable to the Class A Certificates and (B) the
                  excess, if any, of (I) a price equivalent to the average of
                  bids quoted on such Record Date, or if not a Business Day, on
                  the next succeeding Business Day by at least two recognized
                  dealers selected by the Trustee for the purchase by such
                  dealers of a security which is similar to the Class B
                  Certificates with a remaining maturity approximately equal to
                  the remaining maturity of the Class B Certificates and rated
                  by each Rating Agency in the rating category originally
                  assigned to the Class B Certificates over (II) the portion of
                  the Reassignment Amount attributable to the Class B
                  Certificates.

                  (b) With respect to the Reassignment Amount deposited into the
Collection Account pursuant to Section 7.01 or any amounts allocable to the
Series 2002-6 Certificateholders' Interest deposited into the Collection Account
pursuant to Section 7.02, the Trustee shall, in accordance with the written
direction of the Servicer, not later than 12:00 noon, New York City time, on the
related Distribution Date, make deposits or distributions of the following
amounts (in the priority set forth below and, in each case after giving effect
to any deposits and distributions otherwise to be made on such date) in
immediately available funds: (i) (x) the Class A Invested Amount on such
Distribution Date will be distributed to the Paying Agent for payment to the
Class A Certificateholders and (y) an amount equal to the sum of (A) Class A
Monthly Interest for such Distribution Date, (B) any Class A Monthly Interest
previously due but not distributed to the Class A Certificateholders on a prior
Distribution Date and (C) the amount of Class A Additional Interest, if any, for
such Distribution Date and any Class A Additional Interest previously due but
not distributed to the Class A Certificateholders on any prior Distribution
Date, will be distributed to the Paying Agent for payment to the Class A
Certificateholders, (ii) (x) the Class B Invested Amount on such Distribution
Date will be distributed to the Paying Agent for payment to the Class B
Certificateholders and (y) an amount equal to the sum of (A) Class B Monthly
Interest for such Distribution Date, (B) any Class B Monthly Interest previously
due but not distributed to the Class B Certificateholders on a prior
Distribution Date and (C) the amount of Class B Additional Interest, if any, for
such Distribution Date and any Class B Additional Interest previously due but
not distributed to the Class B Certificateholders on any prior Distribution
Date, will be distributed to the Paying Agent for payment to the Class B
Certificateholders and (iii) the balance, if any, will be distributed to the
Collateral Interest Holder for application in accordance with the Loan
Agreement.

                  (c) Notwithstanding anything to the contrary in this
Supplement or the Agreement, all amounts distributed to the Paying Agent
pursuant to subsection 8.01(b) for payment to the Series 2002-6
Certificateholders shall be deemed distributed in full to the Series 2002-6
Certificateholders on the date on which such funds are distributed to the Paying
Agent pursuant to this Section and shall be deemed to be a final distribution
pursuant to Section 12.02 of the Agreement.

                                       33
<PAGE>

                  Section 8.02. Distribution of Proceeds of Sale, Disposition or
Liquidation of the Receivables pursuant to Section 9.01 of the Agreement.

                  (a) Not later than 12:00 noon, New York City time, on the
Distribution Date following the date on which the Insolvency Proceeds are
deposited into the Collection Account pursuant to subsection 9.01(b) of the
Agreement, the Trustee shall in accordance with the written direction of the
Servicer (in the following priority and, in each case, after giving effect to
any deposits and distributions otherwise to be made on such Distribution Date)
(i) deduct an amount equal to the Class A Invested Amount on such Distribution
Date from the portion of the Insolvency Proceeds allocated to Series 2002-6
Allocable Principal Collections and distribute such amount to the Paying Agent
for payment to the Class A Certificateholders, provided that the amount of such
distribution shall not exceed the product of (x) the portion of the Insolvency
Proceeds allocated to Series 2002-6 Allocable Principal Collections and (y) the
Principal Allocation Percentage with respect to the related Monthly Period, (ii)
deduct an amount equal to the Class B Invested Amount on such Distribution Date
from the portion of the Insolvency Proceeds allocated to Series 2002-6 Allocable
Principal Collections and distribute such amount to the Paying Agent for payment
to the Class B Certificateholders, provided that the amount of such distribution
shall not exceed (x) the product of (A) the portion of such Insolvency Proceeds
allocated to Series 2002-6 Allocable Principal Collections and (B) the Principal
Allocation Percentage with respect to the related Monthly Period minus (y) the
amount distributed to the Paying Agent pursuant to clause (i) of this sentence
and (iii) deduct an amount equal to the Collateral Invested Amount, if any, on
such Distribution Date from the portion of the Insolvency Proceeds allocated to
Series 2002-6 Allocable Principal Collections and distribute such amount to the
Collateral Interest Holder for application in accordance with the Loan
Agreement, provided that the amount of such distribution shall not exceed (x)
the product of (1) the portion of the Insolvency Proceeds allocated to Series
2002-6 Allocable Principal Collections and (2) the Principal Allocation
Percentage with respect to such Monthly Period minus (y) the amounts distributed
to the Paying Agent pursuant to clauses (i) and (ii) of this sentence. To the
extent that the product of (A) the portion of the Insolvency Proceeds allocated
to Series 2002-6 Allocable Principal Collections and (B) the Principal
Allocation Percentage with respect to the related Monthly Period exceeds the
aggregate amounts distributed to the Paying Agent pursuant to the preceding
sentence, the excess shall be allocated to the Transferor's Interest and shall
be released to the Holders of the Transferor Certificates on such Distribution
Date.

                  (b) Not later than 12:00 noon, New York City time, on such
Distribution Date, the Trustee shall in accordance with the written direction of
the Servicer (in the following priority and, in each case, after giving effect
to any deposits and distributions otherwise to be made on such Distribution
Date) (i) deduct an amount equal to the sum of (w) Class A Monthly Interest for
such Distribution Date, (x) any Class A Monthly Interest previously due but not
distributed to the Class A Certificateholders on a prior Distribution Date and
(y) the amount of Class A Additional Interest, if any, for such Distribution
Date and any Class A Additional Interest previously due but not distributed to
the Class A Certificateholders on a prior Distribution Date from the portion of
the Insolvency Proceeds allocated to Collections of Finance Charge Receivables
and distribute such amount to the Paying Agent for payment to the Class A
Certificateholders, provided that the amount of such distribution shall not
exceed the product of (x) the portion of the Insolvency Proceeds allocated to
Series 2002-6 Allocable Finance Charge Collections, (y) the Floating Allocation
Percentage with respect to the related Monthly Period and (z) the Class A
Floating Percentage with respect to such Monthly Period and (ii) deduct an
amount equal to the sum of (w) Class B Monthly Interest for such Distribution
Date, (x) Class B Monthly Interest previously due but not distributed to the
Class B Certificateholders on a prior Distribution Date and (y) the amount of
Class B Additional Interest, if any, for such Distribution Date and any Class B
Additional Interest previously due but not distributed to the Class B
Certificateholders on a prior Distribution Date from the portion of the
Insolvency Proceeds allocated to Series 2002-6 Allocable Finance Charge
Collections and distribute such amount to the Paying Agent for payment to the
Class B Certificateholders, provided that the amount of such distribution shall
not exceed the product of (x) the portion of the Insolvency Proceeds allocated
to Series 2002-6 Allocable Finance Charge Collections, (y) the Floating
Allocation Percentage with respect to the related Monthly Period and (z) the
Class B Floating Percentage with respect to such Monthly Period. To the extent
that the product of (A) the portion of the Insolvency Proceeds allocated to
Series 2002-6 Allocable Finance Charge Collections and (B) the Floating
Allocation Percentage with respect to the related Monthly Period exceeds the
aggregate amount distributed to the Paying Agent pursuant to the preceding
sentence, the excess shall be released to the Collateral Interest Holder for
application by the Collateral Interest Holder in accordance with the Loan
Agreement.

                                       34
<PAGE>

                  (c) Notwithstanding anything to the contrary in this
Supplement or the Agreement, all amounts distributed to the Paying Agent
pursuant to this Section for payment to the Series 2002-6 Certificateholders
shall be distributed in full to the Series 2002-6 Certificateholders on the date
on which funds are distributed to the Paying Agent pursuant to this Section and
shall be deemed to be a final distribution pursuant to Section 12.02 of the
Agreement.

                                   ARTICLE IX

                            Miscellaneous Provisions

                  Section 9.01. Ratification of Agreement. As supplemented by
this Supplement, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Supplement shall be read, taken and
construed as one and the same instrument.

                  Section 9.02. Counterparts. This Supplement may be executed in
two or more counterparts, and by different parties on separate counterparts,
each of which shall be an original, but all of which shall constitute one and
the same instrument.

                  Section 9.03. Governing Law. THIS SUPPLEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.

                  Section 9.04. Certain Accounting Related Amendments. In
addition to being subject to amendment pursuant to any other provisions relating
to amendments in either the Agreement or this Supplement, the Agreement or this
Supplement may be amended by the Transferors without the consent of the
Servicer, the Trustee or any Investor Certificateholder to account for the
transfer of assets as sales in accordance with FASB Statement No. 140, including
providing for the transfer of receivables from American Express Centurion Bank
to a bankruptcy-remote special purpose entity and from that entity to the trust;
provided that the Transferors shall have delivered a Tax Opinion on the date of
such amendment. Promptly after the effectiveness of any amendment pursuant to
this Section 9.04, the Transferors shall deliver a copy of such amendment to
each of the Servicer, the Trustee and each Rating Agency.

                  Section 9.05. Additional Representations and Warranties of the
Transferors. Each Transferor hereby makes the following representations and
warranties. Such representations and warranties shall survive until the
termination of this Series Supplement. Such representations and warranties speak
of the date that the Collateral (as defined below) is transferred to the Trustee
but shall not be waived by any of the parties to this Series Supplement unless
each Rating Agency shall have notified the Transferors, the Servicer and the
Trustee in writing that such waiver will not result in a reduction or withdrawal
of the rating of any outstanding Series or Class to which it is a Rating Agency.

                                       35
<PAGE>

                           (a) The Agreement creates a valid and continuing
         security interest (as defined in the applicable UCC) in favor of the
         Trustee in the Receivables described in Section 2.01 of the Agreement
         or in Section 3(a) of any Assignment (the "Collateral"), which security
         interest is prior to all other liens, and is enforceable as such
         against creditors of and purchasers from such Transferor.

                           (b) The Collateral constitutes "accounts" within the
         meaning of the applicable UCC.

                           (c) At the time of its transfer of any Receivable to
         the Trustee pursuant to the Agreement or an Assignment, such Transferor
         owned and had good and marketable title to such Receivable free and
         clear of any lien, claim or encumbrance of any Person.

                           (d) Such Transferor has caused or will have caused,
         within ten (10) days of the initial execution of the Agreement and each
         Assignment, the filing of all appropriate financing statements in the
         proper filing office in the appropriate jurisdictions under applicable
         law in order to perfect the security interest in the related Collateral
         granted to the Trustee pursuant to the Agreement or such Assignment.

                           (e) Other than the security interest granted to the
         Trustee pursuant to the Agreement or an Assignment, such Transferor has
         not pledged, assigned, sold, granted a security interest in, or
         otherwise conveyed the Collateral. Such Transferor has not authorized
         the filing of and is not aware of any financing statements against such
         Transferor that include a description of the Collateral other than any
         financing statement relating to the security interest granted to the
         Trustee pursuant to the Agreement or an Assignment or that has been
         terminated. Such Transferor is not aware of any judgment or tax lien
         filings against such Transferor.

                     [The signature page follows this page.]

                                       36
<PAGE>

                  IN WITNESS WHEREOF, the undersigned have caused this
Supplement to be duly executed and delivered by their respective duly authorized
officers on the day and year first above written.

                            AMERICAN EXPRESS RECEIVABLES
                            FINANCING CORPORATION II,
                              as a Transferor,

                            By:          /s/  Leslie R. Scharfstein
                                ----------------------------------------------
                                Name: Leslie R. Scharfstein
                                Title:   President

                            AMERICAN EXPRESS CENTURION BANK,
                                   as a Transferor,

                            By:         /s/  Maureen  A. Ryan
                                ----------------------------------------------
                                Name: Maureen A. Ryan
                                Title:   Assistant Treasurer

                            AMERICAN EXPRESS TRAVEL RELATED
                            SERVICES COMPANY, INC.,
                                   as the Servicer,

                            By:          /s/  Jay B. Stevelman
                                ----------------------------------------------
                                Name: Jay B. Stevelman
                                Title:    Senior Vice President and Treasurer

                            THE BANK OF NEW YORK,
                                   as Trustee,

                            By:            /s/ Catherine L. Cerilles
                                ----------------------------------------------
                                Name:  Catherine L. Cerilles
                                Title:    Assistant Vice President

                   [Signature page - Series 2002-6 Supplement]

<PAGE>

                        FORM OF CLASS A CERTIFICATE                 EXHIBIT A-1

REGISTERED                                                         $________ 1/

No. R-______________                                      CUSIP No.____________

                  Unless this Class A Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to American Express Centurion Bank, American Express Receivables Financing
Corporation II or their agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.

                  AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST

                                  SERIES 2002-6

                 CLASS A FLOATING RATE ASSET BACKED CERTIFICATE

                          Expected Final Payment Date:
                        The August 2007 Distribution Date

                  Each $1,000 minimum denomination represents a
                         1/594,000ths undivided interest
                                in Class A of the

           AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST, SERIES 2002-6

Evidencing an undivided interest in certain assets of a trust, the corpus of
which consists primarily of an interest in receivables generated from time to
time in the ordinary course of business in a portfolio of credit and charge
accounts serviced by

             AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.,

and other assets and interests constituting Trust Assets under the Pooling and
Servicing Agreement referred to below.

      (Not an interest in or obligation of American Express Travel Related
   Services Company, Inc., American Express Centurion Bank, American Express
        Receivables Financing Corporation II or any of their respective
                                   affiliates)

-------------------------
1/ Denominations of $1,000 and integral multiples of $1,000 in excess therof.

<PAGE>

This certifies that CEDE & CO. (the "Class A Certificateholder") is the
registered owner of a fractional undivided interest in certain assets of a trust
(the "Trust") created pursuant to the Pooling and Servicing Agreement, dated as
of May 16, 1996 (as amended and supplemented, the "Agreement"), as supplemented
by the Series 2002-6 Supplement, dated as of August 15, 2002 (as amended and
supplemented, the "Supplement"), among American Express Centurion Bank and
American Express Receivables Financing Corporation II, as transferors (together,
the "Transferors"), American Express Travel Related Services Company, Inc., as
servicer, and The Bank of New York, a New York banking corporation, as trustee
(the "Trustee"). The corpus of the Trust consists of (i) the Transferors'
ownership interest in a portfolio of receivables (the "Receivables") existing in
credit and charge accounts identified under the Agreement from time to time (the
"Accounts"), (ii) all Receivables generated under the Accounts from time to time
thereafter, (iii) funds collected or to be collected from cardmembers in respect
of the Receivables, (iv) all funds which are from time to time on deposit in the
Collection Account, the Special Funding Account and any other Series Accounts
and (v) all other assets and interests constituting the Trust. The Holder of
this Certificate is entitled to the benefits of the subordination of the Class B
Certificates and the Collateral Interest to the extent provided in the
Supplement. Although a summary of certain provisions of the Agreement and the
Supplement is set forth below and in the Summary of Terms and Conditions
attached hereto and made a part hereof, this Class A Certificate does not
purport to summarize the Agreement and the Supplement and reference is made to
the Agreement and the Supplement for information with respect to the interests,
rights, benefits, obligations, proceeds and duties evidenced hereby and the
rights, duties and obligations of the Trustee. A copy of the Agreement and the
Supplement (without schedules) may be requested from the Trustee by writing to
the Trustee at the Corporate Trust Office. To the extent not defined herein, the
capitalized terms used herein have the meanings ascribed to them in the
Agreement or the Supplement, as applicable.

                  This Class A Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement and the Supplement, to which
Agreement and Supplement, each as amended and supplemented from time to time,
the Class A Certificateholder by virtue of the acceptance hereof assents and is
bound.

                  It is the intent of the Transferors and the Class A
Certificateholder that, for federal, state and local income and franchise tax
purposes, the Class A Certificates will qualify as indebtedness of the
Transferors secured by the Receivables. The Class A Certificateholder, by the
acceptance of this Class A Certificate, agrees to treat this Class A Certificate
for federal, state and local income and franchise tax purposes as debt of the
Transferors.

                  In general, payments of principal with respect to the Class A
Certificates are limited to the Class A Invested Amount, which may be less than
the unpaid principal balance of the Class A Certificates. The Expected Final
Payment Date is the August 2007 Distribution Date, but principal with respect to
the Class A Certificates may be paid earlier or later under certain
circumstances described in the Agreement and the Supplement. If for one or more
months during the Controlled Accumulation Period there are not sufficient funds
to pay the Controlled Deposit Amount, then to the extent that excess funds are
not available on subsequent Distribution Dates with respect to the Controlled
Accumulation Period to make up for such shortfalls, the final payment of
principal of the Class A Certificates will occur later than the Expected Final
Payment Date.

                  Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this Class A
Certificate shall not be entitled to any benefit under the Agreement or the
Supplement or be valid for any purpose.

                                     A-1-2

<PAGE>

                  IN WITNESS WHEREOF, the Transferors have caused this Class A
Certificate to be duly executed.

                                     AMERICAN EXPRESS CENTURION BANK

                                     By:
                                         --------------------------------------
                                         Name:
                                         Title:

                                     AMERICAN EXPRESS RECEIVABLES FINANCING
                                     CORPORATION II

                                     By:
                                         --------------------------------------
                                         Name:
                                         Title:
Dated: [___________]

                                     A-1-3

<PAGE>

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the American Express Credit Account Master Trust Series 2002-6
Class A Certificates described in the within-mentioned Agreement and Supplement.

                                   THE BANK OF NEW YORK,
                                   as Trustee,

                                  By:
                                      -----------------------------------------
                                      Authorized Signatory

                                      or

                                  By:
                                      -----------------------------------------
                                      as Authenticating Agent
                                      for the Trustee,

                                  By:
                                      -----------------------------------------
                                      Authorized Signatory

                                     A-1-4

<PAGE>

                  AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST

                                  SERIES 2002-6

                 CLASS A FLOATING RATE ASSET BACKED CERTIFICATE

                         Summary of Terms and Conditions

                  The Receivables consist of Principal Receivables which arise
generally from the purchase of goods and services and amounts advanced to
cardmembers as cash advances and Finance Charge Receivables. This Class A
Certificate is one of a Series of Certificates entitled American Express Credit
Account Master Trust, Series 2002-6 (the "Series 2002-6 Certificates"), and one
of a class thereof entitled Class A Series 2002-6 Floating Rate Asset Backed
Certificates (the "Class A Certificates"), each of which represents a
fractional, undivided interest in certain assets of the Trust. The assets of the
Trust are allocated in part to the investor certificateholders of all
outstanding Series (the "Certificateholders' Interest") with the remainder
allocated to the Holders of the Transferor Certificates. The aggregate interest
represented by the Class A Certificates at any time in the Principal Receivables
in the Trust shall not exceed an amount equal to the Class A Invested Amount at
such time. The Class A Initial Invested Amount is $594,000,000. The Class A
Invested Amount on any date will be an amount equal to (a) the Class A Initial
Invested Amount, minus (b) the aggregate amount of principal payments made to
the Class A Certificateholder on or prior to such date, minus (c) the excess, if
any, of the aggregate amount of Class A Investor Charge-Offs for all prior
Distribution Dates over Class A Investor Charge-Offs reimbursed pursuant to
subsection 4.07(b) of the Supplement prior to such date.

                  Subject to the terms and conditions of the Agreement, the
Transferors may, from time to time, direct the Trustee, on behalf of the Trust,
to issue one or more new Series of Investor Certificates, which will represent
fractional, undivided interests in certain of the Trust Assets.

                  On each Distribution Date, the Paying Agent shall distribute
to each Class A Certificateholder of record on the last day of the preceding
calendar month (each a "Record Date") such Class A Certificateholder's pro rata
share of such amounts (including amounts on deposit in the Collection Account
and Principal Funding Account) as are payable to the Class A Certificateholder
pursuant to the Agreement and the Supplement. Distributions with respect to this
Class A Certificate will be made by the Paying Agent by check mailed to the
address of the Class A Certificateholder of record appearing in the Certificate
Register without the presentation or surrender of this Class A Certificate or
the making of any notation thereon (except for the final distribution in respect
of this Class A Certificate) except that with respect to Class A Certificates
registered in the name of Cede & Co., the nominee for The Depository Trust
Company, distributions will be made in the form of immediately available funds.
Final payment of this Class A Certificate will be made only upon presentation
and surrender of this Class A Certificate at the office or agency specified in
the notice of final distribution delivered by the Trustee to the Series 2002-6
Certificateholders in accordance with the Agreement and the Supplement.

                  On any day occurring on or after the day on which the Invested
Amount is reduced to 5% or less of the Initial Invested Amount, the Transferors
have the option to repurchase the Series 2002-6 Certificateholders' Interest in
the Trust. The repurchase price will be equal to (a) if such day is a
Distribution Date, the Reassignment Amount for such Distribution Date or (b) if
such day is not a Distribution Date, the Reassignment Amount for the
Distribution Date following such day. Following the deposit of the Reassignment
Amount in the Collection Account, Series 2002-6 Certificateholders will not have
any interest in the Receivables and the Series 2002-6 Certificates will
represent only the right to receive such Reassignment Amount.

                                     A-1-5

<PAGE>

                  This Class A Certificate does not represent an obligation of,
or an interest in, the Transferors or the Servicer or any affiliate of any of
them and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other governmental agency or instrumentality. This Class A
Certificate is limited in right of payment to certain Collections with respect
to the Receivables (and certain other amounts), all as more specifically set
forth hereinabove and in the Agreement and the Supplement.

                  The Class A Certificates are issuable only in minimum
denominations of $1,000 and integral multiples of $1,000. The transfer of this
Class A Certificate shall be registered in the Certificate Register upon
surrender of this Class A Certificate for registration of transfer at any office
or agency maintained by the Transfer Agent and Registrar accompanied by a
written instrument of transfer, in a form satisfactory to the Trustee or the
Transfer Agent and Registrar, duly executed by the Class A Certificateholder or
such Class A Certificateholder's attorney, and duly authorized in writing with
such signature guaranteed, and thereupon one or more new Class A Certificates of
authorized denominations and for the same aggregate fractional undivided
interest will be issued to the designated transferee or transferees.

                  As provided in the Agreement and subject to certain
limitations therein set forth, Class A Certificates are exchangeable for new
Class A Certificates evidencing like aggregate fractional, undivided interests
as requested by the Class A Certificateholder surrendering such Class A
Certificates. No service charge may be imposed for any such exchange but the
Servicer or Transfer Agent and Registrar may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
therewith.

                  The Servicer, the Trustee, the Paying Agent and the Transfer
Agent and Registrar and any agent of any of them, may treat the person in whose
name this Class A Certificate is registered as the owner hereof for all
purposes, and neither the Servicer nor the Trustee, the Paying Agent, the
Transfer Agent and Registrar, nor any agent of any of them, shall be affected by
notice to the contrary except in certain circumstances described in the
Agreement.

                  THIS CLASS A CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

                                     A-1-6

<PAGE>

                                   ASSIGNMENT

Social Security or other identifying number of assignee _______________________

                  FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ________________________________________________________________
                              (name and address of assignee)

the within certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints ________________________, attorney, to transfer said
certificate on the books kept for registration thereof, with full power of
substitution in the premises.

Dated: ______________                                ________________________2/

                                                     Signature Guaranteed:
                                                     ------------------------

-----------------------
2 / NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Certificate in every
particular, without alteration, enlargement or any change whatsoever.

                                     A-1-7
<PAGE>

                           FORM OF CLASS B CERTIFICATE               EXHIBIT A-2

THIS CLASS B CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF PERSONS
INVESTING ASSETS OF A BENEFIT PLAN (AS DEFINED BELOW) OR AN INDIVIDUAL
RETIREMENT ACCOUNT OTHER THAN BY INSURANCE COMPANIES INVESTING ASSETS SOLELY OF
THEIR GENERAL ACCOUNTS.

REGISTERED                                                 $----------------- 3/

No. R-                                                     CUSIP No.
      --------------                                                ------------

         Unless this Class B Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to American Express Centurion Bank, American Express Receivables Financing
Corporation II or their agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.

                  AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST

                                  SERIES 2002-6

                 CLASS B FLOATING RATE ASSET BACKED CERTIFICATE

                          Expected Final Payment Date:
                        The August 2007 Distribution Date

                  Each $1,000 minimum denomination represents a
                         1/57,600ths undivided interest
                                in Class B of the

           AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST, SERIES 2002-6

Evidencing an undivided interest in certain assets of a trust, the corpus of
which consists primarily of an interest in receivables generated from time to
time in the ordinary course of business in a portfolio of credit and charge
accounts serviced by

             AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.,

and other assets and interests constituting Trust Assets under the Pooling and
                     Servicing Agreement referred to below.

      (Not an interest in or obligation of American Express Travel Related
   Services Company, Inc., American Express Centurion Bank, American Express
  Receivables Financing Corporation II or any of their respective affiliates)

-------------------------------
3 / Denominations of $1,000 and integral multiples of $1,000 in excess thereof.

<PAGE>

This certifies that CEDE & CO. (the "Class B Certificateholder") is the
registered owner of a fractional, undivided interest in certain assets of a
trust (the "Trust") created pursuant to the Pooling and Servicing Agreement,
dated as of May 16, 1996 (as amended and supplemented, the "Agreement"), as
supplemented by the Series 2002-6 Supplement, dated as of August 15, 2002 (as
amended and supplemented, the "Supplement"), among American Express Centurion
Bank and American Express Receivables Financing Corporation II, as transferors
(together, the "Transferors"), American Express Travel Related Services Company,
Inc., as servicer, and The Bank of New York, a New York banking corporation, as
trustee (the "Trustee"). The corpus of the Trust consists of (i) the
Transferors' ownership interest in a portfolio of receivables (the
"Receivables") existing in credit and charge accounts identified under the
Agreement from time to time (the "Accounts"), (ii) all Receivables generated
under the Accounts from time to time thereafter, (iii) funds collected or to be
collected from cardmembers in respect of the Receivables, (iv) all funds which
are from time to time on deposit in the Collection Account, the Special Funding
Account, and any other Series Accounts and (v) all other assets and interests
constituting the Trust. Although a summary of certain provisions of the
Agreement and the Supplement is set forth below and in the Summary of Terms and
Conditions attached hereto and made a part hereof, this Class B Certificate does
not purport to summarize the Agreement and the Supplement and reference is made
to the Agreement and the Supplement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and obligations of the Trustee. A copy of the Agreement
and the Supplement (without schedules) may be requested from the Trustee by
writing to the Trustee at the Corporate Trust Office. To the extent not defined
herein, the capitalized terms used herein have the meanings ascribed to them in
the Agreement or the Supplement, as applicable.

         This Class B Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement and the Supplement, to which
Agreement and Supplement, each as amended and supplemented from time to time,
the Class B Certificateholder by virtue of the acceptance hereof assents and is
bound.

         No Class B Certificate may be acquired by or for the account of any
employee benefit plan, trust or account, including an individual retirement
account, that is subject to the Employee Retirement Income Security Act of 1974,
as amended, or that is described in Section 4975(e)(1) of the Internal Revenue
Code of 1986, as amended, or an entity whose underlying assets include plan
assets by reason of a plan's investment in such entity (a "Benefit Plan"),
unless (i) such acquirer or holder is an insurance company, (ii) the source of
funds used to acquire or hold such Certificate (or interest therein) is an
"insurance company general account" (as defined in U.S. Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 95-60), and (iii) the conditions
set forth in Sections I and III of PTCE 95-60 have been satisfied. By acquiring
any interest in this Class B Certificate, each applicable Certificate Owner
shall be deemed to have represented and warranted either (i) that it is not a
Benefit Plan and is not acting for the account of any Benefit Plan or (ii) that
(1) it is an insurance company, (2) the source of funds used to acquire or hold
an interest in such Certificate is an "insurance company general account" (as
such term is defined in PTCE 95-60), and (3) the conditions set forth in
Sections I and III of PTCE 95-60 have been satisfied.

         THIS CLASS B CERTIFICATE IS SUBORDINATED TO THE EXTENT NECESSARY TO
FUND PAYMENTS ON THE CLASS A CERTIFICATES TO THE EXTENT SPECIFIED IN THE
SUPPLEMENT.

         It is the intent of the Transferors and the Class B Certificateholder
that, for federal, state and local income and franchise tax purposes, the Class
B Certificates will qualify as indebtedness of the Transferors secured by the
Receivables. The Class B Certificateholder, by the acceptance of this Class B
Certificate, agrees to treat this Class B Certificate for federal, state and
local income and franchise tax purposes as debt of the Transferors.

                                     A-2-2
<PAGE>

         In general, payments of principal with respect to the Class B
Certificates are limited to the Class B Invested Amount, which may be less than
the unpaid principal balance of the Class B Certificates. The Expected Final
Payment Date is the August 2007 Distribution Date, but principal with respect to
the Class B Certificates may be paid earlier or later under certain
circumstances described in the Agreement and the Supplement. If for one or more
months during the Controlled Accumulation Period there are not sufficient funds
to pay the Controlled Deposit Amount, then to the extent that excess funds are
not available on subsequent Distribution Dates with respect to the Controlled
Accumulation Period to make up for such shortfalls, the final payment of
principal of the Class B Certificates will occur later than the Expected Final
Payment Date.

         Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee, by manual signature, this Class B Certificate shall
not be entitled to any benefit under the Agreement or the Supplement or be valid
for any purpose.

         IN WITNESS WHEREOF, the Transferors have caused this Class B
Certificate to be duly executed.

                                     AMERICAN EXPRESS CENTURION BANK

                                     By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                     AMERICAN EXPRESS RECEIVABLES FINANCING
                                     CORPORATION II

                                     By:
                                            ------------------------------------
                                            Name:
                                            Title:
Dated: [____________]

                                     A-2-3
<PAGE>

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the American Express Credit Account Master Trust Series
2002-6 Class B Certificates described in the within mentioned Agreement and
Supplement.

                                   THE BANK OF NEW YORK,
                                   as Trustee

                                   By:
                                          --------------------------------------
                                          Authorized Signatory

                                   or

                                   By:
                                          --------------------------------------
                                          as Authenticating Agent
                                          for the Trustee

                                   By:
                                          --------------------------------------
                                          Authorized Signatory

                                     A-2-4
<PAGE>

                  AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST

                                  SERIES 2002-6

                 CLASS B FLOATING RATE ASSET BACKED CERTIFICATE

                         Summary of Terms and Conditions

         The Receivables consist of Principal Receivables which arise generally
from the purchase of goods and services and amounts advanced to cardmembers as
cash advances and Finance Charge Receivables. This Class B Certificate is one of
a Series of Certificates entitled American Express Credit Account Master Trust,
Series 2002-6 (the "Series 2002-6 Certificates"), and one of a class thereof
entitled Class B Series 2002-6 Floating Rate Asset Backed Certificates (the
"Class B Certificates"), each of which represents a fractional, undivided
interest in certain assets of the Trust. The assets of the Trust are allocated
in part to the investor certificateholders of all outstanding Series (the
"Certificateholders' Interest") with the remainder allocated to the Holders of
the Transferor Certificates. The aggregate interest represented by the Class B
Certificates at any time in the Principal Receivables in the Trust shall not
exceed an amount equal to the Class B Invested Amount at such time. The Class B
Initial Invested Amount is $57,600,000. The Class B Invested Amount on any date
will be an amount equal to (a) the Class B Initial Invested Amount, minus (b)
the aggregate amount of principal payments made to the Class B Certificateholder
on or prior to such date, minus (c) the excess, if any, of the aggregate amount
of Class B Investor Charge-Offs for all prior Distribution Dates over Class B
Investor Charge-Offs reimbursed, minus (d) the amount of Reallocated Principal
Collections allocated on all prior Distribution Dates pursuant to subsection
4.08(a) of the Supplement (excluding any Reallocated Principal Collections that
have resulted in a reduction in the Collateral Invested Amount pursuant to
Section 4.08), minus (e) an amount equal to the amount by which the Class B
Invested Amount has been reduced to cover the Class A Investor Default Amount on
all prior Distribution Dates, and plus (f) the amount of Excess Spread and
Excess Finance Charge Collections allocated to Series 2002-6 and applied on all
prior Distribution Dates for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (c), (d) and (e); provided, however, that the
Class B Invested Amount may not be reduced below zero.

         Subject to the terms and conditions of the Agreement, the Transferors
may, from time to time, direct the Trustee, on behalf of the Trust, to issue one
or more new Series of Investor Certificates, which will represent fractional,
undivided interests in certain of the Trust Assets.

         On each Distribution Date, the Paying Agent shall distribute to each
Class B Certificateholder of record on the last day of the preceding calendar
month (each a "Record Date") such Class B Certificateholder's pro rata share of
such amounts (including amounts on deposit in the Collection Account and
Principal Funding Account) as are payable to the Class B Certificateholder
pursuant to the Agreement and the Supplement. Distributions with respect to this
Class B Certificate will be made by the Paying Agent by check mailed to the
address of the Class B Certificateholder of record appearing in the Certificate
Register without the presentation or surrender of this Class B Certificate or
the making of any notation thereon (except for the final distribution in respect
of this Class B Certificate) except that with respect to Class B Certificates
registered in the name of Cede & Co., the nominee for The Depository Trust
Company, distributions will be made in the form of immediately available funds.
Final payment of this Class B Certificate will be made only upon presentation
and surrender of this Class B Certificate at the office or agency specified in
the notice of final distribution delivered by the Trustee to the Series 2002-6
Certificateholders in accordance with the Agreement and the Supplement.

                                     A-2-5
<PAGE>

         On any day occurring on or after the day on which the Invested Amount
is reduced to 5% or less of the Initial Invested Amount, the Transferors have
the option to repurchase the Series 2002-6 Certificateholders' Interest in the
Trust. The repurchase price will be equal to (a) if such day is a Distribution
Date, the Reassignment Amount for such Distribution Date or (b) if such day is
not a Distribution Date, the Reassignment Amount for the Distribution Date next
following such day. Following the deposit of the Reassignment Amount in the
Collection Account, Series 2002-6 Certificateholders will not have any interest
in the Receivables and the Series 2002-6 Certificates will represent only the
right to receive such Reassignment Amount.

         This Class B Certificate does not represent an obligation of, or an
interest in, the Transferors or the Servicer or any affiliate of any of them and
is not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other governmental agency or instrumentality. This Class B Certificate is
limited in right of payment to certain Collections with respect to the
Receivables (and certain other amounts), all as more specifically set forth
hereinabove and in the Agreement and the Supplement.

         The Class B Certificates are issuable only in minimum denominations of
$1,000 and integral multiples of $1,000. The transfer of this Class B
Certificate shall be registered in the Certificate Register upon surrender of
this Class B Certificate for registration of transfer at any office or agency
maintained by the Transfer Agent and Registrar accompanied by a written
instrument of transfer, in a form satisfactory to the Trustee or the Transfer
Agent and Registrar, duly executed by the Class B Certificateholder or such
Class B Certificateholder's attorney, and duly authorized in writing with such
signature guaranteed, and thereupon one or more new Class B Certificates of
authorized denominations and for the same aggregate fractional undivided
interest will be issued to the designated transferee or transferees.

         As provided in the Agreement and subject to certain limitations therein
set forth, Class B Certificates are exchangeable for new Class B Certificates
evidencing like aggregate fractional undivided interests as requested by the
Class B Certificateholder surrendering such Class B Certificates. No service
charge may be imposed for any such exchange but the Servicer or Transfer Agent
and Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.

         The Servicer, the Trustee, the Paying Agent and the Transfer Agent and
Registrar and any agent of any of them, may treat the person in whose name this
Class B Certificate is registered as the owner hereof for all purposes, and
neither the Servicer nor the Trustee, the Paying Agent, the Transfer Agent and
Registrar, nor any agent of any of them, shall be affected by notice to the
contrary except in certain circumstances described in the Agreement.

         THIS CLASS B CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.

                                     A-2-6
<PAGE>

                                   ASSIGNMENT

Social Security or other identifying number of assignee
                                                        ------------------------

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
     ----------------------------------------------
         (name and address of assignee)

the within certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints _________________________ , attorney, to transfer said
certificate on the books kept for registration thereof, with full power of
substitution in the premises.

Dated: ______________                                 ________________________4/

                                                      Signature Guaranteed:

                                                      ------------------------

-------------------------------
4 / NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Certificate in every
particular, without alteration, enlargement or any change whatsoever.

                                     A-2-7
<PAGE>

                                                                       EXHIBIT B

                    FORM OF MONTHLY PAYMENT INSTRUCTIONS AND
                           NOTIFICATION TO THE TRUSTEE

                            ------------------------

                  AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST

                                  SERIES 2002-6

                            ------------------------

         The undersigned, a duly authorized representative of American Express
Travel Related Services Company, Inc. ("TRS"), as Servicer pursuant to the
Pooling and Servicing Agreement dated as of May 16, 1996 (as amended and
supplemented, the "Pooling and Servicing Agreement"), among TRS, American
Express Centurion Bank and American Express Receivables Financing Corporation
II, as transferors (together, the "Transferors") and The Bank of New York, as
trustee (the "Trustee"), does hereby certify as follows:

         1. Capitalized terms used in this Certificate have their respective
meanings set forth in the Pooling and Servicing Agreement or the Series 2002-6
Supplement, dated as of August 15, 2002, among TRS, the Transferors and the
Trustee (as amended and supplemented, the "Supplement"), as applicable.

         2. TRS is the Servicer.

         3. The undersigned is a Servicing Officer.

I. INSTRUCTION TO MAKE A WITHDRAWAL

         Pursuant to subsections 4.05(a), (b) and (c), the Servicer does hereby
instruct the Trustee (i) to make withdrawals from the Collection Account on
____________, ____, which date is a Distribution Date under the Supplement, in
the aggregate amounts (equal to the Class A Available Funds, Class B Available
Funds and Collateral Available Funds, respectively) as set forth below in
respect of the following amounts and (ii) to apply the proceeds of such
withdrawals in accordance with subsections 4.05(a), (b) and (c):

         With respect to the Class A Certificates,

         A) Pursuant to subsection 4.05(a)(i):

         (1)      Interest at the Class A Certificate Rate for the related
                  Interest Accrual Period on the Class A Invested
                  Amount.......................................$
                                                                -----------

         (2)      Class A Monthly Interest previously due but not
                  paid.........................................$
                                                                -----------

                                      B-1
<PAGE>

         (3)      Class A Additional Interest and any Class A
                  Additional Interest due but not paid.........$
                                                                -----------

         B) Pursuant to subsection 4.05(a)(ii):

         (1)      The Class A Servicing Fee for the preceding
                  Monthly Period, if applicable................$
                                                                -----------

         (2)      Accrued and unpaid Class A Servicing Fees, if
                  applicable...................................$
                                                                -----------

         C) Pursuant to subsection 4.05(a)(iii):

         (1)      Class A Investor Default Amount for the
                  preceding Monthly Period.....................$
                                                                -----------

         With respect to the Class B Certificates,

         A) Pursuant to subsection 4.05(b)(i):

         (1)      Interest at the Class B Certificate Rate for
                  the related Interest Accrual Period on the
                  Class B Invested Amount......................$
                                                                -----------

         (2)      Class B Monthly Interest previously due but not
                  paid.........................................$
                                                                -----------

         (3)      Class B Additional Interest and any Class B
                  Additional Interest previously due but not
                  paid.........................................$
                                                                -----------

         B) Pursuant to subsection 4.05(b)(ii):

         (1)      The Class B Servicing Fee for the preceding
                  Monthly Period, if applicable................$
                                                                -----------

         (2)      Accrued and unpaid Class B Servicing Fees, if
                  applicable...................................$
                                                                -----------

         With respect to the Collateral Interest...............

         A) Pursuant to subsection 4.05(c)(i):

         (1)      The Collateral Servicing Fee for the preceding
                  Monthly Period, if applicable................$
                                                                -----------

         (2)      Accrued and unpaid Collateral Servicing Fee, if
                  applicable...................................$
                                                                -----------

                                      B-2
<PAGE>

         Pursuant to subsections 4.05(d), (e) and (f), the Servicer hereby
instructs the Trustee (i) to make withdrawals from the Collection Account on
___________, ____ which date is a Distribution Date under the Supplement, in the
aggregate amounts (equal to the Available Principal Collections) as set forth
below in respect of the following amounts and (ii) to apply the proceeds of such
withdrawals in accordance with subsections 4.05(d), (e) and (f):

         A) Pursuant to subsection 4.05(d):

         (1)      The excess, if any, of the Collateral Invested
                  Amount over the Required Collateral Invested
                  Amount paid to the Collateral Interest Holder
                  pursuant to the Loan Agreement................$
                                                                -----------

         (2)      Amount to be treated as Shared Principal
                  Collections...................................$
                                                                -----------

         B) Pursuant to subsection 4.05(e):

         (1)      The Lesser of the Controlled Deposit Amount
                  and the sum of the Class A Adjusted Invested
                  Amount and the Class B Adjusted Invested Amount
                  deposited in the Principal Funding Account...$
                                                                -----------

         (2)      After the Class B Invested Amount is paid in full,
                  the amount paid to the Collateral Interest Holder
                  (up to the Collateral Invested Amount) pursuant to
                  the Loan Agreement...........................$
                                                                -----------

         (3)      Prior to the date the Class B Invested Amount is
                  paid in full, excess of the Collateral Invested
                  Amount over the Required Collateral Invested Amount
                  paid to the Collateral Interest Holder pursuant to
                  the Loan Agreement............................$
                                                                -----------

         (4)      Prior to the date the Class B Invested Amount is
                  paid in full, amount to be treated as Shared
                  Principal Collections.........................$
                                                                -----------

         C) Pursuant to subsection 4.05(f):

         (1)      An amount up to the Class A Adjusted Invested
                  Amount deposited in the Principal Funding
                  Account.......................................$
                                                                -----------

         (2)      On and after the Distribution Date on which the
                  Class A Invested Amount is paid in full, an amount
                  up to the Class B Invested Amount deposited in the
                  Principal Funding
                  Account.......................................$
                                                                -----------

         (3)      On an after the Distribution Date on which the
                  Class B Invested Amount is paid in full, an amount
                  up to the Collateral Invested Amount paid to the
                  Collateral Interest Holder pursuant to the Loan
                  Agreement.....................................$
                                                                -----------

                                      B-3
<PAGE>

                  Pursuant to Section 4.07, the Servicer does hereby instruct
the Trustee to apply on , which is a Distribution Date under the Supplement, any
Excess Spread and Excess Finance Charge Collections allocated to Series 2002-6
as follows:

         A) Pursuant to subsection 4.07(a):

            Class A Required Amount applied in the priority set
            forth in subsections 4.05(a)(i), (ii) and (iii).....$
                                                                 -----------

         B) Pursuant to subsection 4.07(b):

            Aggregate amount of Class A Investor Charge-Offs not
            previously reimbursed allocated to Available Principal
            Collections.........................................$
                                                                 -----------

         C) Pursuant to subsection 4.07(c):

            Class B Required Amount applied in the priority set forth in
            subsections
            4.05(b)(i)..........................................$
                                                                 -----------

         D) Pursuant to subsection 4.07(d):

             Interest accrued on aggregate outstanding principal
             balance of the Class B Certificates not otherwise
             distributed to Class B Certificateholders pursuant to
             Section 4.07(c) ...................................$
                                                                 -----------

         E) Pursuant to subsection 4.07(d):

             Amount (up to the Class B Investor Default) to be
             applied as Available Principal Collections.........$
                                                                 -----------

         F) Pursuant to subsection 4.07(e):

            The amount by which the "Class B Invested Amount" has
            been reduced pursuant to clauses (c), (d) and (e) of the
            definition thereof allocated to Available Principal
            Collections.........................................$
                                                                 -----------

         G) Pursuant to subsection 4.07(f):

            (1) Collateral Monthly Interest.....................$
                                                                 -----------

            (2) Collateral Monthly Interest previously due but not
                paid............................................$
                                                                 -----------

            (3) Collateral Additional Interest and any Collateral
                Additional Interest previously due and not
                paid............................................$
                                                                 -----------

                                      B-4

<PAGE>

         H) Pursuant to subsection 4.07(g):

            Monthly Servicing Fee for such Distribution Date that
            has not been paid to the Servicer and any Monthly
            Servicing Fee previously due but not paid to the
            Servicer............................................$
                                                                 -----------

         I) Pursuant to subsection 4.07(h):

            Collateral Default Amount allocated to Available Principal
            Collections..........................................$
                                                                 -----------

         J) Pursuant to subsection 4.07(i):

            The amount by which the "Collateral Invested Amount" has
            been reduced pursuant to clauses (c), (d) and (e) of the
            definition thereof allocated to Available Principal
            Collections..........................................$
                                                                 -----------

         K) Pursuant to subsection 4.07(j):

            The excess of the Required Reserve Account Amount
            over the Available Reserve Amount deposited into the
            Reserve Account......................................$
                                                                 -----------

                                      B-5
<PAGE>

         L) Pursuant to subsection 4.07(k):

            Paid to the Collateral Interest Holder pursuant to the Loan
            Agreement............................................$
                                                                 -----------

         M) Pursuant to subsection 4.07(l):

             Treated as Excess Finance Charge Collections and allocated
             to other Series or paid to the Holders of the Transferor
             Certificates........................................$
                                                                 -----------

         Pursuant to Section 4.08, the Servicer does hereby instruct the Trustee
to apply on ___________, ____ which is a Distribution Date under the Pooling and
Servicing Agreement, $ of Reallocated Principal Collections to fund any
deficiencies in the Required Amount after applying Class A Available Funds,
Class B Available Funds, Excess Spread and Excess Finance Charge Collections
thereto.

II. INSTRUCTION TO MAKE CERTAIN PAYMENTS

         Pursuant to Section 5.01 of the Series Supplement, the Servicer does
hereby instruct the Trustee to pay in accordance with Section 5.01 from the
Interest Funding Account or the Principal Funding Account, as applicable, on
____________, ____ which date is a Payment Date under the Supplement, the
following amounts as set forth below:

         A) Pursuant to subsection 5.01(a):

            Interest to be distributed to Class A
            Certificateholders..................................$
                                                                 -----------

         B) Pursuant to subsection 5.01(b):

            On the Expected Final Payment Date or a Special Payment
            Date, principal to be distributed to the Class A
            Certificateholders..................................$
                                                                 -----------

         C) Pursuant to subsection 5.01(c):

            Interest to be distributed to Class B
            Certificateholders..................................$
                                                                 -----------

         D) Pursuant to subsection 5.01(d):

            On the Expected Final Payment Date or a Special
            Payment Date, on or after the date Class A Invested
            Amount is paid in full, principal to be distributed
            to the Class B Certificateholders...................$
                                                                 -----------

III. ACCRUED AND UNPAID AMOUNTS

         After giving effect to the withdrawals and transfers to be made in
accordance with this notice, the following amounts will be accrued and unpaid
with respect to all Monthly Periods preceding the current calendar month.

                                      B-6
<PAGE>

         1. Subsection 4.06(a):

            The aggregate amount of all unreimbursed Class A Investor
            Charge-Offs.........................................$
                                                                 -----------

         2. Subsection 4.06(a), (b) and 4.08(a):

            The aggregate amount by which the "Class B Invested
            Amount" has been reduced pursuant to clauses (c), (d)
            and (e) of the definition thereof...................$
                                                                 -----------

         3. Subsection 4.06(a), (b), (c) and 4.08(a) and (b):

            The aggregate amount by which the "Collateral Invested
            Amount" has been reduced pursuant to clauses (c), (d) and
            (e) of the definition thereof.......................$
                                                                 -----------

         IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
this          day of                     ,        .
     --------        -------------------- --------

                                    AMERICAN EXPRESS TRAVEL RELATED
                                    SERVICES COMPANY, INC., as Servicer

                                    By:
                                         ---------------------------------------
                                         Name:
                                         Title:

                                      B-7
<PAGE>

                                                                       EXHIBIT C

                            FORM OF MONTHLY STATEMENT

                  AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST
                                  SERIES 2002-6

         Pursuant to the Pooling and Servicing Agreement dated as of May 16,
1996 (hereinafter as such agreement may have been or may be from time to time,
amended or otherwise modified, the "Pooling and Servicing Agreement"), among
American Express Travel Related Services Company, Inc. ("TRS"), as Servicer,
American Express Centurion Bank and American Express Receivables Financing
Corporation II, as transferors (together, the "Transferors"), and The Bank of
New York, as trustee (the "Trustee"), as supplemented by the Series 2002-6
Supplement, dated as of August 15, 2002 (the "Supplement"), among TRS, the
Transferors and the Trustee, TRS, as Servicer is required to prepare certain
information each month regarding current distributions to the Series 2002-6
Certificateholders and the performance of the American Express Credit Account
Master Trust (the "Trust") during the previous month. The information which is
required to be prepared with respect to the Distribution Date of ______________,
and with respect to the performance of the Trust during the month of ___________
is set forth below. Certain of the information is presented on the basis of an
original principal amount of $1,000 per Series 2002-6 Certificate (a
"Certificate"). Certain other information is presented based on the aggregate
amounts for the Trust as a whole. Capitalized terms used in this Monthly
Statement have their respective meanings set forth in the Pooling and Servicing
Agreement and the Supplement.

         A)  Information  regarding  distributions in respect of the Class
             A  Certificates  per $1,000  original  certificate  principal
             amount

             (1)      The total amount of the distribution in respect
                      of Class A Certificates, per $1,000 original
                      certificate principal
                      amount..........................$
                                                       ---------------------

             (2)      The amount of the distribution set forth in
                      paragraph 1 above in respect of interest on the
                      Class A Certificates, per $1,000 original
                      certificate principal amount....$
                                                       ---------------------

             (3)      The amount of the distribution set forth in
                      paragraph 1 above in respect of principal of the
                      Class A Certificates, per $1,000 original
                      certificate principal
                      amount..........................$
                                                       ---------------------

         B)  Class A Investor Charge Offs and Reimbursement of Charge Offs

             (1)      The amount of Class A Investor Charge
                      Offs............................$
                                                       ---------------------

             (2)      The amount of Class A Investor Charge Offs set
                      forth in paragraph 1 above, per $1,000 original
                      certificate principal amount....$
                                                       ---------------------

                                      C-1
<PAGE>

             (3)      The total amount reimbursed in respect of Class A
                      Investor Charge Offs............$
                                                       ---------------------

             (4)      The amount set forth in paragraph 3 above,
                      per $1,000 original certificate principal
                      amount..........................$
                                                       ---------------------

             (5)      The amount, if any, by which the outstanding
                      principal balance of the Class A Certificates
                      exceeds the Class A Invested Amount after giving
                      effect to all transactions on such Distribution
                      Date............................$
                                                       ---------------------

         C)  Information  regarding  distributions in respect of the Class
             B  Certificates,  per $1,000 original  certificate  principal
             amount

             (1)      The total amount of the distribution in respect
                      of Class B Certificates, per $1,000 original
                      certificate principal amount....$
                                                       ---------------------

             (2)      The amount of the distribution set forth in
                      paragraph 1 above in respect of interest on the
                      Class B Certificates, per $1,000 original
                      certificate principal amount....$
                                                       ---------------------

             (3)      The amount of the distribution set forth in
                      paragraph 1 above in respect of principal of the
                      Class B Certificates, per $1,000 original
                      certificate principal amount....$
                                                       ---------------------

         D)  Amount of reductions in Class B Invested Amount
             pursuant to clauses (c), (d), and (e) of the
             definition of Class B Invested Amount

             (1)      The amount of reductions in Class B Invested
                      Amount pursuant to clauses (c), (d) and (e) of
                      the definition of Class B Invested
                      Amount..........................$
                                                       ---------------------

             (2)      The amount of the reductions in the Class B
                      Invested Amount set forth in paragraph 1 above,
                      per $1,000 original certificate principal
                      amount..........................$
                                                       ---------------------

             (3)      The total amount reimbursed in respect
                      of such reductions in the Class B
                      Invested Amount.................$
                                                       ---------------------

             (4)      The amount set forth in paragraph 3 above, per
                      $1,000 original certificate principal
                      amount..........................$
                                                       ---------------------

                                      C-2
<PAGE>

             (5)      The amount, if any, by which the outstanding
                      principal balance of the Class B Certificates
                      exceeds the Class B Invested Amount after giving
                      effect to all transactions on such Distribution
                      Date............................$
                                                       ---------------------

         E)  Information regarding certain distributions to the Collateral
             Interest Holder

             (1)      The amount distributed to the Collateral
                      Interest Holder in respect of interest on the
                      Collateral Invested Amount......$
                                                       ---------------------

             (2)      The amount distributed to the Collateral Interest
                      Holder in respect of principal on the
                      Collateral Invested Amount......$
                                                       ---------------------

         F)  Amount of reductions in Collateral Invested Amount pursuant to
             clauses (c), (d), and (e) of the definition of Collateral
             Invested Amount

             (1)      The amount of reductions in the Collateral
                      Invested Amount pursuant to clauses (c), (d) and
                      (e) of the definition of Collateral Invested
                      Amount..........................$
                                                       ---------------------

             (2)      The total amount reimbursed in respect of such
                      reductions in the Collateral Invested
                      Amount..........................$
                                                       ---------------------

                                       AMERICAN EXPRESS TRAVEL RELATED
                                       SERVICES COMPANY, INC., as Servicer

                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                      C-3
<PAGE>

RECEIVABLES --

Beginning of the Month Principal Receivables:                    $______________

Beginning of the Month Finance Charge Receivables:               $______________

Beginning of the Month Discounted Receivables:                   $______________

Beginning of the Month Premium Receivables:                      $______________

Beginning of the Month Total Receivables:                        $______________

Removed Principal Receivables:                                   $______________

Removed Finance Charge Receivables:                              $______________

Removed Total Receivables:                                       $______________

Additional Principal Receivables:                                $______________

Additional Finance Charge Receivables:                           $______________

Additional Total Receivables:                                    $______________

Discounted Receivables Generated this Period:                    $______________

Premium Receivables Generated this Period:                       $______________

End of the Month Principal Receivables:                          $______________

End of the Month Finance Charge Receivables:                     $______________

End of the Month Discounted Receivables:                         $______________

End of the Month Premium Receivables:                            $______________

End of the Month Total Receivables:                              $______________

Special Funding Account Balance:                                 $______________

Aggregate Invested Amount (all Master Trust Series)::            $______________

End of the Month Transferor Amount:                              $______________

DELINQUENCIES AND LOSSES --

End of the Month Delinquencies:                                  RECEIVABLES
                                                                 -----------

   30-59 Days Delinquent                                         $______________

   60-89 Days Delinquent                                         $______________

   90+ Days Delinquent                                           $______________

                                      C-4
<PAGE>

   Total 30+ Days Delinquent                                     $______________

Defaulted Accounts During the Month:                             $______________

INVESTED AMOUNTS --

   Class A Initial Invested Amount               $594,000,000

   Class B Initial Invested Amount               $57,600,000

   Collateral Initial Invested Amount            $68,400,000

INITIAL INVESTED AMOUNT                                             $720,000,000

   Class A Invested Amount                       $__________

   Class B Invested Amount                       $__________

   Collateral Invested Amount                    $__________

INVESTED AMOUNT                                                  $______________

   Class A Adjusted Invested Amount                              $______________

   Class B Adjusted Invested Amount                              $______________

ADJUSTED INVESTED AMOUNT                                         $______________

MONTHLY SERVICING FEE                                            $______________

INVESTOR DEFAULT AMOUNT                                          $______________

GROUP II INFORMATION

   WEIGHTED AVERAGE CERTIFICATE RATE FOR ALL SERIES
   IN GROUP II                                                   $______________

   GROUP II INVESTOR FINANCE CHARGE COLLECTIONS                  $______________

   GROUP II INVESTOR ADDITIONAL AMOUNTS                          $______________

   GROUP II INVESTOR DEFAULT AMOUNT                              $______________

   GROUP II INVESTOR MONTHLY FEES

   GROUP II INVESTOR MONTHLY INTEREST                            $______________

                                       C-5
<PAGE>

SERIES 2002-6 INFORMATION

   SERIES 2002-6 ALLOCATION PERCENTAGE                            _____________%

   SERIES 2002-6 ALLOCABLE FINANCE CHARGE COLLECTIONS            $______________

   SERIES 2002-6 ADDITIONAL AMOUNTS                              $______________

   SERIES 2002-6 ALLOCABLE DEFAULTED AMOUNT                      $______________

   SERIES 2002-6 MONTHLY FEES                                    $______________

   SERIES 2002-6 ALLOCABLE PRINCIPAL COLLECTIONS                 $______________

   SERIES 2002-6 REQUIRED TRANSFEROR AMOUNT                      $______________

   FLOATING ALLOCATION PERCENTAGE                                $______________

   INVESTOR FINANCE CHARGE COLLECTIONS                            _____________%

   INVESTOR DEFAULT AMOUNT                                       $______________

   REALLOCATED INVESTOR FINANCE CHARGE COLLECTIONS               $______________

   PRINCIPAL ALLOCATIONS PERCENTAGE                               _____________%

   AVAILABLE PRINCIPAL COLLECTIONS                               $______________

CLASS A AVAILABLE FUNDS --

CLASS A FLOATING PERCENTAGE                                       _____________%

   Class A Floating Percentage of Reallocated                    $______________

   Investor Finance Charge Collections

   Other Amounts                               $______________

TOTAL CLASS A AVAILABLE FUNDS                  $______________

   Class A Monthly Interest                    $______________

   Class A Servicing Fee (if applicable)       $______________

   Class A Investor Default Amount             $______________

TOTAL CLASS A EXCESS SPREAD                                      $______________

CLASS A REQUIRED AMOUNT                                          $______________

                                      C-6
<PAGE>

CLASS B AVAILABLE FUNDS --                                       $______________

CLASS B FLOATING PERCENTAGE                                       _____________%

CLASS B AVAILABLE FUNDS                                          $______________

   Class B Monthly Interest                   $______________

   Class B Servicing Fee (if applicable)      $______________

COLLATERAL AVAILABLE FUNDS
COLLATERAL FLOATING PERCENTAGE                                    _____________%

COLLATERAL AVAILABLE FUNDS                                       $______________

   Collateral Interest Servicing Fee (if
   applicable)                                                   $______________

TOTAL COLLATERAL EXCESS SPREAD                                   $______________

TOTAL CLASS B EXCESS SPREAD                                      $______________

EXCESS SPREAD --

TOTAL EXCESS SPREAD                                              $______________

   Excess Spread Applied to Class A
   Required Amount                            $______________

   Excess Spread Applied to Class A Investor
   Charge                                     $______________
   Offs

   Excess Spread Applied to Class B Required
   Amount                                     $______________

   Excess Spread Applied to Reductions of
   Class B Invested Amount pursuant to
   clauses (c), (d) and (e)                   $______________

   Excess Spread Applied to Collateral
   Monthly Interest                           $______________

   Excess Spread Applied to Unpaid Monthly
   Servicing Fee                              $______________

   Excess Spread Applied Collateral Default
   Amount                                     $______________

                                      C-7
<PAGE>

   Excess Spread Applied to Reductions of
   Collateral                                 $______________

   Invested Amount Pursuant to Clauses (c),
   (d) and (e)                                $______________

   Excess Spread Applied to Reserve Account   $______________

   Excess Spread Applied to Other Amounts
   Owed to Collateral Interest Holder         $______________

TOTAL EXCESS FINANCE CHARGE                   $______________
COLLECTIONS ELIGIBLE FOR OTHER
EXCESS ALLOCATION SERIES

EXCESS FINANCE CHARGES
COLLECTIONS

TOTAL EXCESS FINANCE CHARGE                   $______________
COLLECTIONS FOR ALL ALLOCATION
SERIES

SERIES 2002-6 EXCESS FINANCE CHARGE
COLLECTIONS

EXCESS FINANCE CHARGE COLLECTIONS             $______________
ALLOCATED TO SERIES 2002-6

   Excess Finance Charge Collections Applied  $______________
   to Class A Required Amount

   Excess Finance Charge Collections Applied  $______________
   to Class A Investor Charge Offs

   Excess Finance Charge Collections Applied  $______________
   to Class B Required Amount

   Excess Finance Charge Collections Applied  $______________
   to Reductions of Class B Invested Amount
   Pursuant to Clauses (c), (d) and (e)

   Excess Finance Charge Collections Applied  $______________
   to Collateral Monthly Interest

   Excess Finance Charge Collections Applied  $______________
   to Unpaid Monthly Servicing Fee

   Excess Finance Charge Collections Applied  $______________
   to Collateral Default Amount

                                      C-8
<PAGE>

   Excess Finance Charge Collections Applied  $______________
   to Reductions of Collateral Invested
   Amount Pursuant to Clauses (c), (d) and (e)

   Excess Finance Charge Collections Applied  $______________
   to Reserve Account

   Excess Finance Charge Collections Applied  $______________
   to Other Amounts Owed to Collateral
   Interest Holder

YIELD AND BASE RATE --

   Base Rate (Current Month)                   _____________%

   Base Rate (Prior Month)                     _____________%

   Base Rate (Two Months Ago)                  _____________%

THREE MONTH AVERAGE BASE RATE                                    ______________%

   Series Adjusted Portfolio Yield
   (Current Month)                             _____________%

   Series Adjusted Portfolio Yield
   (Prior Month)                               _____________%

   Series Adjusted Portfolio Yield
   (Two Months Ago)                           $_____________%

THREE MONTH AVERAGE SERIES
ADJUSTED PORTFOLIO YIELD                                         ______________%

PRINCIPAL COLLECTIONS --

CLASS A PRINCIPAL PERCENTAGE                                     ______________%

   Class A Principal Collections              $_____________

CLASS B PRINCIPAL PERCENTAGE                                     ______________%

   Class B Principal Collections              $_____________

COLLATERAL PRINCIPAL PERCENTAGE                                  ______________%

                                      C-9
<PAGE>

   Collateral Principal Collections           $_____________

AVAILABLE PRINCIPAL COLLECTIONS                                  $______________

REALLOCATED PRINCIPAL COLLECTIONS                                $______________

SERIES 2002-6 PRINCIPAL SHORTFALL                                $______________

SHARED PRINCIPAL COLLECTIONS ALLOCABLE FROM OTHER
PRINCIPAL SHARING SERIES                                         $______________

ACCUMULATION --  -

   Controlled Accumulation Amount             $_____________

   Deficit Controlled Accumulation Amount     $_____________

CONTROLLED DEPOSIT AMOUNT                                        $______________

PRINCIPAL FUNDING ACCOUNT BALANCE                                $______________

SHARED PRINCIPAL COLLECTIONS
ELIGIBLE FOR OTHER PRINCIPAL
SHARING SERIES                                                   $______________

INVESTOR CHARGE OFFS AND
REDUCTIONS--

CLASS A INVESTOR CHARGE OFFS                                     $______________

REDUCTIONS IN CLASS B INVESTED AMOUNT (OTHER THAN BY
PRINCIPAL PAYMENTS)                                              $______________

REDUCTIONS IN COLLATERAL INVESTED AMOUNT (OTHER THAN BY
PRINCIPAL PAYMENTS)                                              $______________

PREVIOUS CLASS A CHARGE OFFS REIMBURSED                          $______________

                                      C-10
<PAGE>

PREVIOUS CLASS B INVESTED AMOUNT REDUCTIONS REIMBURSED           $______________

PREVIOUS COLLATERAL INVESTED AMOUNT REDUCTIONS REIMBURSED        $______________

                                             AMERICAN EXPRESS TRAVEL RELATED
                                             SERVICES COMPANY, INC., as Servicer

                                             By:
                                                    ----------------------------
                                                    Name:
                                                    Title:

                                      C-11
<PAGE>

                                                                       EXHIBIT D

                     FORM OF MONTHLY SERVICER'S CERTIFICATE

             AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.

                  AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST
                                  SERIES 2002-6

         The undersigned, a duly authorized representative of American Express
Travel Related Services Company, Inc., as Servicer ("TRS"), pursuant to the
Pooling and Servicing Agreement, dated as of May 16, 1996 (as amended and
supplemented, the "Agreement"), as supplemented by the Series 2002-6 Supplement,
dated as of August 15, 2002 (as amended and supplemented, the "Series
Supplement"), among TRS, as Servicer, American Express Centurion Bank and
American Express Receivables Financing Corporation II, as Transferors, and The
Bank of New York, as Trustee, does hereby certify as follows:

         1. Capitalized terms used in this Certificate have their respective
meanings as set forth in the Agreement or the Series Supplement, as applicable.

         2. TRS is, as of the date hereof, the Servicer under the Agreement.

         3. The undersigned is a Servicing Officer.

         4. This Certificate relates to the Distribution Date occurring on
____________________ , 200_.

         5. As of the date hereof, to the best knowledge of the undersigned, the
Servicer has performed in all material respects all its obligations under the
Agreement through the Monthly Period preceding such Distribution Date [or, if
there has been a default in the performance of any such obligation, set forth in
detail the (i) nature of such default, (ii) the action taken by the Servicer, if
any, to remedy such default and (iii) the current status of each such default;
if applicable, insert "None"].

         6. As of the date hereof, to the best knowledge of the undersigned, no
Pay Out Event occurred on or prior to such Distribution Date.

         IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Certificate this ____ day of _______________, 200_.

                                                AMERICAN EXPRESS TRAVEL RELATED
                                                SERVICES COMPANY, INC.,
                                                as Servicer

                                                By:
                                                       -------------------------
                                                       Name:
                                                       Title:

                                      D-1FORM OF ROYALTY AGREEMENT

 

Exhibit 10.1

 

ROYALTY AGREEMENT

Between

Computershare Trust Company of Canada

As Trustee of the

PARAMOUNT ENERGY TRUST

and

Paramount Energy Operating Corp.

As Trustee of the

PARAMOUNT OPERATING TRUST

Effective as of July 1, 2002

 

 

Table of Contents

ARTICLE 1 INTERPRETATION

	 	 	 	 	 	 	 
	1.1	 	
Definitions
	 	 	2	 
	1.2	 	
Definitions Incorporated by Reference
	 	 	15	 
	1.3	 	
Construction of Terms
	 	 	15	 
	1.4	 	
Amendments to Agreements and Laws
	 	 	15	 
	1.5	 	
References
	 	 	15	 
	1.6	 	
Choice of Law
	 	 	15	 
	1.7	 	
Attornment
	 	 	15	 
	1.8	 	
Monetary Sums
	 	 	16	 
	1.9	 	
Accrual Method of Calculation
	 	 	16	 
	1.10	 	
Estimates
	 	 	16	 
	1.11	 	
No Duplication
	 	 	16	 
	1.12	 	
References to Acts Performed by the a Trust
	 	 	17	 
	1.13	 	
Tax Act
	 	 	17	 
	 
	ARTICLE 2 ROYALTY
	 
	2.1	 	
Royalty Grant
	 	 	17	 
	2.2	 	
Royalty Applicable to After Acquired Properties
	 	 	17	 
	2.3	 	
Deferred Royalty Purchase Payments
	 	 	18	 
	2.4	 	
Adjustments to Payment for Royalty
	 	 	19	 
	2.5	 	
Right to Take in Kind
	 	 	19	 
	2.6	 	
Royalty Share of Production not Taken in Kind
	 	 	21	 
	2.7	 	
Petroleum Substances Lost or Used in Operations
	 	 	21	 
	2.8	 	
Not an Interest in Land
	 	 	21	 
	2.9	 	
Reimbursement of Non-Deductible Crown Royalties
	 	 	21	 
	 
	ARTICLE 3 ACCOUNTING
	 
	3.1	 	
Payments from Grantor to Royalty Owner
	 	 	21	 
	3.2	 	
Statements
	 	 	22	 
	3.3	 	
Overpayment
	 	 	22	 
	3.4	 	
Carry Forward of Permitted Royalty Deductions
	 	 	22	 
	3.5	 	
Collection of Production Revenues and Other Revenues
	 	 	23	 
	3.6	 	
Payment of Permitted Royalty Deductions
	 	 	23	 
	3.7	 	
Payments from Royalty Owner to Grantor
	 	 	23	 
	 
	ARTICLE 4 RESERVE AND RECLAMATION FUND
	 
	4.1	 	
Establishment
	 	 	23	 
	4.2	 	
Contributions to the Reserve
	 	 	23	 
	4.3	 	
Use of Reserve and Reclamation Fund
	 	 	23	 
	4.4	 	
Reduction and Termination of Reserve
	 	 	24	 

1

 

	 	 	 	 	 	 	 
	4.5	 	
Reclamation Trust
	 	 	24	 
	 
	ARTICLE 5 OPERATIONS
	 
	5.1	 	
General
	 	 	25	 
	5.2	 	
No Obligation to Develop
	 	 	25	 
	5.3	 	
Amendment and Waiver of Provisions in Title and Operating Documents
	 	 	26	 
	5.4	 	
Rights and Obligations
	 	 	26	 
	5.5	 	
Marketing
	 	 	26	 
	5.6	 	
Additional Title and Operating Documents
	 	 	26	 
	5.7	 	
Future Acquisitions
	 	 	26	 
	5.8	 	
Capital Expenditures
	 	 	27	 
	5.9	 	
Borrowing
	 	 	27	 
	5.10	 	
Costs of Tangibles and Miscellaneous Interests
	 	 	27	 
	 
	ARTICLE 6 DISPOSITIONS
	 
	6.1	 	
Restrictions on Disposition of Properties
	 	 	27	 
	6.2	 	
Dispositions of Tangibles and Miscellaneous Interests
	 	 	28	 
	6.3	 	
Dispositions of Petroleum and Natural Gas Rights
	 	 	28	 
	6.4	 	
Merger of Interests On Concurrent Disposition
	 	 	28	 
	6.5	 	
Proceeds of a Concurrent Disposition
	 	 	28	 
	6.6	 	
Concurrent Disposition Documentation
	 	 	29	 
	6.7	 	
Merger upon Farmout
	 	 	29	 
	 
	ARTICLE 7 TERM OF AGREEMENT
	 
	7.1	 	
Term
	 	 	30	 
	 
	ARTICLE 8 BOOKS AND RECORDS
	 
	8.1	 	
Examination
	 	 	30	 
	8.2	 	
Audit
	 	 	31	 
	8.3	 	
Confidentiality
	 	 	31	 
	8.4	 	
Extension of Time under Limitations Act
	 	 	31	 
	 
	ARTICLE 9 POOLING, UNITIZATION, SURRENDER AND ABANDONMENT
	 
	9.1	 	
Pooling and Unitization
	 	 	32	 
	9.2	 	
Surrender
	 	 	32	 
	9.3	 	
Abandonment
	 	 	32	 
	 
	ARTICLE 10 ASSIGNMENT
	 
	10.1	 	
Restrictions on Assignment
	 	 	32	 
	10.2	 	
Multiple Royalty Owners
	 	 	33	 
	10.3	 	
Grant and Assignment of Security
	 	 	33	 
	10.4	 	
Enforcement of Security
	 	 	34	 

2

 

	 	 	 	 	 	 	 
	10.5	 	
Dispositions Subject to This Agreement
	 	 	34	 
	 
	ARTICLE 11 INSURANCE
	 
	11.1	 	
Maintenance
	 	 	35	 
	 
	ARTICLE 12 NOTICES AND PAYMENTS
	 
	12.1	 	
Addresses for Service and Payments
	 	 	35	 
	12.2	 	
Delivery and Deemed Receipt of Notices
	 	 	35	 
	12.3	 	
Addresses and Telefacsimile Numbers for Service
	 	 	36	 
	12.4	 	
Change of Address
	 	 	36	 
	 
	ARTICLE 13 MISCELLANEOUS
	 
	13.1	 	
Enurement
	 	 	37	 
	13.2	 	
Waivers in Writing
	 	 	37	 
	13.3	 	
Time of Essence
	 	 	37	 
	13.4	 	
No Partnership
	 	 	37	 
	13.5	 	
Severability
	 	 	37	 
	13.6	 	
Amendments
	 	 	37	 
	 
	ARTICLE 14 CONCERNING THE TRUSTEE AND PEOC
	 
	14.1	 	
Acknowledgement
	 	 	37	 

3

 

ROYALTY AGREEMENT

THIS ROYALTY AGREEMENT is made effective as of the 1st day of July, 2002

BETWEEN:

			
	 	Computershare Trust Company of Canada, a trust company
incorporated under the laws of Canada, having an
registered office in Calgary, Alberta, as trustee for
and on behalf of the PARAMOUNT ENERGY TRUST, a trust
formed in accordance with the laws of Alberta (the
“Royalty Owner”)

and

			
	 	Paramount Energy Operating Corp., a corporation
incorporated under the laws of Alberta, having its
registered office and principal place of business in
Calgary, Alberta, as trustee for and on behalf of the
PARAMOUNT OPERATING TRUST, a trust formed in
accordance with the laws of Alberta (the “Grantor”).

WHEREAS:

	A.	 	The Grantor acquired certain assets that are Canadian resource properties
(as hereinafter defined) (the “Initial Assets”), as well as certain assets
that are not Canadian resource properties, from Paramount Resources Ltd.
(“Paramount”) pursuant to that certain Initial Assets Purchase Agreement
(the “Initial Assets Purchase Agreement”) made effective as of July 1,
2002;
	 
	B.	 	Paramount and the Grantor have entered into the Take-Up Agreement made
effective as of July 1, 2002 (the “Take-Up Agreement”) pursuant to which
the Grantor agrees to purchase from Paramount certain additional assets
that are Canadian resource properties or an undivided interest therein on
the terms and conditions therein contained (the “Additional Assets”), as
well as certain assets that are not Canadian resource properties;
	 
	C.	 	The Grantor wishes to enter into this Agreement for the purpose of
granting the Royalty, as hereinafter defined, to the Royalty Owner and the
Royalty Owner wishes to accept and pay for the Royalty on the terms of
this Agreement;
	 
	D.	 	The Royalty shall apply to the Initial Assets and any other Properties
(as hereinafter defined) acquired by the Grantor including, without
limitation, the Additional Assets.

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth,
each Party hereby agrees as follows:

1

 

ARTICLE 1

INTERPRETATION

1.1   Definitions

     In this Agreement, including the recitals and this Article 1, the following
words and expressions shall have the following meanings, except where the
context otherwise necessarily requires:

“Acquisition” means an acquisition by the Grantor of Petroleum and Natural Gas
Rights or interests therein, either by themselves or together with interests in
related Tangibles and Miscellaneous Interests;

“Acquisition Costs” means all costs and expenses incurred by the Grantor in
making any Acquisition including, without limitation, the net purchase price
paid for such an Acquisition, brokers fees, commissions, costs of registration
of conveyances of title, and costs of consultants, lawyers, landmen, engineers
and other technical advisors;

“Agreement”, “herein”, “hereto”, “hereof” and similar expressions refer to this
agreement, including the recitals to this agreement, and not to any particular
article, section, subsection or other subdivision of this agreement and any
agreements or schedules supplemental or ancillary hereto, as any of the same
may be amended, restated or replaced from time to time;

“ARTC” means credits or rebates in respect of Crown Royalties that are paid or
credited by the Crown, including those paid or credited under the Alberta
Corporate Tax Act that are commonly known as “Alberta Royalty Tax Credits”;

“BOE” means the number of barrels of crude oil and crude oil equivalent,
determined on the basis that 6 mcf of natural gas is equivalent to one barrel
of crude oil and one barrel of natural gas liquids is equivalent to one barrel
of crude oil;

“Business Day” means any day other than a Saturday, Sunday, statutory holiday
in the Province of Alberta or any other day on which banks in Calgary, Alberta,
are not open for business;

“Canadian resource property” has the meaning attributable to such term in the
Tax Act;

“Capital Expenditures” means with respect to any period, all of the Grantor’s
costs respecting the drilling, completion, equipping, abandonment or
recompletion of wells, the construction, acquisition or installation of
gathering systems, batteries, plants, pipelines or other facilities, or any
other operations or activities undertaken in respect of the Properties,
acquisition costs of Properties acquired from time to time by the Grantor and
all other costs relating to the Properties that are “capital costs” under GAAP
and are accrued during such period, but excluding Production Costs and costs
reasonably allocable to earning Other Revenues;

“Closing” means the closing of the transactions contemplated by the Initial
Assets Purchase Agreement and this Agreement;

“Closing Date” means the date upon which the Closing occurs;

2

 

“Commodity Price and Currency Swaps” means exchange, swap, hedging and similar
arrangements made by the Grantor, from time to time, in respect of commodity
prices or rates of exchange of currencies, the purpose of which is to mitigate
or eliminate exposure to fluctuations in prices of commodities or rates of
exchange of currencies which affect Production Costs or Royalty Revenues;

“Concurrent Disposition” means any sale in which:

	 	(a)	 	the Grantor sells any interest in the Petroleum and Natural
Gas Rights comprised in the Properties;
	 
	 	(b)	 	the Royalty Owner concurrently sells a portion of the Royalty
determined with reference to production from or relating to such
interests; and
	 
	 	(c)	 	each of the criteria set forth in Section 6.3 is satisfied in
respect of such sale;

“Credit Facilities” means any credit facilities and loans made available to the
Grantor, from time to time, to fund the payment of or to refinance the payment
of Acquisition Costs, Production Costs, Capital Expenditures, payment of the
Royalty, or otherwise, including for greater certainty, any liabilities,
obligations or indebtedness for which the Grantor becomes primarily liable as a
result of having given a guarantee or provided any indemnity in respect of the
liabilities, obligations or indebtedness of another Person and being called
upon to honour such guarantee or indemnity;

“Crown” means Her Majesty the Queen in Right of Canada or a Province thereof;

“Crown Royalties” with respect to any period, means any amount paid or payable
to or received or receivable by the Crown respecting such period by virtue of
an obligation imposed by statute or a contractual obligation substituted for an
obligation imposed by statute such as a royalty, tax (other than municipal or
school tax), lease rental, or bonus or other amount in lieu (or in respect of
the late or non-payment) thereof that may be reasonably regarded as being in
relation to petroleum and natural gas rights or the production of Petroleum
Substances;

“Debt Service Costs” with respect to any period, means each of the following
amounts accrued in such period:

	 	(a)	 	all interest, penalties, fees, indemnities, legal costs, and
other costs, expenses and disbursements for which the Grantor is
liable pursuant to the Credit Facilities or any document or
instrument entered into by the Grantor and the Lender or made by the
Grantor in favour of the Lender in connection therewith, including
without limitation:

	 	(i)	 	all amounts paid or payable pursuant to Credit
Facilities:

	 	(A)	 	on account of principal, including,
without limitation, scheduled, prepaid, whether
voluntary or mandatory, and accelerated payments of
principal; and

3

 

	 	(B)	 	on account of banker’s acceptances or
letters of credit, except for amounts included in
subsection (a) above;

		
	 	provided that the difference between the face amount of a
banker’s acceptance that was issued and accepted pursuant to
Credit Facilities and the discount proceeds of such banker’s
acceptance, if any, shall be accounted for as interest
expense of the Grantor at the times that such interest
expense is considered to accrue in accordance with GAAP, and
provided that when the Grantor becomes liable to pay the face
amount of a banker’s acceptance, the face value or the
discount proceeds paid by the Grantor in respect of such
banker’s acceptance, as the case may be, shall be accounted
for as principal paid by the Grantor; plus

	 	(b)	 	any net loss or minus any net profit, as the case may be,
actually realized from Interest Rate Swaps;

but does not include any of such amounts as are reasonably allocable to earning
Other Revenues;

“Deferred Royalty Purchase Payment” means that amount payable by the Royalty
Owner to the Grantor pursuant to Section 2.3 hereof;

“Discount Rate” on any particular day shall be the lesser of:

	 	(a)	 	twice the yield on ten (10) year Government of Canada Bonds
on the fifth Business Day preceding the particular date, rounded
down to the nearest whole percentage point;
	 
	 	(b)	 	the yield on ten year Government of Canada Bonds on the fifth
Business Day preceding the particular date plus eight percent (8%),
rounded down to the nearest whole percentage point; or
	 
	 	(c)	 	fifteen percent (15%);

provided that the Grantor’s Board of Directors may determine the Discount Rate
to be such other rate as they, acting reasonably and in accordance with prudent
oil and gas industry practices, designate from time to time;

“Drilling Credits” means all allowable work credits, drilling credits, grouping
rights, dryhole contributions, bottomhole contributions, geophysical and
petroleum incentive payments and other similar incentive benefits resulting
from any expenses incurred with respect to the Properties which are borne by
the Grantor;

“Future Acquisition” means any Acquisition made after the Closing Date;

“Future Offering” has the meaning set out in subsection 2.3(a)(iv);

“GAAP” means, as of any time, the generally accepted accounting principles used
in Canada as at such time;

4

 

“General and Administrative Expenses” with respect to any period, means all
general and administrative costs and expenses incurred by the Grantor in such
period that are:

	 	(a)	 	reasonably and necessarily incurred by the Grantor in
connection with the management and administration of the business
and affairs of the Grantor or the Royalty Owner, or the ownership,
operation and maintenance of the Properties, including, without
limitation, costs and expenses incurred in respect of auditing,
accounting, bookkeeping, rent and other leasehold expenses, legal,
land administration, engineering, travel, telephone, data
processing, reporting, executive and management time and salaries;
or
	 
	 	(b)	 	approved by the Grantor’s Board of Directors either
specifically or as part of an approved budget or policy statement;

but does not include any of such amounts as are reasonably allocable to earning
Other Revenues;

“Grantor’s Board of Directors” means the board of directors of PEOC, acting in
its capacity as the board of directors of the Grantor’s trustee;

“Grantor Security Interests” has the meaning set out in Section 10.3 hereof;

“Grantor’s Share of Production” means that portion of any Petroleum Substances
produced from the Properties or properties pooled or unitized therewith to
which the Grantor is entitled for any reason whatsoever, where the said portion
is determined as if the Royalty did not exist;

“Initial Assets” has the meaning set out in recital A hereof, and which
properties are for convenience described in Schedule A hereto;

“Initial Assets Purchase Agreement” has the meaning set out in recital A
hereof;

“Interest Rate Swaps” means exchange, swap, hedging and similar arrangements
made by the Grantor, from time to time, in respect of interest rates, the
purpose of which is to mitigate or eliminate exposure to fluctuations in
interest rates associated with the Credit Facilities;

“Lease” means any lease, licence, permit, reservation, certificate of title or
other document of title by virtue of which the Grantor is entitled to explore
for, recover, remove or dispose of Petroleum Substances within, upon or under
any lands forming part of the Petroleum and Natural Gas Rights or any lands
pooled or unitized therewith;

“Lender” means:

	 	(a)	 	any Person (including for greater certainty, the Royalty
Owner) that has agreed alone or together with other Persons to
provide the Grantor with Credit Facilities;
	 
	 	(b)	 	any Person with whom the Grantor makes Swap Arrangements; and
	 
	 	(c)	 	any Person to whom the Grantor becomes primarily liable as a
result of having given a guarantee or provided any indemnity in
respect of the indebtedness,

5

 

	 	 	 	liabilities or obligations of another Person and being called upon
to honour such guarantee or indemnity;

“Miscellaneous Interests” means all properties, assets, rights and interests of
any nature whatsoever which are related to Petroleum and Natural Gas Rights or
Tangibles, excepting Petroleum and Natural Gas Rights and Tangibles, and
including without limitation:

	 	(a)	 	Title and Operating Documents;
	 
	 	(b)	 	Surface Rights;
	 
	 	(c)	 	books of account and records;
	 
	 	(d)	 	well files, production records and similar data and
information;
	 
	 	(e)	 	injection wells;
	 
	 	(f)	 	geological, seismic and similar data; and
	 
	 	(g)	 	permits, licences, authorizations and similar instruments
required to own, operate or exploit the Petroleum and Natural Gas
Rights or Tangibles;

“Month” means a period that commences at 8:00 a.m. Calgary time on the first
day of any calendar month and ends at 8:00 a.m. Calgary time on the first day
of the immediately following calendar month;

“Monthly Royalty Payment” means, in respect of a Month, ninety-nine percent
(99%) of Royalty Income for such Month payable by the Grantor to the Royalty
Owner in accordance with Section 3.1;

“Non-Deductible Crown Royalties” means Crown Royalties that are:

	 	(a)	 	required to be included in taxable income pursuant to
paragraph 12(1)(o) of the Tax Act or any replacement of such
paragraph; or
	 
	 	(b)	 	not permitted to be used as deductions in computing taxable
income pursuant to paragraph 18(1)(m) of the Tax Act or any
replacement of such paragraph;

“Operating Procedure” means the 1990 Canadian Association of Petroleum
Landmen’s form of operating procedure;

“Other Revenues” with respect to any period means all of the Grantor’s revenues
with respect to such period, including without limitation:

	 	(a)	 	fees and similar payments made by any Third Party to the
Grantor for the gathering, compression, treatment, processing,
transportation or storage of their Petroleum Substances by use of
the Tangibles;

6

 

	 	(b)	 	proceeds from the sale of any interest in Tangibles or
Miscellaneous Interests comprised in the Properties;
	 
	 	(c)	 	insurance proceeds paid to the Grantor, including any
proceeds paid in respect of business interruption insurance,
property damage insurance and third party liability insurance;
	 
	 	(d)	 	proceeds from the sale or licensing of geological, seismic,
and similar data;
	 
	 	(e)	 	income from investing the Reserve; and
	 
	 	(f)	 	overhead and other cost recoveries;

and for greater certainty, not including:

	 	(g)	 	any proceeds of sale from any Concurrent Disposition that are
allocated pursuant to Section 6.5 to the interests in the Royalty
sold by the Royalty Owner;
	 
	 	(h)	 	Production Revenues;
	 
	 	(i)	 	funds paid to the Grantor by the Royalty Owner on account of
any Non-Deductible Crown Royalties paid by the Grantor;
	 
	 	(j)	 	ARTC payable to the Royalty Owner in respect of
Non-Deductible Crown Royalties which the Royalty Owner reimburses to
the Grantor;
	 
	 	(k)	 	funds paid to the Grantor by the Royalty Owner on account of
the Deferred Royalty Purchase Payment;
	 
	 	(l)	 	funds withdrawn by the Grantor from the Reserve; or
	 
	 	(m)	 	any funds advanced to the Grantor pursuant to any Credit
Facilities;

“Party” means each of the Royalty Owner and the Grantor;

“PEOC” means Paramount Energy Operating Corp. in its capacity as trustee of the
Grantor and includes any successor trustee of the Grantor;

“Permitted Investments” means:

	 	(a)	 	obligations issued or guaranteed by the government of Canada
or any province of Canada or any agency thereof;
	 
	 	(b)	 	term deposits, guaranteed investment certificates,
certificates of deposit or bankers’ acceptances of or guaranteed by
any Canadian chartered bank or similar financial institution;

7

 

	 	(c)	 	short-term debt or deposits which have a rating of no lower
than A, or the equivalent thereof, as determined by Standard &
Poor’s, Moody’s Investors Service, Inc. or Dominion Bond Rating
Service Limited;
	 
	 	(d)	 	commercial paper that matures not later than one hundred and
eighty ( 180) days after the date of acquisition, and which has a
rating of no lower than A, or the equivalent thereof, as determined
by Standard & Poor’s, Moody’s Investors Service, Inc. or Dominion
Bond Rating Service Limited; and
	 
	 	(e)	 	money market instruments or funds which constitute secure
investments, as determined by the Grantor acting reasonably and
prudently;

“Permitted Royalty Deductions” means with respect to any period, the following
amounts with respect to such period:

	 	(a)	 	Production Costs;
	 
	 	(b)	 	Debt Service Costs;
	 
	 	(c)	 	Taxes;
	 
	 	(d)	 	General and Administrative Expenses;
	 
	 	(e)	 	Capital Expenditures;
	 
	 	(f)	 	any amounts paid into the Reserve;
	 
	 	(g)	 	any Permitted Royalty Deductions that are carried forward
pursuant to Section 3.4 into such period;

except to the extent that such amounts are reasonably allocable to activities
or assets used for the purpose of earning Other Revenue and except to the
extent that such amounts are funded by:

	 	(h)	 	withdrawals from the Reserve during such period;
	 
	 	(i)	 	advances made pursuant to the Credit Facilities during such
period;
	 
	 	(j)	 	Non-Deductible Crown Royalties reimbursed to the Grantor by
the Royalty Owner in respect of such period;
	 
	 	(k)	 	Deferred Royalty Purchase Payments made by the Royalty Owner
to the Grantor during such period; or
	 
	 	(l)	 	Other Revenues during such period;

“Person” shall be interpreted broadly and includes any individual, partnership,
joint venture, body corporate, association, trust, unincorporated organization,
foundation, government or

8

 

governmental authority or any jurisdiction (whether federal, provincial, state
or municipal) or any other entity or subject;

“Petroleum and Natural Gas Rights” means all of the right, title, estate and
interest, whether absolute or contingent, legal or beneficial, present or
future, vested or not, and whether or not an “interest in land”, held by the
Grantor in or to any of the following, by whatever name the same are known:

	 	(a)	 	rights to explore for, drill for, extract, win, produce,
take, save or market Petroleum Substances;
	 
	 	(b)	 	rights to a share of the production of Petroleum Substances;
	 
	 	(c)	 	rights to a share of the proceeds of, or to receive payment
calculated by reference to, the quantity or value of the production
of Petroleum Substances, other than the rights under agreements for
the sale of Petroleum Substances;
	 
	 	(d)	 	the interests set forth in Schedule A hereto;
	 
	 	(e)	 	rights to acquire any of the rights described in paragraphs
(a) through (d) of this definition; and
	 
	 	(f)	 	interest in any rights described in paragraphs (a) of (d) of
this definition;

including, without limitation, all interests and rights known as working
interests, royalty interests, overriding royalty interests, gross overriding
royalty interests, production payments, profits interests, net profits
interests, revenue interests, net revenue interests, economic interests, and
other interests, fractional or undivided, in any of the foregoing, and all
freehold, leasehold or other interests in and to Petroleum Substances to the
extent that such interests apply to the Royalty Lands and the Leases;

“Petroleum Substances” means petroleum, crude bitumen, oil sands, natural gas,
coal bed methane, natural gas liquids, related hydrocarbons and any and all
other substances, whether liquid, solid or gaseous, whether hydrocarbons or
not, produced or producible in association with any of the foregoing, including
hydrogen sulphide and sulphur;

“Probable Reserves” means those reserves which analysis of drilling,
geological, geophysical and engineering data does not demonstrate to be proved,
but where such analysis suggests the likelihood of their existence and future
recovery under current technology and existing or anticipated economic
conditions, provided that the Probable Reserves to be obtained by the
application of enhanced recovery processes shall be the increased recovery over
and above that included in Proved Reserves which can be realistically estimated
for the pool on the basis of enhanced recovery processes which can be
reasonably expected to be instituted in the future;

“Production Costs” for any period means the amount of all obligations incurred
in such period for operating, maintaining or utilizing the Properties or
equipment for the recovery of Petroleum Substances from the Properties or on
other lands with which the same are pooled or unitized

9

 

insofar as such expenditures are, pursuant to the applicable Leases, reasonably
allocable to the Grantor’s interest in the Properties, including, without
limitation:

	 	(a)	 	all amounts expended, including labour, benefits and travel
expenses, materials, supplies and services, and whether by the
Grantor or by another operator, for operating, reworking, replacing,
repairing, maintaining and utilizing wells, casing, flow lines,
pumps, treaters, dehydrators, compressors, processing facilities,
vehicles, equipment and field offices on or serving the Properties
and all costs for the creation of any petroleum and/or natural gas
unit or units in which any of the Properties are or may be included
and any other amounts (including overhead recoveries) paid to any
operator of the Properties and overhead charges of operators
(whether the Grantor or not) pursuant to applicable operating
procedures, if any;
	 
	 	(b)	 	costs of third party storage, transportation, freight, tank
car and other expenses to move Petroleum Substances produced from or
attributable to the Properties to the point where it is sold;
	 
	 	(c)	 	lessors’ royalties including Crown Royalties, overriding
royalties, net profits interests, carried interests, production
payments and other royalties, lease burdens and encumbrances which
are paid on, or in respect of, production from or attributable to
the Properties;
	 
	 	(d)	 	payments required to maintain an interest in the Properties,
including those to acquire or maintain any Surface Rights or Leases,
including without limitation, deposits, bonus payments, rentals,
delay rentals, renewal or extension fees, and royalties;
	 
	 	(e)	 	all money required to be expended to produce any Petroleum
Substances and the fair market value of any Petroleum Substances
which are supplied, in kind, by the Grantor from lands other than
the Properties, where any buyer of Petroleum Substances has prepaid
for the delivery of Petroleum Substances attributable to the
Properties or otherwise and thereafter such buyer has requested
delivery of the Petroleum Substances and the Grantor is not
reasonably able to meet delivery requirements with Petroleum
Substances produced from the Properties;
	 
	 	(f)	 	sales and use taxes and customs and excise duties and taxes
levied on Petroleum Substances produced from or attributable to the
Properties and not payable by the party purchasing such Petroleum
Substances, taking into account any adjustment thereto including
additional assessments and refunds;

10

 

	 	(g)	 	ad valorem, property, production, severance, mineral,
occupation, gross production and similar taxes and assessments,
imposed by any competent governmental authority based on or measured
by the ownership of property or the production of Petroleum
Substances or any of them or the receipt of proceeds therefrom,
taking into account any adjustment thereof including additional
assessments and refunds; and
	 
	 	(h)	 	all other taxes, rates and charges, charged, levied or rated
by any competent governmental authority on the Properties, the
production of Petroleum Substances therefrom or attributable thereto
or the revenues therefrom including without limitation any new or
additional tax or levy which may hereafter be levied or imposed on
the Properties, the production of Petroleum Substances therefrom or
attributable thereto or the revenues therefrom;

provided that the following amounts shall not be included in Production Costs:

	 	(i)	 	Taxes;
	 
	 	(j)	 	Debt Service Costs;
	 
	 	(k)	 	General and Administrative Costs;
	 
	 	(l)	 	Capital Expenditures;
	 
	 	(m)	 	any payments made to the Reserve; and
	 
	 	(n)	 	any amount that is reasonably allocable to earning Other
Revenues;

“Production Revenues” for any period means all of the Grantor’s revenues during
such period with respect to the Petroleum and Natural Gas Rights, including
without limitation the following:

	 	(a)	 	the gross proceeds from the sale of the Grantor’s Share of
Production;
	 
	 	(b)	 	income from royalties, net profits interests and other
similar interests;
	 
	 	(c)	 	the net profit or loss (which shall be a negative amount for
this purpose in the event of a loss) from Commodity Price and
Currency Swaps;
	 
	 	(d)	 	payments received in cash in the period by the Grantor for
Petroleum Substances expected to be recoverable from or attributable
to the Properties pursuant to a “take or pay” contract for the sale
of Petroleum Substances which are not taken at the time of payment
therefor, and payments made by the buyer of Petroleum

11

 

	 	 	 	Substances received in cash in the period by the Grantor in lieu of
or as a compromise for payments otherwise required to be made under
a “take or pay” contract and payments received in cash in the
period by the Grantor in consideration of a waiver or compromise of
any buyer’s obligations under a “take or pay” contract; provided
that in the event that the sales proceeds are later adjusted as
between the buyer and the seller of the Petroleum Substances, then
the Grantor and the Royalty Owner shall adjust such proceeds
likewise by way of, if possible, a set-off against the Royalty
Income or by such other reasonable means available;
	 
	 	(e)	 	all grants, incentives, rebates, or reimbursements, other
than credits or rebates or other similar amounts under applicable
income tax legislation in respect of the Properties or any
production of Petroleum Substances therefrom;
	 
	 	(f)	 	all Drilling Credits in respect of the Properties that are
received in cash; and
	 
	 	(g)	 	any amount that the Grantor determines pursuant to Section
4.4. is excess to the Reserve’s requirements and causes to be
released from the Reserve;

provided that to the extent that any “take or pay” or similar payments that
have been accounted for in Other Revenues are thereafter credited or set off
against or otherwise used to reduce the proceeds of sale of the Grantor’s Share
of Production, only the proceeds of such sale, if any, after taking such
reduction into account, shall be included in Production Revenues;

“Properties” means the interests of any nature whatsoever in Petroleum and
Natural Gas Rights, Tangibles, Miscellaneous Interests and similar interests
which the Grantor may beneficially own from time to time including, without
limitation, the Initial Assets, the Additional Assets and all other Petroleum
and Natural Gas Rights, Tangibles, Miscellaneous Interests and similar
interests which the Grantor may acquire through Acquisition or otherwise;

“Proved Reserves” means reserves estimated as recoverable with a high degree of
certainty under current technology and existing economic conditions in the case
of constant price and cost analyses, and anticipated economic conditions in the
case of escalated price and cost analyses, from that portion of a reservoir
which can be reasonably evaluated as economically productive on the basis of
analysis of drilling, geological, geophysical and engineering data, including
the reserves to be obtained by enhanced recovery processes demonstrated to be
economic and technically successful in the subject reservoir;

“Quarter” means the period from 8:00 a.m. Calgary time on the Closing Date to
8:00 a.m. Calgary time on October 1, 2002 and any period of three consecutive
Months thereafter which commences on the first day of January, April, July or
October;

“Quarterly Royalty Payment” means, in respect of a Quarter, ninety-nine percent
(99%) of the Royalty Income for such Quarter payable by the Grantor to the
Royalty Owner in accordance with Section 3.1;

12

 

“Reclamation Fund” means the fund established by the Grantor pursuant to
Section 4.1 as part of the Reserve for the purpose of providing for any future
reclamation and environmental obligations and liabilities for which the Grantor
may be liable;

“Record Date” means March 31, June 30, September 30, and December 31 in each
year in relation to the payment of the Quarterly Royalty Payment and the last
day of each Month in relation to the payment of the Monthly Royalty Payment or
such other date as may be determined by the Royalty Owner pursuant to the Trust
Indenture;

“Reserve” means the reserve established by the Grantor pursuant to Section 4.1
for the purpose of funding the payment of Production Costs for which the
Grantor may be liable, and includes the Reclamation Fund;

“Reserve Value” means, in respect of any Property at any time, the present
worth at such time of all of the estimated pre-tax net cash flows from Proved
Reserves and fifty percent (50%) of the estimated pre-tax net cash flows from
Probable Reserves as shown in the most recent independent engineering report
relating to such Property, adjusted for production since the date of the
report, using escalating price and cost assumptions, and discounted at the
internal rate of return that is equal to the Discount Rate over the life of
Proved Reserves and Probable Reserves, as determined after taking into account
any cost of any nature whatsoever associated with such Property;

“RO Facilities” has the meaning set out in Section 10.3 hereof;

“RO Lenders” has the meaning set out in Section 10.3 hereof:

“Royalty” means

	 	(a)	 	the entitlement under Section 3.1 hereof to receive the
Quarterly Royalty Payment or the Monthly Royalty Payment, as
applicable; and
	 
	 	(b)	 	the entitlement to take in kind the Royalty Share of
Production for any Quarter or any Month pursuant to and in
accordance with Section 2.5;

“Royalty Income” means, in respect of a period, the amount by which the Royalty
Revenues that accrue in such period exceed the Permitted Royalty Deductions
that accrue in such period;

“Royalty Lands” means any lands to which the Petroleum and Natural Gas Rights
comprised in the Properties relate;

“Royalty Revenues” means Production Revenues, except for Production Revenues
from the sale of any Petroleum Substances that were taken in kind by the
Royalty Owner;

“Royalty Share of Production” means ninety nine percent (99%) of the Grantor’s
Share of Production;

“Secured Party” has the meaning set out in Section 10.3 hereof;

13

 

“Special Resolution” means a resolution passed as a Special Resolution of
Unitholders under the Trust Indenture;

“Surface Rights” means all rights to use the surface of land in connection with
the Properties including, without limitation, all rights to enter upon and
occupy the surface of land on which the Tangibles and Wells are located and
rights to cross or otherwise use the surface of land for access to the
Properties;

“Swap Arrangements” means Commodity Price and Currency Swaps and Interest Rate
Swaps;

“Tangibles” means the Grantor’s interest in facilities and in all tangible
depreciable property and assets used or intended to be used in connection with
production, gathering, treatment, storage, compression, processing,
transportation, injection, removal or other operations relating to the
Petroleum and Natural Gas Rights and situated within or upon or about the lands
with which they have been pooled, including, without limitation, the tangible
equipment, if any, relating to the wells and down-hole equipment;

“Tax Act” means the Income Tax Act, Revised Statutes of Canada 1985, Chapter 1
(5th Supplement) and the regulations thereto, both as amended from time to
time;

“Taxes” means income taxes and other similar taxes or governmental charges
imposed on the Grantor;

“Third Party” means any Person other than the Grantor, the Royalty Owner or the
Trustee;

“Title and Operating Documents” means, in respect of the Properties:

	 	(a)	 	any contract or agreement pursuant to which the Grantor
derives any interest in the Properties, including without
limitation, any Lease, agreements of purchase and sale, farm-in
agreements, unit agreements and royalty agreements; and
	 
	 	(b)	 	any contract or agreement entered into in the normal course
of the oil and gas business in respect of the exploitation of
Petroleum and Natural Gas Rights or the operation of facilities,
including without limitation, joint operating agreements, unit
operating agreements, farmout agreements, pooling agreements,
royalty agreements, common stream agreements, gas processing
agreements, gas gathering agreements, agreements for the sale of
Petroleum Substances, agreements relating to Surface Rights,
agreements for the construction, ownership or operation of
facilities and agreements for the transportation of Petroleum
Substances;

“Trust Indenture” means the First Amended and Restated Trust Indenture made
effective as of the 1st day of August, 2002 between BMO Nesbitt Burns Inc., as
settlor, Computershare Trust Company of Canada, as trustee, and the Grantor, as
the same may be further amended, restated or replaced from time to time,
relating to the Royalty Owner;

“Trustee” means Computershare Trust Company of Canada in its capacity as
trustee of the Royalty Owner and includes any successor trustee of the Royalty
Owner;

14

 

“Trust Unit” means a unit of the Royalty Owner created, issued and registered
under the Trust Indenture and entitled to the benefits thereof; and

“Unitholder” means a holder of one or more Trust Units.

1.2   Definitions Incorporated by Reference

     Terms that are defined in clause 101 of the Operating Procedure and which are
not otherwise defined herein shall have the meaning herein ascribed to such
terms therein.

	1.3	 	Construction of Terms

     Words importing the singular number only shall include the plural, and vice
versa, and words importing gender shall include the masculine, feminine and
neuter genders. References in this Agreement to “this Royalty Agreement”, “this
Agreement”, “hereto”, “herein”, “hereof”, “hereby”, “hereunder” and similar
expressions shall be deemed, in the absence of express language to the
contrary, to refer to this Agreement and not to any particular Article, Section
or portion hereof and include any and every agreement or other instrument
supplemental or ancillary hereto or in implementation hereof.

1.4   Amendments to Agreements and Laws

     References herein to any agreement or instrument, including this Agreement,
shall be deemed to be a reference to the agreement or instrument as varied,
amended, modified, supplemented, or replaced from time to time and any specific
reference herein to any enactment of law shall be deemed to include reference
to such enactment as the same may be amended or re-enacted from time to time
and every statute that may be substituted therefor, and in the case of any such
amendment, re-enactment and substitution, any reference to such enactment
should be read as referring to the amended, re-enacted or substituted
provisions therefor .

1.5   References

     The table of contents and headings herein are for convenience of reference only
and shall not affect the construction or interpretation of this Agreement. A
reference herein to an Article, Section or subsection without further reference
shall be a reference to an Article, Section or subsection of this Agreement.

1.6   Choice of Law

     This Agreement shall be governed by the laws of the Province of Alberta and the
laws of Canada applicable therein and shall be construed and interpreted in
accordance therewith.

1.7   Attornment

     Any legal action or proceedings with respect to this Agreement shall be brought
in the courts of the Province of Alberta and the courts of appeal therefrom.
Each Party hereby submits and

15

 

attorns to and accepts for itself and in respect of its assets, irrevocably and
unconditionally, the jurisdiction of such courts in respect of all matters
arising out of this Agreement.

1.8   Monetary Sums

     All references herein to dollar amounts or sums of money are to lawful funds of Canada.

1.9   Accrual Method of Calculation

     Except as otherwise specifically provided in this Agreement, all amounts to be
calculated pursuant to this Agreement, including without limitation Capital
Expenditures, Debt Service Costs, Permitted Royalty Deductions, General and
Administrative Expenses, Other Revenues, Production Costs and Production
Revenues, shall be calculated on an accrual basis in accordance with GAAP,
provided that:

	 	(a)	 	costs and expenses of goods supplied, work performed or
services provided shall be treated as being incurred when the goods
are supplied, the work is performed or the services are provided;
	 
	 	(b)	 	rentals and similar payments in respect of Surface Rights,
any Lease, insurance premiums, property taxes and assessments and
amounts payable in respect of Third Party liability claims shall be
deemed to accrue when they are paid;
	 
	 	(c)	 	amounts payable on account of royalties and similar burdens
in respect of the production of Petroleum Substances, other than
sulphur stored in pads, shall be deemed to accrue in the calendar
month in which the Petroleum Substances are produced, provided that
such amounts which are payable in respect of sulphur stored in pads
shall be deemed to accrue in accordance with GAAP; and
	 
	 	(d)	 	abandonment and reclamation costs shall be deemed to accrue
as and when the abandonment and reclamation work is done.

1.10   Estimates

     In calculating Royalty Income for any period, the Grantor may, in accordance
with good industry accounting practice, estimate any amounts that may not be
definitively determined in a timely manner for the purposes of: making such
calculation, provided that any such estimate shall be reconciled with actual
results in calculating Royalty Income for the next following period.

1.11   No Duplication

     For greater certainty, it is the intention of the Parties that in calculating
the various amounts required pursuant to this Agreement, no amount shall be
counted more than once as either a deduction or inclusion.

16

 

1.12   References to Acts Performed by the a Trust

     For greater certainty, where any reference is made herein to an act to be
performed by (a) the Royalty Owner, such reference shall be construed and
applied for all purposes as if it referred to an act to be performed by the
Trustee on behalf of the Royalty Owner or by some other person duly authorized
to do so by the Trustee or pursuant to the provisions hereof; and (b) the
Grantor, such reference shall be construed and applied for all purposes as if
it referred to an act to be performed by PEOC on behalf of the Grantor or by
some other person duly authorized to do so by PEOC or pursuant to the
provisions hereof.

1.13   Tax Act

     Any reference herein to a particular provision of the Tax Act shall include a
reference to that provision as it may be renumbered or amended from time to
time. Where there are proposals for amendments to the Tax Act that have not
been enacted into law or proclaimed into force on or before the date on which
such proposals are to become effective, the Parties may take such proposals
into consideration and apply the provisions hereof as if such proposals had
been enacted into law and proclaimed into force.

ARTICLE 2

ROYALTY

2.1   Royalty Grant

     In consideration of the sum of Sixty-Four Million One Hundred Fifty-Two
Thousand Dollars to be paid in accordance with the terms of that certain
Funding Agreement between Paramount, the Grantor, the Royalty Owner of even
date herewith, together with interest on such consideration from July 1, 2002
at the annual rate of six and one half percent per annum (6.5%) until the
consideration is paid in full by the Royalty Owner, the Grantor hereby grants
to the Royalty Owner the Royalty with respect to the Initial Assets and all
other Properties that may be acquired by the Grantor subsequent to this
Agreement.

2.2   Royalty Applicable to After Acquired Properties

     The Parties acknowledge, for greater certainty, that:

	 	(a)	 	subject to Sections 5.7 through 5.10, the Grantor may acquire
Properties through Future Acquisitions, Capital Expenditures and
otherwise;
	 
	 	(b)	 	in accordance with the definitions of the terms “Properties”,
“Production Revenues”, “Production Costs” and certain other terms in
Section 1.1 hereof, the Royalty Income from any Properties so
acquired by the Grantor shall be included in the calculation of
Royalty Income without further action by the Parties hereto or any
other party; and
	 
	 	(c)	 	the Royalty Owner shall not acquire any additional interest
in the Royalty as a result of the Grantor’s acquisition of
additional Properties until the Royalty Owner pays the Deferred
Royalty Purchase Payment, if any, required respecting such

17

 

	 	 	 	acquisition, at which time the Grantor shall be deemed to dispose
of Canadian resource property with a value equal to the amount of
the Deferred Royalty Purchase Payment so made, and the Royalty
Owner shall be deemed to acquire a Canadian resource property
having the same value.

2.3   Deferred Royalty Purchase Payments

	 	(a)	 	The Royalty Owner shall pay to the Grantor as additional
consideration for the Royalty, certain amounts (the “Deferred
Royalty Purchase Payment”) in respect of Future Acquisitions and
Capital Expenditures, other than those described in paragraph
6.5(b)(iii) hereof, incurred by the Grantor in respect of Petroleum
and Natural Gas Rights, on the following terms:

	 	(i)	 	if the Grantor acquires any additional Properties
as a result of a Future Acquisition, the Royalty Owner shall
make a Deferred Royalty Purchase Payment to the Grantor in an
amount equal to ninety-nine percent (99%) of the amount of the
purchase price (including adjustments) for such additional
Properties that is allocated to Canadian resource property, to
the extent that such portion of such purchase price is not
financed with indebtedness incurred or assumed by the Grantor;
	 
	 	(ii)	 	if the Grantor designates any Capital
Expenditures made with respect to a Canadian resource property
on or before the date on which the same are incurred, the
Royalty Owner shall make a Deferred Royalty Purchase Payment
to the Grantor in an amount equal to ninety-nine percent (99%)
of the amount of such designated Capital Expenditures to the
extent that such portion of such Capital Expenditures are not
financed with indebtedness incurred or assumed by the Grantor;
	 
	 	(iii)	 	if at any time while the Royalty Owner has an
obligation to make a Deferred Royalty Purchase Payment to the
Grantor, the Grantor is indebted to the Royalty Owner, the
Deferred Royalty Purchase Payment may, at the Grantor’s
option, be set off against such indebtedness;
	 
	 	(iv)	 	if the Royalty Owner issues any Trust Units after
the Closing Date (a “Future Offering”), the Royalty Owner
shall make, if requested to do so by the Grantor, a Deferred
Royalty Purchase Payment to the Grantor in such amount as may
be specified by the Grantor, not exceeding the lesser of:

	 	(A)	 	the net proceeds of the Future
Offering after deducting, without limitation,
underwriters’ fees and legal, accounting, engineering,
professional fees and other disbursements; and
	 
	 	(B)	 	ninety-nine percent (99%) of the
principal amount of any outstanding indebtedness under
the Credit Facility which reasonably relates to the
Canadian resource property purchase price component of
any Property acquired by the Grantor by way

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	 	 	 	of Acquisition or Capital Expenditure on or before such
Future Offering with the proceeds of the Credit
Facility for which the Royalty Owner has not paid to
the Grantor a Deferred Royalty Purchase Payment.

	 	(b)	 	The Grantor, by notice in writing to the Royalty Owner at
least ten (10) days before Acquisition Costs or Capital Expenditures
are to be incurred by the Grantor, shall advise the Royalty Owner
that the Grantor proposes to make a Future Acquisition or to incur
Capital Expenditures and shall designate in such notice the portion
of the Acquisition Costs in respect of such Future Acquisition or
such Capital Expenditures, as the case may be, that shall constitute
part of the Deferred Royalty Purchase Payment.

2.4   Adjustments to Payment for Royalty

     The Initial Assets Purchase Agreement and any purchase agreement in respect of
a Future Acquisition may provide for an adjustment to the purchase price of the
Properties acquired thereunder. Such an adjustment may result in a
corresponding decrease or increase of the Acquisition Costs for such
Properties. If Acquisition Costs are decreased by such an adjustment in a case
where the Royalty Owner has made a payment pursuant to Section 2.3, the Grantor
shall pay to the Royalty Owner ninety-nine percent (99%) of the amount of such
adjustment allocated to Canadian resource properties. If the Acquisition Costs
are increased by such an adjustment, the Grantor shall be entitled to set off
ninety-nine percent (99%) of the amount of such adjustment allocated to
Canadian resource properties against any Quarterly Royalty Payment or Monthly
Royalty Payment.

2.5   Right to Take in Kind

	 	(a)	 	Subject to the Title and Operating Documents, the Royalty
Owner shall be entitled to take in kind all, but not less than all,
of the Royalty Share of Production for any Month or Quarter, only
if, prior to such Month or Quarter as the case may be:

	 	(i)	 	the Grantor is insolvent;
	 
	 	(ii)	 	the Royalty Owner has provided notice to the
Grantor, the Lenders and the RO Lenders of its intention to
take the Royalty Share of Production for such Month or Quarter
in kind not less than ninety (90) days prior to the
commencement of such Month or Quarter;
	 
	 	(iii)	 	the Royalty Owner has arranged for the sale and
transportation from the well-site of the Royalty Share of
Production to be taken in kind by the Royalty Owner;
	 
	 	(iv)	 	the Royalty Owner has provided evidence
satisfactory to the Grantor that the arrangements in respect
of the sale and transportation from the well-site of the
Royalty Share of Production to be taken in kind by the Royalty
Owner exist and can reasonably be expected to be performed;

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	 	(v)	 	the Royalty Owner covenants to be bound by and
perform all contracts applicable to the marketing and sale of
the Royalty Share of Production to be taken in kind by the
Royalty Owner;
	 
	 	(vi)	 	the Royalty Owner covenants to reimburse the
Grantor for ninety nine percent (99%) of the aggregate of
Production Costs and losses from Commodity Price and Currency
Swaps, for the period in which the Royalty Owner takes the
Royalty Share of Production in kind; and
	 
	 	(vii)	 	the Royalty Owner has provided concurrently with
the subsection 2.5(a)(ii) notice an irrevocable, assignable
documentary letter of credit which shall be:

	 	(A)	 	issued by one (1) of the five (5)
largest Canadian chartered banks;
	 
	 	(B)	 	for a term of at least one (1) year;
	 
	 	(C)	 	in an amount equal to the aggregate
of the Production Costs for the four (4) complete
Quarters immediately prior to the Month or Quarter in
which the Royalty Owner provides the subsection
2.5(a)(ii) notice, as determined from the statements
delivered by the Grantor to the Royalty Owner pursuant
to Section 3.2;
	 
	 	(D)	 	payable by one or more sight drafts,
with the only draw condition to be the certification by
the Grantor that the Royalty Owner has defaulted upon
its obligations under subsection 2.5(a)(vi); and
	 
	 	(E)	 	on terms satisfactory to the Grantor,
acting reasonably.

	 	(b)	 	Any exercise by the Royalty Owner of its entitlement to take
in kind all of the Royalty Share of Production for any Month or
Quarter shall continue for all subsequent Months or Quarters, unless
the Royalty Owner has failed to:

	 	(i)	 	comply with subsection 2.5(a)(iii) in respect of
any Month or Quarter for which the Royalty Owner has taken or
desires to take the Royalty Share of Production in kind;
	 
	 	(ii)	 	reimburse the Grantor in accordance with
subsection 2.5(a)(vi); or
	 
	 	(iii)	 	replace the letter of credit required by
subsection 2.5(a)(vii), prior to the expiry of such letter of
credit, with a letter of credit which shall be in an amount
equal to the Production Costs for the four (4) complete
Quarters immediately preceding the Month or Quarter in which
the Royalty Owner replaces such letter of credit.

	 	(c)	 	The Royalty Owner may provide notice to the Grantor of its
intention to cease to take the Royalty Share of Production in kind
not less than ninety (90) days prior to the end of any Month or
Quarter in which the Royalty Owner is taking the

20

 

	 	 	 	Royalty Share of Production in kind, and the Royalty Owner shall so
cease to take the Royalty Share of Production in kind on the date
stipulated in such notice.
	 
	 	(d)	 	The Grantor shall cause any Royalty Share of Production that
the Royalty Owner takes in kind to be delivered to the Royalty Owner
at the well site from which such Royalty Share of Production is
produced.

2.6   Royalty Share of Production not Taken in Kind

     The Royalty Owner shall not own any of the Grantor’s Share of Production,
except for the Royalty Share of Production that the Royalty Owner elects to
take in kind pursuant to and in accordance with Section 2.5.

2.7   Petroleum Substances Lost or Used in Operations

     The Royalty shall not apply to any of the Grantor’s Share of Production that is
lost, consumed or used otherwise in respect of any operations of any nature
whatsoever.

2.8   Not an Interest in Land

	 	(a)	 	The Royalty shall not:

	 	(i)	 	be a covenant attached to or running with the
Royalty Lands;
	 
	 	(ii)	 	attach to or form part of any Lease; and
	 
	 	(iii)	 	constitute an interest in land or in real
property.

	 	(b)	 	Ownership of the Properties shall remain vested in the
Grantor.

2.9   Reimbursement of Non-Deductible Crown Royalties.

     The Royalty Owner shall reimburse to the Grantor, ninety nine percent (99%) of
all Non-Deductible Crown Royalties payable by the Grantor in respect of the
Properties or the production of Petroleum Substances therefrom, provided that
the Grantor may at its sole discretion elect to waive its right to any part of
or all of such reimbursement. The Grantor shall be entitled to set off such
reimbursable amounts against any Quarterly Royalty Payment or Monthly Royalty
Payment.

ARTICLE 3

ACCOUNTING

3.1   Payments from Grantor to Royalty Owner

	 	(a)	 	Subject to Section 3.1(b) hereof, at the end of each Quarter,
the Grantor shall calculate and pay the Quarterly Royalty Payment to
the Royalty Owner on the fifteenth (15th) day of the Month following
the end of such Quarter, or the next following Business Day if such
day is not a Business Day.

21

 

	 	(b)	 	If at any time after October 1, 2002 the Grantor’s Board of
Directors so resolves, at the end of each Month the Grantor shall
calculate the Monthly Royalty Payment and pay such Monthly Royalty
Payment to the Royalty Owner on the fifteenth (15th) day of the
month next following or on the next Business Day if such day is not
a Business Day. If the Grantor’s Board of Directors resolves to
have the Grantor pay the Monthly Royalty Payment as provided for
above, it may at any time thereafter resolve to have the Grantor
return to the payment of the Quarterly Royalty Payment as provided
for in Section 3.1(a) above as at the commencement of a Quarter in
respect of which no Monthly Royalty Payment has been made. For
greater certainty, there shall be no Quarterly Royalty Payment for
any period in respect of which the Grantor calculates and pays the
Monthly Royalty Payment and vice-versa.

3.2   Statements

     Each Quarterly Royalty Payment or Monthly Royalty Payment shall be accompanied
by a statement setting forth such information as the Royalty Owner may from
time to time reasonably request, including without limitation:

	 	(a)	 	the amount of the Quarterly Royalty Payment or Monthly
Royalty Payment;
	 
	 	(b)	 	all calculations used in determining the Quarterly Royalty
Payment or Monthly Royalty Payment;
	 
	 	(c)	 	the Grantor’s Share of Production, itemized by product, that
was sold during such Quarter or Month, except for any Royalty Share
of Production that the Royalty Owner took in kind during such
Quarter or Month;
	 
	 	(d)	 	the Production Revenues and Other Revenues for such Quarter
or Month; and
	 
	 	(e)	 	an itemized list of the Production Costs and Permitted
Royalty Deductions for such Quarter or Month.

3.3   Overpayment

     If the payment made by the Grantor on account of the Royalty for a Quarter or
Month is in excess of the actual amount of the Quarterly Royalty Payment for
such Quarter or Monthly Royalty Payment for such Month, as the case may be, the
Grantor shall be entitled to set off the amount of the excess against any
Quarterly Royalty Payment payable in subsequent Quarters or Monthly Royalty
Payment payable in subsequent Months.

3.4   Carry Forward of Permitted Royalty Deductions

     If the Permitted Royalty Deductions for a Quarter or Month are in excess of the
Royalty Revenues for such Quarter or Month, there shall be no Quarterly Royalty
Payment or Monthly Royalty Payment for such Quarter or Month, as the case may
be, and the amount of the excess Permitted Royalty Deductions shall be carried
forward and treated as Permitted Royalty Deductions in the following Quarter or
Month.

22

 

3.5   Collection of Production Revenues and Other Revenues

     The Grantor shall use all commercially reasonable efforts to obtain the payment
of Production Revenues and Other Revenues, excluding Production Revenues from
the Royalty Share of Production that the Royalty Owner took in kind. Provided
that the Grantor makes such commercially reasonable efforts, the Grantor shall
have no liability to the Royalty Owner respecting such revenues in the event
that the Grantor fails to collect same.

3.6   Payment of Permitted Royalty Deductions

     Provided that such payment does not result in any adverse income tax
consequences to the Grantor, the Royalty Owner or the Unitholders, the Grantor
may use Other Revenues to pay amounts that would, but for such payment, be
included in Permitted Royalty Deductions.

3.7   Payments from Royalty Owner to Grantor

     The Royalty Owner shall pay any amounts payable by the Royalty Owner to the
Grantor pursuant to this Agreement as soon as reasonably practicable after the
receipt of an invoice by the Royalty Owner from the Grantor for such amounts.

ARTICLE 4

RESERVE AND RECLAMATION FUND

4.1   Establishment

     The Grantor shall establish a reserve (the “Reserve”) that may be used to fund
the payment of Production Costs and any well bore, facility abandonment and
environmental and reclamation obligations and liabilities for which the Grantor
may be liable. The Grantor shall also establish a specific fund (the
“Reclamation Fund”) within the Reserve for the purposes of funding any such
well bore, facility abandonment, environmental and reclamation obligations and
liabilities. The Grantor shall own the Reserve, including the Reclamation
Fund, and the Royalty Owner shall, subject to Section 4.4, have no interest
therein. Interest and other amounts earned from the investment of the Reserve
shall form part of the Reserve.

4.2   Contributions to the Reserve

     The Grantor shall pay into the Reserve such amounts as the Grantor, acting
reasonably and in accordance with prudent oil and gas industry practices,
designates from time to time, as being required to fund the Reserve and which
shall be paid to the Reserve prior to the fifteenth (15th) day of the second
Month following the end of the Quarter in which the Grantor makes such a
designation.

4.3   Use of Reserve and Reclamation Fund

	 	(a)	 	Subject to section 10.3 hereof, the Grantor shall use the
Reserve only for the purposes designated in this Article 4 and shall
not use the Reserve in any other manner whatsoever. The Grantor
may:

23

 

	 	(i)	 	deposit the funds of the Reserve in one or more
bank accounts;
	 
	 	(ii)	 	commingle the funds of the Reserve with any other
funds; and
	 
	 	(iii)	 	invest the funds of the Reserve in Permitted
Investments.
	 
	 	(b)	 	Subject to this Article 4, the Reclamation Fund shall only be
used to pay future well bore, facility abandonment, environmental
and reclamation obligations and liabilities for which the Grantor
may be liable.

4.4   Reduction and Termination of Reserve

	 	(a)	 	In the event that the Grantor determines, acting reasonably
and in accordance with prudent oil and gas industry practices, that
the Reserve contains an amount that is in excess of its reasonably
foreseeable requirements, the Grantor may withdraw such amount from
the Reserve, and include such amount in Production Revenues for the
period during which it is withdrawn.
	 
	 	(b)	 	When the term of this Agreement expires pursuant to
subsection 7.1(a), the funds in the Reserve shall be used to pay all
obligations and liabilities of the Grantor (whether then due or
thereafter becoming due) incurred in the business or affairs of the
Grantor while otherwise complying with the terms hereof, the Trust
Indenture and any other related agreements and when, in the
reasonable opinion of the Grantor, all such obligations and
liabilities of the Grantor have been paid, the Reserve (including
the Reclamation Fund) shall be collapsed and the remainder of the
funds in the Reserve, up to an amount equal to ninety-nine percent
(99%) of such amount, shall be paid to the Royalty Owner, provided
that such payment to the Royalty Owner does not result in any
material adverse income tax consequences to the Grantor, the Royalty
Owner or the Unitholders, and the balance of the funds in the
Reserve, if any, shall be retained by the Grantor.

4.5   Reclamation Trust

     The Grantor and the Royalty Owner covenant that if changes are made to the Tax
Act so as to permit the formation of a vehicle which:

	 	(a)	 	has characteristics similar to those of a mining reclamation
trust, as defined in the Tax Act;
	 
	 	(b)	 	may be used to secure or otherwise provide funding for any
well bore, facility abandonment, environmental or reclamation
obligations and liabilities in respect of the Properties for which
the Grantor may be liable; and
	 
	 	(c)	 	would have beneficial income tax consequences for the
Grantor, as determined by the Grantor acting reasonably;

then:

24

 

	 	(d)	 	the Grantor may cause such a vehicle to be formed and shall
control such vehicle;
	 
	 	(e)	 	the amount contained in the Reclamation Fund at the time of
the formation of such vehicle shall immediately be paid into such
vehicle;
	 
	 	(f)	 	after the formation of such vehicle, any amounts which would
have been paid into the Reclamation Fund pursuant to this Article 4
shall be paid directly into such vehicle; and
	 
	 	(g)	 	after the formation of such vehicle, for the purpose of
computing the Royalty, payments to or from such vehicle shall be
deemed to be payments to or from the Reserve.

ARTICLE 5

OPERATIONS

5.1   General

     Subject to the provisions of the Title and Operating Documents and the
Grantor’s rights and obligations in respect of each agreement thereunder, the
Grantor shall use all reasonable efforts such that:

	 	(a)	 	operations on the Royalty Lands and lands pooled or unitized
therewith for the recovery of Petroleum Substances and the operation
of the Tangibles are conducted in a good and workmanlike manner, in
accordance with good oilfield and engineering practice and in
compliance with all applicable statutes, regulations, permits and
governmental approvals;
	 
	 	(b)	 	all of its duties and obligations under the Title and
Operating Documents are diligently and promptly performed and all
amounts payable as rental, royalty or similar charges from time to
time due in respect of the Properties are paid and all other actions
as may be reasonably necessary to maintain the Title and Operating
Documents in good standing at all times are taken, subject to the
terms and provisions hereof; and
	 
	 	(c)	 	all Surface Rights needed for the proper operation of the
Properties and Tangibles are acquired and maintained in good
standing and all taxes, rates, assessments and other amounts from
time to time payable in respect of the Properties are promptly paid.

5.2   No Obligation to Develop

     Nothing contained in this Agreement shall impose any obligation, expressed or
implied, upon the Grantor to explore or develop the Royalty Lands.

25

 

5.3   Amendment and Waiver of Provisions in Title and Operating Documents

     The Grantor covenants to and in favour of the Royalty Owner that, except as
provided in Section 9.1, the Grantor shall not, without the written consent of
the Royalty Owner, which consent shall not be unreasonably withheld or delayed,
agree to the amendment or termination of any Title and Operating Documents or
waive or consent to a departure from the performance by any Person of that
Person’s obligations pursuant to any Title and Operating Documents, where such
amendment, waiver or consent to departure may reasonably be expected to have a
material, adverse effect on the Royalty or the rights and obligations of the
Royalty Owner in respect of the Royalty, provided, however, that acts or
omissions by any Person, including operators, beyond the reasonable control of
the Grantor and without the specific authorization of the Grantor, shall not
constitute a breach of this Section 5.3.

5.4   Rights and Obligations

     Except for the Royalty Owner’s rights and obligations under Section 2.5 with
respect to the Royalty Share of Production which it elects to take in kind, as
between the Royalty Owner and the Grantor, the Grantor shall have exclusive
control and authority over the development and recovery of Petroleum Substances
from the Royalty Lands and lands pooled or unitized therewith, including,
without limitation, control over all decisions in respect of whether, when and
how to drill, complete, equip, produce, suspend, abandon and shut-in wells and
whether to elect to convert royalty interests to working interests. The
Royalty Owner shall not be entitled to any interest in the Properties or the
Title and Operating Documents and shall not be liable for any of the duties or
obligations arising under the Title and Operating Documents or in connection
with the Acquisition or operation of the Properties, except as set forth in
subsections 2.5(a)(iii) and 2.5(a)(vi).

5.5   Marketing

     The Grantor shall act reasonably, and in accordance with prudent oil and gas
industry practices, to arrange for the sale of the Grantor’s Share of
Production for the best prices and on the best terms as are reasonably
available. Subject to the foregoing, the Grantor shall have complete
discretion as to the terms, conditions and length of any contract entered into
for the sale of the Grantor’s Share of Production. The Grantor shall not be
responsible for any loss or alleged loss that may occur by reason of any change
in economic or political circumstances or otherwise.

5.6   Additional Title and Operating Documents

     Provided that the Grantor acts reasonably and in accordance with prudent oil
and gas industry practices, the Grantor shall have the right to enter into and,
subject to Section 5.3, amend Title and Operating Documents, from time to time,
on such terms and conditions as it considers appropriate in its sole
discretion.

5.7   Future Acquisitions

	 	(a)	 	Subject to subsection 5.7(b) hereof, the Grantor shall make
no Future Acquisition unless:

26

 

	 	(i)	 	the Properties that are the subject of such
Future Acquisition have a Reserve Value that is twenty percent
(20%) or less of the Reserve Value of all Properties; or
	 
	 	(ii)	 	the Grantor’s Board of Directors determines that
such Future Acquisition, or class of Future Acquisitions into
which such Future Acquisition falls, is in the best interests
of each of the Grantor and the Royalty Owner.
	 

	 	(b)	 	The Grantor’s Board of Directors may provide and amend from
time to time the criteria pursuant to which the Grantor may make
Future Acquisitions, including for greater certainty, the provisions
of subsection 5.7(a).

5.8   Capital Expenditures

     The Grantor may approve and fund Capital Expenditures reasonably required to
maintain or improve production from the Properties and such other Capital
Expenditures as are approved from time to time either specifically or by
general policy of the Grantor’s Board of Directors.

5.9   Borrowing

     The Grantor may:

	 	(a)	 	borrow funds and grant guarantees pursuant to the Credit
Facilities to finance Future Acquisitions, Capital Expenditures or
other financial obligations or encumbrances in respect of the
Properties or to provide working capital or meet any other
requirement for funds approved either specifically or by general
policy of the Grantor’s Board of Directors; and
	 
	 	(b)	 	grant guarantees, provide indemnities, and otherwise act as
surety of the Royalty Owner in respect of the RO Facilities and
grant security on the Properties in priority to the Royalty in
accordance with Section 10.3.

5.10   Costs of Tangibles and Miscellaneous Interests

     The cost of Tangibles and Miscellaneous Interests comprising any Properties to
be acquired pursuant to a Future Acquisition shall be paid for by the Grantor
utilizing its own working capital or funds borrowed by it for such purposes
pursuant to the Credit Facilities.

ARTICLE 6

DISPOSITIONS

6.1   Restrictions on Disposition of Properties

     Except as permitted by Article 9 and Sections 5.9, 6.2, 6.3, 6.7, 10.1 and
10.3, the Grantor shall not sell, assign, transfer, convey, mortgage, pledge,
charge, grant a security interest in or otherwise dispose of or encumber any
interest in the Properties.

27

 

6.2   Dispositions of Tangibles and Miscellaneous Interests

     Notwithstanding anything in this Agreement, the Grantor, acting reasonably and
in accordance with prudent oil and gas industry practices, shall be entitled
to:

	 	(a)	 	dispose of Tangibles and Miscellaneous Interests which are
not required to exploit the Petroleum and Natural Gas Rights
comprised in the Properties; and
	 
	 	(b)	 	license geological, seismic and similar data comprised in the
Properties on such terms and conditions as the Grantor considers
appropriate.

6.3   Dispositions of Petroleum and Natural Gas Rights

     Notwithstanding anything in this Agreement, the Grantor, acting reasonably and
in accordance with prudent oil and gas industry practices, shall be entitled to
sell its interest in Petroleum and Natural Gas Rights comprised in the
Properties, either by themselves or together with interests in related
Tangibles and Miscellaneous Interests, and the Royalty Owner shall concurrently
sell the portion of the Royalty that is calculated with reference to production
from or otherwise relates to such interests, provided that each of the
following criteria is satisfied with respect to such sale:

	 	(a)	 	the Grantor is of the reasonable opinion that such sale is in
the best interests of the Royalty Owner;
	 
	 	(b)	 	the Grantor’s Board of Directors has approved such sale,
provided that such approval shall only be required in the event that
the Properties that are the subject of such sale have a Reserve
Value that is greater than twenty percent (20%) of the Reserve Value
of all Properties; and
	 
	 	(c)	 	the Unitholders have approved such sale by Special
Resolution, provided that such approval shall only be required in
the event that the Properties that are the subject of such sale have
a Reserve Value that is greater than fifty percent (50%) of the
Reserve Value of all Properties.

6.4   Merger of Interests On Concurrent Disposition

     Upon the date of completion of any Concurrent Disposition, the interest in the
portion of the Royalty sold by the Royalty Owner on such Concurrent Disposition
shall merge in the interest in the Properties sold by the Grantor in such
Concurrent Disposition, and such interest in the Royalty shall terminate.

6.5   Proceeds of a Concurrent Disposition

	 	(a)	 	Subject to Section 10.4, if a sale of Properties involves a
sale of Petroleum and Natural Gas Rights comprised therein and
constitutes a Concurrent Disposition, ninety nine percent (99%) of
the net proceeds allocated to such Petroleum and Natural Gas Rights
under the purchase agreement in respect of such Concurrent
Disposition shall be allocated to the interests in the Royalty sold
by the Royalty Owner in such Concurrent Disposition and one percent
(1%) of the net proceeds

28

 

	 	 	 	allocated to such Petroleum and Natural Gas Rights under the
purchase agreement in respect of such Concurrent Disposition shall
be allocated to the interests in Petroleum and Natural Gas Rights
sold by the Grantor in such Concurrent Disposition;
	 
	 	(b)	 	The Grantor shall hold the proceeds of sale allocated to the
interests in the Royalty pursuant to subsection 6.5(a) in trust for
the Royalty Owner, shall invest such proceeds of sale in Permitted
Investments and shall, at its option:

	 	(i)	 	pay to the Royalty Owner such proceeds of sale,
and interest and other income received in respect thereof, or
from time to time part thereof, with, but not as part of, a
Monthly Royalty Payment or Quarterly Royalty Payment, as the
case may be;

	 	(ii)	 	use such proceeds of sale, and interest and other
income received in respect thereof, or from time to time part
thereof, to fund on behalf of the Royalty Owner the portions
of the Deferred Royalty Purchase Payment payable by the
Royalty Owner pursuant to Section 2.3 in respect of Future
Acquisitions; or
	 
	 	(iii)	 	use such proceeds of sale, and interest and
other income received in respect thereof, or from time to time
part thereof, to make Future Acquisitions or incur Capital
Expenditures.

6.6   Concurrent Disposition Documentation

     In any Concurrent Disposition, the Royalty Owner, upon request from and as
reasonably required by the Grantor, shall do all acts and things and execute
and deliver to the Grantor any document or instrument required by the Grantor
to effect the disposition of any interest comprised in such Concurrent
Disposition.

6.7   Merger upon Farmout

     Notwithstanding anything in this Agreement, the Grantor shall be entitled to
enter into farmout agreements with any Person in respect of the Petroleum and
Natural Gas Rights comprised in the Properties, whereby such Person may acquire
an interest in such Petroleum and Natural Gas Rights in exchange for the
payment of capital costs, or other consideration, incurred with a view to
exploit such Petroleum and Natural Gas Rights. Upon the date on which any
Person earns any interest in the Petroleum and Natural Gas Rights comprised in
the Properties pursuant to such a farmout agreement, the interest in the
portion of the Royalty to the extent it is calculated with reference to
production from or otherwise relates to such Petroleum and Natural Gas Rights
shall merge in the interest in such Petroleum and Natural Gas Rights and such
interest in the Royalty shall thereupon terminate. Any interest retained by or
acquired by the Grantor pursuant to such farmout agreements shall form part of
the Properties and be subject to the Royalty.

29

 

ARTICLE 7

TERM OF AGREEMENT

7.1   Term

	 	(a)	 	The term of this Agreement shall commence on the date hereof
and shall continue for so long as there are Properties to which the
Royalty applies or the Grantor holds any proceeds of sale from
Properties that have been allocated to the interests in the Royalty.
	 
	 	(b)	 	Upon the expiration of the term of this Agreement pursuant to
subsection 7.l(a), the Grantor and the Royalty Owner shall have no
further obligations or liabilities under this Agreement except for:

	 	(i)	 	any obligations or liabilities of the Grantor or
the Royalty Owner hereunder which are then accrued and
unfulfilled; and
	 
	 	(ii)	 	the obligations and liabilities of the Grantor
and the Royalty Owner in respect of Articles 8, 12 and 14 and
Sections 2.4, 4.4 and 10.4, which shall survive the expiration
of such term and continue in full force and effect.

ARTICLE 8

BOOKS AND RECORDS

8.1   Examination

	 	(a)	 	During the term of this Agreement and for a period of two (2)
years after the expiration of the term hereof pursuant to subsection
7.1(a), the Grantor shall maintain complete books and records in
respect of:

	 	(i)	 	the Royalty;
	 
	 	(ii)	 	the quantity of the Grantor’s Share of Production
sold by the Grantor;
	 
	 	(iii)	 	the quantity of the Grantor’s Share of
Production that was lost, consumed or used otherwise in
respect of any operations of any nature whatsoever; and
	 
	 	(iv)	 	all calculations made by the Grantor to determine
the amount of payments made on account of the Royalty.

	 	(b)	 	The Royalty Owner shall have the right at all reasonable
times during business hours to inspect such books and records to the
extent reasonably necessary to verify the amounts paid or payable
hereunder in respect of the Royalty.

30

 

8.2   Audit

     Upon notice to the Grantor, the Royalty Owner shall have the right to audit the
books and records referred to in Section 8.1 within the two (2) year period
that next follows the end of the calendar year to which such books and records
relate. The costs of any such audit shall be borne by the Royalty Owner. Any
claims of discrepancies disclosed by such audit shall be made in writing to the
Grantor within two (2) months of the completion of such audit. The Grantor
shall respond to any such claims within six (6) months of the receipt of such
claims. If the Grantor is unable to respond to the claims during the six (6)
month period, one (1) extension of three (3) months shall be allowed if
requested in writing by the Grantor within such six (6) month period.

8.3   Confidentiality

     The Royalty Owner shall keep all information provided to it pursuant to this
Agreement (including, without limitation, information made available to it in
connection with any audit, examination or inspection conducted by the Royalty
Owner pursuant to this Article 8) strictly confidential, and shall not make any
disclosure with respect to same except:

	 	(a)	 	to its officers, directors and employees, contractors,
lenders, and its and their professional advisors to the extent
necessary for the implementation of this Agreement, the RO
Facilities or any other agreement contemplated hereby, on a
confidential basis;
	 
	 	(b)	 	to the extent reasonably necessary for the enforcement of
this Agreement;
	 
	 	(c)	 	in connection with any legal proceedings hereunder;
	 
	 	(d)	 	when ordered to do so by a Court of competent jurisdiction;
and
	 
	 	(e)	 	information which is or becomes publicly available through no
act or omission of the Royalty Owner, or which becomes available to
the Royalty Owner, with no confidentiality restrictions attached
thereto, from a source other than the Grantor.

8.4   Extension of Time under Limitations Act

     The two (2) year period for seeking a remedial order under section 3(1)(a) of
the Limitations Act (Alberta) as amended from time to time, for any claim (as
defined in that Act) arising in connection with this Agreement is extended to:

	 	(a)	 	two (2) years after the time this Agreement permitted that
audit to be performed for claims disclosed by an audit; and
	 
	 	(b)	 	four (4) years for all other claims.

31

 

ARTICLE 9

POOLING, UNITIZATION, SURRENDER AND ABANDONMENT

9.1   Pooling and Unitization

     Notwithstanding anything in this Agreement, the Grantor shall have full right,
power and authority to pool or unitize any of the Petroleum and Natural Gas
Rights comprised in the Properties with any other Petroleum and Natural Gas
Rights without the prior consent of the Royalty Owner, provided that the
Grantor, acting in a reasonable and prudent manner, determines that the pooling
or unitization and the terms thereof are in accordance with prudent oil and gas
industry practises.

9.2   Surrender

     Notwithstanding anything in this Agreement and subject to the Title and
Operating Documents, the Grantor shall be entitled to surrender any Lease, in
whole or in part, to the lessor thereunder without the prior consent of the
Royalty Owner, provided that the Grantor, acting reasonably and in accordance
with prudent oil and gas industry practises determines that all of the wells
located on the lands subject to such Lease are incapable of producing Petroleum
Substances in commercially feasible quantities. In respect of any Lease, this
Agreement and the Royalty shall apply only to matters that occur prior to the
time of surrender of such Lease and shall not apply to any matters that occur
from and after the time of such surrender.

9.3   Abandonment

     Notwithstanding anything in this Agreement, the Grantor shall have, in respect
of the Properties, full right, power and authority to authorize the abandonment
of any well without the prior consent of the Royalty Owner, provided that the
Grantor, acting reasonably and in accordance with prudent oil and gas industry
practises, determines that such well is incapable of producing Petroleum
Substances in commercially feasible quantities. In respect of any Well, this
Agreement and the Royalty shall apply only to matters that occur prior to the
time of abandonment of such Well and shall not apply to any matters that occur
from and after the time of such abandonment.

ARTICLE 10

ASSIGNMENT

10.1   Restrictions on Assignment

     Except as permitted by Section 10.3, neither the Grantor nor the Royalty Owner
shall sell, assign, transfer, convey, mortgage, pledge, charge, or grant (in
this Section 10.1, an “Assignment”) any security interest in, or otherwise
dispose of or encumber (in this Section 10.1, an “Encumbrance”) any interest in
this Agreement, unless the written consent to any such Assignment or
Encumbrance is first obtained from the non-disposing or non-encumbering Party,
as the case may be, which consent shall not be unreasonably withheld. No such
Assignment or Encumbrance shall be effective against the non-assigning or
non-encumbering Party unless an agreement satisfactory to the non-assigning or
non-encumbering Party, acting reasonably, is first executed by:

32

 

	 	(a)	 	each Party making such Assignment or Encumbrance;
	 
	 	(b)	 	the Person that is the grantee of such Assignment or
Encumbrance; and
	 
	 	(c)	 	the non-assigning or non-encumbering Party.

     In such agreement, the Person that is the grantee of such Assignment or
Encumbrance shall covenant to be bound by any of the terms and conditions of
this Agreement that may apply to any interest transferred by such Assignment or
Encumbrance.

10.2   Multiple Royalty Owners

     Notwithstanding that more than one Person may beneficially own a portion of the
Royalty, the Grantor shall be entitled to communicate exclusively with the
Royalty Owner in respect of any matter arising pursuant to this Agreement, and
to deliver to the Royalty Owner any payment, statement, designation, notice or
any similar type of communication required hereunder.

10.3   Grant and Assignment of Security

	 	(a)	 	The Parties acknowledge that:

	 	(i)	 	the Royalty Owner shall enter into credit
facilities with its lenders (the “RO Lenders”) from time to
time pursuant to which the RO Lenders shall provide various
forms of credit arrangements and accommodations, most of which
shall be for the direct or indirect benefit of the Grantor and
some of which (such as commodity price swaps) may be entered
into directly with the Grantor (such credit arrangements and
accommodations collectively called the “RO Facilities”);
	 
	 	(ii)	 	the RO Facilities shall be secured by, inter
alia, guarantees and indemnities provided by the Grantor and
the Grantor’s obligations thereunder shall be secured by way
of security interests (collectively, together with any
subordination or postponement agreements entered into by the
Grantor with, inter alia, the RO Lenders, called the “Grantor
Security Interests”) granted by the Grantor in all of the
Grantor’s assets charged by such Security Interests, which may
include without limitation the Properties, the Reserve and
this Agreement (the “Collateral”);
	 
	 	(iii)	 	the terms and conditions of the RO Facilities
and the Grantor Security Interests may contain limitations and
restrictions upon the Parties with respect to this Agreement,
the Collateral and the Royalty including, without limitation,
upon the ability of the Parties to amend this Agreement,
assign their rights hereunder in whole or in part, dispose of
the Properties in whole or in part and the use of the proceeds
thereof, and the use of the Reserve;
	 
	 	(iv)	 	the actions of the Parties and their relationship
pursuant to this Agreement shall be subject to the provisions
of the RO Facilities and the Grantor

33

 

	 	 	 	Security Interests, to the extent so provided therein, and to
the extent of a conflict between the provisions of this
Agreement and the provisions of the RO Facilities or the
Grantor Security Interests, the latter shall govern; and
	 
	 	(v)	 	to the extent provided for therein, the Grantor
Security Interests shall at all times be in priority to and
paramount to the Royalty, including for greater certainty the
grant of the Royalty in respect of any future Properties.

	 	(b)	 	Notwithstanding any other provision of this Agreement:

	 	(i)	 	each of the Parties shall be entitled to
mortgage, pledge, charge, grant a security interest in,
postpone and subordinate their rights respecting or otherwise
encumber any of the Collateral to secure any present or future
obligation or liability of the Royalty Owner or Grantor in
respect of or in relationship to the RO Facilities, or of the
Grantor that may arise pursuant to the Credit Facilities or
Swap Arrangements, including for greater certainty any
guarantees, indemnities or security interests required of the
Grantor in connection with the Credit Facilities;
	 
	 	(ii)	 	any Lender, or RO Lender, or any receiver,
receiver-manager, enforcement agent or any similar Person
appointed by an RO Lender or Lender (each a “Secured Party”)
enforcing or realizing upon any encumbrance or security
interest that was granted by the Grantor in respect of any
Collateral or by the Royalty Owner in respect of this
Agreement or the Royalty, shall be entitled to sell, assign or
otherwise dispose of in whole or in part (A) any such
encumbrances or security interests or (B) any of such
Collateral;

10.4   Enforcement of Security

     If a Secured Party enforces its rights and remedies in respect of any mortgage,
pledge, charge, security interest or other encumbrance or Grantor Security
Interest granted by the Grantor against the Properties or any of them and such
Secured Party sells, assigns or otherwise disposes of the Properties, or any of
them, such sale, assignment or other disposition shall constitute a Concurrent
Disposition for the purposes of this Agreement and any surplus proceeds of such
sale, assignment or other disposition remaining after the liabilities and
obligations secured thereby are indefeasibly satisfied and discharged shall
constitute proceeds of such Concurrent Disposition and shall be dealt with in
accordance with Section 6.5.

10.5   Dispositions Subject to This Agreement

     Notwithstanding anything in this Agreement, if either Party assigns, sells,
mortgages, pledges, charges, transfers, conveys, grants any security interest
in, encumbers or otherwise disposes of any interest in this Agreement (other
than to a Lender or pursuant to any Grantor Security Interest, or to any Person
acquiring an interest in any Properties pursuant to an enforcement or
realization thereof), then each Party hereto shall adopt the position in any
matter arising pursuant to this Agreement, that the Person (other than a
Lender, any RO Lender, any Secured Party or

34

 

any Person acquiring an interest in any Properties pursuant to an enforcement
or realization of security interests by any of them) that is the grantee of
such disposition is subject to the terms and conditions of this Agreement which
are applicable to any interest transferred by such disposition.

ARTICLE 11

INSURANCE

11.1   Maintenance

     The Grantor shall obtain and maintain property damage and third party liability
insurance coverage to provide protection for the Properties that is at or above
industry standards and which, in any event, shall provide insurance coverage
for property damage, general liability and, where appropriate in the reasonable
opinion of the Grantor, business interruption. Such insurance shall be
maintained with reputable insurers and in such amounts as the Grantor, in its
reasonable opinion, determines to be appropriate, having regard to insurance
maintained pursuant to the Title and Operating Documents and normal oil and gas
industry standards in Canada.

ARTICLE 12

NOTICES AND PAYMENTS

12.1   Addresses for Service and Payments

     All payments in respect of the Royalty shall be paid or tendered to the Royalty
Owner at its address for notices specified herein, or at such other place or
depository as the Royalty Owner may specify in a written notice delivered to
the Grantor, provided that no change in the place at which payments in respect
of the Royalty are to be paid or tendered shall be effective unless thirty (30)
days have elapsed after the date on which the Grantor received such written
notice.

12.2   Delivery and Deemed Receipt of Notices

	 	(a)	 	Notwithstanding anything in this Agreement, any notice,
designation, statement or similar communication required by or
permitted in this Agreement shall be in writing;
	 
	 	(b)	 	Any notice, designation, statement or similar communication
may be served upon the Party for whom such communication was
intended by causing such communication to be delivered:

	 	(i)	 	to the address for service, as specified herein,
of such Party, during a Business Day and during the usual
business hours of such Party; or
	 
	 	(ii)	 	by telefacsimile or any similar method in which
printed documents can be electronically transmitted and
reproduced, to the telefacsimile number for service, as
specified herein, of such Party, during a Business Day and
during the usual business hours of such Party;

35

 

	 	(c)	 	Any notice, designation, statement or communication delivered
in accordance with either subsection 12.2(b)(i) or 12.2(b)(ii) shall
be deemed to have been received by the Party for whom such
communication was intended on the Business Day on which such
communication was delivered; and
	 
	 	(d)	 	Any notice, designation, statement or communication delivered
in a manner that is not in accordance with either subsection
12.2(b)(i) or 12.2(b)(ii) shall be deemed to have been received by
the Party for whom such communication was intended on the first
Business Day that follows the day on which such communication was
actually delivered to such Party.

12.3   Addresses and Telefacsimile Numbers for Service

	 	(a)	 	The address and telefacsimile number for service of each of
the Grantor and the Royalty Owner for any notice, designation,
statement or similar communication required by or permitted in this
Agreement shall be:

	 	(i)	 	the Grantor:

	 	Paramount Energy Operating Corp.

As Trustee of Paramount Operating Trust

#500, 630 – 4th Avenue S.W.

Calgary, Alberta

T2P 0J9

Attention: The President

Facsimile: (403) 269-4444

	 	(ii)	 	the Royalty Owner:

	 	Computershare Trust Company of Canada

#710, 530 – 8th Avenue S.W.

Calgary, Alberta

T2P 3S8

Calgary, Alberta

Attention: Manager, Corporate Trust Department

Facsimile: (403) 267-6598

12.4   Change of Address

     Either Party may change its address or telefacsimile number for service by
specifying such change and the new address or telefacsimile number for service,
as the case may be, in a written notice delivered to the other Party in
accordance with Section 12.2.

36

 

ARTICLE 13

MISCELLANEOUS

13.1   Enurement

     This Agreement shall enure to the benefit of and be binding upon each Party and
their respective successors and permitted assigns.

13.2   Waivers in Writing

     No waiver by either Party of any breach of any of the covenants, terms and
conditions contained herein shall be effective or be binding upon either Party
unless such waiver is expressed in writing. Any such waiver so expressed shall
not limit or affect the waiving Party’s rights in respect of any breach, other
than the breach for which the waiver was intended to apply.

13.3   Time of Essence

     Time is of the essence in this Agreement.

13.4   No Partnership

     Nothing herein shall be construed as creating a partnership and no Party shall
have any partnership rights or liabilities hereunder or in connection herewith.

13.5   Severability

     The terms and provisions of this Agreement shall be severable in the event that
a Court of competent jurisdiction rules that any term or provision hereof is
either unenforceable or invalid. Each Party agrees that the unenforceability
or invalidity of any one or more of the terms or provisions of this Agreement
shall not render any of the other terms or provisions hereof unenforceable or
invalid and that this Agreement shall be construed as if such unenforceable or
invalid term or provision was, to the extent of such unenforceability or
invalidity, not contained herein.

13.6   Amendments

     No amendment, alteration or variation of this Agreement or of any of its terms
or conditions shall be binding upon either Party unless such amendment,
alteration or variation is in writing and signed by the duly authorized
representatives of each Party.

ARTICLE 14

CONCERNING THE TRUSTEE AND PEOC

14.1   Acknowledgement

     The Parties acknowledge and agree that:

	 	(a)	 	PEOC and the Trustee have entered into this Agreement solely
in their capacities as trustees of the Grantor and the Royalty
Owner, respectively;

37

 

	 	(b)	 	the obligations of the Royalty Owner hereunder shall not be
personally binding upon the Trustee or any of the Unitholders in
their respective capacities as such;
	 
	 	(c)	 	the obligations of the Grantor hereunder shall not be
personally binding upon PEOC, any beneficiary of the Grantor or, for
greater certainty, any beneficiary of any such beneficiary, in their
respective capacities as such;
	 
	 	(d)	 	any recourse against the Royalty Owner, the Trustee or any
Unitholder, in their respective capacities as such, in any manner in
respect of any indebtedness, obligation or liability of the Royalty
Owner arising hereunder or arising in connection herewith or from
the matters to which this Agreement relates, including without
limitation claims based in contract, negligence, tortious behaviour
or otherwise, shall be limited to, and satisfied only out of, the
Trust Fund as defined in the Trust Indenture; and
	 
	 	(e)	 	any recourse against the Grantor, PEOC, any beneficiary of
the Grantor or, for greater certainty, any beneficiary of any such
beneficiary, in their respective capacities as such, in any manner
in respect of any indebtedness, obligation or liability of the
Grantor arising hereunder or arising in connection herewith or from
the matters to which this Agreement relates, including without
limitation claims based in contract, negligence, tortious behaviour
or otherwise, shall be limited to, and satisfied only out of, the
Trust Properties as defined in the First Amended and Restated Trust
Indenture made effective as of August 1, 2002 as the same may be
amended, restated or replaced from time to time, and relating to the
Paramount Operating Trust.

IN WITNESS WHEREOF, each Party has caused this Agreement to be executed as of
the date first above written.

	 	 	 	 	 
	Paramount Energy Operating Corp., as

Trustee for and on behalf of

PARAMOUNT OPERATING TRUST	 	
Computershare Trust Company of

Canada, as Trustee for and on behalf

of the PARAMOUNT ENERGY TRUST
	 
	Per:	
	 	Per:	

	 
	Per:	
	 	Per:	

38

 

			
	 	Schedule A to an Agreement made effective as of July
1, 2002 between Computershare Trust Company of Canada,
as Trustee for and on behalf of Paramount Energy Trust
and Paramount Energy Operating Corp., as Trustee for
and on behalf of Paramount Operating Trust

P&NG Rights

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