EXHIBIT 4.2
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HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I
Issuer
and
XXXXX FARGO BANK MINNESOTA, N.A.
Indenture Trustee and Securities Intermediary
SERIES 2000-[.] INDENTURE SUPPLEMENT
Dated as of [.], 2000
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TABLE OF CONTENTS
ARTICLE I Creation of the Series 2000-[ ] Notes.................................................. 1
Section 1.01 Designation............................................................................ 1
ARTICLE II Definitions............................................................................ 3
Section 2.01 Definitions............................................................................ 3
ARTICLE III Servicing Fee and Interchange.......................................................... 16
Section 3.01 Servicing Compensation; Interchange.................................................... 16
ARTICLE IV Rights of Series 2000-[ ] Noteholders and Allocation and Application of Collections... 17
Section 4.01 Collections and Allocations............................................................ 17
Section 4.02 Determination of Monthly Interest...................................................... 18
Section 4.03 Determination of Monthly Principal..................................................... 20
Section 4.04 Application of Available Funds on Deposit in the Collection Account.................... 20
Section 4.05 Investor Charge-Offs................................................................... 23
Section 4.06 Subordinated Principal Collections..................................................... 23
Section 4.07 Excess Finance Charge and Administrative Collections................................... 23
Section 4.08 Shared Principal Collections........................................................... 23
Section 4.09 Reallocated Investor Finance Charge and Administrative Collections..................... 24
Section 4.10 Principal Funding Account.............................................................. 25
Section 4.11 Reserve Account........................................................................ 26
Section 4.12 Spread Account......................................................................... 27
Section 4.13 Determination of LIBOR................................................................. 30
Section 4.14 Investment Instructions................................................................ 30
ARTICLE V Delivery of Series 2000-[ ] Notes; Distributions; Reports to Series 2000-[ ]
Noteholders............................................................................ 31
Section 5.01 Delivery and Payment for the Series 2000-[ ] Notes..................................... 31
Section 5.02 Distributions.......................................................................... 31
Section 5.03 Reports and Statements to Series 2000-[ ] Noteholders.................................. 32
ARTICLE VI Series 2000-[ ] Amortization Events.................................................... 33
Section 6.01 Series 2000-[ ] Amortization Events.................................................... 33
ARTICLE VII Redemption of Series 2000-[ ] Notes; Series Final Maturity; Final Distributions........ 35
Section 7.01 Optional Redemption of Series 2000-[ ] Notes........................................... 35
Section 7.02 Series Final Maturity.................................................................. 35
ARTICLE VIII Miscellaneous Provisions............................................................... 37
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Section 8.01 Ratification of Agreement.............................................................. 37
Section 8.02 Form of Delivery of the Series 2000-[ ] Notes.......................................... 37
Section 8.03 Counterparts........................................................................... 37
Section 8.04 Governing Law.......................................................................... 37
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EXHIBITS
EXHIBIT A-1 FORM OF CLASS A NOTE
EXHIBIT A-2 FORM OF CLASS B NOTE
EXHIBIT A-3 FORM OF CLASS C NOTE
EXHIBIT B FORM OF MONTHLY PAYMENT INSTRUCTIONS AND NOTIFICATION TO THE
INDENTURE TRUSTEE
EXHIBIT C FORM OF MONTHLY STATEMENT
EXHIBIT D FORM OF MONTHLY SERVICER'S CERTIFICATE
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SERIES 2000-[.] INDENTURE SUPPLEMENT, dated as of [.], 2000 (the "Indenture
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Supplement"), between HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I, a business
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trust organized and existing under the laws of the State of Delaware (herein,
the "Issuer" or the "Trust"), and XXXXX FARGO BANK MINNESOTA, N.A., a [.], not
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in its individual capacity, but solely as indenture trustee (herein, together
with its successors in the trusts thereunder as provided in the Master Indenture
referred to below, the "Indenture Trustee") and Securities Intermediary, under
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the Master Indenture, dated [.], 2000 (the "Indenture") between the Issuer and
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the Indenture Trustee (the Indenture, together with this Indenture Supplement,
the "Agreement").
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Pursuant to Section 2.12 of the Indenture, the Issuer may direct the
Indenture Trustee to issue one or more Series of Notes. The Principal Terms of
this Series are set forth in this Indenture Supplement to the Indenture.
Pursuant to this Indenture Supplement, the Issuer shall create the initial
Series of Notes and specify the Principal Terms thereof.
In addition to the Grant of the Indenture, the Issuer hereby Grants to the
Indenture Trustee, for the exclusive benefit of the Holders of the Series 2000-
[.] Notes all of the Issuer's right, title and interest in and to (a) the
Collections on the Receivables allocated to the Holders of the Series 2000-[.]
Notes and (b) the Series 2000-[.] Accounts, including all Eligible Investments
therein and all income from the investment of funds therein. Such Grants are
made in trust to secure the Series 2000-[.] Notes equally and ratably without
prejudice, priority or distinction, except as expressly provided in the
Agreement, between any Series 2000-[.] Notes, and to secure (i) the payment of
all amounts due on the Series 2000-[.] Notes in accordance with their terms,
(ii) the payment of all other sums payable under the Agreement and (iii)
compliance with the provisions of the Agreement all as provided in the
Agreement.
The Indenture Trustee acknowledges such Grant, accepts the trusts hereunder
in accordance with the provisions hereof and agrees to perform the duties
herein.
ARTICLE I
Creation of the Series 2000-[.] Notes
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Section 1.01. Designation
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(a) There is hereby created a Series of Notes to be issued pursuant to
the Indenture and this Indenture Supplement to be known as "Household Credit
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Card Master Note Trust I, Series 2000-[.]" or the "Series 2000-[.] Notes." The
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Series 2000-[.] Notes shall be issued in three Classes, the first of which shall
be known as the "Class A Series 2000-[.] Floating Rate Asset Backed Notes," the
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second of which shall be known as the "Class B Series 2000-[.] Floating Rate
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Asset Backed Notes" and the third of which shall be known as the "Class C Series
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2000-[.] Floating Rate Asset Backed Notes." The Series 2000--[.] Notes shall be
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due and payable on the Series 2000--[.] Final Maturity Date.
(b) Series 2000-[.] shall be a Pool One Series and shall be in
Reallocation Group One, Principal Sharing Series Group One, and Excess Finance
Charge Sharing Group One and shall not be in a Shared Enhancement Group or be
allocated Shared Transferor Principal Collections. Series 2000-[.] shall not be
subordinated to any other Series. Notwithstanding any provision in the
Indenture or in this Indenture Supplement to the contrary, the first
Distribution Date with respect to Series 2000-[.] shall be the [.] 2000
Distribution Date and the first Due Period shall begin on and include [.], 2000
and end on and include [.], 2000.
(c) In the event that any term or provision contained herein shall
conflict with or be inconsistent with any term or provision contained in the
Indenture, the terms and provisions of this Indenture Supplement shall be
controlling. All capitalized terms not otherwise defined herein are defined in
the Indenture, the Transfer and Servicing Agreement or the Trust Agreement.
Each capitalized term defined herein shall relate only to the Series 2000-[.]
Notes and no other Series of Notes issued by the Issuer.
[END OF ARTICLE I]
2
ARTICLE II
Definitions
Section 2.01. Definitions.
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(a) Whenever used in this Indenture 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.
"Accumulation Period Factor" shall mean, with respect to any Due
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Period, a fraction, the numerator of which is equal to the sum of the initial
invested amounts of all outstanding Series in Principal Sharing Group One and
the denominator of which is equal to the sum of (a) the Initial Invested Amount,
and (b) the initial invested amounts of all outstanding Principal Sharing Group
One Series (other than Series 2000-[.]) which are not expected to be in their
revolving periods from such date to the Expected Principal Payment Date;
provided, however, that this definition may be changed at anytime if the Rating
Agency Condition is satisfied.
"Accumulation Period Length" shall have the meaning assigned such term
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in subsection 4.04(e).
"Additional Amounts" shall mean, with respect to any Distribution
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Date, the sum of the amounts determined (without regard to the sufficiency of
Collections to satisfy such amounts) pursuant to subsection 4.04(a)(vi) for such
Distribution Date.
"Additional Interest" shall mean, with respect to any Distribution
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Date, Class A Additional Interest, Class B Additional Interest and the Class C
Additional Interest for such Distribution Date.
"Adjusted Invested Amount" shall mean, with respect to any date of
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determination, an amount equal to the Invested Amount minus the Principal
Funding Account Balance on such date.
"Adjusted Pool One Principal Balance" shall mean an amount equal to
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the greater of (a) the sum of (i) the total amount of Principal Receivables in
Pool One as of the close of business on the last day of the immediately
preceding Due Period (or with respect to the first Due Period, the total amount
of Principal Receivables in Pool One as of the Closing Date) and (ii) the
principal amount on deposit in the Special Funding Account with respect to Pool
One as of the close of business on such last day (or with respect to the first
Due Period, the Closing Date) and (b) the sum of the numerators used to
calculate the investor percentages for allocations with respect to Principal
Receivables, Finance Charge and Administrative Receivables or Defaulted Amounts,
as applicable, for all Pool One Series outstanding as of the date as to which
such determination is being made; provided, however, that with respect to any
Due Period in which an Addition Date for an Aggregate Addition or a Removal Date
occurs, the amount in clause (a)(i) above shall be the sum of the amounts for
each day in such Due Period computed as follows and divided by the number of
days in such Due Period: (1) the aggregate amount of Principal Receivables in
Pool One as of the close of business on the last day of the prior Due Period,
for each day in the period from and including the first day of such Due Period
to but excluding the related Additional Cut-Off Date or Removal Date and (2) the
aggregate amount of Principal Receivables in Pool One as of the close of
business on the related Additional Cut-off Date or Removal Date after adjusting
for the aggregate amount of Principal Receivables added to or removed from Pool
One on the related Additional Cut-off Date or
3
Removal Date, as the case may be, for each day in the period from and including
the related Additional Cut-off Date or Removal Date to and including the last
day of such Due Period.
"Administration Fee" shall mean, with respect to any Distribution
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Date, the fee payable to the Administrator on such date pursuant to the
Administration Agreement.
"Available Investor Finance Charge and Administrative Collections"
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shall mean, with respect to any Due Period, an amount equal to the sum of (a) an
amount equal to the Investor Finance Charge and Administrative Collections, (b)
Principal Funding Investment Proceeds, if any, with respect to the related
Distribution Date, and (c) amounts, if any, to be withdrawn from the Reserve
Account which will be deposited into the Collection Account on the related
Distribution Date to be treated as Available Investor Finance Charge and
Administrative Collections pursuant to subsections 4.11(b) and (d).
"Available Investor Principal Collections" shall mean, with respect to
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any Due Period, an amount equal to the sum of (a) (i) an amount equal to the
Investor Percentage of all Collections of Principal Receivables received during
such Due Period minus (ii) the amount of Subordinated Principal Collections with
respect to such Due Period which pursuant to Section 4.06 are required to fund
the Required Amount for the related Distribution Date, (b) any Shared Principal
Collections with respect to other Principal Sharing Series with respect to Pool
One (including any amounts on deposit in the Special Funding Account with
respect to Pool One that are allocated to Series 2000-[.] pursuant to the
Agreement for application as Shared Principal Collections), and (c) any other
amounts which pursuant to Section 4.04 hereof are to be treated as Available
Investor Principal Collections with respect to the related Distribution Date,
including proceeds of any new Series to the extent permitted by the Indenture
Trustee acting on behalf of the affected Noteholders.
"Available Reserve Account Amount" shall mean, with respect to any
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Distribution Date, the lesser of (a) the amount on deposit in the Reserve
Account on such date (after taking into account any interest and earnings
retained in the Reserve Account pursuant to subsection 4.11(b) and 4.11(d) on
such date, but before giving effect to any (i) deposit made or to be made
pursuant to subsection 4.04(a)(ix) to the Reserve Account on such date, or (ii)
any withdrawal made or to be made pursuant to subsection 4.11(d), (e) and (f)
from the Reserve Account with respect to such date) and (b) the Required Reserve
Account Amount.
"Available Spread Account Amount" shall mean, with respect to any
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Distribution Date, an amount equal to the lesser of (a) the amount on deposit in
the Spread Account (exclusive of Investment Earnings) on such date (before
giving effect to any (i) deposit made or to be made pursuant to subsection
4.04(a)(x) to the Spread Account on such date, or any withdrawal made or to be
made pursuant to subsection 4.12(c) or (d) from the Spread Account with respect
to such date) and (b) the Required Spread Account Amount for such Distribution
Date.
"Base Rate" shall mean the weighted average of the Class A Note
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Interest Rate, the Class B Note Interest Rate and the Class C Note Interest Rate
(weighted based on the Class A Note Principal Balance, the Class B Note
Principal Balance and the Class C Note Principal Balance as of the last day of
the preceding Due Period), plus the Servicing Fee Rate.
"Class A Additional Interest" shall have the meaning specified in
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subsection 4.02(a).
"Class A Interest Shortfall" shall have the meaning specified in
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subsection 4.02(a).
"Class A Monthly Interest" shall have the meaning specified in
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subsection 4.02(a).
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"Class A Note Initial Principal Balance" shall mean $[.].
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"Class A Note Interest Rate" shall mean a per annum rate of [.]% in
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excess of LIBOR as determined (i) on [.], 2000, for the period from and
including the Closing Date through and excluding [.], 2000 and (ii) on the
related LIBOR Determination Date with respect to each Interest Period
thereafter.
"Class A Note Principal Balance" shall mean, with respect to any date,
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the Class A Note Initial Principal Balance, minus the aggregate amount of any
principal payments made to the Class A Noteholders prior to such date.
"Class A Noteholder" shall mean the Person in whose name a Class A
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Note is registered in the Note Register.
"Class A Notes" shall mean any one of the Notes executed by the
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Transferor and authenticated by or on behalf of the Indenture Trustee,
substantially in the form of Exhibit A-1.
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"Class B Additional Interest" shall have the meaning specified in
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subsection 4.02(b).
"Class B Interest Shortfall" shall have the meaning specified in
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subsection 4.02(b).
"Class B Monthly Interest" shall have the meaning specified in
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subsection 4.02(b).
"Class B Note Initial Principal Balance" shall mean $[.].
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"Class B Note Interest Rate" shall mean a per annum rate of [.]% in
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excess of LIBOR as determined (i) on [.], 2000, for the period from and
including the Closing Date through and excluding [.], 2000 and (ii) on the
related LIBOR Determination Date with respect to each Interest Period
thereafter.
"Class B Note Principal Balance" shall mean, with respect to any date,
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the Class B Note Initial Principal Balance, minus the aggregate amount of any
principal payments made to the Class B Noteholders prior to such date.
"Class B Noteholder" shall mean the Person in whose name a Class B
------------------
Note is registered in the Note Register.
"Class B Notes" shall mean any one of the Notes executed by the
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Transferor and authenticated by or on behalf of the Indenture Trustee,
substantially in the form of Exhibit A-2.
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"Class C Additional Interest" shall have the meaning specified in
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subsection 4.02(c).
"Class C Interest Shortfall" shall have the meaning specified in
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subsection 4.02(c).
"Class C Monthly Interest" shall have the meaning specified in
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subsection 4.02(c).
"Class C Note Initial Principal Balance" shall mean $[.].
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"Class C Note Interest Rate" shall mean a per annum rate of [.]% in
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excess of LIBOR as determined (i) on [.], 2000, for the period from and
including the Closing Date through and excluding [.], 2000 and (ii) on the
related LIBOR Determination Date with respect to each Interest Period
thereafter.
5
"Class C Note Principal Balance" shall mean, with respect to any date,
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the Class C Note Initial Principal Balance, minus the aggregate amount of any
principal payments made to the Class C Noteholders prior to such date.
"Class C Noteholder" shall mean the Person in whose name a Class C
------------------
Note is registered in the Note Register.
"Class C Notes" shall mean any one of the Notes executed by the
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Transferor and authenticated by or on behalf of the Indenture Trustee,
substantially in the form of Exhibit A-3.
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"Closing Date" shall mean [.], 2000.
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"Controlled Accumulation Amount" shall mean for any Distribution Date
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with respect to the Controlled Accumulation Period, $[.]; provided, however,
that if the Accumulation Period Length is determined to be less than 12 months
pursuant to subsection 4.04(e), the Controlled Accumulation Amount for each
Distribution Date with respect to the Controlled Accumulation Period will be
equal to (a) the product of (i) the Initial Invested Amount and (ii) the
Accumulation Period Factor for such Due Period divided by (b) the Required
Accumulation Factor Number.
"Controlled Accumulation Period" shall mean, unless an Amortization
------------------------------
Event shall have occurred prior thereto, the period commencing at the close of
business on [.], 20[.] or such later date as is determined in accordance with
subsection 4.04(e) and ending on the first to occur of (a) the commencement of
the Early Amortization Period, (b) the payment in full of the Note Principal
Balance and (c) the Series 2000-[.] Final Maturity Date.
"Controlled Deposit Amount" shall mean, with respect to any
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Distribution Date with respect to the Controlled Accumulation Period, an amount
equal to the sum of (a) the Controlled Accumulation Amount for such Distribution
Date and (b) any existing Deficit Controlled Accumulation Amount.
"Covered Amount" shall mean an amount, determined as of each
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Distribution Date with respect to any Interest Period, equal to the sum of (a)
the product of (i) a fraction, the numerator of which is the actual number of
days in such Interest Period and the denominator of which is 360, times (ii) the
Class A Note Interest Rate in effect with respect to such Interest Period, times
(iii) the aggregate amount on deposit in the Principal Funding Account up to the
Class A Note Principal Balance as of the Record Date preceding such Distribution
Date, (b) the product of (i) a fraction, the numerator of which is the actual
number of days in such Interest Period and the denominator of which is 360,
times (ii) the Class B Note Interest Rate in effect with respect to such
Interest Period, times (iii) the lesser of (A) the aggregate amount on deposit
in the Principal Funding Account in excess of the Class A Note Principal Balance
and (B) the Class B Note Principal Balance, in each case as of the Record Date
preceding such Distribution Date, and (c) the product of (i) a fraction, the
numerator of which is the actual number of days in such Interest Period and the
denominator of which is 360, times (ii) the Class C Note Interest Rate in effect
with respect to such Interest Period, times (iii) the aggregate amount on
deposit in the Principal Funding Account in excess of the Class A Note Principal
Balance and the Class B Note Principal Balance as of the Record Date preceding
such Distribution Date.
"Deficit Controlled Accumulation Amount" shall mean (a) on the first
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Distribution Date during 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
6
Distribution Date over the amount deposited into the Principal Funding Account
on any previous Distribution Date.
"Distribution Date" shall mean [.], 2000 and the fifteenth day of each
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calendar month thereafter, or if such fifteenth day is not a Business Day, the
next succeeding Business Day.
"Early Amortization Period" shall mean the period commencing on the
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day on which an Amortization Event with respect to Series 2000-[.] is deemed to
have occurred, and ending on the first to occur of (i) the payment in full of
the Note Principal Balance or (ii) the Series 2000-[.] Final Maturity Date.
"Excess Spread" shall mean with respect to any Due Period, the excess
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of (a) the Reallocated Investor Finance Charge and Administrative Collections
and Excess Finance Charge and Administrative Collections allocated to Series
2000-[.] for such Due Period over (b) the amount to be distributed by the
Indenture Trustee pursuant to subsections 4.04(a)(i) through (viii).
"Excess Spread Percentage" shall mean, with respect to any Due Period,
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an amount equal to the annualized percentage equivalent of a fraction, the
numerator of which is the product of (a) an amount equal to the Excess Spread
with respect to such Due Period, and (b) twelve, and the denominator of which is
the Adjusted Invested Amount on the first day of such Due Period.
"Expected Principal Payment Date" shall mean the [.]
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20[.] Distribution Date.
"Finance Charge Shortfall" shall have the meaning specified in Section
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4.07.
"Fixed Investor Percentage" shall mean, with respect to any Due Period
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or portion thereof occurring after the end of the Revolving Period, the
percentage equivalent (which percentage shall never exceed 100%) of a fraction,
(a) the numerator of which is the Adjusted Invested Amount as of the close of
business on the last day of the Revolving Period and (b) the denominator of
which is the Adjusted Pool One Principal Balance.
"Floating Investor Percentage" shall mean, with respect to any Due
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Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, (a) the numerator of which is the Adjusted Invested Amount as of the
close of business on the last day of the preceding Due Period (or with respect
to the first Due Period, the Initial Invested Amount) and (b) the denominator of
which is the Adjusted Pool One Principal Balance.
"Initial Invested Amount" shall mean $[.].
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"Interest Period" shall mean, with respect to any Distribution Date,
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the period from and including the Distribution Date immediately preceding such
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date) to but excluding such Distribution Date.
"Invested Amount" shall mean, as of any date of determination, an
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amount equal to the initial principal amount of the Series 2000--[.] Notes minus
the amount of principal previously paid to the Series 2000--[.] Noteholders with
respect to the Class A Notes, the Class B Notes and the Class C Notes minus the
amount of unreimbursed Investor Charge-Offs and Subordinated Principal
Collections.
"Investment Earnings" shall mean, with respect to any Distribution
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Date, all interest and earnings on Eligible Investments included in the Spread
Account (net of losses and investment expenses)
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during the period commencing on and including the Distribution Date immediately
preceding such Distribution Date and ending on but excluding such Distribution
Date.
"Investor Charge-Offs" shall have the meaning specified in Section
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4.05.
"Investor Defaulted Amount" shall mean, with respect to any
-------------------------
Distribution Date, an amount equal to the product of (a) the Defaulted Amount
for the related Due Period and (b) the Investor Percentage for such Due Period.
"Investor Finance Charge and Administrative Collections" shall mean,
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with respect to any Distribution Date, an amount equal to the product of (a)
Floating Investor Percentage for the related Due Period and (b) Collections of
Finance Charge and Administrative Receivables deposited in the Collection
Account for the related Due Period.
"Investor Percentage" shall mean, for any Due Period, (a) with respect
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to Finance Charge and Administrative Receivables and Defaulted Amounts at any
time and Principal Receivables during the Revolving Period, the Floating
Investor Percentage, and (b) with respect to Principal Receivables during the
Controlled Accumulation Period or the Early Amortization Period, the Fixed
Investor Percentage.
"LIBOR" shall mean, for any Interest Period, the London interbank
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offered rate for one-month United States dollar deposits determined by the
Indenture Trustee for each Interest Period in accordance with the provisions of
Section 4.13.
"LIBOR Determination Date" shall mean (i) [.], 2000 for the period
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from and including the Closing Date through and including [.], 2000 and (ii) the
second London Business Day prior to the commencement of the second and each
subsequent Interest Period.
"London Business Day" shall mean any Business Day on which dealings in
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deposits in United States dollars are transacted in the London interbank market.
"Modified Excess Spread Percentage" shall mean, with respect to the
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first Due Period an amount equal to the percentage equivalent of a fraction,
(a) the numerator of which is an amount equal to twelve times the
excess, if any, of:
(i) the amount of Collections of Reallocated Investor Finance Charge
and Administrative Receivables and Excess Finance Charge and
Administrative Collections deposited in the Collection Account
and allocable to the Series 2000-[.] Noteholders for such first
Due Period, over
(ii) the sum of,
(A) the product of (1) the Class A Monthly Interest for the
related Interest Period times (2) a fraction (I) the
numerator of which is the actual number of days in such
first Due Period and (II) the denominator of which is the
actual number of days in the related Interest Period, plus
(B) the product of (1) the Class B Monthly Interest for such
Interest Period times (2) a fraction (I) the numerator of
which is the actual number of days in such first Due Period
and (II) the denominator of which is the actual number of
days in such Interest Period, plus
8
(C) the product of (1) the Class C Monthly Interest for such
Interest Period times (2) a fraction (I) the numerator of
which is the actual number of days in such first Due Period
and (II) the denominator of which is the actual number of
days in such Interest Period, plus
(D) the Monthly Servicing Fee and Monthly Administration Fee
with respect to the Distribution Date relating to such first
Due Period, plus
(E) the Investor Defaulted Amount with respect to the related
Distribution Date; and
(b) the denominator of which is the Initial Invested Amount.
"Monthly Administration Fee" shall mean, one-twelfth of the
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Administration Fee.
"Monthly Interest" shall mean, with respect to any Distribution Date,
----------------
the sum of the Class A Monthly Interest, the Class B Monthly Interest and the
Class C Monthly Interest for such Distribution Date.
"Monthly Principal" shall mean the monthly principal distributable in
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respect of the Notes as calculated in accordance with Section 4.03.
"Monthly Servicing Fee" shall mean, for any Distribution Date, an
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amount equal to one-twelfth of the product of:
(a) the Servicing Fee Rate;
(b) the Floating Investor Percentage for the related Due Period; and
(c) the total amount of Principal Receivables as of the close of
business on the last day of the immediately preceding Due Period, or with
respect to the first Due Period, the total amount of Principal Receivables as of
the Closing Date, in either case, excluding the principal portion of
Participation Interests;
provided, however, that with respect to any Due Period in which an Addition Date
for an Aggregate Addition or a Removal Date occurs, the amount in clause (c)
above shall be the sum of the amounts for each day in that Due Period computed
as follows and divided by the number of days in that Due Period:
(i) the aggregate amount of principal receivables, excluding the
principal portion of participation interests, as of the close of
business on the last day of the prior due period, for each day in
the period from and including the first day of that due period to
but excluding the related additional cut-off date or removal
date; and
(ii) the aggregate amount of principal receivables, excluding the
principal portion of participation interests, as of the close of
business on the related Additional Cut-off Date or Removal Date
after adjusting for the aggregate amount of Principal
Receivables, excluding the principal portion of Participation
Interests, added to or removed on the related Additional Cut-off
Date or Removal Date, as the case may be, for each day in the
period from and including the related additional cut-off date or
removal date to and including the last day of that due period;
9
provided further, that with respect to the first Distribution Date, the Monthly
Servicing Fee will equal $[.].
"Monthly Subordination Amount" shall mean with respect to any Due
----------------------------
Period an amount equal to the sum of:
(a) the lower of (i) the excess of the Class A Monthly Interest over
the Reallocated Investor Finance Charge and Administrative Collections and
Excess Finance Charge and Administrative Collections allocated with respect
thereto pursuant to subsection 4.04(a)(i) and (ii) the greater of (A) (1) the
product of (I) [.]% and (II) the Initial Invested Amount minus (2) the amount of
unreimbursed Investor Charge-Offs (after giving effect to Investor Charge-Offs
for the related Due Period) and unreimbursed Subordinated Principal Collections
(as of the previous Distribution Date) and (B) zero; and
(b) the lower of (i) the excess of the Class B Monthly Interest, the
Monthly Servicing Fee (if HFC or an Affiliate of HFC is no longer the Servicer)
and the Monthly Servicing Fees previously due but unpaid for any prior
Distribution Date (if HFC or an Affiliate of HFC is no longer the Servicer),
over the Reallocated Investor Finance Charge and Administrative Collections and
Excess Finance Charge and Administrative Collections allocated with respect
thereto pursuant to subsections 4.04(a)(ii) and (iii) and (ii) the greater of
(A) the product of (1) [.]% and (2) the Initial Investor Interest minus the
amount of unreimbursed Investor Charge-Offs (after giving effect to Investor
Charge-Offs for the related Due Period) and unreimbursed Subordinated Principal
Collections as of the previous Distribution Date) and (B) zero.
"Note Principal Balance" shall mean, with respect to any date, the sum
----------------------
of the Class A Note Principal Balance, the Class B Note Principal Balance and
the Class C Note Principal Balance.
"Percentage Allocation" shall have the meaning set forth in Subsection
---------------------
4.01(c)(ii)(B).
"Pool One" shall mean the pool of Receivables listed on Schedule P1 of
--------
the Indenture.
"Pool One Series" shall mean Series 2000--[.] and each other Series
---------------
which is designated as a Pool One Series in the related Indenture Supplement.
"Principal Funding Account" shall have the meaning set forth in
-------------------------
subsection 4.10(a).
"Principal Funding Account Balance" shall mean, with respect to any
---------------------------------
date of determination, the principal amount, if any, on deposit in the Principal
Funding Account on such date of determination.
"Principal Funding Investment Proceeds" shall mean, with respect to
-------------------------------------
each Distribution Date, the investment earnings on funds in the Principal
Funding Account (net of investment expenses and losses) for the period from and
including the immediately preceding Distribution Date to but excluding such
Distribution Date.
"Principal Sharing Group One" shall mean Series 2000--[.] and each
---------------------------
other Series hereafter specified in the related Indenture Supplement to be
included in Principal Sharing Group One.
"Quarterly Excess Spread Percentage" shall mean
----------------------------------
(a) with respect to the [Month 1] 2000 Distribution Date, the Modified
Excess Spread Percentage,
10
(b) with respect to the [Month 2] 2000 Distribution Date, the
percentage equivalent of a fraction the numerator of which is the sum of (i) the
Modified Excess Spread Percentage for the first Due Period and (ii) the Excess
Spread Percentage with respect to the [Month 1] 2000 Due Period and the
denominator of which is two,
(c) with respect to the [Month 3] 2000 Distribution Date, the
percentage equivalent of a fraction the numerator of which is the sum of (i) the
Modified Excess Spread Percentage for the first Due Period, (ii) the Excess
Spread Percentage with respect to the [Month 1] 2000 Due Period, and (iii) the
Excess Spread Percentage with respect to the [Month 2] 2000 Due Period and the
denominator of which is three, and
(d) with respect to the [Month 4] 2000 Distribution Date and each
Distribution Date thereafter, the percentage equivalent of a fraction the
numerator of which is the sum of the Excess Spread Percentages with respect to
the immediately preceding three Due Periods and the denominator of which is
three.
"Rating Agency" shall mean each of Standard & Poor's, Xxxxx'x and
-------------
Fitch.
"Reallocated Investor Finance Charge and Administrative Collections"
------------------------------------------------------------------
shall mean, with respect to any Due Period, that portion of Reallocation Group
One Investor Finance Charge and Administrative Collections allocated to Series
2000-[.] pursuant to Section 4.09.
"Reallocation Group One" shall mean Series 2000-[.] and each other
----------------------
Series hereafter specified in the related Indenture Supplement to be included in
Reallocation Group One.
"Reallocation Group One Investor Additional Amounts" shall mean, with
--------------------------------------------------
respect to any Distribution Date, the sum of (a) Additional Amounts for such
Distribution Date and (b) for all other Series included in Reallocation Group
One, 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.
"Reallocation Group One Investor Default Amount" shall mean, with
----------------------------------------------
respect to any Distribution Date, the sum of (a) the Investor Defaulted Amount
for such Distribution Date and (b) the aggregate amount of the investor default
amounts for all other Series included in Reallocation Group One for such
Distribution Date.
"Reallocation Group One Investor Finance Charge and Administrative
-----------------------------------------------------------------
Collections" shall mean, with respect to any Distribution Date, the sum of (a)
-----------
the aggregate amount of Available Investor Finance Charge and Administrative
Collections for such Distribution Date and (b) the aggregate amount of the
available investor finance charge and administrative collections for all other
Series included in Reallocation Group One for such Distribution Date.
"Reallocation Group One Monthly Interest" shall mean, with respect to
---------------------------------------
any Distribution Date, the sum of (a) Monthly Interest for Series 2000-[.] for
such Distribution Date, including overdue Monthly Interest and interest on such
overdue Monthly Interest, and (b) the aggregate amount of monthly interest,
including overdue monthly interest and interest on such overdue monthly
interest, if applicable, for all other Series included in Reallocation Group One
for such Distribution Date.
"Reallocation Group One Monthly Fees" shall mean with respect to any
-----------------------------------
Distribution Date, the sum of (a) the Monthly Servicing Fee and the Monthly
Administration Fee for such Distribution
11
Date, (b) the Monthly Servicing Fee and the Monthly Administration Fee past due
but not paid for any prior Distribution Date, (c) the aggregate amount of
servicing fees and administration fees (including any past due servicing fees
and administration fees) plus any additional fees and amounts, including credit
enhancement fees for all other Series included in Reallocation Group One for
such Distribution Date and (d) reserve account funding requirements for all
Series included in Reallocation Group One for such Distribution Date.
"Reassignment Amount" shall mean, with respect to any Distribution
-------------------
Date, after giving effect to any deposits and distributions otherwise to be made
on such Distribution Date, the sum of (a) the Note Principal Balance on such
Distribution Date, plus (b) Monthly Interest for such Distribution Date and any
Monthly Interest previously due but not distributed to the Series 2000-[.]
Noteholders, plus (c) the amount of Additional Interest, if any, for such
Distribution Date and any Additional Interest previously due but not distributed
to the Series 2000-[.] Noteholders on a prior Distribution Date.
"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 12 months preceding the date of
such calculation; provided, however, that this definition may be changed at any
time if the Rating Agency Condition is satisfied.
"Required Amount" shall mean, with respect to any Distribution Date,
---------------
an amount equal to the sum of the amounts described in subsections 4.04(a)(i),
(ii) and (iii).
"Required Reserve Account Amount" shall mean, with respect to any
-------------------------------
Distribution Date on or after the Reserve Account Funding Date, an amount equal
to (a) [0.5]% of the Class A Note Principal Balance or (b) any other amount
designated by the Transferor; provided, however, that if such designation is of
a lesser amount, the Transferor shall (i) provide the Servicer and the Indenture
Trustee with evidence that the Rating Agency Condition shall have been satisfied
and (ii) deliver to the Indenture Trustee a certificate of an authorized officer
to the effect that, based on the facts known to such officer at such time, in
the reasonable belief of the Transferor, such designation will not cause an
Amortization Event or an event that, after the giving of notice or the lapse of
time, would cause an Amortization Event to occur with respect to Series 2000-
[.].
"Required Spread Account Amount" shall mean, with respect to any date
------------------------------
of determination, the product of (a) the Spread Account Percentage in effect on
such date and (b) the Initial Invested Amount; provided, that in no event will
the Required Spread Account Amount exceed the Class C Note Principal Balance
minus the excess, if any, of the Principal Funding Account Balance over the sum
of the Class A Note Principal Balance and the Class B Note Principal Balance on
such date of determination.
"Required Transferor Amount" shall have the meaning specified in the
--------------------------
Master Indenture.
"Required Transferor Percentage" shall mean with respect to Pool One,
------------------------------
(a) initially [.]% or (b) any other percentage designated by the Transferor;
provided, however, that if such designation is of a lesser amount, the
Transferor shall (i) provide the Servicer and the Indenture Trustee with
evidence that the Rating Agency Condition shall have been satisfied and (ii)
deliver to the Indenture Trustee a certificate of an authorized officer to the
effect that, based on the facts known to such officer at such time, in the
reasonable belief of the Transferor, such designation will not have an Adverse
Effect.
12
"Reserve Account" shall have the meaning specified in subsection
---------------
4.11(a).
"Reserve Account Funding Date" shall mean the Distribution Date which
----------------------------
occurs not later than the Distribution Date with respect to the Due Period which
commences 3 months prior to the commencement of the Controlled Accumulation
Period.
"Reserve Account Surplus" shall mean, as of any Distribution Date
-----------------------
following the Reserve Account Funding Date, the amount, if any, by which the
amount on deposit in the Reserve Account exceeds the Required Reserve Account
Amount.
"Reserve Draw Amount" shall mean, with respect to each Distribution
-------------------
Date relating to the Controlled Accumulation Period or the first Distribution
Date relating to the Early Amortization Period, the amount, if any, by which the
Principal Funding Investment Proceeds for such Distribution Date are less than
the Covered Amount determined as of such Distribution Date.
"Revolving Period" shall mean the period beginning on the Closing Date
----------------
and ending on the earlier of the close of business on the day immediately
preceding the day the Controlled Accumulation Period commences or the Early
Amortization Period commences.
"Series 2000-[.]" shall mean the Series of Notes the terms of which
---------------
are specified in this Indenture Supplement.
"Series 2000-[.] Amortization Event" shall have the meaning specified
----------------------------------
in Section 6.01.
"Series 2000-[.] Final Maturity Date" shall mean the earliest to occur
-----------------------------------
of (a) the Distribution Date on which the Notes are paid in full, (b) the [.]
Distribution Date and (c) the termination of the Trust pursuant to Section 11.01
of the Indenture.
"Series 2000-[.] Note" shall mean a Class A Note or a Class B Note or
--------------------
a Class C Note.
"Series 2000-[.] Noteholder" shall mean a Class A Noteholder or a
--------------------------
Class B Noteholder or a Class C Noteholder.
"Series 2000-[.] Noteholders' Collateral" shall mean the Noteholders'
---------------------------------------
Collateral for Series 2000-[.].
"Series 2000-[.] Principal Shortfall" shall have the meaning specified
-----------------------------------
in subsection 4.08(a).
"Series Adjusted Invested Amount" shall mean, with respect to any Due
-------------------------------
Period:
(a) during the Revolving Period, the Invested Amount as of the last
day of the immediately preceding Due Period;
(b) during the Controlled Accumulation Period, the Invested Amount as
of the close of business on the last day of the Revolving Period less the
Principal Funding Account Balance on such date of determination; provided,
however, that on any date, at the option of the Seller (the exercise of such
option to be evidenced by written instructions from the Seller to the Servicer
and the Indenture Trustee), such amount may be reduced below the amount
specified for the previous Due Period to an amount not less than the greater of
(i) the Invested Amount as of the last day of the immediately preceding Due
Period (less the amount of any distribution of principal made to Noteholders of
this Series since the last
13
day of the immediately preceding Due Period) and (ii) an amount that, if used as
the numerator of the Fixed Investor Percentage for the remainder of the
Controlled Accumulation Period, would assure that Available Investor Principal
Collections for this Series plus the product of the aggregate amount of the
Shared Principal Collections during each Due Period multiplied by a fraction the
numerator of which is the Invested Amount of this Series and the denominator of
which is the aggregate invested amount of all Series not scheduled to be in
their revolving period during such Due Period would equal at least 125% of the
applicable Controlled Deposit Amount for such Due Period for so long as the
Invested Amount is greater than zero, assuming for this purpose that (A) the
payment rate with respect to Collections of Principal Receivables remains
constant at the level of the immediately preceding Due Period, (B) the total
amount of Principal Receivables theretofore conveyed to and in the Trust (and
the Special Funding Amount) remains constant at the level existing on the date
of such reduction, (C) no amortization event with respect to any Series will
subsequently occur and (D) no additional Series (other than any Series being
issued on the date of such reduction) will be subsequently issued; and
(c) during any Early Amortization Period, the Invested Amount as of
the last day of the Revolving Period less the Principal Funding Account Balance
or, if less, the amount last determined pursuant to clause (b) above during the
Controlled Accumulation Period.
"Series Portfolio Yield" shall mean, with respect to any Due Period,
----------------------
the annualized percentage equivalent of a fraction, (a) the numerator of which
is equal to the sum of (i) Reallocated Investor Finance Charge and
Administrative Collections with respect to such Due Period, plus (ii) any Excess
Finance Charge and Administrative Collections that are allocated to Series 2000-
[.] with respect to such Due Period, such sum to be calculated on a cash basis
after subtracting the Investor Defaulted Amount for such Due Period, and (b) the
denominator of which is the Note Principal Balance as of the last day of the
immediately preceding Due Period.
"Servicing Fee Rate" shall mean 2% per annum or such lesser percentage
------------------
as may be specified by the Servicer in an Officer's Certificate filed with the
Trustee, which Officer's Certificate shall state that, in the reasonable belief
of the Servicer, such change in percentage will not result in an Adverse Effect.
"Spread Account" shall have the meaning specified in subsection
--------------
4.12(a).
"Spread Account Deficiency" shall mean the excess, if any, of the
-------------------------
Required Spread Account Amount over the Available Spread Account Amount.
"Spread Account Percentage" shall mean, (a) zero if the Quarterly
-------------------------
Excess Spread Percentage on such Distribution Date is greater than or equal to
[.]%, (b) [.]% if the Quarterly Excess Spread Percentage on such Distribution
Date is less than [.]% and greater than or equal to [.]%, (c) [.]% if the
Quarterly Excess Spread Percentage on such Distribution Date is less than [.]%
and greater than or equal to [.]%, (d) [.]% if the Quarterly Excess Spread
Percentage on such Distribution Date is less than [.]% and greater than or equal
to [.]%, and (e) [.]% if the Quarterly Excess Spread Percentage on such
Distribution Date is less than [.]%, provided, that if an Amortization Event
with respect to Series 2000-[.] has occurred, the Spread Account Percentage
shall be [.]%.
"Subordinated Principal Collections" shall mean with respect to any
----------------------------------
Due Period, Available Investor Principal Collections applied in accordance with
Section 4.06 in an amount not to exceed the lesser of the Monthly Subordination
Amount for the related Due Period and the Invested Amount after giving effect to
any Investor Charge-Offs for the related Distribution Date.
14
"Telerate Page 3750" shall mean the display page currently so
------------------
designated on the Bridge Telerate Capital Markets Report (or such other page as
may replace that page in that service for the purpose of displaying comparable
rates or prices).
Each capitalized term defined herein shall relate to the Series 2000-
[.] Notes and no other Series of Notes 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 Indenture or the Transfer and
Servicing 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 Indenture or Transfer and Servicing Agreement, the terms and provisions of
this Indenture Supplement shall govern.
The words "hereof," "herein" and "hereunder" and words of similar
------ ------ ---------
import when used in this Indenture Supplement shall refer to this Indenture
Supplement as a whole and not to any particular provision of this Indenture
Supplement; references to any Article, subsection, Section or Exhibit are
references to Articles, subsections, Sections and Exhibits in or to this
Indenture Supplement unless otherwise specified; and the term "including" means
---------
"including without limitation."
-----------------------------
[END OF ARTICLE II]
15
ARTICLE III
Servicing Fee and Interchange
Section 3.01. Servicing Compensation; Interchange.
-----------------------------------
(a) Servicing Fee. The share of the Servicing Fee allocable to the
-------------
Series 2000-[.] Noteholders with respect to any Distribution Date shall equal
the Monthly Servicing Fee. The portion of the Servicing Fee that is not
allocable to the Series 2000-[.] Noteholders shall be paid by the holders of the
Transferor Certificates or the noteholders of other Series (as provided in the
related Indenture Supplements) and in no event shall the Trust, the Indenture
Trustee or the Series 2000-[.] Noteholders be liable for the share of the
Servicing Fee to be paid by the holders of the Transferor Certificates or the
noteholders of any other Series.
(b) Interchange. Not later than 1:00 p.m., New York City time, on
-----------
each Transfer Date, the Transferor shall notify the Servicer of the amount of
Interchange to be included as Collections of Finance Charge and Administrative
Receivables and allocable to Series 2000-[.] with respect to the preceding Due
Period as determined pursuant to this subsection 3.01(b). Such amount of
Interchange shall be equal to the product of (i) the amount of Interchange
attributable to the Accounts, as determined by the Bank pursuant to the
Receivables Purchase Agreement, and (ii) the Investor Percentage with regard to
Finance Charge and Administrative Receivables. On each Distribution Date, the
Transferor shall cause to be deposited into the Collection Account, in
immediately available funds, the amount of Interchange to be so included as
Collections of Finance Charge and Administrative Receivables allocable to Series
2000-[.] with respect to the preceding Due Period and such Interchange shall be
treated as a portion of Collections of Finance Charge and Administrative
Receivables allocable to Series 2000-[.] for all purposes of this Indenture
Supplement, the Indenture and the Transfer and Servicing Agreement.
Notwithstanding the above, if the Transferor shall have delivered to the
Indenture Trustee an Officer's Certificate stating that the Transferor
reasonably believes that such action will not have an adverse effect, the
Transferor may, in lieu of causing the deposit of Interchange into the
Collection Account as set forth above, designate Discount Option Collections
pursuant to Section 2.12 of the Transfer and Servicing Agreement in an amount
approximately equal to the then current Interchange with respect to the
Accounts.
[END OF ARTICLE III]
16
ARTICLE IV
Rights of Series 2000-[.] Noteholders
and Allocation and Application of Collections
Section 4.01. Collections and Allocations.
---------------------------
(a) Allocations. Collections of Finance Charge and
-----------
Administrative Receivables and Principal Receivables and Defaulted Receivables
allocated to Series 2000-[.] pursuant to Article VIII of the Indenture (and, as
described herein, Collections of Finance Charge and Administrative Receivables
reallocated from other Series in Reallocation Group One) shall be allocated and
distributed as set forth in this Article.
(b) Payments to the Transferor. The Servicer shall on Deposit
--------------------------
Dates withdraw from the Collection Account and, after giving effect to the
deposit into the Special Funding Account, pay to the Owner Trustee for
distribution in accordance with the Trust Agreement the following amounts:
(i) an amount equal to the Transferor Percentage for the
related Due Period of Collections of Finance Charge and Administrative
Receivables allocable to Series 2000-[.] to the extent such amount is
deposited in the Collection Account; and
(ii) an amount equal to the Transferor Percentage for the
related Due Period of Collections of Principal Receivables allocable to
Series 2000-[.] 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 Noteholders' Collateral pursuant to Section 2.06 or 7.01 of the Transfer and
Servicing Agreement or Section 11.04 of the Indenture and payment of the
purchase price for the Series 2000-[.] Noteholders' Collateral pursuant to
Section 7.01 of this Indenture Supplement.
(c) Allocations to the Series 2000-[.] Noteholders. The Servicer
----------------------------------------------
shall, prior to the close of business on any Deposit Date, allocate to the
Series 2000-[.] Noteholders the following amounts as set forth below:
(i) Allocations of Finance Charge Collections. The Servicer
-----------------------------------------
shall allocate to the Series 2000-[.] Noteholders and retain in the
Collection Account for application as provided herein an amount equal to
the product of (A) the Investor Percentage and (B) the aggregate amount of
Collections of Finance Charge and Administrative Receivables deposited in
the Collection Account on such Deposit Date.
(ii) Allocations of Principal Collections. The Servicer shall
------------------------------------
allocate to the Series 2000-[.] Noteholders the following amounts as set
forth below:
(A) Allocations During the Revolving Period. During the
---------------------------------------
Revolving Period an amount equal to the product of (I) the Investor
Percentage and (II) the aggregate amount of Collections of Principal
Receivables deposited in the Collection Account on
17
such Deposit Date, shall be allocated to the Series 2000-[.]
Noteholders and retained in the Collection Account until applied as
provided herein.
(B) Allocations During the Controlled Accumulation Period.
-----------------------------------------------------
During the Controlled Accumulation Period an amount equal to the
product of (I) the Investor Percentage and (II) the aggregate amount
of Collections of Principal Receivables deposited in the Collection
Account on such Deposit Date (the product for any such date is
hereinafter referred to as a "Percentage Allocation") shall be
---------------------
allocated to the Series 2000-[.] Noteholders and deposited in the
Principal Funding 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 Due Period
exceeds the Controlled Deposit Amount 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 in Principal
Sharing Group One 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
to other Series in Principal Sharing Group One on the related
Distribution Date, and second paid to the Owner Trustee for
distribution the holders of the Transferor Certificates in accordance
with the Trust Agreement 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
for Pool One.
(C) Allocations During the Early Amortization Period. During the
------------------------------------------------
Early Amortization Period, an amount equal to the product of (I) the
Investor Percentage and (II) the aggregate amount of Collections of
Principal Receivables deposited in the Collection Account on such
Deposit Date, shall be allocated to the Series 2000-[.] Noteholders
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 Note Principal Balance has been
deposited into the Collection Account and allocated to the Series 200
0-[.] Noteholders, the excess over such amount shall be first, if any
other Principal Sharing Series in Principal Sharing Group One 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 Owner Trustee for distribution the
holders of the Transferor Certificates in accordance with the Trust
Agreement 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 for Pool One.
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 Notes 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 related
Interest Period and the denominator of which is 360, times (B) the Class A Note
Interest Rate in effect with respect to the related Interest Period and (ii) the
Class A Note Principal Balance as of the close of business on the last day of
the preceding Due Period.
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
18
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) a fraction, the numerator of which is the actual number of days in the
related Interest Period and the denominator of which is 360, times (B) the Class
A Note Interest Rate and (ii) such Class A Interest Shortfall (or the portion
thereof which has not been paid to the Class A Noteholders) shall be payable as
provided herein with respect to the Class A Notes. Notwithstanding anything to
the contrary herein, Class A Additional Interest shall be payable or distributed
to the Class A Noteholders only to the extent permitted by applicable law.
(b) The amount of monthly interest ("Class B Monthly Interest")
------------------------
distributable from the Collection Account with respect to the Class B Notes 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 related
Interest Period and the denominator of which is 360, times (B) the Class B Note
Interest Rate in effect with respect to the related Interest Period and (ii) the
Class B Note Principal Balance as of the close of business on the last day of
the preceding Due Period.
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) 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, times (B)
the Class B Note Interest Rate and (ii) such Class B Interest Shortfall (or the
portion thereof which has not been paid to the Class B Noteholders) shall be
payable as provided herein with respect to the Class B Notes. Notwithstanding
anything to the contrary herein, Class B Additional Interest shall be payable or
distributed to the Class B Noteholders only to the extent permitted by
applicable law.
(c) The amount of monthly interest ("Class C Monthly Interest")
------------------------
distributable from the Collection Account with respect to the Class C Notes 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 related
Interest Period and the denominator of which is 360, times (B) the Class C Note
Interest Rate in effect with respect to the related Interest Period and (ii) the
Class C Note Principal Balance as of the close of business on the last day of
the preceding Due Period.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine an amount (the "Class C Interest Shortfall") equal to
--------------------------
(x) the Class C Monthly Interest for such Distribution Date minus (y) the
aggregate amount of funds allocated and available to pay such Class C Monthly
Interest on such Distribution Date. If the Class C Interest Shortfall with
respect to any Distribution Date is greater than zero, on each subsequent
Distribution Date until such Class C Interest Shortfall is fully paid, an
additional amount ("Class C Additional Interest") shall be payable as provided
---------------------------
herein with respect to the Class C Notes 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, times (B) the Class
C Note Interest Rate, and (ii) such Class C Interest Shortfall (or the portion
thereof which has not been paid to the Class C Noteholders (after giving effect
to the application of the proceeds of any draw made on the Spread Account as
provided in subsection 4.04(a)(vi) and Section 4.12(c) for the purpose of paying
such amount with respect to such Distribution Date)). Notwithstanding anything
to the contrary herein,
19
Class C Additional Interest shall be payable or distributed to the Class C
Noteholders only to the extent permitted by applicable law.
Section 4.03. Determination of Monthly Principal.
----------------------------------
The amount of monthly principal distributable from the Collection Account
with respect to the Notes on each Distribution Date (the "Monthly Principal"),
-----------------
beginning with the Distribution Date in the month following the month in which
the Controlled Accumulation Period or, if earlier, the Early Amortization
Period, begins, shall be equal to the least of (i) the Available Investor
Principal Collections on deposit in the Collection Account with respect to such
Distribution Date, (ii) for each Distribution Date with respect to the
Controlled Accumulation Period, the Controlled Deposit Amount for such
Distribution Date and (iii) the Adjusted Invested Amount (after taking into
account any adjustments to be made on such Distribution Date pursuant to
Sections 4.05 and 4.06).
Section 4.04. Application of Available Funds on Deposit in the Collection
-----------------------------------------------------------
Account. The Servicer shall apply, or shall cause the Indenture Trustee to apply
-------
by written instruction to the Indenture Trustee, on each Distribution Date,
Reallocated Investor Finance Charge and Administrative Collections, Excess
Finance Charge and Administrative Collections allocable to Series 2000-[.] in
accordance with Section 4.07 and Available Investor 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 sum of (x)
Reallocated Investor Finance Charge and Administrative Collections and (y)
Excess Finance Charge and Administrative Collections allocable to Series 2000-
[.] in accordance with Section 4.07, 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 Noteholders on a prior
Distribution Date, plus the amount of any Class A Additional Interest for
such Distribution Date plus the amount of any Class A Additional Interest
previously due but not distributed to Class A Noteholders on a prior
Distribution Date, shall be distributed to the Paying Agent for payment to
Class A Noteholders on such Distribution Date;
(ii) 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 Noteholders on a prior
Distribution Date, plus the amount of any Class B Additional Interest for
such Distribution Date plus the amount of any Class B Additional Interest
previously due but not distributed to Class B Noteholders on a prior
Distribution Date, shall be distributed to the Paying Agent for payment to
Class B Noteholders on the applicable Distribution Date;
(iii) (A) if HFC or an Affiliate of HFC is no longer the
Servicer, an amount equal to the Monthly Servicing Fee for such
Distribution Date, plus the amount of any Monthly Servicing Fee previously
due but not distributed to such Servicer on a prior Distribution Date,
shall be distributed to such Servicer (unless such amount has been netted
against deposits to the Collection Account in accordance with Section 8.04
of the Indenture) and (B) if HFC or an Affiliate of HFC is no longer the
Administrator, an amount equal to the Monthly Administration Fee for such
Distribution Date, plus the amount of any Monthly Administration Fee
previously due but not distributed to such Administrator on a prior
Distribution Date, shall be distributed to such Administrator (unless such
amount has been netted against deposits to the Collection Account in
accordance with Section 8.04 of the Indenture);
20
(iv) an amount equal to Class C Monthly Interest for such
Distribution Date, plus the amount of any Class C Monthly Interest
previously due but not distributed to the Class C Noteholders on a prior
Distribution Date, plus the amount of any Class C Additional Interest for
such Distribution Date and any Class C Additional Interest previously due
but not distributed to the Class C Noteholders on a prior Distribution Date
shall be distributed to the Paying Agent for payment to the Class C
Noteholders on such Distribution Date; provided, however, that, in the
event that Class C Monthly Interest exceeds the amount of Reallocated
Investor Finance Charge and Administrative Collections and Excess Finance
Charge and Administrative Collections available (after giving effect to
subsections 4.04(a)(i) through (iii) above) to fund such Class C Monthly
Interest, a draw will be made from amounts available for distribution in
the Spread Account (at the times and in the amounts specified in Section
4.12) and shall be distributed to the Paying Agent for payment to the Class
C Noteholders on such Distribution Date in accordance with this subsection
4.04(a)(iv);
(v) an amount equal to the Investor Defaulted Amount for such
Distribution Date shall be treated as a portion of Available Investor
Principal Collections for such Distribution Date;
(vi) an amount equal to the sum of the aggregate amount of
Investor Charge-Offs and the amount of Subordinated Principal Collections
which have not been previously reimbursed shall be treated as a portion of
Available Investor Principal Collections for such Distribution Date;
(vii) if HFC or an Affiliate of HFC is the Servicer, 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;
(viii) if HFC or an Affiliate of HFC is the Administrator, an
amount equal to the Monthly Administration Fee for such Distribution Date
and any Monthly Administration Fee due but not paid to the Administrator on
a prior Distribution Date shall be paid to the Administrator;
(ix) on each Distribution Date from and after the Reserve
Account Funding Date, but prior to the date on which the Reserve Account
terminates as described in Section 4.11(f), an amount equal to the excess,
if any, of the Required Reserve Account Amount over the Available Reserve
Account Amount shall be deposited into the Reserve Account;
(x) (a) prior to the occurrence of an Event of Default with
respect to Series 2000-[.] and acceleration of the maturity of the Series
2000-[.] Notes pursuant to Section 5.03 of the Indenture, an amount equal
to the amounts required to be deposited in the Spread Account pursuant to
Section 4.12 shall be deposited into the Spread Account as provided in
Section 4.12; and (b) upon the occurrence of an Event of Default with
respect to Series 2000-[.] and acceleration of the maturity of the Series
2000-[.] Notes pursuant to Section 5.03 of the Indenture the balance, if
any, up to the outstanding Note Principal Balance shall be treated as a
portion of Available Investor Principal Collections for such Distribution
Date for distribution to the Series 2000-[.] Noteholders; and
(xi) the balance, if any, will constitute a portion of Excess
Finance Charge and Administrative Collections for such Distribution Date
and will be available for allocation to other Series in Excess Finance
Charge Sharing Group One or to the Owner Trustee for
21
distribution in accordance with the Trust Agreement, as set forth in
Section 8.08C of the Indenture.
(b) On each Distribution Date with respect to the Revolving Period,
an amount equal to the Available Investor Principal Collections deposited in the
Collection Account for the related Due Period shall be treated as Shared
Principal Collections with respect to Principal Sharing Group One and applied in
accordance with Section 8.05 of the Indenture.
(c) On each Distribution Date with respect to the Controlled
Accumulation Period or the Early Amortization Period, an amount equal to the
Available Investor Principal Collections deposited in the Collection Account for
the related Due Period shall be distributed or deposited in the following order
of priority:
(i) during the Controlled Accumulation Period and prior to the
payment in full of the Class A Notes, the Class B Notes and the Class C
Notes, an amount equal to the Monthly Principal for such Distribution Date
shall be deposited into the Principal Funding Account;
(ii) during the Early Amortization Period, an amount equal to
the Monthly Principal for such Distribution Date shall be distributed to
the Paying Agent for payment to the Class A Noteholders on such
Distribution Date and on each subsequent Distribution Date until the Class
A Note Principal Balance has been paid in full;
(iii) after giving effect to the distribution referred to in
clause (ii) above, during the Early Amortization Period, an amount equal to
the Monthly Principal remaining, if any, shall be distributed to the Paying
Agent for payment to the Class B Noteholders on such Distribution Date and
on each subsequent Distribution Date until the Class B Note Principal
Balance has been paid in full;
(iv) after giving effect to the distributions referred to in
clauses (ii) and (iii) above, during the Early Amortization Period, an
amount equal to the Monthly Principal remaining, if any, shall be
distributed to the Paying Agent for payment to the Class C Noteholders on
such Distribution Date and on each subsequent Distribution Date until the
Class C Note Principal Balance has been paid in full;
(v) the balance of such Available Investor Principal
Collections shall be treated as Shared Principal Collections with respect
to Principal Sharing Group One and applied in accordance with Section 8.05
of the Indenture.
(d) On the earlier to occur of (i) the first Distribution Date with
respect to the Early Amortization Period and (ii) the Expected Principal Payment
Date, the Indenture Trustee, acting in accordance with instructions from the
Servicer, shall withdraw from the Principal Funding Account and distribute to
the Paying Agent for payment first, to the Class A Noteholders up to the Class A
Note Principal Balance, second, to the Class B Noteholders up to the Class B
Note Principal Balance, and third, to the Class C Noteholders up to the Class C
Note Principal Balance, the amounts deposited into the Principal Funding Account
pursuant to subsection 4.04(c)(i).
(e) The Controlled Accumulation Period is scheduled to commence at
the close of business on [.], 20[.]; provided, however, that, if the
Accumulation Period Length (determined as described below) is less than 12 Due
Periods, the date on which the Controlled Accumulation Period actually commences
will be delayed to the first Business Day of the Due Period that is the number
of
22
whole Due Periods prior to the Expected Principal Payment Date at least equal to
the Accumulation Period Length and, as a result, the number of Due Periods in
the Controlled Accumulation Period will at least equal the Accumulation Period
Length. On the Determination Date immediately preceding the [.] Distribution
Date, and each Determination Date thereafter until the Controlled Accumulation
Period begins, the Servicer will determine the "Accumulation Period Length"
--------------------------
which will equal the number of whole Due Periods such that the sum of the
Accumulation Period Factors for each Due Period during such period will be equal
to or greater than the Required Accumulation Factor Number; provided, however,
that the Accumulation Period Length will not be determined to be less than one
Due Period; provided further, however, that the determination of the
Accumulation Period Length may be changed at any time if the Rating Agency
Condition is satisfied.
Section 4.05 Investor Charge-Offs. On each Determination Date, the
--------------------
Servicer shall calculate the Investor Defaulted Amount, if any, for the related
Distribution Date. If, on any Distribution Date, the Investor Defaulted Amount
for the related Due Period exceeds the amount available therefor pursuant to
Section 4.04(a)(v) with respect to such Due Period, the Invested Amount will be
reduced by the amount of such excess, but not by more than the Investor
Defaulted Amount for such Distribution Date (such reduction, an "Investor Charge
---------------
Off").
---
Section 4.06. Subordinated Principal Collections. On each Distribution
----------------------------------
Date, the Servicer shall apply, or shall cause the Indenture Trustee to withdraw
from the Principal Account and apply, Subordinated Principal Collections with
respect to such Distribution Date, in an amount equal to the lesser of the
Available Investor Principal Collections and the Monthly Subordination Amount
for the preceding Due Period, and apply such amounts on such Distribution Date
in accordance with the priority set forth in clauses (i) through (iii) of
Section 4.04(a). On each Distribution Date, the Invested Amount shall be reduced
by the amount of Subordinated Principal Collections for such Distribution Date.
Section 4.07. Excess Finance Charge and Administrative Collections.
----------------------------------------------------
Subject to Section 8.08C of the Indenture, Excess Finance Charge and
Administrative Collections with respect to the Excess Finance Charge Sharing
Series in Excess Finance Charge Sharing Group One for any Distribution Date will
be allocated to Series 2000-[.] in an amount equal to the product of (x) the
aggregate amount of Excess Finance Charge and Administrative Collections with
respect to all the Excess Finance Charge Sharing Series in Excess Finance Charge
Sharing Group One for such Distribution Date and (y) a fraction, the numerator
of which is the Finance Charge Shortfall for Series 2000-[.] for such
Distribution Date and the denominator of which is the aggregate amount of
Finance Charge Shortfalls for all the Excess Finance Charge Sharing Series in
Excess Finance Charge Sharing Group One for such Distribution Date. The "Finance
-------
Charge Shortfall" for Series 2000-[.] 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 4.04(a)(i) through (ix) on such
Distribution Date over (b) the Reallocated Finance Charge and Administrative
Collections with respect to such Distribution Date.
Section 4.08. Shared Principal Collections.
----------------------------
Subject to Section 8.05 of the Indenture, Shared Principal Collections
with respect to the Series in Principal Sharing Group One for any Distribution
Date will be allocated to Series 2000-[.] in an amount equal to the product of
(i) the aggregate amount of Shared Principal Collections with respect to all
Principal Sharing Series in Principal Sharing Group One for such Distribution
Date and (ii) a fraction, the numerator of which is the Series 2000-[.]
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 in Principal Sharing Group One for such Distribution
Date. The "Series 2000-[.] Principal Shortfall" will be equal to (i) for any
-----------------------------------
Distribution Date with respect to the Revolving Period, zero, (ii) for any
Distribution Date with respect to the Controlled Accumulation Period, the
excess, if any,
23
of the Controlled Deposit Amount with respect to such Distribution Date over the
amount of Available Investor Principal Collections for such Distribution Date
(excluding any portion thereof attributable to Shared Principal Collections),
and (iii) for any Distribution Date with respect to the Early Amortization
Period, the excess, if any, of the Invested Amount over the amount of Available
Investor Principal Collections for such Distribution Date (excluding any portion
thereof attributable to Shared Principal Collections).
Section 4.09. Reallocated Investor Finance Charge and Administrative
------------------------------------------------------
Collections. (a) That portion of Reallocation Group One Investor Finance Charge
-----------
and Administrative Collections for any Distribution Date equal to the amount of
Reallocated Investor Finance Charge and Administrative Collections for such
Distribution Date will be allocated to Series 2000-[.] and will be distributed
as set forth in this Series Supplement.
(b) Reallocated Investor Finance Charge and Administrative
Collections, with respect to any Distribution Date shall equal the sum of (i)
the aggregate amounts payable under Sections 4.04(a)(i) through (ix) and (ii)
that portion of excess Reallocation Group One Investor Finance Charge and
Administrative Collections to be included in Reallocated Investor Finance Charge
and Administrative Collections pursuant to subsection (c) hereof; provided,
however, that if the amount of Reallocation Group One Investor Finance Charge
and Administrative Collections for such Distribution Date is less than the sum
of (A) Reallocation Group One Monthly Interest, (B) Reallocation Group One
Investor Default Amount, (C) Reallocation Group One Monthly Fees, and (D)
Reallocation Group One Investor Additional Amounts, then Reallocated Investor
Finance Charge and Administrative Collections shall equal the sum of the
following amounts for such Distribution Date:
(1) The product of (I) Reallocation Group One Investor
Finance Charge and Administrative Collections (up to the amount of
Reallocation Group One Monthly Interest) and (II) a fraction, the numerator
of which is the sum of the amounts payable in Sections 4.04(a)(i), (ii) and
(iv) and the denominator of which is Reallocation Group One Monthly
Interest;
(2) the product of (I) Reallocation Group One Investor
Finance Charge and Administrative Collections less the amount of
Reallocation Group One Monthly Interest (up to the Reallocation Group One
Investor Default Amount) and (II) a fraction, the numerator of which is the
Investor Defaulted Amount and the denominator of which is the Reallocation
Group One Investor Default Amount;
(3) the product of (I) Reallocation Group One Investor
Finance Charge and Administrative Collections less the amount of
Reallocation Group One Monthly Interest and the Reallocation Group One
Investor Default Amount (up to Reallocation Group One Monthly Fees) and
(II) a fraction, the numerator of which is the sum of the amounts payable
in Section 4.04(a)(iii), (vi), (vii), (viii) and (ix) for Series 2000-[.]
and the denominator of which is Reallocation Group One Monthly Fees; and
(4) the product of (I) Reallocation Group One Investor
Finance Charge and Administrative Collections less the amount of
Reallocation Group One Monthly Interest, the Reallocation Group One
Investor Default Amount, and the Reallocation Group One Investor Monthly
Fees, and (II) a fraction, the numerator of which is Additional Amounts and
the denominator of which is Reallocation Group One Investor Additional
Amounts.
(c) If the amount of Reallocation Group One Investor Finance
Charge and Administrative Collections for such Distribution Date exceeds the sum
of (i) Reallocation Group One Monthly Interest, (ii) Reallocation Group One
Investor Default Amount, (iii) Reallocation Group One
24
Monthly Fees, and (iii) Reallocation Group One Investor Additional Amounts, then
Reallocated Investor Finance Charge and Administrative Collections for such
Distribution Date shall include an amount equal to the product of (A) the amount
of such excess and (B) a fraction, the numerator of which is the Adjusted
Invested Amount as of the last day of the second preceding Due Period and the
denominator of which is the sum of such Adjusted Invested Amount and the
aggregate invested amounts for all other Series included in Reallocation Group
One as of such last day.
Section 4.10. Principal Funding Account.
-------------------------
(a) The Indenture Trustee shall establish and maintain with an
Eligible Institution, which may be the Indenture Trustee, in the name of the
Trust, on behalf of the Trust, for the benefit of the Noteholders, a segregated
trust account with the corporate trust department of such Eligible Institution
(the "Principal Funding Account"), bearing a designation clearly indicating that
-------------------------
the funds deposited therein are held for the benefit of the Noteholders. The
Indenture 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 Indenture Trustee for the benefit of the Noteholders. If at any
time the institution holding the Principal Funding Account ceases to be an
Eligible Institution, the Transferor shall notify the Indenture Trustee, and the
Indenture Trustee upon being notified (or the Servicer on its behalf) shall,
within 10 Business Days, establish a new Principal Funding Account meeting the
conditions specified above with an Eligible Institution, and shall transfer any
cash or any investments to such new Principal Funding Account. The Indenture
Trustee, at the direction of the Servicer, shall (i) make withdrawals from the
Principal Funding Account from time to time, in the amounts and for the purposes
set forth in this Indenture Supplement, and (ii) on each Distribution Date (from
and after the commencement of the Controlled Accumulation Period) prior to the
termination of the Principal Funding Account, make deposits into the Principal
Funding Account in the amounts specified in, and otherwise in accordance with,
subsection 4.04(c)(i).
(b) Funds on deposit in the Principal Funding Account shall be
invested at the direction of the Servicer by the Indenture Trustee in Eligible
Investments. Funds on deposit in the Principal Funding Account on any
Distribution Date, after giving effect to any withdrawals from the Principal
Funding Account on such Distribution 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 Distribution Date. The Indenture Trustee shall:
(i) hold each Eligible Investment that constitutes
investment property through a securities intermediary, which securities
intermediary shall agree with the Indenture Trustee that (A) such
investment property shall at all times be credited to a securities account
of the Indenture Trustee, (B) such securities intermediary shall comply
with entitlement orders originated by the Indenture Trustee without the
further consent of any other person or entity, (C) all property credited to
such securities account shall be treated as a financial asset, (D) such
securities intermediary shall waive any lien on, security interest in, or
right of set-off with respect to any property credited to such securities
account, and (E) such agreement shall be governed by the laws of the State
of New York; and
(ii) maintain possession of each other Eligible Investment
not described in clause (i) above;
provided, that no Eligible Investment shall be disposed of prior to its maturity
date. Terms used in clause (i) above that are defined in the New York UCC and
not otherwise defined herein shall have the meaning set forth in the New York
UCC.
25
On each Distribution Date with respect to the Controlled Accumulation
Period and on the first Distribution Date with respect to the Early Amortization
Period, the Indenture Trustee, acting at the Servicer's direction given on or
before such Distribution Date, shall transfer from the Principal Funding Account
to the Collection Account the Principal Funding Investment Proceeds on deposit
in the Principal Funding Account for application as Available Investor Finance
Charge and Administrative Collections for such Distribution Date.
Principal Funding Investment Proceeds (including reinvested interest)
shall not be considered part of the amounts on deposit in the Principal Funding
Account for purposes of this Indenture Supplement.
Section 4.11. Reserve Account.
---------------
(a) The Indenture Trustee shall establish and maintain with an
Eligible Institution, which may be the Indenture Trustee in the name of the
Trust, on behalf of the Trust, for the benefit of the Noteholders, a segregated
trust account with the corporate trust department of such Eligible Institution
(the "Reserve Account"), bearing a designation clearly indicating that the funds
---------------
deposited therein are held for the benefit of the Noteholders. The Indenture
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 Indenture Trustee
for the benefit of the Noteholders. If at any time the institution holding the
Reserve Account ceases to be an Eligible Institution, the Transferor shall
notify the Indenture Trustee, and the Indenture Trustee upon being notified (or
the Servicer on its behalf) shall, within 10 Business Days (or such longer
period as the Rating Agency may consent), establish a new Reserve Account
meeting the conditions specified above with an Eligible Institution, and shall
transfer any cash or any investments to such new Reserve Account. The Indenture
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 Indenture
Supplement, and (ii) on each Distribution Date (from and after the Reserve
Account Funding Date) prior to termination of the Reserve Account, make a
deposit into the Reserve Account in the amount specified in, and otherwise in
accordance with, subsection 4.04(a)(ix).
(b) Funds on deposit in the Reserve Account shall be invested at
the direction of the Servicer by the Indenture Trustee in Eligible Investments.
Funds on deposit in the Reserve Account on any Distribution Date, after giving
effect to any withdrawals from the Reserve Account on such Distribution 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 Distribution Date. The
Indenture Trustee shall:
(i) hold each Eligible Investment that constitutes
investment property through a securities intermediary, which securities
intermediary shall agree with the Indenture Trustee that (A) such
investment property shall at all times be credited to a securities account
of the Indenture Trustee, (B) such securities intermediary shall comply
with entitlement orders originated by the Indenture Trustee without the
further consent of any other person or entity, (C) all property credited to
such securities account shall be treated as a financial asset, (D) such
securities intermediary shall waive any lien on, security interest in, or
right of set-off with respect to any property credited to such securities
account, and (E) such agreement shall be governed by the laws of the State
of New York; and
(ii) maintain possession of each other Eligible Investment
not described in clause (i) above;
provided, that no Eligible Investment shall be disposed of prior to its maturity
date. Terms used in clause
26
(i) above that are defined in the New York UCC and not otherwise defined herein
shall have the meaning set forth in the New York UCC.
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 into the
Collection Account and included in Available Investor Finance Charge and
Administrative Collections for such Distribution Date. For purposes of
determining the availability of funds or the balance in the Reserve Account for
any reason under this Indenture 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 or before each Distribution Date with respect to the
Controlled Accumulation Period and on or before the first Distribution Date with
respect to the Early Amortization Period, the Servicer shall calculate the
Reserve Draw Amount; provided, however, that such amount will be reduced to the
extent that funds otherwise would be available for deposit in the Reserve
Account under Section 4.04(a)(ix) with respect to such Distribution 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 such
Distribution Date by the Indenture Trustee (acting in accordance with the
instructions of the Servicer) and deposited into the Collection Account for
application as Available Investor Finance Charge and Administrative Collections
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 Indenture Trustee, acting in accordance with the instructions of the
Servicer, shall withdraw from the Reserve Account and pay to the Owner Trustee
for distribution in accordance with the Trust Agreement an amount equal to such
Reserve Account Surplus.
(f) Upon the earliest to occur of (i) the termination of the Trust
pursuant to Article VIII of the Trust Agreement, (ii) if the Controlled
Accumulation Period has not commenced, the first Distribution Date relating to
the Early Amortization Period and (iii) if the Controlled Accumulation Period
has commenced, the earlier of the first Distribution Date with respect to the
Early Amortization Period and the Expected Principal Payment Date, the Indenture
Trustee, acting in accordance with the instructions of the Servicer, after the
prior payment of all amounts owing to the Series 2000-[.] Noteholders that are
payable from the Reserve Account as provided herein, shall withdraw from the
Reserve Account and pay to the Owner Trustee for distribution in accordance with
the Trust 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
Indenture Supplement; provided, however, that following the occurrence of an
Event of Default with respect to Series 2000-[.] and acceleration of the
maturity of the Series 2000-[.] Notes pursuant to Section 5.03 of the Indenture,
the Servicer shall withdraw from the Reserve Account all amounts on deposit
therein and the Indenture Trustee or the Servicer shall deposit such amounts in
the Collection Account for distribution to the Noteholders in accordance with
Section 5.02 to fund any shortfalls in amounts owed to such Noteholders.
Section 4.12. Spread Account.
--------------
(a) The Indenture Trustee shall establish and maintain with an
Eligible Institution, which may be the Indenture Trustee in the name of the
Trust, on behalf of the Trust, for the benefit of the Class C Noteholders, a
segregated account with the corporate trust department of such Eligible
Institution
27
(the "Spread Account"), bearing a designation clearly indicating that the
--------------
funds deposited therein are held for the benefit of the Class C Noteholders.
Except as otherwise provided in this Section 4.12, the Indenture Trustee shall
possess all right, title and interest in all funds on deposit from time to time
in the Spread Account and in all proceeds thereof. The Spread Account shall be
under the sole dominion and control of the Indenture Trustee for the benefit of
the Class C Noteholders. If at any time the institution holding the Spread
Account ceases to be an Eligible Institution, the Transferor shall notify the
Indenture Trustee, and the Indenture Trustee upon being notified (or the
Servicer on its behalf) shall, within 10 Business Days (or such longer period as
to which the Rating Agency may consent) establish a new Spread Account meeting
the conditions specified above with an Eligible Institution, and shall transfer
any cash or any investments to such new Spread Account. The Indenture Trustee,
at the direction of the Servicer, shall (i) make withdrawals from the Spread
Account from time to time in an amount up to the Available Spread Account Amount
at such time, for the purposes set forth in this Indenture Supplement, and (ii)
on each Distribution Date prior to termination of the Spread Account, make a
deposit into the Spread Account in the amount specified in, and otherwise in
accordance with, Section 4.04(a).
(b) Funds on deposit in the Spread Account shall be invested at
the direction of the Servicer by the Indenture Trustee in Eligible Investments;
provided, however, that, for purposes of the investment of funds on deposit in
the Spread Account, references in the definition of "Eligible Investments" to a
rating in the "highest rating category" shall be modified to require a rating,
from any one of the following Rating Agencies, of at least A-2 by Standard &
Poor's, P-2 by Xxxxx'x or (if such investment is rated by Fitch) F2 by Fitch.
Funds on deposit in the Spread Account on any Distribution Date, after giving
effect to any withdrawals from and deposits to the Spread Account on such
Distribution 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
Distribution Date. The Indenture Trustee shall:
(i) hold each Eligible Investment that constitutes
investment property through a securities intermediary, which securities
intermediary shall agree with the Indenture Trustee that (A) such
investment property shall at all times be credited to a securities account
of the Indenture Trustee, (B) such securities intermediary shall comply
with entitlement orders originated by the Indenture Trustee without the
further consent of any other person or entity, (C) all property credited to
such securities account shall be treated as a financial asset, (D) such
securities intermediary shall waive any lien on, security interest in, or
right of set-off with respect to any property credited to such securities
account, and (E) such agreement shall be governed by the laws of the State
of New York; and
(ii) maintain possession of each other Eligible Investment
not described in clause (i) above;
provided, that no Eligible Investment shall be disposed of prior to its maturity
date. Terms used in clause (i) above that are defined in the New York UCC and
not otherwise defined herein shall have the meaning set forth in the New York
UCC.
On each Distribution Date (but subject to subsections 4.12(c), 4.12(d)
and 4.12(e)), the Investment Earnings, if any, accrued since the preceding
Distribution Date on funds on deposit in the Spread Account shall be paid by the
Indenture Trustee to the Owner Trustee for distribution to the holders of the
Transferor Certificates pursuant to the Trust Agreement. For purposes of
determining the availability of funds or the balance in the Spread Account for
any reason under this Indenture Supplement (subject to subsections 4.12(c),
4.12(d) and 4.12(e)), all Investment Earnings shall be deemed not to be
available or on deposit.
28
(c) If, on any Distribution Date, the aggregate amount available
for distribution pursuant to subsection 4.04(a)(iv) is less than the aggregate
amount required to be distributed pursuant to subsection 4.04(a)(iv), the
Indenture Trustee, at the direction of the Servicer, shall withdraw from the
Spread Account the amount of such deficiency up to the Available Spread Account
Amount and, if the Available Spread Account Amount is less than such deficiency,
Investment Earnings credited to the Spread Account, and deposit such amount in
the Collection Account for payment to the Class C Noteholders in respect of
interest on the Class C Notes.
(d) On the Series 2000-[.] Final Maturity Date, or on any earlier
Distribution Date on which the outstanding principal balance of the Class A
Notes and the Class B Notes is paid in full, the Indenture Trustee at the
direction of the Servicer shall withdraw from the Spread Account an amount equal
to the lesser of (i) the outstanding principal balance of the Class C Notes
(after any payments to be made on such date) and (ii) the Available Spread
Account Amount and, if the Available Spread Account Amount is less than the
amount of such excess, Investment Earnings credited to the Spread Account up to
the amount of such excess, and the Indenture Trustee or the Servicer shall
deposit such amounts into the Collection Account for distribution to the Class C
Noteholders in accordance with subsection 5.02(e).
(e) On any day following the occurrence of an Event of Default
with respect to Series 2000-[.] and acceleration of the maturity of the Series
2000-[.] Notes pursuant to Section 5.03 of the Indenture, the Servicer shall
withdraw from the Spread Account all amounts on deposit therein (including all
Investment Earnings, if any, on funds on deposit in the Spread Account) and the
Indenture Trustee or the Servicer shall deposit such amounts in the Collection
Account for distribution to the Class C Noteholders, the Class A Noteholders and
the Class B Noteholders, in that order of priority, in accordance with Section
5.02, to fund any shortfalls in amounts owed to such Noteholders.
(f) If on any Distribution Date, after giving effect to all
withdrawals from the Spread Account, the Available Spread Account Amount is less
than the Required Spread Account Amount then in effect, Reallocated Investor
Finance Charge and Administrative Collections and Excess Finance Charge and
Administrative Collections shall be deposited into the Spread Account under the
circumstances set forth in subsection 4.04(a)(x) up to the amount of the Spread
Account Deficiency.
(g) After the Spread Account Percentage has been increased above
zero pursuant to any of clauses (ii) through (v) of the definition thereof, the
Spread Account Percentage shall remain at that percentage until (a) further
increased to a higher required percentage specified in clauses (ii) through (v)
of the definition thereof or (b) the Distribution Date on which the Quarterly
Excess Spread Percentage has increased to a level above that for the then
current Spread Account Percentage, in which case the Spread Account Percentage
shall be decreased to the appropriate percentage in clauses (ii) through (iv) of
the definition thereof (or, if the Excess Spread Percentage is greater than or
equal to [.]%, the Spread Account Percentage shall be zero and the Required
Spread Account Amount shall be $0). Notwithstanding the foregoing, if an
Amortization Event with respect to Series 2000-[.] has occurred, the Spread
Account Percentage shall equal [.]% (as provided in the definition of Spread
Account Percentage) and shall no longer be subject to reduction.
(h) If on any Distribution Date, after giving effect to all
withdrawals from and deposits to the Spread Account, the amount on deposit in
the Spread Account would exceed the Required Spread Account Amount then in
effect, the Indenture Trustee shall, at the written direction of the Servicer,
release such excess to the Transferor. On the date on which the Class C Note
Principal Balance has been paid in full (including amounts to be paid to the
Class C Noteholders pursuant to subsection 4.12(d) above), the Indenture
Trustee, at the direction of the Servicer, shall withdraw from the Spread
Account all amounts then remaining in the Spread Account and pay such amounts to
the Owner Trustee for distribution to the holders of the Transferor Certificates
in accordance with the Trust Agreement.
29
Section 4.13. Determination of LIBOR.
----------------------
(a) On each LIBOR Determination Date, the Indenture Trustee shall
determine LIBOR on the basis of the rate for deposits in United States dollars
for a one-month period which appears on Telerate Page 3750 as of 11:00 a.m.,
London time, on such date. If such rate does not appear on Telerate Page 3750,
the rate for that LIBOR Determination Date shall 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 one-month period. The Indenture
Trustee shall 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 shall 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 one-month period.
(b) The Class A Note Interest Rate, Class B Note Interest Rate and
Class C Note Interest Rate applicable to the then current and the immediately
preceding Interest Periods may be obtained by telephoning the Indenture Trustee
at its corporate trust office at [.] or such other telephone number as shall be
designated by the Indenture Trustee for such purpose by prior written notice by
the Indenture Trustee to each Noteholder from time to time.
(c) On each LIBOR Determination Date, the Indenture Trustee shall
send to the Servicer and the Administrator by facsimile transmission,
notification of LIBOR for the following Interest Period.
Section 4.14. Investment Instructions. Any investment instructions
-----------------------
required to be given to the Indenture Trustee pursuant to the terms hereof must
be given to the Indenture Trustee no later than 11:00 a.m. (New York City time)
on the date such investment is to be made. In the event the Indenture Trustee
receives such investment instruction later than such time, the Indenture Trustee
may, but shall have no obligation to, make such investment. In the event the
Indenture Trustee is unable to make an investment required in an investment
instruction received by the Indenture Trustee after [10:00] a.m. (New York City
time) on such day, such investment shall be made by the Indenture Trustee on the
next succeeding Business Day. In no event shall the Indenture Trustee be liable
for any investment not made pursuant to investment instructions received after
[10:00] a.m. (New York City time) on the day such investment is requested to be
made.
[END OF ARTICLE IV]
30
ARTICLE V
Delivery of Series 2000-[.] Notes;
Distributions; Reports to Series 2000-[.] Noteholders
Section 5.01. Delivery and Payment for the Series 2000-[.] Notes.
--------------------------------------------------
The Indenture Trustee shall execute and authenticate the Series 2000-
[.] Notes in accordance with Section 2.03 of the Master Indenture. The Indenture
Trustee shall deliver the Series 2000-[.] Notes to or upon the order of the
Trust when so authenticated.
Section 5.02. Distributions.
-------------
(a) On each Distribution Date, the Paying Agent shall distribute
to each Class A Noteholder of record on the related Record Date (other than as
provided in Section 11.02 of the Indenture) such Class A Noteholder'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 Notes pursuant to this
Indenture Supplement.
(b) On each Distribution Date, the Paying Agent shall distribute
to each Class A Noteholder of record on the related Record Date such Class A
Noteholder's pro rata share of the amounts held by the Paying Agent that are
allocated and available on such Distribution Date to pay principal of the Class
A Notes pursuant to this Indenture Supplement.
(c) On each Distribution Date, the Paying Agent shall distribute
to each Class B Noteholder of record on the related Record Date (other than as
provided in Section 11.02 of the Indenture) such Class B Noteholder'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 Notes pursuant to this
Indenture Supplement.
(d) On each Distribution Date, the Paying Agent shall distribute
to each Class B Noteholder of record on the related Record Date such Class B
Noteholder's pro rata share of the amounts held by the Paying Agent that are
allocated and available on such Distribution Date to pay principal of the Class
B Notes pursuant to this Indenture Supplement.
(e) On each Distribution Date, the Paying Agent shall distribute
to each Class C Noteholder of record on the related Record Date (other than as
provided in Section 11.02 of the Indenture) such Class C Noteholder's pro rata
share of the amounts held by the Paying Agent (including amounts held by the
Paying Agent with respect to amounts withdrawn from the Spread Account (at the
times and in the amounts specified in Section 4.12)) that are allocated and
available on such Distribution Date to pay interest on the Class C Notes
pursuant to this Indenture Supplement.
(f) On each Distribution Date, the Paying Agent shall distribute
to each Class C Noteholder of record on the related Record Date such Class C
Noteholder's pro rata share of the amounts held by the Paying Agent that are
allocated and available on such Distribution Date to pay principal of the Class
C Notes pursuant to this Indenture Supplement.
31
(g) The distributions to be made pursuant to this Section 5.02 are
subject to the provisions of Sections 2.06, 6.01 and 7.01 of the Transfer and
Servicing Agreement, Section 11.02 of the Indenture and Section 7.01 of this
Indenture Supplement.
(h) Except as provided in Section 11.02 of the Indenture with
respect to a final distribution, distributions to Series 2000-[.] Noteholders
hereunder shall be made by (i) check mailed to each Series 2000-[.] Noteholder
(at such Noteholder's address as it appears in the Note Register), except that
with respect to any Series 2000-[.] Notes registered in the name of the nominee
of a Clearing Agency, such distribution shall be made in immediately available
funds and (ii) without presentation or surrender of any Series 2000-[.] Note or
the making of any notation thereon.
Section 5.03. Reports and Statements to Series 2000-[.] Noteholders.
-----------------------------------------------------
(a) On each Distribution Date, the Paying Agent, on behalf of the
Indenture Trustee, shall forward to each Series 2000-[.] Noteholder a statement
substantially in the form of Exhibit C prepared by the Servicer.
---------
(b) Not later than the second Business Day preceding each
Distribution Date, the Servicer shall deliver to the Owner Trustee, the
Indenture Trustee, the Paying Agent and each Rating Agency (i) a statement
substantially in the form of Exhibit C prepared by the Servicer and (ii) a
---------
certificate of an Authorized Officer substantially in the form of Exhibit D;
---------
provided that the Servicer may amend the form of Exhibit C and Exhibit D,
--------- ---------
from time to time.
(c) A copy of each statement or certificate provided pursuant to
paragraph (a) or (b) may be obtained by any Series 2000-[.] Noteholder by a
request in writing to the Servicer.
(d) On or before January 31 of each calendar year, beginning with
calendar year 2001, the Paying Agent, on behalf of the Indenture Trustee, shall
furnish or cause to be furnished to each Person who at any time during the
preceding calendar year was a Series 2000-[.] Noteholder, a statement prepared
by the Servicer containing the information which is required to be contained in
the statement to Series 2000-[.] Noteholders, as set forth in paragraph (a)
above, aggregated for such calendar year 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.
[END OF ARTICLE V]
32
ARTICLE VI
Series 2000-[.] Amortization Events
Section 6.01. Series 2000-[.] Amortization Events. If any one of the
-----------------------------------
following events shall occur with respect to the Series 2000-[.] Notes:
(a) failure on the part of the Transferor (i) to make any
payment or deposit required by the terms of the Transfer and Servicing
Agreement, the Indenture or this Indenture 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 Transferor set forth in the Transfer and
Servicing Agreement, the Indenture or this Indenture Supplement, which failure
has an Adverse Effect on the Series 2000-[.] Noteholders and which continues
unremedied and continues to materially and adversely affect the interests of the
Noteholders for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Transferor by the Indenture Trustee, or to the Transferor and the Indenture
Trustee by any Holder of the Series 2000-[.] Notes;
(b) any representation or warranty made by the Transferor in the
Transfer and Servicing Agreement, the Indenture or this Indenture Supplement, or
any information contained in a computer file or microfiche list required to be
delivered by the Transferor pursuant to Section 2.01 or subsection 2.09(h) of
the Transfer and Servicing Agreement shall prove to have been incorrect in any
material respect when made or when delivered, which continues to be incorrect in
any material respect for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Transferor by the Indenture Trustee, or to the Transferor and the
Indenture Trustee by any Holder of the Series 2000-[.] Notes and as a result of
which the interests of the Series 2000-[.] Noteholders are materially and
adversely affected and continue to be materially and adversely affected for the
designated period; provided, however, that a Series 2000-[.] Amortization Event
Out Event pursuant to this subsection 6.01(b) shall not be deemed to have
occurred hereunder if the Transferor has accepted reassignment of the related
Receivable, or all of such Receivables, if applicable, during such period in
accordance with the provisions of the Transfer and Servicing Agreement;
(c) a failure by the 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 Transfer and
Servicing Agreement;
(d) any Servicer Default shall occur which has an Adverse Effect
on the Series 2000-[.] Noteholders;
(e) the average Series Portfolio Yield for any three consecutive
Due Periods is reduced to a rate which is less than the average of the Base
Rates for such period;
(f) the Class A Note Principal Balance or the Class B Note
Principal Balance or the Class C Note Principal Balance shall not be paid in
full on the Expected Principal Payment Date; or
(g) without limiting the foregoing, the occurrence of an Event
of Default with respect to Series 2000--[.] and an acceleration of the maturity
of the Series 2000--[.] Notes pursuant to Section 5.03 of the Indenture; or
33
then, in the case of any event described in subparagraph (a), (b), (d) or (f)
after the applicable grace period, if any, set forth in such subparagraphs,
either the Indenture Trustee or the Holders of Series 2000-[.] Notes evidencing
more than 50% of the Outstanding Amount of Series 2000-[.] Notes by notice then
given in writing to the Transferor and the Servicer (and to the Indenture
Trustee if given by the Series 2000-[.] Noteholders) may declare that an
amortization event (a "Series 2000-[.] Amortization Event") has occurred as of
----------------------------------
the date of such notice, and, in the case of any event described in subparagraph
(c), (e) or (g), a Series 2000-[.] Amortization Event shall occur without any
notice or other action on the part of the Indenture Trustee or the Series 2000-
[.] Noteholders immediately upon the occurrence of such event.
[END OF ARTICLE VI]
34
ARTICLE VII
Redemption of Series 2000-[.] Notes; Series Final Maturity; Final Distributions
Section 7.01. Optional Redemption of Series 2000-[.] Notes.
--------------------------------------------
(a) On any day occurring on or after the date on which the sum
of the Class A Note Principal Balance, the Class B Note Principal Balance, and
any portion of the Class C Note Principal Balance that is not held by the
Transferor or an affiliate, is reduced to 10% or less of the sum of the Class A
Note Initial Principal Balance, the Class B Note Initial Principal Balance, and
any portion of the Class C Note Initial Principal Balance that is not held by
the Transferor or an affiliate, the Transferor shall have the option to redeem
the Series 2000-[.] Noteholders' Collateral, 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.
(b) The Transferor shall give the Servicer and the Indenture
Trustee at least 30 days prior written notice of the date on which the
Transferor intends to exercise such optional redemption. Not later than 12:00
noon, New York City time, on such day the Transferor shall deposit into the
Collection Account in immediately available funds the excess of the Reassignment
Amount over the amount, if any, on deposit in the Principal Funding Account.
Such redemption option is subject to payment in full of the Reassignment Amount.
Following such deposit into the Collection Amount in accordance with the
foregoing, the Invested Amount for Series 2000-[.] shall be reduced to zero and
the Series 2000-[.] Noteholders shall have no further interest in the
Receivables. The Reassignment Amount shall be distributed as set forth in
subsection [.].
Section 7.02. Series Final Maturity.
---------------------
(a) The amount to be paid by the Transferor with respect to
Series 2000-[.] in connection with a reassignment of the Noteholders' Collateral
pursuant to Section 2.06 or Section 7.01 of the Transfer and Servicing Agreement
shall be the Reassignment Amount for the first Distribution Date following the
Due Period in which the reassignment obligation arises under the Transfer and
Servicing Agreement. With respect to the Reassignment Amount deposited into the
Collection Account pursuant to Section 7.01 or Section 2.06 of the Transfer and
Servicing Agreement or the proceeds from any Foreclosure Remedy pursuant to
Section 5.05 of the Indenture, the Indenture 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 Note Principal Balance on such Distribution
Date will be distributed to the Paying Agent for payment to the Class A
Noteholders 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 Noteholders 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 Noteholders on any prior
Distribution Date, will be distributed to the Paying Agent for payment to
the Class A Noteholders;
35
(ii) (x) the Class B Note Principal Balance on such Distribution
Date will be distributed to the Paying Agent for payment to the Class B
Noteholders 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 Noteholders 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 Noteholders on any prior
Distribution Date, will be distributed to the Paying Agent for payment to
the Class B Noteholders; and
(iii) (x) the Class C Note Principal Balance on such Distribution
Date will be distributed to the Paying Agent for payment to the Class C
Noteholders and (y) an amount equal to the sum of (A) Class C Monthly
Interest for such Distribution Date, (B) any Class C Monthly Interest
previously due but not distributed to the Class C Noteholders on a prior
Distribution Date and (C) the amount of Class C Additional Interest, if
any, for such Distribution Date and any Class C Additional Interest
previously due but not distributed to the Class C Noteholders on any prior
Distribution Date, will be distributed to the Paying Agent for payment to
the Class C Noteholders.
(b) Notwithstanding anything to the contrary in this Indenture
Supplement, the Indenture or the Transfer and Servicing Agreement, all amounts
distributed to the Paying Agent pursuant to subsection 7.02(d) for payment to
the Series 2000-[.] Noteholders shall be deemed distributed in full to the
Series 2000-[.] Noteholders 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 11.02 of the Indenture.
[END OF ARTICLE VII]
36
ARTICLE VIII
Miscellaneous Provision
Section 8.01. Ratification of Agreement. As supplemented by this
-------------------------
Indenture Supplement, the Indenture is in all respects ratified and confirmed
and the Indenture as so supplemented by this Indenture Supplement shall be read,
taken and construed as one and the same instrument.
Section 8.02. Form of Delivery of the Series 2000-[.] Notes.
---------------------------------------------
The Series 2000-[.] Notes shall be delivered as Registered Notes as
provided in Section 2.01 of the Indenture.
Section 8.03. Counterparts. This Indenture 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 8.04. Governing Law. THIS INDENTURE 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.
[END OF ARTICLE VIII]
[SIGNATURE PAGE FOLLOWS]
37
IN WITNESS WHEREOF, the undersigned have caused this Indenture Supplement
to be duly executed and delivered by their respective duly authorized officers
on the day and year first above written.
Dated: [.], 2000 HOUSEHOLD CREDIT CARD NOTE TRUST I,
as Issuer
By: _______________________________
not in its individual
capacity, but solely as Owner
Trustee
By: _______________________________
Name:
Title:
XXXXX FARGO BANK MINNESOTA, N.A.,
as Indenture Trustee and
Securities Intermediary
By: _______________________________
not in its individual
capacity, but solely as
Indenture Trustee and
Securities Intermediary
By: _______________________________
Name:
Title:
38
EXHIBIT A-1
-----------
FORM OF
CLASS A [FLOATING RATE] [ %] ASSET BACKED NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE 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.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF COVENANTS AND AGREES THAT
IT WILL NOT AT ANY TIME INSTITUTE AGAINST THE ISSUER OR THE TRANSFEROR, OR JOIN
IN INSTITUTING AGAINST THE ISSUER OR THE TRANSFEROR, ANY BANKRUPTCY,
REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS, OR OTHER
PROCEEDINGS UNDER ANY UNITED STATES FEDERAL OR STATE BANKRUPTCY OR SIMILAR LAW.
THE HOLDER OF THIS CLASS A NOTE, BY ACCEPTANCE OF THIS NOTE, AND EACH
HOLDER OF A BENEFICIAL INTEREST THEREIN, AGREE TO TREAT THE CLASS A NOTES AS
INDEBTEDNESS OF THE ISSUER FOR APPLICABLE FEDERAL, STATE, AND LOCAL INCOME AND
FRANCHISE TAX LAW AND FOR PURPOSES OF ANY OTHER TAX IMPOSED ON, OR MEASURED BY,
INCOME.
A-1-1
INITIAL OUTSTANDING PRINCIPAL BALANCE
REGISTERED $______1/
-
No. R-__ CUPSIP NO._______
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I
SERIES 2000-_
CLASS A [FLOATING RATE] [ %] ASSET BACKED NOTE
Household Credit Card Master Note Trust I (herein referred to as the
"Issuer" or the "Trust"), a Delaware statutory business trust governed by a
------- -----
Trust Agreement dated as of _______, 2000, for value received, hereby promises
to pay to _________________, or registered assigns, subject to the following
provisions, the principal sum of __________________ DOLLARS, or such greater or
lesser amount as determined in accordance with the Indenture, on the Series
2000-_ Final Maturity Date (which is the earlier to occur of (a) the
Distribution Date on which the Notes is paid in full and (b) the ___________
____ Distribution Date), except as otherwise provided below or in the Indenture.
The Issuer will pay interest on the unpaid principal amount of this Note at the
Class A Note Interest Rate on each Distribution Date until the principal amount
of this Note is paid in full. Interest on this Note will accrue for each
Distribution Date from and including the most recent Distribution Date on which
interest has been paid to but excluding such Distribution Date or, for the
initial Distribution Date, from and including the Closing Date to but excluding
such Distribution Date. [Interest will be computed on the basis of a 360-day
year and the actual number of days elapsed.] Principal of this Note shall be
paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Indenture Trustee, by manual signature, this Note shall not be
entitled to any benefit under the Indenture or the Indenture Supplement referred
to on the reverse hereof, or be valid for any purpose.
______________
1/ Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
-
A-1-2
IN WITNESS WHEREOF, the Issuer has caused this Class A Note to be duly
executed.
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I,
as Issuer
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Owner Trustee under the Trust
Agreement
By: _____________________________________
Name:
Title:
Dated: ________, _____
A-1-3
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A Notes described in the within-mentioned Indenture.
XXXXX FARGO BANK MINNESOTA, N.A.,
as Indenture Trustee
By: _______________________
Authorized Signatory
A-1-4
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I
SERIES 2000-_
CLASS A [FLOATING RATE] [ %] ASSET BACKED NOTE
Summary of Terms and Conditions
This Class A Note is one of a duly authorized issue of Notes of the
Issuer, designated as Household Credit Card Master Note Trust I, Series 2000-_
(the "Series 2000-_ Notes"), issued under a Master Indenture dated as of
-------------------
__________ __, 2000 (the "Master Indenture"), between the Issuer and Xxxxx Fargo
----------------
Bank Minnesota, N.A., as indenture trustee (the "Indenture Trustee"), as
-----------------
supplemented by the Indenture Supplement dated as of __________ __, 2000 (the
"Indenture Supplement"), and representing the right to receive certain payments
---------------------
from the Issuer. The term "Indenture," unless the context otherwise requires,
refers to the Master Indenture as supplemented by the Indenture Supplement. The
Notes are subject to all of the terms of the Indenture. All terms used in this
Note that are defined in the Indenture shall have the meanings assigned to them
in or pursuant to the Indenture. In the event of any conflict or inconsistency
between the Indenture and this Note, the Indenture shall control.
The Class B Notes and the Class C Notes will also be issued under the
Indenture.
The Noteholder, by its acceptance of this Note, agrees that it will
look solely to the property of the Trust allocated to the payment of this Note
for payment hereunder and that the Indenture Trustee is not liable to the
Noteholders for any amount payable under the Note or the Indenture or, except as
expressly provided in the Indenture, subject to any liability under the
Indenture.
This Note does not purport to summarize the Indenture and reference is
made to the Indenture for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Indenture Trustee.
The Class A Note Initial Principal Balance is $[_____________]. The
Class A Note Principal Balance on any date of determination will be an amount
equal to (a) the Class A Note Initial Principal Balance, minus (b) the aggregate
amount of principal payments made to the Class A Noteholders on or prior to such
date.
The Expected Principal Payment Date is the [________ ________]
Distribution Date, but principal with respect to the Class A Notes may be paid
earlier or later under certain circumstances described in the Indenture. If for
one or more months during the Controlled Accumulation Period there are not
sufficient funds to deposit into the Principal Funding Account 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 Notes will
occur later than the Expected Principal Payment Date. Payments of principal of
the Notes shall be payable in accordance with the provisions of the Indenture.
Subject to the terms and conditions of the Indenture, the Transferor
may, from time to time, direct the Owner Trustee, on behalf of the Trust, to
issue one or more new Series of Notes.
On each Distribution Date, the Paying Agent shall distribute to each
Class A Noteholder of record on the related Record Date (except for the final
distribution in respect of this Class A Note) such Class A Noteholder's pro rata
share of the amounts held by the Paying Agent that are allocated and
A-1-5
available on such Distribution Date to pay interest and principal on the Class A
Notes pursuant to the Indenture Supplement. Except as provided in the Indenture
with respect to a final distribution, distributions to Series 2000-_ Noteholders
shall be made by (i) check mailed to each Series 2000-_ Noteholder (at such
Noteholder's address as it appears in the Note Register), except that with
respect to any Series 2000-_ Notes registered in the name of the nominee of a
Clearing Agency, such distribution shall be made in immediately available funds
and (ii) without presentation or surrender of any Series 2000-_ Note or the
making of any notation thereon. Final payment of this Class A Note will be made
only upon presentation and surrender of this Class A Note at the office or
agency specified in the notice of final distribution delivered by the Indenture
Trustee to the Series 2000-_ Noteholders in accordance with the Indenture.
On any day occurring on or after the date on which the outstanding
principal balance of the Series 2000-_ Notes is reduced to 10% or less of the
initial outstanding principal balance of the Series 2000-_ Notes, the Issuer
shall have the option to redeem the Series 2000-_ Notes, 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.
This Class A Note does not represent an obligation of, or an interest
in, the Transferor, Household Finance Corporation, Household Bank (Nevada), N.A.
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.
Each Noteholder, by accepting a Note, hereby covenants and agrees that
it will not at any time institute against the Issuer or the Transferor, or join
in instituting against the Issuer or the Transferor, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law.
Except as otherwise provided in the Indenture Supplement, the Class A
Notes are issuable only in minimum denominations of $1,000 and integral
multiples of $1,000. The transfer of this Class A Note shall be registered in
the Note Register upon surrender of this Class A Note 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
Indenture Trustee or the Transfer Agent and Registrar, duly executed by the
Class A Noteholder or such Class A Noteholder's attorney, and duly authorized in
writing with such signature guaranteed, and thereupon one or more new Class A
Notes in any authorized denominations of like aggregate principal amount will be
issued to the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations
therein set forth, Class A Notes are exchangeable for new Class A Notes in any
authorized denominations and of like aggregate principal amount, upon surrender
of such Notes to be exchanged at the office or agency of the Transfer Agent and
Registrar. No service charge may be imposed for any such exchange but the
Issuer 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 Issuer, the Transferor, the Indenture Trustee and any agent of the
Issuer, Transferor or the Indenture Trustee shall treat the person in whose name
this Class A Note is registered as the owner hereof for all purposes, and
neither the Issuer, the Transferor, the Indenture Trustee nor any agent of the
Issuer, Transferor or the Indenture Trustee shall be affected by notice to the
contrary.
THIS CLASS A NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
A-1-6
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-1-7
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 note and all rights thereunder, and hereby irrevocably constitutes
and appoints ____________________, attorney, to transfer said note 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 Note in every
particular, without alteration, enlargement or any change whatsoever.
X-0-0
XXXXXXX X-0
-----------
FORM OF
CLASS B [FLOATING RATE] [ %] ASSET BACKED NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE 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.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF COVENANTS AND AGREES THAT
IT WILL NOT AT ANY TIME INSTITUTE AGAINST THE ISSUER OR THE TRANSFEROR, OR JOIN
IN INSTITUTING AGAINST THE ISSUER OR THE TRANSFEROR, ANY BANKRUPTCY,
REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS, OR OTHER
PROCEEDINGS UNDER ANY UNITED STATES FEDERAL OR STATE BANKRUPTCY OR SIMILAR LAW.
THE HOLDER OF THIS CLASS B NOTE, BY ACCEPTANCE OF THIS NOTE, AND EACH
HOLDER OF A BENEFICIAL INTEREST THEREIN, AGREE TO TREAT THE CLASS B NOTES AS
INDEBTEDNESS OF THE ISSUER FOR APPLICABLE FEDERAL, STATE, AND LOCAL INCOME AND
FRANCHISE TAX LAW AND FOR PURPOSES OF ANY OTHER TAX IMPOSED ON, OR MEASURED BY,
INCOME.
A-2-1
REGISTERED $___________3/
-
No. R-__ CUSIP NO. __________
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I
SERIES 2000-_
CLASS B [FLOATING RATE] [ %] ASSET BACKED NOTE
Household Credit Card Master Note Trust I (herein referred to as the
"Issuer" or the "Trust"), a Delaware statutory business trust governed by a
------- -----
Trust Agreement dated as of ______, 2000, for value received, hereby promises to
pay to _________________, or registered assigns, subject to the following
provisions, the principal sum of __________________ DOLLARS, or such greater or
lesser amount as determined in accordance with the Indenture, on the Series
2000-_ Final Maturity Date (which is the earlier to occur of (a) the
Distribution Date on which the Notes is paid in full and (b) the ___________
____ Distribution Date), except as otherwise provided below or in the Indenture.
The Issuer will pay interest on the unpaid principal amount of this Note at the
Class B Note Interest Rate on each Distribution Date until the principal amount
of this Note is paid in full. Interest on this Note will accrue for each
Distribution Date from and including the most recent Distribution Date on which
interest has been paid to but excluding such Distribution Date or, for the
initial Distribution Date, from and including the Closing Date to but excluding
such Distribution Date. [Interest will be computed on the basis of a 360-day
year and the actual number of days elapsed.] Principal of this Note shall be
paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Indenture Trustee, by manual signature, this Note shall not
be entitled to any benefit under the Indenture or the Indenture Supplement
referred to on the reverse hereof, or be valid for any purpose.
THIS CLASS B NOTE IS SUBORDINATED TO THE EXTENT NECESSARY TO FUND
PAYMENTS ON THE CLASS A NOTES TO THE EXTENT SPECIFIED IN THE INDENTURE
SUPPLEMENT.
__________________
3/ Denominations of $1,000 and integral multiples of $1,000 in excess
- thereof.
A-2-2
IN WITNESS WHEREOF, the Issuer has caused this Class B Note
to be duly executed.
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I,
as Issuer
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Owner Trustee under the Trust
Agreement
By: ________________________________
Name:
Title:
Dated: ________, _____
A-2-3
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B Notes described in the within-mentioned Indenture.
XXXXX FARGO BANK MINNESOTA, N.A.,
as Indenture Trustee
By: ______________________
Authorized Signatory
A-2-4
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I
SERIES 2000-_
CLASS A [FLOATING RATE] [ %] ASSET BACKED NOTE
Summary of Terms and Conditions
This Class A Note is one of a duly authorized issue of Notes of the
Issuer, designated as Household Credit Card Master Note Trust I, Series 2000-_
(the "Series 2000-_ Notes"), issued under a Master Indenture dated as of
-------------------
__________ __, 2000 (the "Master Indenture"), between the Issuer and Xxxxx Fargo
----------------
Bank Minnesota, N.A., as indenture trustee (the "Indenture Trustee"), as
-----------------
supplemented by the Indenture Supplement dated as of __________ __, 2000 (the
"Indenture Supplement"), and representing the right to receive certain payments
--------------------
from the Issuer. The term "Indenture," unless the context otherwise requires,
refers to the Master Indenture as supplemented by the Indenture Supplement. The
Notes are subject to all of the terms of the Indenture. All terms used in this
Note that are defined in the Indenture shall have the meanings assigned to them
in or pursuant to the Indenture. In the event of any conflict or inconsistency
between the Indenture and this Note, the Indenture shall control.
The Class B Notes and the Class C Notes will also be issued under the
Indenture.
The Noteholder, by its acceptance of this Note, agrees that it will
look solely to the property of the Trust allocated to the payment of this Note
for payment hereunder and that the Indenture Trustee is not liable to the
Noteholders for any amount payable under the Note or the Indenture or, except as
expressly provided in the Indenture, subject to any liability under the
Indenture.
This Note does not purport to summarize the Indenture and reference is
made to the Indenture for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Indenture Trustee.
The Class A Note Initial Principal Balance is $[_____________]. The
Class A Note Principal Balance on any date of determination will be an amount
equal to (a) the Class A Note Initial Principal Balance, minus (b) the aggregate
amount of principal payments made to the Class A Noteholders on or prior to such
date.
The Expected Principal Payment Date is the [________ ________]
Distribution Date, but principal with respect to the Class A Notes may be paid
earlier or later under certain circumstances described in the Indenture. If for
one or more months during the Controlled Accumulation Period there are not
sufficient funds to deposit into the Principal Funding Account 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 Notes will
occur later than the Expected Principal Payment Date. Payments of principal of
the Notes shall be payable in accordance with the provisions of the Indenture.
Subject to the terms and conditions of the Indenture, the Transferor
may, from time to time, direct the Owner Trustee, on behalf of the Trust, to
issue one or more new Series of Notes.
On each Distribution Date, the Paying Agent shall distribute to each
Class A Noteholder of record on the related Record Date (except for the final
distribution in respect of this Class A Note) such Class A Noteholder's pro rata
share of the amounts held by the Paying Agent that are allocated and
A-2-5
available on such Distribution Date to pay interest and principal on the Class A
Notes pursuant to the Indenture Supplement. Except as provided in the Indenture
with respect to a final distribution, distributions to Series 2000-_ Noteholders
shall be made by (i) check mailed to each Series 2000-_ Noteholder (at such
Noteholder's address as it appears in the Note Register), except that with
respect to any Series 2000-_ Notes registered in the name of the nominee of a
Clearing Agency, such distribution shall be made in immediately available funds
and (ii) without presentation or surrender of any Series 2000-_ Note or the
making of any notation thereon. Final payment of this Class A Note will be made
only upon presentation and surrender of this Class A Note at the office or
agency specified in the notice of final distribution delivered by the Indenture
Trustee to the Series 2000-_ Noteholders in accordance with the Indenture.
On any day occurring on or after the date on which the outstanding
principal balance of the Series 2000-_ Notes is reduced to 10% or less of the
initial outstanding principal balance of the Series 2000-_ Notes, the Issuer
shall have the option to redeem the Series 2000-_ Notes, 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.
This Class A Note does not represent an obligation of, or an interest
in, the Transferor, Household Finance Corporation, Household Bank (Nevada), N.A.
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.
Each Noteholder, by accepting a Note, hereby covenants and agrees that
it will not at any time institute against the Issuer or the Transferor, or join
in instituting against the Issuer or the Transferor, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law.
Except as otherwise provided in the Indenture Supplement, the Class A
Notes are issuable only in minimum denominations of $1,000 and integral
multiples of $1,000. The transfer of this Class A Note shall be registered in
the Note Register upon surrender of this Class A Note 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
Indenture Trustee or the Transfer Agent and Registrar, duly executed by the
Class A Noteholder or such Class A Noteholder's attorney, and duly authorized in
writing with such signature guaranteed, and thereupon one or more new Class A
Notes in any authorized denominations of like aggregate principal amount will be
issued to the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations
therein set forth, Class A Notes are exchangeable for new Class A Notes in any
authorized denominations and of like aggregate principal amount, upon surrender
of such Notes to be exchanged at the office or agency of the Transfer Agent and
Registrar. No service charge may be imposed for any such exchange but the
Issuer 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 Issuer, the Transferor, the Indenture Trustee and any agent of the
Issuer, Transferor or the Indenture Trustee shall treat the person in whose name
this Class A Note is registered as the owner hereof for all purposes, and
neither the Issuer, the Transferor, the Indenture Trustee nor any agent of the
Issuer, Transferor or the Indenture Trustee shall be affected by notice to the
contrary.
THIS CLASS A NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
A-2-6
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-2-7
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 note and all rights thereunder, and hereby irrevocably constitutes
and appoints ____________________, attorney, to transfer said note 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 Note in every
particular, without alteration, enlargement or any change whatsoever.
X-0-0
XXXXXXX X-0
-----------
FORM OF
CLASS B [FLOATING RATE] [ %] ASSET BACKED NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE 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.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF COVENANTS AND AGREES THAT
IT WILL NOT AT ANY TIME INSTITUTE AGAINST THE ISSUER OR THE TRANSFEROR, OR JOIN
IN INSTITUTING AGAINST THE ISSUER OR THE TRANSFEROR, ANY BANKRUPTCY,
REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS, OR OTHER
PROCEEDINGS UNDER ANY UNITED STATES FEDERAL OR STATE BANKRUPTCY OR SIMILAR LAW.
THE HOLDER OF THIS CLASS B NOTE, BY ACCEPTANCE OF THIS NOTE, AND EACH
HOLDER OF A BENEFICIAL INTEREST THEREIN, AGREE TO TREAT THE CLASS B NOTES AS
INDEBTEDNESS OF THE ISSUER FOR APPLICABLE FEDERAL, STATE, AND LOCAL INCOME AND
FRANCHISE TAX LAW AND FOR PURPOSES OF ANY OTHER TAX IMPOSED ON, OR MEASURED BY,
INCOME.
A-3-1
REGISTERED $___________5/
-
No. R-__ CUSIP NO. __________
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I
SERIES 2000-_
CLASS B [FLOATING RATE] [ %] ASSET BACKED NOTE
Household Credit Card Master Note Trust I (herein referred to as the
"Issuer" or the "Trust"), a Delaware statutory business trust governed by a
------ -----
Trust Agreement dated as of ______, 2000, for value received, hereby promises to
pay to _________________, or registered assigns, subject to the following
provisions, the principal sum of __________________ DOLLARS, or such greater or
lesser amount as determined in accordance with the Indenture, on the Series
2000-_ Final Maturity Date (which is the earlier to occur of (a) the
Distribution Date on which the Notes is paid in full and (b) the ___________
____ Distribution Date), except as otherwise provided below or in the Indenture.
The Issuer will pay interest on the unpaid principal amount of this Note at the
Class B Note Interest Rate on each Distribution Date until the principal amount
of this Note is paid in full. Interest on this Note will accrue for each
Distribution Date from and including the most recent Distribution Date on which
interest has been paid to but excluding such Distribution Date or, for the
initial Distribution Date, from and including the Closing Date to but excluding
such Distribution Date. [Interest will be computed on the basis of a 360-day
year and the actual number of days elapsed.] Principal of this Note shall be
paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Indenture Trustee, by manual signature, this Note shall not
be entitled to any benefit under the Indenture or the Indenture Supplement
referred to on the reverse hereof, or be valid for any purpose.
THIS CLASS B NOTE IS SUBORDINATED TO THE EXTENT NECESSARY TO FUND
PAYMENTS ON THE CLASS A NOTES TO THE EXTENT SPECIFIED IN THE INDENTURE
SUPPLEMENT.
IN WITNESS WHEREOF, the Issuer has caused this Class B Note to be duly
executed.
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I,
as Issuer
_______________________
5/ Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
-
A-3-2
By: WILMINGTON TRUST COMPANY, not in its individual
capacity but solely as Owner Trustee under the
Trust Agreement
By:_______________________________
Name:
Title:
Dated: ________, _____
A-3-3
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B Notes described in the within-mentioned Indenture.
XXXXX FARGO BANK MINNESOTA, N.A.,
as Indenture Trustee
By: ________________________
Authorized Signatory
A-3-4
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I
SERIES 2000-_
CLASS B [FLOATING RATE] [ %] ASSET BACKED NOTE
Summary of Terms and Conditions
This Class B Note is one of a duly authorized issue of Notes of the
Issuer, designated as Household Credit Card Master Note Trust I, Series 2000-_
(the "Series 2000-_ Notes"), issued under a Master Indenture dated as of _____,
-------------------
2000 (the "Master Indenture"), between the Issuer and Xxxxx Fargo Minnesota,
----------------
N.A., as indenture trustee (the "Indenture Trustee"), as supplemented by the
-----------------
Indenture Supplement dated as of __________ __, 2000 (the "Indenture
---------
Supplement"), and representing the right to receive certain payments from the
----------
Issuer. The term "Indenture," unless the context otherwise requires, refers to
the Master Indenture as supplemented by the Indenture Supplement. The Notes are
subject to all of the terms of the Indenture. All terms used in this Note that
are defined in the Indenture shall have the meanings assigned to them in or
pursuant to the Indenture. In the event of any conflict or inconsistency
between the Indenture and this Note, the Indenture shall control.
The Class A Notes and the Class C Notes will also be issued under the
Indenture.
The Noteholder, by its acceptance of this Note, agrees that it will
look solely to the property of the Trust allocated to the payment of this Note
for payment hereunder and that the Indenture Trustee is not liable to the
Noteholders for any amount payable under the Note or the Indenture or, except as
expressly provided in the Indenture, subject to any liability under the
Indenture.
This Note does not purport to summarize the Indenture and reference is
made to the Indenture for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Indenture Trustee.
The Class B Note Initial Principal Balance is $[___________]. The
Class B Note Principal Balance on any date of determination will be an amount
equal to (a) the Class B Note Initial Principal Balance, minus (b) the aggregate
amount of principal payments made to the Class B Noteholders on or prior to such
date.
The Expected Principal Payment Date is the [________ ________]
Distribution Date, but principal with respect to the Class B Notes may be paid
earlier or later under certain circumstances described in the Indenture. If for
one or more months during the Controlled Accumulation Period there are not
sufficient funds to deposit into the Principal Funding Account 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 Notes will
occur later than the Expected Principal Payment Date. Payments of principal of
the Notes shall be payable in accordance with the provisions of the Indenture.
Subject to the terms and conditions of the Indenture, the Transferor
may, from time to time, direct the Owner Trustee, on behalf of the Trust, to
issue one or more new Series of Notes.
On each Distribution Date, the Paying Agent shall distribute to each
Class B Noteholder of record on the related Record Date (except for the final
distribution in respect of this Class B Note) such Class B Noteholder's pro rata
share of the amounts held by the Paying Agent that are allocated and
A-3-5
available on such Distribution Date to pay interest and principal on the Class B
Notes pursuant to the Indenture Supplement. Except as provided in the Indenture
with respect to a final distribution, distributions to Series 2000-_ Noteholders
shall be made by (i) check mailed to each Series 2000-_ Noteholder (at such
Noteholder's address as it appears in the Note Register), except that with
respect to any Series 2000-_ Notes registered in the name of the nominee of a
Clearing Agency, such distribution shall be made in immediately available funds
and (ii) without presentation or surrender of any Series 2000-_ Note or the
making of any notation thereon. Final payment of this Class B Note will be made
only upon presentation and surrender of this Class B Note at the office or
agency specified in the notice of final distribution delivered by the Indenture
Trustee to the Series 2000-_ Noteholders in accordance with the Indenture.
On any day occurring on or after the date on which the outstanding
principal balance of the Series 2000-_ Notes is reduced to 10% or less of the
initial outstanding principal balance of the Series 2000-_ Notes, the Issuer
shall have the option to redeem the Series 2000-_ Notes, 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.
This Class B Note does not represent an obligation of, or an interest
in, the Transferor, Household Finance Corporation, Household Bank (Nevada), N.A.
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.
Each Noteholder, by accepting a Note, hereby covenants and agrees that
it will not at any time institute against the Issuer or the Transferor, or join
in instituting against the Issuer or the Transferor, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law.
Except as otherwise provided in the Indenture Supplement, the Class B
Notes are issuable only in minimum denominations of $1,000 and integral
multiples of $1,000. The transfer of this Class B Note shall be registered in
the Note Register upon surrender of this Class B Note 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
Indenture Trustee or the Transfer Agent and Registrar, duly executed by the
Class B Noteholder or such Class B Noteholder's attorney, and duly authorized in
writing with such signature guaranteed, and thereupon one or more new Class B
Notes in any authorized denominations of like aggregate principal amount will be
issued to the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations
therein set forth, Class B Notes are exchangeable for new Class B Notes in any
authorized denominations and of like aggregate principal amount, upon surrender
of such Notes to be exchanged at the office or agency of the Transfer Agent and
Registrar. No service charge may be imposed for any such exchange but the
Issuer 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 Issuer, the Transferor, the Indenture Trustee and any agent of the
Issuer, the Transferor or the Indenture Trustee shall treat the person in whose
name this Class B Note is registered as the owner hereof for all purposes, and
neither the Issuer, the Transferor, the Indenture Trustee nor any agent of the
Issuer, the Transferor or the Indenture Trustee shall be affected by notice to
the contrary.
THIS CLASS B NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
A-3-6
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-3-7
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 note and all rights thereunder, and hereby irrevocably constitutes
and appoints ____________________, attorney, to transfer said note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: __________________6/
-
Signature Guaranteed:
_____________________
_________________
___________________
6/ NOTE: The signature to this Assignment must correspond with the name of the
-
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-3-8
EXHIBIT B
---------
FORM OF MONTHLY PAYMENT INSTRUCTIONS AND
NOTIFICATION TO THE INDENTURE TRUSTEE
______________________________
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I
SERIES 2000-_
______________________________
The undersigned, a duly authorized representative of Household Finance
Corporation ("HFC"), as Servicer pursuant to the Transfer and Servicing
---
Agreement, dated as of ______, 2000 (as amended and supplemented, the "Transfer
--------
and Servicing Agreement"), among HFC, Household Receivables Funding, Inc. III.
-----------------------
("HRF"), as Transferor and Household Credit Card Master Note Trust I (the
---
"Trust"), does hereby certify as follows:
-----
1. Capitalized terms used in this Certificate have their respective
meanings set forth in the Transfer and Servicing Agreement or the Master
Indenture, dated as of ______, 2000 (as amended or supplemented, the "Master
------
Indenture"), between the Trust and Xxxxx Fargo Bank Minnesota, N.A., as
---------
indenture trustee (the "Indenture Trustee") as supplemented by the Series 2000-_
-----------------
Indenture Supplement, dated as of __________ __, 2000, between the Trust and the
Indenture Trustee (as amended and supplemented, the "Indenture Supplement"), as
--------------------
applicable.
2. HFC is the Servicer.
3. The undersigned is an Authorized Officer of the Servicer.
I INSTRUCTION TO MAKE A WITHDRAWAL
--------------------------------
Pursuant to subsection 4.04(a), the Servicer does hereby instruct the
Indenture Trustee (i) to make withdrawals from the Collection Account on
___________, ____, which date is a Distribution Date under the Indenture
Supplement, in the aggregate amounts (equal to the Available Finance Charge
Collections) as set forth below in respect of the following amounts and (ii) to
apply the proceeds of such withdrawals in accordance with subsections 3.01(a)
and 4.04(a):
A) Pursuant to subsection 3.01(b):
-------------------------------
(1) Servicer Interchange....................... $_______
B) Pursuant to subsection 4.04(a)(i):
----------------------------------
(1) Interest at the Class A Note Interest Rate
for the related Interest Period on the outstanding
principal balance of the Class A Notes............... $_______
B-1
(2) Class A Monthly Interest previously due but
not paid ........................................... $_______
(3) Class A Additional Interest and any Class A
Additional Interest previously due but not paid...... $_______
C) Pursuant to subsection 4.04(a)(ii):
-----------------------------------
(1) Interest at the Class B Note Interest Rate for the
related Interest Period on the outstanding principal
balance of the Class B Notes......................... $_______
(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................. $_______
D) Pursuant to subsection 4.04(a)(iii):
------------------------------------
(1) If HFC or an Affiliate of HFC is no longer
the Servicer, the Monthly Servicing Fee for such
Distribution Date.................................... $_______
(2) If HFC or an Affiliate of HFC is no longer
the Servicer, the accrued and unpaid Monthly Servicing
Fees................................................. $_______
(3) If HFC or an Affiliate of HFC is no longer
the Administrator, the Monthly Administration Fee for
such Distribution Date............................... $_______
(4) If HFC or an Affiliate of HFC is no longer
the Administrator, the accrued and unpaid Monthly
Administration Fees.................................. $_______
E) Pursuant to subsection 4.04(a)(iv):
-----------------------------------
(1) Interest at the Class C Note Interest Rate
for the related Interest Period on the outstanding
principal balance of the Class C Notes............... $_______
(2) Class C Monthly Interest previously due but
not paid.............................................. $_______
(3) Class C Additional Interest and any Class C
Additional Interest previously due but not paid...... $_______
F) Pursuant to subsection 4.04(a)(v):
----------------------------------
(1) Investor Default Amount for such
Distribution Date to be treated as Available Principal
Collections.......................................... $_______
G) Pursuant to subsection 4.04(a)(vi):
-----------------------------------
(1) Aggregate amount of Investor Charge-Offs
and Subordinated Principal Collections not previously
reimbursed to be treated as Available Principal
Collections.......................................... $_______
B-2
H) Pursuant to subsection 4.04(a)(vii):
------------------------------------
(1) If HFC or an Affiliate of HFC is the
Servicer, the Monthly Servicing Fee for such
Distribution Date.................................... $_______
(2) If HFC or an Affiliate of HFC is the
Servicer, the accrued and unpaid Monthly Servicing
Fees................................................. $_______
I) Pursuant to subsection 4.04(a)(viii):
-------------------------------------
(1) If HFC or an Affiliate of HFC is the
Administrator, the Monthly Administration Fee for
such Distribution Date............................... $_______
(2) If HFC or an Affiliate of HFC is the
Administrator, the accrued and unpaid Monthly
Administration Fees.................................. $_______
J) Pursuant to subsection 4.04(a)(ix):
-----------------------------------
(2) An amount equal to the amounts to be
deposited in the Reserve Account to be deposited in
the Reserve Account.................................. $_______
K) Pursuant to subsection 4.04(a)(x):
----------------------------------
(1) An amount equal to the amounts to be
deposited in the Spread Account to be deposited
in the Spread Account................................ $_______
Pursuant to subsections 4.04(b) and (c), the Servicer hereby instructs
the Indenture Trustee (i) to make withdrawals from the Collection Account on
____________, which date is a Distribution Date under the Indenture 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 4.04(b) and (c):
A) Pursuant to subsection 4.04(b):
-------------------------------
(1) Amount equal to Available Principal
Collections to be treated as Shared Principal
Collections............................................... $_______
B) Pursuant to subsection 4.04(c)(i):
----------------------------------
(1) During Controlled Accumulation Period,
Monthly Principal for such Distribution Date
deposited into the Principal Funding Account.............. $_______
C) Pursuant to subsection 4.04(c)(ii):
-----------------------------------
(1) During Early Amortization Period, Monthly
Principal for such Distribution Date to Class A Notes
until Class A Notes paid in full.......................... $_______
D) Pursuant to subsection 4.04(c)(iii):
------------------------------------
(1) After giving effect to clause (C) above, during
B-3
Early Amortization Period, if any remaining Monthly
Principal, to Class B Notes until Class B Notes paid
in full.............................................. $_______
E) Pursuant to subsection 4.04(c)(iv):
-----------------------------------
(1) After giving effect to clauses (C) and (D)
above, during Early Amortization Period, if any
remaining Monthly Principal, to Class C Notes until
Class C Notes paid in full........................... $_______
F) Pursuant to subsection 4.04(c)(v):
----------------------------------
(1) Amount, if any, remaining after giving
effect to clauses (B) or (E) above, to be treated as
Shared Principal Collections......................... $_______
Pursuant to Section 4.06, the Servicer does hereby instruct the
Indenture Trustee to apply on __________, which is a Distribution Date under the
Indenture Supplement, any Subordinated Principal Collections for such
Distribution Date in amount equal to the lesser of Available Investor Principal
Collections and the Monthly Subordination Amount for the preceding Due Period.
II. INSTRUCTION TO MAKE CERTAIN PAYMENTS
Pursuant to Section 5.02, the Servicer does hereby instruct the
Indenture Trustee or the Paying Agent, as the case may be, to pay in accordance
with Section 5.02 from the Collection Account or the Principal Funding Account,
as applicable, on __________, which date is a Distribution Date under the
Indenture Supplement, the following amounts as set forth below:
A) Pursuant to subsection 5.02(a):
-------------------------------
Interest to be distributed to Class A Noteholders......... $________
B) Pursuant to subsection 5.02(b):
-------------------------------
Principal to be distributed to Class A Noteholders........ $________
C) Pursuant to subsection 5.02(c):
-------------------------------
Interest to be distributed to Class B Noteholders......... $________
D) Pursuant to subsection 5.02(d):
-------------------------------
Principal to be distributed to Class B Noteholders........ $________
E) Pursuant to subsection 5.02(e):
-------------------------------
Interest to be distributed to Class C Noteholders
(including amounts from the Spread Account)............... $________
F) Pursuant to subsection 5.02(f):
-------------------------------
Principal to be distributed to Class C Noteholders........ $________
B-4
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
this ____ day of ________, _____.
HOUSEHOLD FINANCE CORPORATION
By: _______________________________________
Name:
Title:
B-5
EXHIBIT C
---------
FORM OF MONTHLY STATEMENT
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I
SERIES 2000-_
Pursuant to the Master Indenture, dated as of ______, 2000 (as amended
and supplemented, the "Master Indenture"), between Household Credit Card Master
----------------
Note Trust I (the "Trust") and Xxxxx Fargo Bank Minnesota, N.A., as indenture
-----
trustee (the "Indenture Trustee"), as supplemented by the Series 2000-_
-----------------
Indenture Supplement, dated as of __________ __, 2000 (the "Indenture
---------
Supplement"), between the Trust and the Indenture Trustee, Household Finance
Corporation, as Servicer (the "Servicer") under the Transfer and Servicing
--------
Agreement, dated as of ______, 2000 (the "Transfer and Servicing Agreement")
--------------------------------
among Household Receivables Funding, Inc. III, as Transferor, the Servicer and
the Trust, is required to prepare certain information each month regarding
current distributions to the Series 2000-_ Noteholders and the performance of
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. Capitalized terms used in this Monthly Statement have their respective
meanings set forth in the Master Indenture and the Indenture Supplement.
A) Information regarding distributions in respect of the Class A
Notes
(1) The total amount of the distribution in respect of Class A
Notes.......................................................... $_____
(2) The amount of the distribution set forth in paragraph 1
above in respect of interest on the Class A Notes.............. $_____
(3) The amount of the distribution set forth in paragraph 1
above in respect of principal of the Class A Notes............. $_____
B) Information regarding distributions in respect of the Class B
Notes
(1) The total amount of the distribution in respect of Class B
Notes.......................................................... $_____
(2) The amount of the distribution set forth in paragraph 1
above in respect of interest on the Class B Notes.............. $-----
(3) The amount of the distribution set forth in paragraph 1
above in respect of principal of the Class B Notes............. $_____
C-1
C) Information regarding distributions in respect of the Class C
Notes.......................................................... $_____
(1) The total amount of the distribution in respect of Class C
Notes.......................................................... $_____
(2) The amount of the distribution set forth in paragraph 1
above in respect of interest on the Class C Notes.............. $_____
(3) The amount of the distribution set forth in paragraph 1
above in respect of principal of the Class C Notes............. $_____
RECEIVABLES --
Beginning of the Month Principal Receivables: $_________
Beginning of the Month Finance Charge and Administrative $_________
Receivables:
Beginning of the Month Discounted Receivables: $_________
Beginning of the Month Total Receivables: $_________
Removed Principal Receivables: $_________
Removed Finance Charge and Administrative Receivables: $_________
Removed Total Receivables: $_________
Additional Principal Receivables: $_________
Additional Finance Charge and Administrative Receivables: $_________
Additional Total Receivables: $_________
Discounted Receivables Generated this Period: $_________
End of the Month Principal Receivables: $_________
End of the Month Finance Charge and Administrative Receivables: $_________
End of the Month Discounted Receivables: $_________
End of the Month Total Receivables: $_________
Special Funding Account Balance: $_________
Aggregate Principal Balance (all Series): $_________
End of the Month Transferor Interest: $_________
X-0
XXXXXXXXXXXXX XXX XXXXXX --
Xxx of the Month Delinquencies: RECEIVABLES
-----------
1-29 Days Delinquent $_________
30-59 Days Delinquent $_________
60-89 Days Delinquent $_________
90-119 Days Delinquent $_________
120+ Days Delinquent $_________
Total End of Month Delinquencies $_________
Defaulted Receivables During the Month $_________
NOTE PRINCIPAL BALANCES --
Class A Note Principal Balance $_________
Class B Note Principal Balance $_________
Class C Note Principal Balance $_________
INITIAL INVESTED AMOUNT $_________
MONTHLY SERVICING FEE $_________
INVESTOR DEFAULT AMOUNT $_________
INVESTOR CHARGE-OFFS $_________
SERIES 2000-_ INFORMATION
FLOATING INVESTOR PERCENTAGE _________%
FIXED INVESTOR PERCENTAGE _________%
AVAILABLE FINANCE CHARGE COLLECTIONS $_________
INVESTOR DEFAULT AMOUNT $_________
MONTHLY SERVICING FEES $_________
AVAILABLE PRINCIPAL COLLECTIONS $_________
C-3
REQUIRED TRANSFEROR INTEREST $_________
EXCESS FINANCE CHARGE AND ADMINISTRATIVE $_________
COLLECTIONS
SHARED PRINCIPAL COLLECTIONS $_________
APPLICATION OF COLLECTIONS --
CLASS A MONTHLY INTEREST $__________
CLASS B MONTHLY INTEREST $__________
IF HFC OR AN AFFILIATE OF HFC IS NO LONGER
SERVICER, MONTHLY SERVICING FEE $__________
IF HFC OR AN AFFILIATE OF HFC IS NO LONGER
ADMINISTRATOR, THE MONTHLY ADMINISTRATION FEE $__________
CLASS C MONTHLY INTEREST $__________
INVESTOR DEFAULT AMOUNT $__________
INVESTOR CHARGE OFFS AND $__________
REALLOCATED PRINCIPAL COLLECTIONS
NOT PREVIOUSLY REIMBURSED
IF HFC OR AN AFFILIATE OF HFC IS SERVICER, MONTHLY
SERVICING FEE $__________
IF HFC OR AN AFFILIATE OF HFC IS ADMINISTRATOR,
THE MONTHLY ADMINISTRATION FEE $__________
AMOUNTS TO BE DEPOSITED IN THE $__________
RESERVE ACCOUNT
AMOUNTS TO BE DEPOSITED IN THE $__________
SPREAD ACCOUNT
EXCESS FINANCE CHARGE AND ADMINISTRATIVE COLLECTIONS
TOTAL EXCESS FINANCE CHARGE AND ADMINISTRATIVE
COLLECTIONS FOR ALL ALLOCATION SERIES $_________
YIELD AND BASE RATE --
Base Rate (Current Month) _________%
Base Rate (Prior Month) _________%
Base Rate (Two Months Ago) _________%
THREE MONTH AVERAGE BASE RATE _________%
C-4
Portfolio Yield (Current Month) _________%
Portfolio Yield (Prior Month) _________%
Portfolio Yield (Two Months Ago) _________%
THREE MONTH AVERAGE PORTFOLIO YIELD _________%
PRINCIPAL COLLECTIONS --
MONTHLY PRINCIPAL _________%
SERIES 2000-_ PRINCIPAL SHORTFALL $_________
SHARED PRINCIPAL COLLECTIONS ALLOCABLE FROM
OTHER PRINCIPAL SHARING SERIES $_________
INVESTOR CHARGE OFFS AND REDUCTIONS
INVESTOR CHARGE OFFS $_________
REDUCTIONS IN INVESTED AMOUNT (OTHER THAN BY
PRINCIPAL PAYMENTS) $_________
PREVIOUS REDUCTIONS IN INVESTED AMOUNT
REIMBURSED $_________
________________________________________
as Paying Agent
By: _______________________________________
Name:
Title:
C-5
EXHIBIT D
---------
FORM OF MONTHLY SERVICER'S CERTIFICATE
HOUSEHOLD FINANCE CORPORATION
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I
SERIES 2000-_
The undersigned, a duly authorized representative of Household Finance
Corporation ("HFC"), as Servicer pursuant to the Transfer and Servicing
---
Agreement, dated as of ______, 2000 (as amended and supplemented, the "Transfer
--------
and Servicing Agreement"), among HFC, Household Receivables Funding, Inc. III
-----------------------
("HRF"), as Transferor and Household Credit Card Master Note Trust I (the
---
"Trust"), does hereby certify as follows:
-----
1. Capitalized terms used in this Certificate have their respective
meanings set forth in the Transfer and Servicing Agreement or the Master
Indenture, dated as of ______, 2000 (as amended or supplemented, the
"Master Indenture"), between the Trust and Xxxxx Fargo Bank Minnesota,
----------------
N.A., as indenture trustee (the "Indenture Trustee") as supplemented by the
-----------------
Series 2000-_ Indenture Supplement, dated as of __________ __, 2000,
between the Trust and the Indenture Trustee (as amended and supplemented,
the "Indenture Supplement" and together with the Master Indenture, the
--------------------
"Indenture"), as applicable.
----------
2. HFC is, as of the date hereof, the Servicer under the Transfer
and Servicing Agreement.
3. The undersigned is an Authorized Officer of the Servicer.
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 Transfer and Servicing Agreement and the Indenture 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 Amortization Event occurred on or prior to such Distribution Date.
D-1
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Certificate this ____ day of ____, ____.
HOUSEHOLD FINANCE CORPORATION,
Servicer
By: ________________________________
Name:
Title:
D-2
