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TARGET RECEIVABLES CORPORATION,
Transferor
RETAILERS NATIONAL BANK,
Servicer
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
on behalf of the Series 2000-__ Certificateholders
----------------------------------------
SERIES 2000-__ SUPPLEMENT
Dated as of _______________
to
AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT
Dated as of April 28, 2000
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TARGET CREDIT CARD MASTER TRUST
$___________ ____% Class A Asset Backed
Certificates, Series 2000-__
$_____________ Class B Asset Backed
Certificates, Series 2000-__
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TABLE OF CONTENTS
Page
ARTICLE I
CREATION OF THE SERIES 2000-__ CERTIFICATES
Section 1.1. Designation............................................ 1
Section 1.2. Delivery and Payment for the Series 2000-
__ Certificates........................................ 1
Section 1.3. Form of Delivery of Series 2000-__
Certificates........................................... 2
ARTICLE II
DEFINITIONS
Section 2.1. Definitions............................................ 3
ARTICLE III
SERVICER
Section 3.1. Servicing Compensation................................. 16
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.1. Rights of Certificateholders........................... 17
Section 4.2. Collections and Allocation; Payments on
Transferor Certificate................................. 17
Section 4.3. Determination of Monthly Interest for the
Series 2000-__ Certificates............................ 21
Section 4.4. Determination of Principal Amounts..................... 22
Section 4.5. Shared Principal Collections........................... 23
Section 4.6. Application of Funds on Deposit in the
Collection Account for the Certificates................ 23
Section 4.7. Coverage of Required Amount for the
Series 2000-__ Certificates............................ 28
Section 4.8. Investor Charge-Offs................................... 29
Section 4.9. Reallocated Class B Principal Collections
for the Series 2000-__ Certificates.................... 29
Section 4.10. Issuance of Additional Investor
Certificates........................................... 30
Section 4.11. Establishment of the Principal Funding
Account for the Certificates........................... 31
Section 4.12. Accumulation Period.................................... 32
Section 4.13. Reserve Account........................................ 33
SECTION 4.14. Defeasance............................................. 35
ARTICLE V
DISTRIBUTIONS AND REPORTS TO SERIES 2000-__ INVESTOR
CERTIFICATEHOLDERS
Section 5.1. Distributions.......................................... 36
Section 5.2. Reports and Statements to Series 2000-__
Certificateholders...................................... 37
ARTICLE VI
EARLY AMORTIZATION EVENTS
Section 6.1. Series 2000-__ Early Amortization Events............... 38
ARTICLE VII
OPTIONAL REPURCHASE; SERIES TERMINATION;
SALE OF CLASS B CERTIFICATES
Section 7.1. Optional Repurchase.................................... 40
Section 7.2. Series 2000-__ Termination............................. 40
Section 7.3. Reduction of Class B Invested Amount
During the Revolving Period; Designation
of Class B Certificate Terms; Sale of
Class B Certificates................................... 40
Section 7.4. Purchase of the Class A Certificates by
the Transferor......................................... 41
ARTICLE VIII
FINAL DISTRIBUTION
Section 8.1. Sale of Receivables or Certificateholders' Interest
pursuant to Section 2.6 or 10.1 of the Agreement and
Section 7.1 or 7.2 of this Supplement.................. 43
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1. Delivery and Payment for the Series 2000-
__ Certificates........................................ 45
Section 9.2. Form of Delivery of Series 2000-__
Certificates........................................... 45
Section 9.3. Legend on Class B Certificates......................... 45
Section 9.4. Ratification of Agreement.............................. 46
Section 9.5. Counterparts........................................... 46
Section 9.6. Paired Series.......................................... 46
Section 9.7. Jurisdiction; Service.................................. 47
Section 9.8. Governing Law.......................................... 47
Section 9.9. Instructions in Writing................................ 47
EXHIBITS
EXHIBIT A-1 FORM OF CLASS A INVESTOR CERTIFICATE
EXHIBIT A-2 FORM OF CLASS B INVESTOR CERTIFICATE
EXHIBIT B FORM OF MONTHLY SERIES 2000-__
CERTIFICATEHOLDERS' STATEMENT
EXHIBIT C FORM OF MONTHLY SERVICER'S CERTIFICATE
SERIES 2000-__ SUPPLEMENT, dated as of __________, 2000 (this
"Supplement") by and among TARGET RECEIVABLES CORPORATION, a corporation
organized and existing under the laws of the State of Minnesota, as
Transferor (the "Transferor"), RETAILERS NATIONAL BANK, a national banking
association organized and existing under the laws of the United States, as
Servicer (the "Servicer"), and NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, a national banking association organized and existing under
the laws of the United States, as trustee (together with its successors in
trust thereunder as provided in the Agreement referred to below, the
"Trustee") under the Amended and Restated Pooling and Servicing Agreement
dated as of April 28, 2000, as amended (the "Agreement") among the
Transferor, the Servicer and the Trustee.
Section 6.3 of the Agreement provides, among other things, that
the Transferor and the Trustee may at any time and from time to time enter
into a supplement to the Agreement for the purpose of authorizing the
issuance by the Transferor, for execution and redelivery to the Trustee for
authentication, of one or more Series of Certificates.
Pursuant to this Supplement, the Transferor and the Trustee
shall create a new Series of Investor Certificates and shall specify the
Principal Terms thereof. The Investor Certificates shall not be
subordinated to any other Series.
ARTICLE I
CREATION OF THE SERIES 2000-__ CERTIFICATES
Section 1.1. Designation. There is hereby created a Series of
Investor Certificates to be issued pursuant to the Agreement and this
Supplement to be known generally as the "Series 2000-__ Certificates." The
Series 2000-__ Certificates shall be issued in two Classes, which shall be
designated generally as the $____________ ____% Class A Asset Backed
Certificates, Series 2000-__ (the "Class A Certificates") and the
$______________ Class B Asset Backed Certificates, Series 2000-__ (the
"Class B Certificates"), subject to any increase in such principal amounts
as a result of the issuance of Additional Certificates pursuant to Section
4.10 of this Supplement. The Series 2000-__ Certificates shall be a
Principal Sharing Series and shall be included in Group I. The Series
2000-__ Certificates shall be entitled to share Excess Transferor Finance
Charge Collections and Shared Transferor Principal Collections.
Section 1.2. Delivery and Payment for the Series 2000- __
Certificates. The Transferor shall execute and deliver the Series 2000-__
Certificates to the Trustee for authentication in accordance with Section
6.1 of the Agreement. The Trustee shall deliver the Series 2000-__
Certificates to or upon the order of the Transferor when authenticated in
accordance with Section 6.2 of the Agreement.
Section 1.3. Form of Delivery of Series 2000-__ Certificates.
(a) The Class A Certificates shall be delivered as Book-Entry Certificates
as provided in Sections 6.1, 6.2 and 6.10 of the Agreement and shall be
substantially in the form of Exhibit A-1 hereto. The Class B Certificates
shall be delivered as Definitive Certificates as provided in Sections 6.1,
6.2 and 6.10 of the Agreement and shall be substantially in the form of
Exhibit A-2 hereto.
(b) The Depositary for the Class A Certificates shall be the
Depositary Trust Company, and the Class A Certificates initially shall be
registered in the name of Cede & Co., its nominee.
ARTICLE II
DEFINITIONS
Section 2.1. Definitions. In the event that any term or
provision contained herein shall conflict with or be inconsistent with any
provision contained in the Agreement, the terms and provisions of this
Supplement shall govern with respect to the Series 2000-__ Certificates.
All Article, Section or subsection references herein shall mean Article,
Section or subsections of this Supplement except as otherwise provided
herein. All capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Agreement. Each capitalized
term defined herein shall relate only to the Series 2000-__ Certificates
and to no other Series of Certificates issued by the Trust.
"Accumulation Date" shall mean the first day of the ___________
Monthly Period.
"Accumulation Period" shall mean, with respect to the Class A
Certificates, the period commencing on the Accumulation Date, or such later
date as may be specified by the Servicer in accordance with Section 4.12,
and continuing to and including the earliest of (x) the Early Amortization
Commencement Date, (y) the end of the _________ Monthly Period and (z) the
date of termination of the Trust pursuant to Section 12.1 of the Agreement.
"Accumulation Period Length" shall have the meaning specified
in Section 4.12.
"Additional Certificate Date" shall have the meaning specified
in subsection 4.10(a).
"Additional Certificates" shall have the meaning specified in
subsection 4.10(a).
"Additional Interest" shall mean, at any time of determination,
the sum of Class A Additional Interest and Class B Additional Interest, if
any.
"Adjusted Invested Amount" shall mean for any Business Day an
amount equal to the sum of the Class A Adjusted Invested Amount plus the
Class B Invested Amount.
"Amortization Period Commencement Date" shall mean the earlier
of the Accumulation Date, or such later date as may be specified by the
Servicer in accordance with Section 4.12, and the Early Amortization
Commencement Date.
"Available Reserve Account Amount" shall mean, with respect to
any Transfer Date, the lesser of (a) the amount on deposit in the Reserve
Account as of such date (before giving effect to any deposit or withdrawals
made or to be made pursuant to subsections 4.6(a)(ix) and 4.13(d) to the
Reserve Account on such date) and (b) the Required Reserve Account Amount.
"Available Series 2000-__ Finance Charge Collections" shall
have the meaning specified in subsection 4.6(a).
"Available Shared Principal Collections" shall mean, for any
Monthly Period, Shared Principal Collections available to be allocated to
the Certificates from each other Series that has a controlled or scheduled
amortization or accumulation period beginning after the _________
Distribution Date.
"Base Rate" shall mean, with respect to any Monthly Period, the
sum of (i) the annualized percentage equivalent of a fraction the numerator
of which is the sum of the Class A Interest and the Class B Interest for
the related Interest Accrual Period and the denominator of which is the
Invested Amount as of the close of business on the last day of the Monthly
Period and (ii) the annualized percentage equivalent of a fraction the
numerator of which is the Monthly Servicing Fee for such Monthly Period and
the denominator of which is the Invested Amount as of the close of business
on the last day of the preceding Monthly Period.
"Carryover Class A Interest" shall mean, with respect to any
Distribution Date, (a) any Class A Interest due but not paid on any
previous Distribution Date plus (b) any Class A Additional Interest.
"Carryover Class B Interest" shall mean, with respect to any
Distribution Date, (a) any Class B Interest due but not paid on any
previous Distribution Date plus (b) any Class B Additional Interest.
"Carryover Interest" shall mean, with respect to any
Distribution Date, the sum of Carryover Class A Interest and Carryover
Class B Interest.
"Class A Additional Interest" shall have the meaning specified
in subsection 4.3.
"Class A Adjusted Invested Amount" shall mean for any Business
Day an amount equal to the Class A Invested Amount minus the aggregate
principal amount on deposit in the Principal Funding Account on such
Business Day.
"Class A Certificateholder" shall mean the Person in whose name
a Class A Certificate is registered in the Certificate Register.
"Class A Certificateholders' Interest" shall mean, with respect
to any date, the portion of the Series 2000-__ Certificateholders' Interest
evidenced by the Class A Certificates.
"Class A Certificate Rate" shall mean, with respect to any
Interest Accrual Period, a per annum rate equal to ____%.
"Class A Certificates" shall mean any of the certificates
executed by the Transferor and authenticated by or on behalf of the
Trustee, substantially in the form of Exhibit X- 0 hereto.
"Class A Expected Final Payment Date" shall mean the
___________ Distribution Date.
"Class A Floating Allocation Percentage" shall mean, with
respect to any Monthly Period, the percentage equivalent of a fraction, the
numerator of which is the Class A Adjusted Invested Amount as of (x) during
the Revolving Period or the Accumulation Period with respect to Collections
of Finance Charge Receivables and at all times with respect to Defaulted
Amounts, the close of business on the last day of the immediately preceding
Monthly Period (or, in the case of the first Monthly Period, the Closing
Date) and (y) during an Early Amortization Period with respect to
Collections of Finance Charge Receivables, the close of business on the
last day of the Monthly Period immediately preceding the occurrence of an
Early Amortization Event and the denominator of which is the greater of (a)
the total amount of Principal Receivables in the Trust plus the amounts on
deposit in the Special Funding Account as of the close of business on such
date and (b) when used with respect to Collections of Finance Charge
Receivables, the sum of the numerators with respect to all Classes of all
Series and Participations then outstanding used to calculate the applicable
allocation percentage.
"Class A Initial Invested Amount" shall mean the aggregate
initial principal amount of the Class A Certificates, which is
$_____________.
"Class A Interest" shall mean the interest distributable in
respect of the Class A Certificates as calculated in accordance with
Section 4.3.
"Class A Interest Shortfall" shall have the meaning specified
in Section 4.3.
"Class A Invested Amount" shall mean, when used with respect to
any date of determination, an amount equal to (a) the Class A Initial
Invested Amount, minus (b) the aggregate amount of principal payments made
to Class A Certificateholders prior to such date, minus (c) the aggregate
amount of Class A Investor Charge-Offs for all prior Distribution Dates,
plus (d) the sum of the aggregate amount allocated with respect to Class A
Investor Charge-Offs and available on all prior Distribution Dates pursuant
to subsection 4.6(a)(vi) and, with respect to such subsection, pursuant to
Sections 4.7 and 4.9, for the purpose of reinstating amounts reduced
pursuant to the foregoing clause (c), plus (e) the amount of any increase
in the Class A Invested Amount resulting from the issuance of Additional
Certificates under Section 4.10 and minus (f) the amount of any reduction
in the Class A Invested Amount as a result of the purchase by the
Transferor and subsequent cancellation of Class A Certificates pursuant to
Section 7.4.
"Class A Investor Charge-Offs" shall have the meaning specified
in subsection 4.8(b).
"Class A Investor Defaulted Amount" shall mean, with respect to
each Distribution Date, an amount equal to the product of (a) the Class A
Floating Allocation Percentage applicable on such date and (b) the
Defaulted Amount for the related Monthly Period.
"Class A Percentage" shall mean a fraction the numerator of
which is the Class A Adjusted Invested Amount and the denominator of which
is the sum of the Class A Adjusted Invested Amount and the Class B Invested
Amount.
"Class A Principal" shall mean the principal distributable in
respect of the Class A Certificates as calculated in accordance with
subsection 4.4(a).
"Class A Required Amount" shall mean, with respect to each
Distribution Date, the amount determined by the Servicer equal to the
excess, if any, of (x) the sum of (i) Class A Interest for the related
Monthly Period, (ii) any Carryover Class A Interest previously due but not
paid to the Class A Certificateholders on a prior Distribution Date, (iii)
the Class A Servicing Fee for the related Monthly Period, (iv) the Class A
Investor Defaulted Amount and (v) the Class A Percentage of the Series
Allocation Percentage of the adjustment payments required to be made by the
Transferor pursuant to Section 3.9 of the Agreement but not made on or
prior to the related Distribution Date, over (y) the sum of the Available
Series 2000-__ Finance Charge Collections applied with respect to such
amounts pursuant to subsection 4.6(a) plus any Excess Finance Charge
Collections from other Series and Excess Transferor Finance Charge
Collections allocable to Series 2000-__ and applied with respect to such
amounts pursuant to Section 4.7.
"Class A Servicing Fee" shall have the meaning specified in
Section 3.1.
"Class B Additional Interest" shall mean the amount, if any,
distributable in respect of the Class B Certificates as calculated pursuant
to a supplemental agreement entered into in accordance with Section 7.3.
"Class B Certificateholder" shall mean the Person in whose name
a Class B Certificate is registered in the Certificate Register.
"Class B Certificateholders' Interest" shall mean, with respect
to any date, the portion of the Series 2000-__ Certificateholders' Interest
evidenced by the Class B Certificates.
"Class B Certificate Rate" shall mean, with respect to any
Interest Accrual Period, a per annum rate equal to 0%; provided, however
such interest rate may be increased pursuant to the terms of a supplemental
agreement entered into in accordance with Section 7.3.
"Class B Certificates" shall mean any of the certificates
executed by the Transferor and authenticated by or on behalf of the
Trustee, substantially in the form of Exhibit X- 0 hereto.
"Class B Floating Allocation Percentage" shall mean, with
respect to any Monthly Period, the percentage equivalent of a fraction, the
numerator of which is the Class B Invested Amount as of (x) during the
Revolving Period or the Accumulation Period with respect to Collections of
Finance Charge Receivables and at all times with respect to Defaulted
Amounts, the close of business on the last day of the immediately preceding
Monthly Period (or, in the case of the first Monthly Period, the Closing
Date) and (y) during an Early Amortization Period with respect to
Collections of Finance Charge Receivables, the close of business on the
last day of the Monthly Period immediately preceding the occurrence of an
Early Amortization Event and the denominator of which is the greater of (a)
the total amount of Principal Receivables plus the amount on deposit in the
Special Funding Account as of the close of business on such date and (b)
when used with respect to Collections of Finance Charge Receivables, the
sum of the numerators with respect to all Classes of all Series and
Participations then outstanding used to calculate the applicable allocation
percentage.
"Class B Initial Invested Amount" shall mean the aggregate
initial principal amount of the Class B Certificates, which is
$___________.
"Class B Interest" shall mean the interest, if any,
distributable in respect of the Class B Certificates as may be calculated
pursuant to a supplemental agreement entered into in accordance with
Section 7.3.
"Class B Invested Amount" shall mean, when used with respect to
any date of determination, an amount equal to (a) the Class B Initial
Invested Amount, minus (b) the aggregate amount of principal payments made
to Class B Certificateholders prior to such date, minus (c) the aggregate
amount of Class B Investor Charge-Offs for all prior Distribution Dates,
minus (d) the aggregate amount of Reallocated Class B Principal Collections
for which the Class B Invested Amount has been reduced for all prior
Distribution Dates, plus (e) the sum of the aggregate amount allocated and
available on all prior Distribution Dates pursuant to subsection
4.6(a)(vii) and, with respect to such subsection, pursuant to Section 4.7,
for the purpose of reinstating amounts reduced pursuant to the foregoing
clauses (c) and (d) plus (f) the amount of any increase in the Class B
Invested Amount resulting from the issuance of Additional Certificates
under Section 4.10.
"Class B Investor Charge-Offs" shall have the meaning specified
in subsection 4.8(a).
"Class B Investor Defaulted Amount" shall mean, with respect to
each Distribution Date, an amount equal to the product of (a) the Class B
Floating Allocation Percentage applicable on such date and (b) the
Defaulted Amount for the related Monthly Period.
"Class B Percentage" shall mean a fraction the numerator of
which is the Class B Invested Amount and the denominator of which is the
sum of the Class A Adjusted Invested Amount and the Class B Invested
Amount.
"Class B Principal" shall mean the principal distributable in
respect of the Class B Certificates as calculated in accordance with
subsection 4.4(b).
"Class B Principal Allocation Percentage" shall mean, with
respect to any Monthly Period, the percentage equivalent of a fraction, the
numerator of which is (a) during the Revolving Period, the Class B Invested
Amount as of the last day of the immediately preceding Monthly Period (or,
in the case of the first Monthly Period, the Closing Date), (b) during the
Accumulation Period, the Class B Invested Amount as of the last day of the
Revolving Period, and (c) during the Early Amortization Period, the Class B
Invested Amount as of the last day of the Revolving Period, or, if less,
the last numerator used to calculate the Class B Principal Allocation
Percentage in the Accumulation Period, if any, and the denominator of which
is the greater of (a)(x) if only one Series is outstanding (i) during the
Revolving Period, the sum of the total amount of Principal Receivables in
the Trust and the principal amount on deposit in the Special Funding
Account as of the last day of the immediately preceding Monthly Period and
(ii) during the Accumulation Period and the Early Amortization Period the
sum of the total amount of Principal Receivables in the Trust and the
principal amount on deposit in the Special Funding Account as of the last
day of the Revolving Period and (y), if more than one Series is
outstanding, the sum of the total amount of Principal Receivables in the
Trust and the principal amount on deposit in the Special Funding Account as
of the last day of the immediately preceding Monthly Period (or, in the
case of the first Monthly Period, the Closing Date) and (b) the sum of the
numerators used to calculate the principal allocation percentages for all
Series and Participations outstanding as of the date as to which such
determination is being made; provided, that such calculations are subject
to adjustment to give effect to additions of Additional Accounts.
"Class B Servicing Fee" shall have the meaning specified in
Section 3.1.
"Closing Date" shall mean __________________.
"Controlled Accumulation Amount" shall mean $____________
provided that such amount may be increased pursuant to Section 4.10 as a
result of the issuance of Additional Certificates; provided, further, that,
if the Accumulation Period is modified pursuant to Section 4.12, (i) the
Controlled Accumulation Amount for each Distribution Date with respect to
the Accumulation Period shall mean the amount determined in accordance with
Section 4.12 on the date on which the Accumulation Period has most recently
been modified and (ii) the sum of the Controlled Accumulation Amounts for
all Distribution Dates with respect to the modified Accumulation Period
shall not be less than the Class A Invested Amount.
"Controlled Deposit Amount" shall mean, with respect to any
Distribution Date with respect to the Accumulation Period, an amount equal
to the Controlled Accumulation Amount plus the Deficit Controlled
Accumulation Amount for the preceding Distribution Date, if any.
"Covered Amount" shall mean, with respect to any Interest
Accrual Period prior to the payment in full of the Class A Invested Amount,
one-twelfth of the product of (a) the Class A Certificate Rate in effect
with respect to the related Interest Accrual Period and (b) the Principal
Funding Account Balance as of the first day of such Interest Accrual
Period.
"Deficit Controlled Accumulation Amount" shall mean, on each
Distribution Date with respect to the Accumulation Period, the excess, if
any, of the Controlled Deposit Amount for such Distribution Date over the
amount distributed from the Collection Account as Class A Principal for
such Distribution Date.
"Distribution Date" shall mean ________________ and the 25th
day of each month thereafter, or if such day is not a Business Day, the
next succeeding Business Day.
"Early Amortization Commencement Date" shall mean the date on
which an Early Amortization Event is deemed to occur pursuant to Section
9.1 of the Agreement or a Series 2000-__ Early Amortization Event is deemed
to occur pursuant to Section 6.1.
"Early Amortization Period" shall mean the period beginning on
the earlier of (a) the day on which a Series 2000-__ Early Amortization
Event or an Early Amortization Event occurs or is deemed to have occurred
and (b) the Class A Expected Final Payment Date if the Class A Invested
Amount has not been paid in full on such date, and ending on the earlier of
(i) the date on which the Class A Invested Amount and the Class B Invested
Amount have been paid in full and (ii) the Series 2000-__ Termination Date.
"Enhancement" shall mean, with respect to the Class A
Certificates, the subordination of the Class B Invested Amount.
"Excess Finance Charge Collections" shall mean, with respect to
any Distribution Date, as the context requires, either (x) the amount
described in subsection 4.6(a)(x) allocated to the Series 2000-__
Certificates but available to cover shortfalls in amounts paid from
Collections of Finance Charge Receivables for other Series, if any or (y)
the aggregate amount of Collections of Finance Charge Receivables allocable
to other Series in excess of the amounts necessary to make required
payments with respect to such Series, if any, and available to cover
shortfalls with respect to the Series 2000-__ Certificates.
"Excess Transferor Finance Charge Collections" shall have the
meaning specified in subsection 4.2(d).
"Floating Allocation Percentage" shall mean, with respect to
any date of determination, the sum of the Class A Floating Allocation
Percentage and Class B Floating Allocation Percentage on such date.
"Initial Invested Amount" shall mean the sum of the Class A
Initial Invested Amount and the Class B Initial Invested Amount.
"Interest Accrual Period" shall mean, with respect to a
Distribution Date, the period from and including the preceding Distribution
Date to and excluding such Distribution Date; provided, however, that the
initial Interest Accrual Period shall be the period from the Closing Date
to and excluding the first Distribution Date.
"Invested Amount" shall mean, as of any date of determination,
an amount equal to the sum of (a) the Class A Invested Amount as of such
date and (b) the Class B Invested Amount as of such date.
"Investor Certificateholder" shall mean the Holder of record of
an Investor Certificate.
"Investor Certificates" shall mean the Class A Certificates and
the Class B Certificates; provided, however, that the Class B Certificates
shall not be considered to be Investor Certificates for purposes of any Tax
Opinion or other opinion relating to tax matters hereunder or under the
Agreement for so long as they are held by the Transferor.
"Investor Charge-Offs" shall mean the sum of Class A Investor
Charge-Offs and Class B Investor Charge-Offs.
"Investor Defaulted Amount" shall mean, with respect to any
Monthly Period, an amount equal to the product of the Defaulted Amount and
the Floating Allocation Percentage as of the related Distribution Date.
"Investor Percentage" shall mean, with respect to Principal
Receivables, the Principal Allocation Percentage and, with respect to
Finance Charge Receivables and Receivables in Defaulted Accounts, the
Floating Allocation Percentage.
"Monthly Period" shall mean with respect to each Distribution
Date, the immediately preceding fiscal month of the Transferor, provided,
that the first Monthly Period shall begin on the Closing Date and end on
the last day of the fiscal month of the Transferor during which the Closing
Date occurs.
"Monthly Servicing Fee" shall have the meaning specified in
Section 3.1.
"Percentage Allocation" shall have the meaning specified in
subsection 4.2(b)(ii)(y).
"Portfolio Yield" shall mean for the Series 2000-__
Certificates, with respect to any Monthly Period, the annualized percentage
equivalent of a fraction, the numerator of which is an amount equal to the
sum of the aggregate amount of Available Series 2000-__ Finance Charge
Collections for such Monthly Period, minus the aggregate Investor Defaulted
Amount for such Monthly Period and the Series 2000-__ Allocation Percentage
of any adjustment payments required to be made by the Transferor pursuant
to Section 3.9 of the Agreement but not made on or prior to the related
Distribution Date, and the denominator of which is the Invested Amount as
of the last day of the preceding Monthly Period.
"Principal Allocation Percentage" shall mean, with respect to
any Monthly Period, the percentage equivalent of a fraction, the numerator
of which is (a) during the Revolving Period, the Invested Amount as of the
last day of the immediately preceding Monthly Period (or, in the case of
the first Monthly Period, the Closing Date), (b) during the Accumulation
Period, the Invested Amount as of the last day of the Revolving Period;
provided, that during the Accumulation Period on the date of issuance of a
new Series, at the option of the Transferor, such amount may be reduced to
an amount not less than the greater of (x) the Adjusted Invested Amount on
such date and (y) the amount which would result in a Principal Allocation
Percentage which when multiplied by the amount of Collections of Principal
Receivables for the preceding Monthly Period would equal (I) the Controlled
Deposit Amount for such Monthly Period plus 10% of the Controlled
Accumulation Amount or, if such date is on or after the Class A Expected
Final Payment Date and the Class A Invested Amount has been paid in full,
the Class B Invested Amount minus (II) the amount of any Available Shared
Principal Collections with respect to such Monthly Period, and (c) during
the Early Amortization Period, the Invested Amount as of the last day of
the Revolving Period or, if less, the last numerator used to calculate the
Principal Allocation Percentage in the Accumulation Period, if any, and the
denominator of which is the greater of (a)(x) if only one Series is
outstanding (i) during the Revolving Period, the sum of the total amount of
Principal Receivables in the Trust and the principal amount on deposit in
the Special Funding Account as of the last day of the immediately preceding
Monthly Period and (ii) during the Accumulation Period and the Early
Amortization Period the sum of the total amount of Principal Receivables in
the Trust and the principal amount on deposit in the Special Funding
Account as of the last day of the Revolving Period and (y), if more than
one Series is outstanding, the sum of the total amount of Principal
Receivables in the Trust and the principal amount on deposit in the Special
Funding Account as of the last day of the immediately preceding Monthly
Period (or, in the case of the first Monthly Period, the Closing Date) and
(b) the sum of the numerators used to calculate the principal allocation
percentages for all Series and Participations outstanding as of the date as
to which such determination is being made; provided, further, that such
calculations are subject to adjustment to give effect to additions of
Additional Accounts.
"Principal Funding Account" shall have the meaning specified in
subsection 4.11(a).
"Principal Funding Account Balance" shall mean, with respect to
any date of determination during the Accumulation Period, 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 Interest Accrual Period during the Accumulation Period, the
investment earnings on funds on deposit in the Principal Funding Account
(net of investment expenses and losses) for such Interest Accrual Period.
"Principal Funding Investment Shortfall" shall mean, with
respect to each Interest Accrual Period during the Accumulation Period, the
amount, if any, by which the Principal Funding Investment Proceeds are less
than the Covered Amount.
"Principal Shortfalls" shall mean on any Distribution Date (x)
for Series 2000-__, (i) during the Accumulation Period, the excess of the
Controlled Deposit Amount over the aggregate amount applied with respect
thereto for such Distribution Date, and (ii) at all other times, the
Invested Amount of the class then receiving principal payments after the
application of Collections of Principal Receivables on such Distribution
Date provided however, that after the Class A Invested Amount has been paid
in full, such amount shall be equal to the Class B Invested Amount or (y)
for any other Series the amounts specified as such in the Supplement for
such other Series.
"Rating Agency" shall mean each of Standard & Poor's and
Moody's.
"Reallocated Class B Principal Collections" shall have the
meaning specified in Section 4.9.
"Reassignment Amount" shall mean, with respect to any
Distribution Date, after giving effect to any deposits and distributions
otherwise to be made on such Distribution Date, the sum of (i) the sum of
the Class A Adjusted Invested Amount and the Class B Invested Amount on
such Distribution Date, plus (ii) the sum of the Class A Interest and Class
B Interest, if any, for such Distribution Date and the sum of Class A
Interest and Class B Interest, if any, previously due but not distributed
to the Series 2000-__ Certificateholders on a prior Distribution Date, plus
(iii) the amount of Additional Interest, if any, for such Distribution Date
and any Additional Interest previously due but not distributed to the
Series 2000-__ Certificateholders on a prior Distribution Date.
"Record Date" shall mean, with respect to any Distribution
Date, the last Business Day of the calendar month preceding the month in
which such Distribution Date occurs.
"Required Amount" shall have the meaning specified in Section
4.7.
"Required Reserve Account Amount" shall mean, with respect to
any Distribution Date on or after the Reserve Account Funding Date, an
amount, if any, specified by the Transferor.
"Required Retained Transferor's Percentage" shall mean 2%;
provided, however, that such percentage may be adjusted from time to time
upon written notice from the Transferor to the Trustee if each Rating
Agency initially contracted to rate the Class A Certificates shall have
been notified of such amendment and shall have provided notice to the
Trustee or the Servicer that such action would not result in a reduction or
withdrawal of its rating of the Class A Certificates and such action shall
not, as evidenced by a Tax Opinion, cause the Trust to be characterized for
Federal income tax purposes as an association or publicly traded
partnership taxable as a corporation or otherwise have any material adverse
effect on the Federal income taxation of any outstanding Series of
Certificates or any Certificate Owner.
"Reserve Account" shall have the meaning specified in
subsection 4.13(a).
"Reserve Account Funding Date" shall mean the date specified by
the Transferor for the commencement of the funding of the Reserve Account.
"Reserve Account Surplus" shall mean, as of any Transfer 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 have the meaning specified in
subsection 4.13(c).
"Revolving Period" shall mean the period from and including the
Closing Date to, but not including, the Amortization Period Commencement
Date.
"Scheduled Series 2000-__ Termination Date" shall mean the
___________ Distribution Date.
"Series Accounts" shall mean the Principal Funding Account and
the Reserve Account.
"Series Invested Amount" shall mean, for Series 2000-1, as of
any date of determination, an amount equal to the sum of (a) the Class A
Adjusted Invested Amount as of such date and (b) the Class B Invested
Amount as of such date.
"Series 2000-__" shall mean the Series of the Target Credit
Card Master Trust represented by the Series 2000-__ Certificates.
"Series 2000-__ Allocation Percentage" shall mean, on any date
of determination, the percentage equivalent of a fraction the numerator of
which is the sum of the Class A Adjusted Invested Amount and the Class B
Invested Amount and the denominator of which is the sum of the invested
amounts (or adjusted invested amounts, as applicable) of all then
outstanding Series.
"Series 2000-__ Certificateholder" shall mean the holder of
record of any Series 2000-__ Investor Certificate.
"Series 2000-__ Certificateholders' Interest" shall have the
meaning specified in Section 4.1.
"Series 2000-__ Certificates" shall have the meaning specified
in Section 1.1.
"Series 2000-__ Early Amortization Event" shall have the
meaning specified in Section 6.1.
"Series 2000-__ Termination Date" shall mean the earlier to
occur of (i) the day after the Distribution Date on which the Series
2000-__ Certificates are paid in full, or (ii) the Scheduled Series 2000-__
Termination Date.
"Servicing Base Amount" shall have the meaning specified in
Section 3.1.
"Servicing Fee Rate" shall mean 2.00% per annum.
"Shared Principal Collections" shall mean, as the context
requires, either (a) the amount allocated to the Series 2000-__
Certificates which, in accordance with subsections 4.6(a)(iii), (iv), (v),
(vi) and (vii), 4.6(b) and 4.6(c)(iii), may be applied in accordance with
Section 4.4 of the Agreement or (b) the amounts allocated to the investor
certificates of other Series which the applicable Supplements for such
Series specify are to be treated as "Shared Principal Collections" plus
amounts specified in any Participation Supplement with respect to any
participation to be treated as Shared Principal Collections which may be
applied to cover Principal Shortfalls with respect to the Series 2000-__
Certificates.
"Special Payment Date" shall mean each Distribution Date
following the Monthly Period in which an Early Amortization Event occurs
with respect to an Early Amortization Period and each Distribution Date
following the Class A Expected Final Payment Date.
"Shared Transferor Principal Collections" shall have the
meaning specified in subsection 4.2(d).
"Termination Payment Date" shall mean the earlier of the first
Distribution Date following (i) to the extent applicable, the liquidation
or sale of the Receivables as a result of an Insolvency Event and (ii) the
occurrence of the Scheduled Series 2000-__ Termination Date.
"Transferor Retained Certificates" shall mean investor
certificates of any Series, including the Class B Certificates, which the
Transferor retains, but only to the extent that and for so long as the
Transferor is the Holder of such Certificates.
"Transferor Retained Class" shall mean the Class B
Certificates.
ARTICLE III
SERVICER
Section 3.1. Servicing Compensation. The share of the Servicing
Fee allocable to the Series 2000-__ Certificateholders with respect to any
Distribution Date (the "Monthly Servicing Fee") shall be equal to
one-twelfth of the product of (a) the Servicing Fee Rate and (b) (i) the
sum of the Class A Adjusted Invested Amount and the Class B Invested Amount
as of the last day of the Monthly Period second preceding such Distribution
Date, minus (ii) the product of the amount, if any, on deposit in the
Special Funding Account as of the last day of the Monthly Period second
preceding such Distribution Date and the Floating Allocation Percentage
with respect to such Monthly Period (the amount calculated pursuant to this
clause (b) is referred to as the "Servicing Base Amount"); provided,
however, that with respect to the first Distribution Date, the Monthly
Servicing Fee shall be $________. The share of the Monthly Servicing Fee
allocable to the Class A Certificateholders with respect to any
Distribution Date (the "Class A Servicing Fee") shall be equal to the
product of (a) the Class A Percentage and (b) the Monthly Servicing Fee;
provided, however, that with respect to the first Distribution Date the
Class A Servicing Fee shall be $________. The share of the Monthly
Servicing Fee allocable to the Class B Certificateholders with respect to
any Distribution Date (the "Class B Servicing Fee") shall be equal to the
product of (a) the Class B Percentage and (b) the Monthly Servicing Fee;
provided, however, that with respect to the first Distribution Date, the
Class B Servicing Fee shall be $________. The remainder of the Servicing
Fee shall be paid from amounts allocable to the Holder of the Transferor
Certificate, holders of Participations or the Certificateholders of other
Series (as provided in the related Supplements) and in no event shall the
Trust, the Trustee or the Series 2000-__ Certificateholders be liable for
the share of the Servicing Fee to be paid from amounts allocable to the
Holder of the Transferor Certificate, holders of a Participation or the
Certificateholders of any other Series. The Monthly Servicing Fee shall be
payable to the Servicer solely to the extent amounts are available for
distribution in respect thereof pursuant to Section 4.6(a)(ii).
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.1. Rights of Certificateholders. The Series 2000-__
Certificates shall represent undivided interests in the Trust, consisting
of the right to receive, to the extent necessary to make the required
payments with respect to such Series 2000-__ Certificates at the times and
in the amounts specified in this Agreement, (a) the Floating Allocation
Percentage and the Principal Allocation Percentage (as applicable from time
to time) of Collections, (b) funds distributable to the Series 2000-__
Certificates pursuant to Section 4.2 of the Agreement on deposit in the
Special Funding Account, (c) funds on deposit in the Principal Funding
Account and (d) funds on deposit in the Reserve Account (for such Series,
the "Series 2000-__ Certificateholders' Interest"). The Class B
Certificates shall be subordinated to the Class A Certificates to the
extent provided in this Article IV. The Class B Certificates will not have
the right to receive payments of principal until the Class A Invested
Amount has been paid in full, except as provided in Section 7.3.
Section 4.2. Collections and Allocation; Payments on
Transferor Certificate.
(a) Collections. The Servicer will apply or will instruct
the Trustee to apply all funds on deposit in the Collection Account, the
Special Funding Account, the Principal Funding Account and the Reserve
Account allocable to the Series 2000-__ Certificates as described in this
Article IV and Article IV of the Agreement. In addition, on the Closing
Date, the Transferor shall make a deposit to the Collection Account in the
amount of $_________, to be allocated to the Series 2000-__ Certificates.
(b) Allocations. The Servicer will apply, or will instruct the
Trustee to apply, all collections and other funds that are allocated to the
Investor Certificates as follows:
(i) Daily Allocations During the Revolving Period.
During the Revolving Period, the Servicer shall, prior to
the close of business on any Date of Processing, allocate
the following amounts as set forth below:
(x) Allocate to the Investor Certificateholders and
deposit in the Collection Account in accordance with Section
4.3(a) of the Agreement an amount equal to the product of (i)
the Floating Allocation Percentage and (ii) the aggregate
amount of Collections of Finance Charge Receivables on such
Date of Processing, provided, however, that, with respect to
each Monthly Period, such amount shall only be allocated until
such time as the amount deposited in the Collection Account
equals the amount of Class A Interest, Class B Interest, if
any, Carryover Interest, if any, and, at any time that
Retailers National Bank is not the Servicer, the Servicing Fee,
due on the next Distribution Date.
(y) Allocate to the Investor Certificateholders an amount
equal to the product of (A) the Principal Allocation Percentage
on such Date of Processing and (B) the aggregate amount of
Collections of Principal Receivables on such Date of Processing
and pay such amount to the Holder of the Transferor
Certificate; provided, however, that the amount to be paid to
the Holder of the Transferor Certificate pursuant to this
Section 4.2(b)(i)(y) on any Date of Processing shall be first,
if any other Principal Sharing Series is outstanding and in its
Amortization Period, deposited in the Collection Account for
application, to the extent necessary, as Shared Principal
Collections on the related Distribution Date and second shall
be paid to such Holder only if on such Date of Processing the
Transferor Amount (excluding the interest represented by the
Supplemental Certificate) is greater than the Required Retained
Transferor Amount and otherwise shall be deposited in the
Special Funding Account; provided, further, that such amounts
will be paid to the Holder of the Transferor Certificate
subject to the obligation of the Transferor to make an amount
equal to the Reallocated Class B Principal Collections for each
Monthly Period available on the related Distribution Date for
application in accordance with Section 4.9.
(ii) Daily Allocations During the Accumulation Period. During
the Accumulation Period, the Servicer shall, prior to the close of
business on any Date of Processing, allocate the following amounts as
set forth below:
(x) Allocate to the Investor Certificateholders and
deposit in the Collection Account in accordance with Section
4.3(a) of the Agreement an amount equal to the product of (A)
the Floating Allocation Percentage on such Date of Processing
and (B) the aggregate amount of Collections of Finance Charge
Receivables on such Date of Processing, provided, however,
that, with respect to each Monthly Period, such amount shall
only be allocated until such time as the amount deposited in
the Collection Account equals the amount of Class A Interest,
Class B Interest, if any, and Carryover Interest, if any, and,
at any time that Retailers National Bank is not the Servicer,
the Servicing Fee, due on the next Distribution Date.
(y) During each Monthly Period prior to the Monthly
Period related to the Distribution Date on which the Class A
Invested Amount is paid in full, allocate to the Class A
Certificateholders and deposit in the Collection Account in
accordance with Section 4.3(a) of the Agreement an amount equal
to the product of (x) the Principal Allocation Percentage on
such Date of Processing and (y) the aggregate amount of
Collections of Principal Receivables on such Date of Processing
(for any such date, a "Percentage Allocation"); provided,
however, that if the sum of such Percentage Allocations with
respect to the same Monthly Period exceeds the Controlled
Deposit Amount for the related Distribution Date, then such
excess shall be first, if any other Principal Sharing Series is
outstanding and in its Amortization Period, deposited in the
Collection Account for application, to the extent necessary, as
Shared Principal Collections on the related Distribution Date
and second shall not be treated as a Percentage Allocation and
shall be paid to the Holder of the Transferor Certificate only
if the Transferor Amount (excluding the interest represented by
the Supplemental Certificate) on such Date of Processing is
greater than the Required Retained 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; provided, further, that such amounts
will be paid to the Holder of the Transferor Certificate
subject to the obligation of the Transferor to make an amount
equal to the Reallocated Class B Principal Collections for each
Monthly Period available on the related Distribution Date for
application in accordance with Section 4.9.
(iii) Daily Allocations During the Early Amortization Period.
During the Early Amortization Period, the Servicer shall, prior to
the close of business on any Date of Processing, allocate the
following amounts as set forth below:
(x) Allocate to the Investor Certificateholders and
deposit in the Collection Account in accordance with Section
4.3(a) of the Agreement an amount equal to the product of (A)
the Floating Allocation Percentage on such Date of Processing
and (B) the aggregate amount of Collections of Finance Charge
Receivables on such Date of Processing.
(y) Allocate to the Investor Certificateholders and
deposit in the Collection Account in accordance with Section
4.3(a) of the Agreement an amount equal to the product of (A)
the Principal Allocation Percentage on such Date of Processing
and (B) the aggregate amount of Collections of Principal
Receivables on such Date of Processing; provided, however, that
after the date on which an amount of such Collections equal to
the Invested Amount has been deposited into the Collection
Account and allocated to the Investor Certificateholders, any
excess of the amount determined in accordance with this
subparagraph (y) shall be first, if any other Principal Sharing
Series is outstanding and in its Amortization Period, deposited
in the Collection Account for application, to the extent
necessary, as Shared Principal Collections on the related
Distribution Date and second shall be paid to the Holder of the
Transferor Certificate only if on such Date of Processing the
Transferor Amount (excluding the interest represented by the
Supplemental Certificate) is greater than the Required Retained
Transferor Amount and otherwise shall be deposited in the
Special Funding Account.
(iv) Monthly Allocations During the Revolving Period and
Accumulation Period. During the Revolving Period and Accumulation
Period, the Servicer shall, prior to the close of business on any
Transfer Date allocate to the Investor Certificateholders and deposit
in the Collection Account an amount equal to the sum of (I) (A) the
lesser of (1) the sum of (a) the product of (x) the Floating
Allocation Percentage with respect to the preceding Monthly Period
and (y) the aggregate amount of Collections of Finance Charge
Receivables for the related Monthly Period, (b) the amount of Excess
Finance Charge Collections allocated to Series 2000-__ for the
related Monthly Period and (c) the amount of Excess Transferor
Finance Charge Collections allocated to Series 2000-__ for the
related Monthly Period and (2) the aggregate of the amounts to be
paid on such Distribution Date pursuant to clause (y) of each of
clauses (i) through (viii) of Section 4.6(a) and the amount described
in Section 4.6(a)(ix), less (B) the daily amounts deposited in the
Collection Account during such Monthly Period pursuant to subsections
4.2(b)(i)(x) and 4.2(b)(ii)(x) with respect to the Revolving Period
and the Accumulation Period, respectively, (II) the excess of the
amount of Reallocated Class B Principal Collections over the amount
retained in the Collection Account pursuant to subsections
4.2(b)(i)(y) and 4.2(b)(ii)(y) with respect to the Revolving Period
and Accumulation Period, (III) an amount equal to the pro rata
portion of Finance Charge Shortfalls, if any, for Group I allocated
to Series 2000-__ pursuant to Section 4.5 of the Agreement, not to
exceed Excess Finance Charge Collections pursuant to Section
4.6(a)(x) available on the related Distribution Date, (IV) an amount
equal to the amount of Shared Principal Collections to be applied for
the benefit of other Principal Sharing Series pursuant to Section 4.4
of the Agreement from amounts that were originally allocated to
Series 2000-__, not to exceed (a) during the Revolving Period, the
Principal Allocation Percentage of Principal Collections for the
related Monthly Period or (b) during the Accumulation Period, the
Principal Allocation Percentage of Principal Collections for the
related Monthly Period less the amount thereof applied to pay Class A
Principal on the related Distribution Date and (V) the amount of
Shared Transferor Principal Collections to be applied to make
payments of Class A Principal and Class B Principal on the related
Distribution Date.
(c) The allocations to be made pursuant to this subsection 4.2
also apply to deposits into the Collection Account that are treated as
Collections, including adjustment payments made in accordance with Section
3.9 of the Agreement, payment of the reassignment price pursuant to Section
2.5(b) of the Agreement and proceeds from the sale, disposition or
liquidation of the Receivables pursuant to Section 10.2, 12.1 or 12.2 of
the Agreement and Section 7.1. Such deposits to be treated as Collections
will be allocated as Finance Charge Receivables or Principal Receivables as
provided in the Agreement.
(d) Notwithstanding anything herein or in the Agreement, the
Supplement for any other Series or any Enhancement Agreement for any Series
to the contrary, all amounts designated to be paid to the Transferor or any
holder of a Transferor Certificate in such documents, other than amounts
allocated to be paid to the holder of any Supplemental Certificate,
instead, to the extent that such amounts are derived from Collections of
Finance Charge Receivables and other amounts applied like collections of
Finance Charge Receivables, including any amounts constituting Excess
Finance Charge Collections remaining after application thereof to all
Series but prior to payment thereof to the Transferor, shall be deemed to
be "Excess Transferor Finance Charge Collections" and to the extent that
such amounts are derived from Collections of Principal Receivables, and to
the extent of any Excess Transferor Finance Charge Collections remaining
after application thereof to each Series designated to be entitled thereto,
shall be deemed to be "Shared Transferor Principal Collections."
Section 4.3. Determination of Monthly Interest for the Series
2000-__ Certificates. The amount of monthly interest (the "Class A
Interest") allocable to the Class A Certificates with respect to any
Interest Accrual Period shall be an amount equal to one-twelfth of the
product of (i) the Class A Certificate Rate and (ii) the outstanding
principal balance of the Class A Certificates as of the close of business
on the last day of the preceding monthly period, provided, however, that
with respect to the first Distribution Date after the Closing Date the
Class A Interest shall be an amount equal to $_____________.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine an amount (the "Class A Interest Shortfall") equal
to the excess, if any, of (x) the Class A Interest for the Interest Accrual
Period applicable to such Distribution Date over (y) the amount available
to be paid to the Class A Certificateholders in respect of interest on such
Distribution Date. If there is a Class A Interest Shortfall with respect to
any Distribution Date, an additional amount ("Class A Additional Interest")
shall be payable as provided herein with respect to the Class A
Certificates on each Distribution Date following such Distribution Date, to
and including the Distribution Date on which such Class A Interest
Shortfall is paid to Class A Certificateholders, equal to one-twelfth of
the product of (i) the Class A Certificate Rate plus 2% per annum and (ii)
such Class A Interest Shortfall remaining unpaid. Notwithstanding anything
to the contrary herein, Class A Additional Interest shall be payable or
distributed to Class A Certificateholders only to the extent permitted by
applicable law.
Section 4.4. Determination of Principal Amounts. (a) The amount
of principal (the "Class A Principal") distributable from the Collection
Account with respect to the Class A Certificates on each Distribution Date
with respect to the Amortization Period shall be equal to an amount
calculated as follows: the sum of (i) an amount equal to the product of the
Principal Allocation Percentage and the aggregate amount of Collections of
Principal Receivables with respect to the preceding Monthly Period, (ii)
any amount on deposit in the Special Funding Account that is distributable
to the Class A Certificates pursuant to subsection 4.6(d) with respect to
the preceding Monthly Period, (iii) the amount, if any, allocated to the
Class A Certificates pursuant to subsections 4.6(a)(iii), (iv), (v), (vi)
and (vii), (iv) the amount of Shared Principal Collections allocated to the
Class A Certificates with respect to the preceding Monthly Period pursuant
to Section 4.4 of the Agreement and (v) the amount of Shared Transferor
Principal Collections allocated to the Class A Certificates with respect to
the preceding Monthly Period pursuant to subsection 4.5(b); provided,
however, that (i) with respect to any Distribution Date during the
Accumulation Period, Class A Principal may not exceed the Controlled
Deposit Amount for such Distribution Date; (ii) with respect to any
Distribution Date, Class A Principal may not exceed the Class A Adjusted
Invested Amount; and (iii) with respect to the Scheduled Series 2000-__
Termination Date, the Class A Principal shall be an amount equal to the
Class A Adjusted Invested Amount.
(b) The amount of principal (the "Class B Principal")
distributable from the Collection Account with respect to the Class B
Certificates on each Distribution Date on and after the Distribution Date
on which the Class A Invested Amount is paid in full, shall be an amount
equal to the lesser of: (x) the sum of (i) an amount equal to the product
of the Principal Allocation Percentage and the aggregate amount of
Collections of Principal Receivables (subtracting from such product the
amount of Reallocated Class B Principal Collections) with respect to the
preceding Monthly Period, (ii) any amount on deposit in the Special Funding
Account that is distributable to the Class B Certificates pursuant to
subsection 4.6(d) with respect to the preceding Monthly Period, and (iii)
the amount, if any, allocated to the Class B Certificates pursuant to
subsections 4.6(a)(iv), (v) and (vii) with respect to such Distribution
Date, (iv) the amount, if any, of principal allocable to the Class A
Certificates pursuant to subsection 4.4(a) (without regard to the proviso
thereof), respectively, but remaining after distributions have been made to
Class A Certificateholders pursuant to subsections 4.6(c)(i), (v) the
amount of Shared Principal Collections allocated to the Class B
Certificates with respect to the preceding Monthly Period pursuant to
Section 4.4 of the Agreement and (vi) the amount of Shared Transferor
Principal Collections allocated to the Class B Certificates with respect to
the preceding Monthly Period pursuant to subsection 4.5(b) and (y) the
Class B Invested Amount, provided, however, that with respect to the
Scheduled Series 2000-__ Termination Date, the Class B Principal shall be
an amount equal to the Class B Invested Amount,
Section 4.5. Shared Principal Collections. (a) Shared Principal
Collections allocated to the Series 2000-__ Certificates and to be applied
pursuant to subsection 4.4(a)(iv) and subsection 4.4(b)(v) for any
Distribution Date with respect to the Amortization Period shall mean an
amount equal to the product of (x) Shared Principal Collections for all
Series for such date and (y) a fraction, the numerator of which is the
Principal Shortfall for the Series 2000-__ Certificates for such date and
the denominator of which is the aggregate amount of Principal Shortfalls
for all Series for such date. For any Distribution Date with respect to the
Revolving Period, Shared Principal Collections allocated to the Series
2000-__ Certificates shall be zero.
(b) Shared Transferor Principal Collections allocated to the
Series 2000-__ Certificates and to be applied pursuant to subsection
4.4(a)(v) and subsection 4.4(b)(vi) for any Distribution Date with respect
to the Amortization Period shall mean an amount equal to the product of (x)
the aggregate amount of Shared Transferor Principal Collections for such
date and (y) a fraction, the numerator of which is the Principal Shortfall
for the Series 2000-__ Certificates for such date and the denominator of
which is the aggregate amount of Principal Shortfalls for all Series for
such date. For any Distribution Date with respect to the Revolving Period,
Shared Transferor Principal Collections allocated to the Series 2000-__
Certificates shall be zero.
Section 4.6. Application of Funds on Deposit in the Collection
Account for the Certificates. (a) On each Distribution Date, the Servicer
shall instruct the Trustee to withdraw, and the Trustee, acting in
accordance with such instructions set forth in the Monthly Servicer Report,
shall withdraw from the Collection Account, or retain therein, as
applicable, to the extent of the sum of (x) the Floating Allocation
Percentage of Collections of Finance Charge Receivables collected during
the preceding Monthly Period plus (y) any investment earnings on amounts on
deposit in the Principal Funding Account deposited in the Collection
Account pursuant to Section 4.11(b) and investment earnings on amounts on
deposit in the Reserve Account deposited in the Collection Account pursuant
to Section 4.13(b) plus (z) the Reserve Draw Amount deposited into the
Collection Account pursuant to subsection 4.13(d) (such sum, the "Available
Series 2000-__ Finance Charge Collections"; provided that, with respect to
the first Distribution Date, the amount deposited by the Transferor into
the Collection Account pursuant to Section 4.2(a) shall also constitute
Available Series 2000-__ Finance Charge Collections), the following
amounts, and apply such amounts as follows and in the following priority:
(i) Class A Interest. An amount equal to the lesser of (x) the
Available Series 2000-__ Finance Charge Collections for such date and
(y) the sum of Class A Interest and Carryover Class A Interest shall
be paid to the Class A Certificateholders in accordance with Section
5.1. Notwithstanding anything to the contrary herein, the portion of
Carryover Class A Interest that constitutes Class A Additional
Interest shall be payable or distributable to Class A
Certificateholders only to the extent permitted by applicable law.
(ii) Servicing Fee. An amount equal to the lesser of (x) any
Available Series 2000-__ Finance Charge Collections remaining after
giving effect to the withdrawal pursuant to subsection 4.6(a)(i) and
(y) the Monthly Servicing Fee for such Monthly Period plus any unpaid
Monthly Servicing Fees from prior Monthly Periods.
(iii) Class A Investor Defaulted Amount. An amount equal to the
lesser of (x) any Available Series 2000-__ Finance Charge Collections
remaining after giving effect to the withdrawals pursuant to
subsections 4.6(a)(i) and (ii) and (y) the aggregate Class A Investor
Defaulted Amount for such Distribution Date, shall be (A) during the
Revolving Period, treated as Shared Principal Collections and (B)(I)
during the Accumulation Period, on and prior to the date on which an
amount equal to the Class A Invested Amount is available in the
Principal Funding Account for distribution to the Class A
Certificateholders, deposited in the Principal Funding Account, and
(II) during the Early Amortization Period, on and prior to the date
on which the Class A Invested Amount is paid in full, deposited in
the Collection Account, in each case for payment to the Class A
Certificateholders to the extent required in accordance with
subsections 4.4(a)(iii) and 4.6(c).
(iv) Class B Investor Defaulted Amount. An amount equal to the
lesser of (x) any Available Series 2000-__ Finance Charge Collections
remaining after giving effect to the withdrawals pursuant to
subsections 4.6(a)(i) through (iii) and (y) the aggregate Class B
Investor Defaulted Amount for such Distribution Date, shall be (A)
during the Revolving Period treated as Shared Principal Collections,
(B)(I) during the Accumulation Period, on and prior to the day on
which an amount equal to the Class A Invested Amount is deposited in
the Principal Funding Account, retained in the Principal Funding
Account, and (II) during the Early Amortization Period, on and prior
to the date on which the Class A Invested Amount is paid in full,
deposited in the Collection Account, in each case for payment to the
Class A Certificateholders to the extent required in accordance with
subsections 4.4(a)(iii) and 4.6(c) and (C) on and after the date on
which an amount equal to the Class A Invested Amount has been
retained in the Principal Funding Account or the Class A Invested
Amount has been paid in full, distributed to the Class B
Certificateholders to the extent of the Class B Invested Amount.
(v) Adjustment Payment Shortfalls. An amount equal to the
lesser of (x) any Available Series 2000-__ Finance Charge Collections
remaining after giving effect to the withdrawals pursuant to
subsections 4.6(a)(i) through (iv) and (y) an amount equal to the
Floating Allocation Percentage of any adjustment payment which the
Transferor is required but fails to make pursuant to subsection
3.9(a) of the Agreement shall be, (A) during the Revolving Period,
treated as Shared Principal Collections, (B)(I) during the
Accumulation Period, on and prior to the day on which an amount equal
to the Class A Invested Amount is deposited in the Principal Funding
Account, retained in the Principal Funding Account, and (II) during
the Early Amortization Period, on and prior to the date on which the
Class A Invested Amount is paid in full, deposited in the Collection
Account, in each case for payment to the Class A Certificateholders
to the extent required in accordance with subsections 4.4(a)(iii) and
4.6(c) and (C) on and after the date on which an amount equal to the
Class A Invested Amount has been retained in the Principal Funding
Account or the Class A Invested Amount has been paid in full,
distributed to the Class B Certificateholders to the extent of the
Class B Invested Amount.
(vi) Reimbursement of Class A Investor Charge-Offs. An amount
equal to the lesser of (x) any Available Series 2000-__ Finance
Charge Collections remaining after giving effect to the withdrawals
pursuant to subsections 4.6(a)(i) through (v) and (y) the
unreimbursed Class A Investor Charge-Offs, if any, will be applied to
reimburse Class A Investor Charge-Offs, and shall be (A) during the
Revolving Period, treated as Shared Principal Collections and (B)(I)
during the Accumulation Period, on and prior to the day on which an
amount equal to the Class A Invested Amount is available in the
Principal Funding Account, retained in the Principal Funding Account,
and (II) during the Early Amortization Period, on and prior to the
date on which the Class A Invested Amount is paid in full, deposited
in the Collection Account, in each case for payment to the Class A
Certificateholders to the extent required in accordance with
subsections 4.4(a)(iii) and 4.6(c).
(vii) Reimbursement of Class B Investor Charge-Offs and
Reallocated Class B Principal Collections. An amount equal to the
lesser of (x) any Available Series 2000-__ Finance Charge Collections
remaining after giving effect to the withdrawals pursuant to
subsections 4.6(a)(i) through (vi) and (y) the unreimbursed
reductions in the Class B Invested Amount as a result of Class B
Investor Charge-Offs and Reallocated Class B Principal Collections,
if any, shall be (A) during the Revolving Period treated as Shared
Principal Collections, (B)(I) during the Accumulation Period, on and
prior to the day on which an amount equal to the Class A Invested
Amount is deposited in the Principal Funding Account, retained in the
Principal Funding Account, and (II) during the Early Amortization
Period, on and prior to the date on which the Class A Invested Amount
is paid in full, deposited in the Collection Account, in each case
for payment to the Class A Certificateholders to the extent required
in accordance with subsections 4.4(a)(iii) and 4.6(c) and (C) on and
after the date on which an amount equal to the Class A Invested
Amount has been retained in the Principal Funding Account or the
Class A Invested Amount has been paid in full, distributed to the
Class B Certificateholders to the extent of the Class B Invested
Amount.
(viii) Class B Interest. An amount equal to the lesser of (x)
any Available Series 2000-__ Finance Charge Collections remaining
after giving effect to the withdrawals to subsections 4.6(a)(i)
through (vii) and (y) the sum of Class B Interest and Carryover Class
B Interest, if any, shall be paid to the Class B Certificateholders.
Notwithstanding anything to the contrary herein, the portion of
Carryover Class B Interest that constitutes Class B Additional
Interest shall be payable or distributable to Class B
Certificateholders only to the extent permitted by applicable law.
(ix) Reserve Account. On each Distribution Date from and after
the Reserve Account Funding Date, but prior to the date of
termination of the Reserve Account as described in subsection
4.13(f), an amount up to the excess, if any, of the Required Reserve
Account Amount over the Available Reserve Account Amount shall be
deposited into the Reserve Account.
(x) Excess Finance Charge Collections. Any Available Series
2000-__ Finance Charge Collections after giving effect to the
withdrawals pursuant to subsection 4.6(a)(i) through (ix) shall be
treated as Excess Finance Charge Collections, and the Servicer shall
direct the Trustee in writing on each Distribution Date to withdraw
such amounts from the Collection Account and to first make such
amounts available to pay to Certificateholders of other Series to the
extent of shortfalls, if any, in amounts payable to such
certificateholders from Collections of Finance Charge Receivables
allocated to such other Series, and then, to pay any unpaid expenses
or liabilities of the Trust, and then treated as Excess Transferor
Finance Charge Collections.
(b) For each Distribution Date with respect to the Revolving
Period, the product of (i) the Principal Allocation Percentage and (ii)
Collections of Principal Receivables with respect to such Distribution Date
will be treated as Shared Principal Collections and applied, for such
Distribution Date, as provided in Section 4.4 of the Agreement; provided,
however, that if the Class B Invested Amount is reduced in accordance with
Section 7.3(a), the amount specified in clauses (i) and (ii) may be
distributed to the Class B Certificateholders in an amount not to exceed
such reduction.
(c) For each Distribution Date on and after the Amortization
Period Commencement Date, the Trustee, acting pursuant to the Servicer's
instructions, will distribute the amount of funds on deposit in the
Collection Account available for payment of principal to Series 2000-__
Certificateholders in accordance with Section 4.4 in the following
priority:
(i) an amount equal to Class A Principal, subject to the
proviso in Section 4.4(a) (x) with respect to the Accumulation
Period, to the Principal Funding Account for payment to the
Class A Certificateholders on the earlier of the Class A
Expected Final Payment Date and the first Special Payment Date
or (y) with respect to the Early Amortization Period, to the
Class A Certificateholders;
(ii) after the Class A Invested Amount has been paid in
full, to the Class B Certificateholders, an amount equal to
Class B Principal, subject to the proviso in Section 4.4(b);
and
(iii) an amount equal to the sum of (I) the excess, if
any, of (A) the sum of the amounts described in subsections
4.4(a)(i) and (iii) over (B) the Class A Principal and (II) the
excess, if any, of (A) the sum of the amounts described in
subsections 4.4(b)(i) and (iii) over (B) the Class B Principal
will be treated as Shared Principal Collections and applied as
provided in subsection 4.4 of the Agreement.
(d) On each Distribution Date during the Amortization Period,
funds on deposit in the Special Funding Account and distributable to Series
2000-__ as provided in Section 4.2 of the Agreement will be deposited in
the Collection Account. Such amounts will be allocated in the following
order of priority:
(i) on each Distribution Date until the Class A Invested
Amount is paid in full to the Class A Certificateholders in an
amount equal to the lesser of the Principal Shortfall and the
amount allocated with respect thereto pursuant to Section 4.2
of the Agreement; provided, however, such amount shall not
exceed the Class A Principal after subtracting therefrom any
amounts to be deposited in the Collection Account with respect
thereto pursuant to subsections 4.4(a)(i), (iii),(iv) and (v);
and provided, further that during the Accumulation Period such
amount shall be deposited in the Principal Funding Account; and
(ii) on each Distribution Date on and after the
Distribution Date on which the Class A Invested Amount is paid
in full to the Class B Certificateholders in an amount not to
exceed the Class B Invested Amount after subtracting therefrom
any amounts to be deposited in the Collection Account with
respect thereto pursuant to subsections 4.4(b)(i), (iii), (iv),
(v) and (vi) to be paid to the Class B Certificateholders.
Section 4.7. Coverage of Required Amount for the Series 2000-__
Certificates. To the extent that on any Distribution Date payments are
being made pursuant to any of subsections 4.6(a)(i) through (ix),
respectively, and the full amount to be paid pursuant to any such
subsection receiving payments on such Distribution Date is not paid in full
on such Distribution Date, the Servicer shall apply all or a portion of the
Excess Finance Charge Collections from other Series with respect to such
Distribution Date allocable to the Series 2000-__ Certificates in an amount
equal to the excess of the full amount to be allocated or paid pursuant to
the applicable subsection over the amount applied with respect thereto from
Available Series 2000-__ Finance Charge Collections on such Distribution
Date (the "Required Amount"). Excess Finance Charge Collections allocated
to the Series 2000-__ Certificates for any Distribution Date shall mean an
amount equal to the product of (x) Excess Finance Charge Collections
available from all other Series in Group I for such Distribution Date and
(y) a fraction, the numerator of which is the Required Amount for such
Distribution Date and the denominator of which is the aggregate amount of
shortfalls in required amounts or other amounts to be paid from Collections
of Finance Charge Receivables for all Series in Group I for such
Distribution Date.
In addition, the Servicer shall apply all or a portion of the
Excess Transferor Finance Charge Collections with respect to such
Distribution Date allocable to the Series 2000-__ Certificates in an amount
equal to the unpaid Required Amount after the application of Excess Finance
Charge Collections. Excess Transferor Finance Charge Collections allocated
to the Series 2000-__ Certificates for any Distribution Date shall mean an
amount equal to the product of (x) Excess Transferor Finance Charge
Collections available for such Distribution Date and (y) a fraction, the
numerator of which is the unpaid Required Amount after the application of
Excess Finance Charge Collections for such Distribution Date and the
denominator of which is the aggregate amount of shortfalls for such
Distribution Date in required amounts or other amounts to be paid from
Collections of Finance Charge Receivables for all Series which are
designated pursuant to the applicable Series Supplement to be entitled to
share Excess Transferor Finance Charge Collections.
Section 4.8. Investor Charge-Offs. (a) If, on any Determination
Date, the aggregate Investor Defaulted Amount and the Series Allocation
Percentage of any unpaid adjustment payments required by Section 3.9 of the
Agreement in the preceding Monthly Period exceed the Available Series
2000-__ Finance Charge Collections applied to the payment thereof pursuant
to subsections 4.6(a)(iii), (iv) and (v) plus the amount of Excess Finance
Charge Collections and Excess Transferor Finance Charge Collections
allocated thereto pursuant to Section 4.7, plus the amount of Reallocated
Class B Principal Collections applied with respect thereto pursuant to
Section 4.9, the Class B Invested Amount will be reduced by the amount by
which the remaining aggregate Investor Defaulted Amount and Series
Allocation Percentage of such unpaid adjustment payments exceed the amount
applied with respect thereto during such preceding Monthly Period (a "Class
B Investor Charge-Off").
(b) In the event that any such reduction of the Class B
Invested Amount would cause the Class B Invested Amount to be a negative
number, the Class B Invested Amount will be reduced to zero, and the Class
A Invested Amount will be reduced by the amount by which the Class B
Invested Amount would have been reduced below zero, but not more than the
aggregate Investor Defaulted Amount and Series Allocation Percentage of the
unpaid adjustment payments required by Section 3.9 of the Agreement for
such Monthly Period (a "Class A Investor Charge-Off").
Section 4.9. Reallocated Class B Principal Collections for the
Series 2000-__ Certificates. On each Distribution Date, the Servicer will
apply or cause the Trustee to apply from amounts on deposit in the
Collection Account an amount equal to the lesser of (i) the Class B
Invested Amount, (ii) the product of (x) the Class B Principal Allocation
Percentage and (y) the amount of Collections of Principal Receivables with
respect to the related Monthly Period and (iii) the Class A Required Amount
for such Distribution Date (such amount called "Reallocated Class B
Principal Collections") to the components of the Class A Required Amount in
the same priority as amounts are applied to such components from Available
Series 2000-__ Finance Charge Collections pursuant to subsection 4.6(a).
Section 4.10. Issuance of Additional Investor Certificates. (a)
During the Revolving Period, the Transferor may, in its discretion and
subject to the terms of subsection (b) below, request the Trustee to issue
additional Class A Certificates and Class B Certificates (each such
additional certificates, the "Additional Certificates") in an amount and on
the date (the "Additional Certificate Date") determined by the Transferor.
Upon issuance, the Additional Certificates will be identical in all
respects (except that the principal amount of such Additional Certificates
may be different) to the Certificates currently outstanding and will be
equally and ratably entitled to the benefits of this Supplement and the
Agreement. As a result of such issuance, the Class A Invested Amount and
the Class B Invested Amount shall be increased pro rata and all the
calculations required pursuant to this Supplement shall, from and after the
Additional Certificate Date, be computed using such increased Class A
Invested Amount and Class B Invested Amount. The Controlled Accumulation
Amount shall be increased proportionally to reflect the additional
principal amount of Class A Certificates and Class B Certificates
represented by the Additional Certificates.
(b) Additional Certificates shall only be issued upon
satisfaction of all of the following conditions:
(i) on or before the fifth Business Day immediately preceding
the date on which the Additional Certificates are to be issued, the
Transferor shall give notice to the Trustee, the Servicer and the
Rating Agency of such issuance and the date upon which it is to
occur;
(ii) after giving effect to the addition of the Additional
Certificates to the Series, the total amount of Principal Receivables
in the Trust shall be greater than or equal to the Required Principal
Balance;
(iii) on or before the Additional Certificate Date, the
Rating Agency Condition shall have been satisfied;
(iv) the Transferor shall have delivered to the Trustee an
Officer's Certificate dated as of the Additional Certificate Date,
stating that the Transferor reasonably believes that the issuance of
such Additional Certificates will not have a material adverse effect
on the Class A Certificates or Class B Certificates;
(v) as of the date of issuance of the Additional
Certificates, the amount of unreimbursed Investor Charge-
Offs shall be zero; and
(vi) the Transferor shall have delivered to the Trustee a Tax
Opinion with respect to such issuance.
Section 4.11. Establishment of the Principal Funding Account
for the Certificates. (a) The Trustee, for the benefit of the holders of
the Series 2000-__ Certificates, shall establish and maintain in the name
of the Trustee, on behalf of the Trust, an Eligible Deposit Account bearing
a designation clearly indicating that the funds deposited therein are held
for the benefit of the holders of the Series 2000-__ Certificates (the
"Principal Funding Account"). The Principal Funding Account shall initially
be established with the Trustee. The Trustee shall possess all right, title
and interest in all funds on deposit from time to time in the Principal
Funding Account and in all proceeds thereof for the benefit of the holders
of the Series 2000-__ Certificates. For purposes of the definition of
"Required Retained Transferor Amount" the Principal Funding Account shall
be an account specified in clause (i)(b) of the definition thereof. Except
as provided in subsection 4.11(b), the Principal Funding Account shall be
under the sole dominion and control of the Trustee for the benefit of the
holders of the Series 2000-__ Certificates. If, at any time, the Principal
Funding Account ceases to be an Eligible Deposit Account, the Trustee (or
the Servicer on its behalf) shall within 10 Business Days establish a new
Principal Funding Account meeting the conditions specified above, transfer
any cash and/or any investments to such new Principal Funding Account and
from the date such new Principal Funding Account is established, it shall
be, for the Certificates, the "Principal Funding Account."
(b) On each Distribution Date with respect to the Accumulation
Period and any Special Payment Date, the Servicer shall withdraw from the
Principal Funding Account and deposit in the Collection Account all
interest and other investment income (net of losses and investment
expenses) on funds then on deposit in the Principal Funding Account.
Investment income (including reinvested interest) on funds deposited in the
Principal Funding Account and invested pursuant to subsection 4.11(c) shall
not be considered to be principal amounts on deposit in the Principal
Funding Account for purposes hereof, and shall be treated as Available
Series 2000-__ Finance Charge Collections with respect to the last day of
the related Monthly Period. Funds on deposit in the Principal Funding
Account prior to the Class A Expected Final Payment Date shall be invested
at the direction of the Transferor by the Trustee in Eligible Investments.
Any such investment shall (i) convert or be convertible into cash so that
such funds shall be made available for withdrawal on or prior to the next
Distribution Date and (ii) shall be held until maturity; provided, however,
that the Trustee, at the direction of the Transferor, may sell an
investment that is no longer an Eligible Investment prior to its maturity.
Any request to the Trustee from the Transferor to invest funds on deposit
in the Principal Funding Account shall be in writing and shall certify that
the requested investment is an Eligible Investment which converts or is
convertible into cash at or prior to the time required hereby.
(c) Pursuant to the authority granted to the Servicer in
subsection 3.1(b) of the Agreement, the Servicer shall have the power,
revocable by the Trustee, to make withdrawals and payments or to instruct
the Trustee to make withdrawals and payments from the Principal Funding
Account for the purposes of carrying out of the Servicer's or Trustee's
duties hereunder. Pursuant to the authority granted to the Paying Agent in
Sections 5.1 and 6.7 of the Agreement, the Paying Agent shall have the
power, revocable by the Trustee, to withdraw funds from the Principal
Funding Account for the purpose of making distributions to the
Certificateholders.
Section 4.12. Accumulation Period. The Accumulation Period is
scheduled to commence on the Accumulation Date; provided, however, that if
the Accumulation Period Length (determined as described below) on any
Determination Date on or after the ____________ Determination Date is less
than 12 months,upon written notice to the Trustee, the Transferor and each
Rating Agency, the Servicer, at its option, may elect to modify the date on
which the Accumulation Period actually commences to the first day of the
month that is a number of months prior to the month in which the Class A
Expected Final Payment Date occurs at least equal to the Accumulation
Period Length (so that, as a result of such election, the number of Monthly
Periods in the Accumulation Period will at least equal the Accumulation
Period Length); provided, however, that (i) the length of the Accumulation
Period will not be less than one month; (ii) such determination of the
Accumulation Period Length shall be made on each Determination Date on and
after the __________ Determination Date but prior to the commencement of
the Accumulation Period, and any election to shorten the Accumulation
Period shall be subject to the subsequent lengthening of the Accumulation
Period to the Accumulation Period Length determined on any subsequent
Determination Date, but the Accumulation Period shall in no event commence
prior to the Accumulation Date, and (iii) notwithstanding any other
provision of the Series 2000-__ Supplement to the contrary, no election to
postpone the commencement of the Accumulation Period shall be made after an
Early Amortization Event (as defined in the related Supplement) shall have
occurred and be continuing with respect to any other Series. The
"Accumulation Period Length" will mean a number of months such that the
amount available for distribution of principal on the Class A Certificates
on the Class A Expected Final Payment Date is expected to equal or exceed
the Class A Invested Amount, assuming for this purpose that (1) the payment
rate with respect to Collections of Principal Receivables remains constant
at the lowest level of such payment rate during the twelve preceding
Monthly Periods (or such lower payment rate as the Servicer may select),
(2) the total amount of Principal Receivables in the Trust (and the
principal amount on deposit in the Special Funding Account, if any) remains
constant at the level on such date of determination, (3) no Early
Amortization Event with respect to any Series will subsequently occur and
(4) no additional Series (other than any Series being issued on such date
of determination) will be subsequently issued. Any notice by the Servicer
electing to modify the commencement of the Accumulation Period pursuant to
this Section 4.12 shall specify (i) the Accumulation Period Length, (ii)
the commencement date of the Accumulation Period and (iii) the Controlled
Accumulation Amount with respect to each Monthly Period during the
Accumulation Period.
Section 4.13. Reserve Account. (a) The Servicer shall establish
and maintain with an Eligible Institution, which may be the Trustee, in the
name of the Trustee, on behalf of the Trust, for the benefit of the
Investor Certificateholders, 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 Investor Certificateholders. The Trustee
shall possess all right, title and interest in all funds on deposit from
time to time in the Reserve Account and in all proceeds thereof. The
Reserve Account shall be under the sole dominion and control of the Trustee
for the benefit of the Investor Certificateholders. If at any time the
institution holding the Reserve Account ceases to be an Eligible
Institution the Transferor shall notify the Trustee, and the Trustee upon
being notified (or the Servicer on its behalf) shall, within 10 Business
Days, 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 Trustee, at the written
direction of the Servicer, shall (i) make withdrawals from the Reserve
Account from time to time in an amount up to the Available Reserve Account
Amount at such time, for the purposes set forth in this Supplement, and
(ii) on each Distribution Date (from and after the Reserve Account Funding
Date) prior to termination of the Reserve Account make a deposit into the
Reserve Account in the amount specified in, and otherwise in accordance
with, subsection 4.6(a)(ix).
(b) Funds on deposit in the Reserve Account shall be invested
by the Transferor (or, at the direction of the Transferor, by the Servicer
or the Trustee on behalf of the Transferor) in Eligible Investments. Funds
on deposit in the Reserve Account on any Transfer Date, after giving effect
to any withdrawals from the Reserve Account on such Transfer Date shall be
invested in such investments that will convert or be convertible into cash
so that such funds will be available for withdrawal on or prior to the
following Transfer Date. The Trustee shall maintain for the benefit of the
Investor Certificateholders possession of the negotiable instruments or
certificated securities, if any, evidencing such Eligible Investments. No
Eligible Investment shall be disposed of prior to its maturity. On each
Transfer Date, all interest and earnings (net of losses and investment
expenses) accrued since the preceding Transfer 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 for application as Available Series 2000-__ Finance
Charge Collections on the following Distribution Date. For purposes of
determining the availability of funds or the balance in the Reserve Account
for any reason under this Supplement, except as otherwise provided in the
preceding sentence, investment earnings on such funds shall be deemed not
to be available or on deposit.
(c) On each Transfer Date with respect to the Accumulation
Period prior to the payment in full of the Class A Invested Amount and the
first Transfer Date with respect to the Early Amortization Period, the
Servicer shall calculate the "Reserve Draw Amount" which shall be equal to
the Principal Funding Investment Shortfall with respect to each Transfer
Date with respect to the Accumulation Period or the first Transfer Date
with respect to the Early Amortization Period.
(d) In the event that for any Transfer 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
Transfer Date by the Trustee (acting in accordance with the written
instructions of the Servicer), deposited into the Collection Account and
included in Available Series 2000-__ Finance Charge Collections for such
Transfer 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 on and prior to such Distribution Date, is greater
than zero, the Trustee, acting in accordance with the written instructions
of the Servicer, shall withdraw from the Reserve Account, and apply as
Excess Finance Charge Collections, an amount equal to such Reserve Account
Surplus.
(f) Upon the earliest to occur of (i) the termination of the
Trust pursuant to Article XII of the Agreement, (ii) the day on which the
Class A Invested Amount is paid in full to the Class A Certificateholders,
(iii) if the Accumulation Period has not commenced, the occurrence of a
Series 2000-__ Early Amortization Event or a Early Amortization Event and
(iv) if the Accumulation Period has commenced, the earlier of the first
Transfer Date with respect to the Early Amortization Period and the Class A
Expected Final Payment Date, the Trustee, acting in accordance with the
written instructions of the Servicer, shall withdraw from the Reserve
Account and apply as Available Series 2000-__ Finance Charge Collections,
all amounts, if any, on deposit in the Reserve Account and the Reserve
Account shall be deemed to have terminated for purposes of this Supplement.
SECTION 4.14. Defeasance. On any date prior to the Early
Amortization Period on which the following conditions have been satisfied:
(i) the Transferor has deposited (x) in the Principal Funding Account, an
amount equal to the outstanding principal balance of the Class A
Certificates, which amount will be invested in Eligible Investments and (y)
in the Reserve Account an amount equal to or greater than the Covered
Amount, as estimated by the Transferor, for the period from the date of the
deposit to the Principal Funding Account through the Class A Expected Final
Payment Date; (ii) the Transferor has delivered to the Trustee an opinion
of counsel to the effect that such deposit and termination of obligations
as described below will not result in the Trust being required to register
as an "investment company" within the meaning of the Investment Company Act
of 1940, as amended, and an opinion of counsel to the effect that following
such deposit none of the Trust, the Reserve Account or the Principal
Funding Account will be deemed to be an association (or publicly traded
partnership) taxable as a corporation; (iii) the Transferor has delivered
to the Trustee a certificate of an officer of the Transferor stating that
the Transferor reasonably believes that such deposit and termination of its
obligations will not constitute an Early Amortization Event or any event
that, with the giving of notice or the lapse of time, would constitute an
Early Amortization Event or a Series 2000-__ Early Amortization Event to
occur; and (iv) the Rating Agency Condition shall have been satisfied;
then, the Series 2000-__ Certificates will no longer be entitled to the
security interest of the Trust in the Receivables and, except those set
forth in clause (i) above, other Trust assets ("Defeasance"), and the
Investor Percentages applicable to the allocation to the Series 2000-__
Certificateholders of Collections of Principal Receivables, Finance Charge
Receivables and Defaulted Receivables will be reduced to zero. Upon the
satisfaction of the foregoing conditions, the Class B Invested Amount will
be reduced to zero.
ARTICLE V
DISTRIBUTIONS AND REPORTS TO SERIES 2000-__ INVESTOR
CERTIFICATEHOLDERS
Section 5.1. Distributions.
(a) On each Distribution Date, the Paying Agent shall
distribute to each Class A Certificateholder of record on the related
Record Date (other than as provided in Section 12.2 of the Agreement) such
Class A Certificateholder's pro rata share of the amounts that are
available on such Distribution Date to pay interest on the Class A
Certificates pursuant to this Supplement.
(b) On the Class A Expected Final Payment Date and on each
Distribution Date thereafter, and on each Distribution Date with respect to
the Early Amortization Period, the Paying Agent shall distribute to each
Class A Certificateholder of record on the related Record Date (other than
as provided in Section 12.2 of the Agreement) such Class A
Certificateholder's pro rata share of the amounts that are available on
such date to pay principal of the Class A Certificates pursuant to this
Supplement up to a maximum amount on any such date equal to the Class A
Invested Amount on such date. On each Distribution Date on and after the
Distribution Date on which the Class A Invested Amount is paid in full, the
Paying Agent shall distribute to each Class B Certificateholder of record
on the related Record Date (other than as provided in Section 12.2 of the
Agreement) such Class B Certificateholder's pro rata share of the amounts
that are available on such date to pay principal of the Class B
Certificates pursuant to this Supplement up to a maximum amount on any such
date equal to the Class B Invested Amount on such date.
(c) The distributions to be made pursuant to this Section 5.1
are subject to the provisions of Sections 2.6, 10.1 and 12.2 of the
Agreement and Section 8.1.
(d) Except as provided in Section 12.2 of the Agreement with
respect to a final distribution, distributions to Series 2000-__
Certificateholders hereunder shall be made by check mailed to each Series
2000-__ Certificateholder at such Series 2000-__ Certificateholder's
address appearing in the Certificate Register without presentation or
surrender of any Series 2000-__ Certificate or the making of any notation
thereon; provided, however, that with respect to Series 2000-__
Certificates registered in the name of a Clearing Agency, such
distributions shall be made to such Clearing Agency in immediately
available funds; provided, further, that the final payment in retirement of
the Class A Certificates will be made only upon presentation and surrender
of the Class A Certificates at the offices specified in the notice of such
final distribution delivered by the Trustee pursuant to Section 12.2 of the
Agreement.
Section 5.2. Reports and Statements to Series 2000-__
Certificateholders.
(a) On each Distribution Date, the Paying Agent, on behalf of
the Trustee, shall forward to each Class A Certificateholder a statement
substantially in the form of Exhibit B prepared by the Servicer.
(b) Not later than each Determination Date, the Servicer shall
deliver to the Trustee, the Paying Agent and each Rating Agency (i)
statements substantially in the form of Exhibit B prepared by the Servicer
and (ii) a certificate of a Servicing Officer substantially in the form of
Exhibit C.
(c) On or before January 31 of each calendar year, beginning
with calendar year ____, the Paying Agent, on behalf of the Trustee, shall
furnish or cause to be furnished to each Person who at any time during the
preceding calendar year was a Series 2000-__ Certificateholder, a statement
prepared by the Servicer containing the information which is required to be
contained in the statement to Series 2000-__ Certificateholders, as set
forth in paragraph (a) or (b) above, as applicable, aggregated for such
calendar year or the applicable portion thereof during which such Person
was a Series 2000-__ Certificateholder, together with other information as
is required to be provided by an issuer of indebtedness under the Internal
Revenue 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 Internal
Revenue Code as from time to time in effect.
ARTICLE VI
EARLY AMORTIZATION EVENTS
Section 6.1. Series 2000-__ Early Amortization Events.
If any one of the following events shall occur with respect to
the Series 2000-__ Certificates:
(a) failure on the part of the Transferor (i) to make any
payment or deposit required to be made by the Transferor by the terms of
(A) the Agreement or (B) this Supplement, on or before the date occurring
five Business Days after the date such payment or deposit is required to be
made herein, (ii) to perform in all material respects the Transferor's
covenant not to sell, pledge, assign, or transfer to any person, or grant
any unpermitted lien on, any Receivable; or (iii) duly to observe or
perform in any material respect any covenants or agreements of the
Transferor set forth in the Agreement or this Supplement, which failure has
a material adverse effect on the Series 2000-__ Certificateholders and
which continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Transferor by the Trustee, or to the Transferor and
the Trustee by any Holder of Series 2000-__ Certificates;
(b) any representation or warranty made by the Transferor in
the Agreement or this Supplement (i) shall prove to have been incorrect in
any material respect when made, 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 Trustee, or to the Transferor and the
Trustee by any Holder of Series 2000-__ Certificates, and (ii) as a result
of which the interests of the Series 2000-__ Certificateholders are
materially and adversely affected; provided, however, that a Series 2000-__
Early Amortization Event pursuant to this subsection 6.1(b) shall not be
deemed to have occurred hereunder if the Transferor has accepted
designation of the related Receivable as an Ineligible Receivable during
such period in accordance with the provisions of the Agreement;
(c) the average of the Portfolio Yields for any three
consecutive Monthly Periods is reduced to a rate which is less than the
average of the Base Rates for such three consecutive Monthly Periods;
(d) (i) a failure by DHCC or the Transferor to make an Addition
within five Business Days after the Required Designation Date or (ii) the
Class B Invested Amount shall be less than 5% of the Initial Invested
Amount;
(e) any Servicer Default shall occur which would have
a material adverse effect on the Series 2000-__ Certificateholders; or
(f) the amount on deposit in the Special Funding Account as a
percentage of the sum of the aggregate amount of Principal Receivables plus
the amount on deposit in the Special Funding Account shall equal or exceed
30% on the last day of three consecutive Monthly Periods;
then, the Trustee shall within five days publish a notice of such Early
Amortization Event and in the case of any event described in subparagraph
(a), (b) or (e), after the applicable grace period, if any, set forth in
such subparagraphs, the Holders of Series 2000-__ Certificates evidencing
undivided interests aggregating more than 50% of the Invested Amount of
this Series 2000-__ by notice then given in writing to the Trustee, the
Transferor and the Servicer may declare that a early amortization event (a
"Series 2000-__ Early Amortization Event") has occurred as of the date of
such notice, and in the case of any event described in subparagraphs (c),
(d) or (f), a Series 2000-__ Early Amortization Event shall occur without
any notice or other action on the part of the Trustee or the Series 2000-__
Certificateholders immediately upon the occurrence of such event.
ARTICLE VII
OPTIONAL REPURCHASE; SERIES TERMINATION;
SALE OF CLASS B CERTIFICATES
Section 7.1. Optional Repurchase. The Series 2000-__
Certificates shall be subject to termination by the Transferor at its
option on any Distribution Date on or after the Distribution Date on which
the Class A Invested Amount is reduced to an amount less than or equal to
10% of the Class A Initial Invested Amount. The deposit required in
connection with any such termination and final distribution shall be equal
to the Class A Invested Amount plus accrued and unpaid interest on the
Series 2000-__ Certificates through the day prior to the Distribution Date
on which the final distribution occurs.
Section 7.2. Series 2000-__ Termination. (a) If, on the
__________ Distribution Date, the Invested Amount (after giving effect to
all changes therein on such date) would be greater than zero, the Servicer,
on behalf of the Trustee, shall, within the forty-day period which begins
on such Distribution Date, solicit bids for the sale of Principal
Receivables and the related Finance Charge Receivables (or interests
therein) in the amount specified in subsection 12.2(c) of the Agreement.
Such bids shall require that such sale shall (subject to Section 7.2(b))
occur on the Scheduled Series 2000-__ Termination Date. The Transferor
shall be entitled to participate in, and to receive from the Trustee a copy
of each other bid submitted in connection with, such bidding process.
(b) The Servicer, on behalf of the Trustee, shall sell such
Receivables (or interests therein) on the Scheduled Series 2000-__
Termination Date to the bidder who made the highest cash purchase offer.
The proceeds of any such sale shall be treated as Collections on the
Receivables to be allocated to the Series 2000-__ Certificateholders
pursuant to the Agreement and this Supplement; provided, however, that the
Servicer shall determine conclusively the amount of such proceeds which are
allocable to Finance Charge Receivables and the amount of such proceeds
which are allocable to Principal Receivables. During the period from the
__________ Distribution Date to the Scheduled Series 2000-__ Termination
Date, the Servicer shall continue to collect payments on the Receivables
and allocate and deposit such Collections in accordance with the provisions
of the Agreement and this Supplement.
Section 7.3. Reduction of Class B Invested Amount During the
Revolving Period; Designation of Class B Certificate Terms; Sale of Class B
Certificates. (a) The Class B Invested Amount may be reduced during the
Revolving Period by distributing Collections of Principal Receivables to
the Class B Certificateholders in accordance with Section 4.6(b), provided
that (i) the Rating Agency Condition shall have been satisfied with respect
to such reduction and (ii) the Transferor shall have delivered to the
Trustee an Officer's Certificate stating that the Transferor reasonably
believes that such reduction will not, based on the facts known to such
officer at the time of such certification, cause an Early Amortization
Event or any event that, after the giving of notice or the lapse of time or
both, would constitute an Early Amortization Event.
(b) The Transferor may at any time, without the consent of the
Investor Certificateholders, (i) sell or transfer all or a portion of the
Class B Certificates and (ii) in connection with any such sale or transfer,
enter into a supplemental agreement with the Trustee pursuant to which the
Transferor and the Trustee may amend the Class B Certificate Rate, set
forth the amount of monthly interest due Class B Certificateholders (the
"Class B Interest"), provide for the payment of additional amounts (the
"Class B Additional Interest") with respect to any shortfall (the "Class B
Interest Shortfall") in such Class B Interest and provide for such other
provisions with respect to the Class B Certificates as may be specified in
such supplemental agreement, provided that in each such case (A) the
Transferor shall have given notice to the Trustee, the Servicer and the
Rating Agencies of such proposed sale or transfer of the Class B
Certificates and such supplemental agreement at least five business days
prior to the consummation of such sale or transfer and the execution of
such proposed supplemental agreement; (B) the Rating Agency Condition shall
have been satisfied; (C) no Early Amortization Event shall have occurred
prior to the consummation of such proposed sale or transfer of Class B
Certificates or the execution of such supplemental agreement; (D) the
Transferor shall have delivered an Officer's Certificate, dated the date of
the consummation of such sale or transfer and the effectiveness of such
supplemental agreement, to the effect that, in the reasonable belief of the
Transferor, such action will not, based on the facts known to such officer
at the time of such certification, cause an Early Amortization Event to
occur with respect to any Series, and (E) the Transferor will have
delivered a Tax Opinion, dated the date of such certificate with respect to
such action; provided, further, (i) as a condition to the sale or transfer
of all or a portion of the Class B Certificates the transferee shall be
required to agree not to institute against, or join any other Person in
instituting against, the Trust or the Transferor any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, for one
year and one day after all Investor Certificates are paid in full and (ii)
the Class B Certificates may not be sold or transferred, in whole or in
part, to Target Capital Corporation.
Section 7.4. Purchase of the Class A Certificates by the
Transferor. The Transferor may from time to time, purchase Class A
Certificates on the secondary market and request the Trustee to cancel such
Class A Certificates held by the Transferor and reduce the Class A Invested
Amount by a corresponding amount.
ARTICLE VIII
FINAL DISTRIBUTION
Section 8.1. Sale of Receivables or Certificateholders'
Interest pursuant to Section 2.6 or 10.1 of the Agreement and Section 7.1
or 7.2 of this Supplement.
(a) The amount to be paid by the Transferor with respect to
Series 2000-__ in connection with a reassignment of Receivables to the
Transferor pursuant to Section 2.6 of the Agreement or a repurchase of the
Certificateholder's Interest pursuant to Section 10.1 shall equal the
Reassignment Amount for the first Distribution Date following the Monthly
Period in which the reassignment obligation arises under the Agreement.
(b) With respect to the Reassignment Amount deposited into the
Collection Account pursuant to Sections 7.1 or 8.1 or any amounts allocable
to the Series 2000-__ Certificateholders' Interest deposited into the
Collection Account pursuant to Section 7.2, the Trustee shall, not later
than 10:00 a.m., New York City time, on the related Distribution Date, make
deposits or distributions of the following amounts (in the priority set
forth below and, in each case after giving effect to any deposits and
distributions otherwise to be made on such date) in immediately available
funds: (i) (x) the Class A Invested Amount on such Distribution Date will
be distributed to the Paying Agent for payment to the Class A
Certificateholders and (y) an amount equal to the sum of (A) Class A
Interest for such Distribution Date, (B) any Class A Interest previously
due but not distributed to the Class A Certificateholders on a prior
Distribution Date and (C) the amount of Class A Additional Interest, if
any, for such Distribution Date and any Class A Additional Interest
previously due but not distributed to the Class A Certificateholders on any
prior Distribution Date, will be distributed to the Paying Agent for
payment to the Class A Certificateholders, (ii) (x) the Class B Invested
Amount on such Distribution Date will be distributed to the Paying Agent
for payment to the Class B Certificateholders and (y) an amount equal to
the sum of (A) Class B Monthly Interest for such Distribution Date, (B) any
Class B Monthly Interest previously due but not distributed to the Class B
Certificateholders on a prior Distribution Date and (C) the amount of Class
B Additional Interest, if any, for such Distribution Date and any Class B
Additional Interest previously due but not distributed to the Class B
Certificateholders on any prior Distribution Date, will be distributed to
the Paying Agent for payment to the Class B Certificateholders, (iii) any
other amounts payable pursuant to subsection 4.6(a) shall be paid in
accordance therewith and (iv) the balance, if any, will be distributed to
the Holder of the Transferor Certificate.
(c) Notwithstanding anything to the contrary in this Supplement
or the Agreement, all amounts distributed to the Paying Agent pursuant to
Section 8.1(b) for payment to the Series 2000-__ Certificateholders shall
be deemed distributed in full to the Series 2000-__ Certificateholders on
the date on which such funds are distributed to the Paying Agent pursuant
to this Section and shall be deemed to be a final distribution pursuant to
Section 12.2 of the Agreement.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1. Delivery and Payment for the Series 2000- __
Certificates. The Transferor shall execute and deliver the Series 2000-__
Certificates to the Trustee for authentication in accordance with Section
6.1 of the Agreement. The Trustee shall deliver the Series 2000-__
Certificates to or upon the order of the Transferor when authenticated in
accordance with Section 6.2 of the Agreement.
Section 9.2. Form of Delivery of Series 2000-__ Certificates.
The Class A certificates and the Class B Certificates shall be delivered as
Registered Certificates as provided in Section 6.1 of the Agreement.
Section 9.3. Legend on Class B Certificates.
Each Class B Certificate will bear a legend substantially in
the following form:
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF
TARGET RECEIVABLES CORPORATION AND THE TRUSTEE THAT SUCH PURCHASER IS
NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA,
(II) A PLAN DESCRIBED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE") THAT IS SUBJECT TO SECTION 4975
OF THE CODE, (III) A GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32)
OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A
MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS
INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY OR
(V) A PERSON INVESTING "PLAN ASSETS" OF ANY SUCH PLAN (INCLUDING FOR
PURPOSES OF CLAUSES (IV) AND (V), ANY INSURANCE COMPANY GENERAL
ACCOUNT, BUT EXCLUDING ANY ENTITY REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED).
THIS CERTIFICATE MAY NOT BE ACQUIRED, SOLD, TRADED OR
TRANSFERRED, NOR MAY AN INTEREST IN THIS CERTIFICATE BE MARKETED ON
OR THROUGH (I) AN "ESTABLISHED SECURITIES MARKET" WITHIN THE MEANING
OF SECTION 7704(b)(1) OF THE CODE AND ANY PROPOSED, TEMPORARY OR
FINAL REGULATION THEREUNDER, INCLUDING, WITHOUT LIMITATION, AN
OVER-THE-COUNTER MARKET OR AN INTERDEALER QUOTATION SYSTEM THAT
REGULARLY DISSEMINATES FIRM BUY OR SELL QUOTATIONS OR (II) A
"SECONDARY MARKET" WITHIN THE MEANING OF SECTION 7704(b)(2) OF THE
CODE AND ANY PROPOSED, TEMPORARY OR FINAL TREASURY REGULATION
THEREUNDER INCLUDING A MARKET WHEREIN INTERESTS IN THE CLASS B
CERTIFICATES ARE REGULARLY QUOTED BY ANY PERSON MAKING A MARKET IN
SUCH INTERESTS AND A MARKET WHEREIN ANY PERSON REGULARLY MAKES
AVAILABLE BID OR OFFER QUOTES WITH RESPECT TO INTERESTS IN THE CLASS
B CERTIFICATES AND STANDS READY TO EFFECT BUY OR SELL TRANSACTIONS AT
THE QUOTED PRICES FOR ITSELF OR ON BEHALF OF OTHERS.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES OR "BLUE SKY" LAWS OF THE UNITED STATES OR OTHER
JURISDICTION. NEITHER THIS CERTIFICATE NOR ANY PORTION HEREOF MAY BE
OFFERED, SOLD PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE
WITH THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND ANY
APPLICABLE PROVISIONS OF ANY STATE SECURITIES OR "BLUE SKY" LAWS OF
THE UNITED STATES OR OTHER JURISDICTION OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM SUCH REGISTRATION PROVISIONS AND IN ACCORDANCE WITH
THE PROVISIONS OF THE SERIES 2000-__ SUPPLEMENT.
Section 9.4. Ratification of Agreement. As supplemented by this
Supplement, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Supplement shall be read, taken, and
construed as one and the same instrument.
Section 9.5. Counterparts. This Supplement may be executed in
any number of counterparts, each of which so executed shall be deemed to be
an original, but all of such counterparts shall together constitute but one
and the same instrument.
Section 9.6. Paired Series. Subject to satisfaction of the
Rating Agency Condition, and prior to the commencement of the Early
Amortization Period, the Series 2000-__ Certificates may be paired with one
or more other Series (each a "Paired Series"). Each Paired Series either
will be pre-funded with an initial deposit to a prefunding account in an
amount up to the initial principal balance of such Paired Series and
primarily from the proceeds of the sale of such Paired Series or will have
a variable principal amount. Any such prefunding account will be held for
the benefit of such Paired Series and not for the benefit of the Series
2000-__ Certificateholders. As principal is paid with respect to the Series
2000-__ Certificates, either (i) in the case of a prefunded Paired Series,
an equal amount of funds on deposit in any prefunding account for such
prefunded Paired Series will be released (which funds will be distributed
to the Transferor) or (ii) in the case of a Paired Series having a variable
principal amount, an interest in such variable Paired Series in an equal or
lesser amount may be sold by the Trust (and the proceeds thereof will be
distributed to the Transferor) and, in either case, the invested amount in
the Trust of such Paired Series will increase by up to a corresponding
amount. Upon payment in full of the Series 2000-__ Certificates, assuming
that there have been no unreimbursed charge-offs with respect to any
related Paired Series, the aggregate invested amount of such related Paired
Series will have been increased by an amount up to an aggregate amount
equal to the Invested Amount paid to the Series 2000-__ Certificateholders
since the issuance of such Paired Series. The issuance of a Paired Series
will be subject to the conditions described in subsection 6.3 of the
Agreement.
Section 9.7. Jurisdiction; Service. Solely with respect to the
Agreement (as supplemented hereby and as further amended, modified or
supplemented from time to time) and the transactions and other matters
contemplated thereby or relating thereto, each of the parties hereto hereby
irrevocably and unconditionally agrees (a) to be subject to the
jurisdiction of the courts of the State of Delaware and of the federal
courts sitting in the State of Delaware, and (b)(i) to the extent such
party is not otherwise subject to service of process in the State of
Delaware, to appoint and maintain an agent in the State of Delaware as such
party's agent for acceptance of legal process, and (ii) that service of
process may also be made on such party by prepaid certified mail with a
proof of mailing receipt validated by the United States Postal Service
constituting evidence of valid service, and that service made pursuant to
(b)(i) or (ii) above shall have the same legal force and effect as if
served upon such party personally within the State of Delaware. For
purposes of implementing the parties' foregoing agreement to appoint and
maintain an agent for service of process in the State of Delaware solely in
respect of the Agreement and the transactions and other matters
contemplated thereby or relating thereto, each such party that has not as
of the date hereof already duly appointed such an agent does hereby appoint
RL&F Service Corp., Xxx Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxx, Xxxxxxxx
00000, as such agent.
SECTION 9.8. GOVERNING LAW. THIS SUPPLEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO
ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 9.9. Instructions in Writing. All
instructions or other communications given by the Servicer or any
other person to the Trustee pursuant to this Supplement shall be
in writing.
IN WITNESS WHEREOF, the Transferor, the Servicer and the
Trustee have caused this Series 2000-__ Supplement to be duly executed by
their respective officers as of the day and year first above written.
TARGET RECEIVABLES CORPORATION,
Transferor
By:________________________________________
Name:
Title:
RETAILERS NATIONAL BANK,
Servicer
By:_______________________________________
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION,
Trustee
By:________________________________________
Name:
Title:
Exhibit A-1
[FORM OF CLASS A INVESTOR CERTIFICATE]
REGISTERED $[ ]
No. [ ] CUSIP NO.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST
HEREIN.
TARGET CREDIT CARD MASTER TRUST
SERIES 2000-__
____% CLASS A ASSET BACKED CERTIFICATE
Evidencing an undivided interest in a trust, the corpus of which consists
of receivables generated from time to time in the ordinary course of
business from a portfolio of consumer open end credit card accounts
generated or to be generated by Retailers National Bank ("RNB" or the
"Servicer") and other assets and interests constituting the Trust under the
Agreement described below.
(Not an interest in or a recourse obligation of Target
Receivables Corporation, Target Capital Corporation or RNB or any affiliate
of any of them.)
This certifies that CEDE & CO. (the "Certificateholder") is the
registered owner of a fractional undivided interest in the Target Credit
Card Master Trust (the "Trust") issued pursuant to the Amended and Restated
Pooling and Servicing Agreement, dated as of April 28, 2000, as amended
(the "Pooling and Servicing Agreement"; such term to include any amendment
thereto) by and between Target Receivables Corporation, as Transferor (the
"Transferor"), RNB, as the Servicer, and Norwest Bank Minnesota, National
Association, as Trustee (the "Trustee"), and the Series 2000-__ Supplement,
dated as of ___________ (the "Series 2000-__ Supplement"), among the
Transferor, the Servicer and the Trustee. The Pooling and Servicing
Agreement, as supplemented by the Series 2000-__ Supplement, is herein
referred to as the "Agreement"). The corpus of the Trust consists of all of
the Transferor's right, title and interest in, to and under the Trust
Assets (as defined in the Agreement).
This Certificate does not purport to summarize the Agreement
and reference is made to that Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds, and duties evidenced
hereby and the rights, duties and obligations of the Trustee. To the extent
not defined herein, the capitalized terms used herein have the meanings
ascribed to them in the Agreement. This Certificate is one of a class of
Certificates entitled "Target Credit Card Master Trust $___________ ____%
Class A Asset Backed Certificates, Series 2000-__" (the "Class A
Certificates"), each of which represents a fractional undivided interest in
the Trust, and is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement, as amended from time to
time, the Certificateholder by virtue of the acceptance hereof assents and
by which the Certificateholder is bound.
The Transferor has structured the Agreement, the Class A
Certificates and the "Target Credit Card Master Trust $___________ Class B
Asset Backed Certificates, Series 2000-__" (the "Class B Certificates")
with the intention that the Class A Certificates will qualify under
applicable tax law as debt, and both the Transferor and each holder of a
Class A Certificate (a "Class A Certificateholder") or any interest therein
by acceptance of its Certificate or any interest therein, agrees to treat
the Class A Certificates for purposes of federal, state and local income or
franchise taxes and any other tax imposed on or measured by income, as
debt.
No principal will be payable to the Class A Certificateholders
until the earlier of (i) the first Distribution Date in the Early
Amortization Period and (ii) the Class A Expected Final Payment Date.
Each Class A Certificate represents the right to receive
interest at the rate of ____% per annum (such rate, as in effect from time
to time, the "Class A Certificate Rate"). Interest on the Class A
Certificates will accrue from the Closing Date and will be distributed on
______________, and on the 25th day of each month thereafter, or if such
day is not a business day, on the next succeeding business day (each, a
"Distribution Date"), in an amount equal to one-twelfth of the product of
(a) the Class A Certificate Rate and (b) the outstanding principal balance
of the Class A Certificates as of the last day of the preceding Monthly
Period (or in the case of the first Distribution Date, the initial Class A
Invested Amount).
Principal is scheduled to be paid in full on the __________
Distribution Date for the Class A Certificates, but may be paid earlier or
later in certain circumstances. Unpaid principal, together with interest,
will be payable monthly to Class A Certificateholders following the Class A
Expected Final Payment Date to the extent principal has not been paid in
full on the Class A Expected Final Payment Date. However, no payments of
principal or interest will be made on the Series 2000-__ Certificates after
the Series 2000-__ Termination Date, regardless of whether principal and
interest have been paid in full with respect thereto. Interest will be
distributed to the Class A Certificateholders monthly on each Distribution
Date prior to the Series Termination Date. Interest for any Distribution
Date will include accrued interest at the Class A Certificate Rate from and
including the preceding Distribution Date or, in the case of the first
Distribution Date from and including the Closing Date, to but excluding
such Distribution Date. Interest for any Distribution Date due but not paid
on any Distribution Date will be due on the next succeeding Distribution
Date together with, to the extent permitted by applicable law, additional
interest on such amount at the Class A Certificate Rate plus 2% per annum.
In general, payments of principal with respect to the Class A
Certificates are limited to the Class A Invested Amount, which may be less
than the unpaid principal balance of the Class A Certificates. The Class A
Expected Final Payment Date is the ____________ Distribution Date, but
principal with respect to the Class A Certificates may be paid earlier or
later under certain circumstances described in the Agreement and the Series
2000-__ Supplement. If for one or more months during the Accumulation
Period there are not sufficient funds to pay the Controlled Deposit Amount,
then to the extent that excess funds are not available on subsequent
Distribution Dates with respect to the Accumulation Period to make up for
such shortfalls, the final payment of principal of the Class A Certificates
will occur later than the Class A Expected Final Payment Date.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Certificate
to be duly executed under its official seal.
TARGET RECEIVABLES
CORPORATION
By:_____________________________________
Name:
Title:
Dated: __________ __, ____
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates referred to in the
within-mentioned Pooling and Servicing Agreement.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
By:____________________________________
Name:
Title:
Exhibit A-2
[FORM OF CLASS B INVESTOR CERTIFICATE]
REGISTERED $
No. [ ]
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF
TARGET RECEIVABLES CORPORATION AND THE TRUSTEE THAT SUCH PURCHASER IS
NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA,
(II) A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE") THAT IS SUBJECT TO SECTION 4975
OF THE CODE, (III) A GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32)
OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A
MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS
INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY OR
(V) A PERSON INVESTING "PLAN ASSETS" OF ANY SUCH PLAN (INCLUDING FOR
PURPOSES OF CLAUSES (IV) AND (V), ANY INSURANCE COMPANY GENERAL
ACCOUNT, BUT EXCLUDING ANY ENTITY REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED).
THIS CERTIFICATE MAY NOT BE ACQUIRED, SOLD, TRADED OR
TRANSFERRED, NOR MAY AN INTEREST IN THIS CERTIFICATE BE MARKETED ON
OR THROUGH (I) AN "ESTABLISHED SECURITIES MARKET" WITHIN THE MEANING
OF SECTION 7704(B)(1) OF THE CODE AND ANY PROPOSED, TEMPORARY OR
FINAL REGULATION THEREUNDER, INCLUDING, WITHOUT LIMITATION, AN
OVER-THE-COUNTER MARKET OR AN INTERDEALER QUOTATION SYSTEM THAT
REGULARLY DISSEMINATES FIRM BUY OR SELL QUOTATIONS OR (II) A
"SECONDARY MARKET" WITHIN THE MEANING OF SECTION 7704(B)(2) OF THE
CODE AND ANY PROPOSED, TEMPORARY OR FINAL TREASURY REGULATION
THEREUNDER INCLUDING A MARKET WHEREIN INTERESTS IN THE CLASS B
CERTIFICATES ARE REGULARLY QUOTED BY ANY PERSON MAKING A MARKET IN
SUCH INTERESTS AND A MARKET WHEREIN ANY PERSON REGULARLY MAKES
AVAILABLE BID OR OFFER QUOTES WITH RESPECT TO INTERESTS IN THE CLASS
B CERTIFICATES AND STANDS READY TO EFFECT BUY OR SELL TRANSACTIONS AT
THE QUOTED PRICES FOR ITSELF OR ON BEHALF OF OTHERS.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES OR "BLUE SKY" LAWS OF THE UNITED STATES OR OTHER
JURISDICTION. NEITHER THIS CERTIFICATE NOR ANY PORTION HEREOF MAY BE
OFFERED, SOLD PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE
WITH THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND ANY
APPLICABLE PROVISIONS OF ANY STATE SECURITIES OR "BLUE SKY" LAWS OF
THE UNITED STATES OR OTHER JURISDICTION OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM SUCH REGISTRATION PROVISIONS AND IN ACCORDANCE WITH
THE PROVISIONS OF THE SERIES 2000-__ SUPPLEMENT.
TARGET CREDIT CARD MASTER TRUST
SERIES 2000-__
$__________ CLASS B ASSET BACKED CERTIFICATE
Evidencing an undivided interest in a trust, the corpus of
which consists of receivables generated from time to time in the ordinary
course of business from a portfolio of consumer open end credit card
accounts generated or to be generated by Retailers National Bank ("RNB" or
the "Servicer") and other assets and interests constituting the Trust under
the Agreement described below.
(Not an interest in or a recourse obligation of Target
Receivables Corporation, Target Capital Corporation or RNB or any affiliate
of any of them.)
This certifies that Target Receivables Corporation (the
"Certificateholder") is the registered owner of a fractional undivided
interest in the Target Credit Card Master Trust (the "Trust") issued
pursuant to the Amended and Restated Pooling and Servicing Agreement, dated
as of April 28, 2000 (the "Pooling and Servicing Agreement"; such term to
include any amendment thereto) by and between Target Receivables
Corporation, as Transferor (the "Transferor"), RNB as the Servicer, and
Norwest Bank Minnesota, National Association, as Trustee (the "Trustee"),
and the Series 2000-__ Supplement, dated as of _____________ (the "Series
2000- __ Supplement"), among the Transferor, RNB, as Servicer and the
Trustee. The Pooling and Servicing Agreement, as supplemented by the Series
2000-__ Supplement, is herein referred to as the "Agreement". The corpus of
the Trust consists of all of the Transferor's right, title and interest in,
to and under the Trust Assets (as defined in the Agreement).
This Certificate does not purport to summarize the Agreement
and reference is made to that Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds, and duties evidenced
hereby and the rights, duties and obligations of the Trustee. To the extent
not defined herein, the capitalized terms used herein have the meanings
ascribed to them in the Agreement. This Certificate is one of a class of
Certificates entitled "Target Credit Card Master Trust $_____________ Class
B Asset Backed Certificates, Series 2000-__" (the "Class B Certificates"),
each of which represents a fractional undivided interest in the Trust, and
is issued under and is subject to the terms, provisions and conditions of
the Agreement, to which Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which
the Certificateholder is bound.
Unless the Rating Agency Condition and certain other conditions
set forth in the Series 2000-__ Supplement are satisfied, (i) no principal
will be payable to the Class B Certificateholders until the Class A
Invested Amount is paid in full and (ii) no interest will accrue on the
unpaid principal amount of the Class B Certificates. Principal is scheduled
to be paid in full to the Class A Certificates on the _________
Distribution Date.
In general, payments of principal with respect to the Class B
Certificates are limited to the Class B Invested Amount, which may be less
than the unpaid principal balance of the Class B Certificates. The Class B
Expected Final Payment Date is the ___________ Distribution Date, but
principal with respect to the Class B Certificates may be paid earlier or
later under certain circumstances described in the Agreement and the Series
2000-__ Supplement.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Certificate
to be duly executed under its official seal.
TARGET RECEIVABLES
CORPORATION
By:_____________________________________
Name:
Title:
Dated: __________ __, ____
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the
within-mentioned Pooling and Servicing Agreement.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
By:____________________________________
Name:
Title:
EXHIBIT B
FORM OF MONTHLY SERIES 2000-__ CERTIFICATEHOLDERS' STATEMENT
EXHIBIT C
FORM OF MONTHLY SERVICER'S CERTIFICATE
RETAILERS NATIONAL BANK
TARGET CREDIT CARD MASTER TRUST
SERIES 2000-__
The undersigned, a duly authorized representative of Retailers
National Bank, as Servicer ("RNB"), pursuant to the Amended and Restated
Pooling and Servicing Agreement, dated as of April 28, 2000 (as may be
amended, from time to time, the "Agreement"), as supplemented by the Series
2000-__ Supplement (as amended and supplemented, the "Series Supplement"),
among RNB, Target Receivables Corporation and Norwest Bank Minnesota,
National Association, does hereby certify as follows:
1. Capitalized terms used in this Certificate have their respective
meanings as set forth in the Agreement or the Series Supplement, as
applicable.
2. RNB is, as of the date hereof, the Servicer under the
Agreement.
3. The undersigned is a Servicing Officer.
4. This Certificate relates to the Distribution Date
occurring on __________ __, ____ (the "________ __
Distribution Date").
5. As of the date hereof, to the best knowledge of the undersigned,
the Servicer has performed in all material respects all its
obligations under the Agreement through the Monthly Period preceding
such Distribution Date [or, if there has been a default in the
performance of any such obligation, set forth in detail the (i)
nature of such default, (ii) the action taken by the Servicer, if
any, to remedy such default and (iii) the current status of each such
default; if applicable, insert "None"].
6. As of the date hereof, to the best knowledge of the undersigned,
no Early Amortization Event occurred on or prior to such Distribution
Date.
IN WITNESS WHEREOF, the undersigned has duly executed and
delivered this Certificate this ____ day of ___________ ____.
RETAILERS NATIONAL BANK,
as Servicer
By:_____________________________________
Name:
Title:
