EXHIBIT 4.1
EXECUTION COPY
WORLD FINANCIAL NETWORK CREDIT CARD MASTER NOTE TRUST
Issuer
And
BNY MIDWEST TRUST COMPANY
Indenture Trustee
Series 2002-A INDENTURE SUPPLEMENT
Dated as of November 7, 2002
TABLE OF CONTENTS
ARTICLE I. Creation of the Series 2002-A Notes........................................................1
Section 1.1 Designation.......................................................................1
ARTICLE II. Definitions................................................................................1
Section 2.1 Definitions.......................................................................1
ARTICLE III. Noteholder Servicing Fee..................................................................17
Section 3.1 Servicing Compensation...........................................................17
Section 3.2 Representations and Warranties...................................................17
ARTICLE IV. Rights of Series 2002-A Noteholders and Allocation and Application of Collections.........17
Section 4.1 Collections and Allocations......................................................17
Section 4.2 Determination of Monthly Interest................................................20
Section 4.3 Determination of Monthly Principal...............................................22
Section 4.4 Application of Available Finance Charge Collections and
Available Principal Collections..................................................22
Section 4.5 Investor Charge-Offs.............................................................25
Section 4.6 Reallocated Principal Collections................................................25
Section 4.7 Excess Finance Charge Collections................................................25
Section 4.8 Shared Principal Collections.....................................................26
Section 4.9 Certain Series Accounts..........................................................26
Section 4.10 Reserve Account..................................................................28
Section 4.11 Cash Collateral Account..........................................................30
Section 4.12 Spread Account...................................................................31
Section 4.13 Investment Instructions..........................................................33
Section 4.14 Controlled Accumulation Period...................................................34
Section 4.15 Suspension of Controlled Accumulation Period.....................................34
Section 4.16 Determination of LIBOR...........................................................36
Section 4.17 Swaps............................................................................36
ARTICLE V. Delivery of Series 2002-A Notes; Distributions; Reports to Series 2002-A Noteholders......37
Section 5.1 Delivery and Payment for the Series 2002-A Notes.................................37
Section 5.2 Distributions....................................................................37
Section 5.3 Reports and Statements to Series 2002-A Noteholders..............................38
ARTICLE VI. Series 2002-A Early Amortization Events...................................................38
Section 6.1 Series 2002-A Early Amortization Events..........................................38
ARTICLE VII. Redemption of Series 2002-A Notes; Final Distributions; Series Termination................40
Section 7.1 Optional Redemption of Series 2002-A Notes; Final Distributions..................40
Section 7.2 Series Termination...............................................................42
ARTICLE VIII. Miscellaneous Provisions..................................................................42
Section 8.1 Ratification of Indenture; Amendments............................................42
Section 8.2 Form of Delivery of the Series 2002-A Notes......................................42
Section 8.3 Counterparts.....................................................................42
Section 8.4 GOVERNING LAW....................................................................42
Section 8.5 Limitation of Liability..........................................................42
Section 8.6 Rights of the Indenture Trustee..................................................43
Section 8.7 Additional Provisions............................................................43
Section 8.8 Additional Requirements for Registration of and Limitations on
Transfer and Exchange of Notes...................................................43
EXHIBITS
EXHIBIT A-1.......FORM OF CLASS A NOTE
EXHIBIT A-2.......FORM OF CLASS B NOTE
EXHIBIT A-3.......FORM OF CLASS C NOTE
EXHIBIT B.........FORM OF MONTHLY PAYMENT INSTRUCTIONS AND
.........NOTIFICATION TO INDENTURE TRUSTEE
EXHIBIT C.........FORM OF MONTHLY NOTEHOLDERS' STATEMENT
EXHIBIT D.........FORM OF MONTHLY SERVICER'S CERTIFICATE
EXHIBIT E-1.......FORM OF CLASS A SWAP
EXHIBIT E-2.......FORM OF CLASS B SWAP
EXHIBIT E-3.......FORM OF CLASS C SWAP
SCHEDULE I PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS
ii
SERIES 2002-A INDENTURE SUPPLEMENT, dated as of November 7, 2002
(the "Indenture Supplement"), between WORLD FINANCIAL NETWORK CREDIT CARD
MASTER NOTE TRUST, a business trust organized and existing under the laws
of the State of Delaware (herein, the "Issuer" or the "Trust"), and BNY
MIDWEST TRUST COMPANY, a trust company organized and existing under the
laws of the State of Illinois, not in its individual capacity, but solely
as indenture trustee (herein, together with its successors in the trusts
thereunder as provided in the Master Indenture referred to below, the
"Indenture Trustee") under the Master Indenture, dated as of August 1, 2001
(the "Indenture"), between the Issuer and the Indenture Trustee (the
Indenture, together with this Indenture Supplement, the "Agreement").
Pursuant to Section 2.11 of the Indenture, the Transferor may
direct the Issuer to issue one or more Series of Notes. The Principal Terms
of this Series are set forth in this Indenture Supplement to the Indenture.
ARTICLE I
Creation of the Series 2002-A Notes
Section 1.1 Designation.
(a) There is hereby created and designated a Series of Notes to be
issued pursuant to the Indenture and this Indenture Supplement to be known
as "World Financial Network Credit Card Master Note Trust, Series 2002-A"
or the "Series 2002-A Notes." The Series 2002-A Notes shall be issued in
three Classes, known as the "Class A Series 2002-A Floating Rate Asset
Backed Notes," the "Class B Series 2002-A Floating Rate Asset Backed
Notes," and the "Class C Series 2002-A Floating Rate Asset Backed Notes."
(b) Series 2002-A shall be included in Group One and shall be a
Principal Sharing Series. Series 2002-A shall be an Excess Allocation
Series with respect to Group One only. Series 2002-A shall not be
subordinated to any other Series.
ARTICLE II
Definitions
Section 2.1 Definitions.
(a) Whenever used in this Indenture Supplement, the following words
and phrases shall have the following meanings, and the definitions of such
terms are applicable to the singular as well as the plural forms of such
terms and the masculine as well as the feminine and neuter genders of such
terms.
"Accumulation Shortfall" means (a) for the first Distribution Date
during the Controlled Accumulation Period, zero; and (b) thereafter, for
any Distribution Date during the Controlled Accumulation Period, the
excess, if any, of the Controlled Deposit Amount for the previous
Distribution Date over the amount deposited into the Principal Accumulation
Account pursuant to subsection 4.4(c)(i) for the previous Distribution
Date.
"Additional Interest" means, for any Distribution Date, Class A
Additional Interest, Class B Additional Interest and Class C Additional
Interest for such Distribution Date.
"Additional Minimum Transferor Amount" means (a) as of any date of
determination falling in November, December and January of each calendar
year, the product of (i) 2% and (ii) the sum of (A) the Aggregate Principal
Receivables and (B) if such date of determination occurs prior to the
Certificate Trust Termination Date, the amount on deposit in the Excess
Funding Account and (b) as of any date of determination falling in any
other month, zero; provided that the amount specified in clause (a) shall
be without duplication with the amount specified as the "Additional Minimum
Transferor Amount" in the supplements to the Pooling and Servicing
Agreement relating to the Series 1996-VFC Certificates and Series 1996-B
Certificates issued by the Certificate Trust (or in any future supplement
to the Pooling and Servicing Agreement that specifies such an amount and
indicates that such amount is without duplication of the amount specified
in clause (a)) and in the Indenture Supplement relating to the Series
2001-A Notes (or in any future Indenture Supplement that specifies such an
amount and indicates that such amount is without duplication of the amount
specified in clause (a)). The Additional Minimum Transferor Amount is
specified pursuant to Section 8.7 of this Indenture Supplement as an
additional amount to be considered part of the Minimum Transferor Amount.
"Aggregate Investor Default Amount" means, as to any Monthly
Period, the sum of the Investor Default Amounts in respect of such Monthly
Period.
"Allocation Percentage" means, with respect to any Monthly Period,
the percentage equivalent of a fraction:
(a) the numerator of which shall be equal to:
(i) for Principal Collections during the Revolving Period and for
Finance Charge Collections and Default Amounts at any time, the
Collateral Amount at the end of the last day of the prior Monthly
Period (or, in the case of the Monthly Period in which the Closing
Date occurs, on the Closing Date), less any reductions to be made to
the Collateral Amount on account of principal payments or deposits to
the Principal Accumulation Account to be made on the Distribution
Date falling in the Monthly Period for which the Allocation
Percentage is being calculated; or
(ii) for Principal Collections during the Early Amortization
Period and the Controlled Accumulation Period, the Collateral Amount
at the end of the last day of the Revolving Period, provided,
however, that the Transferor may, by written notice to the Indenture
Trustee, the Servicer and the Rating Agencies, reduce the numerator
used for purposes of allocating Principal Collections to Series
2002-A at any time if (x) the Rating Agency Condition shall have been
satisfied with respect to such reduction and (y) the Transferor shall
have delivered to the Indenture Trustee an Officer's Certificate to
the effect, based on the facts known to such officer at that time, in
the reasonable belief of the Transferor, such designation will not
cause an Early Amortization Event or an event that, after the giving
of notice or the lapse of time, would cause an Early Amortization
Event to occur with respect to Series 2002-A, and
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(b) the denominator of which shall be the greater of (x) the Aggregate
Principal Receivables determined as of the close of business on the last
day of the prior Monthly Period and (y) the sum of the numerators used to
calculate the allocation percentages for allocations with respect to
Finance Charge Collections, Principal Collections or Default Amounts, as
applicable, for all outstanding Series and all outstanding Series under
(and as defined in) the Pooling and Servicing Agreement (other than any
Series represented by the Collateral Certificate) on such date of
determination provided, that if one or more Reset Dates occur in a
Monthly Period, the Allocation Percentage for the portion of the Monthly
Period falling on and after such Reset Date and prior to any subsequent
Reset Date will be recalculated for such period as of the close of business
on the subject Reset Date.
"Available Cash Collateral Amount" means with respect to any
Transfer Date, an amount equal to the lesser of (a) the amount on deposit
in the Cash Collateral Account (before giving effect to any deposit to, or
withdrawal from, the Cash Collateral Account made or to be made with
respect to such date) and (b) the Required Cash Collateral Amount for such
Transfer Date.
"Available Finance Charge Collections" means, for any Monthly
Period, an amount equal to the sum of (a) the Investor Finance Charge
Collections for such Monthly Period, plus (b) the Excess Finance Charge
Collections allocated to Series 2002-A for such Monthly Period, plus (c)
Principal Accumulation Investment Proceeds, if any, with respect to the
related Transfer Date, plus (d) interest and earnings on funds on deposit
in the Reserve Account, Cash Collateral Account and Spread Account which
will be deposited into the Finance Charge Account on the related Transfer
Date to be treated as Available Finance Charge Collections pursuant to
subsections 4.10(b), 4.11(b) and 4.12(b), respectively, plus (e) amounts,
if any, to be withdrawn from the Reserve Account which will be deposited
into the Finance Charge Account on the related Transfer Date to be treated
as Available Finance Charge Collections pursuant to subsection 4.10(d),
plus (f) any Net Swap Receipts for the related Distribution Date.
"Available Principal Collections" means, for any Monthly Period,
an amount equal to the sum of (a) the Investor Principal Collections for
such Monthly Period, minus (b) the amount of Reallocated Principal
Collections with respect to such Monthly Period which pursuant to Section
4.6 are required to be applied on the related Distribution Date, plus (c)
any Shared Principal Collections with respect to other Principal Sharing
Series (including any amounts on deposit in the Excess Funding Account that
are allocated to Series 2002-A for application as Shared Principal
Collections), plus (d) the aggregate amount to be treated as Available
Principal Collections pursuant to subsections 4.4(a)(v) and (vi) for the
related Distribution Date.
"Available Reserve Account Amount" means, for any Transfer Date,
the lesser of (a) the amount on deposit in the Reserve Account (after
taking into account any interest and earnings retained in the Reserve
Account pursuant to subsection 4.10(b) on such date, but before giving
effect to any deposit made or to be made pursuant to subsection
4.4(a)(viii) to the Reserve Account on such date) and (b) the Required
Reserve Account Amount.
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"Available Spread Account Amount" means, for any Transfer Date, an
amount equal to the lesser of (a) the amount on deposit in the Spread
Account (before giving effect to any deposit to, or withdrawal from, the
Spread Account made or to be made with respect to such date) and (b) the
Required Spread Account Amount, in each case on such Transfer Date.
"Base Rate" means, for any Monthly Period, the annualized
percentage equivalent of a fraction, the numerator of which is equal to the
sum of (a) the Monthly Interest, (b) the Net Swap Payments and (c) the
Noteholder Servicing Fee, each with respect to the related Distribution
Date, and the denominator of which is the Collateral Amount plus amounts on
deposit in the Principal Accumulation Account, each as of the close of
business on the last day of such Monthly Period.
"Cash Collateral Account" is defined in Section 4.11(a)
"Class A Additional Interest" is defined in subsection 4.2(a).
"Class A Counterparty" means JPMorgan Chase Bank or the
counterparty under any interest rate swap with respect to the Class A Notes
obtained pursuant to Section 4.17.
"Class A Deficiency Amount" is defined in subsection 4.2(a).
"Class A/B Expected Principal Payment Date" means October 15,
2007.
"Class A Monthly Interest" is defined in subsection 4.2(a).
"Class A Net Interest Obligation" means, for any Distribution
Date: (a) if there are Class A Net Swap Payments due on that Distribution
Date, the sum of the Class A Net Swap Payments and the Class A Monthly
Interest for that Distribution Date; (b) if there are Class A Net Swap
Receipts due on that Distribution Date, the result of the Class A Monthly
Interest for that Distribution Date, minus the Class A Net Swap Receipts
for that Distribution Date; and (c) if the Class A Swap has terminated for
any reason, the Class A Monthly Interest for that Distribution Date.
"Class A Net Swap Payment" means, with respect to any Distribution
Date, any net amount payable by the Issuer under the Class A Swap as a
result of LIBOR being less than the Class A Swap Rate. For the avoidance of
doubt, Class A Net Swap Payments do not include early termination payments
or payment of breakage or other miscellaneous costs.
"Class A Net Swap Receipt" means, with respect to any Distribution
Date, any net amount payable by the Class A Counterparty as a result of
LIBOR being greater than the Class A Swap Rate. For the avoidance of doubt,
Class A Net Swap Receipts do not include early termination payments.
"Class A Note Initial Principal Balance" means $468,000,000.
"Class A Note Interest Rate" means a per annum rate of 0.43% in
excess of LIBOR as determined on the LIBOR Determination Date for the
applicable Distribution Period.
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"Class A Note Principal Balance" means, on any date of
determination, an amount equal to (a) the Class A Note Initial Principal
Balance, minus (b) the aggregate amount of principal payments made to the
Class A Noteholders on or prior to such date.
"Class A Noteholder" means the Person in whose name a Class A Note
is registered in the Note Register.
"Class A Notes" means any one of the Notes executed by the Issuer
and authenticated by or on behalf of the Indenture Trustee, substantially
in the form of Exhibit A-1.
"Class A Required Amount" means, for any Distribution Date, an
amount equal to the excess of the amounts described in subsection 4.4(a)(i)
over the sum of (a) Available Finance Charge Collections applied to pay
such amount pursuant to subsection 4.4(a) and (b) any amount withdrawn from
the Cash Collateral Account and applied to pay such amount pursuant to
subsection 4.11(c).
"Class A Swap" means an interest rate swap agreement with respect
to the Class A Notes between the Trust and the Class A Counterparty
substantially in the form of Exhibit E-1 to this Indenture Supplement, or
such other form as shall have satisfied the Rating Agency Condition.
"Class A Swap Rate" means 3.52% per annum.
"Class B Additional Interest" is defined in subsection 4.2(b).
"Class B Counterparty" means JPMorgan Chase Bank or the
counterparty under any interest rate swap with respect to the Class B Notes
obtained pursuant to Section 4.17.
"Class B Deficiency Amount" is defined in subsection 4.2(b).
"Class B Monthly Interest" is defined in subsection 4.2(b).
"Class B Net Interest Obligation" means, for any Distribution
Date: (a) if there are Class B Net Swap Payments due on that Distribution
Date, the sum of the Class B Net Swap Payments and the Class B Monthly
Interest for that Distribution Date; (b) if there are Class B Net Swap
Receipts due on that Distribution Date, the result of the Class B Monthly
Interest for that Distribution Date, minus the Class B Net Swap Receipts
for that Distribution Date; and (c) if the Class B Swap has terminated for
any reason, the Class B Monthly Interest for that Distribution Date.
"Class B Net Swap Payment" means, with respect to any Distribution
Date, any net amount payable by the Issuer under the Class B Swap as a
result of LIBOR being less than the Class B Swap Rate. For the avoidance of
doubt, Class B Net Swap Payments do not include early termination payments
or payment of breakage or other miscellaneous costs.
"Class B Net Swap Receipt" means, with respect to any Distribution
Date, any net amount payable by the Class B Counterparty as a result of
LIBOR being greater than the Class B Swap Rate. For the avoidance of doubt,
Class B Net Swap Receipts do not include early termination payments.
5
"Class B Note Initial Principal Balance" means $51,000,000.
"Class B Note Interest Rate" means a per annum rate of 1.25% in
excess of LIBOR as determined on the LIBOR Determination Date for the
applicable Distribution Period.
"Class B Note Principal Balance" means, on any date of
determination, an amount equal to (a) the Class B Note Initial Principal
Balance, minus (b) the aggregate amount of principal payments made to the
Class B Noteholders on or prior to such date.
"Class B Noteholder" means the Person in whose name a Class B Note
is registered in the Note Register.
"Class B Notes" means any one of the Notes executed by the Issuer
and authenticated by or on behalf of the Indenture Trustee, substantially
in the form of Exhibit A-2.
"Class B Required Amount" means, for any Distribution Date, an
amount equal to the excess of the amount described in subsection 4.4(a)(ii)
over the sum of (a) Available Finance Charge Collections applied to pay
such amount pursuant to subsection 4.4(a) and (b) any amount withdrawn from
the Cash Collateral Account and applied to pay such amount pursuant to
subsection 4.11(c).
"Class B Swap" means an interest rate swap agreement between the
Trust and the Class B Counterparty substantially in the form of Exhibit E-2
to this Indenture Supplement, or such other form as shall have satisfied
the Rating Agency Condition.
"Class B Swap Rate" means 3.52% per annum.
"Class C Additional Interest" is defined in subsection 4.2(c).
"Class C Counterparty" means JPMorgan Chase Bank or the
counterparty under any interest rate swap with respect to the Class C Notes
obtained pursuant to Section 4.19.
"Class C Deficiency Amount" is defined in subsection 4.2(c).
"Class C Expected Principal Payment Date" means November 15, 2007.
"Class C Monthly Interest" is defined in subsection 4.2(c).
"Class C Net Interest Obligation" means, for any Distribution
Date: (a) if there are Class C Net Swap Payments due on that Distribution
Date, the sum of the Class C Net Swap Payments and the Class C Monthly
Interest for that Distribution Date; (b) if there are Class C Net Swap
Receipts due on that Distribution Date, the result of the Class C Monthly
Interest for that Distribution Date, minus the Class C Net Swap Receipts
for that Distribution Date; and (c) if the Class C Swap has terminated for
any reason, the Class C Monthly Interest for that Distribution Date.
"Class C Net Swap Payment" means, with respect to any Distribution
Date, any net amount payable by the Issuer under the Class C Swap as a
result of LIBOR being less than the Class C Swap Rate. For the avoidance of
doubt, Class C Net Swap Payments do not include early termination payments
or payment of breakage or other miscellaneous costs.
6
"Class C Net Swap Receipt" means, with respect to any Distribution
Date, any net amount payable by the Class C Counterparty as a result of
LIBOR being greater than the Class C Swap Rate. For the avoidance of doubt,
Class C Net Swap Receipts do not include early termination payments.
"Class C Note Initial Principal Balance" means $81,000,000.
--------------------------------------
"Class C Note Interest Rate" means a per annum rate of 2.95% in
excess of LIBOR as determined on the LIBOR Determination Date for the
applicable Distribution Period.
"Class C Note Principal Balance" means, on any date of
determination, an amount equal to (a) the Class C Note Initial Principal
Balance, minus (b) the aggregate amount of principal payments made to the
Class C Noteholders on or prior to such date.
"Class C Noteholder" means the Person in whose name a Class C Note
is registered in the Note Register.
"Class C Notes" means any one of the Notes executed by the Issuer
and authenticated by or on behalf of the Indenture Trustee, substantially
in the form of Exhibit A-3.
"Class C Swap" means an interest rate swap agreement with respect
to the Class C Notes between the Trust and the Class C Counterparty
substantially in the form of Exhibit E-3 to this Indenture Supplement, or
such other form as shall have satisfied the Rating Agency Condition.
"Class C Swap Rate" means 3.56% per annum.
"Class C Swap Required Amount" means, for any Distribution Date,
an amount equal to the excess of the Class C Net Swap Payment for such
Distribution Date over the sum of (a) Available Finance Charge Collections
applied to pay such Class C Net Swap Payment pursuant to subsection
4.4(a)(iv)(B), (b) any amount withdrawn from the Cash Collateral Account
and applied to pay such Class C Net Swap Payment pursuant to subsection
4.11(c) and (c) any amount withdrawn from the Spread Account and applied to
pay such Class C Net Swap Payment pursuant to subsection 4.12(c).
"Closing Date" means November 7, 2002.
"Collateral Amount" means, as of any date of determination, an
amount equal to the result of (a) the Initial Collateral Amount, minus (b)
the amount of principal previously paid to the Series 2002-A Noteholders
(other than any principal payments made from funds on deposit in the Spread
Account), minus (c) the balance on deposit in the Principal Accumulation
Account, minus (d) the excess, if any, of the aggregate amount of Investor
Charge-Offs and Reallocated Principal Collections over the reimbursements
of such amounts pursuant to subsection 4.4(a)(vi) prior to such date.
7
"Controlled Accumulation Amount" means, (a) for any Transfer Date
with respect to the Controlled Accumulation Period occurring prior to the
October 2007 Distribution Date, $43,250,000 and (b) on the Transfer Date
immediately preceding the Class C Expected Principal Payment Date, the
Class C Note Principal Balance; provided, however, that if the Controlled
Accumulation Period Length is determined to be less than 12 months pursuant
to Section 4.14 or 4.15, the amount described in clause (a) of this
definition shall be equal to (i) the sum of the Class A Note Initial
Principal Balance and the Class B Note Initial Principal Balance divided by
(ii) the Controlled Accumulation Period Length; provided, further, that the
Controlled Accumulation Amount for any Distribution Date shall not exceed
the Note Principal Balance minus any amount already on deposit in the
Principal Accumulation Account on such Transfer Date.
"Controlled Accumulation Period" means, unless an Early
Amortization Event shall have occurred prior thereto, the period commencing
at the opening of business on October 1, 2006 or such later date as is
determined in accordance with Sections 4.14 and 4.15, and ending on the
first to occur of (a) the commencement of the Early Amortization Period and
(b) the Series Termination Date.
"Controlled Accumulation Period Length" is defined in subsection
4.14.
"Controlled Deposit Amount" means, for any Transfer Date with
respect to the Controlled Accumulation Period, an amount equal to the sum
of the Controlled Accumulation Amount for such Transfer Date and any
existing Accumulation Shortfall.
"Counterparty" means the Class A Counterparty, the Class B
Counterparty or the Class C Counterparty.
"Covered Amount" means an amount, determined as of each Transfer
Date for any Distribution Period, equal to the sum of (a) the product of
(i) the Class A Net Interest Obligation times (ii) a fraction, (A) the
numerator of which is equal to the aggregate amount on deposit in the
Principal Accumulation Account, up to the Class A Note Principal Balance as
of the Record Date preceding such Transfer Date, and (B) the denominator of
which is equal to the Class A Note Principal Balance as of the Record Date
preceding such Transfer Date plus (b) the product of (i) the Class B Net
Interest Obligation times (ii) a fraction (A) the numerator of which is
equal to the aggregate amount on deposit in the Principal Accumulation
Account in excess of the Class A Note Principal Balance as of the Record
Date preceding such Transfer Date, up to the Class B Note Principal Balance
as of the Record Date preceding such Transfer Date, and (B) the denominator
of which is equal to the Class B Note Principal Balance as of the Record
Date preceding such Transfer Date.
"Default Amount" means, as to any Defaulted Account, the amount of
Principal Receivables (other than Ineligible Receivables, unless there is
an Insolvency Event with respect to WFN or the Transferor) in such
Defaulted Account on the day it became a Defaulted Account.
"Defaulted Account" means an Account in which there are Defaulted
Receivables.
8
"Designated Maturity" means, for any LIBOR Determination Date, one
month; provided that LIBOR for the initial Distribution Period will be
determined by straight-line interpolation (based on the actual number of
days in the initial Distribution Period) between two rates determined in
accordance with the definition of LIBOR, one of which will be determined
for a Designated Maturity of one month and the other of which will be
determined for a Designated Maturity of two months.
"Dilution" means any downward adjustment made by Servicer in the
amount of any Receivable (a) because of a rebate, refund, unauthorized
charge, fraudulent or counterfeit charge or billing error to an
accountholder, (b) because such Receivable was created in respect of
merchandise which was refused or returned by an accountholder or (c) for
any other reason other than receiving Collections therefor or charging off
such amount as uncollectible.
"Distribution Account" is defined in subsection 4.9(a).
"Distribution Date" means December 16, 2002 and the 15th day of
each calendar month thereafter, or if such 15th day is not a Business Day,
the next succeeding Business Day.
"Distribution Period" means, for any Distribution Date, the period
from and including the Distribution Date immediately preceding such
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date) to but excluding such Distribution Date.
"Early Amortization Period" means the period commencing on the
date on which a Trust Early Amortization Event or a Series 2002-A Early
Amortization Event is deemed to occur and ending on the Series Termination
Date.
"Eligible Investments" is defined in Annex A to the Indenture;
provided that solely for purposes of Section 4.12(b), references to the
"highest investment category" of S&P shall mean A-2.
"Excess Spread Percentage" means, for any Monthly Period, a
percentage equal to the Portfolio Yield for such Monthly Period, minus the
Base Rate for such Monthly Period.
"Finance Charge Account" is defined in Section 4.9(a).
"Finance Charge Collections" means Collections of Finance Charge
Receivables.
"Finance Charge Shortfall" is defined in Section 4.7.
"Group One" means Series 2001-A, Series 2002-A, the outstanding
Series under (and as defined in) the Pooling and Servicing Agreement (other
than Series represented by the Collateral Certificate) and each other
Series hereafter specified in the related Indenture Supplement to be
included in Group One.
"Initial Collateral Amount" means $600,000,000.
"Investment Earnings" means, for any Distribution Date, all
interest and earnings on Eligible Investments included in the Spread
Account (net of losses and investment expenses) during the period
commencing on and including the Distribution Date immediately preceding
such Distribution Date and ending on but excluding such Distribution Date.
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"Investor Charge-Offs" is defined in Section 4.5.
"Investor Default Amount" means, with respect to any Defaulted
Account, an amount equal to the product of (a) the Default Amount and (b)
the Allocation Percentage on the day such Account became a Defaulted
Account.
"Investor Finance Charge Collections" means, for any Monthly
Period, an amount equal to the aggregate amount of Finance Charge
Collections (including Net Recoveries treated as Finance Charge
Collections) retained or deposited in the Finance Charge Account for Series
2002-A pursuant to subsection 4.1(b)(i) for such Monthly Period.
"Investor Principal Collections" means, for any Monthly Period, an
amount equal to the aggregate amount of Principal Collections retained or
deposited in the Principal Account for Series 2002-A pursuant to subsection
4.1(b)(ii) for such Monthly Period.
"Investor Uncovered Dilution Amount" means an amount equal to the
product of (x) the Series Allocation Percentage for the related Monthly
Period (determined on a weighted average basis, if a Reset Date occurs
during that Monthly Period), times (y) the aggregate Dilutions occurring
during that Monthly Period as to which any deposit is required to be made
to the Excess Funding Account pursuant to Section 3.9(a) of the Transfer
and Servicing Agreement or Section 3.9(a) of the Pooling and Servicing
Agreement but has not been made, provided that, if the Transferor Amount is
greater than zero at the time the deposit referred to in clause (y) is
required to be made, the Investor Uncovered Dilution Amount for such amount
to be deposited shall be deemed to be zero.
"LIBOR" means, for any Distribution Period, an interest rate per
annum for each Distribution Period determined by the Indenture Trustee in
accordance with the provisions of Section 4.16.
"LIBOR Determination Date" means (i) November 5, 2002 for the
period from and including the Closing Date through and including December
15, 2002 and (ii) the second London Business Day prior to the commencement
of the second and each subsequent Distribution Period.
"London Business Day" means any day on which dealings in deposits
in United States dollars are transacted in the London interbank market.
"Minimum Transferor Amount" means (a) prior to the Certificate
Trust Termination Date, the "Minimum Transferor Amount" under (and as
defined in) the Pooling and Servicing Agreement and (b) on and after the
Certificate Trust Termination Date, the "Minimum Transferor Amount" as
defined in Annex A to the Indenture.
"Monthly Interest" means, for any Distribution Date, the sum of
the Class A Monthly Interest, the Class B Monthly Interest, and the Class C
Monthly Interest for such Distribution Date.
"Monthly Period" means the period from and including the first day
of the calendar month preceding a related Distribution Date to and
including the last day of such calendar month; provided that the Monthly
Period related to the December 2002 Distribution Date shall mean the period
from and including the Closing Date to and including the last day of
November 2002.
10
"Monthly Principal" is defined in Section 4.3.
"Monthly Principal Reallocation Amount" means, for any Monthly
Period, an amount equal to the sum of:
(a) the lower of (i) the Class A Required Amount and (ii) the greater
of (A)(x) the product of (I) 22.00% and (II) the Initial
Collateral Amount minus (y) the amount of unreimbursed Investor
Charge-Offs (after giving effect to Investor Charge-Offs for the
related Monthly Period) and unreimbursed Reallocated Principal
Collections (as of the previous Distribution Date) and (B) zero;
and
(b) the lower of (i) the sum of the Class B Required Amount, the
Servicing Fee Required Amount and the Class C Swap Required Amount
and (ii) the greater of (A)(x) the product of (I) 13.5% and (II)
the Initial Collateral Amount minus (y) the amount of unreimbursed
Investor Charge-Offs (after giving effect to Investor Charge-Offs
for the related Monthly Period) and unreimbursed Reallocated
Principal Collections (as of the previous Distribution Date and as
required in clause (a) above) and (B) zero.
"Net Interest Obligation" means, for any Distribution Date, the
sum of the Class A Net Interest Obligation, the Class B Net Interest
Obligation and the Class C Net Interest Obligation for such Distribution
Date.
"Net Swap Payments" means, with respect to any Distribution Date,
collectively, the Class A Net Swap Payment, the Class B Net Swap Payment
and the Class C Net Swap Payment for such Distribution Date.
"Net Swap Receipts" means, collectively, the Class A Net Swap
Receipt, the Class B Net Swap Receipt and the Class C Net Swap Receipt for
such Distribution Date.
"Note Principal Balance" means, on any date of determination, an
amount equal to the sum of the Class A Note Principal Balance, the Class B
Note Principal Balance and the Class C Note Principal Balance.
"Noteholder Servicing Fee" is defined in Section 3.1.
"Percentage Allocation" is defined in subsection 4.1(b)(ii)(y).
"Portfolio Yield" means, for any Monthly Period, the annualized
percentage equivalent of a fraction, (a) the numerator of which is equal to
(i) the Available Finance Charge Collections (excluding any Excess Finance
Charge Collections), minus (ii) the Aggregate Investor Default Amount and
the Uncovered Dilution Amount for such Monthly Period and (b) the
denominator of which is the Collateral Amount plus amounts on deposit in
Principal Accumulation Account, each as of the close of business on the
last day of such Monthly Period.
"Principal Account" is defined in subsection 4.9(a).
11
"Principal Accumulation Account" is defined in subsection 4.9(a).
"Principal Accumulation Account Balance" means, for any date of
determination, the principal amount, if any, on deposit in the Principal
Accumulation Account on such date of determination.
"Principal Accumulation Investment Proceeds" means, with respect
to each Transfer Date, the investment earnings on funds in the Principal
Accumulation Account (net of investment expenses and losses) for the period
from and including the immediately preceding Transfer Date to but excluding
such Transfer Date.
"Principal Collections" means Collections of Principal Receivables.
"Principal Shortfall" is defined in Section 4.8.
"Qualified Maturity Agreement" means an agreement whereby an
Eligible Institution agrees to make a deposit into the Principal
Accumulation Account on the Class A/B Expected Principal Payment Date in an
amount equal to the initial Note Principal Balance (excluding the Class C
Note Initial Principal Balance) and a further deposit into the Principal
Accumulation Account on the Class C Expected Principal Payment Date in an
amount equal to the Class C Note Initial Principal Balance.
"Quarterly Excess Spread Percentage" means (a) with respect to the
December 2002 Distribution Date, the Excess Spread Percentage for such
Distribution Date, (b) with respect to the January 2003 Distribution Date,
the percentage equivalent of a fraction the numerator of which is the sum
of (i) the Excess Spread Percentage for the December 2002 Distribution Date
and (ii) the Excess Spread Percentage with respect to the January 2003
Distribution Date and the denominator of which is two, (c) with respect to
the February 2003 Distribution Date, the percentage equivalent of a
fraction the numerator of which is the sum of (i) the Excess Spread
Percentage for the December 2002 Distribution Date (ii) the Excess Spread
Percentage with respect to the January 2003 Distribution Date and (iii) the
Excess Spread Percentage with respect to the February 2003 Distribution
Date and the denominator of which is three and (d) with respect to the
March 2003 Distribution Date and each Distribution Date thereafter, the
percentage equivalent of a fraction the numerator of which is the sum of
the Excess Spread Percentages determined with respect to such Distribution
Date and the immediately preceding two Distribution Dates and the
denominator of which is three.
"Rating Agency" means each of Fitch, Xxxxx'x and Standard & Poor's.
"Reallocated Principal Collections" means, for any Transfer Date,
Investor Principal Collections applied in accordance with Section 4.6 in an
amount not to exceed the Monthly Principal Reallocation Amount for the
related Monthly Period.
"Reassignment Amount" means, for any Transfer Date, after giving
effect to any deposits and distributions otherwise to be made on the
related Distribution Date, the sum of (i) the Note Principal Balance on the
related Distribution Date, plus (ii) Monthly Interest for the related
Distribution Date and any Monthly Interest previously due but not
distributed to the Series 2002-A Noteholders, plus (iii) the amount of
Additional Interest, if any, for the related Distribution Date and any
Additional Interest previously due but not distributed to the Series 2002-A
Noteholders on a prior Distribution Date.
12
"Reference Banks" means four major banks in the London interbank
market selected by the Servicer.
"Required Cash Collateral Amount" means, for any Transfer Date,
the greatest of (a) an amount equal to 2.5% of the Collateral Amount (after
taking into account deposits to the Principal Accumulation Account on such
Transfer Date and payments to be made on the related Distribution Date),
(b) $15,000,000 and (c) for any Transfer Date occurring on or after the
commencement of the Early Amortization Period, an amount equal to 2.5% of
the Collateral Amount as of the close of business on the last day of the
Revolving Period; provided that the Required Cash Collateral Amount will
never exceed the Note Principal Balance, minus the Principal Accumulation
Account Balance (after taking into account deposits to the Principal
Accumulation Account on such Transfer Date and payments to be made on the
related Distribution Date); and provided, further, that the Transferor may
reduce the Required Cash Collateral Amount at any time if the Indenture
Trustee has been provided evidence that the Rating Agency Condition has
been satisfied.
"Required Draw Amount" is defined in subsection 4.11(c).
"Required Reserve Account Amount" means, for any Transfer Date on
or after the Reserve Account Funding Date, an amount equal to (a) 0.50% of
the sum of the Class A Note Principal Balance and the Class B Note
Principal Balance or (b) any other amount designated by the Transferor;
provided, however, that if such designation is of a lesser amount, the
Transferor shall (i) provide the Servicer and the Indenture Trustee with
evidence that the Rating Agency Condition shall have been satisfied and
(ii) deliver to the Indenture Trustee a certificate of an Authorized
Officer to the effect that, based on the facts known to such officer at
such time, in the reasonable belief of the Transferor, such designation
will not cause an Early Amortization Event or an event that, after the
giving of notice or the lapse of time, would cause an Early Amortization
Event to occur with respect to Series 2002-A.
"Required Retained Transferor Percentage" means, for purposes of
Series 2002-A, 4%.
"Required Spread Account Amount" means, for any Distribution Date,
(a) the product of (i) the Spread Account Percentage in effect on such date
and (ii) during (x) the Revolving Period, the Collateral Amount, and (y)
thereafter, the Collateral Amount as of the last day of the Revolving
Period; provided that after the occurrence of an Event of Default resulting
in acceleration of the Series 2002-A Notes, the Required Spread Account
Amount shall equal the Note Principal Balance (after taking into account
any payments to be made on such Distribution Date); and provided, further,
that, except as described in the preceding proviso following the
acceleration of the Series 2002-A Notes, in no event will the Required
Spread Account Amount exceed the Class C Note Principal Balance (after
taking into account any payments to be made on such Distribution Date).
"Reserve Account" is defined in subsection 4.10(a).
13
"Reserve Account Funding Date" means the Transfer Date designated
by the Servicer which occurs not later than the Transfer Date with respect
to the Monthly Period which commences 3 months prior to the commencement of
the Controlled Accumulation Period (which commencement shall be subject to
postponement pursuant to Section 4.15); (b) the first Transfer Date for
which the Quarterly Excess Spread Percentage is less than 2%, but in such
event the Reserve Account Funding Date shall not be required to occur
earlier than the Transfer Date with respect to the Monthly Period which
commences 12 months prior to the commencement of the Controlled
Accumulation Period; (c) the first Transfer Date for which the Quarterly
Excess Spread Percentage is less than 3%, but in such event the Reserve
Account Funding Date shall not be required to occur earlier than the
Transfer Date with respect to the Monthly Period which commences 6 months
prior to the commencement of the Controlled Accumulation Period; and (d)
the first Transfer Date for which the Quarterly Excess Spread Percentage is
less than 4%, but in such event the Reserve Account Funding Date shall not
be required to occur earlier than the Transfer Date with respect to the
Monthly Period which commences 4 months prior to the commencement of the
Controlled Accumulation Period; provided, however, that subject to
satisfaction of the Rating Agency Condition, the Reserve Account Funding
Date may be any date selected by the Servicer.
"Reserve Account Surplus" means, 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" means, with respect to each Transfer Date
relating to the Controlled Accumulation Period or the first Transfer Date
relating to the Early Amortization Period, the amount, if any, by which the
Principal Accumulation Investment Proceeds for such Distribution Date are
less than the Covered Amount determined as of such Transfer Date.
"Reset Date" means:
(a) each Addition Date and each "Addition Date" (as such term is
defined in the Pooling and Servicing Agreement), in each case
relating to Supplemental Accounts;
(b) each Removal Date and each "Removal Date" (as such term is
defined in the Pooling and Servicing Agreement) on which, if any
Series of Notes or any Series under (and as defined in) the Pooling
and Servicing Agreement has been paid in full, Principal Receivables
equal to the Initial Collateral Amount for that Series are removed
from the Receivables Trust;
(c) each date on which there is an increase in the outstanding
balance of any Variable Interest or "Variable Interest" (as such term
is defined in the Pooling and Servicing Agreement); and
(d) each date on which a new Series or Class of Notes is issued
and each date on which a new "Series" or "Class" (each as defined in
the Pooling and Servicing Agreement) of investor certificates is
issued by the Certificate Trust.
14
"Revolving Period" means the period beginning on the Closing Date
and ending at the close of business on the day immediately preceding the
earlier of the day the Controlled Accumulation Period commences or the day
the Early Amortization Period commences.
"Series 2002-A" means the Series of Notes the terms of which are
specified in this Indenture Supplement.
"Series 2002-A Early Amortization Event" is defined in Section 6.1.
"Series 2002-A Final Maturity Date" means the August 2011
Distribution Date.
"Series 2002-A Note" means a Class A Note, a Class B Note or a
Class C Note.
"Series 2002-A Noteholder" means a Class A Noteholder, a Class B
Noteholder or a Class C Noteholder.
"Series Allocation Percentage" means, with respect to any Monthly
Period, the percentage equivalent of a fraction, the numerator of which is
the Allocation Percentage for Finance Charge Collections for that Monthly
Period and the denominator of which is the sum of the Allocation
Percentages for Finance Charge Receivables for all outstanding Series on
such date of determination; provided that if one or more Reset Dates occur
in a Monthly Period, the Series Allocation Percentage for the portion of
the Monthly Period falling on and after each such Reset Date and prior to
any subsequent Reset Date will be determined using a denominator which is
equal to the sum of the numerators used in determining the Allocation
Percentage for Finance Charge Receivables for all outstanding Series as of
the close of business on the subject Reset Date.
"Series Servicing Fee Percentage" means 2% per annum.
"Series Termination Date" means the earliest to occur of (a) the
date on which the Note Principal Balance is paid in full, (b) the date on
which the Collateral Amount is reduced to zero and (c) the Series 2002-A
Final Maturity Date.
"Servicing Fee Required Amount" means, for any Distribution Date,
an amount equal to the excess of the amount described in subsection
4.4(a)(iii) over the (a) Available Finance Charge Collections applied to
pay such amount pursuant to subsection 4.4(a) and (b) any amount withdrawn
from the Cash Collateral Account and applied to pay such amount pursuant to
subsection 4.11(c).
"Specified Transferor Amount" means, at any time, the Minimum
Transferor Amount (including the Additional Minimum Transferor Amount, if
any) at that time.
"Spread Account" is defined in subsection 4.12(a).
"Spread Account Deficiency" means the excess, if any, of the
Required Spread Account Amount over the Available Spread Account Amount.
15
"Spread Account Percentage" means, for any Distribution Date, (i)
1.00% if the Quarterly Excess Spread Percentage on such Distribution Date
is greater than or equal to 6.0%, (ii) 1.25% if the Quarterly Excess Spread
Percentage on such Distribution Date is less than 6.0% and greater than or
equal to 5.5%, (iii) 1.5% if the Quarterly Excess Spread Percentage on such
Distribution Date is less than 5.5% and greater than or equal 5.0%, (iv)
2.25% if the Quarterly Excess Spread Percentage on such Distribution Date
is less than 5.0% and greater than or equal to 4.5%, (v) 2.75% if the
Quarterly Excess Spread Percentage on such Distribution Date is less than
4.5% and greater than or equal to 4.0%, (vi) 3.25% if the Quarterly Excess
Spread Percentage on such Distribution Date is less than 4.0% and greater
than or equal to 3.0%, (vii) 3.75% if the Quarterly Excess Spread
Percentage on such Distribution Date is less than 3.0% and greater than or
equal to 2.5%, and (viii) 4.25% if the Quarterly Excess Spread Percentage
on such Distribution Date is less than 2.5%; provided, that:
(a) if the Spread Account Percentage for a Distribution Date is
greater than 1.5%, then the Spread Account Percentage shall not
decrease to a lower percentage until the first subsequent
Distribution Date on which the arithmetic mean of the Quarterly
Excess Spread Percentages for such subsequent Distribution Date and
for the two Distribution Dates immediately prior to such subsequent
Distribution Date is greater than or equal to the lowest Quarterly
Excess Spread Percentage associated with a lower Spread Account
Percentage;
(b) if the Spread Account Percentage for a Distribution is equal
1.5%, then the Spread Account Percentage shall not decrease to a
lower percentage until the first subsequent Distribution Date on
which the arithmetic mean of the Quarterly Excess Spread Percentages
for such subsequent Distribution Date and for the Distribution Date
immediately prior to such subsequent Distribution Date is greater
than or equal to the lowest Quarterly Excess Spread Percentage
associated with a lower Spread Account Percentage;
(c) in no event will the Spread Account Percentage decrease by
more than one of the levels specified above between any two
Distribution Dates; /1 and
(d) if an Early Amortization Event is deemed to occur with
respect to Series 2002-A, the Spread Account Percentage shall be
13.5%.
"Target Amount" is defined in subsection 4.1(b)(i).
"Telerate Page 3750" means the display page currently so
designated on the Moneyline Telerate Service (or such page as may replace
that page in that service for the purpose of displaying comparable rates or
prices).
------------
/1 For example, if the Spread Account Percentage on one Distribution Date
were 1.5%, then the Spread Account Percentage for the next Distribution
Date could not be less than 1.25%, even if the Quarterly Excess Spread
Percentage on such next Distribution Date were greater than or equal to
6.0%
16
"Uncovered Dilution Amount" means an amount equal to the product
of (x) the Series Allocation Percentage for the related Monthly Period
(determined on a weighted average basis, if a Reset Date occurs during that
Monthly Period), times (y) the aggregate Dilutions occurring during that
Monthly Period as to which any deposit is required to be made to the Excess
Funding Account pursuant to Section 3.9(a) of the Transfer and Servicing
Agreement or Section 3.9(a) of the Pooling and Servicing Agreement but has
not been made; provided that, if the Transferor Amount is greater than zero
at the time the deposit referred to in clause (y) is required to be made,
the Uncovered Dilution Amount for such amount to be deposited shall be
deemed to be zero.
(b) Each capitalized term defined herein shall relate to the Series
2002-A Notes and no other Series of Notes issued by the Trust, unless the
context otherwise requires. All capitalized terms used herein and not
otherwise defined herein have the meanings ascribed to them in Annex A to
the Master Indenture.
(c) The interpretive rules specified in Section 1.2 of the Master
Indenture also apply to this Indenture Supplement. If any term or provision
contained herein shall conflict with or be inconsistent with any term or
provision contained in the Master Indenture, the terms and provisions of
this Indenture Supplement shall be controlling.
ARTICLE III.
Noteholder Servicing Fee
Section 3.1 Servicing Compensation. The share of the Servicing Fee
allocable to Series 2002-A for any Transfer Date (the "Noteholder Servicing
Fee") shall be equal to one-twelfth of the product of (a) the Series
Servicing Fee Percentage and (b) the Collateral Amount as of the last day
of the Monthly Period preceding such Transfer Date; provided, however, that
with respect to the first Transfer Date, the Noteholder Servicing Fee shall
be equal to $800,000. The remainder of the Servicing Fee shall be paid by
the holders of the Transferor Interest or the noteholders of other Series
(as provided in the related Indenture Supplements) and in no event shall
the Trust, the Indenture Trustee or the Series 2002-A Noteholders be liable
for the share of the Servicing Fee to be paid by the holders of the
Transferor Interest or the noteholders of any other Series.
Section 3.2 Representations and Warranties. The parties hereto agree
that the representations, warranties and covenants set forth in Schedule I
shall be a part of this Indenture Supplement for all purposes.
ARTICLE IV.
Rights of Series 2002-A Noteholders and
Allocation and Application of Collections
Section 4.1 Collections and Allocations
(a) Allocations. Finance Charge Collections, Principal Collections and
Defaulted Receivables allocated to Series 2002-A pursuant to Article VIII
of the Indenture shall be allocated and distributed as set forth in this
Article.
17
(b) Allocations to the Series 2002-A Noteholders. The Servicer shall
on the Date of Processing, allocate to the Series 2002-A Noteholders the
following amounts as set forth below:
(i) Allocations of Finance Charge Collections. The Servicer shall
allocate to the Series 2002-A Noteholders an amount equal to the
product of (A) the Allocation Percentage and (B) the aggregate
Finance Charge Collections processed on such Date of Processing and
shall deposit such amount into the Finance Charge Account, provided
that, with respect to each Monthly Period falling in the Revolving
Period (and with respect to that portion of each Monthly Period in
the Controlled Accumulation Period falling on or after the day on
which Collections of Principal Receivables equal to the related
Controlled Deposit Amount have been allocated pursuant to Section
4.1(b)(ii) and deposited pursuant to Section 4.1(c)), so long as the
Available Cash Collateral Amount is not less than the Required Cash
Collateral Amount on such Date of Processing, Collections of Finance
Charge Receivables shall be transferred into the Finance Charge
Account only until such time as the aggregate amount so deposited
equals the sum (the "Target Amount") of (A) the Net Interest
Obligation for the related Distribution Date, (B) if WFN is not the
Servicer, the Noteholder Servicing Fee (and if WFN is the Servicer,
then amounts that otherwise would have been transferred into the
Finance Charge Account pursuant to this clause (B) shall instead by
returned to WFN as payment of the Noteholder Servicing Fee), (C) any
amount required to be deposited in the Reserve Account, the Spread
Account and the Cash Collateral Account on the related Transfer Date
and (D) if the Excess Spread Percentage for the preceding Monthly
Period was less than 3%, the sum of Default Amounts and any Uncovered
Dilution Amounts for the portion of the current Monthly Period that
has elapsed through such Date of Processing; provided further, that,
notwithstanding the preceding proviso, if on any Business Day the
Servicer determines that the Target Amount for a Monthly Period
exceeds the Target Amount for that Monthly Period as previously
calculated by Servicer, then (x) Servicer shall (on the same Business
Day) inform Transferor of such determination, and (y) within two
Business Days of receiving such notice Transferor shall deposit into
the Finance Charge Account funds in an amount equal to the amount of
Collections of Finance Charge Receivables allocated to the
Noteholders for that Monthly Period but not deposited into the
Finance Charge Account due to the operation of the preceding proviso
(but not in excess of the amount required so that the aggregate
amount deposited for the subject Monthly Period equals the Target
Amount); and provided, further, if on any Transfer Date the
Transferor Amount is less than the Specified Transferor Amount after
giving effect to all transfers and deposits on that Transfer Date,
Transferor shall, on that Transfer Date, deposit into the Principal
Account funds in an amount equal to the amounts of Available Finance
Charge Collections that are required to be treated as Available
Principal Collections pursuant to Section 4.4(a)(v) and (vi) but are
not available from funds in the Finance Charge Account as a result of
the operation of second preceding proviso.
With respect to any Monthly Period when deposits of Collections of
Finance Charge Receivables into the Finance Charge Account are limited to
deposits up to the Target Amount in accordance with clause (i) above,
18
notwithstanding such limitation: (1) "Reallocated Principal Collections"
for the related Transfer Date shall be calculated as if the full amount of
Finance Charge Collections allocated to the Noteholders during that Monthly
Period had been deposited in the Finance Charge Account and applied on such
Transfer Date in accordance with Section 4.4(a); and (2) Collections of
Finance Charge Receivables released to Transferor pursuant to such Section
4.1(b)(i) shall be deemed, for purposes of all calculations under this
Indenture Supplement, to have been retained in the Finance Charge Account
and applied to the items specified in Sections 4.4(a) to which such amounts
would have been applied (and in the priority in which they would have been
applied) had such amounts been available in the Finance Charge Account on
such Transfer Date. To avoid doubt, the calculations referred to in the
preceding clause (2) include the calculations required by clause (d) of the
definition of Collateral Amount and by the definition of Portfolio Yield.
(ii) Allocations of Principal Collections. The Servicer shall
allocate to the Series 2002-A Noteholders the following amounts as
set forth below:
(x) Allocations During the Revolving Period.
(1) During the Revolving Period an amount equal
to the product of the Allocation Percentage and the
aggregate amount of Principal Collections processed on
such Date of Processing, shall be allocated to the Series
2002-A Noteholders and first, if any other Principal
Sharing Series is outstanding and in its accumulation
period or amortization period, retained in the Principal
Account for application, to the extent necessary, as
Shared Principal Collections to other Principal Sharing
Series on the related Distribution Date, second deposited
in the Excess Funding Account to the extent necessary so
that the Transferor Amount is not less than the Specified
Transferor Amount and third paid to the holders of the
Transferor Interest.
(2) With respect to each Monthly Period falling
in the Revolving Period, to the extent that Collections
of Principal Receivables allocated to the Series 2002-A
Noteholders pursuant to this subsection 4.1(b)(ii) are
paid to Transferor, Transferor shall make an amount equal
to the Reallocated Principal Collections for the related
Transfer Date available on that Transfer Date for
application in accordance with Section 4.6.
(y) Allocations During the Controlled
Accumulation Period. During the Controlled Accumulation
Period an amount equal to the product of the Allocation
Percentage and the aggregate amount of Principal
Collections processed on such Date of Processing (the
product for any such date is hereinafter referred to as a
"Percentage Allocation") shall be allocated to the Series
2002-A Noteholders and transferred to the Principal
Account until applied as provided herein; provided,
however, that if the sum of such Percentage Allocation
and all preceding Percentage Allocations with respect to
the same Monthly Period exceeds the Controlled Deposit
Amount during the Controlled Accumulation Period for the
related Distribution Date, then such excess shall not be
treated as a Percentage Allocation and shall be first, if
any other Principal Sharing Series is outstanding and in
its accumulation period or amortization period, retained
in the Principal Account for application, to the extent
19
necessary, as Shared Principal Collections to other
Principal Sharing Series on the related Distribution
Date, second deposited in the Excess Funding Account to
the extent necessary so that the Transferor Amount is not
less than the Specified Transferor Amount and third paid
to the holders of the Transferor Interest.
(z) Allocations During the Early Amortization
Period. During the Early Amortization Period, an amount
equal to the product of the Allocation Percentage and the
aggregate amount of Principal Collections processed on
such Date of Processing shall be allocated to the Series
2002-A Noteholders and transferred to the Principal
Account until applied as provided herein; provided,
however, that after the date on which an amount of such
Principal Collections equal to the Note Principal Balance
has been deposited into the Principal Account such amount
shall be first, if any other Principal Sharing Series is
outstanding and in its accumulation period or
amortization period, retained in the Principal Account
for application, to the extent necessary, as Shared
Principal Collections to other Principal Sharing Series
on the related Distribution Date, second deposited in the
Excess Funding Account to the extent necessary so that
the Transferor Amount is not less than the Specified
Transferor Amount and third paid to the holders of the
Transferor Interest.
(c) During any period when Servicer is permitted by Section 4.3 of the
Pooling and Servicing Agreement or Section 8.4 of the Indenture to make a
single monthly deposit to the Collection Account, amounts allocated to the
Noteholders pursuant to Sections 4.1(a) and (b) with respect to any Monthly
Period need not be deposited into the Collection Account or any Series
Account prior to the related Transfer Date, and, when so deposited, (x) may
be deposited net of any amounts required to be distributed to Transferor
and, if WFN is Servicer, Servicer, and (y) shall be deposited into the
Finance Charge Account (in the case of Collections of Finance Charge
Receivables) and the Principal Account (in the case of Collections of
Principal Receivables (not including any Shared Principal Collections
allocated to Series 2002-A pursuant to Section 4.15 of the Pooling and
Servicing Agreement or Section 8.5 of the Indenture)).
(d) On any date, Servicer may withdraw from the Collection Account or
any Series Account any amounts inadvertently deposited in such account that
should have not been so deposited.
Section 4.2 Determination of Monthly Interest.
(a) The amount of monthly interest ("Class A Monthly Interest")
distributable from the Distribution Account with respect to the Class A
Notes on any Distribution Date shall be an amount equal to the product of
(i) (A) a fraction, the numerator of which is the actual number of days in
the related Distribution Period and the denominator of which is 360, times
(B) the Class A Note Interest Rate in effect with respect to the related
Distribution Period and (ii) the Class A Note Principal Balance as of the
close of business on the last day of the preceding Monthly Period (or, with
respect to the initial Distribution Date, the Class A Note Initial
Principal Balance).
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class A Deficiency
Amount"), of (x) the aggregate amount accrued pursuant to this Section
4.2(a) as of the prior Distribution Date over (y) the amount actually
20
transferred from the Distribution Account for payment of such amount. If
the Class A Deficiency Amount for any Distribution Date is greater than
zero, on each subsequent Distribution Date until such Class A Deficiency
Amount is fully paid, an additional amount ("Class A Additional Interest")
equal to the product of (i) (A) a fraction, the numerator of which is the
actual number of days in the related Distribution Period and the
denominator of which is 360, times (B) the Class A Note Interest Rate in
effect with respect to the related Distribution Period plus 2% per annum
and (ii) such Class A Deficiency Amount (or the portion thereof which has
not been paid to the Class A Noteholders) shall be payable as provided
herein with respect to the Class A Notes. Notwithstanding anything to the
contrary herein, Class A Additional Interest shall be payable or
distributed to the Class A Noteholders only to the extent permitted by
applicable law.
(b) The amount of monthly interest ("Class B Monthly Interest")
distributable from the Distribution Account with respect to the Class B
Notes on any Distribution Date shall be an amount equal to the product of
(i) (A) a fraction, the numerator of which is the actual number of days in
the related Distribution Period and the denominator of which is 360, times
(B) the Class B Note Interest Rate in effect with respect to the related
Distribution Period and (ii) the Class B Note Principal Balance as of the
close of business on the last day of the preceding Monthly Period (or, with
respect to the initial Distribution Date, the Class B Note Initial
Principal Balance).
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class B Deficiency
Amount"), of (x) the aggregate amount accrued pursuant to this Section
4.2(b) as of the prior Distribution Date over (y) the amount of funds
actually transferred from the Distribution Account for payment of such
amount. If the Class B Deficiency Amount for any Distribution Date is
greater than zero, on each subsequent Distribution Date until such Class B
Deficiency Amount is fully paid, an additional amount ("Class B Additional
Interest") equal to the product of (i) (A) a fraction, the numerator of
which is the actual number of days in the related Distribution Period and
the denominator of which is 360, times (B) the Class B Note Interest Rate
in effect with respect to the related Distribution Period plus 2% per annum
and (ii) such Class B Deficiency Amount (or the portion thereof which has
not been paid to the Class B Noteholders) shall be payable as provided
herein with respect to the Class B Notes. Notwithstanding anything to the
contrary herein, Class B Additional Interest shall be payable or
distributed to the Class B Noteholders only to the extent permitted by
applicable law.
(c) The amount of monthly interest ("Class C Monthly Interest")
distributable from the Distribution Account with respect to the Class C
Notes on any Distribution Date shall be an amount equal to the product of
(i) (A) a fraction, the numerator of which is the actual number of days in
the related Distribution Period and the denominator of which is 360, times
(B) the Class C Note Interest Rate in effect with respect to the related
Distribution Period and (ii) the Class C Note Principal Balance as of the
close of business on the last day of the preceding Monthly Period (or, with
respect to the initial Distribution Date, the Class C Note Initial
Principal Balance).
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On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class C Deficiency
Amount"), of (x) the aggregate amount accrued pursuant to this Section
4.2(c) as of the prior Distribution Date over (y) the amount of funds
actually transferred from the Distribution Account for payment of such
amount. If the Class C Deficiency Amount for any Distribution Date is
greater than zero, on each subsequent Distribution Date until such Class C
Deficiency Amount is fully paid, an additional amount ("Class C Additional
Interest") equal to the product of (i) (A) a fraction, the numerator of
which is the actual number of days in the related Distribution Period and
the denominator of which is 360, times (B) the Class C Note Interest Rate
in effect with respect to the related Distribution Period plus 2% per annum
and (ii) such Class C Deficiency Amount (or the portion thereof which has
not been paid to the Class C Noteholders) shall be payable as provided
herein with respect to the Class C Notes. Notwithstanding anything to the
contrary herein, Class C Additional Interest shall be payable or
distributed to the Class C Noteholders only to the extent permitted by
applicable law.
Section 4.3 Determination of Monthly Principal. The amount of monthly
principal to be transferred from the Principal Account with respect to the
Notes on each Transfer Date (the "Monthly Principal"), beginning with the
Transfer Date in the month following the month in which the Controlled
Accumulation Period or, if earlier, the Early Amortization Period, begins,
shall be equal to the least of (i) the Available Principal Collections on
deposit in the Principal Account with respect to such Transfer Date, (ii)
for each Transfer Date with respect to the Controlled Accumulation Period,
the Controlled Deposit Amount for such Transfer Date, (iii) the Collateral
Amount (after taking into account any adjustments to be made on such
Distribution Date pursuant to Sections 4.5 and 4.6) prior to any deposit
into the Principal Accumulation Account on such Transfer Date, and (iv) the
Note Principal Balance, minus any amount already on deposit in the
Principal Accumulation Account on such Transfer Date.
Section 4.4 Application of Available Finance Charge Collections and
Available Principal Collections. On or before each Transfer Date, the
Servicer shall instruct the Indenture Trustee in writing (which writing
shall be substantially in the form of Exhibit B) to withdraw and the
Indenture Trustee, acting in accordance with such instructions, shall
withdraw on such Transfer Date or related Distribution Date, as applicable,
to the extent of available funds, the amount required to be withdrawn from
the Finance Charge Account, the Principal Account, the Principal
Accumulation Account and the Distribution Account as follows:
(a) On each Transfer Date, an amount equal to the Available Finance
Charge Collections with respect to the related Distribution Date will be
distributed or deposited in the following priority:
(i) on a pari passu basis (A) an amount equal to Class A Monthly
Interest for such Distribution Date, plus any Class A Deficiency
Amount, plus the amount of any Class A Additional Interest for such
Distribution Date, plus the amount of any Class A Additional Interest
previously due but not distributed to Class A Noteholders on a prior
Distribution Date shall be deposited by the Servicer or Indenture
Trustee into the Distribution Account, and (B) any Class A Net Swap
Payment for such Distribution Date shall be paid to the Class A Swap
Counterparty;
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(ii) on a pari passu basis (A) an amount equal to Class B Monthly
Interest for such Distribution Date, plus any Class B Deficiency
Amount, plus the amount of any Class B Additional Interest for such
Distribution Date, plus the amount of any Class B Additional Interest
previously due but not distributed to Class B Noteholders on a prior
Distribution Date shall be deposited by the Servicer or Indenture
Trustee into the Distribution Account, and (B) any Class B Net Swap
Payment for such Distribution Date shall be paid to the Class B Swap
Counterparty;
(iii) an amount equal to the Noteholder Servicing Fee for such
Transfer Date, plus the amount of any Noteholder Servicing Fee
previously due but not distributed to the Servicer on a prior
Transfer Date, shall be distributed to the Servicer;
(iv) on a pari passu basis (A) an amount equal to Class C Monthly
Interest for such Distribution Date, plus any Class C Deficiency
Amount, plus the amount of any Class C Additional Interest for such
Distribution Date, plus the amount of any Class C Additional Interest
previously due but not distributed to the Class C Noteholders on a
prior Distribution Date shall be deposited by the Servicer or
Indenture Trustee into the Distribution Account, and (B) any Class C
Net Swap Payment for such Distribution Date shall be paid to the
Class C Counterparty;
(v) an amount equal to the Aggregate Investor Default Amount and
any Investor Uncovered Dilution Amount for such Distribution Date
shall be treated as a portion of Available Principal Collections for
such Distribution Date and, during the Controlled Accumulation Period
or the Early Amortization Period, deposited into the Principal
Account on the related Transfer Date;
(vi) an amount equal to the sum of the aggregate amount of
Investor Charge-Offs and the amount of Reallocated Principal
Collections which have not been previously reimbursed pursuant to
this subsection (vi) shall be treated as a portion of Available
Principal Collections for such Distribution Date;
(vii) an amount equal to the excess, if any, of the Required Cash
Collateral Amount over the Available Cash Collateral Amount shall be
deposited into the Cash Collateral Account;
(viii) on each Transfer Date from and after the Reserve Account
Funding Date, but prior to the date on which the Reserve Account
terminates as described in subsection 4.10(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;
(ix) an amount equal to the amounts required to be deposited in
the Spread Account pursuant to Section 4.12(f) shall be deposited
into the Spread Account as provided in Section 4.12(f);
(x) on a pari passu basis (A) an amount equal to any partial or
early termination payments or other additional payments owed to the
Class A Counterparty under the Class A Swap shall be paid to the
Class A Counterparty, (B) an amount equal to any partial or early
termination payments or other additional payments owed to the Class B
Counterparty under the Class B Swap shall be paid to the Class B
Counterparty and (C) an amount equal to any partial or early
termination payments or other additional payments owed to the Class C
Counterparty under the Class C Swap shall be paid to the Class C
Counterparty;
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(xi) any amounts designated in writing by the Transferor to the
Servicer and Indenture Trustee as amounts to be paid from Available
Finance Charge Collections shall be paid in accordance with the
Transferor's instructions; and
(xii) the balance, if any, will constitute a portion of Excess
Finance Charge Collections for such Distribution Date.
(b) On each Transfer Date with respect to the Revolving Period, an
amount equal to the Available Principal Collections for the related Monthly
Period shall be treated as Shared Principal Collections and applied in
accordance with Section 8.5 of the Indenture.
(c) On each Transfer Date with respect to the Controlled Accumulation
Period or the Early Amortization Period, an amount equal to the Available
Principal Collections for the related Monthly Period shall be distributed
or deposited in the following order of priority:
(i) during the Controlled Accumulation Period, an amount equal to
the Monthly Principal for such Transfer Date shall be deposited into
the Principal Accumulation Account;
(ii) during the Early Amortization Period, an amount equal to the
Monthly Principal for such Transfer Date shall be deposited into the
Distribution Account on such Transfer Date and on each subsequent
Transfer Date for payment to the Class A Noteholders on the related
Distribution Date until the Class A Note Principal Balance has been
paid in full;
(iii) during the Early Amortization Period, after giving effect
to the distribution referred to in clause (ii) above, an amount equal
to the Monthly Principal remaining, if any, shall be deposited into
the Distribution Account on such Transfer Date and on each subsequent
Transfer Date for payment to the Class B Noteholders on the related
Distribution Date until the Class B Note Principal Balance has been
paid in full;
(iv) during the Early Amortization Period, after giving effect to
the distributions referred to in clauses (ii) and (iii) above, an
amount equal to the Monthly Principal remaining, if any, shall be
deposited into the Distribution Account on such Transfer Date and on
each subsequent Transfer Date for payment to the Class C Noteholders
on the related Distribution Date until the Class C Note Principal
Balance has been paid in full; and
(v) in the case of each of the Controlled Accumulation Period and
the Early Amortization Period, the balance of such Available
Principal Collections remaining after application in accordance with
clauses (i) through (iv) above shall be treated as Shared Principal
Collections and applied in accordance with Section 8.5 of the
Indenture.
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(d) On each Distribution Date, the Indenture Trustee shall pay in
accordance with Section 5.2 to the Class A Noteholders from the
Distribution Account, the amount deposited into the Distribution Account
pursuant to Section 4.4(a)(i) on the preceding Transfer Date, to the Class
B Noteholders from the Distribution Account, the amount deposited into the
Distribution Account pursuant to Section 4.4(a)(ii) and to the Class C
Noteholders from the Distribution Account, the amount deposited into the
Distribution Account pursuant to Section 4.4(a)(iv).
(e) On the earlier to occur of (i) the first Transfer Date with
respect to the Early Amortization Period and (ii) the Transfer Date
immediately preceding the Class A/B Expected Principal Payment Date, the
Indenture Trustee, acting in accordance with instructions from the
Servicer, shall withdraw from the Principal Accumulation Account and
deposit into the Distribution Account amounts necessary to pay first, to
the Class A Noteholders, until paid in full, second, to the Class B
Noteholders, until paid in full, and, if the Early Amortization Period has
commenced, any remainder to the Class C Noteholders, the amounts deposited
into the Principal Accumulation Account pursuant to subsection 4.4(c)(i).
On the Class C Expected Principal Payment Date, if the Early Amortization
Period has not commenced, the Indenture Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from the Principal
Accumulation Account and deposit into the Distribution Account for payment
to the Class C Noteholders the amounts deposited into the Principal
Accumulation Account pursuant to subsection 4.4(c)(i) on the related
Transfer Date. The Indenture Trustee, acting in accordance with the
instructions of the Servicer, shall in accordance with Section 5.2 pay from
the Distribution Account to the Class A Noteholders, the Class B
Noteholders and the Class C Noteholders, as applicable, the amounts
deposited for the account of such Noteholders into the Distribution Account
pursuant to this subsection 4.4(e).
Section 4.5 Investor Charge-Offs. On each Determination Date, the Servicer
shall calculate the Aggregate Investor Default Amount and any Investor
Uncovered Dilution Amount for the related Distribution Date. If, on any
Distribution Date, the sum of the Aggregate Investor Default Amount and any
Investor Uncovered Dilution Amount for such Distribution Date exceeds the
sum of the amount of Available Finance Charge Collections and the amount
withdrawn from the Cash Collateral Account allocated with respect thereto
pursuant to subsection 4.4(a)(v) and 4.11(c), respectively, with respect to
such Distribution Date, the Collateral Amount will be reduced (but not
below zero) by the amount of such excess (such reduction, an "Investor
Charge-Off").
Section 4.6 Reallocated Principal Collections. On each Transfer Date, the
Servicer shall apply, or shall instruct the Indenture Trustee in writing to
apply, Reallocated Principal Collections with respect to that Transfer
Date, to fund any deficiency pursuant to and in the priority set forth in
subsections 4.4(a)(i), (ii), (iii) and (iv)(B), after giving effect to any
withdrawal from the Cash Collateral Account or the Spread Account to cover
such payments. On each Transfer Date, the Collateral Amount shall be
reduced by the amount of Reallocated Principal Collections for such
Transfer Date.
Section 4.7 Excess Finance Charge Collections. Series 2002-A shall be an
Excess Allocation Series with respect to Group One only. For this purpose,
each outstanding series of certificates issued by World Financial Network
Master Trust (other than series represented by the Collateral Certificate)
shall be deemed to be a Series in Group One. Subject to Section 8.6 of the
Indenture, Excess Finance Charge Collections with respect to the Excess
Allocation Series in Group One for any Transfer Date will be allocated to
Series 2002-A in an amount equal to the product of (x) the aggregate amount
of Excess Finance Charge Collections with respect to all the Excess
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Allocation Series in Group One for such Distribution Date and (y) a
fraction, the numerator of which is the Finance Charge Shortfall for Series
2002-A for such Distribution Date and the denominator of which is the
aggregate amount of Finance Charge Shortfalls for all the Excess Allocation
Series in Group One for such Distribution Date. The "Finance Charge
Shortfall" for Series 2002-A for any Distribution Date will be equal to the
excess, if any, of (a) the full amount required to be paid, without
duplication, pursuant to subsections 4.4(a)(i) through (xi) on such
Distribution Date over (b) the Available Finance Charge Collections with
respect to such Distribution Date (excluding any portion thereof
attributable to Excess Finance Charge Collections).
Section 4.8 Shared Principal Collections. Subject to Section 4.4 of the
Pooling and Servicing Agreement and Section 8.5 of the Indenture, Shared
Principal Collections allocable to Series 2002-A on any Transfer Date will
be equal to the product of (x) the aggregate amount of Shared Principal
Collections with respect to all Principal Sharing Series for such Transfer
Date and (y) a fraction, the numerator of which is the Principal Shortfall
for Series 2002-A for such Transfer Date and the denominator of which is
the aggregate amount of Principal Shortfalls for all the Series which are
Principal Sharing Series for such Transfer Date. For this purpose, each
outstanding series of certificates issued by World Financial Network Master
Trust (other than series represented by the Collateral Certificate) shall
be deemed to be a Principal Sharing Series. The "Principal Shortfall" for
Series 2002-A will be equal to (a) for any Transfer Date with respect to
the Revolving Period or the Early Amortization Period, zero, and (b) for
any Transfer Date with respect to the Controlled Accumulation Period, the
excess, if any, of the Controlled Deposit Amount with respect to such
Transfer Date over the amount of Available Principal Collections for such
Transfer Date (excluding any portion thereof attributable to Shared
Principal Collections).
Section 4.9 Certain Series Accounts.
(a) The Indenture Trustee shall establish and maintain with an
Eligible Institution, which may be the Indenture Trustee in the name of the
Trust, on behalf of the Trust, for the benefit of the Noteholders, four
segregated trust accounts with such Eligible Institution (the "Finance
Charge Account", the "Principal Account", the "Principal Accumulation
Account" and the "Distribution Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Series 2002-A Noteholders. The Indenture Trustee shall possess all right,
title and interest in all funds on deposit from time to time in the Finance
Charge Account, the Principal Account, the Principal Accumulation Account
and the Distribution Account and in all proceeds thereof. The Finance
Charge Account, the Principal Account, the Principal Accumulation Account
and the Distribution Account shall be under the sole dominion and control
of the Indenture Trustee for the benefit of the Series 2002-A Noteholders.
If at any time the institution holding the Finance Charge Account, the
26
Principal Account, the Principal Accumulation Account and the Distribution
Account ceases to be an Eligible Institution, the Transferor shall notify
the Indenture Trustee in writing, and the Indenture Trustee upon being
notified (or the Servicer on its behalf) shall, within ten (10) Business
Days, establish a new Finance Charge Account, a new Principal Account, a
new Principal Accumulation Account and a new Distribution Account meeting
the conditions specified above with an Eligible Institution, and shall
transfer any cash or any investments to such new Finance Charge Account,
new Principal Account, new Principal Accumulation Account and new
Distribution Account. The Indenture Trustee, at the written direction of
the Servicer, shall (i) make withdrawals from the Finance Charge Account,
the Principal Account, the Principal Accumulation Account and the
Distribution Account from time to time, in the amounts and for the purposes
set forth in this Indenture Supplement, and (ii) on each Transfer Date
(from and after the commencement of the Controlled Accumulation Period)
prior to the termination of the Principal Accumulation Account, make
deposits into the Principal Accumulation Account in the amounts specified
in, and otherwise in accordance with, subsection 4.4(c)(i). Indenture
Trustee at all times shall maintain accurate records reflecting each
transaction in the Finance Charge Account, the Principal Account, the
Principal Accumulation Account and the Distribution Account.
(b) Funds on deposit in the Finance Charge Account, the Principal
Account, the Principal Accumulation Account and the Distribution Account,
from time to time shall be invested and reinvested at the direction of the
Servicer by the Indenture Trustee in Eligible Investments that will mature
so that such funds will be available for withdrawal on or prior to the
following Transfer Date.
The Indenture Trustee shall hold such of the Eligible Investments
as consists of instruments, deposit accounts, negotiable documents, money,
goods, letters of credit, and advices of credit in the State of New York
and/or Illinois. The Indenture Trustee shall hold such of the Eligible
Investments as constitutes investment property through a securities
intermediary, which securities intermediary shall agree with the Indenture
Trustee that (a) such investment property shall at all times be credited to
a securities account of the Indenture Trustee, (b) such securities
intermediary shall treat the Indenture Trustee as entitled to exercise the
rights that comprise each financial asset credited to such securities
account, (c) all property credited to such securities account shall be
treated as a financial asset, (d) such securities intermediary shall comply
with entitlement orders originated by the Indenture Trustee without the
further consent of any other person or entity, (e) such securities
intermediary will not agree with any person or entity other than the
Indenture Trustee to comply with entitlement orders originated by such
other person or entity, (f) such securities accounts and the property
credited thereto shall not be subject to any lien, security interest or
right of set-off in favor of such securities intermediary or anyone
claiming through it (other than the Indenture Trustee), and (g) such
agreement shall be governed by the laws of the State of New York. Terms
used in the preceding sentence that are defined in the New York UCC and not
otherwise defined herein shall have the meaning set forth in the New York
UCC.
On each Transfer Date with respect to the Controlled Accumulation
Period and on the first Transfer Date with respect to the Early
Amortization Period, the Indenture Trustee, acting at the Servicer's
direction given on or before such Transfer Date, shall transfer from the
Principal Accumulation Account to the Finance Charge Account the Principal
Accumulation Investment Proceeds on deposit in the Principal Accumulation
Account for application as Available Finance Charge Collections in
accordance with Section 4.4.
27
Principal Accumulation Investment Proceeds (including reinvested
interest) shall not be considered part of the amounts on deposit in the
Principal Accumulation Account for purposes of this Indenture Supplement.
Section 4.10 Reserve Account.
(a) The Indenture Trustee shall establish and maintain with an
Eligible Institution, which may be the Indenture Trustee in the name of the
Trust, on behalf of the Trust, for the benefit of the Series 2002-A
Noteholders, a segregated trust account (the "Reserve Account"), bearing a
designation clearly indicating that the funds deposited therein are held
for the benefit of the Series 2002-A Noteholders. The Indenture Trustee
shall possess all right, title and interest in all funds on deposit from
time to time in the Reserve Account and in all proceeds thereof. The
Reserve Account shall be under the sole dominion and control of the
Indenture Trustee for the benefit of the Series 2002-A Noteholders. If at
any time the institution holding the Reserve Account ceases to be an
Eligible Institution, the Transferor shall notify the Indenture Trustee,
and the Indenture Trustee upon being notified (or the Servicer on its
behalf) shall, within ten (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 Indenture Trustee, at the direction of the Servicer,
shall (i) make withdrawals from the Reserve Account from time to time in an
amount up to the Available Reserve Account Amount at such time, for the
purposes set forth in this Indenture Supplement, and (ii) on each Transfer
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
4.4(a)(viii).
(b) Funds on deposit in the Reserve Account shall be invested at the
written direction of the Servicer by the Indenture Trustee in Eligible
Investments. Funds on deposit in the Reserve Account on any Transfer Date,
after giving effect to any withdrawals from the Reserve Account on such
Transfer Date, shall be invested in such investments that will mature so
that such funds will be available for withdrawal on or prior to the
following Transfer Date.
The Indenture Trustee shall hold such of the Eligible Investments
as consists of instruments, deposit accounts, negotiable documents, money,
goods, letters of credit, and advices of credit in the State of New York.
The Indenture Trustee shall hold such of the Eligible Investments as
constitutes investment property through a securities intermediary, which
securities intermediary shall agree with the Indenture Trustee that (a)
such investment property shall at all times be credited to a securities
account of the Indenture Trustee, (b) such securities intermediary shall
treat the Indenture Trustee as entitled to exercise the rights that
comprise each financial asset credited to such securities account, (c) all
property credited to such securities account shall be treated as a
financial asset, (d) such securities intermediary shall comply with
entitlement orders originated by the Indenture Trustee without the further
consent of any other person or entity, (e) such securities intermediary
will not agree with any person or entity other than the Indenture Trustee
to comply with entitlement orders originated by such other person or
entity, (f) such securities accounts and the property credited thereto
shall not be subject to any lien, security interest, or right of set-off in
favor of such securities intermediary or anyone claiming through it (other
than the Indenture Trustee), and (g) such agreement shall be governed by
the laws of the State of New York. Terms used in the preceding sentence
that are defined in the New York UCC and not otherwise defined herein shall
have the meaning set forth in the New York UCC.
28
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 Finance Charge Account and included in Available Finance
Charge Collections for such Transfer Date. For purposes of determining the
availability of funds or the balance in the Reserve Account for any reason
under this Indenture Supplement, except as otherwise provided in the
preceding sentence, investment earnings on such funds shall be deemed not
to be available or on deposit.
(c) On or before each Transfer Date with respect to the Controlled
Accumulation Period and on or before the first Transfer Date with respect
to the Early Amortization Period, the Servicer shall calculate the Reserve
Draw Amount; provided, however, that such amount will be reduced to the
extent that funds otherwise would be available for deposit in the Reserve
Account under Section 4.4(a)(viii) with respect to such Transfer Date.
(d) If 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
Indenture Trustee (acting in accordance with the written instructions of
the Servicer) and deposited into the Finance Charge Account for application
as Available Finance Charge Collections for such Transfer Date.
(e) If the Reserve Account Surplus on any Transfer Date, after giving
effect to all deposits to and withdrawals from the Reserve Account with
respect to such Transfer Date, is greater than zero, the Indenture Trustee,
acting in accordance with the written instructions of the Servicer, shall
withdraw from the Reserve Account an amount equal to such Reserve Account
Surplus and (i) deposit such amounts in the Spread Account, to the extent
that funds on deposit in the Spread Account are less than the Required
Spread Account Amount, and (ii) distribute any such amounts remaining after
application pursuant to subsection 4.10(e)(i) to the holders of the
Transferor Interest.
(f) Upon the earliest to occur of (i) the termination of the Trust
pursuant to Article VIII of the Trust Agreement, (ii) the first Transfer
Date relating to the Early Amortization Period and (iii) the Transfer Date
immediately preceding the Class A/B Expected Principal Payment Date, the
Indenture Trustee, acting in accordance with the instructions of the
Servicer, after the prior payment of all amounts owing to the Series 2002-A
Noteholders that are payable from the Reserve Account as provided herein,
shall withdraw from the Reserve Account all amounts, if any, on deposit in
the Reserve Account and (i) deposit such amounts in the Spread Account, to
the extent that funds on deposit in the Spread Account are less than the
Required Spread Account Amount, and (ii) distribute any such amounts
remaining after application pursuant to subsection 4.10(f)(i) to the
holders of the Transferor Interest. The Reserve Account shall thereafter be
deemed to have terminated for purposes of this Indenture Supplement. Funds
on deposit in the Reserve Account at any time that the Controlled
Accumulation Period is suspended pursuant to Section 4.15 shall remain on
deposit until applied in accordance with subsection 4.10(d), (e) or (f).
29
Section 4.11 Cash Collateral Account.
(a) The Indenture Trustee shall establish and maintain with an
Eligible Institution, which may be the Indenture Trustee in the name of the
Trust, on behalf of the Trust, for the benefit of the Series 2002-A
Noteholders, a segregated trust account (the "Cash Collateral Account"),
bearing a designation clearly indicating that the funds deposited therein
are held for the benefit of the Series 2002-A Noteholders. The Indenture
Trustee shall possess all right, title and interest in all funds on deposit
from time to time in the Cash Collateral Account and in all proceeds
thereof. The Cash Collateral Account shall be under the sole dominion and
control of the Indenture Trustee for the benefit of the Series 2002-A
Noteholders. If at any time the institution holding the Cash Collateral
Account ceases to be an Eligible Institution, the Transferor shall notify
the Indenture Trustee, and the Indenture Trustee upon being notified (or
the Servicer on its behalf) shall, within ten (10) Business Days, establish
a new Cash Collateral Account meeting the conditions specified above with
an Eligible Institution, and shall transfer any cash or any investments to
such new Cash Collateral Account.
(b) On the Closing Date, Transferor shall deposit $15,000,000 in
immediately available funds into the Cash Collateral Account. Funds on
deposit in the Cash Collateral Account shall be invested at the written
direction of the Servicer by the Indenture Trustee in Eligible Investments.
Funds on deposit in the Cash Collateral Account on any Transfer Date, after
giving effect to any withdrawals from the Cash Collateral Account on such
Transfer Date, shall be invested in such investments that will mature so
that such funds will be available for withdrawal on or prior to the
following Transfer Date.
The Indenture Trustee shall hold such of the Eligible Investments
as consists of instruments, deposit accounts, negotiable documents, money,
goods, letters of credit, and advices of credit in the State of New York.
The Indenture Trustee shall hold such of the Eligible Investments as
constitutes investment property through a securities intermediary, which
securities intermediary shall agree with the Indenture Trustee that (a)
such investment property shall at all times be credited to a securities
account of the Indenture Trustee, (b) such securities intermediary shall
treat the Indenture Trustee as entitled to exercise the rights that
comprise each financial asset credited to such securities account, (c) all
property credited to such securities account shall be treated as a
financial asset, (d) such securities intermediary shall comply with
entitlement orders originated by the Indenture Trustee without the further
consent of any other person or entity, (e) such securities intermediary
will not agree with any person or entity other than the Indenture Trustee
to comply with entitlement orders originated by such other person or
entity, (f) such securities accounts and the property credited thereto
shall not be subject to any lien, security interest, or right of set-off in
favor of such securities intermediary or anyone claiming through it (other
than the Indenture Trustee), and (g) such agreement shall be governed by
the laws of the State of New York. Terms used in the preceding sentence
that are defined in the New York UCC and not otherwise defined herein shall
have the meaning set forth in the New York UCC.
30
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 Cash Collateral Account shall be retained in the Cash
Collateral Account (to the extent that the Available Cash Collateral
Account Amount is less than the Required Cash Collateral Account Amount)
and the balance, if any, shall be deposited into the Finance Charge Account
and included in Available Finance Charge Collections for such Transfer
Date. For purposes of determining the availability of funds or the balance
in the Cash Collateral Account for any reason under this Indenture
Supplement, except as otherwise provided in the preceding sentence,
interest and earnings on such funds shall be deemed not to be available or
on deposit.
(c) On each Determination Date, Servicer shall calculate the amount
(the "Required Draw Amount") by which the sum of the amounts required to be
distributed pursuant to Sections 4.4(a)(i) through (v) with respect to the
related Transfer Date exceeds the amount of Available Finance Charge
Collections with respect to the related Monthly Period. If the Required
Draw Amount for any Transfer Date is greater than zero, Servicer shall give
written notice to the Indenture Trustee of such positive Required Draw
Amount on the related Determination Date. On the related Transfer Date, the
Required Draw Amount, if any, up to the Available Cash Collateral Amount,
shall be withdrawn from the Cash Collateral Account and distributed to fund
any deficiency pursuant to Section 4.4(a)(i) through (v) (in the order of
priority set forth in Section 4.4(a)).
(d) If, after giving effect to all deposits to and withdrawals from
the Cash Collateral Account with respect to any Transfer Date, the amount
on deposit in the Cash Collateral Account exceeds the Required Cash
Collateral Amount, the Indenture Trustee acting in accordance with the
instructions of the Servicer, shall withdraw an amount equal to such excess
from the Cash Collateral Account and (i) deposit such amounts in the Spread
Account, to the extent that funds on deposit in the Spread Account are less
than the Required Spread Account Amount and (ii) distribute such amounts
remaining after application pursuant to subsection 4.11(d) to the
Transferor.
Section 4.12 Spread Account.
(a) On or prior to the Closing Date, the Indenture Trustee shall
establish and maintain with an Eligible Institution, which may be the
Indenture Trustee in the name of the Trust, on behalf of the Trust, for the
benefit of the Class C Noteholders and the Transferor, a segregated account
(the "Spread Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Class C Noteholders
and the Transferor. Except as otherwise provided in this Section 4.12, the
Indenture Trustee shall possess all right, title and interest in all funds
on deposit from time to time in the Spread Account and in all proceeds
thereof. The Spread Account shall be under the sole dominion and control of
the Indenture Trustee for the benefit of the Class C Noteholders and the
holder of the Transferor Interest. If at any time the institution holding
the Spread Account ceases to be an Eligible Institution, the Servicer shall
notify the Indenture Trustee in writing, and the Indenture Trustee upon
being notified (or the Servicer on its behalf) shall, within ten (10)
Business Days (or such longer period as to which the Rating Agencies may
consent) establish a new Spread Account meeting the conditions specified
above with an Eligible Institution and shall transfer any cash or any
investments to such new Spread Account. The Indenture Trustee, at the
written direction of the Servicer, shall (i) make withdrawals from the
Spread Account from time to time in an amount up to the Available Spread
Account Amount at such time, for the purposes set forth in this Indenture
Supplement, and (ii) on each Transfer Date prior to termination of the
Spread Account, make a deposit into the Spread Account in the amount
specified in, and otherwise in accordance with, subsection 4.12(f).
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(b) Funds on deposit in the Spread Account shall be invested at the
written direction of the Servicer by the Indenture Trustee in Eligible
Investments. Funds on deposit in the Spread Account on any Transfer Date,
after giving effect to any withdrawals from and deposits to the Spread
Account on such Transfer Date, shall be invested in such investments that
will mature so that such funds will be available for withdrawal on or prior
to the following Transfer Date.
The Indenture Trustee shall hold such of the Eligible Investments
as consists of instruments, deposit accounts, negotiable documents, money,
goods, letters of credit, and advices of credit in the State of New York.
The Indenture Trustee shall hold such of the Eligible Investments as
constitutes investment property through a securities intermediary, which
securities intermediary shall agree with the Indenture Trustee that (a)
such investment property shall at all times be credited to a securities
account of the Indenture Trustee, (b) such securities intermediary shall
treat the Indenture Trustee as entitled to exercise the rights that
comprise each financial asset credited to such securities account, (c) all
property credited to such securities account shall be treated as a
financial asset, (d) such securities intermediary shall comply with
entitlement orders originated by the Indenture Trustee without the further
consent of any other person or entity, (e) such securities intermediary
will not agree with any person or entity other than the Indenture Trustee
to comply with entitlement orders originated by such other person or
entity, (f) such securities accounts and the property credited thereto
shall not be subject to any lien, security interest, or right of set-off in
favor of such securities intermediary or anyone claiming through it (other
than the Indenture Trustee), and (g) such agreement shall be governed by
the laws of the State of New York. Terms used in the preceding sentence
that are defined in the New York UCC and not otherwise defined herein shall
have the meaning set forth in the New York UCC. Except as permitted by this
subsection 4.12(b), the Indenture Trustee shall not hold Eligible
Investments through an agent or a nominee.
On each Transfer Date (but subject to subsection 4.12(c)), the
Investment Earnings, if any, accrued since the preceding Transfer Date on
funds on deposit in the Spread Account shall be retained in the Spread
Account (to the extent that the Available Spread Account Amount is less
than the Required Spread Account Amount) and the balance, if any, shall be
deposited into the Finance Charge Account and included in Available Finance
Charge Collections for such Transfer Date. For purposes of determining the
availability of funds or the balance in the Spread Account for any reason
under this Indenture Supplement (subject to subsection 4.12(c)), all
Investment Earnings shall be deemed not to be available or on deposit.
(c) If, on any Transfer Date, the aggregate amount of Available
Finance Charge Collections and the amount, if any, withdrawn from the Cash
Collateral Account available for deposit into the Distribution Account
pursuant to subsection 4.4(a)(iv) and 4.11(c), respectively, is less than
the aggregate amount required to be deposited pursuant to subsection
4.4(a)(iv), the Indenture Trustee, at the written direction of the
Servicer, shall withdraw from the Spread Account the amount of such
deficiency up to the Available Spread Account Amount and, if the Available
Spread Account Amount is less than such deficiency, Investment Earnings
credited to the Spread Account, and deposit such amount in the Distribution
Account to fund any deficiency pursuant to subsection 4.4(a)(iv).
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(d) On the earlier of Series 2002-A Final Maturity Date and the date
on which the Class A Note Principal Balance and the Class B Note Principal
Balance have been paid in full, after applying any funds on deposit in the
Spread Account as described in Section 4.12(c), the Indenture Trustee at
the written direction of the Servicer shall withdraw from the Spread
Account an amount equal to the lesser of (i) the Class C Note Principal
Balance (after any payments to be made pursuant to subsection 4.4(c) on
such date) and (ii) the Available Spread Account Amount and, if the
Available Spread Account Amount is not sufficient to reduce the Class C
Note Principal Balance to zero, Investment Earnings credited to the Spread
Account up to the amount required to reduce the Class C Note Principal
Balance to zero, and the Indenture Trustee upon the written direction of
the Servicer or the Servicer shall deposit such amounts into the Collection
Account for distribution to the Class C Noteholders in accordance with
subsection 5.2(e).
(e) On any day following the occurrence of an Event of Default with
respect to Series 2002-A and acceleration of the maturity of the Series
2002-A Notes pursuant to Section 5.3 of the Indenture, Servicer shall
withdraw from the Spread Account an amount equal to the Available Spread
Account Amount and Indenture Trustee or Servicer shall deposit such amounts
into the Distribution Account for distribution to the Class C Noteholders,
the Class A Noteholders and the Class B Noteholders, in that order of
priority, in accordance with Section 5.2, to fund any shortfalls in amounts
owed to such Noteholders.
(f) If on any Transfer Date, after giving effect to all withdrawals
from the Spread Account, the Available Spread Account Amount is less than
the Required Spread Account Amount then in effect, Available Finance Charge
Collections shall be deposited into the Spread Account pursuant to
subsection 4.4(a)(ix) up to the amount of the Spread Account Deficiency.
(g) If, after giving effect to all deposits to and withdrawals from
the Spread Account with respect to any Transfer Date, the amount on deposit
in the Spread Account exceeds the Required Spread Account Amount, the
Indenture Trustee acting in accordance with the instructions of the
Servicer, shall withdraw an amount equal to such excess from the Spread
Account and distribute such amount to the Transferor. On the date on which
the Class C Note Principal Balance has been paid in full, after making any
payments to the Noteholders required pursuant to subsections 4.12(c), (d)
and (e), the Indenture Trustee, at the written direction of Servicer, shall
withdraw from the Spread Account all amounts then remaining in the Spread
Account and pay such amounts to the holders of the Transferor Interest.
Section 4.13 Investment Instructions. Any investment instructions required
to be given to the Indenture Trustee pursuant to the terms hereof must be
given to the Indenture Trustee no later than 11:00 a.m., New York City
time, on the date such investment is to be made. In the event the Indenture
Trustee receives such investment instruction later than such time, the
Indenture Trustee may, but shall have no obligation to, make such
investment. In the event the Indenture Trustee is unable to make an
investment required in an investment instruction received by the Indenture
Trustee after 11:00 a.m., New York City time, on such day, such investment
shall be made by the Indenture Trustee on the next succeeding Business Day.
In no event shall the Indenture Trustee be liable for any investment not
made pursuant to investment instructions received after 11:00 a.m., New
York City time, on the day such investment is requested to be made.
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Section 4.14 Controlled Accumulation Period. The Controlled Accumulation
Period is scheduled to commence at the beginning of business on October 1,
2006; provided that if the Controlled Accumulation Period Length
(determined as described below) on any Determination Date on or after the
September 2006 Determination Date is less than 12 months, upon written
notice to the Indenture Trustee, Transferor and, each Rating Agency,
Servicer, at its option, may elect to modify the date on which the
Controlled Accumulation Period actually commences to the first Business Day
of the month that is the number of whole months prior to the month in which
the Class A/B Expected Principal Payment Date occurs at least equal to the
Controlled Accumulation Period Length (so that, as a result of such
election, the number of Monthly Periods in the Controlled Accumulation
Period will at least equal the Controlled Accumulation Period Length);
provided that (i) the length of the Controlled Accumulation Period will not
be less than two months, (ii) such determination of the Controlled
Accumulation Period Length shall be made on each Determination Date on and
after the September 2006 Determination Date but prior to the commencement
of the Controlled Accumulation Period, and any election to shorten the
Controlled Accumulation Period shall be subject to the subsequent
lengthening of the Controlled Accumulation Period to the Controlled
Accumulation Period Length determined on any subsequent Determination Date,
but the Controlled Accumulation Period shall in no event commence prior to
the Controlled Accumulation Date, and (iii) notwithstanding any other
provision of this Indenture Supplement to the contrary, no election to
postpone the commencement of the Controlled Accumulation Period shall be
made after an Early Amortization Event shall have occurred and be
continuing with respect to any other Series. The "Controlled Accumulation
Period Length" will mean a number of whole months such that the amount
available for distribution of principal on the Class A Notes and the Class
B Notes on the Class A/B Expected Payment Date is expected to equal or
exceed the sum of the Class A Note Principal Balance and the Class B Note
Principal Balance, assuming for this purpose that (1) the payment rate with
respect to Principal Collections remains constant at the lowest level of
such payment rate during the twelve preceding Monthly Periods (or such
lower payment rate as Servicer may select), (2) the total amount of
Principal Receivables in the Trust (and the principal amount on deposit in
the Excess 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 Servicer electing to modify the commencement of the
Controlled Accumulation Period pursuant to this Section 4.14 shall specify
(i) the Controlled Accumulation Period Length, (ii) the commencement date
of the Controlled Accumulation Period and (iii) the Controlled Accumulation
Amount with respect to each Monthly Period during the Controlled
Accumulation Period. The Servicer shall calculate the Controlled
Accumulation Period Length on each Determination Date prior to the
September 2006 Determination Date as necessary to determine the Reserve
Account Funding Date.
Section 4.15 Suspension of Controlled Accumulation Period. (a) The Servicer
may elect to suspend the commencement of the Controlled Accumulation Period
with prior notice to the Rating Agencies. The commencement of the
Controlled Accumulation Period shall be suspended upon delivery by the
Servicer to the Indenture Trustee of (i) an Officer's Certificate stating
that the Servicer has elected to suspend the commencement of the Controlled
Accumulation Period and that all conditions precedent to such suspension
set forth in this Section 4.15 have been satisfied, (ii) a copy of an
executed Qualified Maturity Agreement and (iii) an Opinion of Counsel
addressed to the Indenture Trustee as to the due authorization, execution
and delivery and the validity and enforceability of such Qualified Maturity
Agreement. The Issuer does hereby transfer, assign, set-over, and otherwise
convey to the Indenture Trustee for the benefit of the Series 2002-A
Noteholders, without recourse, all of its rights under any Qualified
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Maturity Agreement obtained in accordance with this Section 4.15 and all
proceeds thereof. Such property shall constitute part of the Trust Estate
for all purposes of the Indenture. The foregoing transfer, assignment,
set-over and conveyance does not constitute and is not intended to result
in a creation or an assumption by the Indenture Trustee or any Noteholder
of any obligation of the Issuer or any other Person in connection with a
Qualified Maturity Agreement or under any agreement or instrument relating
thereto.
The Indenture Trustee hereby acknowledges its acceptance, to the
extent validly transferred, assigned, set-over or otherwise conveyed to the
Indenture Trustee, for the benefit of the Series 2002-A Noteholders, of all
of the rights previously held by the Issuer under any Qualified Maturity
Agreement obtained by the Issuer and all proceeds thereof, and declares
that it shall hold such rights upon the trust set forth herein and in the
Agreement, and subject to the terms hereof and thereof, for the benefit of
the Series 2002-A Noteholders.
(b) The Issuer shall cause the provider of each Qualified Maturity
Agreement to deposit into the Principal Accumulation Account on or before
the Class A/B Expected Principal Payment Date an amount equal to the
initial Note Principal Balance (excluding the Class C Note Initial
Principal Balance) and a further deposit into the Principal Accumulation
Account on the Class C Expected Principal Payment Date in an amount equal
to the Class C Note Initial Principal Balance; provided, however, that the
Issuer may instead elect to fund all or a portion of such deposits with the
proceeds of the issuance of a new Series or with the Available Principal
Collections with respect to such Transfer Date. The amounts so deposited
shall be applied on the Class A/B Expected Principal Payment Date and the
Class C Expected Principal Payment Date, respectively, pursuant to
subsection 4.4(c) as if the commencement of the Controlled Accumulation
Period had not been suspended.
(c) Each Qualified Maturity Agreement shall terminate at the close of
business on the Class C Expected Principal Payment Date; provided, however,
that the Issuer may terminate a Qualified Maturity Agreement prior to such
Distribution Date, with notice to each Rating Agency, if (i) the Available
Reserve Account Amount equals the Required Reserve Account Amount and (ii)
one of the following events occurs: (A) the Issuer obtains a substitute
Qualified Maturity Agreement, (B) the provider of the Qualified Maturity
Agreement ceases to qualify as an Eligible Institution and the Issuer is
unable to obtain a substitute Qualified Maturity Agreement or (C) an Early
Amortization Event occurs. In addition, the Issuer may terminate a
Qualified Maturity Agreement prior to the later of (i) the date on which
the Controlled Accumulation Period was scheduled to begin, before giving
effect to the suspension of the Controlled Accumulation Period, and (ii)
the date to which the commencement of the Controlled Accumulation Period
may be postponed pursuant to Section 4.14 (as determined on the
Determination Date preceding the date of such termination), in which case
the commencement of the Controlled Accumulation Period shall be determined
as if the Issuer had not elected to suspend such commencement; provided,
however, that the available Reserve Account Amount equals the Required
Reserve Account Amount. In the event that the provider of a Qualified
Maturity Agreement ceases to qualify as an Eligible Institution, the Issuer
shall use its best efforts to obtain a substitute Qualified Maturity
Agreement.
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(d) If a Qualified Maturity Agreement is terminated prior to the
earlier of the Class C Expected Principal Payment Date and the commencement
of the Early Amortization Period and the Issuer does not obtain a
substitute Qualified Maturity Agreement, the Controlled Accumulation Period
shall commence on the latest of (i) the beginning of business on October 1,
2006, (ii) at the election of the Issuer, the date to which the
commencement of the Controlled Accumulation Period may be postponed
pursuant to Section 4.l4 (as determined on the date of such termination)
and (iii) the first day of the Monthly Period following the date of such
termination.
Section 4.16 Determination of LIBOR.
(a) On each LIBOR Determination Date in respect of a Distribution
Period, the Indenture Trustee shall determine LIBOR on the basis of the
rate for deposits in United States dollars for a period of the Designated
Maturity which appears on Telerate Page 3750 as of 11:00 a.m., London time,
on such date. If such rate does not appear on Telerate Page 3750, the rate
for that Distribution Period Determination Date shall be determined on the
basis of the rates at which deposits in United States dollars are offered
by the Reference Banks at approximately 11:00 a.m., London time, on that
day to prime banks in the London interbank market for a period of the
Designated Maturity. The Indenture Trustee shall request the principal
London office of each of the Reference Banks to provide a quotation of its
rate. If at least two (2) such quotations are provided, the rate for that
Distribution Period shall be the arithmetic mean of the quotations. If
fewer than two (2) quotations are provided as requested, the rate for that
Distribution Period will be the arithmetic mean of the rates quoted by
major banks in New York City, selected by the Servicer, at approximately
11:00 a.m., New York City time, on that day for loans in United States
dollars to leading European banks for a period of the Designated Maturity.
(b) The Class A Note Interest Rate, the Class B Note Interest Rate and
the Class C Note Interest Rate applicable to the then current and the
immediately preceding Distribution Periods may be obtained by telephoning
the Indenture Trustee at its corporate trust office at (000) 000-0000 or
such other telephone number as shall be designated by the Indenture Trustee
for such purpose by prior written notice by the Indenture Trustee to each
Series 2002-A Noteholder from time to time.
(c) On each LIBOR Determination Date, the Indenture Trustee shall send
to the Servicer by facsimile transmission, notification of LIBOR for the
following Distribution Period.
Section 4.17 Swaps. (a) On or prior to the Closing Date, the Issuer shall
enter into a Class A Swap with the Class A Counterparty, a Class B Swap
with the Class B Counterparty and a Class C Swap with the Class C
Counterparty for the benefit of the Class A Noteholders, the Class B
Noteholders and the Class C Noteholders, respectively. The aggregate
notional amount under the Class A Swap shall, at any time, be equal to the
Class A Note Principal Balance at such time. The aggregate notional amount
under the Class B Swap shall, at any time, be equal to the Class B Note
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Principal Balance at such time. The aggregate notional amount under the
Class C Swap shall, at any time, be equal to the Class C Note Principal
Balance. Net Swap Receipts payable by the Class A Counterparty, the Class B
Counterparty or the Class C Counterparty shall be deposited by the
Indenture Trustee in the Collection Account on the day received and treated
as Available Finance Charge Collections. On any Distribution Date when
there shall be a Class A Net Swap Payment, such Class A Net Swap Payment
shall be paid as provided in subsection 4.4(a)(i). On any Distribution Date
when there shall be a Class B Net Swap Payment, such Class B Net Swap
Payment shall be paid as provided in subsection 4.4(a)(ii). On any
Distribution Date when there shall be a Class C Net Swap Payment, such
Class C Net Swap Payment shall be paid as provided in subsection
4.4(a)(iv). On any Distribution Date when there shall be early termination
payments or any other miscellaneous payments payable by the Issuer to the
Counterparties, such amounts shall be paid as provided in subsection
4.4(a)(x).
(b) The Servicer may, upon satisfaction of the Rating Agency
Condition, and, when required under the terms of the existing Class A Swap,
Class B Swap or Class C Swap, shall obtain a replacement Class A Swap,
Class B Swap or Class C Swap, as applicable.
ARTICLE V.
Delivery of Series 2002-A Notes; Distributions;
Reports to Series 2002-A Noteholders
Section 5.1 Delivery and Payment for the Series 2002-A Notes.
The Issuer shall execute and issue, and the Indenture Trustee
shall authenticate, the Series 2002-A Notes in accordance with Section 2.3
of the Indenture. The Indenture Trustee shall deliver the Series 2002-A
Notes to or upon the written order of the Trust when so authenticated.
Section 5.2 Distributions.
(a) On each Distribution Date, the Indenture Trustee shall distribute
to each Class A Noteholder of record on the related Record Date (other than
as provided in Section 11.2 of the Indenture) such Class A Noteholder's pro
rata share of the amounts on deposit in the Distribution Account that are
allocated and available on such Distribution Date and as are payable to the
Class A Noteholders pursuant to this Indenture Supplement.
(b) On each Distribution Date, the Indenture Trustee shall distribute
to each Class B Noteholder of record on the related Record Date (other than
as provided in Section 11.2 of the Indenture) such Class B Noteholder's pro
rata share of the amounts on deposit in the Distribution Account that are
allocated and available on such Distribution Date and as are payable to the
Class B Noteholders pursuant to this Indenture Supplement.
(c) On each Distribution Date, the Indenture Trustee shall distribute
to each Class C Noteholder of record on the related Record Date (other than
as provided in Section 11.2 of the Indenture) such Class C Noteholder's pro
rata share of the amounts on deposit in the Distribution Account (including
amounts withdrawn from the Spread Account (at the times and in the amounts
specified in Section 4.12)) that are allocated and available on such
Distribution Date and as are payable to the Class C Noteholders pursuant to
this Indenture Supplement.
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(d) The distributions to be made pursuant to this Section 5.2 are
subject to the provisions of Sections 2.6, 6.1 and 7.1 of the Transfer and
Servicing Agreement, Section 11.2 of the Indenture and Section 7.1 of this
Indenture Supplement.
(e) Except as provided in Section 11.2 of the Indenture with respect
to a final distribution, distributions to Series 2002-A Noteholders
hereunder shall be made by (i) check mailed to each Series 2002-A
Noteholder (at such Noteholder's address as it appears in the Note
Register), except that for any Series 2002-A Notes registered in the name
of the nominee of a Clearing Agency, such distribution shall be made by
wire transfer of immediately available funds and (ii) without presentation
or surrender of any Series 2002-A Note or the making of any notation
thereon.
Section 5.3 Reports and Statements to Series 2002-A Noteholders.
(a) On each Distribution Date, the Indenture Trustee shall forward to
each Series 2002-A Noteholder a statement substantially in the form of
Exhibit C prepared by the Servicer.
(b) Not later than the second Business Day preceding each Distribution
Date, the Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and each Rating Agency (i) a statement substantially in the form of
Exhibit B prepared by the Servicer and (ii) a certificate of an Authorized
Officer substantially in the form of Exhibit D; provided that the Servicer
may amend the form of Exhibit B from time to time, with the prior written
consent of the Indenture Trustee.
(c) A copy of each statement or certificate provided pursuant to
paragraph (a) or (b) may be obtained by any Series 2002-A Noteholder by a
request in writing to the Servicer.
(d) On or before January 31 of each calendar year, beginning with
January 31, 2003, the Indenture Trustee shall furnish or cause to be
furnished to each Person who at any time during the preceding calendar year
was a Series 2002-A Noteholder, a statement prepared by the Servicer
containing the information which is required to be contained in the
statement to Series 2002-A Noteholders, as set forth in paragraph (a)
above, aggregated for such calendar year or the applicable portion thereof
during which such Person was a Series 2002-A Noteholder, together with
other information as is required to be provided by an issuer of
indebtedness under the Code. Such obligation of the Indenture Trustee shall
be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Servicer pursuant to any
requirements of the Code as from time to time in effect.
ARTICLE VI.
Series 2002-A Early Amortization Events
Section 6.1 Series 2002-A Early Amortization Events. If any one of the
following events shall occur with respect to the Series 2002-A Notes:
(a) failure on the part of Transferor or the "Transferor" under the
Pooling and Servicing Agreement (i) to make any payment or deposit required
to be made by it by the terms of the Pooling and Servicing Agreement, the
Collateral Series Supplement, the Transfer and Servicing Agreement, the
Indenture or this Indenture Supplement on or before the date occurring five
(5) Business Days after the date such payment or deposit is required to be
made therein or herein or (ii) duly to observe or perform in any material
38
respect any other of its covenants or agreements set forth in the Transfer
and Servicing Agreement, the Pooling and Servicing Agreement, the Indenture
or this Indenture Supplement, which failure has a material adverse effect
on the Series 2002-A Noteholders and which continues unremedied for a
period of sixty (60) days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Transferor by the Indenture Trustee, or to the Transferor and the Indenture
Trustee by any Holder of the Series 2002-A Notes;
(b) any representation or warranty made by Transferor or the
"Transferor" under the Pooling and Servicing Agreement, in the Transfer and
Servicing Agreement or the Pooling and Servicing Agreement or any
information contained in a computer file or microfiche list required to be
delivered by it pursuant to Section 2.1 or subsection 2.6(c) of the
Transfer and Servicing Agreement or Section 2.1 or subsection 2.6(c) of the
Pooling and Servicing Agreement shall prove to have been incorrect in any
material respect when made or when delivered, which continues to be
incorrect in any material respect for a period of sixty (60) days after the
date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Transferor by the Indenture Trustee,
or to the Transferor and the Indenture Trustee by any Holder of the Series
2002-A Notes and as a result of which the interests of the Series 2002-A
Noteholders are materially and adversely affected for such period;
provided, however, that a Series 2002-A Early Amortization Event pursuant
to this subsection 6.1(b) shall not be deemed to have occurred hereunder if
the Transferor has accepted reassignment of the related Receivable, or all
of such Receivables, if applicable, during such period in accordance with
the provisions of the Transfer and Servicing Agreement or the Pooling and
Servicing Agreement;
(c) a failure by Transferor or the "Transferor" under the Pooling and
Servicing Agreement to convey Receivables in Additional Accounts or
Participations to the Receivables Trust within five (5) Business Days after
the day on which it is required to convey such Receivables pursuant to
subsection 2.6(b) of the Transfer and Servicing Agreement or subsection
2.8(b) of the Pooling and Servicing Agreement, respectively, provided that
such failure shall not give rise to an Early Amortization Event if, prior
to the date on which such conveyance was required to be completed,
Transferor causes a reduction in the invested amount of any Variable
Interest to occur, so that, after giving effect to that reduction (i) the
Transferor Amount is not less than the Minimum Transferor Amount (including
the Additional Minimum Transferor Amount, if any) and (ii) the sum of the
aggregate amount of Principal Receivables plus amounts on deposit in the
Excess Funding Account is not less than the Required Principal Balance;
(d) any Servicer Default or any "Servicer Default" under the Pooling
and Servicing Agreement shall occur;
(e) the Portfolio Xxxxx averaged over three consecutive Monthly
Periods is less than the Base Rate averaged over such period;
39
(f) the Class A Note Principal Balance or the Class B Note Principal
Balance shall not be paid in full on the Class A/B Expected Principal
Payment Date or the Class C Note Principal Balance shall not be paid in
full on the Class C Expected Principal Payment Date, respectively;
(g) the Class A Counterparty, the Class B Counterparty or the Class C
Counterparty shall fail to pay any net amount payable by such Counterparty
under the Class A Swap, Class B Swap or the Class C Swap, as applicable, as
a result of LIBOR being greater than the Class A Swap Rate, Class B Swap
Rate or the Class C Swap Rate, as applicable, and such failure is not cured
within five Business Days;
(h) the Class A Swap shall terminate prior to the earlier of the
payment in full of the Class A Notes and the Series Termination Date and
the Issuer shall fail to enter into a replacement Class A Swap in
accordance with subsection 4.17(b); the Class B Swap shall terminate prior
to the earlier of the payment in full of the Class B Notes and the Series
Termination Date and the Issuer shall fail to enter into a replacement
Class B Swap in accordance with subection 4.17(b); or the Class C Swap
shall terminate prior to the earlier of the payment in full of the Class C
Notes and the Series Termination Date and the Issuer shall fail to enter
into a replacement Class C Swap in accordance with subsection 4.17(b);
(i) without limiting the foregoing, the occurrence of an Event of
Default with respect to Series 2002-A and acceleration of the maturity of
the Series 2002-A Notes pursuant to Section 5.3 of the Indenture; or
(j) the occurrence of an Early Amortization Event as defined in the
Pooling and Servicing Agreement and specified in Section 9.1 of that
Agreement;
then, in the case of any event described in subsection (a), (b) or (d),
after the applicable grace period, if any, set forth in such subparagraphs,
either the Indenture Trustee or the holders of Series 2002-A Notes
evidencing more than 50% of the aggregate unpaid principal amount of Series
2002-A Notes by notice then given in writing to the Transferor and the
Servicer (and to the Indenture Trustee if given by the Series 2002-A
Noteholders) may declare that a "Series Early Amortization Event" with
respect to Series 2002-A (a "Series 2002-A Early Amortization Event") has
occurred as of the date of such notice, and, in the case of any event
described in subsection (c), (e), (f), (g), (h), (i) or (j) a Series 2002-A
Early Amortization Event shall occur without any notice or other action on
the part of the Indenture Trustee or the Series 2002-A Noteholders
immediately upon the occurrence of such event.
ARTICLE VII.
Redemption of Series 2002-A Notes; Final Distributions; Series Termination
Section 7.1 Optional Redemption of Series 2002-A Notes; Final
Distributions.
(a) On any day occurring on or after the date on which the outstanding
principal balance of the Series 2002-A Notes is reduced to 5% or less of
the initial outstanding principal balance of Series 2002-A Notes, the
Servicer shall have the option to redeem the Series 2002-A Notes, at a
purchase price equal to (i) if such day is a Distribution Date, the
Reassignment Amount for such Distribution Date or (ii) if such day is not a
Distribution Date, the Reassignment Amount for the Distribution Date
following such day.
40
(b) Servicer shall give the Indenture Trustee at least thirty (30)
days prior written notice of the date on which Servicer intends to exercise
such optional redemption. Not later than 12:00 noon, New York City time, on
such day Servicer shall deposit into the Collection Account in immediately
available funds the excess of the Reassignment Amount over the amount, if
any, on deposit in the Principal Accumulation Account. Such redemption
option is subject to payment in full of the Reassignment Amount. Following
such deposit into the Collection Account in accordance with the foregoing,
the Collateral Amount for Series 2002-A shall be reduced to zero and the
Series 2002-A Noteholders shall have no further security interest in the
Receivables. The Reassignment Amount shall be distributed as set forth in
subsection 7.1(d).
(c) (i) The amount to be paid by the Transferor with respect to Series
2002-A in connection with a reassignment of Receivables to the Transferor
pursuant to Section 2.4(e) of the Transfer and Servicing Agreement shall
equal the Reassignment Amount for the first Distribution Date following the
Monthly Period in which the reassignment obligation arises under the
Transfer and Servicing Agreement.
(ii) The amount to be paid by the Transferor with respect to
Series 2002-A in connection with a repurchase of the Notes pursuant
to Section 7.1 of the Transfer and Servicing Agreement shall equal
the Reassignment Amount for the Distribution Date of such repurchase.
(d) With respect to (a) the Reassignment Amount deposited into the
Distribution Account pursuant to Section 7.1 or (b) the proceeds of any
sale of Receivables pursuant to Section 5.5(a)(iii) of the Indenture with
respect to Series 2002-A, the Indenture Trustee shall, in accordance with
the written direction of the Servicer, not later than 12:00 noon, New York
City time, on the related Distribution Date, make distributions of the
following amounts (in the priority set forth below and, in each case, after
giving effect to any deposits and distributions otherwise to be made on
such date) in immediately available funds: (i) (x) the Class A Note
Principal Balance on such Distribution Date will be distributed to the
Class A Noteholders and (y) an amount equal to the sum of (A) Class A
Monthly Interest for such Distribution Date, (B) any Class A Deficiency
Amount for such Distribution Date and (C) the amount of Class A Additional
Interest, if any, for such Distribution Date and any Class A Additional
Interest previously due but not distributed to the Class A Noteholders on
any prior Distribution Date, will be distributed to the Class A
Noteholders, (ii) (x) the Class B Note Principal Balance on such
Distribution Date will be distributed to the Class B Noteholders and (y) an
amount equal to the sum of (A) Class B Monthly Interest for such
Distribution Date, (B) any Class B Deficiency Amount for such Distribution
Date and (C) the amount of Class B Additional Interest, if any, for such
Distribution Date and any Class B Additional Interest previously due but
not distributed to the Class B Noteholders on any prior Distribution Date,
will be distributed to the Class B Noteholders, (iii) (x) the Class C Note
Principal Balance on such Distribution Date will be distributed to the
Class C Noteholders and (y) an amount equal to the sum of (A) Class C
Monthly Interest for such Distribution Date, (B) any Class C Deficiency
Amount for such Distribution Date and (C) the amount of Class C Additional
Interest, if any, for such Distribution Date and any Class C Additional
Interest previously due but not distributed to the Class C Noteholders on
any prior Distribution Date will be distributed to the Class C Noteholders
and (iv) on a pari passu basis, (A) any amounts owed to the Counterparty
41
under the Class A Swap will be paid to the Class A Counterparty and (B) any
amounts owed to the Class B Counterparty under the Class B Swap will be
paid to the Class B Counterparty and (v) any excess shall be released to
the Issuer.
Section 7.2 Series Termination.
On the Series 2002-A Final Maturity Date, the unpaid principal
amount of the Series 2002-A Notes shall be due and payable, and the right
of the Series 2002-A Noteholders to receive payments from the Issuer will
be limited solely to the right to receive payments pursuant to Section 5.5
of the Indenture.
ARTICLE VIII.
Miscellaneous Provisions
Section 8.1 Ratification of Indenture; Amendments. As supplemented by this
Indenture Supplement, the Indenture is in all respects ratified and
confirmed and the Indenture as so supplemented by this Indenture Supplement
shall be read, taken and construed as one and the same instrument. This
Indenture Supplement may be amended only by a Supplemental Indenture
entered in accordance with the terms of Section 10.1 or 10.2 of the
Indenture and with the written consent of the Class A Counterparty, the
Class B Counterparty and the Class C Counterparty prior to the date on
which such Supplemental Indenture takes effect if any provision of such
Supplemental Indenture materially and adversely affects the timing, amount
or priority of distributions to be made to the Class A Counterparty, the
Class B Counterparty and the Class C Counterparty, respectively. For
purposes of the application of Section 10.2 to any amendment of this
Indenture Supplement, the Series 2002-A Noteholders shall be the only
Noteholders whose vote shall be required.
Section 8.2 Form of Delivery of the Series 2002-A Notes. The Class A Notes,
the Class B Notes and the Class C Notes shall be Book-Entry Notes and shall
be delivered as Registered Notes as provided in Sections 2.1 and 2.13 of
the Indenture.
Section 8.3 Counterparts. This Indenture Supplement may be executed in two
or more counterparts, and by different parties on separate counterparts,
each of which shall be an original, but all of which shall constitute one
and the same instrument.
Section 8.4 GOVERNING LAW. THIS INDENTURE SUPPLEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 8.5 Limitation of Liability. Notwithstanding any other provision
herein or elsewhere, this Agreement has been executed and delivered by
Chase Manhattan Bank USA, National Association, not in its individual
capacity, but solely in its capacity as Owner Trustee of the Trust, in no
event shall Chase Manhattan Bank USA, National Association in its
individual capacity have any liability in respect of the representations,
warranties, or obligations of the Trust hereunder or under any other
document, as to all of which recourse shall be had solely to the assets of
the Trust, and for all purposes of this Agreement and each other document,
the Owner Trustee (as such or in its individual capacity) shall be subject
to, and entitled to the benefits of, the terms and provisions of the Trust
Agreement.
42
Section 8.6 Rights of the Indenture Trustee. The Indenture Trustee shall
have herein the same rights, protections, indemnities and immunities as
specified in the Master Indenture.
Section 8.7 Additional Provisions. The Additional Minimum Transferor Amount
is hereby specified as an additional amount to be considered part of the
Minimum Transferor Amount pursuant to clause (b) of the definition of
Minimum Transferor Amount.
Section 8.8 Additional Requirements for Registration of and Limitations on
Transfer and Exchange of Notes. All transfers will be subject to the
transfer restrictions set forth on the Notes.
[SIGNATURE PAGE FOLLOWS]
43
IN WITNESS WHEREOF, the undersigned have caused this Indenture
Supplement to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
WORLD FINANCIAL NETWORK CREDIT
CARD MASTER NOTE TRUST, as Issuer
By: Chase Manhattan Bank USA, National
Association, not in its individual
capacity, but solely as Owner Trustee
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
BNY MIDWEST TRUST COMPANY, as
Indenture Trustee
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
Acknowledged and Accepted:
WORLD FINANCIAL NETWORK NATIONAL BANK,
as Servicer
By: /s/ Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Vice President and Treasurer
WFN CREDIT COMPANY, LLC
as Transferor
By: /s/ Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Vice President and Treasurer
S-1
EXHIBIT A-1
FORM OF CLASS A SERIES 2002-A FLOATING RATE ASSET BACKED NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF COVENANTS AND
AGREES THAT IT WILL NOT AT ANY TIME INSTITUTE AGAINST WORLD FINANCIAL
NETWORK CREDIT CARD MASTER TRUST, A COMMON LAW TRUST ORGANIZED UNDER THE
LAWS OF NEW YORK ("WFNMT"), THE TRANSFEROR OR THE ISSUER, OR SOLICIT OR
JOIN OR COOPERATE WITH OR ENCOURAGE OR ENCOURAGE ANY INSTITUTION IN
INSTITUTING AGAINST WFNMT, THE TRANSFEROR OR THE ISSUER, ANY BANKRUPTCY,
REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS, OR
OTHER PROCEEDINGS UNDER ANY UNITED STATES FEDERAL OR STATE BANKRUPTCY OR
SIMILAR LAW IN CONNECTION WITH ANY OBLIGATION RELATING TO THE NOTES, THE
INDENTURE OR ANY OF THE TRANSACTION DOCUMENTS.
THE HOLDER OF THIS CLASS A NOTE, BY ACCEPTANCE OF THIS NOTE, AND
EACH HOLDER OF A BENEFICIAL INTEREST THEREIN, AGREE TO TREAT THE CLASS A
NOTES AS INDEBTEDNESS OF THE ISSUER FOR APPLICABLE FEDERAL, STATE, AND
LOCAL INCOME AND FRANCHISE TAX LAW AND FOR PURPOSES OF ANY OTHER TAX
IMPOSED ON, OR MEASURED BY, INCOME.
THE HOLDER OF THIS CLASS A NOTE SHALL BE DEEMED TO REPRESENT AND
WARRANT THAT EITHER (I) IT IS NOT ACQUIRING THE NOTE WITH THE PLAN ASSETS
OF AN "EMPLOYEE BENEFIT PLAN" AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), WHICH IS
SUBJECT TO TITLE I OF ERISA, A "PLAN" AS DEFINED IN SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AN ENTITY DEEMED TO
HOLD THE PLAN ASSETS OF ANY OF THE FOREGOING BY REASON OF INVESTMENT BY AN
EMPLOYEE BENEFIT PLAN OR PLAN IN SUCH ENTITY, OR A GOVERNMENTAL PLAN
SUBJECT TO APPLICABLE LAW THAT IS SUBSTANTIALLY SIMILAR TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA OR SECTION 4975 OF THE CODE (EACH SUCH
ENTITY A "BENEFIT PLAN"); OR (II) THE ACQUISITION AND HOLDING OF THE CLASS
A NOTE WILL NOT GIVE RISE TO A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE (OR, IN THE CASE OF A
GOVERNMENTAL PLAN, ANY SUBSTANTIALLY SIMILAR APPLICABLE LAW).
Exhibit A-1 (Page 1)
REGISTERED $468,000,000
No. R-1 CUSIP NO. 000000XX0
WORLD FINANCIAL NETWORK CREDIT CARD
MASTER NOTE TRUST SERIES 2002-A
CLASS A SERIES 2002-A FLOATING RATE ASSET BACKED NOTE
World Financial Network Credit Card Master Note Trust (herein
referred to as the "Issuer" or the "Trust"), a Delaware statutory business
trust governed by an Amended and Restated Trust Agreement dated as of
August 1, 2001, for value received, hereby promises to pay to Cede & Co.,
or registered assigns, subject to the following provisions, the principal
sum of FOUR HUNDRED SIXTY-EIGHT MILLION DOLLARS, or such greater or lesser
amount as determined in accordance with the Indenture, on the August 2011
Distribution Date, except as otherwise provided below or in the Indenture.
The Issuer will pay interest on the unpaid principal amount of this Note at
the Class A Note Interest Rate on each Distribution Date until the
principal amount of this Note is paid in full. Interest on this Note will
accrue for each Distribution Date from and including the most recent
Distribution Date on which interest has been paid to but excluding such
Distribution Date or, for the initial Distribution Date, from and including
the Closing Date to but excluding such Distribution Date. Interest will be
computed on the basis of a 360-day year and the actual number of days
elapsed. Principal of this Note shall be paid in the manner specified in
the Indenture Supplement referred to on the reverse hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Indenture Trustee, by manual signature, this Note
shall not be entitled to any benefit under the Indenture or the Indenture
Supplement referred to on the reverse hereof, or be valid for any purpose.
Exhibit A-1 (Page 2)
IN WITNESS WHEREOF, the Issuer has caused this Class A Note to be duly
executed.
WORLD FINANCIAL NETWORK CREDIT CARD
MASTER NOTE TRUST,
as Issuer
By: Chase Manhattan Bank USA, National
Association, not in its individual
capacity but solely as Owner Trustee under
the Trust Agreement
By:
--------------------------------------
Name:
Title:
Dated: November 7, 2002
Exhibit A-1 (Page 3)
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A Notes described in the within-mentioned
Indenture.
BNY MIDWEST TRUST COMPANY, as
Indenture Trustee
By:__________________________________
Authorized Signatory
Dated: ______________________________
Exhibit A-1 (Page 4)
WORLD FINANCIAL NETWORK CREDIT CARD
MASTER NOTE TRUST SERIES 2002-A
CLASS A SERIES 2002-A FLOATING RATE ASSET BACKED NOTE
Summary of Terms and Conditions
This Class A Note is one of a duly authorized issue of Notes of
the Issuer, designated as World Financial Network Credit Card Master Note
Trust, Series 2002-A (the "SERIES 2002-A NOTES"), issued under a Master
Indenture dated as of August 1, 2001 (the "MASTER INDENTURE"), between the
Issuer and BNY Midwest Trust Company, as indenture trustee (the "INDENTURE
TRUSTEE"), as supplemented by the Indenture Supplement dated as of November
7, 2002 (the "INDENTURE SUPPLEMENT"), and representing the right to receive
certain payments from the Issuer. The term "Indenture," unless the context
otherwise requires, refers to the Master Indenture as supplemented by the
Indenture Supplement. The Notes are subject to all of the terms of the
Indenture. All terms used in this Note that are defined in the Indenture
shall have the meanings assigned to them in or pursuant to the Indenture.
In the event of any conflict or inconsistency between the Indenture and
this Note, the Indenture shall control.
The Class B Notes and the Class C Notes will also be issued under
the Indenture.
The Noteholder, by its acceptance of this Note, agrees that it
will look solely to the property of the Issuer allocated to the payment of
this Note for payment hereunder and that neither the Owner Trustee nor the
Indenture Trustee is liable to the Noteholders for any amount payable under
the Notes or the Indenture or, except in the case of the Indenture Trustee
as expressly provided in the Indenture, subject to any liability under the
Indenture.
This Note does not purport to summarize the Indenture and
reference is made to the Indenture for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced thereby,
and the rights, duties and immunities of the Indenture Trustee.
THIS CLASS A NOTE DOES NOT REPRESENT AN OBLIGATION OF, OR AN
INTEREST IN, THE ISSUER, WORLD FINANCIAL NETWORK NATIONAL BANK, WFN CREDIT
COMPANY, LLC, OR ANY OF THEIR AFFILIATES, AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY OR INSTRUMENTALITY.
The Issuer, the Transferor, the Indenture Trustee and any agent of
the Issuer, the Transferor or the Indenture Trustee shall treat the person
in whose name this Class A Note is registered as the owner hereof for all
purposes, and neither the Issuer, the Transferor, the Indenture Trustee nor
any agent of the Issuer, the Transferor or the Indenture Trustee shall be
affected by notice to the contrary.
THIS CLASS A NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Exhibit A-1 (Page 5)
ASSIGNMENT
Social Security or other identifying number of assignee ______________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _____________ (name and address of assignee) the within
certificate and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________ attorney, to transfer said certificate on the books
kept for registration thereof, with full power of substitution in the premises.
Dated:_____________________ ____________________________________/**
Signature Guaranteed:
-----------------
/** The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
Exhibit A-1 (Page 6)
EXHIBIT A-2
FORM OF CLASS B SERIES 2002-A FLOATING RATE ASSET BACKED NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF COVENANTS AND
AGREES THAT IT WILL NOT AT ANY TIME INSTITUTE AGAINST WORLD FINANCIAL
NETWORK CREDIT CARD MASTER TRUST, A COMMON LAW TRUST ORGANIZED UNDER THE
LAWS OF NEW YORK ("WFNMT"), THE TRANSFEROR OR THE ISSUER, OR SOLICIT OR
JOIN OR COOPERATE WITH OR ENCOURAGE OR ENCOURAGE ANY INSTITUTION IN
INSTITUTING AGAINST WFNMT, THE TRANSFEROR OR THE ISSUER, ANY BANKRUPTCY,
REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS, OR
OTHER PROCEEDINGS UNDER ANY UNITED STATES FEDERAL OR STATE BANKRUPTCY OR
SIMILAR LAW IN CONNECTION WITH ANY OBLIGATION RELATING TO THE NOTES, THE
INDENTURE OR ANY OF THE TRANSACTION DOCUMENTS.
THE HOLDER OF THIS CLASS B NOTE, BY ACCEPTANCE OF THIS NOTE, AND
EACH HOLDER OF A BENEFICIAL INTEREST THEREIN, AGREE TO TREAT THE CLASS B
NOTES AS INDEBTEDNESS OF THE ISSUER FOR APPLICABLE FEDERAL, STATE, AND
LOCAL INCOME AND FRANCHISE TAX LAW AND FOR PURPOSES OF ANY OTHER TAX
IMPOSED ON, OR MEASURED BY, INCOME.
THE HOLDER OF THIS CLASS B NOTE SHALL BE DEEMED TO REPRESENT AND
WARRANT THAT EITHER (I) IT IS NOT ACQUIRING THE NOTE WITH THE PLAN ASSETS
OF AN "EMPLOYEE BENEFIT PLAN" AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), WHICH IS
SUBJECT TO TITLE I OF ERISA, A "PLAN" AS DEFINED IN SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AN ENTITY DEEMED TO
HOLD THE PLAN ASSETS OF ANY OF THE FOREGOING BY REASON OF INVESTMENT BY AN
EMPLOYEE BENEFIT PLAN OR PLAN IN SUCH ENTITY, OR A GOVERNMENTAL PLAN
SUBJECT TO APPLICABLE LAW THAT IS SUBSTANTIALLY SIMILAR TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA OR SECTION 4975 OF THE CODE (EACH SUCH
ENTITY A "BENEFIT PLAN"); OR (II) THE ACQUISITION AND HOLDING OF THE CLASS
B NOTE WILL NOT GIVE RISE TO A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE (OR, IN THE CASE OF A
GOVERNMENTAL PLAN, ANY SUBSTANTIALLY SIMILAR APPLICABLE LAW).
Exhibit A-2 (Page 1)
REGISTERED $51,000,000
No. R-1 CUSIP NO. 000000XX0
WORLD FINANCIAL NETWORK CREDIT CARD
MASTER NOTE TRUST SERIES 2002-A
CLASS B SERIES 2002-A FLOATING RATE ASSET BACKED NOTE
World Financial Network Credit Card Master Note Trust (herein
referred to as the "Issuer" or the "Trust"), a Delaware statutory business
trust governed by an Amended and Restated Trust Agreement dated as of
August 1, 2001, for value received, hereby promises to pay to Cede & Co.,
or registered assigns, subject to the following provisions, the principal
sum of FIFTY-ONE MILLION DOLLARS, or such greater or lesser amount as
determined in accordance with the Indenture, on the August 2011
Distribution Date, except as otherwise provided below or in the Indenture.
The Issuer will pay interest on the unpaid principal amount of this Note at
the Class B Note Interest Rate on each Distribution Date until the
principal amount of this Note is paid in full. Interest on this Note will
accrue for each Distribution Date from and including the most recent
Distribution Date on which interest has been paid to but excluding such
Distribution Date or, for the initial Distribution Date, from and including
the Closing Date to but excluding such Distribution Date. Interest will be
computed on the basis of a 360-day year and the actual number of days
elapsed. Principal of this Note shall be paid in the manner specified in
the Indenture Supplement referred to on the reverse hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Indenture Trustee, by manual signature, this Note
shall not be entitled to any benefit under the Indenture or the Indenture
Supplement referred to on the reverse hereof, or be valid for any purpose.
THIS CLASS B NOTE IS SUBORDINATED TO THE EXTENT NECESSARY TO FUND
PAYMENTS ON THE CLASS A NOTES TO THE EXTENT SPECIFIED IN THE INDENTURE
SUPPLEMENT.
Exhibit A-2 (Page 2)
IN WITNESS WHEREOF, the Issuer has caused this Class B Note to be duly
executed.
WORLD FINANCIAL NETWORK CREDIT CARD
MASTER NOTE TRUST,
as Issuer
By: Chase Manhattan Bank USA, National
Association, not in its individual
capacity but solely as Owner Trustee under
the Trust Agreement
By:
--------------------------------------
Name:
Title:
Dated: November 7, 2002
Exhibit A-2 (Page 3)
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B Notes described in the within-mentioned
Indenture.
BNY MIDWEST TRUST COMPANY, as
Indenture Trustee
By:__________________________________
Authorized Signatory
Dated: ______________________________
Exhibit A-2 (Page 4)
WORLD FINANCIAL NETWORK CREDIT CARD
MASTER NOTE TRUST SERIES 2002-A
CLASS B SERIES 2002-A FLOATING RATE ASSET BACKED NOTE
Summary of Terms and Conditions
This Class B Note is one of a duly authorized issue of Notes of
the Issuer, designated as World Financial Network Credit Card Master Note
Trust, Series 2002-A (the "SERIES 2002-A NOTES"), issued under a Master
Indenture dated as of August 1, 2001 (the "MASTER INDENTURE"), between the
Issuer and BNY Midwest Trust Company, as indenture trustee (the "INDENTURE
TRUSTEE"), as supplemented by the Indenture Supplement dated as of November
7, 2002 (the "INDENTURE SUPPLEMENT"), and representing the right to receive
certain payments from the Issuer. The term "Indenture," unless the context
otherwise requires, refers to the Master Indenture as supplemented by the
Indenture Supplement. The Notes are subject to all of the terms of the
Indenture. All terms used in this Note that are defined in the Indenture
shall have the meanings assigned to them in or pursuant to the Indenture.
In the event of any conflict or inconsistency between the Indenture and
this Note, the Indenture shall control.
The Class A Notes and the Class C Notes will also be issued under
the Indenture.
The Noteholder, by its acceptance of this Note, agrees that it
will look solely to the property of the Issuer allocated to the payment of
this Note for payment hereunder and that neither the Owner Trustee nor the
Indenture Trustee is liable to the Noteholders for any amount payable under
the Notes or the Indenture or, except in the case of the Indenture Trustee
as expressly provided in the Indenture, subject to any liability under the
Indenture.
This Note does not purport to summarize the Indenture and
reference is made to the Indenture for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced thereby,
and the rights, duties and immunities of the Indenture Trustee.
THIS CLASS B NOTE DOES NOT REPRESENT AN OBLIGATION OF, OR AN
INTEREST IN, THE ISSUER, WORLD FINANCIAL NETWORK NATIONAL BANK, WFN CREDIT
COMPANY, LLC, OR ANY OF THEIR AFFILIATES, AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY OR INSTRUMENTALITY.
The Issuer, the Transferor, the Indenture Trustee and any agent of
the Issuer, the Transferor or the Indenture Trustee shall treat the person
in whose name this Class B Note is registered as the owner hereof for all
purposes, and neither the Issuer, the Transferor, the Indenture Trustee nor
any agent of the Issuer, the Transferor or the Indenture Trustee shall be
affected by notice to the contrary.
THIS CLASS B NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Exhibit A-2 (Page 5)
ASSIGNMENT
Social Security or other identifying number of assignee ______________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _____________ (name and address of assignee) the within
certificate and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________ attorney, to transfer said certificate on the books
kept for registration thereof, with full power of substitution in the premises.
Dated:______________, _______ ____________________________________/**
Signature Guaranteed:
------------------
/** The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
Exhibit A-2 (Page 6)
EXHIBIT A-3
FORM OF CLASS C SERIES 2002-A FLOATING RATE ASSET BACKED NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF COVENANTS AND
AGREES THAT IT WILL NOT AT ANY TIME INSTITUTE AGAINST WORLD FINANCIAL
NETWORK CREDIT CARD MASTER TRUST, A COMMON LAW TRUST ORGANIZED UNDER THE
LAWS OF NEW YORK ("WFNMT"), THE TRANSFEROR OR THE ISSUER, OR SOLICIT OR
JOIN OR COOPERATE WITH OR ENCOURAGE OR ENCOURAGE ANY INSTITUTION IN
INSTITUTING AGAINST WFNMT, THE TRANSFEROR OR THE ISSUER, ANY BANKRUPTCY,
REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS, OR
OTHER PROCEEDINGS UNDER ANY UNITED STATES FEDERAL OR STATE BANKRUPTCY OR
SIMILAR LAW IN CONNECTION WITH ANY OBLIGATION RELATING TO THE NOTES, THE
INDENTURE OR ANY OF THE TRANSACTION DOCUMENTS.
THE HOLDER OF THIS CLASS C NOTE, BY ACCEPTANCE OF THIS NOTE, AND
EACH HOLDER OF A BENEFICIAL INTEREST THEREIN, AGREE TO TREAT THE CLASS C
NOTES AS INDEBTEDNESS OF THE ISSUER FOR APPLICABLE FEDERAL, STATE, AND
LOCAL INCOME AND FRANCHISE TAX LAW AND FOR PURPOSES OF ANY OTHER TAX
IMPOSED ON, OR MEASURED BY, INCOME.
THE HOLDER OF THIS CLASS C NOTE SHALL BE DEEMED TO REPRESENT AND
WARRANT THAT EITHER (I) IT IS NOT ACQUIRING THE NOTE WITH THE PLAN ASSETS
OF AN "EMPLOYEE BENEFIT PLAN" AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), WHICH IS
SUBJECT TO TITLE I OF ERISA, A "PLAN" AS DEFINED IN SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AN ENTITY DEEMED TO
HOLD THE PLAN ASSETS OF ANY OF THE FOREGOING BY REASON OF INVESTMENT BY AN
EMPLOYEE BENEFIT PLAN OR PLAN IN SUCH ENTITY, OR A GOVERNMENTAL PLAN
SUBJECT TO APPLICABLE LAW THAT IS SUBSTANTIALLY SIMILAR TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA OR SECTION 4975 OF THE CODE (EACH SUCH
ENTITY A "BENEFIT PLAN"); OR (II) THE ACQUISITION AND HOLDING OF THE CLASS
C NOTE WILL NOT GIVE RISE TO A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE (OR, IN THE CASE OF A
GOVERNMENTAL PLAN, ANY SUBSTANTIALLY SIMILAR APPLICABLE LAW).
Exhibit A-3 (Page 1)
REGISTERED $81,000,000
No. R- 1 CUSIP NO. 000000XX0
WORLD FINANCIAL NETWORK CREDIT CARD
MASTER NOTE TRUST SERIES 2002-A
CLASS C SERIES 2002-A FLOATING RATE ASSET BACKED NOTE
World Financial Network Credit Card Master Note Trust (herein
referred to as the "Issuer" or the "Trust"), a Delaware statutory business
trust governed by an Amended and Restated Trust Agreement dated as of
August 1, 2001, for value received, hereby promises to pay to Cede & Co.,
or registered assigns, subject to the following provisions, the principal
sum of EIGHTY-ONE MILLION DOLLARS, or such greater or lesser amount as
determined in accordance with the Indenture, on the August 2011
Distribution Date, except as otherwise provided below or in the Indenture.
The Issuer will pay interest on the unpaid principal amount of this Note at
the Class C Note Interest Rate on each Distribution Date until the
principal amount of this Note is paid in full. Interest on this Note will
accrue for each Distribution Date from and including the most recent
Distribution Date on which interest has been paid to but excluding such
Distribution Date or, for the initial Distribution Date, from and including
the Closing Date to but excluding such Distribution Date. Interest will be
computed on the basis of a 360-day year and the actual number of days
elapsed. Principal of this Note shall be paid in the manner specified in
the Indenture Supplement referred to on the reverse hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Indenture Trustee, by manual signature, this Note
shall not be entitled to any benefit under the Indenture or the Indenture
Supplement referred to on the reverse hereof, or be valid for any purpose.
THIS CLASS C NOTE IS SUBORDINATED TO THE EXTENT NECESSARY TO FUND
PAYMENTS ON THE CLASS A AND CLASS B NOTES TO THE EXTENT SPECIFIED IN THE
INDENTURE SUPPLEMENT.
Exhibit A-3 (Page 2)
IN WITNESS WHEREOF, the Issuer has caused this Class C Note to be duly
executed.
WORLD FINANCIAL NETWORK CREDIT CARD
MASTER NOTE TRUST,
as Issuer
By: Chase Manhattan Bank USA, National
Association, not in its individual
capacity but solely as Owner Trustee under
the Trust Agreement
By:
--------------------------------------
Name:
Title:
Dated: November 7, 2002
Exhibit A-3 (Page 3)
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class C Notes described in the within-mentioned
Indenture.
BNY MIDWEST TRUST COMPANY, as
Indenture Trustee
By:__________________________________
Authorized Signatory
Dated: ______________________________
Exhibit A-3 (Page 4)
WORLD FINANCIAL NETWORK CREDIT CARD
MASTER NOTE TRUST SERIES 2002-A
CLASS C SERIES 2002-A FLOATING RATE ASSET BACKED NOTE
Summary of Terms and Conditions
This Class C Note is one of a duly authorized issue of Notes of
the Issuer, designated as World Financial Network Credit Card Master Note
Trust, Series 2002-A (the "SERIES 2002-A NOTES"), issued under a Master
Indenture dated as of August 1, 2001 (the "MASTER INDENTURE"), between the
Issuer and BNY Midwest Trust Company, as indenture trustee (the "INDENTURE
TRUSTEE"), as supplemented by the Indenture Supplement dated as of November
7, 2002 (the "INDENTURE SUPPLEMENT"), and representing the right to receive
certain payments from the Issuer. The term "Indenture," unless the context
otherwise requires, refers to the Master Indenture as supplemented by the
Indenture Supplement. The Notes are subject to all of the terms of the
Indenture. All terms used in this Note that are defined in the Indenture
shall have the meanings assigned to them in or pursuant to the Indenture.
In the event of any conflict or inconsistency between the Indenture and
this Note, the Indenture shall control.
The Class A Notes and the Class B Notes will also be issued under
the Indenture.
The Noteholder, by its acceptance of this Note, agrees that it
will look solely to the property of the Issuer allocated to the payment of
this Note for payment hereunder and that neither the Owner Trustee nor the
Indenture Trustee is liable to the Noteholders for any amount payable under
the Notes or the Indenture or, except in the case of the Indenture Trustee
as expressly provided in the Indenture, subject to any liability under the
Indenture.
This Note does not purport to summarize the Indenture and
reference is made to the Indenture for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced thereby,
and the rights, duties and immunities of the Indenture Trustee.
THIS CLASS C NOTE DOES NOT REPRESENT AN OBLIGATION OF, OR AN
INTEREST IN, THE ISSUER, WORLD FINANCIAL NETWORK NATIONAL BANK, WFN CREDIT
COMPANY LLC, OR ANY OF THEIR AFFILIATES, AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY OR INSTRUMENTALITY.
The Issuer, the Transferor, the Indenture Trustee and any agent of
the Issuer, the Transferor or the Indenture Trustee shall treat the person
in whose name this Class C Note is registered as the owner hereof for all
purposes, and neither the Issuer, the Transferor, the Indenture Trustee nor
any agent of the Issuer, the Transferor or the Indenture Trustee shall be
affected by notice to the contrary.
THIS CLASS C NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Exhibit A-3 (Page 5)
ASSIGNMENT
Social Security or other identifying number of assignee ______________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _____________ (name and address of assignee) the within
certificate and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________ attorney, to transfer said certificate on the books
kept for registration thereof, with full power of substitution in the premises.
Dated:______________, _______ ____________________________________/**
Signature Guaranteed:
-------------------
/** The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
Exhibit A-3 (Page 6)
EXHIBIT B
FORM OF MONTHLY PAYMENT INSTRUCTIONS AND
NOTIFICATION TO INDENTURE TRUSTEE
WORLD FINANCIAL NETWORK CREDIT CARD MASTER NOTE TRUST
SERIES 2002-A
The undersigned, a duly authorized representative of World
Financial Network National Bank ("WFN"), as Servicer pursuant to the
Transfer and Servicing Agreement, dated as of August 1, 2001 (the "Transfer
and Servicing Agreement") between WFN, as Servicer, WFN Credit Company,
LLC, as transferor (the "Transferor") and World Financial Network Credit
Card Master Note Trust, as issuer (the "Issuer"), does hereby certify as
follows:
A. Capitalized terms used in this Certificate have their
respective meanings set forth in the Master Indenture dated as of
August 1, 2001 (the "Indenture") between the Issuer and BNY Midwest
Trust Company, as indenture trustee (the "Indenture Trustee") as
supplemented by the 2002-A Indenture Supplement dated as of November 7,
2002 between the Issuer and Indenture Trustee (as amended and
supplemented, the "Indenture Supplement").
B. WFN is the Servicer.
C. The undersigned is an Authorized Officer of the Servicer.
I. INSTRUCTION TO MAKE A WITHDRAWAL
Pursuant to Section 4.4, the Servicer does hereby instruct
the Indenture Trustee (i) to make a withdrawal from the Distribution
Account (or other Series Account as specified below) on ____________, 200_,
which date is a Distribution Date under the Indenture Supplement, in an
aggregate amount (equal to the Available Finance Charge Collections) as set
forth below in respect of the following amounts and (ii) to apply the
proceeds of such withdrawal in accordance with Section 4.4(a):
A. Pursuant to Subsection 4.4(a)(i):
Class A Monthly Interest for the
preceding Interest Period................................$_________
Monthly Interest previously due but not
distributed to Class A Noteholders.......................$_________
Additional Interest previously due but not
distributed to Class A Noteholders.......................$_________
Class A Net Swap Payment.................................$_________
Exhibit B-1 (Page 1)
B. Pursuant to Subsection 4.4(a)(ii):
Class B Monthly Interest for the
preceding Interest Period................................$_________
Monthly Interest previously due but not
distributed to Class B Noteholders.......................$_________
Additional Interest previously due but not
distributed to Class B Noteholders.......................$_________
Class B Net Swap Payment.................................$_________
C. Pursuant to Subsection 4.4(a)(iii):
Noteholder Servicing Fee for such Distribution Date,
plus the amount of any Noteholder Servicing Fee
previously due but not distributed to the Servicer
on a prior Distribution Date.............................$_________
D. Pursuant to Subsection 4.4(a)(iv):
Class C Monthly Interest for the
preceding Interest Period................................$_________
Monthly Interest previously due but not
distributed to Class C Noteholders.......................$_________
Additional Interest previously due but not
distributed to Class C Noteholders.......................$_________
Class C Net Swap Payment.................................$_________
E. Pursuant to Subsection 4.4(a)(v) from the Principal
Account:
Investor Default Amount to be treated as Available
Principal Collections....................................$_________
Investor Uncovered Dilution Amount for such
Distribution Date to be treated as Available
Principal Collections....................................$_________
F. Pursuant to Subsection 4.4(a)(vi):
Investor Charge Offs and the amount of Reallocated
Principal Collections not previously reimbursed to be
treated as Available Principal Collections...............$_________
Exhibit B-1 (Page 2)
G. Pursuant to Subsection 4.4(a)(vii):
Amount to be deposited into the Cash Collateral
Account..................................................$_________
H. Pursuant to Subsection 4.4(a)(viii):
Amount to be deposited into the Reserve Account..........$_________
I. Pursuant to Subsection 4.4(a)(ix):
Amount to be deposited in the Spread Account.............$_________
J. Pursuant to Subsection 4.4(a)(x):
Early termination payments or other additional payments
owed to be paid to the Class A Counterparty .............$_________
Early termination payments or other additional payments
owed to be paid to the Class B Counterparty .............$_________
Early termination payments or other additional payments
owed to be paid to the Class C Counterparty .............$_________
K. Pursuant to Subsection 4.4(a)(xi):
Additional amounts designated by the Servicer to be
paid from Available Finance Charge Collections ..........$_________
L. Pursuant to Subsection 4.4(a)(xii):
The balance will constitute Excess Finance Charge
Collections for such Distribution Date...................$_________
Pursuant to Section 4.4(b) and (c), the Servicer does hereby
instruct the Indenture Trustee (i) to make a withdrawal from the
Distribution Account (or other Series Account specified below) on
____________, 200_, which date is a Distribution Date under the Indenture
Supplement, in an aggregate
Exhibit B-1 (Page 3)
amount (equal to the Available Principal Collections) as set forth below in
respect of the following amounts and (ii) to apply the proceeds of such
withdrawal in accordance with Section 4.4(b) and (c):
A. Pursuant to Subsection 4.4(b):
During the Revolving Period, amount equal to the
Available Principal Collections to be treated as Shared
Principal Collections and applied in accordance with
Section 8.5 of the
Indenture................................................$_________
B. Pursuant to Subsection 4.4(c)(i):
During the Controlled Accumulation Period, Monthly
Principal for such Distribution Date to be deposited
into the Principal Accumulation Account..................$_________
C. Pursuant to Subsection 4.4(c)(ii):
During the Early Amortization Period, Monthly Principal
for such Distribution Date for payment to the Class A
Noteholders on such Distribution Date until the Class A
Note Principal Balance has been paid in full.............$_________
D. Pursuant to Subsection 4.4(c)(iii):
During the Early Amortization Period, after giving
effect to Clause (C) above, if any remaining Monthly
Principal, to the Class B Noteholders on such
Distribution Date until the Class B Note Principal
Balance has been paid in full............................$_________
E. Pursuant to Subsection 4.4(c)(iv):
During the Early Amortization Period, after giving
effect to Clause (D) above, if any remaining Monthly
Principal, to the Class C Noteholders, on such
Distribution Date until the Class C Note Principal
Balance has been paid in full............................$_________
F. Pursuant to Subsection 4.4(c)(v):
Amount, if any, remaining after giving effect to Clauses
(B) through (E) above, to be treated as Shared
Principal Collections....................................$_________
Exhibit B-1 (Page 4)
Pursuant to Section 4.6, the Servicer does hereby instruct
the Indenture Trustee (i) to make a withdrawal from the Distribution
Account on ____________, 200_, which date is a Distribution Date under the
Indenture Supplement, in an aggregate amount (equal to the Available
Principal Collections) as set forth below in respect of the following
amounts and (ii) to apply the proceeds of such withdrawal in accordance
with Section 4.6:
Reallocated Principal Collections to fund any deficiency
pursuant to and in the priority set forth subsections
4.4(a)(i), (ii), (iii) and (iv)(B) of the
Indenture Supplement.....................................$_________
Pursuant to Section 4.9, the Servicer does hereby instruct
the Indenture Trustee to transfer from the Principal Accumulation Account
to the Collection Account, the Principal Accumulation Investment Proceeds
on deposit in the Principal Accumulation Account for application as
Available Finance Charge Collections in the following amount.
......................................................................$_________
Pursuant to Section 4.10, the Servicer does hereby
instruct the Indenture Trustee to withdraw from the Reserve Account an
amount equal to any Reserve Account Surplus to be deposited into the Spread
Account in accordance with Section 4.10(e), in the following amount.
......................................................................$_________
Pursuant to Section 4.12, the Servicer does hereby
instruct the Indenture Trustee to withdraw from the Spread Account an
amount equal to a deficiency in Class C Monthly Interest and Class C Net
Swap Payments up to the Available Spread Account Amount, in the following
amount.
......................................................................$_________
II. INSTRUCTIONS TO MAKE CERTAIN PAYMENTS
Pursuant to Section 5.2, the Servicer does hereby
instruct the Indenture Trustee or the Paying Agent as the case may be, to
pay in accordance with Section 5.2 from the Collection Account or the
Principal Accumulation Account, as applicable, on _______________, which
date is a Distribution Date under the Indenture Supplement, the following
amounts:
A. Pursuant to Subsection 5.2(a):
(1) Class A Noteholder's pro rata share of the amounts on
deposit in the Distribution Account that are allocated
and available on such Distribution Date to pay interest
on the Class A Notes pursuant to the Indenture
Supplement...............................................$_________
Exhibit B-1 (Page 5)
(2) Class A Noteholder's pro rata share of the amounts on
deposit in the Distribution Account that are allocated
and available on such Distribution Date to pay principal
of the Class A Notes pursuant to the
Indenture Supplement.....................................$_________
B. Pursuant to Subsection 5.2(b):
(1) Class B Noteholder's pro rata share of the amounts on
deposit in the Distribution Account that are allocated
and available on such Distribution Date to pay interest
on the Class B Notes pursuant to the Indenture
Supplement...............................................$_________
(2) Class B Noteholder's pro rata share of the amounts on
deposit in the Distribution Account that are allocated
and available on such Distribution Date to pay
principal of the Class B Notes pursuant to the
Indenture Supplement.....................................$_________
C. Pursuant to Subsection 5.2(c):
(1) Class C Noteholder's pro rata share of the amounts on
deposit in the Distribution Account that are allocated
and available on such Distribution Date to pay interest
of the Class C Notes pursuant to the Indenture
Supplement, including amounts withdrawn from the Spread
Account..................................................$_________
(2) Class C Noteholder's pro rata share of the amounts on
deposit in the Distribution Account that are allocated
and available on such Distribution Date to pay
principal on the Class C Notes pursuant to the
Indenture Supplement.....................................$_________
Exhibit B-1 (Page 6)
IN WITNESS WHEREOF, the undersigned has duly executed this
certificate this ___________ day of ________________, 200_.
WORLD FINANCIAL NETWORK NATIONAL
BANK, as Servicer
By:
--------------------------------
Name:
Title:
Exhibit B-1 (Page 7)
EXHIBIT C
FORM OF MONTHLY NOTEHOLDERS' STATEMENT
WORLD FINANCIAL NETWORK CREDIT CARD MASTER NOTE TRUST
SERIES 2002-A
Pursuant to the Master Indenture, dated as of August 1,
2001, (as amended and supplemented, the "Indenture") between World
Financial Network Credit Card Master Note Trust (the "Issuer") and BNY
Midwest Trust Company, as indenture trustee (the "Indenture Trustee"), as
supplemented by the Series 2002-A Indenture Supplement (the "Indenture
Supplement"), dated as of November 7, 2002, between the Issuer and the
Indenture Trustee, World Financial Network National Bank, as Servicer (the
"Servicer") under the Transfer and Servicing Agreement, dated as of August
1, 2002 (the "Transfer and Servicing Agreement") between the Servicer, WFN
Credit Company, as LLC, as Transferor and the Issuer is required to prepare
certain information each month regarding current distributions to the
Series 2002-A Noteholders and the performance of the Trust during the
previous month. The information required to be prepared with respect to the
Distribution Date of _________________, and with respect to the performance
of the Trust during the month of ________ is set forth below. Capitalized
terms used herein are defined in the Indenture and the Indenture
Supplement.
A. Information regarding distributions in respect of the Notes
1. The total amount of the distribution
in respect of Class A Notes...............................$_________
2. The amount of the distribution set forth in paragraph 1
above in respect of principal of the Class A
Notes....................................................$_________
3. The amount of the distribution set forth in paragraph 1
above in respect of interest on the Class A
Notes....................................................$_________
4. The total amount of the distribution in respect of
Class B Notes............................................$_________
5. The amount of the distribution set forth in paragraph 4
above in respect of principal of the
Class B Notes............................................$_________
6. The amount of the distribution set forth in paragraph 4
above in respect of interest on the Class B Notes........$_________
7. The total amount of the distribution in respect of
Class C Notes............................................$_________
Exhibit C-1 (Page 1)
8. The amount of the distribution set forth in paragraph 7
above in respect of principal of the Class C Notes.......$_________
9. The amount of the distribution set forth in paragraph 7
above in respect of interest on the Class C Notes........$_________
RECEIVABLES -
Beginning of the Month Principal Receivables: $_________
Beginning of the Month Finance Charge Receivables: $_________
Beginning of the Month Discount Option Receivables: $_________
Beginning of the Month Total Receivables: $_________
Removed Principal Receivables: $_________
Removed Finance Charge Receivables: $_________
Removed Total Receivables: $_________
Additional Principal Receivables: $_________
Additional Finance Charge Receivables: $_________
Additional Total Receivables: $_________
Discount Option Receivables Generated this Period: $_________
Net Recoveries for month of __________ 200_ $_________
End of the Month Principal Receivables: $_________
End of the Month Finance Charge Receivables: $_________
End of the Month Discount Option Receivables: $_________
Exhibit C-1 (Page 2)
End of the Month Total Receivables: $__________
Excess Funding Account Balance: $__________
Aggregate Principal Balance: $__________
Minimum Aggregate Principal Balance: $__________
End of the Month Transferor Amount: $__________
Minimum Transferor Amount: $__________
DELINQUENCIES AND LOSSES -
End of the Month Delinquencies: RECEIVABLES
-----------
30-59 Days Delinquent $__________
60-89 Days Delinquent $__________
90+ Days Delinquent $__________
Total 30+ Days Delinquent $__________
Defaulted Receivables During the Month $__________
NOTE PRINCIPAL BALANCES -
Class A Note Principal Balance $__________
Class B Note Principal Balance $__________
Class C Note Principal Balance $__________
SERIES 2002-A
ALLOCATION PERCENTAGE __________%
AVAILABLE FINANCE CHARGE COLLECTIONS $__________
Exhibit C-1 (Page 3)
INVESTOR DEFAULT AMOUNT $__________
INVESTOR UNCOVERED DILUTION AMOUNT $__________
NOTEHOLDER SERVICING FEES $__________
AVAILABLE PRINCIPAL COLLECTIONS $__________
EXCESS FINANCE CHARGE COLLECTIONS $__________
SHARED PRINCIPAL COLLECTIONS $__________
CASH COLLATERAL ACCOUNT BALANCE $__________
RESERVE ACCOUNT BALANCE $__________
SPREAD ACCOUNT BALANCE $__________
APPLICATION OF COLLECTIONS -
CLASS A MONTHLY INTEREST $__________
CLASS A NET SWAP PAYMENT $__________
CLASS B MONTHLY INTEREST $__________
CLASS B NET SWAP PAYMENT $__________
CLASS C MONTHLY INTEREST $__________
CLASS C NET SWAP PAYMENT $__________
INVESTOR DEFAULT AMOUNT $__________
INVESTOR UNCOVERED DILUTION AMOUNT $__________
INVESTOR CHARGEOFFS AND REALLOCATED
PRINCIPAL COLLECTIONS NOT
PREVIOUSLY REIMBURSED $__________
AMOUNTS TO BE DEPOSITED
IN THE CASH COLLATERAL ACCOUNT $__________
AMOUNTS TO BE DEPOSITED IN THE
RESERVE ACCOUNT $__________
AMOUNTS TO BE DEPOSITED
IN THE SPREAD ACCOUNT $__________
Exhibit C-1 (Page 4)
EXCESS FINANCE CHARGES COLLECTIONS -
TOTAL EXCESS FINANCE CHARGE COLLECTIONS
FOR ALL ALLOCATION SERIES $__________
SHARED PRINCIPAL COLLECTIONS -
TOTAL SHARED PRINCIPAL COLLECTIONS
FOR ALL ALLOCATIONS SERIES $__________
YIELD AND BASE RATE -
Base Rate (Current Month) %
------------------
Base Rate (Prior Month) %
------------------
Base Rate (Two Months Ago) %
------------------
THREE MONTH AVERAGE BASE RATE ________%
Portfolio Yield (Current Month) %
------------------
Portfolio Yield (Prior Month) %
------------------
Portfolio Yield (Two Months Ago) %
------------------
THREE MONTH AVERAGE PORTFOLIO YIELD ________%
Exhibit C-1 (Page 5)
PRINCIPAL COLLECTIONS -
MONTHLY PRINCIPAL __________%
PRINCIPAL ACCUMULATION ACCOUNT BALANCE $__________
SERIES 2002-A PRINCIPAL SHORTFALL $__________
SHARED PRINCIPAL COLLECTIONS ALLOCABLE
FROM OTHER PRINCIPAL SHARING SERIES $__________
INVESTOR CHARGE OFFS AND REDUCTIONS -
INVESTOR CHARGE OFFS $__________
REALLOCATED PRINCIPAL COLLECTIONS $__________
REDUCTIONS IN COLLATERAL AMOUNT
(OTHER THAN BY PRINCIPAL PAYMENTS) $__________
REDUCTIONS IN COLLATERAL AMOUNT DUE TO
APPLICATION OF AVAILABLE PRINCIPAL
COLLECTIONS AS SHARED PRINCIPAL
COLLECTIONS $__________
PREVIOUS REDUCTIONS IN COLLATERAL AMOUNT
REIMBURSED $__________
----------------------------------------------
as Indenture Trustee
By:
-------------------------------------------
Name:
Title:
Exhibit C-1 (Page 6)
EXHIBIT D
FORM OF MONTHLY SERVICER'S CERTIFICATE
WORLD FINANCIAL NETWORK NATIONAL BANK
WORLD FINANCIAL NETWORK CREDIT CARD MASTER NOTE TRUST SERIES
2002-A
The undersigned, a duly authorized representative of World
Financial Network National Bank ("WFN"), as Servicer pursuant to the
Transfer and Servicing Agreement, dated as of August 1, 2001 (as amended
and supplemented, the "Transfer and Servicing Agreement"), among WFN Credit
Company, LLC, as Transferor, World Financial Network National Bank, as
Servicer and World Financial Network Master Note Trust (the "Trust"), as
Issuer, does hereby certify as follows:
1. Capitalized terms used in this Certificate have their
respective meanings set forth in the Transfer and Servicing Agreement or
the Master Indenture dated as of August 1, 2001 (as amended or
supplemented, the "Master Indenture"), between the Trust and BNY Midwest
Trust Company, as indenture trustee (the "Indenture Trustee") as
supplemented by the Series 2002-A Indenture Supplement, dated as of
November 7, 2002, between the Trust and the Indenture Trustee (as amended
and supplemented, the "Indenture Supplement") and together with the Master
Indenture, the "Indenture"), as applicable.
2. WFN is, as of the date hereof, the Servicer under the Transfer
and Servicing Agreement.
3. The undersigned is an Authorized Officer of the Servicer.
4. This Certificate relates to the Distribution Date occurring on
________ __, 200_.
5. As of the date hereof, to the best knowledge of the
undersigned, the Servicer has performed in all material respects all of its
obligations under the Transfer and Servicing Agreement and the Indenture
through the Monthly Period preceding such Distribution Date [or, if there
has been a default in the performance of any such obligation, set forth in
detail the (i) nature of such default, (ii) the action taken by the
Servicer, if any, to remedy such default and (iii) the current status of
each such default]; if applicable, insert "None".
6. As of the date hereof, to the best knowledge of the
undersigned, no Early Amortization Event occurred on or prior to such
Distribution Date.
Exhibit D (Page 1)
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Certificate this ___ day of _____________ __, 20__.
WORLD FINANCIAL NETWORK NATIONAL
BANK, as Servicer
By:
---------------------------------
Name:
Title:
Exhibit D (Page 2)
EXHIBIT E-1
Form of Class A Swap
Exhibit E-1 (Page 1)
EXECUTION COPY
CLASS A
CONFIRMATION FOR U.S. DOLLAR INTEREST RATE SWAP
TRANSACTION UNDER 2002 MASTER AGREEMENT
Date: November 7, 2002 Our ref: JPMorgan Reference Number
0009022940/63339120
To: World Financial Network From: JPMorgan Chase Bank
Credit Card Master Note Trust 000 Xxxx Xxxxxx
x/x Xxxxx Xxxxxxxxx Xxxx Xxx Xxxx, XX 00000
XXX, National Association
500 Xxxxxxx Xxxxxxxxxx Road Global Derivative Operations
OPS4, 3rd Floor 0 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000 Xxxxxxxx, XX 00000
Attn: Institutional Trust Services Contact: Document Control
Fax No:000-000-0000 Fax No: 000-000-0000
Tel No:000-000-0000 Tel No: 000-000-0000
Dear Sir/Madam,
The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between World Financial Network
Credit Card Master Note Trust and JPMorgan Chase Bank (each a "party" and
together "the parties") on the Trade Date specified below (the "Transaction").
This letter agreement constitutes a "Confirmation" as referred to in the ISDA
Master Agreement specified in paragraph 1 below (the "Agreement").
The definitions and provisions contained in the 2000 ISDA Definitions
(as published by the International Swaps and Derivatives Association, Inc.,
the "Definitions") are incorporated into this Confirmation. In the event of
any inconsistency between the Definitions and this Confirmation, this
Confirmation will govern. Capitalized terms used herein and not otherwise
defined have the meanings set forth in the Definitions or the Indenture dated
as of August 1, 2001, between Party B and BNY Midwest Trust Company, as
indenture trustee (the "Indenture") as supplemented by the Series 2002-A
Indenture Supplement, dated as of November 7, 2002 (the "Indenture Supplement"
and together with the Indenture, the "Indenture").
1. This Confirmation supplements, forms part of, and is subject to, the
ISDA Master Agreement (including the Schedule thereto) dated as of October
29, 2002 as amended and supplemented from time to time (the "Agreement"),
between the parties. All provisions contained in the Agreement govern this
Confirmation except as expressly modified below.
In this Confirmation "Party A" means JPMorgan Chase Bank and "Party
B" means World Financial Network Credit Card Master Note Trust.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Notional Amount: Initially, USD 468,000,000.00 and
thereafter an amount equal for each
Calculation Period to the Class A Note
Principal Balance (as defined in the
Indenture Supplement) at the end of the
first day of that Calculation Period.
Trade Date: October 30, 2002
Effective Date: November 7, 2002
Exhibit E-1 (Page 2)
Termination Date: The earlier of (i) August 15, 2011, subject
to adjustment in accordance with the
Following Business Day Convention, and
(ii) the date on which the Class A Note
Principal Balance (as defined in the
Indenture Supplement) is reduced to zero,
subject to early termination in accordance
with the terms of the Agreement. In
accordance with the Indenture Supplement,
the Class A Expected Principal
Distribution Date is October 15, 2007,
subject to the Modified Following Business
Day Convention.
Fixed Amounts:
Fixed Rate Payer: Party B
Fixed Rate Payer The 15th of each month commencing
Payment Dates: December 16, 2002 and ending on the
Termination Date, subject to adjustment in
accordance with the Modified Following
Business Day Convention
Fixed Rate: 3.52% per annum
Fixed Rate Day Count Actual/360
Fraction:
Floating Amounts:
Floating Rate Payer: Party A
Floating Rate Payer The 15th of each month commencing
Payment Dates: December 16, 2002 and ending on
the Termination Date, subject to
adjustment in accordance with the Modified
Following Business Day Convention.
Floating Rate for initial Linear Interpolation
Calculation Period:
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 Month, except for the initial Calculation
Period, which shall be interpolated.
Spread: None
Floating Rate Day Count Actual/360
Fraction:
Reset Dates: First day of each Calculation Period
Business Days: New York, London, Columbus, Ohio,
and Chicago, Illinois
Calculation Agent: Party A
Exhibit E-1 (Page 3)
3. Additional Amounts Upon Partial Termination
On any Payment Date prior to the Class A Expected Principal
Distribution Date (as defined in the Indenture Supplement), where as a result
of principal payments on the Class A Notes (as defined in the Indenture
Supplement), the Notional Amount would be reduced by the corresponding
reduction in the Class A Note Principal Balance (as defined in the Indenture
Supplement), the parties hereto shall treat the portion of such reduction
(without duplication) as terminated on such Payment Date (a "Terminated
Transaction"). Party A shall calculate the Market Quotation for the Terminated
Transaction as set forth below.
"Market Quotation" means, with respect to a Terminated Transaction,
an amount determined on the basis of quotations from Reference Market-makers.
Each quotation will be for an amount, if any, that would be paid to Party A
(expressed as a negative number) or by Party A (expressed as a positive
number) in consideration of an agreement between Party A and the quoting
Reference Market-maker to enter into such Terminated Transaction (with the
same fixed and floating payment rates and remaining term as this Transaction)
on the relevant Payment Date. Party A will request each Reference Market-maker
to provide its quotation to the extent reasonably practicable as of the same
day and time (without regard to different time zones) on or as soon as
reasonably practicable prior to the relevant Payment Date. The day and time as
of which those quotations are to be obtained will be selected in good faith by
Party A. If more than three quotations are provided, the Market Quotation will
be the arithmetic mean of the quotations, without regard to the quotations
having the highest and lowest values. If exactly three such quotations are
provided, the Market Quotation will be the quotation remaining after
disregarding the highest and lowest quotations. For this purpose, if more than
one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided,
Party A will determine the Market Quotation in good faith. Notwithstanding the
foregoing, Party A shall be the sole Reference Market-maker unless: (a) the
reduction in the Notional Amount of the Transaction is equal to or greater
than $50 million on such Payment Date, and (b) the Servicer or the Indenture
Trustee requests that quotations from Reference Market-makers other than Party
A are utilized.
If the amount so determined by Party A in respect of a Terminated
Transaction is positive, Party B shall owe such amount to Party A, which shall
be payable (with interest thereon accruing from such Payment Date and
calculated at the Fixed Rate) on the next Distribution Date to the extent
provided in the Indenture. If such amount is negative, no amounts shall be
payable by Party A or Party B in respect of the Terminated Transaction.
4. Account Details:
Account for payments to Party A: Name: JPMorgan Chase Bank
City: New York
ABA# 000-000-000
Ref: World Financial Network
Credit Card Master
Note Trust-Swaps Group
Acct: 000-000-0000
Account for payments to Party B: Name: Bank of New York
City: New York
ABA# 000-000-000
Ref: World Financial Network
Credit Card Master
Note Trust - GLA111565
Acct: 394569 Finance
Charge Account
Exhibit E-1 (Page 4)
5. Offices:
The Office of Party A for this 0 Xxxxxxxxx Xxxxxx, 17th Floor
Transaction is: Brooklyn, NY 11245
The Office of Party B for this c/o Chase Manhattan Bank
Transaction is: USA, National Association
000 Xxxxxxx Xxxxxxxxxx Xxxx
XXX0, 0xx Xxxxx
Xxxxxx, XX 00000
Please confirm that the foregoing correctly sets forth the terms
and conditions of our agreement by responding within three (3)
Business Days by returning via telecopier an executed copy of
this Confirmation to the attention of Xxx Xxxx (fax no.
000-000-0000/9262).
Failure to respond within such period shall not affect the validity or
enforceability of this Transaction, and shall be deemed to be an affirmation
of the terms and conditions contained herein, absent manifest error.
Exhibit E-1 (Page 5)
JPMORGAN CHASE BANK Accepted and confirmed as of the
date first written:
WORLD FINANCIAL NETWORK CREDIT
By: CARD MASTER NOTE TRUST,
-------------------- By: Chase Manhattan Bank USA, National
Name: Association, not in its individual
Title: capacity, but solely as Owner Trustee
By:
------------------------------
Name:
Title:
Exhibit E-1 (Page 6)
EXHIBIT E-2
Form of Class B Swap
Exhibit E-2 (Page 1)
EXECUTION COPY
CLASS B
CONFIRMATION FOR U.S. DOLLAR INTEREST RATE SWAP
TRANSACTION UNDER 2002 MASTER AGREEMENT
Date: November 7, 2002 Our ref: JPMorgan Reference Number
0009022940/63339120
To: World Financial Network From: JPMorgan Chase Bank
Credit Card Master Note Trust 000 Xxxx Xxxxxx
x/x Xxxxx Xxxxxxxxx Xxxx Xxx Xxxx, XX 00000
XXX, National Association
500 Xxxxxxx Xxxxxxxxxx Road Global Derivative Operations
OPS4, 3rd Floor 0 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000 Xxxxxxxx, XX 00000
Attn: Institutional Trust Services Contact: Document Control
Fax No:000-000-0000 Fax No: 000-000-0000
Tel No:000-000-0000 Tel No: 000-000-0000
Dear Sir/Madam,
The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between World Financial Network
Credit Card Master Note Trust and JPMorgan Chase Bank (each a "party" and
together "the parties") on the Trade Date specified below (the "Transaction").
This letter agreement constitutes a "Confirmation" as referred to in the ISDA
Master Agreement specified in paragraph 1 below (the "Agreement").
The definitions and provisions contained in the 2000 ISDA Definitions
(as published by the International Swaps and Derivatives Association, Inc.,
the "Definitions") are incorporated into this Confirmation. In the event of
any inconsistency between the Definitions and this Confirmation, this
Confirmation will govern. Capitalized terms used herein and not otherwise
defined have the meanings set forth in the Definitions or the Indenture dated
as of August 1, 2001, between Party B and BNY Midwest Trust Company, as
indenture trustee (the "Indenture") as supplemented by the Series 2002-A
Indenture Supplement, dated as of November 7, 2002 (the "Indenture Supplement"
and together with the Indenture, the "Indenture").
1. This Confirmation supplements, forms part of, and is subject to, the
ISDA Master Agreement (including the Schedule thereto) dated as of October 29,
2002 as amended and supplemented from time to time (the "Agreement"),
between the parties. All provisions contained in the Agreement govern this
Confirmation except as expressly modified below.
In this Confirmation "Party A" means JPMorgan Chase Bank and "Party
B" means World Financial Network Credit Card Master Note Trust.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Notional Amount: Initially, USD 51,000,000.00 and
thereafter an amount equal for each
Calculation Period to the Class A Note
Principal Balance (as defined in the
Indenture Supplement) at the end of the
first day of that Calculation Period.
Trade Date: October 30, 2002
Effective Date: November 7, 2002
Exhibit E-2 (Page 2)
Termination Date: The earlier of (i) August 15, 2011, subject
to adjustment in accordance with the
Following Business Day Convention, and
(ii) the date on which the Class A Note
Principal Balance (as defined in the
Indenture Supplement) is reduced to zero,
subject to early termination in accordance
with the terms of the Agreement. In
accordance with the Indenture Supplement,
the Class B Expected Principal
Distribution Date is October 15, 2007,
subject to the Modified Following Business
Day Convention.
Fixed Amounts:
Fixed Rate Payer: Party B
Fixed Rate Payer The 15th of each month commencing
Payment Dates: December 16, 2002 and ending on the
Termination Date, subject to adjustment in
accordance with the Modified Following
Business Day Convention
Fixed Rate: 3.52% per annum
Fixed Rate Day Actual/360
Count Fraction:
Floating Amounts:
Floating Rate Payer: Party A
Floating Rate Payer The 15th of each month commencing
Payment Dates: December 16, 2002 and ending on
the Termination Date, subject to
adjustment in accordance with the Modified
Following Business Day Convention.
Floating Rate for initial
Calculation Period: Linear Interpolation
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 Month, except for the initial Calculation
Period, which shall be interpolated.
Spread: None
Floating Rate Day Count Actual/360
Fraction:
Reset Dates: First day of each Calculation Period
Business Days: New York, London, Columbus, Ohio,
and Chicago, Illinois
Calculation Agent: Party A
Exhibit E-2 (Page 3)
3. Additional Amounts Upon Partial Termination
On any Payment Date prior to the Class B Expected Principal
Distribution Date (as defined in the Indenture Supplement), where as a result
of principal payments on the Class B Notes (as defined in the Indenture
Supplement), the Notional Amount would be reduced by the corresponding
reduction in the Class B Note Principal Balance (as defined in the Indenture
Supplement), the parties hereto shall treat the portion of such reduction
(without duplication) as terminated on such Payment Date (a "Terminated
Transaction"). Party A shall calculate the Market Quotation for the Terminated
Transaction as set forth below.
"Market Quotation" means, with respect to a Terminated Transaction,
an amount determined on the basis of quotations from Reference Market-makers.
Each quotation will be for an amount, if any, that would be paid to Party A
(expressed as a negative number) or by Party A (expressed as a positive
number) in consideration of an agreement between Party A and the quoting
Reference Market-maker to enter into such Terminated Transaction (with the
same fixed and floating payment rates and remaining term as this Transaction)
on the relevant Payment Date. Party A will request each Reference Market-maker
to provide its quotation to the extent reasonably practicable as of the same
day and time (without regard to different time zones) on or as soon as
reasonably practicable prior to the relevant Payment Date. The day and time as
of which those quotations are to be obtained will be selected in good faith by
Party A. If more than three quotations are provided, the Market Quotation will
be the arithmetic mean of the quotations, without regard to the quotations
having the highest and lowest values. If exactly three such quotations are
provided, the Market Quotation will be the quotation remaining after
disregarding the highest and lowest quotations. For this purpose, if more than
one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided,
Party A will determine the Market Quotation in good faith. Notwithstanding the
foregoing, Party A shall be the sole Reference Market-maker unless: (a) the
reduction in the Notional Amount of the Transaction is equal to or greater
than $50 million on such Payment Date, and (b) the Servicer or the Indenture
Trustee requests that quotations from Reference Market-makers other than Party
A are utilized.
If the amount so determined by Party A in respect of a Terminated
Transaction is positive, Party B shall owe such amount to Party A, which shall
be payable (with interest thereon accruing from such Payment Date and
calculated at the Fixed Rate) on the next Distribution Date to the extent
provided in the Indenture. If such amount is negative, no amounts shall be
payable by Party A or Party B in respect of the Terminated Transaction.
4. Account Details:
Account for payments to Party A: Name: JPMorgan Chase Bank
City: New York
ABA# 000-000-000
Ref: World Financial Network
Credit Card Master
Note Trust-Swaps Group
Acct: 000-000-0000
Account for payments to Party B: Name: Bank of New York
City: New York
ABA# 000-000-000
Ref: World Financial Network
Credit Card Master
Note Trust - GLA111565
Acct: 394569 Finance
Charge Account
Exhibit E-2 (Page 4)
5. Offices:
The Office of Party A for this 0 Xxxxxxxxx Xxxxxx, 17th Floor
Transaction is: Brooklyn, NY 11245
The Office of Party B for this c/o Chase Manhattan Bank
Transaction is: USA, National Association
000 Xxxxxxx Xxxxxxxxxx Xxxx
XXX0, 0xx Xxxxx
Xxxxxx, XX 00000
Please confirm that the foregoing correctly sets forth the terms
and conditions of our agreement by responding within three (3)
Business Days by returning via telecopier an executed copy of
this Confirmation to the attention of Xxx Xxxx (fax no.
000-000-0000/9262).
Failure to respond within such period shall not affect the validity or
enforceability of this Transaction, and shall be deemed to be an affirmation
of the terms and conditions contained herein, absent manifest error.
Exhibit E-2 (Page 5)
JPMORGAN CHASE BANK Accepted and confirmed as of the
date first written:
WORLD FINANCIAL NETWORK CREDIT
By: CARD MASTER NOTE TRUST,
-------------------- By: Chase Manhattan Bank USA, National
Name: Association, not in its individual
Title: capacity, but solely as Owner Trustee
By:
------------------------------
Name:
Title:
Exhibit E-2 (Page 6)
EXHIBIT E-3
Form of Class C Swap
Exhibit E-3 (Page 1)
EXECUTION COPY
CLASS C
CONFIRMATION FOR U.S. DOLLAR INTEREST RATE SWAP
TRANSACTION UNDER 2002 MASTER AGREEMENT
Date: November 7, 2002 Our ref: JPMorgan Reference Number
0009023078/63325217
To: World Financial Network From: JPMorgan Chase Bank
Credit Card Master Note Trust 000 Xxxx Xxxxxx
x/x Xxxxx Xxxxxxxxx Xxxx Xxx Xxxx, XX 00000
XXX, National Association
500 Xxxxxxx Xxxxxxxxxx Road Global Derivative Operations
OPS4, 3rd Floor 0 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000 Xxxxxxxx, XX 00000
Attn: Institutional Trust Services Contact: Document Control
Fax No: 000-000-0000 Fax No: 000-000-0000
Tel No: 000-000-0000 Tel No: 000-000-0000
Dear Sir/Madam,
The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between World Financial Network
Credit Card Master Note Trust and JPMorgan Chase Bank (each a "party" and
together "the parties") on the Trade Date specified below (the "Transaction").
This letter agreement constitutes a "Confirmation" as referred to in the ISDA
Master Agreement specified in paragraph 1 below (the "Agreement").
The definitions and provisions contained in the 2000 ISDA
Definitions (as published by the International Swaps and Derivatives
Association, Inc., the "Definitions") are incorporated into this Confirmation.
In the event of any inconsistency between the Definitions and this
Confirmation, this Confirmation will govern. Capitalized terms used herein and
not otherwise defined have the meanings set forth in the Definitions or the
Indenture dated as of August 1, 2001, between Party B and BNY Midwest Trust
Company, as indenture trustee (the "Indenture") as supplemented by the Series
2002-A Indenture Supplement, dated as of November 7, 2002 (the "Indenture
Supplement" and together with the Indenture, the "Indenture").
1. This Confirmation supplements, forms part of, and is subject to, the
ISDA Master Agreement (including the Schedule thereto) dated as of October 29,
2002, as amended and supplemented from time to time (the "Agreement"), between
the parties. All provisions contained in the Agreement govern this
Confirmation except as expressly modified below.
In this Confirmation "Party A" means JPMorgan Chase Bank and "Party
B" means World Financial Network Credit Card Master Note Trust.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Notional Amount: Initially, USD 81,000,000.00 and thereafter
an amount equal for each Calculation Period
to the Class C Note Principal Balance (as
defined in the Indenture Supplement) at the
end of the first day of that Calculation
Period.
Trade Date: October 30, 2002
Exhibit E-3 (Page 2)
Effective Date: November 7, 2002
Termination Date: The earlier of (i) August 15, 2011, subject
to adjustment in accordance with the
Following Business Day Convention, and
ii) the date on which the Class C Note
Principal Balance (as defined in the
Indenture Supplement) is reduced to zero,
subject to early termination in accordance
with the terms of the Agreement. In
accordance with the Indenture Supplement,
the Class C Expected Principal Distribution
Date is November 15, 2007, subject to the
Modified Following Business Day
Convention.
Fixed Amounts:
Fixed Rate Payer: Party B
Fixed Rate Payer The 15th of each month commencing
Payment Dates: December 16, 2002 and ending on the
Termination Date, subject to adjustment in
accordance with the Modified Following
Business Day Convention
Fixed Rate: 3.56% per annum
Fixed Rate Day Count Actual/360
Fraction:
Floating Amounts:
Floating Rate Payer: Party A
Floating Rate Payer The 15th of each month commencing December
Payment Dates: 16, 2002 and ending on the Termination Date,
subject to adjustment in accordance with the
Modified Following Business Day Convention.
Floating Rate for initial
Calculation Period: Linear Interpolation
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 Month, except for the initial Calculation
Period, which shall be interpolated.
Spread: None
Floating Rate Day Count Actual/360
Fraction:
Reset Dates: First day of each Calculation Period
Business Days: New York, London, Columbus, Ohio, and
Chicago, Illinois
Calculation Agent: Party A
Exhibit E-3 (Page 3)
3. Additional Amounts Upon Partial Termination
On any Payment Date prior to the Class C Expected Principal
Distribution Date (as defined in the Indenture Supplement), where as a result
of principal payments on the Class C Notes (as defined in the Indenture
Supplement), the Notional Amount would be reduced by the corresponding
reduction in the Class C Note Principal Balance (as defined in the Indenture
Supplement), the parties hereto shall treat the portion of such reduction
(without duplication) as terminated on such Payment Date (a "Terminated
Transaction"). Party A shall calculate the Market Quotation for the Terminated
Transaction as set forth below.
"Market Quotation" means, with respect to a Terminated Transaction,
an amount determined on the basis of quotations from Reference Market-makers.
Each quotation will be for an amount, if any, that would be paid to Party A
(expressed as a negative number) or by Party A (expressed as a positive
number) in consideration of an agreement between Party A and the quoting
Reference Market-maker to enter into such Terminated Transaction (with the
same fixed and floating payment rates and remaining term as this Transaction)
on the relevant Payment Date. Party A will request each Reference Market-maker
to provide its quotation to the extent reasonably practicable as of the same
day and time (without regard to different time zones) on or as soon as
reasonably practicable prior to the relevant Payment Date. The day and time as
of which those quotations are to be obtained will be selected in good faith by
Party A. If more than three quotations are provided, the Market Quotation will
be the arithmetic mean of the quotations, without regard to the quotations
having the highest and lowest values. If exactly three such quotations are
provided, the Market Quotation will be the quotation remaining after
disregarding the highest and lowest quotations. For this purpose, if more than
one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided,
Party A will determine the Market Quotation in good faith. Notwithstanding the
foregoing, Party A shall be the sole Reference Market-maker unless: (a) the
reduction in the Notional Amount of the Transaction is equal to or greater
than $50 million on such Payment Date, and (b) the Servicer or the Indenture
Trustee requests that quotations from Reference Market-makers other than Party
A are utilized.
If the amount so determined by Party A in respect of a Terminated
Transaction is positive, Party B shall owe such amount to Party A, which shall
be payable (with interest thereon accruing from such Payment Date and
calculated at the Fixed Rate) on the next Distribution Date to the extent
provided in the Indenture. If such amount is negative, no amounts shall be
payable by Party A or Party B in respect of the Terminated Transaction.
4. Account Details:
Account for payments to Name: JPMorgan Chase Bank
Party A: City: New York
ABA# 000-000-000
Ref: World Financial Network
Credit Card Master Note Trust
- Swaps Group
Acct: 000-000-0000
Exhibit E-3 (Page 4)
Account for payments to Name: Bank of New York
Party B: City: New York
ABA# 000-000-000
Ref: World Financial Network Credit
Card Master Note Trust - GLA111565
Acct: 394569 Finance Charge Account
5. Offices:
The Office of Party A for this 4 Metrotech Center, 17th Floor
Transaction is: Brooklyn, NY 11245
The Office of Party B for this c/o Chase Manhattan Bank
Transaction is: USA, National Association
000 Xxxxxxx Xxxxxxxxxx Xxxx
XXX0, 0xx Xxxxx
Xxxxxx, XX 00000
Please confirm that the foregoing correctly sets forth the terms
and conditions of our agreement by responding within three (3)
Business Days by returning via telecopier an executed copy of
this Confirmation to the attention of Xxx Xxxx (fax
no.000-000-0000/9262).
Failure to respond within such period shall not affect the validity or
enforceability of this Transaction, and shall be deemed to be an affirmation
of the terms and conditions contained herein, absent manifest error.
Exhibit E-3 (Page 5)
JPMORGAN CHASE BANK Accepted and confirmed as of the
date first written:
WORLD FINANCIAL NETWORK CREDIT
By: CARD MASTER NOTE TRUST,
-------------------- By: Chase Manhattan Bank USA, National
Name: Association, not in its individual
Title: capacity, but solely as Owner Trustee
By:
------------------------------
Name:
Title:
Exhibit E-3 (Page 6)
SCHEDULE 1
PERFECTION REPRESENTATIONS, WARRANTIES
AND COVENANTS
(a) In addition to the representations, warranties and covenants
contained in the Indenture, the Issuer hereby represents, warrants and
covenants to the Indenture Trustee as follows as of the Closing Date:
(1) The Indenture creates a valid and continuing security interest (as
defined in the applicable Uniform Commercial Code) in the Net Swap Receipts
in favor of the Indenture Trustee, which security interest is prior to all
other Liens, and is enforceable as such against creditors of and purchasers
from Issuer.
(2) The Net Swap Receipts constitute "general intangibles" within the
meaning of the applicable Uniform Commercial Code.
(3) Issuer owns and has good and marketable title to the Net Swap
Receipts free and clear of any Lien, claim or encumbrance of any Person.
(4) There are no consents or approvals required by the terms of the
Class A Swap, Class B Swap or Class C Swap for the pledge of the Net Swap
Receipts to the Indenture Trustee pursuant to the Indenture.
(5) Issuer (or the Administrator on behalf of the Issuer) has caused
the filing of all appropriate financing statements in the proper filing
office in the appropriate jurisdictions under applicable law in order to
perfect the security interest granted to the Indenture Trustee under the
Indenture in the Net Swap Receipts.
(6) Other than the pledge of the Net Swap Receipts to Indenture
Trustee pursuant to the Indenture, Issuer has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed the Net Swap
Receipts. Issuer has not authorized the filing of and is not aware of any
financing statements against Issuer that include a description of the Net
Swap Receipts, except for the financing statement filed pursuant to the
Indenture.
(7) Notwithstanding any other provision of the Indenture, the
representations and warranties set forth in this Schedule 1 shall be
continuing, and remain in full force and effect, until such time as the
Series 2002-A Notes are retired.
(b) Indenture Trustee covenants that it shall not, without satisfying
the Rating Agency Condition, waive a breach of any representation or
warranty set forth in this Schedule 1.
(c) The Servicer covenants that in order to evidence the interests of
Issuer and Indenture Trustee under the Indenture, Servicer shall take such
action, or execute and deliver such instruments as may be necessary or
advisable (including, without limitation, such actions as are requested by
Indenture Trustee) to maintain and perfect, as a first priority interest,
Indenture Trustee's security interest in the Net Swap Receipts.
