TARGET RECEIVABLES CORPORATION,
Transferor
RETAILERS NATIONAL BANK,
Servicer
and
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
Trustee
on behalf of the Series 2003-__ Certificateholders
________________________________________
SERIES 2003-__ SUPPLEMENT
Dated as of _______, 2003
to
AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT
Dated as of April 28, 2000
________________________________________
TARGET CREDIT CARD MASTER TRUST
$__________ Floating Rate Class A
Asset Backed Certificates, Series 2003-__
$_____________ Collateral Interest,
Series 2003-__
TABLE OF CONTENTS
ARTICLE I CREATION OF THE SERIES 2003-__CERTIFICATES
Section 1.1 Designation.....................................................................................1
Section 1.2 Delivery and Payment for the Series 2003-__Certificates.........................................1
Section 1.3 Form of Delivery of Series 2003-__Class A Certificates and Collateral Interest..................2
ARTICLE II DEFINITIONS
Section 2.1 Definitions.....................................................................................2
ARTICLE III SERVICER
Section 3.1 Servicing Compensation.........................................................................14
ARTICLE IV RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.1 Rights of Series 2003-__ Certificateholders....................................................14
Section 4.2 Collections and Allocations; Payments on Transferor Certificate................................14
Section 4.3 Determination of Monthly Interest for the Class A Certificates.................................21
Section 4.4 Determination of Principal Amounts.............................................................21
Section 4.5 Shared Principal Collections and Shared Transferor Principal Collections.......................22
Section 4.6 Application of Funds on Deposit in the Collection Account for the Certificates.................23
Section 4.7 Excess Finance Charge Collections; Excess Transferor Finance Charge Collections................25
Section 4.8 Investor Defaulted Amount......................................................................26
Section 4.9 Reallocated Collateral Principal Collections for the Series 2003-__ Certificates...............26
Section 4.10 Issuance of Additional Series 2003-__ Certificates.............................................27
Section 4.11 Establishment of the Principal Funding Account for the Series 2003-__ Certificates.............28
Section 4.12 Accumulation Period............................................................................29
Section 4.13 Reserve Account................................................................................30
Section 4.14 Defeasance.....................................................................................31
Section 4.15 Determination of LIBOR.........................................................................32
ARTICLE V DISTRIBUTIONS AND REPORTS TO SERIES 2003- CERTIFICATEHOLDERS
Section 5.1 Distributions..................................................................................32
Section 5.2 Reports and Statements to Series 2003-__Certificateholders.....................................33
ARTICLE VI EARLY AMORTIZATION EVENTS
Section 6.1 Series 2003-__ Early Amortization Events.......................................................34
ARTICLE VII OPTIONAL TERMINATION; SERIES TERMINATION; SALE OF COLLATERAL INTEREST
Section 7.1 Optional Termination...........................................................................35
Section 7.2 Series 2003-__ Termination.....................................................................35
Section 7.3 Reduction of Collateral Invested Amount During the Revolving Period; Designation of Collateral Interest
Terms; Sale of Collateral Interest.............................................................36
Section 7.4 Purchase of Series 2003-__ Certificates by the Transferor......................................37
ARTICLE VIII FINAL DISTRIBUTION
Section 8.1 Sale of Receivables or Certificateholders' Interest pursuant to Section 2.6 or 10.1 of the Agreement and
Section 7.1 or 7.2 of this Supplement..........................................................37
ARTICLE IX MISCELLANEOUS PROVISIONS
Section 9.1 Legend on Collateral Interest Certificate......................................................38
Section 9.2 Ratification of Agreement......................................................................39
Section 9.3 Counterparts...................................................................................40
Section 9.4 Paired Series..................................................................................40
Section 9.5 Jurisdiction; Service..........................................................................40
Section 9.6 GOVERNING LAW..................................................................................41
Section 9.7 Instructions in Writing........................................................................41
Section 9.8 Target VISA Automatic Addition Limitation......................................................41
Section 9.9 Eligible Investments...........................................................................41
EXHIBITS
Form of Series 2003-__ Class A Certificate.......................................................Exhibit A-1
Form of Collateral Interest Certificate..........................................................Exhibit A-2
Form of Monthly Series 2003-__ Certificateholders' Statement.....................................Exhibit B
Form of Monthly Servicer's Certificate...........................................................Exhibit C
SERIES 2003-__ SUPPLEMENT, dated as of _______, 2003 (this
"Supplement") by and among TARGET RECEIVABLES CORPORATION, a corporation
organized and existing under the laws of the State of Minnesota, as Transferor
(the "Transferor"), RETAILERS NATIONAL BANK, a national banking association
organized and existing under the laws of the United States, as Servicer ("RNB"
or the "Servicer"), and XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a
national banking association organized and existing under the laws of the
United States, as trustee (together with its successors in trust thereunder as
provided in the Agreement referred to below, the "Trustee") under the Amended
and Restated Pooling and Servicing Agreement dated as of April 28, 2000, as
amended (the "Agreement") by and among the Transferor, the Servicer and the
Trustee.
Section 6.3 of the Agreement provides, among other things,
that the Transferor and the Trustee may at any time and from time to time enter
into a supplement to the Agreement for the purpose of authorizing the issuance
by the Transferor, for execution and redelivery to the Trustee for
authentication, of one or more Series of Certificates.
Pursuant to this Supplement, the Transferor and the Trustee
shall create a new Series of Investor Certificates and shall specify the
Principal Terms thereof. The Investor Certificates for this Series shall not be
subordinated to any other Series.
ARTICLE I
CREATION OF THE SERIES 2003-__CERTIFICATES
Section 1.1 Designation. There is hereby created a Series of Investor
Certificates to be issued pursuant to the Agreement and this Supplement to be
known generally as the "Series 2003-__ Certificates." The Series 2003-__
Certificates shall be issued in two Classes, which shall be designated
generally as the $_________ Floating Rate Class A Asset Backed Certificates,
Series 2003-__ (the "Class A Certificates") and the $_____________ Collateral
Interest, Series 2003-__ (the "Collateral Interest"), subject to any increase
in such principal amounts as a result of the issuance of Additional
Certificates pursuant to Section 4.10 of this Supplement. The Collateral
Interest shall be treated as a Class of Investor Certificates and each holder
of the Collateral Interest shall be treated as an Investor Certificateholder;
provided, however, that the Collateral Interest or any portion thereof held by
the Transferor shall not be considered to be an Investor Certificate for
purposes of any Tax Opinion or other opinion relating to tax matters hereunder
or under the Agreement for so long as the Collateral Interest or such portion
thereof is held by the Transferor. The Series 2003-__ Certificates shall be a
Principal Sharing Series and shall be included in Group I for purposes of
sharing Excess Finance Charge Collections. The Series 2003-__ Certificates
shall be entitled to share Excess Transferor Finance Charge Collections as
specified herein. The Transferor, at its sole option, may allow the Series
2003-__ Certificates to share Shared Transferor Principal Collections as
specified herein.
Section 1.2 Delivery and Payment for the Series 2003-__Certificates.
The Transferor shall execute and deliver the Series 2003-__ Certificates to the
Trustee for authentication in accordance with Section 6.1 of the Agreement. The
Trustee shall deliver the Series 2003-__ Certificates to or upon the order of
the Transferor when authenticated in accordance with Section 6.2 of the
Agreement.
Section 1.3 Form of Delivery of Series 2003-__Class A Certificates and
Collateral Interest. (a) The Class A Certificates shall be delivered as
Book-Entry Certificates as provided in Sections 6.1, 6.2 and 6.10 of the
Agreement and shall be substantially in the form of Exhibit A-1 hereto. The
Collateral Interest shall initially be delivered as a Definitive Certificate as
provided in Sections 6.1, 6.2 and 6.12 of the Agreement and shall be
substantially in the form of Exhibit A-2 hereto. A Collateral Interest Holder
may instruct the Trustee to convert its Collateral Interest to uncertificated
form by delivering the certificate representing the Collateral Interest to the
Trustee for cancellation together with a request in writing that the Collateral
Interest be uncertificated. If uncertificated, the Collateral Interest shall
not be subject to any provisions contained in Article VI or Article XII of the
Agreement relating to the registration, form, execution, authentication,
delivery, presentation, cancellation and surrender of Certificates pursuant to
Section 6.14 of the Agreement.
(b) The Depositary for the Class A Certificates shall be The
Depository Trust Company, and the Class A Certificates initially shall be
registered in the name of Cede & Co., its nominee.
ARTICLE II
DEFINITIONS
Section 2.1 Definitions. In the event that any term or provision
contained herein shall conflict with or be inconsistent with any provision
contained in the Agreement, the terms and provisions of this Supplement shall
govern with respect to the Series 2003-__ Certificates. All Article, Section or
subsection references herein shall mean Article, Section or subsections of this
Supplement except as otherwise provided herein. All capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed to
them in the Agreement. Each capitalized term defined herein shall relate only
to the Series 2003-__ Certificates and to no other Series of Certificates
issued by the Trust.
"Accumulation Date" shall mean the first day of the ________ Monthly
Period.
"Accumulation Period" shall mean, the period commencing on the
Accumulation Date, or such later date as may be specified by the Servicer in
accordance with Section 4.12, and continuing to and ending on the earlier of
(x) the calendar day prior to an Early Amortization Commencement Date and (y)
the Series 2003-__ Termination Date.
"Accumulation Period Length" shall have the meaning specified in
Section 4.12.
"Additional Certificate Date" shall have the meaning specified in
subsection 4.10(a).
"Additional Certificates" shall have the meaning specified in
subsection 4.10(a).
"Additional Interest" shall mean, with respect to any Distribution
Date, the sum of Class A Additional Interest and Collateral Additional
Interest, if any.
"Adjusted Invested Amount" shall mean, for any date of determination,
an amount equal to the sum of the Class A Adjusted Invested Amount plus the
Collateral Invested Amount.
"Amortization Period Commencement Date" shall mean the earlier of (a)
the first day of the Accumulation Period and (b) an Early Amortization
Commencement Date.
"Available Finance Charge Collections Shortfall Amount" shall have the
meaning specified in subsection 4.7(a).
"Available Reserve Account Amount" shall mean, with respect to any
Transfer Date, the lesser of (a) the amount on deposit in the Reserve Account
as of such date (before giving effect to any deposit or withdrawal made or to
be made pursuant to subsections 4.6(a)(vi) and 4.13(d) to the Reserve Account
on such date) and (b) the Required Reserve Account Amount.
"Available Series 2003-__ Finance Charge Collections" shall have the
meaning specified in subsection 4.6(a).
"Available Series 2003-__ Principal Collections" shall mean, with
respect to any Distribution Date, the sum of (a) the Principal Allocation
Percentage of Collections of Principal Receivables collected during the
preceding Monthly Period minus Reallocated Collateral Principal Collections
with respect to such Distribution Date, and (b) the sum of the amounts
designated to be treated as Available Series 2003-__ Principal Collections
pursuant to subsections 4.6(a)(iii) and (iv) with respect to such Distribution
Date.
"Available Shared Principal Collections" shall mean, with respect to
any Monthly Period, Shared Principal Collections available to be allocated to
the Certificates from each other Series that has a controlled or scheduled
amortization or accumulation period beginning after the _________ Distribution
Date.
"Base Rate" shall mean, with respect to any Monthly Period, the sum of
(i) the annualized percentage equivalent of the weighted average of the Class A
Certificate Rate and the Collateral Rate, both for the related Interest Accrual
Period (weighted by the Class A Invested Amount and the Collateral Invested
Amount, both at the end of the last day of such Monthly Period, or in the case
of the first Monthly Period, the Closing Date) and (ii) the Servicing Fee Rate.
"Business Day" shall (a) for the purpose of determining LIBOR, have
the meaning provided in the Agreement; provided, however, that for such
purpose, a Business Day shall not include any day on which banking institutions
in London, England, trading in United States dollar deposits in the London
interbank market, are authorized or obligated by law or executive order to be
closed and (b) for all other purposes, have the meaning provided in the
Agreement.
"Carryover Interest" shall mean, with respect to any Distribution
Date, the sum of Class A Carryover Interest and Collateral Carryover Interest.
"Class A Additional Interest" shall have the meaning specified in
Section 4.3.
"Class A Adjusted Invested Amount" shall mean, for any date of
determination, an amount equal to the Class A Invested Amount minus the
principal amount on deposit in the Principal Funding Account on such date of
determination.
"Class A Carryover Interest" shall mean, with respect to any
Distribution Date, (a) any Class A Monthly Interest due but not paid to the
Class A Certificateholders on any previous Distribution Date plus (b) any Class
A Additional Interest due with respect to such Distribution Date.
"Class A Certificate Rate" shall mean, with respect to any Interest
Accrual Period, a per annum rate equal to LIBOR plus ____%.
"Class A Certificateholder" shall mean the Person in whose name a
Class A Certificate is registered in the Certificate Register.
"Class A Certificateholders' Interest" shall mean, with respect to any
date, the portion of the Series 2003-__ Certificateholders' Interest evidenced
by the Class A Certificates.
"Class A Certificates" shall mean any of the $[ ] Floating Rate Class
A Asset Backed Certificates, Series 2003-__ executed by the Transferor and
authenticated by or on behalf of the Trustee, substantially in the form of
Exhibit A-1 hereto.
"Class A Controlled Accumulation Amount" shall mean, for any
Distribution Date with respect to the Accumulation Period, $___________,
provided that such amount may be increased pursuant to Section 4.10 as a result
of the issuance of Additional Certificates; provided, further, that, if the
Accumulation Period is modified pursuant to Section 4.12, (i) the Class A
Controlled Accumulation Amount for each Distribution Date with respect to the
Accumulation Period shall mean the amount determined in accordance with Section
4.12 on the date on which the Accumulation Period has most recently been
modified and (ii) the sum of the Class A Controlled Accumulation Amounts for
all Distribution Dates with respect to the modified Accumulation Period shall
not be less than the Class A Invested Amount.
"Class A Controlled Deposit Amount" shall mean, for any Distribution
Date with respect to the Accumulation Period, an amount equal to the Class A
Controlled Accumulation Amount plus the Class A Deficit Controlled Accumulation
Amount for the preceding Distribution Date, if any.
"Class A Covered Amount" shall mean, with respect to any Interest
Accrual Period prior to the payment in full of the Class A Invested Amount, the
product of (a) the Class A Certificate Rate in effect with respect to such
Interest Accrual Period, (b) a fraction the numerator of which is the actual
number of days in such Interest Accrual Period and the denominator of which is
360, and (c) the Principal Funding Account Balance as of the first day of such
Interest Accrual Period.
"Class A Deficit Controlled Accumulation Amount" shall mean, on each
Distribution Date with respect to the Accumulation Period, the excess, if any,
of the Class A Controlled Deposit Amount for such Distribution Date over the
amount distributed from the Collection Account as Class A Principal for such
Distribution Date.
"Class A Expected Final Payment Date" shall mean the ______
Distribution Date.
"Class A Initial Invested Amount" shall mean the aggregate initial
principal amount of the Class A Certificates, which is $_____________.
"Class A Invested Amount" shall mean, for any date of determination,
an amount equal to (a) the Class A Initial Invested Amount, plus (b) the amount
of any increase in the Class A Invested Amount resulting from the issuance of
Additional Certificates under Section 4.10, minus (c) the aggregate amount of
principal payments made to Class A Certificateholders prior to such date, minus
(d) the aggregate amount of Investor Charge-Offs allocated to the Class A
Invested Amount pursuant to subsection 4.8(b) for all prior Distribution Dates,
plus (e) the sum of the aggregate amount applied pursuant to subsection
4.6(a)(iv), and, with respect to such subsection, pursuant to Section 4.7, for
the purpose of reinstating amounts previously reduced pursuant to the foregoing
clause (d) and, minus (f) the amount of any reduction in the Class A Invested
Amount as a result of the purchase by the Transferor and subsequent
cancellation of Class A Certificates pursuant to Section 7.4.
"Class A Monthly Interest" shall have the meaning specified in Section
4.3.
"Class A Monthly Interest Shortfall" shall have the meaning specified
in Section 4.3.
"Class A Percentage" shall mean, with respect to any date of
determination, a fraction the numerator of which is the Class A Adjusted
Invested Amount and the denominator of which is the Series Invested Amount.
"Class A Principal" shall mean the principal distributable in respect
of the Class A Certificates as calculated in accordance with subsection 4.4(a).
"Closing Date" shall mean __________.
"Collateral Additional Interest" shall mean the amount, if any,
distributable in respect of the Collateral Interest as calculated pursuant to a
supplemental agreement entered into in accordance with subsection 7.3(b).
"Collateral Carryover Interest" shall mean, with respect to any
Distribution Date, (a) any Collateral Monthly Interest due but not paid to the
Collateral Interest Holders on any previous Distribution Date plus (b) any
Collateral Additional Interest due with respect to such Distribution Date.
"Collateral Interest" shall mean the [$___] Collateral Interest,
Series 2003-__, which shall initially be represented by the certificates
executed by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-2 hereto.
"Collateral Interest Holder" shall mean the holder of a Collateral
Interest, and if certificated, shall mean the Person in whose name a Collateral
Interest certificate is registered in the Certificate Register. "Collateral
Initial Invested Amount" shall mean the aggregate initial principal amount of
the Collateral Interest, which is $_________.
"Collateral Invested Amount" shall mean, for any date of
determination, an amount equal to (a) the Collateral Initial Invested Amount,
plus (b) the amount of any increase in the Collateral Invested Amount resulting
from the issuance of Additional Certificates under Section 4.10, minus (c) the
aggregate amount of principal payments made to Collateral Interest Holders
prior to such date, minus (d) the aggregate amount of Investor Charge-Offs
allocated to the Collateral Invested Amount pursuant to subsection 4.8(a) and
Section 4.9 for all prior Distribution Dates, plus (e) the sum of the aggregate
amount applied on all prior Distribution Dates pursuant to subsection
4.6(a)(iv) and, with respect to such subsection, pursuant to Section 4.7, for
the purpose of reinstating amounts previously reduced pursuant to the foregoing
clause (d) and, minus (f) the amount of any reduction in the Collateral
Invested Amount pursuant to Section 7.4 as a result of the reduction of the
Collateral Interest held by the Transferor or the purchase by the Transferor
and subsequent cancellation of all or a portion of the Collateral Interest.
"Collateral Monthly Interest" shall mean the amount of interest
payable with respect to the Collateral Interest on each Distribution Date,
which shall initially be zero, but which may be increased pursuant to a
supplemental agreement entered into in accordance with subsection 7.3(b).
"Collateral Monthly Interest Shortfall" shall mean, with respect to
any Distribution Date, the excess, if any, of (x) the Collateral Monthly
Interest for the Interest Accrual Period applicable to such Distribution Date
as calculated pursuant to a supplemental agreement entered into in accordance
with subsection 7.3(b) over (y) the amount available to be paid to the
Collateral Interest Holders in respect of interest on such Distribution Date.
"Collateral Principal" shall mean the principal distributable in
respect of the Collateral Interest as calculated in accordance with subsection
4.4(b).
"Collateral Rate" shall mean the interest rate for the Collateral
Interest, which shall initially be 0%, but which may be increased pursuant to a
supplemental agreement entered into in accordance with subsection 7.3(b).
"Defeasance" shall have the meaning specified in Section 4.14.
"Distribution Date" shall mean ______, and the 25th day of each month
thereafter, or if such day is not a Business Day, the next succeeding Business
Day.
"Early Amortization Commencement Date" shall mean the initial date on
which an Early Amortization Event or a Series 2003-__ Early Amortization Event
is deemed to occur.
"Early Amortization Event" shall mean any of the events specified in
Section 9.1 of the Agreement.
"Early Amortization Period" shall mean the period beginning on an
Early Amortization Commencement Date and ending on the Series 2003-__
Termination Date.
"Enhancement" shall mean, with respect to the Class A Certificates,
the subordination of the Collateral Interest.
"Excess Finance Charge Collections" shall mean, with respect to any
Distribution Date, as the context requires, either (x) the amount described in
subsection 4.6(a)(vii) allocated to the Series 2003-__ Certificates but
available to cover shortfalls in amounts paid from Collections of Finance
Charge Receivables for other Series in Group I, if any, or (y) the aggregate
amount of Collections of Finance Charge Receivables allocable to other Series
in Group I in excess of the amounts necessary to make required payments with
respect to such Series, if any, and available to cover shortfalls with respect
to the Series 2003-__ Certificates.
"Excess Spread Percentage" shall mean, with respect to any
Distribution Date, the amount, if any, by which the Portfolio Yield for the
preceding Monthly Period exceeds the Base Rate for the preceding Monthly
Period.
"Excess Transferor Finance Charge Collections" shall have the meaning
specified in subsection 4.2(d).
"Floating Allocation Percentage" shall mean, with respect to any
Monthly Period, the percentage equivalent of a fraction, the numerator of which
is the Adjusted Invested Amount as of (x) during the Revolving Period or the
Accumulation Period with respect to Collections of Finance Charge Receivables
and at all times with respect to the Defaulted Amount, the end of the last day
of the immediately preceding Monthly Period (or, in the case of the first
Monthly Period, the Closing Date) and (y) during an Early Amortization Period
with respect to Collections of Finance Charge Receivables, the end of the last
day of the Monthly Period immediately preceding an Early Amortization
Commencement Date and the denominator of which is (i) with respect to the
Defaulted Amount, the sum of (a) the total amount of Principal Receivables in
the Trust plus (b) the amounts on deposit in the Special Funding Account at the
end of the last day of the Monthly Period used to determine the numerator and
(ii) with respect to Collections of Finance Charge Receivables, the greater of
(a) the sum of (I) the total amount of Principal Receivables in the Trust plus
(II) the amounts on deposit in the Special Funding Account at the end of the
last day of the Monthly Period used to determine the numerator and (b) the sum
of the numerators used to calculate the applicable allocation percentages for
Collections of Finance Charge Receivables for all Classes of all Series and
Participations then outstanding; provided, that such calculations are subject
to adjustment upon the direction of the Transferor, in accordance with
subsection 2.9(g) of the Agreement, to give effect to additions of Additional
Accounts.
"Group I" shall mean, the Group in which Series 2003-__ is to be
included for the purpose of sharing Excess Finance Charge Collections.
"Initial Invested Amount" shall mean the sum of the Class A Initial
Invested Amount and the Collateral Initial Invested Amount.
"Interest Accrual Period" shall mean, with respect to any Distribution
Date, the period from and including the preceding Distribution Date to and
excluding such Distribution Date; provided, however, that the initial Interest
Accrual Period shall begin on and include the Closing Date and end on but
exclude the first Distribution Date.
"Invested Amount" shall mean, for any date of determination, an amount
equal to the sum of (a) the Class A Invested Amount as of such date and (b) the
Collateral Invested Amount as of such date.
"Investor Charge-Off" shall mean, with respect to any Distribution
Date, the aggregate amount of (a) any reduction in the Collateral Invested
Amount (i) pursuant to subsection 4.8(a) or (ii) as a result of the application
of Reallocated Collateral Principal Collections pursuant to Section 4.9 and (b)
any reduction in the Class A Invested Amount pursuant to subsection 4.8(b).
"Investor Defaulted Amount" shall mean, with respect to any Monthly
Period, an amount equal to the product of the Defaulted Amount and the Floating
Allocation Percentage with respect to such Monthly Period.
"Investor Percentage" shall mean, with respect to Principal
Receivables, the Principal Allocation Percentage and, with respect to Finance
Charge Receivables and the Defaulted Amount, the Floating Allocation
Percentage.
"LIBOR" shall mean, with respect to any Interest Accrual Period, the
London Interbank Offered Rate indexed to the offered rates for one-month United
States dollar deposits determined by the Trustee for each Interest Accrual
Period in accordance with the provisions of Section 4.15.
"LIBOR Determination Date" shall mean (a) ________ for the first
Interest Accrual Period and (b) the second Business Day prior to the
commencement of the second and each subsequent Interest Accrual Period.
"Monthly Period" shall mean, with respect to each Distribution Date,
the immediately preceding fiscal month of the Transferor; provided, that the
first Monthly Period shall begin on the first day of the fiscal month of the
Transferor during which the Closing Date occurs and end on the last day of the
fiscal month of the Transferor during which the Closing Date occurs.
"Monthly Servicing Fee" shall have the meaning specified in Section
3.1.
"Paired Series" shall have the meaning specified in Section 9.4.
"Percentage Allocation" shall have the meaning specified in subsection
4.2(b)(i)(y).
"Portfolio Yield" shall mean, for the Series 2003-__ Certificates,
with respect to any Monthly Period, the annualized percentage equivalent of a
fraction, the numerator of which is an amount equal to the sum of the Floating
Allocation Percentage of Collections of Finance Charge Receivables for that
Monthly Period, minus, if the Required Reserve Account Amount is greater than
zero, the excess of the Principal Funding Investment Shortfall over the amount
applied from the Reserve Account in accordance with subsection 4.13(d), minus
the Investor Defaulted Amount for that Monthly Period, and the denominator of
which is the Adjusted Invested Amount at the end of the last day of the
preceding Monthly Period, or in the case of the first Monthly Period, the
Closing Date. [For the first Monthly Period, the initial deposit of $________
made to the Collection Account on the Closing Date for application as Available
Series 2003-__ Finance Charge Collections will be added to the numerator
described above.]
"Principal Allocation Percentage" shall mean, with respect to any
Monthly Period, the percentage equivalent of a fraction, the numerator of which
is (a) during the Revolving Period, the Invested Amount at the end of the last
day of the immediately preceding Monthly Period (or, in the case of the first
Monthly Period, the Closing Date), (b) during the Accumulation Period, the
Invested Amount at the end of the last day of the Revolving Period; provided,
that during the Accumulation Period on the date of issuance of a new Series, at
the option of the Transferor, upon satisfaction of the Rating Agency Condition,
such amount may be reduced to an amount not less than the greater of (x) the
Adjusted Invested Amount on such date and (y) the amount which would result in
a Principal Allocation Percentage which when multiplied by the amount of
Collections of Principal Receivables for the preceding Monthly Period would
equal (I) the Class A Controlled Deposit Amount for such Monthly Period plus
10% of the Class A Controlled Accumulation Amount or, if such date is on or
after the Class A Expected Final Payment Date and the Class A Invested Amount
has been paid in full, the Collateral Invested Amount minus (II) the amount of
any Available Shared Principal Collections with respect to such Monthly Period,
and (c) during the Early Amortization Period, the Invested Amount at the end of
the last day of the Revolving Period or, if less, the last numerator used to
calculate the Principal Allocation Percentage in the Accumulation Period, if
any, and the denominator of which is the greater of (a)(x) if only one Series
is outstanding (i) during the Revolving Period, the sum of the total amount of
Principal Receivables in the Trust and the principal amount on deposit in the
Special Funding Account at the end of the last day of the immediately preceding
Monthly Period (or, in the case of the first Monthly Period, the Closing Date)
and (ii) during the Accumulation Period and the Early Amortization Period, the
sum of the total amount of Principal Receivables in the Trust and the principal
amount on deposit in the Special Funding Account at the end of the last day of
the Revolving Period and (y), if more than one Series is outstanding, the sum
of the total amount of Principal Receivables in the Trust at the end of the
last day of the immediately preceding Monthly Period, and the principal amount
on deposit in the Special Funding Account at the end of the last day of the
immediately preceding Monthly Period (or, in the case of the first Monthly
Period, the Closing Date) and (b) the sum of the numerators used to calculate
the principal allocation percentages for all Series and Participations
outstanding as of the date as to which such determination is being made;
provided, further, that such calculations are subject to adjustment upon the
direction of the Transferor, in accordance with subsection 2.9(g) of the
Agreement, to give effect to additions of Additional Accounts.
"Principal Funding Account" shall have the meaning specified in
subsection 4.11(a).
"Principal Funding Account Balance" shall mean, for any date of
determination during the Accumulation Period, the principal amount, if any, on
deposit in the Principal Funding Account on such date of determination.
"Principal Funding Investment Proceeds" shall mean, with respect to
each Distribution Date during the Accumulation Period and on the first Special
Payment Date, the investment earnings on funds on deposit in the Principal
Funding Account (net of investment expenses and losses) for the related
Interest Accrual Period.
"Principal Funding Investment Shortfall" shall mean, with respect to
each Distribution Date during the Accumulation Period, the amount, if any, by
which the Principal Funding Investment Proceeds are less than the Class A
Covered Amount for the related Interest Accrual Period.
"Principal Shortfall" shall mean, with respect to any Distribution
Date (x) for Series 2003-__, (i) during the Accumulation Period on and prior to
the Class A Expected Final Payment Date, the excess of the Class A Controlled
Deposit Amount over the aggregate amount applied with respect thereto for such
Distribution Date, and (ii) during the Accumulation Period following the Class
A Expected Final Payment Date or during an Early Amortization Period, the
Invested Amount of the Class then receiving principal payments after the
application of Collections of Principal Receivables on such Distribution Date;
provided, however, that after the Class A Invested Amount has been paid in
full, such amount shall be equal to the Collateral Invested Amount or (y) for
any other Series, the amounts specified as such in the Supplement for such
other Series.
"Rating Agency" shall mean each of Standard & Poor's and Moody's.
"Reallocated Collateral Principal Collections" shall have the meaning
specified in Section 4.9.
"Reassignment Amount" shall mean, with respect to any Distribution
Date, after giving effect to any deposits and distributions otherwise to be
made on such Distribution Date, the sum of (i) the sum of the Class A Adjusted
Invested Amount and the Collateral Invested Amount on such Distribution Date
plus (ii) the sum of the Class A Monthly Interest and the Collateral Monthly
Interest, if any, for such Distribution Date and the Carryover Interest, if
any, for such Distribution Date.
"Record Date" shall mean, with respect to any Distribution Date, the
last Business Day of the calendar month preceding the month in which such
Distribution Date occurs.
"Reference Banks" shall mean four major banks in the London interbank
market selected by the Servicer.
"Required Amount" shall mean, with respect to each Distribution Date,
the amount determined by the Servicer equal to the excess, if any, of (x) the
sum of (i) Class A Monthly Interest for such Distribution Date, (ii) any Class
A Carryover Interest for such Distribution Date and (iii) the Monthly Servicing
Fee for such Distribution Date, over (y) the sum of the Available Series
2003-___ Finance Charge Collections applied with respect to such amounts
pursuant to subsection 4.6(a) plus any Excess Finance Charge Collections from
other Series in Group I allocable to Series 2003-___ and applied with respect
to such amounts pursuant to subsection 4.7(a).
"Required Reserve Account Amount" shall mean, with respect to any
Distribution Date on or after the Reserve Account Funding Date, an amount
specified by the Transferor.
"Required Retained Transferor's Percentage" shall mean [2]%; provided,
however, that such percentage may be adjusted from time to time upon written
notice from the Transferor to the Trustee if each Rating Agency initially
contracted to rate the Class A Certificates shall have been notified of such
adjustment and shall have provided notice to the Trustee or the Servicer that
such action would not result in a reduction or withdrawal of its rating of the
Class A Certificates and such action shall not, as evidenced by a Tax Opinion,
cause the Trust to be characterized for Federal income tax purposes as an
association or publicly traded partnership taxable as a corporation or
otherwise have any material adverse effect on the Federal income taxation of
any outstanding Series of Certificates or any Certificate Owner.
"Reserve Account" shall have the meaning specified in subsection
4.13(a).
"Reserve Account Funding Date" shall mean the date, if any, specified
by the Transferor for the commencement of the funding of the Reserve Account.
"Reserve Account Surplus" shall mean, as of any Transfer Date following the
Reserve Account Funding Date, the amount, if any, by which the amount on
deposit in the Reserve Account exceeds the Required Reserve Account Amount.
"Reserve Draw Amount" shall have the meaning specified in subsection
4.13(c).
"Revolving Period" shall mean the period from and including the
Closing Date to, but not including, the Amortization Period Commencement Date.
"Scheduled Series 2003-__ Termination Date" shall mean the ______
Distribution Date.
"Series Accounts" shall mean the Principal Funding Account and the
Reserve Account.
"Series Invested Amount" shall mean, for Series 2003-__, for any date
of determination, an amount equal to the sum of (a) the Class A Adjusted
Invested Amount as of such date and (b) the Collateral Invested Amount as of
such date.
"Series 2003-__" shall mean the Series of the Target Credit Card
Master Trust represented by the Series 2003-__ Certificates.
"Series 2003-__ Allocation Percentage" shall mean, on any date of
determination, the percentage equivalent of a fraction the numerator of which
is the Series Invested Amount and the denominator of which is the sum of the
invested amounts (or adjusted invested amounts, as applicable) of all then
outstanding Series.
"Series 2003-__ Certificateholder" shall mean the holder of record of
any Series 2003-__ Certificates and in the plural shall mean the holders of
record of each Series 2003-__ Certificate.
"Series 2003-__ Certificateholders' Interest" shall have the meaning
specified in Section 4.1.
"Series 2003-__ Certificates" shall mean the Class A Certificates and
the Collateral Interest.
"Series 2003-__ Early Amortization Event" shall have the meaning
specified in Section 6.1.
"Series 2003-__ Termination Date" shall mean the earlier to occur of
(i) the day after the Distribution Date on which the Invested Amount is paid in
full, and (ii) the Scheduled Series 2003-__ Termination Date.
"Servicing Fee Rate" shall mean 2.00% per annum.
"Shared Principal Collections" shall mean, as the context requires,
either (a) the amount allocated to the Series 2003-__ Certificates which, in
accordance with subsections 4.6(b) and 4.6(c)(iii), may be applied in
accordance with Section 4.4 of the Agreement or (b) the amounts allocated to
the Investor Certificates of other Series which the applicable Supplements for
such Series specify are to be treated as "Shared Principal Collections" plus
amounts specified in any Participation Supplement with respect to any
Participation to be treated as Shared Principal Collections which may be
applied to cover Principal Shortfalls with respect to the Series 2003-__
Certificates.
"Shared Transferor Principal Collections" shall have the meaning
specified in subsection 4.2(d).
"Special Payment Date" shall mean each Distribution Date following the
Monthly Period in which an Early Amortization Commencement Date occurs.
"Specified Investor Default Amount" shall mean, with respect to any
Distribution Date, the sum of (a) the product of (x) 1.5 and (y) the average of
the Investor Defaulted Amounts for the three preceding Monthly Periods, and (b)
the amount of unreimbursed Investor Charge-Offs allocated to the Collateral
Invested Amount for the preceding Monthly Period.
"Telerate Page 3750" shall mean the display designated as page "3750"
by Telerate, Inc. (or such other page as may replace Telerate Page 3750 on that
service or a comparable service for the purpose of displaying London interbank
offered rates of major banks).
"Transferor Retained Certificates" shall mean Investor Certificates of
any Series, including the Collateral Interest, which the Transferor retains,
but only to the extent that and for so long as the Transferor is the Holder of
such Certificates.
ARTICLE III
SERVICER
Section 3.1 Servicing Compensation. The share of the Servicing Fee
allocable to the Series 2003-__ Certificateholders with respect to any
Distribution Date (the "Monthly Servicing Fee") shall be equal to one-twelfth
of the product of (a) the Servicing Fee Rate and (b) (i) the Adjusted Invested
Amount at the end of the last day of the Monthly Period second preceding such
Distribution Date, minus (ii) the product of the amount, if any, on deposit in
the Special Funding Account at the end of the last day of the Monthly Period
second preceding such Distribution Date and the Floating Allocation Percentage
with respect to such Monthly Period; provided, however, that with respect to
the first Distribution Date, the Monthly Servicing Fee shall be $______. The
remainder of the Servicing Fee shall be paid from amounts allocable to the
Holder of the Transferor Certificate, holders of Participations or the
Certificateholders of other Series (as provided in the related Supplements) and
in no event shall the Trust, the Trustee or the Series 2003-__
Certificateholders be liable for the share of the Servicing Fee to be paid from
amounts allocable to the Holder of the Transferor Certificate, holders of
Participations or the Certificateholders of any other Series. The Monthly
Servicing Fee shall be payable to the Servicer solely to the extent amounts are
available for distribution in respect thereof pursuant to subsection
4.6(a)(ii).
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.1 Rights of Series 2003-__ Certificateholders. The Series
2003-__ Certificates shall represent undivided interests in the Trust,
consisting of the right to receive, to the extent necessary to make the
required payments with respect to such Series 2003-__ Certificates at the times
and in the amounts specified in this Supplement, (a) the Floating Allocation
Percentage and the Principal Allocation Percentage (as applicable from time to
time) of Collections, (b) funds distributable to the Series 2003-__
Certificates pursuant to Section 4.2 of the Agreement on deposit in the Special
Funding Account, (c) funds on deposit in the Principal Funding Account and (d)
funds on deposit in the Reserve Account (for such Series, the "Series 2003-
Certificateholders' Interest"). The Collateral Interest shall be subordinated
to the Class A Certificates to the extent provided in this Article IV. The
Collateral Interest will not have the right to receive payments of principal
until the Class A Invested Amount has been paid in full, except as provided in
subsection 7.3(a).
Section 4.2 Collections and Allocations; Payments on Transferor
Certificate. (a) Collections. The Servicer shall apply or shall instruct the
Trustee to apply all funds on deposit in the Collection Account, the Special
Funding Account, the Principal Funding Account and the Reserve Account
allocable to the Series 2003-__ Certificates as described in this Article IV
and Article IV of the Agreement. [In addition, on the Closing Date, the
Transferor shall make a deposit to the Collection Account in the amount of
$______ to be allocated to the Series 2003-__ Certificates.]
(b) Allocations. The Servicer shall apply, or shall instruct the
Trustee to apply, all Collections and other funds that are allocated to the
Series 2003-__ Certificates as follows:
(i) Daily Allocations During the Revolving Period.
During the Revolving Period, if the conditions specified in the last
sentence of subsection 4.3(a) of the Agreement are not satisfied, the
Servicer shall, prior to the close of business on any Date of
Processing, allocate the following amounts as set forth below:
(x) Allocate to the Series 2003-__ Certificateholders and
deposit in the Collection Account no later than the second Business
Day following the Date of Processing an amount equal to the product of
(A) the Floating Allocation Percentage with respect to the current
Monthly Period and (B) the aggregate amount of Collections of Finance
Charge Receivables on such Date of Processing; provided, however,
that, with respect to each Monthly Period, such amount shall only be
deposited until such time as the amount of Collections of Finance
Charge Receivables allocable to Series 2003-__ deposited in the
Collection Account equals the amount of Class A Monthly Interest,
Collateral Monthly Interest, if any, Carryover Interest, if any, and,
at any time that RNB is not the Servicer, the Monthly Servicing Fee,
in each case due on the Distribution Date in the following Monthly
Period, and, if on the Distribution Date in the preceding Monthly
Period the Excess Spread Percentage was less than 4% or if there were
unreimbursed Investor Charge-Offs, the Specified Investor Default
Amount determined for the Distribution Date in the preceding Monthly
Period.
(y) Allocate to the Series 2003-__ Certificateholders and
deposit in the Collection Account no later than the second Business
Day following the Date of Processing an amount equal to the least of
(A) the product of (I) the Principal Allocation Percentage with
respect to the current Monthly Period and (II) the aggregate amount of
Collections of Principal Receivables on such Date of Processing (for
any such date, a "Percentage Allocation"), (B) an amount not to exceed
the Collateral Invested Amount minus the aggregate amount previously
deposited in the Collection Account under this subsection 4.2(b)(i)(y)
with respect to the current Monthly Period, and (C) (1) the sum of the
Class A Monthly Interest, the Class A Carryover Interest, the Monthly
Servicing Fee, if RNB is not the Servicer, and the Class A Percentage
of the Specified Investor Default Amount determined for the
Distribution Date in the preceding Monthly Period if on the
Distribution Date in the preceding Monthly Period the Excess Spread
Percentage was less than 4% or if there were unreimbursed Investor
Charge-Offs over (2) the amount of Collections of Finance Charge
Receivables deposited in the Collection Account on that Date of
Processing and on each preceding Date of Processing in that Monthly
Period pursuant to subsection 4.2(b)(i)(x).
These Collections of Principal Receivables shall only be retained or
deposited in the Collection Account pursuant to this subsection
4.2(b)(i)(y) to the extent that the sum of the Collections of
Principal Receivables and the Collections of Finance Charge
Receivables retained in the Collection Account pursuant to subsection
4.2(b)(i)(x) and this subsection 4.2(b)(i)(y) do not exceed the sum of
the Class A Monthly Interest, the Class A Carryover Interest, the
Monthly Servicing Fee, if RNB is not the Servicer, and the Class A
Percentage of the Specified Investor Default Amount determined for the
Distribution Date in the preceding Monthly Period if the conditions
requiring that deposit exist. The excess of the amount of Collections
of Principal Receivables on deposit in the Collection Account over the
amount required to be retained in the Collection Account and the
remainder of the Principal Allocation Percentage of the amount of
Collections of Principal Receivables on that Date of Processing shall
be paid to the Holder of the Transferor Certificate; provided,
however, that the amount to be paid to the Holder of the Transferor
Certificate pursuant to this subsection 4.2(b)(i)(y) on any Date of
Processing shall be first, if the Rating Agency Condition is satisfied
in connection with a request of the Transferor to reduce the
Collateral Invested Amount, used to reduce the Collateral Invested
Amount pursuant to subsection 7.3(a), second, if any other Principal
Sharing Series is outstanding and in its Amortization Period,
deposited in the Collection Account for application, to the extent
necessary, as Shared Principal Collections on the Distribution Date in
the following Monthly Period and, third, shall be paid to the Holder
of the Transferor Certificate only if on such Date of Processing the
Transferor Amount (excluding the interest represented by the
Supplemental Certificate) is greater than the Required Retained
Transferor Amount (after giving effect to all Receivables transferred
to the Trust on such day) and otherwise shall be deposited in the
Special Funding Account; provided, further, that such amounts will be
paid to the Holder of the Transferor Certificate subject to the
obligation of the Transferor to make an amount equal to the
Reallocated Collateral Principal Collections for each Monthly Period
available on the Distribution Date in the following Monthly Period for
application in accordance with Section 4.9.
(ii) Daily Allocations During the Accumulation Period.
During the Accumulation Period, if the conditions specified in the
last sentence of subsection 4.3(a) of the Agreement are not satisfied,
the Servicer shall, prior to the close of business on any Date of
Processing, allocate the following amounts as set forth below:
(x) Allocate to the Series 2003-__ Certificateholders and
deposit in the Collection Account no later than the second Business
Day following the Date of Processing an amount equal to the product of
(A) the Floating Allocation Percentage with respect to the current
Monthly Period and (B) the aggregate amount of Collections of Finance
Charge Receivables on such Date of Processing; provided, however,
that, with respect to each Monthly Period, such amount shall only be
deposited until such time as the amount of Collections of Finance
Charge Receivables allocable to Series 2003-__ on deposit in the
Collection Account equals the amount of Class A Monthly Interest,
Collateral Monthly Interest, if any, Carryover Interest, if any, and,
at any time that RNB is not the Servicer, the Monthly Servicing Fee,
in each case due on the Distribution Date in the following Monthly
Period, and, if on the Distribution Date in the preceding Monthly
Period the Excess Spread Percentage was less than 4% or if there were
unreimbursed Investor Charge-Offs, the Specified Investor Default
Amount determined for the Distribution Date in the preceding Monthly
Period.
(y) Allocate to the Series 2003-__ Certificateholders and
deposit in the Collection Account no later than the second Business
Day following the Date of Processing an amount equal to the sum of (I)
the Percentage Allocation and (II) at the option of the Transferor,
the product of (x) the aggregate amount of Shared Transferor Principal
Collections for such Date of Processing and (y) a fraction, the
numerator of which is the excess of the Class A Controlled Deposit
Amount for the Distribution Date in the following Monthly Period over
the amount on deposit in the Collection Account with respect to
principal for the benefit of Series 2003-__ for payment or deposit to
the Principal Funding Account on the Distribution Date in the
following Monthly Period and the denominator of which is the
equivalent amount for all Series for such date; provided, however,
that with respect to each Monthly Period, such amount shall only be
deposited in the Collection Account until such time as the amount
deposited in the Collection Account with respect to principal for the
benefit of Series 2003-__ equals the sum of (i) (A) during each
Monthly Period prior to the Monthly Period in which the Class A
Invested Amount is paid in full, the lesser of the Class A Controlled
Deposit Amount for the Distribution Date in the following Monthly
Period and the Class A Adjusted Invested Amount on the applicable date
of deposit, and (B) during each Monthly Period beginning with the
Monthly Period in which the Class A Invested Amount is paid in full,
the Collateral Invested Amount on the applicable date of deposit, and
(ii) the lesser of (1) the amount by which (A) the sum of the Class A
Monthly Interest, the Class A Carryover Interest, the Monthly
Servicing Fee, if RNB is not the Servicer, and, if on the Distribution
Date in the preceding Monthly Period the Excess Spread Percentage was
less than 4% or if there were unreimbursed Investor Charge-Offs, the
Class A Percentage of the Specified Investor Default Amount determined
for the Distribution Date in the preceding Monthly Period, is greater
than (B) the amount of Collections of Finance Charge Receivables
deposited in the Collection Account on that Date of Processing and on
each preceding Date of Processing in that Monthly Period pursuant to
subsection 4.2(b)(ii)(x), and (2) the Collateral Invested Amount.
Collections of Principal Receivables allocable to Series 2003-__ will
only be retained or deposited in the Collection Account in excess of:
(I) during each Monthly Period prior to the Monthly Period in which
the Class A Invested Amount is paid in full, the lesser of the Class A
Controlled Deposit Amount and the Class A Adjusted Invested Amount,
and (II) during each Monthly Period beginning with the Monthly Period
in which the Class A Invested Amount is paid in full, the Collateral
Invested Amount, to the extent that the Collections of Principal
Receivables and Collections of Finance Charge Receivables retained in
the Collection Account pursuant to subsection 4.2(b)(ii)(x) and this
subsection 4.2(b)(ii)(y) do not exceed the sum of the Class A Monthly
Interest, the Class A Carryover Interest, the Monthly Servicing Fee,
if RNB is not the Servicer, and the Class A Percentage of the
Specified Investor Default Amount determined for the Distribution Date
in the preceding Monthly Period if the conditions requiring that
deposit exist. The excess of the amount of Collections of Principal
Receivables on deposit in the Collection Account over the amount
required to be retained in the Collection Account and the remainder of
the Principal Allocation Percentage of the amount of Collections of
Principal Receivables on that Date of Processing shall be first, if
any other Principal Sharing Series is outstanding and in its
Amortization Period, deposited in the Collection Account for
application, to the extent necessary, as Shared Principal Collections
on the Distribution Date in the following Monthly Period and second
shall not be treated as a Percentage Allocation and shall be paid to
the Holder of the Transferor Certificate only if on such Date of
Processing the Transferor Amount (excluding the interest represented
by any Supplemental Certificate) on such Date of Processing is greater
than the Required Retained Transferor Amount (after giving effect to
all Principal Receivables transferred to the Trust on such day) and
otherwise shall be deposited in the Special Funding Account; provided,
that such amounts will be paid to the Holder of the Transferor
Certificate subject to the obligation of the Transferor to make an
amount equal to the Reallocated Collateral Principal Collections for
each Monthly Period available on the Distribution Date in the
following Monthly Period for application in accordance with Section
4.9.
(iii) Daily Allocations During the Early Amortization
Period. During the Early Amortization Period, if the conditions
specified in the last sentence of subsection 4.3(a) of the Agreement
are not satisfied, the Servicer shall, prior to the close of business
on any Date of Processing, allocate the following amounts as set forth
below:
(x) Allocate to the Series 2003-__ Certificateholders and
deposit in the Collection Account no later than the second Business
Day following the Date of Processing an amount equal to the product of
(A) the Floating Allocation Percentage with respect to the current
Monthly Period and (B) the aggregate amount of Collections of Finance
Charge Receivables on such Date of Processing.
(y) Allocate to the Series 2003-__ Certificateholders and
deposit in the Collection Account no later than the second Business
Day following the Date of Processing an amount equal to the Percentage
Allocation; provided, however, that after the date on which an amount
of such Collections equal to the Invested Amount has been deposited
into the Collection Account and allocated to the Series 2003-__
Certificateholders, any excess of the amount determined in accordance
with this subparagraph (y) shall be first, if any other Principal
Sharing Series is outstanding and in its Amortization Period,
deposited in the Collection Account for application, to the extent
necessary, as Shared Principal Collections on the Distribution Date in
the following Monthly Period and second shall be paid to the Holder of
the Transferor Certificate only if on such Date of Processing the
Transferor Amount (excluding the interest represented by any
Supplemental Certificate) is greater than the Required Retained
Transferor Amount (after giving effect to all Principal Receivables
transferred to the Trust on such day) and otherwise shall be deposited
in the Special Funding Account.
(iv) Monthly Allocations. At all times, the Servicer
shall, prior to the close of business on any Transfer Date, allocate
to the Series 2003-__ Certificateholders and deposit in the Collection
Account an amount equal to the sum of (I) (A) the lesser of (1) the
sum of (a) the product of (x) the Floating Allocation Percentage with
respect to the preceding Monthly Period and (y) the aggregate amount
of Collections of Finance Charge Receivables for the preceding Monthly
Period, (b) the amount of Excess Finance Charge Collections allocated
to Series 2003-__ for the preceding Monthly Period and (c) the amount
of Excess Transferor Finance Charge Collections allocated to Series
2003-__ for the preceding Monthly Period and (2) the aggregate of (a)
the amounts described pursuant to clause (y) of each of clauses (i)
through (v) of subsection 4.6(a) with respect to the related
Distribution Date and (b) the amount described in subsection
4.6(a)(vi) with respect to the related Distribution Date, less (B) the
daily amounts deposited in the Collection Account during the preceding
Monthly Period pursuant to subsections 4.2(b)(i)(x), 4.2(b)(ii)(x) and
4.2(b)(iii)(x) with respect to the Revolving Period, the Accumulation
Period and the Early Amortization Period, respectively, if any, (II)
(A) the lesser of (1) the product of (a) the Principal Allocation
Percentage with respect to the preceding Monthly Period and (b) the
aggregate amount of Collections of Principal Receivables for the
preceding Monthly Period and (2) (w) for each Monthly Period during
the Revolving Period, zero, (x) for each Monthly Period during the
Accumulation Period prior to the Monthly Period in which the Class A
Invested Amount is paid in full, the lesser of the Class A Controlled
Deposit Amount and the Class A Adjusted Invested Amount, (y) for each
Monthly Period during the Accumulation Period beginning with the
Monthly Period in which the Class A Invested Amount is paid in full,
the Collateral Invested Amount, and (z) for each Monthly Period during
the Early Amortization Period, the Invested Amount, less (B) the daily
amounts deposited in the Collection Account during the preceding
Monthly Period pursuant to subsections 4.2(b)(i)(y), 4.2(b)(ii)(y) and
4.2(b)(iii)(y) with respect to the Revolving Period, the Accumulation
Period and the Early Amortization Period, respectively, if any, (III)
the excess of the amount of Reallocated Collateral Principal
Collections over the amount retained in the Collection Account
pursuant to subsections 4.2(b)(i)(y) and 4.2(b)(ii)(y) with respect to
the Revolving Period and the Accumulation Period, respectively, (IV)
an amount equal to the pro rata portion of Finance Charge Shortfalls,
if any, for Group I allocated to Series 2003-__ pursuant to Section
4.5 of the Agreement, not to exceed Excess Finance Charge Collections
pursuant to subsection 4.6(a)(vii) available on the related
Distribution Date, (V) an amount equal to (A) the amount of Shared
Principal Collections to be applied for the benefit of other Principal
Sharing Series pursuant to Section 4.4 of the Agreement from amounts
that were originally allocated to Series 2003-__, not to exceed (a)
during the Revolving Period, the Principal Allocation Percentage of
Collections of Principal Receivables for the preceding Monthly Period
or (b) during the Accumulation Period and the Early Amortization
Period, the Principal Allocation Percentage of Collections of
Principal Receivables for the preceding Monthly Period less the amount
thereof applied to pay Class A Principal or Collateral Principal on
the related Distribution Date, less (B) the daily amounts deposited in
the Collection Account during the preceding Monthly Period pursuant to
subsections 4.2(b)(i), 4.2(b)(ii) and 4.2(b)(iii) with respect to the
Revolving Period, the Accumulation Period and the Early Amortization
Period, respectively, if any, and (VI) at the option of the
Transferor, the amount of Shared Transferor Principal Collections to
be applied to make payments of Class A Principal or Collateral
Principal on the related Distribution Date, less the daily amounts
deposited in the Collection Account during the preceding Monthly
Period pursuant to subsection 4.2(b)(ii)(y) with respect to the
Accumulation Period, if any.
Notwithstanding the foregoing or any other provision of this
Supplement, in accordance with Section 4.3(c) of the Agreement, the
Servicer need not deposit in the Collection Account any amounts
payable to the Transferor.
(c) The allocations to be made pursuant to this Section 4.2 also apply
to deposits into the Collection Account that are treated as Collections
(including adjustment payments made in accordance with Section 3.9 of the
Agreement), payment of the reassignment price pursuant to subsection 2.5(b) of
the Agreement and proceeds from the sale, disposition or liquidation of the
Receivables pursuant to Section 2.6, 10.1, or 12.2 of the Agreement and Section
8.1. Such deposits to be treated as Collections will be allocated as Finance
Charge Receivables or Principal Receivables as provided in the Agreement.
(d) Notwithstanding anything herein or in the Agreement, the
Supplement for any other Series or any Enhancement Agreement for any Series to
the contrary, all amounts designated to be paid to the Transferor or any Holder
of a Transferor Certificate in such documents, other than amounts allocated to
be paid to the holder of any Supplemental Certificate, instead, to the extent
that such amounts are derived from Collections of Finance Charge Receivables
and other amounts applied like Collections of Finance Charge Receivables,
including any amounts constituting Excess Finance Charge Collections remaining
after application thereof to all Series but prior to payment thereof to the
Transferor, shall be deemed to be "Excess Transferor Finance Charge
Collections". Excess Transferor Finance Charge Collections shall be used to
cover Principal Funding Investment Shortfalls, if any, and will be deposited in
the Collection Account on each Transfer Date to be applied as Available Series
2003-__ Finance Charge Collections pursuant to subsection 4.7(b). The sum of
(x) any Excess Transferor Finance Charge Collections remaining after
application thereof to each Series designated to be entitled thereto, and (y)
Collections of Principal Receivables and other amounts treated like Collections
of Principal Receivables, for any Monthly Period (A) allocated to the
Transferor's Interest remaining after payments to the holders of any
Supplemental Certificate and (B) initially allocated to any Series and not
applied to make principal deposits or payments for such Series or reallocated
as Shared Principal Collections to make principal deposits or payments for any
other Series, shall be deemed to be "Shared Transferor Principal Collections"
and available for payments to Series 2003-___ at the option of the Transferor.
On or prior to the _____ Distribution Date, the Transferor shall notify the
Servicer and the Trustee in writing whether the Transferor elects to make
Shared Transferor Principal Collections available to Series 2003-___ during the
Accumulation Period. If the Transferor elects to make Shared Transferor
Principal Collections available to fund Class A Principal during the
Accumulation Period, those amounts allocated to the Series 2003-__ Certificates
pursuant to subsection 4.5(b) shall be applied to cover any Principal
Shortfalls not covered by Shared Principal Collections allocated to the Series
2003-__ Certificates pursuant to subsection 4.5(a) during the Accumulation
Period. In addition, at the option of the Transferor, Shared Transferor
Principal Collections may be applied for the benefit of Series 2003-__ pursuant
to subsection 4.5(b) during the Early Amortization Period to cover any
Principal Shortfalls not covered by Shared Principal Collections allocated to
the Series 2003-__ Certificates pursuant to subsection 4.5(a).
Section 4.3 Determination of Monthly Interest for the Class A
Certificates. The amount of monthly interest (the "Class A Monthly Interest")
allocable to the Class A Certificates with respect to any Distribution Date
shall be an amount equal to the product of (i) the Class A Certificate Rate for
the related Interest Accrual Period, (ii) the outstanding principal balance of
the Class A Certificates at the end of the last day of the preceding Monthly
Period, and (iii) a fraction the numerator of which is the actual number of
days in the related Interest Accrual Period and the denominator of which is
360; provided, however, that with respect to the first Distribution Date after
the Closing Date the Class A Monthly Interest shall be an amount equal to
$_______.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine an amount (the "Class A Monthly Interest Shortfall")
equal to the excess, if any, of (x) the Class A Monthly Interest for the
Interest Accrual Period applicable to such Distribution Date over (y) the
amount available to be paid to the Class A Certificateholders in respect of
interest on such Distribution Date. If there is a Class A Monthly Interest
Shortfall with respect to any Distribution Date, an additional amount ("Class A
Additional Interest") shall be payable as provided herein with respect to the
Class A Certificates on each Distribution Date following such Distribution
Date, to and including the Distribution Date on which such Class A Monthly
Interest Shortfall is paid to Class A Certificateholders, equal to the product
of (i) the Class A Certificate Rate plus 2% per annum, (ii) such Class A
Monthly Interest Shortfall remaining unpaid, and (iii) a fraction the numerator
of which is the actual number of days in the related Interest Accrual Period
and the denominator of which is 360. Notwithstanding anything to the contrary
herein, Class A Additional Interest shall be payable or distributed to Class A
Certificateholders only to the extent permitted by applicable law.
Section 4.4 Determination of Principal Amounts. (a) The amount of
principal (the "Class A Principal") distributable from the Collection Account
with respect to the Class A Certificates on each Distribution Date with respect
to the Amortization Period shall be equal to an amount calculated as follows:
the sum of (i) the Available Series 2003-__ Principal Collections with respect
to such Distribution Date, (ii) any amount on deposit in the Special Funding
Account that is distributable to the Class A Certificates pursuant to
subsection 4.6(d)(i) with respect to the preceding Monthly Period, (iii) the
amount of Shared Principal Collections allocated to Series 2003-__ with respect
to the preceding Monthly Period pursuant to Section 4.4 of the Agreement and
(iv) at the option of the Transferor, the amount of Shared Transferor Principal
Collections allocated to Series 2003-__ with respect to the preceding Monthly
Period pursuant to subsection 4.5(b); provided, however, that (i) with respect
to any Distribution Date during the Accumulation Period, Class A Principal may
not exceed the Class A Controlled Deposit Amount for such Distribution Date and
(ii) with respect to any Distribution Date, Class A Principal may not exceed
the Class A Adjusted Invested Amount.
(b) The amount of principal (the "Collateral Principal") distributable
from the Collection Account with respect to the Collateral Interest on each
Distribution Date on and after the Distribution Date on which the Class A
Invested Amount is paid in full, shall be an amount equal to the lesser of: (x)
the sum of (i) the Available Series 2003-__ Principal Collections with respect
to such Distribution Date, (ii) any amount on deposit in the Special Funding
Account that is distributable to the Collateral Interest pursuant to subsection
4.6(d)(ii) with respect to the preceding Monthly Period, (iii) the amount of
Shared Principal Collections allocated to Series 2003-__ with respect to the
preceding Monthly Period pursuant to Section 4.4 of the Agreement and (iv) at
the option of the Transferor, the amount of Shared Transferor Principal
Collections allocated to Series 2003-__ with respect to the preceding Monthly
Period pursuant to subsection 4.5(b); provided, however, that with respect to
the Distribution Date on which the Class A Invested Amount is paid in full, the
amounts described in clauses (i), (iii) and (iv) shall be net of any amount
thereof applied to the payment of Class A Principal, and (y) the Collateral
Invested Amount.
Section 4.5 Shared Principal Collections and Shared Transferor
Principal Collections. (a) Shared Principal Collections allocated to the Series
2003-__ Certificates and to be applied pursuant to clause (iii) of subsection
4.4(a) and clause (iii) of subsection 4.4(b) for any Distribution Date with
respect to the Amortization Period shall mean an amount equal to the product of
(x) Shared Principal Collections for all Principal Sharing Series for such date
and (y) a fraction, the numerator of which is the Principal Shortfall for the
Series 2003-__ Certificates for such date and the denominator of which is the
aggregate amount of Principal Shortfalls for all Principal Sharing Series for
such date. For any Distribution Date with respect to the Revolving Period,
Shared Principal Collections allocated to the Series 2003-__ Certificates shall
be zero.
(b) If the Transferor elects to make Shared Transferor Principal
Collections available, Shared Transferor Principal Collections allocated to the
Series 2003-__ Certificates and to be applied pursuant to clause (iv) of
subsection 4.4(a) and clause (iv) of subsection 4.4(b) for any Distribution
Date with respect to the Amortization Period shall mean an amount equal to the
product of (x) the aggregate amount of Shared Transferor Principal Collections
for such date and (y) a fraction, the numerator of which is the Principal
Shortfall for the Series 2003-__ Certificates for such date and the denominator
of which is the aggregate amount of Principal Shortfalls for all Series for
such date. For any Distribution Date with respect to the Revolving Period,
Shared Transferor Principal Collections allocated to the Series 2003-__
Certificates shall be zero.
Section 4.6 Application of Funds on Deposit in the Collection Account
for the Certificates. (a) On each Distribution Date, the Servicer shall
instruct the Trustee to withdraw, and the Trustee, acting in accordance with
such instructions set forth in the Monthly Report, substantially in the form of
Exhibit B, shall withdraw from the Collection Account, or retain therein, as
applicable, to the extent of the sum of (w) the Floating Allocation Percentage
of Collections of Finance Charge Receivables collected during the preceding
Monthly Period plus (x) any Principal Funding Investment Proceeds deposited in
the Collection Account pursuant to subsection 4.11(c) and any investment
earnings on amounts on deposit in the Reserve Account deposited in the
Collection Account pursuant to subsection 4.13(b) plus (y) the Reserve Draw
Amount, if any, deposited into the Collection Account pursuant to subsection
4.13(d) plus (z) the amount of Excess Transferor Finance Charge Collections
applied to cover Principal Funding Investment Shortfalls, if any (such sum, the
"Available Series 2003-__Finance Charge Collections"[; provided that, with
respect to the first Distribution Date, the amount deposited by the Transferor
into the Collection Account pursuant to subsection 4.2(a) shall also constitute
Available Series 2003-__ Finance Charge Collections]), the following amounts,
and apply such amounts as follows and in the following priority:
(i) Class A Monthly Interest. An amount equal to the
lesser of (x) the Available Series 2003-__ Finance Charge Collections
for such date and (y) the sum of Class A Monthly Interest and Class A
Carryover Interest shall be paid to the Class A Certificateholders in
accordance with Section 5.1.
(ii) Servicing Fee. An amount equal to the lesser of
(x) any Available Series 2003-__ Finance Charge Collections remaining
after giving effect to the withdrawal pursuant to subsection 4.6(a)(i)
and (y) the Monthly Servicing Fee for such Monthly Period plus any
unpaid Monthly Servicing Fees from prior Monthly Periods shall be paid
to the Servicer.
(iii) Investor Defaulted Amount. An amount equal to the
lesser of (x) any Available Series 2003-__ Finance Charge Collections
remaining after giving effect to the withdrawals pursuant to
subsections 4.6(a)(i) and (ii) and (y) the aggregate Investor
Defaulted Amount for such Distribution Date, shall be treated as
Available Series 2003-__ Principal Collections.
(iv) Reimbursement of Investor Charge-Offs. An amount
equal to the lesser of (x) any Available Series 2003-__ Finance Charge
Collections remaining after giving effect to the withdrawals pursuant
to subsections 4.6(a)(i) through (iii) and (y) the amount by which the
aggregate amount of Investor Charge-Offs for all prior Distribution
Dates exceeds the aggregate amount previously applied pursuant to this
subsection 4.6(a)(iv) and, with respect to this subsection, pursuant
to Section 4.7 on prior Distribution Dates, if any, will be applied to
reinstate prior reductions of the Invested Amount, and shall be
treated as Available Series 2003-__ Principal Collections.
(v) Collateral Monthly Interest. An amount equal to the
lesser of (x) any Available Series 2003-__ Finance Charge Collections
remaining after giving effect to the withdrawals pursuant to
subsections 4.6(a)(i) through (iv) and (y) the sum of Collateral
Monthly Interest and Collateral Carryover Interest, if any, shall be
paid to the Collateral Interest Holders.
(vi) Reserve Account. On each Distribution Date from
and after the Reserve Account Funding Date, if such date is designated
by the Transferor at its option, but prior to the date of termination
of the Reserve Account as described in subsection 4.13(f), an amount
up to the excess, if any, of the Required Reserve Account Amount over
the Available Reserve Account Amount shall be deposited into the
Reserve Account.
(vii) Excess Finance Charge Collections. Any Available
Series 2003-__ Finance Charge Collections after giving effect to the
withdrawals pursuant to subsections 4.6(a)(i) through (vi) shall be
treated as Excess Finance Charge Collections, and the Servicer shall
direct the Trustee in writing on each Distribution Date to withdraw
such amounts from the Collection Account and to first make such
amounts available to pay to Certificateholders of other Series in
Group I to the extent of shortfalls, if any, in amounts payable to
such Certificateholders from Collections of Finance Charge Receivables
allocated to such other Series in Group I, and then to pay any unpaid
expenses or liabilities of the Trust, and then to treat the remaining
amount as Excess Transferor Finance Charge Collections.
(b) For each Distribution Date with respect to the Revolving Period,
the Available Series 2003-__ Principal Collections will be treated as Shared
Principal Collections and applied, for such Distribution Date, as provided in
Section 4.4 of the Agreement; provided, however, that if the Collateral
Invested Amount is reduced in accordance with subsection 7.3(a), the amount
specified above may be distributed to the Collateral Interest Holders in an
amount not to exceed such reduction.
(c) For each Distribution Date on and after the Amortization Period
Commencement Date, the Trustee, acting pursuant to the Servicer's instructions,
will distribute the amount of funds on deposit in the Collection Account
available for payment of principal to Series 2003-__ Certificateholders in
accordance with Section 4.4 in the following priority:
(i) an amount equal to Class A Principal, subject to
the proviso in subsection 4.4(a), (x) with respect to the Accumulation
Period, to the Principal Funding Account for payment to the Class A
Certificateholders on the earlier of the Class A Expected Final
Payment Date and, if an Early Amortization Commencement Date occurs
during the Accumulation Period, the first Special Payment Date or (y)
with respect to the Early Amortization Period, to the Class A
Certificateholders;
(ii) after the Class A Invested Amount has been paid in
full, to the Collateral Interest Holders, an amount equal to the
Collateral Invested Amount, subject to the proviso in subsection
4.4(b); and
(iii) an amount equal to the sum of (I) the excess, if
any, of (A) the sum of the amounts described in subsection 4.4(a) over
(B) the Class A Principal and (II) the excess, if any, of (A) the sum
of the amounts described in subsection 4.4(b) over (B) the Collateral
Invested Amount will be treated as Shared Principal Collections and
applied as provided in Section 4.4 of the Agreement.
(d) On each Distribution Date during the Amortization Period, funds on
deposit in the Special Funding Account and distributable to Series 2003-__ as
provided in Section 4.2 of the Agreement will be deposited in the Collection
Account. Such amounts will be allocated in the following order of priority:
(i) on each Distribution Date until the Class A
Invested Amount is paid in full, to the Class A Certificates in an
amount equal to the lesser of the Principal Shortfalls and the amount
allocated with respect thereto pursuant to Section 4.2 of the
Agreement; provided, however, such amount shall not exceed the Class A
Principal after subtracting therefrom any amounts to be deposited in
the Collection Account with respect thereto pursuant to subsections
4.4(a)(i), (iii) and (iv); and provided, further that during the
Accumulation Period such amount shall be deposited in the Principal
Funding Account; and
(ii) on each Distribution Date on and after the
Distribution Date on which the Class A Invested Amount is paid in
full, to the Collateral Interest in an amount not to exceed the
Collateral Invested Amount after subtracting therefrom any amounts to
be deposited in the Collection Account with respect thereto pursuant
to subsections 4.4(b)(i), (iii) and (iv) to be paid to the Collateral
Interest Holders.
Section 4.7 Excess Finance Charge Collections; Excess Transferor
Finance Charge Collections. (a) To the extent that on any Distribution Date
payments are being made pursuant to any of subsections 4.6(a)(i) through (vi)
and the full amount to be paid pursuant to any such subsection receiving
payments on such Distribution Date is not paid in full on such Distribution
Date, the Servicer shall apply all or a portion of the Excess Finance Charge
Collections from other Series with respect to such Distribution Date allocable
to the Series 2003-__ Certificates in an amount equal to the excess of the full
amount to be allocated or paid pursuant to the applicable subsection over the
amount applied with respect thereto from Available Series 2003-__ Finance
Charge Collections on such Distribution Date (the "Available Finance Charge
Collections Shortfall Amount"). Excess Finance Charge Collections allocated to
the Series 2003-__ Certificates for any Distribution Date shall mean an amount
equal to the product of (x) Excess Finance Charge Collections available from
all other Series in Group I for such Distribution Date and (y) a fraction, the
numerator of which is the Available Finance Charge Collections Shortfall Amount
for such Distribution Date and the denominator of which is the aggregate amount
of shortfalls in available Collections of Finance Charge Receivables for all
Series in Group I for such Distribution Date.
(b) In addition, on each Distribution Date following the Transfer Date
on which Excess Transferor Finance Charge Collections are deposited to the
Collection Account, the Servicer shall apply all or a portion of such Excess
Transferor Finance Charge Collections as Available Series 2003-__ Finance
Charge Collections with respect to such Distribution Date in an amount equal to
the Principal Funding Investment Shortfall, if any. Excess Transferor Finance
Charge Collections allocated to the Series 2003-__ Certificates for any
Distribution Date shall mean an amount equal to the product of (x) Excess
Transferor Finance Charge Collections available for such Distribution Date and
(y) a fraction, the numerator of which is the Principal Funding Investment
Shortfall, if any, for the related Interest Accrual Period and the denominator
of which is the aggregate amount of shortfalls for such Distribution Date in
amounts for all Series which are designated pursuant to the applicable
Supplement for such Series to be entitled to share Excess Transferor Finance
Charge Collections.
Section 4.8 Investor Defaulted Amount. (a) If, on any Distribution
Date, the aggregate Investor Defaulted Amount for the preceding Monthly Period
exceeds the Available Series 2003-__ Finance Charge Collections applied to the
payment thereof pursuant to subsection 4.6(a)(iii) plus the amount of Excess
Finance Charge Collections allocated thereto pursuant to subsection 4.7(a) and
to the extent of the Series 2003-__ Allocation Percentage of unpaid adjustment
payments, if any, required to be made by the Transferor on such Distribution
Date, the Collateral Invested Amount shall be reduced by the sum of (i) the
amount by which the aggregate Investor Defaulted Amount exceeds the amount
applied with respect thereto during such preceding Monthly Period and (ii) the
Series 2003-__ Allocation Percentage of unpaid adjustment payments required to
be made by the Transferor on such Distribution Date, and the amount of such
reduction shall be an Investor Charge-Off.
(b) In the event that any such reduction of the Collateral Invested
Amount would cause the Collateral Invested Amount to be a negative number, the
Collateral Invested Amount shall be reduced to zero, and the Class A Invested
Amount shall be reduced by the amount by which the Collateral Invested Amount
would have been reduced below zero and the amount of such reduction shall be an
Investor Charge-Off.
Section 4.9 Reallocated Collateral Principal Collections for the
Series 2003-__ Certificates. On each Distribution Date, the Servicer will apply
or cause the Trustee to apply from amounts on deposit in the Collection Account
an amount equal to the least of (i) the Collateral Invested Amount, (ii) the
Principal Allocation Percentage of Collections of Principal Receivables
collected during the preceding Monthly Period and (iii) the Required Amount for
such Distribution Date (such amount called "Reallocated Collateral Principal
Collections") to the components of the Required Amount in the same priority as
amounts are applied to such components from Available Series 2003-__ Finance
Charge Collections pursuant to subsection 4.6(a). On each Distribution Date,
the Collateral Invested Amount shall be reduced by the amount of Reallocated
Collateral Principal Collections, if any, and the amount of such reduction
shall be an Investor Charge-Off.
Section 4.10 Issuance of Additional Series 2003-__ Certificates. (a)
During the Revolving Period, the Transferor may, at its discretion and subject
to the terms of (b) below, request the Trustee to issue additional Class A
Certificates and Collateral Interest (each such additional certificates, the
"Additional Certificates") in an amount and on the date (the "Additional
Certificate Date") determined by the Transferor. Upon issuance, the Additional
Certificates will be identical in all respects (except that the principal
amount of such Additional Certificates may be different) to the Certificates
currently outstanding and will be equally and ratably entitled to the benefits
of this Supplement and the Agreement. As a result of such issuance, the Class A
Invested Amount and the Collateral Invested Amount shall be increased pro rata
based upon the principal amount of the Additional Certificates issued for the
Class A Certificates and the Collateral Interest, respectively, and all the
calculations required pursuant to this Supplement shall, from and after the
Additional Certificate Date, be computed using such increased Class A Invested
Amount and Collateral Invested Amount. The Class A Controlled Accumulation
Amount shall be increased proportionally to reflect the additional principal
amount of Class A Certificates represented by the Additional Certificates.
(b) Additional Certificates shall only be issued upon satisfaction of
all of the following conditions:
(i) on or before the fifth Business Day immediately
preceding the date on which the Additional Certificates are to be
issued, the Transferor shall give notice to the Trustee, the Servicer
and each Rating Agency of such issuance and the date upon which it is
to occur;
(ii) after giving effect to the addition of the
Additional Certificates to the Series, the total amount of Principal
Receivables in the Trust shall be greater than or equal to the
Required Principal Balance;
(iii) on or before the Additional Certificate Date, the
Rating Agency Condition shall have been satisfied;
(iv) the Transferor shall have delivered to the Trustee
an Officer's Certificate dated as of the Additional Certificate Date,
stating that the Transferor reasonably believes that the issuance of
such Additional Certificates will not have a material adverse effect
on the Class A Certificates or Collateral Interest; however, a
dilution of voting rights does not constitute a material adverse
effect for the purposes of this Section 4.10;
(v) as of the date of issuance of the Additional
Certificates, the amount of unreimbursed Investor Charge-Offs shall be
zero;
(vi) after giving effect to the addition of the
Additional Certificates to the Series, the Transferor Amount
(excluding the interest represented by any Supplemental Certificate)
shall be greater than the Required Retained Transferor Amount (after
giving effect to all Receivables transferred to the Trust on such
day); and
(vii) the Transferor shall have delivered to the
Trustee a Tax Opinion with respect to such issuance.
Section 4.11 Establishment of the Principal Funding Account for the
Series 2003-__ Certificates. (a) The Trustee, for the benefit of the Series
2003-__ Certificateholders, shall establish and maintain in the name of the
Trustee, on behalf of the Trust, an Eligible Deposit Account bearing a
designation clearly indicating that the funds deposited therein are held for
the benefit of Series 2003-__ Certificateholders (the "Principal Funding
Account"). The Principal Funding Account shall initially be established with
the Trustee. The Trustee shall possess all right, title and interest in all
funds on deposit from time to time in the Principal Funding Account and in all
proceeds thereof for the benefit of the Series 2003-__ Certificateholders. For
purposes of the definition of "Required Retained Transferor Amount" in Section
1.1 of the Agreement the Principal Funding Account shall be an account
specified in clause (i)(b) of the definition thereof. Except as provided in
subsection 4.11(d), the Principal Funding Account shall be under the sole
dominion and control of the Trustee for the benefit of the Series 2003-__
Certificateholders. If, at any time, the Principal Funding Account ceases to be
an Eligible Deposit Account, the Trustee (or the Servicer on its behalf) shall
within 10 Business Days establish a new Principal Funding Account meeting the
conditions specified above, transfer any cash and/or any investments to such
new Principal Funding Account and from the date such new Principal Funding
Account is established, it shall be, for the Series 2003-__ Certificates, the
"Principal Funding Account."
(b) Funds on deposit in the Principal Funding Account prior to the
Class A Expected Final Payment Date shall be invested until the following
Distribution Date at the direction of the Transferor by the Trustee in Eligible
Investments. Any such investment shall (i) convert or be convertible into cash
so that such funds shall be made available for withdrawal on or prior to each
Distribution Date and (ii) be held until maturity. Any request to the Trustee
from the Transferor to invest funds on deposit in the Principal Funding Account
shall be in writing and shall certify that the requested investment is an
Eligible Investment which converts or is convertible into cash at or prior to
the time required hereby.
(c) On each Distribution Date with respect to the Accumulation Period
and the first Special Payment Date, the Servicer shall instruct the Trustee to
withdraw from the Principal Funding Account and deposit in the Collection
Account the Principal Funding Investment Proceeds for such Distribution Date or
Special Payment Date. Principal Funding Investment Proceeds shall not be
considered to be principal amounts on deposit in the Principal Funding Account
for purposes hereof, and shall be treated as Available Series 2003-__ Finance
Charge Collections with respect to each Monthly Period.
(d) Pursuant to the authority granted to the Servicer in subsection
3.1(b) of the Agreement, the Servicer shall have the power, revocable by the
Trustee, to make withdrawals and payments or to instruct the Trustee to make
withdrawals and payments from the Principal Funding Account for the purposes of
carrying out the Servicer's or the Trustee's duties hereunder. Pursuant to the
authority granted to the Paying Agent in Section 6.7 of the Agreement and
Section 5.1, the Paying Agent shall have the power, revocable by the Trustee,
to withdraw funds from the Principal Funding Account for the purpose of making
distributions to the Certificateholders.
Section 4.12 Accumulation Period. The Accumulation Period is scheduled
to commence on the Accumulation Date; provided, however, that if the
Accumulation Period Length (determined as described below) on any Determination
Date is less than 12 months, upon written notice to the Trustee, the Transferor
and each Rating Agency, the Servicer, at its option, may elect to modify the
date on which the Accumulation Period actually commences to the first day of
the month that is a number of months prior to the month in which the Class A
Expected Final Payment Date occurs at least equal to the Accumulation Period
Length (so that, as a result of such election, the number of Monthly Periods in
the Accumulation Period will at least equal the Accumulation Period Length);
provided, however, that (i) the Accumulation Period Length will not be less
than one month; (ii) such determination of the Accumulation Period Length shall
be made on the third Business Day before each Distribution Date beginning on
_____________ but prior to the commencement of the Accumulation Period, and any
election to shorten the Accumulation Period shall be subject to the subsequent
lengthening of the Accumulation Period to the Accumulation Period Length
determined on any subsequent Determination Date, but the Accumulation Period
shall in no event commence prior to the Accumulation Date; and (iii)
notwithstanding any other provision of this Supplement to the contrary, no
election to postpone the commencement of the Accumulation Period shall be made
after the commencement of an Early Amortization Period (as defined in the
related Supplement) for any other Series. The "Accumulation Period Length" will
mean a number of months such that the amount available for distribution of
principal on the Class A Certificates on the Class A Expected Final Payment
Date is expected to equal or exceed the Class A Invested Amount, assuming for
this purpose that (1) the payment rate with respect to Collections of Principal
Receivables remains constant at the lowest level of such payment rate during
the 12 preceding Monthly Periods (or such lower payment rate as the Servicer
may select), (2) the total amount of Principal Receivables in the Trust (and
the principal amount on deposit in the Special Funding Account, if any) remains
constant at the level on such date of determination, (3) no Early Amortization
Event with respect to any Series will subsequently occur and (4) no additional
Series (other than any Series being issued on such date of determination) will
be subsequently issued. The Servicer shall determine the Accumulation Period
Length on the basis of the monthly Collections of Principal Receivables
expected to be allocated to all Principal Sharing Series during the
Accumulation Period for Series 2003-__, and the amount of Collections of
Principal Receivables expected to be distributable to Holders of other
Principal Sharing Series that are expected to be in their Accumulation Period
or Amortization Period during the Accumulation Period for Series 2003-__. Any
notice by the Servicer electing to modify the commencement of the Accumulation
Period pursuant to this Section 4.12 shall specify (i) the most recently
determined Accumulation Period Length, (ii) the commencement date of the
Accumulation Period and (iii) the Class A Controlled Accumulation Amount with
respect to each Monthly Period during the Accumulation Period.
In addition, prior to the Servicer making its initial determination of
the Accumulation Period Length, the Transferor shall determine whether or not
it shall utilize Shared Transferor Principal Collections to fund the Principal
Funding Account. If, at its option, the Transferor elects to utilize Shared
Transferor Principal Collections to fund the Principal Funding Account, such
determination shall be irrevocable and the Servicer shall include Shared
Transferor Principal Collections expected to be available for Series 2003-__ in
its determination of the Accumulation Period Length.
Section 4.13 Reserve Account. (a) Upon designation by the Transferor
of a Reserve Account Funding Date, the Trustee shall establish and maintain
with an Eligible Institution, in the name of the Trustee, on behalf of the
Trust, for the benefit of the Series 2003-__ Certificateholders, a segregated
trust account with the corporate trust department of such Eligible Institution
(the "Reserve Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Series 2003-__
Certificateholders. The Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Reserve Account and in all
proceeds thereof. The Reserve Account shall be under the sole dominion and
control of the Trustee for the benefit of the Series 2003-__
Certificateholders. If at any time the institution holding the Reserve Account
ceases to be an Eligible Institution the Transferor shall notify the Trustee,
and the Trustee upon being notified (or the Servicer on its behalf) shall,
within 10 Business Days, establish a new Reserve Account meeting the conditions
specified above with an Eligible Institution, and shall transfer any cash or
any investments to such new Reserve Account. The Trustee, at the written
direction of the Servicer, shall (i) make withdrawals from the Reserve Account
from time to time in an amount up to the Available Reserve Account Amount at
such time, for the purposes set forth in this Supplement, and (ii) on each
Distribution Date (from and after the Reserve Account Funding Date) prior to
termination of the Reserve Account make a deposit into the Reserve Account in
the amount specified in, and otherwise in accordance with, subsection
4.6(a)(vi).
(b) Funds on deposit in the Reserve Account shall be invested by the
Transferor (or, at the direction of the Transferor, by the Servicer or the
Trustee on behalf of the Transferor) in Eligible Investments. Funds on deposit
in the Reserve Account on any Transfer Date, after giving effect to any
withdrawals from the Reserve Account on such Transfer Date, shall be invested
in such investments that will convert or be convertible into cash so that such
funds will be available for withdrawal on or prior to the following Transfer
Date. The Trustee shall maintain for the benefit of the Series 2003-__
Certificateholders possession of the negotiable instruments or certificated
securities, if any, evidencing such Eligible Investments. No Eligible
Investment shall be disposed of prior to its maturity. On each Transfer Date,
all interest and earnings (net of losses and investment expenses) accrued since
the preceding Transfer Date on funds on deposit in the Reserve Account shall be
retained in the Reserve Account to the extent that the Available Reserve
Account Amount is less than the Required Reserve Account Amount and the
balance, if any, shall be deposited into the Collection Account for application
as Available Series 2003-__ Finance Charge Collections on the following
Distribution Date. For purposes of determining the availability of funds or the
balance in the Reserve Account for any reason under this Supplement, except as
otherwise provided in the preceding sentence, investment earnings on such funds
shall be deemed not to be available or on deposit.
(c) On each Transfer Date with respect to the Accumulation Period
prior to the payment in full of the Class A Invested Amount and the first
Transfer Date with respect to the Early Amortization Period, the Servicer shall
calculate the "Reserve Draw Amount" which shall be equal to the Principal
Funding Investment Shortfall with respect to each Transfer Date with respect to
the Accumulation Period or the first Transfer Date with respect to the Early
Amortization Period.
(d) In the event that for any Transfer Date the Reserve Draw Amount is
greater than zero, the Reserve Draw Amount, up to the Available Reserve Account
Amount, shall be withdrawn from the Reserve Account on such Transfer Date by
the Trustee (acting in accordance with the written instructions of the
Servicer), deposited into the Collection Account and included in Available
Series 2003-__ Finance Charge Collections for such Transfer Date.
(e) In the event that the Reserve Account Surplus on any Distribution
Date, after giving effect to all deposits to and withdrawals from the Reserve
Account on and prior to such Distribution Date, is greater than zero, the
Trustee, acting in accordance with the written instructions of the Servicer,
shall withdraw from the Reserve Account, and apply as Excess Finance Charge
Collections, an amount equal to such Reserve Account Surplus.
(f) Upon the earliest to occur of (i) the day on which the Class A
Invested Amount is paid in full to the Class A Certificateholders, (ii) the
first Transfer Date with respect to the Early Amortization Period and (iii) the
Class A Expected Final Payment Date, the Trustee, acting in accordance with the
written instructions of the Servicer, shall withdraw from the Reserve Account
and apply as Available Series 2003-__ Finance Charge Collections, all amounts,
if any, on deposit in the Reserve Account and the Reserve Account shall be
deemed to have terminated for purposes of this Supplement.
Section 4.14 Defeasance. On any date on which the following conditions
have been satisfied: (i) the Transferor has deposited (x) into the Principal
Funding Account, an amount equal to the outstanding principal balance of the
Class A Certificates, which amount shall be invested in Eligible Investments
and (y) if such defeasance occurs prior to the Early Amortization Commencement
Date, into the Reserve Account an amount equal to or greater than the Class A
Covered Amount, as estimated by the Transferor, for the period from the date of
the deposit to the Principal Funding Account through the Class A Expected Final
Payment Date; (ii) the Transferor has delivered to the Trustee an opinion of
counsel to the effect that such deposit and termination of obligations as
described below will not result in the Trust being required to register as an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, and an opinion of counsel to the effect that following such deposit
none of the Trust, the Reserve Account or the Principal Funding Account will be
deemed to be an association (or publicly traded partnership) taxable as a
corporation; (iii) if such defeasance occurs prior to an Early Amortization
Commencement Date, the Transferor has delivered to the Trustee a certificate of
an officer of the Transferor stating that the Transferor reasonably believes
that such deposit and termination of its obligations will not constitute an
Early Amortization Event or any event that, with the giving of notice or the
lapse of time, would cause an Early Amortization Event or a Series 2003-__
Early Amortization Event to occur; and (iv) the Rating Agency Condition shall
have been satisfied; then, the Series 2003-__ Certificates will no longer be
entitled to the security interest of the Trust in the Receivables or, except
those set forth in clause (i) above, any other Trust assets ("Defeasance"), and
the Investor Percentages applicable to the allocation to Series 2003-__
Certificateholders of Collections of Principal Receivables, Finance Charge
Receivables and the Defaulted Amount will be reduced to zero; provided,
however, that if the Collateral Interest is held by the Transferor or an
affiliate of the Transferor on the date the Transferor defeases the Class A
Certificates, the Collateral Invested Amount will be reduced to zero. If the
Collateral Interest or any portion thereof is not held by the Transferor or an
affiliate of the Transferor prior to any such Defeasance the Transferor shall
be obligated to satisfy any other conditions to Defeasance as are set forth in
each applicable supplemental agreement as described in subsection 7.3(b).
Section 4.15 Determination of LIBOR. (a) On each LIBOR Determination
Date, the Trustee shall determine LIBOR on the basis of the rate for deposits
in United States dollars for a one-month period which appears on Telerate Page
3750 or on such comparable system as is customarily used to quote LIBOR as of
11:00 a.m., London time, on such date. If such rate does not appear on Telerate
Page 3750 or on such comparable system as is customarily used to quote LIBOR,
the rate for that LIBOR Determination Date shall be determined on the basis of
the rates at which deposits in United States dollars are offered by the
Reference Banks at approximately 11:00 a.m., London time, on that day to prime
banks in the London interbank market for a one-month period. The Trustee shall
request the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, the rate
for that LIBOR Determination Date will be the arithmetic mean of the
quotations. If fewer than two quotations are provided as requested, the rate
for that LIBOR Determination Date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Servicer at
approximately 11:00 a.m., New York City time, on that day for loans in United
States dollars to leading European banks for a one-month-period
(b) The Class A Certificate Rate applicable to the then current and
the immediately preceding Interest Accrual Periods may be obtained by any Class
A Certificateholder by telephoning the Trustee at (000) 000-0000.
(c) On each LIBOR Determination Date, the Trustee shall send to the
Servicer by facsimile notification of LIBOR for the following Interest Accrual
Period.
ARTICLE V
DISTRIBUTIONS AND REPORTS TO SERIES 2003-
CERTIFICATEHOLDERS
Section 5.1 Distributions. (a) On each Distribution Date, the Paying
Agent shall distribute to each Class A Certificateholder of record on the
related Record Date (other than as provided in Section 12.2 of the Agreement)
such Class A Certificateholder's pro rata share of the amounts that are
available on such Distribution Date to pay interest on the Class A Certificates
pursuant to this Supplement.
(b) On the Class A Expected Final Payment Date and on each
Distribution Date thereafter, and on each Distribution Date with respect to the
Early Amortization Period, the Paying Agent shall distribute to each Class A
Certificateholder of record on the related Record Date (other than as provided
in Section 12.2 of the Agreement) such Class A Certificateholder's pro rata
share of the amounts that are available on such date to pay principal of the
Class A Certificates pursuant to this Supplement up to a maximum amount on any
such date equal to the Class A Invested Amount on such date. On each
Distribution Date on and after the Distribution Date on which the Class A
Invested Amount is paid in full, the Paying Agent shall distribute to each
Collateral Interest Holder of record on the related Record Date (other than as
provided in Section 12.2 of the Agreement) such Collateral Interest Holder's
pro rata share of the amounts that are available on such date to pay principal
of the Collateral Interest pursuant to this Supplement up to a maximum amount
on any such date equal to the Collateral Invested Amount on such date.
(c) The distributions to be made pursuant to this Section 5.1 are
subject to the provisions of Sections 2.6, 10.1 and 12.2 of the Agreement and
Section 8.1.
(d) Except as provided in Section 12.2 of the Agreement with respect
to a final distribution, distributions to Series 2003-__ Certificateholders
hereunder shall be made by check mailed to each Series 2003-__
Certificateholder at such Series 2003-__ Certificateholder's address appearing
in the Certificate Register without presentation or surrender of any Series
2003-__ Certificate or the making of any notation thereon; provided, however,
that with respect to Series 2003-__ Certificates registered in the name of a
Clearing Agency, such distributions shall be made to such Clearing Agency in
immediately available funds; provided, further, that the final payment in
retirement of the Class A Certificates will be made only upon presentation and
surrender of the Class A Certificates at the offices specified in the notice of
such final distribution delivered by the Trustee pursuant to Section 12.2 of
the Agreement.
Section 5.2 Reports and Statements to Series
2003-__Certificateholders. (a) On each Distribution Date, the Paying Agent, on
behalf of the Trustee, shall forward to each Class A Certificateholder a
statement substantially in the form of Exhibit B prepared by the Servicer.
(b) Not later than each Determination Date, the Servicer shall deliver
to the Trustee, the Paying Agent and each Rating Agency (i) statements
substantially in the form of Exhibit B prepared by the Servicer and (ii) a
certificate of a Servicing Officer substantially in the form of Exhibit C.
(c) On or before January 31 of each calendar year, beginning with
calendar year 2004, the Paying Agent, on behalf of the Trustee, shall furnish
or cause to be furnished to each Person who at any time during the preceding
calendar year was a Series 2003-__ Certificateholder, a statement prepared by
the Servicer containing the information which is required to be contained in
the statement to Series 2003-__ Certificateholders, as set forth in paragraph
(a) or (b) above, as applicable, aggregated for such calendar year or the
applicable portion thereof during which such Person was a Series 2003-__
Certificateholder, together with other information as is required to be
provided by an issuer of indebtedness under the Internal Revenue Code. Such
obligation of the Servicer shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Paying Agent
pursuant to any requirements of the Internal Revenue Code as from time to time
in effect.
ARTICLE VI
EARLY AMORTIZATION EVENTS
Section 6.1 Series 2003-__ Early Amortization Events. If any one of
the following events shall occur with respect to the Series 2003-__
Certificates:
(a) failure on the part of (i) RNB duly to observe or perform in any
material respect any covenants or agreements of RNB set forth in the Bank
Purchase Agreement, (ii) TCC duly to observe or perform in any material respect
any covenants or agreements of TCC set forth in the Receivables Purchase
Agreement or (iii) the Transferor (A) to make any payment or deposit required
to be made by the Transferor by the terms of (I) the Agreement or (II) this
Supplement, on or before the date occurring five Business Days after the date
such payment or deposit is required to be made herein, (B) to perform in all
material respects the Transferor's covenant not to sell, pledge, assign, or
transfer to any Person, or grant any unpermitted lien on, any Receivable, or
(C) duly to observe or perform in any material respect any covenants or
agreements of the Transferor set forth in the Agreement or this Supplement,
which failure under clause (i), (ii) or (iii) has a material adverse effect on
the Series 2003-__ Certificateholders and which continues unremedied for a
period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Transferor by
the Trustee, or to the Transferor and the Trustee by any Series 2003-__
Certificateholder;
(b) any representation or warranty made by RNB in the Bank Purchase
Agreement, TCC in the Receivables Purchase Agreement or the Transferor in the
Agreement or this Supplement (i) shall prove to have been incorrect in any
material respect when made, which continues to be incorrect in any material
respect for a period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Transferor by the Trustee, or to the Transferor and the Trustee by any Series
2003-__ Certificateholder, and (ii) as a result of which the interests of the
Series 2003-__ Certificateholders are materially and adversely affected;
provided, however, that a Series 2003-__ Early Amortization Event pursuant to
this subsection 6.1(b) shall not be deemed to have occurred hereunder if the
Transferor has accepted designation of the related Receivable as an Ineligible
Receivable during such period in accordance with the provisions of the
Agreement;
(c) the average of the Portfolio Yields for any three consecutive
Monthly Periods is reduced to a rate which is less than the average of the Base
Rates for such three consecutive Monthly Periods;
(d) a failure by TCC or the Transferor to make an Addition within five
Business Days after the Required Designation Date;
(e) any Servicer Default shall occur which would have a material
adverse effect on the Series 2003-__ Certificateholders;
(f) the principal amount on deposit in the Special Funding Account as
a percentage of the sum of (i) the aggregate amount of Principal Receivables
plus (ii) the principal amount on deposit in the Special Funding Account, shall
equal or exceed 30% at the end of the last day of three consecutive Monthly
Periods; or
(g) the Class A Invested Amount is not paid in full on the Class A
Expected Final Payment Date;
then, the Trustee shall within five days publish a notice of such early
amortization event and in the case of any event described in subparagraph (a),
(b) or (e), after the applicable grace period, if any, set forth in such
subparagraphs, the Series 2003-__ Certificateholders evidencing undivided
interests aggregating more than 50% of the Invested Amount of this Series
2003-__ by notice then given in writing to the Trustee, the Transferor and the
Servicer may declare that a early amortization event (a "Series 2003-__ Early
Amortization Event") has occurred as of the date of such notice, and in the
case of any event described in subparagraphs (c), (d), (f) or (g), a Series
2003-__ Early Amortization Event shall occur without any notice or other action
on the part of the Trustee or the Series 2003-__ Certificateholders immediately
upon the occurrence of such event. The Trustee shall provide to the Transferor
a copy of any notice received from any Series 2003-__ Certificateholder and the
Transferor shall provide to RNB or TCC, as applicable, a copy of any notice
received from the Trustee or any Series 2003-__ Certificateholder under
subparagraphs (a) and (b) above if such notice shall relate to a covenant,
agreement, representation or warranty by RNB or TCC, respectively.
ARTICLE VII
OPTIONAL TERMINATION; SERIES TERMINATION;
SALE OF COLLATERAL INTEREST
Section 7.1 Optional Termination. The Class A Certificates shall be
subject to repurchase by the Transferor at its option on any Distribution Date
on or after the Distribution Date on which the Class A Invested Amount is
reduced to an amount less than or equal to 10% of the highest Class A Invested
Amount outstanding at any time. The deposit to the Collection Account required
in connection with any such repurchase and final distribution shall be equal to
the outstanding principal balance of the Class A Certificates plus any accrued
and unpaid interest on the outstanding principal balance of the Class A
Certificates through the day prior to the Distribution Date on which the
repurchase occurs at the applicable Class A Certificate Rate.
Section 7.2 Series 2003-__ Termination. (a) If, on the second
Distribution Date prior to the Scheduled Series 2003-__ Termination Date, the
Invested Amount (after giving effect to all changes therein on such date) would
be greater than zero, the Servicer, on behalf of the Trustee, shall, within 45
days, solicit bids for the sale of Principal Receivables and the related
Finance Charge Receivables (or interests therein) in the amount specified in
subsection 12.2(c) of the Agreement. Such bids shall require that such sale
shall (subject to subsection 7.2(b)) occur on the Scheduled Series 2003-__
Termination Date. The Transferor shall be entitled to participate in, and to
receive from the Trustee a copy of each other bid submitted in connection with,
such bidding process.
(b) The Servicer, on behalf of the Trustee, shall sell such
Receivables (or interests therein) on the Scheduled Series 2003-__ Termination
Date to the bidder who made the highest cash purchase offer. The proceeds of
any such sale shall be treated as Collections on the Receivables and deposited
in the Collection Account to be allocated to the Series 2003-__
Certificateholders pursuant to the Agreement and this Supplement; provided,
however, that the Servicer shall determine conclusively the amount of such
proceeds which are allocable to Finance Charge Receivables and the amount of
such proceeds which are allocable to Principal Receivables. During the period
from the second Distribution Date prior to the Scheduled Series 2003-__
Termination Date to the Scheduled Series 2003-__ Termination Date, the Servicer
shall continue to collect payments on the Receivables and allocate and deposit
such Collections in accordance with the provisions of the Agreement and this
Supplement.
Section 7.3 Reduction of Collateral Invested Amount During the
Revolving Period; Designation of Collateral Interest Terms; Sale of Collateral
Interest. (a) The Collateral Invested Amount may be reduced during the
Revolving Period by distributing Collections of Principal Receivables to the
Collateral Interest Holders in accordance with subsection 4.6(b); provided that
(i) the Rating Agency Condition shall have been satisfied with respect to such
reduction and (ii) the Transferor shall have delivered to the Trustee an
Officer's Certificate stating that the Transferor reasonably believes that such
reduction will not, based on the facts known to such officer at the time of
such certification, cause an Early Amortization Commencement Date to occur.
(b) At any time that the Transferor is the holder of the Collateral
Interest, the Transferor may, without the consent of the other Series 2003-__
Certificateholders, (i) sell or transfer all or a portion of the Collateral
Interest in certificated or uncertificated form and (ii) in connection with any
such sale or transfer, enter into a supplemental agreement with the Trustee
pursuant to which the Transferor and the Trustee may amend the Collateral Rate,
set forth the Collateral Monthly Interest, provide for the payment of
Collateral Additional Interest with respect to any Collateral Monthly Interest
Shortfall and provide for such other provisions with respect to the Collateral
Interest as may be specified in such supplemental agreement; provided, however,
that in each such case (A) the Transferor shall have given notice to the
Trustee, the Servicer and the Rating Agencies of such proposed sale or transfer
of the Collateral Interest and such supplemental agreement at least five
Business Days prior to the consummation of such sale or transfer and the
execution of such proposed supplemental agreement; (B) the Rating Agency
Condition shall have been satisfied; (C) an Early Amortization Commencement
Date shall not have occurred prior to the consummation of such proposed sale or
transfer of the Collateral Interest or the execution of such supplemental
agreement; (D) the Transferor shall have delivered an Officer's Certificate,
dated the date of the consummation of such sale or transfer and the
effectiveness of such supplemental agreement, to the effect that, in the
reasonable belief of the Transferor, such action will not, based on the facts
known to such officer at the time of such certification, cause an Early
Amortization Event, a Series 2003-__ Early Amortization Event or any similar
event to occur with respect to any Series; and (E) the Transferor will have
delivered a Tax Opinion, dated the date of such Officer's Certificate with
respect to such action; provided, further, (i) as a condition to the sale or
transfer of all or a portion of the Collateral Interest the transferee shall be
required to agree not to institute against, or join any other Person in
instituting against, the Trust or the Transferor any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, for one year
and one day after all Series 2003-__ Certificates are paid in full and (ii) the
Collateral Interest may not be sold or transferred, in whole or in part, to
TCC. Regardless of whether the Collateral Interest is sold in certificated or
uncertificated form, any holder of the Collateral Interest will be treated as a
"Certificateholder" in accordance with the terms hereof, including Section 1.1.
Section 7.4 Purchase of Series 2003-__ Certificates by the Transferor.
The Transferor may, from time to time, purchase Class A Certificates in the
secondary market and request the Trustee to cancel such Class A Certificates
held by the Transferor and reduce the Class A Invested Amount by a
corresponding amount. In conjunction with such reduction of the Class A
Invested Amount, the Transferor may, at its option, reduce the Collateral
Invested Amount pro rata by either (i) reducing and cancelling the required
amount of the Collateral Interest held by the Transferor or an affiliate of the
Transferor, or (ii) purchasing all or a portion of the Collateral Interest not
held by the Transferor or an affiliate of the Transferor in the secondary
market and cancelling a corresponding amount of such Collateral Interest.
ARTICLE VIII
FINAL DISTRIBUTION
Section 8.1 Sale of Receivables or Certificateholders' Interest
pursuant to Section 2.6 or 10.1 of the Agreement and Section 7.1 or 7.2 of this
Supplement.
(a) The amount to be paid by the Transferor with respect to Series
2003-__ in connection with a reassignment of Receivables to the Transferor
pursuant to Section 2.6 of the Agreement or a repurchase of the
Certificateholders' Interest pursuant to Section 10.1 of the Agreement shall
equal the Reassignment Amount for the first Distribution Date following the
Monthly Period in which the reassignment obligation arises under the Agreement.
(b) With respect to the Reassignment Amount deposited into the
Collection Account pursuant to Section 7.1 or to subsection 8.1(a) or any
amounts allocable to the Series 2003-__ Certificateholders' Interest deposited
into the Collection Account pursuant to Section 7.2, the Trustee shall, not
later than 10:00 a.m., New York City time, on the applicable Distribution Date,
make deposits or distributions of the following amounts (in the priority set
forth below and, in each case after giving effect to any deposits and
distributions otherwise to be made on such date) in immediately available
funds: (i) (x) the Class A Invested Amount on such Distribution Date will be
distributed to the Paying Agent for payment to the Class A Certificateholders
and (y) an amount equal to the sum of (A) Class A Monthly Interest for such
Distribution Date, (B) any Class A Monthly Interest previously due but not
distributed to the Class A Certificateholders on a prior Distribution Date and
(C) the amount of Class A Additional Interest, if any, for such Distribution
Date and any Class A Additional Interest previously due but not distributed to
the Class A Certificateholders on any prior Distribution Date, will be
distributed to the Paying Agent for payment to the Class A Certificateholders,
(ii) (x) the Collateral Invested Amount on such Distribution Date will be
distributed to the Paying Agent for payment to the Collateral Interest Holders
and (y) an amount equal to the sum of (A) Collateral Monthly Interest for such
Distribution Date, (B) any Collateral Monthly Interest previously due but not
distributed to the Collateral Interest Holders on a prior Distribution Date and
(C) the amount of Collateral Additional Interest, if any, for such Distribution
Date and any Collateral Additional Interest previously due but not distributed
to the Collateral Interest Holders on any prior Distribution Date, will be
distributed to the Paying Agent for payment to the Collateral Interest Holders,
(iii) any other amounts payable pursuant to subsection 4.6(a) shall be paid in
accordance therewith and (iv) the balance, if any, will be distributed to the
Holder of the Transferor Certificate.
(c) Notwithstanding anything to the contrary in this Supplement or the
Agreement, all amounts distributed to the Paying Agent pursuant to subsection
8.1(b) for payment to the Series 2003-__ Certificateholders shall be deemed
distributed in full to the Series 2003-__ Certificateholders on the date on
which such funds are distributed to the Paying Agent pursuant to this Section
and shall be deemed to be a final distribution pursuant to Section 12.2 of the
Agreement.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 Legend on Collateral Interest Certificate. Each
certificate representing the Collateral Interest will bear a legend
substantially in the following form:
EACH PURCHASER OR HOLDER REPRESENTS AND WARRANTS FOR THE BENEFIT OF
TARGET RECEIVABLES CORPORATION AND THE TRUSTEE THAT SUCH PURCHASER IS
NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"))
THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (II) A PLAN
DESCRIBED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE") THAT IS SUBJECT TO SECTION 4975 OF THE CODE,
(III) A GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA,
SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL
EXTENT, SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION
4975 OF THE CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN
ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY OR (V) A PERSON
INVESTING "PLAN ASSETS" OF ANY SUCH PLAN (INCLUDING FOR PURPOSES OF
CLAUSES (IV) AND (V), ANY INSURANCE COMPANY GENERAL ACCOUNT).
THIS CERTIFICATE MAY NOT BE ACQUIRED, SOLD, TRADED OR TRANSFERRED, NOR
MAY AN INTEREST IN THIS CERTIFICATE BE MARKETED ON OR THROUGH (I) AN
"ESTABLISHED SECURITIES MARKET" WITHIN THE MEANING OF SECTION
7704(b)(1) OF THE CODE AND ANY PROPOSED, TEMPORARY OR FINAL REGULATION
THEREUNDER, INCLUDING, WITHOUT LIMITATION, AN OVER-THE-COUNTER MARKET
OR AN INTERDEALER QUOTATION SYSTEM THAT REGULARLY DISSEMINATES FIRM
BUY OR SELL QUOTATIONS OR (II) A "SECONDARY MARKET" WITHIN THE MEANING
OF SECTION 7704(b)(2) OF THE CODE AND ANY PROPOSED, TEMPORARY OR FINAL
TREASURY REGULATION THEREUNDER INCLUDING A MARKET WHEREIN INTERESTS IN
THE COLLATERAL INTEREST ARE REGULARLY QUOTED BY ANY PERSON MAKING A
MARKET IN SUCH INTERESTS AND A MARKET WHEREIN ANY PERSON REGULARLY
MAKES AVAILABLE BID OR OFFER QUOTES WITH RESPECT TO INTERESTS IN THE
COLLATERAL INTEREST AND STANDS READY TO EFFECT BUY OR SELL
TRANSACTIONS AT THE QUOTED PRICES FOR ITSELF OR ON BEHALF OF OTHERS.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES OR
"BLUE SKY" LAWS OF THE UNITED STATES OR OTHER JURISDICTION. NEITHER
THIS CERTIFICATE NOR ANY PORTION HEREOF MAY BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE REGISTRATION
PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE PROVISIONS OF ANY
STATE SECURITIES OR "BLUE SKY" LAWS OF THE UNITED STATES OR OTHER
JURISDICTION OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH
REGISTRATION PROVISIONS AND IN ACCORDANCE WITH THE PROVISIONS OF THE
SERIES 2003-__ SUPPLEMENT.
Section 9.2 Ratification of Agreement. As supplemented by this
Supplement, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Supplement shall be read, taken, and
construed as one and the same instrument.
Section 9.3 Counterparts. This Supplement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and
the same instrument.
Section 9.4 Paired Series. Subject to satisfaction of the Rating
Agency Condition, and prior to the commencement of the Early Amortization
Period, the Series 2003-__ Certificates may be paired with one or more other
Series (each, a "Paired Series"). Each Paired Series either will be pre-funded
with an initial deposit to a pre-funding account in an amount up to the initial
principal balance of such Paired Series and primarily from the proceeds of the
sale of such Paired Series or will have a variable principal amount. Any such
pre-funding account will be held for the benefit of such Paired Series and not
for the benefit of the Series 2003-__ Certificateholders. As principal is paid
with respect to the Series 2003-__ Certificates, either (i) in the case of a
pre-funded Paired Series, an equal amount of funds on deposit in any
pre-funding account for such pre-funded Paired Series will be released (which
funds will be distributed to the Transferor) or (ii) in the case of a Paired
Series having a variable principal amount, an interest in such variable Paired
Series in an equal or lesser amount may be sold by the Trust (and the proceeds
thereof will be distributed to the Transferor) and, in either case, the
invested amount in the Trust of such Paired Series will increase by up to a
corresponding amount. Upon payment in full of the Series 2003-__ Certificates,
assuming that there have been no unreimbursed Investor Charge-Offs with respect
to any related Paired Series, the aggregate invested amount of such related
Paired Series will have been increased by an amount up to an aggregate amount
equal to the Invested Amount paid to the Series 2003-__ Certificateholders
since the issuance of such Paired Series. The issuance of a Paired Series will
be subject to the conditions described in Section 6.3 of the Agreement.
Section 9.5 Jurisdiction; Service. Solely with respect to the
Agreement (as supplemented hereby and as further amended, modified or
supplemented from time to time) and the transactions and other matters
contemplated thereby or relating thereto, each of the parties hereto hereby
irrevocably and unconditionally agrees (a) to be subject to the jurisdiction of
the courts of the State of Delaware and of the federal courts sitting in the
State of Delaware, and (b)(i) to the extent such party is not otherwise subject
to service of process in the State of Delaware, to appoint and maintain an
agent in the State of Delaware as such party's agent for acceptance of legal
process, and (ii) that service of process may also be made on such party by
prepaid certified mail with a proof of mailing receipt validated by the United
States Postal Service constituting evidence of valid service, and that service
made pursuant to (b)(i) or (ii) above shall have the same legal force and
effect as if served upon such party personally within the State of Delaware.
For purposes of implementing the parties' foregoing agreement to appoint and
maintain an agent for service of process in the State of Delaware solely in
respect of the Agreement and the transactions and other matters contemplated
thereby or relating thereto, each such party that has not as of the date hereof
already duly appointed such an agent does hereby appoint RL&F Service Corp.,
Xxx Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, as such agent.
Section 9.6 GOVERNING LAW. THIS SUPPLEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 9.7 Instructions in Writing. All instructions or other
communications given by the Servicer or any other person to the Trustee
pursuant to this Supplement shall be in writing.
Section 9.8 Target VISA Automatic Addition Limitation. The Transferor
shall elect to terminate the inclusion in Accounts of new accounts which would
otherwise be Automatic Additional Accounts in accordance with subsection
2.9(d)(i) of the Agreement if on any Determination Date the percentage
equivalent of a fraction the numerator of which is the number of Target VISA
accounts originated through responses from obligors who were not previously
customers of Target Corporation or any of its subsidiaries (i) to mass mailings
of new account solicitations and (ii) to internet advertising on web sites
other than the web sites of Target Corporation or any of its subsidiaries, and
the denominator of which is the aggregate number of Target VISA accounts
designated to have their Receivables included in the Trust on that
Determination Date, exceeds 15%. If such limitation is exceeded, the Transferor
shall deliver to the Trustee, the Servicer and each Rating Agency written
notice of the Automatic Addition Suspension Date or the Automatic Addition
Termination Date. If on any subsequent Determination Date such percentage shall
be less than 15%, the Transferor may provide notice of a Restart Date in
accordance with subsection 2.9(d) of the Agreement.
Section 9.9 Eligible Investments. In addition to the Eligible
Investments identified in Section 1.1 of the Agreement, amounts held in the
accounts established for the benefit of the Series 2003-__ Certificateholders
may be invested in investments in money market funds having, at the time of the
Trust's investment, a rating in the highest rating category from each Rating
Agency or otherwise approved in writing by each Rating Agency. In order to
qualify as an "Eligible Investment," each type of investment described in
clauses (b), (c), (d) and (f) of the definition of "Eligible Investments" in
Section 1.1 of the Agreement must be rated "A-1+" by Standard & Poor's.
IN WITNESS WHEREOF, the Transferor, the Servicer and the
Trustee have caused this Series 2003-__ Supplement to be duly executed by their
respective officers as of the day and year first above written.
TARGET RECEIVABLES CORPORATION,
Transferor
By: _____________________________
Name:
Title:
RETAILERS NATIONAL BANK,
Servicer
By: _____________________________
Name:
Title:
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
Trustee
By: _____________________________
Name:
Title:
Exhibit A-1
[FORM OF] SERIES 2003-__ CLASS A CERTIFICATE
REGISTERED $_______________
No. ___ CUSIP NO. _______
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.
TARGET CREDIT CARD MASTER TRUST
SERIES 2003-__
FLOATING RATE CLASS A ASSET BACKED CERTIFICATE
Evidencing an undivided interest in a trust, the corpus of which consists of
receivables generated from time to time in the ordinary course of business from
a portfolio of consumer open-end credit card accounts generated or to be
generated by Retailers National Bank ("RNB" or the "Servicer") and other assets
and interests constituting the Trust under the Agreement described below.
(Not an interest in or a recourse obligation of Target
Corporation, Target Receivables Corporation, Target Capital Corporation or RNB
or any affiliate of any of them.)
This certifies that CEDE & CO. (the "Certificateholder") is
the registered owner of a fractional undivided interest in the Target Credit
Card Master Trust (the "Trust") issued pursuant to the Amended and Restated
Pooling and Servicing Agreement, dated as of April 28, 2000, as amended (the
"Pooling and Servicing Agreement," such term to include any amendment thereto)
by and among Target Receivables Corporation, as Transferor (the "Transferor"),
RNB, as the Servicer, and Xxxxx Fargo Bank Minnesota, National Association, as
Trustee (the "Trustee"), and the Series 2003-__ Supplement, dated as of ______
(the "Series 2003-__ Supplement"), by and among the Transferor, the Servicer
and the Trustee. The Pooling and Servicing Agreement, as supplemented by the
Series 2003-__ Supplement, is herein referred to as the "Agreement". The corpus
of the Trust consists of all of the Transferor's right, title and interest in,
to and under the Trust Assets (as defined in the Agreement).
This Certificate does not purport to summarize the Agreement
and reference is made to that Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds, and duties evidenced hereby
and the rights, duties and obligations of the Trustee. To the extent not
defined herein, the capitalized terms used herein have the meanings ascribed to
them in the Agreement. This Certificate is one of a class of Certificates
entitled "Target Credit Card Master Trust $_______ Floating Rate Class A Asset
Backed Certificates, Series 2003-__" (the "Class A Certificates"), each of
which represents a fractional undivided interest in the Trust, and is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement, as amended from time to time, the Certificateholder by
virtue of the acceptance hereof assents and by which the Certificateholder is
bound.
The Transferor has structured the Agreement, the Class A
Certificates and the "Target Credit Card Master Trust $_______ Collateral
Interest, Series 2003-__" (the "Collateral Interest") with the intention that
the Class A Certificates will qualify under applicable tax law as debt, and
both the Transferor and each holder of a Class A Certificate (a "Class A
Certificateholder") or any interest therein by acceptance of its Certificate or
any interest therein, agrees to treat the Class A Certificates for purposes of
federal, state and local income or franchise taxes and any other tax imposed on
or measured by income, as debt.
No principal will be payable to the Class A
Certificateholders until the earlier of (i) the first Distribution Date in the
Early Amortization Period and (ii) the Class A Expected Final Payment Date.
Each Class A Certificate represents the right to receive
interest at a per annum rate equal to the London Interbank Offered Rate
("LIBOR") for one-month United States dollar deposits in Europe (determined as
set forth in the Pooling and Servicing Agreement on the applicable LIBOR
Determination Date), in each case plus ______% per annum (such rate, as in
effect from time to time, the "Class A Certificate Rate"). Monthly interest on
the Class A Certificates will accrue from the Closing Date and will be
distributed on each Distribution Date in an amount equal to the product of (a)
the Class A Certificate Rate for the current Interest Accrual Period, (b) the
outstanding principal balance of the Class A Certificates at the end of the
last day of the preceding Monthly Period (or in the case of the first
Distribution Date, the Class A Initial Invested Amount), and (c) a fraction,
the numerator of which is the actual number of days in the related Interest
Accrual Period and the denominator of which is 360. Interest for any
Distribution Date due but not paid on such Distribution Date will be due on the
next succeeding Distribution Date together with, to the extent permitted by
applicable law, additional interest on such amount at the Class A Certificate
Rate plus 2% per annum.
In general, payments of principal with respect to the Class A
Certificates are limited to the Class A Invested Amount, which may be less than
the unpaid principal balance of the Class A Certificates. The Class A Expected
Final Payment Date is the _____ Distribution Date, but principal with respect
to the Class A Certificates may be paid earlier or later under certain
circumstances described in the Agreement and the Series 2003-__ Supplement.
Unpaid principal, together with interest, will be payable monthly to Class A
Certificateholders following the Class A Expected Final Payment Date to the
extent principal has not been paid in full on the Class A Expected Final
Payment Date. If for one or more months during the Accumulation Period there
are not sufficient funds to pay the Class A Controlled Deposit Amount, then to
the extent that excess funds are not available on subsequent Distribution Dates
with respect to the Accumulation Period to make up for such shortfalls, the
final payment of principal of the Class A Certificates will occur later than
the Class A Expected Final Payment Date. However, no payments of principal or
interest will be made on the Series 2003-__ Certificates after the Series
2003-__ Termination Date, regardless of whether principal and interest have
been paid in full with respect thereto.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
IN WITNESS WHEREOF, the Transferor has caused this
Certificate to be duly executed under its official seal.
TARGET RECEIVABLES CORPORATION
By:___________________________
Name:
Title:
Dated: __________ __, ____
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates referred to in the
within-mentioned Pooling and Servicing Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:___________________________
Name:
Title:
Exhibit A-2
[FORM OF] COLLATERAL INTEREST CERTIFICATE
REGISTERED $_______________
No. ___ .........
EACH PURCHASER OR HOLDER REPRESENTS AND WARRANTS FOR THE BENEFIT OF TARGET
RECEIVABLES CORPORATION AND THE TRUSTEE THAT SUCH PURCHASER IS NOT (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION 4975(e)(1) OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") THAT IS SUBJECT TO
SECTION 4975 OF THE CODE, (III) A GOVERNMENTAL PLAN, AS DEFINED IN SECTION
3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A
MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION
4975 OF THE CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY
REASON OF A PLAN'S INVESTMENT IN THE ENTITY OR (V) A PERSON INVESTING "PLAN
ASSETS" OF ANY SUCH PLAN (INCLUDING FOR PURPOSES OF CLAUSES (IV) AND (V), ANY
INSURANCE COMPANY GENERAL ACCOUNT).
THIS CERTIFICATE MAY NOT BE ACQUIRED, SOLD, TRADED OR TRANSFERRED, NOR MAY AN
INTEREST IN THIS CERTIFICATE BE MARKETED ON OR THROUGH (I) AN "ESTABLISHED
SECURITIES MARKET" WITHIN THE MEANING OF SECTION 7704(b)(1) OF THE CODE AND ANY
PROPOSED, TEMPORARY OR FINAL REGULATION THEREUNDER, INCLUDING, WITHOUT
LIMITATION, AN OVER-THE-COUNTER MARKET OR AN INTERDEALER QUOTATION SYSTEM THAT
REGULARLY DISSEMINATES FIRM BUY OR SELL QUOTATIONS OR (II) A "SECONDARY MARKET"
WITHIN THE MEANING OF SECTION 7704(b)(2) OF THE CODE AND ANY PROPOSED,
TEMPORARY OR FINAL TREASURY REGULATION THEREUNDER INCLUDING A MARKET WHEREIN
INTERESTS IN THE COLLATERAL INTEREST ARE REGULARLY QUOTED BY ANY PERSON MAKING
A MARKET IN SUCH INTERESTS AND A MARKET WHEREIN ANY PERSON REGULARLY MAKES
AVAILABLE BID OR OFFER QUOTES WITH RESPECT TO INTERESTS IN THE COLLATERAL
INTEREST AND STANDS READY TO EFFECT BUY OR SELL TRANSACTIONS AT THE QUOTED
PRICES FOR ITSELF OR ON BEHALF OF OTHERS.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES OR "BLUE SKY" LAWS OF
THE UNITED STATES OR OTHER JURISDICTION. NEITHER THIS CERTIFICATE NOR ANY
PORTION HEREOF MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND ANY
APPLICABLE PROVISIONS OF ANY STATE SECURITIES OR "BLUE SKY" LAWS OF THE UNITED
STATES OR OTHER JURISDICTION OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH
REGISTRATION PROVISIONS AND IN ACCORDANCE WITH THE PROVISIONS OF THE SERIES
2003-__ SUPPLEMENT.
TARGET CREDIT CARD MASTER TRUST
SERIES 2003-__
$__________ COLLATERAL INTEREST
Evidencing an undivided interest in a trust, the corpus of which consists of
receivables generated from time to time in the ordinary course of business from
a portfolio of consumer open-end credit card accounts generated or to be
generated by Retailers National Bank ("RNB" or the "Servicer") and other assets
and interests constituting the Trust under the Agreement described below.
(Not an interest in or a recourse obligation of Target
Corporation, Target Receivables Corporation, Target Capital Corporation or RNB
or any affiliate of any of them.)
This certifies that Target Receivables Corporation (the
"Certificateholder") is the registered owner of a fractional undivided interest
in the Target Credit Card Master Trust (the "Trust") issued pursuant to the
Amended and Restated Pooling and Servicing Agreement, dated as of April 28,
2000, as amended (the "Pooling and Servicing Agreement," such term to include
any amendment thereto) by and among Target Receivables Corporation, as
Transferor (the "Transferor"), RNB as the Servicer, and Xxxxx Fargo Bank
Minnesota, National Association, as Trustee (the "Trustee"), and the Series
2003-__ Supplement, dated as of _______ (the "Series 2003-__ Supplement"), by
and among the Transferor, the Servicer and the Trustee. The Pooling and
Servicing Agreement, as supplemented by the Series 2003-__ Supplement, is
herein referred to as the "Agreement." The corpus of the Trust consists of all
of the Transferor's right, title and interest in, to and under the Trust Assets
(as defined in the Agreement).
This Certificate does not purport to summarize the Agreement
and reference is made to that Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds, and duties evidenced hereby
and the rights, duties and obligations of the Trustee. To the extent not
defined herein, the capitalized terms used herein have the meanings ascribed to
them in the Agreement. This Certificate is one of a class of Certificates
entitled "Target Credit Card Master Trust $_______ Collateral Interest
Certificates, Series 2003-__" (the "Collateral Interest"), each of which
represents a fractional undivided interest in the Trust, and is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement, as amended from time to time, the Certificateholder by virtue
of the acceptance hereof assents and by which the Certificateholder is bound.
Unless the Rating Agency Condition and certain other
conditions set forth in the Series 2003-__ Supplement are satisfied, (i) no
principal will be payable to the Collateral Certificateholders until the Class
A Invested Amount is paid in full and (ii) no interest will accrue on the
unpaid principal amount of the Collateral Interest. Principal is scheduled to
be paid in full to the Class A Certificates on the _______ Distribution Date.
In general, payments of principal with respect to the
Collateral Interest are limited to the Collateral Invested Amount, which may be
less than the unpaid principal balance of the Collateral Interest.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
IN WITNESS WHEREOF, the Transferor has caused this
Certificate to be duly executed under its official seal.
TARGET RECEIVABLES CORPORATION
By:___________________________
Name:
Title:
Dated: __________ __, ____
CERTIFICATE OF AUTHENTICATION
This is one of the Collateral Interest referred to in the
within-mentioned Pooling and Servicing Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:___________________________
Name:
Title:
Exhibit B
[FORM OF MONTHLY SERIES 2003-__ CERTIFICATEHOLDERS' STATEMENT]
-----------------------------------------------------------------------------
MONTHLY CERTIFICATEHOLDERS' STATEMENT
RETAILERS NATIONAL BANK
TARGET CREDIT CARD MASTER TRUST
SERIES 2003-__
Pursuant to the Amended and Restated Pooling and Servicing Agreement, dated as
of April 28, 2000 (as may be amended, from time to time, the "Agreement"), as
supplemented by the Series 2003-__ Supplement (as amended and supplemented, the
"Series Supplement"), each among Retailers National Bank, as Servicer, Target
Receivables Corporation, as Transferor, and Xxxxx Fargo Bank Minnesota,
National Association, as Trustee, the Servicer is required to prepare certain
information each month regarding distributions to Certificateholders and the
performance of the Trust. The information with respect to the applicable
Distribution Date and Monthly Period is set forth below.
Monthly Period:
Distribution Date:
No. of Days in Period:
A. ORIGINAL DEAL PARAMETERS
(a) Class A Initial Invested Amount
(b) Collateral Initial Invested Amount
(c) Total Initial Invested Amount
(d) Class A Certificate Rate
(e) Collateral Rate
(f) Servicing Fee Rate
(g) Discount Percentage
I. RECEIVABLES IN THE TRUST
(a) Beginning of the Period Principal Receivables
(b) Beginning of the Period Finance Charge Receivables
(c) Beginning of the Period Discounted Receivables
(d) Beginning of the Period Total Receivables (a + b + c)
(e) Removed Principal Receivables
(f) Removed Finance Charge Receivables
(g) Removed Total Receivables (e + f)
(h) Supplemental Principal Receivables
(i) Supplemental Finance Charge Receivables
(j) Supplemental Total Receivables (h + i)
(k) End of Period Principal Receivables
(l) End of Period Finance Charge Receivables
(m) End of Period Discounted Receivables
(n) End of Period Total Receivables (k + l + m)
II. INVESTED AMOUNTS AND ALLOCATION PERCENTAGES
(a) Class A Initial Invested Amount
(b) Collateral Initial Invested Amount
(c) Total Initial Invested Amount (a + b)
(d) Class A Invested Amount
(e) Collateral Invested Amount
(f) Total Invested Amount (d + e)
(g) Class A Adjusted Invested Amount
(h) Collateral Invested Amount
(i) Total Adjusted Invested Amount (g + h)
(j) Floating Allocation Percentage
(k) Principal Allocation Percentage
(l) Servicing Fee
(m) Investor Defaulted Amount (j * (IV.(k)))
III. TRANSFEROR'S INTEREST, RETAINED INTEREST, SPECIAL FUNDING ACCOUNT
AND PRINCIPAL FUNDING ACCOUNT
(a) Transferor's Amount (end of month)
(b) Required Retained Transferor Amount (end of month)
(c) Required Principal Balance (end of month)
(d) Funds on deposit in Special Funding Account (end of month)
(e) Principal on deposit in Principal Funding Account (beginning of
month)
(f) Principal on deposit in Principal Funding Account (end of month)
IV. PERFORMANCE SUMMARY
COLLECTIONS:
(a) Collections of Principal Receivables
(b) Collections of Finance Charge Receivables (from cardholder payments)
(c) Collections of Finance Charge Receivables (from merchant fees,
deferred billing fees, collection account interest, interchange
fees)
(d) Collections of Discount Option Receivables
(e) Total Finance Charge Collections (b + c + d)
(f) Total Collections (a + e)
DELINQUENCIES AND LOSSES:
(g) 2 missed payments
(h) 3 missed payments
(i) 4 or more missed payments
(j) Total delinquencies (g + h + i)
(k) Gross Charge-Offs during the month
(l) Recoveries during the month
(m) Net Charge-Offs during the month (k - l)
V NON-U.S. ACCOUNTS
(a) Non-U.S. Accounts at end of month
(b) as a percentage of total (a / c)
(c) Total number of Accounts in Trust (at end of month)
VI AVAILABLE SERIES 2003-__ FINANCE CHARGE COLLECTIONS AND APPLICATION
OF FUNDS
(a) Floating Allocation Percentage of Collections of Finance Charge
Receivables
(b) Investment earnings on Principal Funding Account
(c) Investment earnings in Reserve Account deposited in the Collection
Account
(d) Closing Date deposit into the Collection Account
(e) Excess Transferor Finance Charge Collections applied to cover
Principal Funding Investment Shortfalls
(f) Amounts from Reserve Account applied to cover Principal Funding
Investment Shortfalls
(g) Available Series 2003-__ Finance Charge Collections (a + b + c + d +
e + f)
(i) Class A Monthly Interest and Class A Carryover Interest
(ii) Monthly Servicing Fee and unpaid Monthly Servicing Fees from prior
periods
(iii) Investor Defaulted Amount (II.m)
(iv) Reimbursement of Investor Charge-Offs
(v) Collateral Monthly Interest
(vi) Reserve Account
(vii) Excess Finance Charge Collections (g-i-ii-iii-iv-v-vi)
VII YIELD and BASE RATE
Base Rate
(a) Base Rate (current month)
(b) Base Rate (prior month)
(c) Base Rate (2 months ago)
(d) 3 Month Average Base Rate
Portfolio
Yield
(e) Portfolio Yield (current month)
(f) Portfolio Yield (prior month)
(g) Portfolio Yield (2 months ago)
(h) 3 Month Average Portfolio Yield
VIII PORTFOLIO PERFORMANCE RATES
(a) Net Charge-Offs (annualized % of Principal Receivables at beginning
of period)
(b) Monthly Payment Rate (% of Total Receivables at beginning of period
(adjusted for number of days in period))
(c) Trust Portfolio Yield (annualized) (d) Portfolio Yield (3 month
average (annualized)) (e) Base Rate (3 month average) (f) Excess
Finance Charge Collections % (d - e)
IX PRINCIPAL COLLECTIONS
(a) Class A Principal
(b) Collateral distributable re: Collateral Interest
(c) Total Principal (a + b)
(d) Reallocated Collateral Principal Collections
(e) Shared Principal Collections allocable from other Series and
Participation
(f) Shared Transferor Principal Collections
X INVESTOR CHARGE-OFFS
INVESTOR CHARGE-OFFS
(a) Investor Charge-Offs
(b) Investor Charge-Offs per $1,000 original
certificate principal amount
(c) Total amount reimbursed in respect of Investor
Charge-Offs
(d) The amount, if any, by which the outstanding principal balance of
the Class A Certificates exceeds the Class A Invested Amount after
giving effect to all transactions on such Distribution Date.
XI AMORTIZATION
(a) Accumulation Period Length (months)
(b) Class A Controlled Accumulation Amount
(c) Class A Deficit Controlled Accumulation Amount
(d) Total Principal on deposit in Principal Funding Account for the
benefit of Class A Certificateholders (end of month)
RETAILERS NATIONAL BANK,
as Servicer
By:____________________________
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
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Exhibit C
[FORM OF MONTHLY SERVICER'S CERTIFICATE]
RETAILERS NATIONAL BANK
TARGET CREDIT CARD MASTER TRUST
SERIES 2003-__
The undersigned, a duly authorized representative of
Retailers National Bank, as Servicer ("RNB"), pursuant to the Amended and
Restated Pooling and Servicing Agreement, dated as of April 28, 2000 (as may be
amended, from time to time, the "Agreement"), as supplemented by the Series
2003-__ Supplement (as amended and supplemented, the "Series Supplement"),
dated as of _______ by and among RNB, Target Receivables Corporation and Xxxxx
Fargo Bank Minnesota, National Association, does hereby certify as follows:
1. Capitalized terms used in this Certificate have their
respective meanings as set forth in the Agreement or the Series Supplement, as
applicable.
2. RNB is, as of the date hereof, the Servicer under the
Agreement.
3. The undersigned is a Servicing Officer.
4. This Certificate relates to the Distribution Date
occurring on __________ __, ____ (the "________ __ Distribution Date").
5. As of the date hereof, to the best knowledge of the
undersigned, the Servicer has performed in all material respects all its
obligations under the Agreement through the Monthly Period preceding such
Distribution Date [or, if there has been a default in the performance of any
such obligation, set forth in detail the (i) nature of such default, (ii) the
action taken by the Servicer, if any, to remedy such default and (iii) the
current status of each such default; if applicable, insert "None."]
6. As of the date hereof, to the best knowledge of the
undersigned, no Early Amortization Commencement Date occurred on or prior to
such Distribution Date.
IN WITNESS WHEREOF, the undersigned has duly executed and
delivered this Certificate this ____ day of ___________ ____.
RETAILERS NATIONAL BANK,
as Servicer
By:___________________________
Name:
Title:
