Exhibit 4.1
MBNA CREDIT CARD MASTER NOTE TRUST
as Issuer
CLASS B(2002-1) TERMS DOCUMENT
dated as of February 28, 2002
to
MBNASERIES INDENTURE SUPPLEMENT
dated as of May 24, 2001
to
INDENTURE
dated as of May 24, 0000
XXX XXXX XX XXX XXXX
as Indenture Trustee
THIS CLASS B(2002-1) TERMS DOCUMENT (this "Terms
Document"), by and between MBNA CREDIT CARD MASTER NOTE TRUST, a
statutory business trust organized under the laws of the State of
Delaware (the "Issuer"), having its principal office at Xxxxxx Square
North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, and THE
BANK OF NEW YORK, a New York banking corporation ( the "Indenture
Trustee"), is made and entered into as of February 28, 2002.
Pursuant to this Terms Document, the Issuer and the Trust
shall create a new tranche of Class B Notes and shall specify the
principal terms thereof.
ARTICLE I
Definitions and Other Provisions of General Application
Section 1.01. Definitions. For all purposes of this Terms
Document, except as otherwise expressly provided or unless the context
otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article, and include the
plural as well as the singular;
(2) all other terms used herein which are defined in the
Indenture Supplement or the Indenture, either
directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with
generally accepted accounting principles and, except
as otherwise herein expressly provided, the term
"generally accepted accounting principles" with
respect to any computation required or permitted
hereunder means such accounting principles as are
generally accepted in the United States of America at
the date of such computation;
(4) all references in this Terms Document to designated
"Articles," "Sections" and other subdivisions are to
the designated Articles, Sections and other
subdivisions of this Terms Document as originally
executed;
(5) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Terms
Document as a whole and not to any particular
Article, Section or other subdivision;
(6) in the event that any term or provision contained
herein shall conflict with or be inconsistent with
any term or provision contained in the Indenture
Supplement or the Indenture, the terms and provisions
of this Terms Document shall be controlling;
(7) each capitalized term defined herein shall relate
only to the Class B(2002-1) Notes and no other
tranche of Notes issued by the Issuer; and
(8) "including" and words of similar import will be
deemed to be followed by "without limitation."
"Accumulation Reserve Funding Period" shall mean, (a) if
the Accumulation Period Length is determined to be one (1) month, there
shall be no Accumulation Reserve Funding Period and (b) otherwise, the
period (x) commencing on the earliest to occur of (i) the Monthly
Period beginning three (3) calendar months prior to the first Transfer
Date for which a budgeted deposit is targeted to be made into the
Principal Funding sub-Account of the Class B(2002-1) Notes pursuant to
Section 3.10(b) of the Indenture Supplement, (ii) the Monthly Period
following the first Transfer Date following and including the January
2005 Transfer Date for which the Quarterly Excess Available Funds
Percentage is less than 2%, but in such event the Accumulation Reserve
Funding Period shall not be required to commence earlier than 24 months
prior to the Expected Principal Payment Date, (iii) the Monthly Period
following the first Transfer Date following and including the July 2005
Transfer Date for which the Quarterly Excess Available Funds Percentage
is less than 3%, but in such event the Accumulation Reserve Funding
Period shall not be required to commence earlier than 18 months prior
to the Expected Principal Payment Date, and (iv) the Monthly Period
following the first Transfer Date following and including the September
2005 Transfer Date for which the Quarterly Excess Available Funds
Percentage is less than 4%, but in such event the Accumulation Reserve
Funding Period shall not be required to commence earlier than 16 months
prior to the Expected Principal Payment Date and (y) ending on the
close of business on the last day of the Monthly Period preceding the
earlier to occur of (i) the Expected Principal Payment Date for the
Class B(2002-1) Notes and (ii) the date on which the Class B(2002-1)
Notes are paid in full.
"Base Rate" means, with respect to any Monthly Period, the
sum of (i) the Weighted Average Interest Rates for the Outstanding
MBNAseries Notes, (ii) the Net Servicing Fee Rate (as such term is
defined in the Series 2001-D Supplement) and (iii) so long as MBNA or
The Bank of New York is the Servicer, the Servicer Interchange Rate, in
each case, for such Monthly Period.
"Class B(2002-1) Note" means any Note, substantially in the
form set forth in Exhibit A-2 to the Indenture Supplement, designated
therein as a Class B(2002-1) Note and duly executed and authenticated
in accordance with the Indenture.
"Class B(2002-1) Noteholder" means a Person in whose name a
Class B(2002-1) Note is registered in the Note Register.
"Class B(2002-1) Termination Date" means the earliest to
occur of (a) the Principal Payment Date on which the Outstanding Dollar
Principal Amount of the Class B(2002-1) Notes is paid in full, (b) the
Legal Maturity Date and (c) the date on which the Indenture is
discharged and satisfied pursuant to Article VI thereof.
"Class B Required Subordinated Amount of Class C Notes" is
defined in Section 2.02(b).
"Controlled Accumulation Amount" means $20,833,333.34;
provided, however, if the Accumulation Period Length is determined to
be less than twelve (12) months pursuant to Section 3.10(b)(ii) of the
Indenture Supplement, the Controlled Accumulation Amount shall be the
amount specified in the definition of "Controlled Accumulation Amount"
in the Indenture Supplement.
"Derivative Agreement" means the ISDA Master Agreement,
together with the Schedule and the Confirmation thereto, each dated as
of February 28, 2002, between the Issuer and the Derivative
Counterparty, as such Derivative Agreement may be amended, modified or
replaced.
"Derivative Counterparty" means Westdeutsche Landesbank
Girozentrale, New York Branch and any of its successors or transferees
under the Derivative Agreement.
"Derivative Fixed Rate" means, for any applicable Interest
Period, the fixed rate specified in the Derivative Agreement.
"Derivative Floating Rate" means, for any applicable
Interest Period, the floating rate specified in the Derivative
Agreement.
"Derivative Reserve Account" is defined in Section 2.11.
"Excess Available Funds Percentage" shall mean, with
respect to any Transfer Date, the amount, if any, by which the
Portfolio Yield for the preceding Monthly Period exceeds the Base Rate
for such Monthly Period.
"Expected Principal Payment Date" means February 15, 2007.
"Fixed Amount" means, for any Transfer Date, an amount
equal to the fixed amount (including the amount of any termination
payment payable by the Derivative Counterparty to the Issuer pursuant
to Section 6 of the Derivative Agreement following the termination of
the Derivative Agreement pursuant to the terms thereof) payable by the
Derivative Counterparty to the Issuer for such date pursuant to the
Derivative Agreement for interest for the Class B(2002-1) Notes.
"Floating Amount" means, for any Transfer Date, an amount
equal to (a) the floating amount (excluding the amount of any
termination payment payable by the Issuer to the Derivative
Counterparty pursuant to Section 6 of the Derivative Agreement
following the termination of the Derivative Agreement pursuant to the
terms thereof) payable by the Issuer to the Derivative Counterparty for
such date pursuant to the Derivative Agreement for interest for the
Class B(2002-1) Notes, minus (b) the amount, if any, by which the PFA
Accumulation Earnings Shortfall plus the PFA Prefunding Earnings
Shortfall for the Class B(2002-1) Notes for such Transfer Date exceeds
the sum of (i) the aggregate amount withdrawn from the Derivative
Reserve Account and (ii) the aggregate amount to be treated as
MBNAseries Available Funds pursuant to Section 3.04(a)(i) or
3.04(a)(ii) of the Indenture Supplement, in each case, for the Class
B(2002-1) Notes for such Transfer Date; provided, however, that solely
for purposes of clause (c) of the definition of PFA Accumulation
Earnings Target and clause (c) of the definition of PFA Prefunding
Earnings Target, the "Floating Amount" for any Transfer Date will be
limited to the amount determined pursuant to clause (a) above.
"Initial Dollar Principal Amount" means $250,000,000.
"Interest Payment Date" means the fifteenth day of each
month commencing April 15, 2002, or if such fifteenth day is not a
Business Day, the next succeeding Business Day.
"Interest Period" means, with respect to any Interest
Payment Date, the period from and including the previous Interest
Payment Date (or in the case of the initial Interest Payment Date, from
and including the Issuance Date) through the day preceding such
Interest Payment Date.
"Interest Reserve Account" is defined in Section 2.09.
"Interest Reserve Account Event" is defined in Section
2.08.
"Issuance Date" means February 28, 2002.
"Legal Maturity Date" means July 15, 2009.
"MBNAseries Servicer Interchange" means, with respect to
any Monthly Period, an amount equal to the product of (a) the Servicer
Interchange (as such term is defined in the Series 2001-D Supplement)
with respect to such Monthly Period and (b) a fraction the numerator of
which is the Weighted Average Available Funds Allocation Amount for the
MBNAseries for such Monthly Period and the denominator of which is the
Weighted Average Available Funds Allocation Amount for all series of
Notes for such Monthly Period.
"Net Derivative Payment" means, for any Transfer Date, (a)
if the netting provisions of subsection 2(c)(ii) of the Derivative
Agreement apply, the amount by which the Floating Amount for such date
exceeds the Fixed Amount for such date, and (b) otherwise, an amount
equal to the Floating Amount for such date.
"Net Derivative Receipt" means, for any Transfer Date, (a)
if the netting provisions of subsection 2(c)(ii) of the Derivative
Agreement apply, the amount by which the Fixed Amount for such date
exceeds the Floating Amount for such date, and (b) otherwise, an amount
equal to the Fixed Amount for such date.
"Note Interest Rate" means a rate per annum equal to 5.15%.
"Paying Agent" means The Bank of New York.
"Portfolio Yield" means, with respect to any Monthly
Period, the annualized percentage equivalent of a fraction, the
numerator of which is (a) the amount of Available Funds allocated to
the MBNAseries pursuant to Section 501 of the Indenture, plus (b) any
Interest Funding sub-Account Earnings on the related Transfer Date,
plus (c) any amounts to be treated as MBNAseries Available Funds
pursuant to Sections 3.20(d) and 3.27(a) of the Indenture Supplement,
plus (d) the MBNAseries Servicer Interchange for such Monthly Period,
minus (e) the excess, if any, of the sum of the PFA Prefunding Earnings
Shortfall plus the PFA Accumulation Earnings Shortfall over the sum of
the aggregate amount to be treated as MBNAseries Available Funds for
such Monthly Period pursuant to Sections 3.04(a)(ii) and 3.25(a) of the
Indenture Supplement plus any other amounts applied to cover earnings
shortfalls on amounts in the Principal Funding sub-Account for any
tranche of MBNAseries Notes for such Monthly Period, minus (f) the
MBNAseries Investor Default Amount for such Monthly Period, and the
denominator of which is the Weighted Average Available Funds Allocation
Amount for the MBNAseries for such Monthly Period.
"Predecessor Note" means, with respect to any particular
Note, every previous Note evidencing all or a portion of the same debt
as that evidenced by such particular Note; and, for the purpose of this
definition, any Note authenticated and delivered under Section 306 of
the Indenture in lieu of a mutilated, lost, destroyed or stolen Note
shall be deemed to evidence the same debt as the mutilated, lost,
destroyed or stolen Note.
"Quarterly Excess Available Funds Percentage" means, with
respect to the January 2005 Transfer Date and each Transfer Date
thereafter, the percentage equivalent of a fraction the numerator of
which is the sum of the Excess Available Funds Percentages with respect
to the immediately preceding three Monthly Periods and the denominator
of which is three.
"Record Date" means, for any Transfer Date, the last
Business Day of the preceding Monthly Period.
"Required Accumulation Reserve sub-Account Amount" means,
with respect to any Monthly Period during the Accumulation Reserve
Funding Period, an amount equal to (i) 0.5% of the Outstanding Dollar
Principal Amount of the Class B(2002-1) Notes as of the close of
business on the last day of the preceding Monthly Period or (ii) any
other amount designated by the Issuer; provided, however, that if such
designation is of a lesser amount, the Note Rating Agencies shall have
provided prior written confirmation that a Ratings Effect will not
occur with respect to such change.
"Required Derivative Reserve Amount" shall have the meaning
specified in the Supplemental Derivative Letter dated as of the date
hereof between the Issuer, the Indenture Trustee and the Derivative
Counterparty.
"Required Interest Reserve Amount" is defined in Section
2.08.
"Servicer Interchange Rate" means, for any Monthly Period,
the percentage equivalent of a fraction, the numerator of which is the
MBNAseries Servicer Interchange for such Monthly Period, and the
denominator of which is the Weighted Average Available Funds Allocation
Amount for the MBNAseries for such Monthly Period.
"Stated Principal Amount" means $250,000,000.
"Weighted Average Interest Rates" means, with respect to
any Outstanding Notes of a class or tranche of the MBNAseries, or of
all of the Outstanding Notes of the MBNAseries, on any date, the
weighted average (weighted based on the Outstanding Dollar Principal
Amount of the related Notes on such date) of the following rates of
interest:
(a) in the case of a tranche of Dollar Interest-bearing
Notes with no Derivative Agreement for interest, the rate of interest
applicable to that tranche on that date;
(b) in the case of a tranche of Discount Notes, the rate
of accretion (converted to an accrual rate) of that tranche on that
date;
(c) in the case of a tranche of Notes with a payment due
under a Performing Derivative Agreement for interest, the rate at which
payments by the Issuer to the applicable Derivative Counterparty accrue
on that date (prior to the netting of such payments, if applicable);
and
(d) in the case of a tranche of Notes with a non-
Performing Derivative Agreement for interest, the rate specified for
that date in the related terms document, which, in the event that the
Derivative Agreement for the Class B(2002-1) Notes is non-Performing,
is the Note Interest Rate.
Section 1.02. Governing Law. THIS TERMS DOCUMENT WILL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 1.03. Counterparts. This Terms Document may be
executed in any number of counterparts, each of which so executed will
be deemed to be an original, but all such counterparts will together
constitute but one and the same instrument.
Section 1.04. Ratification of Indenture and Indenture
Supplement. As supplemented by this Terms Document, each of the
Indenture and the Indenture Supplement is in all respects ratified and
confirmed and the Indenture as so supplemented by the Indenture
Supplement as so supplemented and this Terms Document shall be read,
taken and construed as one and the same instrument.
[END OF ARTICLE I]
ARTICLE II
The Class B(2002-1) Notes
Section 2.01. Creation and Designation. There is hereby
created a tranche of MBNAseries Class B Notes to be issued pursuant to
the Indenture and the MBNAseries Indenture Supplement to be known as
the "MBNAseries Class B(2002-1) Notes."
Section 2.02. Specification of Required Subordinated Amount
and other Terms.
(a) Notwithstanding any provision of Section 2.03 of the
Indenture Supplement to the contrary, on any date of determination, the
available subordinated amount of Class C Notes for the Class B(2002-1)
Notes shall be at least equal to the Class B Required Subordinated
Amount of Class C Notes for the Class B(2002-1) Notes. For purposes of
this clause, the available subordinated amount of Class C Notes for the
Class B(2002-1) Notes as of any date means the sum of the following,
after giving effect to any issuances, deposits, allocations,
reallocations or payments to be made on that date:
(i) the aggregate Nominal Liquidation Amount of all
tranches of Class C Notes which are Outstanding on that
date; minus
(ii) the sum of (A) the aggregate Class B Required
Subordinated Amount of Class C Notes for all other tranches
of Class B Notes which are Outstanding on that date plus
(B) the aggregate Class A Required Subordinated Amount of
Class C Notes for all tranches of Class A Notes for which
the Class A Required Subordinated Amount of Class B Notes
is equal to zero which are Outstanding on that date.
(b) For the Class B(2002-1) Notes for any date of
determination, the Class B Required Subordinated Amount of Class C
Notes will be an amount equal to 100% of (i) the Adjusted Outstanding
Dollar Principal Amount of the Class B(2002-1) Notes on such date or
(ii) if an Early Redemption Event with respect to the Class B(2002-1)
Notes shall have occurred, if an Event of Default and acceleration of
the Class B(2002-1) Notes shall have occurred or if the Class B Usage
of the Class C Required Subordinated Amount for such tranche of Class B
Notes is greater than zero, the Adjusted Outstanding Dollar Principal
Amount of the Class B(2002-1) Notes as of close of business on the day
immediately preceding the occurrence of such Early Redemption Event,
such Event of Default and acceleration or the date on which the Class B
Usage of Class C Required Subordinated Amount exceeded zero. The Issuer
may change the percentage set forth in the preceding sentence without
the consent of any Noteholder so long as the Issuer has (i) received
written confirmation from each Note Rating Agency that has rated any
Outstanding Notes of the MBNAseries that the change in either of such
percentages will not result in a Ratings Effect with respect to any
Outstanding Class B(2002-1) Notes and (ii) delivered to the Indenture
Trustee and the Note Rating Agencies a Master Trust Tax Opinion and an
Issuer Tax Opinion.
Section 2.03. Interest Payment.
(a) For each Interest Payment Date, the amount of
interest due with respect to the Class B(2002-1) Notes shall be an
amount equal to one-twelfth of the product (i) the Note Interest Rate,
times (ii) the Outstanding Dollar Principal Amount of the Notes
determined as of the Record Date preceding the related Transfer Date;
provided, however, that for the first Interest Payment Date the amount
of interest due is $1,609,375. Interest on the Class B(2002-1) Notes
will be calculated on the basis of a 360-day year and twelve 30-day
months.
(b) For purposes of Section 3.02(c) and Section 3.13(d)
of the Indenture Supplement, for each Interest Payment Date, the amount
owed to the Derivative Counterparty, if any, will be an amount equal to
the Net Derivative Payment; provided, however, that solely for purposes
of determining the targeted deposit to be made to the Interest Funding
sub-Account for the Class B(2002-1) Notes for any Transfer Date
pursuant to Section 3.02(c) of the Indenture Supplement, the targeted
deposit to the Interest Funding sub-Account for the Class B(2002-1)
Notes will be an amount equal to the Net Derivative Payment less the
aggregate amount, if any, deposited directly into the Interest Funding
sub-Account pursuant to Section 2.11(c) for such Transfer Date.
(c) Pursuant to Section 3.03 of the Indenture Supplement,
on each Transfer Date, the Indenture Trustee shall deposit into the
Class B(2002-1) Interest Funding sub-Account the portion of MBNAseries
Available Funds allocable to the Class B(2002-1) Notes.
Section 2.04. Payments of Interest and Principal.
(a) Any installment of interest or principal, if any,
payable on any Class B(2002-1) Note which is punctually paid or duly
provided for by the Issuer and the Indenture Trustee on the applicable
Interest Payment Date or Principal Payment Date shall be paid by the
Paying Agent to the Person in whose name such Class B(2002-1) Note (or
one or more Predecessor Notes) is registered on the Record Date, by
wire transfer of immediately available funds to such Person's account
as has been designated by written instructions received by the Paying
Agent from such Person not later than the close of business on the
third Business Day preceding the date of payment or, if no such account
has been so designated, by check mailed first-class, postage prepaid to
such Person's address as it appears on the Note Register on such Record
Date, except that with respect to Notes registered on the Record Date
in the name of the nominee of Cede & Co., payment shall be made by wire
transfer in immediately available funds to the account designated by
such nominee.
(b) The right of the Class B(2002-1) Noteholders to
receive payments from the Issuer will terminate on the first Business
Day following the Class B(2002-1) Termination Date.
Section 2.05. Form of Delivery of Class B(2002-1) Notes;
Depository; Denominations.
(a) The Class B(2002-1) Notes shall be delivered in the
form of Registered, Global Notes as provided in Sections 202 and 301(i)
of the Indenture, respectively.
(b) The Depository for the Class B(2002-1) Notes shall be
The Depository Trust Company, and the Class B(2002-1) Notes shall
initially be registered in the name of Cede & Co., its nominee.
(c) The Class B(2002-1) Notes will be issued in minimum
denominations of $1,000 and integral multiples that amount.
Section 2.06. Delivery and Payment for the Class B(2002-1)
Notes. The Issuer shall execute and deliver the Class B(2002-1) Notes
to the Indenture Trustee for authentication, and the Indenture Trustee
shall deliver the Class B(2002-1) Notes when authenticated, each in
accordance with Section 303 of the Indenture.
Section 2.07. Targeted Deposits to the Accumulation Reserve
Account. The deposit targeted to be made to the Accumulation Reserve
Account for any Monthly Period during the Accumulation Reserve Funding
Period will be an amount equal to the Required Accumulation Reserve
sub-Account Amount.
Section 2.08. Derivative Agreement.
(a) The Issuer shall enter into the Derivative Agreement,
certain terms of which are set forth herein for the convenience of the
parties thereto for incorporation therein by reference, with the
Derivative Counterparty on the Issuance Date. Pursuant to the terms of
the Derivative Agreement, the Derivative Counterparty shall pay to the
Issuer on each Transfer Date the Net Derivative Receipt, if any, plus
the amount of any Net Derivative Receipt due but not paid with respect
to any previous Transfer Date. The Issuer shall deposit such Net
Derivative Receipts, if any, into the Collection Account and shall
apply such amounts as MBNAseries Available Funds pursuant to Section
3.04(a)(iii) of the Indenture Supplement. In addition, in accordance
with the terms of the Derivative Agreement, the Issuer shall pay to the
Derivative Counterparty the Net Derivative Payment, if any, for such
Transfer Date, plus the amount of any Net Derivative Payment due but
not paid on any previous Transfer Date, from amounts on deposit in the
Interest Funding sub-Account for the Class B(2002-1) Notes. If the
Derivative Agreement has not been terminated and the Issuer has not
received any Net Derivative Receipt due with respect to the related
Transfer Date prior to 12:00 p.m. on the date such payment is due, (i)
the Issuer shall notify the Derivative Counterparty, the Beneficiary
and the Servicer of such fact prior to 1:00 p.m. on such date, (ii) the
Issuer, if directed by the Servicer, shall designate an Early
Termination Date (as such term is defined in the Derivative Agreement)
pursuant to the Derivative Agreement and shall, if the Beneficiary so
directs, terminate the Derivative Agreement pursuant to its terms, and
(iii) the Issuer shall provide the Trustee, prior to 4:30 p.m. on the
related Transfer Date, with new statements substantially in the forms
of Exhibit B and Exhibit C to the Indenture Supplement revised, if
necessary, to reflect that the Net Derivative Receipt (or any portion
thereof) was not received by the Issuer for such Transfer Date.
(b) The Issuer shall direct the Derivative Counterparty
to assign its rights and obligations under the Derivative Agreement to
a replacement Derivative Counterparty, in the event that the long-term,
senior, unsecured debt rating of the Derivative Counterparty or a
replacement Derivative Counterparty, if any, is reduced below BBB- by
Standard & Poor's or below Baa3 by Moody's or is withdrawn by either
Standard & Poor's or Moody's. The Issuer shall give Standard & Poor's
and Moody's notice of the replacement of the Derivative Counterparty as
soon as practicable thereafter.
(c) The parties hereto agree that all obligations of the
Issuer under the Derivative Agreement shall be paid from, and limited
to, amounts on deposit in the Interest Funding sub-Account for the
Class B(2002-1) Notes which are specifically available to be applied
therefor pursuant to Section 3.13(d) of the Indenture Supplement, as
determined pursuant to Section 2.03(b) of this Terms Document, and any
amounts specifically available to be applied therefor pursuant to
Section 2.12 of this Terms Document, and that the Beneficiary shall not
be required to expend or risk its own funds or otherwise incur any
liability in connection with the Derivative Agreement.
(d) If the Issuer has actual knowledge of any event
specified in Section 5 of the Derivative Agreement, the Issuer shall
provide written notice of such event to the Beneficiary, the Servicer
and the Note Rating Agencies. The Beneficiary, upon becoming aware of
any event specified in Section 5 of the Derivative Agreement, whether
pursuant to notice from the Issuer or otherwise, shall immediately
provide the Issuer with written instructions as to the course of action
to be taken under Section 6 of the Derivative Agreement, including
without limitation any notices to be provided and whether or not an
Early Termination Date (as defined in the Derivative Agreement) should
be designated and, if so, when such Early Termination Date should be
designated. Prior to receiving such written instructions from the
Beneficiary, the Issuer shall not designate an Early Termination Date
and shall not terminate the Derivative Agreement.
(e) At the request of the Issuer, the Beneficiary shall
provide the Issuer with any document the Issuer is required to provide
the Derivative Counterparty pursuant to Section 4(a) of the Derivative
Agreement.
(f) (i) In the event the short-term senior debt rating of
the Derivative Counterparty or a replacement Derivative Counterparty,
if any, from Standard & Poor's is below A-1, or is withdrawn by
Standard & Poor's, or (ii) in the case of a replacement Derivative
Counterparty assuming the interests and obligations of the original
Derivative Counterparty under the Derivative Agreement that does not
have a short-term senior debt rating from Standard & Poor's, the long-
term senior debt rating of such replacement Derivative Counterparty
from Standard & Poor's is below A+ or is withdrawn by Standard &
Poor's, the Derivative Counterparty will be required within 30 days
from the date of such rating downgrade or withdrawal of the Derivative
Counterparty to fund the Interest Reserve Account in an amount equal to
one-twelfth of the product of (A) the Derivative Fixed Rate and (B) the
Outstanding Dollar Principal Amount of the Class B(2002-1) Notes as of
the close of business on the last day of the Monthly Period preceding
such rating downgrade or withdrawal of the Derivative Counterparty (the
"Required Interest Reserve Amount"). The Derivative Counterparty's
failure to adequately fund the Interest Reserve Account within 30 days
of such rating downgrade or withdrawal of the Derivative Counterparty
shall constitute an "Interest Reserve Account Event."
Section 2.09. Interest Reserve Account.
(a) On or before the Issuance Date, the Indenture Trustee
will cause to be established and maintained a Qualified Account
denominated as the "Interest Reserve Account" in the name of the
Indenture Trustee, bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Class B(2002-1)
Noteholders. The Interest Reserve Account constitutes a Supplemental
Account and shall be under the sole dominion and control of the
Indenture Trustee for the benefit of the Class B(2002-1) Noteholders.
If, at any time, the institution holding the Interest Reserve Account
ceases to be a Qualified Institution, the Issuer will within ten (10)
Business Days (or such longer period, not to exceed thirty (30)
calendar days, as to which each Note Rating Agency may consent)
establish a new Interest Reserve Account that is a Qualified Account
and shall transfer any cash and/or investments to such new Interest
Reserve Account. From the date such new Interest Reserve Account is
established, it will be the "Interest Reserve Account." The Interest
Reserve Account will receive deposits as described in this Section.
(b) 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 Interest Reserve Account will be
retained in the Interest Reserve Account (to the extent that the amount
on deposit in the Interest Reserve Account with respect to the related
Monthly Period is less than the required balance for the Interest
Reserve Account for that Monthly Period) and the balance, if any, will
be paid to the Derivative Counterparty pursuant to the terms of the
Derivative Agreement.
(c) In the event that the Derivative Agreement terminates
due to a default by the Derivative Counterparty, on the Transfer Date
on or immediately following such termination, the Issuer shall withdraw
from the Interest Reserve Account an amount equal to the lesser of (i)
the Net Derivative Receipt, if any, with respect to such Transfer Date
plus the amount of any Net Derivative Receipt previously due but not
paid to the Issuer and (ii) the amount on deposit in the Interest
Reserve Account on such Transfer Date, and shall deposit such amount in
the Collection Account to be included in MBNAseries Available Funds
with respect to such Transfer Date and give notice of such withdrawal
to each Note Rating Agency. Such withdrawal will be deemed to be a Net
Derivative Receipt and a payment received from the Derivative
Counterparty for all purposes under the Indenture Supplement and this
Terms Document.
(d) Upon the earliest to occur of (i) any Transfer Date
subsequent to the return of the Derivative Counterparty's or
replacement Derivative Counterparty's short-term senior debt rating to
A-1 or higher by Standard & Poor's, (ii) any Transfer Date subsequent
to the return of the Derivative Counterparty's or replacement
Derivative Counterparty's long-term senior debt rating to A+ or higher
by Standard & Poor's, (iii) the Transfer Date on or immediately
following the termination of the Derivative Agreement and (iv) the
Transfer Date immediately preceding the Expected Principal Payment
Date, the Issuer, after the prior payment of all amounts owing to the
Class B(2002-1) Noteholders that are payable from the Interest Reserve
Account as provided herein, shall withdraw from the Interest Reserve
Account and pay to the Derivative Counterparty pursuant to the terms of
the Derivative Agreement, all amounts, if any, on deposit in the
Interest Reserve Account. In addition, following the earliest to occur
of the events described in clauses (iii) or (iv) of the preceding
sentence, the Interest Reserve Account shall be deemed to have
terminated for purposes of this Terms Document, the Indenture
Supplement and the Indenture.
Section 2.10. Early Redemption Events. Notwithstanding any
provision of the Indenture or the Indenture Supplement to the contrary,
upon the occurrence of an Early Redemption Event with respect to the
Class B(2002-1) Notes (other than an Early Redemption Event described
in Section 1201(c) of the Indenture), if none of (i) an Early
Redemption Event described in Section 1201(c) of the Indenture, (ii) an
Interest Reserve Account Event, (iii) the termination of the Derivative
Agreement pursuant to its terms or (iv) an Event of Default and
acceleration of the Class B(2002-1) Notes has previously occurred, then
the Issuer will not pay any amounts accumulated in the Principal
Funding sub-Account for the Class B(2002-1) Notes to the holders of the
Class B(2002-1) Notes until the Monthly Principal Payment Date
occurring on or immediately following the earliest to occur of:
(a) the Expected Principal Payment Date;
(b) the date on which an Early Redemption Event Described
in Section 1201(c) of the Indenture occurs;
(c) the date on which an Interest Reserve Account Event
occurs; and
(d) the date on which the Derivative Agreement terminates
pursuant to its terms.
If the Issuer is unable to pay the redemption price in full
on such Monthly Principal Payment Date, monthly payments on the Class
B(2002-1) Notes will thereafter be made on each following Monthly
Principal Payment Date until the Outstanding Dollar Principal Amount of
the Class B(2002-1) Notes, plus all accrued and unpaid interest, is
paid in full or the Legal Maturity Date occurs, whichever is earlier,
subject to Article V of the Indenture and Article III of the Indenture
Supplement. Any funds in any Supplemental Account (other than the
Interest Reserve Account) for the Class B(2002-1) Notes will be applied
to make the principal and interest payments on the Class B(2002-1)
Notes on the redemption date, subject to Article V of the Indenture,
Article III of the Indenture Supplement and Article II of this Terms
Document.
Section 2.11. Derivative Reserve Account.
(a) On or before the Issuance Date, the Indenture Trustee
will cause to be established and maintained a Qualified Account
denominated as the "Derivative Reserve Account" in the name of the
Indenture Trustee, bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Class B(2002-1)
Noteholders and the Derivative Counterparty, as their interests appear
herein. The Indenture Trustee hereby accepts the Derivative Reserve
Account and any amounts on deposit therein in trust under the
Indenture, the Indenture Supplement and this Terms Document, in
accordance with the provisions thereof and hereof, and agrees to
perform the duties thereunder and hereunder to the end that the
interests of the Derivative Counterparty and the Class B(2002-1)
Noteholders may be adequately and effectively protected. The
Derivative Reserve Account constitutes a Supplemental Account and shall
be under the sole dominion and control of the Indenture Trustee for the
benefit of the Class B(2002-1) Noteholders and the Derivative
Counterparty. If, at any time, the institution holding the Derivative
Reserve Account ceases to be a Qualified Institution, the Issuer will
within ten (10) Business Days (or such longer period, not to exceed
thirty (30) calendar days, as to which each Note Rating Agency may
consent) establish a new Derivative Reserve Account that is a Qualified
Account and shall transfer any cash and/or investments to such new
Derivative Reserve Account. From the date such new Derivative Reserve
Account is established, it will be the "Derivative Reserve Account."
The Derivative Reserve Account will receive deposits as described in
this Section.
(b) On the Issuance Date, the Issuer shall deposit an
amount equal to the Required Derivative Reserve Amount received by it
from the Beneficiary in immediately available funds into the Derivative
Reserve Account. Funds on deposit in the Derivative Reserve Account
shall be invested by the Indenture Trustee in Permitted Investments;
provided, however, that, for purposes of the investment of funds on
deposit in the Derivative Reserve Account, references in the definition
of "Permitted Investments" to a rating of "A-1+" by Standard & Poor's
shall be modified to require a rating of not lower than "A-1" by such
Note Rating Agency.
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 Derivative Reserve Account shall be
retained in the Derivative Reserve Account (to the extent that the
amount on deposit in the Derivative Reserve Account (prior to taking
into account any such interest and earnings) is less than the Required
Derivative Reserve Amount) and the balance, if any, shall be paid to
the Issuer on such Transfer Date.
(c) On or prior to each Transfer Date following the
occurrence of an Early Redemption Event with respect to the Class
B(2002-1) Notes (other than an Early Redemption Event described in
Section 1201(c) of the Indenture), the Issuer will calculate PFA
Accumulation Earnings Shortfall (if any) for the Principal Funding sub-
Account for the Class B(2002-1) Notes. If there is any PFA
Accumulation Earnings Shortfall for the Principal Funding sub-Account
for that Transfer Date for the Class B(2002-1) Notes, the Issuer will
withdraw such amount from the Derivative Reserve Account, to the extent
available, for deposit in the Interest Funding sub-Account for the
Class B(2002-1) Notes on such Transfer Date.
(d) If on any Transfer Date following the termination of
the Derivative Agreement pursuant to the terms thereof there is a
termination payment payable by the Issuer to the Derivative
Counterparty pursuant to Section 6 of the Derivative Agreement, the
Issuer will pay to the Derivative Counterparty directly, without
transfer to any other account, any amount on deposit in the Derivative
Reserve Account (after giving effect to Section 2.11(c) of this Terms
Document); provided, however, that such amount shall not exceed the
amount of such termination payment payable by the Issuer to the
Derivative Counterparty.
(e) Any amounts owed to the Issuer pursuant to this
Section 2.11 on any Transfer Date shall be paid to the Issuer only if
any payments owed to the Derivative Counterparty pursuant to this
Section 2.11 on such Transfer Date are also made.
Section 2.12. Termination Payments.
(a) If on any Transfer Date following the termination of
the Derivative Agreement pursuant to the terms thereof there is a
termination payment payable by the Issuer to the Derivative
Counterparty pursuant to Section 6 of the Derivative Agreement, the
Issuer will pay to the Derivative Counterparty from MBNAseries
Available Funds (after giving effect to Sections 3.01(a) through (f) of
the Indenture Supplement) for such Transfer Date an amount not to
exceed the lesser of (i) the product of (x) the amount of MBNAseries
Available Funds remaining for application pursuant to Section 3.01(g)
of the Indenture Supplement times (y) a fraction, the numerator of
which is the Nominal Liquidation Amount of the Class B(2002-1) Notes as
of the close of business on the last day of the preceding Monthly
Period and the denominator of which is the Nominal Liquidation Amount
of all tranches of Notes as of the close of business on the last day of
the preceding Monthly Period and (ii) the amount of such termination
payment payable by the Issuer to the Derivative Counterparty, less any
amounts paid to the Derivative Counterparty pursuant to Section 2.11(d)
of this Terms Document.
(b) Any termination payment owed to the Derivative
Counterparty pursuant to Section 6 of the Derivative Agreement shall be
made first from any amounts available pursuant to Section 2.11(d) of
this Terms Document and, if such termination payment owed exceeds the
amounts available pursuant to the Section 2.11(d) of this Terms
Document, then from any amounts available pursuant to Section 2.12(a)
of this Terms Document.
[END OF ARTICLE II]
ARTICLE III
Representations and Warranties
Section 3.01. Issuer's Representations and Warranties.
The Issuer makes the following representations and warranties as to the
Collateral Certificate on which the Indenture Trustee is deemed to have
relied in acquiring the Collateral Certificate. Such representations
and warranties speak as of the execution and delivery of this Terms
Document, but shall survive until the termination of this Terms
Document. Such representations and warranties shall not be waived by
any of the parties to this Terms Document unless the Issuer has
obtained written confirmation from each Note Rating Agency that there
will be no Ratings Effect with respect to such waiver.
(a) The Indenture creates a valid and continuing security
interest (as defined in the New York UCC) in the Collateral Certificate
in favor of the Indenture Trustee, which security interest is prior to
all other liens, and is enforceable as such as against creditors of and
purchasers from the Issuer.
(b) The Collateral Certificate constitutes either an
"account," a "general intangible," an "instrument," or a "certificated
security," each within the meaning of the New York UCC.
(c) At the time of the transfer and assignment of the
Collateral Certificate to the Indenture Trustee pursuant to the
Indenture, the Issuer owned and had good and marketable title to the
Collateral Certificate free and clear of any lien, claim or encumbrance
of any Person.
(d) The Issuer has caused, within ten days of the
execution of the Indenture, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions
under applicable law in order to perfect the security interest in the
Collateral Certificate granted to the Indenture Trustee pursuant to the
Indenture.
(e) Other than the security interest granted to the
Indenture Trustee pursuant to the Indenture, the Issuer has not
pledged, assigned, sold, granted a security interest in, or otherwise
conveyed the Collateral Certificate. The Issuer has not authorized the
filing of and is not aware of any financing statements against the
Issuer that include a description of collateral covering the Collateral
Certificate other than any financing statement relating to the security
interest granted to the Indenture Trustee pursuant to the Indenture or
any financing statement that has been terminated. The Issuer is not
aware of any judgment or tax lien filings against the Issuer.
(f) All original executed copies of the Collateral
Certificate have been delivered to the Indenture Trustee.
(g) At the time of the transfer and assignment of the
Collateral Certificate to the Indenture Trustee pursuant to the
Indenture, the Collateral Certificate had no marks or notations
indicating that it has been pledged, assigned or otherwise conveyed to
any Person other than the Indenture Trustee.
[END OF ARTICLE III]
IN WITNESS WHEREOF, the parties hereto have caused this
Terms Document to be duly executed, all as of the day and year first
above written.
MBNA CREDIT CARD MASTER NOTE TRUST,
by MBNA AMERICA BANK,
NATIONAL ASSOCIATION,
as Beneficiary and not in its individual
capacity
By: /s/Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: First Vice President
THE BANK OF NEW YORK, as Indenture
Trustee
and not in its individual capacity
By: /s/ Xxxxxxxxx Xxxxx
Name: Xxxxxxxxx Xxxxx
Title: Assistant Vice President
[Signature Page to the Class B(2002-1) Terms Document]
ARTICLE I
Definitions and Other Provisions of General
Application
Section 1.01. Definitions 1
Section 1.02. Governing Law 6
Section 1.03. Counterparts 6
Section 1.04. Ratification of Indenture and Indenture Supplement 6
ARTICLE II
The Class B(2002-1) Notes
Section 2.01. Creation and Designation 7
Section 2.02. Specification of Required Subordinated Amount and
other Terms 7
Section 2.03. Interest Payment 8
Section 2.04. Payments of Interest and Principal 8
Section 2.05. Form of Delivery of Class B(2002-1) Notes;
Depository; Denominations 8
Section 2.06. Delivery and Payment for the Class B(2002-1) Notes 9
Section 2.07. Targeted Deposits to the Accumulation Reserve
Account. 9
Section 2.08. Derivative Agreement. 9
Section 2.09. Interest Reserve Account. 10
Section 2.10. Early Redemption Events. 11
Section 2.11. Derivative Reserve Account. 12
Section 2.12. Termination Payments. 13
ARTICLE III
Representations and Warranties
Section 3.01. Issuer's Representations and Warranties 15
An extra section break has been inserted above this paragraph. Do
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