<PAGE>
As filed with the Securities and Exchange Commission on February 14, 2000
Registration No. 333-
94035
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
--------------
CIRCUIT CITY CREDIT CARD MASTER TRUST
(Issuer with respect to the securities)
--------------
FIRST NORTH AMERICAN NATIONAL BANK
(Originator of the Trust described herein)
(Exact name of registrant as specified in its charter)
--------------
United States 58-1897792
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)
225 Chastain Meadows Court
Kennesaw, Georgia 30144
(770) 792-4600
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
--------------
Michael T. Chalifoux
First North American National Bank
225 Chastain Meadows Court
Kennesaw, Georgia 30144
(770) 792-4600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------
Copies to:
David E. Melson, Esquire Douglas L. Madsen, Esquire
McGuire, Woods, Battle & Boothe LLP Orrick, Herrington & Sutcliffe LLP
One James Center Washington Harbour
901 East Cary Street 3050 K Street, N.W.
Richmond, Virginia 23219 Washington, D.C. 20007
(804) 775-1000 (202) 339-8400
--------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable on or after the effective date of this registration statement. [_]
If the only securities registered on this Form are to be offered pursuant
to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
Title of
Securities Amount Proposed Maximum Proposed Maximum
being to be Offering Price Aggregate Amount of
Registered Registered Per Security* Offering Price* Registration Fee
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Asset Backed
Securities.. $1,185,000,000 100% $1,185,000,000 $312,840**
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</TABLE>
* Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act.
** $264 of which has previously been paid. In accordance with Rule 429 of the
General Rules and Regulations under the Securities Act, the prospectus
included herein is a combined prospectus which also relates to $315,000,000
of unissued asset backed securities registered under Registration Statement
No. 33-82882. A filing fee of $160,000 was paid with Registration Statement
No. 33-82882 in connection with such unissued asset backed securities.
--------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
In accordance with Rule 429 of the General Rules and Regulations under the
Securities Act of 1933, the Prospectus included herein is a combined
Prospectus which also relates to $315,000,000 of unissued asset backed
securities registered under Registration Statement No. 33-82882, Post-
Effective Amendment No. 1 (Registration Statement No. 33-99336) and Post-
Effective Amendment No. 2 (Registration Statement No. 33-99336), and this
Registration Statement constitutes Post-Effective Amendment No. 3 to such
Registration Statement.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus supplement is not complete and may be +
+changed. We may not sell these securities until the registration statement +
+filed with the Securities and Exchange Commission is effective. This +
+prospectus supplement is not an offer to sell these securities and it is not +
+soliciting an offer to buy these securities in any state where the offer or +
+sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
REPRESENTATIVE FORM OF PROSPECTUS SUPPLEMENT
SUBJECT TO COMPLETION, DATED FEBRUARY [ ], 2000
PROSPECTUS SUPPLEMENT
(to prospectus dated February [ ], 2000)
Circuit City Credit Card Master Trust
Asset Backed Securities
First North American National Bank
Transferor and Servicer
$[ ] Class A [Fixed] [Floating] Rate Asset Backed Certificates, Series 2000-
[ ]
$[ ] Class B [Fixed] [Floating] Rate Asset Backed Certificates, Series 2000-
[ ]
The offered certificates are highly structured. Before you purchase the offered
certificates, please consider carefully the risk factors beginning on page S-9
of this prospectus supplement.
The offered certificates are not deposits, and neither the offered certificates
nor the accounts or the receivables are insured or guaranteed by the Federal
Deposit Insurance Corporation or any other governmental agency.
The offered certificates represent interests in the trust only and do not
represent interests in or obligations of First North American National Bank,
Circuit City Stores, Inc. or any of their affiliates.
This prospectus supplement may be used to offer and sell the offered
certificates only if accompanied by the prospectus.
<TABLE>
<CAPTION>
Class A Class B
Certificates Certificates
---------------- ----------------
<S> <C> <C>
Principal Amount $[ ] $[ ]
Interest Rate [ ]% [Plus [ ]% [Plus
One-Month LIBOR] One-Month LIBOR]
Per Annum Per Annum
Distribution Dates Monthly Monthly
(Interest) Beginning Beginning
[ ], 2000 [ ], 2000
Expected Final [ ], 20[ ] [ ], 20[ ]
Distribution Date
Stated Series [ ], 20[ ] [ ], 20[ ]
Termination Date
Price to Public [ ]% [ ]%
Per Certificate
Underwriting [ ]% [ ]%
Discount Per
Certificate
Proceeds to [ ]% [ ]%
FNANB Per
Certificate
</TABLE>
The total price to the public is $[ ], and the total amount of the underwriting
discount is $[ ]. The total amount of proceeds before deduction of estimated
expenses of $[ ] is $[ ].
The class A certificates and the class B certificates, which are referred to in
this prospectus supplement as the offered certificates, are the only securities
offered for sale through this prospectus supplement and the attached
prospectus. The trust will issue, in addition to the offered certificates,
$[ ] of collateralized trust obligations and $[ ] of class D certificates.
Credit Enhancement:
. The class B certificates, the collateralized trust obligations and the
class D certificates will be subordinated to the class A certificates and
will provide credit enhancement for the class A certificates.
. The collateralized trust obligations and the class D certificates will be
subordinated to the class B certificates and will provide credit
enhancement for the class B certificates.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
Underwriters of the Class A Certificates
Underwriters of the Class B Certificates
February [ ], 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
OVERVIEW OF THE INFORMATION PROVIDED IN THIS PROSPECTUS SUPPLEMENT AND
THE ATTACHED PROSPECTUS................................................. S-1
OVERVIEW OF SERIES 2000-[ ].............................................. S-2
PRINCIPAL TERMS OF THE OFFERED CERTIFICATES.............................. S-3
SERIES 2000-[ ] SUMMARY.................................................. S-4
RISK FACTORS............................................................. S-9
DELINQUENCY AND LOSS EXPERIENCE FOR THE CIRCUIT CITY PRIVATE LABEL CREDIT
CARD PORTFOLIO.......................................................... S-21
Delinquency Experience................................................. S-21
Loss Experience........................................................ S-22
Delinquency and Loss Trends............................................ S-22
CHARACTERISTICS OF THE TRUST RECEIVABLES................................. S-23
MATURITY CONSIDERATIONS.................................................. S-26
RECEIVABLE YIELD CONSIDERATIONS.......................................... S-27
USE OF PROCEEDS.......................................................... S-28
RECENT FINANCIAL INFORMATION FOR CIRCUIT CITY AND FNANB.................. S-28
DESCRIPTION OF THE OFFERED CERTIFICATES.................................. S-29
Book-Entry Registration................................................ S-29
Interest Payments...................................................... S-29
[The Interest Rate Caps]............................................... S-30
[The Interest Rate Cap Provider]....................................... S-31
Principal Payments..................................................... S-31
</TABLE>
<TABLE>
<S> <C>
Postponement of Accumulation
Period............................ S-33
Suspension of Accumulation Period.. S-34
The Principal Funding Account...... S-35
The Reserve Account................ S-35
Credit Enhancement................. S-36
The Spread Account................. S-37
Allocation of Collections.......... S-37
Application of Collections......... S-38
Allocation of Default Amount....... S-41
Calculation of Series Adjustment
Amount............................ S-41
Calculation of Allocable Amounts... S-42
Reallocation of Cash Flows;
Investor Charge-Offs.............. S-42
Early Amortization Events.......... S-44
Servicing Compensation............. S-45
Amendments Relating to FASIT
Election.......................... S-45
MATERIAL FEDERAL INCOME TAX
CONSEQUENCES........................ S-47
Tax Treatment of the Certificates.. S-47
ERISA CONSIDERATIONS................. S-48
Class A Certificates............... S-48
Class B Certificates............... S-48
Consultation with Counsel.......... S-48
UNDERWRITING......................... S-49
LEGAL MATTERS........................ S-50
GLOSSARY OF DEFINED TERMS............ S-51
ANNEX I: PREVIOUSLY ISSUED SERIES.... S-66
</TABLE>
<PAGE>
OVERVIEW OF THE INFORMATION PROVIDED IN THIS
PROSPECTUS SUPPLEMENT AND THE ATTACHED PROSPECTUS
This prospectus supplement provides specific information about the offered
certificates. The attached prospectus provides general information about the
trust and the securities issued by the trust, including information which may
not apply to the offered certificates.
You must read carefully this prospectus supplement and the attached
prospectus in their entirety to understand fully the structure and terms of the
offered certificates. If the specific information about the offered
certificates provided in this prospectus supplement varies from the general
information about the trust and the certificates issued by the trust provided
in the attached prospectus, you should rely on the information provided in this
prospectus supplement.
This prospectus supplement begins with the following introductory sections
describing the trust and the offered certificates in summary form:
. the overview of series 2000-[ ] section sets forth the basic structure of
series 2000-[ ];
. the principal terms of the offered certificates section sets forth the
principal terms of the offered certificates;
. the series 2000-[ ] summary section describes the key structural features
of series 2000-[ ] and includes cross references to captions under which
you can find additional, related information; and
. the risk factors section describes the material risks that apply to an
investment in the offered certificates.
You should rely only on the information provided in, or incorporated by
reference into, this prospectus supplement and the attached prospectus. We have
not authorized anyone to provide you with additional or different information.
We include in this prospectus supplement and the attached prospectus cross-
references to captions under which you can find additional, related
discussions. The preceding table of contents and the table of contents included
in the attached prospectus, as applicable, set forth the pages on which these
captions are located.
We include in this prospectus supplement and the attached prospectus
capitalized terms that have meanings not evident from their context and that
cannot be defined concisely when they are first used. The glossary beginning on
page S-51 of this prospectus supplement and the glossary beginning on page 57
of the attached prospectus, as applicable, contain the definitions of these
capitalized terms.
We are not offering the offered certificates in any state where the offer is
not permitted.
S-1
<PAGE>
OVERVIEW OF SERIES 2000-[ ]
First North American National Bank, a national
Transferor............... banking association referred to in this prospectus
supplement and the attached prospectus as FNANB
Servicer.................
FNANB or any successor servicer appointed in
accordance with the master pooling and servicing
agreement
Trustee.................. Bankers Trust Company, a New York banking
corporation
Trust Assets.............
All receivables created from time to time in a
portfolio of consumer revolving credit card
accounts, all monies due or to become due in
payment of the receivables, including recoveries on
charged-off receivables, and the other property
described in this prospectus supplement and the
attached prospectus
<TABLE>
<CAPTION>
Percentage of Total
Principal Amount Principal Amount
---------------- -------------------
<S> <C> <C>
Class A Certificates..................... $[ ] [ ]%
Class B Certificates..................... $[ ] [ ]%
Collateralized Trust Obligations......... $[ ] [ ]%
Class D Certificates..................... $[ ] [ ]%
------ ---
Total.................................. $[ ] 100%
====== ===
</TABLE>
S-2
<PAGE>
PRINCIPAL TERMS OF THE OFFERED CERTIFICATES
<TABLE>
<CAPTION>
Class A Certificates Class B Certificates
-------------------- --------------------
<S> <C> <C>
Anticipated Ratings
(Moody's/Standard &
Poor's/Fitch).......... Aaa/AAA/AAA A2/A/A
Credit Enhancement...... Subordination of Class B Subordination of
Certificates, Collateralized Trust
Collateralized Trust Obligations and Class D
Obligations and Class D Certificates
Certificates
Pricing Date............ [ ], 20[ ] [ ], 20[ ]
Closing Date............ [ ], 20[ ] [ ], 20[ ]
Minimum Denomination.... $1,000 $1,000
Clearance and DTC/Clearstream/Euroclear DTC/Clearstream/Euroclear
Settlement.............
Principal Amount........ $[ ] $[ ]
Interest Rate........... [ ]% [Plus One-Month LIBOR] [ ]% [Plus One-Month LIBOR]
Per Annum Per Annum
Distribution Dates Monthly Beginning [ ], Monthly Beginning [ ],
(Interest)............. 2000 2000
Interest Accrual Actual/360 Actual/360
Method.................
Interest Accrual From and Including From and Including
Period................. Distribution Date/Closing Distribution Date/Closing
Date to but Excluding Date to but Excluding
Following Distribution Date Following Distribution Date
[Interest Rate
Determination Date].... [Two London Business Days [Two London Business Days
Before Each Interest Before Each Interest
Accrual Period] Accrual Period]
Servicing Fee 2.00% Per Annum 2.00% Per Annum
Percentage.............
Expected Final [ ], 20[ ] [ ], 20[ ]
Distribution Date......
Scheduled Commencement
of Accumulation
Period................. [ ], 20[ ] [ ], 20[ ]
Stated Series [ ], 20[ ] [ ], 20[ ]
Termination Date.......
CUSIP Number............ [ ] [ ]
ISIN.................... [ ] [ ]
Common Code............. [ ] [ ]
</TABLE>
S-3
<PAGE>
SERIES 2000-[ ] SUMMARY
Series Structure
The trust will issue the following securities as part of series 2000-[ ]:
. the class A certificates;
. the class B certificates;
. the collateralized trust obligations; and
. the class D certificates.
The series 2000-[ ] securities will be issued under the series 2000-[ ]
supplement to the master pooling and servicing agreement. We are offering the
class A certificates and the class B certificates for sale through this
prospectus supplement and the attached prospectus. We are not offering the
collateralized trust obligations or the class D certificates for sale through
this prospectus supplement or the attached prospectus.
The trust has previously issued seven other series, five of which are currently
outstanding, and may issue additional series from time to time without your
consent. The terms of the other series issued by the trust may be significantly
different from the terms of the offered certificates. See "Annex A--Previously
Issued Series" beginning on page S-66 of this prospectus supplement for a
summary of the terms of the previously issued series that are currently
outstanding.
The offered certificates will be included in a group of securities designated
as group one. The securities included in group one will be entitled to share
amounts collected on the receivables during each month and allocated to other
series in group one, to the extent those amounts are not needed to make
required payments with respect to other series in group one, in each case in
the manner and to the extent specified in the series supplements for those
other series.
Interest Payments
Each class A certificate will represent the right to receive interest payments
on each distribution date in an amount equal to [one twelfth of] the
product of:
. the class A interest rate [for the preceding interest period];
. [a fraction, the numerator of which is the actual number of days in that
preceding interest period and the denominator of which is 360]; and
. the outstanding principal balance of that class A certificate as of the close
of business on the preceding distribution date or, in the case of the first
distribution date, as of the closing date;
provided, however, that the interest due on the class A certificates on the
first distribution date will equal $[ ].
Each class B certificate will represent the right to receive interest payments
on each distribution date in an amount equal to [one twelfth of] the
product of:
. the class B interest rate [for the preceding interest period];
. [a fraction, the numerator of which is the actual number of days in that
preceding interest period and the denominator of which is 360]; and
. the outstanding principal balance of that class B certificate as of the close
of business on the preceding distribution date or, in the case of the first
distribution date, as of the closing date;
provided, however, that the interest due on the class B certificates on the
first distribution date will equal $[ ].
The distribution dates for series 2000-[ ] will be the fifteenth day of each
month, beginning [ ], 2000, or, if that day is not a business day, the
following business day. The interest periods for series 2000-[ ] will be each
period from and including a distribution date, or, in the case of the first
interest period, the closing date, to but excluding the following distribution
date.
Any interest due but not paid on a distribution date will be payable on the
following distribution date, together with additional interest on the unpaid
amount at the class A interest rate or the class B interest rate, as
applicable, plus 2.00% per annum. The final interest payment on the offered
certificates
S-4
<PAGE>
will be made no later than the stated series termination date.
Principal Payments
The offered certificates and the collateralized trust obligations are scheduled
to receive a single principal payment on the expected final distribution date
following the accumulation of principal in a segregated trust account referred
to in this prospectus supplement as the principal funding account. We cannot
assure you, however, that principal payments will not be made before or after
the expected final distribution date.
If various events referred to in this prospectus supplement as early
amortization events occur, principal payments may be made earlier than the
expected final distribution date. If the actual payment rate on the receivables
is lower than the payment rate that was assumed in structuring the accumulation
period, the principal funding account may not be funded as expected and the
certificateholders may not be paid in full on the expected final distribution
date. There is no penalty for the early or late payment of principal.
The final principal payment on the offered certificates will be made no later
than the stated series termination date. The class B certificateholders will in
no event begin to receive principal payments until the class A certificates
have been paid in full.
Credit Enhancement
The class A certificates will benefit from the subordination of the class B
certificates, the collateralized trust obligations and the class D
certificates. The class B certificates will benefit from the subordination of
the collateralized trust obligations and the class D certificates.
The issuance of subordinated securities is intended to protect you against
payment delays or losses with respect to your certificates. The subordinated
securities are required to absorb losses on the receivables and other
shortfalls in cash flow before those losses and other shortfalls are absorbed
by the senior securities. If the receivables experience higher losses than were
assumed in determining the principal balance of the subordinated securities,
you may experience payment delays or losses with respect to your certificates.
Allocation of Collections and Default Amounts
On each determination date, the servicer will allocate to each class of the
offered certificates a portion of:
. the collections of finance charge receivables and principal receivables
received during the preceding month; and
. the receivables, if any, charged off as uncollectible during the preceding
month, which amount is referred to in this prospectus supplement as the
default amount.
The determination dates for series 2000-[ ] will be the eighth day before each
distribution date, beginning [ ] 2000, or, if that day is not a business day,
the following business day.
Calculation of Series Adjustment Amount
On each determination date, the servicer will calculate the amount of any
deficiency in trust assets as of the last day of the preceding month
attributable to downward adjustments made in the amount of principal
receivables in the trust for non-credit reasons. If a deficiency in trust
assets causes the aggregate outstanding principal balance of the series 2000-
[ ] securities to exceed the aggregate amount of principal receivables
allocated to series 2000- [ ], FNANB will be required to deposit the amount of
that excess into a segregated trust account referred to in this prospectus
supplement as the excess funding account. If FNANB fails to make this deposit,
the servicer will calculate the amount of any remaining deficiency in trust
assets allocable to series 2000-[ ], which amount is referred to in this
prospectus supplement as the series adjustment amount. On each determination
date, the servicer will allocate to each class of the offered certificates a
portion of the series adjustment amount as of the last day of the preceding
month.
Application of Finance Charge Collections
On each distribution date, collections of finance charge receivables received
during the preceding
S-5
<PAGE>
month and allocated to the class A certificates plus various other amounts
specified in the series 2000-[ ] supplement will be applied:
. to pay the interest due on the class A certificates on that distribution
date;
. to pay the servicing fee due to the servicer on that distribution date to the
extent that servicing fee is allocated to the class A certificates;
. to fund the default amount for the preceding month plus the series adjustment
amount as of the last day of the preceding month, in each case to the extent
that amount is allocated to the class A certificates;
. to make various required payments with respect to the class B certificates,
the collateralized trust obligations or the class D certificates as described
under "Description of the Offered Certificates --Application of Collections--
Excess Spread; Shared Excess Finance Charge Collections" beginning on page S-
39 of this prospectus supplement;
. to fund any deficiency in a segregated trust account referred to in this
prospectus supplement as the spread account, which account is intended to
help assure the payment of interest and principal on the collateralized trust
obligations and to offset potential reductions in the outstanding principal
balance of the collateralized trust obligations; and
. to fund any deficiency in a segregated trust account referred to in this
prospectus supplement as the reserve account, which account is intended to
help assure the payment of interest on the offered certificates and the
collateralized trust obligations on each distribution date relating to the
accumulation period.
Any remaining collections of finance charge receivables allocated to the class
A certificates will be shared with other series in group one or, to the extent
those collections are not needed to make required payments with respect to
other series in group one, will be paid to the holder of the exchangeable
transferor certificate.
On each distribution date, collections of finance charge receivables received
during the preceding month and allocated to the class B certificates plus
various other amounts specified in the series 2000-[ ] supplement will be
applied:
. to pay the interest due on the class B certificates on that distribution
date;
. to pay the servicing fee due to the servicer on that distribution date to the
extent that servicing fee is allocated to the class B certificates;
. to make various required payments with respect to the class A certificates,
the class B certificates, the collateralized trust obligations or the class D
certificates as described under "Description of the Offered Certificates--
Application of Collections--Excess Spread; Shared Excess Finance Charge
Collections" beginning on page S-39 of this prospectus supplement;
. to fund any deficiency in the spread account; and
. to fund any deficiency in the reserve account.
Any remaining collections of finance charge receivables allocated to the class
B certificates will be shared with other series in group one or, to the extent
those collections are not needed to make required payments with respect to
other series in group one, will be paid to the holder of the exchangeable
transferor certificate.
Application of Principal Collections
The timing and amount of principal payments to be made on any distribution date
will depend on whether that distribution date relates to the revolving period,
the accumulation period or the early amortization period. In addition, on each
distribution date, collections of principal receivables received during the
preceding month and allocated to the subordinated securities may be reallocated
to fund required payments with respect to the senior securities.
Revolving Period
The series 2000-[ ] securities will include a period during which collections
of principal receivables allocated to series 2000-[ ] will not be accumulated
for or paid to the series 2000-[ ] securityholders. This period, which is
referred to in this prospectus supplement as the revolving period, will begin
on the closing date and end on the earlier of the close of business on the day
preceding the commencement
S-6
<PAGE>
of the accumulation period and the close of business on the day preceding the
commencement of the early amortization period.
On each distribution date relating to the revolving period, collections of
principal receivables received during the preceding month and allocated to
series 2000-[ ], other than collections reallocated to fund required payments
with respect to the offered certificates or the collateralized trust
obligations, plus various other amounts specified in the series 2000-[ ]
supplement:
. will be treated as shared principal collections and applied to make required
payments with respect to other series in group one; and
. to the extent those collections and other specified amounts are not applied
to make required payments with respect to other series in group one, will be
deposited into the excess funding account or paid to the holder of the
exchangeable transferor certificate.
Accumulation Period
The series 2000-[ ] securities may include a period during which collections of
principal receivables allocated to series 2000-[ ], up to a specified amount,
will be deposited on or before each distribution date into the principal
funding account. This period, which is referred to in this prospectus
supplement as the accumulation period, is scheduled to begin on [ ], 20[ ]
and end on the earliest of the close of business on the day preceding the
commencement of the early amortization period, the date on which the series
2000-[ ] securities are paid in full and the stated series termination date.
The servicer may postpone the commencement of the accumulation period or
suspend the accumulation period under certain limited circumstances.
On or before each distribution date relating to the accumulation period,
collections of principal receivables received during the preceding month and
allocated to series 2000-[ ], other than collections reallocated to fund
required payments with respect to the offered certificates or the
collateralized trust obligations, plus various other amounts specified in the
series 2000-[ ] supplement:
. will be deposited into the principal funding account up to a specified
amount;
. to the extent those collections and other specified amounts are not deposited
into the principal funding account, will be treated as shared principal
collections and applied to make required payments with respect to other
series in group one; and
. to the extent those collections and other specified amounts are not applied
to make required payments with respect to other series in group one, will be
deposited into the excess funding account or paid to the holder of the
exchangeable transferor certificate.
On the expected final distribution date, the amount on deposit in the principal
funding account:
. will be paid to the class A certificateholders until the class A certificates
have been paid in full;
. if the class A certificates have been paid in full, will be paid to the class
B certificateholders until the class B certificates have been paid in full;
and
. if the class B certificates have been paid in full, will be paid to the
holders of the collateralized trust obligations until the collateralized
trust obligations have been paid in full;
provided, however, that, if the early amortization period begins prior to the
expected final distribution date, the amount on deposit in the principal
funding account on the first distribution date relating to the early
amortization period will be paid in that order of priority on that date.
Early Amortization Period
The series 2000-[ ] securities may include a period during which collections of
principal receivables allocated to series 2000-[ ] will be applied on each
distribution date to make principal payments to the certificateholders. This
period, which is referred to in this prospectus supplement as the early
amortization period, will begin on the date on which an early amortization
event occurs and will end on the earlier of the date on which the series 2000-
[ ] securities are paid in full and the stated series termination date.
S-7
<PAGE>
On each distribution date relating to the early amortization period,
collections of principal receivables received during the preceding month and
allocated to series 2000-[ ], other than collections reallocated to fund
required payments with respect to the offered certificates or the
collateralized trust obligations, plus various other amounts specified in the
series 2000-[ ] supplement:
. will be paid to the class A certificateholders until the class A certificates
have been paid in full;
. if the class A certificates have been paid in full, will be paid to the class
B certificateholders until the class B certificates have been paid in full;
and
. if the class B certificates have been paid in full, will be paid to the
holders of the collateralized trust obligations until the collateralized
trust obligations have been paid in full.
See "Description of the Offered Certificates--Early Amortization Events"
beginning on page S-44 of this prospectus supplement for a further discussion
of the early amortization events applicable to series 2000-[ ].
Tax Status of the Offered Certificates and the Trust
McGuire, Woods, Battle & Boothe LLP, special tax counsel to FNANB, is of the
opinion that:
. the offered certificates will be treated as debt for federal income tax
purposes; and
. the trust will not be treated as an association or publicly traded
partnership taxable as a corporation for federal income tax purposes.
See "Material Federal Income Tax Consequences" beginning on page S-47 of this
prospectus supplement and "Material Federal Income Tax Consequences" beginning
on page 46 of the attached prospectus for a further discussion of the tax
consequences of acquiring, holding and disposing of the offered certificates.
ERISA Considerations
The underwriters of the class A certificates expect that the class A
certificates will qualify as publicly offered securities under regulations
issued by the U.S. Department of Labor. If the class A certificates qualify as
publicly offered securities, the class A certificates may be eligible for
purchase by persons investing assets of employee benefit plans or individual
retirement accounts. The class B certificates are not eligible for purchase by
persons investing assets of employee benefit plans or individual retirement
accounts.
See "ERISA Considerations" beginning on page S-48 of this prospectus supplement
and "ERISA Considerations" beginning on page 52 of the attached prospectus for
a further discussion of the ERISA considerations applicable to a purchase of
the offered certificates.
Additional Information
You may obtain additional information about the offered certificates by
contacting FNANB in writing at 225 Chastain Meadows Court, Kennesaw, Georgia
30144, Attention: Treasury Department, or by telephone at (770) 423-7900.
S-8
<PAGE>
RISK FACTORS
This section summarizes the material risks that apply to an investment in
the offered certificates. You should consider these risks in deciding whether
to purchase the offered certificates.
If You Hold Class A Certificates, The class B certificates, the
The Subordination Of The Class B collateralized trust obligations and
Certificates, The Collateralized the class D certificates will be
Trust Obligations And The Class D subordinated to the class A
Certificates May Not Be Adequate To certificates to the extent necessary
Assure Payment Of Your Certificates to fund various payments with
respect to the class A certificates.
We cannot assure you, however, that
the subordination of these interests
will be adequate to assure payment
of the class A certificates.
If the receivables experience higher
losses than were assumed in
determining the principal balance of
the subordinated securities:
. the trust may not have sufficient
funds to pay in full the interest
and principal owed to the class A
certificateholders on one or more
distribution dates and the class A
certificateholders will suffer
payment delays with respect to
their certificates; and
. if and to the extent that the
amount of that insufficiency is
not offset on subsequent
distribution dates, the class A
certificateholders will suffer
losses with respect to their
certificates.
If you hold class A certificates and
the class D certificates, the
collateralized trust obligations and
the class B certificates are reduced
to zero, you will bear directly the
credit and other risks associated
with your undivided interest in the
trust.
See "Description of the Offered
Certificates--Credit Enhancement"
beginning on page S-36 of this
prospectus supplement for a further
discussion of the subordination
feature.
If You Hold Class B Certificates, The collateralized trust obligations
The Subordination Of The and the class D certificates will be
Collateralized Trust Obligations And subordinated to the class B
The Class D Certificates May Not Be certificates to the extent necessary
Adequate To Assure Payment Of Your to fund various payments with
Certificates respect to the class B certificates.
We cannot assure you, however, that
the subordination of these interests
will be adequate to assure payment
of the class B certificates.
If the receivables experience higher
losses than were assumed in
determining the principal balance of
the subordinated securities:
S-9
<PAGE>
. the trust may not have sufficient
funds to pay in full the interest
and principal owed to the class B
certificateholders on one or more
distribution dates and the class B
certificateholders will suffer
payment delays with respect to
their certificates; and
. if and to the extent that the
amount of that insufficiency is
not offset on subsequent
distribution dates, the class B
certificateholders will suffer
losses with respect to their
certificates.
If you hold class B certificates and
the class D certificates and the
collateralized trust obligations are
reduced to zero, you will bear
directly the credit and other risks
associated with your undivided
interest in the trust.
See "Description of the Offered
Certificates--Credit Enhancement"
beginning on page S-36 of this
prospectus supplement for a further
discussion of the subordination
feature.
If You Hold Class B Certificates, The class B certificates will be
You Could Suffer Payment Delays Or subordinated to the class A
Losses As A Result Of The certificates to the extent necessary
Subordination Of Your Certificates to fund various payments with
To The Class A Certificates respect to the class A certificates.
If the trust does not have
sufficient funds to make all
required payments with respect to
the class A certificates on any
distribution date and the class D
certificates and the collateralized
trust obligations have been reduced
to zero, the principal balance of
the class B certificates will be
reduced. If and to the extent that
the amount of that reduction is not
reimbursed on subsequent
distribution dates:
. the percentage of finance charge
collections allocable to the class
B certificates will be reduced,
which may delay or reduce interest
payments on subsequent
distribution dates; and
. the class B certificateholders
will suffer losses with respect to
their certificates.
The class B certificateholders will
not receive principal payments,
whether made during the early
amortization period or following a
sale of the trust assets, until the
class A certificates have been paid
in full. If the funds available to
make principal payments to the
holders of the offered certificates
during the early amortization period
or following a sale of the trust
assets are not sufficient to pay the
S-10
<PAGE>
offered certificates in full, the
class B certificateholders will
suffer a loss with respect to their
certificates. See "Description of
the Offered Certificates--
Application of Collections"
beginning on page S-38 of this
prospectus supplement for a further
discussion of the manner in which
principal payments will be made to
the holders of the offered
certificates.
If You Hold Class B Certificates, The consent or approval of a
You May Be Unable To Control Whether specified percentage of the
The Holders Of The Series 2000-[ ] aggregate principal amount of the
Securities Have Consented To Or series 2000-[ ] securities will be
Approved Of Actions To Be Taken required in determining whether the
Under The Master Pooling And holders of the series 2000-[ ]
Servicing Agreement Or The Series securities have consented to or
2000-[ ] Supplement approved of various actions taken
under the master pooling and
servicing agreement or the series
2000-[ ] supplement. Because the
aggregate principal amount of the
class A certificates will in most
cases exceed the aggregate principal
amount of the class B certificates,
the collateralized trust obligations
and the class D certificates, the
class A certificateholders may
control whether these actions will
be consented to or approved of by
the holders of the series 2000-[ ]
securities. We cannot assure you
that the interests of the class A
certificateholders will coincide
with the interests of the class B
certificateholders with respect to
these actions.
If The Transfer Of The Receivables FNANB accounts for the transfer of
To The Trust Is Characterized As A the receivables to the trust as a
Financing Rather Than A Sale, The sale rather than the grant of a
Trust's Interest In The Receivables security interest. A court could
May Be Subject To Various conclude, however, that FNANB still
Nonconsensual Liens owns the receivables and that the
trust holds only a security interest
in the receivables. The risk of a
court reaching this conclusion may
be increased by the retention by
FNANB of the exchangeable transferor
certificate, the class D
certificates and any similar
interests issued and retained with
respect to other series.
If a court were to conclude that the
transfer of the receivables to the
trust constituted only the grant of
a security interest in the
receivables, a tax, governmental or
other nonconsensual lien on property
of FNANB arising before new
receivables came into existence
might have priority over the trust's
interests in those receivables. See
"Material Legal Aspects of the
Receivables--Transfer of
Receivables" beginning on page 43 of
the attached prospectus for a
further discussion of the
circumstances under which the
interest of the trust might be
subject to prior liens.
S-11
<PAGE>
The Appointment Of A Receiver Or FNANB is chartered as a national
Conservator For FNANB Could banking association and is subject
Adversely Affect The Timing Or to regulation and supervision by the
Amount Of Payments On Your Office of the Comptroller of the
Certificates Currency. If various events relating
to FNANB's financial condition or
the propriety of its actions were to
occur, the OCC would be authorized
to appoint the FDIC as receiver or
conservator for FNANB. If the OCC
were to appoint the FDIC as receiver
or conservator, the FDIC could:
. require the trustee to go through
an administrative claims procedure
to establish its right to amounts
collected on the receivables in
the trust;
. request a stay of proceedings with
respect to the trust's claims
against FNANB; or
. repudiate the master pooling and
servicing agreement and limit the
trust's resulting claim against
FNANB to actual direct
compensatory damages measured as
of the date of receivership or
conservatorship.
If the FDIC were to take any of
these actions, payments on your
certificates could be delayed or
reduced.
If the OCC were to appoint the FDIC
as receiver or conservator for
FNANB:
. an early amortization event would
occur with respect to all
outstanding series;
. new principal receivables would
not be transferred to the trust;
and
. the trustee would dispose of the
receivables in the trust unless
otherwise instructed by the
holders of certificates
representing undivided interests
aggregating more than 50% of the
aggregate principal amount of each
class of each outstanding series
or unless otherwise required by
the FDIC.
If the receivables in the trust were
disposed of following an early
amortization event and that
disposition produced insufficient
net proceeds to pay your
certificates in full, you would
suffer a loss on your certificates.
A receiver or conservator for FNANB
might have the power,
notwithstanding the terms of the
master pooling and servicing
agreement:
. to prevent the commencement of the
early amortization period with
respect to all outstanding series;
S-12
<PAGE>
. to require the transfer of new
principal receivables to the
trust; and
. to prevent the sale of the
receivables in the trust and the
termination of the trust.
A receiver or conservator for FNANB
might have the power,
notwithstanding your instructions:
. to prohibit the transfer of new
principal receivables to the
trust; and
. to require the sale of the
receivables in the trust, the
termination of the trust and the
retirement of the offered
certificates.
In addition, a receiver or
conservator for FNANB might have the
power to prevent the trustee or the
certificateholders from appointing a
new servicer under the master
pooling and servicing agreement. See
"Material Legal Aspects of the
Receivables--Matters Relating to
Receivership and Conservatorship"
beginning on page 43 of the attached
prospectus for a further discussion
of the implications of the
appointment of a receiver or
conservator for FNANB.
The Application Of Federal Or State A number of federal and state
Consumer Protection Laws Could consumer protection laws regulate
Adversely Affect The Timing Or the creation and enforcement of
Amount Of Payments On Your consumer loans such as the
Certificates receivables. The existing consumer
protection laws could be amended to
impose additional restrictions on
the creation and enforcement of
consumer loans. In addition, new
consumer protection laws could be
adopted imposing those additional
restrictions. We cannot assure you
that the application of federal or
state consumer protection laws will
not have an adverse impact on the
timing or amount of payments on your
certificates.
If The Yield On The Receivables If the yield on the receivables
Declines, You May Receive Principal declines, an early amortization
Payments Earlier Than The Expected event may occur and you may receive
Final Distribution Date And May Be principal payments earlier than the
Unable To Reinvest That Principal In expected final distribution date.
A Comparable Investment Security The following events, each of which
is discussed in more detail below,
could result in a decline in the
yield on the receivables:
. a reduction in the periodic
finance charges or other fees and
charges assessed on the accounts
instituted by FNANB for
competitive reasons or to promote
the Circuit City private label
credit card;
. a reduction in the periodic
finance charges or other fees and
charges assessed on the accounts
required by law;
S-13
<PAGE>
. a reduction in the amount of
periodic finance charges or other
fees and charges paid by
cardholders as a result of
economic, social or other factors;
. the deposit of funds into the
excess funding account for the
trust; or
. the deposit of funds into the
principal funding account for
series 2000-[ ].
If you receive principal payments
earlier than expected, you may be
unable to reinvest that principal in
an investment security that earns a
rate of return comparable to the
interest rate on your certificate or
that has risk characteristics
comparable to the risk
characteristics of your certificate.
See "Description of the Offered
Certificates--Early Amortization
Events" beginning on page S-44 of
this prospectus supplement for a
further discussion of the early
amortization events applicable to
series 2000-[ ].
Reduction for Competitive Reasons
The credit card industry is highly
competitive and has experienced a
substantial increase in the use of
advertising, target marketing, price
reductions and incentive programs as
new issuers seek to enter the market
and existing issuers seek to
increase their market share. In many
cases, consumers select credit cards
on the basis of product features,
such as interest rate and credit
limit, and will change credit cards
or use other sources of credit to
take advantage of more attractive
credit terms. As owner of the
accounts included in the trust,
FNANB has the right to change
various account terms, including the
periodic finance charges and other
fees and charges assessed on the
accounts. In addition, FNANB
periodically offers interest free
promotions under which holders of
the Circuit City private label
credit card are able to purchase
designated products on an interest
free basis for a specified period.
We cannot assure you that FNANB will
not reduce the periodic finance
charges or other fees and charges
assessed on the accounts in response
to increased competition from other
credit card issuers or other credit
providers or that an increase in the
use of interest free promotions will
not cause a decline in the yield on
the receivables.
Reduction Required by Law
A number of federal and state
consumer protection laws regulate
the creation and enforcement of
S-14
<PAGE>
consumer loans such as the
receivables. The existing consumer
protection laws could be amended to
limit the fees and charges that may
be assessed with respect to credit
card accounts. In addition, new
consumer protection laws could be
adopted limiting those fees and
charges. We cannot assure you that
FNANB will not be required by law to
reduce the periodic finance charges
and other fees and charges assessed
on the accounts.
Economic, Social and Other Factors
A variety of economic, social or
other factors could cause
cardholders who have historically
incurred periodic finance charges or
other fees and charges to begin
paying account balances in full on a
monthly basis. These factors include
increases in disposable income,
changes in consumer attitudes toward
the repayment of revolving debt and
the availability of competing
sources of credit. We cannot assure
you that the amount of periodic
finance charges and other fees and
charges assessed on the accounts
will not decline as a result of
economic, social or other factors.
Excess Funding Account Deposits
If the transferor amount is less
than the minimum transferor amount
on any date, collections of
principal receivables that would
otherwise be distributed to the
holder of the exchangeable
transferor certificate will instead
be deposited into the excess funding
account to the extent of that
deficiency. The amount, if any, on
deposit in the excess funding
account will be invested in eligible
investments. The deposit of amounts
into the excess funding account has
the effect of substituting cash for
principal receivables. Because the
investment earnings on amounts on
deposit in the excess funding
account may be less than the
effective yield from the collections
of finance charge receivables that
would otherwise have been included
in the trust, this substitution may
result in a decline in the yield on
the receivables.
Principal Funding Account Deposits
On or before each distribution date
relating to the controlled
accumulation period for series 2000-
[ ], collections of principal
receivables that would otherwise be
distributed to the holder of the
exchangeable transferor certificate
will instead be deposited into the
principal funding account for series
2000-[ ] in an amount not to exceed
the
S-15
<PAGE>
controlled deposit amount for that
distribution date. The amount on
deposit in the principal funding
account will be invested in eligible
investments. The servicer will
allocate collections of finance
charge receivables to series 2000-
[ ] based on an allocation
percentage that decreases as amounts
are deposited in the principal
funding account for series 2000-[ ].
As a result, the deposit of amounts
into the principal funding account
has the effect of substituting
earnings on eligible investments for
collections of finance charge
receivables. Because the investment
earnings on the amounts on deposit
in the principal funding account may
be less than the effective yield
from the collections of finance
charge receivables that would
otherwise have been allocated to
series 2000-[ ], this substitution
may result in a decline in the yield
on the receivables.
If The Rate At Which New Receivables FNANB is required to transfer
Are Created Declines, You May additional receivables to the trust
Receive Principal Payments Earlier if there would otherwise be
Than The Expected Final Distribution insufficient receivables to support
Date And May Be Unable To Reinvest all outstanding series. If the rate
That Principal In A Comparable at which new receivables are created
Investment Security declines and FNANB is unable to
transfer additional receivables to
the trust, an early amortization
event may occur and you may receive
principal payments earlier than the
expected final distribution date.
The following events, each of which
is discussed in more detail below,
could result in a decline in the
rate at which new receivables are
created:
. a decline in credit and non-credit
sales at Circuit City retail
stores as a result of increased
competition from other retailers;
. a decline in credit and non-credit
sales at Circuit City retail
stores as a result of a decline in
the demand for consumer
electronics, personal computers,
major appliances or entertainment
software;
. a decline in private label and
non-private label credit sales at
Circuit City retail stores as a
result of economic, social or
other factors; or
. a decline in private label credit
sales at Circuit City retail
stores as a result of increased
competition from other providers
of consumer credit.
If you receive principal payments
earlier than expected, you may be
unable to reinvest that principal in
an investment security that earns a
rate of return comparable to the
interest rate on your
S-16
<PAGE>
certificate or that has risk
characteristics comparable to the
risk characteristics of your
certificate.
Increase in Retail Competition
The consumer electronics industry is
highly competitive. Circuit City
competes with numerous companies in
each of its geographic markets,
including regional and national
specialty stores and discount
retailers, smaller local stores that
carry similar categories of
merchandise and internet-based
retailers. We cannot assure you that
increased competition will not cause
Circuit City sales to decline. If
Circuit City sales decline as a
result of increased retail
competition, the rate at which new
receivables are created could also
decline.
Decline in Consumer Demand
Circuit City may experience a
decline in sales if the demand for
consumer electronics, personal
computers, major appliances or
entertainment software declines. The
demand for these products could
decline for various reasons,
including the absence of product
innovations or new product
categories and general economic
factors, such as increased inflation
or unemployment rates, that lead to
a general reduction in consumer
spending. We cannot assure you that
consumer demand for the products
sold by Circuit City will not
decline. If Circuit City sales
decline as a result of a decline in
consumer demand, the rate at which
new receivables are created could
also decline.
Economic, Social and Other Factors
Circuit City may experience a
decline in credit sales if the rate
at which consumers purchase
merchandise and services on credit
declines. The use of credit by
consumers could decline as a result
of various economic, social and
other factors, including increased
inflation or unemployment rates,
changes in consumer attitudes toward
financing purchases with debt and
new payment methods such as debit
cards. We cannot assure you that the
use of credit by consumers will not
decline. If Circuit City credit
sales decline as a result of a
decline in the use of credit, the
rate at which new receivables are
created could also decline.
Increase in Credit Competition
Circuit City accepts various credit
cards in addition to its private
label credit card, including
American Express, MasterCard, VISA
and Discover credit
S-17
<PAGE>
cards. We cannot assure you that
increased competition from other
credit card issuers or other credit
providers will not cause Circuit
City private label credit card use
to decline. If Circuit City private
label credit card use declines, the
rate at which new receivables are
created will also decline.
If The Principal Payment Rate On The If the rate at which principal
Receivables Declines, You May payments are made on the receivables
Receive Principal Payments Later declines during the accumulation
Than The Expected Final Distribution period, the trust may be unable to
Date accumulate principal in the
principal funding account in an
amount sufficient to pay the offered
certificates in full on the expected
final distribution date. The
following events, each of which is
discussed in more detail below,
could result in a decline in the
principal payment rate:
. changes in account terms that
reduce principal payment
requirements or make it less
costly for cardholders to defer
principal payments; or
. changes in cardholder payment
habits resulting from economic,
social or other factors.
Changes in Account Terms
The rate at which cardholders make
principal payments is influenced by
various account terms. If FNANB were
to reduce the minimum monthly
payment requirement applicable to
the accounts or the periodic finance
charges assessed on the accounts,
either for competitive reasons or as
required by law, cardholders might
reduce the amount of their monthly
payments. We cannot assure you that
FNANB will not change the account
terms in a way that causes the
principal payment rate on the
receivables to decline.
Economic, Social and Other Factors
A variety of economic, social or
other factors could cause
cardholders to reduce the amount of
their monthly principal payments.
These factors include reductions in
disposable income, changes in
consumer attitudes toward the
repayment of revolving debt and
seasonal payment habits. We cannot
assure you that the principal
payment rate on the receivables will
not decline as a result of economic,
social or other factors.
S-18
<PAGE>
The Creation Or Designation Of All accounts meeting the eligibility
Additional Accounts Could Adversely requirements set forth in the master
Affect The Timing Or Amount Of pooling and servicing agreement
Payments On Your Certificates will, subject to various limitations
imposed by the rating agencies, be
automatically included as accounts
as of the date of their creation
upon the identification of those
accounts in a computer file or
microfiche list delivered to the
trustee. In addition:
. FNANB may from time to time in its
discretion designate additional
eligible accounts to be included
as accounts; and
. FNANB will be required to
designate additional eligible
accounts to be included as
accounts if there would otherwise
be insufficient receivables to
support all outstanding series.
FNANB will transfer all existing and
future receivables in the automatic
additional accounts and the
designated additional accounts to
the trust.
The delinquency or loss experience
of the additional accounts may be
different from the delinquency or
loss experience of the accounts
included in the trust on the date of
this prospectus supplement. In
addition, the terms of the
receivables in the additional
accounts may be different from the
terms of the receivables in the
accounts included in the trust on
the date of this prospectus
supplement.
We cannot assure you that the
creation or designation of
additional accounts will not have an
adverse impact on the timing or
amount of payments on your
certificates. See "Description of
the Securities--Addition of
Accounts" beginning on page 17 of
the attached prospectus for a
further discussion of the procedure
by which additional accounts will be
included in the trust.
The Issuance Of A New Series Could The trust has previously issued
Adversely Affect The Timing Or seven other series, five of which
Amount Of Payments On Your are currently outstanding, and may
Certificates issue additional series from time to
time without your consent. The terms
of the other series issued by the
trust may be significantly different
from the terms of the offered
certificates.
It is a condition to the issuance of
each new series that each rating
agency that has rated an outstanding
series confirm in writing that the
issuance of the new series will not
result in a reduction or withdrawal
of its rating of any class of that
outstanding series. We cannot assure
you, however, that the terms of any
other series will not have an
adverse impact on the timing or
amount of payments on your
certificates. See "Description of
the Securities--Issuing New
S-19
<PAGE>
Series" beginning on page 15 of the
attached prospectus for a further
discussion of the procedure for
issuing a new series.
The Issuance Of A Companion Series The trust may issue a companion
Could Adversely Affect The Timing Or series with respect to series 2000-
Amount Of Payments On Your [ ] without your consent. The terms
Certificates of a companion series issued by the
trust may be significantly different
from the terms of the offered
certificates and may include early
amortization events not included
with respect to the offered
certificates. If an early
amortization event were to occur
with respect to a companion series
prior to the payment in full of the
offered certificates, the allocation
percentage used to allocate
collections of principal receivables
to series 2000-[ ] might be reduced
and you might receive principal
payments later than the expected
final distribution date.
It is a condition to the issuance of
each new series, including a
companion series, that each rating
agency that has rated an outstanding
series confirm in writing that the
issuance of the new series will not
result in a reduction or withdrawal
of its rating of any class of that
outstanding series. We cannot assure
you, however, that the terms of any
companion series will not have an
adverse impact on the timing or
amount of payments on your
certificates. See "Description of
the Securities--Companion Series"
beginning on page 21 of the attached
prospectus for a further discussion
of the companion series feature.
The Holders Of The Offered The consent or approval of the
Certificates May Be Unable To holders of a specified percentage of
Control Actions Taken Under The the aggregate principal amount of
Master Pooling And Servicing all outstanding series is required
Agreement before various actions may be taken
under the master pooling and
servicing agreement. These actions
include the appointment of a
successor servicer following a
servicer default, the amendment of
the master pooling and servicing
agreement under specified
circumstances and the repurchase or
liquidation of the receivables. We
cannot assure you that the interests
of the certificateholders of other
series will coincide with your
interests with respect to these
actions.
S-20
<PAGE>
DELINQUENCY AND LOSS EXPERIENCE FOR THE
CIRCUIT CITY PRIVATE LABEL CREDIT CARD PORTFOLIO
Delinquency Experience
The following table sets forth the delinquency experience for the Circuit
City private label credit card portfolio as of each of the dates shown. We
cannot assure you that the future delinquency experience for the receivables in
the trust will be similar to the historical delinquency experience for the
private label credit card portfolio set forth in the table.
Delinquency Experience
Private Label Credit Card Portfolio
(Dollars in Thousands)
<TABLE>
<CAPTION>
As of December 31,
-----------------------------------------------------------------------------------------------
1999 1998 1997 1996
----------------------- ----------------------- ----------------------- -----------------------
Percentage Percentage Percentage Percentage
of Total of Total of Total of Total
Receivables Receivables Receivables Receivables Receivables Receivables Receivables Receivables
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Receivables
Outstanding............ $1,256,547 100.00% $1,294,580 100.00% $1,103,270 100.00% $1,132,298 100.00%
---------- ------ ---------- ------ ---------- ------ ---------- ------
Delinquent 31 to 60
Days................... $ 22,714 1.81% $ 24,448 1.89% $ 26,347 2.39% $ 28,268 2.50%
Delinquent 61 to 90
Days................... 14,084 1.12 14,403 1.11 15,557 1.41 15,609 1.38
Delinquent 91 or More
Days................... 26,586 2.12 27,440 2.12 30,783 2.79 29,755 2.63
---------- ------ ---------- ------ ---------- ------ ---------- ------
Total................... $ 63,384 5.05% $ 66,291 5.12% $ 72,687 6.59% $ 73,632 6.50%
========== ====== ========== ====== ========== ====== ========== ======
</TABLE>
The delinquency periods are calculated based on the number of days a payment
is contractually past due. All receivables are charged off not later than the
earlier of the last day of the month during which they become 180 days
delinquent on a contractual basis and 30 days after receipt of notice by FNANB
that the related obligor has died or declared bankruptcy. As a result, no
receivable reported as delinquent in the delinquency experience table was more
than 179 days delinquent as of the reporting date.
The percentages set forth for each delinquency period and each reporting
date are calculated by dividing the total receivables outstanding for that
delinquency period as of that reporting date by the total receivables
outstanding in the private label credit card portfolio as of that reporting
date. The totals reported in the delinquency experience table may not equal the
sum of the related amounts or percentages due to rounding.
Loss Experience
The following table sets forth the loss experience for the Circuit City
private label credit card portfolio for each of the periods shown. We cannot
assure you that the future loss experience for the receivables in the trust
will be similar to the historical loss experience for the private label credit
card portfolio set forth in the table.
S-21
<PAGE>
Loss Experience
Private Label Credit Card Portfolio
(Dollars in Thousands)
<TABLE>
<CAPTION>
Twelve Months Ended December 31,
--------------------------------------------
1999 1998 1997 1996
---------- ---------- ---------- --------
<S> <C> <C> <C> <C>
Average Principal Receivables
Outstanding..................... $1,150,689 $1,069,258 $1,040,188 $999,707
Gross Principal Charge-Offs...... $ 80,012 $ 89,463 $ 94,805 $ 72,429
Recoveries....................... $ 20,853 $ 17,774 $ 14,846 $ 11,783
Net Principal Charge-Offs........ $ 59,159 $ 71,689 $ 79,959 $ 60,646
Net Principal Charge-Offs as a
Percentage of Average Principal
Receivables Outstanding......... 5.14% 6.70% 7.69% 6.07%
</TABLE>
The average principal receivables for any period equals the average of the
principal balances outstanding at the beginning and end of each month during
that period. The gross principal charge-offs for any period do not include
fraud losses. The exclusion of fraud losses in calculating gross principal
charge-offs for any period does not have a material effect on that calculation.
Delinquency and Loss Trends
As indicated in the delinquency and loss tables, delinquency and loss rates
for the private label credit card portfolio have, in general, decreased in
recent years. The delinquency and loss experience for the private label credit
card portfolio reflects, among other factors, the overall credit quality of the
cardholders, the seasoning of the accounts, the success of collection efforts
and general economic conditions. The decrease in delinquency and loss rates
indicated in the tables is primarily attributable to improvements in the
collections process, including management's use of daily reporting to tailor
collection incentives to specific delinquency cycles, changes to the
collections training process, increased management monitoring of customer
contacts and the establishment of a separate inbound call group. The
origination of higher quality accounts and improvements in overall economic
conditions have also contributed to the decrease in delinquency and loss rates.
We cannot assure you that the recent delinquency and loss trend will continue
in the future.
CHARACTERISTICS OF THE TRUST RECEIVABLES
As of December 31, 1999:
. the receivables included $1,229,823,750 of Principal Receivables and
$26,723,442 of Finance Charge Receivables;
. the Accounts with debit balances had an average receivables balance of
$790.56;
. the average credit limit of the Accounts was $2,659.68;
. the average receivables balance of the Accounts with debit balances
divided by the average credit limit of all the Accounts, expressed as a
percentage, was 29.72%; and
. the obligors on the Accounts had billing addresses in all 50 states, the
District of Columbia and various U.S. territories and possessions.
The Accounts consist solely of accounts established under a private label
credit card program for customers of Circuit City. As a result, the rate at
which new receivables are created relates to the rate at which Circuit City
generates private label credit card sales. The following table sets forth the
private label credit card purchases at Circuit City retail stores as a
percentage of total Circuit City retail sales for each of the periods shown. We
cannot assure you that future private label credit card use will be similar to
the historical experience set forth below.
S-22
<PAGE>
Private Label Credit Card Purchases
<TABLE>
<CAPTION>
Twelve Months Ended
December 31,
--------------------------
1999 1998 1997 1996
----- ----- ----- -----
<S> <C> <C> <C> <C>
Percentage of Total Retail Sales.................... 13.94% 15.23% 14.05% 14.92%
</TABLE>
The following tables set forth information with respect to the Accounts and
the receivables as of December 31, 1999. If there is a material adverse change
in the characteristics of the Accounts or the receivables between December 31,
1999 and the date on which the offering price for the offered certificates is
determined, we will send you updated information with respect to the Accounts
and the receivables. In each case where information in the following tables is
presented as a percentage of the total number of Accounts or as a percentage of
the total receivables, the sum of the percentages presented may be less than or
greater than 100.00% due to rounding.
Composition by Account Balance
Trust Portfolio
<TABLE>
<CAPTION>
Percentage
Number of Total Percentage
of Number of of Total
Account Balance Range Accounts Accounts Receivables Receivables
- --------------------- --------- ---------- ----------------- -----------
<S> <C> <C> <C> <C>
Credit Balance.............. 33,126 0.57% $ (1,254,109.59) (0.10)%
Zero Balance................ 4,213,067 72.18 0.00 0.00
$0.01 to $1,500.00.......... 1,393,533 23.87 824,311,558.86 65.61
$1,500.01 to $3,000.00...... 175,386 3.00 349,002,721.27 27.78
$3,000.01 to $4,500.00...... 18,065 0.31 63,507,675.13 5.05
$4,500.01 to $10,000.00..... 3,901 0.07 20,825,987.97 1.66
Over $10,000.00............. 4 0.00 52,190.65 0.00
--------- ------ ----------------- ------
TOTAL..................... 5,837,082 100.00% $1,256,446,024.29 100.00%
========= ====== ================= ======
</TABLE>
Composition by Credit Limit
Trust Portfolio
<TABLE>
<CAPTION>
Percentage
of Total Percentage
Number of Number of of Total
Credit Line Range Accounts Accounts Receivables Receivables
- ----------------- --------- ---------- ----------------- -----------
<S> <C> <C> <C> <C>
Zero Limit.................. 1,165 0.02% $ 2,303.84 0.00%
$0.01 to $1,500.00.......... 2,364,556 40.51 455,092,839.58 36.22
$1,500.01 to $3,000.00...... 1,556,493 26.67 355,935,097.80 28.33
$3,000.01 to $4,500.00...... 813,697 13.94 134,918,706.41 10.74
$4,500.01 to $10,000.00..... 1,101,169 18.87 310,497,076.66 24.71
$10,000.01 to $15,000.00.... 2 0.00 0.00 0.00
--------- ------ ----------------- ------
TOTAL..................... 5,837,082 100.00% $1,256,446,024.29 100.00%
========= ====== ================= ======
</TABLE>
S-23
<PAGE>
Composition by Payment Status
Trust Portfolio
<TABLE>
<CAPTION>
Percentage
of Total Percentage
Number of Number of of Total
Payment Status Accounts Accounts Receivables Receivables
- -------------- --------- ---------- ----------------- -----------
<S> <C> <C> <C> <C>
Not Delinquent............. 5,669,909 97.14% $1,097,809,539.32 87.37%
Delinquent 1 to 30 Days.... 107,510 1.84 95,280,582.88 7.58
Delinquent 31 to 60 Days... 23,047 0.39 22,710,529.86 1.81
Delinquent 61 to 90 Days... 13,018 0.22 14,070,677.79 1.12
Delinquent 91 to 120 Days.. 9,694 0.17 10,714,060.53 0.85
Delinquent 121 to 150
Days...................... 7,129 0.12 8,004,859.83 0.64
Delinquent 151 or More
Days...................... 6,775 0.12 7,855,774.08 0.63
--------- ------ ----------------- ------
TOTAL.................... 5,837,082 100.00% $1,256,446,024.29 100.00%
========= ====== ================= ======
</TABLE>
Composition by Account Age
Trust Portfolio
<TABLE>
<CAPTION>
Percentage
of Total Percentage
Number of Number of of Total
Account Age Accounts Accounts Receivables Receivables
- ----------- --------- ---------- ----------------- -----------
<S> <C> <C> <C> <C>
0 to 3 Months................ 294,997 5.05% $ 239,771,491.80 19.08%
4 to 6 Months................ 230,485 3.95 140,763,265.79 11.20
7 to 9 Months................ 185,226 3.17 78,512,400.50 6.25
10 to 12 Months.............. 195,208 3.34 60,869,860.31 4.84
13 to 24 Months.............. 929,952 15.93 206,560,118.40 16.44
25 to 36 Months.............. 665,689 11.40 118,608,943.95 9.44
37 or More Months............ 3,335,525 57.14 411,359,943.54 32.74
--------- ------ ----------------- ------
TOTAL...................... 5,837,082 100.00% $1,256,446,024.29 100.00%
========= ====== ================= ======
</TABLE>
Composition by Cardholder Billing Address
Trust Portfolio
<TABLE>
<CAPTION>
Percentage
of Total Percentage
Number of Number of of Total
Cardholder Billing Address Accounts Accounts Receivables Receivables
- -------------------------- --------- ---------- -------------- -----------
<S> <C> <C> <C> <C>
Alabama........................ 109,672 1.88% $21,388,685.87 1.70%
Alaska......................... 1,441 0.02 155,731.97 0.01
Arizona........................ 121,863 2.09 24,973,378.38 1.99
Arkansas....................... 23,555 0.40 6,327,136.95 0.50
California..................... 1,355,950 23.23 257,661,021.61 20.51
Colorado....................... 63,524 1.09 16,735,757.06 1.33
Connecticut.................... 41,021 0.70 11,687,842.12 0.93
Delaware....................... 9,234 0.16 2,565,116.77 0.20
District of Columbia........... 16,492 0.28 3,253,916.85 0.26
Florida........................ 489,719 8.39 103,694,293.45 8.25
Georgia........................ 228,678 3.92 48,465,002.82 3.86
Hawaii......................... 8,254 0.14 2,423,919.48 0.19
Idaho.......................... 9,428 0.16 2,758,959.12 0.22
Illinois....................... 248,556 4.26 55,199,889.84 4.39
Indiana........................ 72,453 1.24 20,994,620.04 1.67
Iowa........................... 3,565 0.06 434,369.25 0.03
</TABLE>
S-24
<PAGE>
<TABLE>
<CAPTION>
Percentage
of Total Percentage
Number of Number of of Total
Cardholder Billing Address Accounts Accounts Receivables Receivables
- -------------------------- --------- ---------- ----------------- -----------
<S> <C> <C> <C> <C>
Kansas........................ 28,673 0.49 7,066,226.94 0.56
Kentucky...................... 95,311 1.63 16,436,885.12 1.31
Louisiana..................... 66,054 1.13 18,968,822.42 1.51
Maine......................... 11,236 0.19 2,635,860.37 0.21
Maryland...................... 167,999 2.88 28,663,455.61 2.28
Massachusetts................. 123,352 2.11 26,871,721.36 2.14
Michigan...................... 103,221 1.77 31,413,290.90 2.50
Minnesota..................... 64,867 1.11 11,195,836.06 0.89
Mississippi................... 14,792 0.25 4,190,876.96 0.33
Missouri...................... 126,841 2.17 25,217,094.06 2.01
Montana....................... 1,164 0.02 113,455.19 0.01
Nebraska...................... 12,657 0.22 2,485,095.19 0.20
Nevada........................ 63,768 1.09 13,831,895.08 1.10
New Hampshire................. 27,712 0.47 5,628,668.60 0.45
New Jersey.................... 80,858 1.39 20,279,253.47 1.61
New Mexico.................... 15,068 0.26 3,861,275.90 0.31
New York...................... 129,287 2.21 40,011,979.95 3.18
North Carolina................ 227,282 3.89 44,270,961.42 3.52
North Dakota.................. 603 0.01 51,343.46 0.00
Ohio.......................... 144,677 2.48 36,117,483.24 2.87
Oklahoma...................... 52,476 0.90 9,825,809.31 0.78
Oregon........................ 39,997 0.69 9,946,586.68 0.79
Other......................... 12,824 0.22 1,354,156.15 0.11
Pennsylvania.................. 187,210 3.21 48,171,556.10 3.83
Rhode Island.................. 26,731 0.46 6,426,091.71 0.51
South Carolina................ 98,914 1.69 18,120,673.62 1.44
South Dakota.................. 633 0.01 72,080.35 0.01
Tennessee..................... 151,475 2.60 29,213,973.08 2.33
Texas......................... 537,419 9.21 127,987,304.11 10.19
Utah.......................... 37,362 0.64 7,541,594.35 0.60
Vermont....................... 4,778 0.08 1,366,721.52 0.11
Virginia...................... 265,699 4.55 51,147,467.35 4.07
Washington.................... 54,293 0.93 15,013,058.11 1.19
West Virginia................. 18,740 0.32 4,004,286.15 0.32
Wisconsin..................... 37,814 0.65 7,562,186.07 0.60
Wyoming....................... 1,890 0.03 661,356.75 0.05
--------- ------ ----------------- ------
TOTAL....................... 5,837,082 100.00% $1,256,446,024.29 100.00%
========= ====== ================= ======
</TABLE>
Because the largest number of cardholders, based on billing address, whose
Accounts were included in the trust as of December 31, 1999 were located in
California, Florida and Texas, adverse changes in the economic conditions in
these states could have a direct impact on the creation of receivables or the
timing or amount of payments on the offered certificates.
MATURITY CONSIDERATIONS
The offered certificates and the CTOs are scheduled to receive a single
principal payment on the Expected Final Distribution Date following the
accumulation of principal in the Principal Funding Account. We expect that the
amount on deposit in the Principal Funding Account on the Expected Final
Distribution Date will be sufficient to make these payments. We cannot assure
you, however, that these payments will be made. If the actual payment rate on
the receivables is lower than the payment rate that was assumed in structuring
the Accumulation Period, the Principal Funding Account may not be funded as
expected and the certificateholders may not be paid in full on the Expected
Final Distribution Date. If the certificateholders are not paid in full on the
Expected Final Distribution Date, an Early Amortization Event will occur with
respect to series 2000-[ ]. See "Description of
S-25
<PAGE>
the Offered Certificates--Principal Payments--Accumulation Period" beginning on
page S-32 of this prospectus supplement for a further discussion of the
Accumulation Period.
The certificateholders will not receive principal payments before the
Expected Final Distribution Date unless an Early Amortization Event occurs that
results in the commencement of the Early Amortization Period. If the Early
Amortization Period begins prior to the Expected Final Distribution Date, any
amount then on deposit in the Principal Funding Account will be paid to the
certificateholders and the holders of the CTOs on the first Distribution Date
relating to the Early Amortization Period in the following order of priority:
. to the Class A certificateholders until the Class A certificates have
been paid in full;
. if the Class A certificates have been paid in full, to the Class B
certificateholders until the Class B certificates have been paid in full;
and
. if the Class B certificates have been paid in full, to the holders of the
CTOs until the CTOs have been paid in full.
On each subsequent Distribution Date relating to the Early Amortization
Period, Available Principal Collections will be paid to the certificateholders
and the holders of the CTOs in the following order of priority:
. to the Class A certificateholders until the earlier of the date on which
the Class A certificates have been paid in full and the Stated Series
Termination Date;
. if the Class A certificates have been paid in full, to the Class B
certificateholders until the earlier of the date on which the Class B
certificates have been paid in full and the Stated Series Termination
Date; and
. if the Class B certificates have been paid in full, to the holders of the
CTOs until the earlier of the date on which the CTOs have been paid in
full and the Stated Series Termination Date.
The Class B certificateholders will in no event begin to receive principal
payments until the Class A certificates have been paid in full. If an Early
Amortization Event occurs with respect to series 2000-[ ], the
certificateholders may begin to receive principal payments earlier than the
Expected Final Distribution Date. See "Description of the Offered
Certificates--Principal Payments--Early Amortization Period" beginning on page
S-33 of this prospectus supplement for a further discussion of the Early
Amortization Period. See "Description of the Offered Certificates--Early
Amortization Events" beginning on page S-44 of this prospectus supplement and
"Description of the Securities--Early Amortization Events" beginning on page 24
of the attached prospectus for a further discussion of the Early Amortization
Events applicable to series 2000-[ ].
The following table sets forth the highest and lowest cardholder monthly
payment rates for the Circuit City private label credit card portfolio for any
month during the periods shown and the average cardholder monthly payment rates
for all months during the periods shown. The payment rates are calculated for
each month by dividing the total amount of collections received during that
month, including recoveries on charged-off accounts, by the average receivables
balance for that month. The collections received during each month include
amounts that would constitute collections of Principal Receivables and amounts
that would constitute collections of Finance Charge Receivables.
Monthly Payment Rate
Private Label Credit Card Portfolio
<TABLE>
<CAPTION>
Twelve Months Ended
December 31,
--------------------------
1999 1998 1997 1996
----- ----- ----- -----
<S> <C> <C> <C> <C>
Lowest Month........................................ 11.67% 10.73% 10.48% 9.39%
Highest Month....................................... 15.43% 13.49% 12.24% 12.49%
Monthly Average..................................... 13.07% 12.03% 11.42% 10.64%
</TABLE>
S-26
<PAGE>
We cannot assure you that the future payment rates on the receivables in the
trust will be similar to the historical payment rates for the private label
credit card portfolio set forth in the table. See "Risk Factors--If The
Principal Payment Rate On The Receivables Declines, You May Receive Principal
Payments Later Than The Expected Final Distribution Date" beginning on page S-
18 of this prospectus supplement for a further discussion of the events that
could result in a decline in the rate at which principal payments are made on
the receivables.
RECEIVABLE YIELD CONSIDERATIONS
The following table sets forth the yield from periodic finance charges and
fees billed to accounts in the Circuit City private label credit card portfolio
for each of the periods shown. The historical yield percentages set forth in
the table are calculated on an accrual basis. The amounts collected during any
period in respect of the receivables in the trust are calculated on a cash
basis.
Portfolio Yield
Private Label Credit Card Portfolio
(Dollars in Thousands)
<TABLE>
<CAPTION>
Twelve Months Ended
December 31,
----------------------------------------------
1999 1998 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Average Total Receivables
Outstanding.................. $1,176,172 $1,094,533 $1,064,228 $1,020,993
Finance Charges Billed........ $ 254,349 $ 253,012 $ 243,916 $ 234,406
Yield from Finance Charges.... 21.63% 23.12% 22.92% 22.96%
</TABLE>
The average total receivables outstanding for any period equals the average
of the total receivables balance at the beginning and end of each month during
that period.
We cannot assure you that the future yield on the receivables in the trust
will be similar to the historical yield percentages for the private label
credit card portfolio set forth in the table. See "Risk Factors--If The Yield
On The Receivables Declines, You May Receive Principal Payments Earlier Than
The Expected Final Distribution Date And May Be Unable To Reinvest That
Principal In A Comparable Investment Security" beginning on page S-13 of this
prospectus supplement for a further discussion of the events that could result
in a decline in the yield on the receivables.
USE OF PROCEEDS
The net proceeds from the sale of the offered certificates will be paid to
FNANB. FNANB will use these proceeds to repay a portion of the series [ ]
variable funding certificates and for general corporate purposes. A portion of
the series [ ] variable funding certificates are owned by a multi-seller
commercial paper vehicle administered by affiliates of [ ].
RECENT FINANCIAL INFORMATION FOR
CIRCUIT CITY AND FNANB
As of November 30, 1999, Circuit City had consolidated assets of
approximately $4,248 million and equity of approximately $1,982 million.
As of November 30, 1999, FNANB had assets of approximately $406.4 million
and equity of approximately $200.7 million.
S-27
<PAGE>
DESCRIPTION OF THE OFFERED CERTIFICATES
The offered certificates will be issued by the trust under the master
pooling and servicing agreement and a series supplement related to series 2000-
[ ]. The following is a summary of the material terms of the offered
certificates. You should refer to the master pooling and servicing agreement
and the series 2000-[ ] supplement for a complete description of all terms of
the offered certificates.
Book-Entry Registration
The offered certificates will initially be issued in book-entry form. You
may hold the offered certificates through DTC in the United States or through
Clearstream or Euroclear in Europe. See "Registration and Transfer of the
Securities" beginning on page 32 in the attached prospectus for a further
discussion of the book-entry registration system and the limited circumstances
under which the offered certificates will be issued in fully registered,
certificated form.
Interest Payments
Each class of the offered certificates will accrue interest during each
Interest Period at the interest rate applicable to that class. An Interest
Period is the period from and including a Distribution Date, or, in the case of
the initial Interest Period, from and including the Closing Date, to but
excluding the following Distribution Date. Interest will be distributed on the
[ ] 2000 Distribution Date and on each subsequent Distribution Date to the
certificateholders in whose names the offered certificates were registered at
the close of business on the last Business Day of the preceding month.
The offered certificates will accrue interest at the following interest
rates:
. the interest rate applicable to the Class A certificates for each
Interest Period is [ ]% per annum [above LIBOR prevailing on the related
LIBOR Determination Date]; and
. the interest rate applicable to the Class B certificates for each
Interest Period is [ ]% per annum [above LIBOR prevailing on the related
LIBOR Determination Date].
The interest due on the Class A certificates on each Distribution Date will
equal [one twelfth of] the product of:
. the Class A interest rate [for the preceding Interest Period];
. [a fraction, the numerator of which is the actual number of days in that
preceding Interest Period and the denominator of which is 360]; and
. the outstanding principal balance of the Class A certificates as of the
close of business on the preceding Distribution Date or, in the case of
the interest due on the initial Distribution Date, as of the Closing
Date;
provided, however, that the interest due on the Class A certificates on the
first Distribution Date will equal $[ ].
The interest due on the Class B certificates on each Distribution Date will
equal [one twelfth of] the product of:
. the Class B interest rate [for the preceding Interest Period];
. [a fraction, the numerator of which is the actual number of days in that
preceding Interest Period and the denominator of which is 360]; and
. the outstanding principal balance of the Class B certificates as of the
close of business on the preceding Distribution Date or, in the case of
the interest due on the initial Distribution Date, as of the Closing
Date;
provided, however, that the interest due on the Class B certificates on the
first Distribution Date will equal $[ ].
S-28
<PAGE>
If the interest due on any Distribution Date is not paid in full, the
shortfall will be due on the next Distribution Date, together with additional
interest on the amount of the shortfall at the applicable certificate interest
rate plus 2.00% per annum. This additional interest will be payable only to the
extent permitted by law.
[The certificateholders may call the trustee at (800) 735-7777 to obtain the
interest rates applicable to the offered certificates for the current and
preceding Interest Periods. This information will also be included in
statements delivered to the certificateholders on each Distribution Date.]
The interest due on any Distribution Date will be funded from Class A
Available Funds or Class B Available Funds, as applicable, for that
Distribution Date. If Class A Available Funds for any Distribution Date are not
sufficient to pay the interest due on the Class A certificates on that
Distribution Date, the shortfall will be funded from Excess Spread and Shared
Excess Finance Charge Collections allocable to series 2000-[ ] and Reallocated
Principal Collections. If Class B Available Funds for any Distribution Date are
not sufficient to pay the interest due on the Class B certificates on that
Distribution Date, the shortfall will be funded from Excess Spread and Shared
Excess Finance Charge Collections allocable to series 2000-[ ] and Reallocated
Principal Collections, in each case after applying those amounts, if needed, to
fund the Class A Required Amount for that Distribution Date; provided, however,
that collections of Principal Receivables allocated to the Class B certificates
will not be reallocated to fund the interest due on the Class B certificates.
The interest due on the CTOs and the Class D certificates on each
Distribution Date will be calculated in accordance with the series 2000-[ ]
supplement. [The weighted average interest rate applicable to the CTOs and the
Class D certificates for each Interest Period will not exceed [ ]% per annum
above LIBOR prevailing on the related LIBOR Determination Date.]
[The Interest Rate Caps]
[On the Closing Date, FNANB will enter into the Interest Rate Caps with the
Interest Rate Cap Provider. The Class A Interest Rate Cap and the Class B
Interest Rate Cap will be for the exclusive benefit of the Class A
certificateholders and the Class B certificateholders, respectively. FNANB will
assign to the trust, for the benefit of the Class A certificateholders and the
Class B certificateholders, the right to payment under the Interest Rate Caps.
The notional amount of the Class A Interest Rate Cap will, at all times
prior to the Expected Final Distribution Date, equal or exceed the sum of the
Class A Invested Amount plus the aggregate amount on deposit in the Principal
Funding Account in respect of Class A Monthly Principal. The notional amount of
the Class A Interest Rate Cap will decrease on each Distribution Date following
the Expected Final Distribution Date through termination of the Class A
Interest Rate Cap by the fixed amount that, if applied on each Distribution
Date following the Expected Final Distribution Date through the Stated Series
Termination Date, would cause the notional amount of the Class A Interest Rate
Cap to decrease to zero on the Stated Series Termination Date. On each
Distribution Date on which the Class A interest rate for the preceding Interest
Period exceeds [ ]%, the Interest Rate Cap Provider will make a payment under
the Class A Interest Rate Cap to the trust in an amount equal to the product
of:
. the amount by which the Class A interest rate exceeds [ ]%;
. the notional amount of the Class A Interest Rate Cap for that
Distribution Date; and
. a fraction, the numerator of which is the actual number of days in that
Interest Period and the denominator of which is 360.
Any amount paid under the Class A Interest Rate Cap on any Distribution Date
will be included in Class A Available Funds for that Distribution Date. The
Class A Interest Rate Cap will terminate on the earlier of the day the Class A
certificates are paid in full and the day following the Stated Series
Termination Date; provided, however, that the Class A Interest Rate Cap may be
terminated on an earlier date if FNANB has obtained a substitute interest rate
cap or alternative arrangement satisfactory to each rating agency rating the
offered
S-29
<PAGE>
certificates that will not result in a reduction or withdrawal of the rating
assigned by that rating agency to the offered certificates.
The notional amount of the Class B Interest Rate Cap will, at all times
prior to the Expected Final Distribution Date, equal or exceed the sum of the
Class B Invested Amount plus the aggregate amount on deposit in the Principal
Funding Account in respect of Class B Monthly Principal. The notional amount of
the Class B Interest Rate Cap will decrease on each Distribution Date following
the Expected Final Distribution Date through termination of the Class B
Interest Rate Cap by the fixed amount that, if applied on each Distribution
Date following the Expected Final Distribution Date through the Stated Series
Termination Date, would cause the notional amount of the Class B Interest Rate
Cap to decrease to zero on the Stated Series Termination Date. On each
Distribution Date on which the Class B interest rate for the preceding Interest
Period exceeds [ ]%, the Interest Rate Cap Provider will make a payment under
the Class B Interest Rate Cap to the trust in an amount equal to the product
of:
. the amount by which the Class B interest rate exceeds [ ]%;
. the notional amount of the Class B Interest Rate Cap for that
Distribution Date; and
. a fraction, the numerator of which is the actual number of days in that
Interest Period and the denominator of which is 360.
Any amount paid under the Class B Interest Rate Cap on any Distribution Date
will be included in Class B Available Funds for that Distribution Date. The
Class B Interest Rate Cap will terminate on the earlier of the day the Class B
certificates are paid in full and the day following the Stated Series
Termination Date; provided, however, that the Class B Interest Rate Cap may be
terminated on an earlier date if the servicer has obtained a substitute
interest rate cap or alternative arrangement satisfactory to each rating agency
rating the offered certificates that will not result in a reduction or
withdrawal of the rating assigned by that rating agency to the offered
certificates.
The Interest Rate Cap Provider has a short-term rating of [ ] from Standard
& Poor's and [ ] from Moody's. If the credit rating of the Interest Rate Cap
Provider is reduced or withdrawn as specified in the Interest Rate Caps, the
servicer will use its best efforts to obtain for each Interest Rate Cap a
substitute interest rate cap or alternative arrangement satisfactory to each
rating agency rating the offered certificates that will not result in a
reduction or withdrawal of the rating assigned by that rating agency to the
offered certificates.]
[The Interest Rate Cap Provider]
[The following information has been obtained from the Interest Rate Cap
Provider and has not been verified by FNANB or the underwriters. FNANB and the
underwriters make no representation or warranty concerning the following
information.
The Interest Rate Cap Provider is [ ], a bankruptcy remote derivative
products company headquartered in [ ]. The Interest Rate Cap Provider
was organized in [ ]. As of December 31, 1999, the Interest Rate Cap
Provider had assets of approximately $[ ] million and equity of
approximately $[ ] million.]
Principal Payments
The principal due on any Distribution Date will be funded from Available
Principal Collections for that Distribution Date. The timing and amount of
principal payments to be made on any Distribution Date will depend on whether
that Distribution Date occurs with respect to the Revolving Period or the
Accumulation Period or during the Early Amortization Period.
Revolving Period
The Revolving Period will begin on the Closing Date and end on the earlier
of the close of business on the day preceding the commencement of the
Accumulation Period and the close of business on the day preceding
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the commencement of the Early Amortization Period. The certificateholders will
not receive principal payments during the Revolving Period.
On each Distribution Date relating to the Revolving Period, the Available
Principal Collections for that Distribution Date will be applied in the
following order of priority:
. if other series in group one require additional collections of Principal
Receivables, the Available Principal Collections will be treated as
Shared Principal Collections and applied to make required payments with
respect to other series in group one;
. if the Transferor Amount is less than the Minimum Transferor Amount, the
remaining Available Principal Collections, if any, will be deposited in
the Excess Funding Account; and
. if the Transferor Amount equals or exceeds the Minimum Transferor
Amount, the remaining Available Principal Collections, if any, will be
paid to the holder of the Exchangeable Transferor Certificate.
Accumulation Period
The Accumulation Period is scheduled to begin at the close of business on
the last day of the Revolving Period and end on the earliest of the close of
business on the day preceding the commencement of the Early Amortization
Period, the date on which the series 2000-[ ] securities are paid in full and
the Stated Series Termination Date. On or before each Distribution Date
relating to the Accumulation Period, the trustee will deposit the Available
Principal Collections for that Distribution Date into the Principal Funding
Account up to a specified amount. The amount on deposit in the Principal
Funding Account is scheduled to be paid to the certificateholders and the
holders of the CTOs on the Expected Final Distribution Date. The Accumulation
Period is intended to enable the trust to make a single principal payment,
rather than a series of principal payments, to the certificateholders and the
holders of the CTOs.
On or before each Distribution Date relating to the Accumulation Period, the
trustee will deposit into the Principal Funding Account an amount equal to the
least of:
. the Available Principal Collections for that Distribution Date;
. the Controlled Deposit Amount for that Distribution Date; and
. the sum of the Class A Invested Amount plus the Class B Invested Amount
plus the CTO Invested Amount, in each case as of that Distribution Date
and before giving effect to that deposit;
provided, however, that, if the Accumulation Period is suspended and then
reinstated after the later of the date on which the Accumulation Period was
scheduled to begin before giving effect to that suspension and the date to
which the commencement of the Accumulation Period may be postponed in
accordance with the series 2000-[ ] supplement, the amount to be deposited into
the Principal Funding Account on or before each Distribution Date relating to
the Accumulation Period will be calculated without regard to the Controlled
Deposit Amount for that Distribution Date. See "--Postponement of the
Accumulation Period" beginning on page S-33 of this prospectus supplement for a
discussion of the circumstances under which the commencement of the
Accumulation Period may be postponed. See "--Suspension of the Accumulation
Period" beginning on page S-34 of this prospectus supplement for a discussion
of the circumstances under which the Accumulation Period may be suspended.
The amount on deposit in the Principal Funding Account on the Expected Final
Distribution Date will be paid on that date in the following order of priority:
. to the Class A certificateholders until the Class A certificates have
been paid in full;
. if the Class A certificates have been paid in full, to the Class B
certificateholders until the Class B certificates have been paid in
full; and
. if the Class B certificates have been paid in full, to the holders of
the CTOs until the CTOs have been paid in full;
S-31
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provided, however, that, if the Early Amortization Period begins prior to the
Expected Final Distribution Date, the amount on deposit in the Principal
Funding Account on the first Distribution Date relating to the Early
Amortization Period will be paid in that order of priority on that date. If the
amount on deposit in the Principal Funding Account is not sufficient to pay the
offered certificates in full on the Expected Final Distribution Date, that
amount will be paid in that order of priority on that Distribution Date and the
Early Amortization Period will begin on that Distribution Date.
We expect that the amount on deposit in the Principal Funding Account on the
Expected Final Distribution Date will be sufficient to make the principal
payments scheduled to be made on that date. We cannot assure you, however, that
these payments will be made. See "Maturity Considerations" beginning on page S-
26 of this prospectus supplement for a further discussion of the circumstances
under which principal payments might be made earlier or later than expected.
On each Distribution Date relating to the Accumulation Period, the amount,
if any, by which the Available Principal Collections for that Distribution Date
exceed the amount deposited into the Principal Funding Account on or in respect
of that Distribution Date will be applied in the following order of priority:
. if other series in group one require additional collections of Principal
Receivables, the remaining Available Principal Collections, if any, will
be treated as Shared Principal Collections and applied to make required
payments with respect to other series in group one;
. if the Transferor Amount is less than the Minimum Transferor Amount, the
remaining Available Principal Collections, if any, will be deposited in
the Excess Funding Account; and
. if the Transferor Amount equals or exceeds the Minimum Transferor
Amount, the remaining Available Principal Collections, if any, will be
paid to the holder of the Exchangeable Transferor Certificate.
Early Amortization Period
The Early Amortization Period will begin on the date on which an Early
Amortization Event occurs and will end on the earlier of the date on which the
series 2000-[ ] securities are paid in full and the Stated Series Termination
Date. On each Distribution Date relating to the Early Amortization Period,
Available Principal Collections for that Distribution Date will be paid in the
following order of priority:
. to the Class A certificateholders until the Class A certificates have
been paid in full;
. if the Class A certificates have been paid in full, to the Class B
certificateholders until the Class B certificates have been paid in
full; and
. if the Class B certificates have been paid in full, to the holders of
the CTOs until the CTOs have been paid in full.
See "--Early Amortization Events" beginning on page S-44 of this prospectus
supplement and "Description of the Securities--Early Amortization Events"
beginning on page 24 of the attached prospectus for a further discussion of the
Early Amortization Events applicable to series 2000-[ ].
Postponement of Accumulation Period
The Accumulation Period is scheduled to begin at the close of business on
the last day of the [ ] 20[ ] Due Period. FNANB may elect to postpone the
commencement of the Accumulation Period, however, if it determines that fewer
than 12 months will be needed to accumulate in the Principal Funding Account an
amount equal to the aggregate outstanding principal balance of the offered
certificates and the CTOs.
On each Determination Date prior to the commencement of the Accumulation
Period, the servicer will calculate the amount of principal collections that it
expects to receive during each Due Period prior to the Expected Final
Distribution Date and, based on that calculation, will determine the number of
months needed to accumulate in the Principal Funding Account an amount equal to
the aggregate outstanding principal balance of the offered certificates and the
CTOs. In making this determination, the servicer will, in general, consider:
. the collections of Principal Receivables expected to be allocated to the
certificateholders of other series, assuming a principal payment rate no
greater than the lowest monthly principal payment rate for the preceding
12 months; and
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. the amount of principal expected to be distributable to the
certificateholders of other series that are not expected to be in their
revolving periods during the Accumulation Period.
If the servicer determines that fewer than 12 months will be needed to
accumulate in the Principal Funding Account an amount equal to the aggregate
outstanding principal balance of the offered certificates and the CTOs, the
servicer may elect to postpone the commencement of the Accumulation Period such
that the number of months in the Accumulation Period equals or exceeds the
number of months that the servicer determines will be needed to accumulate that
amount; provided, however, that the length of the Accumulation Period may not
be less than one month after giving effect to that postponement.
Suspension of Accumulation Period
FNANB may elect to suspend the Accumulation Period if it obtains a Qualified
Maturity Agreement. The Accumulation Period will be suspended upon delivery by
FNANB to the trustee of written notice of the suspension, a copy of the
executed Qualified Maturity Agreement and an opinion of counsel to the effect
that the Qualified Maturity Agreement constitutes a valid and enforceable
obligation of the provider of that agreement. FNANB will pledge to the trustee,
for the benefit of the certificateholders and the CTO securityholders, all
right, title and interest of FNANB in any Qualified Maturity Agreement.
If FNANB obtains a Qualified Maturity Agreement, it will cause the provider
of that agreement to deposit into the Principal Funding Account on or before
the Expected Final Distribution Date an amount equal to the aggregate
outstanding principal balance of the offered certificates and the CTOs on that
Distribution Date; provided, however, that FNANB may instead elect to fund all
or a portion of the deposit with the proceeds of the issuance of a new series
or with Available Principal Collections. The amount on deposit in the Principal
Funding Account on the Expected Final Distribution Date will be paid to the
certificateholders and the holders of the CTOs as if the Accumulation Period
had not been suspended.
The Qualified Maturity Agreement will terminate at the close of business on
the Expected Final Distribution Date; provided, however, that:
. FNANB may terminate the Qualified Maturity Agreement prior to the close
of business on the Expected Final Distribution Date if it obtains a
substitute Qualified Maturity Agreement;
. FNANB may terminate the Qualified Maturity Agreement prior to the close
of business on the Expected Final Distribution Date if the institution
providing the Qualified Maturity Agreement ceases to qualify as a
Qualified Institution and FNANB is unable to obtain a substitute
Qualified Maturity Agreement;
. FNANB may terminate the Qualified Maturity Agreement prior to the close
of business on the Expected Final Distribution Date if an Early
Amortization Event occurs; and
. FNANB may terminate the Qualified Maturity Agreement prior to the later
of the date on which the Accumulation Period was scheduled to begin,
before giving effect to the suspension of the Accumulation Period, and
the date to which the commencement of the Accumulation Period may be
postponed, as determined on the Determination Date preceding the
termination of the Qualified Maturity Agreement.
If the institution providing a Qualified Maturity Agreement ceases to
qualify as a Qualified Institution, FNANB will, unless it elects to terminate
the Qualified Maturity Agreement and is not required to obtain a substitute
Qualified Maturity Agreement as described in the preceding proviso, use its
best efforts to obtain a substitute Qualified Maturity Agreement.
If a Qualified Maturity Agreement is terminated prior to the earlier of the
Expected Final Distribution Date and the commencement of the Early Amortization
Period and FNANB does not obtain a substitute Qualified Maturity Agreement, the
Accumulation Period will begin on the latest of:
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<PAGE>
. the date on which the Accumulation Period was scheduled to begin, before
giving effect to the suspension of the Accumulation Period;
. at the election of FNANB, the date to which the commencement of the
Accumulation Period may be postponed, as determined on the Determination
Date preceding the termination of the Qualified Maturity Agreement; and
. the first day of the Due Period following the termination of the
Qualified Maturity Agreement.
The Principal Funding Account
The servicer will establish and maintain with an Eligible Institution, for
the benefit of the certificateholders and the holders of the CTOs, a segregated
trust account designated as the Principal Funding Account. On or before each
Distribution Date relating to the Accumulation Period, the trustee will deposit
into the Principal Funding Account all or a portion of the Available Principal
Collections for that Distribution Date. The amount on deposit in the Principal
Funding Account will be used to make principal payments to the
certificateholders and the holders of the CTOs. See "--Principal Payments--
Accumulation Period" beginning on page S-32 of this prospectus supplement for a
further discussion of the administration of the Principal Funding Account.
The servicer will direct the trustee to invest amounts on deposit in the
Principal Funding Account in Eligible Investments that mature before the next
Distribution Date. On each Distribution Date relating to the Accumulation
Period, all net investment earnings on funds on deposit in the Principal
Funding Account received during the preceding Due Period will be withdrawn from
the Principal Funding Account and applied as Class A Available Funds, Class B
Available Funds or CTO Available Funds, in each case based on the applicable
PFA Allocation Percentage for the preceding Due Period. If the net investment
earnings on funds on deposit in the Principal Funding Account received during
any Due Period are less than the Covered Amount for the following Distribution
Date, the amount, if any, on deposit in the Reserve Account on that
Distribution Date will be applied to fund the shortfall.
The Reserve Account
The servicer will establish and maintain with an Eligible Institution, for
the benefit of the certificateholders and the holders of the CTOs, a segregated
trust account designated as the Reserve Account. The Reserve Account is
intended to help assure the payment of interest on the offered certificates and
the CTOs on each Distribution Date relating to the Accumulation Period.
The servicer will direct the trustee to invest amounts on deposit in the
Reserve Account in Eligible Investments that mature before the next
Distribution Date. On each Distribution Date, all net investment earnings on
funds on deposit in the Reserve Account received during the preceding Due
Period will be applied as follows:
. if the amount on deposit in the Reserve Account is less than the
Required Reserve Account Amount for that Distribution Date, the net
investment earnings will be retained in the Reserve Account to the
extent of that deficiency;
. if the amount on deposit in the Reserve Account exceeds the Required
Reserve Account Amount for that Distribution Date, the net investment
earnings will be withdrawn from the Reserve Account and deposited into
the Collection Account.
The Reserve Account will have an initial balance of zero. On the Reserve
Account Funding Date and on each subsequent Distribution Date prior to the
termination of the Reserve Account, the trustee will deposit available Excess
Spread and Shared Excess Finance Charge Collections allocated to series 2000-
[ ] for that Distribution Date into the Reserve Account as described in clause
(14) under "--Application of Collections--Excess Spread; Shared Excess Finance
Charge Collections" beginning on page S-39 of this prospectus supplement until
the amount on deposit in the Reserve Account equals the Required Reserve
Account Amount
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<PAGE>
for that Distribution Date; provided, however, that the trustee will not
deposit amounts into the Reserve Account during any period that the
Accumulation Period is suspended. If, on any Distribution Date, the amount on
deposit in the Reserve Account exceeds the Required Reserve Account Amount for
that Distribution Date, in each case after making any required deposits into or
withdrawals from the Reserve Account, the trustee will withdraw that excess
from the Reserve Account and distribute it to the holder of the Exchangeable
Transferor Certificate in accordance with the series 2000-[ ] supplement.
On each Distribution Date relating to the Accumulation Period and on the
first Distribution Date relating to the Early Amortization Period, the servicer
will withdraw from the Reserve Account and deposit into the Collection Account
the lesser of:
. the amount on deposit in the Reserve Account on that Distribution Date;
and
. the amount, if any, by which the Covered Amount for that Distribution
Date exceeds the net investment earnings on funds on deposit in the
Principal Funding Account received during the preceding Due Period.
Any amount withdrawn from the Reserve Account and deposited into the
Collection Account will be applied as Class A Available Funds, Class B
Available Funds or CTO Available Funds as specified in the series 2000-[ ]
supplement. The Reserve Account will terminate on the earliest of:
. the date on which the trust is terminated under the master pooling and
servicing agreement;
. the date on which the series 2000-[ ] securities are paid in full;
. if the Accumulation Period has not commenced, the date on which an Early
Amortization Event occurs with respect to series 2000-[ ]; and
. if the Accumulation Period has commenced, the earlier of the first
Distribution Date relating to the Early Amortization Period and the
Expected Final Distribution Date.
On the date on which the Reserve Account is terminated, the trustee will
withdraw the amount on deposit in the Reserve Account and distribute that
amount to the holder of the Exchangeable Transferor Certificate in accordance
with the series 2000-[ ] supplement.
Credit Enhancement
The Class B certificates, the CTOs and the Class D certificates will be
subordinated to the Class A certificates to the extent necessary to fund
various payments with respect to the Class A certificates. On each Distribution
Date, collections of Principal Receivables allocated to the Class B
certificates, the CTOs or the Class D certificates may be reallocated to fund
the Class A Required Amount for that Distribution Date. If the Class D Invested
Amount and the CTO Invested Amount have been reduced to zero, this reallocation
will cause the Class B Invested Amount to be reduced. If and to the extent that
the amount of this reduction is not reimbursed on subsequent Distribution
Dates, the percentage of collections of Finance Charge Receivables allocated to
the Class B certificates will be reduced and the Class B certificateholders
will suffer losses with respect to their certificates.
The CTOs and the Class D certificates will be subordinated to the Class B
certificates to the extent necessary to fund various payments with respect to
the Class B certificates. On each Distribution Date, collections of Principal
Receivables allocated to the CTOs or the Class D certificates may be
reallocated to fund the Class A Required Amount or the Class B Required Amount
for that Distribution Date.
See "--Reallocation of Cash Flows; Investor Charge-Offs" beginning on page
S-42 of this prospectus supplement for a further discussion of the reallocation
of principal collections and the circumstances under which that reallocation
will cause the Invested Amount to be reduced.
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<PAGE>
The Spread Account
The servicer will establish and maintain with an Eligible Institution, for
the benefit of the holders of the CTOs, a segregated trust account designated
as the Spread Account. The Spread Account will have an initial balance of zero.
On each Distribution Date, the trustee, acting at the written direction of the
servicer, will deposit available Excess Spread and Shared Excess Finance Charge
Collections allocated to series 2000-[ ] for that Distribution Date into the
Spread Account as described in clause (9) under "--Application of Collections--
Excess Spread; Shared Excess Finance Charge Collections" beginning on page S-39
of this prospectus supplement. The amount on deposit in the Spread Account will
be used, if needed, to make interest and principal payments to the holders of
the CTOs and to offset potential reductions in the CTO Invested Amount.
The servicer will direct the trustee to invest amounts on deposit in the
Spread Account in Eligible Investments that mature before the next Distribution
Date. On each Distribution Date, all net investment earnings on funds on
deposit in the Spread Account received during the preceding Due Period will be
applied in accordance with the series 2000-[ ] supplement. If, on any
Distribution Date, the amount on deposit in the Spread Account exceeds the
Required Spread Account Amount for that Distribution Date, in each case after
making any required deposits into or withdrawals from the Spread Account on
that Distribution Date, the trustee will withdraw that excess from the Spread
Account and distribute it to the holder of the Exchangeable Transferor
Certificate in accordance with the series 2000-[ ] supplement.
The certificateholders should not view the Spread Account as providing
credit enhancement for the offered certificates. If amounts on deposit in the
Spread Account are applied in a manner that prevents losses on the CTOs,
however, the certificateholders may also benefit.
Allocation of Collections
On each Determination Date, the servicer will allocate all collections of
Finance Charge Receivables received during the preceding Due Period and all
collections of Principal Receivables received during the preceding Due Period
among series 2000-[ ], each other outstanding series, the Transferor Interest
and, to the extent provided in the series supplement for any other outstanding
series, any provider of credit enhancement for that other series.
The servicer will allocate collections of Finance Charge Receivables to
series 2000-[ ] as follows:
. collections of Finance Charge Receivables received during any Due Period
with respect to the Revolving Period or the Accumulation Period will be
allocated to series 2000-[ ] in an amount equal to the product of the
amount of those collections and the Floating Allocation Percentage for
that Due Period; and
. collections of Finance Charge Receivables received during any Due Period
during the Early Amortization Period will be allocated to series 2000-
[ ] in an amount equal to the product of the amount of those collections
and the Fixed Allocation Percentage for that Due Period.
On each Determination Date, the servicer will allocate collections of
Finance Charge Receivables allocated on that date to series 2000-[ ] among the
Class A certificates, the Class B certificates, the CTOs and the Class D
certificates.
The servicer will allocate collections of Principal Receivables to series
2000-[ ] as follows:
. collections of Principal Receivables received during any Due Period
during the Revolving Period will be allocated to series 2000-[ ] in an
amount equal to the amount of those collections and the Floating
Allocation Percentage for that Due Period; and
. collections of Principal Receivables received during any Due Period
during the Accumulation Period or the Early Amortization Period will be
allocated to series 2000-[ ] in an amount equal to the product of the
amount of those collections and the Fixed Allocation Percentage for that
Due Period.
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<PAGE>
On each Determination Date, the servicer will allocate collections of
Principal Receivables allocated on that date to series 2000-[ ] among the Class
A certificates, the Class B certificates, the CTOs and the Class D
certificates.
Application of Collections
Payment of Interest, Fees and Other Items
On each Distribution Date, the trustee, acting at the written direction of
the servicer, will apply the Class A Available Funds for the preceding Due
Period in the following order of priority:
. an amount equal to the Class A Monthly Interest for that Distribution
Date plus any unpaid Class A Monthly Interest for prior Distribution
Dates plus any Class A Additional Interest for that Distribution Date
will be distributed to the Class A certificateholders;
. if FNANB is no longer the servicer, an amount equal to the Class A
Servicing Fee for that Distribution Date plus any unpaid Class A
Servicing Fees for prior Distribution Dates will be distributed to the
servicer;
. an amount equal to the Class A Allocable Amount for that Distribution
Date will be treated as a portion of Available Principal Collections for
that Distribution Date as described under "--Application of
Collections--Payment of Principal" beginning on page S-40 of this
prospectus supplement; and
. the balance, if any, will constitute Excess Spread and will be allocated
and applied as described under "--Application of Collections--Excess
Spread; Shared Excess Finance Charge Collections" beginning on page S-39
of this prospectus supplement.
On each Distribution Date, the trustee, acting at the written direction of
the servicer, will apply the Class B Available Funds for the preceding Due
Period in the following order of priority:
. an amount equal to the Class B Monthly Interest for that Distribution
Date plus any unpaid Class B Monthly Interest for prior Distribution
Dates plus any Class B Additional Interest for that Distribution Date
will be distributed to the Class B certificateholders;
. if FNANB is no longer the servicer, an amount equal to the Class B
Servicing Fee for that Distribution Date plus any unpaid Class B
Servicing Fees for prior Distribution Dates will be distributed to the
servicer; and
. the balance, if any, will constitute Excess Spread and will be allocated
and applied as described under "--Application of Collections--Excess
Spread; Shared Excess Finance Charge Collections" beginning on page S-39
of this prospectus supplement.
On each Distribution Date, the trustee, acting at the written direction of
the servicer, will apply the CTO Available Funds for the preceding Due Period
in the following order of priority:
. if FNANB is no longer the servicer, an amount equal to the CTO Servicing
Fee for that Distribution Date plus any unpaid CTO Servicing Fees for
prior Distribution Dates will be distributed to the servicer; and
. the balance, if any, will constitute Excess Spread and will be allocated
and applied as described under "--Application of Collections--Excess
Spread; Shared Excess Finance Charge Collections" beginning on page S-39
of this prospectus supplement.
On each Distribution Date, the trustee, acting at the written direction of
the servicer, will apply the Class D Available Funds for the preceding Due
Period in the following order of priority:
. if FNANB is no longer the servicer, an amount equal to the Class D
Servicing Fee for that Distribution Date plus any unpaid Class D
Servicing Fees for prior Distribution Dates will be distributed to the
servicer; and
S-37
<PAGE>
. the balance, if any, will constitute Excess Spread and will be allocated
and applied as described under "--Application of Collections--Excess
Spread; Shared Excess Finance Charge Collections" beginning on page S-39
of this prospectus supplement.
Excess Spread; Shared Excess Finance Charge Collections
On each Distribution Date, the trustee, acting at the written direction of
the servicer, will apply the Excess Spread and Shared Excess Finance Charge
Collections allocated to series 2000-[ ] for the preceding Due Period in the
following order of priority:
(1) an amount equal to the Class A Required Amount for that
Distribution Date will be applied to fund the following items in the
following order of priority:
. the Class A Monthly Interest for that Distribution Date plus any
unpaid Class A Monthly Interest for prior Distribution Dates and any
Class A Additional Interest for that Distribution Date, in each case
to the extent not able to be funded on that Distribution Date
through the application of Class A Available Funds;
. if FNANB is no longer the servicer, the Class A Servicing Fee for
that Distribution Date plus any unpaid Class A Servicing Fees for
prior Distribution Dates, in each case to the extent not able to be
funded on that Distribution Date through the application of Class A
Available Funds; and
. an amount equal to the Class A Allocable Amount for that
Distribution Date will, to the extent not funded on that
Distribution Date through the application of Class A Available
Funds, be treated as a portion of Available Principal Collections
for that Distribution Date as described under "--Application of
Collections--Payment of Principal" beginning on page S-40 of this
prospectus supplement;
(2) an amount equal to the aggregate amount of unreimbursed Class A
Investor Charge-Offs will be treated as a portion of Available Principal
Collections for that Distribution Date as described under "--Application
of Collections--Payment of Principal" beginning on page S-40 of this
prospectus supplement;
(3) an amount equal to the Class B Required Amount for that
Distribution Date will be applied to fund the following items in the
following order of priority:
. the Class B Monthly Interest for that Distribution Date plus any
unpaid Class B Monthly Interest for prior Distribution Dates plus
any Class B Additional Interest for that Distribution Date, in each
case to the extent not able to be funded on that Distribution Date
through the application of Class B Available Funds;
. if FNANB is no longer the servicer, the Class B Servicing Fee for
that Distribution Date plus any unpaid Class B Servicing Fees for
prior Distribution Dates, in each case to the extent not able to be
funded on that Distribution Date through the application of Class B
Available Funds; and
. an amount equal to the Class B Allocable Amount for that
Distribution Date will be treated as a portion of Available
Principal Collections for that Distribution Date as described under
"--Application of Collections--Payment of Principal" beginning on
page S-40 of this prospectus supplement;
(4) an amount equal to the aggregate unreimbursed reductions of the
Class B Invested Amount resulting from Class B Investor Charge-Offs,
Reallocated Principal Collections or reductions made to fund the Class A
Allocable Amount will be treated as a portion of Available Principal
Collections for that Distribution Date as described under "--Application
of Collections--Payment of Principal" beginning on page S-40 of this
prospectus supplement;
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<PAGE>
(5) an amount equal to the CTO Monthly Interest for that Distribution
Date plus any unpaid CTO Monthly Interest for prior Distribution Dates
plus any CTO Additional Interest for that Distribution Date will be
distributed to the holders of the CTOs;
(6) if FNANB is the servicer, an amount equal to the Class A Servicing
Fee, the Class B Servicing Fee and the CTO Servicing Fee, in each case for
that Distribution Date, plus any unpaid Class A Servicing Fees, Class B
Servicing Fees or CTO Servicing Fees, in each case for prior Distribution
Dates, or, if FNANB is no longer the servicer, the CTO Servicing Fee for
that Distribution Date plus any unpaid CTO Servicing Fees for prior
Distribution Dates, will be distributed to the servicer;
(7) an amount equal to the CTO Allocable Amount for that Distribution
Date will be treated as a portion of Available Principal Collections for
that Distribution Date as described under "--Application of Collections--
Payment of Principal" beginning on page S-40 of this prospectus
supplement;
(8) an amount equal to the aggregate unreimbursed reductions of the CTO
Invested Amount resulting from CTO Investor Charge-Offs, Reallocated
Principal Collections or reductions made to fund the Class A Allocable
Amount or the Class B Allocable Amount will be treated as a portion of
Available Principal Collections for that Distribution Date as described
under "--Application of Collections--Payment of Principal" beginning on
page S-40 of this prospectus supplement;
(9) an amount equal to the excess, if any, of the Required Spread
Account Amount for that Distribution Date over the amount on deposit in
the Spread Account on that Distribution Date, in each case before making
any required deposits into or withdrawals from the Spread Account on that
Distribution Date, will be deposited into the Spread Account;
(10) an amount equal to the Class D Monthly Interest for that
Distribution Date plus any unpaid Class D Monthly Interest for prior
Distribution Dates plus any Class D Additional Interest for that
Distribution Date will be distributed to the Class D certificateholders;
(11) if FNANB is the servicer, an amount equal to the Class D Servicing
Fee for that Distribution Date, or, if FNANB is no longer the servicer,
the portion of that amount remaining unpaid, plus any unpaid Class D
Servicing Fees for prior Distribution Dates will be distributed to the
servicer;
(12) an amount equal to the Class D Allocable Amount for that
Distribution Date will be treated as a portion of Available Principal
Collections for that Distribution Date as described under "--Application
of Collections--Payment of Principal" beginning on page S-40 of this
prospectus supplement;
(13) an amount equal to the aggregate unreimbursed reductions of the
Class D Invested Amount resulting from Class D Investor Charge-Offs,
Reallocated Principal Collections or reductions made to fund the Class A
Allocable Amount, the Class B Allocable Amount or the CTO Allocable Amount
will be treated as a portion of Available Principal Collections for that
Distribution Date as described under "--Application of Collections--
Payment of Principal" beginning on page S-40 of this prospectus
supplement;
(14) an amount equal to the excess, if any, of the Required Reserve
Account Amount for that Distribution Date over the amount on deposit in
the Reserve Account on that Distribution Date will be deposited into the
Reserve Account; and
(15) the balance, if any, will constitute Shared Excess Finance Charge
Collections with respect to group one and will be applied to other series
in group one or paid to the holder of the Exchangeable Transferor
Certificate in accordance with the master pooling and servicing agreement.
Payment of Principal
On each Distribution Date relating to the Revolving Period, the Available
Principal Collections for the preceding Due Period will be treated as Shared
Principal Collections for other series and applied as described under
"Description of the Securities--Shared Principal Collections" beginning on page
20 of the attached prospectus.
S-39
<PAGE>
On or before each Distribution Date relating to the Accumulation Period, the
trustee, acting at the written direction of the servicer, will apply the
Available Principal Collections for the preceding Due Period in the following
order of priority:
. an amount equal to the Controlled Deposit Amount for that
Distribution Date will be deposited into the Principal Funding
Account for payment to the Class A certificateholders, the Class B
certificateholders and the holders of the CTOs on the Expected Final
Distribution Date; and
. the balance, if any, will be treated as Shared Principal Collections
for other series and applied as described under "Description of the
Securities--Shared Principal Collections" beginning on page 20 of
the attached prospectus.
On each Distribution Date relating to the Early Amortization Period, the
trustee, acting at the written direction of the servicer, will apply the
Available Principal Collections for the preceding Due Period plus, in the case
of the first Distribution Date relating to the Early Amortization Period, any
amount on deposit in the Principal Funding Account on that Distribution Date in
the following order of priority:
. an amount equal to the Class A Monthly Principal for that Distribution
Date will be distributed to the Class A certificateholders;
. an amount equal to the Class B Monthly Principal for that Distribution
Date will be distributed to the Class B certificateholders;
. an amount equal to the CTO Monthly Principal for that Distribution Date
will be distributed to the holders of the CTOs;
. an amount equal to the Class D Monthly Principal for that Distribution
Date will be distributed to the Class D certificateholders; and
. the balance, if any, will be treated as Shared Principal Collections for
other series and applied as described under "Description of the
Securities--Shared Principal Collections" beginning on page 18 of the
attached prospectus.
You will receive the final interest and principal payment on your
certificates no later than the Stated Series Termination Date. After the Stated
Series Termination Date, the trust will have no further obligation to make
interest or principal payments on the series 2000-[ ] securities.
Allocation of Default Amount
On each Determination Date, the servicer will allocate the Default Amount
for the preceding Due Period to series 2000-[ ] in an amount equal to the
product of that Default Amount and the Floating Allocation Percentage for that
Due Period. On each Determination Date, the servicer will allocate the Default
Amount allocated on that date to series 2000-[ ] among the Class A
certificates, the Class B certificates, the CTOs and the Class D certificates.
See "Description of the Securities--Allocation of Default Amount" beginning on
page 22 of the attached prospectus for a further discussion of the Default
Amount.
Calculation of Series Adjustment Amount
On each Determination Date, the servicer will calculate the Series
Adjustment Amount as of the last day of the preceding Due Period as described
under "Description of the Securities--Calculation of Series Adjustment Amount"
beginning on page 22 of the attached prospectus. On each Determination Date,
the servicer will allocate the Series Adjustment Amount as of the last day of
the preceding Due Period among the Class A certificates, the Class B
certificates, the CTOs and the Class D certificates.
The Series Adjustment Amount will be reduced to the extent that the
aggregate amount of Principal Receivables in the trust increases, amounts
allocable to series 2000-[ ] are deposited into the Excess Funding Account, the
principal balance of an outstanding series is reduced or a payment is made in
respect of the Series
S-40
<PAGE>
Adjustment Amount. Any reduction in the Series Adjustment Amount will be
allocated in the following order of priority:
. to the Class A certificates to the extent of any reduction in the Class
A Invested Amount attributable to an unreduced Series Adjustment Amount;
. to the Class B certificates to the extent of any reduction in the Class
B Invested Amount attributable to an unreduced Series Adjustment Amount;
. to the CTOs to the extent of any reduction in the CTO Invested Amount
attributable to an unreduced Series Adjustment Amount; and
. to the Class D certificates to the extent of any reduction in the Class
D Invested Amount attributable to an unreduced Series Adjustment Amount.
Calculation of Allocable Amounts
On each Determination Date, the servicer will calculate the Class A
Allocable Amount for the following Distribution Date. The Class A Allocable
Amount for any Distribution Date represents the sum of the portion of the
Default Amount for the preceding Due Period allocated to the Class A
certificates plus the portion of the Series Adjustment Amount as of the last
day of that Due Period allocated to the Class A certificates. On each
Distribution Date, the Class A Allocable Amount will be included in calculating
the Class A Required Amount, if any, for that Distribution Date.
On each Determination Date, the servicer will calculate the Class B
Allocable Amount for the following Distribution Date. The Class B Allocable
Amount for any Distribution Date represents the sum of the portion of the
Default Amount for the preceding Due Period allocated to the Class B
certificates plus the portion of the Series Adjustment Amount as of the last
day of that Due Period allocated to the Class B certificates. On each
Distribution Date, the Class B Allocable Amount will be included in calculating
the Class B Required Amount, if any, for that Distribution Date.
Reallocation of Cash Flows; Investor Charge-Offs
Class A Investor Charge-Offs
On each Determination Date, the servicer will calculate the Class A Required
Amount, if any, for the following Distribution Date. The Class A Required
Amount for any Distribution Date will be funded, to the extent necessary, from
the following sources in the following order of priority:
. Excess Spread and Shared Excess Finance Charge Collections allocated to
series 2000-[ ] on that Distribution Date and available for that
purpose; and
. collections of Principal Receivables received during the preceding Due
Period allocated to the Class D certificates, the CTOs and the Class B
certificates, which collections will be reallocated in that order of
priority.
If these sources are not sufficient to fund the Class A Required Amount for
any Distribution Date, the Class D Invested Amount, the CTO Invested Amount and
the Class B Invested Amount will be reduced on that Distribution Date, in that
order of priority, by the amount of the deficiency; provided, however, that the
Class D Invested Amount, the CTO Invested Amount and the Class B Invested
Amount will not be reduced to fund the Class A Required Amount for any
Distribution Date by more than the Class A Allocable Amount for that
Distribution Date.
If the reductions in the Class D Invested Amount, the CTO Invested Amount
and the Class B Invested Amount on any Distribution Date are not sufficient to
fund the Class A Allocable Amount for that Distribution Date, the Class A
Invested Amount will be reduced by the amount of the deficiency. This reduction
is referred to in this prospectus supplement as a Class A Investor Charge-Off
and may adversely effect the timing or
S-41
<PAGE>
amount of payments on the Class A certificates. If you hold Class A
certificates and the Class D Invested Amount, the CTO Invested Amount and the
Class B Invested Amount are reduced to zero, you will bear directly the credit
and other risks associated with your undivided interest in the trust.
Any reduction in the Class A Invested Amount attributable to an inability to
fund the Class A Allocable Amount for any Distribution Date will be reimbursed
on subsequent Distribution Dates:
. to the extent that Excess Spread and Shared Excess Finance Charge
Collections allocated to series 2000-[ ] are available for that purpose
as described in clause (2) under "--Application of Collections--Excess
Spread; Shared Excess Finance Charge Collections" beginning on page S-39
of this prospectus supplement; or
. in the case of a reduction in the Class A Invested Amount resulting from
the allocation of a Series Adjustment Amount, to the extent that a
reduction in that Series Adjustment Amount is allocated to the Class A
certificates as described under "--Calculation of Series Adjustment
Amount" beginning on page S-41 of this prospectus supplement.
Class B Investor Charge-Offs
On each Determination Date, the servicer will calculate the Class B Required
Amount, if any, for the following Distribution Date. The Class B Required
Amount for any Distribution Date will be funded, to the extent necessary, from
the following sources in the following order of priority:
. Excess Spread and Shared Excess Finance Charge Collections allocated to
series 2000-[ ] on that Distribution Date and not required to fund the
Class A Required Amount or to reimburse Class A Investor Charge-Offs for
that Distribution Date; and
. collections of Principal Receivables received during the preceding Due
Period allocated to the Class D certificates and the CTOs and not
required to fund the Class A Required Amount for that Distribution Date,
which collections will be reallocated in that order of priority.
If these sources are not sufficient to fund the Class B Required Amount for
any Distribution Date, the Class D Invested Amount and the CTO Invested Amount
will be reduced on that Distribution Date, in that order of priority, by the
amount of the deficiency; provided, however, that the Class D Invested Amount
and the CTO Invested Amount will not be reduced to fund the Class B Required
Amount for any Distribution Date by more than the Class B Allocable Amount for
that Distribution Date.
If the reductions in the Class D Invested Amount and the CTO Invested Amount
on any Distribution Date are not sufficient to fund the Class B Allocable
Amount for that Distribution Date, the Class B Invested Amount will be reduced
by the amount of the deficiency. This reduction is referred to in this
prospectus supplement as a Class B Investor Charge-Off and may adversely effect
the timing or amount of payments on the Class B certificates. If you hold Class
B certificates and the Class D Invested Amount and the CTO Invested Amount are
reduced to zero, you will bear directly the credit and other risks associated
with your undivided interest in the trust.
Any reduction in the Class B Invested Amount attributable to an inability to
fund the Class B Allocable Amount for any Distribution Date will be reimbursed
on subsequent Distribution Dates:
. to the extent that Excess Spread and Shared Excess Finance Charge
Collections allocated to series 2000-[ ] are available to reimburse
Class B Investor Charge-Offs as described in clause (4) under "--
Application of Collections--Excess Spread; Shared Excess Finance Charge
Collections" beginning on page S-39 of this prospectus supplement; or
. in the case of a reduction in the Class B Invested Amount resulting from
the allocation of a Series Adjustment Amount, to the extent that a
reduction in that Series Adjustment Amount is allocated to the Class B
certificates as described under "--Calculation of Series Adjustment
Amount" beginning on page S-41 of this prospectus supplement.
S-42
<PAGE>
CTO Investor Charge-Offs
On each Determination Date, the servicer will calculate the CTO Allocable
Amount, if any, for the following Distribution Date. If the CTO Allocable
Amount for any Distribution Date exceeds the sum of:
. the amount of Excess Spread and Shared Excess Finance Charge Collections
allocated to series 2000-[ ] and available to fund the CTO Allocable
Amount on that Distribution Date as described in clause (7) under "--
Application of Collections--Excess Spread; Shared Excess Finance Charge
Collections" beginning on page S-39 of this prospectus supplement; plus
. the amount available to be withdrawn from the Spread Account to fund the
CTO Allocable Amount on that Distribution Date in accordance with the
series 2000-[ ] supplement; plus
. collections of Principal Receivables received during the preceding Due
Period allocated to the Class D certificates and not required to fund
the Class A Required Amount or the Class B Required Amount for that
Distribution Date;
the Class D Invested Amount will be reduced on that Distribution Date by the
amount of that excess. If the reduction in the Class D Invested Amount on any
Distribution Date is not sufficient to fund the CTO Allocable Amount for that
Distribution Date, the CTO Invested Amount will be reduced by the amount of the
deficiency. This reduction is referred to in this prospectus supplement as a
CTO Investor Charge-Off.
Class D Investor Charge-Offs
On each Determination Date, the servicer will calculate the Class D
Allocable Amount, if any, for the following Distribution Date. If the Class D
Allocable Amount for any Distribution Date exceeds the amount of Excess Spread
and Shared Excess Finance Charge Collections allocated to series 2000-[ ] and
available to fund the Class D Allocable Amount on that Distribution Date as
described in clause (12) under "--Application of Collections--Excess Spread;
Shared Excess Finance Charge Collections" beginning on page S-39 of this
prospectus supplement, the Class D Invested Amount will be reduced on that
Distribution Date by the amount of that excess. This reduction is referred to
in this prospectus supplement as a Class D Investor Charge-Off.
Early Amortization Events
An Early Amortization Event will occur with respect to series 2000-[ ] upon
the occurrence of any of the events described under "Description of the
Securities--Early Amortization Events" beginning on page 24 of the attached
prospectus or, upon satisfaction of various notice requirements, if any of the
following events occurs:
(1) FNANB fails to make any payment or deposit when required under the
master pooling and servicing agreement or within a five Business Day grace
period;
(2) FNANB fails to observe or perform in any material respect any of
its other covenants or agreements under the master pooling and servicing
agreement and that failure continues unremedied for 60 days after written
notice of that failure, requiring that it be remedied, is given to FNANB
by the trustee, or to FNANB and the trustee by the holders of not less
than 50% of the Invested Amount, and that failure materially and adversely
affects the interests of the holders of the securities of any outstanding
series;
(3) any representation or warranty made by FNANB in the master pooling
and servicing agreement or the series 2000-[ ] supplement proves to have
been incorrect in any material respect when made, that representation or
warranty continues to be incorrect in any material respect for 60 days
after written notice of that incorrectness, requiring that it be remedied,
is given to FNANB by the trustee, or to FNANB and the trustee by the
holders of not less than 50% of the Invested Amount, and that
incorrectness materially and adversely affects the interests of the
holders of the securities of any outstanding series; provided, however,
that if that representation or warranty relates to a particular receivable
or group of receivables, an Early Amortization Event will not occur if
FNANB has accepted reassignment of that receivable or group of receivables
during that 60-day period, or during such longer
S-43
<PAGE>
period not to exceed 180 days as the trustee may specify, in accordance
with the master pooling and servicing agreement;
(4) various events of bankruptcy, insolvency, receivership or
conservatorship occur with respect to FNANB or Circuit City;
(5) a Servicer Default occurs that has a material adverse effect on the
series 2000-[ ] securities;
(6) FNANB fails to designate Designated Additional Accounts or cause
the trust to repurchase the securities of other series when required to do
so under the master pooling and servicing agreement;
(7) the average of the Portfolio Yields for any three consecutive Due
Periods is less than the average of the Base Rates for those Due Periods;
(8) [the Interest Rate Cap Provider fails to make any payment when
required under the Class A Interest Rate Cap or the Class B Interest Rate
Cap or within a five business day grace period]; or
(9) the Class A certificates, the Class B certificates or the CTOs are
not paid in full on the Expected Final Distribution Date.
If an event described in clause (1), (2), (3) or (5) above occurs, an Early
Amortization Event will be deemed to have occurred with respect to series 2000-
[ ] only if the trustee, by written notice to FNANB and the servicer, or the
holders of more than 50% of the Invested Amount, by written notice to FNANB,
the servicer and the trustee, declare that an Early Amortization Event has
occurred. Any such Early Amortization Event will be deemed to have occurred as
of the date of that notice.
If an event described in clause (4), (6), (7), (8) or (9) above occurs, an
Early Amortization Event will be deemed to have occurred with respect to all
outstanding series immediately upon the occurrence of that event without any
notice or other action by the trustee or the certificateholders.
Servicing Compensation
The servicer receives a monthly fee for its servicing activities under the
master pooling and servicing agreement. The share of the monthly servicing fee
allocated to series 2000-[ ] for each Distribution Date will equal one-twelfth
of the product of 2.00% and the Invested Amount as of the last day of the
preceding Due Period; provided, however, that the monthly servicing fee
allocated to series 2000-[ ] for the first Distribution Date will equal $[ ].
The monthly servicing fee allocated to series 2000-[ ] for each Distribution
Date will be allocated among the Class A certificates, the Class B
certificates, the CTOs and the Class D certificates.
The Class A Servicing Fee, the Class B Servicing Fee, the CTO Servicing Fee
and the Class D Servicing Fee for each Distribution Date will be payable on
that Distribution Date only to the extent that funds are available to make
those payments. If the monthly servicing fee due on any Distribution Date is
not paid in full, the shortfall will be due on the next Distribution Date. The
share of the monthly servicing fee not allocated to series 2000-[ ] will be
paid by FNANB or from amounts allocated to other series. In no event will the
trust, the trustee or the holders of the series 2000-[ ] securities be liable
for the share of the monthly servicing fee to be paid by FNANB or from amounts
allocated to other series.
Amendments Relating to FASIT Election
Each holder of the series 2000-[ ] securities, by acquiring an interest in a
series 2000-[ ] security, will be deemed to have consented to any amendment to
the master pooling and servicing agreement or the series 2000-[ ] supplement
necessary for FNANB to elect FASIT status for the trust or any portion of the
trust. FNANB may only elect FASIT status for the trust if it delivers to the
trustee an opinion of counsel to the effect that:
. the issuance of FASIT regular interests will not adversely affect the
tax characterization as debt of the securities of any outstanding series
or class for which an opinion of counsel was delivered at the time of
their issuance that those securities would be characterized as debt;
S-44
<PAGE>
. following the issuance of FASIT regular interests, the trust will not be
classified for federal income tax purposes as an association, or
publicly traded partnership, taxable as a corporation; and
. the issuance of FASIT regular interests will not cause or constitute an
event in which gain or loss would be recognized by any certificateholder
of any series.
S-45
<PAGE>
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes the federal income tax treatment
applicable to the offered certificates. See "Material Federal Income Tax
Consequences" beginning on page 46 of the attached prospectus for a further
discussion of the material federal income tax consequences of the purchase,
ownership and disposition of the offered certificates.
This discussion is based upon current provisions of the Internal Revenue
Code of 1986, as amended, existing and proposed Treasury regulations
promulgated under the Internal Revenue Code and published rulings and court
decisions in effect as of the date of this prospectus supplement, all of which
are subject to change, possibly with retroactive effect. Any changes in these
provisions, regulations, rulings or decisions could modify or adversely affect
the tax consequences summarized below. We will not seek a ruling from the IRS
with respect to any of the federal income tax consequences discussed in this
prospectus supplement and cannot assure you that the IRS will not challenge the
conclusions reached in this prospectus supplement.
The opinion of McGuire, Woods, Battle & Boothe, LLP, special tax counsel to
FNANB, described in this prospectus supplement assumes that all relevant
parties will comply with the terms of the master pooling and servicing
agreement, the series 2000-[ ] supplement and all related documents. If the
relevant parties fail to comply with the terms of the master pooling and
servicing agreement, the series 2000-[ ] supplement or any related document,
the conclusions of special tax counsel reached in the opinion and the
discussion of the federal income tax consequences set forth in this prospectus
supplement may not be accurate.
Tax Treatment of the Certificates
FNANB expresses in the master pooling and servicing agreement its intent
that, for federal, state and local income and franchise tax purposes, the
offered certificates will be indebtedness secured by the receivables in the
trust. FNANB has agreed, and each certificateholder and Certificate Owner, by
acquiring an interest in an offered certificate, will be deemed to agree, to
treat the offered certificates as indebtedness for federal, state and local
income and franchise tax purposes except to the extent that different treatment
is explicitly required under state or local tax statutes. Because different
criteria are used to determine the non-tax accounting characterization of the
transaction contemplated by the master pooling and servicing agreement and the
series 2000-[ ] supplement, FNANB expects to treat the transaction, for
regulatory and financial accounting purposes, as a sale of an ownership
interest in the receivables and not as a secured loan.
In general, whether a sale of property constitutes, for federal income tax
purposes, a sale of an ownership interest in that property or a loan the
repayment of which is secured by that property is a question of fact, the
resolution of which is based upon the economic substance of the transaction.
While the IRS and the courts have set forth several factors to be taken into
account in determining whether the substance of a transaction is a sale or a
secured loan for federal income tax purposes, the primary factor in making this
determination in connection with the transaction contemplated by the master
pooling and servicing agreement and the series 2000-[ ] supplement is whether
FNANB has assumed the risk of loss or other economic burdens relating to the
receivables and has retained the benefits of ownership of the receivables.
McGuire, Woods, Battle & Boothe LLP, special tax counsel to FNANB, is of the
opinion that, under current law and based on its analysis of the transaction
contemplated by the master pooling and servicing agreement and the series 2000-
[ ] supplement, although no transaction closely comparable to that transaction
has been the subject of any Treasury regulation, revenue ruling or judicial
decision, the offered certificates will be treated as indebtedness for federal
income tax purposes.
S-46
<PAGE>
ERISA CONSIDERATIONS
ERISA and the Internal Revenue Code impose requirements on Plans and Plan
fiduciaries. A Plan fiduciary considering an investment in the offered
certificates should determine, among other factors, whether that investment is
permitted under the governing Plan, is appropriate for the Plan in view of its
overall investment policy and the composition and diversification of its
portfolio and is prudent considering the factors discussed in this prospectus
supplement and the attached prospectus.
ERISA and the Internal Revenue Code prohibit various transactions involving
the assets of a Plan and persons referred to as parties in interest under ERISA
or disqualified persons under the Internal Revenue Code. A prohibited
transaction may subject disqualified persons to excise taxes and Plan
fiduciaries to other liabilities. A Plan fiduciary considering an investment in
the offered certificates should also consider whether that investment might
constitute a prohibited transaction under ERISA or the Internal Revenue Code.
A transaction involving the operation of the trust might constitute a
prohibited transaction under ERISA and the Internal Revenue Code if assets of
the trust were deemed to be assets of an investing Plan. We believe that the
offered certificates are likely to be deemed to be assets of an investing Plan
for purposes of ERISA and the Internal Revenue Code unless an exception is
available under the plan asset regulations.
Class A Certificates
The assets of the trust will not be deemed to be assets of a Plan that
invests in the Class A certificates if the Class A certificates qualify as
publicly offered securities under the plan asset regulations. A publicly-
offered security is a security that is freely transferable, part of a class of
securities that is owned by 100 or more investors independent of the issuer and
of one another and either:
. part of a class of securities registered under the Exchange Act; or
. sold to the Plan as part of an offering of securities to the public
under the Securities Act; provided, however, that the class of
securities of which the security is a part must be registered under the
Exchange Act within 120 days, or later if allowed by the SEC, after the
end of the fiscal year of the issuer during which the offering of the
securities to the public occurred.
The underwriters of the Class A certificates expect that the Class A
certificates will qualify as publicly offered securities under the plan asset
regulations. We cannot assure you that the Class A certificates will be held by
100 or more independent investors, however, and no monitoring or other measures
will be taken to insure that this requirement of the publicly offered security
exception will be satisfied. If the Class A certificates do not qualify as
publicly offered securities under the plan asset regulations, the assets of the
trust may be deemed to be assets of any Plan that invests in the Class A
certificates. In that event, transactions involving the trust and either
parties in interest or disqualified persons with respect to an investing Plan
might be prohibited under ERISA or the Internal Revenue Code and could subject
disqualified persons to excise taxes and Plan fiduciaries to other liabilities.
Class B Certificates
The underwriters of the Class B certificates do not expect that the Class B
certificates will be held by at least 100 independent investors, and,
therefore, we do not expect that the Class B certificates will qualify as
publicly-offered securities under the plan asset regulations. As a result, the
Class B certificates may not be acquired or held by a Plan. Each Class B
certificateholder will be deemed, by its acceptance of a Class B certificate,
to have represented and warranted that it is not a Plan.
Consultation with Counsel
We suggest that Plan fiduciaries or other persons considering an investment
in the offered certificates on behalf of or with the assets of a Plan consult
their own counsel concerning the consequences to the Plan of that
S-47
<PAGE>
investment, including the consequences to the Plan if the assets of the trust
were to become subject to the fiduciary and prohibited transaction rules of
ERISA and the Internal Revenue Code.
UNDERWRITING
FNANB has agreed to sell to each underwriter listed below, and that
underwriter has agreed to purchase, the principal amount of offered
certificates of each class set forth next to that underwriter's name.
<TABLE>
<CAPTION>
Principal Amount of
Underwriters Class A Certificates
------------ --------------------
<S> <C>
[ ]............................................... $[ ]
[ ]............................................... [ ]
[ ]............................................... [ ]
------
Total.............................................. $[ ]
======
<CAPTION>
Principal Amount of
Underwriters Class B Certificates
------------ --------------------
<S> <C>
[ ]............................................... $[ ]
[ ]............................................... [ ]
[ ]............................................... [ ]
------
Total.............................................. $[ ]
======
</TABLE>
The underwriters' obligation to acquire the offered certificates will be
subject to various conditions. The underwriters will offer the offered
certificates for sale only if the trust issues the offered certificates and all
conditions to the issuance of the offered certificates are satisfied or waived.
The underwriters have agreed to purchase all of the offered certificates if any
of the offered certificates is purchased.
The underwriters of the Class A certificates propose initially to offer the
Class A certificates to the public at the price set forth on the cover page of
this prospectus supplement and to dealers at that price less concessions not in
excess of [ ]% of the principal amount of the Class A certificates. The
underwriters may allow, and dealers may reallow, concessions not in excess of
[ ]% of the principal amount of the Class A certificates to brokers and
dealers. After the initial public offering, the underwriters may change the
public offering price and other selling terms applicable to the Class A
certificates.
The underwriters of the Class B certificates propose initially to offer the
Class B certificates to the public at the price set forth on the cover page of
this prospectus supplement and to dealers at that price less concessions not in
excess of [ ]% of the principal amount of the Class B certificates. The
underwriters may allow, and dealers may reallow, concessions not in excess of
[ ]% of the principal amount of the Class B certificates to brokers and
dealers. After the initial public offering, the underwriters may change the
public offering price and other selling terms applicable to the Class B
certificates.
The public offering price, the underwriting discounts and commissions and
the proceeds to FNANB, each expressed as a percentage of the principal amount
of each class of the offered certificates and as a dollar amount, are as
follows:
<TABLE>
<CAPTION>
Per Class A Per Class B
Certificate Certificate Total
----------- ----------- ------
<S> <C> <C> <C>
Public Offering Price........................ [ ]% [ ]% $[ ]
Underwriting Discounts and Commissions....... [ ]% [ ]% [ ]
Proceeds to FNANB............................ [ ]% [ ]% $[ ]
</TABLE>
FNANB estimates that additional offering expenses will equal $[ ].
S-48
<PAGE>
FNANB will indemnify the underwriters against various liabilities, including
liabilities under the federal securities laws or will contribute to any amounts
the underwriters may be required to pay with respect to those liabilities.
Until the distribution of the offered certificates is completed, the rules
of the SEC may limit the ability of the underwriters and selling group members
to bid for and purchase the offered certificates. As an exception to these
rules, the underwriters will be permitted to engage in over-allotment
transactions, stabilizing transactions, syndicate covering transactions and
penalty bids with respect to the offered certificates in accordance with
Regulation M under the Exchange Act. See "Plan of Distribution" beginning on
page 54 of the attached prospectus for a further discussion of these
transactions and their potential effect on the price of the offered
certificates.
Each underwriter has represented and agreed that:
. it has not offered or sold and will not offer or sell the offered
certificates to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments, as principal or agent, for the purpose of
their businesses or otherwise in circumstances which do not constitute
an offer to the public in the United Kingdom for purposes of the Public
Offers of Securities Regulations 1995;
. it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issue
of the offered certificates to a person who is of a kind described in
Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996, as amended, or is a person to
whom the document may otherwise lawfully be issued or passed on;
. it has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in
relation to the offered certificates in, from or otherwise involving the
United Kingdom; and
. if that underwriter is an authorized person under the Financial Services
Act 1986, it has only promoted and will only promote, as that term is
defined in Regulation 1.02 of the Financial Services (Promotion of
Unregulated Schemes) Regulations 1991, to any person in the United
Kingdom the scheme described in this prospectus supplement if that
person is of a kind described either in Section 76(2) of the Financial
Services Act 1986 or in Regulation 1.04 of the Financial Services
(Promotion of Unregulated Schemes) Regulations 1991.
LEGAL MATTERS
Various legal matters relating to the issuance of the offered certificates
and various federal income tax matters relating to the trust and the offered
certificates will be passed upon for FNANB by McGuire, Woods, Battle & Boothe
LLP, Richmond, Virginia. Various legal matters relating to the issuance of the
offered certificates will be passed upon for the underwriters by Orrick,
Herrington & Sutcliffe LLP, Washington, D.C.
GLOSSARY OF DEFINED TERMS
"Accumulation Period" means the period commencing at the close of business
on the last day of the [ ] 20[ ] Due Period, or such later date on which the
Accumulation Period may commence following a postponement of the commencement
of the Accumulation Period as described under "Description of the Offered
Certificates--Postponement of Accumulation Period" beginning on page S-33 of
this prospectus supplement or a suspension of the Accumulation Period as
described under "Description of the Offered Certificates--Suspension of
Accumulation Period" beginning on page S-34 of this prospectus supplement, and
ending on the earliest of:
S-49
<PAGE>
. the close of business on the day preceding the commencement of the Early
Amortization Period;
. the date on which the series 2000-[ ] securities are paid in full; and
. the Stated Series Termination Date.
"Adjusted Invested Amount" means, as of any date, the Invested Amount as of
that date plus the amount on deposit in the Principal Funding Account as of
that date.
"Available Principal Collections" means, for any Distribution Date:
. in the case of any Distribution Date relating to the Revolving Period,
the Floating Allocation Percentage of all collections of Principal
Receivables received during the preceding Due Period; plus
. in the case of any Distribution Date relating to the Accumulation Period
or during the Early Amortization Period, the Fixed Allocation Percentage
of all collections of Principal Receivables received during the
preceding Due Period; plus
. any Class A Available Funds to be treated as Available Principal
Collections on that Distribution Date as described under "Description of
the Offered Certificates--Application of Collections--Payment of
Interest, Fees and Other Items" beginning on page S-38 of this
prospectus supplement; plus
. any available Excess Spread or Shared Excess Finance Charge Collections
to be treated as Available Principal Collections on that Distribution
Date as described under "Description of the Offered Certificates--
Application of Collections--Excess Spread; Shared Excess Finance Charge
Collections" beginning on page S-39 of this prospectus supplement; plus
. the amount of Shared Principal Collections allocated to series 2000-[ ]
on that Distribution Date; plus
. during the Early Amortization Period, amounts, if any, on deposit in the
Excess Funding Account allocated to series 2000-[ ] on that Distribution
Date; minus
. the amount of Reallocated Principal Collections applied on that
Distribution Date.
"Average Excess Spread Percentage" means, for any Distribution Date, the
average of the Excess Spread Percentages for the three consecutive Due Periods
preceding that Distribution Date.
"Base Rate" means, for any Due Period:
. the annualized percentage equivalent of a fraction, the numerator of
which is the sum of the Class A Monthly Interest, the Class B Monthly
Interest, the CTO Monthly Interest and the Class D Monthly Interest, in
each case for the following Distribution Date, and the denominator of
which is the Adjusted Invested Amount as of the last day of the Due
Period preceding that Due Period; plus
. the product of 2.00% per annum and a fraction, the numerator of which is
the Invested Amount as of the last day of that preceding Due Period and
the denominator of which is the Adjusted Invested Amount as of the last
day of that preceding Due Period.
"Class A Additional Interest" means, for any Distribution Date, interest on
any interest amounts that were due but not paid to the Class A
certificateholders on a prior Distribution Date, which interest will accrue at
a rate equal to the Class A interest rate [for the preceding Interest Period]
plus 2.00% per annum.
"Class A Adjustment Amount" means, for any Distribution Date, the product
of:
. the Series Adjustment Amount as of the last day of the preceding Due
Period; and
. the percentage equivalent of a fraction, the numerator of which is the
Class A Invested Amount and the denominator of which is the Invested
Amount, in each case as of the last day of the Due Period preceding that
preceding Due Period.
S-50
<PAGE>
"Class A Allocable Amount" means, for any Distribution Date, the Class A
Default Amount for that Distribution Date plus the Class A Adjustment Amount
for that Distribution Date.
"Class A Available Funds" means, for any Due Period:
. in the case of any Due Period during the Revolving Period or the
Accumulation Period, the Class A Floating Allocation Percentage of all
collections of Finance Charge Receivables received during that Due
Period, including the net investment earnings, if any, on funds on
deposit in the Excess Funding Account to be treated as collections of
Finance Charge Receivables in accordance with the series 2000-[ ]
supplement; plus
. in the case of any Due Period during the Early Amortization Period, the
Class A Fixed Allocation Percentage of all collections of Finance Charge
Receivables received during that Due Period, including the net
investment earnings, if any, on funds on deposit in the Excess Funding
Account to be treated as collections of Finance Charge Receivables for
that Due Period in accordance with the series 2000-[ ] supplement; plus
. [the amount, if any, paid to the trust on the following Distribution
Date under the Class A Interest Rate Cap as described under "Description
of the Offered Certificates--The Interest Rate Caps" beginning on page
S-30 of this prospectus supplement]; plus
. the applicable PFA Allocation Percentage of all net investment earnings,
if any, on funds on deposit in the Principal Funding Account received
during that Due Period; plus
. the amount, if any, to be withdrawn from the Reserve Account and applied
as Class A Available Funds on the following Distribution Date in
accordance with the series 2000-[ ] supplement; plus
. the net investment earnings, if any, on funds on deposit in the Reserve
Account received during that Due Period to be withdrawn from the Reserve
Account and applied as Class A Available Funds on that following
Distribution Date in accordance with the series 2000-[ ] supplement.
"Class A Default Amount" means, for any Distribution Date, an amount equal
to the product of the Default Amount for the preceding Due Period and the Class
A Floating Allocation Percentage for that preceding Due Period.
"Class A Fixed Allocation Percentage" means, for any Due Period, the
percentage equivalent of a fraction, the numerator of which is the Class A
Invested Amount as of the last day of the Revolving Period and the denominator
of which is equal to the greater of:
. the aggregate amount of Principal Receivables in the trust, other than
Principal Receivables that have been charged-off, as of the last day of
the preceding Due Period plus the amount on deposit in the Excess
Funding Account as of the end of that last day plus the aggregate amount
of Principal Receivables in all Designated Additional Accounts
designated during the Due Period for which the Class A Fixed Allocation
Percentage is being calculated; and
. the sum of the numerators used to calculate the corresponding allocation
percentages for all outstanding series;
provided, however, that FNANB may, by written notice to the trustee and the
servicer, designate a different numerator to be used to calculate the Class A
Fixed Allocation Percentage if:
. the series 2000-[ ] securities are paired with a Companion Series and
the Early Amortization Period, as defined in the series supplement for
that Companion Series, begins; and
. the numerator designated by FNANB is not less than the Class A Invested
Amount as of the last day of the Revolving Period, as defined in the
series supplement for that Companion Series.
"Class A Floating Allocation Percentage" means, for any Due Period, the
percentage equivalent of a fraction, the numerator of which is the Class A
Invested Amount as of the last day of the preceding Due Period
S-51
<PAGE>
or, in the case of the initial Due Period applicable to series 2000-[ ], the
Class A Initial Invested Amount and the denominator of which is equal to the
greater of:
. the aggregate amount of Principal Receivables, other than Principal
Receivables that have been charged-off, in the trust as of that last day
or, in the case of the initial Due Period applicable to series 2000-[ ],
as of the Closing Date plus the amount on deposit in the Excess Funding
Account as of the end of that last day plus the aggregate amount of
Principal Receivables in all Designated Additional Accounts designated
during the Due Period for which the Class A Floating Allocation
Percentage is being calculated; and
. the sum of the numerators used to calculate the corresponding allocation
percentages for all outstanding series.
"Class A Initial Invested Amount" means $[ ].
["Class A Interest Rate Cap" means the interest rate protection agreement
between the trust and the Interest Rate Cap Provider entered into for the
exclusive benefit of the Class A certificateholders].
"Class A Invested Amount" means, as of any date, the Class A Initial
Invested Amount minus the aggregate amount on deposit in the Principal Funding
Account on that date in respect of Class A Monthly Principal minus the
aggregate amount of principal payments made to the Class A certificateholders
prior to that date minus the aggregate amount of Class A Investor Charge-Offs
for all prior Distribution Dates plus the amount of Excess Spread and Shared
Excess Finance Charge Collections allocated and available on all prior
Distribution Dates to reimburse Class A Investor Charge-Offs plus, without
duplication, reductions of the Class A Adjustment Amount for all prior
Distribution Dates; provided, however, that the Class A Invested Amount may not
be less than zero.
"Class A Investor Charge-Offs" means, for any Distribution Date, the amount
of any reduction in the Class A Invested Amount made to fund the Class A
Allocable Amount for that Distribution Date as described under "Description of
the Offered Certificates--Reallocation of Cash Flows; Investor Charge-Offs--
Class A Investor Charge-Offs" beginning on page S-42 of this prospectus
supplement.
"Class A Monthly Interest" means, for any Distribution Date, [one twelfth
of] the product of:
. the Class A interest rate [for the preceding Interest Period];
. [a fraction, the numerator of which is the actual number of days in that
preceding Interest Period and the denominator of which is 360]; and
. the outstanding principal balance of the Class A certificates as of the
close of business on the preceding Distribution Date or, in the case of
the initial Distribution Date, as of the Closing Date;
[provided, however, that Class A Monthly Interest for the initial Distribution
Date will equal $[ ]].
"Class A Monthly Principal" means, for any Distribution Date relating to the
Accumulation Period or the Early Amortization Period, the least of:
. the Available Principal Collections for that Distribution Date;
. if that Distribution Date relates to the Accumulation Period, the
Controlled Deposit Amount for that Distribution Date; and
. the Class A Invested Amount as of that Distribution Date plus any
portion of the Available Principal Collections for that Distribution
Date previously deposited into the Principal Funding Account in respect
of Class A Monthly Principal;
provided, however, that, if the Accumulation Period is suspended and then
reinstated after the later of the date on which the Accumulation Period was
scheduled to begin before giving effect to that suspension and the date to
which the commencement of the Accumulation Period may be postponed in
accordance with the series 2000-
S-52
<PAGE>
[ ] supplement, Class A Monthly Principal for any Distribution Date relating to
the Accumulation Period will be calculated without regard to the Controlled
Deposit Amount for that Distribution Date.
"Class A Required Amount" means, for any Distribution Date, the amount, if
any, by which:
. the Class A Monthly Interest for that Distribution Date plus any unpaid
Class A Monthly Interest for prior Distribution Dates plus any Class A
Additional Interest for that Distribution Date plus, if FNANB is no
longer the servicer, the Class A Servicing Fee for that Distribution
Date plus any unpaid Class A Servicing Fees for prior Distribution Dates
plus the Class A Allocable Amount for that Distribution Date; exceeds
. the Class A Available Funds for the preceding Due Period.
"Class A Servicing Fee" means, for any Distribution Date, one-twelfth of the
product of 2.00% and the Class A Invested Amount as of the last day of the
preceding Due Period; provided, however, that the Class A Servicing Fee for the
initial Distribution Date will equal $[ ].
"Class B Additional Interest" means, for any Distribution Date, interest on
any interest amounts that were due but not paid to the Class B
certificateholders on a prior Distribution Date, which interest will accrue at
a rate equal to the Class B interest rate [for the preceding Interest Period]
plus 2.00% per annum.
"Class B Adjustment Amount" means, for any Distribution Date, the product
of:
. the Series Adjustment Amount as of the last day of the preceding Due
Period; and
. the percentage equivalent of a fraction, the numerator of which is the
Class B Invested Amount and the denominator of which is the Invested
Amount, in each case as of the last day of the Due Period preceding that
preceding Due Period.
"Class B Allocable Amount" means, for any Distribution Date, the Class B
Default Amount for that Distribution Date plus the Class B Adjustment Amount
for that Distribution Date.
"Class B Available Funds" means, for any Due Period:
. in the case of any Due Period during the Revolving Period or the
Accumulation Period, the Class B Floating Allocation Percentage of all
collections of Finance Charge Receivables received during that Due
Period, including the net investment earnings, if any, on funds on
deposit in the Excess Funding Account to be treated as collections of
Finance Charge Receivables for that Due Period in accordance with the
series 2000-[ ] supplement; plus
. in the case of any Due Period during the Early Amortization Period, the
Class B Fixed Allocation Percentage of all collections of Finance Charge
Receivables received during that Due Period, including the net
investment earnings, if any, on funds on deposit in the Excess Funding
Account to be treated as collections of Finance Charge Receivables for
that Due Period in accordance with the series 2000-[ ] supplement; plus
. [the amount, if any, paid to the trust on the following Distribution
Date under the Class B Interest Rate Cap as described under "Description
of the Offered Certificates--The Interest Rate Caps" beginning on page
S-30 of this prospectus supplement]; plus
. the applicable PFA Allocation Percentage of all net investment earnings,
if any, on funds on deposit in the Principal Funding Account received
during that Due Period; plus
. the amount, if any, to be withdrawn from the Reserve Account and applied
as Class B Available Funds on the following Distribution Date in
accordance with the series 2000-[ ] supplement; plus
. the net investment earnings, if any, on funds on deposit in the Reserve
Account received during that Due Period to be withdrawn from the Reserve
Account and applied as Class B Available Funds on that following
Distribution Date in accordance with the series 2000-[ ] supplement.
S-53
<PAGE>
"Class B Default Amount" means, for any Distribution Date, an amount equal
to the product of the Default Amount for the preceding Due Period and the Class
B Floating Allocation Percentage for that preceding Due Period.
"Class B Fixed Allocation Percentage" means, for any Due Period, the
percentage equivalent of a fraction, the numerator of which is the Class B
Invested Amount as of the last day of the Revolving Period and the denominator
of which is equal to the greater of:
. the aggregate amount of Principal Receivables in the trust, other than
Principal Receivables that have been charged-off, as of the last day of
the preceding Due Period plus the amount on deposit in the Excess
Funding Account as of the end of that last day plus the aggregate amount
of Principal Receivables in all Designated Additional Accounts
designated during the Due Period for which the Class B Fixed Allocation
Percentage is being calculated; and
. the sum of the numerators used to calculate the corresponding allocation
percentages for all outstanding series.
provided, however, that FNANB may, by written notice to the trustee and the
servicer, designate a different numerator to be used to calculate the Class B
Fixed Allocation Percentage if:
. the series 2000-[ ] securities are paired with a Companion Series and
the Early Amortization Period, as defined in the series supplement for
that Companion Series, begins; and
. the numerator designated by FNANB is not less than the Class B Invested
Amount as of the last day of the Revolving Period, as defined in the
series supplement for that Companion Series.
"Class B Floating Allocation Percentage" means, for any Due Period, the
percentage equivalent of a fraction, the numerator of which is the Class B
Invested Amount as of the last day of the preceding Due Period or, in the case
of the initial Due Period applicable to series 2000-[ ], the Class B Initial
Invested Amount and the denominator of which is equal to the greater of:
. the aggregate amount of Principal Receivables, other than Principal
Receivables that have been charged-off, in the trust as of that last day
or, in the case of the initial Due Period applicable to series 2000-[ ],
as of the Closing Date plus the amount on deposit in the Excess Funding
Account as of the end of that last day plus the aggregate amount of
Principal Receivables in all Designated Additional Accounts designated
during the Due Period for which the Class B Floating Allocation
Percentage is being calculated; and
. the sum of the numerators used to calculate the corresponding allocation
percentages for all outstanding series.
"Class B Initial Invested Amount" means $[ ].
["Class B Interest Rate Cap" means the interest rate protection agreement
between the trust and the Interest Rate Cap Provider entered into for the
exclusive benefit of the Class B certificateholders.]
"Class B Invested Amount" means, as of any date, the Class B Initial
Invested Amount minus the aggregate amount on deposit in the Principal Funding
Account on that date in respect of Class B Monthly Principal minus the
aggregate amount of principal payments made to the Class B certificateholders
prior to that date minus the aggregate amount of Class B Investor Charge-Offs
for all prior Distribution Dates minus the amount of Reallocated Principal
Collections applied to fund payments in respect of the Class A certificates on
all prior Distribution Dates that have not resulted in a reduction in the Class
D Invested Amount or the CTO Invested Amount minus, without duplication, the
amount by which the Class B Invested Amount has been reduced on all prior
Distribution Dates to fund the Class A Allocable Amount plus the amount of
Excess Spread and Shared Excess Finance Charge Collections allocated and
available on all prior Distribution Dates to reimburse Class B Investor Charge-
Offs, Reallocated Principal Collections described above or other reductions in
the Class B Invested Amount made to fund the Class A Allocable Amount plus,
without duplication,
S-54
<PAGE>
reductions of the Class B Adjustment Amount for all prior Distribution Dates;
provided, however, that the Class B Invested Amount may not be less than zero.
"Class B Investor Charge-Offs" means, for any Distribution Date, the amount
of any reduction in the Class B Invested Amount made to fund the Class B
Allocable Amount for that Distribution Date as described under "Description of
the Offered Certificates--Reallocation of Cash Flows; Investor Charge-Offs--
Class B Investor Charge-Offs" beginning on page S-43 of this prospectus
supplement.
"Class B Monthly Interest" means, for any Distribution Date, [one twelfth
of] the product of:
. the Class B interest rate [for the preceding Interest Period];
. [a fraction, the numerator of which is the actual number of days in that
preceding Interest Period and the denominator of which is 360]; and
. the outstanding principal balance of the Class B certificates as of the
close of business on the preceding Distribution Date or, in the case of
the initial Distribution Date, as of the Closing Date;
[provided, however, that Class B Monthly Interest for the initial Distribution
Date will equal $[ ]].
"Class B Monthly Principal" means, for any Distribution Date relating to the
Accumulation Period or the Early Amortization Period, the least of:
. the Available Principal Collections for that Distribution Date minus any
portion of those Available Principal Collections applied to Class A
Monthly Principal for that Distribution Date;
. if that Distribution Date relates to the Accumulation Period, the
Controlled Deposit Amount for that Distribution Date minus the Class A
Monthly Principal for that Distribution Date; and
. the Class B Invested Amount as of that Distribution Date plus any
portion of the Available Principal Collections for that Distribution
Date previously deposited into the Principal Funding Account in respect
of Class B Monthly Principal;
provided, however, that, if the Accumulation Period is suspended and then
reinstated after the later of the date on which the Accumulation Period was
scheduled to begin before giving effect to that suspension and the date to
which the commencement of the Accumulation Period may be postponed in
accordance with the series 2000-[ ] supplement, Class B Monthly Principal for
any Distribution Date relating to the Accumulation Period will be calculated
without regard to the Controlled Deposit Amount for that Distribution Date.
"Class B Required Amount" means, for any Distribution Date:
. the amount, if any, by which the Class B Monthly Interest for that
Distribution Date plus any unpaid Class B Monthly Interest for prior
Distribution Dates plus any Class B Additional Interest for that
Distribution Date plus, if FNANB is no longer the servicer, the Class B
Servicing Fee for that Distribution Date plus any unpaid Class B
Servicing Fees for prior Distribution Date exceeds the Class B Available
Funds for the preceding Due Period; plus
. the Class B Allocable Amount for that Distribution Date.
"Class B Servicing Fee" means, for any Distribution Date, one-twelfth of the
product of 2.00% and the Class B Invested Amount as of the last day of the
preceding Due Period; provided, however, that the Class B Servicing Fee for the
initial Distribution Date will equal $[ ].
"Class D Additional Interest" means, for any Distribution Date, interest on
any interest amounts that were due but not paid to the Class D
certificateholders on a prior Distribution Date, which interest will accrue at
a rate equal to the Class D interest rate for the preceding Interest Period
plus 2.00% per annum.
"Class D Adjustment Amount" means, for any Distribution Date, the product
of:
. the Series Adjustment Amount as of the last day of the preceding Due
Period; and
S-55
<PAGE>
. the percentage equivalent of a fraction, the numerator of which is the
Class D Invested Amount and the denominator of which is the Invested
Amount, in each case as of the last day of the Due Period preceding that
preceding Due Period.
"Class D Allocable Amount" means, for any Distribution Date, the Class D
Default Amount for that Distribution Date plus the Class D Adjustment Amount
for that Distribution Date.
"Class D Available Funds" means, for any Due Period:
. in the case of any Due Period during the Revolving Period or the
Accumulation Period, the Class D Floating Allocation Percentage of all
collections of Finance Charge Receivables received during that Due
Period, including the net investment earnings, if any, on funds on
deposit in the Excess Funding Account to be treated as collections of
Finance Charge Receivables for that Due Period in accordance with the
series 2000-[ ] supplement; plus
. in the case of any Due Period during the Early Amortization Period, the
Class D Fixed Allocation Percentage of all collections of Finance Charge
Receivables received during that Due Period, including the net
investment earnings, if any, on funds on deposit in the Excess Funding
Account to be treated as collections of Finance Charge Receivables for
that Due Period in accordance with the series 2000-[ ] supplement.
"Class D Default Amount" means, for any Distribution Date, an amount equal
to the product of the Default Amount for the preceding Due Period and the Class
D Floating Allocation Percentage for that preceding Due Period.
"Class D Fixed Allocation Percentage" means, for any Due Period, the
percentage equivalent of a fraction, the numerator of which is the Class D
Invested Amount as of the last day of the Revolving Period and the denominator
of which is equal to the greater of:
. the aggregate amount of Principal Receivables in the trust, other than
Principal Receivables that have been charged-off, as of the last day of
the preceding Due Period plus the amount on deposit in the Excess
Funding Account as of the end of that last day plus the aggregate amount
of Principal Receivables in all Designated Additional Accounts
designated during the Due Period for which the Class D Fixed Allocation
Percentage is being calculated; and
. the sum of the numerators used to calculate the corresponding allocation
percentages for all outstanding series.
provided, however, that FNANB may, by written notice to the trustee and the
servicer, designate a different numerator to be used to calculate the Class D
Fixed Allocation Percentage if:
. the series 2000-[ ] securities are paired with a Companion Series and
the Early Amortization Period, as defined in the series supplement for
that Companion Series, begins; and
. the numerator designated by FNANB is not less than the Class D Invested
Amount as of the last day of the Revolving Period, as defined in the
series supplement for that Companion Series.
"Class D Floating Allocation Percentage" means, for any Due Period, the
percentage equivalent of a fraction, the numerator of which is the Class D
Invested Amount as of the last day of the preceding Due Period or, in the case
of the initial Due Period applicable to series 2000-[ ], the Class D Initial
Invested Amount and the denominator of which is equal to the greater of:
. the aggregate amount of Principal Receivables, other than Principal
Receivables that have been charged-off, in the trust as of that last day
or, in the case of the initial Due Period applicable to series 2000-[ ],
as of the Closing Date plus the amount on deposit in the Excess Funding
Account as of the end of that last day plus the aggregate amount of
Principal Receivables in all Designated Additional Accounts designated
during the Due Period for which the Class D Floating Allocation
Percentage is being calculated; and
S-56
<PAGE>
. the sum of the numerators used to calculate the corresponding allocation
percentages for all outstanding series.
"Class D Initial Invested Amount" means $[ ].
"Class D Invested Amount" means, as of any date, the Class D Initial
Invested Amount minus the the aggregate amount of principal payments made to
the Class D certificateholders prior to that date minus the aggregate amount of
Class D Investor Charge-Offs for all prior Distribution Dates minus the amount
of Reallocated Principal Collections applied to fund payments in respect of the
offered certificates or the CTOs on all prior Distribution Dates minus, without
duplication, the amount by which the Class D Invested Amount has been reduced
on all prior Distribution Dates to fund the Class A Allocable Amount, the Class
B Allocable Amount or the CTO Allocable Amount plus the amount of Excess Spread
and Shared Excess Finance Charge Collections allocated and available on all
prior Distribution Dates to reimburse Class D Investor Charge-Offs, Reallocated
Principal Collections described above or other reductions in the Class D
Invested Amount made to fund the Class A Allocable Amount, the Class B
Allocable Amount or the CTO Allocable Amount plus, without duplication,
reductions of the Class D Adjustment Amount for all prior Distribution Dates;
provided, however, that the Class D Invested Amount may not be less than zero.
"Class D Investor Charge-Offs" means, for any Distribution Date, the amount
of any reduction in the Class D Invested Amount made to fund the Class D
Allocable Amount for that Distribution Date as described under "Description of
the Offered Certificates--Reallocation of Cash Flows; Investor Charge-Offs--
Class D Investor Charge-Offs" beginning on page S-44 of this prospectus
supplement.
"Class D Monthly Interest" means, for any Distribution Date, the product of:
. the Class D interest rate for [the preceding Interest Period];
. a fraction, the numerator of which is the actual number of days in that
preceding Interest Period and the denominator of which is 360; and
. the outstanding principal balance of the Class D certificates as of the
close of business on the preceding Distribution Date or, in the case of
the initial Distribution Date, as of the Closing Date.
"Class D Monthly Principal" means, for any Distribution Date after the CTOs
have been paid in full, the lesser of the Available Principal Collections for
that Distribution Date, minus any portion of those Available Principal
Collections applied to Class A Monthly Principal, Class B Monthly Principal or
CTO Monthly Principal on that Distribution Date, and the outstanding principal
balance of the Class D certificates as of that Distribution Date.
"Class D Servicing Fee" means, for any Distribution Date, one-twelfth of the
product of 2.00% and the Class D Invested Amount as of the last day of the
preceding Due Period; provided, however, that the Class D Servicing Fee for the
initial Distribution Date will equal $[ ].
"Closing Date" means [ ], 2000.
"Controlled Accumulation Amount" means, for any Distribution Date relating
to the Accumulation Period, $[ ]; provided, however, that if the commencement
of the Accumulation Period is postponed as described under "Description of the
Offered Certificates--Postponement of Accumulation Period" beginning on page S-
33 of this prospectus supplement the Controlled Accumulation Amount for any
Distribution Date relating to the Accumulation Period will be increased to the
amount that causes the amount on deposit in the Principal Funding Account on
the Expected Final Distribution Date to equal the aggregate outstanding
principal balance of the offered certificates and the CTOs as of that date.
"Controlled Deposit Amount" means, for any Distribution Date relating to the
Accumulation Period, the Controlled Accumulation Amount for that Distribution
Date plus any portion of the Controlled Accumulation Amount for any prior
Distribution Date not previously deposited into the Principal Funding Account.
S-57
<PAGE>
"Covered Amount" means, for any Distribution Date relating to the
Accumulation Period or the first Distribution Date relating to the Early
Amortization Period:
. [one twelfth of] the product of the Class A interest rate [for the
preceding Interest Period, a fraction, the numerator of which is the
actual number of days in that preceding Interest Period and the
denominator of which is 360,] and the aggregate amount on deposit in the
Principal Funding Account as of the close of business on the preceding
Distribution Date in respect of Class A Monthly Principal; plus
. [one twelfth of] the product of the Class B interest rate [for the
preceding Interest Period, a fraction, the numerator of which is the
actual number of days in that preceding Interest Period and the
denominator of which is 360,] and the aggregate amount on deposit in the
Principal Funding Account as of the close of business on the preceding
Distribution Date in respect of Class B Monthly Principal; plus
. [one twelfth of] the product of the CTO interest rate [for the preceding
Interest Period, a fraction, the numerator of which is the actual number
of days in that preceding Interest Period and the denominator of which
is 360,] and the aggregate amount on deposit in the Principal Funding
Account as of the close of business on the preceding Distribution Date
in respect of CTO Monthly Principal.
"CTO Additional Interest" means, for any Distribution Date, interest on any
interest amounts that were due but not paid to the Holders of the CTOs on a
prior Distribution Date, which interest will accrue at a rate equal to the CTO
interest rate [for the preceding Interest Period] plus 2.00% per annum.
"CTO Adjustment Amount" means, for any Distribution Date, the product of:
. the Series Adjustment Amount as of the last day of the preceding Due
Period; and
. the percentage equivalent of a fraction, the numerator of which is the
CTO Invested Amount and the denominator of which is the Invested Amount,
in each case as of the last day of the Due Period preceding that
preceding Due Period.
"CTO Allocable Amount" means, for any Distribution Date, the CTO Default
Amount for that Distribution Date plus the CTO Adjustment Amount for that
Distribution Date.
"CTO Available Funds" means, for any Due Period:
. in the case of any Due Period during the Revolving Period or the
Accumulation Period, the CTO Floating Allocation Percentage of all
collections of Finance Charge Receivables received during that Due
Period, including the net investment earnings, if any, on funds on
deposit in the Excess Funding Account to be treated as collections of
Finance Charge Receivables for that Due Period in accordance with the
series 2000-[ ] supplement; plus
. in the case of any Due Period during the Early Amortization Period, the
CTO Fixed Allocation Percentage of all collections of Finance Charge
Receivables received during that Due Period, including the net
investment earnings, if any, on funds on deposit in the Excess Funding
Account to be treated as collections of Finance Charge Receivables for
that Due Period in accordance with the series 2000-[ ] supplement; plus
. the applicable PFA Allocation Percentage of all net investment earnings,
if any, on funds on deposit in the Principal Funding Account received
during that Due Period; plus
. the amount, if any, to be withdrawn from the Reserve Account and applied
as CTO Available Funds on the following Distribution Date in accordance
with the series 2000-[ ] supplement; plus
. the net investment earnings, if any, on funds on deposit in the Reserve
Account received during that Due Period to be withdrawn from the Reserve
Account and applied as CTO Available Funds on that following
Distribution Date in accordance with the series 2000-[ ] supplement.
S-58
<PAGE>
"CTO Default Amount" means, for any Distribution Date, an amount equal to
the product of the Default Amount for the preceding Due Period and the CTO
Floating Allocation Percentage for that preceding Due Period.
"CTO Fixed Allocation Percentage" means, for any Due Period, the percentage
equivalent of a fraction, the numerator of which is the CTO Invested Amount as
of the last day of the Revolving Period and the denominator of which is equal
to the greater of:
. the aggregate amount of Principal Receivables in the trust, other than
Principal Receivables that have been charged-off, as of the last day of
the preceding Due Period plus the amount on deposit in the Excess
Funding Account as of the end of that last day plus the aggregate amount
of Principal Receivables in all Designated Additional Accounts
designated during the Due Period for which the CTO Fixed Allocation
Percentage is being calculated; and
. the sum of the numerators used to calculate the corresponding allocation
percentages for all outstanding series.
provided, however, that FNANB may, by written notice to the trustee and the
servicer, designate a different numerator to be used to calculate the CTO Fixed
Allocation Percentage if:
. the series 2000-[ ] securities are paired with a Companion Series and
the Early Amortization Period, as defined in the series supplement for
that Companion Series, begins; and
. the numerator designated by FNANB is not less than the CTO Invested
Amount as of the last day of the Revolving Period, as defined in the
series supplement for that Companion Series.
"CTO Floating Allocation Percentage" means, for any Due Period, the
percentage equivalent of a fraction, the numerator of which is the CTO Invested
Amount as of the last day of the preceding Due Period or, in the case of the
initial Due Period applicable to series 2000-[ ], the CTO Initial Invested
Amount and the denominator of which is equal to the greater of:
. the aggregate amount of Principal Receivables, other than Principal
Receivables that have been charged-off, in the trust as of that last day
or, in the case of the initial Due Period applicable to series 2000-[ ],
as of the Closing Date plus the amount on deposit in the Excess Funding
Account as of the end of that last day plus the aggregate amount of
Principal Receivables in all Designated Additional Accounts designated
during the Due Period for which the CTO Floating Allocation Percentage
is being calculated; and
. the sum of the numerators used to calculate the corresponding allocation
percentages for all outstanding series.
"CTO Initial Invested Amount" means $[ ].
"CTO Invested Amount" means, as of any date, the CTO Initial Invested Amount
minus the aggregate amount on deposit in the Principal Funding Account on that
date in respect of CTO Monthly Principal minus the aggregate amount of
principal payments made to the holders of the CTOs prior to that date minus the
aggregate amount of CTO Investor Charge-Offs for all prior Distribution Dates
minus the amount of Reallocated Principal Collections applied to fund payments
in respect of the offered certificates on all prior Distribution Dates that
have not resulted in a reduction in the Class D Invested Amount minus, without
duplication, the amount by which the CTO Invested Amount has been reduced on
all prior Distribution Dates to fund the Class A Allocable Amount or the Class
B Allocable Amount plus the amount of Excess Spread and Shared Excess Finance
Charge Collections allocated and available on all prior Distribution Dates to
reimburse CTO Investor Charge-Offs, Reallocated Principal Collections described
above or other reductions in the CTO Invested Amount made to fund the Class A
Allocable Amount or the Class B Allocable Amount plus, without duplication, the
amount withdrawn from the Spread Account and applied on all prior Distribution
Dates to reimburse CTO Investor Charge-Offs, Reallocated Principal Collections
described above or reductions in the CTO Invested Amount made to fund the Class
A Allocable Amount or the Class B Allocable Amount plus,
S-59
<PAGE>
without duplication, reductions of the CTO Adjustment Amount for all prior
Distribution Dates; provided, however, that the CTO Invested Amount may not be
less than zero.
"CTO Investor Charge-Offs" means, for any Distribution Date, the amount of
any reduction in the CTO Invested Amount made to fund the CTO Allocable Amount
for that Distribution Date as described under "Description of the Offered
Certificates--Reallocation of Cash Flows; Investor Charge-Offs--CTO Investor
Charge-Offs" beginning on page S-44 of this prospectus supplement.
"CTO Monthly Interest" means, for any Distribution Date, [one twelfth of]
the product of:
. the CTO interest rate [for the preceding Interest Period];
. [a fraction, the numerator of which is the actual number of days in that
preceding Interest Period and the denominator of which is 360]; and
. the outstanding principal balance of the CTOs as of the close of
business on the preceding Distribution Date or, in the case of the
initial Distribution Date, as of the Closing Date.
"CTO Monthly Principal" means, for any Distribution Date relating to the
Accumulation Period or the Early Amortization Period, the least of:
. the Available Principal Collections for that Distribution Date minus any
portion of those Available Principal Collections applied to Class A
Monthly Principal or Class B Monthly Principal for that Distribution
Date;
. if that Distribution Date relates to the Accumulation Period, the
Controlled Deposit Amount for that Distribution Date minus the sum of
the Class A Monthly Principal for that Distribution Date and the Class B
Monthly Principal for that Distribution Date; and
. the CTO Invested Amount as of that Distribution Date plus any portion of
the Available Principal Collections for that Distribution Date
previously deposited into the Principal Funding Account in respect of
CTO Monthly Principal;
provided, however, that, if the Accumulation Period is suspended and then
reinstated after the later of the date on which the Accumulation Period was
scheduled to begin before giving effect to that suspension and the date to
which the commencement of the Accumulation Period may be postponed in
accordance with the series 2000-[ ] supplement, CTO Monthly Principal for any
Distribution Date relating to the Accumulation Period will be calculated
without regard to the Controlled Deposit Amount for that Distribution Date.
"CTO Servicing Fee" means, for any Distribution Date, one-twelfth of the
product of 2.00% and the CTO Invested Amount as of the last day of the
preceding Due Period; provided, however, that the CTO Servicing Fee for the
initial Distribution Date will equal $[ ].
"CTOs" means the collateralized trust obligations issued by the trust under
the series 2000-[ ] supplement.
"Distribution Date" means the 15th day of each Due Period, beginning [ ],
2000, or, if that day is not a Business Day, the following Business Day.
"Due Period" means the period from and including the first day of a month to
and including the last day of that month.
"Early Amortization Event" means an event described under "Description of
the Offered Certificates--Early Amortization Events" beginning on page S-44 of
this prospectus supplement or under "Description of the Securities--Early
Amortization Events" beginning on page 24 of the attached prospectus.
S-60
<PAGE>
"Early Amortization Period" means the period commencing on the date on which
an Early Amortization Event occurs and ending on the earlier of the date on
which the series 2000-[ ] securities are paid in full and the Stated Series
Termination Date.
"Excess Spread" means, for any Distribution Date:
. the Class A Available Funds for the preceding Due Period remaining after
application of those funds to the Class A Required Amount for that
Distribution Date as described under "Description of the Offered
Certificates--Application of Collections--Payment of Interest, Fees and
Other Items" beginning on page S-38 of this prospectus supplement; plus
. the Class B Available Funds for that preceding Due Period remaining
after application of those funds to the Class B Monthly Interest for
that Distribution Date plus any unpaid Class B Monthly Interest for
prior Distribution Dates plus any Class B Additional Interest for that
Distribution Date plus, if FNANB is no longer the servicer, the Class B
Servicing Fee for that Distribution Date plus any unpaid Class B
Servicing Fees for prior Distribution Dates as described under
"Description of the Offered Certificates--Application of Collections--
Payment of Interest, Fees and Other Items" beginning on page S-38 of
this prospectus supplement; plus
. the CTO Available Funds for that preceding Due Period remaining after
application of those funds to, if FNANB is no longer the servicer, the
CTO Servicing Fee for that Distribution Date plus any unpaid CTO
Servicing Fees for prior Distribution Dates as described under
"Description of the Offered Certificates--Application of Collections--
Payment of Interest, Fees and Other Items" beginning on page S-38 of
this prospectus supplement; plus
. the Class D Available Funds for that preceding Due Period remaining
after application of those funds to, if FNANB is no longer the servicer,
the Class D Servicing Fee for that Distribution Date plus any unpaid
Class D Servicing Fees for prior Distribution Dates as described under
"Description of the Offered Certificates--Application of Collections--
Payment of Interest, Fees and Other Items" beginning on page S-38 of
this prospectus supplement.
"Excess Spread Percentage" means, for any Due Period, the amount, if any,
expressed as a percentage, by which the Portfolio Yield for that Due Period
exceeds the Base Rate for that Due Period.
"Expected Final Distribution Date" means the [ ] 20[ ] Distribution Date.
"Fixed Allocation Percentage" means, for any Due Period, the Class A Fixed
Allocation Percentage for that Due Period plus the Class B Fixed Allocation
Percentage for that Due Period plus the CTO Fixed Allocation Percentage for
that Due Period plus the Class D Fixed Allocation Percentage for that Due
Period.
"Floating Allocation Percentage" means, for any Due Period, the Class A
Floating Allocation Percentage for that Due Period plus the Class B Floating
Allocation Percentage for that Due Period plus the CTO Floating Allocation
Percentage for that Due Period plus the Class D Floating Allocation Percentage
for that Due Period.
"Interest Period" means each period from and including a Distribution Date
or, in the case of the initial Distribution Date, from and including the
Closing Date, to but excluding the following Distribution Date.
["Interest Rate Cap Provider" means [ ].]
["Interest Rate Caps" means the Class A Interest Rate Cap and the Class B
Interest Rate Cap.]
S-61
<PAGE>
"Invested Amount" means, as of any date, the Class A Invested Amount as of
that date plus the Class B Invested Amount as of that date plus the CTO
Invested Amount as of that date plus the Class D Invested Amount as of that
date.
["LIBOR" means, for any LIBOR Determination Date, the rate for deposits in
United States dollars for a one-month period which appears on Telerate Page
3750 as of 11:00 A.M., London time, on that date; provided, however, that if
that rate does not appear on Telerate Page 3750, LIBOR for that LIBOR
Determination Date will be determined on the basis of the rates at which
deposits in United States dollars are offered by the principal London offices
of four major banks in the London interbank market, selected by the servicer,
at approximately 11:00 A.M., London time, on that date to prime banks in the
London interbank market for a one-month period; and, provided further, that if
fewer than two quotations are provided by the Reference Banks, LIBOR for that
LIBOR Determination Date will be the arithmetic mean of the rates quoted by
four major banks in New York City, selected by the servicer, at approximately
11:00 A.M., New York City time, on that date for loans in United States dollars
to leading European banks for a one-month period.]
["LIBOR Determination Date" means, for the initial Interest Period, [ ],
2000, and, for each subsequent Interest Period, the second Business Day
preceding the commencement of that Interest Period; provided, however, that,
for purposes of determining LIBOR, Business Day means a day which is both a
Business Day and a day on which dealings in deposits in United States dollars
are transacted in the London interbank market.]
"PFA Allocation Percentage" means, for any Due Period:
. in the case of the Class A certificates, the percentage equivalent of a
fraction, the numerator of which is the aggregate amount on deposit in
the Principal Funding Account in respect of Class A Monthly Principal
and the denominator of which is the aggregate amount on deposit in the
Principal Funding Account, in each case as of the close of business on
the last day of that Due Period;
. in the case of the Class B certificates, the percentage equivalent of a
fraction, the numerator of which is the aggregate amount on deposit in
the Principal Funding Account in respect of Class B Monthly Principal
and the denominator of which is the aggregate amount on deposit in the
Principal Funding Account, in each case as of the close of business on
the last day of that Due Period; and
. in the case of the CTOs, the percentage equivalent of a fraction, the
numerator of which is the aggregate amount on deposit in the Principal
Funding Account in respect of CTO Monthly Principal and the denominator
of which is the aggregate amount on deposit in the Principal Funding
Account, in each case as of the close of business on the last day of
that Due Period.
"Portfolio Yield" means, for any Due Period, the percentage equivalent of a
fraction, the numerator of which is:
. the collections of Finance Charge Receivables received during that Due
Period and allocated to series 2000-[ ], including the net investment
earnings, if any, on funds on deposit in the Excess Funding Account to
be treated as collections of Finance Charge Receivables for that Due
Period in accordance with the series 2000-[ ] supplement; plus
. the amount of Shared Excess Finance Charge Collections allocated to
series 2000-[ ] for that Due Period; plus
. the net investment earnings, if any, on funds on deposit in the Spread
Account received during that Due Period; plus
. the net investment earnings, if any, on funds on deposit in the
Principal Funding Account received during that Due Period; plus
. the amount, if any, to be withdrawn from the Reserve Account and applied
as Class A Available Funds, Class B Available Funds or CTO Available
Funds on the following Distribution Date in accordance with the series
2000-[ ] supplement; [plus
S-62
<PAGE>
. the amount, if any, paid under the Interest Rate Caps on the following
Distribution Date;] minus
. the portion of the Default Amount for that Due Period allocated to
series 2000-[ ];
and the denominator of which is the Adjusted Invested Amount as of the last day
of that Due Period.
"Qualified Institution" means:
. a depository institution, which may be the trustee, organized under the
laws of the United States or any state or the District of Columbia, or
any domestic branch or agency of any foreign bank, the deposits in which
are insured by the FDIC and which at all times has a short-term
unsecured debt or certificate of deposit rating of at least A-1+ and P-1
by the applicable rating agency or has a long-term unsecured debt rating
of at least AAA or Aa2 by the applicable rating agency; or
. a depository institution, which may be the trustee, otherwise acceptable
to each rating agency.
"Qualified Maturity Agreement" means a written agreement between FNANB and a
Qualified Institution under which the Qualified Institution agrees to deposit
into the Principal Funding Account on or before the Expected Final Distribution
Date an amount equal to the aggregate outstanding principal balance of the
offered certificates and the CTOs as of the Expected Final Distribution Date.
"Reallocated Principal Collections" means collections of Principal
Receivables allocated to the Class D certificateholders, the holders of the
CTOs or the Class B certificateholders that have been reallocated to fund the
Class A Required Amount, the Class B Required Amount or the CTO Allocable
Amount for any Distribution Date as described under "Description of the Offered
Certificates--Reallocation of Cash Flows; Investor Charge-Offs" beginning on
page S-42 of this prospectus supplement.
"Required Reserve Account Amount" means, for any Distribution Date on or
after the Reserve Account Funding Date, an amount equal to [ ]% of the
aggregate outstanding principal balance of the offered certificates and the
CTOs as of the preceding Distribution Date or such other amount as may be
designated by FNANB; provided, however, that FNANB may not designate a lower
amount unless:
. it receives written confirmation from each rating agency rating the
offered certificates that the designation of that lower amount will not
result in a reduction or withdrawal of the rating assigned by that
rating agency to the offered certificates; and
. it delivers to the trustee an officer's certificate confirming that, in
the reasonable belief of that officer, that designation will not cause
an Early Amortization Event or an event which, with notice or lapse of
time or both, would constitute an Early Amortization Event to occur with
respect to series 2000-[ ].
"Required Spread Account Amount" means, for any Distribution Date, an amount
equal to the product of the Required Spread Account Percentage for that
Distribution Date and the Invested Amount as of the end of the preceding Due
Period; provided, however, that the Required Spread Account Amount for the
[ ] 2000 Distribution Date will be zero.
"Required Spread Account Percentage" means, for any Distribution Date, a
percentage determined in accordance with the following table based upon the
Average Excess Spread Percentage for that Distribution Date:
<TABLE>
<CAPTION>
Average Excess Spread
Percentage Required Spread Account Percentage
--------------------- ----------------------------------
<S> <C>
^[ ]% [ ]%
^[ ]% and < [ ]% [ ]%
^[ ]% and < [ ]% [ ]%
^[ ]% and < [ ]% [ ]%
< [ ]% [ ]%
</TABLE>
S-63
<PAGE>
provided, however, that any reduction in the Required Spread Account Percentage
resulting from an increase in the Average Excess Spread Percentage will not
take effect until the amount on deposit in the Spread Account is greater than
or equal to the Required Spread Account Amount for three consecutive
Distribution Dates, in which case the reduction will take effect on that third
Distribution Date.
"Reserve Account" means an Eligible Deposit Account established by the
servicer for the benefit of the certificateholders and the holders of the CTOs
intended to help assure the payment of interest on the offered certificates and
the CTOs on each Distribution Date relating to the Accumulation Period.
"Reserve Account Funding Date" means the Distribution Date following the Due
Period which begins three months prior to the commencement of the Accumulation
Period or such earlier Distribution Date as may be required under the series
2000-[ ] supplement.
"Revolving Period" means the period commencing on the Closing Date and
ending on the earlier of the close of business on the day preceding the
commencement of the Accumulation Period and the close of business on the day
preceding the commencement of the Early Amortization Period.
"Series Adjustment Amount" means, as of the last day of any Due Period, the
Series Adjustment Amount calculated for series 2000-[ ] as of that last day as
described under "Description of the Securities--Calculation of Series
Adjustment Amount" beginning on page 22 of the attached prospectus.
"Series Minimum Aggregate Principal Receivables" means, with respect to
series 2000-[ ], the initial Invested Amount or such lesser amount as may be
designated by FNANB; provided, however, that FNANB may not designate a lesser
amount unless it receives written confirmation from each rating agency that the
designation of that lesser amount will not result in a reduction or withdrawal
of the rating assigned by that rating agency to any outstanding series.
"Series Minimum Transferor Amount" means, with respect to series 2000-[ ],
zero or such greater amount as may be designated by FNANB; provided, however,
that FNANB may not designate a greater amount unless, after giving effect to
that designation, the Transferor Amount equals or exceeds the Minimum
Transferor Amount.
"Spread Account" means an Eligible Deposit Account established by the
servicer for the benefit of the holders of the CTOs intended to help assure the
payment of interest and principal on the CTOs on each Distribution Date.
"Stated Series Termination Date" means the [ ] 20[ ] Distribution Date.
["Telerate Page 3750" means the display page designated as Telerate Page
3750 on the Bridge Telerate Market Report or such other page as may replace
that page on that service for the purpose of displaying comparable rates or
prices.]
ANNEX I:
PREVIOUSLY ISSUED SERIES
The following table sets forth the principal characteristics of the six
series previously issued by the trust and currently outstanding. You may obtain
more specific information with respect to any series by contacting the servicer
at (770) 423-7900.
<TABLE>
<C> <S>
Series 1995-1 (Group One)
1. Class A Certificates
</TABLE>
S-64
<PAGE>
<TABLE>
<C> <S>
Initial Invested Amount...................................... $216,000,000
Invested Amount as of December 31, 1999...................... $144,000,000
Expected Invested Amount at End of Closing Date.............. $[ ]
Interest Rate................................................ 6.375%
Controlled Accumulation Amount............................... $18,000,000
Commencement of Accumulation Period.......................... August 31, 1999
September 2000
Expected Final Distribution Date............................. Distribution Date
Series Minimum Transferor Amount............................. Zero
Series Minimum Aggregate Principal Receivables............... Initial Invested Amount
Initial Collateral Indebtedness Amount....................... $39,000,000
Initial Class D Invested Amount.............................. $15,000,000
Enhancement.................................................. Cash Collateral Account;
Subordination of Class B
Certificates, Collateral
Indebtedness Interest
and Class D Certificates
Servicing Fee Percentage..................................... 2.00% Per Annum
August 2005 Distribution
Stated Series Termination Date............................... Date
Issuance Date................................................ September 7, 1995
2. Class B Certificates
Initial Invested Amount...................................... $30,000,000
Invested Amount as of December 31, 1999...................... $30,000,000
Expected Invested Amount at End of Closing Date.............. $[ ]
Interest Rate................................................ 6.625%
Controlled Accumulation Amount............................... $15,000,000
Commencement of Accumulation Period.......................... Following Payment of
Class A Certificates
November 2000
Expected Final Distribution Date............................. Distribution Date
Enhancement.................................................. Cash Collateral Account;
Subordination of
Collateral Indebtedness
Interest and Class D
Certificates
Servicing Fee Percentage..................................... 2.00% Per Annum
August 2005 Distribution
Stated Series Termination Date............................... Date
Issuance Date................................................ September 7, 1995
Series 1996-1 (Group One)
1. Class A Certificates
Initial Invested Amount...................................... $162,000,000
Invested Amount as of December 31, 1999...................... $162,000,000
Expected Invested Amount at End of Closing Date.............. $[ ]
Interest Rate................................................ One Month LIBOR + 0.17%
Controlled Accumulation Amount (Subject to Adjustment)....... $13,500,000
Commencement of Accumulation Period (Subject to Adjustment).. October 31, 2000
November 2001
Expected Final Distribution Date............................. Distribution Date
Series Minimum Transferor Amount............................. Zero
Series Minimum Aggregate Principal Receivables............... Initial Invested Amount
Initial Collateral Indebtedness Amount....................... $29,250,000
Initial Class D Invested Amount.............................. $11,250,000
</TABLE>
S-65
<PAGE>
<TABLE>
<C> <S>
Enhancement...................................... Cash Collateral Account;
Interest Rate Cap;
Subordination of Class B
Certificates, Collateral
Indebtedness Interest and
Class D Certificates
Servicing Fee Percentage......................... 2.00% Per Annum
October 2006 Distribution
Stated Series Termination Date................... Date
Issuance Date.................................... November 27, 1996
2. Class B Certificates
Initial Invested Amount.......................... $22,500,000
Invested Amount as of December 31, 1999.......... $22,500,000
Expected Invested Amount at End of Closing Date.. $[ ]
Interest Rate.................................... One Month LIBOR + 0.40%
Controlled Accumulation Amount................... $11,250,000
Commencement of Accumulation Period.............. Following Payment of
Class A Certificates
Expected Final Distribution Date................. January 2002 Distribution
Date
Enhancement...................................... Cash Collateral Account;
Interest Rate Cap;
Subordination of
Collateral Indebtedness
Interest and Class D
Certificates
Servicing Fee Percentage......................... 2.00% Per Annum
Stated Series Termination Date................... October 2006 Distribution
Date
Issuance Date.................................... November 27, 1996
Series 1998-1 (Group One)
Initial Invested Amount.......................... $0
Maximum Invested Amount.......................... $452,000,000
Expected Invested Amount at End of Closing Date.. $[ ]
Interest Rate.................................... Floating
Servicing Fee Percentage......................... 2.00% Per Annum
Stated Series Termination Date................... August 2005 Distribution
Date
Issuance Date.................................... November 6, 1998
Series 1998-2 (Group One)
Initial Invested Amount.......................... $113,000,000
Maximum Invested Amount.......................... $226,000,000
Expected Invested Amount at End of Closing Date.. $[ ]
Interest Rate.................................... Floating
Servicing Fee Percentage......................... 2.00% Per Annum
Stated Series Termination Date................... August 2005 Distribution
Date
Issuance Date.................................... November 12, 1998
Series 1999-1 (Group One)
Initial Invested Amount.......................... $0
Maximum Invested Amount.......................... $300,000,000
Expected Invested Amount at End of Closing Date.. $[ ]
Interest Rate.................................... Floating
Servicing Fee Percentage......................... 2.00% Per Annum
Stated Series Termination Date................... June 2006 Distribution
Date
Issuance Date.................................... September 1, 1999
</TABLE>
S-66
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED FEBRUARY , 2000
PROSPECTUS
Circuit City Credit Card Master Trust
Asset Backed Securities
First North American National Bank
Transferor and Servicer
The offered The trust:
securities are
highly . may periodically issue asset backed securities in one
structured. or more series, each of which may include one or more
Before you classes; and
purchase the
offered . will own the receivables created from time to time in a
securities, portfolio of consumer revolving credit card accounts,
please consider all monies due or to become due in payment of the
carefully the receivables and the other property described in this
risk factors prospectus and the attached prospectus supplement.
described in the
attached The securities:
prospectus
supplement. . will represent interests in the trust only and will be
paid only from the assets of the trust;
The offered
securities are . offered through this prospectus and the attached
not deposits, and prospectus supplement, which are referred to in this
neither the prospectus as the offered securities, will be rated in
offered one of the four highest rating categories by at least
securities nor one nationally recognized statistical rating
the accounts or organization;
the receivables
are insured or . may benefit from one or more forms of credit
guaranteed by the enhancement; and
Federal Deposit
Insurance . will be issued as part of a designated series that may
Corporation or include one or more classes of securities.
any other
governmental The securityholders:
agency.
. will receive interest and principal payments from a
The offered varying percentage of the amounts collected on the
securities receivables.
represent
interests in the
trust only and do
not represent
interests in or
obligations of
First North
American National
Bank, Circuit
City Stores, Inc.
or any of their
affiliates.
This prospectus
may be used to
offer and sell
securities of a
series only if
accompanied by
the prospectus
supplement for
that series.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
February , 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
OVERVIEW OF THE INFORMATION
PROVIDED IN THIS PROSPECTUS AND
THE ATTACHED PROSPECTUS
SUPPLEMENT........................ 1
DESCRIPTION OF THE TRUST........... 2
DESCRIPTION OF FIRST NORTH AMERICAN
NATIONAL BANK..................... 2
DESCRIPTION OF CIRCUIT CITY STORES,
INC............................... 3
DESCRIPTION OF THE CIRCUIT CITY
PRIVATE LABEL CREDIT CARD
PROGRAM........................... 3
OVERVIEW OF THE ACCOUNTS AND THE
RECEIVABLES....................... 7
MATURITY CONSIDERATIONS............ 10
USE OF PROCEEDS.................... 11
DESCRIPTION OF THE SECURITIES...... 12
Overview of the Securities....... 12
Interest Payments................ 13
Principal Payments............... 13
Identification of the Receiv-
ables........................... 14
Issuing New Series............... 15
Representations and Warranties... 15
Addition of Accounts............. 17
Removal of Accounts.............. 17
Discount Option.................. 18
The Collection Account........... 18
Funding Period................... 19
Allocation of Collections........ 19
Application of Collections....... 19
Shared Excess Finance Charge
Collections..................... 20
Shared Principal Collections..... 20
The Excess Funding Account....... 21
Companion Series................. 21
Allocation of Default Amount..... 22
Calculation of Series Adjustment
Amount.......................... 22
</TABLE>
<TABLE>
<CAPTION>
Page
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<S> <C>
Investor Charge-Offs............. 23
Defeasance....................... 23
Optional Repurchase.............. 24
Series Termination............... 24
Early Amortization Events........ 24
Additional Defaults and Reme-
dies............................ 25
Indemnification.................. 25
The Servicer..................... 25
Servicer Covenants............... 26
Servicing Compensation........... 27
Servicer Defaults................ 27
Reports to Securityholders....... 28
Evidence as to Compliance........ 29
Amendments....................... 29
List of Securityholders.......... 30
The Trustee...................... 31
Termination of the Trust......... 31
REGISTRATION AND TRANSFER OF THE
SECURITIES........................ 32
CREDIT ENHANCEMENT................. 39
SECURITY RATINGS................... 42
MATERIAL LEGAL ASPECTS OF THE
RECEIVABLES....................... 43
Transfer of Receivables.......... 43
Matters Relating to Receivership
and Conservatorship............. 43
Consumer Protection Laws......... 44
MATERIAL FEDERAL INCOME TAX CONSE-
QUENCES........................... 46
ERISA CONSIDERATIONS............... 52
PLAN OF DISTRIBUTION............... 54
LEGAL MATTERS...................... 55
REPORTS TO SECURITYHOLDERS......... 55
WHERE YOU CAN FIND MORE INFORMATION
ABOUT THE TRUST AND THE
SECURITIES........................ 56
INCORPORATION OF DOCUMENTS BY
REFERENCE......................... 56
GLOSSARY OF DEFINED TERMS.......... 57
</TABLE>
<PAGE>
OVERVIEW OF THE INFORMATION PROVIDED IN THIS PROSPECTUS
AND THE ATTACHED PROSPECTUS SUPPLEMENT
We provide information to you about the securities in two documents: this
prospectus, which provides general information about the trust and the
securities issued by the trust, some of which may not apply to your series or
class of securities, and the attached prospectus supplement, which provides
specific information about your series or class of securities, including:
. information about the receivables;
. the timing and amount of interest and principal payments for each class
of securities;
. information about the credit enhancement, if any, for each class of
securities;
. the ratings, if any, assigned to each class of securities; and
. the method for selling the securities.
You must read carefully this prospectus and the attached prospectus
supplement in their entirety to understand fully the structure and terms of
your series or class of securities. If the general information about the
securities issued by the trust provided in this prospectus varies from the
specific information about your series or class of securities provided in the
attached prospectus supplement, you should rely on the information provided in
the attached prospectus supplement.
You should rely only on the information provided in, or incorporated by
reference into, this prospectus and the attached prospectus supplement. We have
not authorized anyone to provide you with additional or different information.
We include in this prospectus and the attached prospectus supplement cross-
references to captions under which you can find additional, related
discussions. The preceding table of contents and the table of contents included
in the attached prospectus supplement, as applicable, set forth the pages on
which these captions are located.
We include in this prospectus and the attached prospectus supplement
capitalized terms that have meanings not evident from their context and that
cannot be defined concisely when they are first used. The glossary beginning on
page 57 of this prospectus and the glossary included in the attached prospectus
supplement, as applicable, contain the definitions of these capitalized terms.
<PAGE>
DESCRIPTION OF THE TRUST
The trust was formed under a master pooling and servicing agreement dated as
of October 4, 1994, as amended, between First North American National Bank, a
national banking association referred to in this prospectus and the attached
prospectus supplement as FNANB, as transferor and servicer, and Bankers Trust
Company, a New York banking corporation, as trustee. The trust is a master
trust under which multiple series of securities may be issued. Each series of
securities is issued under a supplement to the master pooling and servicing
agreement that sets forth the terms of that series.
The trust will not engage in any activity other than:
. acquiring and holding the receivables and the other assets of the trust;
. obtaining one or more forms of credit enhancement for each series;
. issuing the securities of each series;
. issuing an exchangeable transferor certificate evidencing an undivided
interest in the assets of the trust not allocated to the securityholders
or any other investor or credit enhancement provider;
. making payments on the securities; and
. engaging in related activities.
The trust is not expected to have any need for, or sources of, additional
capital resources other than the assets of the trust.
DESCRIPTION OF
FIRST NORTH AMERICAN NATIONAL BANK
FNANB is a federally chartered limited purpose credit card bank
headquartered in Kennesaw, Georgia. FNANB engages solely in credit card
operations. FNANB does not accept demand deposits or deposits that the
depositor may withdraw by check or similar means for payment to third parties
or others and does not accept savings or time deposits of less than $100,000.
FNANB may accept deposits of under $100,000 as collateral for extensions of
credit. FNANB maintains only one office that accepts deposits and does not
engage in the business of making commercial loans.
FNANB was chartered by the Office of the Comptroller of the Currency in
October 1990 and commenced operations in November 1990. FNANB is regulated,
supervised and examined by the OCC. OCC examinations include, among other
procedures, a detailed review of underwriting policies and procedures,
compliance with the federal Truth-in-Lending Act and other consumer credit
laws, credit reporting, compliance with community reinvestment and other legal
requirements, adequacy of financial reporting, adequacy of management, capital
and earnings and adequacy of internal control systems.
FNANB is a wholly owned subsidiary of Circuit City Stores, Inc., a Virginia
corporation. As of November 30, 1999, FNANB had assets of approximately $406.4
million and equity of approximately $200.7 million. The principal offices of
FNANB are located at 225 Chastain Meadows Court, Kennesaw, Georgia 30144.
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DESCRIPTION OF CIRCUIT CITY STORES, INC.
Circuit City is a leading national retailer of brand-name consumer
electronics, personal computers, major appliances and entertainment software.
As of December 31, 1999, the company operated 615 retail locations in 46 states
and the District of Columbia. Circuit City uses selection, service and pricing
to differentiate itself from its competition. As part of its competitive
strategy, the company offers a broad selection of top-quality merchandise that
includes 3,200 to 4,000 brand-name items, excluding entertainment software.
DESCRIPTION OF THE CIRCUIT CITY
PRIVATE LABEL CREDIT CARD PROGRAM
Credit Card Programs
FNANB offers a private label credit card that can be used to purchase
merchandise, repair services and service contracts at Circuit City retail
stores and to finance credit insurance premiums related to customer accounts.
FNANB also offers MasterCard(R) and VISA(R)/1/ credit cards that can be used to
purchase goods or services or to obtain cash advances.
The receivables transferred to the trust consist solely of receivables
created from time to time under the Circuit City private label credit card
program. FNANB may, in the future, subject to rating agency approval and
various other conditions set forth in the master pooling and servicing
agreement, transfer to the trust receivables created under MasterCard and VISA
credit card accounts or other consumer revolving credit card accounts it owns
or acquires.
New Account Underwriting
Circuit City private label credit card account applications are currently
available in all Circuit City retail stores. Circuit City sales associates
offer account applications and provide information about the private label
credit card program directly to customers. Circuit City sales associates enter
application information in a proprietary point of sale terminal that is linked
directly to an automated credit evaluation and account processing system
developed by Total System Services, Inc. Total System uses this system to
process all new private label credit card account applications in accordance
with terms specified by FNANB.
FNANB evaluates all private label credit card account applications using
credit risk scores derived from proprietary scoring models. These application
scorecards are heavily weighted to consider credit bureau information in
addition to application data. FNANB will, in most cases, approve an account
application if the applicant's credit risk score is above the minimum score
established by FNANB and the applicant has an active credit bureau file with
satisfactory credit history.
If a customer's application is approved, an account is established and an
order for a new card is automatically transmitted to the FNANB card production
service department. This department uses special equipment to emboss the
customer's name, card account number and expiration date on the face of the
card and mails the card directly to the customer via first class mail. When a
card is presented for the first time, the point of sale terminal prompts the
Circuit City sales associate to request picture identification from the
cardholder. This procedure is intended to reduce the risk that a stolen credit
card will be accepted for use at a Circuit City retail store.
- --------
/1/MasterCard(R) and VISA(R) are federally registered service marks of
MasterCard International Inc. and VISA U.S.A., Inc., respectively.
3
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Each extension of credit by FNANB to a cardholder is subject to the terms
and conditions contained in the account agreement with FNANB in effect at that
time. FNANB reserves the right to change or terminate various terms,
conditions, services or features of the account, including increasing or
decreasing periodic finance charges, late fees, returned check charges, other
fees and charges or minimum payment requirements, subject to the conditions set
forth in the account agreement. FNANB may, at any time and without prior notice
to the cardholder, elect to preclude or restrict further credit card use by the
cardholder, usually as a result of poor payment performance or concern over the
cardholder's creditworthiness. FNANB has the ability to code an account within
the credit operating system to prevent the cardholder from using his or her
credit card until the reason for the restriction on use has been satisfactorily
resolved.
Billing and Payments
FNANB assesses finance charges on an account based on the average daily
balance outstanding on the account during a monthly billing cycle. The average
daily balance of an account for a billing cycle is determined by summing the
daily balances for the account for each day during the billing cycle and by
dividing that sum by the number of the days in the billing cycle. The daily
balance for an account for any day during a billing cycle is equal to the
beginning balance of the account for that day plus the amount of all purchases
and unpaid finance charges posted to the account on that day minus the amount
of all payments and credits posted to the account on that day. FNANB charges an
annual percentage rate on private label credit card accounts currently ranging
from 19.8% to 24.0%. FNANB will not assess a finance charge on an account if
the entire new balance shown on the billing statement is paid within 25 days of
the statement closing date.
FNANB assesses a late fee, currently $25, if a cardholder does not remit a
past due payment before the closing date of the next billing cycle. FNANB also
assesses a returned check fee, currently $25, if a financial institution does
not honor a cardholder payment.
FNANB periodically offers interest free promotions under which holders of
the Circuit City private label credit card are able to purchase designated
products on an interest free basis for a specified period. The interest free
period is usually 90 or 180 days. The cardholder is still required to make
regular monthly principal payments, and finance charges are reinstated,
retroactive to the date of the transaction or the first day of the billing
cycle, whichever is later, if the cardholder does not meet the terms and
conditions of the interest free promotion. The use of interest free promotions
may reduce the amount of finance charge receivables collected by the trust
during the interest free period. We do not expect, however, that this reduction
would cause a material reduction in the yield on the receivables.
Approximately 80% of the private label cardholders are required to make
minimum monthly payments equal to the greater of $20 or 4% of the account
balance. Approximately 20% of the private label cardholders are required to
make minimum monthly payments equal to the greater of $15 or 3.5% of the
account balance.
Delinquencies and Collections
FNANB classifies an account as delinquent when the minimum payment due on
the account is not received by the payment due date specified in the
cardholder's billing statement. The FNANB collections staff is segregated into
teams specializing in different delinquency categories. The collections staff
initiates collection efforts as early as the second day of delinquency, and no
later than the 21st day of delinquency, when collectors attempt to establish
telephone contact. FNANB uses behavioral risk scoring of all accounts to adjust
its collection efforts based on the potential risk of an account and the
dollars at risk. Collection efforts escalate in intensity as an account is
cycled into a more advanced delinquency category.
FNANB's collection strategy begins with an early delinquency calling program
using state-of-the-art technology that includes predictive dialing for accounts
that are up to 60 days past due. FNANB also uses statement messaging and
automatic letter dunning during the first 60 days of delinquency. The FNANB
4
<PAGE>
collections staff monitors delinquency levels on a daily basis, and aggregated
delinquency information is reported to and reviewed by senior management.
Accounts that are 61-90 days past due are assigned to specific members of
the FNANB collections staff for accelerated collection efforts, including
demands for balance in full, correspondence from one or more of the national
credit bureaus describing the impact that the delinquent credit obligation has
on the cardholder's credit history and preparatory actions to place accounts
with attorneys for legal action. The FNANB collections staff pursues aggressive
collection activities through the 180th day of delinquency. FNANB charges off
an account as uncollectible no later than the earlier of the date on which the
account becomes 181 days past due on a contractual basis and 30 days after
FNANB receives notice of the death or bankruptcy of the cardholder.
FNANB maintains relationships with a select group of third-party collection
agencies to insure that collections support will be available if FNANB
experiences problems with its collections systems and to allow FNANB to compare
the performance of its collections staff with others in the industry. FNANB
assigns less than 10% of the delinquent accounts to third-party collection
agencies.
FNANB automatically re-ages delinquent accounts if the cardholder has a
balance equal to or greater than $100 and pays at least the full minimum
monthly payment during three consecutive billing cycles. In general, FNANB will
manually re-age a delinquent account only if billing errors, customer disputes
or other account problems warrant that action. A sample of all re-aged accounts
are audited monthly for compliance with FNANB's re-age procedures.
Customer Service and Account Management
FNANB's customer service departments are located in Richmond, Virginia, and
Kennesaw, Georgia. An automated voice response unit handles a substantial
percentage of incoming calls and enables customers to receive account
information 24 hours a day. Customers can receive balance, payment and credit
information, request documents and make payments over the telephone without
having to speak with a customer service representative.
The FNANB customer service representatives are authorized to release
information to a customer relating to the customer's account. Each customer
service representative is also authorized to modify and update account data,
including customer information such as addresses or telephone numbers, and to
record account transactions. The ability to change data on a customer's file is
restricted by established system security protocols. Each customer service
representative is assigned access to customer files by an independent systems
security administrator. In addition, every transaction performed by a customer
service representative, whether the transaction modifies information on the
account or merely allows the customer service representative to view a
customer's information without making changes, is automatically logged in a
computer file which can be reviewed at a later time. FNANB periodically audits
financial transactions and maintenance transactions to confirm that customer
service representatives are complying with applicable policies and procedures.
The FNANB customer service areas are equipped with overhead monitors that
provide current customer service information. The information provided includes
the number of customers who are waiting to speak to a customer service
representative, the number of calls that have been answered within time
standards established by FNANB, the number of representatives active in the
system to handle telephone calls and the number of representatives performing
follow-up administrative functions to address customer requests.
FNANB has implemented several other systems to increase the efficiency of
its customer service areas, including a system that automatically displays the
identity of a customer and related account information to a customer service
representative based on the telephone number of the inbound call. FNANB also
uses a system that allows customer service representatives to increase customer
credit lines or decrease customer annual percentage rates within specified
underwriting parameters with the push of a keystroke, reducing call handling
time and attrition while increasing customer satisfaction.
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<PAGE>
FNANB uses both a credit bureau risk model developed by an outside
consultant and a credit risk monitoring system to adjust credit lines either up
or down, as necessary. These systems evaluate credit bureau risk scores and
historical experience to develop a composite risk score on each account.
Increases in credit lines are usually granted in conjunction with a purchase
that is outside of a customer's line availability. The decision to increase the
credit line is currently based on a real time point of sale review of the
customer's creditworthiness through a review of the customer's past payment
behavior and credit bureau risk score.
Description of Total System Services, Inc.
Total System performs various data processing and ministerial functions
associated with the servicing of the private label credit card accounts on
behalf of FNANB from its facilities in Columbus, Georgia. Total System is one
of the world's largest processors of credit, debit, commercial and private
label cards. Total System provides a variety of data processing services to
FNANB, including processing and settlement of transactions, maintenance of
individual cardholder accounts, processing of cardholder statements and
issuance of plastic cards.
6
<PAGE>
OVERVIEW OF THE ACCOUNTS AND THE RECEIVABLES
The trust assets include all receivables created from time to time in a
portfolio of consumer revolving credit card accounts originated by FNANB and
identified in a computer file or microfiche list delivered by FNANB to the
trustee under the master pooling and servicing agreement. FNANB delivers an
updated computer file or microfiche list to the trustee on a monthly basis to
reflect the addition or removal of identified accounts. The accounts identified
in the most current computer file or microfiche list delivered to the trustee
are sometimes referred to in this prospectus and the attached prospectus
supplement as the Accounts included in the trust. You should note, however,
that, under the master pooling and servicing agreement, FNANB transfers to the
trust the receivables created under the Accounts but not the Accounts. FNANB
continues to own the Accounts included in the trust.
As of the date of this prospectus, the Accounts included in the trust
consist solely of accounts established under the Circuit City private label
credit card program. The Accounts included in the trust fall into one of the
following three categories:
. Accounts designated by FNANB on the initial closing date and included in
the trust as of the initial closing date;
. Accounts automatically included in the trust as of the date of their
creation, which Accounts are sometimes referred to in this prospectus and
the attached prospectus supplement as Automatic Additional Accounts; and
. Accounts designated by FNANB after the initial closing date and included
in the trust as of the date of their designation, which Accounts are
sometimes referred to in this prospectus and the attached prospectus
supplement as Designated Additional Accounts.
Each Account must satisfy the following eligibility criteria to be included
in the trust:
. the Account must be in existence and owned by FNANB;
. the Account must be payable in United States dollars;
. the related credit card must not have been reported lost or stolen or
have been designated as fraudulent;
. the Account must not have been identified in FNANB's computer files as
having been cancelled due to the bankruptcy, insolvency or death of the
related obligor;
. the receivables in the Account must not have been charged off as
uncollectible in accordance with the FNANB account guidelines;
. the receivables in the Account must not have been assigned, pledged or
sold other than under the master pooling and servicing agreement;
. the related obligor must have provided, as his or her most recent billing
address, an address located in the United States or its territories or
possessions; and
. the related obligor must not be FNANB or an affiliate of FNANB.
The account eligibility criteria must be satisfied as of the Initial Cut-Off
Date, in the case of Accounts designated by FNANB on the initial closing date,
as of the related date of creation, in the case of Automatic Additional
Accounts, and as of the related Additional Cut-Off Date, in the case of
Designated Additional Accounts. See "Description of the Securities--Addition of
Accounts" beginning on page 17 of this prospectus for a further discussion of
the circumstances under which Automatic Additional Accounts and Designated
Additional Accounts will be included in the trust.
FNANB has the right to designate accounts previously included in the trust
as Removed Accounts and to cause the receivables in the Removed Accounts to be
retransferred to FNANB. See "Description of the Securities--Removal of
Accounts" beginning on page 17 of this prospectus for a further discussion of
the circumstances under which FNANB may designate Removed Accounts.
7
<PAGE>
The receivables included in the trust fall into one of the following two
categories:
. receivables representing amounts charged by cardholders for merchandise,
repair services, service contracts, other services or credit insurance
premiums, which receivables are sometimes referred to in this prospectus
and the attached prospectus supplement as Principal Receivables; or
. receivables representing amounts billed on the accounts in respect of
periodic finance charges, late fees, returned check fees or other fees or
charges, which receivables are sometimes referred to in this prospectus
and the attached prospectus supplement as Finance Charge Receivables;
provided, however, that, if FNANB exercises the Discount Option, an amount
equal to the product of the Discount Percentage and the amount of receivables
created in the Accounts on or after the date the Discount Option is exercised
that would otherwise be treated as Principal Receivables will be treated as
Finance Charge Receivables. See "Description of the Securities--Discount
Option" beginning on page 18 of this prospectus for a further discussion of the
Discount Option.
Each receivable must satisfy the following eligibility criteria to be
included in the trust:
. the receivable must have been created under an Eligible Account;
. the receivable must have been created in compliance with all applicable
requirements of law and pursuant to an agreement which complies with all
applicable requirements of law, in either case the failure to comply with
which would have a material adverse effect upon the securityholders;
. all material consents, licenses, approvals or authorizations of, or
registrations with, any governmental authority required to be obtained or
given by FNANB in connection with the creation of the receivable or the
execution, delivery and performance by FNANB of the related account
agreement must have been duly obtained or given and must be in full force
and effect as of the date of that creation;
. the trust must have had good and marketable title to the receivable at
the time of the transfer of the receivable to the trust, free and clear
of all liens other than limited tax or other governmental liens permitted
under the master pooling and servicing agreement;
. the receivable must have been the subject of either a valid transfer and
assignment from FNANB to the trust of all of FNANB's right, title and
interest in the receivable or the grant of a first priority perfected
security interest in the receivable and in the proceeds of the receivable
to the extent set forth in Section 9-306 of the Uniform Commercial Code,
effective until the termination of the trust;
. the receivable must at all times be the legal, valid and binding payment
obligation of the related obligor enforceable against that obligor in
accordance with its terms, subject to bankruptcy and equity related
exceptions;
. the receivable must constitute chattel paper, an account or a general
intangible under and as defined in Article 9 of the UCC;
. the receivable, at the time of its transfer to the trust, must not have
been waived or modified other than in accordance with the policies and
procedures of FNANB relating to the operation of its consumer credit card
business;
. the receivable, at the time of its transfer to the trust, must not have
been subject to any setoff, right of rescission, counterclaim or other
defense, including the defense of usury, other than bankruptcy related
defenses;
. FNANB must have satisfied all obligations to be fulfilled with respect to
the receivable at the time of the transfer of the receivable to the
trust; and
. FNANB must have done nothing to impair the rights of the trust or the
securityholders in the receivable at the time of the transfer of the
receivable to the trust.
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FNANB must accept the retransfer of receivables included in the trust that
were ineligible at the time of their transfer to the trust and must, to the
extent specified in the master pooling and servicing agreement, either replace
the retransferred receivables with eligible receivables or pay the value of the
retransferred receivables to the trust. See "Description of the Securities--
Representations and Warranties" and "--Addition of Accounts" beginning on page
15 and page 17, respectively, of this prospectus for a further discussion of
the circumstances under which FNANB will be required to replace or pay for
ineligible receivables.
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MATURITY CONSIDERATIONS
We expect that each series will include an Accumulation Period, in which
case collections of Principal Receivables will be used to make a single
principal payment to securityholders on a Scheduled Distribution Date, or an
Amortization Period, in which case collections of Principal Receivables will be
used to make a series of principal payments to securityholders commencing on a
Principal Commencement Date. The attached prospectus supplement describes the
structure and material terms of any Accumulation Period or Amortization Period
applicable to your series or class of securities.
If a series includes an Accumulation Period and a single class of
securities, we expect that:
. all or a portion of the collections of Principal Receivables allocated to
that series plus any other amounts specified in the related series
supplement will be deposited on or before each Distribution Date relating
to the Accumulation Period into a Principal Funding Account for that
series;
. the amount of each deposit will not exceed a specified amount, in the
case of a Controlled Accumulation Period, or will equal the collections
of Principal Receivables allocated to that series plus any other amounts
specified in the related series supplement, in the case of a Rapid
Accumulation Period; and
. the amount accumulated in the Principal Funding Account will be used to
make a single principal payment to securityholders on the Scheduled
Distribution Date for that series;
provided, however, that, if an Early Amortization Event occurs with respect to
that series or if the actual payment rate on the receivables is substantially
lower than the payment rate assumed in structuring the Accumulation Period,
securityholders may begin to receive principal payments earlier than the
Scheduled Distribution Date or may not be paid in full on the Scheduled
Distribution Date. If your series includes an Accumulation Period, the attached
prospectus supplement may describe circumstances under which the commencement
of that period may be postponed or that period may be suspended.
If a series includes an Amortization Period and a single class of
securities, we expect that:
. all or a portion of the collections of Principal Receivables allocated to
that series plus any other amounts specified in the related series
supplement will be used to make a series of principal payments to
securityholders on each Distribution Date commencing on the Principal
Commencement Date for that series; and
. the amount of each principal payment will not exceed a specified amount,
in the case of a Controlled Amortization Period, or will equal the
collections of Principal Receivables allocated to that series plus any
other amounts specified in the related series supplement, in the case of
a Principal Amortization Period;
provided, however, that, if an Early Amortization Event occurs with respect to
that series or if the actual payment rate on the receivables is substantially
lower than the payment rate assumed in structuring the Amortization Period,
securityholders may begin to receive principal payments earlier than the
Principal Commencement Date or may not receive the full amount scheduled to be
paid on any Distribution Date.
If a series has more than one class of securities, a different method of
making principal payments, or a different Scheduled Distribution Date or
Principal Commencement Date, may be assigned to each class. See "Description of
the Securities--Application of Collections" beginning on page 19 of this
prospectus for a further discussion of the different Accumulation Periods or
Amortization Periods that may be used with respect to the securities.
The principal payment structure for a series will provide for the
accelerated accumulation or payment of principal upon the occurrence of an
Early Amortization Event with respect to that series. If an Early
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Amortization Event occurs with respect to your securities, you may receive
principal payments earlier than expected.
The principal payment structure for a series will be established based upon
various assumptions as to the payment rate on the receivables. These
assumptions will be based upon a review of historical payment rates and other
information relating to the Circuit City private label credit card program. The
attached prospectus supplement provides historical performance information with
respect to the receivables in the trust, including payment rate information. We
cannot assure you, however, that the future payment rate experience for the
receivables in the trust will be similar to the historical payment rates
reviewed in structuring the Accumulation Period or the Amortization Period for
your securities. The payment rate on the receivables is influenced by a number
of factors, including seasonal variations in consumer spending, the
availability of competing sources of credit, general economic conditions and
the payment habits of individual cardholders. If the actual payment rate on the
receivables is substantially lower than the payment rate assumed in structuring
the Accumulation Period or the Amortization Period for your securities, you may
receive principal payments later than expected.
USE OF PROCEEDS
The net proceeds from the sale of each series of securities will, in most
cases, be paid to FNANB and used for general corporate purposes. The attached
prospectus supplement may provide that all or a portion of the net sale
proceeds will be used for other purposes, including the full or partial
repayment of other series or the funding of one or more trust accounts.
11
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DESCRIPTION OF THE SECURITIES
Overview of the Securities
The securities will be issued in series. Each series of securities will be
issued by the trust under the master pooling and servicing agreement and a
series supplement related to that series. A copy of the master pooling and
servicing agreement and a form of the series supplement are filed with the SEC
as exhibits to the registration statement of which this prospectus is a part.
This prospectus describes the material provisions common to each series of
securities. The attached prospectus supplement provides additional information
specific to your securities.
Each series of securities may include one or more classes, one or more of
which may be senior securities and one or more of which may be subordinated
securities. The Invested Amount of a series with more than one class will be
allocated among the classes of that series as described in the related
prospectus supplement. The securities of each class included in a series may
have different terms, including different interest rates, principal payment
structures, maturity dates, allocation terms and access to credit enhancement.
Each series of securities may be included in a designated group. Each series
of securities included in a designated group will be entitled to share amounts
collected on the receivables and allocated to other series in that group to the
extent those amounts are not needed to make required deposits or payments with
respect to other series in that group, in each case in the manner and to the
extent provided in the series supplements for those other series.
Each series of securities will represent an undivided interest in the assets
of the trust. The assets of the trust not allocated to the securityholders will
be allocated among the holder of the Exchangeable Transferor Certificate and,
to the extent described in the series supplement for any series, the provider
of any credit enhancement for that series. FNANB currently holds the
Exchangeable Transferor Certificate.
Each series of securities:
. will represent the right to receive a varying percentage of the amounts
collected on the receivables during each Due Period;
. will be allocated a varying percentage of the receivables, if any,
charged off as uncollectible during each Due Period; and
. will be allocated a varying percentage of the downward adjustments, if
any, made in the amount of the receivables for non-credit reasons during
each Due Period.
Each series of securities:
. will represent the right to receive interest at a specified rate per
annum on each Distribution Date in the manner and to the extent provided
in the related series supplement;
. if that series includes an Accumulation Period, will represent the right
to receive principal on a Scheduled Distribution Date in the manner and
to the extent provided in the related series supplement; and
. if that series includes an Amortization Period, will represent the right
to receive principal commencing on a Principal Commencement Date in the
manner and to the extent provided in the related series supplement.
The series supplement for a series may provide that the securities of that
series will initially be represented by securities registered in the name of
Cede & Co., as nominee of The Depository Trust Company, and that beneficial
interests in those securities will be available for purchase in book-entry form
only. If the securities of a series are registered in the name of Cede & Co.,
all references in this prospectus or the attached prospectus
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supplement to actions taken by securityholders refer to actions taken by DTC,
upon instructions from its participants, and all references in this prospectus
or the attached prospectus supplement to distributions, notices, reports and
statements to securityholders refer to distributions, notices, reports and
statements to DTC or Cede & Co., as the registered holder of the securities, as
the case may be, for distribution to the Security Owners in accordance with DTC
procedures. See "Registration and Transfer of the Securities" beginning on page
32 of this prospectus for a further discussion of the book-entry registration
system and the limited circumstances under which Definitive Securities will be
issued.
The series supplement for a series may specify that application will be made
to list the securities of that series, or all or a portion of any class of that
series, on the Luxembourg Stock Exchange or any other specified exchange.
Interest Payments
Each series or class of securities will accrue interest from the date
specified in the related series supplement on the outstanding principal amount
of that series or class at the interest rate specified for that series or class
in that series supplement. Each interest rate may be a fixed rate, a floating
rate or any other type of rate specified in the related series supplement.
Interest will be paid to securityholders on the Distribution Dates specified in
the related series supplement.
Interest payments for any series or class of securities will be funded on
each Distribution Date from collections of Finance Charge Receivables received
during the preceding Due Period and allocated to that series or class plus any
other sources specified in the related series supplement. If the Distribution
Dates for a series or class occur less frequently than monthly, an Interest
Funding Account may be established to accumulate the required interest payment
amount. If a series includes more than one class of securities, each class in
that series may have a separate Interest Funding Account.
Your securities will pay interest on the Distribution Dates and at the
interest rate specified in the attached prospectus supplement. If your
securities bear interest at a floating rate, the attached prospectus supplement
describes the initial interest rate and the method for calculating subsequent
interest rates.
Principal Payments
Each series of securities will include a Revolving Period during which
principal will not be accumulated for or paid to the securityholders of that
series. The Revolving Period for a series will begin on the related closing
date and will end on the earlier of the close of business on the day preceding
the commencement of the Accumulation Period for that series and the close of
business on the day preceding the commencement of the Amortization Period for
that series. All collections of Principal Receivables allocated to a series
during the Revolving Period for that series will, to the extent specified in
the related series supplement, be applied as reallocated collections of
Principal Receivables, shared with other series, deposited in the Excess
Funding Account or paid to the holder of the Exchangeable Transferor
Certificate.
At the end of the Revolving Period for a series, one or more of the
following types of principal accumulation periods or principal payment periods
will commence:
. a Controlled Accumulation Period;
. a Rapid Accumulation Period;
. a Controlled Amortization Period;
. a Principal Amortization Period; or
. an Early Amortization Period.
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The Controlled Accumulation Period, Rapid Accumulation Period, Controlled
Amortization Period or Principal Amortization Period, as applicable, for a
series will begin on the date specified in or determined in the manner
specified in the related series supplement. The Early Amortization Period for a
series will begin upon the occurrence of an Early Amortization Event with
respect to that series.
During the Controlled Accumulation Period or Rapid Accumulation Period for a
series, collections of Principal Receivables allocated to that series and any
other amounts specified in the related series supplement will be used on or
before each Distribution Date to make deposits into a Principal Funding Account
for that series. At the end of the Accumulation Period, the amount on deposit
in the Principal Funding Account will be used to make a single principal
payment to the securityholders of that series. The series supplement for each
series that includes an Accumulation Period will specify the Scheduled
Distribution Date for that series and the frequency and amount of the scheduled
deposits. The series supplement for each series that includes an Accumulation
Period may also specify circumstances under which FNANB may postpone the
commencement of the Accumulation Period or eliminate the Accumulation Period.
The funds held in any Principal Funding Account for a series may be subject
to a guaranteed rate or investment agreement or other arrangement specified in
the related series supplement intended to assure a minimum rate of return on
the investment of those funds. A series or class that includes an Accumulation
Period may be subject to a principal guaranty or other similar arrangement
specified in the related series supplement to enhance the likelihood that the
principal amount of that series or class will be paid in full at the end of the
Accumulation Period.
During the Controlled Amortization Period or Principal Amortization Period
for a series, collections of Principal Receivables allocated to that series and
any other amounts specified in the related series supplement will be used on
each Distribution Date to make principal payments to the securityholders of
that series. The series supplement for each series that includes a Controlled
Amortization Period or a Principal Amortization Period will specify the
Principal Commencement Date for that series and the frequency and amount of the
scheduled principal payments.
During the Early Amortization Period for a series, collections of Principal
Receivables allocated to that series and any other amounts specified in the
related series supplement will be used each month to make principal payments to
the securityholders of that series. The series supplement for each series will
specify the Early Amortization Events applicable to that series. See
"Description of the Securities--Early Amortization Events" beginning on page 24
of this prospectus for a further discussion of the Early Amortization Events
applicable to all series.
If your class of securities is subordinated to one or more senior classes,
you will receive principal payments only after the more senior classes are paid
in full. You may receive principal payments earlier or later than expected. See
"Maturity Considerations" beginning on page 10 of this prospectus for a further
discussion of the circumstances under which principal payments could be made
earlier or later than expected.
Identification of the Receivables
FNANB has indicated in its records, including its computer files, that the
receivables have been transferred from FNANB to the trust. In addition, FNANB
has provided to the trustee a computer file or a microfiche list showing the
Account number and the amount of receivables relating to each Account. FNANB,
as initial servicer, will retain and will not deliver to the trustee any other
records or agreements relating to the Accounts or the receivables. The records
and agreements relating to the Accounts or the receivables will not be
segregated from those relating to other credit card accounts or receivables
owned or serviced by FNANB and will not be stamped or otherwise marked to
reflect the transfer of the receivables to the trust. The trustee will have
reasonable access to these records and agreements as required by applicable law
or to enforce the rights of the securityholders. FNANB has filed UCC financing
statements in accordance with Georgia state law to
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perfect the trust's interest in the receivables. See "Material Legal Aspects of
the Receivables" beginning on page 43 of this prospectus for a discussion of
the limited circumstances under which a creditor of FNANB could acquire an
interest in the receivables.
Issuing New Series
FNANB may tender the Exchangeable Transferor Certificate, or the
Exchangeable Transferor Certificate and the securities of one or more series,
to the trustee in exchange for one or more newly issued series of securities
and a reissued Exchangeable Transferor Certificate. FNANB will specify the
principal terms of each new series in the related series supplement. The master
pooling and servicing agreement does not limit the number of exchanges that
FNANB may perform.
FNANB must notify the trustee at least three days in advance of the date on
which it proposes to issue a new series of securities. FNANB must also notify
the trustee of the designation of the new series, the initial Invested Amount
of the new series and, if applicable, the initial amount to be deposited in the
Pre-Funding Account for the new series or the method for calculating these
amounts and the interest rates applicable to the new series or the method for
allocating interest payments or other cash flows to the new series, if any. On
the date of the issuance of a new series of securities, FNANB must deliver to
the trustee the following:
. a series supplement in form satisfactory to the trustee signed by FNANB
and specifying the terms of the new series;
. the credit enhancement, if any, applicable to the new series and the
related credit enhancement agreement;
. an opinion of counsel to the effect that securities of the new series,
other than any class required to be retained by FNANB, will be
characterized either as indebtedness or an interest in a partnership that
is not taxable as a corporation under existing law for federal income tax
purposes and that the issuance of the new series will not have a material
adverse effect on the federal income tax characterization of any
outstanding series that has been the subject of a previous opinion of tax
counsel or result in the trust being taxable as an association for
federal or applicable state tax purposes;
. written confirmation from each rating agency that the issuance of the new
series will not result in a reduction or withdrawal of the rating
assigned by that rating agency to any outstanding series; and
. the existing Exchangeable Transferor Certificate and, if applicable, the
securities of the series to be exchanged.
Upon satisfaction of these conditions, the trustee will cancel the existing
Exchangeable Transferor Certificate and the securities of the exchanged series,
if applicable, and issue the new series of securities and a new Exchangeable
Transferor Certificate. FNANB, the servicer, the trustee and the trust are not
required to obtain, and do not intend to obtain, the consent of any
securityholder to the issuance of a new series of securities. The issuance of a
new series of securities could affect the timing or amount of payments on your
securities.
Representations and Warranties
FNANB represents and warrants to the trustee, on behalf of the trust, that:
. each receivable is an Eligible Receivable as of the initial cut-off date,
in the case of receivables in the initial Accounts, as of the related
creation date, in the case of receivables in the Automatic Additional
Accounts, and as of the related Additional Cut-Off Date, in the case of
receivables in the Designated Additional Accounts;
. each computer file or microfiche list of the Accounts delivered by FNANB
to the trustee under the master pooling and servicing agreement is an
accurate and complete listing of the Accounts in all
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material respects as of the initial cut-off date, in the case of the
initial Accounts, as of the related creation date, in the case of the
Automatic Additional Accounts, and as of the related Additional Cut-Off
Date, in the case of the Designated Additional Accounts; and
. no selection procedure believed by FNANB to be adverse to the interests
of the securityholders was used in selecting the Accounts.
If any of these representations and warranties is found to have been
incorrect when made and, as a result, any receivable is charged off or the
trust's rights in that receivable or its proceeds are materially impaired and
that breach continues unremedied for 60 days, or for such longer period as may
be agreed to by the trustee not to exceed an additional 90 days, after FNANB
discovers or receives notice of that breach, then FNANB will be obligated to
accept retransfer of the principal amount of that receivable by directing the
servicer to deduct the principal amount of that receivable from the aggregate
amount of Principal Receivables in the trust. If this deduction would cause the
Transferor Amount to be reduced below zero, FNANB will deposit into the Excess
Funding Account an amount equal to the amount by which the Transferor Amount
would have been reduced below zero. This deduction or deposit will be treated
as a repayment in full of the related receivable and will be allocated in the
same manner as payments received from cardholders under the Accounts. FNANB
will also be obligated to accept retransfer of receivables that are subject to
various types of liens immediately upon the discovery of those liens. FNANB's
obligation to accept retransfer of a receivable is the only remedy available to
the securityholders with respect to any breach of a representation or warranty
concerning the eligibility of that receivable.
FNANB represents and warrants to the trustee, on behalf of the trust, as of
each closing date with respect to each series, that:
. FNANB is duly organized and validly existing and has the authority to
execute, deliver and perform its obligations under the master pooling and
servicing agreement and the related series supplement and to issue the
securities of that series;
. the master pooling and servicing agreement and the related series
supplement constitute legal, valid, binding and enforceable obligations
of FNANB; and
. the trust owns or has a first priority perfected security interest in the
receivables subject only to limited tax or other governmental liens
permitted under the master pooling and servicing agreement.
If any of these representations and warranties is found to have been
incorrect when made or if a material amount of receivables are not Eligible
Receivables and, in either case, that event has a material adverse effect on
the securityholders and continues unremedied for 60 days, or for such longer
period as may be agreed to by the trustee not to exceed an additional 90 days,
after FNANB receives notice of that event, then the trustee or the holders of
securities representing more than 50% of the aggregate Invested Amount of all
outstanding series may direct FNANB to accept retransfer of all of the
receivables in the trust on a Distribution Date specified by FNANB occurring
within the applicable cure period by depositing into the Collection Account an
amount equal to the aggregate Invested Amount of all outstanding series plus
all accrued but unpaid interest on the securities of all outstanding series.
This deposit will be treated as a prepayment in full of the receivables and
will be allocated in the same manner as payments received from cardholders
under the Accounts. FNANB's obligation to accept retransfer of all of the
receivables in the trust is the only remedy available to the securityholders
with respect to any breach of these representations or warranties.
The attached prospectus supplement may specify additional representations
and warranties made by FNANB with respect to your securities. The trustee is
not required to make any initial or periodic examination of the receivables or
any records relating to the receivables. The servicer, however, is required to
deliver to the trustee once each year an opinion of counsel as to the validity
of the security interest of the trust in the receivables.
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Addition of Accounts
Automatic Additional Accounts
All Eligible Accounts will be automatically included as Accounts as of the
date of their creation upon the identification of those accounts in a computer
file or microfiche list delivered to the trustee; provided, however, that each
Automatic Additional Account must be of a type previously included in the trust
or otherwise consented to in writing by each rating agency and the number of
Automatic Additional Accounts that may be added during any Due Period is
limited. The receivables in the Automatic Additional Accounts will be
automatically transferred to the trust. FNANB can discontinue the Automatic
Additional Account feature at any time and for any reason. The Automatic
Additional Account feature allows FNANB to transfer additional receivables to
the trust more efficiently than through the designation of Designated
Additional Accounts.
The securityholders will not incur any costs in connection with the addition
of Automatic Additional Accounts. We cannot assure you, however, that the
Automatic Additional Accounts will be of the same credit quality as the initial
Accounts.
Designated Additional Accounts
FNANB has the right to designate, from time to time, additional Eligible
Accounts to be included as Accounts. In addition, FNANB is required to
designate additional Eligible Accounts to be included as Accounts if, as of the
end of any Due Period, the Transferor Amount is less than the Minimum
Transferor Amount and FNANB fails to eliminate that deficiency by repurchasing
securities of one or more outstanding series or the aggregate amount of
Principal Receivables in the trust is less than the Minimum Aggregate Principal
Receivables.
FNANB will transfer the receivables in the new Accounts to the trust upon
satisfaction of various conditions, including the following:
. each new Account must be an Eligible Account at the time of its
selection;
. each new Account must be selected in a manner that FNANB believes will
not materially adversely affect the securityholders or any provider of
credit enhancement;
. the trust must own or have a first priority perfected security interest
in each new Account;
. FNANB must deliver to the trustee and each rating agency an opinion of
counsel as specified in the master pooling and servicing agreement;
. FNANB must record and file financing statements to the extent necessary
to perfect the transfer of the new Accounts to the trust; and
. FNANB must deliver prior written notice of the designation of the new
Accounts to each rating agency, the trustee and the servicer and, if
required, must receive written confirmation from each rating agency that
the designation of the new Accounts will not result in a reduction or
withdrawal of the rating assigned by that rating agency to any
outstanding series.
The Designated Additional Account feature requires FNANB to transfer
additional receivables to the trust if there would otherwise be insufficient
receivables to support all outstanding series. If FNANB fails to designate new
Eligible Accounts within 10 days after it is required to do so, an Early
Amortization Event will occur with respect to the related series.
The securityholders will not incur any costs in connection with the addition
of Designated Additional Accounts. We cannot assure you, however, that the
Designated Additional Accounts will be of the same credit quality as the
initial Accounts.
Removal of Accounts
FNANB has the right to designate, from time to time, Accounts the
receivables in which will be removed from the trust. The trust will retransfer
the receivables in the Removed Accounts to FNANB upon satisfaction of various
conditions, including the following:
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. FNANB must deliver to the trustee a reassignment document to be signed by
the trustee and a computer file or microfiche list containing a true and
complete list of the Removed Accounts;
. FNANB must represent and warrant that the Removed Accounts were not
selected through a procedure believed to be materially adverse to the
interests of the securityholders or any provider of credit enhancement;
. the retransfer of the receivables in the Removed Accounts must not, in
the reasonable belief of FNANB, cause an Early Amortization Event or an
event which, with notice or lapse of time or both, would constitute an
Early Amortization Event to occur;
. the retransfer of the receivables in the Removed Accounts must not cause
the Transferor Amount to be less than the Minimum Transferor Amount; and
. FNANB must deliver prior written notice of the designation of the Removed
Accounts to each rating agency and must receive written confirmation from
each rating agency that the retransfer of the receivables in the Removed
Accounts will not result in a reduction or withdrawal of the rating
assigned by that rating agency to any outstanding series.
Discount Option
FNANB has the right to cause a specified percentage of receivables in the
trust that would otherwise be treated as Principal Receivables to be treated as
Finance Charge Receivables, a right which is referred to in this prospectus and
the attached prospectus supplement as the Discount Option. FNANB may only
exercise or discontinue the Discount Option upon satisfaction of various
conditions, including receipt of written confirmation from each rating agency
that the proposed action will not result in a reduction or withdrawal of the
rating assigned by that rating agency to any outstanding series. FNANB may use
the Discount Option to reduce the likelihood that an Early Amortization Event
would occur as a result of a decrease in the yield on the receivables. The use
of the Discount Option will increase the likelihood that FNANB will be required
to add Principal Receivables to the trust.
The Collection Account
The trustee has established and will maintain with an Eligible Institution,
for the benefit of the securityholders of all series, a segregated trust
account designated as the Collection Account. The servicer may direct that
funds on deposit in the Collection Account be invested in Eligible Investments.
On each Distribution Date, all net investment earnings on funds on deposit in
the Collection Account will be withdrawn from the Collection Account and paid
to the holder of the Exchangeable Transferor Certificate. The servicer has the
revocable power to make withdrawals and payments from the Collection Account
and to instruct the trustee to make withdrawals and payments from the
Collection Account, in each case in accordance with the master pooling and
servicing agreement and any series supplement.
The servicer will deposit amounts collected on the receivables that are
allocated to a series into the Collection Account no later than the second
Business Day following the date those collections are processed; provided,
however, that the servicer will not be required to deposit collections into the
Collection Account until the Business Day before each Distribution Date if:
. FNANB or an affiliate of FNANB is the servicer;
. no Servicer Default has occurred and is continuing; and
. the servicer maintains short-term credit ratings required by the rating
agencies or obtains written confirmation from each rating agency that the
monthly deposit of collections will not result in a reduction or
withdrawal of the rating assigned by that rating agency to any
outstanding series.
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If amounts collected on the receivables are deposited into the Collection
Account on a monthly basis, the servicer may use those collections for its own
purposes until the deposit date, the servicer need not segregate those
collections from its other assets until the deposit date and the servicer may
invest those collections in investments that mature on or before the deposit
date and may retain for its own account any net investment earnings on those
collections. We cannot assure you that collections held by the servicer will be
available to the securityholders if the servicer becomes insolvent or a
receiver or conservator is appointed for the servicer.
The servicer will remit amounts collected on the receivables that are
allocated to the Transferor Interest to the holder of the Exchangeable
Transferor Certificate on each Business Day. The series supplement for a series
may limit the amounts collected on the receivables during any Due Period that
need to be deposited into the Collection Account.
Funding Period
The series supplement for a series may provide for a Funding Period during
which the aggregate amount of Principal Receivables in the trust that are
allocated to that series may be less than the aggregate principal amount of the
securities of that series. If a series includes a Funding Period, the amount of
that deficiency will be deposited into a Pre-Funding Account pending the
transfer of additional receivables to the trust or the reduction of the
Invested Amount of one or more other series. During the Funding Period, funds
on deposit in the Pre-Funding Account will be withdrawn and paid to FNANB to
the extent of any increase in the aggregate amount of Principal Receivables in
the trust. On each Distribution Date during the Funding Period, all net
investment earnings on funds on deposit in the Pre-Funding Account will be
withdrawn from the Pre-Funding Account and deposited into the Collection
Account and will be used to pay interest on the securities of the related
series in the manner specified in the related series supplement.
The series supplement for a series that includes a Funding Period will
specify the initial Invested Amount of that series, the initial aggregate
principal amount of the securities of that series, the date by which the
Invested Amount of that series is expected to equal the initial aggregate
principal amount of the securities of that series and the date on which that
Funding Period will end. If the Funding Period for a series does not end by the
date specified in the related series supplement, any amount remaining in the
Pre-Funding Account on that date and any other amounts specified in the related
series supplement will be paid to securityholders.
Allocation of Collections
On each Determination Date, the servicer will allocate all amounts collected
on the receivables during the preceding Due Period among each outstanding
series, or, if a series has multiple classes, among each class of that series,
the Transferor Interest and, to the extent provided in the series supplement
for any outstanding series, any provider of credit enhancement for that series.
The servicer will allocate these amounts based on the applicable Invested
Percentage of each series or the Transferor Percentage. The series supplement
for each series will specify how the Invested Percentages are calculated for
that series and, if that series has multiple classes, how allocations will be
made among those classes. The Invested Percentage for a series may be based on
an amount other than the Invested Amount of that series.
Application of Collections
On each Distribution Date, the servicer will apply or cause the trustee to
apply all amounts collected on the receivables during the preceding Due Period
as follows:
. Finance Charge Receivables During All Periods. All collections of Finance
Charge Receivables allocated to a series will be applied as specified in
the related series supplement;
. Principal Receivables During the Revolving Period. All collections of
Principal Receivables allocated to a series will be shared with other
series, deposited into the Excess Funding Account or paid to the holder
of the Exchangeable Transferor Certificate, in each case as specified in
the related series supplement;
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. Principal Receivables During the Controlled Accumulation Period. All
collections of Principal Receivables allocated to a series, up to a
specified amount, will be deposited into the Principal Funding Account
for that series as specified in the related series supplement; provided,
however, that, if the available amount exceeds the amount to be deposited
into the Principal Funding Account, that excess will be shared with other
series, deposited into the Excess Funding Account or paid to the holder
of the Exchangeable Transferor Certificate, in each case as specified in
the related series supplement;
. Principal Receivables During the Rapid Accumulation Period. All
collections of Principal Receivables allocated to a series will be
deposited into the Principal Funding Account for that series as specified
in the related series supplement; provided, however, that, if the
available amount exceeds the amount remaining to be accumulated with
respect to that series, that excess will be shared with other series,
deposited into the Excess Funding Account or paid to the holder of the
Exchangeable Transferor Certificate, in each case as specified in the
related series supplement;
. Principal Receivables During the Controlled Amortization Period. All
collections of Principal Receivables allocated to a series, up to a
specified amount, will be paid to the securityholders of that series as
specified in the related series supplement; provided, however, that, if
the available amount exceeds the amount to be paid to securityholders,
that excess will be shared with other series, deposited into the Excess
Funding Account or paid to the holder of the Exchangeable Transferor
Certificate, in each case as specified in the related series supplement;
and
. Principal Receivables During the Principal Amortization Period or the
Early Amortization Period. All collections of Principal Receivables
allocated to a series will be paid to the securityholders of that series
as specified in the rel series supplement; provided, however, that, if
the available amount exceeds the amount remaining to be paid with respect
to that series, that excess will be shared with other series, deposited
into the Excess Funding Account or paid to the holder of the Exchangeable
Transferor Certificate, in each case as specified in the related series
supplement.
If a series of securities includes more than one class, the amounts
collected on the receivables and allocated to that series will be applied to
each class in the manner and order of priority specified in the related series
supplement.
Shared Excess Finance Charge Collections
If a series is included in a group, collections of Finance Charge
Receivables allocated to that series in excess of the amount needed to make all
required deposits or payments with respect to that series may be shared with
other series in that group. If only one series in a group requires additional
collections of Finance Charge Receivables, that series will have access to all
of the excess collections available to the series in that group. If two or more
series in a group require additional collections of Finance Charge Receivables,
the excess collections available to the series in that group will be allocated
among those series pro rata based on the amount required by each series. In all
cases, any excess collections of Finance Charge Receivables remaining after
covering amounts required by other series in a group will be paid to the holder
of the Exchangeable Transferor Certificate.
The sharing of excess collections of Finance Charge Receivables may enable
FNANB to avoid the occurrence of an Early Amortization Event that would
otherwise occur as a result of a shortfall in collections of Finance Charge
Receivables allocated to one or more series. We cannot assure you, however,
that excess collections will exist or be allocated to any particular series on
any Distribution Date.
Shared Principal Collections
If a series is included in a group, collections of Principal Receivables
allocated to that series in excess of the amount needed to make all required
deposits or payments with respect to that series may be shared with other
series in that group. If only one series in a group requires additional
collections of Principal Receivables,
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that series will have access to all of the excess collections available to the
series in that group. If two or more series in a group require additional
collections of Principal Receivables, the excess collections available to the
series in that group will be allocated among those series pro rata based on the
amount required by each series. In all cases, any excess collections of
Principal Receivables remaining after covering amounts required by other series
in a group will be deposited into the Excess Funding Account or paid to the
holder of the Exchangeable Transferor Certificate, in each case as provided in
the related series supplement.
The sharing of excess collections of Principal Receivables may enable FNANB
to avoid the occurrence of an Early Amortization Event that would otherwise
occur as a result of a shortfall in collections of Principal Receivables
allocated to one or more series. We cannot assure you, however, that excess
collections will exist or be allocated to any particular series on any
Distribution Date.
The Excess Funding Account
The trustee has established and will maintain with an Eligible Institution,
for the benefit of the securityholders of all series, a segregated trust
account designated as the Excess Funding Account. The servicer may direct that
funds on deposit in the Excess Funding Account be invested in Eligible
Investments. On each Distribution Date, all net investment earnings on funds on
deposit in the Excess Funding Account will be withdrawn from the Excess Funding
Account, deposited into the Collection Account and applied as collections of
Finance Charge Receivables.
If, on any Business Day, the Transferor Amount is less than the Minimum
Transferor Amount, the servicer will deposit into the Excess Funding Account
any collections of Principal Receivables that otherwise would be distributed to
the holder of the Exchangeable Transferor Certificate.
If, on any Business Day, the Transferor Amount exceeds the Minimum
Transferor Amount, the servicer will instruct the trustee to withdraw from the
Excess Funding Account and pay to the holder of the Exchangeable Transferor
Certificate an amount equal to that excess or, if less, the amount then on
deposit in the Excess Funding Account; provided, however, that if the
Accumulation Period or the Amortization Period commences for a series included
in a group, the amount that would otherwise be withdrawn from the Excess
Funding Account and paid to the holder of the Exchangeable Transferor
Certificate will instead be withdrawn from the Excess Funding Account and
shared with other series to the extent specified in the related series
supplement.
Companion Series
The series supplement for a series may provide for that series to be paired
with one or more Companion Series. A Companion Series may be used to finance
the increase in the Transferor Amount that would otherwise occur as principal
is deposited into a Principal Funding Account for another series or paid to the
securityholders of another series. As principal is allocated to the series with
which the Companion Series is paired, the Invested Amount of the Companion
Series will increase and either:
. an equal amount of funds on deposit in a Pre-Funding Account for the
Companion Series will be released to FNANB; or
. an interest in a variable funding series that is equal to the principal
allocated to the series with which the Companion Series is paired will be
sold and the proceeds will be distributed to FNANB.
If a Companion Series includes a Pre-Funding Account, that account will be
funded on the related closing date with the proceeds from the sale of the
Companion Series. Any Pre-Funding Account will be held for the benefit of the
Companion Series and not for the benefit of any other series.
We cannot assure you that the terms of a Companion Series will not have an
adverse impact on the timing or amount of payments allocated to the series with
which the Companion Series is paired. If an Early
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Amortization Event occurs with respect to a Companion Series while the series
with which it is paired is outstanding, the percentage of receivables allocated
to the series with which the Companion Series is paired may be reduced if the
series supplement relating to the Companion Series requires that the Companion
Series also receive its share of collections of Principal Receivables. In
addition, if an Early Amortization Event occurs with respect to the series with
which a Companion Series is paired, the percentage of receivables allocated to
the Companion Series may be reduced until the series with which the Companion
Series is paired is paid in full.
A Companion Series may be issued privately or sold publicly. A Companion
Series sold publicly will be registered under the registration statement we
have filed with the SEC relating to the securities. The series supplement for a
Companion Series and the series supplement for each series with which a
Companion Series is paired will specify the relationship between those series.
Allocation of Default Amount
On each Determination Date, the servicer will calculate the Default Amount
for the preceding Due Period. The Default Amount for any Due Period represents,
in general, the aggregate amount of Principal Receivables charged-off as
uncollectible during that Due Period minus the aggregate amount of recoveries
received by the servicer during that Due Period with respect to charged-off
receivables. A receivable will be considered charged off for purposes of the
master pooling and servicing agreement on the earliest of the date on which the
related Account is charged off under the customary and usual servicing
procedures of the servicer, the last day of the month in which that receivable
becomes 180 days delinquent on a contractual basis and 30 days after receipt of
notice by the servicer that the related obligor has died or declared
bankruptcy.
On each Determination Date, the servicer will allocate the Default Amount
for the preceding Due Period among each outstanding series, or, if a series has
multiple classes, among each class of that series, the Transferor Interest and,
to the extent provided in the series supplement for any outstanding series, any
provider of credit enhancement for that series. The servicer will allocate the
Default Amount based on the applicable Invested Percentage of each series and
the Transferor Percentage. If a series includes one or more classes of
subordinated securities, the related series supplement may provide that all or
a portion of any collections otherwise allocable to the subordinated securities
are to be allocated to the senior securities to cover any Default Amount
allocated to the senior securities.
Calculation of Series Adjustment Amount
On each Determination Date, the servicer will calculate the Dilution Amount
as of the last day of the preceding Due Period. The Dilution Amount as of the
last day of any Due Period represents, in general, the amount of any deficiency
in trust assets as of that last day attributable to downward adjustments made
in the amount of Principal Receivables in the trust for non-credit reasons.
FNANB may adjust downward the amount of a Principal Receivable because of a
rebate, refund or billing error, because goods or services were refused,
returned or not received by a cardholder or because of a fraudulent or
counterfeit charge. If FNANB adjusts downward the amount of a Principal
Receivable for any of these reasons, or if FNANB makes any other downward
adjustment in the amount of a Principal Receivable without collecting the
amount of that adjustment or charging off that amount as uncollectible, the
aggregate amount of Principal Receivables in the trust will be reduced by the
amount of the adjustment.
If the Dilution Amount as of the last day of any Due Period is greater than
zero, the servicer will allocate a portion of that amount to each outstanding
series based on a percentage, the numerator of which is the sum of the Invested
Amount of that series plus the Series Minimum Transferor Amount for that series
and the denominator of which is the sum of the aggregate Invested Amount of all
outstanding series plus the Minimum Transferor Amount. If the Dilution Amount
allocated to any series exceeds the Series Minimum Transferor
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Amount for that series, FNANB will be required to deposit an amount equal to
that excess into the Excess Funding Account. If FNANB fails to make this
deposit with respect to one or more series:
. the servicer will allocate a portion of any amount deposited to each
outstanding series based on a percentage, the numerator of which is the
amount required to be deposited with respect to that series and the
denominator of which is the amount required to be deposited with respect
to all outstanding series; and
. the servicer will calculate for each series the amount, if any, by which
the Dilution Amount allocated to that series exceeds the sum of the
Series Minimum Transferor Amount for that series plus any amount
deposited into the Excess Funding Account with respect to that Dilution
Amount that has been allocated to that series, which excess is referred
to in this prospectus as the Series Adjustment Amount for that series.
On each Determination Date, the servicer will allocate the Series Adjustment
Amount calculated as of the last day of the preceding Due Period for any series
that has multiple classes among each class of that series as specified in the
related series supplement. If a series includes one or more classes of
subordinated securities, the related series supplement may provide that all or
a portion of any collections otherwise allocable to the subordinated securities
are to be allocated to the senior securities to cover any Series Adjustment
Amount allocated to the senior securities.
Investor Charge-Offs
On each Distribution Date, the servicer will apply all collections of
Finance Charge Receivables allocated to each series and any other amounts
specified in the related series supplement to pay or cover various amounts,
including, to the extent specified in that series supplement:
. the interest payable on that series on that Distribution Date;
. the servicing fee payable to a successor servicer with respect to that
series;
. the Default Amount allocated to that series for the preceding Due Period;
. the Series Adjustment Amount calculated for that series as of the last
day of the preceding Due Period; and
. any other required amounts.
If the available funds for any series are insufficient to pay or cover the
required amounts for that series, the Invested Amount of that series will be
reduced in the manner and to the extent specified in the related series
supplement. The amount of this reduction on any Distribution Date will be
limited to the Default Amount allocated to that series for that Distribution
Date plus the Series Adjustment Amount calculated for that series as of the
last day of the preceding Due Period. The Invested Amount of a series may be
increased through reimbursement of Investor Charge-Offs on any subsequent
Distribution Date.
If a series includes one or more classes of subordinated securities, the
related series supplement may provide that all or a portion of any collections
otherwise allocable to the subordinated securities are to be allocated to the
senior securities to cover any Investor Charge-Offs that would otherwise be
applied to the senior securities.
Defeasance
FNANB may terminate its obligations with respect to a series by depositing
with the trustee funds adequate to make all remaining scheduled interest and
principal payments on that series. FNANB may defease an outstanding series upon
satisfaction of various conditions, including the following:
. FNANB must deliver to the trustee an opinion of counsel that the
defeasance will not be treated for federal income tax purposes as a sale
or exchange by the holders of the defeased series;
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. FNANB must receive written confirmation from each rating agency that the
defeasance will not result in a reduction or withdrawal of the rating
assigned by that rating agent to any outstanding series;
. FNANB must deliver to the trustee an opinion of counsel that the
defeasance will not require the trust to register as an investment
company under the Investment Company Act of 1940, as amended; and
. FNANB must deliver to the trustee an officer's certificate confirming
that, in the reasonable opinion of FNANB, the defeasance will not cause
an Early Amortization Event to occur with respect to any outstanding
series.
If FNANB terminates its obligations with respect to a defeased series, the
securityholders may lose the benefit of any credit enhancement for that
series.
Optional Repurchase
FNANB has the option to repurchase the securities of any series on any
Distribution Date after the Invested Amount of that series is reduced to an
amount equal to or less than 5% of the initial outstanding principal amount of
the securities of that series or any other amount specified in the related
series supplement. The repurchase price for any series will equal the Invested
Amount of that series plus all accrued but unpaid interest on the securities
of that series and any other amounts specified in the related series
supplement or any other repurchase price specified in the related series
supplement.
Series Termination
The securities of each series will be retired on the earliest of the date
on which the Invested Amount of that series is reduced to zero, the Stated
Series Termination Date for that series and the date on which the trust
terminates. If the Invested Amount of a series is greater than zero on the
related Stated Series Termination Date, the trustee will sell receivables
allocated to that series in an amount sufficient to repay the Invested Amount
of that series plus all accrued but unpaid interest on the securities of that
series and any other amounts specified in the related series supplement.
Early Amortization Events
An Early Amortization Event will occur with respect to all series if any of
the following events occurs:
. FNANB becomes insolvent or a receiver or conservator is appointed for
FNANB;
. FNANB is unable to transfer receivables to the trust as required by the
master pooling and servicing agreement; or
. the trust becomes an investment company within the meaning of the
Investment Company Act.
Each series may have additional Early Amortization Events applicable only
to that series as specified in the related series supplement. If an Early
Amortization Event occurs with respect to a series, the Early Amortization
Period will begin and the securityholders of that series may receive principal
payments earlier than expected. If a receiver or conservator is appointed for
FNANB, the receiver or conservator may have the power to delay or prevent the
commencement of the Early Amortization Period.
If FNANB voluntarily enters liquidation or a receiver or conservator is
appointed for FNANB, FNANB will immediately stop transferring receivables to
the trust and will promptly notify the trustee of the occurrence of that
event. The trustee will publish a notice of any liquidation or appointment
within 15 days of its receipt of the notice of that event. The notice
published by the trustee will state that the trustee intends to liquidate the
receivables in the trust in a commercially reasonable manner and on
commercially reasonable terms. The trustee will liquidate the receivables
allocable to any series issued prior to series 1996-1 unless instructed to do
otherwise by the holders of securities representing more than 50% of the
Invested Amount of each class of that
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series and each holder of an interest in the Transferor Interest other than
FNANB. The trustee will liquidate the receivables allocable to series 1996-1
and to series issued after series 1996-1 unless instructed to do otherwise by
the holders of interests aggregating more than 50% of each class of each
outstanding series, each holder of an interest in the Transferor Interest other
than FNANB and any other person specified in any series supplement.
The proceeds from a liquidation of the receivables will be treated as
collections allocable to the applicable securityholders or other holders of
interests in the trust and will be distributed with respect to each series in
the manner specified in the related series supplement. If the trustee is
instructed not to liquidate a portion of the receivables allocable to a series,
the trust will continue for that series under the terms of the master pooling
and servicing agreement and the related series supplement. If a receiver or
conservator is appointed for FNANB, the receiver or conservator may have the
power to delay or prevent an early liquidation of the receivables.
Additional Defaults and Remedies
The series supplement for a series may provide that additional defaults and
remedies apply to one or more classes included in that series. The additional
defaults applicable to a class may include the failure to pay interest owed to
the holders of that class on one or more Distribution Dates, the failure to
reimburse Investor Charge-Offs applicable to that class for one or more
Distribution Dates or such other defaults as may be specified in the related
series supplement. The additional remedies applicable to a class may include
the right, following the payment in full of all senior securities, to cause the
trustee to liquidate an amount of receivables not to exceed a specified
percentage of the Invested Amount of that class or such other remedies as may
be specified in the related series supplement. The attached prospectus
supplement describes any additional defaults or remedies applicable to your
class of securities.
Indemnification
The servicer will indemnify the trust, for the benefit of the
securityholders, and the trustee for any losses arising out of or relating to
the actions or omissions of the servicer under the master pooling and servicing
agreement or any series supplement; provided, however, that the servicer will
not indemnify the trust or the trustee for any losses relating to:
. any action taken by the trustee at the request of the securityholders;
. any taxes required to be paid by the trust, the trustee or the
securityholders;
. as to the trustee, any wrongful actions taken by or omissions of the
trustee;
. any fraud, negligence or willful misconduct by the trustee; or
. market or investment risks.
FNANB will be liable to each injured party for any losses, other than losses
incurred by a securityholder in the capacity of an investor in the securities,
arising out of or based on the arrangement created by the master pooling and
servicing agreement or the actions taken by the servicer under the master
pooling and servicing agreement as though the master pooling and servicing
agreement created a partnership under the Uniform Partnership Act. In addition,
FNANB will indemnify each securityholder for any of these losses, other than
losses incurred by a securityholder in the capacity of an investor in the
securities, except to the extent that those losses arise from any action by any
securityholder.
The Servicer
The servicer will be responsible for servicing and administering the
receivables and for collecting payments due under the receivables in accordance
with its customary and usual servicing procedures for servicing credit card
receivables comparable to the receivables. The servicer may modify its
servicing
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procedures from time to time. The servicer is required to maintain fidelity
bond coverage against losses incurred through wrongdoing of its servicing
officers in amounts that the servicer believes to be reasonable from time to
time.
The servicer may not resign from its obligations and duties under the master
pooling and servicing agreement unless it determines that the performance of
those obligations and duties is impermissible under applicable law. Any
resignation of the servicer will be effective only when the trustee or a
successor servicer assumes the servicer's obligations and duties under the
master pooling and servicing agreement. The servicer may delegate some of its
servicing duties to a person who agrees to perform those duties in accordance
with the servicer's written servicing policies and procedures, but the servicer
will remain liable for the performance of those duties.
Servicer Covenants
The servicer makes various covenants to the securityholders, including that:
. the servicer will fulfill in all material respects its obligations with
respect to each receivable and the related Account;
. the servicer will maintain in effect all material qualifications required
to service properly each receivable and the related Account;
. the servicer will comply in all material respects with all laws relating
to the servicing of each receivable and the related Account the failure
to comply with which would have a material adverse effect on the
securityholders;
. the servicer will not permit any rescission or cancellation of a
receivable, except pursuant to a court order or in the ordinary course of
business and in accordance with its written servicing policies and
procedures;
. the servicer will do nothing to impair the rights of the securityholders
or any provider of credit enhancement in a receivable;
. the servicer will not take any action that causes a receivable to be
evidenced by an instrument under the UCC; and
. the servicer will not reschedule, revise, waive or defer payments due on
a receivable except in accordance with its written servicing policies and
procedures.
If the servicer breaches any of these covenants and that breach:
. has a material adverse effect on the interests of the securityholders in
a receivable; and
. continues unremedied for 60 days, or for such longer period as may be
agreed to by the trustee not to exceed an additional 90 days, after the
servicer discovers or receives notice of that breach;
then the servicer will be obligated to accept transfer of that receivable by
depositing the amount of that receivable into the Collection Account. The
servicer will make this deposit on the day before the Distribution Date
following the Due Period during which the obligation to make the deposit
arises. This deposit will be treated as a repayment in full of the related
receivable and will be allocated in the same manner as payments received from
cardholders under the Accounts. The servicer's obligation to accept transfer of
a receivable is the only remedy available to the securityholders with respect
to any breach of the covenants of the servicer.
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Servicing Compensation
The servicer receives a monthly fee for its servicing activities under the
master pooling and servicing agreement and is reimbursed for various expenses
incurred in servicing the receivables and in administering the trust. The
servicing fee is allocated among each outstanding series, or, if a series has
multiple classes, among each class of that series, and the Transferor Interest
and accrues for each outstanding series in the manner specified in the related
series supplement. The servicing fee allocable to each series is payable from
collections of Finance Charge Receivables allocated to that series. If a series
includes multiple classes of securities, each class will be responsible for a
portion of the servicing fee allocated to that series. The trust and the
securityholders are not responsible for any servicing fee allocable to the
Transferor Interest.
The servicer will pay from its servicing compensation certain expenses
incurred in connection with servicing the receivables and the Accounts,
including expenses related to enforcement of the receivables, payment of fees
and disbursements of the trustee and independent accountants and all other fees
and expenses which are not expressly stated in the master pooling and servicing
agreement to be payable by the trust or the securityholders, other than income
or franchise taxes, if any, of the trust.
Servicer Defaults
A Servicer Default will occur with respect to all series if any of the
following events occurs:
. the servicer fails to make, or to instruct the trustee to make, any
payment when required under the master pooling and servicing agreement or
any series supplement or within a five Business Day grace period;
provided, however, that a failure caused by circumstances beyond the
servicer's control will not be a Servicer Default if the servicer
promptly remedies that failure within five Business Days after the
servicer receives notice of or otherwise becomes aware of that failure;
. the servicer fails to observe or perform any of its other covenants or
agreements under the master pooling and servicing agreement or any series
supplement, that failure has a material adverse effect on the
securityholders of any outstanding series and continues unremedied for 60
days after written notice of that failure, requiring that it be remedied,
is given to the servicer by the trustee, or to the servicer and the
trustee by the holders of more than 50% of the Invested Amount of any
series adversely affected by that failure, and that failure continues to
materially adversely affect the rights of the securityholders of any
outstanding series;
. the servicer delegates its duties under the master pooling and servicing
agreement, except as specifically permitted under the master pooling and
servicing agreement;
. any representation, warranty or certification made by the servicer in the
master pooling and servicing agreement or any series supplement or in any
certificate delivered under those agreements proves to have been
incorrect when made, that incorrectness has a material adverse effect on
the rights of the securityholders of any outstanding series and that
representation or warranty continues to be incorrect in any material
respect and to affect materially and adversely the rights of the
securityholders of any outstanding series for 60 days after written
notice of that incorrectness, requiring that it be remedied, is given to
the servicer by the trustee, or to the servicer and the trustee by the
holders of more than 50% of the Invested Amount of any series adversely
affected by that incorrectness; or
. various events of bankruptcy, insolvency or receivership occur with
respect to the servicer;
provided, however, that a Servicer Default will not result from:
. a failure to make any payment, transfer or deposit which continues for a
period of 10 Business Days after the applicable grace period; or
. a failure to observe or perform any other covenant or agreement or a
breach of a representation or warranty which, in each case, continues for
a period of 60 Business Days after the applicable grace period;
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if the failure could not have been prevented by the exercise of reasonable
diligence by the servicer and the failure was caused by an act of God or other
similar event. The servicer must still use its best reasonable efforts to
perform its obligations in a timely manner under the master pooling and
servicing agreement or any series supplement. The servicer will give prompt
notice to the trustee, FNANB, the securityholders and any providers of credit
enhancement of any failure caused by an act of God or other similar event and
will include with that notice a description of its efforts to remedy that
failure.
The servicer will immediately notify the trustee in writing of any Servicer
Default. If a Servicer Default occurs and is not remedied, the trustee or the
holders of securities representing more than 50% of the aggregate Invested
Amount of all outstanding series may remove the existing servicer and appoint a
new servicer. If a new servicer has not been appointed or has not accepted its
appointment by the time the outgoing servicer ceases to act as servicer, the
trustee will become the servicer.
If the trustee is unable to obtain a new servicer and the outgoing servicer
certifies that it cannot in good faith cure the related Servicer Default, the
trustee may offer FNANB the right to accept retransfer of all of the
receivables in the trust. The amount paid by FNANB in connection with the
retransfer will equal:
. the aggregate Invested Amount of all outstanding series; minus
. the aggregate principal amount on deposit in the Excess Funding Account
and any Principal Funding Account for any series; plus
. all accrued but unpaid interest on the securities of all outstanding
series; plus
. any amounts payable to the providers of credit enhancement.
If a receiver or conservator is appointed for the servicer, the receiver or
conservator may have the power to prevent the appointment of a successor
servicer.
Reports to Securityholders
On each Determination Date, the servicer will deliver to the trustee a
statement setting forth various information about the trust and the securities
of each series. This information will include:
. the aggregate amount of collections, the aggregate amount of collections
of Finance Charge Receivables and the aggregate amount of collections of
Principal Receivables processed during the immediately preceding Due
Period;
. the Invested Percentage for that Due Period;
. the receivables in the trust broken out by delinquency status;
. the portion of the Default Amount allocated to each series for that
Distribution Date;
. the Series Adjustment Amount calculated for each series as of the last
day of the preceding Due Period;
. the amount of any Investor Charge-Offs and any reimbursements of Investor
Charge-Offs for that Distribution Date;
. the amount of the servicing fee allocable to each series for that
Distribution Date;
. the aggregate amount of receivables in the trust at the close of business
on the last day of the immediately preceding Due Period;
. the Invested Amount of each series as of the close of business on the
last day of the immediately preceding Due Period;
. whether an Early Amortization Event has occurred; and
. information relating to floating interest rates, if applicable, for the
immediately preceding Due Period.
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On each Distribution Date, the trustee will deliver or cause to be delivered
to each securityholder of each series a statement prepared by the servicer
setting forth various information about that series. This information will
include the information about that series set forth in the related monthly
statement delivered by the servicer to the trustee and will also include, to
the extent specified in the related series supplement, the total amount
distributed on that Distribution Date, the amount of that distribution
allocable to principal, the amount of that distribution allocable to interest
and the amount, if any, by which the aggregate principal amount of the
securities exceeds the aggregate Invested Amount of all outstanding series.
On or before January 31 of each year, the trustee will deliver or cause to
be delivered to each person who was a securityholder of record at any time
during the preceding calendar year a statement summarizing the distributions
made to the related series during that calendar year. This information is
intended to help securityholders prepare their tax returns.
If the securities are held in book-entry form, each monthly securityholders
statement will be delivered to DTC or its nominee, Cede & Co., as the
registered holder of the securities. DTC and its participants will deliver each
monthly securityholders statement to the Security Owners in accordance with DTC
rules and the rules and policies of the DTC participants.
Evidence as to Compliance
On or before June 30 of each year, the servicer will cause a firm of
nationally recognized independent accountants to deliver to the trustee, the
rating agencies and, if required by the related series supplement, the provider
of any credit enhancement:
. a report to the effect that, in their opinion, the monthly statements
delivered by the servicer to the trustee during the preceding fiscal year
of the trust conform in all material respects with the requirements of
the master pooling and servicing agreement; and
. a report to the effect that, in connection with their examination of the
monthly statements delivered by the servicer to the trustee during the
preceding fiscal year of the trust, nothing came to their attention that
caused them to believe that the servicer failed to comply with specified
terms and conditions of the master pooling and servicing agreement.
The report delivered by the accountants in connection with their examination
of the monthly statements delivered by the servicer to the trustee:
. will be based on a comparison of the mathematical calculations of each
amount set forth in those statements with the servicer's computer reports
that were the source of those amounts; and
. will state that, on the basis of that comparison, the accountants are of
the opinion that those amounts are in agreement except for such
exceptions as the accountants believe are immaterial and such other
exceptions as are set forth in the report.
On or before June 30 of each year, an officer of the servicer will deliver
to the trustee and the rating agencies a certificate stating that, based on a
review of the activities of the servicer during the preceding fiscal year of
the trust, the servicer has fully performed its obligations under the master
pooling and servicing agreement during that fiscal year or, if an event which,
with the giving of notice or passage of time or both, would constitute a
Servicer Default has occurred, specifying that event and the nature and status
of that event. A securityholder or Security Owner may obtain a copy of this
certificate from the trustee upon written request.
Amendments
The master pooling and servicing agreement and any series supplement may be
amended from time to time by FNANB, the servicer and the trustee, without
securityholder consent, to do the following:
. cure any ambiguity;
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. correct or supplement any provision in the master pooling and servicing
agreement or any series supplement that may be inconsistent with any
other provision in the master pooling and servicing agreement or that
series supplement; or
. add additional code numbers to those used to identity the Accounts; or
. add any other provisions with respect to matters or questions arising
under the master pooling and servicing agreement or any series supplement
which are not inconsistent with the provisions of the master pooling and
servicing agreement or that series supplement;
provided, however, that the proposed amendment may not adversely affect in any
material respect the interests of any of the securityholders.
The master pooling and servicing agreement and any series supplement may
also be amended from time to time by FNANB, the servicer and the trustee,
without securityholder consent, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the master
pooling and servicing agreement or modifying in any manner the rights of the
securityholders; provided, however, that:
. the servicer must deliver to the trustee an opinion of counsel to the
effect that the proposed amendment will not materially and adversely
affect the interests of the securityholders of any outstanding series,
which opinion may rely on rating agency confirmation of the ratings for
any rated series;
. the servicer must deliver to the trustee an opinion of counsel to the
effect that the proposed amendment will not cause the trust to be subject
to corporate taxation or have any other materially adverse federal income
tax effect on any outstanding series or the securityholders; and
. each rating agency must confirm in writing that the proposed amendment
will not result in a reduction or withdrawal of any rating assigned by
that rating agency to any outstanding series.
The master pooling and servicing agreement and any series supplement may
also be amended from time to time by FNANB, the servicer and the trustee, with
the consent of the holders of securities representing not less than 66 2/3% of
the aggregate Invested Amount of all series adversely affected by the proposed
amendment, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the master pooling and servicing
agreement or modifying in any manner the rights of the securityholders of any
outstanding series; provided, however, that the proposed amendment may not:
. reduce in any manner the amount of, or delay the timing of, distributions
required to be made on the securities of that series without the consent
of the related securityholders;
. change the definition of or the manner of calculating the Invested Amount
of that series, the Invested Percentage of that series, the amount
available under any credit enhancement for that series or the Default
Amount allocated to that series without the consent of the related
securityholders; or
. reduce the percentage of the Invested Amount of that series that is
required to consent to an amendment to the master pooling and servicing
agreement without the consent of the related securityholders.
The trustee will furnish written notice of the substance of any amendment to
the master pooling and servicing agreement, other than an amendment not
requiring securityholder consent or rating agency confirmation, to each
securityholder promptly after the execution of that amendment.
List of Securityholders
The holders of securities representing not less than 10% of the Invested
Amount of a series may request access to the trustee's current list of
securityholders for purposes of communicating with other securityholders about
their rights under the master pooling and servicing agreement. The requesting
securityholders must cover any costs and expenses of the trustee relating to
this request.
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The Trustee
Bankers Trust Company is the trustee under the master pooling and servicing
agreement. FNANB, the servicer and their respective affiliates may from time to
time have banking and trustee relationships with the trustee and its
affiliates. The trustee, FNANB, the servicer and their respective affiliates
may hold securities of any series in their own names, but any securities held
by them will not be entitled to participate in any decisions made or
instructions given to the trustee by the securityholders as a group. The
trustee's address is Four Albany Street, New York, New York 10006, Attention:
Corporate Trust and Agency Group--Structured Finance.
In addition, where required by local law, the trustee may appoint a co-
trustee or separate trustee of all or any part of the trust. If this occurs,
all rights, powers, duties and obligations conferred or imposed upon the
trustee will be conferred or imposed jointly on the trustee and any separate
trustee or co-trustee or, in any jurisdiction where the trustee will be
incompetent or unqualified to perform required acts, singly on any separate
trustee or co-trustee. In each case, a separate trustee or co-trustee will
exercise and perform these rights, powers, duties and obligations solely at the
direction of the trustee.
The trustee may resign at any time. If the trustee resigns, FNANB will be
obligated to appoint a successor trustee. In addition, FNANB may remove the
trustee and appoint a successor trustee if the trustee ceases to be eligible to
continue in that role under the master pooling and servicing agreement or the
trustee becomes insolvent.
Any resignation or removal of the trustee and appointment of a successor
trustee will not become effective until acceptance of the appointment by the
successor trustee.
Termination of the Trust
The trust is scheduled to terminate on the earliest of:
. the day following the date on which funds are deposited in the Collection
Account sufficient to pay in full the aggregate Invested Amount of all
outstanding series and the aggregate Enhancement Invested Amount, if any,
of all outstanding series plus interest accrued through the last day of
the preceding interest accrual period on all outstanding series;
. the expiration of 21 years from the death of the last survivor of the
descendants of George Herbert Walker Bush, former President of the United
States, living on October 4, 1994; and
. September 1, 2094.
Upon the termination of the trust and the surrender of the Exchangeable
Transferor Certificate, the trustee will convey to FNANB the receivables and
all other assets of the trust, other than amounts held in bank accounts
maintained by the trust for the final payment of interest and principal to
securityholders.
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REGISTRATION AND TRANSFER OF THE SECURITIES
Book-Entry Securities
We expect that the offered securities will initially be issued in book-entry
form. If the offered securities are issued in book-entry form, you may hold
your securities through DTC in the United States or through Clearstream or
Euroclear in Europe.
The Depository Trust Company
DTC is a limited-purpose trust company organized under the New York Banking
Law, a banking organization within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a clearing corporation within the meaning
of the New York UCC and a clearing agency registered under the Exchange Act.
DTC holds securities that its participating organizations deposit with DTC. DTC
also facilitates the clearance and settlement of securities transactions among
organizations participating in DTC, including transfers and pledges of
deposited securities, through electronic book-entry changes in DTC
participants' accounts, eliminating the need for physical movement of
securities. DTC participants include securities brokers and dealers, banks,
trust companies and clearing corporations and may include other organizations.
DTC is owned by a number of its DTC participants and the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. Indirect access to the DTC system is also available
to others, including securities brokers and dealers, banks and trust companies
that clear through or maintain a custodial relationship with a DTC participant,
either directly or indirectly. The rules applicable to DTC and its DTC
participants are on file with the SEC.
The information set forth in this section concerning DTC has been provided
by DTC for informational purposes only and is not intended to serve as a
representation, warranty or contract modification of any kind. We make no
representations as to the accuracy or completeness of this information.
Clearstream
Clearstream Banking, societe anonyme, is incorporated under the laws of
Luxembourg as a professional depository. Clearstream holds securities for
organizations participating in Clearstream's book-entry system and facilitates
the clearance and settlement of securities transactions between Clearstream
customers through electronic book-entry changes in accounts of Clearstream
customers, eliminating the need for physical movement of securities.
Transactions may be settled by Clearstream in any of 36 currencies, including
U.S. dollars. Clearstream provides to its customers, among other things,
services for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Clearstream also deals with domestic securities markets in over 30 countries
through established depository and custodial relationships. Clearstream is
registered as a bank in Luxembourg, and as such is subject to regulation by the
Commission de Surveillance du Secteur Financier, which supervises Luxembourg
banks. Clearstream customers are world-wide financial institutions, including
underwriters, securities brokers and dealers, banks, trust companies and
clearing corporations and may include the underwriters of any series of
securities offered through this prospectus. Clearstream customers in the U.S.
are limited to securities brokers and dealers and banks. Clearstream has
approximately 2,000 customers located in over 80 countries, including all major
European countries, Canada and the United States. Indirect access to
Clearstream is available to other institutions that clear through or maintain a
custodial relationship with an account holder of Clearstream. Clearstream has
established an electronic bridge with Morgan Guaranty Trust Company of New
York, as operator of the Euroclear system, in Brussels, Belgium to facilitate
settlement of trades between Clearstream and Euroclear.
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Euroclear
The Euroclear system was created in 1968 to hold securities for
organizations participating in the Euroclear system and to clear and settle
transactions between those organizations through simultaneous electronic book-
entry delivery against payment, eliminating the need for physical movement of
securities and any risk from lack of simultaneous transfers of securities and
cash. Transactions may be settled through the Euroclear system in any of 34
currencies, including U.S. dollars. The Euroclear system includes various other
services, including securities lending and borrowing and interfaces with
domestic markets in several countries similar to the arrangements for cross-
market transfers with DTC. The Euroclear system is operated by the Brussels,
Belgium office of Morgan Guaranty Trust Company of New York under a contract
with Euroclear Clearance System, S.C., a Belgian cooperative corporation. All
operations are conducted by that office, and all Euroclear securities clearance
accounts and Euroclear cash accounts are maintained with that office, not
Euroclear Clearance System. Euroclear Clearance System establishes policy for
the Euroclear system on behalf of organizations participating in the Euroclear
system. Those organizations include banks, including central banks, securities
brokers and dealers and other professional financial intermediaries, and may
include the underwriters of any series of securities offered through this
prospectus. Indirect access to the Euroclear system is also available to other
firms that clear through or maintain a custodial relationship with a Euroclear
participant, either directly or indirectly.
Morgan Guaranty is a New York banking corporation and a member bank of the
Federal Reserve System. Morgan Guaranty is regulated and examined by the Board
of Governors of the Federal Reserve System and the New York State Banking
Department. The Brussels, Belgium office of Morgan Guaranty is regulated and
examined by the Belgian Banking Commission.
The Terms and Conditions Governing Use of Euroclear, the related Operating
Procedures of the Euroclear system and applicable Belgian law govern the
securities clearance accounts and cash accounts maintained with the operator of
the Euroclear system, transfers of securities and cash within the Euroclear
system, withdrawal of securities and cash from the Euroclear system and
receipts of payments with respect to securities in the Euroclear system. All
securities in the Euroclear system are held on a fungible basis without
attribution of specific securities to specific securities clearance accounts.
The operator of the Euroclear system acts under these terms and conditions only
on behalf of Euroclear customers and has no record of or relationship with
persons holding through those organizations.
Book-Entry Registration
Cede & Co., as DTC's nominee, will hold the global securities. Clearstream
and Euroclear will hold omnibus positions on behalf of Clearstream customers
and Euroclear participants, respectively, through customers' securities
accounts in Clearstream's and Euroclear's names on the books of their
respective depositaries. These depositaries will in turn hold these positions
in customers' securities accounts in the depositaries' names on DTC's books.
Transfers between DTC participants will occur in accordance with DTC rules.
Transfers between Clearstream customers and Euroclear participants will occur
in accordance with their applicable rules and operating procedures. Cross-
market transfers between persons holding securities directly or indirectly
through DTC, on the one hand, and directly or indirectly through Clearstream
customers or Euroclear participants, on the other, will be effected in DTC in
accordance with DTC rules on behalf of the relevant European international
clearing system by its depositary. These cross-market transactions will require
delivery of instructions to the relevant European international clearing system
by the counterparty in the system in accordance with its rules and procedures
and within its established European time deadlines. The relevant European
international clearing system will, if the transaction meets its settlement
requirements, deliver instructions to its depositary to take action to effect
final settlement on its behalf by delivering or receiving securities in DTC and
making or receiving payment in accordance with normal procedures for same-day
funds
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settlement applicable to DTC. Clearstream customers or Euroclear participants
may not deliver instructions directly to the Clearstream or Euroclear
depositaries.
Because of time-zone differences, credits of securities in Clearstream or
Euroclear as a result of a transaction with a DTC participant will be made
during the subsequent securities settlement processing, dated the Business Day
following the DTC settlement date, and those credits or any transactions in
those securities settled during that processing will be reported to the
relevant Clearstream customer or Euroclear participant on that Business Day.
Cash received in Clearstream or the Euroclear system as a result of sales of
securities by or through a Clearstream customer or Euroclear participant to a
DTC participant will be received with value on the DTC settlement date but will
be available in the relevant Clearstream or Euroclear cash account only as of
the Business Day following settlement in DTC.
All purchases of securities under the DTC system must be made by or through
DTC participants, which will receive a credit for the securities on DTC's
records. The ownership interest of each Security Owner is in turn recorded on
the records of the DTC participant or, in the case of a purchase made through
an indirect participant, on the records of the indirect participant. The
Security Owners will not receive written confirmation from DTC of their
purchase, but are expected to receive written confirmation providing details of
the transaction, as well as periodic statements of their holdings, from the DTC
participant or indirect participant through which they entered into the
transaction. Transfers of ownership interests in the securities are
accomplished by entries made on the books of DTC participants acting on behalf
of the Security Owners.
To facilitate subsequent transfers, all securities deposited with DTC by its
participating organizations are registered in the name of Cede & Co. The
deposit of securities with DTC and their registration in the name of Cede & Co.
effects no change in beneficial ownership. DTC has no knowledge of the identity
of the Security Owners. DTC's records reflect only the identity of the DTC
participants to whose accounts the securities are credited, which may or may
not be the Security Owners. DTC participants remain responsible for keeping
account of their holdings on behalf of their customers.
Because DTC can only act on behalf of its participating organizations, who
in turn act on behalf of organizations participating indirectly in DTC and
various banks, the ability of the Security Owners to pledge those securities to
persons or entities that do not participate in the DTC system, or otherwise
take action relating to the securities, may be limited due to the lack of a
physical certificate for the securities.
Conveyance of notices and other communications by DTC to DTC participants,
by DTC participants to indirect participants and by DTC participants and
indirect participants to securityholders will be governed by arrangements among
them, subject to any statutory or regulatory requirements as may be in effect
from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the
securities. Under its usual procedures, DTC mails an omnibus proxy to the
issuer as soon as possible after the record date, which assigns Cede & Co.'s
consenting or voting rights to those DTC participants to whose accounts these
securities are credited on the relevant record date as identified in a listing
attached to the omnibus proxy.
Principal and interest payments on the securities will be made to DTC. DTC's
practice is to credit DTC participants' accounts on the applicable Distribution
Date in accordance with their respective holdings shown on DTC's records unless
DTC has reason to believe that it will not receive payment on the Distribution
Date. Payments by DTC participants to securityholders will be governed by
standing instructions and customary practices, as is the case with securities
held for the account of customers in bearer form or registered in street name,
and will be the responsibility of the relevant DTC participant and not of DTC,
the trustee or FNANB, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payments of principal and interest to DTC
will be the responsibility of the trustee, disbursement of these payments to
DTC participants will be the responsibility of DTC, and disbursement of these
payments to securityholders will be
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the responsibility of DTC participants and indirect participants. Accordingly,
the actual owners of the securities may experience some delay in their receipt
of principal and interest payments.
Distributions on securities held through Clearstream or Euroclear will be
credited to the cash accounts of Clearstream customers or Euroclear
participants in accordance with the relevant system's rules and procedures, to
the extent received by its depositary. These distributions will be subject to
tax reporting in accordance with relevant United States tax laws and
regulations as described under "--Material U.S. Federal Income Tax
Documentation Requirements" beginning on page 37 of this prospectus and
"Material Federal Income Tax Consequences" beginning on page 46 of this
prospectus. Clearstream or the operator of the Euroclear system, as applicable,
will take any other action permitted to be taken by a securityholder under the
master pooling and servicing agreement or any series supplement, as applicable,
on behalf of a Clearstream customer or Euroclear participant only in accordance
with its relevant rules and procedures and subject to its depositary's ability
to effect those actions on its behalf through DTC.
Although DTC, Clearstream and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of securities among their
participants, they are under no obligation to perform or continue to perform
these procedures, and these procedures may be discontinued at any time.
Definitive Securities
If the securities are initially issued in book-entry form, Definitive
Securities will not be issued to any party other than DTC or its nominee
unless:
. FNANB advises the trustee in writing that DTC is no longer willing or
able to discharge properly its responsibilities as depository with
respect to a series, and the trustee or FNANB is unable to locate a
qualified successor;
. FNANB, at its option, advises the trustee in writing that it elects to
terminate the book-entry system through DTC; or
. after the occurrence of a Servicer Default, Security Owners representing
beneficial interests aggregating more than 50%, or such other percentage
as may be specified in the related series supplement, of the Invested
Amount of any series advise the trustee and DTC through DTC participants
in writing that the continuation of a book-entry system through DTC or
its successor is no longer in the best interests of the Security Owners.
If any of these events occurs, the trustee will notify the Security Owners,
through the DTC participants, of the availability of Definitive Securities.
Upon surrender by DTC of the physical certificate representing the securities
and receipt of instructions for re-registration, the trustee will issue the
securities as Definitive Securities. The trustee will recognize the holders of
the Definitive Securities as securityholders under the master pooling and
servicing agreement.
Principal and interest payments on the Definitive Securities will be made on
each Distribution Date directly to the holders in whose names the Definitive
Securities were registered at the close of business on the related Record Date;
provided, however, that the final payment on any Definitive Security will be
made only upon presentation and surrender of that security at the office or
agency specified in the notice of final distribution to securityholders.
Definitive Securities will be transferable and exchangeable at the offices
of the transfer agent and registrar, which will initially be the trustee. No
service charge will be imposed for any registration of transfer or exchange,
but the transfer agent and registrar may require payment of a sum sufficient to
cover any tax or other governmental charge imposed in connection with any
transfer or exchange. The transfer agent and registrar will not be required to
register the transfer or exchange of Definitive Securities for a period of
fifteen days before the due date for any payment of the Definitive Securities.
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Initial Settlement
Investors who elect to hold securities through DTC will follow the
settlement procedures applicable to U. S. corporate debt obligations. The
custody accounts of investors who elect to hold securities through DTC will be
credited with their holdings against payment in same-day funds on the
settlement date.
Investors who elect to hold securities through Clearstream or Euroclear
accounts will follow the settlement procedures applicable to conventional
eurobonds, except that there will be no temporary global security and no
distribution compliance period. The securities will be credited to the
securities custody accounts on the settlement date against payment in same-day
funds.
Secondary Market Trading
Because the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading Between DTC Participants. Secondary market trading between investors
holding securities through DTC will be conducted in accordance with the rules
and procedures applicable to U.S. corporate debt obligations. Secondary market
trading between DTC participants will be settled in same-day funds.
Trading Between Clearstream Customers and/or Euroclear
Participants. Secondary market trading between investors holding securities
through Clearstream and Euroclear will be conducted in accordance with their
normal rules and operating procedures and in accordance with conventional
eurobond practice. Secondary market trading between Clearstream customers or
Euroclear participants will be settled using the procedures applicable to
conventional eurobonds in same-day funds.
Trading Between DTC Seller and Clearstream or Euroclear Purchaser. When
securities are to be transferred from the account of a DTC participant to the
account of a Clearstream customer or Euroclear participant, the purchaser will
send instructions to Clearstream or Euroclear through a Clearstream customer or
Euroclear participant, as applicable, at least one Business Day prior to
settlement. Clearstream or Euroclear will instruct its respective depositary to
receive the securities against payment. Payment will include interest accrued
on the securities from and including the last coupon payment date to and
excluding the settlement date. Payment will then be made by the respective
depositary to the DTC participant's account against delivery of the securities.
After settlement has been completed, the securities will be credited to the
respective clearing system and by the clearing system, in accordance with its
usual procedures, to the account of the Clearstream customer or Euroclear
participant. The securities credit will appear the next day, European time, and
the cash debit will be back-valued to, and the interest on the securities will
accrue from, the value date which would be the preceding day when settlement
occurred in New York. If settlement is not completed on the intended value
date, the Clearstream or Euroclear cash debit will be valued as of the actual
settlement date.
Clearstream customers and Euroclear participants must make available to the
respective clearing systems the funds necessary to process same-day funds
settlement. The most direct means of doing so is to pre-position funds for
settlement, either from cash on hand or existing lines of credit, as they would
for any settlement occurring within Clearstream or Euroclear. Under this
approach, they may take on credit exposure to Clearstream or Euroclear until
the securities are credited to their accounts one day later.
As an alternative, if Clearstream or Euroclear has extended a line of credit
to them, Clearstream customers or Euroclear participants can elect not to pre-
position funds and allow that credit line to be drawn upon to finance
settlement. Under this procedure, Clearstream customers or Euroclear
participants purchasing securities would incur overdraft charges for one day,
assuming they cleared the overdraft when the securities were credited to their
accounts. Interest on the securities would accrue from the value date.
Therefore, in many cases, the investment income on the securities earned during
that one-day period may substantially reduce or offset
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the amount of these overdraft charges, although this result will depend on the
cost of funds for the related Clearstream customer or Euroclear participant.
Because settlement is taking place during New York business hours, DTC
participants can use their usual procedures for sending securities to the
respective depositary for the benefit of Clearstream customers or Euroclear
participants. The sale proceeds will be available to the DTC seller on the
settlement date. Therefore, to the DTC participant, a cross-market transaction
will settle no differently than a trade between two DTC participants.
Trading Between Clearstream or Euroclear Seller and DTC Purchaser. Due to
time zone differences in their favor, Clearstream customers or Euroclear
participants may employ their customary procedures for transactions in which
securities are to be transferred by the respective clearing system, through the
respective depositary, to a DTC participant. The seller will send instructions
to Clearstream or Euroclear through a Clearstream customer or Euroclear
participant, as applicable, at least one Business Day prior to settlement.
Clearstream or Euroclear will instruct the respective depositary to deliver the
securities to the DTC participant's account against payment. Payment will
include interest accrued on the securities from and including the last coupon
payment date to and excluding the settlement date. The payment will then be
reflected in the account of the Clearstream customer or Euroclear participant
the following day, and the receipt of the cash proceeds in the Clearstream
customer's or Euroclear participant's account will be back-valued to the value
date, which will be the preceding day, when settlement occurred in New York. If
the Clearstream customer or Euroclear participant has a line of credit with its
respective clearing system and elects to be in debit in anticipation of receipt
of the sale proceeds in its account, the back-valuation will extinguish any
overdraft charges incurred over that one-day period. If settlement is not
completed on the intended value date, receipt of the cash proceeds in the
Clearstream customer's or Euroclear participant's account will be valued as of
the actual settlement date.
Finally, day traders that use Clearstream or Euroclear and that purchase
securities from DTC participants for delivery to Clearstream customers or
Euroclear participants should note that these trades will automatically fail on
the sale side unless affirmative action is taken. At least three techniques
should be readily available to eliminate this potential problem:
. borrowing through Clearstream or Euroclear for one day, until the
purchase side of the day trade is reflected in their Clearstream or
Euroclear accounts, in accordance with the clearing system's customary
procedures;
. borrowing the securities in the U.S. from a DTC participant no later than
one day prior to settlement, which would give the securities sufficient
time to be reflected in their Clearstream or Euroclear accounts in order
to settle the sale side of the trade; or
. staggering the value dates for the buy and sell sides of the trade so
that the value date for the purchase from the DTC participant is at least
one day prior to the value date for the sale to the Clearstream customer
or Euroclear participant.
Material U.S. Federal Income Tax Documentation Requirements
A Security Owner holding securities through Clearstream or Euroclear, or
through DTC if the holder has an address outside the U.S., will be subject to
the 30% U.S. withholding tax that generally applies to payments of interest,
including original issue discount, on registered debt issued by U.S. Persons
unless:
. each clearing system, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business in
the chain of intermediaries between the Security Owner and the U.S.
entity required to withhold tax complies with applicable certification
requirements; and
. the Security Owner takes one of the following steps to obtain an
exemption or reduced tax rate:
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Exemption For Non-U.S. Persons. A Security Owner that is a Non-U.S. Person
can obtain a complete exemption from the withholding tax by filing Form W-8,
Certificate of Foreign Status. If the information shown on Form W-8 changes, a
new Form W-8 must be filed within 30 days of that change.
Exemption For Non-U.S. Persons With Effectively Connected Income. A Security
Owner that is a Non-U.S. Person, including a non-U.S. corporation or bank with
a U.S. branch, and for which the related interest income is effectively
connected with the conduct of a trade or business in the United States can
obtain a complete exemption from the withholding tax by filing Form 4224,
Exemption from Withholding of Tax on Income Effectively Connected with the
Conduct of a Trade or Business in the United States. For payments made after
December 31, 2000, Form 4224 will not apply, and a Security Owner that is a
Non-U.S. Person will be required to file a Form W-8 ECI to obtain an exemption
for interest payments that are effectively connected with the conduct of a
trade or business in the U.S.
Exemption or Reduced Rate For Non-U.S. Persons Resident in Treaty
Countries. A Security Owner that is a Non-U.S. Person and resides in a country
that has a tax treaty with the United States can obtain an exemption or reduced
tax rate, depending on the treaty terms, by filing Form 1001, Ownership,
Exemption or Reduced Rate Certificate. If the treaty provides only for a
reduced rate, withholding tax will be imposed at that rate unless the Security
Owner files Form W-8. Form 1001 may be filed by the Security Owner or its
agent. For payments made after December 31, 2000, Form 1001 will not apply, and
a Security Owner that is a Non-U.S. Person will be required to file a Form W-8
BEN to claim the benefit of an applicable tax treaty.
Exemption for U.S. Persons. A Security Owner that is a U.S. Person can
obtain a complete exemption from the withholding tax by filing Form W-9,
Payer's Request for Taxpayer Identification Number and Certification.
U.S. Federal Income Tax Reporting Procedure. A Security Owner or, in the
case of a Form 1001 or a Form 4224 filer, its agent files by submitting the
appropriate form to the person through whom it holds, which person would be the
clearing agency in the case of persons holding directly on the books of the
clearing agency. Form W-8 and Form 1001 are effective for three calendar years
and Form 4224 is effective for one calendar year. For payments made after
December 31, 2000, Form 4224 and Form 1001 will be replaced by Form W-8 ECI and
Form W-8 BEN, respectively, each of which will be effective from the date the
form is signed through the end of the third succeeding calendar year.
This summary does not deal with all aspects of U.S. federal income tax
withholding that may be relevant to foreign Security Owners. We suggest that
each foreign Security Owner consult its own tax advisors regarding the tax
consequences of the purchase, ownership and disposition of the securities.
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CREDIT ENHANCEMENT
Each series or class of securities may benefit from one or more forms of
credit enhancement available only to that series or class. The trustee will
hold each form of credit enhancement only on behalf of the series or class to
which that credit enhancement relates. The form of credit enhancement for any
series or class may be different from the form of credit enhancement for any
other series or class. The attached prospectus supplement describes the
structure and material terms of any credit enhancement applicable to your
securities and the material provisions of any agreement relating to that credit
enhancement.
The structure and terms of the credit enhancement applicable to any series
or class of securities will be determined based on several factors, including:
. the characteristics of the receivables and the Accounts included in the
trust as of the closing date for that series or class;
. the desired rating for the securities of that series or class, and
. the requirements of each rating agency rating the securities of that
series or class.
In most cases, credit enhancement will not provide protection against all
risks of loss and will not guarantee the timely payment of interest or
repayment of the entire principal amount of the related securities. If losses
occur which are not covered by credit enhancement or which exceed the amount
covered by credit enhancement, the securityholders will bear their allocable
share of those losses.
If your securities benefit from one or more forms of credit enhancement, the
attached prospectus supplement may provide information with respect to the
provider of that credit enhancement, including:
. a brief description of its principal business activities;
. its principal place of business, the jurisdiction of its incorporation or
organization and the jurisdictions under which it is licensed to do
business;
. if applicable, the identity of the regulatory agencies which exercise
primary jurisdiction over the conduct of its business; and
. its total assets, its stockholders' equity or policy holders' surplus, if
applicable, and other appropriate financial information as of the date
specified in the prospectus supplement.
If any credit enhancement for your securities is available to make principal
payments following the occurrence of an Early Amortization Event, the provider
of that credit enhancement may hold an interest in amounts collected on the
receivables.
The securities issued by the trust may benefit from one or more of the
following forms of credit enhancement. The attached prospectus supplement
describes the extent, if any, to which these forms of credit enhancement are
applicable to your securities.
Subordination
The securities of one or more classes of a series may be subordinated to the
extent necessary to fund payments with respect to the securities of one or more
other classes of that series. The rights of the holders of the subordinated
securities to receive interest payments or principal payments on any
Distribution Date may be subordinated in right and priority to the rights of
the holders of the senior securities. The prospectus supplement for any series
that includes subordination will provide the following information:
. the designation and amount of each class of subordinated securities and
the circumstances, if any, under which that amount will increase or
decrease;
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. the circumstances, if any, under which amounts that would otherwise be
paid to the holders of the subordinated securities will instead be paid
to the holders of the senior securities; and
. the circumstances, if any, under which losses that would otherwise be
allocated to the holders of the senior securities will instead be
allocated to the holders of the subordinated securities.
If collections that would otherwise be paid to the holders of the securities
of one series will instead be used as support for the securities of another
series, the related prospectus supplement will describe the structure and terms
of this cross-support feature.
Letter of Credit
The securities of one or more classes may benefit from one or more letters
of credit. The issuer of a letter of credit will be obligated to honor drawings
made in accordance with the terms of the letter of credit to the extent of the
amount available under the letter of credit. The prospectus supplement for any
series that includes a letter of credit will provide the following information:
. the classes that will benefit from the letter of credit;
. the initial stated amount of the letter of credit and the circumstances,
if any, under which that amount will increase or decrease;
. the circumstances under which drawings may be submitted under the letter
of credit and the manner in which amounts drawn under the letter of
credit will be applied; and
. the expiration date of the letter of credit and the circumstances, if
any, under which the letter of credit may be extended or replaced.
Cash Collateral Guaranty or Cash Collateral Account
The securities of one or more classes may benefit from a cash collateral
guaranty secured by the deposit of cash or permitted investments in a cash
collateral account or from a cash collateral account. The prospectus supplement
for any series that includes a cash collateral guaranty or a cash collateral
account will provide the following information:
. the classes that will benefit from the cash collateral guaranty or the
cash collateral account;
. the amount required to be on deposit in the cash collateral account on
the closing date for that series and the circumstances, if any, under
which the required amount will increase or decrease;
. the mechanism by which additional amounts, if any, will be deposited in
the cash collateral account;
. the amount available under the cash collateral guaranty or the cash
collateral account, which amount will not exceed the amount on deposit in
the cash collateral account or such lesser amount as may be specified in
the related series supplement;
. the circumstances under which payments will be made under the cash
collateral guaranty or from the cash collateral account and the manner in
which those payments will be applied; and
. the circumstances, if any, under which the cash collateral guaranty may
be replaced.
Collateral Interest or Collateralized Trust Obligation
The securities of one or more classes may benefit from the issuance of an
undivided interest in the trust referred to as a collateral interest or a
collateralized trust obligation. The prospectus supplement for any series that
includes a collateral interest or a collateralized trust obligation will
provide the following information:
. the classes that will benefit from the collateral interest or the
collateralized trust obligation;
. the amount of the collateral interest or the collateralized trust
obligation and the circumstances, if any, under which that amount will
increase or decrease;
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. the structure and terms of any cash collateral guaranty or cash
collateral account established in combination with the collateral
interest or the collateralized trust obligation, including the
circumstances, if any, under which the amount required to be on deposit
in the cash collateral account will increase or decrease, the mechanism
by which additional amounts, if any, will be deposited in the cash
collateral account, the circumstances under which payments will be made
under the cash collateral guaranty or from the cash collateral account
and the manner in which those payments will be applied;
. the circumstances, if any, under which amounts that would otherwise be
paid to the holders of the collateral interest or the collateralized
trust obligation will instead be paid to the holders of one or more other
classes of securities; and
. the circumstances, if any, under which losses that would otherwise be
allocated to the holders of the collateral interest or the collateralized
trust obligation will instead be allocated to the holders of one or more
other classes of securities.
The total amount of credit enhancement available from the collateral
interest or the collateralized trust obligation and, if applicable, the related
cash collateral guaranty or cash collateral account will equal the sum of the
collateral interest or the collateralized trust obligation, as applicable, and
the amount on deposit in the cash collateral account or such lesser amount as
may be specified in the related series supplement.
Surety Bond or Insurance Policy
The securities of one or more classes may benefit from a surety bond or
insurance policy. The prospectus supplement for any series that includes a
surety bond or an insurance policy will provide the following information:
. the classes that will benefit from the surety bond or the insurance
policy;
. the initial amount of the surety bond or the insurance policy and the
circumstances, if any, under which that amount will increase or decrease;
. the circumstances under which claims may be submitted under the surety
bond or the insurance policy and the manner in which amounts paid under
the surety bond or the insurance policy will be applied; and
. the expiration date, if any, of the surety bond or the insurance policy
and the circumstances, if any, under which the surety bond or the
insurance policy may be extended or replaced.
Spread Account or Reserve Account
The securities of one or more classes may benefit from a spread account or a
reserve account. The prospectus supplement for any series that includes a
spread account or a reserve account will provide the following information:
. the classes that will benefit from the spread account or the reserve
account;
. the amount, if any, required to be on deposit in the spread account or
the reserve account on the closing date for that series and the
circumstances, if any, under which that amount will increase or decrease;
. the mechanism by which additional amounts, if any, will be deposited in
the spread account or the reserve account;
. the amount available under the spread account or the reserve account,
which amount will not exceed the amount on deposit in that account or
such lesser amount as may be specified in the related series supplement;
and
. the circumstances under which payments will be made from the spread
account or the reserve account and the manner in which those payments
will be applied.
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SECURITY RATINGS
FNANB will request one or more nationally recognized statistical rating
organizations to assign a rating to the offered securities. The offered
securities will not be issued unless they are rated in one of the four highest
rating categories by at least one rating agency. The attached prospectus
supplement sets forth each rating assigned to your securities. A rating agency
not requested to rate the offered securities could assign a rating to those
securities and that rating could be lower than any rating assigned to those
securities at the request of FNANB.
A security rating indicates the rating agency's view on the likelihood that
securityholders will receive required interest and principal payments and the
rating agency's evaluation of the receivables and the sufficiency of any credit
enhancement for the offered securities. A security rating does not address:
. the likelihood that an Early Amortization Event will occur with respect
to the offered securities;
. the likelihood that a U.S. withholding tax will be imposed on non-U.S.
holders of the offered securities;
. the price of the offered securities;
. the marketability of the offered securities; or
. whether the offered securities are an appropriate investment for you.
A security rating is not a recommendation to buy, sell or hold the offered
securities. A security rating may be lowered or withdrawn at any time by the
related rating agency.
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MATERIAL LEGAL ASPECTS OF THE RECEIVABLES
Transfer of Receivables
The transfer of receivables by FNANB to the trust constitutes either a sale
of the receivables or the grant of a security interest in the receivables. If
the transfer constitutes the grant of a security interest in the receivables,
FNANB has perfected that security interest through the filing of all necessary
financing statements under the UCC. FNANB has represented and warranted in the
master pooling and servicing agreement that the trust has a first priority
perfected ownership interest or security interest in the receivables subject
only to limited tax or other governmental liens permitted under the master
pooling and servicing agreement. If the trust does not have a first priority
perfected interest in the receivables, the trust may direct FNANB to accept
retransfer of the receivables in accordance with the master pooling and
servicing agreement. See "Description of the Securities--Representations and
Warranties" beginning on page 15 of this prospectus for a further discussion of
the circumstances under which the trust may direct FNANB to accept retransfer
of the receivables.
A creditor of FNANB could, under limited circumstances, acquire an interest
in the receivables that would have priority over the interest of the trust in
the receivables. In addition, a tax, governmental or other nonconsensual lien
on property of FNANB that arises before the transfer of receivables to the
trust might have priority over the interest of the trust in those receivables.
If the OCC were to appoint the FDIC as receiver or conservator for FNANB,
administrative expenses of the receiver or conservator might also have priority
over the interest of the trust in the receivables.
Matters Relating to Receivership and Conservatorship
FNANB is chartered as a national banking association and is subject to
regulation and supervision by the OCC. If various events relating to FNANB's
financial condition or the propriety of its actions were to occur, the OCC
would be authorized to appoint the FDIC as receiver or conservator for FNANB.
If the OCC were to appoint the FDIC as receiver or conservator for FNANB,
the FDIC would have the power to repudiate or disaffirm the obligations of
FNANB under the master pooling and servicing agreement. FDIC policy statements
suggest that, upon repudiation or disaffirmation of those obligations, the
FDIC, as receiver or conservator, would compensate the trust for its interest
in the receivables if each of the following conditions were satisfied:
. FNANB granted a security interest in the receivables to the trust;
. the security interest was validly perfected before FNANB's insolvency;
. the security interest was not taken or granted in contemplation of
FNANB's insolvency or with the intent to hinder, delay or defraud FNANB
or its creditors;
. the master pooling and servicing agreement was approved by FNANB's board
of directors or loan committee, which approval is reflected in the
minutes of the board or committee, and had been continuously maintained
as a record of FNANB; and
. the master pooling and servicing agreement represented a bona fide and
arm's-lengths transaction undertaken for adequate consideration in the
ordinary course of business and the trustee, as the secured party, is not
an insider or affiliate of FNANB.
The FDIC could, however, assert a contrary position. In addition, the FDIC
could request a stay of any proceedings against FNANB and would have the right
to require that the trust establish its right to compensation by submitting to
and completing the administrative claims procedure established under the law
applicable to bank insolvencies. These actions could cause you to suffer
payment delays or losses with respect to your securities.
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The amount of compensation that the FDIC would be required to pay is limited
to your actual direct compensatory damages. The staff of the FDIC takes the
position that these damages would not include interest accrued to the date of
actual repudiation or disaffirmation. Under the FDIC interpretation, you would
receive interest only through the date of the appointment of the receiver or
conservator. Because the FDIC could delay actual repudiation or disaffirmation
for a reasonable period following its appointment as receiver or conservator,
this position could cause you to receive less than the full amount of interest
owing to you under your securities.
If FNANB were to become insolvent or a receiver or conservator were to be
appointed for FNANB, an Early Amortization Event would occur with respect to
all outstanding series, newly created receivables would not be transferred to
the trust and the trustee would proceed to liquidate the receivables in a
commercially reasonable manner and on commercially reasonable terms unless
otherwise instructed by the securityholders or otherwise required by the FDIC.
The proceeds from a liquidation of the receivables will be treated as
collections on the receivables and will be distributed to securityholders in
accordance with the master pooling and servicing agreement. See "Description of
the Securities--Early Amortization Events" beginning on page 24 of this
prospectus for a further discussion of the circumstances under which the
securityholders may instruct the trustee not to liquidate the receivables.
If the OCC were to appoint the FDIC as receiver or conservator for FNANB,
the FDIC might have the power to delay or prevent the early sale of the
receivables and the commencement of the Early Amortization Period. In addition,
the FDIC might have the power to cause the early sale of the receivables and
the early retirement of the securities or to prohibit the continued transfer of
receivables to the trust. See "Description of the Securities--Early
Amortization Events" beginning on page 24 of this prospectus for a further
discussion of the Early Amortization Events applicable to all series and the
circumstances under which the receivables may be liquidated.
If the OCC were to appoint the FDIC as receiver or conservator for the
servicer, the FDIC might have the power to prevent the appointment of a
successor servicer. See "Description of the Securities--Servicer Defaults"
beginning on page 27 of this prospectus for a discussion of the Servicer
Defaults applicable to all series and the circumstances under which a successor
servicer may be appointed.
Consumer Protection Laws
The relationship between the credit card issuer and the cardholder is
extensively regulated by federal and state consumer protection laws. The most
significant laws include the federal Truth-in-Lending Act, the Equal Credit
Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act and the Electronics Funds Transfer Act. These statutes and
various state consumer protection laws:
. impose disclosure requirements when a credit card account is advertised,
when an account is opened, at the end of monthly billing cycles, upon
account renewal for accounts on which annual fees are assessed and at
year end;
. limit cardholder liability for unauthorized use;
. prohibit discriminatory practices in extending credit;
. limit the type of account-related charges that may be assessed; and
. regulate collection practices.
In addition, cardholders are entitled under these laws to have payments and
credits applied to their credit card accounts promptly, to receive prescribed
notices and to require billing errors to be resolved promptly.
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The trust may be liable for violations of consumer protection laws that
apply to the receivables. In addition, a cardholder may be entitled to assert
violations of consumer protection laws by way of set off against his or her
obligation to pay outstanding receivables. FNANB has represented and warranted
in the master pooling and servicing agreement that all receivables will be
created in compliance in all material respects with all federal and state
consumer protection laws. In addition, the servicer has agreed in the master
pooling and servicing agreement to indemnify the trust from and against, among
other things, any liability arising from any violation of federal or state
consumer protection laws caused by the servicer. If a receivable is not created
in compliance in all material respects with the consumer protection laws, the
trustee may direct FNANB to accept retransfer of that receivable in accordance
with the master pooling and servicing agreement. See "Description of the
Securities--Representations and Warranties" beginning on page 15 of this
prospectus for a further discussion of the circumstances under which the trust
may direct FNANB to accept retransfer of the receivables.
There have been numerous attempts at the federal, state and local level to
regulate further the credit card industry. In particular, legislation has been
introduced in Congress that would impose a ceiling on the rate at which a
financial institution may assess finance charges and other fees on credit card
accounts. These ceilings are substantially below the rate at which periodic
finance charges and other fees are currently assessed on the Accounts. FNANB
cannot predict whether any such legislation will be enacted. If ceilings on
periodic finance charges or other fees are enacted, the yield on the
receivables could be reduced and this reduction could result in the
commencement of the Early Amortization Period.
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MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The following discussion and the tax discussion in the attached prospectus
supplement summarize the material federal income tax consequences of the
purchase, ownership and disposition of the offered securities. This discussion
is based upon current provisions of the Internal Revenue Code of 1986, as
amended, existing and proposed Treasury regulations promulgated under the
Internal Revenue Code and published rulings and court decisions in effect as of
the date of this prospectus, all of which are subject to change, possibly with
retroactive effect. Any changes in these provisions, regulations, rulings or
decisions could modify or adversely affect the tax consequences summarized
below. We will not seek a ruling from the IRS with respect to any of the
federal income tax consequences discussed in this prospectus and cannot assure
you that the IRS will not challenge the conclusions reached in this prospectus.
The opinion of McGuire, Woods, Battle & Boothe LLP, special tax counsel to
FNANB, described in this prospectus assumes that all relevant parties will
comply with the terms of the master pooling and servicing agreement and all
related documents. If the relevant parties fail to comply with the terms of the
master pooling and servicing agreement or any related document, the conclusions
of special tax counsel reached in the opinion and the discussion of the federal
income tax consequences set forth in this prospectus may not be accurate.
This discussion does not address every aspect of the federal income tax laws
that may be relevant to Security Owners in light of their personal investment
circumstances or to Security Owners subject to special treatment under the
federal income tax laws, such as banks and other financial institutions,
insurance companies, dealers in securities, tax-exempt organizations and
persons holding offered securities as part of a hedging or conversion
transaction. We suggest that each prospective Security Owner consult its own
tax advisors regarding the federal, state, local and foreign tax consequences
of the purchase, ownership and disposition of the offered securities.
This discussion assumes that the offered securities will be issued in
registered form, that all payments on the offered securities will be in U.S.
dollar denominations, that the offered securities will have a term exceeding
one year, that the offered securities' interest formula meets the requirements
for qualified stated interest under Treasury regulations relating to original
issue discount and that any OID does not exceed a de minimis amount. This
discussion also assumes that the offered securities will be treated as debt for
federal income tax purposes. See "--Classification of the Transaction"
beginning on page 46 of this prospectus for a further discussion of the
possibility that the offered securities would not be treated as debt.
Tax Treatment of the Offered Securities
McGuire, Woods, Battle & Boothe LLP, special tax counsel to FNANB, will
render its opinion in the attached prospectus supplement as to the federal
income tax treatment applicable to the offered securities.
Tax Treatment of the Trust
McGuire, Woods, Battle & Boothe LLP, special tax counsel to FNANB, is of the
opinion that, under current law, the trust will not be treated as an
association or publicly traded partnership taxable as a corporation for federal
income tax purposes.
Classification of the Transaction
Any opinion of special tax counsel with respect to the federal income tax
treatment of the offered securities or the trust is not binding on the courts
or the IRS. It is possible that the IRS could assert that, for purposes of the
Internal Revenue Code, some or all of the offered securities are not debt
obligations for federal income tax purposes and that the proper classification
of the legal relationship between FNANB, any other holders of equity interests
in the trust and the Security Owners resulting from the transaction
contemplated by
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the master pooling and servicing agreement is that of a partnership, a publicly
traded partnership taxable as a corporation or an association taxable as a
corporation. FNANB currently does not intend to comply with the federal income
tax reporting requirements that would apply if the offered securities were
treated as interests in a partnership or corporation unless, as is permitted by
the master pooling and servicing agreement, an interest in the trust is issued
or sold that is intended to be classified as an interest in a partnership.
If the trust were treated in whole or in part as a partnership in which some
or all Security Owners were partners, that partnership could be classified as a
publicly traded partnership taxable as a corporation. A partnership will be
classified as a publicly traded partnership taxable as a corporation if any of
its equity interests are traded on an established securities market or are
readily tradable on a secondary market or its substantial equivalent, unless
certain exceptions apply. One exception that would apply is if the trust is not
engaged in a financial business and 90% or more of its income consists of
interest and certain other types of passive income. Because Treasury
regulations do not clarify the meaning of a financial business for this
purpose, it is unclear whether this exception applies. FNANB has taken and
intends to take measures designed to reduce the risk that the trust could be
classified as a publicly traded partnership taxable as a corporation. We cannot
assure you, however, that the trust will not become a publicly traded
partnership.
If the transaction contemplated by the master pooling and servicing
agreement were treated as creating a partnership between FNANB and the Security
Owners whose interests in the trust were treated as equity, the partnership
would not be subject to federal income tax unless it were classified as a
publicly traded partnership taxable as a corporation. If the transaction were
treated as creating a partnership, the partners of the partnership, including
the Security Owners whose interests in the trust were treated as equity, would
be taxed individually on their respective distributive shares of the
partnership's income, gain, loss, deductions and credits. The amount and timing
of items of income and deductions of a Security Owner could differ if the
offered securities were held to constitute partnership interests rather than
indebtedness. In addition, unless the partnership were treated as engaged in a
trade or business, an individual's share of expenses of the partnership would
be miscellaneous itemized deductions that, in the aggregate, would be allowed
as deductions only to the extent they exceeded 2% of the individual's adjusted
gross income and would be subject to reduction under Section 68 of the Internal
Revenue Code if the individual's adjusted gross income exceeded certain limits.
As a result, an individual might be taxed on a greater amount of income than
the stated rate on the offered securities. Finally, if the partnership were
classified as a publicly traded partnership that qualifies for exemption from
taxation as a corporation, all or a portion of any taxable income allocated to
a Security Owner that is a pension, profit sharing or employee benefit plan or
other tax-exempt entity, including an individual retirement account, might,
under certain circumstances, constitute unrelated business taxable income which
in most cases would be taxable to that Security Owner.
If the transaction contemplated by the master pooling and servicing
agreement were treated as creating an entity classified as an association or as
a publicly traded partnership taxable as a corporation, the trust would be
subject to federal income tax at corporate income tax rates on the income it
derives from the receivables, which would reduce the amounts available for
distribution to the Security Owners, possibly including holders of a series
that is treated as indebtedness. That classification might also have adverse
state and local tax consequences that would reduce amounts available for
distribution to Security Owners. In most cases, cash distributions to the
Security Owners, other than the Security Owners of any class not
recharacterized as an equity interest in an association, would be treated as
dividends for tax purposes to the extent deemed part of the corporation's
earnings and profits and, in the case of Non-U.S. Security Owners, would be
subject to withholding tax.
U.S. Security Owners
If the offered securities are treated as debt obligations for federal income
tax purposes, interest on the offered securities will be includible in income
by a U.S. Security Owner as ordinary income in accordance with its method of
tax accounting. In addition, interest received on the offered securities may
constitute investment
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income for purposes of certain limitations of the Internal Revenue Code
concerning deductibility of investment interest expense.
Although it is not anticipated that the offered securities will be issued at
a greater than de minimis discount, the offered securities may nevertheless be
deemed to have been issued with original issue discount under applicable
Treasury regulations. This could be the case, for example, if interest payments
are not treated as qualified stated interest because the IRS determines that:
. no reasonable legal remedies exist to compel timely payment; and
. the offered securities do not have terms and conditions that make the
likelihood of late payment, other than a late payment that occurs within
a reasonable grace period, or nonpayment a remote contingency.
The applicable Treasury regulations provide that, for purposes of the
foregoing test, the possibility of nonpayment due to default, insolvency or
similar circumstances is ignored. Although this provision does not directly
apply to the offered securities because the offered securities have no actual
default provisions, FNANB intends to take the position that, because nonpayment
can occur only as a result of a substantial deterioration in receivable
performance, nonpayment is a remote contingency. Based on the foregoing, and on
the fact that interest will accrue on the offered securities at a qualified
rate, FNANB intends to take the position that interest payments on the offered
securities constitute qualified stated interest. If interest payments on the
offered securities were not qualified stated interest, all of the taxable
income to be recognized with respect to the offered securities would be
includible in income as OID but would not be includible again when the interest
payments were actually received.
If the offered securities are issued at a greater than de minimis discount
or are treated as having been issued with OID under applicable Treasury
regulations, the excess of the stated redemption price at maturity of an
offered security over the initial offering price at which a substantial amount
of the offered securities are sold to the public will constitute OID. A U.S.
Security Owner must include OID in income as interest over the term of the
offered security under a constant yield method. In general, OID must be
included in income in advance of the receipt of cash representing that income.
In the case of a debt instrument as to which the repayment of principal may be
accelerated as a result of the prepayment of other obligations securing that
debt instrument, the periodic accrual of OID is determined by taking into
account both the prepayment assumptions used in pricing that debt instrument
and the actual prepayment experience. If this provision is applied to the
offered securities, the amount of OID which will accrue in any given accrual
period may either increase or decrease depending upon the actual prepayment
rate. Under the applicable Treasury regulations, if an offered security is
issued with de minimis OID, a U.S. Security Owner must include the OID in
income proportionately as principal payments are made. We suggest that each
U.S. Security Owner consult its own tax advisors regarding the effect of the
OID rules if the offered securities are issued with OID.
A U.S. Security Owner who purchases an offered security at a discount from
its adjusted issue price after its original issuance may be subject to the
market discount rules of the Internal Revenue Code. These rules provide, in
part, for the treatment of gain attributable to accrued market discount as
ordinary income upon the receipt of partial principal payments or upon the sale
or other disposition of the offered security and for the deferral of interest
deductions with respect to debt incurred to acquire or carry the market
discount offered security.
A U.S. Security Owner who purchases an offered security after its original
issuance for an amount in excess of the sum of all amounts payable on the
offered security after the purchase date other than payment of qualified stated
interest will be considered to have purchased the offered security at a
premium. The Security Owner may in most cases elect to amortize the premium, as
an offset to interest income, using a constant yield method, over the remaining
term of the offered security.
A U.S. Security Owner who purchases an offered security that was issued with
OID after its original issuance for an amount less than or equal to the sum of
all amounts payable on the offered security after the
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purchase date other than payment of qualified stated interest but in excess of
its adjusted issue price is in most cases permitted to reduce the daily portion
of OID otherwise includible in the Security Owner's taxable income.
Disposition of the Offered Securities
In general, a U.S. Security Owner will recognize gain or loss upon the sale,
exchange, redemption or other taxable disposition of an offered security
measured by the difference between:
. the amount of cash and the fair market value of any property received,
other than amounts attributable to, and taxable as, accrued interest; and
. the U.S. Security Owner's tax basis in the offered security, which is
equal, in general, to the purchase price of the offered security
increased by any OID or market discount previously included in income by
the holder and decreased by any deductions previously allowed for
amortizable bond premium and by any payments reflecting principal or OID
received with respect to the offered security.
In general, subject to the market discount rules and to the one-year holding
requirement for long-term capital gain treatment, any gain or loss will be
long-term capital gain; provided, however, that the offered security was held
as a capital asset; and, provided further, that, if the rules applicable to
prepayable instruments apply, any OID not previously accrued will be treated as
ordinary income. The maximum ordinary income tax rate for individuals, estates
and trusts exceeds the maximum long-term capital gains tax rate for those
taxpayers. In addition, capital losses may, in general, be used only to offset
capital gains.
Non-U.S. Security Owners
This section describes the U.S. federal income tax treatment of Non-U.S.
Security Owners if the offered securities are treated as indebtedness.
Interest, including OID, paid to a Non-U.S. Security Owner will be subject
to U.S. withholding taxes at a rate of 30% unless:
. the income is effectively connected with the conduct by the Non-U.S.
Security Owner of a trade or business carried on in the United States and
the Non-U.S. Security Owner evidences this fact by delivering an IRS Form
4224 or IRS Form W-8ECI; or
. the Non-U.S. Security Owner and each securities clearing organization,
bank or other financial institution that holds the offered securities on
behalf of the Non-U.S. Security Owner in the ordinary course of its trade
or business in the chain between the Non-U.S. Security Owner and the U.S.
person otherwise required to withhold the U.S. tax complies with
applicable identification requirements; and
. the Non-U.S. Security Owner does not actually or constructively own 10%
or more of the voting stock of FNANB or, upon the issuance of an interest
in the trust that is treated as a partnership interest, any holder of
that interest;
. the Non-U.S. Security Owner is not a controlled foreign corporation with
respect to FNANB or, upon the issuance of an interest in the trust that
is treated as a partnership interest, any holder of that interest;
. the Non-U.S. Security Owner is not a bank whose receipt of interest on an
offered security is described in Section 881(c)(3)(A) of the Internal
Revenue Code;
. the interest is not contingent interest described in Section 871(h)(4) of
the Internal Revenue Code; and
. the Non-U.S. Security Owner does not bear certain relationships to any
holder of the Exchangeable Transferor Certificate other than FNANB or any
holder of the securities of any series not properly characterized as
debt.
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In general, applicable identification requirements will be satisfied if
there is delivered to a securities clearing organization:
. IRS Form W-8 or IRS Form W-8BEN signed under penalties of perjury by the
Security Owner stating that the Security Owner is not a U.S. Security
Owner and providing the Security Owner's name and address; or
. IRS Form 1001 or IRS Form W-8BEN, signed under penalties of perjury by
the Security Owner or the Security Owner's agent claiming exemption from
withholding under an applicable tax treaty;
provided, however, that, in each case, the applicable form must be delivered
under applicable procedures and must be properly transmitted to the United
States entity otherwise required to withhold tax and none of the entities
receiving that form may have actual knowledge that the Security Owner is a U.S.
Security Owner.
Recently finalized Treasury regulations affect the procedures to be followed
by a Non-U.S. Security Owner in complying with U.S. federal withholding, backup
withholding and information reporting rules. These regulations are not
effective as of the date of this prospectus but will be effective in most cases
for payments made after December 31, 2000. We suggest that you consult your own
tax advisors regarding the effect, if any, of these regulations on the
purchase, ownership and disposition of the offered securities.
If a Non-U.S. Security Owner is engaged in a trade or business in the United
States and interest on the offered security is effectively connected with the
conduct of that trade or business, the Non-U.S. Security Owner, although exempt
from U.S. withholding tax, will be subject to U.S. federal income tax on the
interest on a net income basis in the same manner as if the Non-U.S. Security
Owner were a U.S. Security Owner. In addition, a Non-U.S. Security Owner that
is a foreign corporation may be subject to a branch profits tax equal to 30% of
its effectively connected earnings and profits for the taxable year, subject to
certain adjustments.
A Non-U.S. Security Owner will not be subject to U.S. federal income tax on
gain realized upon the sale, exchange or redemption of an offered security if:
. the gain is not effectively connected with the conduct of a trade or
business in the United States;
. in the case of a Non-U.S. Security Owner that is an individual, the Non-
U.S. Security Owner is not present in the United States for 183 days or
more during the taxable year in which the sale, exchange or redemption
occurs; and
. in the case of gain representing accrued but unpaid interest, the
conditions described with respect to interest and OID are satisfied.
If the interests of a Non-U.S. Security Owner were classified as interests
in a partnership, not taxable as a corporation, that classification could cause
a Non-U.S. Security Owner to be treated as engaged in a trade or business in
the United States. If a Non-U.S. Security Owner were to be treated as engaged
in a trade or business in the United States, the Non-U.S. Security Owner would
be required to file a U.S. federal income tax return and, in general, would be
subject to U.S. federal income tax, including branch profits tax in the case of
a Non-U.S. Security Owner that is a corporation, unless eliminated under an
applicable tax treaty, on its net income from the partnership. In addition, the
partnership would be required, on a quarterly basis, to pay withholding tax
equal to the sum, for each foreign partner, of the foreign partner's
distributive share of effectively connected income of the partnership
multiplied by the highest rate of tax applicable to that foreign partner. The
tax withheld from each foreign partner would be credited against the foreign
partner's U.S. income tax liability.
If the Trust were taxable as a corporation, distributions to foreign
persons, to the extent treated as dividends, would, in general, be subject to
withholding at the rate of 30%, unless the rate were reduced by an applicable
tax treaty.
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Backup Withholding
A Security Owner may be subject to backup withholding at the rate of 31%
with respect to interest paid on the offered securities if the Security Owner
fails to supply the trustee or the Security Owner's broker with the Security
Owner's taxpayer identification number, furnishes an incorrect taxpayer
identification number, fails to report interest, dividends or other reportable
payments properly or, under certain circumstances, fails to provide the trustee
or the Security Owner's broker with a certified statement that the Security
Owner is not subject to backup withholding. Information returns will be sent
annually to the IRS and to each Security Owner setting forth the amount of
interest paid on the offered securities owned by that Security Owner and the
amount of tax withheld on those payments.
State and Local Tax Consequences
The above discussion does not address the tax consequences of the purchase,
ownership or disposition of the offered securities under any state or local tax
law. We suggest that you consult your own tax advisors regarding the state and
local tax consequences of the purchase, ownership and disposition of the
offered securities.
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ERISA CONSIDERATIONS
ERISA and the Internal Revenue Code impose requirements on Plans and Plan
fiduciaries. A Plan fiduciary considering an investment in the offered
securities should determine, among other factors, whether that investment is
permitted under the governing Plan, is appropriate for the Plan in view of its
overall investment policy and the composition and diversification of its
portfolio and is prudent considering the factors discussed in this prospectus
and the attached prospectus supplement.
ERISA and the Internal Revenue Code prohibit various transactions involving
the assets of a Plan and persons referred to as parties in interest under ERISA
or disqualified persons under the Internal Revenue Code. A prohibited
transaction could subject disqualified persons to excise taxes and Plan
fiduciaries to other liabilities. A Plan fiduciary considering an investment in
the offered securities should consider whether that investment might constitute
a prohibited transaction under ERISA or the Internal Revenue Code.
A number of employee benefit plans, such as foreign plans, governmental
plans, as defined in Section 3(32) of ERISA, and certain church plans, as
defined in Section 3(33) of ERISA, are not subject to the restrictions of
ERISA. As a result, assets of these plans may be invested in the offered
securities without regard to the ERISA restrictions, subject to the provisions
of any other applicable federal or state law. You should note, however, that
any governmental plan or church plan that is qualified and exempt from taxation
under Sections 401(a) and 501(a) of the Internal Revenue Code is subject to the
prohibited transaction rules set forth in Section 503 of the Internal Revenue
Code.
Prohibited Transaction Considerations
Treatment of Trust Assets as Plan Assets. A transaction involving the
operation of the trust might constitute a prohibited transaction under ERISA
and the Internal Revenue Code if assets of the trust were deemed to be assets
of an investing Plan. The United States Department of Labor has issued
regulations, called the plan asset regulations, addressing whether the assets
of a Plan would include the assets of an entity in which the Plan has invested
for purposes of the fiduciary responsibility provisions of ERISA and the
prohibited transaction provisions of ERISA and the Internal Revenue Code. In
general, under the plan asset regulations, when a Plan acquires an equity
interest in an entity such as the trust, the assets of the Plan include both
the equity interest and an undivided interest in each of the underlying assets
of the entity unless the exceptions set forth in the regulations apply. In
general, an equity interest is defined under the plan asset regulations as any
interest in an entity, other than an instrument that is treated as indebtedness
under applicable local law and has no substantial equity features, and includes
a beneficial interest in a trust.
If the assets of the trust are deemed to be the assets of an investing Plan,
any person who has discretionary authority or control with respect to the trust
assets, and any person who provides investment advice for a fee with respect to
trust assets, will be a fiduciary of the investing Plan. This fiduciary status
would increase the scope of activities that would constitute prohibited
transactions under ERISA and the Internal Revenue Code.
Exception for Insignificant Participation by Benefit Plan Investors. The
plan asset regulation provides that the assets of an entity such as the trust
will not be deemed to be the assets of an investing Plan if equity
participation in the entity by benefit plan investors, such as employee benefit
plans or individual retirement accounts, is not significant. An equity
participation in an entity is not deemed to be significant if benefit plan
investors hold less than 25% of the value of each class of equity interests in
that entity. In calculating the value of a class of equity interests, the value
of any equity interests held by FNANB, the trustee or any of their affiliates
must be excluded. We cannot assure you that benefit plan investors will hold
less than 25% of the value of each class of equity interests in the trust.
Exception for Publicly Offered Securities. The plan asset regulation
provides that the issuer of a publicly-offered security acquired by a Plan will
not be deemed to hold Plan assets solely because of that
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acquisition. A publicly-offered security is a security that is freely
transferable, part of a class of securities that is owned by 100 or more
investors independent of the issuer and of one another and either:
. part of a class of securities registered under the Exchange Act; or
. sold to the Plan as part of an offering of securities to the public under
the Securities Act; provided, however, that the class of securities of
which the security is a part must be registered under the Exchange Act
within 120 days, or later if allowed by the SEC, after the end of the
fiscal year of the issuer during which the offering of the securities to
the public occurred.
The attached prospectus supplement states whether FNANB expects the
conditions of this exception to be met with respect to your securities.
We suggest that Plan fiduciaries or other persons considering an investment
in the offered securities on behalf of or with the assets of a Plan consult
their own counsel regarding the consequences to the Plan of that investment,
including the consequence to the Plan if the assets of the trust were to become
subject to the fiduciary and prohibited transaction rules of ERISA and the
Internal Revenue Code.
Additional Considerations for Insurance Company General Accounts
In John Hancock Mut. Life Ins. Co. v. Harris Trust and Sav. Bank, 510 U.S.
86 (1993), the United States Supreme Court held that, under some circumstances,
assets held in an insurance company's general account may be deemed to be
assets of Plans that were issued policies supported by that general account.
The Small Business Job Protection Act of 1996 added a new section of ERISA
relating to the status of the assets of insurance company general accounts
under ERISA and the Internal Revenue Code. This new section provides that
assets underlying general account policies issued before December 31, 1998 will
not be considered assets of a Plan to the extent the criteria set forth in DOL
regulations are satisfied. This new section also requires the DOL to issue
regulations establishing those criteria. On January 4, 2000, the DOL issued
final regulations, called the general account regulations, for this purpose.
The general account regulations are not generally applicable until July 5,
2001. The general account regulations provide that, if a Plan holds a policy
issued by an insurance company on or before December 31, 1998 which is
supported by assets of the insurance company's general account, the assets of
the Plan will include the policy but not the underlying assets of the general
account to the extent the requirements set forth in the general account
regulations are satisfied. The general account regulations do not apply to any
general account policies issued after December 31, 1998.
We suggest that Plan fiduciaries or other persons considering an investment
in the offered securities on behalf of an insurance company general account
consult their own counsel regarding the effect of the John Hancock decision and
the general account regulations on that investment.
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PLAN OF DISTRIBUTION
FNANB may sell the offered securities through underwriters or dealers,
directly to one or more purchasers or through agents. The attached prospectus
supplement sets forth the terms on which your securities are offered,
including, without limitation:
. the names of any underwriters;
. the purchase price of your securities and the resulting proceeds to
FNANB;
. any underwriting discounts or other items constituting underwriters'
compensation;
. the initial public offering price for your securities; and
. any discounts or commissions allowed or reallowed or paid to dealers.
The underwriters of any underwritten securities will purchase the securities
for their own account. The underwriters may sell any securities they purchase
in one or more transactions at a fixed public offering price or at varying
prices to be determined at the time of sale. The terms of any sale of your
securities will be set forth or described in the attached prospectus
supplement. If FNANB sells any securities to dealers as principals, those
dealers may re-sell those securities to the public at varying prices set by
those dealers from time to time. FNANB also may sell the securities through
agents on a best-efforts basis at varying prices.
Each underwriting agreement will provide that FNANB, as transferor of the
receivables, will indemnify the underwriters against liabilities under the
federal securities laws or will contribute to any amounts the underwriters may
be required to pay with respect to those liabilities. Dealers and agents may
also be entitled to indemnification or contribution with respect to liabilities
under the federal securities laws.
Any underwriter will be permitted to engage in the following transactions,
to the extent permitted by Regulation M under the Exchange Act:
. over-allotment transactions, which involve syndicate sales in excess of
the offering size creating a syndicate short position;
. stabilizing transactions, which permit bids to purchase the offered
securities so long as the stabilizing bids do not exceed a specified
maximum;
. syndicate covering transactions, which involve purchases of the offered
securities in the open market after the distribution has been completed
in order to cover syndicate short positions; and
. penalty bids, which permit the underwriters to reclaim a selling
concession from a syndicate member when the offered securities originally
sold by the syndicate member are purchased in a syndicate covering
transaction.
Any over allotment transactions, stabilizing transactions, syndicate
covering transactions and penalty bids may cause prices of the offered
securities to be higher than they would be in the absence of such transactions.
Neither the trust nor any of the underwriters makes any representation or
prediction as to the effect, if any, that these transactions could have on the
prices of the offered securities. In addition, neither the trust nor any of the
underwriters represents that the underwriters will engage in any of these
transactions or that any of these transactions, once commenced, will not be
discontinued without notice.
The underwriters or their affiliates may engage in transactions with, or
perform services for, FNANB, Circuit City or their affiliates in the ordinary
course of business.
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LEGAL MATTERS
We expect that legal matters relating to the issuance of the offered
securities will be passed upon for FNANB by McGuire, Woods, Battle & Boothe
LLP, Richmond, Virginia, and for the underwriters by Orrick, Herrington &
Sutcliffe LLP, Washington, D.C. We expect that federal income tax matters
relating to the trust and the offered securities will be passed upon for FNANB
by McGuire, Woods, Battle & Boothe LLP.
REPORTS TO SECURITYHOLDERS
Unless and until the securities are issued in definitive form, monthly and
annual reports containing information concerning the trust and prepared by the
servicer will be sent on behalf of the trust to Cede & Co., as nominee of DTC
and as registered holder of the securities. These reports will not constitute
financial statements prepared in accordance with generally accepted accounting
principles. FNANB is not required and does not intend to send any of its
financial reports to the securityholders or to the owners of beneficial
interests in the securities. The servicer will file with the SEC those periodic
reports with respect to the trust that are required to be filed under the
Exchange Act and under the SEC rules and regulations under the Exchange Act.
See "Registration and Transfer of the Securities" beginning on page 32 of this
prospectus for a further discussion of the circumstances under which the
securities will be issued in definitive form.
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WHERE YOU CAN FIND MORE INFORMATION
ABOUT THE TRUST AND THE SECURITIES
We have filed a registration statement relating to the trust and the
securities with the SEC. The registration statement includes information with
respect to the trust and the securities not included in this prospectus.
We have filed with the SEC periodic and special reports and other
information with respect to the trust and the securities. You may review these
filings, without charge, at the public reference facilities maintained by the
SEC at 450 Fifth Street, NW, Washington, DC 20549, 7 World Trade Center, New
York, New York 10048, and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. You may obtain copies of these
filings, for a fee, at the public reference facility maintained by the SEC at
450 Fifth Street, NW, Washington, DC 20549. You may call the SEC at (800) SEC-
0330 for further information about the operation of the public reference
facilities. You may also view SEC filings with respect to the trust and the
securities on the SEC Internet site at http://www.sec.gov.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference into this prospectus
information contained in documents we file with the SEC. Any information that
we incorporate by reference into this prospectus is considered part of this
prospectus. All information that we file later with the SEC will automatically
update the information in this prospectus. If the information provided in, or
incorporated by reference into, this prospectus or the attached prospectus
supplement differs from later information incorporated by reference into this
prospectus or the attached prospectus supplement, you should rely on the later
information. We incorporate by reference into this prospectus all periodic and
special reports and all other information filed with the SEC by or on behalf of
the trust after the date of this prospectus and before the termination of the
offering of the securities.
You may obtain a copy of any document we incorporate by reference into this
prospectus, without exhibits unless the exhibits are specifically incorporated
by reference, without charge, by writing or calling us c/o Circuit City Stores,
Inc., 9954 Mayland Drive, Richmond, Virginia 23233, Attention: Treasury
Department, (804) 527-4000.
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GLOSSARY OF DEFINED TERMS
"Account" means an Eligible Account included in the trust in accordance with
the master pooling and servicing agreement; provided, however, that:
. an Automatic Additional Account will be included as an Account only from
and after the date that account is created;
. a Designated Additional Account will be included as an Account only from
and after the date that account is designated; and
. a Removed Account will be included as an Account only until the
receivables in that Removed Account are retransferred to FNANB.
"Accumulation Period" means, with respect to any series, a Controlled
Accumulation Period, a Rapid Accumulation Period or such other type of
accumulation period as may be specified in the related series supplement.
"Additional Cut-Off Date" means, with respect to a Designated Additional
Account, the related cut-off date.
"Amortization Period" means, with respect to any series, a Controlled
Amortization Period, a Principal Amortization Period, an Early Amortization
Period or such other type of amortization period as may be specified in the
related series supplement.
"Automatic Additional Account" means an Eligible Account automatically
included in the trust upon its creation in accordance with the master pooling
and servicing agreement.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in Richmond, Virginia, Atlanta, Georgia or New York,
New York, or, with respect to any series, any other city specified in the
related series supplement, are authorized or obligated by law or executive
order to be closed.
"Collection Account" means a segregated trust account established by the
trustee with an Eligible Institution, for the benefit of the securityholders,
into which the servicer deposits amounts collected on the receivables.
"Companion Series" means a series that is paired with a previously issued
series and that has an Invested Amount that increases as the Invested Amount of
the paired series decreases.
"Controlled Accumulation Period" means, with respect to any series, a period
during which collections of Principal Receivables allocated to that series and
any other amounts specified in the related series supplement, up to a specified
amount, are deposited on or before each Distribution Date into a Principal
Funding Account.
"Controlled Amortization Period" means, with respect to any series, a period
during which collections of Principal Receivables allocated to that series and
any other amounts specified in the related series supplement, up to a specified
amount, are used on each Distribution Date to make principal payments to the
securityholders of that series or any class of that series then scheduled to
receive principal payments.
"Definitive Securities" means securities issued in fully registered,
certificated form.
"Default Amount" means, for any Due Period, the aggregate amount of
Principal Receivables, other than Principal Receivables that are not Eligible
Receivables, in all Accounts that were charged-off during that Due Period minus
all amounts recovered with respect to charged-off Accounts during that Due
Period.
"Designated Additional Account" means an Eligible Account designated by
FNANB after the initial closing date and included in the trust upon its
designation in accordance with the master pooling and servicing agreement.
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"Determination Date" means the eighth day prior to each Distribution Date
or, if that eighth day is not a Business Day, the next succeeding Business Day.
"Dilution Amount" means, as of any date, the amount, if any, by which the
sum of the aggregate Invested Amount of all outstanding series plus the Minimum
Transferor Amount, in each case as of that date, exceeds the sum of the
aggregate amount of Principal Receivables plus the amount on deposit in the
Excess Funding Account, in each case as of that date; provided, however, that
this excess will only constitute a Dilution Amount to the extent attributable
to downward adjustments made in the amount of Principal Receivables for non-
credit reasons as described under "Description of the Securities--Calculation
of the Series Adjustment Amount" beginning on page 22 of this prospectus.
"Discount Option" means the option of FNANB to designate a percentage of
receivables in the trust that would otherwise be treated as Principal
Receivables to be treated as Finance Charge Receivables.
"Discount Percentage" means a specified fixed or variable percentage
specified by FNANB in accordance with the master pooling and servicing
agreement.
"Distribution Date" means, with respect to any series, the date specified in
the related series supplement on which payments are scheduled to be made to the
securityholders of that series.
"Due Period" means, with respect to any series, the period from and
including the first day of a month to and including the last day of that month
or such other period as may be specified in the related series supplement.
"Early Amortization Event" means, with respect to any series, an event or
condition described under "Description of the Securities--Early Amortization
Events" beginning on page 24 of this prospectus and any other event identified
as an Early Amortization Event in the related prospectus supplement.
"Early Amortization Period" means, with respect to any series, a period
during which collections of Principal Receivables allocated to that series and
any other amounts specified in the related series supplement are used on each
Distribution Date to make principal payments to the securityholders of that
series or any class of that series then scheduled to receive principal
payments.
"Eligible Account" means a consumer revolving credit card account that
satisfies the eligibility criteria described under "Overview of the Accounts
and the Receivables" beginning on page 7 of this prospectus.
"Eligible Institution" means:
. a depository institution, which may be the trustee, organized under the
laws of the United States or any state or the District of Columbia, or
any domestic branch or agency of any foreign bank, the deposits in which
are insured by the FDIC and which at all times has a short-term unsecured
debt or certificate of deposit rating of at least A-1+ and P-1 by the
applicable rating agency or has a long-term unsecured debt rating of at
least AAA or Aa2 by the applicable rating agency; or
. a depository institution, which may be the trustee, otherwise acceptable
to each rating agency;
provided, however, that these ratings will not be required if the depository
institution has corporate trust powers and maintains the Collection Account,
any Principal Funding Account, any Interest Funding Account or any other bank
account maintained for the benefit of the securityholders as a fully segregated
trust account with the trust department of that depository institution.
"Eligible Investments" means:
. U.S. government debt;
. deposits at financial institutions having a rating in the highest rating
category from the applicable rating agency;
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. commercial paper having a rating in the highest rating category from the
applicable rating agency;
. money market funds having a rating in the highest rating category from
the applicable rating agency;
. Eurodollar time deposits having a rating in the highest rating category
from the applicable rating agency;
. repurchase agreements involving some of these investments so long as the
counterparty has a rating in the highest rating category from the
applicable rating agency; and
. any other investment approved by the applicable rating agency.
"Eligible Receivable" means a receivable that satisfies the eligibility
criteria described under "Overview of the Accounts and the Receivables"
beginning on page 7 of this prospectus.
"Enhancement Invested Amount" means, with respect to any series or class,
the aggregate amount of Principal Receivables in the trust allocated to the
provider of any credit enhancement for that series or class, in each case as
specified in the related series supplement.
"Excess Funding Account" means a segregated trust account established by the
trustee with an Eligible Institution, for the benefit of the securityholders,
in which collections of Principal Receivables are held as collateral if the
Transferor Amount is less than the Minimum Transferor Amount.
"Exchangeable Transferor Certificate" means a certificate evidencing an
undivided interest in the assets of the trust not evidenced by the securities
of any outstanding series or, to the extent provided in any series supplement
for any outstanding series, any provider of credit enhancement for that series.
"Finance Charge Receivables" means receivables representing amounts charged
to the Accounts in respect of periodic finance charges, late fees, returned
check fees or other fees or charges; provided, however, that, if FNANB
exercises the Discount Option, an amount equal to the product of the Discount
Percentage and the amount of receivables created under the Accounts on or after
the date the Discount Option is exercised that would otherwise be treated as
Principal Receivables will be treated as Finance Charge Receivables.
"Funding Period" means, with respect to any pre-funded series, a period
during which the aggregate amount of Principal Receivables in the trust
allocated to that series may be less than the aggregate principal amount of the
securities of that series.
"Initial Cut-Off Date" means September 30, 1994.
"Interest Funding Account" means, with respect to any series that provides
for the payment of interest less frequently than monthly, a segregated trust
account established by the trustee with an Eligible Institution, for the
benefit of the securityholders of that series, into which collections of
Finance Charge Receivables allocated to that series and any other amounts
specified in the related series supplement are deposited.
"Invested Amount" means, with respect to any series or class, the aggregate
amount of Principal Receivables in the trust allocated to that series or class,
in each case as specified in the related series supplement.
"Invested Percentage" means, with respect to any series or class, the
percentage used to allocate collections of Finance Charge Receivables,
collections of Principal Receivables or Default Amounts, as applicable, to that
series or class, in each case as specified in the related series supplement.
"Investor Charge-Off" means, with respect to any series or class, a
reduction in the Invested Amount of that series or class resulting from a
shortfall in available funds; provided, however, that the amount of that
reduction for any series on any Distribution Date may not exceed the Default
Amount allocated to that series for the preceding Due Period.
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"Minimum Aggregate Principal Receivables" means the aggregate of the Series
Minimum Aggregate Principal Receivables for all outstanding series.
"Minimum Transferor Amount" means the aggregate of the Series Minimum
Transferor Amounts for all outstanding series.
"Non-U.S. Security Owner" means a beneficial owner of a security who is not
a U.S. Security Owner.
"Plan" means:
. an employee benefit plan, as defined in Section 3(3) of ERISA, that is
subject to Title I of ERISA;
. a plan, as defined in Section 4975(e)(1) of the Internal Revenue Code,
that is subject to Section 4975 of the Internal Revenue Code, including
individual retirement accounts or Keogh plans; and
. an entity whose underlying assets include plan assets by reason of a
plan's investment in that entity, including insurance company general
accounts.
"Pre-Funding Account" means, with respect to any series that includes a
Funding Period, a segregated trust account established by the servicer with an
Eligible Institution, for the benefit of the securityholders of that series,
into which the difference between the aggregate amount of Principal
Receivables in the trust allocated to that series and the aggregate principal
amount of the securities of that series, and any other amounts specified in
the related series supplement, are deposited.
"Principal Amortization Period" means, with respect to any series, a period
during which collections of Principal Receivables allocated to that series and
any other amounts specified in the related series supplement are used on each
Distribution Date to make principal payments to the securityholders of that
series or any class of that series then scheduled to receive principal
payments.
"Principal Commencement Date" means, with respect to any series that
includes an Amortization Period, the date on which principal payments on the
related securities are scheduled to commence.
"Principal Funding Account" means, with respect to any series that includes
an Accumulation Period, a segregated trust account established by the servicer
with an Eligible Institution, for the benefit of the securityholders of that
series, into which collections of Principal Receivables allocated to that
series and any other amounts specified in the related series supplement are
deposited.
"Principal Receivables" means receivables representing amounts charged by
cardholders for merchandise, repair services, service contracts or other
services or credit insurance premiums; provided, however, that, if FNANB
exercises the Discount Option, an amount equal to the product of the Discount
Percentage and the amount of receivables created under the Accounts on or
after the date the Discount Option is exercised that would otherwise be
treated as Principal Receivables will be treated as Finance Charge
Receivables.
"Rapid Accumulation Period" means, with respect to any series, a period
during which collections of Principal Receivables allocated to that series and
any other amounts specified in the related series supplement are deposited on
or before each Distribution Date into a Principal Funding Account.
"Record Date" means, with respect to any Distribution Date for any series,
the last Business Day of the preceding month or such other date as may be
specified in the related series supplement.
"Removed Account" means an Account the receivables in which are to be
retransferred to FNANB.
"Revolving Period" means, with respect to any series, a period during which
collections of Principal Receivables allocated to that series are not
accumulated for or paid to the securityholders of that series.
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"Scheduled Distribution Date" means, with respect to any series that
includes an Accumulation Period, the date on which a single principal payment
on the related securities is scheduled to occur.
"Security Owner" means the beneficial owner of a security.
"Series Adjustment Amount" means, with respect to any series, the amount
calculated for that series as described under "Description of the Securities--
Calculation of Series Adjustment Amount" beginning on page 22 of this
prospectus.
"Series Minimum Aggregate Principal Receivables" means, with respect to any
series, the amount specified as the minimum aggregate principal receivables in
the related series supplement, which amount is described with respect to the
previously issued series that are currently outstanding under "Annex I:
Previously Issued Series" in the attached prospectus supplement, or such lesser
amount as may be designated by FNANB; provided, however, that FNANB may not
designate a lesser amount unless it receives written confirmation from each
rating agency that the designation of that lesser amount will not result in a
reduction or withdrawal of the rating assigned by that rating agency to any
outstanding series.
"Series Minimum Transferor Amount" means, with respect to any series, the
amount specified as such in the related series supplement, which amount is
described with respect to the previously issued series that are currently
outstanding under "Annex I: Previously Issued Series" in the attached
prospectus supplement, or such greater amount as may be designated by FNANB;
provided, however, that FNANB may not designate a greater amount unless, after
giving effect to that designation, the Transferor Amount equals or exceeds the
Minimum Transferor Amount.
"Servicer Default" means, with respect to any series, an event or condition
described under "Description of the Securities--Servicer Defaults" beginning on
page 27 of this prospectus.
"Shared Excess Finance Charge Collections" means collections of Finance
Charge Receivables allocated to a series included in a group that are not
needed to make required deposits or payments with respect to that series.
"Shared Principal Collections" means collections of Principal Receivables
allocated to a series included in a group that are not needed to make required
deposits or payments with respect to that series.
"Stated Series Termination Date" means, for any series, the date specified
in the related series supplement as the last day on which interest and
principal will be distributed to the securityholders of that series.
"Transferor Amount" means, as of any date:
. the aggregate amount of Principal Receivables, other than Principal
Receivables that have been charged off as uncollectible, in the trust at
the end of the day preceding that date; plus
. the amount on deposit in the Excess Funding Account at the end of the day
preceding that date; minus
. the aggregate Invested Amount of all outstanding series at the end of the
day preceding that date; minus
. without duplication, the aggregate Enhancement Invested Amount, if any,
for all outstanding series at the end of the day preceding that date.
"Transferor Certificate" means the certificate that represents the interest
of FNANB in the trust.
"Transferor Interest" means the undivided interest in the assets of the
trust evidenced by the Exchangeable Transferor Certificate.
61
<PAGE>
"Transferor Percentage" means the percentage used to allocate collections of
Finance Charge Receivables, collections of Principal Receivables or Default
Amounts, as applicable, to FNANB, which percentage equals 100% minus the sum of
the Invested Percentages for all outstanding series.
"U.S. Security Owner" means a beneficial owner of a security that is:
. a citizen or resident of the United States;
. a corporation or partnership created or organized in the United States or
under the laws of the United States or any political subdivision of the
United States;
. an estate the income of which is subject to U.S. federal income taxation
regardless of its source; or
. a trust that is subject to the supervision of a court within the Unites
States and the control of a United States person as described in Section
7701(a)(30) of the Internal Revenue Code or that has a valid election in
effect under applicable U.S. Treasury regulations to be treated as a
United States person.
"U.S. Person" means:
. a citizen or resident of the United States;
. a corporation, partnership or other entity created or organized in the
United States or under the laws of the United States or of any state,
unless, in the case of a partnership, Treasury regulations provide
otherwise;
. an estate the income of which is includible in gross income for federal
income taxation regardless of its source; or
. a trust the income of which is subject to federal income taxation
regardless of its source, if a United States court is able to exercise
primary supervision over the administration of the trust and one or more
U.S. Persons has authority to control all substantial decisions of the
trust.
62
<PAGE>
PART II
Item 14. Other Expenses of Issuance and Distribution
The following is an itemized list of the estimated expenses to be incurred
in connection with the offering of the securities being offered hereunder other
than underwriting discounts and commissions.
<TABLE>
<S> <C>
Registration Fee................................................ $312,840
Printing and Engraving.......................................... 75,000
Trustee's Fees.................................................. 2,500
Legal Fees and Expenses......................................... 300,000
Blue Sky Fees and Expenses...................................... 10,000
Accountants' Fees and Expenses.................................. 10,000
Rating Agency Fees.............................................. 235,000
Miscellaneous Fees.............................................. 30,000
--------
Total......................................................... $975,340
========
</TABLE>
Item 15. Indemnification of Directors and Officers
Article ELEVENTH of FNANB's Articles of Association provides that FNANB
shall indemnify any person who was or is made a party or is threatened to be
made a party to any threatened, pending or completed action, suit, proceeding
or appeal, whether civil, criminal, administrative or investigative and whether
formal or informal, because he or she is or was a director or officer of FNANB
or, while a director or officer of FNANB, is or was serving any other legal
entity in any capacity at the request of FNANB against all judgments,
settlements, penalties, fines or other obligations and reasonable expenses
incurred in such action, suit, proceeding or appeal except such obligations and
expenses as are incurred because of the indemnitee's willful misconduct or
knowing violation of criminal law (regardless of whether such action, suit,
proceeding or appeal is by or in the right of FNANB). FNANB is obligated to
make advances and reimbursements for expenses incurred by an indemnitee in any
such action, suit, proceeding or appeal upon receipt of an undertaking (which
undertaking may be an unlimited, unsecured general obligation of the indemnitee
and shall be accepted by FNANB without reference to the indemnitee's ability to
make repayment) from the indemnitee to repay the same if it is ultimately
determined that the indemnitee is not entitled to indemnification.
Article ELEVENTH also provides that FNANB may, to a lesser extent or to the
same extent that it is required to provide indemnification and make advances
and reimbursements for expenses to its directors and officers, provide
indemnification and make advances and reimbursements for expenses to its
employees and agents, the directors, officers, employees and agents of its
subsidiaries and predecessor entities, and any person serving any other legal
entity in any capacity at the request of FNANB and, if authorized by FNANB's
board of directors, may contract in advance to do so.
The determination that indemnification is permissible and the evaluation as
to reasonableness of expenses shall be made, in the case of a director, as
provided by law and, in the case of an officer, as authorized from time to time
by FNANB's board of directors (which authorization may be made before or after
the claim for indemnification is made) or as otherwise provided by law. If,
however, in either case, a majority of the directors serving on the board of
directors has changed after the date of the alleged conduct giving rise to a
claim for indemnification, such determination and evaluation shall, at the
option of the indemnitee, be made by special legal counsel agreed upon by the
board of directors and such indemnitee. The termination of any proceeding by
judgement, order, settlement, conviction or upon a plea of nolo contendere or
its equivalent shall not of itself create a presumption that an indemnitee
acted in such a manner as to make him or her ineligible for indemnification.
Article ELEVENTH provides that the indemnification provided thereby shall
not be exclusive of any other right of indemnification to which an indemnitee
may be entitled including indemnification pursuant to a valid
II-1
<PAGE>
contract, indemnification by legal entities other than FNANB and
indemnification under policies of insurance purchased and maintained by FNANB
or others; provided, however, that no indemnitee shall be entitled to
indemnification by FNANB to the extent he or she is indemnified by another,
including an insurer.
FNANB is authorized under Article ELEVENTH to purchase and maintain
insurance against any liability it may have under Article ELEVENTH or to
protect any indemnitee against any liability arising from his or her service to
FNANB or to any other legal entity at the request of FNANB regardless of
FNANB's power to indemnify against such liability.
Article ELEVENTH does not permit (i) the indemnification of directors,
officers or employees of FNANB against expenses, penalties or other payments
incurred in any administrative proceeding or action instituted by an
appropriate bank regulatory agency which proceeding or action results in a
final order assessing civil money penalties or requires affirmative action by
an individual or individuals in the form of payment to FNANB or (ii) insurance
coverage for a formal order assessing civil money penalties against a director
or employee of FNANB.
In the Underwriting Agreement, a form of which is attached as Exhibit 1.1
hereto, the Underwriters agree to indemnify, under certain conditions, the
Registrant, its directors, certain of its officers and persons who control the
Registrant within the meaning of the Securities Act against certain
liabilities.
Item 16. Exhibits and Financial Statements
(a) Exhibits
<TABLE>
<C> <C> <S>
1 -- Form of Underwriting Agreement (incorporated by reference to
Exhibit 1.1 to Registration Statement No. 33-82882)
3.1 -- Articles of Association (incorporated by reference to Exhibit 3.1
to Registration Statement No. 33-82882).
3.2 -- Bylaws (incorporated by reference to Exhibit 3.2 to Registration
Statement No. 33-82882).
4.1 -- Master Pooling and Servicing Agreement (incorporated by reference
to Exhibit 4.1 to Registration Statement No. 33-82882).
4.2 -- Form of Series Supplement (including form of Securities).
5.1 -- Opinion of McGuire, Woods, Battle & Boothe LLP with respect to
validity of the securities.
8.1 -- Opinion of McGuire, Woods, Battle & Boothe LLP with respect to
tax matters.
24.1 -- Consent of McGuire, Woods, Battle & Boothe LLP (included in its
opinion filed as Exhibit 5.1).
24.2 -- Consent of McGuire, Woods, Battle & Boothe LLP (included in its
opinion filed as Exhibit 8.1).
</TABLE>
(b) Financial Statements
All financial statements, schedules and historical financial
information have been omitted as they are not applicable.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement: (i) to include
any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
II-2
<PAGE>
(iii) to include any material information with respect to the plan of
distribution nor previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that (a)(i) and (a)(ii) will not apply if the
information required to be included in a post-effective amendment thereby
is contained in periodic reports filed pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering hereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(d) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(e) That, insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described
under Item 15 above, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(f) That, for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this Registration Statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of
1933 shall be deemed to be part of this Registration Statement as of the
time it was declared effective.
(g) That, for purposes of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and that the security rating
requirement set forth in Transaction Requirement B.5 of Form S-3 will be met
by the time of the sale of the securities registered hereunder and has duly
caused this Amendment No. 1 to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Richmond,
Commonwealth of Virginia on February 14, 2000.
FIRST NORTH AMERICAN NATIONAL BANK
as originator of the Trust and Co-
Registrant and as Servicer on behalf
of the Trust as Co-Registrant
/s/ Michael T. Chalifoux
By: _________________________________
Name: Michael T. Chalifoux
Title: President and Chairman
Each individual whose signature appears below constitutes and appoints
Michael T. Chalifoux and Philip J. Dunn, and each of them, such individual's
true and lawful attorneys-in-fact and agents with full power of substitution,
for such individual and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Amendment No. 1 to Registration Statement and to file the
same (and any and all related exhibits) with the Securities and Exchange
Commission.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 to Registration Statement has been signed on February 14,
2000 by the following persons in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Michael T. Chalifoux President, Chairman and February 14, 2000
______________________________________ Director (Principal
Michael T. Chalifoux Executive Officer)
/s/ Kerry L. VerStreate Chief Financial Officer February 14, 2000
______________________________________ (Principal Financial
Kerry L. VerStreate Officer and Principal
Accounting Officer)
/s/ Philip J. Dunn Director February 14, 2000
______________________________________
Philip J. Dunn
/s/ Mark A. Arensmeyer Director February 14, 2000
______________________________________
Mark A. Arensmeyer
/s/ Merle Worsham Director February 14, 2000
______________________________________
Merle Worsham
/s/ Angela C. Schwarz Director February 14, 2000
______________________________________
Angela C. Schwarz
</TABLE>
II-4
<PAGE>
EXHIBIT 4.2
------------------------------------------------------------
FIRST NORTH AMERICAN NATIONAL BANK
Transferor and Servicer
and
BANKERS TRUST COMPANY
Trustee
on behalf of the Certificateholders
-------------------------------
SERIES 2000-[__] SUPPLEMENT
Dated as of [____________], 2000
to
MASTER POOLING AND SERVICING AGREEMENT
Dated as of October 4, 1994
-------------------------------
$[____________]
CIRCUIT CITY CREDIT CARD MASTER TRUST
SERIES 2000-[__]
------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. Designation.................................................1
SECTION 2. Definitions.................................................2
SECTION 3. Minimum Transferor Interest Percentage
and Minimum Aggregate Principal
Receivables................................................27
SECTION 4. Reassignment and Transfer Terms............................26
SECTION 4A. [Interest Rate Caps].......................................27
SECTION 5. Delivery and Payment for the Certificates..................31
SECTION 6. Form of Delivery of the Series 2000-[__]
Certificate................................................31
SECTION 7. Servicing Compensation.....................................31
SECTION 8. Article IV of the Agreement................................32
ARTICLE IV
RIGHTS OF SERIES 2000-[__] CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.2 Collections and Allocations................................32
Section 4.3 Determination of Monthly Interest..........................33
[Section 4.3A] Determination of LIBOR.....................................36
Section 4.4 Determination of Monthly Interest..........................37
Section 4.5 Required Amount............................................38
Section 4.6 Application of Class A Available Funds,
Class B Available Funds, CTO Available
Funds, Class D Available Funds and
Collections of Principal Receivables.......................41
Section 4.7 Defaulted Amounts; Adjustment Amounts,
Investor Charge Offs; Reductions of
Adjustment Amounts.........................................44
Section 4.8 Excess Spread; Shared Excess Finance
Charge Collections.........................................48
Section 4.9 Subordinated Principal Collections.........................50
Section 4.10 Principal Shortfall........................................51
Section 4.11 Finance Charge Shortfall...................................52
Section 4.12 Spread Account.............................................52
Section 4.13 Principal Funding Account..................................53
Section 4.14 Reserve Account............................................54
Section 4.15 Postponement of Accumulation Period........................57
Section 4.16 Suspension of Accumulation Period..........................58
i
<PAGE>
Page
----
SECTION 9. Article V of the Agreement..............................61
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS
Section 5.1 Distributions...........................................60
Section 5.2 Statements to Series 2000-[__]
Certificateholder.......................................61
SECTION 10. Early Amortization Events...............................62
SECTION 11. CTO Defaults............................................64
SECTION 12. Restrictions on Transfer................................65
SECTION 13. Tax Characterization of the
Collateralized Trust Obligations and the
Class D Certificates....................................70
SECTION 14. Ratification of Master Pooling and
Servicing Agreement.....................................70
SECTION 15. Counterparts............................................70
SECTION 16. Governing Law...........................................71
SECTION 17. Subordination of Certain Termination
Payments................................................71
SECTION 18. FASIT Election..........................................71
SECTION 19. Paired Series...........................................71
Exhibit A Form of Class A Certificate
Exhibit B Form of Class B Certificate
Exhibit C Form of Collateralized Trust Obligation
Exhibit D Form of Class D Certificate
Exhibit E Form of Monthly Servicer's Certificate
Exhibit F Form of Monthly Certificateholder's Statement
Exhibit G Form of Transfer Certification
ii
<PAGE>
SERIES 2000-[__] SUPPLEMENT, dated as of [____________], 2000 (this
"Series Supplement"), between FIRST NORTH AMERICAN NATIONAL BANK , a national
------------------
banking association, as Transferor and Servicer, and BANKERS TRUST COMPANY, a
banking corporation organized and existing under the laws of New York (together
with its successors in trust thereunder as provided in the Agreement referred to
below, the "Trustee"), as trustee under the Master Pooling and Servicing
-------
Agreement, dated as of October 4, 1994, as amended (the "Agreement"), between
---------
the Transferor and Servicer and the Trustee.
PRELIMINARY STATEMENT
Section 6.9 of the Agreement provides, among other things, that the
Transferor and the Trustee may at any time and from time to time enter into one
or more Supplements to the Agreement for the purpose of authorizing the issuance
by the Trust to the Transferor, for execution and redelivery to the Trustee for
authentication, of one or more Series of Investor Certificates.
SECTION 1. Designation. The Certificates issued hereunder shall be
-----------
designated generally as the Series 2000-[__] Certificates. The Series 2000-[__]
Certificates shall be one of the Series of Investor Certificates in Group One
and shall be a Principal Sharing Series. The Transferor and the Servicer hereby
enter into this Series Supplement with the Trustee as required by Section 6.9(c)
of the Agreement to provide for the issuance, authentication and delivery of the
Class A [Fixed] [Floating] Rate Asset Backed Certificates, Series 2000-[__], the
Class B [Fixed] [Floating] Rate Asset Backed Certificates, Series 2000-[__], the
Collateralized Trust Obligations, Series 2000-[__] and the Class D Asset Backed
Certificates, Series 2000-[__]. The first Distribution Date with respect to
Series 2000-[__] shall be the [____________] 2000 Distribution Date. In the
event that any term or provision contained herein shall conflict with or be
inconsistent with any term or provision contained in the Agreement, the terms
and provisions of this Series Supplement shall govern. Notwithstanding the
foregoing, the provisions of Section 6.9(b) of the Agreement with respect to the
delivery of an Opinion of Counsel to the effect that a newly issued Series of
Investor Certificates will be characterized as either indebtedness or an
interest in a partnership under existing law for Federal income tax purposes
shall not be applicable to the Class D Certificates.
SECTION 2. Definitions. All capitalized terms not otherwise defined
-----------
herein are defined in the Agreement. All Article, Section or subsection
references herein shall mean
<PAGE>
Articles, Sections or subsections of the Agreement, except as otherwise provided
herein. Unless otherwise stated herein, as the context otherwise requires or if
such term is otherwise defined in the Agreement, each capitalized term used or
defined herein shall relate only to the Series 2000-[__] Certificates and no
other Series of Certificates issued by the Trust. The following words and
phrases shall have the following meanings with respect to the Series 2000-[__]
Certificates and the definitions of such terms are applicable to the singular as
well as the plural form of such terms and to the masculine as well as the
feminine and neuter genders of such terms:
"Accumulation Commencement Due Period" shall mean the Due Period in
------------------------------------
which the Accumulation Period commences.
"Accumulation Period" shall mean, unless an Early Amortization Event
-------------------
with respect to Series 2000-[__] shall have occurred prior thereto, the period
commencing at the close of business on the last day of the [____________] Due
Period, or such later date as shall be determined in accordance with Section
4.15 or Section 4.16, and ending on the first to occur of (a) the commencement
of the Early Amortization Period, (b) the payment in full of the Class A
Certificates, the Class B Certificates, the Collateralized Trust Obligations and
the Class D Certificates and (c) the Stated Series Termination Date.
"Accumulation Period Factor" shall mean, for each Due Period, a
--------------------------
fraction, the numerator of which is equal to the sum of the initial invested
amounts of all outstanding Series and the denominator of which is equal to the
sum of (a) the Initial Invested Amount, (b) the initial invested amounts (or
other corresponding amounts) of all outstanding Series (other than Series 2000-
[__]) which are not expected to be in their revolving periods during such Due
Period and (c) the initial invested amounts (or other corresponding amounts) of
all outstanding Series (other than Series 2000-[__]) which are not allocating
Shared Principal Collections to other Series and are expected to be in their
revolving periods during such Due Period.
"Accumulation Period Length" shall have the meaning specified in
--------------------------
Section 4.15.
"Adjusted Invested Amount" shall mean, as of any date, an amount equal
------------------------
to the sum of the Class A Adjusted Invested Amount, the Class B Adjusted
Invested Amount, the CTO Adjusted Invested Amount and the Class D Invested
Amount, in each case as of such date.
"Assignee" shall have the meaning specified in Section 12(d) of this
--------
Series Supplement.
2
<PAGE>
"Available Principal Collections" shall mean, with respect to any
-------------------------------
Distribution Date, an amount equal to (a) the applicable Invested Percentage of
Collections of Principal Receivables for the preceding Due Period, plus (b) the
----
amounts included in Available Principal Collections with respect to such
Distribution Date pursuant to Section 4.6 and Section 4.8, plus (c) Shared
----
Principal Collections allocated to Series 2000-[__], plus (d) during the Early
----
Amortization Period, any amounts allocated to Series 2000-[__] as described in
Section 4.10, minus (e) Subordinated Principal Collections applied pursuant to
-----
Section 4.9 for such preceding Due Period.
"Available Reserve Account Amount" shall mean, with respect to any
--------------------------------
Distribution Date, the lesser of (a) the amount on deposit in and available to
be withdrawn from the Reserve Account on such Distribution Date (before giving
effect to any deposit or withdrawal to be made to or from the Reserve Account on
such date) and (b) the Required Reserve Account Amount with respect to such
Distribution Date.
"Available Spread Account Amount" shall mean, with respect to any
-------------------------------
Distribution Date, the lesser of (a) the amount on deposit in and available to
be withdrawn from the Spread Account on such Distribution Date (before giving
effect to any deposit or withdrawal to be made to or from the Spread Account on
such date) and (b) the Required Spread Account Amount with respect to such
Distribution Date.
"Average Excess Spread Percentage" shall mean, with respect to any
--------------------------------
Distribution Date, the average of the Excess Spread Percentages for the three
consecutive Due Periods preceding such Distribution Date.
"Base Rate" shall mean, with respect to any Due Period, the sum of (a)
---------
the annualized percentage equivalent of a fraction, the numerator of which is
the sum of the Class A Monthly Interest, the Class B Monthly Interest, the CTO
Monthly Interest and the Class D Monthly Interest distributable on the
Distribution Date immediately following the last day of such Due Period and the
denominator of which is the Adjusted Invested Amount as of the last day of the
Due Period preceding such Due Period and (b) the product of (i) 2.00% per annum
and (ii) a fraction, the numerator of which is the Invested Amount and the
denominator of which is the Adjusted Invested Amount, each as of the last day of
such preceding Due Period.
"Business Day" shall have the meaning specified in the Agreement.
------------
"Class A Additional Interest" shall have the meaning specified in
---------------------------
Section 4.3(a).
3
<PAGE>
"Class A Adjusted Invested Amount" shall mean, as of any date, an
--------------------------------
amount equal to the sum of the Class A Invested Amount as of such date and the
aggregate amount on deposit in the Principal Funding Account on such date in
respect of Class A Monthly Principal (excluding interest and other investment
earnings on such amount).
"Class A Adjustment Amount" shall mean, with respect to any
-------------------------
Distribution Date, an amount equal to the product of (i) the Series Adjustment
Amount for Series 2000-[__] as of the end of the preceding Due Period and (ii)
the percentage equivalent of a fraction, the numerator of which is the Class A
Invested Amount and the denominator of which is the Invested Amount, each as of
the last day of the Due Period preceding such preceding Due Period.
"Class A Allocable Amount" shall mean, with respect to any
------------------------
Distribution Date, the sum of the Class A Default Amount with respect to such
Distribution Date and the Class A Adjustment Amount with respect to such
Distribution Date.
"Class A Available Funds" shall mean, with respect to any Due Period,
-----------------------
an amount equal to the sum of (a) the Class A Floating Allocation Percentage
(with respect to any Due Period during the Revolving Period or the Accumulation
Period) or the Class A Fixed Allocation Percentage (with respect to any Due
Period during the Early Amortization Period) of Collections of Finance Charge
Receivables for such Due Period and any other amounts that are to be treated as
Collections of Finance Charge Receivables for such Due Period in accordance with
the Agreement, [(b) the Class A Cap Payment, if any, deposited in the Collection
Account on the Distribution Date immediately following the last day of such Due
Period,] (c) the portion of the Principal Funding Investment Proceeds, if any,
withdrawn from the Principal Funding Account on the Distribution Date
immediately following the last day of such Due Period and included in Class A
Available Funds pursuant to Section 4.13(c), (d) the amount, if any, withdrawn
from the Reserve Account on the Distribution Date immediately following the last
day of such Due Period and included in Class A Available Funds pursuant to
Section 4.14(d) and (e) the interest and other investment earnings, if any (net
of losses and investment expenses), on funds on deposit in the Reserve Account
withdrawn from the Reserve Account on the Distribution Date immediately
following the last day of such Due Period and included in Class A Available
Funds pursuant to Section 4.14(e).
["Class A Cap Payment" shall mean, with respect to any Distribution
-------------------
Date, any payment made to the Trust pursuant to the Class A Interest Rate Cap
with respect to such Distribution Date.]
["Class A Cap Rate" shall mean [____]% per annum.]
----------------
4
<PAGE>
"Class A Certificate Rate" shall mean [[____]% per annum][, with
------------------------
respect to any Interest Period, a per annum rate of [____]% in excess of LIBOR,
as determined on the related LIBOR Determination Date].
"Class A Certificateholder" shall mean the Person in whose name a
-------------------------
Class A Certificate is registered in the Certificate Register.
"Class A Certificates" shall mean any one of the Certificates executed
--------------------
by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A.
---------
"Class A Default Amount" shall mean, with respect to any Distribution
----------------------
Date, an amount equal to the product of (i) the Default Amount for the preceding
Due Period and (ii) the Class A Floating Allocation Percentage for such Due
Period.
"Class A Fixed Allocation Percentage" shall mean, with respect to any
-----------------------------------
Due Period, the percentage equivalent of a fraction, the numerator of which is
equal to the Class A Invested Amount as of the last day of the Revolving Period
and the denominator of which is equal to the greater of (i) the sum of (a) the
Aggregate Principal Receivables in the Trust as of the last day of the
immediately preceding Due Period and (b) the Excess Funding Amount at the end of
such last day and (ii) the sum of the numerators used to calculate the
corresponding invested percentages for all Series outstanding as of the date on
which such determination is being made; provided, however, that, with respect to
-------- -------
any Due Period in which Additional Accounts are included as Accounts pursuant to
Section 2.6(a) or Section 2.6(b), the amount calculated in clause (i) above
shall be increased by the amount of Principal Receivables in such Additional
Accounts as of the Additional Account Cut Off Date on and after the Additional
Account Closing Date applicable to such Additional Accounts; and, provided
--------
further, that if the Series 2000-[__] Certificates are paired with a Paired
- -------
Series and the Early Amortization Period (as defined in the Supplement for such
Paired Series) commences, the Transferor may, by written notice to the Trustee
and the Servicer, designate a different numerator to be used to determine such
percentage (provided that such numerator is not less than the Class A Invested
Amount as of the last day of the Revolving Period (as defined in the Supplement
for such Paired Series)).
"Class A Floating Allocation Percentage" shall mean, with respect to
--------------------------------------
any Due Period, the percentage equivalent of a fraction, the numerator of which
is equal to the Class A Invested Amount as of the last day of the immediately
preceding Due Period (or the Class A Initial Invested Amount, in the case of the
first Due Period applicable to Series 2000-[__]) and the denominator of which is
equal to the greater of (i) the sum of (a) the Aggregate
5
<PAGE>
Principal Receivables in the Trust as of the last day of such immediately
preceding Due Period (or the Closing Date, in the case of the first Due Period
applicable to Series 2000- [__]) and (b) the Excess Funding Amount at the end of
such last day and (ii) the sum of the numerators used to calculate the
corresponding invested percentages for all Series outstanding as of the date on
which such determination is being made; provided, however, that, with respect to
-------- -------
any Due Period in which Additional Accounts are included as Accounts pursuant to
Section 2.6(a) or Section 2.6(b), the amount calculated in clause (i) above
shall be increased by the amount of Principal Receivables in such Additional
Accounts as of the Additional Account Cut Off Date on and after the Additional
Account Closing Date applicable to such Additional Accounts.
"Class A Initial Invested Amount" shall mean the aggregate initial
-------------------------------
principal amount of the Class A Certificates, which is $[____________].
["Class A Interest Rate Cap" shall mean the master agreement dated as
-------------------------
of [____________], 2000 between the Trust and the Interest Rate Cap Provider, as
supplemented by the schedule attached thereto and the confirmation dated as of
[____________], 2000 between the Trust and the Interest Rate Cap Provider,
relating to the Class A Certificates and for the exclusive benefit of the Class
A Certificateholders, or any Replacement Interest Rate Cap or Qualified
Substitute Arrangement.]
"Class A Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.3(a).
"Class A Invested Amount" shall mean, as of any date, an amount equal
-----------------------
to (a) the Class A Initial Invested Amount, minus (b) the aggregate amount
-----
deposited into the Principal Funding Account prior to such date as Class A
Monthly Principal (excluding interest and other investment earnings on such
amount), minus (c) the aggregate amount of principal payments made to the Class
-----
A Certificateholders prior to such date, minus (d) the excess, if any, of the
-----
aggregate amount of Class A Investor Charge Offs for all prior Distribution
Dates over the sum of the aggregate amount of Class A Investor Charge Offs
----
reimbursed prior to such date pursuant to Section 4.8(b) and, without
duplication, the aggregate amount of the reductions of the Series Adjustment
Amounts allocated to the Class A Invested Amount prior to such date pursuant to
Section 4.7(f); provided, however, that the Class A Invested Amount may not be
-------- -------
reduced below zero.
"Class A Investor Charge Offs" shall have the meaning specified in
----------------------------
Section 4.7(a).
6
<PAGE>
"Class A Monthly Interest" shall have the meaning specified in Section
------------------------
4.3(a).
"Class A Monthly Principal" shall have the meaning specified in
-------------------------
Section 4.4(a).
["Class A Notional Amount" shall mean, as of any date, an amount equal
-----------------------
to $[____________], subject to adjustment each [____________], [____________],
[____________] and [____________] Distribution Date such that the Class A
Notional Amount will be reduced (effective as of such date) to the outstanding
principal amount of the Class A Certificates after giving effect to the
distribution of Class A Monthly Principal on such Distribution Date.]
"Class A Penalty Rate" shall mean [, for any Interest Period,] the sum
--------------------
of the Class A Certificate Rate [for such Interest Period] and 2.00% per annum.
"Class A Required Amount" shall have the meaning specified in Section
-----------------------
4.5(a).
"Class A Servicing Fee" shall have the meaning specified in Section 7
---------------------
of this Series Supplement.
"Class B Additional Interest" shall have the meaning specified in
---------------------------
Section 4.3(b).
"Class B Adjusted Invested Amount" shall mean, as of any date, an
--------------------------------
amount equal to the sum of the Class B Invested Amount as of such date and the
aggregate amount on deposit in the Principal Funding Account on such date in
respect of Class B Monthly Principal (excluding interest and other investment
earnings on such amount).
"Class B Adjustment Amount" shall mean, with respect to any
-------------------------
Distribution Date, an amount equal to the product of (i) the Series Adjustment
Amount for Series 2000-[__] as of the end of the preceding Due Period and (ii)
the percentage equivalent of a fraction, the numerator of which is the Class B
Invested Amount and the denominator of which is the Invested Amount, each as of
the last day of the Due Period preceding such preceding Due Period.
"Class B Allocable Amount" shall mean, with respect to any
------------------------
Distribution Date, the sum of the Class B Default Amount with respect to such
Distribution Date and the Class B Adjustment Amount with respect to such
Distribution Date.
"Class B Available Funds" shall mean, with respect to any Due Period,
-----------------------
an amount equal to the sum of (a) the Class B Floating Allocation Percentage
(with respect to any Due Period
7
<PAGE>
during the Revolving Period or the Accumulation Period) or the Class B Fixed
Allocation Percentage (with respect to any Due Period during the Early
Amortization Period) of Collections of Finance Charge Receivables for such Due
Period and any other amounts that are to be treated as Collections of Finance
Charge Receivables for such Due Period in accordance with the Agreement, [(b)
the Class B Cap Payment, if any, deposited in the Collection Account on the
Distribution Date immediately following the last day of such Due Period,] (c)
the portion of the Principal Funding Investment Proceeds, if any, withdrawn from
the Principal Funding Account on the Distribution Date immediately following the
last day of such Due Period and included in Class B Available Funds pursuant to
Section 4.13(c), (d) the amount, if any, withdrawn from the Reserve Account on
the Distribution Date immediately following the last day of such Due Period and
included in Class B Available Funds pursuant to Section 4.14(d) and (e) the
interest and other investment earnings, if any (net of losses and investment
expenses), on funds on deposit in the Reserve Account withdrawn from the Reserve
Account on the Distribution Date immediately following the last day of such Due
Period and included in Class B Available Funds pursuant to Section 4.14(e).
["Class B Cap Payment" shall mean, with respect to any Distribution
-------------------
Date, any payment made to the Trust pursuant to the Class B Interest Rate Cap
with respect to such Distribution Date.]
["Class B Cap Rate" shall mean [____]% per annum.]
----------------
"Class B Certificate Rate" shall mean [[____]% per annum] [, with
------------------------
respect to any Interest Period, a per annum rate of [____]% in excess of LIBOR,
as determined on the related LIBOR Determination Date].
"Class B Certificateholder" shall mean the Person in whose name a
-------------------------
Class B Certificate is registered in the Certificate Register.
"Class B Certificates" shall mean any one of the Certificates executed
--------------------
by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit B.
---------
"Class B Default Amount" shall mean, with respect to any Distribution
----------------------
Date, an amount equal to the product of (i) the Default Amount for the preceding
Due Period and (ii) the Class B Floating Allocation Percentage for such Due
Period.
"Class B Fixed Allocation Percentage" shall mean, with respect to any
-----------------------------------
Due Period, the percentage equivalent of a fraction, the numerator of which is
equal to the Class B Invested Amount as of the last day of the Revolving Period
and the denominator of which is equal to the greater of (i) the sum of
8
<PAGE>
(a) the Aggregate Principal Receivables in the Trust as of the last day of the
immediately preceding Due Period and (b) the Excess Funding Amount at the end of
such last day and (ii) the sum of the numerators used to calculate the
corresponding invested percentages for all Series outstanding as of the date on
which such determination is being made; provided, however, that, with respect to
--------
any Due Period in which Additional Accounts are included as Accounts pursuant to
Section 2.6(a) or Section 2.6(b), the amount calculated in clause (i) above
shall be increased by the amount of Principal Receivables in such Additional
Accounts as of the Additional Account Cut Off Date on and after the Additional
Account Closing Date applicable to such Additional Accounts; and, provided
--------
further, that if the Series 2000-[__] Certificates are paired with a Paired
- -------
Series and the Early Amortization Period (as defined in the Supplement for such
Paired Series) commences, the Transferor may, by written notice to the Trustee
and the Servicer, designate a different numerator to be used to determine such
percentage (provided that such numerator is not less than the Class B Invested
Amount as of the last day of the Revolving Period (as defined in the Supplement
for such Paired Series)).
"Class B Floating Allocation Percentage" shall mean, with respect to
--------------------------------------
any Due Period, the percentage equivalent of a fraction, the numerator of which
is equal to the Class B Invested Amount as of the last day of the immediately
preceding Due Period (or the Class B Initial Invested Amount, in the case of the
first Due Period applicable to Series 2000-[__]) and the denominator of which is
equal to the greater of (i) the sum of (a) the Aggregate Principal Receivables
in the Trust as of the last day of such immediately preceding Due Period (or the
Closing Date, in the case of the first Due Period applicable to Series 2000-
[__]) and (b) the Excess Funding Amount at the end of such last day and (ii) the
sum of the numerators used to calculate the corresponding invested percentages
for all Series outstanding as of the date on which such determination is being
made; provided, however, that, with respect to any Due Period in which
-------- -------
Additional Accounts are included as Accounts pursuant to Section 2.6(a) or
Section 2.6(b), the amount calculated in clause (i) above shall be increased by
the amount of Principal Receivables in such Additional Accounts as of the
Additional Account Cut Off Date on and after the Additional Account Closing Date
applicable to such Additional Accounts.
"Class B Initial Invested Amount" shall mean the aggregate initial
-------------------------------
principal amount of the Class B Certificates, which is $[____________].
["Class B Interest Rate Cap" shall mean the master agreement dated as
-------------------------
of [____________], 2000 between the Trust and the Interest Rate Cap Provider, as
supplemented by the schedule attached thereto and the confirmation dated as of
[____________],
9
<PAGE>
2000 between the Trust and the Interest Rate Cap Provider, relating to the Class
B Certificates and for the exclusive benefit of the Class B Certificateholders,
or any Replacement Interest Rate Cap or Qualified Substitute Arrangement.]
"Class B Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.3(b).
"Class B Invested Amount" shall mean, as of any date, an amount equal
-----------------------
to (a) the Class B Initial Invested Amount, minus (b) the aggregate amount
-----
deposited into the Principal Funding Account prior to such date as Class B
Monthly Principal (excluding interest and other investment earnings on such
amount), minus (c) the aggregate amount of principal payments made to the Class
-----
B Certificateholders prior to such date, minus (d) the aggregate amount of Class
-----
B Investor Charge Offs for all prior Distribution Dates, minus (e) the amount of
-----
Class B Subordinated Principal Collections allocated on all prior Distribution
Dates pursuant to Section 4.9(a), minus (f) an amount equal to the amount by
-----
which the Class B Invested Amount has been reduced on all prior Distribution
Dates pursuant to Section 4.7(a), plus (g) the sum of the amount of Excess
----
Spread and Shared Excess Finance Charge Collections allocated and available on
all prior Distribution Dates pursuant to Section 4.8(e) for the purpose of
reimbursing amounts deducted pursuant to the foregoing clauses (d), (e) and (f)
and, without duplication, the aggregate amount of the reductions of the Series
Adjustment Amounts allocated to the Class B Invested Amount prior to such date
pursuant to Section 4.7(f); provided, however, that the Class B Invested Amount
-------- -------
may not be reduced below zero.
"Class B Investor Charge Offs" shall have the meaning specified in
----------------------------
Section 4.7(b).
"Class B Monthly Interest" shall have the meaning specified in Section
------------------------
4.3(b).
"Class B Monthly Principal" shall have the meaning specified in
-------------------------
Section 4.4(b).
["Class B Notional Amount" shall mean, as of any date, an amount equal
-----------------------
to $[____________], subject to adjustment each [____________], [____________],
[____________] and [____________] Distribution Date such that the Class B
Notional Amount will be reduced (effective as of such date) to the outstanding
principal amount of the Class B Certificates after giving effect to the
distribution of Class B Monthly Principal on such Distribution Date.]
"Class B Penalty Rate" shall mean [, for any Interest Period,] the sum
--------------------
of the Class B Certificate Rate [for such Interest Period] and 2.00% per annum.
10
<PAGE>
"Class B Principal Commencement Date" shall mean (i) unless the Early
-----------------------------------
Amortization Period shall have commenced or the Accumulation Period shall have
been suspended in accordance with Section 4.16, the first Distribution Date on
which the aggregate amount on deposit in the Principal Funding Account in
respect of Class A Monthly Principal equals the outstanding principal balance of
the Class A Certificates and (ii) if the Early Amortization Period shall have
commenced or the Accumulation Period shall have been suspended in accordance
with Section 4.16, the Distribution Date on which the Class A Certificates are
paid in full.
"Class B Required Amount" shall have the meaning specified in Section
-----------------------
4.5(b).
"Class B Servicing Fee" shall have the meaning specified in Section 7
---------------------
of this Series Supplement.
"Class B Subordinated Principal Collections" shall mean, with respect
------------------------------------------
to any Due Period, an amount equal to the product of (i) the Class B Floating
Allocation Percentage (with respect to any Due Period during the Revolving
Period) or the Class B Fixed Allocation Percentage (with respect to any Due
Period during the Accumulation Period or the Early Amortization Period) and (ii)
the aggregate amount of Collections of Principal Receivables for such Due
Period.
"Class D Additional Interest" shall have the meaning specified in
---------------------------
Section 4.3(d).
"Class D Adjustment Amount" shall mean, with respect to any
-------------------------
Distribution Date, an amount equal to the product of (i) the Series Adjustment
Amount for Series 2000-[__] as of the end of the preceding Due Period and (ii)
the percentage equivalent of a fraction, the numerator of which is the Class D
Invested Amount and the denominator of which is the Invested Amount, each as of
the last day of the Due Period preceding such preceding Due Period.
"Class D Allocable Amount" shall mean, with respect to any
------------------------
Distribution Date, the sum of the Class D Default Amount with respect to such
Distribution Date and the Class D Adjustment Amount with respect to such
Distribution Date.
"Class D Available Funds" shall mean, with respect to any Due Period,
-----------------------
the Class D Floating Allocation Percentage (with respect to any Due Period
during the Revolving Period or the Accumulation Period) or the Class D Fixed
Allocation Percentage (with respect to any Due Period during the Early
Amortization Period) of Collections of Finance Charge Receivables for such Due
Period and any other amounts that are to be treated as
11
<PAGE>
Collections of Finance Charge Receivables for such Due Period in accordance with
the Agreement.
"Class D Certificate Rate" shall mean, with respect to any Interest
------------------------
Period, the rate designated in the letter agreement, dated [____________], 2000,
between the Transferor and the Trustee; provided, however, that the Class D
-------- -------
Certificate Rate shall in no event exceed LIBOR plus [____]% per annum.
"Class D Certificateholder" shall mean the Person in whose name a
-------------------------
Class D Certificate is registered in the Certificate Register.
"Class D Certificates" shall mean any one of the Certificates executed
--------------------
by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit D.
---------
"Class D Default Amount" shall mean, with respect to any Distribution
----------------------
Date, an amount equal to the product of (i) the Default Amount for the preceding
Due Period and (ii) the Class D Floating Allocation Percentage for such Due
Period.
"Class D Fixed Allocation Percentage" shall mean, with respect to any
-----------------------------------
Due Period, the percentage equivalent of a fraction, the numerator of which is
equal to the Class D Invested Amount as of the last day of the Revolving Period
and the denominator of which is equal to the greater of (i) the sum of (a) the
Aggregate Principal Receivables in the Trust as of the last day of the
immediately preceding Due Period and (b) the Excess Funding Amount at the end of
such last day and (ii) the sum of the numerators used to calculate the
corresponding invested percentages for all Series outstanding as of the date on
which such determination is being made; provided, however, that, with respect to
-------- -------
any Due Period in which Additional Accounts are included as Accounts pursuant to
Section 2.6(a) or Section 2.6(b), the amount calculated in clause (i) above
shall be increased by the amount of Principal Receivables in such Additional
Accounts as of the Additional Account Cut Off Date on and after the Additional
Account Closing Date applicable to such Additional Accounts; and, provided
--------
further, that if the Series 2000-[__] Certificates are paired with a Paired
- -------
Series and the Early Amortization Period (as defined in the Supplement for such
Paired Series) commences, the Transferor may, by written notice to the Trustee
and the Servicer, designate a different numerator to be used to determine such
percentage (provided that such numerator is not less than the Class D Invested
Amount as of the last day of the Revolving Period (as defined in the Supplement
for such Paired Series)).
"Class D Floating Allocation Percentage" shall mean, with respect to
--------------------------------------
any Due Period, the percentage equivalent of a fraction, the numerator of which
is equal to the Class D Invested
12
<PAGE>
Amount as of the last day of the immediately preceding Due Period (or the Class
D Initial Invested Amount, in the case of the first Due Period applicable to
Series 2000-[__]) and the denominator of which is equal to the greater of (i)
the sum of (a) the Aggregate Principal Receivables in the Trust as of the last
day of such immediately preceding Due Period (or the Closing Date, in the case
of the first Due Period applicable to Series 2000- [__]) and (b) the Excess
Funding Amount at the end of such last day and (ii) the sum of the numerators
used to calculate the corresponding invested percentages for all Series
outstanding as of the date on which such determination is being made; provided,
--------
however, that, with respect to any Due Period in which Additional Accounts are
- -------
included as Accounts pursuant to Section 2.6(a) or Section 2.6(b), the amount
calculated in clause (i) above shall be increased by the amount of Principal
Receivables in such Additional Accounts as of the Additional Account Cut Off
Date on and after the Additional Account Closing Date applicable to such
Additional Accounts.
"Class D Initial Invested Amount" shall mean the aggregate initial
-------------------------------
principal amount of the Class D Certificates, which is $[____________].
"Class D Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.3(d).
"Class D Invested Amount" shall mean, as of any date, an amount equal
-----------------------
to (a) the Class D Initial Invested Amount, minus (b) the aggregate amount of
-----
principal payments made to the Class D Certificateholders prior to such date,
minus (c) the aggregate amount of Class D Investor Charge Offs for all prior
- -----
Distribution Dates, minus (d) the amount of Class D Subordinated Principal
-----
Collections allocated on all prior Distribution Dates pursuant to Section
4.9(a), (b) or (c), minus (e) an amount equal to the amount by which the Class D
-----
Invested Amount has been reduced on all prior Distribution Dates pursuant to
Section 4.7(a), (b) or (c), plus (f) the sum of the amount of Excess Spread and
----
Shared Excess Finance Charge Collections allocated and available on all prior
Distribution Dates pursuant to Section 4.8(n) for the purpose of reimbursing
amounts deducted pursuant to the foregoing clauses (c), (d) and (e) and, without
duplication, the aggregate amount of the reductions of the Series Adjustment
Amounts allocated to the Class D Invested Amount prior to such date pursuant to
Section 4.7(f); provided, however, that the Class D Invested Amount may not be
-------- -------
reduced below zero.
"Class D Investor Charge Off" shall have the meaning specified in
---------------------------
Section 4.7(d).
"Class D Monthly Interest" shall have the meaning specified in Section
------------------------
4.3(d).
13
<PAGE>
"Class D Monthly Principal" shall have the meaning specified in
-------------------------
Section 4.4(d).
"Class D Penalty Rate" shall mean, for any Interest Period, the sum of
--------------------
the Class D Certificate Rate for such Interest Period and 2.00% per annum.
"Class D Principal Commencement Date" shall mean the Distribution Date
-----------------------------------
on which the Class A Certificates, the Class B Certificates and the
Collateralized Trust Obligations are paid in full.
"Class D Servicing Fee" shall have the meaning specified in Section 7
---------------------
of this Series Supplement.
"Class D Subordinated Principal Collections" shall mean, with respect
------------------------------------------
to any Due Period, an amount equal to the product of (i) the Class D Floating
Allocation Percentage (with respect to any Due Period during the Revolving
Period) or the Class D Fixed Allocation Percentage (with respect to any Due
Period during the Accumulation Period or the Early Amortization Period) and (ii)
the aggregate amount of Collections of Principal Receivables for such Due
Period.
"Closing Date" shall mean [____________], 2000.
------------
"Code" shall mean the Internal Revenue Code of 1986, as amended.
----
"Collateralized Trust Obligations" shall mean any one of the
--------------------------------
Collateralized Trust Obligations executed by the Transferor and authenticated by
or on behalf of the Trustee, substantially in the form of Exhibit C.
---------
"Controlled Accumulation Amount" shall mean, for any Distribution Date
------------------------------
with respect to the Accumulation Period, $[____________]; provided, however,
-------- -------
that, if the Accumulation Period Length shall be determined to be less than 12
months in accordance with Section 4.15, the Controlled Accumulation Amount for
any Distribution Date with respect to the Accumulation Period shall be equal to
(i) the product of (x) the Target Accumulation Amount and (y) the Accumulation
Period Factor for the Due Period preceding such Distribution Date divided by
(ii) the Required Accumulation Factor Number with respect to such Distribution
Date.
"Controlled Deposit Amount" shall mean, for any Distribution Date with
-------------------------
respect to the Accumulation Period, an amount equal to the sum of the Controlled
Accumulation Amount for such Distribution Date and any Deficit Controlled
Accumulation Amount for the immediately preceding Distribution Date.
14
<PAGE>
"Covered Amount" shall mean, for any Distribution Date with respect to
--------------
the Accumulation Period or the first Special Distribution Date, an amount equal
to (a) [one-twelfth of] the product of (i) the Class A Certificate Rate [for the
related Interest Period], (ii) the aggregate amount, if any, on deposit in the
Principal Funding Account as of such Distribution Date in respect of Class A
Monthly Principal [and (iii) a fraction, the numerator of which is the actual
number of days in such Interest Period and the denominator of which is 360] plus
----
(b) [one-twelfth of] the product of (i) the Class B Certificate Rate [for the
related Interest Period], (ii) the aggregate amount, if any, on deposit in the
Principal Funding Account as of such Distribution Date in respect of Class B
Monthly Principal [and (iii) a fraction, the numerator of which is the actual
number of days in such Interest Period and the denominator of which is 360] plus
----
(c) [one-twelfth of] the product of (i) the CTO Interest Rate [for the related
Interest Period], (ii) the aggregate amount, if any, on deposit in the Principal
Funding Account as of such Distribution Date in respect of CTO Monthly Principal
[and (iii) a fraction, the numerator of which is the actual number of days in
such Interest Period and the denominator of which is 360].
"CTO Additional Interest" shall have the meaning specified in Section
-----------------------
4.3(c).
"CTO Adjusted Invested Amount" shall mean, as of any date, an amount
----------------------------
equal to the sum of the CTO Invested Amount as of such date and the aggregate
amount on deposit in the Principal Funding Account on such date in respect of
CTO Monthly Principal (excluding interest and other investment earnings on such
amount).
"CTO Adjustment Amount" shall mean, with respect to any Distribution
---------------------
Date, an amount equal to the product of (i) the Series Adjustment Amount for
Series 2000-[__] as of the end of the preceding Due Period and (ii) the
percentage equivalent of a fraction, the numerator of which is the CTO Invested
Amount and the denominator of which is the Invested Amount, each as of the last
day of the Due Period preceding such preceding Due Period.
"CTO Allocable Amount" shall mean, with respect to any Distribution
--------------------
Date, the sum of the CTO Default Amount with respect to such Distribution Date
and the CTO Adjustment Amount with respect to such Distribution Date.
"CTO Available Funds" shall mean, with respect to any Due Period, an
-------------------
amount equal to the sum of (a) the CTO Floating Allocation Percentage (with
respect to any Due Period during the Revolving Period or the Accumulation
Period) or the CTO Fixed Allocation Percentage (with respect to any Due Period
during the Early Amortization Period) of Collections of Finance Charge
Receivables for such Due Period and any other amounts that are to
15
<PAGE>
be treated as Collections of Finance Charge Receivables for such Due Period in
accordance with the Agreement, (b) the portion of the Principal Funding
Investment Proceeds, if any, withdrawn from the Principal Funding Account on the
Distribution Date immediately following the last day of such Due Period and
included in CTO Available Funds pursuant to Section 4.13(c), (c) the amount, if
any, withdrawn from the Reserve Account on the Distribution Date immediately
following the last day of such Due Period and included in CTO Available Funds
pursuant to Section 4.14(d) and (d) the interest and other investment earnings,
if any (net of losses and investment expenses), on funds on deposit in the
Reserve Account withdrawn from the Reserve Account on the Distribution Date
immediately following the last day of such Due Period and included in CTO
Available Funds pursuant to Section 4.14(e).
"CTO Default" shall mean each event specified in Section 11 of this
-----------
Series Supplement as a CTO Default.
"CTO Default Amount" shall mean, with respect to any Distribution
------------------
Date, an amount equal to the product of (i) the Default Amount for the preceding
Due Period and (ii) the CTO Floating Allocation Percentage for such Due Period.
"CTO Fixed Allocation Percentage" shall mean, with respect to any Due
-------------------------------
Period, the percentage equivalent of a fraction, the numerator of which is equal
to the CTO Invested Amount as of the last day of the Revolving Period and the
denominator of which is equal to the greater of (i) the sum of (a) the Aggregate
Principal Receivables in the Trust as of the last day of the immediately
preceding Due Period and (b) the Excess Funding Amount at the end of such last
day and (ii) the sum of the numerators used to calculate the corresponding
invested percentages for all Series outstanding as of the date on which such
determination is being made; provided, however, that, with respect to any Due
-------- -------
Period in which Additional Accounts are included as Accounts pursuant to Section
2.6(a) or Section 2.6(b), the amount calculated in clause (i) above shall be
increased by the amount of Principal Receivables in such Additional Accounts as
of the Additional Account Cut Off Date on and after the Additional Account
Closing Date applicable to such Additional Accounts; and, provided further, that
-------- -------
if the Series 2000-[__] Certificates are paired with a Paired Series and the
Early Amortization Period (as defined in the Supplement for such Paired Series)
commences, the Transferor may, by written notice to the Trustee and the
Servicer, designate a different numerator to be used to determine such
percentage (provided that such numerator is not less than the CTO Invested
Amount as of the last day of the Revolving Period (as defined in the Supplement
for such Paired Series)).
16
<PAGE>
"CTO Floating Allocation Percentage" shall mean, with respect to any
----------------------------------
Due Period, the percentage equivalent of a fraction, the numerator of which is
equal to the CTO Invested Amount as of the last day of the immediately preceding
Due Period (or the CTO Initial Invested Amount, in the case of the first Due
Period applicable to Series 2000-[__]) and the denominator of which is equal to
the greater of (i) the sum of (a) the Aggregate Principal Receivables in the
Trust as of the last day of such immediately preceding Due Period (or the
Closing Date, in the case of the first Due Period applicable to Series 2000-
[__]) and (b) the Excess Funding Amount at the end of such last day and (ii) the
sum of the numerators used to calculate the corresponding invested percentages
for all Series outstanding as of the date on which such determination is being
made; provided, however, that, with respect to any Due Period in which
-------- -------
Additional Accounts are included as Accounts pursuant to Section 2.6(a) or
Section 2.6(b), the amount calculated in clause (i) above shall be increased by
the amount of Principal Receivables in such Additional Accounts as of the
Additional Account Cut Off Date on and after the Additional Account Closing Date
applicable to such Additional Accounts.
"CTO Initial Invested Amount" shall mean the aggregate initial
---------------------------
principal amount of the Collateralized Trust Obligations, which is
$[___________].
"CTO Interest Rate" shall mean [[____]% per annum] [, with respect to
-----------------
any Interest Period, a per annum rate of [____]% in excess of LIBOR, as
determined on the related LIBOR Determination Date].
"CTO Interest Shortfall" shall have the meaning specified in Section
----------------------
4.3(c).
"CTO Invested Amount" shall mean, as of any date, an amount equal to
-------------------
(a) the CTO Initial Invested Amount, minus (b) the aggregate amount deposited
-----
into the Principal Funding Account prior to such date as CTO Monthly Principal
(excluding interest and other investment earnings on such amount), minus (c) the
-----
aggregate amount of principal payments made to the CTO Securityholders prior to
such date, minus (d) the aggregate amount of CTO Investor Charge Offs for all
-----
prior Distribution Dates, minus (e) the amount of CTO Subordinated Principal
-----
Collections allocated on all prior Distribution Dates pursuant to Section 4.9(a)
or (b), minus (f) an amount equal to the amount by which the CTO Invested Amount
-----
has been reduced on all prior Distribution Dates pursuant to Section 4.7(a) or
(b), plus (g) the sum of the amount of Excess Spread and Shared Excess Finance
----
Charge Collections allocated and available on all prior Distribution Dates
pursuant to Section 4.8(i) for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (d), (e) and (f) and, without duplication, the
aggregate amount
17
<PAGE>
of the reductions of the Series Adjustment Amounts allocated to the CTO Invested
Amount prior to such date pursuant to Section 4.7(f); provided, however, that
-------- -------
the CTO Invested Amount may not be reduced below zero.
"CTO Investor Charge Off" shall have the meaning specified in Section
-----------------------
4.7(c).
"CTO Monthly Interest" shall have the meaning specified in Section
--------------------
4.3(c).
"CTO Monthly Principal" shall have the meaning specified in Section
---------------------
4.4(c).
"CTO Penalty Rate" shall mean [, for any Interest Period,] the sum of
----------------
the CTO Interest Rate [for such Interest Period] and 2.00% per annum.
"CTO Principal Commencement Date" shall mean (i) unless the Early
-------------------------------
Amortization Period shall have commenced or the Accumulation Period shall have
been suspended in accordance with Section 4.16, the first Distribution Date on
which the aggregate amount on deposit in the Principal Funding Account in
respect of Class A Monthly Principal or Class B Monthly Principal equals the
aggregate outstanding principal balance of the Class A Certificates and the
Class B Certificates and (ii) if the Early Amortization Period shall have
commenced or the Accumulation Period shall have been suspended in accordance
with Section 4.16, the Distribution Date on which the Class A Certificates and
the Class B Certificates are paid in full.
"CTO Required Amount" shall have the meaning specified in Section
-------------------
4.5(c).
"CTO Securityholder" shall mean the Person in whose name a
------------------
Collateralized Trust Obligation is registered in the Certificate Register.
"CTO Servicing Fee" shall have the meaning specified in Section 7 of
-----------------
this Series Supplement.
"CTO Subordinated Principal Collections" shall mean, with respect to
--------------------------------------
any Due Period, an amount equal to the product of (i) the CTO Floating
Allocation Percentage (with respect to any Due Period during the Revolving
Period) or the CTO Fixed Allocation Percentage (with respect to any Due Period
during the Accumulation Period or the Early Amortization Period) and (ii) the
aggregate amount of Collections of Principal Receivables for such Due Period.
"Deficit Controlled Accumulation Amount" shall mean (a) on the first
--------------------------------------
Distribution Date with respect to the Accumulation
18
<PAGE>
Period, the excess, if any, of the Controlled Accumulation Amount for such
Distribution Date over the amount deposited into the Principal Funding Account
on or before that Distribution Date as Class A Monthly Principal, Class B
Monthly Principal or CTO Monthly Principal and (b) on each subsequent
Distribution Date with respect to the Accumulation Period, the excess, if any,
of the Controlled Deposit Amount for such subsequent Distribution Date over the
amount deposited into the Principal Funding Account with respect to that
Distribution Date as Class A Monthly Principal, Class B Monthly Principal or CTO
Monthly Principal.
"Early Amortization Period" shall mean the period commencing at the
-------------------------
close of business on the day on which an Early Amortization Event with respect
to Series 2000-[__] is deemed to have occurred and ending on the earlier of (a)
the date on which the Series 2000-[__] Certificates are paid in full and (b) the
Stated Series Termination Date.
"Excess Spread" shall mean, with respect to any Distribution Date, the
-------------
sum of the amounts, if any, specified pursuant to Sections 4.6(a)(iv),
4.6(b)(iii), 4.6(c)(ii) and 4.6(d)(ii) with respect to such Distribution Date.
"Excess Spread Percentage" shall mean, for any Due Period, the amount,
------------------------
if any, expressed as a percentage, by which the Portfolio Yield with respect to
such Due Period exceeds the Base Rate with respect to such Due Period.
"Expected Final Distribution Date" shall mean the [____________]
--------------------------------
20[__] Distribution Date.
"Finance Charge Shortfall" shall have the meaning specified in Section
------------------------
4.11.
"Fitch" shall mean Fitch IBCA, Inc.
-----
"Fixed Allocation Percentage" shall mean, with respect to any Due
---------------------------
Period, the sum of the Class A Fixed Allocation Percentage, the Class B Fixed
Allocation Percentage, the CTO Fixed Allocation Percentage and the Class D Fixed
Allocation Percentage, in each case with respect to such Due Period.
"Floating Allocation Percentage" shall mean, with respect to any Due
------------------------------
Period, the sum of the Class A Floating Allocation Percentage, the Class B
Floating Allocation Percentage, the CTO Floating Allocation Percentage and the
Class D Floating Allocation Percentage, in each case with respect to such Due
Period.
"Initial Invested Amount" shall mean the aggregate initial principal
-----------------------
amount of the Series 2000-[__] Certificates, which is $[____________].
19
<PAGE>
["Interest Period" shall mean, with respect to any Distribution Date,
---------------
the period from and including the Distribution Date immediately preceding such
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date) to but excluding such Distribution Date.]
["Interest Rate Cap" shall mean either the Class A Interest Rate Cap
-----------------
or the Class B Interest Rate Cap, as applicable.]
["Interest Rate Caps" shall mean the Class A Interest Rate Cap and the
------------------
Class B Interest Rate Cap.]
["Interest Rate Cap Payment" shall mean, with respect to any
-------------------------
Distribution Date, the Class A Cap Payment and the Class B Cap Payment, if any,
with respect to such Distribution Date.]
["Interest Rate Cap Provider" shall mean [____________________], in
--------------------------
its capacity as obligor under the Interest Rate Caps, or, if any Replacement
Interest Rate Cap or Qualified Substitute Arrangement is obtained pursuant to
Section 4A of this Series Supplement, any obligor with respect to such
Replacement Interest Rate Cap or Qualified Substitute Arrangement.]
"Invested Amount" shall mean, as of any date, an amount equal to the
---------------
sum of the Class A Invested Amount, the Class B Invested Amount, the CTO
Invested Amount and the Class D Invested Amount, in each case as of such date.
"Invested Percentage" shall mean, with respect to any Due Period, (a)
-------------------
when used with respect to Finance Charge Receivables during the Revolving Period
or the Accumulation Period or Principal Receivables during the Revolving Period,
the Floating Allocation Percentage, (b) when used with respect to Finance Charge
Receivables during the Early Amortization Period or Principal Receivables during
the Accumulation Period or the Early Amortization Period, the Fixed Allocation
Percentage and (c) when used with respect to the Default Amount or the Series
Adjustment Amount at any time, the Floating Allocation Percentage.
"Investor Default Amount" shall mean, with respect to any Distribution
-----------------------
Date, an amount equal to the product of (a) the Default Amount for the
immediately preceding Due Period and (b) the Floating Allocation Percentage for
such Due Period.
"Investor Monthly Servicing Fee" shall have the meaning specified in
------------------------------
Section 7 of this Series Supplement.
["LIBOR" shall mean, for any Interest Period, the London interbank
-----
offered rate for one-month dollar deposits
20
<PAGE>
determined by the Trustee for such Interest Period in accordance with Section
4.3A.]
["LIBOR Determination Date" shall mean, for any Interest Period, the
------------------------
second Business Day prior to the Distribution Date on which such Interest Period
commences; provided, however, that the LIBOR Determination Date for the initial
-------- -------
Interest Period shall be [____________], 2000. For purposes of this definition,
a Business Day is any Business Day on which dealings in deposits in United
States dollars are transacted in the London interbank market.]
"Minimum Aggregate Principal Receivables" shall have the meaning
---------------------------------------
specified in Section 3 of this Series Supplement.
"Minimum Transferor Interest Percentage" shall have the meaning
--------------------------------------
specified in Section 3 of this Series Supplement.
"Monthly Interest" shall mean, with respect to any Distribution Date,
----------------
the sum of the Class A Monthly Interest, the Class B Monthly Interest, the CTO
Monthly Interest and the Class D Monthly Interest, in each case for such
Distribution Date.
"Paired Series" shall have the meaning specified in Section 19 of this
-------------
Series Supplement.
"Portfolio Yield" shall mean, with respect to any Due Period, the
---------------
annualized percentage equivalent of a fraction, the numerator of which is equal
to (a) the Collections of Finance Charge Receivables for such Due Period that
are allocated to Series 2000-[__] (including any interest and other investment
earnings on funds on deposit in the Excess Funding Account applied as
Collections of Finance Charge Receivables for such Due Period), plus (b) any
----
Shared Excess Finance Charge Collections that are allocated to Series 2000-[__]
with respect to such Due Period, plus (c) the interest and other investment
----
earnings, if any (net of losses and investment expenses), on funds on deposit in
the Spread Account included in Excess Spread for the Distribution Date
immediately following the last day of such Due Period pursuant to Section
4.12(b), plus (d) the portion of the Principal Funding Investment Proceeds, if
----
any, required to be deposited into the Collection Account on the Distribution
Date immediately following the last day of such Due Period pursuant to Section
4.13(c), plus (e) the Reserve Account Draw Amount with respect to such Due
----
Period, plus (f) the interest and other investment earnings, if any (net of
----
losses and investment expenses), on funds on deposit in the Reserve Account
required to be deposited into the Collection Account on the Distribution Date
immediately following the last day of such Due Period pursuant to Section
4.14(e), [plus (g) the Interest Rate Cap Payments, if any, required to be
----
deposited in the Collection Account on the Distribution Date immediately
following the last day of such Due
21
<PAGE>
Period] minus [(h)] the Investor Default Amount for the Distribution Date
-----
immediately following the last day of such Due Period, and the denominator of
which is the Adjusted Invested Amount as of the last day of such Due Period.
"Principal Funding Account" shall have the meaning specified in
-------------------------
Section 4.13(a).
"Principal Funding Investment Proceeds" shall have the meaning
-------------------------------------
specified in Section 4.13(b).
"Principal Shortfall" shall have the meaning specified in Section
-------------------
4.10.
"Qualified Institution" shall mean (i) a depository institution, which
---------------------
may include the Trustee, organized under the laws of the United States or any
one of the states thereof or the District of Columbia (or any domestic branch or
agency of any foreign bank), the deposits in which are insured by the FDIC and
which at all times has a short-term unsecured debt or certificate of deposit
rating of at least A-1+ or P-1 by each Rating Agency or a long-term unsecured
debt rating of at least AAA or Aa2 by each Rating Agency or (ii) a depository
institution, which may include the Trustee, otherwise acceptable to each Rating
Agency.
"Qualified Maturity Agreement" shall mean a written agreement between
----------------------------
the Transferor and a Qualified Institution under which the Qualified Institution
agrees to deposit into the Principal Funding Account on or before the Expected
Final Distribution Date an amount equal to the aggregate outstanding principal
balance of the Class A Certificates, the Class B Certificates and the
Collateralized Trust Obligations as of the Expected Final Distribution Date.
["Qualified Substitute Arrangement" shall have the meaning specified
--------------------------------
in Section 4A(c)(iii) of this Series Supplement.]
"Rating Agencies" shall mean Fitch, Moody's and Standard & Poor's.
---------------
["Reference Banks" shall mean the principal London offices of
---------------
[____________________], [____________________], [____________________], and
[____________________], or such other four major banks in the London interbank
market as may be selected by the Servicer upon notice to the Trustee.]
["Replacement Interest Rate Cap" shall mean one or more Interest Rate
-----------------------------
Caps, which, in combination with all other Interest Rate Caps then in effect,
after giving effect to any planned cancellations of any presently outstanding
Interest Rate Caps,
22
<PAGE>
aggregate outstanding principal amount of the Class A Certificates, the Class B
Certificates and the CTO's satisfies the conditions set forth in Section 4A of
this Series Supplement.]
"Required Accumulation Factor Number" shall mean, with respect to any
-----------------------------------
Distribution Date, a fraction, rounded upwards to the nearest whole number, the
numerator of which is one and the denominator of which is equal to the lowest
monthly principal payment rate on the Accounts, expressed as a decimal, for any
month during the 12 month period preceding the date of such calculation (or any
lower monthly principal payment rate selected by the Servicer at its option and
in its sole discretion).
"Required Draw Amount" shall have the meaning specified in Section
--------------------
4.12(c).
"Required Reserve Account Amount" shall mean, with respect to any
-------------------------------
Distribution Date prior to the Reserve Account Funding Date, $0, and, with
respect to any Distribution Date on or after the Reserve Account Funding Date,
an amount equal to (a) .50% of the aggregate outstanding principal amount of the
Class A Certificates, the Class B Certificates and the CTOs as of the preceding
Distribution Date or (b) such other amount as may be designated by the
Transferor; provided, however, that if any designation pursuant to clause (b)
-------- -------
above is of a lesser amount, (i) the Rating Agency Condition shall have been
satisfied and (ii) the Transferor shall have delivered to the Trustee an
Officer's Certificate to the effect that, based on the facts known to such
officer at such time, in the reasonable belief of such officer, such designation
will not cause an Early Amortization Event or an event that, after the giving of
notice or the lapse of time, would constitute an Early Amortization Event to
occur with respect to Series 2000-[__].
"Required Spread Account Amount" shall mean, with respect to any
------------------------------
Distribution Date, an amount equal to the product of (i) the Required Spread
Account Percentage for such Distribution Date and (ii) the Invested Amount as of
the last day of the preceding Due Period; provided, however, that (i) if an
-------- -------
Early Amortization Event shall have occurred, the Required Spread Account Amount
with respect to each Distribution Date thereafter (subject to clause (iii)
below) shall equal the Required Spread Account Amount with respect to the
Distribution Date immediately preceding the occurrence of such Early
Amortization Event, (ii) if a CTO Default shall have occurred, the Required
Spread Account Amount with respect to each Distribution Date thereafter shall
equal the CTO Invested Amount as of such date, (iii) in no event shall the
Required Spread Account Amount with respect to any Distribution Date exceed the
CTO Invested Amount as of such date and (iv) the Required Spread Account Amount
may be reduced without the consent of the CTO Securityholders or the Holders of
any other class of Series 2000-[__] Certificates if (x) the Transferor shall
have received written notice from each Rating
23
<PAGE>
Agency rating the Collateralized Trust Obligations (with a copy delivered to the
Trustee) that such reduction will not result in the reduction or withdrawal of
the then current rating of the Collateralized Trust Obligations, (y) the
Transferor shall have delivered to the Trustee an Officer's Certificate to the
effect that, based on the facts known to such officer at such time, in the
reasonable belief of the Transferor, such reduction will not cause an Early
Amortization Event or an event that, after the giving of notice or the lapse of
time, would constitute an Early Amortization Event to occur with respect to
Series 2000-[__] and (z) the Transferor shall have provided an Opinion of
Counsel addressed to the Trustee, dated the date of such reduction, to the
effect that such reduction will not cause any Class of the Series 2000-[__]
Investor Certificates as to which an opinion that such Class was debt was given
on the Closing Date to fail to qualify as debt for federal income tax purposes,
cause the Trust to be characterized for federal income tax purposes as an
association taxable as a corporation or otherwise have any material adverse
impact on the federal income tax characterization of any outstanding Series of
Investor Certificates or the federal income taxation of any Investor
Certificateholder or any Certificate Owner; and, provided further, that this
-------- -------
definition may be amended at any time and from time to time by the Servicer, the
Transferor and the Trustee with the consent of the Holders of more than 50% of
the CTO Invested Amount.
"Required Spread Account Percentage" shall mean, as of any
----------------------------------
Distribution Date, (a) if the Average Excess Spread Percentage as of such
Distribution Date is greater than or equal to [____]%, [____]%, (b) if the
Average Excess Spread Percentage as of such Distribution Date is less than
[____]% but greater than or equal to [____]%, [____]%, (c) if the Average Excess
Spread Percentage as of such Distribution Date is less than [____]% but greater
than or equal to [____]%, [____]%, (d) if the Average Excess Spread Percentage
as of such Distribution Date is less than [____]% but greater than or equal to
[____]%, [____]%, and (e) if the Average Excess Spread Percentage as of such
Distribution Date is less than [____]%, [____]%; provided, however, that any
-------- -------
reduction in the Required Spread Account Percentage resulting from an increase
in the Average Excess Spread Percentage shall not take effect until the amount
on deposit in the Spread Account is greater than or equal to the Required Spread
Account Amount with respect to three consecutive Distribution Dates (in which
case such reduction shall take effect on the last of such Distribution Dates);
and, provided further, that this definition may be amended at any time and from
-------- -------
time to time by the Servicer, the Transferor and the Trustee with the consent of
the Holders of more than 50% of the CTO Invested Amount.
24
<PAGE>
"Reserve Account" shall have the meaning specified in Section 4.14(a).
---------------
"Reserve Account Draw Amount" shall have the meaning specified in
---------------------------
Section 4.14(c).
"Reserve Account Funding Date" shall mean the Distribution Date
----------------------------
immediately following the Due Period which commences three months prior to the
Accumulation Commencement Due Period, provided that the Reserve Account Funding
Date shall be accelerated to (a) the Distribution Date immediately following the
Due Period which commences four months prior to the Accumulation Commencement
Due Period if the Portfolio Yield minus the Base Rate shall for any Due Period
be less than [____]%, (b) the Distribution Date immediately following the Due
Period which commences six months prior to the Accumulation Commencement Due
Period if the Portfolio Yield minus the Base Rate shall for any Due Period be
less than [____]% or (c) the Distribution Date immediately following the Due
Period which commences nine months prior to the Accumulation Commencement Due
Period if the Portfolio Yield minus the Base Rate shall for any Due Period be
less than [____]%.
"Reserve Account Surplus" shall mean, as of any Distribution Date, the
-----------------------
amount, if any, by which the amount on deposit in the Reserve Account on such
Distribution Date exceeds the Required Reserve Account Amount with respect to
such Distribution Date.
"Revolving Period" shall mean the period beginning on the Closing Date
----------------
and ending on the earlier of (a) the close of business on the day preceding the
commencement of the Accumulation Period and (b) the close of business on the day
preceding the commencement of the Early Amortization Period.
"Series 2000-[__]" shall mean the Series the terms of which are
----------------
specified in this Series Supplement.
"Series 2000-[__] Certificate" shall mean a Class A Certificate, a
----------------------------
Class B Certificate, a Collateralized Trust Obligation or a Class D Certificate.
"Series 2000-[__] Certificateholder" shall mean a Class A
----------------------------------
Certificateholder, a Class B Certificateholder, a CTO Securityholder or a Class
D Certificateholder.
"Series Minimum Transferor Amount" shall mean zero or, if the
--------------------------------
Transferor designates a Minimum Transferor Interest Percentage higher than 0%
pursuant to Section 3 of this Series Supplement, an amount calculated as
follows:
X - X
=====
25
<PAGE>
1-Y
where
X = Invested Amount (without giving effect to any Series
Adjustment Amount); and
Y = Minimum Transferor Interest Percentage;
provided, however, that if on a previous date there was a Dilution Amount and
- -------- -------
the Transferor shall not have then or thereafter paid the amount required by
Section 3.8, and there remains an obligation to pay such amount, the Series
Minimum Transferor Amount as of such previous date shall continue to apply.
"Servicing Fee Percentage" shall mean 2.00%.
------------------------
"Shared Excess Finance Charge Collections" shall mean, with respect to
----------------------------------------
any Due Period, the aggregate amount for all outstanding Series in Group One of
Collections of Finance Charge Receivables which the related Supplements specify
are to be treated as "Shared Excess Finance Charge Collections" for such Due
Period.
"Shared Principal Collections" shall mean, with respect to any Due
----------------------------
Period, the aggregate amount for all outstanding Series in Group One of
Collections of Principal Receivables which the related Supplements specify are
to be treated as "Shared Principal Collections" for such Due Period.
"Special Distribution Date" shall mean each Distribution Date with
-------------------------
respect to the Early Amortization Period.
"Spread Account" shall have the meaning specified in Section 4.12(a).
--------------
"Spread Account Draw Amount" shall have the meaning specified in
--------------------------
Section 4.12(c).
"Spread Account Surplus" shall mean, as of any Distribution Date, the
----------------------
amount, if any, by which the amount on deposit in the Spread Account on such
Distribution Date exceeds the Required Spread Account Amount with respect to
such Distribution Date.
"Stated Series Termination Date" shall mean the [____________]
------------------------------
Distribution Date.
26
<PAGE>
"Subordinated Principal Collections" shall mean, with respect to any
----------------------------------
Due Period, an amount equal to the sum of the Class B Subordinated Principal
Collections, CTO Subordinated Principal Collections and Class D Subordinated
Principal Collections for such Due Period.
"Target Accumulation Amount" shall mean $[____________].
--------------------------
"Telerate Page 3750" shall mean the display page currently so
------------------
designated on the Bridge Telerate Market Report (or such other page as may
replace that page on that service for the purpose of displaying comparable rates
or prices).
"Transfer" shall have the meaning specified in Section 12(d) of this
--------
Series Supplement.
SECTION 3. Minimum Transferor Interest Percentage and Minimum
--------------------------------------------------
Aggregate Principal Receivables. The Minimum Transferor Interest Percentage
- -------------------------------
applicable to the Series 2000-[__] Certificates shall be 0%; provided, however,
-------- -------
that the Transferor may, in its sole discretion, designate a higher percentage
as the Minimum Transferor Interest Percentage so long as, after giving effect to
such designation and any repurchase of Investor Certificates or designation of
Additional Accounts, the Transferor Amount shall equal or exceed the Minimum
Transferor Amount. The Minimum Aggregate Principal Receivables applicable to
the Series 2000-[__] Certificates shall be the Initial Invested Amount or,
subject to the Rating Agency Condition, such lesser amount as may be designated
by the Transferor.
SECTION 4. Reassignment and Transfer Terms. The Series 2000-[__]
-------------------------------
Certificates may be reassigned and transferred to the Transferor on any
Distribution Date on or after which the Invested Amount is reduced to an amount
less than or equal to 5% of the Initial Invested Amount, subject to the
provisions of Section 12.2 of the Agreement.
[Section 4A. Interest Rate Caps. (a) On or prior to the Closing
------------------
Date, the Transferor shall enter into the Class A Interest Rate Cap for the
benefit of the Class A Certificateholders and the Class B Interest Rate Cap for
the benefit of the Class B Certificateholders. Each of the Class A Interest
Rate Cap and the Class B Interest Rate Cap provides that it will terminate on
the earlier of the day the outstanding principal balance of the Class A
Certificates or the Class B Certificates, as applicable, is reduced to zero and
the day following the Stated Series Termination Date. The Transferor does
hereby transfer, assign, set-over, and otherwise convey to the Trustee for the
benefit of the Class A Certificateholders and the Class B Certificateholders,
without recourse, all of its rights under the Class A Interest Rate Cap and the
Class B
27
<PAGE>
Interest Rate Cap, respectively, and all proceeds thereof. Such property shall
constitute Trust Property for all purposes of the Agreement. The foregoing
transfer, assignment, set-over and conveyance does not constitute and is not
intended to result in a creation or an assumption by the Trust, the Trustee or
any Certificateholder of any obligation of the Transferor or any other Person in
connection with the Interest Rate Caps or under any agreement or instrument
relating thereto.
In connection with such transfer, the Transferor agrees to record and
file, at its own expense, financing statements (and continuation statements with
respect to such financing statements when applicable) with respect to the
Interest Rate Caps for the transfer of general intangibles (as defined in the
UCC in effect in the Relevant UCC State) meeting the requirements of applicable
state law in such manner and in such jurisdictions as are necessary to perfect
the foregoing transfer and assignment by the Transferor to the Trustee, and to
deliver a file-stamped copy of such financing statements or other evidence of
such filings to the Trustee on or prior to the Closing Date. In connection with
such transfer, the Transferor agrees to deliver to the Trustee on or prior to
the Closing Date an executed copy of each of the Interest Rate Caps.
The Transferor hereby grants to the Trustee a security interest in all
of the Transferor's rights under the Interest Rate Caps in order to secure the
payment of the Series 2000-[__] Certificates. This Agreement shall constitute a
security agreement under applicable law.
The Trustee hereby acknowledges its acceptance, to the extent validly
transferred, assigned, set-over or otherwise conveyed to the Trustee, for the
benefit of the Class A Certificateholders and the Class B Certificateholders, of
all of the rights previously held by the Transferor under the Class A Interest
Rate Cap and the Class B Interest Rate Cap, respectively, and all proceeds
thereof, and declares that it shall hold such rights upon the trust set forth
herein and in the Agreement, and subject to the terms hereof and thereof, for
the benefit of the Class A Certificateholders and the Class B
Certificateholders, respectively.
(b) The Interest Rate Caps shall not require the Trustee or the Trust
to make any payments thereunder, and each Interest Rate Cap shall provide that
(i) the Trustee shall be entitled to receive a payment (determined in accordance
with the respective Interest Rate Cap) from the Interest Rate Cap Provider on or
prior to each Distribution Date if LIBOR for the related Interest Period plus
[____]% exceeds the Class A Cap Rate or LIBOR for the related Interest Period
plus [____]% exceeds the Class B Cap Rate, and (ii) notwithstanding any prior
termination of the Agreement, the Interest Rate Cap Provider shall not, prior
28
<PAGE>
to the date which is one year and one day after the final payment of the Series
2000-[__] Certificates, petition or otherwise invoke the process of any
governmental authority for the purpose of commencing or sustaining a case
against the Trust under any federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Trust or any substantial part of
its property or ordering the winding up or liquidation of the affairs of the
Trust. The Interest Rate Caps shall require the Interest Rate Cap Provider to
make a payment on or prior to each Distribution Date to the Trustee, on behalf
of the Class A Certificateholders or the Class B Certificateholders, as
applicable, in an amount equal to the product of (i) the amount by which, in the
case of the Class A Interest Rate Cap, LIBOR for the related Interest Period
plus [____]% exceeds the Class A Cap Rate or, in the case of the Class B
Interest Rate Cap, LIBOR for the related Interest Period plus [____]% exceeds
the Class B Cap Rate, (ii) the Class A Notional Amount or the Class B Notional
Amount, as applicable, for such Interest Period and (iii) the actual number of
days in such Interest Period divided by 360. Payments pursuant to the Class A
Interest Rate Cap shall be deposited in the Collection Account on each
Distribution Date for payment to the Class A Certificateholders on such
Distribution Date. Payments pursuant to the Class B Interest Rate Cap shall be
deposited in the Collection Account on each Distribution Date for payment to the
Class B Certificateholders on such Distribution Date.
(c) In the event that the counterparty rating of the Interest Rate
Cap Provider is withdrawn or reduced below Aa3 by Moody's, or AAA by Standard &
Poor's or Fitch, then within 60 days (in the case of a withdrawal or reduction
by Standard & Poor's) or 30 days (in the case of a withdrawal or reduction by
Moody's or Fitch) after such decline in the creditworthiness of the Interest
Rate Cap Provider as determined by the applicable Rating Agency (notice of which
the Interest Rate Cap Provider shall be required to provide to the Trustee and
the Rating Agencies promptly upon obtaining knowledge thereof), the Interest
Rate Caps shall require the Interest Rate Cap Provider, at its own expense, to
either (x) obtain a Replacement Interest Rate Cap for each Interest Rate Cap
under which it is then currently an obligor or (y) enter into a Qualified
Substitute Arrangement.
Upon receipt of notice of any such reduction or withdrawal, the
Servicer shall use its best efforts to either:
(i) with the prior written confirmation of each Rating Agency
that such action will not result in a reduction or withdrawal of the rating
of the Class A Certificates or the Class B Certificates, (1) cause the
Interest Rate Cap Provider to pledge securities in the manner provided by
applicable law or (2) otherwise cause to
29
<PAGE>
be pledged securities, which in each case shall be held by the Trustee, its
custodian or its agent free and clear of the Lien of any third party, in a
manner conferring on the Trustee a perfected first Lien in such securities
securing the Interest Rate Cap Provider's performance of its obligations
under the applicable Interest Rate Cap(s); or
(ii) (A) provide written notice to such Interest Rate Cap
Provider of the Transferor's intention to terminate such Interest Rate Cap
within such 30-day period or 60-day period, as applicable, (B) terminate
such Interest Rate Cap on behalf of the Transferor within such 30-day
period or 60-day period, as applicable, and (C) request the payment to it
of all amounts due under such Interest Rate Cap through the termination
date and deposit any such amounts so received, on the day of receipt, to
the Collection Account for application as Class A Available Funds or Class
B Available Funds, as applicable; provided however, that the Servicer shall
-------- -------
not effect any termination of any Interest Rate Cap unless a Replacement
Interest Rate Cap or Qualified Substitute Arrangement meeting the
requirements of Section 4A(d) has been obtained or will be obtained prior
to or simultaneously with the termination of such Interest Rate Cap; or
(iii) with the prior written confirmation of each Rating
Agency that such action will not result in a reduction or withdrawal of the
rating of the Class A Certificates or the Class B Certificates, establish
any other arrangement satisfactory to the Rating Agency including
collateral, guarantees or letters of credit (a "Qualified Substitute
--------------------
Arrangement");
-----------
provided, however, that in the event at any time any Replacement Interest Rate
- -------- -------
Cap, Qualified Substitute Arrangement or arrangement pursuant to clause (i) of
this sentence shall cease to be satisfactory to the Rating Agency or shall
terminate prior to the Expected Final Distribution Date, then the provisions of
this Section 4A(c) shall again be applied and in connection therewith the 30-day
period or 60-day period, as applicable, referred to above shall commence on the
date the Servicer receives notice of such cessation or termination, as the case
may be.
(d) The Servicer shall not at any time effect any termination of any
Interest Rate Cap unless, prior to or simultaneously with the termination
thereof, the Servicer has obtained or shall obtain (i) a Replacement Interest
Rate Cap or Qualified Substitute Arrangement with respect thereto, (ii) to the
extent applicable, an Opinion of Counsel addressed to the Trustee as to the due
authorization, execution and delivery and the validity and enforceability of
such Replacement Interest Rate
30
<PAGE>
Cap or Qualified Substitute Arrangement, as the case may be, and (iii) a letter
from the Rating Agencies confirming that the termination of such Interest Rate
Cap and its replacement with such Replacement Interest Rate Cap or Qualified
Substitute Arrangement will not adversely affect its rating of the Class A
Certificates or the Class B Certificates, all such documents to be delivered to
the Trustee.
(e) The Servicer shall notify the Trustee and the Rating Agencies
within five Business Days after obtaining knowledge that the short term
unsecured debt or short term certificate of deposit rating, or long term
unsecured debt or long term certificate of deposit rating, of the Interest Rate
Cap Provider is withdrawn or reduced by Standard & Poor's or Moody's.
(f) Notwithstanding the foregoing, the Servicer may at any time
obtain a Replacement Interest Rate Cap or Qualified Substitute Arrangement,
provided that the Servicer delivers to the Trustee (i) an Opinion of Counsel
addressed to the Trustee as to the due authorization, execution and delivery and
validity and enforceability of such Replacement Interest Rate Cap or Qualified
Substitute Arrangement with respect to the provider thereof and (ii) a letter
from the Rating Agencies confirming that the termination of the then current
Interest Rate Cap and its replacement with such Replacement Interest Rate Cap or
Qualified Substitute Arrangement will not adversely affect their respective
ratings of the Class A Certificates or the Class B Certificates.
(g) The Interest Rate Caps shall provide that the Interest Rate Cap
Provider shall perform the duties of the calculation agent under the Interest
Rate Caps.]
SECTION 5. Delivery and Payment for the Certificates. The Trustee shall
-----------------------------------------
deliver the Series 2000-[__] Certificates when authenticated in accordance with
Section 6.2 of the Agreement.
SECTION 6. Form of Delivery of the Series 2000-[__] Certificates. The Class
-----------------------------------------------------
A Certificates, the Class B Certificates and the Collateralized Trust
Obligations shall be delivered as provided in Section 6.11 of the Agreement.
The Class D Certificates shall be delivered as Registered Certificates as
provided in Section 6.1 of the Agreement and shall be issued in minimum
denominations of $500,000 and in integral multiples of $1,000 in excess thereof.
SECTION 7. Servicing Compensation. The share of the Monthly Servicing Fee
----------------------
allocable to the Series 2000-[__] Certificateholders with respect to any
Distribution Date (the "Investor Monthly Servicing Fee") shall be equal to one-
------------------------------
twelfth of the product of (a) the Servicing Fee Percentage and (b) the Invested
Amount as of the last day of the immediately preceding Due Period; provided,
--------
however, with respect to the first
- -------
31
<PAGE>
Distribution Date, the Investor Monthly Servicing Fee shall be equal to
$[____________]. The share of the Investor Monthly Servicing Fee allocable to
the Class A Certificateholders with respect to any Distribution Date (the "Class
-----
A Servicing Fee") shall be equal to the product of (a) the Class A Floating
- ---------------
Allocation Percentage divided by the Floating Allocation Percentage, in each
case with respect to such Distribution Date, and (b) the Investor Monthly
Servicing Fee with respect to such Distribution Date; provided, however, that
-------- -------
with respect to the first Distribution Date, the Class A Servicing Fee shall be
equal to $[____________]. The share of the Investor Monthly Servicing Fee
allocable to the Class B Certificateholders with respect to any Distribution
Date (the "Class B Servicing Fee") shall be equal to the product of (a) the
---------------------
Class B Floating Allocation Percentage divided by the Floating Allocation
Percentage, in each case with respect to such Distribution Date, and (b) the
Investor Monthly Servicing Fee with respect to such Distribution Date; provided,
--------
however, that with respect to the first Distribution Date, the Class B Servicing
- -------
Fee shall be equal to $[____________]. The share of the Investor Monthly
Servicing Fee allocable to the CTO Securityholders with respect to any
Distribution Date (the "CTO Servicing Fee") shall be equal to the product of (a)
-----------------
the CTO Floating Allocation Percentage divided by the Floating Allocation
Percentage, in each case with respect to such Distribution Date, and (b) the
Investor Monthly Servicing Fee with respect to such Distribution Date; provided,
--------
however, that with respect to the first Distribution Date, the CTO Servicing Fee
- -------
shall be equal to $[____________]. The share of the Investor Monthly Servicing
Fee allocable to the Class D Certificateholders with respect to any Distribution
Date (the "Class D Servicing Fee") shall be equal to the product of (a) the
---------------------
Class D Floating Allocation Percentage divided by the Floating Allocation
Percentage, in each case with respect to such Distribution Date, and (b) the
Investor Monthly Servicing Fee with respect to such Distribution Date; provided,
--------
however, that with respect to the first Distribution Date, the Class D Servicing
- -------
Fee shall be equal to $[____________]. The Class A Servicing Fee, the Class B
Servicing Fee, the CTO Servicing Fee and the Class D Servicing Fee shall be
payable solely to the extent amounts are available for distribution in respect
thereof pursuant to this Series Supplement. The remainder of the Monthly
Servicing Fee shall be paid by the Transferor or from amounts allocable to other
Series (as provided in the Agreement and the Supplements relating to such other
Series) and in no event shall the Trust, the Trustee or the Series 2000-[__]
Certificateholders be liable for the share of the Monthly Servicing Fee to be
paid by the Transferor or from amounts allocable to any other Series.
SECTION 8. Article IV of the Agreement. Any provisions of Article IV of the
---------------------------
Agreement which distribute Collections to the Transferor on the basis of the
Transferor Percentage shall continue to apply irrespective of the issuance
32
<PAGE>
of the Series 2000-[__] Certificates. Section 4.1 of the Agreement shall read in
its entirety as provided in the Agreement. Article IV of the Agreement (except
for Section 4.1) as it relates to Series 2000-[__] shall read in its entirety as
follows:
ARTICLE IV
Rights of Series 2000-[__] Certificateholders and
-------------------------------------------------
Allocation and Application of Collections
-----------------------------------------
Section 4.2 Collections and Allocations. (a) Collections of Finance
----------------------------
Charge Receivables with respect to any Due Period shall be allocated to Series
2000-[__] in an amount equal to the product of the amount of such Collections
and the applicable Invested Percentage. Collections of Principal Receivables
with respect to any Due Period shall be allocated to Series 2000-[__] in an
amount equal to the product of the amount of such Collections and the applicable
Invested Percentage. Collections of Principal Receivables processed on any
Business Day with respect to the Accumulation Period shall be allocated to
Series 2000-[__] in an amount equal to the product of the amount of such
Collections and the Fixed Allocation Percentage with respect to the Due Period
in which such Business Day occurs.
(b) The Servicer shall apply, or shall instruct the Trustee to apply,
all Collections, [Interest Rate Cap Payments] and other funds on deposit in the
Collection Account that are allocated to the Series 2000-[__] Certificates as
described in this Article IV. During the Revolving Period and the Accumulation
Period, Collections of Finance Charge Receivables allocable to Series 2000-[__]
with respect to each Due Period need not be deposited into the Collection
Account on a daily basis after an amount equal to Monthly Interest for the
following Distribution Date plus, if First North American National Bank is no
----
longer the Servicer, the Investor Monthly Servicing Fee for such Distribution
Date, has been deposited into the Collection Account. During the Revolving
Period, Collections of Principal Receivables allocable to Series 2000-[__] with
respect to each Due Period need not be deposited into the Collection Account on
a daily basis; provided, however, that, in the event that the Minimum Transferor
-------- -------
Amount exceeds the Transferor Amount on any date, such Collections of Principal
Receivables shall be deposited into the Excess Funding Account until the
Transferor Amount equals the Minimum Transferor Amount; and, provided further,
-------- -------
that, on any date on which the sum of the Aggregate Principal Receivables and
the Excess Funding Amount is less than the Aggregate Invested Amount, such
Collections of Principal Receivables shall be deposited into the Excess Funding
Account on a daily basis. During the Accumulation Period, after an amount of
Collections of Principal Receivables allocable to Series 2000-[__] equal to the
Controlled Deposit Amount with respect to each
33
<PAGE>
Due Period has been deposited into the Collection Account, Collections of
Principal Receivables allocable to Series 2000-[__] with respect to each Due
Period need not be deposited into the Collection Account on a daily basis;
provided, however, that, in the event that the Minimum Transferor Amount exceeds
- -------- -------
the Transferor Amount on any date, such Collections of Principal Receivables
shall be deposited into the Excess Funding Account until the Transferor Amount
equals the Minimum Transferor Amount; and, provided further, that, on any date
-------- -------
on which the sum of the Aggregate Principal Receivables and the Excess Funding
Amount is less than the Aggregate Invested Amount, such Collections of Principal
Receivables shall be deposited into the Excess Funding Account on a daily basis.
Notwithstanding the foregoing, the Servicer need not make daily deposits of
Collections into the Collection Account at any time when the requirements of
Section 4.1(e) are satisfied.
Section 4.3 Determination of Monthly Interest. (a) The amount of
---------------------------------
monthly interest ("Class A Monthly Interest") distributable from the Collection
------------------------
Account with respect to the Class A Certificates on any Distribution Date shall
be an amount equal to [one-twelfth of] the product of (i) the Class A
Certificate Rate [for the related Interest Period], (ii) the outstanding
principal amount of the Class A Certificates as of the preceding Distribution
Date (or, in the case of the first Distribution Date, as of the Closing Date)
[and (iii) a fraction, the numerator of which is the actual number of days in
such Interest Period and the denominator of which is 360] [; provided, however,
-------- -------
that, with respect to the first Distribution Date, Class A Monthly Interest
shall be equal to $[____________]].
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class A Interest Shortfall"),
--------------------------
of (x) the Class A Monthly Interest for such Distribution Date over (y) the
aggregate amount of funds allocated and available to pay such Class A Monthly
Interest on such Distribution Date. If the Class A Interest Shortfall with
respect to any Distribution Date is greater than zero, an additional amount
("Class A Additional Interest") equal to [one-twelfth of] the product of (i) the
---------------------------
Class A Penalty Rate [for the related Interest Period], (ii) such Class A
Interest Shortfall (or the portion thereof which has not theretofore been paid
to the Class A Certificateholders) [and (iii) a fraction, the numerator of which
is the actual number of days in such Interest Period and the denominator of
which is 360], shall be payable as provided herein with respect to the Class A
Certificates on each Distribution Date following such Distribution Date to and
including the Distribution Date on which such Class A Interest Shortfall is paid
to the Class A Certificateholders. Notwithstanding anything to the contrary
herein, Class A Additional Interest shall be payable or distributed to the Class
34
<PAGE>
A Certificateholders only to the extent permitted by applicable law.
(b) The amount of monthly interest ("Class B Monthly Interest")
------------------------
distributable from the Collection Account with respect to the Class B
Certificates on any Distribution Date shall be an amount equal to [one-twelfth
of] the product of (i) the Class B Certificate Rate [for the related Interest
Period], (ii) the outstanding principal amount of the Class B Certificates as of
the preceding Distribution Date (or, in the case of the first Distribution Date,
as of the Closing Date) [and (iii) a fraction, the numerator of which is the
actual number of days in such Interest Period and the denominator of which is
360] [; provided, however, that, with respect to the first Distribution Date,
-------- -------
Class B Monthly Interest shall be equal to $[____________]].
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class B Interest Shortfall"),
--------------------------
of (x) the Class B Monthly Interest for such Distribution Date over (y) the
aggregate amount of funds allocated and available to pay such Class B Monthly
Interest on such Distribution Date. If the Class B Interest Shortfall with
respect to any Distribution Date is greater than zero, an additional amount
("Class B Additional Interest") equal to [one-twelfth of] the product of (i) the
---------------------------
Class B Penalty Rate [for the related Interest Period], (ii) such Class B
Interest Shortfall (or the portion thereof which has not theretofore been paid
to the Class B Certificateholders) [and (iii) a fraction, the numerator of which
is the actual number of days in such Interest Period and the denominator of
which is 360], shall be payable as provided herein with respect to the Class B
Certificates on each Distribution Date following such Distribution Date to and
including the Distribution Date on which such Class B Interest Shortfall is paid
to the Class B Certificateholders. Notwithstanding anything to the contrary
herein, Class B Additional Interest shall be payable or distributed to the Class
B Certificateholders only to the extent permitted by applicable law.
(c) The amount of monthly interest ("CTO Monthly Interest")
--------------------
distributable from the Collection Account with respect to the Collateralized
Trust Obligations on any Distribution Date shall be an amount equal to [one-
twelfth of] the product of (i) the CTO Interest Rate [for the related Interest
Period], (ii) the outstanding principal amount of the Collateralized Trust
Obligations as of the preceding Distribution Date (or, in the case of the first
Distribution Date, as of the Closing Date) [and (iii) a fraction, the numerator
of which is the actual number of days in such Interest Period and the
denominator of which is 360] [; provided, however, that, with respect to the
-------- -------
first Distribution Date, CTO Monthly Interest shall be equal to
$[____________]].
35
<PAGE>
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "CTO Interest Shortfall"), of
----------------------
(x) the CTO Monthly Interest for such Distribution Date over (y) the aggregate
amount of funds allocated and available to pay such CTO Monthly Interest on such
Distribution Date. If the CTO Interest Shortfall with respect to any
Distribution Date is greater than zero, an additional amount ("CTO Additional
--------------
Interest") equal to the product of (i) the CTO Penalty Rate [for the related
- --------
Interest Period], (ii) such CTO Interest Shortfall (or the portion thereof which
has not theretofore been paid to the CTO Securityholders) [and (iii) a fraction,
the numerator of which is the actual number of days in such Interest Period and
the denominator of which is 360], shall be payable as provided herein with
respect to the Collateralized Trust Obligations on each Distribution Date
following such Distribution Date to and including the Distribution Date on which
such CTO Interest Shortfall is paid to the CTO Securityholders. Notwithstanding
anything to the contrary herein, CTO Additional Interest shall be payable or
distributed to the CTO Securityholders only to the extent permitted by
applicable law.
(d) The amount of monthly interest ("Class D Monthly Interest")
------------------------
distributable from the Collection Account with respect to the Class D
Certificates on any Distribution Date shall be an amount equal to product of (i)
the Class D Certificate Rate for the related Interest Period, (ii) the
outstanding principal amount of the Class D Certificates as of the preceding
Distribution Date (or, in the case of the first Distribution Date, as of the
Closing Date) and (iii) a fraction, the numerator of which is the actual number
of days in such Interest Period and the denominator of which is 360.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class D Interest Shortfall"),
--------------------------
of (x) the Class D Monthly Interest for such Distribution Date over (y) the
aggregate amount of funds allocated and available to pay such Class D Monthly
Interest on such Distribution Date. If the Class D Interest Shortfall with
respect to any Distribution Date is greater than zero, an additional amount
("Class D Additional Interest") equal to the product of (i) the Class D Penalty
---------------------------
Rate for the related Interest Period, (ii) such Class D Interest Shortfall (or
the portion thereof which has not theretofore been paid to the CTO
Securityholders) and (iii) a fraction, the numerator of which is the actual
number of days in such Interest Period and the denominator of which is 360,
shall be payable as provided herein with respect to the Class D Certificates on
each Distribution Date following such Distribution Date to and including the
Distribution Date on which such Class D Interest Shortfall is paid to the Class
D Certificateholders. Notwithstanding anything to the contrary herein, Class D
Additional Interest shall be
36
<PAGE>
payable or distributed to the Class D Certificateholders only to the extent
permitted by applicable law.
[Section 4.3A Determination of LIBOR. (a) On each LIBOR
----------------------
Determination Date, the Trustee shall determine LIBOR for the following Interest
Period on the basis of the rate for deposits in United States dollars for a one-
month period (commencing on the first day of such Interest Period) which appears
on Telerate Page 3750 as of 11:00 a.m., London time, on such LIBOR Determination
Date. If such rate does not appear on Telerate Page 3750, LIBOR for such
Interest Period 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 such LIBOR Determination Date to prime banks in the
London interbank market for a one-month period (commencing on the first day of
such Interest 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 shall
be the arithmetic mean of the quotations. If fewer than two quotations are
provided as requested, the rate for that LIBOR Determination Date shall 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
(commencing on the first day of such Interest Period).
(b) The Class A Certificate Rate, the Class B Certificate Rate and
the CTO Interest Rate applicable to the then current and the immediately
preceding Interest Periods may be obtained by any Series 2000-[__]
Certificateholder by telephoning the Trustee at its Corporate Trust Office at
(212) 250-6599.
(c) On each LIBOR Determination Date, the Trustee shall send to the
Servicer by facsimile notification of LIBOR for the following Interest Period.]
Section 4.4 Determination of Monthly Principal. (a) The amount of
----------------------------------
monthly principal ("Class A Monthly Principal") distributable or available for
-------------------------
deposit into the Principal Funding Account from the Collection Account with
respect to the Class A Certificates on each Distribution Date, beginning with
the Distribution Date in the month following the month in which the Accumulation
Period or the Early Amortization Period begins, shall be equal to the least of
(x) the Available Principal Collections on deposit in the Collection Account and
available for distribution with respect to such Distribution Date, (y) for each
Distribution Date with respect to the Accumulation Period, the Controlled
Deposit Amount for such Distribution Date and (z) the Class A Invested Amount as
of such Distribution Date plus the aggregate amount of Collections of Principal
----
Receivables with
37
<PAGE>
respect to the preceding Due Period transferred to the Principal Funding Account
prior to such Distribution Date in respect of Class A Monthly Principal pursuant
to Section 4.6(g); provided, however, that, if, as a result of the application
-------- -------
of Section 4.16(d), the Accumulation Period shall commence after the later of
the last day of the [____________] Due Period and the date to which the
commencement of the Accumulation Period may be postponed pursuant to Section
4.15, Class A Monthly Principal for each Distribution Date with respect to the
Accumulation Period shall be calculated without regard to clause (y) above.
(b) The amount of monthly principal ("Class B Monthly Principal")
-------------------------
distributable or available for deposit into the Principal Funding Account from
the Collection Account with respect to the Class B Certificates on each
Distribution Date, beginning with the Class B Principal Commencement Date, shall
be equal to the least of (x) the Available Principal Collections with respect to
such Distribution Date minus the portion of such Available Principal Collections
-----
applied in respect of Class A Monthly Principal on or before such Distribution
Date, (y) for each Distribution Date with respect to the Accumulation Period,
the Controlled Deposit Amount for such Distribution Date minus the Class A
-----
Monthly Principal with respect to such Distribution Date and (z) the Class B
Invested Amount as of such Distribution Date plus the aggregate amount of
----
Collections of Principal Receivables with respect to the preceding Due Period
transferred to the Principal Funding Account prior to such Distribution Date in
respect of Class B Monthly Principal pursuant to Section 4.6(g); provided,
--------
however, that, if, as a result of the application of Section 4.16(d), the
- -------
Accumulation Period shall commence after the later of the last day of the
[____________] Due Period and the date to which the commencement of the
Accumulation Period may be postponed pursuant to Section 4.15, Class B Monthly
Principal for each Distribution Date with respect to the Accumulation Period
shall be calculated without regard to clause (y) above.
(c) The amount of monthly principal ("CTO Monthly Principal")
---------------------
distributable or available for deposit into the Principal Funding Account from
the Collection Account with respect to the Collateralized Trust Obligations on
each Distribution Date, beginning with the CTO Principal Commencement Date,
shall be equal to the least of (x) the Available Principal Collections on
deposit in the Collection Account and available for distribution with respect to
such Distribution Date minus the portion of such Available Principal Collections
-----
applied in respect of Class A Monthly Principal or Class B Monthly Principal on
such Distribution Date, (y) for each Distribution Date with respect to the
Accumulation Period, the Controlled Deposit Amount for such Distribution Date
minus the sum of the Class A Monthly Principal with respect to such Distribution
- -----
Date and the Class B Monthly Principal with respect to such Distribution Date
and (z)
38
<PAGE>
the CTO Invested Amount as of such Distribution Date plus the aggregate amount
----
of Collections of Principal Receivables with respect to the preceding Due
Period transferred to the Principal Funding Account prior to such Distribution
Date in respect of CTO Monthly Principal pursuant to Section 4.6(g); provided,
--------
however, that, if, as a result of the application of Section 4.16(d), the
- -------
Accumulation Period shall commence after the later of the last day of the
[____________] Due Period and the date to which the commencement of the
Accumulation Period may be postponed pursuant to Section 4.15, CTO Monthly
Principal for each Distribution Date with respect to the Accumulation Period
shall be calculated without regard to clause (y) above.
(d) The amount of monthly principal ("Class D Monthly Principal")
-------------------------
distributable with respect to the Class D Certificates on each Distribution
Date, beginning with the Class D Principal Commencement Date, shall be equal to
the least of (x) the Available Principal Collections on deposit in the
Collection Account and available for distribution with respect to such
Distribution Date minus the portion of such Available Principal Collections
-----
applied in respect of Class A Monthly Principal, Class B Monthly Principal or
CTO Monthly Principal on such Distribution Date and (y) the Class D Invested
Amount as of such Distribution Date.
Section 4.5 Required Amount. (a) On each Determination Date, the
---------------
Servicer shall determine for the following Distribution Date the amount (the
"Class A Required Amount"), if any, by which (x) the sum of (i) Class A Monthly
-----------------------
Interest for such following Distribution Date, (ii) any Class A Monthly Interest
previously due but not distributed to the Class A Certificateholders on a prior
Distribution Date, (iii) any Class A Additional Interest for such following
Distribution Date and any Class A Additional Interest previously due but not
distributed to the Class A Certificateholders on a prior Distribution Date, (iv)
the Class A Allocable Amount, if any, for such following Distribution Date and
(v) if First North American National Bank is no longer the Servicer, the Class A
Servicing Fee for such following Distribution Date and the amount of any Class A
Servicing Fee previously due but not distributed to the Servicer on a prior
Distribution Date exceeds (y) Class A Available Funds with respect to the
preceding Due Period. In the event that the Class A Required Amount for any
Distribution Date is greater than zero, the Servicer shall give written notice
to the Trustee of such positive Class A Required Amount on the date of
computation and all or a portion of the Excess Spread and the Shared Excess
Finance Charge Collections allocable to Series 2000-[__] pursuant to Section
4.1(h) with respect to the preceding Due Period in an amount equal to the Class
A Required Amount for such Distribution Date shall be distributed from the
Collection Account on such Distribution Date pursuant to Section 4.8(a). In the
event that the Class A Required Amount for any
39
<PAGE>
Distribution Date exceeds the amount of the Excess Spread and the Shared Excess
Finance Charge Collections allocable to Series 2000-[__] with respect to the
preceding Due Period, all or a portion of the Subordinated Principal Collections
with respect to such Due Period in an amount equal to such excess shall be
distributed from the Collection Account on such Distribution Date pursuant to
Section 4.9(a).
(b) On each Determination Date, the Servicer shall determine for the
following Distribution Date the amount (the "Class B Required Amount"), if any,
-----------------------
equal to the sum of (x) the amount, if any, by which the sum of (i) Class B
Monthly Interest for such following Distribution Date, (ii) any Class B Monthly
Interest previously due but not distributed to the Class B Certificateholders on
a prior Distribution Date, (iii) any Class B Additional Interest for such
following Distribution Date and any Class B Additional Interest previously due
but not distributed to the Class B Certificateholders on a prior Distribution
Date and (iv) if First North American National Bank is no longer the Servicer,
the Class B Servicing Fee for such following Distribution Date and the amount of
any Class B Servicing Fee previously due but not distributed to the Servicer on
a prior Distribution Date exceeds Class B Available Funds with respect to the
preceding Due Period and (y) the Class B Allocable Amount, if any, for such
following Distribution Date. In the event that the Class B Required Amount for
any Distribution Date is greater than zero, the Servicer shall give written
notice to the Trustee of such positive Class B Required Amount on the date of
computation and all or a portion of the Excess Spread and the Shared Excess
Finance Charge Collections allocable to Series 2000-[__] pursuant to Section
4.1(h) with respect to the preceding Due Period (other than Excess Spread and
Shared Excess Finance Charge Collections applied pursuant to Section 4.8(a) or
(b)) shall be distributed from the Collection Account on such Distribution Date
pursuant to Sections 4.8(c) and (d). In the event that the Class B Required
Amount for any Distribution Date exceeds the amount of the Excess Spread and the
Shared Excess Finance Charge Collections allocable to Series 2000-[__] with
respect to the preceding Due Period and not applied pursuant to Section 4.8(a)
or (b), all or a portion of the Subordinated Principal Collections with respect
to such Due Period (other than the portion of the Subordinated Principal
Collections applied to fund the Class A Required Amount and other than Class B
Subordinated Principal Collections) in an amount equal to such excess shall be
distributed from the Collection Account on such Distribution Date pursuant to
Section 4.9(b).
(c) On each Determination Date, the Servicer shall determine for the
following Distribution Date the amount (the "CTO Required Amount"), if any,
-------------------
equal to the sum of (x) the amount, if any, by which the sum of (i) CTO Monthly
Interest for such following Distribution Date, (ii) any CTO Monthly Interest
40
<PAGE>
previously due but not distributed to the CTO Securityholders on a prior
Distribution Date, (iii) any CTO Additional Interest for such following
Distribution Date and any CTO Additional Interest previously due but not
distributed to the CTO Securityholders on a prior Distribution Date and (iv) if
First North American National Bank is no longer the Servicer, the CTO Servicing
Fee for such following Distribution Date and the amount of any CTO Servicing Fee
previously due but not distributed to the Servicer on a prior Distribution Date
exceeds the amount available to make payments with respect thereto pursuant to
Sections 4.6(c)(i) and 4.8(f) with respect to the preceding Due Period and (y)
the amount, if any, by which the CTO Allocable Amount, if any, for such
Distribution Date exceeds the amount available to make payments with respect
thereto pursuant to Section 4.8(h). In the event that the CTO Required Amount
for any Distribution Date is greater than zero, the Servicer shall give written
notice to the Trustee of such positive CTO Required Amount on the date of
computation and all or a portion of the Available Spread Account Amount with
respect to such Distribution Date in an amount equal to such excess shall be
applied to fund the CTO Required Amount. In the event that the CTO Required
Amount for any Distribution Date exceeds the Available Spread Account Amount
with respect to such Distribution Date, all or a portion of the Subordinated
Principal Collections with respect to the preceding Due Period (other than the
portion of the Subordinated Principal Collections applied to fund the Class A
Required Amount or the Class B Required Amount and other than Class B
Subordinated Principal Collections or CTO Subordinated Principal Collections) in
an amount equal to such excess shall be distributed from the Collection Account
on such Distribution Date pursuant to Section 4.9(c).
Section 4.6 Application of Class A Available Funds, Class B Available
---------------------------------------------------------
Funds, CTO Available Funds, Class D Available Funds and Collections of Principal
- --------------------------------------------------------------------------------
Receivables. The Servicer shall apply or shall instruct the Trustee to apply,
- -----------
on each Distribution Date, Class A Available Funds, Class B Available Funds, CTO
Available Funds, Class D Available Funds and Collections of Principal
Receivables allocable to Series 2000-[__] on deposit in the Collection Account
with respect to the Due Period immediately preceding such Distribution Date to
make the following distributions:
(a) On each Distribution Date, Class A Available Funds with respect
to the Due Period immediately preceding such Distribution Date shall be applied
in the following priority:
(i) an amount equal to Class A Monthly Interest for such
Distribution Date, plus the amount of any Class A Monthly Interest
----
previously due but not distributed to the Class A Certificateholders on a
prior Distribution Date, plus the amount of any Class A Additional Interest
----
for such
41
<PAGE>
Distribution Date and any Class A Additional Interest previously due but
not distributed to the Class A Certificateholders on a prior Distribution
Date, shall be distributed to the Paying Agent for payment to the Class A
Certificateholders;
(ii) if First North American National Bank is no longer the
Servicer, an amount equal to the Class A Servicing Fee for such
Distribution Date, plus the amount of any Class A Servicing Fee previously
----
due but not distributed to the Servicer on a prior Distribution Date, shall
be distributed to the Servicer;
(iii) an amount equal to the Class A Allocable Amount for such
Distribution Date shall be included in Available Principal Collections with
respect to such Distribution Date; and
(iv) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.8.
(b) On each Distribution Date, Class B Available Funds with respect
to the Due Period immediately preceding such Distribution Date shall be applied
in the following priority:
(i) an amount equal to Class B Monthly Interest for such
Distribution Date plus the amount of any Class B Monthly Interest
----
previously due but not distributed to the Class B Certificateholders on a
prior Distribution Date, plus the amount of any Class B Additional Interest
----
for such Distribution Date and any Class B Additional Interest previously
due but not distributed to the Class B Certificateholders on a prior
Distribution Date, shall be distributed to the Paying Agent for payment to
the Class B Certificateholders;
(ii) if First North American National Bank is no longer the
Servicer, an amount equal to the Class B Servicing Fee for such
Distribution Date, plus the amount of any Class B Servicing Fee previously
----
due but not distributed to the Servicer on a prior Distribution Date, shall
be distributed to the Servicer; and
(iii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.8.
(c) On each Distribution Date, CTO Available Funds with respect to
the Due Period immediately preceding such Distribution Date shall be applied in
the following priority:
42
<PAGE>
(i) if First North American National Bank is no longer the
Servicer, an amount equal to the CTO Servicing Fee for such Distribution
Date, plus the amount of any CTO Servicing Fee previously due but not
----
distributed to the Servicer on a prior Distribution Date, shall be
distributed to the Servicer; and
(ii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.8.
(d) On each Distribution Date, Class D Available Funds with respect
to the Due Period immediately preceding such Distribution Date shall be applied
in the following priority:
(i) if First North American National Bank is no longer the
Servicer, an amount equal to the Class D Servicing Fee for such
Distribution Date, plus the amount of any Class D Servicing Fee previously
----
due but not distributed to the Servicer on a prior Distribution Date, shall
be distributed to the Servicer; and
(ii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.8.
(e) On each Distribution Date with respect to the Revolving Period,
Available Principal Collections with respect to such Distribution Date shall be
treated as "Shared Principal Collections" with respect to Group One and shall be
applied in accordance with Section 4.1(g) (and shall be retained in the Excess
Funding Account if required by Section 4.1(g)).
(f) On each Distribution Date following the commencement of the
Accumulation Period or the Early Amortization Period, Available Principal
Collections with respect to such Distribution Date shall be applied in the
following priority:
(i) an amount equal to Class A Monthly Principal for such
Distribution Date (minus the aggregate amount of Collections of Principal
-----
Receivables with respect to the preceding Due Period transferred to the
Principal Funding Account in respect of Class A Monthly Principal pursuant
to Section 4.6(g)) shall, during the Accumulation Period, be deposited in
the Principal Funding Account for payment to the Class A Certificateholders
on the earlier to occur of the Expected Final Distribution Date or the
first Special Distribution Date and, during the Early Amortization Period,
be distributed to the Paying Agent for payment to the Class A
Certificateholders;
43
<PAGE>
(ii) an amount equal to Class B Monthly Principal for such
Distribution Date (minus the aggregate amount of Collections of Principal
-----
Receivables with respect to the preceding Due Period transferred to the
Principal Funding Account in respect of Class A Monthly Principal or Class
B Monthly Principal pursuant to Section 4.6(g)) shall, during the
Accumulation Period, be deposited in the Principal Funding Account for
payment to the Class B Certificateholders on the earlier to occur of the
Expected Final Distribution Date or the first Special Distribution Date
and, during the Early Amortization Period, be distributed to the Paying
Agent for payment to the Class B Certificateholders;
(iii) an amount equal to CTO Monthly Principal for such
Distribution Date (minus the aggregate amount of Collections of Principal
-----
Receivables with respect to the preceding Due Period transferred to the
Principal Funding Account in respect of Class A Monthly Principal, Class B
Monthly Principal or CTO Monthly Principal pursuant to Section 4.6(g))
shall, during the Accumulation Period, be deposited in the Principal
Funding Account for payment to the CTO Securityholders on the earlier to
occur of the Expected Final Distribution Date and the first Special
Distribution Date and, during the Early Amortization Period, be distributed
to the Paying Agent for payment to the CTO Securityholders;
(iv) an amount equal to Class D Monthly Principal for such
Distribution Date shall be distributed to the Paying Agent for payment to
the Class D Certificateholders; and
(v) the balance, if any, shall be treated as "Shared
Principal Collections" with respect to Group One and shall be applied in
accordance with Section 4.1(g) (and shall be retained in the Excess Funding
Account if required by Section 4.1(g)).
(g) On any Business Day during the Accumulation Period, the Servicer
may, in its sole discretion, direct the Trustee to transfer (and the Trustee, at
the direction of the Servicer, shall transfer) the Collections of Principal
Receivables allocated to Series 2000-[__] and on deposit in the Collection
Account on such Business Day to the Principal Funding Account; provided,
--------
however, that the aggregate amount transferred from the Collection Account to
- -------
the Principal Funding Account with respect to any Due Period pursuant to this
Section 4.6(g) shall not exceed the Controlled Deposit Amount for the following
Distribution Date; and, provided further, that if, on any Determination Date,
-------- -------
the Servicer determines that the amount transferred from the Collection Account
to the Principal Funding
44
<PAGE>
Account with respect to any Due Period pursuant to this Section 4.6(g) exceeded
the sum of the Class A Monthly Principal, Class B Monthly Principal and CTO
Monthly Principal for the following Distribution Date, the Trustee shall, at the
direction of the Servicer, transfer an amount equal to such excess from the
Principal Funding Account to the Collection Account.
Section 4.7 Defaulted Amounts; Adjustment Amounts; Investor Charge
------------------------------------------------------
Offs; Reductions of Adjustment Amounts. (a) On each Determination Date, the
- --------------------------------------
Servicer shall calculate the Class A Required Amount, if any, for the following
Distribution Date. If, on any Distribution Date, the Class A Required Amount
for such Distribution Date exceeds the sum of (x) the amount of Excess Spread
and Shared Excess Finance Charge Collections available to fund the Class A
Required Amount for such Distribution Date pursuant to Section 4.8(a) and (y)
the amount of Subordinated Principal Collections available to fund the Class A
Required Amount for such Distribution Date pursuant to Section 4.9(a), then the
Class D Invested Amount (after giving effect to any reduction thereof pursuant
to Section 4.7(d)) shall be reduced by the amount of such excess, but not by
more than the excess of the Class A Allocable Amount for such Distribution Date
over the sum of the amount of Excess Spread and Shared Excess Finance Charge
Collections used to fund the Class A Allocable Amount for such Distribution Date
and the amount of Subordinated Principal Collections used to fund the Class A
Allocable Amount for such Distribution Date. In the event that such reduction
would cause the Class D Invested Amount to be a negative number, the Class D
Invested Amount shall be reduced to zero and the CTO Invested Amount (after
giving effect to any reduction thereof pursuant to Section 4.7(c)) shall be
reduced by the amount by which the Class D Invested Amount would have been
reduced below zero, but not by more than the excess, if any, of the Class A
Allocable Amount for such Distribution Date over the sum of the amount of such
reduction, if any, of the Class D Invested Amount as of such Distribution Date,
the amount of Excess Spread and Shared Excess Finance Charge Collections used to
fund the Class A Allocable Amount for such Distribution Date and the amount of
Subordinated Principal Collections used to fund the Class A Allocable Amount for
such Distribution Date. In the event that such reduction would cause the CTO
Invested Amount to be a negative number, the CTO Invested Amount shall be
reduced to zero and the Class B Invested Amount (after giving effect to any
reduction thereof pursuant to Section 4.7(b)) shall be reduced by the amount by
which the CTO Invested Amount would have been reduced below zero, but not by
more than the excess, if any, of the Class A Allocable Amount for such
Distribution Date over the sum of the aggregate amount of the reductions, if
any, of the Class D Invested Amount and the CTO Invested Amount as of such
Distribution Date, the amount of Excess Spread and Shared Excess Finance Charge
Collections used to fund the Class A Allocable Amount for such Distribution Date
and the amount of Subordinated
45
<PAGE>
Principal Collections used to fund the Class A Allocable Amount for such
Distribution Date. In the event that such reduction would cause the Class B
Invested Amount to be a negative number, the Class B Invested Amount shall be
reduced to zero and the Class A Invested Amount shall be reduced by the amount
by which the Class B Invested Amount would have been reduced below zero, but not
by more than the excess, if any, of the Class A Allocable Amount for such
Distribution Date over the sum of the aggregate amount of the reductions, if
any, of the Class D Invested Amount, the CTO Invested Amount and the Class B
Invested Amount for such Distribution Date, the amount of Excess Spread and
Shared Excess Finance Charge Collections used to fund the Class A Allocable
Amount for such Distribution Date and the amount of Subordinated Principal
Collections used to fund the Class A Allocable Amount for such Distribution Date
(a "Class A Investor Charge Off"). Class A Investor Charge Offs shall thereafter
---------------------------
be reimbursed and the Class A Invested Amount increased (but not by an amount in
excess of the aggregate unreimbursed Class A Investor Charge Offs) on any
Distribution Date by the amount of Excess Spread and Shared Excess Finance
Charge Collections allocated and available for that purpose pursuant to Section
4.8(b) and, without duplication, the aggregate amount of the reductions of the
Series Adjustment Amount allocable to the Class A Invested Amount pursuant to
Section 4.7(f).
(b) On each Determination Date, the Servicer shall calculate the
Class B Required Amount, if any, for the following Distribution Date. If, on
any Distribution Date, the Class B Required Amount for such Distribution Date
exceeds the sum of (x) the amount of Excess Spread and Shared Excess Finance
Charge Collections available to fund the Class B Required Amount for such
Distribution Date pursuant to Section 4.8(c) and (d) and (y) the amount of
Subordinated Principal Collections available to fund the Class B Required Amount
for such Distribution Date pursuant to Section 4.9(b), then the Class D Invested
Amount (after giving effect to any reduction thereof pursuant to Section 4.7(a)
or (d)) shall be reduced by the amount of such excess, but not by more than the
excess of the Class B Allocable Amount for such Distribution Date over the sum
of the amount of Excess Spread and Shared Excess Finance Charge Collections used
to fund the Class B Allocable Amount for such Distribution Date and the amount
of Subordinated Principal Collections used to fund the Class B Allocable Amount
for such Distribution Date. In the event that such reduction would cause the
Class D Invested Amount to be a negative number, the Class D Invested Amount
shall be reduced to zero and the CTO Invested Amount (after giving effect to any
reduction thereof pursuant to Section 4.7(a) or (c)) shall be reduced by the
amount by which the Class D Invested Amount would have been reduced below zero,
but not by more than the excess, if any, of the Class B Allocable Amount for
such Distribution Date over the sum of the amount of such reduction, if any, of
the Class D Invested Amount as of such Distribution
46
<PAGE>
Date, the amount of Excess Spread and Shared Excess Finance Charge Collections
used to fund the Class B Allocable Amount for such Distribution Date and the
amount of Subordinated Principal Collections used to fund the Class B Allocable
Amount for such Distribution Date. In the event that such reduction would cause
the CTO Invested Amount to be a negative number, the CTO Invested Amount shall
be reduced to zero and the Class B Invested Amount (after giving effect to any
reduction thereof pursuant to Section 4.7(a)) shall be reduced by the amount by
which the CTO Invested Amount would have been reduced below zero, but not by
more than the excess, if any, of the Class B Allocable Amount for such
Distribution Date over the sum of the aggregate amount of the reductions, if
any, of the Class D Invested Amount and the CTO Invested Amount as of such
Distribution Date, the amount of Excess Spread and Shared Excess Finance Charge
Collections used to fund the Class B Allocable Amount for such Distribution Date
and the amount of Subordinated Principal Collections used to fund the Class B
Allocable Amount for such Distribution Date (a "Class B Investor Charge Off").
---------------------------
Class B Investor Charge Offs shall thereafter be reimbursed and the Class B
Invested Amount increased (but not by an amount in excess of the aggregate
unreimbursed Class B Investor Charge Offs) on any Distribution Date by the
amount of Excess Spread and Shared Excess Finance Charge Collections allocated
and available for that purpose pursuant to Section 4.8(e) and, without
duplication, the aggregate amount of the reductions of the Series Adjustment
Amount allocable to the Class B Invested Amount pursuant to Section 4.7(f).
(c) On each Determination Date, the Servicer shall calculate the CTO
Allocable Amount, if any, for the following Distribution Date. If, on any
Distribution Date, the CTO Allocable Amount for such Distribution Date exceeds
the sum of (x) the amount of Excess Spread and Shared Excess Finance Charge
Collections available to fund the CTO Allocable Amount for such Distribution
Date pursuant to Section 4.8(h), (y) the Available Spread Account Amount
available to fund the CTO Allocable Amount for such Distribution Date pursuant
to Section 4.12(d) and (z) the amount of Subordinated Principal Collections
available to fund the CTO Allocable Amount for such Distribution Date pursuant
to Section 4.9(c), then the Class D Invested Amount (after giving effect to any
reduction thereof pursuant to Section 4.7(a), (b) or (d)) shall be reduced by
the amount of such excess. In the event that such reduction would cause the
Class D Invested Amount to be a negative number, the Class D Invested Amount
shall be reduced to zero and the CTO Invested Amount shall be reduced by the
amount by which the Class D Invested Amount would have been reduced below zero
(a "CTO Investor Charge Off"); provided, however, that the CTO Invested Amount
----------------------- -------- -------
shall not be reduced below zero. CTO Investor Charge Offs shall thereafter be
reimbursed and the CTO Invested Amount increased (but not by an amount in excess
of the aggregate unreimbursed CTO Investor Charge Offs) on
47
<PAGE>
any Distribution Date by the amount of Excess Spread and Shared Excess Finance
Charge Collections allocated and available for that purpose pursuant to Section
4.8(i) and, without duplication, the aggregate amount of the reductions of the
Series Adjustment Amount allocable to the CTO Invested Amount pursuant to
Section 4.7(f).
(d) On each Determination Date, the Servicer shall calculate the
Class D Allocable Amount, if any, for the following Distribution Date. If, on
any Distribution Date, the Class D Allocable Amount for such Distribution Date
exceeds the amount of Excess Spread and Shared Excess Finance Charge Collections
available to fund the Class D Allocable Amount for such Distribution Date
pursuant to Section 4.8(m), then the Class D Invested Amount shall be reduced by
the amount of such excess (a "Class D Investor Charge Off"); provided, however,
--------------------------- -------- -------
that the Class D Invested Amount shall not be reduced below zero. Class D
Investor Charge Offs shall thereafter be reimbursed and the Class D Invested
Amount increased (but not by an amount in excess of the aggregate unreimbursed
Class D Investor Charge Offs) on any Distribution Date by the amount of Excess
Spread and Shared Excess Finance Charge Collections allocated and available for
that purpose pursuant to Section 4.8(n) and, without duplication, the aggregate
amount of the reductions of the Series Adjustment Amount allocable to the Class
D Invested Amount pursuant to Section 4.7(f).
(e) Whenever funds or other amounts are available hereunder in
respect of the Class A Allocable Amount, the Class B Allocable Amount, the CTO
Allocable Amount or the Class D Allocable Amount, as the case may be, such funds
or other amounts shall be applied first to the elimination of any deficiency
resulting from Default Amounts and then to any deficiency resulting from Series
Adjustment Amounts.
(f) Any reduction of the Series Adjustment Amount for Series 2000-
[__] as a result of the deposit of funds into the Excess Funding Account, the
repurchase or other repayment of Investor Certificates or the increase of
Principal Receivables in the Trust shall be allocated first to the Class A
Certificates, then to the Class B Certificates, then to the Collateralized Trust
Obligations and finally to the Class D Certificates, in each case to the extent
of any unreimbursed reduction of the Invested Amount thereof attributable to
Series Adjustment Amounts.
Section 4.8 Excess Spread; Shared Excess Finance Charge Collections.
-------------------------------------------------------
The Servicer shall apply, or shall instruct the Trustee to apply, on each
Distribution Date, Excess Spread and Shared Excess Finance Charge Collections
allocable to Series 2000-[__] pursuant to Section 4.1(h) with respect to the
48
<PAGE>
preceding Due Period, to make the following distributions in the following
priority:
(a) an amount equal to the Class A Required Amount, if any, with
respect to such Distribution Date shall be distributed by the Trustee to fund
any deficiency pursuant to Sections 4.6(a)(i), (ii) and (iii), in that order of
priority;
(b) an amount equal to the aggregate amount of Class A Investor
Charge Offs which have not been previously reimbursed shall be included in
Available Principal Collections with respect to such Distribution Date;
(c) an amount equal to the amount calculated for such Distribution
Date pursuant to clause (x) of Section 4.5(b) shall be distributed by the
Trustee to fund any deficiency pursuant to Sections 4.6(b)(i) and (ii), in that
order of priority;
(d) an amount equal to the Class B Allocable Amount for such
Distribution Date shall be included in Available Principal Collections with
respect to such Distribution Date;
(e) an amount equal to the aggregate amount by which the Class B
Invested Amount has been reduced pursuant to clauses (d), (e) and (f) of the
definition of "Class B Invested Amount" (but not in excess of the aggregate
amount of such reductions which have not been previously reimbursed) shall be
included in Available Principal Collections with respect to such Distribution
Date;
(f) an amount equal to the CTO Monthly Interest for such Distribution
Date, plus the amount of CTO Monthly Interest previously due but not distributed
----
to the CTO Securityholders on a prior Distribution Date, plus the amount of CTO
----
Additional Interest for such Distribution Date and any CTO Additional Interest
previously due but not distributed to the CTO Securityholders on a prior
Distribution Date shall be distributed to the Paying Agent for payment to the
CTO Securityholders;
(g) if First North American National Bank is the Servicer, an amount
equal to the Class A Servicing Fee, the Class B Servicing and the CTO Servicing
Fee for such Distribution Date (or, if First North American National Bank is no
longer the Servicer, the portion of the CTO Servicing Fee for such Distribution
Date not paid pursuant to Section 4.6(c)(i)), plus the amount of any Class A
----
Servicing Fee, Class B Servicing Fee or CTO Servicing Fee previously due but not
distributed to the Servicer on a prior Distribution Date, shall be distributed
to the Servicer;
49
<PAGE>
(h) an amount equal to the CTO Allocable Amount for such Distribution
Date shall be included in Available Principal Collections with respect to such
Distribution Date;
(i) an amount equal to the aggregate amount by which the CTO Invested
Amount has been reduced pursuant to clauses (d), (e) and (f) of the definition
of "CTO Invested Amount" (but not in excess of the aggregate amount of such
reductions which have not been previously reimbursed) shall be included in
Available Principal Collections with respect to such Distribution Date;
(j) an amount equal to the excess, if any, of the Required Spread
Account Amount with respect to such Distribution Date over the Available Spread
Account Amount with respect to such Distribution Date shall be deposited into
the Spread Account;
(k) an amount equal to the Class D Monthly Interest for such
Distribution Date, plus the amount of Class D Monthly Interest previously due
----
but not distributed to the Class D Certificateholders on a prior Distribution
Date, plus the amount of Class D Additional Interest for such Distribution Date
----
and any Class D Additional Interest previously due but not distributed to the
Class D Certificateholders on a prior Distribution Date shall be distributed to
the Paying Agent for payment to the Class D Certificateholders;
(l) if First North American National Bank is the Servicer, an amount
equal to the Class D Servicing Fee for such Distribution Date (or, if First
North American National Bank is no longer the Servicer, the portion of the Class
D Servicing Fee for such Distribution Date not paid pursuant to Section
4.6(d)(i)), plus the amount of any Class D Servicing Fee previously due but not
----
distributed to the Servicer on a prior Distribution Date, shall be distributed
to the Servicer;
(m) an amount equal to the Class D Allocable Amount for such
Distribution Date shall be included in Available Principal Collections with
respect to such Distribution Date;
(n) an amount equal to the aggregate amount by which the Class D
Invested Amount has been reduced pursuant to clauses (c), (d) and (e) of the
definition of "Class D Invested Amount" (but not in excess of the aggregate
amount of such reductions which have not been previously reimbursed) shall be
included in Available Principal Collections with respect to such Distribution
Date;
(o) an amount equal to the excess, if any, of the Required Reserve
Account Amount with respect to such Distribution Date over the Available Reserve
Account Amount with respect to
50
<PAGE>
such Distribution Date shall be deposited into the Reserve Account; and
(p) the balance, if any, shall constitute "Shared Excess Finance
Charge Collections" with respect to Group One to be applied in accordance with
Section 4.1(h).
Section 4.9 Subordinated Principal Collections. The Servicer shall
----------------------------------
apply, or shall instruct the Trustee to apply, Subordinated Principal
Collections (applying all Class D Subordinated Principal Collections prior to
applying any CTO Subordinated Principal Collections, and applying all CTO
Subordinated Principal Collections prior to applying any Class B Subordinated
Principal Collections, and applying no Class B Subordinated Principal
Collections with respect to the Class B Required Amount pursuant to clause (b)
below and applying no Class B Subordinated Principal Collections or CTO
Subordinated Principal Collections with respect to the CTO Required Amount
pursuant to clause (c) below) with respect to each Distribution Date to make the
following distributions in the following priority:
(a) an amount equal to the excess, if any, of (i) the Class A
Required Amount, if any, for such Distribution Date over (ii) the amount of
Excess Spread and Shared Excess Finance Charge Collections allocable to Series
2000-[__] with respect to the preceding Due Period shall be distributed by the
Trustee to fund any deficiency pursuant to Sections 4.6(a)(i), (ii) and (iii),
in that order of priority;
(b) an amount equal to the excess, if any, of (i) the Class B
Required Amount, if any, for such Distribution Date over (ii) the amount of
Excess Spread and Shared Excess Finance Charge Collections available to fund the
Class B Required Amount for such Distribution Date pursuant to Sections 4.8(c)
and (d) shall be distributed by the Trustee to fund any deficiency pursuant to
Sections 4.6(b)(i) and (ii) and Section 4.8(d), in that order of priority; and
(c) an amount equal to the excess, if any, of (i) the CTO Required
Amount, if any, for such Distribution Date over (ii) the sum of the amount of
Excess Spread and Shared Excess Finance Charge Collections available to fund the
CTO Required Amount for such Distribution Date pursuant to Sections 4.8(f) and
(h) and the amount withdrawn from the Spread Account in respect of the CTO
Required Amount for such Distribution Date shall be distributed by the Trustee
to fund any deficiency pursuant to Section 4.6(c)(i) and Sections 4.8(f) and
(h), in that order of priority.
Section 4.10 Principal Shortfall. The "Principal Shortfall" for
------------------- -------------------
Series 2000-[__] shall be equal to (a) for any
51
<PAGE>
Distribution Date with respect to the Revolving Period, zero, (b) for any
Distribution Date with respect to the Accumulation Period (on or prior to the
Expected Final Distribution Date), the excess, if any, of the Controlled Deposit
Amount with respect to such Distribution Date over the amount of Available
Principal Collections with respect to such Distribution Date (excluding any
portion thereof attributable to Shared Principal Collections) and (c) for any
Distribution Date with respect to the Early Amortization Period, the excess, if
any, of the Invested Amount as of the end of the preceding Due Period over the
amount of Available Principal Collections with respect to such Distribution Date
(excluding any portion thereof attributable to Shared Principal Collections).
On each Distribution Date during the Early Amortization Period, the
Trustee, at the direction of the Servicer, shall withdraw from the Excess
Funding Account and deposit into the Collection Account an amount equal to the
product of (i) the amount on deposit in the Excess Funding Account, if any, on
such Distribution Date and (ii) the percentage equivalent of a fraction, the
numerator of which is the Principal Shortfall with respect to Series 2000-[__]
for such Distribution Date and the denominator of which is the aggregate
Principal Shortfalls of all Series then outstanding for such Distribution Date.
The amount withdrawn from the Excess Funding Account shall be included in
Available Principal Collections with respect to such Distribution Date.
Section 4.11 Finance Charge Shortfall. The "Finance Charge
------------------------ --------------
Shortfall" for Series 2000-[__] for any Distribution Date shall be equal to the
- ---------
excess, if any, of (a) the amount required to be paid, without duplication,
pursuant to Sections 4.6(a), 4.6(b), 4.6(c), 4.6(d) and Section 4.8 (a)-(o) on
such Distribution Date over (b) the Collections of Finance Charge Receivables
allocated to Series 2000-[__] for the preceding Due Period.
Section 4.12 Spread Account. (a) The Servicer shall establish and
--------------
maintain, in the name of the Trustee, for the benefit of the CTO
Securityholders, with an Eligible Institution a segregated trust account (the
"Spread Account"), bearing a designation clearly indicating that the funds
- ---------------
deposited therein are held for the benefit of the CTO Securityholders. The
Spread 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 Spread Account and in all proceeds thereof. The Spread Account
shall be under the sole dominion and control of the Trustee for the benefit of
the CTO Securityholders. If, at any time, the institution holding the Spread
Account ceases to be an Eligible Institution, the Trustee (or the Servicer on
its behalf) shall within five Business Days establish a new Spread Account
meeting the conditions specified
52
<PAGE>
above with an Eligible Institution and shall transfer any cash and/or any
investments to such new Spread Account. The Trustee, at the direction of the
Servicer, shall make deposits to and withdrawals from the Spread Account in the
amounts and at the times set forth in this Agreement. The CTO Securityholders
shall not be entitled to reimbursement from the Trust Property for any
withdrawals from the Spread Account except as specifically provided in this
Agreement.
(b) Funds on deposit in the Spread Account shall be invested by the
Trustee, at the direction of the Servicer, in Eligible Investments that will
mature so that such funds will be available for withdrawal on or prior to the
following Distribution Date. The Trustee shall maintain, for the benefit of the
CTO Securityholders, possession of the negotiable instruments or securities, if
any, evidencing such Eligible Investments. No Eligible Investment shall be
disposed of prior to its maturity; provided, however, that the Trustee may sell,
-------- -------
liquidate or dispose of an Eligible Investment before its maturity, if so
directed by the Servicer, the Servicer having reasonably determined that the
interest of the CTO Securityholders may be adversely affected if such Eligible
Investment is held to its maturity. On each Distribution Date, all interest and
other investment earnings (net of losses and investment expenses) on funds on
deposit in the Spread Account shall be included in Excess Spread for such
Distribution Date and applied in accordance with Section 4.8.
(c) On each Determination Date, the Servicer shall calculate the sum
of (i) the CTO Required Amount for the following Distribution Date, (ii) the
aggregate amount by which the CTO Invested Amount would be reduced on such
Distribution Date pursuant to clauses (d), (e) and (f) of the definition of "CTO
Invested Amount" (but for the application of this Section 4.12(c)) and (iii) the
aggregate amount by which the CTO Invested Amount has been reduced on all prior
Distribution Dates pursuant to clauses (d), (e) and (f) of the definition of
"CTO Invested Amount" (but only to the extent that such reductions have not been
previously reimbursed) (the "Spread Account Draw Amount").
--------------------------
(d) On each Distribution Date on which the Spread Account Draw Amount
is greater than zero, the Trustee, at the direction of the Servicer, shall
withdraw from the Spread Account an amount equal to the lesser of such Spread
Account Draw Amount and the Available Spread Account Amount. The Trustee, at
the direction of the Servicer, shall apply the amount withdrawn from the Spread
Account on any Distribution Date to fund any deficiency pursuant to Section
4.5(c), 4.7(c) or 4.8(i), in that order of priority.
(e) On each Distribution Date on which the Spread Account Surplus,
after giving effect to all deposits to and
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withdrawals from the Spread Account with respect to such Distribution Date, is
greater than zero, the Trustee, at the direction of the Servicer, shall withdraw
from the Spread Account and pay to the Holder of the Exchangeable Transferor
Certificate an amount equal to such Spread Account Surplus.
(f) Upon the earliest to occur of (i) the termination of the Trust
pursuant to Article XII of the Agreement, (ii) the day on which the
Collateralized Trust Obligations shall have been paid in full, (iii) if the
Accumulation Period has not commenced, the occurrence of an Early Amortization
Event with respect to Series 2000-[__] and (iv) if the Accumulation Period has
commenced, the earlier of the first Special Distribution Date and the Expected
Final Distribution Date, the Trustee, at the direction of the Servicer, after
the prior payment of all amounts owing to the CTO Securityholders which are
payable from the Spread Account as provided herein, shall withdraw from the
Spread Account and pay to the Holder of the Exchangeable Transferor Certificate
all amounts, if any, on deposit in the Spread Account, and the Spread Account
shall be deemed to have terminated for all purposes of the Agreement.
Section 4.13 Principal Funding Account. (a) The Servicer shall
-------------------------
establish and maintain, in the name of the Trustee, for the benefit of the
Series 2000-[__] Certificateholders, with an Eligible Institution a segregated
trust account (the "Principal Funding Account"), bearing a designation clearly
-------------------------
indicating that the funds deposited therein are held for the benefit of the
Series 2000-[__] Certificateholders. 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. The Principal Funding Account shall
be under the sole dominion and control of the Trustee for the benefit of the
Series 2000-[__] Certificateholders. If, at any time, the institution holding
the Principal Funding Account ceases to be an Eligible Institution, the Trustee
(or the Servicer on its behalf) shall within five Business Days establish a new
Principal Funding Account meeting the conditions specified above with an
Eligible Institution and shall transfer any cash and/or any investments to such
new Principal Funding Account. Pursuant to the authority granted to the
Servicer in Section 3.1(b), 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.
(b) Funds on deposit in the Principal Funding Account shall be
invested by the Trustee, at the direction of the Servicer, in Eligible
Investments that will mature so that such funds will be available for withdrawal
on or prior to the
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following Distribution Date. The Trustee shall maintain, for the benefit of the
Series 2000-[__] Certificateholders, possession of the negotiable instruments or
securities, if any, evidencing such Eligible Investments. No Eligible Investment
shall be disposed of prior to its maturity; provided, however, that the Trustee
-------- -------
may sell, liquidate or dispose of an Eligible Investment before its maturity, if
so directed by the Servicer, the Servicer having reasonably determined that the
interest of the Series 2000-[__] Certificateholders may be adversely affected if
such Eligible Investment is held to its maturity. On each Distribution Date, all
interest and other investment earnings (net of losses and investment expenses)
on funds on deposit in the Principal Funding Account ("Principal Funding
-----------------
Investment Proceeds") shall be applied as set forth in Section 4.13(c).
- -------------------
(c) On each Distribution Date with respect to the Accumulation
Period, the Trustee, at the direction of the Servicer, shall withdraw from the
Principal Funding Account and deposit into the Collection Account all Principal
Funding Investment Proceeds received during the preceding Due Period. The
Trustee, at the direction of the Servicer, shall apply the Principal Funding
Investment Proceeds withdrawn from the Principal Funding Account on any
Distribution Date as follows:
(i) an amount equal to the product of (x) the amount
withdrawn and (y) the percentage equivalent of a fraction, the numerator of
which is the aggregate amount on deposit in the Principal Funding Account
as of the last day of the preceding Due Period in respect of Class A
Monthly Principal and the denominator of which is the aggregate amount on
deposit in the Principal Funding Account as of such last day, shall be
included in Class A Available Funds with respect to such preceding Due
Period and applied pursuant to Section 4.6(a);
(ii) an amount equal to the product of (x) the amount
withdrawn and (y) the percentage equivalent of a fraction, the numerator of
which is the aggregate amount on deposit in the Principal Funding Account
as of the last day of the preceding Due Period in respect of Class B
Monthly Principal and the denominator of which is the aggregate amount on
deposit in the Principal Funding Account as of such last day, shall be
included in Class B Available Funds with respect to such preceding Due
Period and applied pursuant to Section 4.6(b); and
(iii) an amount equal to the product of (x) the amount
withdrawn and (y) the percentage equivalent of a fraction, the numerator of
which is the aggregate amount on deposit in the Principal Funding Account
as of the last day of the preceding Due Period in respect of CTO Monthly
Principal and the denominator of which is the aggregate
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amount on deposit in the Principal Funding Account as of such last day,
shall be included in CTO Available Funds with respect to such preceding Due
Period and applied pursuant to Section 4.6(c).
(d) Reinvested interest and other investment earnings on funds on
deposit in the Principal Funding Account shall not be considered to be principal
amounts on deposit therein for purposes of this Agreement.
Section 4.14 Reserve Account. (a) The Servicer shall establish and
---------------
maintain, in the name of the Trustee, for the benefit of the Series 2000-[__]
Certificateholders, with an Eligible Institution a segregated trust account (the
"Reserve Account"), bearing a designation clearly indicating that the funds
---------------
deposited therein are held for the benefit of the Series 2000-[__]
Certificateholders. The Reserve 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 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 2000-[__] Certificateholders. If, at any time,
the institution holding the Reserve Account ceases to be an Eligible
Institution, the Trustee (or the Servicer on its behalf) shall within five
Business Days establish a new Reserve Account meeting the conditions specified
above with an Eligible Institution and shall transfer any cash and/or any
investments to such new Reserve Account. The Trustee, at the direction of the
Servicer, shall (i) make withdrawals from the Reserve Account from time to time
in an amount up to the Available Reserve Account Amount at such time, for the
purposes set forth in this Agreement, and (ii) on each Distribution Date (from
and after the Reserve Account Funding Date) prior to the termination of the
Reserve Account, make a deposit into the Reserve Account in the amount specified
in, and otherwise in accordance with, Section 4.8(o).
(b) Funds on deposit in the Reserve Account shall be invested by the
Trustee, at the direction of the Servicer, in Eligible Investments that will
mature so that such funds will be available for withdrawal on or prior to the
following Distribution Date. The Trustee shall maintain, for the benefit of the
Series 2000-[__] Certificateholders, possession of the negotiable instruments or
securities, if any, evidencing such Eligible Investments. No Eligible
Investment shall be disposed of prior to its maturity; provided, however, that
-------- -------
the Trustee may sell, liquidate or dispose of an Eligible Investment before its
maturity, if so directed by the Servicer, the Servicer having reasonably
determined that the interest of the Series 2000-[__] Certificateholders may be
adversely affected if such Eligible Investment is held to its maturity. On each
Distribution Date, all interest and other investment earnings (net of losses and
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investment expenses) 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 Amount and the balance, if any, shall
be applied in accordance with Section 4.14(e). For purposes of determining the
availability of funds or the balance in the Reserve Account for any reason under
this Agreement, except as otherwise provided in the preceding sentence, interest
and other investment earnings on such funds shall be deemed not to be available
or on deposit.
(c) On the Determination Date preceding each Distribution Date with
respect to the Accumulation Period (prior to the Expected Final Distribution
Date) and the first Special Distribution Date, the Servicer shall calculate the
amount (the "Reserve Account Draw Amount") if any, by which the Covered Amount
---------------------------
with respect to such Distribution Date or Special Distribution Date exceeds the
Principal Funding Investment Proceeds with respect to such Distribution Date or
Special Distribution Date.
(d) On each Distribution Date on which the Reserve Account Draw
Amount is greater than zero, the Trustee, at the direction of the Servicer,
shall withdraw from the Reserve Account and deposit into the Collection Account
an amount equal to the lesser of such Reserve Account Draw Amount and the
Available Reserve Account Amount. The Trustee, at the direction of the
Servicer, shall apply the amount withdrawn from the Reserve Account on any
Distribution Date pursuant to this Section 4.14(d) as follows:
(i) an amount equal to the product of (x) the amount withdrawn
and (y) the percentage equivalent of a fraction, the numerator of which is
the amount calculated pursuant to clause (a) of the definition of "Covered
Amount" for such Distribution Date and the denominator of which is the
Covered Amount for such Distribution Date, shall be included in Class A
Available Funds with respect to the preceding Due Period and applied
pursuant to Section 4.6(a);
(ii) an amount equal to the product of (x) the amount withdrawn
and (y) the percentage equivalent of a fraction, the numerator of which is
the amount calculated pursuant to clause (b) of the definition of "Covered
Amount" for such Distribution Date and the denominator of which is the
Covered Amount for such Distribution Date, shall be included in Class B
Available Funds with respect to the preceding Due Period and applied
pursuant to Section 4.6(b); and
(iii) an amount equal to the product of (x) the amount withdrawn
and (y) the percentage equivalent of a fraction, the numerator of which is
the amount calculated
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pursuant to clause (c) of the definition of "Covered Amount" for such
Distribution Date and the denominator of which is the Covered Amount for
such Distribution Date, shall be included in CTO Available Funds with
respect to the preceding Due Period and applied pursuant to Section 4.6(c).
(e) On each Distribution Date with respect to the Accumulation Period
(prior to the Expected Final Distribution Date) and the first Special
Distribution Date, the Trustee, at the direction of the Servicer, shall withdraw
from the Reserve Account and deposit into the Collection Account all interest
and other investment earnings (net of losses and investment expenses) on funds
on deposit in the Reserve Account to the extent that the Available Reserve
Account Amount with respect to such Distribution Date exceeds the Required
Reserve Account Amount with respect to such Distribution Date. The Trustee, at
the direction of the Servicer, shall apply the amount withdrawn from the Reserve
Account on any Distribution Date pursuant to this Section 4.14(e) as follows:
(i) the amount withdrawn shall, until the Class A Certificates
have been paid in full, be included in Class A Available Funds with respect
to the preceding Due Period and applied pursuant to Section 4.6(a);
(ii) the amount withdrawn shall, after the Class A Certificates
have been paid in full and until the Class B Certificates have been paid in
full, be included in Class B Available Funds with respect to the preceding
Due Period and applied pursuant to Section 4.6(b); and
(iii) the amount withdrawn shall, after the Class B Certificates
have been paid in full and until the Collateralized Trust Obligations have
been paid in full, be included in CTO Available Funds with respect to the
preceding Due Period and applied pursuant to Section 4.6(c).
(f) On each Distribution Date on which the Reserve Account Surplus,
after giving effect to all deposits to and withdrawals from the Reserve Account
with respect to such Distribution Date, is greater than zero, the Trustee, at
the direction of the Servicer, shall withdraw from the Reserve Account and pay
to the Holder of the Exchangeable Transferor Certificate an amount equal to such
Reserve Account Surplus.
(g) Upon the earliest to occur of (i) the termination of the Trust
pursuant to Article XII of the Agreement, (ii) the day on which the Class A
Certificates, the Class B Certificates and the Collateralized Trust Obligations
shall have been paid in full, (iii) if the Accumulation Period has not
commenced, the occurrence of an Early Amortization Event with respect to Series
2000-[__] and (iv) if the Accumulation Period has commenced, the
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earlier of the first Special Distribution Date and the Expected Final
Distribution Date, the Trustee, at the direction of the Servicer, after the
prior payment of all amounts owing to the Series 2000-[__] Certificateholders
which are payable from the Reserve Account as provided herein, shall withdraw
from the Reserve Account and pay to the Holder of the Exchangeable Transferor
Certificate all amounts, if any, on deposit in the Reserve Account, and the
Reserve Account shall be deemed to have terminated for all purposes of the
Agreement.
Section 4.15 Postponement of Accumulation Period. The Accumulation
-----------------------------------
Period is scheduled to commence at the end of the day on the last day of the
[____________] 20[__] Due Period; provided, however, that, if the Accumulation
-------- -------
Period Length (determined as described below) shall be less than 12 months, the
date on which the Accumulation Period actually commences may, at the option of
the Transferor, be delayed to the first day of any month that is a number of
whole months prior to the Expected Final Distribution Date at least equal to the
Accumulation Period Length and, as a result, the number of Due Periods in the
Accumulation Period shall at least equal the Accumulation Period Length. On
each Determination Date until the Accumulation Period begins, the Servicer shall
determine the "Accumulation Period Length," which shall equal the number of
--------------------------
whole months such that the sum of the Accumulation Period Factors for each month
during such period will be equal to or greater than the Required Accumulation
Factor Number; provided, however, that the Accumulation Period Length shall not
-------- -------
be determined to be less than one month.
Section 4.16 Suspension of Accumulation Period. (a) The Transferor
---------------------------------
may, in its sole discretion, elect to suspend the commencement of the
Accumulation Period. The commencement of the Accumulation Period shall be
suspended upon delivery by the Transferor to the Trustee of (i) an Officer's
Certificate stating that the Transferor has elected to suspend the commencement
of the Accumulation Period and that all conditions precedent to such suspension
set forth in this Section 4.16 have been satisfied, (ii) a copy of an executed
Qualified Maturity Agreement and (iii) an Opinion of Counsel addressed to the
Trustee as to the due authorization, execution and delivery and the validity and
enforceability of such Qualified Maturity Agreement. The Transferor does hereby
transfer, assign, set-over, and otherwise convey to the Trustee for the benefit
of the Class A Certificateholders, the Class B Certificateholders and the CTO
Securityholders, without recourse, all of its rights under any Qualified
Maturity Agreement obtained in accordance with this Section 4.16 and all
proceeds thereof. Such property shall constitute Trust Property for all
purposes of the Agreement. The foregoing transfer, assignment, set-over and
conveyance does not constitute and is not intended to result in a creation or an
assumption by the Trust, the Trustee or any Certificateholder of
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<PAGE>
any obligation of the Transferor or any other Person in connection with a
Qualified Maturity Agreement or under any agreement or instrument relating
thereto.
The Trustee hereby acknowledges its acceptance, to the extent validly
transferred, assigned, set-over or otherwise conveyed to the Trustee, for the
benefit of the Class A Certificateholders, the Class B Certificateholders and
the CTO Securityholders, of all of the rights previously held by the Transferor
under any Qualified Maturity Agreement obtained by the Transferor and all
proceeds thereof, and declares that it shall hold such rights upon the trust set
forth herein and in the Agreement, and subject to the terms hereof and thereof,
for the benefit of the Class A Certificateholders, the Class B
Certificateholders and the CTO Securityholders.
(b) The Transferor shall cause the provider of each Qualified
Maturity Agreement to deposit into the Principal Funding Account on or before
the Expected Final Distribution Date an amount equal to the aggregate
outstanding principal balance of the Class A Certificates, the Class B
Certificates and the Collateralized Trust Obligations on such Distribution Date;
provided, however, that the Transferor may instead elect to fund all or a
- -------- -------
portion of such deposit with the proceeds of the issuance of a new Series or
with the Available Principal Collections with respect to such Distribution Date.
The amount deposited shall be applied on the Expected Final Distribution Date
pursuant to Section 4.6(f) as if the commencement of the Accumulation Period had
not been suspended.
(c) Each Qualified Maturity Agreement shall terminate at the close of
business on the Expected Final Distribution Date; provided, however, that the
-------- -------
Transferor may terminate a Qualified Maturity Agreement prior to such
Distribution Date if (i) it obtains a Substitute Qualified Maturity Agreement,
(ii) the provider of the Qualified Maturity Agreement ceases to qualify as a
Qualified Institution and the Transferor is unable to obtain a substitute
Qualified Maturity Agreement or (iii) an Early Amortization Event occurs. In
addition, the Transferor may terminate a Qualified Maturity Agreement prior to
the later of the last day of the [____________] Due Period and the date to which
the commencement of the Accumulation Period may be postponed pursuant to Section
4.15 (as determined on the Determination Date preceding the date of such
termination), in which case the commencement of the Accumulation Period shall be
determined as if the Transferor had not elected to suspend such commencement.
In the event that the provider of a Qualified Maturity Agreement ceases to
qualify as a Qualified Institution, the Transferor shall use its best efforts to
obtain a substitute Qualified Maturity Agreement.
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(d) If a Qualified Maturity Agreement is terminated prior to the
earlier of the Expected Final Distribution Date and the commencement of the
Early Amortization Period and the Transferor does not obtain a substitute
Qualified Maturity Agreement, the Accumulation Period shall commence on the
latest of (i) the last day of the [____________] Due Period, (ii) at the
election of the Transferor, the date to which the commencement of the
Accumulation Period may be postponed pursuant to Section 4.15 (as determined on
the date of such termination) and (iii) the first day of the Due Period
following the date of such termination.
SECTION 9. Article V of the Agreement. Article V of the Agreement
--------------------------
as it relates to Series 2000-[__] shall read in its entirety as follows:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS
Section 5.1 Distributions. (a) On each Determination Date, the
-------------
Servicer shall deliver to the Trustee and the Paying Agent a certificate
substantially in the form of Exhibit E prepared by the Servicer.
---------
(b) On each Distribution Date, the Paying Agent shall distribute to
each Class A Certificateholder of record as of the preceding Record Date (other
than as provided in Section 12.2 respecting a final distribution) 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
Agreement.
(c) On the Expected Final Distribution Date and each Special
Distribution Date, the Paying Agent shall distribute to each Class A
Certificateholder of record as of the preceding Record Date (other than as
provided in Section 12.2 respecting a final distribution) 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 Agreement.
(d) On each Distribution Date, the Paying Agent shall distribute to
each Class B Certificateholder of record as of the preceding Record Date (other
than as provided in Section 12.2 respecting a final distribution) such Class B
Certificateholder's pro rata share of the amounts that are available on such
Distribution Date to pay interest on the Class B Certificates pursuant to this
Agreement.
(e) On the Expected Final Distribution Date and each Special
Distribution Date, the Paying Agent shall distribute to
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each Class B Certificateholder of record as of the preceding Record Date (other
than as provided in Section 12.2 respecting a final distribution) such Class B
Certificateholder's pro rata share of the amounts that are available on such
date to pay principal of the Class B Certificates pursuant to this Agreement.
(f) On each Distribution Date, the Paying Agent shall distribute to
each CTO Securityholder of record as of the preceding Record Date (other than as
provided in Section 12.2 respecting a final distribution) such CTO
Securityholder's pro rata share of the amounts that are available on such
Distribution Date to pay interest on the Collateralized Trust Obligations
pursuant to this Agreement.
(g) On each Distribution Date, the Paying Agent shall distribute to
each CTO Securityholder of record as of the preceding Record Date (other than as
provided in Section 12.2 respecting a final distribution) such CTO
Securityholder's pro rata share of the amounts that are available on such date
to pay principal of the Collateralized Trust Obligations pursuant to this
Agreement.
(h) On each Distribution Date, the Paying Agent shall distribute to
each Class D Certificateholder of record as of the preceding Record Date (other
than as provided in Section 12.2 respecting a final distribution) such Class D
Certificateholder's pro rata share of the amounts that are available on such
Distribution Date to pay interest on the Class D Certificates pursuant to this
Agreement.
(i) On each Distribution Date, beginning with the Distribution Date
on which the Class A Certificates, the Class B Certificates and the
Collateralized Trust Obligations are paid in full, the Paying Agent shall
distribute to each Class D Certificateholder of record as of the preceding
Record Date (other than as provided in Section 12.2 respecting a final
distribution) such Class D Certificateholder's pro rata share of the amounts
that are available on such date to pay principal of the Class D Certificates
pursuant to this Agreement.
(j) Except as provided in Section 12.2 with respect to a final
distribution, distributions to Series 2000-[__] Certificateholders hereunder
shall be made by check mailed to each such Certificateholder at such
Certificateholder's address appearing in the Certificate Register without
presentation or surrender of any such Series 2000-[__] Certificate or the making
of any notation thereon; provided, however, that, with respect to any such
-------- -------
Series 2000-[__] Certificates registered in the name of a Clearing Agency, such
distributions shall be made to such Clearing Agency in immediately available
funds.
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Section 5.2 Statements to Series 2000-[__] Certificateholders. On
-------------------------------------------------
each Distribution Date, the Paying Agent, on behalf of the Trustee, shall
forward to each Series 2000-[__] Certificateholder of record as of the preceding
Record Date a statement substantially in the form of Exhibit F prepared by the
---------
Servicer setting forth certain information relating to the Trust and the Series
2000-[__] Certificates.
On or before January 31 of each calendar year, beginning with 2001,
the Paying Agent, on behalf of the Trustee, shall furnish or cause to be
furnished to each Person who at any time during the preceding calendar year was
a Series 2000-[__] Certificateholder a statement prepared by the Servicer
containing the information which is required to be contained in the monthly
statement referred to in the preceding paragraph, aggregated for such calendar
year or the applicable portion thereof during which such Person was a Series
2000-[__] Certificateholder, together with such other information as is required
to be provided by an issuer of indebtedness under the Internal Revenue Code and
such other customary information as is necessary to enable the Series 2000-[__]
Certificateholders to prepare their tax returns. Such obligation of the
Servicer shall be deemed to have been satisfied to the extent that substantially
comparable information shall have been provided by the Paying Agent pursuant to
any requirements of the Internal Revenue Code as from time to time in effect.
[END OF ARTICLE V]
SECTION 10. Early Amortization Events. If any one of the events
-------------------------
specified in Section 9.1 of the Agreement or any one of the following events
shall occur during either the Revolving Period or the Accumulation Period with
respect to the Series 2000-[__] Certificates:
(a) failure on the part of the Transferor (x) to make any payment
or deposit required by the terms of the Agreement on or before the date
occurring five Business Days after the date such payment or deposit is required
to be made; or (y) duly to observe or perform in any material respect any other
covenants or agreements of the Transferor set forth in the Agreement that
continues unremedied for a period of 60 days [(or, in the case of a covenant
pursuant to Section 4A of this Series Supplement, 30 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 the Holders of Series 2000-[__] Certificates evidencing not less than
50% of the Invested Amount, and as a result of which the interests of the Series
2000-[__] Certificateholders are materially and adversely affected;
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(b) any representation or warranty made by the Transferor in the
Agreement shall prove to have been incorrect in any material respect when made
that 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 the Holders of Series 2000-[__] Certificates
evidencing not less than 50% of the Invested Amount, and as a result of which
the interests of the Series 2000-[__] Certificateholders are materially and
adversely affected; provided, however, that if the representation or warranty
-------- -------
which was breached relates to any particular Receivable or group of Receivables,
an Early Amortization Event shall not be deemed to have occurred hereunder if
the Transferor shall have accepted reassignment of such Receivable, or all of
such Receivables, if applicable, during such period (or such longer period not
to exceed a total of 180 days as the Trustee may specify) in accordance with the
provisions hereof;
(c) the Transferor or Circuit City shall consent to the
appointment of a trustee, conservator, receiver, liquidator, custodian or other
similar official in any bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities, receivership, conservatorship or similar
proceedings of or relating to the Transferor or Circuit City or of or relating
to all or substantially all of its property; or a decree or order of a court or
agency or supervisory authority having jurisdiction in the premises for the
appointment of a trustee, conservator, receiver, liquidator, custodian or other
similar official in any bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities, receivership, conservatorship or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the Transferor or Circuit City and such decree or order
shall have remained in force undischarged or unstayed for a period of 30 days;
either the Transferor or Circuit City shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take advantage of
any applicable bankruptcy, insolvency, receivership, conservatorship or
reorganization statute, make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations; an involuntary proceeding shall
be commenced or an involuntary petition shall be filed with respect to the
Transferor or Circuit City in a court of competent jurisdiction seeking to take
advantage of any applicable bankruptcy, insolvency, receivership,
conservatorship or reorganization statute and such proceeding or petition shall
continue undismissed for 60 days; or the Transferor shall become unable for any
reason to transfer Receivables to the Trust in accordance with the provisions of
the Agreement;
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(d) any Servicer Default shall occur that would have a material
adverse effect on the Holders of the Series 2000-[__] Certificates;
(e) the Transferor shall fail to designate Additional Accounts or
cause the Trust to repurchase Investor Certificates in an amount and within the
time period required by Section 2.6(a) of the Agreement; or
(f) the average of the Portfolio Yields for any three consecutive
Due Periods shall be less than the average of the Base Rates for such period;
(g) [the Interest Rate Cap Provider shall fail to make any
payment under the Class A Interest Rate Cap or the Class B Interest Rate Cap
within five days of the date on which such payment was due]; or
(h) the Class A Certificates, the Class B Certificates or the
Collateralized Trust Obligations shall not be paid in full on the Expected Final
Distribution Date;
then, in the case of any event described in clause (a), (b) or (d), an Early
Amortization Event will be deemed to have occurred with respect to the Series
2000-[__] Certificates only if, after any applicable grace period described in
the clauses, either the Trustee or the Holders of Series 2000-[__] Certificates
evidencing more than 50% of the Invested Amount, by written notice to the
Transferor and the Servicer (and to the Trustee, if given by such Holders)
declare that an Early Amortization Event has occurred as of the date of such
notice, and, in the case of any event described in Section 9.1 of the Agreement
an Early Amortization Event with respect to all Series, and in the case of any
event described in clause (c), (e), (f), (g) or (h), an Early Amortization Event
with respect to only the Series 2000-[__] Certificates, will be deemed to have
occurred without any notice or other action on the part of the Trustee or the
Holders of the Series 2000-[__] Certificates immediately upon the occurrence of
such event.
SECTION 11. CTO Defaults. If any one of the following events shall
------------
occur with respect to the CTOs:
(a) accrued but unpaid CTO Monthly Interest is not paid in full
to the CTO Securityholders on two consecutive Distribution Dates; or
(b) there is a CTO Investor Charge Off on three consecutive
Distribution Dates;
then a CTO Default will be deemed to have occurred with respect to the
Collateralized Trust Obligations. If a CTO Default has
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occurred and is continuing, at the direction of the Holders of more than 50% of
the CTO Invested Amount, (i) before the payment in full of the Class A
Certificates and the Class B Certificates, the Required Spread Account Amount
with respect to each Distribution Date thereafter shall equal the CTO Invested
Amount as of such date and (ii) following the payment in full of the Class A
Certificates and the Class B Certificates, the Trustee shall sell or cause to be
sold an amount of Principal Receivables and the related Finance Charge
Receivables (or interests therein) up to 110% of the Invested Amount at the
close of business on the date of such sale and pay the proceeds of such sale to
the holders of the Series 2000-[__] Certificates in final payment of all
principal of and accrued interest on Series 2000-[__] (which proceeds will be
applied first to the CTO Invested Amount until the Collateralized Trust
Obligations have been paid in full and then to the Class D Invested Amount until
the Class D Certificates have been paid in full); provided, however, that the
-------- -------
amount of such Principal Receivables shall not exceed the sum of (1) the product
of (A) the Transferor Amount on such date and (B) a fraction, the numerator of
which is the Invested Amount on such date and the denominator of which is the
Aggregate Invested Amount on such date and (2) the Invested Amount on such date.
The Transferor may purchase such Receivables in such case and shall have a right
of first refusal with respect thereto to the extent of a bona fide offer by an
unrelated third party for fair value. Any proceeds of such sale in excess of
such principal and interest paid shall be paid to the Transferor.
SECTION 12. Restrictions on Transfer.
------------------------
(a) Each Collateralized Trust Obligation will bear a legend or
legends substantially in the following form:
EACH PURCHASER OF THIS COLLATERALIZED TRUST OBLIGATION REPRESENTS AND
WARRANTS FOR THE BENEFIT OF FIRST NORTH AMERICAN NATIONAL BANK 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"), (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" (AS DESCRIBED IN 29
C.F.R. 2510.3-101) BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY OR (V) A
PERSON INVESTING "PLAN ASSETS" (AS DESCRIBED IN 29 C.F.R. 2510.3-101) OF ANY
SUCH PLAN (INCLUDING, FOR PURPOSES OF CLAUSES (IV) AND (V), INSURANCE COMPANY
GENERAL CONTRACTS (WITHIN THE MEANING OF SECTION 401(c) OF ERISA), BUT EXCLUDING
ANY ENTITY REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED).
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THIS COLLATERALIZED TRUST OBLIGATION HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
--------------
OR ANY STATE SECURITIES LAW. THE HOLDER OF THIS COLLATERALIZED TRUST
OBLIGATION, BY THE PURCHASE HEREOF, AGREES THAT THIS COLLATERALIZED TRUST
OBLIGATION MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) TO THE
TRANSFEROR OR (2) IN RELIANCE ON RULE 144A UNDER THE SECURITIES ACT TO A PERSON
WHOM THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" WITHIN
THE MEANING OF RULE 144A ("QIB") PURCHASING FOR ITS OWN ACCOUNT OR A QIB
---
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A. EACH BENEFICIAL OWNER OF THIS COLLATERALIZED TRUST OBLIGATION, BY
THE ACCEPTANCE OF A BENEFICIAL INTEREST HEREIN, IF SUCH BENEFICIAL OWNER
ACQUIRED SUCH INTEREST IN A TRANSFER DESCRIBED IN CLAUSE (2) ABOVE, IS DEEMED TO
REPRESENT THAT IT IS EITHER A QIB PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF ANOTHER QIB.
(b) Upon surrender for registration of transfer of a
Collateralized Trust Obligation at the office of the Transfer Agent and
Registrar, accompanied by a certification by the CTO Securityholder
substantially in the form attached as Exhibit G, executed by the registered
owner, in person or by such CTO Securityholder's attorney thereunto duly
authorized in writing, such Collateralized Trust Obligation shall be transferred
upon the Certificate Register, and the Transferor shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferees one or
more new registered Collateralized Trust Obligations of any authorized
denominations and of a like aggregate principal amount and tenor. Each transfer
of a Collateralized Trust Obligation shall be subject to the restrictions set
forth in this Section 12 and to such other restrictions as shall be set forth in
the text of the Collateralized Trust Obligation. Successive registrations and
registrations of transfers as aforesaid may be made from time to time as
desired, and each such registration shall be noted on the Certificate Register.
Collateralized Trust Obligations held as Definitive Certificates may be
exchanged for an interest in Book-Entry Certificates at any time (whether or not
in connection with a transfer but subject to the rules and procedures of the
related Clearing Agency) upon request to the Trustee by the registered holder of
such Definitive Certificates.
(c) The Transferor may at any time, without the consent of the
Series 2000-[__] Certificateholders, (i) sell or transfer all or a portion of
the Class D Certificates, provided that (A) the Transferor shall have given
notice to the Trustee and the Servicer of such proposed sale or transfer at
least five Business Days prior to the consummation of such sale or transfer,
67
<PAGE>
(B) no Early Amortization Event shall have occurred prior to the consummation of
such proposed sale or transfer; (C) the Transferor shall have delivered an
Officer's Certificate dated the date of the consummation of such proposed sale
or transfer to the effect that, in the reasonable belief of the Transferor, such
action will not, based on the facts known to such officer at the time of such
certification, cause an Early Amortization Event to occur with respect to any
Series and (D) the Transferor shall have provided an Opinion of Counsel
addressed to the Trustee, dated the date of such certificate, to the effect that
such proposed sale or transfer will not (x) adversely affect the tax
characterization as debt of Investor Certificates of any outstanding Series or
Class with respect to which an Opinion of Counsel addressed to the Trustee was
delivered at the time of their issuance that such Investor Certificates would be
characterized as debt, (y) cause the Trust to be classified, for federal income
tax purposes, as an association (or publicly traded partnership) taxable as a
corporation and (z) cause or constitute an event in which gain or loss would be
recognized by any Certificateholder.
(d) No Class D Certificate or any interest therein may be
Transferred except in accordance with this Section 12. Any sale, conveyance,
assignment, hypothecation, pledge, participation or other transfer (each, a
"Transfer") of a Class D Certificate otherwise permitted by this Section 12 will
--------
be permitted only if it consists of a pro rata percentage interest in all
payments made with respect to such holder's Class D Certificates. No Class D
Certificate or any interest therein may be Transferred to any Person (each, an
"Assignee") unless the Assignee shall have executed and delivered the
--------
certification referred to in subsection 12(e) below and each of the Transferor
and the Servicer shall have granted its prior consent thereto. The consent of
the Transferor and the Servicer shall be granted unless the Transferor
reasonably determines that such Transfer would create a risk that the Trust
would be classified for federal or any applicable state tax purposes as an
association or publicly traded partnership taxable as a corporation; provided,
--------
however, that any attempted Transfer that would cause the number of Holders to
- -------
exceed ninety-nine shall be void.
(e) Each initial purchaser of a Class D Certificate or any
interest therein and any Assignee shall certify to the Transferor, the Servicer
and the Trustee that it is either (x)(A) a citizen or resident of the United
States, (B) a corporation, partnership or other entity organized in or under the
laws of the United States or any political subdivision thereof which, if such
entity is a tax-exempt entity, recognizes that payments with respect to the
Class D Certificates may constitute unrelated business taxable income or (C) a
person not described in (A) or (B) whose ownership of the Class D Certificates
is effectively connected with the conduct of a trade
68
<PAGE>
or business within the United States (within the meaning of the Code) and whose
ownership of any interest in a Class D Certificate will not result in any
withholding obligation with respect to any payments with respect to the Class D
Certificates by any Person and who will furnish to the Certificateholder making
the Transfer, the Servicer and the Trustee, a properly executed United States
Internal Revenue Service Form 4224 (and agree to provide a new Form 4224 upon
the expiration or obsolescence of any previously delivered form and comparable
statements in accordance with applicable United States laws) or (y) an estate or
trust the income of which is includible in gross income for United States
federal income tax purposes.
(f) Each initial purchaser of a Class D Certificate or any
interest therein and any Assignee shall certify to the Transferor, the Servicer
and the Trustee that it has neither acquired nor will it Transfer any interest
in a Class D Certificate or cause an interest in a Class D Certificate to be
marketed on or through (i) an "established securities market" within the meaning
of Section 7704(b)(1) of the Code and any treasury 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 treasury regulation thereunder, including, without limitation, a market
wherein interests in the Class D Certificates are regularly quoted by any Person
making a market in such interests and a market wherein any Person regularly
makes available bid or offer quotes with respect to interests in the Class D
Certificates and stands ready to effect buy or sell transactions at the quoted
price for itself or on behalf of others. In addition, each initial purchaser of
a Class D Certificate or any interest therein and any Assignee shall certify,
prior to any delivery or Transfer to it of a Class D Certificate, that it is not
and will not become, for so long as it holds an interest in a Class D
Certificate, a partnership, Subchapter S corporation or grantor trust for United
States federal income tax purposes. If an initial purchaser of an interest in a
Class D Certificate or an Assignee cannot make the certification described in
the preceding sentence, the Transferor may, in its sole discretion, prohibit a
Transfer to such entity; provided, however, that if the Transferor agrees to
-------- -------
permit such a Transfer, the Transferor, the Servicer or the Trustee may require
additional certifications in order to prevent the Trust from being treated as a
publicly traded partnership. Each Holder acknowledges that special tax counsel
to the Transferor may render Opinions of Counsel from time to time to the
Transferor and others that the Trust will not be treated as a publicly traded
partnership taxable as a corporation, and that such Opinions of Counsel will
rely in part on the accuracy of the certifications in this subsection 11(c).
69
<PAGE>
(g) Each Class D Certificate will bear a legend or legends
substantially in the following form:
EACH PURCHASER OF THIS CLASS D CERTIFICATE REPRESENTS AND WARRANTS FOR
THE BENEFIT OF FIRST NORTH AMERICAN NATIONAL BANK 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"), (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" (AS DESCRIBED IN 29 C.F.R. 2510.3-
101) BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY OR (V) A PERSON INVESTING
"PLAN ASSETS" (AS DESCRIBED IN 29 C.F.R. 2510.3-101) OF ANY SUCH PLAN
(INCLUDING, FOR PURPOSES OF CLAUSES (IV) AND (V), INSURANCE COMPANY GENERAL
CONTRACTS (WITHIN THE MEANING OF SECTION 401(c) OF ERISA), BUT EXCLUDING ANY
ENTITY REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED).
THIS CLASS D CERTIFICATE MAY NOT BE ACQUIRED, SOLD, TRADED OR
TRANSFERRED, NOR MAY AN INTEREST IN THIS CLASS D CERTIFICATE BE MARKETED, ON OR
THROUGH AN "ESTABLISHED SECURITIES MARKET" WITHIN THE MEANING OF SECTION
7704(b)(1) OF THE CODE AND ANY TREASURY REGULATION THEREUNDER, INCLUDING,
WITHOUT LIMITATION, AN OVER-THE-COUNTER-MARKET OR AN INTERDEALER QUOTATION
SYSTEM THAT REGULARLY DISSEMINATES FIRM BUY OR SELL QUOTATIONS.
THIS CLASS D CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
--------------
SECURITIES LAW. THE HOLDER OF THIS CLASS D CERTIFICATE, BY THE PURCHASE HEREOF,
AGREES THAT THIS CLASS D CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) TO THE TRANSFEROR OR (2) TO A LIMITED NUMBER OF
INSTITUTIONAL "ACCREDITED INVESTORS" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT) AND IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (UPON DELIVERY OF THE DOCUMENTATION REQUIRED
BY THE POOLING AND SERVICING AGREEMENT AND, IF THE TRUSTEE SO REQUIRES, AN
OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE). EACH BENEFICIAL OWNER OF A
CLASS D CERTIFICATE, BY THE ACCEPTANCE OF A BENEFICIAL INTEREST HEREIN, IS
DEEMED TO REPRESENT THAT IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT). THIS
CLASS D CERTIFICATE WILL NOT BE ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT
UPON PRESENTATION OF EVIDENCE SATISFACTORY TO THE TRANSFER AGENT AND REGISTRAR
THAT
70
<PAGE>
THE RESTRICTIONS ON TRANSFER SET FORTH IN THE SERIES 2000-[__] SUPPLEMENT HAVE
BEEN COMPLIED WITH. THIS CLASS D CERTIFICATE MAY NOT BE REOFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHOUT THE PRIOR WRITTEN CONSENT OF EACH OF
THE TRANSFEROR AND THE SERVICER AND UNLESS AND UNTIL THE TRUSTEE SHALL HAVE
RECEIVED THE CERTIFICATIONS REQUIRED BY THE SERIES 2000-[__] SUPPLEMENT.
(h) Upon surrender for registration of transfer of a Class D
Certificate at the office of the Transfer Agent and Registrar, accompanied by a
certification by the Class D Certificateholder substantially in the form
attached as Exhibit G, executed by the registered owner, in person or by such
Class D Certificateholder's attorney thereunto duly authorized in writing, and
receipt by the Trustee of the written consent of each of the Transferor and the
Servicer to such transfer, such Class D Certificate shall be transferred upon
the Certificate Register, and the Transferor shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferees one or
more new registered Class D Certificates of any authorized denominations and of
a like aggregate principal amount and tenor. Each transfer of a Class D
Certificate shall be subject to the restrictions set forth in this Section 12
and to such other restrictions as shall be set forth in the text of the Class D
Certificates. Successive registrations and registrations of transfers as
aforesaid may be made from time to time as desired, and each such registration
shall be noted on the Certificate Register.
SECTION 13. Tax Characterization of the Collateralized Trust
------------------------------------------------
Obligations and the Class D Certificates. It is the intention of the parties
- -----------------------------------------
hereto that the Collateralized Trust Obligations and the Class D Certificates be
treated under applicable tax law as indebtedness. In the event that either the
Collateralized Trust Obligations or the Class D Certificates are not so treated,
it is the intention of the parties that the Collateralized Trust Obligations or
the Class D Certificates, as the case may be, be treated under applicable tax
law as interests in a partnership that owns the Receivables. In the event that
either the Collateralized Trust Obligations or the Class D Certificates are
treated under applicable tax law as interests in a partnership, it is the
intention of the parties that the Collateralized Trust Obligations or the Class
D Certificates, as the case may be, be treated as guaranteed payments and, if
for any reason they are not so treated, that the Holders of the Collateralized
Trust Obligations or the Class D Certificates, as the case may be, be specially
allocated gross interest income equal to the interest accrued during each
Interest Period on the Collateralized Trust Obligations or the Class D
Certificates, as the case may be.
SECTION 14. Ratification of Master Pooling and Servicing Agreement.
------------------------------------------------------
As supplemented by this Series Supplement,
71
<PAGE>
the Agreement is in all respects ratified and confirmed and the Agreement as so
supplemented by this Series Supplement shall be read, taken, and construed as
one and the same instrument; provided, however, that pursuant to Section 9.2(a)
-------- -------
of the Agreement, the Trustee shall sell the portion of the Receivables
allocable to Series 2000-[__] unless instructed not to sell, dispose of or
otherwise liquidate the Receivables by holders of interests aggregating more
than 50% of each Class of each Series (including a majority in interest in each
collateral indebtedness interest or collateralized trust obligation), each
holder of an interest in the Transferor Interest other than the Transferor and
any other Person specified in a Supplement.
SECTION 15. Counterparts. This Series 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 16. Governing Law. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 17. Subordination of Certain Termination Payments.
---------------------------------------------
Notwithstanding anything contained in Section 12.2(c) of the Agreement, upon the
sale of Receivables or interests therein as provided in Section 12.2(c) of the
Agreement, the proceeds of any such sale payable in respect of the Series 2000-
[__] Certificates shall be payable first to the Class A Certificateholders on a
pro rata basis until all obligations payable in respect of the Class A
Certificates are paid in full, then to the Class B Certificateholders on a pro
rata basis until all obligations payable in respect of the Class B Certificates
are paid in full, then to the CTO Securityholders on a pro rata basis until all
obligations payable in respect of the Collateralized Trust Obligations are paid
in full and then to the Class D Certificateholders on a pro rata basis until all
obligations payable in respect of the Class D Certificates are paid in full.
SECTION 18. FASIT Election. Each Series 2000-[__] Certificateholder,
--------------
by acquiring an interest in a Series 2000-[__] Certificate, is deemed to consent
to any amendment to the Agreement or this Series Supplement necessary for the
Transferor to elect for the Trust or any portion thereof to be treated as a
financial asset securitization investment trust ("FASIT") within the meaning of
-----
Section 860L of the Code (or any successor provision thereto); provided,
--------
however, that such election may not be made unless the Transferor delivers to
- -------
the Trustee an Opinion of Counsel to the effect that (i) the issuance of FASIT
regular
72
<PAGE>
interests will not adversely affect the tax characterization as debt of Investor
Certificates of any outstanding Series or Class with respect to which an Opinion
of Counsel was delivered at the time of their issuance that such Investor
Certificates would be characterized as debt, (ii) following such issuance, the
Trust will not be classified, for federal income tax purposes, as an association
(or publicly traded partnership) taxable as a corporation, and (iii) such
issuance will not cause or constitute an event in which gain or loss would be
recognized by any Investor Certificateholder.
SECTION 19. Paired Series. Subject to obtaining confirmation by each
-------------
Rating Agency of the then existing ratings of each class of Series 2000-[__]
Certificates which is then rated, and prior to the commencement of the Early
Amortization Period, the Series 2000-[__] Certificates may be paired with one or
more other Series (each, a "Paired Series"). Each Paired Series either will be
-------------
pre-funded with an initial deposit to a pre-funding account in an amount up to
the initial principal balance of such Paired Series and funded 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 2000-[__]
Certificateholders. As principal is paid or deposited into the Principal
Funding Account with respect to the Series 2000-[__] 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, if requested by
the Transferor, 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, if
requested by the Transferor, be sold by the Trust (and the proceeds thereof
will, if requested by the Transferor, be distributed to the Transferor) and, in
either case, the invested amount in the Trust of such Paired Series will
increase by up to a corresponding amount. Upon payment in full of the Series
2000-[__] Certificates, assuming that there have been no unreimbursed charge-
offs with respect to any related Paired Series, the aggregate invested amount of
such related Paired Series will have been increased by an amount up to an
aggregate amount equal to the Invested Amount paid to the Series 2000-[__]
Certificateholders since the issuance of such Paired Series. The issuance of a
Paired Series will be subject to the conditions described in subsection 6.9(b)
of the Agreement. The numerator of the Class A Fixed Allocation Percentage, the
Class B Fixed Allocation Percentage, the CTO Fixed Allocation Percentage and the
Class D Fixed Allocation Percentage with respect to allocations of Collections
of Principal Receivables may be changed upon the occurrence of an Early
Amortization Event with respect to (and as defined in the Supplement for) a
Paired Series (provided that such numerator is not less than the Class A
73
<PAGE>
Invested Amount, the Class B Invested Amount, the CTO Invested Amount or the
Class D Invested Amount, respectively, as of the last day of the Revolving
Period (as defined in the Supplement for such Paired Series)).
74
<PAGE>
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Series Supplement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.
FIRST NORTH AMERICAN NATIONAL BANK,
as Transferor and Servicer
By:______________________________
Name:
Title:
BANKERS TRUST COMPANY,
as Trustee and Paying Agent
By:______________________________
Name:
Title:
75
<PAGE>
EXHIBIT A
REGISTERED $[___________]
No. A-[__] CUSIP No.
[___________]
Unless this Class A Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any 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.
CIRCUIT CITY CREDIT CARD MASTER TRUST
CLASS A [FLOATING RATE] ASSET BACKED CERTIFICATE,
SERIES 2000-[__]
Expected Final Distribution Date:
[____________] 20[__] Distribution Date
Each $1,000 minimum denomination represents a
1/[_________] undivided interest
in certain assets of the
CIRCUIT CITY CREDIT CARD MASTER TRUST
Evidencing an undivided interest in a trust, the corpus of which consists
primarily of receivables created from time to time in a portfolio of consumer
revolving credit card accounts of
FIRST NORTH AMERICAN NATIONAL BANK
(Not an interest in or obligation of First North
American National Bank, Circuit City Stores, Inc. or any of their
affiliates)
This certifies that Cede & Co. (the "Class A Certificateholder") is the
registered owner of a fractional undivided interest in certain assets of a trust
(the "Trust") created pursuant to the Master Pooling and Servicing Agreement,
dated as of October 4, 1994 (as amended and supplemented, the "Agreement"), as
supplemented by the Series 2000-[__] Supplement, dated as of [____________],
20[__] (as amended and supplemented, the "Series Supplement"), among First North
American National Bank, a national banking association, as Transferor and
Servicer, and Bankers Trust Company, a New York banking corporation, as trustee
(the "Trustee"). The corpus of the Trust consists of (i)
<PAGE>
receivables (the "Receivables") created from time to time in a portfolio of
consumer revolving credit card accounts identified under the Agreement (the
"Accounts"), (ii) all monies due or to become due in payment of the Receivables,
(iii) all proceeds of the Receivables and proceeds of credit insurance policies
relating to the Receivables, (iv) all monies on deposit in certain bank accounts
of the Trust (excluding investment earnings, unless otherwise specified in the
Agreement or any Supplement), [(v) the Transferor's rights under an interest
rate cap agreement for the exclusive benefit of the Class A Certificateholders
and the Transferor's rights under an interest rate cap agreement for the
exclusive benefit of the Class A Certificateholders,] (vi) any Enhancement with
respect to any Series (or class thereof) and (vii) all other assets and
interests constituting the Trust Property. Although a summary of certain
provisions of the Agreement and the Series Supplement is set forth below and on
the Summary of Terms and Conditions attached hereto and made a part hereof, this
Class A Certificate does not purport to summarize the Agreement and the Series
Supplement and reference is made to the Agreement and the Series Supplement for
information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and obligations of
the Trustee. A copy of the Agreement and the Series Supplement (without
schedules) may be requested from the Trustee by writing to the Trustee at the
Corporate Trust Office: 4 Albany Street, New York, New York 10006, Attention:
Corporate Trust and Agency Group/Structured Finance. To the extent not defined
herein, the capitalized terms used herein have the meanings ascribed to them in
the Agreement or the Series Supplement, as applicable.
This Class A Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement and the Series Supplement, to which
Agreement and Series Supplement, each as amended and supplemented from time to
time, the Class A Certificateholder by virtue of the acceptance hereof assents
and is bound.
It is the intent of the Transferor and the Investor Certificateholders
(and Certificate Owners) that, for Federal, state and local income and franchise
tax purposes only, the Investor Certificates will qualify as indebtedness of the
Transferor secured by the Receivables (unless otherwise specified in the related
Supplement). The Class A Certificateholder (and each Certificate Owner of a
Class A Certificate), by the acceptance of this Class A Certificate (or its
interest therein), is deemed to agree to treat this Class A Certificate for
Federal, state and local income and franchise tax purposes and any other tax
imposed on or measured by income as indebtedness of the Transferor.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Class A Certificate shall
not be entitled to any
<PAGE>
benefit under the Agreement or the Series Supplement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Transferor has caused this Class A Certificate
to be duly executed.
FIRST NORTH AMERICAN NATIONAL BANK
By: _______________________________
Name:
Title:
Dated: [___________], 20[__]
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates described in the within-mentioned
Agreement and Series Supplement.
BANKERS TRUST COMPANY,
as Trustee
By: __________________
Authorized Officer
<PAGE>
CIRCUIT CITY CREDIT CARD MASTER TRUST
CLASS A [FLOATING RATE] ASSET BACKED CERTIFICATE,
SERIES 2000-[__]
Summary of Terms and Conditions
This Class A Certificate is one of a Series of Certificates entitled
Circuit City Credit Card Master Trust, Series 2000-[__] Certificates (the
"Series 2000-[__] Certificates"), and one of a class thereof entitled Class A
[Floating Rate] Asset Backed Certificates, Series 2000-[__] (the "Class A
Certificates"), each of which represents a fractional undivided interest in
certain assets of the Trust. The Trust Property is allocated in part to the
Investor Certificateholders of all outstanding Series (the "Certificateholders'
Interest") and the interests, if any, of any Enhancement Providers, with the
remainder allocated to the Transferor. The aggregate interest represented by
the Class A Certificates at any time in the Principal Receivables in the Trust
shall not exceed an amount equal to the Class A Invested Amount at such time.
The Class A Initial Invested Amount is $[____________]. The Class A Invested
Amount on any date will be an amount equal to (a) the Class A Initial Invested
Amount, minus (b) the aggregate amount deposited into the Principal Funding
-----
Account prior to such date as Class A Monthly Principal (excluding interest and
other investment earnings on such amount), minus (c) the aggregate amount of
-----
principal payments made to the Class A Certificateholders prior to such date,
minus (d) the excess, if any, of the aggregate amount of Class A Investor Charge
- -----
Offs for all prior Distribution Dates over the sum of the aggregate amount of
Class A Investor Charge Offs reimbursed prior to such date pursuant to the
Series Supplement and, without duplication, the aggregate amount of the
reductions of the Series Adjustment Amounts allocated to the Class A Invested
Amount pursuant to the Series Supplement; provided, however, that the Class A
-------- -------
Invested Amount may not be reduced below zero. In addition, classes of the
Series 2000-[__] Certificates entitled Class B [Floating Rate] Asset Backed
Certificates, Series 2000-[__] (the "Class B Certificates"), Collateralized
Trust Obligations, Series 2000-[__] (the " Collateralized Trust Obligations ")
and Class D Asset Backed Certificates, Series 2000-[__] (the "Class D
Certificates") will be issued. The Exchangeable Transferor Certificate which
represents the Transferor Interest, has been issued to First North American
National Bank pursuant to the Agreement.
Subject to the terms and conditions of the Agreement, the Transferor
may from time to time direct the Trustee, on behalf of the Trust, to issue one
or more new Series of Investor Certificates, which will represent fractional
undivided interests in certain Trust Property.
Each Class A Certificate represents the right to receive payments of
(i) interest at the rate of [__]% per annum
<PAGE>
[above Certificate LIBOR (as determined on the related Certificate LIBOR
Determination Date)], accruing from [____________], 20[__] payable on
[____________], 20[__] and on the 15th day of each month thereafter (or, if such
15th day is not a Business Day, the next succeeding Business Day) (each, a
"Distribution Date") and (ii) principal on the [___________], 20[__]
Distribution Date (and on each Distribution Date thereafter, if the Class A
Certificates are not paid in full on the [____________], 20[__] Distribution
Date) or, upon the occurrence of an Early Amortization Event, on each
Distribution Date relating to the Early Amortization Period, in each case funded
from a percentage of the payments received with respect to the Receivables and
certain other funds, all as more fully described in the Agreement and the Series
Supplement. Interest on the Class A Certificates will be calculated on the basis
of a 360-day year [consisting of twelve 30-day months]and [the actual number of
days in the relevant Interest Period].
The Class B Certificates, the Collateralized Trust Obligations and the
Class D Certificates are subordinated to the Class A Certificates to the extent
set forth in the Series Supplement.
On each Distribution Date, the Paying Agent shall distribute to each
Class A Certificateholder of record on the last day of the preceding calendar
month (each a "Record Date") such Class A Certificateholder's pro rata share of
such amounts (including amounts on deposit in the Principal Funding Account) as
are payable to the Class A Certificateholders pursuant to the Agreement and the
Series Supplement. Distributions with respect to this Class A Certificate will
be made by the Paying Agent by check mailed to the address of the Class A
Certificateholder of record appearing in the Certificate Register without the
presentation or surrender of this Class A Certificate or the making of any
notation thereon (except for the final distribution in respect of this Class A
Certificate), except that with respect to Class A Certificates registered in the
name of Cede & Co., the nominee for The Depository Trust Company, distributions
will be made in the form of immediately available funds. Final payment of this
Class A Certificate will be made only upon presentation and surrender of this
Class A Certificate at the office or agency specified in the notice of final
distribution delivered by the Trustee in accordance with the Agreement and the
Series Supplement.
On any Distribution Date occurring on or after the day on which the
Invested Amount is reduced to an amount less than or equal to 5% of the Initial
Invested Amount, the Class A Certificates are subject to retransfer to the
Transferor. The retransfer price will be equal to the Class A Invested Amount
plus accrued but unpaid interest thereon.
Subject to certain conditions in the Agreement, if the Invested Amount
is greater than zero on the [____________],
<PAGE>
20[__] Distribution Date (the "Stated Series Termination Date"), the Trustee
shall sell or cause to be sold an amount of Receivables up to 110% of the
Invested Amount at the close of business on such date, but not more than the
total amount of Receivables allocable to the Series 2000-[__] Certificates, and
apply the proceeds of such sale as provided in the Agreement and the Series
Supplement.
This Class A Certificate does not represent a recourse obligation of,
or an interest in, the Transferor, the Servicer, Circuit City Stores, Inc. or
any of their affiliates and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency or instrumentality. This
Class A Certificate is limited in right of payment to certain Collections with
respect to the Receivables (and certain other amounts), all as more specifically
set forth hereinabove and in the Agreement and the Series Supplement.
The Agreement and any Supplement may be amended from time to time by
the Servicer, the Transferor and the Trustee, without the consent of any of the
Investor Certificateholders, to cure any ambiguity, to correct or supplement any
provisions therein which may be inconsistent with any other provisions therein
or to add other identifying code numbers to the definition of Account or to add
any other provisions with respect to matters or questions raised under the
Agreement which shall not be inconsistent with the provisions of the Agreement;
provided, however, that such action shall not adversely affect in any material
- -------- -------
respect the interests of any of the Investor Certificateholders. In addition,
the Agreement and any Supplement may be amended from time to time by the
Servicer, the Transferor and the Trustee, without the consent of any of the
Investor Certificateholders, to add to or change any of the provisions of the
Agreement to enable Bearer Certificates to be issued in conformity with the
Bearer Rules, to provide that Bearer Certificates may be registrable as to
principal, to change or eliminate any restrictions on the payment of principal
(or premium, if any) or any interest on Bearer Certificates to comply with the
Bearer Rules, to permit Bearer Certificates to be issued in exchange for
Registered Certificates (if then permitted by the Bearer Rules), to permit
Bearer Certificates to be issued in exchange for Bearer Certificates of other
authorized denominations or to permit the issuance of Investor Certificates in
uncertificated form, provided any such action shall not adversely affect the
interest of the Holders of Bearer Certificates of any Series or any related
Coupons in any material respect unless such amendment is necessary to comply
with the Bearer Rules.
The Agreement and any Supplement may also be amended from time to time
by the Servicer, the Transferor and the Trustee, without the consent of any of
the Investor Certificateholders, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of
<PAGE>
the Agreement, or of modifying in any manner the rights of the Holders of
Investor Certificates; provided, however, that (i) the Servicer shall have
provided an Opinion of Counsel to the Trustee to the effect that such amendment
will not materially and adversely affect the interests of the Investor
Certificateholders of any outstanding Series, which Opinion of Counsel may rely
solely on the rating confirmation referred to in clause (iii) below (or 100% of
the class of Certificateholders so affected have consented), (ii) such amendment
shall not, as evidenced by an Opinion of Counsel, cause any outstanding Series
as to which an opinion that it was debt was given on its Closing Date to fail to
qualify as debt for Federal income tax purposes, cause the Trust to be
characterized for Federal income tax purposes as an association taxable as a
corporation or otherwise have any material adverse impact on the Federal income
taxation characterization of any outstanding Series of Investor Certificates or
the Federal income taxation of any Investor Certificateholder or any Certificate
Owner and (iii) the Rating Agencies shall confirm that such amendment shall not
cause a reduction or withdrawal of the rating of any outstanding Series of
Certificates; and, provided, further, that such amendment shall not reduce in
any manner the amount of, or delay the timing of, or change the priority of,
distributions which are required to be made on any Investor Certificate of such
Series without the consent of the related Investor Certificateholder, change the
definition of or the manner of calculating the interest of any Investor
Certificateholder of such Series without the consent of the related Investor
Certificateholder or reduce the required percentage for consents to amendments
pursuant to the following paragraph without the consent of each affected
Investor Certificateholder.
The Agreement and any Supplement may also be amended from time to time
by the Servicer, the Transferor and the Trustee with the consent of the Holders
of Investor Certificates evidencing undivided interests aggregating not less
than 66-2/3% of the Invested Amount of all Series adversely affected, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of the Agreement or of modifying in any manner the rights of
the Investor Certificateholders of any Series then issued and outstanding;
provided, however, that no such amendment shall (i) reduce in any manner the
- -------- -------
amount of, or delay the timing of, distributions which are required to be made
on any Investor Certificate of such Series without the consent of the related
Investor Certificateholders, (ii) change the definition of or the manner of
calculating the Invested Amount, the Invested Percentage, the applicable
available amount under any Enhancement or the Investor Default Amount of such
Series without the consent of the related Investor Certificateholders, or (iii)
reduce the aforesaid percentage required to consent to any such amendment,
without the consent of the related Investor Certificateholders. Any amendment
pursuant to this paragraph shall require that each Rating Agency rating the
affected Series confirm that such
<PAGE>
amendment will not cause a reduction or withdrawal of the rating of any
outstanding Series of Certificates.
The Class A Certificates are issuable only in minimum denominations of
$1,000 and integral multiples of $1,000. The transfer of this Class A
Certificate shall be registered in the Certificate Register upon surrender of
this Class A Certificate for registration of transfer at any office or agency
maintained by the Transfer Agent and Registrar, and thereupon one or more new
Class A Certificates in authorized denominations representing like aggregate
undivided interests in the Trust will be issued to the designated transferee or
transferees.
As provided in the Agreement and subject to certain limitations
therein set forth, Class A Certificates are exchangeable for new Class A
Certificates in authorized denominations of like aggregate undivided interests
in the Trust as requested by the Class A Certificateholder surrendering such
Class A Certificates. No service charge may be imposed for any transfer or
exchange but the Transfer Agent and Registrar and the Trustee may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith.
The Trustee, the Paying Agent and the Transfer Agent and Registrar and
any agent of any of them may treat the person in whose name this Class A
Certificate is registered as the owner hereof for all purposes, and neither the
Trustee, the Paying Agent, the Transfer Agent and Registrar, nor any agent of
any of them, shall be affected by notice to the contrary.
THE AGREEMENT AND THIS CLASS A CERTIFICATE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES UNDER THE AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
<PAGE>
ASSIGNMENT
Social Security or other identifying number of assignee
____________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________________________________________________
(name and address of assignee)
the within certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer said
certificate on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: ______________________________*
Signature Guaranteed:
______________________________
______________________
(*) NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Certificate in
every particular, without alteration, enlargement or any change whatsoever.
<PAGE>
EXHIBIT B
REGISTERED $[___________]
No. B-[__] CUSIP No. [___________]
Unless this Class B Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any 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.
CIRCUIT CITY CREDIT CARD MASTER TRUST
CLASS B [FLOATING RATE] ASSET BACKED CERTIFICATE,
SERIES 2000-[__]
Expected Final Distribution Date:
[____________] 20[__] Distribution Date
Each $1,000 minimum denomination represents a
1/[_________] undivided interest
in certain assets of the
CIRCUIT CITY CREDIT CARD MASTER TRUST
Evidencing an undivided interest in a trust, the corpus of which consists
primarily of receivables created from time to time in a portfolio of consumer
revolving credit card accounts of
FIRST NORTH AMERICAN NATIONAL BANK
(Not an interest in or obligation of First North
American National Bank, Circuit City Stores, Inc. or any of their
affiliates)
This certifies that Cede & Co. (the "Class B Certificateholder") is the
registered owner of a fractional undivided interest in certain assets of a trust
(the "Trust") created pursuant to the Master Pooling and Servicing Agreement,
dated as of October 4, 1994 (as amended and supplemented, the "Agreement"), as
supplemented by the Series 2000-[__] Supplement, dated as of [____________],
20[__] (as amended and supplemented, the "Series Supplement"), among First North
American National Bank, a national banking association, as Transferor and
Servicer, and Bankers Trust Company, a New York banking corporation, as trustee
(the "Trustee"). The corpus of the Trust consists of (i)
<PAGE>
receivables (the "Receivables") created from time to time in a portfolio of
consumer revolving credit card accounts identified under the Agreement (the
"Accounts"), (ii) all monies due or to become due in payment of the Receivables,
(iii) all proceeds of the Receivables and proceeds of credit insurance policies
relating to the Receivables, (iv) all monies on deposit in certain bank accounts
of the Trust (excluding investment earnings, unless otherwise specified in the
Agreement or any Supplement), [(v) the Transferor's rights under an interest
rate cap agreement for the exclusive benefit of the Class B Certificateholders
and the Transferor's rights under an interest rate cap agreement for the
exclusive benefit of the Class B Certificateholders,] (vi) any Enhancement with
respect to any Series (or class thereof) and (vii) all other assets and
interests constituting the Trust Property. Although a summary of certain
provisions of the Agreement and the Series Supplement is set forth below and on
the Summary of Terms and Conditions attached hereto and made a part hereof, this
Class B Certificate does not purport to summarize the Agreement and the Series
Supplement and reference is made to the Agreement and the Series Supplement for
information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and obligations of
the Trustee. A copy of the Agreement and the Series Supplement (without
schedules) may be requested from the Trustee by writing to the Trustee at the
Corporate Trust Office: 4 Albany Street, New York, New York 10006, Attention:
Corporate Trust and Agency Group/Structured Finance. To the extent not defined
herein, the capitalized terms used herein have the meanings ascribed to them in
the Agreement or the Series Supplement, as applicable.
This Class B Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement and the Series Supplement, to which
Agreement and Series Supplement, each as amended and supplemented from time to
time, the Class B Certificateholder by virtue of the acceptance hereof assents
and is bound.
It is the intent of the Transferor and the Investor Certificateholders
(and Certificate Owners) that, for Federal, state and local income and franchise
tax purposes only, the Investor Certificates will qualify as indebtedness of the
Transferor secured by the Receivables (unless otherwise specified in the related
Supplement). The Class B Certificateholder (and each Certificate Owner of a
Class B Certificate), by the acceptance of this Class B Certificate (or its
interest therein), is deemed to agree to treat this Class B Certificate for
Federal, state and local income and franchise tax purposes and any other tax
imposed on or measured by income as indebtedness of the Transferor.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Class B Certificate shall
not be entitled to any
<PAGE>
benefit under the Agreement or the Series Supplement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Transferor has caused this Class B Certificate
to be duly executed.
FIRST NORTH AMERICAN NATIONAL BANK
By: _______________________________
Name:
Title:
Dated: [___________], 20[__]
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates described in the within-mentioned
Agreement and Series Supplement.
BANKERS TRUST COMPANY,
as Trustee
By: __________________
Authorized Officer
<PAGE>
CIRCUIT CITY CREDIT CARD MASTER TRUST
CLASS B [FLOATING RATE] ASSET BACKED CERTIFICATE,
SERIES 2000-[__]
Summary of Terms and Conditions
This Class B Certificate is one of a Series of Certificates entitled
Circuit City Credit Card Master Trust, Series 2000-[__] Certificates (the
"Series 2000-[__] Certificates"), and one of a class thereof entitled Class B
[Floating Rate] Asset Backed Certificates, Series 2000-[__] (the "Class B
Certificates"), each of which represents a fractional undivided interest in
certain assets of the Trust. The Trust Property is allocated in part to the
Investor Certificateholders of all outstanding Series (the "Certificateholders'
Interest") and the interests, if any, of any Enhancement Providers, with the
remainder allocated to the Transferor. The aggregate interest represented by
the Class B Certificates at any time in the Principal Receivables in the Trust
shall not exceed an amount equal to the Class B Invested Amount at such time.
The Class B Initial Invested Amount is $[____________]. The Class B Invested
Amount on any date will be an amount equal to (a) the Class B Initial Invested
Amount, minus (b) the aggregate amount deposited into the Principal Funding
-----
Account prior to such date as Class B Monthly Principal (excluding interest and
other investment earnings on such amount), minus (c) the aggregate amount of
-----
principal payments made to the Class B Certificateholders prior to such date,
minus (d) the aggregate amount of Class B Investor Charge Offs for all prior
- -----
Distribution Dates, minus (e) the amount of Class B Subordinated Principal
-----
Collections allocated on all prior Distribution Dates pursuant to the Series
Supplement, minus (f) an amount equal to the amount by which the Class B
-----
Invested Amount has been reduced on all prior Distribution Dates pursuant to the
Series Supplement, plus (g) the sum of the amount of Excess Spread and Shared
----
Excess Finance Charge Collections allocated and available on all prior
Distribution Dates pursuant to the Series Supplement for the purpose of
reimbursing amounts deducted pursuant to the foregoing clauses (d), (e) and (f)
and, without duplication, the aggregate amount of the reductions of the Series
Adjustment Amounts allocated to the Class B Invested Amount prior to such date
pursuant to the Series Supplement; provided, however, that the Class B Invested
-------- -------
Amount may not be reduced below zero. In addition, classes of the Series 2000-
[__] Certificates entitled Class A [Floating Rate] Asset Backed Certificates,
Series 2000-[__] (the "Class A Certificates"), Collateralized Trust Obligations,
Series 2000-[__] (the " Collateralized Trust Obligations ") and Class D Asset
Backed Certificates, Series 2000-[__] (the "Class D Certificates") will be
issued. The Exchangeable Transferor Certificate which represents the Transferor
Interest, has been issued to First North American National Bank pursuant to the
Agreement.
<PAGE>
Subject to the terms and conditions of the Agreement, the Transferor
may from time to time direct the Trustee, on behalf of the Trust, to issue one
or more new Series of Investor Certificates, which will represent fractional
undivided interests in certain Trust Property.
Each Class B Certificate represents the right to receive payments of
(i) interest at the rate of [__]% per annum [above Certificate LIBOR (as
determined on the related Certificate LIBOR Determination Date)], accruing from
[____________], 20[__] payable on [____________], 20[__] and on the 15th day of
each month thereafter (or, if such 15th day is not a Business Day, the next
succeeding Business Day) (each, a "Distribution Date") and (ii) principal on the
[___________], 20[__] Distribution Date (and on each Distribution Date
thereafter, if the Class B Certificates are not paid in full on the
[____________], 20[__] Distribution Date) or, upon the occurrence of an Early
Amortization Event, on each Distribution Date relating to the Early Amortization
Period, in each case funded from a percentage of the payments received with
respect to the Receivables and certain other funds, all as more fully described
in the Agreement and the Series Supplement. Interest on the Class B
Certificates will be calculated on the basis of a 360-day year [consisting of
twelve 30-day months]and [the actual number of days in the relevant Interest
Period].
The Class B Certificates are subordinated to the Class A Certificates
to the extent set forth in the Series Supplement. The Collateralized Trust
Obligations and the Class D Certificates are subordinated to the Class A
Certificates and the Class B Certificates to the extent set forth in the Series
Supplement.
On each Distribution Date, the Paying Agent shall distribute to each
Class B Certificateholder of record on the last day of the preceding calendar
month (each a "Record Date") such Class B Certificateholder's pro rata share of
such amounts (including amounts on deposit in the Principal Funding Account) as
are payable to the Class B Certificateholders pursuant to the Agreement and the
Series Supplement. Distributions with respect to this Class B Certificate will
be made by the Paying Agent by check mailed to the address of the Class B
Certificateholder of record appearing in the Certificate Register without the
presentation or surrender of this Class B Certificate or the making of any
notation thereon (except for the final distribution in respect of this Class B
Certificate), except that with respect to Class B Certificates registered in the
name of Cede & Co., the nominee for The Depository Trust Company, distributions
will be made in the form of immediately available funds. Final payment of this
Class B Certificate will be made only upon presentation and surrender of this
Class B Certificate at the office or agency specified in the notice of final
distribution delivered by the Trustee in accordance with the Agreement and the
Series Supplement.
<PAGE>
On any Distribution Date occurring on or after the day on which the
Invested Amount is reduced to an amount less than or equal to 5% of the Initial
Invested Amount, the Class B Certificates are subject to retransfer to the
Transferor. The retransfer price will be equal to the Class B Invested Amount
plus accrued but unpaid interest thereon.
Subject to certain conditions in the Agreement, if the Invested Amount
is greater than zero on the [____________], 20[__] Distribution Date (the
"Stated Series Termination Date"), the Trustee shall sell or cause to be sold an
amount of Receivables up to 110% of the Invested Amount at the close of business
on such date, but not more than the total amount of Receivables allocable to the
Series 2000-[__] Certificates, and apply the proceeds of such sale as provided
in the Agreement and the Series Supplement.
This Class B Certificate does not represent a recourse obligation of,
or an interest in, the Transferor, the Servicer, Circuit City Stores, Inc. or
any of their affiliates and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency or instrumentality. This
Class B Certificate is limited in right of payment to certain Collections with
respect to the Receivables (and certain other amounts), all as more specifically
set forth hereinabove and in the Agreement and the Series Supplement.
The Agreement and any Supplement may be amended from time to time by
the Servicer, the Transferor and the Trustee, without the consent of any of the
Investor Certificateholders, to cure any ambiguity, to correct or supplement any
provisions therein which may be inconsistent with any other provisions therein
or to add other identifying code numbers to the definition of Account or to add
any other provisions with respect to matters or questions raised under the
Agreement which shall not be inconsistent with the provisions of the Agreement;
provided, however, that such action shall not adversely affect in any material
- -------- -------
respect the interests of any of the Investor Certificateholders. In addition,
the Agreement and any Supplement may be amended from time to time by the
Servicer, the Transferor and the Trustee, without the consent of any of the
Investor Certificateholders, to add to or change any of the provisions of the
Agreement to enable Bearer Certificates to be issued in conformity with the
Bearer Rules, to provide that Bearer Certificates may be registrable as to
principal, to change or eliminate any restrictions on the payment of principal
(or premium, if any) or any interest on Bearer Certificates to comply with the
Bearer Rules, to permit Bearer Certificates to be issued in exchange for
Registered Certificates (if then permitted by the Bearer Rules), to permit
Bearer Certificates to be issued in exchange for Bearer Certificates of other
authorized denominations or to permit the issuance of Investor Certificates in
uncertificated form, provided any such action shall not adversely affect the
interest of the Holders of Bearer
<PAGE>
Certificates of any Series or any related Coupons in any material respect unless
such amendment is necessary to comply with the Bearer Rules.
The Agreement and any Supplement may also be amended from time to time
by the Servicer, the Transferor and the Trustee, without the consent of any of
the Investor Certificateholders, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Agreement, or
of modifying in any manner the rights of the Holders of Investor Certificates;
provided, however, that (i) the Servicer shall have provided an Opinion of
Counsel to the Trustee to the effect that such amendment will not materially and
adversely affect the interests of the Investor Certificateholders of any
outstanding Series, which Opinion of Counsel may rely solely on the rating
confirmation referred to in clause (iii) below (or 100% of the class of
Certificateholders so affected have consented), (ii) such amendment shall not,
as evidenced by an Opinion of Counsel, cause any outstanding Series as to which
an opinion that it was debt was given on its Closing Date to fail to qualify as
debt for Federal income tax purposes, cause the Trust to be characterized for
Federal income tax purposes as an association taxable as a corporation or
otherwise have any material adverse impact on the Federal income taxation
characterization of any outstanding Series of Investor Certificates or the
Federal income taxation of any Investor Certificateholder or any Certificate
Owner and (iii) the Rating Agencies shall confirm that such amendment shall not
cause a reduction or withdrawal of the rating of any outstanding Series of
Certificates; and, provided further, that such amendment shall not reduce in any
manner the amount of, or delay the timing of, or change the priority of,
distributions which are required to be made on any Investor Certificate of such
Series without the consent of the related Investor Certificateholder, change the
definition of or the manner of calculating the interest of any Investor
Certificateholder of such Series without the consent of the related Investor
Certificateholder or reduce the required percentage for consents to amendments
pursuant to the following paragraph without the consent of each affected
Investor Certificateholder.
The Agreement and any Supplement may also be amended from time to time
by the Servicer, the Transferor and the Trustee with the consent of the Holders
of Investor Certificates evidencing undivided interests aggregating not less
than 66-2/3% of the Invested Amount of all Series adversely affected, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of the Agreement or of modifying in any manner the rights of
the Investor Certificateholders of any Series then issued and outstanding;
provided, however, that no such amendment shall (i) reduce in any manner the
- -------- -------
amount of, or delay the timing of, distributions which are required to be made
on any Investor Certificate of such Series without the consent of the related
Investor
<PAGE>
Certificateholders, (ii) change the definition of or the manner of calculating
the Invested Amount, the Invested Percentage, the applicable available amount
under any Enhancement or the Investor Default Amount of such Series without the
consent of the related Investor Certificateholders, or (iii) reduce the
aforesaid percentage required to consent to any such amendment, without the
consent of the related Investor Certificateholders. Any amendment pursuant to
this paragraph shall require that each Rating Agency rating the affected Series
confirm that such amendment will not cause a reduction or withdrawal of the
rating of any outstanding Series of Certificates.
The Class B Certificates are issuable only in minimum denominations of
$1,000 and integral multiples of $1,000. The transfer of this Class B
Certificate shall be registered in the Certificate Register upon surrender of
this Class B Certificate for registration of transfer at any office or agency
maintained by the Transfer Agent and Registrar, and thereupon one or more new
Class B Certificates in authorized denominations representing like aggregate
undivided interests in the Trust will be issued to the designated transferee or
transferees.
As provided in the Agreement and subject to certain limitations
therein set forth, Class B Certificates are exchangeable for new Class B
Certificates in authorized denominations of like aggregate undivided interests
in the Trust as requested by the Class B Certificateholder surrendering such
Class B Certificates. No service charge may be imposed for any transfer or
exchange but the Transfer Agent and Registrar and the Trustee may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith.
The Trustee, the Paying Agent and the Transfer Agent and Registrar and
any agent of any of them may treat the person in whose name this Class B
Certificate is registered as the owner hereof for all purposes, and neither the
Trustee, the Paying Agent, the Transfer Agent and Registrar, nor any agent of
any of them, shall be affected by notice to the contrary.
THE AGREEMENT AND THIS CLASS B CERTIFICATE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES UNDER THE AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
<PAGE>
ASSIGNMENT
Social Security or other identifying number of assignee
____________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _________________________________________
(name and address of assignee)
the within certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer said
certificate on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: ______________________________*
Signature Guaranteed:
______________________________
______________________
(*) NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Certificate in
every particular, without alteration, enlargement or any change whatsoever.
<PAGE>
Exhibit 5.1 - Opinion of McGuire, Woods, Battle & Boothe LLP -
Validity of the Securities
February 11, 2000
First North American National Bank
225 Chastain Meadows Court
Kennesaw, Georgia 30144
Circuit City Credit Card Master Trust
Asset Backed Securities
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to First North American National
Bank, a national banking association ("FNANB"), and the Circuit City Credit Card
Master Trust (the "Trust") in connection with the filing with the Securities and
Exchange Commission of a Registration Statement on Form S-3 and Amendment No. 1
thereto (together, the "Registration Statement") registering Asset Backed
Securities representing undivided interests in certain assets of the Trust (the
"Securities"). The Securities of a particular series will be issued pursuant to
the Master Pooling and Servicing Agreement dated as of October 4, 1994, as
amended (the "Pooling and Servicing Agreement"), between FNANB and Bankers Trust
Company, as trustee (the "Trustee"), filed as Exhibit 4.1 to the Registration
Statement, and a related Series Supplement to the Pooling and Servicing
Agreement (a "Series Supplement") between FNANB and the Trustee, the form of
which is filed as Exhibit 4.2 to the Registration Statement.
In connection with our engagement, we have made such legal and
factual examinations and inquiries and have examined such corporate records,
certificates and other documents as we have deemed necessary or advisable for
purposes of this opinion.
We express no opinion as to the laws of any jurisdiction other
than the laws of the Commonwealth of Virginia, the State of New York and the
laws of the United States of America.
Based upon and subject to the foregoing, we are of the opinion
that, when the Securities of a particular series have been duly authorized by
FNANB, duly executed and authenticated in accordance with the terms of the
Pooling and Servicing Agreement and the related Series Supplement and delivered
and sold as contemplated by the Registration Statement, such Securities will be
legally issued, fully paid and non-assessable.
<PAGE>
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference to McGuire, Woods, Battle &
Boothe LLP under the caption "Legal Matters" in the prospectus included in the
Registration Statement. We do not admit by giving this consent that we are in
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended.
Very truly yours,
/s/ McGuire, Woods, Battle & Boothe LLP
<PAGE>
Exhibit 8.1 - Opinion of McGuire, Woods, Battle & Boothe LLP -
Tax Matters
February 11, 2000
First North American National Bank
225 Chastain Meadows Court
Kennesaw, Georgia 30144
Circuit City Credit Card Master Trust
Asset Backed Securities
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as special tax counsel to First North American
National Bank, a national banking association ("FNANB"), and the Circuit City
Credit Card Master Trust (the "Trust") in connection with the filing with the
Securities and Exchange Commission of a Registration Statement on Form S-3 and
Amendment No. 1 thereto (together, the "Registration Statement") registering
Asset Backed Securities representing undivided interests in certain assets of
the Trust (the "Securities"). The Securities of a particular series will be
issued pursuant to the Master Pooling and Servicing Agreement dated as of
October 4, 1994, as amended (the "Pooling and Servicing Agreement"), between
FNANB and Bankers Trust Company, as trustee (the "Trustee"), filed as Exhibit
4.1 to the Registration Statement, and a related Series Supplement to the
Pooling and Servicing Agreement (a "Series Supplement") between FNANB and the
Trustee, the form of which is filed as Exhibit 4.2 to the Registration
Statement.
In connection with our engagement, we have examined (i) the
Registration Statement, including the form of prospectus included therein (the
"Prospectus"), (ii) the Pooling and Servicing Agreement, (iii) the form of
Series Supplement and (iv) such other documents as we have deemed necessary or
advisable for purposes of this opinion.
The opinion expressed herein is based on the Internal Revenue
Code of 1986, as amended, administrative rulings, judicial decisions, proposed,
temporary and final Treasury regulations and other applicable authorities. The
statutory provisions, regulations and interpretations upon which such opinion is
based are subject to change, and such changes could apply retroactively. In
addition, there can be no assurance that positions contrary to those stated in
our opinion will not be asserted by the Internal Revenue Service.
<PAGE>
Based upon and subject to the foregoing, we hereby confirm
that the statements set forth under the caption "Material Federal Income Tax
Consequences" in the Prospectus, insofar as such statements constitute matters
of law or legal conclusions with respect thereto and except to the extent
qualified therein, constitute our opinion as to the material federal income tax
consequences of the purchase, ownership and disposition of the Securities, and
we expressly adopt them as such.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference to McGuire, Woods, Battle &
Boothe LLP under the caption "Material Federal Income Tax Consequences" in the
Prospectus. We do not admit by giving this consent that we are in the category
of persons whose consent is required under Section 7 of the Securities Act of
1933, as amended.
Very truly yours,
/s/ McGuire, Woods, Battle & Boothe LLP
