As filed with the Securities and Exchange Commission on January 3, 2000
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
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)
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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
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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. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE MAXIMUM AGGREGATE AMOUNT OF
BEING REGISTERED REGISTERED PER SECURITY* OFFERING PRICE* REGISTRATION FEE
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<S> <C>
Asset Backed Securities $1,000,000 100% $1,000,000 $264
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* Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act.
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The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
SUBJECT TO COMPLETION, DATED JANUARY [__], 2000
PROSPECTUS SUPPLEMENT
- ---------------------
(to prospectus dated January [__], 2000)
- ----------------------------------------
Circuit City Credit Card Master Trust
Asset Backed Securities
First North American National Bank
Transferor and Servicer
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$[_____] Class A [Fixed] [Floating] Rate Asset Backed Certificates, Series 2000-[__]
$[_____] Class B [Fixed] [Floating] Rate Asset Backed Certificates, Series 2000-[__]
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Class A Certificates Class B Certificates
The offered certificates --------------------- ---------------------
are highly structured. Principal Amount $[____________] $[____________]
Before you purchase the
offered certificates, Interest Rate [______]% [Plus [______]% [Plus
please consider One-Month LIBOR] One-Month LIBOR]
carefully the risk Per Annum Per Annum
factors beginning on
page S-7 of this Distribution Dates Monthly Beginning Monthly Beginning
prospectus supplement. (Interest) [____________], 2000 [____________], 2000
The offered certificates Expected Final [____________], [____________],
are not deposits, and Distribution Date 20[__] 20[__]
neither the offered
certificates nor the Stated Series [____________], [____________],
accounts or the Termination Date 20[__] 20[__]
receivables are insured
or guaranteed by the Price to Public Per
Federal Deposit Certificate [____]% [____]%
Insurance Corporation or
any other governmental
agency. Underwriting
Discount Per
The offered certificates Certificate [____]% [____]%
represent interests in
the trust only and do
not represent interests
in or obligations of Proceeds to FNANB
First North American Per Certificate [____]% [____]%
National Bank, Circuit
City Stores, Inc. or any
of their affiliates.
The total price to the public is $[__________], and the total
This prospectus amount of the underwriting discount is $[__________]. The total
supplement may be used amount of proceeds before deduction of estimated expenses of
to offer and sell the $[__________] is $[__________].
offered certificates The class A certificates and the class B certificates, which are
only if accompanied by referred to in this prospectus supplement as the offered
the prospectus. 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, which are referred to in
this prospectus supplement as the CTOs, and $[__________]
of class D certificates.
</TABLE>
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.
<PAGE>
Credit Enhancement:
o The class B certificates, the CTOs and the
class D certificates will be subordinated to
the class A certificates and will provide
credit enhancement for the class A
certificates.
o The CTOs 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
January [__], 2000
<PAGE>
TABLE OF CONTENTS
OVERVIEW OF THE INFORMATION PROVIDED IN THIS PROSPECTUS
SUPPLEMENT AND THE ATTACHED PROSPECTUS........................... 1
OVERVIEW OF SERIES 2000-[__]...................................... 2
PRINCIPAL TERMS OF THE OFFERED CERTIFICATES....................... 3
SERIES 2000-[__] SUMMARY.......................................... 4
RISK FACTORS...................................................... 7
DELINQUENCY AND LOSS EXPERIENCE FOR THE CIRCUIT CITY PRIVATE
LABEL CREDIT CARD PORTFOLIO....................................... 18
Delinquency Experience.......................................... 18
Loss Experience................................................. 19
Delinquency and Loss Trends..................................... 19
CHARACTERISTICS OF THE TRUST RECEIVABLES.......................... 20
MATURITY CONSIDERATIONS........................................... 23
RECEIVABLE YIELD CONSIDERATIONS................................... 24
USE OF PROCEEDS................................................... 25
RECENT FINANCIAL INFORMATION FOR CIRCUIT CITY AND FNANB........... 25
DESCRIPTION OF THE OFFERED CERTIFICATES........................... 26
Book-Entry Registration......................................... 26
Interest Payments............................................... 26
[The Interest Rate Caps]........................................ 27
[The Interest Rate Cap Provider]................................ 28
Principal Payments.............................................. 28
Postponement of Accumulation Period............................. 30
Suspension of Accumulation Period............................... 30
The Principal Funding Account................................... 31
The Reserve Account............................................. 32
Credit Enhancement.............................................. 33
The Spread Account.............................................. 33
Allocation of Collections....................................... 34
Application of Collections...................................... 34
Allocation of Default Amount.................................... 38
Calculation of Series Adjustment Amount......................... 38
Calculation of Allocable Amounts................................ 38
Reallocation of Cash Flows; Investor Charge-Offs................ 39
Early Amortization Events....................................... 41
Servicing Compensation.......................................... 41
Amendments Relating to FASIT Election........................... 42
MATERIAL FEDERAL INCOME TAX CONSEQUENCES.......................... 43
Tax Treatment of the Certificates............................... 43
ERISA CONSIDERATIONS.............................................. 44
Class A Certificates............................................ 44
Class B Certificates............................................ 44
Consultation with Counsel....................................... 44
UNDERWRITING...................................................... 46
LEGAL MATTERS..................................................... 47
GLOSSARY OF DEFINED TERMS......................................... 48
ANNEX I: PREVIOUSLY ISSUED SERIES................................. 61
<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:
o the overview of series 2000-[__] section sets forth the basic
structure of series 2000-[__];
o the principal terms of the offered certificates section sets forth
the principal terms of the offered certificates;
o 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
o 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-48 of this prospectus supplement and the glossary beginning on page 51
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-[__]
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Transferor.............................. First North American National Bank, a national banking association,
which is 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
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<CAPTION>
Percentage of Total
Principal Amount -----------------------------------
---------------------------------- Principal Amount
-----------------------------------
<S> <C> <C>
Class A Certificates.................... $[____________] [____]%
Class B Certificates.................... $[____________] [____]%
CTOs.................................... $[____________] [____]%
Class D Certificates.................... $[____________] [____]%
Total................................. $[____________] 100%
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S-2
<PAGE>
PRINCIPAL TERMS OF THE OFFERED CERTIFICATES
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<CAPTION>
Class A Certificates Class B Certificates
---------------------------- ----------------------------------
<S> <C>
Anticipated Ratings
(Moody's/Standard & Poor's/Fitch)......... Aaa/AAA/AAA A2/A/A
Credit Enhancement........................ Subordination of Class B Subordination of CTOs and Class D
Certificates, CTOs and Class D Certificates
Certificates
Pricing Date............................ [____________], 20[__] [____________], 20[__]
Closing Date............................ [____________], 20[__] [____________], 20[__]
Minimum Denomination.................... $ 1,000 $ 1,000
Clearance and Settlement................ DTC/Cedelbank/Euroclear DTC/Cedelbank/Euroclear
Principal Amount........................ $[____________] $[____________]
Interest Rate........................... [______]% [Plus One-Month LIBOR] [______]% [Plus One-Month LIBOR]
Per Annum Per Annum
Distribution Dates (Interest)........... Monthly Beginning [____________], Monthly Beginning [____________],
2000 2000
Interest Accrual Method................. Actual/360 Actual/360
Interest Accrual Period................. From and Including Distribution From and Including Distribution
Date/Closing Date to but Excluding Date/Closing Date to but Excluding
Following Distribution Date Following Distribution Date
[Interest Rate Determination Date]...... [Two London Business Days Before [Two London Business Days Before
Each Interest Accrual Period] Each Interest Accrual Period]
Servicing Fee Percentage................ 2.00% Per Annum 2.00% Per Annum
Expected Final Distribution Date........ [____________], 20[__] [____________], 20[__]
Scheduled Commencement of Accumulation
Period................................. [____________], 20[__] [____________], 20[__]
Stated Series Termination Date.......... [____________], 20[__] [____________], 20[__]
CUSIP Number............................ [____________] [____________]
ISIN.................................... [____________] [____________]
Common Code............................. [____________] [____________]
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S-3
<PAGE>
SERIES 2000-[__] SUMMARY
Series Structure
The trust will issue the following securities as part of series 2000-[__]:
o the Class A certificates;
o the Class B certificates;
o the CTOs; and
o 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 CTOs
or the class D certificates for sale through this prospectus supplement or the
attached prospectus.
The trust has previously issued seven other series of certificates, six of which
are currently outstanding, and may issue additional series of certificates from
time to time without your consent. The other series issued by the trust may have
significantly different terms from the terms of the offered certificates. See
"Annex A -- Previously Issued Series" beginning on page S-61 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 in respect of the receivables 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 represents the right to receive interest payments on
each distribution date in an amount equal to [one twelfth of] the product of:
o the class A interest rate [for the preceding interest period];
o [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
o 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 represents the right to receive interest payments on
each distribution date in an amount equal to [one twelfth of] the product of:
o the class B interest rate [for the preceding interest period];
o [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
o 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 $[____________].
An interest period is a 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.
Principal Payments
The timing and amount of principal payments to be made on the offered
certificates 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.
S-4
<PAGE>
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 the commencement of the
early amortization period. On each distribution date with respect to the
revolving period, amounts collected in respect of principal receivables during
the preceding month and allocated to series 2000-[__] plus various other amounts
specified in the series 2000-[__] supplement:
o will be reallocated to the extent necessary to make required payments
with respect to the offered certificates;
o to the extent those amounts are not reallocated, will be treated as
shared principal collections and applied to make required payments
with respect to other series in group one; and
o to the extent those amounts are not applied to make required payments
with respect to other series in group one, will be deposited into an
excess funding account or paid to the holder of the exchangeable
transferor certificate.
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; provided,
however, that the commencement of the accumulation period may be postponed or
the accumulation period may be suspended under certain circumstances. On or
before each distribution date with respect to the accumulation period, amounts
collected in respect of principal receivables during the preceding month and
allocated to series 2000-[__] plus various other amounts specified in the series
2000-[__] supplement:
o will be deposited into a principal funding account up to a specified
amount;
o to the extent those 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
o to the extent those 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.
The amount on deposit in the principal funding account will be paid on the
expected final payment date:
o to the class A certificateholders until the class A certificates have
been paid in full;
o 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
o if the class B certificates have been paid in full, to the holders of
the CTOs until the CTOs 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 during the early amortization period will
be paid in that order of priority on that date.
We expect that the trust will make a single principal payment to the
certificateholders on the expected final distribution date. We cannot assure
you, however, that principal payments will not be made prior to the expected
final distribution date as a result of the commencement of the early
amortization period or that the amount on deposit in the principal funding
account will be sufficient to pay the offered certificates in full on the
expected final distribution 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, the early amortization period will begin on
that distribution date.
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 during the early amortization period, amounts
collected in respect of principal receivables during the preceding month and
allocated to series 2000-[__] plus various other amounts specified in the series
2000-[__] supplement:
o will be paid to the class A certificateholders until the class A
certificates have been paid in full; and
o 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.
See "Description of the Offered Certificates -- Early Amortization Events"
beginning on page S-41 of this prospectus supplement for a further discussion of
the early amortization events applicable to series 2000-[__].
S-5
<PAGE>
Allocation of Collections and Other Items
The offered certificates:
o will be allocated a varying percentage of the amounts collected in
respect of the receivables during each month; ^ will be allocated a
varying percentage of the receivables, if any, charged off as
uncollectible during each month; and
o will be allocated a varying percentage of any deficiency in trust
assets attributable to downward adjustments made in the amount of the
receivables for non-credit reasons.
Application of Collections
The amounts collected in respect of the receivables during each month will be
applied, to the extent allocated to or otherwise available to the offered
certificates:
o to pay interest and principal owed to the certificateholders on the
following distribution date;
o to pay a portion of the servicing fee owed to the servicer on the
following distribution date; and
o to reimburse any charge-offs and non-credit adjustments allocated to
the offered certificates for prior months.
The amounts allocated to the offered certificates that are not needed to make
these required payments will be shared with other series in group one or, to the
extent those amounts are not needed 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. In no case will
the certificateholders receive more than the interest and principal owed to them
under the terms described in this prospectus supplement.
Credit Enhancement
The class A certificates will benefit from the subordination of the class B
certificates, the CTOs and the class D certificates. The class B certificates
will benefit from the subordination of the CTOs and the class D certificates.
The issuance of subordinated interests is intended to protect you against
payment delays or losses with respect to your certificates. The more
subordinated interests are required to absorb losses on the receivables and
other shortfalls in cash flow before those losses and other shortfalls are
allocated to the more senior interests.
If the receivables experience higher losses than were assumed in determining the
size of the subordinated interests, you may experience payment delays or losses
with respect to your certificates.
Tax Status of the Offered Certificates and the Trust
McGuire, Woods, Battle & Boothe LLP, special tax counsel to FNANB, is of the
opinion that:
o the offered certificates will be treated as debt for federal income
tax purposes; and
o 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-43 of this
prospectus supplement and "Material Federal Income Tax Consequences" beginning
on page 42 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-44 of this prospectus
supplement and "ERISA Considerations" beginning on page 47 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-6
<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.
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If You Hold Class A Certificates, The Subordination Of The Class B The class B certificates, the CTOs and
Certificates, The CTOs And The Class D Certificates May Not Be Adequate the class D certificates will be subordinated
To Assure Payment Of Your Certificates to the class A certificates to the extent
necessary 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 interests:
o 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
o 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 CTOs 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-33 of this prospectus supplement for a
further discussion of the subordination
feature.
If you Hold Class B Certificates, The Subordination Of The CTOs and The Class The CTOs and the class D certificates will be
D Certificates May Not Be Adequate To Assure Payment Of Your Certificates subordinated to the class B certificates to
the extent necessary to fund various payments
with 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
interests:
o 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
</TABLE>
S-7
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
o 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 CTOs 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-33 of this prospectus supplement for a
further discussion of the subordination
feature.
If You Hold Class B Certificates, You Could Suffer Payment Delays Or Losses The class B certificates will be subordinated
As A Result Of The Subordination Of Your Certificates To The Class A to the class A certificates to the extent
Certificates necessary to fund various payments with
respect to the class A certificates.
If the trust does not have sufficient funds to
make all required payments on or in respect of
the class A certificates on any distribution
date and the class D certificates and the CTOs
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:
o 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
o 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
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-34 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, You May Be Unable To Control Whether The consent or approval of a specfied
The Holders Of The Series 2000-[__] Securities Have Consented To Or Approved percentage of the aggregate principal amount
Of Actions To Be Taken Under The Master Pooling And Servicing Agreement Or of the series 2000-[ ] securities will be
The Series 2000-[__] Supplement required in determining whether the holders
of the series 2000-[ ] securities have
consented to or approval 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
</TABLE>
S-8
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
B certificates, the CTOs 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
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 To The Trust Is Characterized As A Financing FNANB accounts for the transfer of the
Rather Than A Sale, The Trust's Interest In The Receivables May Be Subject receivables to the trust as a sale rather
To Various Nonconsensual Liens than the grant of a security interest. A court
could conclude, however, that FNANB still 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
nonconsenual 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 39 of the
attached prospectus for a further discussion
of the circumstances under which the interest
of the trust might be subject to prior liens.
The Appointment Of A Receiver Or Conservator For FNANB Could Adversely FNANB is chartered as a national banking
Affect The Timing Or Amount Of Payments On Your Certificates association and is subject to regulation
and supervision by the Office of the
Comptroller of the 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:
o require the trustee to go through an
administrative claims procedure to
establish its right to amounts collected
in respect of the receivables in the trust;
o request a stay of proceedings with respect
to the trust's claims against FNANB; or
o 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:
S-9
<PAGE>
o an early amortization event would occur
with respect to all outstanding series;
o new principal receivables would not be
transferred to the trust; and
o 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:
o to prevent the commencement of the early
amortization period with respect to all
outstanding series;
o to require the transfer of new principal
receivables to the trust; and
o 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:
o to prohibit the transfer of new principal
receivables to the trust; and
o 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 39 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 Consumer Protection Laws Could A number of federal and state consumer
Adversely Affect The Timing Or Amount Of Payments On Your protection laws regulate the creation and
Certificates enforcement of consumer loans such as the
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
S-10
<PAGE>
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 Declines, You May Receive Principal If the yield on the receivables declines, an
Payments Earlier Than The Expected Final Distribution early amortization payments earlier
Date And May Be Unable To Reinvest That Principal In A than the expected final distribution date. The
Comparable Investment Security following events, each of which is
event may occur and you may receive principal
discussed in more detail below, could
result in a decline in the yield on the
receivables:
o 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;
o a reduction in the periodic finance
charges or other fees and charges assessed
on the accounts required by law;
o 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;
o the deposit of funds into the excess funding
account for the trust; or
o 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-41 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
S-11
<PAGE>
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 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 with
respect 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-12
<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 Are Created Declines, You FNANB is required to transfer additional
May Receive Principal Payments Earlier Than The Expected Final receivables to the trust if there would
Distribution Date And May Be Unable To Reinvest That Principal otherwise be insufficient receivables to
In A Comparable Investment Security support all outstanding series. If the rate
at which new receivables are created 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:
o a decline in credit and non-credit sales at
Circuit City retail stores as a result
of increased competition from other retailers;
o 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;
o 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
o 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 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
S-13
<PAGE>
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 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 Receivables Declines, You If the rate at which principal payments are
May Receive Principal Payments Later Than The Expected made on the receivables declines during
Distribution Date the accumulation period, the trust
may be unable to accumulate principal in
the principal funding Final 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:
S-14
<PAGE>
o changes in account terms that reduce principal
payment requirements or make it less
costly for cardholders to defer principal
payments; or
o 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.
The Creation Or Designation Of Additional Accounts Could Adversely All accounts meeting the eligibility
Affect The Timing Or Amount Of Payments On Your Certificates requirements set forth in the master pooling
and servicing agreement will, subject to
various limitations imposed by the rating
agencies, be automatically included as
accounts upon their creation.
In addition:
o FNANB may from time to time in its discretion
designate additional eligible accounts to
be included as accounts; and
o 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.
S-15
<PAGE>
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
14 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 Adversely Affect The Timing The trust has previously issued seven
Or Amount Of Payments On Your Certificates other series, six 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.
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 Series" beginning on
page 12 of the attached prospectus for a further
discussion of the procedure for issuing a new
series.
The Issuance Of A Companion Series Could Adversely Affect The Timing The trust may issue a companion series
Or Amount Of Payments On Your Certificates with respect to series 2000-[__] without your
consent. The terms 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 19
of the attached prospectus for a further
discussion of the companion series feature.
S-16
<PAGE>
The Holders Of The Offered Certificates May Be Unable To Control The consent or approval of the holders of a
Actions Taken Under The Master Pooling And Servicing Agreement specified percentage of the aggregate principal
amount of all outstanding series is required
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.
The consent or approval of the holders of a
specified percentage of the aggregate
principal amount of the series 2000-[__]
securities will be required in determining
whether the holders of the series 2000-[__]
securities have consented to or 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 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.
S-17
</TABLE>
<PAGE>
DELINQUENCY AND LOSS EXPERIENCE FOR THE
CIRCUIT CITY PRIVATE LABEL CREDIT CARD PORTFOLIO
Delinquency Experience
The following table sets forth the delinquency for the Circuit City private
label credit card portfolio for each of the periods 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)
As of November 30,
------------------------------------------------------
1999 1998
-------------------------- --------------------------
Percentage Percentage
of Total of Total
Receivables Receivables Receivables Receivables
------------ ------------ ------------ ------------
Total Receivables
Outstanding $1,170,676 100.00% $1,183,386 100.00%
========= ====== ========= ======
Delinquent 31 to 60
Days $ 23,052 1.97% $ 24,488 2.07%
Delinquent 61 to 90
Days 14,644 1.25 15,214 1.29
Delinquent 91 or
More Days 26,379 2.25 26,754 2.28
--------- ------ --------- ------
Total............... $ 64,075 5.47% $ 66,457 5.62%
========= ====== ========= ======
<TABLE>
<CAPTION>
As of December 31,
-----------------------------------------------------------------------------------------------
1998 1997 1996
------------------------------ ------------------------------ -------------------------------
Percentage Percentage Percentage
of Total of Total of Total
Receivables Receivables Receivables Receivables Receivables Receivables
-------------- -------------- -------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Total Receivables
Outstanding $1,294,580 100.00% $1,103,270 100.00% $1,132,298 100.00%
--------- ------ --------- ------ --------- ------
Delinquent 31 to 60
Days $ 24,448 1.89% $ 26,347 2.39% $ 28,268 2.50%
Delinquent 61 to 90
Days 14,403 1.11 15,557 1.41 15,609 1.38
Delinquent 91 or
More Days 27,440 2.12 30,783 2.79 29,755 2.63
--------- ------ --------- ------ --------- ------
Total................... $ 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.
S-18
<PAGE>
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.
Loss Experience
Private Label Credit Card Portfolio
(Dollars in Thousands)
<TABLE>
<CAPTION>
Eleven Months Ended Twelve Months Ended
November 30, December 31,
-------------------------------- -------------------------------------------------
1999 1998 1998 1997 1996
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Average Principal Receivables
Outstanding......................... $1,147,423 $1,056,129 $1,069,258 $1,040,188 $999,707
Gross Principal Charge-Offs........... $ 74,375 $ 84,302 $ 91,785 $ 97,032 $ 77,389
Recoveries............................ $ 18,911 $ 16,217 $ 17,774 $ 14,846 $ 11,783
Net Principal Charge-Offs............. $ 55,461 $ 68,085 $ 74,011 $ 82,186 $ 65,606
Net Principal Charge-Offs as a
Percentage of Average Principal
Receivables Outstanding 5.27% 7.03% 6.92% 7.90% 6.56%
</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. The
percentages for the eleven months ended November 30, 1999 and November 30, 1998
are annualized and are not necessarily indicative of actual results for the
entire year.
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.
S-19
<PAGE>
CHARACTERISTICS OF THE TRUST RECEIVABLES
As of November 30, 1999:
o the receivables included $1,143,393,372.21 of Principal Receivables
and $27,282,604.67 of Finance Charge Receivables;
o the Accounts with debit balances had an average receivables balance of
$782.89;
o the average credit limit of the Accounts was $2,643.97;
o 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 29.6%; and
o 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.
Private Label Credit Card Purchases
<TABLE>
<CAPTION>
Eleven Months Ended Twelve Months Ended
November 30, December 31,
-------------------------------- -------------------------------------------------
1999 1998 1998 1997 1996
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Percentage of Total Retail Sales...... 14.18% 15.32% 15.23% 14.05% 14.92%
</TABLE>
The following tables set forth information with respect to the Accounts and
the receivables as of November 30, 1999. If there is a material adverse change
in the characteristics of the Accounts or the receivables between November 30,
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
of Total Percentage
Number of Number of of Total
Account Balance Range Accounts Accounts Receivables Receivables
------------------------------ -------------- -------------- ----------------------- --------------
<S> <C> <C> <C> <C>
Credit Balance........................ 35,734 0.62% $ (1,289,551.32) (0.11)%
Zero Balance.......................... 4,185,733 73.20 0.00 0.00
$0.01 to $1,500.00.................... 1,313,917 22.98 772,214,030.63 65.97
$1,500.01 to $3,000.00................ 162,984 2.85 323,686,673.03 27.65
$3,000.01 to $4,500.00................ 16,371 0.29 57,476,267.75 4.91
$4,500.01 to $10,000.00............... 3,430 0.06 18,296,787.03 1.56
Over $10,000.00....................... 7 0.00 89,347.51 0.01
--------- ------ ---------------- ------
TOTAL............................ 5,718,176 100.00% $ 1,170,473,554.63 100.00%
========= ====== ================ ======
</TABLE>
S-20
<PAGE>
Composition by Credit Limit
Trust Portfolio
<TABLE>
<CAPTION>
Percentage
of Total Percentage
Number of Number of of Total
Accounts Accounts Receivables Receivables
-------------- -------------- ----------------------------- --------------
<S> <C> <C> <C> <C>
Zero Limit............................ 1,164 0.02% $ 328.86 0.00%
$0.01 to $1,500.00.................... 2,322,971 40.62 428,837,895.49 36.64
$1,500.01 to $3,000.00................ 1,530,952 26.77 336,337,763.93 28.74
$3,000.01 to $4,500.00................ 806,600 14.11 126,241,549.08 10.79
$4,500.01 to $10,000.00............... 1,056,487 18.48 279,056,017.27 23.84
$10,000.01 to $15,000.00.............. 2 0.00 0.00 0.00
--------- ------ ---------------- ------
TOTAL............................ 5,718,176 100.00% $ 1,170,473,554.63 100.00%
========= ====== ================ ======
</TABLE>
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........................ 5,557,368 97.19% $ 1,017,593,170.93 86.94%
Delinquent 1 to 30 Days............... 100,692 1.76 88,963,938.58 7.60
Delinquent 31 to 60 Days.............. 23,175 0.41 23,008,931.40 1.97
Delinquent 61 to 90 Days.............. 13,624 0.24 14,613,441.06 1.25
Delinquent 91 to 120 Days............. 8,762 0.15 9,649,331.66 0.82
Delinquent 121 to 150 Days............ 7,764 0.14 8,783,936.23 0.75
Delinquent 151 or More Days........... 6,791 0.12 7,860,804.77 0.67
--------- ------ ---------------- ------
TOTAL............................ 5,718,176 100.00% $ 1,170,473,554.63 100.00%
========= ====== ================ ======
</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......................... 245,143 4.29% $ 203,878,585.34 17.42%
4 to 6 Months......................... 215,042 3.76 128,082,594.29 10.94
7 to 9 Months......................... 188,051 3.29 78,162,692.07 6.68
10 to 12 Months....................... 275,280 4.81 76,185,423.01 6.51
13 to 24 Months....................... 881,036 15.41 185,286,502.19 15.83
25 to 36 Months....................... 654,667 11.45 109,618,315.83 9.37
37 or More Months..................... 3,258,957 56.99 389,259,441.90 33.26
--------- ------ ---------------- ------
TOTAL............................ 5,718,175 100.00% $1,170,473,554.63 100.00%
========= ====== ================ ======
</TABLE>
S-21
<PAGE>
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.................................... 107,705 1.88% $ 19,553,261.18 1.67%
Alaska..................................... 1,462 0.03 167,567.67 0.01
Arizona.................................... 119,917 2.10 23,559,485.02 2.01
Arkansas................................... 22,914 0.40 5,803,172.50 0.50
California.................................1,337,210 23.39 244,410,246.25 20.88
Colorado................................... 61,484 1.08 15,375,438.63 1.31
Connecticut................................ 39,407 0.69 10,575,957.44 0.90
Delaware................................... 8,912 0.16 2,385,449.88 0.20
District of Columbia....................... 16,314 0.29 3,105,013.19 0.27
Florida.................................... 481,283 8.42 97,701,326.44 8.35
Georgia.................................... 224,277 3.92 44,641,172.93 3.81
Hawaii..................................... 7,940 0.14 2,186,038.77 0.19
Idaho...................................... 9,081 0.16 2,597,013.58 0.22
Illinois................................... 242,802 4.25 50,896,113.13 4.35
Indiana.................................... 69,596 1.22 19,050,531.63 1.63
Iowa....................................... 3,511 0.06 415,988.84 0.04
Kansas..................................... 27,826 0.49 6,393,382.86 0.55
Kentucky................................... 93,776 1.64 15,194,931.28 1.30
Louisiana.................................. 63,871 1.12 17,340,234.21 1.48
Maine...................................... 10,785 0.19 2,370,537.58 0.20
Maryland................................... 165,391 2.89 26,439,812.17 2.26
Massachusetts.............................. 120,669 2.11 25,302,967.53 2.16
Michigan................................... 99,125 1.73 28,635,126.56 2.45
Minnesota.................................. 63,497 1.11 10,344,948.37 0.88
Mississippi................................ 14,108 0.25 3,680,957.88 0.31
Missouri................................... 124,188 2.17 23,075,617.93 1.97
Montana.................................... 1,144 0.02 115,849.60 0.01
Nebraska................................... 12,291 0.21 2,339,420.06 0.20
Nevada..................................... 62,881 1.10 13,092,706.83 1.12
New Hampshire.............................. 27,229 0.48 5,286,449.43 0.45
New Jersey................................. 77,399 1.35 18,358,818.21 1.57
New Mexico................................. 14,607 0.26 3,580,396.29 0.31
New York................................... 123,372 2.16 36,804,813.01 3.14
North Carolina............................. 225,044 3.94 42,002,627.27 3.59
North Dakota............................... 609 0.01 54,737.44 0.00
Ohio....................................... 139,670 2.44 32,714,690.71 2.79
Oklahoma................................... 51,620 0.90 9,251,470.35 0.79
Oregon..................................... 38,735 0.68 9,101,417.49 0.78
Other...................................... 12,421 0.22 1,321,900.65 0.11
Pennsylvania............................... 180,844 3.16 44,569,572.54 3.81
Rhode Island............................... 26,226 0.46 6,182,111.43 0.53
South Carolina............................. 97,507 1.71 16,885,701.51 1.44
South Dakota............................... 620 0.01 65,404.24 0.01
Tennessee.................................. 150,200 2.63 27,506,134.62 2.35
Texas...................................... 527,466 9.22 119,639,288.96 10.22
Utah....................................... 36,361 0.64 6,939,107.28 0.59
Vermont.................................... 4,593 0.08 1,233,981.81 0.11
Virginia................................... 261,557 4.57 47,702,545.01 4.08
Washington................................. 52,268 0.91 13,519,039.63 1.16
West Virginia.............................. 17,934 0.31 3,495,087.96 0.30
Wisconsin.................................. 36,790 0.64 6,943,448.08 0.59
Wyoming.................................... 1,737 0.03 564,540.77 0.05
--------- ------ ----------------- ------
TOTAL.................................5,718,176 100.00% $1,170,473,554.63 100.00%
========= ====== ================= ======
</TABLE>
S-22
<PAGE>
Because the largest number of cardholders, based on billing address, whose
Accounts were included in the trust as of November 30, 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 the Offered Certificates --
Principal Payments -- Accumulation Period" beginning on page S-28 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 during the Early
Amortization Period in the following order of priority:
o to the Class A certificateholders until the Class A certificates have
been paid in full;
o 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
o 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 during the Early Amortization Period,
Available Principal Collections will be paid to the certificateholders in the
following order of priority:
o to the Class A certificateholders until the Class A certificates have
been paid in full; and
o 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.
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-30 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-41 of this prospectus supplement and
"Description of the Securities -- Early Amortization Events" beginning on
page 21 of the attached prospectus for a further discussion of the Early
Amortization Events applicable to series 2000-[__].
S-23
<PAGE>
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>
Eleven Months Ended Twelve Months Ended
November 30, December 31,
-------------------------------- -------------------------------------------------
1999 1998 1998 1997 1996
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Lowest Month.......................... 11.68% 10.75% 10.75% 10.48% 9.40%
Highest Month......................... 15.45% 13.50% 13.50% 12.25% 12.49%
Monthly Average....................... 13.15% 12.11% 12.05% 11.43% 10.64%
</TABLE>
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-
[__] 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>
Eleven Months Ended Twelve Months Ended
November 30, December 31,
-------------------------------- -------------------------------------------------
1999 1998 1998 1997 1996
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Average Total Receivables
Outstanding........................... $1,172,766 $1,081,401 $1,094,533 $1,064,228 $1,020,993
Finance Charges Billed................ $ 233,255 $ 231,446 $ 253,012 $ 243,916 $ 234,406
Yield from Finance Charges............ 21.70% 23.35% 23.12% 22.92% 22.96%
</TABLE>
The average total receivables outstanding for any period equals the average of
the principal balances outstanding at the beginning and end of each month during
that period. The percentages for the eleven months ended November 30, 1999 and
November 30, 1998 are annualized and are not necessarily indicative of actual
results for the entire year.
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-11 of this prospectus
supplement for a further discussion of the events that could result in a decline
in the yield on the receivables.
S-24
<PAGE>
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-25
<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
Cedelbank or Euroclear in Europe. See "Registration and Transfer of the
Securities" beginning on page 29 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:
o 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
o 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:
o the Class A interest rate for the preceding Interest Period;
o [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
o 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:
o the Class B interest rate for the preceding Interest Period;
o [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
o 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-26
<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 [(212) 250-6599] 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 termination of that cap, equal or exceed the sum of the Class A Invested
Amount plus the amount on deposit in the Principal Funding Account in respect of
the Class A certificates. 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:
o the amount by which the Class A interest rate exceeds [____]%;
o the notional amount of the Class A Interest Rate Cap for that
Distribution Date; and
o 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 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 termination of that cap, equal or exceed the sum of the Class B Invested
Amount plus the amount on deposit in the Principal Funding Account in respect of
the Class B certificates. 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:
S-27
<PAGE>
o the amount by which the Class B interest rate exceeds [____]%;
o the notional amount of the Class B Interest Rate Cap for that
Distribution Date; and
o 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.
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 November 30, 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 the commencement of the
Early Amortization Period. The certificateholders will not receive principal
payments during the Revolving Period.
On each Distribution Date with respect to the Revolving Period, the Available
Principal Collections for that Distribution Date will be applied in the
following order of priority:
o 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;
o 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
o 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
S-28
<PAGE>
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 with respect
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 with respect to the Accumulation Period,
the trustee will deposit into the Principal Funding Account an amount equal to
the least of:
o the Available Principal Collections for that Distribution Date;
o the Controlled Deposit Amount for that Distribution Date; and
o the sum of the Class A Invested Amount on that Distribution Date plus
the Class B Invested Amount on that Distribution Date plus the CTO
Invested Amount on that Distribution Date, in each case 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 with respect 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-30 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-30
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:
o to the Class A certificateholders until the Class A certificates have
been paid in full;
o 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
o if the Class B certificates have been paid in full, to the holders of
the CTOs until the CTOs 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 during 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-23 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 with respect 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:
S-29
<PAGE>
o 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;
o 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
o 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 during the Early Amortization Period, Available
Principal Collections for that Distribution Date will be paid to the Class A
certificateholders until the Class A certificates have been paid in full and, 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. See
"-- Early Amortization Events" beginning on page S-41 of this prospectus
supplement and "Description of the Securities -- Early Amortization Events"
beginning on page 21 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. The servicer 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:
o 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
o 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
The servicer may elect to suspend the commencement of the Accumulation Period
if it obtains a Qualified Maturity Agreement from a Qualified Institution. The
commencement of the Accumulation Period will be suspended upon delivery by the
servicer to the trustee of written notice of the suspension, a copy of the
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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. The servicer will pledge to the
trustee, for the benefit of the certificateholders, all right, title and
interest of the servicer in any Qualified Maturity Agreement.
If the servicer obtains a Qualified Maturity Agreement, it will cause the
provider of that agreement to deposit into the Principal Funding Account on 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 the servicer 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 commencement of 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:
o the servicer 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 from a Qualified
Institution;
o the servicer 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 the servicer is unable to
obtain a substitute Qualified Maturity Agreement;
o the servicer 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
o the servicer 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, the servicer 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 commencement of
the Early Amortization Period and the servicer does not obtain a substitute
Qualified Maturity Agreement, the Accumulation Period will begin on the latest
of:
o the date on which the Accumulation Period was scheduled to begin,
before giving effect to the suspension of the Accumulation Period;
o at the election of the servicer, 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
o 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 with respect 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-28 of this prospectus supplement for a
further discussion of the administration of the Principal Funding Account.
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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 with respect 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 with respect 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:
o 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;
o 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-35 of this prospectus supplement
until the amount on deposit in the Reserve Account equals the Required Reserve
Account Amount 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 with respect to the Accumulation Period and on the
first Distribution Date during the Early Amortization Period, the servicer will
withdraw from the Reserve Account and deposit into the Collection Account the
lesser of:
o the amount on deposit in the Reserve Account on that Distribution
Date; and
o 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:
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o the date on which the trust is terminated under the master pooling and
servicing agreement;
o the date on which the series 2000-[__] securities are paid in full;
o if the Accumulation Period has not commenced, the date on which an
Early Amortization Event occurs with respect to series 2000-[__]; and
o if the Accumulation Period has commenced, the earlier of the first
Distribution Date during 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 pay 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 pay 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-
39 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.
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-
35 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.
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<PAGE>
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:
o 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
o 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:
o 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
o 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.
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:
o 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;
o 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;
o 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-37 of this
prospectus supplement; and
o 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-35 of this prospectus supplement.
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<PAGE>
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:
o 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;
o 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
o 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-35 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:
o 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
o 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-35 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:
o 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
o 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-35 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:
o 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;
o if FNANB is no longer the servicer, the Class A Servicing Fee for that
Distribution Date plus any unpaid Class A Servicing Fee 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
o 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
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<PAGE>
Available Principal Collections for that Distribution Date as
described under "-- Application of Collections -- Payment of
Principal" beginning on page S-37 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-37 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:
o 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;
o 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
o 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-37 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-37 of this prospectus
supplement;
(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, or, if FNANB is no longer the servicer, the portion of
that amount remaining unpaid, plus any unpaid Class A Servicing Fees, Class
B Servicing Fees or CTO Servicing Fees, in each case 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-37 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-37 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;
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<PAGE>
(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-37 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-37 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;
(15) an amount equal to the aggregate of any other amounts then due to the
holders of the CTOs under the series 2000-[__] supplement will be applied
in accordance with the series 2000-[__] supplement; and
(16) 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 with respect 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 18 of the attached prospectus.
On or before each Distribution Date with respect 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:
o 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
o 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.
On each Distribution Date during 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 during the Early Amortization Period, any amount on
deposit in the Principal Funding Account on that Distribution Date in the
following order of priority:
o an amount equal to the Class A Monthly Principal for that Distribution
Date will be distributed to the Class A certificateholders;
o an amount equal to the Class B Monthly Principal for that Distribution
Date will be distributed to the Class B certificateholders;
o an amount equal to the CTO Monthly Principal for that Distribution
Date will be distributed to the holders of the CTOs;
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o an amount equal to the Class D Monthly Principal for that Distribution
Date will be distributed to the Class D certificateholders; and
o 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 19 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 20 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 Adjustment Amount. Any reduction in the Series Adjustment Amount will
be allocated in the following order of priority:
o to the Class A certificates to the extent of any reduction in the
Class A Invested Amount attributable to an unreduced Series Adjustment
Amount;
o to the Class B certificates to the extent of any reduction in the
Class B Invested Amount attributable to an unreduced Series Adjustment
Amount;
o to the CTOs to the extent of any reduction in the CTO Invested Amount
attributable to an unreduced Series Adjustment Amount; and
o 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
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<PAGE>
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:
o Excess Spread and Shared Excess Finance Charge Collections allocated
to series 2000-[__] on that Distribution Date and available for that
purpose; and
o 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 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:
o 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-35 of this prospectus supplement;
or
o 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-38 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:
o 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
S-39
<PAGE>
o 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:
o 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-35 of this prospectus
supplement; or
o 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-38 of this prospectus
supplement.
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:
o 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-35 of this
prospectus supplement; plus
o the amount available to be withdrawn from the Spread Account on that
Distribution Date in accordance with the series 2000-[ ] supplement;
plus
o 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-35 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.
S-40
<PAGE>
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 21 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 25% 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 25% 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 period not to exceed 90 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) or (4) 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 (3), (5), (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
S-41
<PAGE>
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:
o 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;
o 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
o 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-42
<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 42 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-43
<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:
o part of a class of securities registered under the Exchange Act; or
o 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 investment,
S-44
<PAGE>
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.
S-45
<PAGE>
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................................................................... $[____________]
===============
</TABLE>
<TABLE>
<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>
Public Offering Price [____]% [____]% $[___________]
Underwriting Discounts and Commissions [____]% [____]% [___________]
-----------------
Proceeds to FNANB [____]% [____]% $[___________]
=================
</TABLE>
FNANB estimates that additional offering expenses will equal $[____________].
S-46
<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 49 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:
o 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;
o 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;
o 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
o 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.
S-47
<PAGE>
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-30 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-30 of this prospectus supplement, and
ending on the earliest of:
o the close of business on the day preceding the commencement of the
Early Amortization Period;
o the date on which the series 2000-[__] securities are paid in full;
and
o 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:
o in the case of any Distribution Date with respect to the Revolving
Period, the Floating Allocation Percentage of all collections of
Principal Receivables received during the preceding Due Period; plus
o in the case of any Distribution Date with respect 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
o 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-34 of this
prospectus supplement; plus
o 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-35 of this
prospectus supplement; plus
o the amount of Shared Principal Collections allocated to series
2000-[__] on that Distribution Date; plus
o during the Early Amortization Period, amounts, if any, on deposit in
the Excess Funding Account allocated to series 2000-[__] on that
Distribution Date; minus
o 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:
o 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
preceding Due Period; plus
o 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.
S-48
<PAGE>
"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:
o the Series Adjustment Amount as of the last day of the preceding Due
Period; and
o 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.
"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:
o 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
o 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 in
accordance with the series 2000-[__] supplement; plus
o [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-27 of this prospectus supplement]; plus
o 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
o 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
o 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 end of the last day of the Revolving Period and the
denominator of which is equal to the greater of:
o the aggregate amount of Principal Receivables in the trust, other than
Principal Receivables that have been charged-off, as of the end of the
last day of the preceding Due Period 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; and
o the sum of the numerators used to calculate the corresponding
allocation percentages for all outstanding series.
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<PAGE>
"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 end of the last day of the preceding Due Period 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:
o the aggregate amount of Principal Receivables, other than Principal
Receivables that have been charged-off, in the trust as of the end 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; and
o 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 amount on deposit in the Principal Funding Account on that date
in respect of the Class A certificates 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-39 of this prospectus supplement.
"Class A Monthly Interest" means, for any Distribution Date, [one twelfth of]
the product of:
o the Class A interest rate for the preceding Interest Period;
o [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
o 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 during the Early
Amortization Period, the lesser of the Available Principal Collections for that
Distribution Date and the outstanding principal balance of the Class A
certificates as of that Distribution Date.
"Class A Required Amount" means, for any Distribution Date, the amount, if
any, by which:
o 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
o the Class A Available Funds for the preceding Due Period.
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<PAGE>
"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:
o the Series Adjustment Amount as of the last day of the preceding Due
Period; and
o 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:
o 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 in accordance with the series 2000-[__]
supplement; plus
o 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 in
accordance with the series 2000-[__] supplement; plus
o [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-27 of this prospectus supplement]; plus
o 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
o 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
o 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.
"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 end of the last day of the Revolving Period and the
denominator of which is equal to the greater of:
o the aggregate amount of Principal Receivables in the trust, other than
Principal Receivables that have been charged-off, as of the end of the
last day of the preceding Due Period 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; and
S-51
<PAGE>
o the sum of the numerators used to calculate the corresponding
allocation percentages for all outstanding 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 end 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:
o the aggregate amount of Principal Receivables, other than Principal
Receivables that have been charged-off, in the trust as of the end 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; and
o 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 amount on deposit in the Principal Funding Account on that date
in respect of the Class B certificates 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 make
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 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
reductions in the Class B Invested Amount made to fund the Class A Allocable
Amount plus, without duplication, 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-39 of this prospectus supplement.
"Class B Monthly Interest" means, for any Distribution Date, [one twelfth of]
the product of:
o the Class B interest rate for the preceding Interest Period;
o [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
o 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 during the Early
Amortization Period, the lesser of the Available Principal Collections for that
Distribution Date, less any portion of those Available Principal Collections
applied to Class A Monthly Principal on that Distribution Date, and the
outstanding principal balance of the Class B certificates as of that
Distribution Date.
"Class B Required Amount" means, for any Distribution Date:
S-52
<PAGE>
o 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 Dates exceeds the Class B
Available Funds for the preceding Due Period; plus
o 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:
o the Series Adjustment Amount as of the last day of the preceding Due
Period; and
o 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:
o 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 in accordance with the series 2000-[__]
supplement; plus
o 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 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 end of the last day of the Revolving Period and the
denominator of which is equal to the greater of:
o the aggregate amount of Principal Receivables in the trust, other than
Principal Receivables that have been charged-off, as of the end of the
last day of the preceding Due Period 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; and
o the sum of the numerators used to calculate the corresponding
allocation percentages for all outstanding series.
S-53
<PAGE>
"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 end 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:
o the aggregate amount of Principal Receivables, other than Principal
Receivables that have been charged-off, in the trust as of the end 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; and
o 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 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 make payments in respect of the
offered certificates or the CTOs on all prior Distribution Dates minus 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 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-40 of this prospectus supplement.
"Class D Monthly Interest" means, for any Distribution Date, [one twelfth of]
the product of:
o the Class D interest rate for the preceding Interest Period;
o [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
o 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, less 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 with respect
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-30 of this prospectus supplement the Controlled
S-54
<PAGE>
Accumulation Amount for any Distribution Date with respect 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 with respect 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.
"Covered Amount" means, for any Distribution Date with respect to the
Accumulation Period or the first Distribution Date during the Early Amortization
Period:
o 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 amount on deposit in the Principal Funding Account as of
the close of business on the preceding Distribution Date in respect of
the Class A certificates; plus
o 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 amount on deposit in the Principal Funding Account as of
the close of business on the preceding Distribution Date in respect of
the Class B certificates; plus
o 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 amount on deposit in the Principal Funding Account as of
the close of business on the preceding Distribution Date in respect of
the CTOs.
"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:
o the Series Adjustment Amount as of the last day of the preceding Due
Period; and
o 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:
o 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 in accordance with the series 2000-[__]
supplement; plus
o 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 in
accordance with the series 2000-[__] supplement; plus
o 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
S-55
<PAGE>
o 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
o 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.
"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 end of the last day of the Revolving Period and the denominator of which
is equal to the greater of:
o the aggregate amount of Principal Receivables in the trust, other than
Principal Receivables that have been charged-off, as of the end of the
last day of the preceding Due Period 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; and
o the sum of the numerators used to calculate the corresponding
allocation percentages for all outstanding 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 end 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:
o the aggregate amount of Principal Receivables, other than Principal
Receivables that have been charged-off, in the trust as of the end 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; and
o 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 amount on deposit in the Principal Funding Account on that date in
respect of the CTOs 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 make 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 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, without
duplication, 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
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 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-40 of this prospectus supplement.
"CTO Monthly Interest" means, for any Distribution Date, [one twelfth of] the
product of:
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<PAGE>
o the CTO interest rate for the preceding Interest Period;
o [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
o 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 during the Early
Amortization Period, the lesser of the Available Principal Collections for that
Distribution Date, less any portion of those Available Principal Collections
applied to Class A Monthly Principal or Class B Monthly Principal on that
Distribution Date, and the outstanding principal balance of the CTOs as of 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.
"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-41 of
this prospectus supplement or under "Description of the Securities -- Early
Amortization Events" beginning on page 21 of the attached prospectus.
"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:
o 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-34 of this prospectus
supplement; plus
o 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-34
of this prospectus supplement; plus
o 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-34
of this prospectus supplement; plus
o 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-34 of this prospectus supplement.
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<PAGE>
"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.]
"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.]
"PFA Allocation Percentage" means, for any Due Period:
o 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 the Class A
certificates 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;
o 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 the Class B
certificates 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
o 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 the CTOs 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:
S-58
<PAGE>
o 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 in accordance
with the series 2000- [__] supplement; plus
o the amount of Shared Excess Finance Charge Collections allocated to
series 2000-[__] for that Due Period; plus
o the net investment earnings, if any, on funds on deposit in the
Principal Funding Account received during that Due Period; plus
o 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; minus
o the portion of the Default Amount for that Due Period allocated to
series 2000-[__];
and the denominator of which is the Invested Amount as of the end of the last
day of that Due Period.
"Qualified Institution" means:
o a depository institution, which may be the trustee, organized under
the laws of the United States or any state or the District of Columbia
the deposits of 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
o a depository institution, which may be the trustee, otherwise
acceptable to each rating agency.
"Qualified Maturity Agreement" means a written commitment 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 plus all accrued but unpaid interest on that aggregate
outstanding principal balance 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.
"Required Reserve Account Amount" means, for any Distribution Date on or after
the Reserve Account Funding Date, an amount equal to [____]% of the sum of
the Invested Amount plus the amount on deposit in the Principal Funding Account,
in each case as of that date, or such other amount as may be designated by
FNANB; provided, however, that FNANB may not designate a lower amount unless:
o 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
o 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:
S-59
<PAGE>
<TABLE>
<CAPTION>
Average Excess Spread Percentage Required Spread Account Percentage
- ------------------------------------------------------- ---------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
> [___]% [___]%
- ------------------------------------------------------------------------------------------------------------------
> [___]% and [___]% [___]%
- ------------------------------------------------------------------------------------------------------------------
> [___]% and [___]% [___]%
- ------------------------------------------------------------------------------------------------------------------
> [___]% and [___]% [___]%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
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 with respect 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 20 of the attached prospectus.
"Series Minimum Aggregate Principal Receivables" means, with respect to series
2000-[__], the initial Invested Amount.
"Series Minimum Transferor Amount" means, with respect to series 2000-[__],
zero.
"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.
S-60
<PAGE>
ANNEX I:
PREVIOUSLY ISSUED SERIES
The following table sets forth the principal characteristics of the five
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>
<CAPTION>
Series 1994-2 (Group One)
1. Class A Certificates
<S> <C>
Initial Invested Amount................................ $308,000,000
Invested Amount as of November 30, 1999................ $0
Expected Invested Amount at End of Closing Date........ $0
Interest Rate.......................................... 8.00%
Controlled Accumulation Amount......................... $ 25,666,667
Commencement of Accumulation Period.................... October 31, 1998
Expected Final Distribution Date....................... November 1999 Distribution Date
Series Minimum Transferor Amount....................... Invested Amount/.92 - Invested Amount
Series Minimum Aggregate Principal Receivables......... Initial Invested Amount
Initial Collateral Indebtedness Amount................. $ 50,000,000
Initial Class D Invested Amount........................ $ 6,000,000
Enhancement............................................ Cash Collateral Account; Subordination of
Class B Certificates, Collateral Indebtedness
Interest and Class D Certificates
Servicing Fee Percentage............................... 2.00% Per Annum
Stated Series Termination Date......................... November 2003 Distribution Date
Issuance Date.......................................... November 17, 1994
2. Class B Certificates
Initial Invested Amount................................ $ 36,000,000
Invested Amount as of November 30, 1999................ $ 18,000,000
Expected Invested Amount at End of Closing Date........ $ 0
Interest Rate.......................................... 8.20%
Controlled Accumulation Amount......................... $ 18,000,000
Commencement of Accumulation Period.................... Following Payment of Class A Certificates
Expected Final Distribution Date....................... January 2000 Distribution Date
Enhancement............................................ Cash Collateral Account; Subordination of
Collateral Indebtedness Interest and Class D
Certificates
Servicing Fee Percentage............................... 2.00% Per Annum
Stated Series Termination Date......................... November 2003 Distribution Date
Issuance Date.......................................... November 17, 1994
</TABLE>
<TABLE>
<CAPTION>
Series 1995-1 (Group One)
1. Class A Certificates
<S> <C>
Initial Invested Amount................................ $216,000,000
Invested Amount as of November 30, 1999................ $162,000,000
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
Expected Final Distribution Date....................... September 2000 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
Stated Series Termination Date......................... August 2005 Distribution Date
Issuance Date.......................................... September 7, 1995
2. Class B Certificates
Initial Invested Amount................................ $ 30,000,000
Invested Amount as of November 30, 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
Expected Final Distribution Date....................... November 2000 Distribution Date
Enhancement............................................ Cash Collateral Account; Subordination of
Collateral Indebtedness Interest and Class D
Certificates
Servicing Fee Percentage............................... 2.00% Per Annum
Stated Series Termination Date......................... August 2005 Distribution Date
Issuance Date.......................................... September 7, 1995
</TABLE>
<TABLE>
<CAPTION>
Series 1996-1 (Group One)
1. Class A Certificates
<S> <C>
Initial Invested Amount................................ $162,000,000
Invested Amount as of November 30, 1999................ $162,000,000
Expected Invested Amount at End of Closing Date........ $162,000,000
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
Expected Final Distribution Date....................... November 2001 Distribution Date
Series Minimum Transferor Amount....................... Zero
Series Minimum Aggregate Principal Receivables......... Initial Invested Amount
Initial Collateral Indebtedness Amount................. $ 29,250,000
S-61
<PAGE>
Initial Class D Invested Amount........................ $ 11,250,000
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
Stated Series Termination Date......................... October 2006 Distribution Date
Issuance Date.......................................... November 27, 1996
2. Class B Certificates
Initial Invested Amount................................ $ 22,500,000
Invested Amount as of November 30, 1999................ $ 22,500,000
Expected Invested Amount at End of Closing Date........ $ 22,500,000
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-62
<PAGE>
SUBJECT TO COMPLETION, DATED JANUARY [__], 2000
PROSPECTUS
- ----------
Circuit City Credit Card Master Trust
Asset Backed Securities
First North American National Bank
Transferor and Servicer
<TABLE>
<S> <C>
The offered securities are The trust:
highly structured. Before
you purchase the o may periodically issue asset backed securities in one or
offered securities, more series, each of which may include one or more classes; and
please consider o will own the receivables created from time to time in a
carefully the risk portfolio of consumer revolving credit card accounts, all
factors described in the monies due or to become due in payment of the receivables and
attached prospectus the other property described in this prospectus and the
supplement. attached prospectus supplement.
The offered securities are The securities:
not deposits, and neither
the offered securities nor o will represent interests in the trust only and will be paid
the accounts or the only from the assets of the trust;
receivables are insured o offered through this prospectus and the attached prospectus
or guaranteed by the supplement, which are referred to in this prospectus as the
Federal Deposit offered securities, will be rated in one of the four highest
Insurance Corporation or rating categories by at least one nationally recognized
any other governmental statistical rating organization;
agency. o may benefit from one or more forms of credit enhancement; and
o will be issued as part of a designated series that may
include one or more classes of securities.
The offered securities
represent interests in the
trust only and do not The securityholders:
represent interests in
or obligations of First o will receive interest and principal payments from a varying
North American National percentage of the amounts collected in respect of the
Bank, Circuit City receivables.
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.
</TABLE>
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.
January [__], 2000
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.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<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..................................................... 2
DESCRIPTION OF THE CIRCUIT CITY
PRIVATE LABEL CREDIT CARD
PROGRAM................................................. 3
OVERVIEW OF THE ACCOUNTS AND THE RECEIVABLES............ 6
MATURITY CONSIDERATIONS................................. 8
USE OF PROCEEDS......................................... 9
DESCRIPTION OF THE SECURITIES...........................10
Overview of the Securities............................10
Interest Payments.....................................11
Principal Payments....................................11
Identification of the Receivables.....................12
Issuing New Series....................................12
Representations and Warranties........................13
Addition of Accounts..................................14
Removal of Accounts...................................15
Discount Option.......................................16
Collection Account....................................16
Funding Period........................................16
Allocation of Collections.............................17
Application of Collections............................17
Shared Excess Finance Charge Collections..............18
Shared Principal Collections..........................18
Excess Funding Account................................18
Companion Series......................................19
Allocation of Default Amount..........................19
Calculation of Series Adjustment Amount...............20
Investor Charge-Offs..................................20
Defeasance............................................21
Optional Repurchase...................................21
Series Termination....................................21
Early Amortization Events.............................21
Additional Remedies or Defaults.......................22
Indemnification.......................................22
The Servicer..........................................22
Servicer Covenants....................................23
Servicing Compensation................................23
Servicer Defaults.....................................24
Reports to Securityholders............................25
Evidence as to Compliance.............................26
Amendments............................................26
List of Securityholders...............................27
The Trustee...........................................28
Termination of the Trust..............................28
REGISTRATION AND TRANSFER OF THE SECURITIES.............29
CREDIT ENHANCEMENT......................................35
SECURITY RATINGS........................................38
MATERIAL LEGAL ASPECTS OF THE RECEIVABLES...............39
Transfer of Receivables...............................39
Matters Relating to Receivership and Conservatorship..39
Consumer Protection Laws..............................40
MATERIAL FEDERAL INCOME TAX CONSEQUENCES................42
ERISA CONSIDERATIONS....................................47
PLAN OF DISTRIBUTION....................................49
LEGAL MATTERS...........................................50
REPORTS TO SECURITYHOLDERS..............................50
WHERE YOU CAN FIND MORE
INFORMATION ABOUT THE TRUST
AND THE SECURITIES......................................50
INCORPORATION OF DOCUMENTS BY REFERENCE.................50
GLOSSARY OF DEFINED TERMS...............................51
</TABLE>
i
<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:
o information about the receivables;
o the timing and amount of interest and principal payments for each class of
securities;
o information about the credit enhancement, if any, for each class of
securities;
o the ratings, if any, assigned to each class of securities; and
o 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 51 of this prospectus and the glossary included in the attached prospectus
supplement, as applicable, contain the definitions of these capitalized terms.
1
<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:
o acquiring and holding the receivables and the other assets of the trust;
o obtaining one or more forms of credit enhancement for each series;
o issuing the securities of each series;
o 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;
o making payments on the securities; and
o 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.
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 November 30, 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.
2
<PAGE>
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.
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
- ---------------------------
(1) MasterCard(R) and VISA(R) are federally registered service marks of
MasterCard International Inc. and VISA U.S.A., Inc., respectively.
3
<PAGE>
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
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.
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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.
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. The majority of Total
System's common stock is owned by Synovus Financial, Inc. A minority portion of
Total System's common stock is publicly traded on the New York Stock Exchange.
Total System is a bankcard and bank data processing company. 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. Total System
is the second largest third-party bankcard processor behind First Data
Resources, Inc.
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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:
o Accounts designated by FNANB on the initial closing date and included in the
trust as of the initial closing date;
o Accounts automatically included in the trust upon their creation, which
Accounts are sometimes referred to in this prospectus and the attached
prospectus supplement as Automatic Additional Accounts; and
o 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:
o the Account must be in existence and owned by FNANB;
o the Account must be payable in United States dollars;
o the related credit card must not have been reported lost or stolen or have
been designated as fraudulent;
o 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;
o the receivables in the Account must not have been charged off as
uncollectible in accordance with the FNANB account guidelines;
o the receivables in the Account must not have been assigned, pledged or sold
other than under the master pooling and servicing agreement;
o 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
o 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 14 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.
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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 15 of this prospectus for a further discussion of
the circumstances under which FNANB may designate Removed Accounts.
The receivables included in the trust fall into one of the following two
categories:
o 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
o receivables representing amounts charged by cardholders for 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 16 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:
o the receivable must have been created under an Eligible Account;
o 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;
o 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;
o 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;
o 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;
o 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;
o the receivable must constitute chattel paper, an account or a general
intangible under and as defined in Article 9 of the UCC;
o 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;
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o 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;
o 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
o 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.
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
13 and page 14, respectively, of this prospectus for a further discussion of the
circumstances under which FNANB will be required to replace or pay for
ineligible receivables.
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:
o 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 with
respect to the Accumulation Period into a Principal Funding Account for that
series;
o 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
o 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:
o 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
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o 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 17 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 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.
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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 in respect of 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:
o will represent the right to receive a varying percentage of the amounts
collected in respect of the receivables during each Due Period;
o will be allocated a varying percentage of the receivables, if any, charged
off as uncollectible during each Due Period; and
o 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:
o 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;
o 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
o 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 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
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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 29 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:
o a Controlled Accumulation Period;
o a Rapid Accumulation Period;
o a Controlled Amortization Period;
o a Principal Amortization Period; or
o an Early Amortization Period.
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.
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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
21 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 8 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 perfect the trust's interest
in the receivables. See "Material Legal Aspects of the Receivables" beginning on
page 39 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
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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:
o a series supplement in form satisfactory to the trustee signed by FNANB and
specifying the terms of the new series;
o the credit enhancement, if any, applicable to the new series and the
related credit enhancement agreement;
o 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;
0 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
o 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:
o 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;
o 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 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
o 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
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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:
o 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;
o the master pooling and servicing agreement and the related series supplement
constitute legal, valid, binding and enforceable obligations of FNANB; and
o 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.
Addition of Accounts
Automatic Additional Accounts
All Eligible Accounts will be automatically included as Accounts upon their
creation and the receivables in those Accounts will be automatically transferred
to the trust; provided, however, that each Automatic Additional Account must be
of a type previously included in the trust and the number of Automatic
Additional Accounts that may be added during any Due Period is limited. 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.
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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:
o each new Account must be an Eligible Account at the time of its selection;
o 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; and
o 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:
o 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;
o 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;
o 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;
o the retransfer of the receivables in the Removed Accounts must not cause the
Transferor Amount to be less than the Minimum Transferor Amount; and
o 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.
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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.
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 in respect of 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:
o FNANB or an affiliate of FNANB is the servicer;
o no Servicer Default has occurred and is continuing; and
o 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.
If amounts collected in respect of 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 in respect of the receivables that
are allocated to the Transferor Interest to the holder of the Exchangeable
Transferor Certificate on each business day.
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
PreFunding Account and deposited into the Collection
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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
in respect of 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 in respect of the receivables during the preceding
Due Period as follows:
o 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;
o 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;
o 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;
o 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;
o 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
o 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
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specified in the related 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
in respect of 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, 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.
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
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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:
o an equal amount of funds on deposit in a Pre-Funding Account for the
Companion Series will be released to FNANB; or
o 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 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.
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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 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:
o 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
o 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:
o the interest payable on that series on that Distribution Date;
o the servicing fee payable to a successor servicer with respect to that
series;
o the Default Amount allocated to that series for the preceding Due Period;
o the Series Adjustment Amount calculated for that series as of the last day
of the preceding Due Period; and
o 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
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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:
o 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;
o 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;
o 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
o 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:
o FNANB becomes insolvent or a receiver or conservator is appointed for FNANB;
o FNANB is unable to transfer receivables to the trust as required by the
master pooling and servicing agreement; or
o the trust becomes an investment company within the meaning of the Investment
Company Act.
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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 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:
o any action taken by the trustee at the request of the securityholders;
o any taxes required to be paid by the trust, the trustee or the
securityholders;
o as to the trustee, any wrongful actions taken by or omissions of the
trustee;
o any fraud, negligence or willful misconduct by the trustee; or
o 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
procedures from time to time.
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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:
o the servicer will fulfill in all material respects its obligations with
respect to each receivable and the related Account;
o the servicer will maintain in effect all material qualifications required to
service properly each receivable and the related Account;
o 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;
o 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;
o the servicer will do nothing to impair the rights of the securityholders or
any provider of credit enhancement in a receivable;
o the servicer will not take any action that causes a receivable to be
evidenced by an instrument under the UCC; and
o 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:
o has a material adverse effect on the interests of the securityholders in a
receivable; and
o 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.
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
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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:
o 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;
o 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;
o the servicer delegates its duties under the master pooling and servicing
agreement, except as specifically permitted under the master pooling and
servicing agreement;
o 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
o various events of bankruptcy, insolvency or receivership occur with respect
to the servicer;
provided, however, that a Servicer Default will not result from:
o a failure to make any payment, transfer or deposit which continues for a
period of 10 business days after the applicable grace period; or
o 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;
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
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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:
o the aggregate Invested Amount of all outstanding series; minus
o the aggregate principal amount on deposit in the Excess Funding Account and
any Principal Funding Account for any series; plus
o all accrued but unpaid interest on the securities of all outstanding series;
plus
o 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:
o 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;
o the Invested Percentage for that Due Period;
o the receivables in the trust broken out by delinquency status;
o the portion of the Default Amount allocated to each series for that
Distribution Date;
o the Series Adjustment Amount calculated for each series as of the last day
of the preceding Due Period;
o the amount of any Investor Charge-Offs and any reimbursements of Investor
Charge-Offs for that Distribution Date;
o the amount of the servicing fee allocable to each series for that
Distribution Date;
o the aggregate amount of receivables in the trust at the close of business on
the last day of the immediately preceding Due Period;
o the Invested Amount of each series as of the close of business on the last
day of the immediately preceding Due Period;
o whether an Early Amortization Event has occurred; and
o 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:
o 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
o 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:
o 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
o 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:
o cure any ambiguity;
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o 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
o add additional code numbers to those used to identity the Accounts; or
o 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:
o 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;
o 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
o 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:
o 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;
o 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
o 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:
o 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;
o 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
o 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 Cedelbank 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.
Cedelbank
Cedelbank, societe anonyme, is incorporated under the laws of Luxembourg as a
professional depository. Cedelbank holds securities for organizations
participating in Cedelbank's book-entry system and facilitates the clearance and
settlement of securities transactions between Cedelbank customers through
electronic book-entry changes in accounts of Cedelbank customers, eliminating
the need for physical movement of securities. Transactions may be settled in
Cedelbank in any of 36 currencies, including U.S. dollars. Cedelbank provides to
its customers, among other things, services for safekeeping, administration,
clearance and settlement of internationally traded securities and securities
lending and borrowing. Cedelbank deals with domestic securities markets in over
30 countries through established depository and custodial relationships.
Cedelbank 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 Cedelbank and Euroclear. Cedelbank
currently accepts over 110,000 securities issues on its books. As a professional
depository, Cedelbank is subject to regulation by the Luxembourg Commission for
the Supervision of the Financial Sector, which supervises Luxembourg banks.
Cedelbank customers are recognized financial institutions around the world,
including underwriters, securities brokers and dealers, banks, trust companies,
clearing corporations and other organizations and may include the underwriters
of any series of securities offered through this prospectus. Cedelbank customers
in the U.S. are limited to securities brokers, dealers and banks. Cedelbank has
approximately 2,000 customers located in over 80 countries, including all major
European countries, Canada and the United States. Indirect access to Cedelbank
is also available to others, including banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
Cedelbank customer, either directly or indirectly.
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
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lending and borrowing and interfaces with domestic markets in several countries
similar to the arrangements for crossmarket 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. Cedelbank and
Euroclear will hold omnibus positions on behalf of Cedelbank customers and
Euroclear participants, respectively, through customers' securities accounts in
Cedelbank'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 Cedelbank 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 Cedelbank 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 settlement applicable to DTC. Cedelbank customers or Euroclear
participants may not deliver instructions directly to the Cedelbank or Euroclear
depositaries.
Because of time-zone differences, credits of securities in Cedelbank 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
Cedelbank customer or Euroclear participant on that business day. Cash received
in Cedelbank or the Euroclear system as a result of sales of securities by or
through a Cedelbank 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 Cedelbank 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
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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 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 Cedelbank or Euroclear will be
credited to the cash accounts of Cedelbank 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 34 of this prospectus and "Material Federal Income Tax
Consequences" beginning on page 42 of this prospectus. Cedelbank 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 Cedelbank 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, Cedelbank 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.
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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:
o 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;
o FNANB, at its option, advises the trustee in writing that it elects to
terminate the book-entry system through DTC; or
o 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.
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 Cedelbank 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.
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Trading Between Cedelbank Customers and/or Euroclear Participants. Secondary
market trading between investors holding securities through Cedelbank 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 Cedelbank customers or Euroclear partcipants will be
settled using the procedures applicable to conventional eurobonds in same-day
funds.
Trading Between DTC Seller and Cedelbank or Euroclear Purchaser. When
securities are to be transferred from the account of a DTC participant to the
account of a Cedelbank customer or Euroclear participant, the purchaser will
send instructions to Cedelbank or Euroclear through a Cedelbank customer or
Euroclear participant, as applicable, at least one business day prior to
settlement. Cedelbank 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 Cedelbank 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
Cedelbank or Euroclear cash debit will be valued as of the actual settlement
date.
Cedelbank 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 Cedelbank or Euroclear. Under this approach,
they may take on credit exposure to Cedelbank or Euroclear until the securities
are credited to their accounts one day later.
As an alternative, if Cedelbank or Euroclear has extended a line of credit to
them, Cedelbank customers or Euroclear participants can elect not to preposition
funds and allow that credit line to be drawn upon to finance settlement. Under
this procedure, Cedelbank 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 the amount of these overdraft charges, although
this result will depend on the cost of funds for the related Cedelbank 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 Cedelbank 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 Cedelbank or Euroclear Seller and DTC Purchaser. Due to time
zone differences in their favor, Cedelbank 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 Cedelbank
or Euroclear through a Cedelbank customer or Euroclear participant, as
applicable, at least one business day prior to settlement. Cedelbank 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 Cedelbank customer or Euroclear participant the following day, and the
receipt of the cash proceeds in the Cedelbank 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 Cedelbank 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 Cedelbank customer's or
Euroclear participant's account will be valued as of the actual settlement date.
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Finally, day traders that use Cedelbank or Euroclear and that purchase
securities from DTC participants for delivery to Cedelbank 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:
o borrowing through Cedelbank or Euroclear for one day, until the purchase
side of the day trade is reflected in their Cedelbank or Euroclear accounts,
in accordance with the clearing system's customary procedures;
o 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 Cedelbank or Euroclear accounts in order to settle
the sale side of the trade; or
o 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 Cedelbank customer or Euroclear
participant.
Material U.S. Federal Income Tax Documentation Requirements
A Security Owner holding securities through Cedelbank 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:
o 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
o the Security Owner takes one of the following steps to obtain an exemption
or reduced tax rate:
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
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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.
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:
o the characteristics of the receivables and the Accounts included in the
trust as of the closing date for that series or class;
o the desired rating for the securities of that series or class, and
o 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:
o a brief description of its principal business activities;
o its principal place of business, the jurisdiction of its incorporation or
organization and the jurisdictions under which it is licensed to do
business;
o if applicable, the identity of the regulatory agencies which exercise
primary jurisdiction over the conduct of its business; and
o 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 received in respect
of 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.
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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:
o the designation and amount of each class of subordinated securities and
the circumstances, if any, under which that amount will increase or
decrease;
o 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
o 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:
o the classes that will benefit from the letter of credit;
o the initial stated amount of the letter of credit and the circumstances,
if any, under which that amount will increase or decrease;
o 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
o 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:
o the classes that will benefit from the cash collateral guaranty or the
cash collateral account;
o 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;
o the mechanism by which additional amounts, if any, will be deposited
in the cash collateral account;
o 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;
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o 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
o 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:
o the classes that will benefit from the collateral interest or the
collateralized trust obligation;
o the amount of the collateral interest or the collateralized trust
obligation and the circumstances, if any, under which that amount will
increase or decrease;
o 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;
o 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
o 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:
o the classes that will benefit from the surety bond or the insurance
policy;
o the initial amount of the surety bond or the insurance policy and the
circumstances, if any, under which that amount will increase or
decrease;
o 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
o 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:
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o the classes that will benefit from the spread account or the reserve
account;
o 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;
o the mechanism by which additional amounts, if any, will be deposited
in the spread account or the reserve account;
o 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
o 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.
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:
o the likelihood that an Early Amortization Event will occur with
respect to the offered securities;
o the likelihood that a U.S. withholding tax will be imposed on non-U.S.
holders of the offered securities;
o the price of the offered securities;
o the marketability of the offered securities; or
o 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 13 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:
o FNANB granted a security interest in the receivables to the trust;
o the security interest was validly perfected before FNANB's insolvency;
o 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;
o 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
o 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.
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
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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 21 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 21 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 24 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:
o 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;
o limit cardholder liability for unauthorized use;
o prohibit discriminatory practices in extending credit;
o limit the type of account-related charges that may be assessed; and
o 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.
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
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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 13 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 42 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 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.
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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 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:
o no reasonable legal remedies exist to compel timely payment; and
o 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.
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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 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:
o the amount of cash and the fair market value of any property received,
other than amounts attributable to, and taxable as, accrued interest;
and
o 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.
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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:
o 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
o 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
o 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;
o 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;
o 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;
o the interest is not contingent interest described in Section 871(h)(4)
of the Internal Revenue Code; and
o 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.
In general, applicable identification requirements will be satisfied if there
is delivered to a securities clearing organization:
o 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
o 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
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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:
o the gain is not effectively connected with the conduct of a trade or
business in the United States;
o 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
o 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.
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 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:
o part of a class of securities registered under the Exchange Act; or
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o 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 December 22, 1997, the DOL
published proposed regulations, called the general account regulations, for this
purpose. The general account regulations provide that, when a Plan acquires 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 DOL has not issued final general account
regulations. If adopted as proposed, the general account regulations would 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:
o the names of any underwriters;
o the purchase price of your securities and the resulting proceeds to
FNANB;
o any underwriting discounts or other items constituting underwriters'
compensation;
o the initial public offering price for your securities; and
o 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:
o over-allotment transactions, which involve syndicate sales in excess
of the offering size creating a syndicate short position;
o stabilizing transactions, which permit bids to purchase the offered
securities so long as the stabilizing bids do not exceed a specified
maximum;
o 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
o 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 29 of this
prospectus for a further discussion of the circumstances under which the
securities will be issued in definitive form.
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:
o an Automatic Additional Account will be included as an Account only
from and after the date that account is created;
o a Designated Additional Account will be included as an Account only
from and after the date that account is designated; and
o 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.
"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 received in respect of 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.
"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
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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 20 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 21 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,
commencing on the date on which an Early Amortization Event occurs with respect
to that series or such other date as may be specified in the related series
supplement and ending on the earlier of the date on which the securities of that
series have been paid in full and the related Stated Series Termination Date,
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 6 of this prospectus.
"Eligible Institution" means:
o a depository institution, which may be the trustee, organized under
the laws of the United States or any state or the District of Columbia
the deposits of 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
o 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:
o U.S. government debt;
o deposits at financial institutions having a rating in the highest
rating category from the applicable rating agency;
o commercial paper having a rating in the highest rating category from
the applicable rating agency;
o money market funds having a rating in the highest rating category from
the applicable rating agency;
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o Eurodollar time deposits having a rating in the highest rating
category from the applicable rating agency;
o 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
o 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 6 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.
"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.
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"Plan" means:
o an employee benefit plan, as defined in Section 3(3) of ERISA, that is
subject to Title I of ERISA;
o 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
o 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.
"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 20 of this
prospectus.
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"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 under "Annex I:
Previously Issued Series" in the attached prospectus supplement, or such lower
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 that the designation of that lower 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 under "Annex I: Previously Issued Series" in the attached prospectus
supplement, or such higher amount as may be designated by FNANB; provided,
however, that FNANB may not designate a higher 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 24 of this prospectus.
"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:
o 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
o the amount on deposit in the Excess Funding Account at the end of the
day preceding that date; minus
o the aggregate Invested Amount of all outstanding series at the end of
the day preceding that date; minus
o 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.
"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:
o a citizen or resident of the United States;
o 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;
o an estate the income of which is subject to U.S. federal income
taxation regardless of its source; or
o 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:
o a citizen or resident of the United States;
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o 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;
o an estate the income of which is includible in gross income for
federal income taxation regardless of its source; or
o 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.
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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.
Registration Fee $ *
Printing and Engraving *
Trustee's Fees *
Legal Fees and Expenses *
Blue Sky Fees and Expenses *
Accountants' Fees and Expenses *
Rating Agency Fees *
Miscellaneous Fees *
---------------
Total $ *
===============
_________________________
* To be added by amendment.
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.
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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
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
<TABLE>
<CAPTION>
(a) Exhibits
<S> <C>
1 X Form of Underwriting Agreement (incorporated by reference to Exhibit 1.1 to Registration
Statement No. 33-82882)
3.1 X Articles of Association (incorporated by reference to Exhibit 3.1 to Registration
Statement No. 33-82882).
3.2 X Bylaws (incorporated by reference to Exhibit 3.2 to Registration Statement No.
33-82882).
4.1 X Master Pooling and Servicing Agreement (incorporated by reference to Exhibit 4.1 to
Registration Statement No. 33-82882).
4.2 X Form of Series Supplement (including form of Securities).*
5.1 X Form of Opinion of McGuire, Woods, Battle & Boothe LLP with respect to validity of the
securities.
8.1 X Form of Opinion of McGuire, Woods, Battle & Boothe LLP with respect to tax matters.
24.1 X Consent of McGuire, Woods, Battle & Boothe LLP (included in its opinion filed as
Exhibit 5.1).
24.2 X Consent of McGuire, Woods, Battle & Boothe LLP (included in its opinion filed as
Exhibit 8.1).
</TABLE>
------------------------
* To be filed by amendment.
(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:
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(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; (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.
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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 Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Richmond, Commonwealth of Virginia on
January 3, 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
By: /s/ Michael T. Chalifoux
-----------------------------
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 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 Registration Statement has been signed on January 3, 2000 by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C>
/s/ Michael T. Chalifoux President, Chairman and Director January 3, 2000
- ------------------------ (Principal Executive Officer)
Michael T. Chalifoux
/s/ Kerry L. VerStreate Chief Financial Officer January 3, 2000
- ----------------------- (Principal Financial Officer and
Kerry L. VerStreate Principal Accounting Officer)
/s/ Philip J. Dunn Director January 3, 2000
- ------------------
Philip J. Dunn
/s/ Mark A. Arensmeyer Director January 3, 2000
- ----------------------
Mark A. Arensmeyer
/s/ Merle Worsham Director January 3, 2000
- -----------------
Merle Worsham
/s/ Angela C. Schwarz Director January 3, 2000
- -----------------------
Angela C. Schwarz
II-4
</TABLE>
Exhibit 5.1 - Form of Opinion of McGuire, Woods, Battle & Boothe LLP -
Validity of the Securities
[ ], 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 (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,
Exhibit 8.1 - Form of Opinion of McGuire, Woods, Battle & Boothe LLP -
Tax Matters
[ ], 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 (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,
