<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) February 28, 2000.
Circuit City Credit Card Master Trust
-----------------------------------------
United States 0-26172 58-1897792
-------------------- -------------------- --------------------
225 Chastain Meadows Court
Kennesaw, Georgia 30144
- ------------------------------- ----------
Registrant's telephone number, including area code: 770-423-7900
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 1. Not Applicable.
Item 2. Not Applicable.
Item 3. Not Applicable.
Item 4. Not Applicable.
Item 5. On February 28, 2000, the Circuit City Credit Card Master Trust
issued its Class A Floating Rate Asset Backed Certificates, Series
2000-1 and its Class B Floating Rate Asset Backed Certificates,
Series 2000-1.
Item 6. Not Applicable.
Item 7. Exhibits.
The following is filed as an Exhibit to this Report under Exhibit 4.
Exhibit 4.1. Series 2000-1 Supplement dated February 28, 2000 between
First North American National Bank, as Transferor and Servicer, and
Bankers Trust Company, as Trustee.
The following is filed as an Exhibit to this Report under Exhibit 10.
Exhibit 10.1. Interest Rate Cap Agreement dated February 25, 2000
between First North American National Bank and Bank of America, N.A.
Item 8. Not Applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Circuit City Credit Card Master Trust
By: FIRST NORTH AMERICAN NATIONAL BANK,
as Transferor and Servicer
By: Philip J. Dunn
----------------------------
Name: Philip J. Dunn
Title: Vice President
<PAGE>
EXHIBIT INDEX
Exhibit Description
- ------- -----------
4.1 Series 2000-1 Supplement dated February 28, 2000 between First
North American National Bank, as Transferor and Servicer, and
Bankers Trust Company, as Trustee
10.1 Interest Rate Cap Agreement dated February 25, 2000 between First
North American National Bank and Bank of America, N.A.
<PAGE>
Exhibit 4.1
[EXECUTION COPY]
_________________________________________________________
FIRST NORTH AMERICAN NATIONAL BANK
Transferor and Servicer
and
BANKERS TRUST COMPANY
Trustee
on behalf of the Certificateholders
______________________________
SERIES 2000-1 SUPPLEMENT
Dated as of February 28, 2000
to
MASTER POOLING AND SERVICING AGREEMENT
Dated as of October 4, 1994
______________________________
$500,000,000
CIRCUIT CITY CREDIT CARD MASTER TRUST
SERIES 2000-1
_________________________________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1. Designation......................................................................... 1
SECTION 2. Definitions......................................................................... 1
SECTION 3. Minimum Transferor Interest Percentage and Minimum Aggregate Principal
Receivables......................................................................... 28
SECTION 4. Reassignment and Transfer Terms..................................................... 28
SECTION 4A. Interest Rate Caps.................................................................. 28
SECTION 5. Delivery and Payment for the Certificates........................................... 32
SECTION 6. Form of Delivery of the Series 2000-1 Certificates.................................. 33
SECTION 7. Servicing Compensation.............................................................. 33
SECTION 8. Article IV of the Agreement......................................................... 34
ARTICLE IV
RIGHTS OF SERIES 2000-1 CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.2 Collections and Allocations......................................................... 34
Section 4.3 Determination of Monthly Interest................................................... 35
Section 4.3A Determination of LIBOR.............................................................. 38
Section 4.4 Determination of Monthly Principal.................................................. 38
Section 4.5 Required Amount..................................................................... 40
Section 4.6 Application of Class A Available Funds, Class B Available Funds, CTO Available
Funds, Class D Available Funds and Collections of Principal Receivables............. 42
Section 4.7 Defaulted Amounts; Adjustment Amounts, Investor Charge Offs; Reductions of
Adjustment Amounts.................................................................. 46
Section 4.8 Excess Spread; Shared Excess Finance Charge Collections............................. 50
Section 4.9 Subordinated Principal Collections.................................................. 52
Section 4.10 Principal Shortfall................................................................. 53
Section 4.11 Finance Charge Shortfall............................................................ 53
Section 4.12 Spread Account...................................................................... 53
Section 4.13 Principal Funding Account........................................................... 55
Section 4.14 Reserve Account..................................................................... 57
Section 4.15 Postponement of Accumulation Period................................................. 60
Section 4.16 Suspension of Accumulation Period................................................... 60
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 9. Article V of the Agreement................................... 62
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS
Section 5.1 Distributions................................................ 62
Section 5.2 Statements to Series 2000-1 Certificateholders............... 64
SECTION 10. Early Amortization Events.................................... 64
SECTION 11. CTO Defaults................................................. 66
SECTION 12. Restrictions on Transfer..................................... 67
SECTION 13. Tax Characterization of the Collateralized Trust
Obligations and the Class D Certificates..................... 72
SECTION 14. Ratification of Master Pooling and Servicing Agreement....... 72
SECTION 15. Counterparts................................................. 73
SECTION 16. Governing Law................................................ 73
SECTION 17. Subordination of Certain Termination Payments................ 73
SECTION 18. FASIT Election............................................... 73
SECTION 19. Paired Series................................................ 74
SECTION 20. Discount Opion............................................... 75
</TABLE>
Exhibit A Form of Class A Certificate
Exhibit B Form of Class B Certificate
Exhibit C Form of Collateralized Trust Obligation
Exhibit D Form of Class D Certificate
Exhibit E Form of Monthly Servicer's Certificate
Exhibit F Form of Monthly Certificateholder's Statement
Exhibit G Form of Transfer Certification
ii
<PAGE>
SERIES 2000-1 SUPPLEMENT, dated as of February 28, 2000 (this "Series
------
Supplement"), between FIRST NORTH AMERICAN NATIONAL BANK, a national banking
- ----------
association, as Transferor and Servicer, and BANKERS TRUST COMPANY, a banking
corporation organized and existing under the laws of New York (together with its
successors in trust thereunder as provided in the Agreement referred to below,
the "Trustee"), as trustee under the Master Pooling and Servicing Agreement,
-------
dated as of October 4, 1994, as amended (the "Agreement"), between the
---------
Transferor and Servicer and the Trustee.
PRELIMINARY STATEMENT
Section 6.9 of the Agreement provides, among other things, that the
Transferor and the Trustee may at any time and from time to time enter into one
or more Supplements to the Agreement for the purpose of authorizing the issuance
by the Trust to the Transferor, for execution and redelivery to the Trustee for
authentication, of one or more Series of Investor Certificates.
SECTION 1. Designation. The Certificates issued hereunder shall be
-----------
designated generally as the Series 2000-1 Certificates. The Series 2000-1
Certificates shall be one of the Series of Investor Certificates in Group One
and shall be a Principal Sharing Series. The Transferor and the Servicer hereby
enter into this Series Supplement with the Trustee as required by Section 6.9(c)
of the Agreement to provide for the issuance, authentication and delivery of the
Class A Floating Rate Asset Backed Certificates, Series 2000-1, the Class B
Floating Rate Asset Backed Certificates, Series 2000-1, the Collateralized Trust
Obligations, Series 2000-1 and the Class D Floating Rate Asset Backed
Certificates, Series 2000-1. The first Distribution Date with respect to Series
2000-1 shall be the April 2000 Distribution Date. In the event that any term or
provision contained herein shall conflict with or be inconsistent with any term
or provision contained in the Agreement, the terms and provisions of this Series
Supplement shall govern. Notwithstanding the foregoing, the provisions of
Section 6.9(b) of the Agreement with respect to the delivery of an Opinion of
Counsel to the effect that a newly issued Series of Investor Certificates will
be characterized as either indebtedness or an interest in a partnership under
existing law for Federal income tax purposes shall not be applicable to the
Class D Certificates.
SECTION 2. Definitions. All capitalized terms not otherwise defined
-----------
herein are defined in the Agreement. All Article, Section or subsection
references herein shall mean Articles, Sections or subsections of the Agreement,
except as
<PAGE>
otherwise provided herein. Unless otherwise stated herein, as the context
otherwise requires or if such term is otherwise defined in the Agreement, each
capitalized term used or defined herein shall relate only to the Series 2000-1
Certificates and no other Series of Certificates issued by the Trust. The
following words and phrases shall have the following meanings with respect to
the Series 2000-1 Certificates and the definitions of such terms are applicable
to the singular as well as the plural form of such terms and to the masculine as
well as the feminine and neuter genders of such terms:
"Accumulation Commencement Due Period" shall mean the Due Period in
------------------------------------
which the Accumulation Period commences.
"Accumulation Period" shall mean, unless an Early Amortization Event
-------------------
with respect to Series 2000-1 shall have occurred prior thereto, the period
commencing at the close of business on the last day of the January 2002 Due
Period, or such later date as shall be determined in accordance with Section
4.15 or Section 4.16, and ending on the first to occur of (a) the commencement
of the Early Amortization Period, (b) the payment in full of the Class A
Certificates, the Class B Certificates, the Collateralized Trust Obligations and
the Class D Certificates and (c) the Stated Series Termination Date.
"Accumulation Period Factor" shall mean, for each Due Period, a
--------------------------
fraction, the numerator of which is equal to the sum of the initial invested
amounts of all outstanding Series and the denominator of which is equal to the
sum of (a) the Initial Invested Amount, (b) the initial invested amounts (or
other corresponding amounts) of all outstanding Series (other than Series 2000-
1) which are not expected to be in their revolving periods during such Due
Period and (c) the initial invested amounts (or other corresponding amounts) of
all outstanding Series (other than Series 2000-1) which are not allocating
Shared Principal Collections to other Series and are expected to be in their
revolving periods during such Due Period.
"Accumulation Period Length" shall have the meaning specified in
--------------------------
Section 4.15.
"Adjusted Invested Amount" shall mean, as of any date, an amount equal
------------------------
to the sum of the Class A Adjusted Invested Amount, the Class B Adjusted
Invested Amount, the CTO Adjusted Invested Amount and the Class D Invested
Amount, in each case as of such date.
"Assignee" shall have the meaning specified in Section 12(d) of this
--------
Series Supplement.
"Available Principal Collections" shall mean, with respect to any
-------------------------------
Distribution Date, an amount equal to (a) the
<PAGE>
applicable Invested Percentage of Collections of Principal Receivables for the
preceding Due Period, plus (b) the amounts included in Available Principal
----
Collections with respect to such Distribution Date pursuant to Section 4.6 and
Section 4.8, plus (c) Shared Principal Collections allocated to Series 2000-1,
----
plus (d) during the Early Amortization Period, any amounts allocated to Series
- ----
2000-1 as described in Section 4.10, minus (e) Subordinated Principal
-----
Collections applied pursuant to Section 4.9 for such preceding Due Period.
"Available Reserve Account Amount" shall mean, with respect to any
--------------------------------
Distribution Date, the lesser of (a) the amount on deposit in and available to
be withdrawn from the Reserve Account on such Distribution Date (before giving
effect to any deposit or withdrawal to be made to or from the Reserve Account on
such date) and (b) the Required Reserve Account Amount with respect to such
Distribution Date.
"Available Spread Account Amount" shall mean, with respect to any
-------------------------------
Distribution Date, the lesser of (a) the amount on deposit in and available to
be withdrawn from the Spread Account on such Distribution Date (before giving
effect to any deposit or withdrawal to be made to or from the Spread Account on
such date) and (b) the Required Spread Account Amount with respect to such
Distribution Date.
"Average Excess Spread Percentage" shall mean, with respect to any
--------------------------------
Distribution Date, the average of the Excess Spread Percentages for the three
consecutive Due Periods preceding such Distribution Date; provided, however,
-------- -------
that (i) the Average Excess Spread Percentage with respect to the first
Distribution Date shall equal the Excess Spread Percentage for the preceding Due
Period and (ii) the Average Excess Spread Percentage with respect to the second
Distribution Date shall equal the average of the Excess Spread Percentages for
the two consecutive Due Periods preceding such Distribution Date.
"Base Rate" shall mean, with respect to any Due Period, the sum of (a)
---------
the annualized percentage equivalent of a fraction, the numerator of which is
the sum of the Class A Monthly Interest, the Class B Monthly Interest, the CTO
Monthly Interest and the Class D Monthly Interest distributable on the
Distribution Date immediately following the last day of such Due Period and the
denominator of which is the Adjusted Invested Amount as of the last day of the
Due Period preceding such Due Period and (b) the product of (i) 2.00% per annum
and (ii) a fraction, the numerator of which is the Invested Amount and the
denominator of which is the Adjusted Invested Amount, each as of the last day of
such preceding Due Period.
"Business Day" shall have the meaning specified in the Agreement.
------------
<PAGE>
"Class A Additional Interest" shall have the meaning specified in
---------------------------
Section 4.3(a).
"Class A Adjusted Invested Amount" shall mean, as of any date, an
--------------------------------
amount equal to the sum of the Class A Invested Amount as of such date and the
aggregate amount on deposit in the Principal Funding Account on such date in
respect of Class A Monthly Principal (excluding interest and other investment
earnings on such amount).
"Class A Adjustment Amount" shall mean, with respect to any
-------------------------
Distribution Date, an amount equal to the product of (i) the Series Adjustment
Amount for Series 2000-1 as of the end of the preceding Due Period and (ii) the
percentage equivalent of a fraction, the numerator of which is the Class A
Invested Amount and the denominator of which is the Invested Amount, each as of
the last day of the Due Period preceding such preceding Due Period.
"Class A Allocable Amount" shall mean, with respect to any
------------------------
Distribution Date, the sum of the Class A Default Amount with respect to such
Distribution Date and the Class A Adjustment Amount with respect to such
Distribution Date.
"Class A Available Funds" shall mean, with respect to any Due Period,
-----------------------
an amount equal to the sum of (a) the Class A Floating Allocation Percentage
(with respect to any Due Period during the Revolving Period or the Accumulation
Period) or the Class A Fixed Allocation Percentage (with respect to any Due
Period during the Early Amortization Period) of Collections of Finance Charge
Receivables for such Due Period and any other amounts that are to be treated as
Collections of Finance Charge Receivables for such Due Period in accordance with
the Agreement, (b) the Class A Cap Payment, if any, deposited in the Collection
Account on the Distribution Date immediately following the last day of such Due
Period, (c) the portion of the Principal Funding Investment Proceeds, if any,
withdrawn from the Principal Funding Account on the Distribution Date
immediately following the last day of such Due Period and included in Class A
Available Funds pursuant to Section 4.13(c), (d) the amount, if any, withdrawn
from the Reserve Account on the Distribution Date immediately following the last
day of such Due Period and included in Class A Available Funds pursuant to
Section 4.14(d) and (e) the interest and other investment earnings, if any (net
of losses and investment expenses), on funds on deposit in the Reserve Account
withdrawn from the Reserve Account on the Distribution Date immediately
following the last day of such Due Period and included in Class A Available
Funds pursuant to Section 4.14(e).
"Class A Cap Payment" shall mean, with respect to any Distribution
-------------------
Date, any payment made to the Trust pursuant to the Class A Interest Rate Cap
with respect to such Distribution Date.
<PAGE>
"Class A Cap Rate" shall mean 7.50% per annum.
----------------
"Class A Certificate Rate" shall mean, with respect to any Interest
------------------------
Period, a per annum rate of 0.23% in excess of LIBOR, as determined on the
related LIBOR Determination Date.
"Class A Certificateholder" shall mean the Person in whose name a
-------------------------
Class A Certificate is registered in the Certificate Register.
"Class A Certificates" shall mean any one of the Certificates executed
--------------------
by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A.
---------
"Class A Default Amount" shall mean, with respect to any Distribution
----------------------
Date, an amount equal to the product of (i) the Default Amount for the preceding
Due Period and (ii) the Class A Floating Allocation Percentage for such Due
Period.
"Class A Fixed Allocation Percentage" shall mean, with respect to any
-----------------------------------
Due Period, the percentage equivalent of a fraction, the numerator of which is
equal to the Class A Invested Amount as of the last day of the Revolving Period
and the denominator of which is equal to the greater of (i) the sum of (a) the
Aggregate Principal Receivables in the Trust as of the last day of the
immediately preceding Due Period and (b) the Excess Funding Amount at the end of
such last day and (ii) the sum of the numerators used to calculate the
corresponding invested percentages for all Series outstanding as of the date on
which such determination is being made; provided, however, that, with respect to
-------- -------
any Due Period in which Additional Accounts are included as Accounts pursuant to
Section 2.6(a) or Section 2.6(b), the amount calculated in clause (i) above
shall be increased by the amount of Principal Receivables in such Additional
Accounts as of the Additional Account Cut Off Date on and after the Additional
Account Closing Date applicable to such Additional Accounts; and, provided
--------
further, that if the Series 2000-1 Certificates are paired with a Paired Series
- -------
and the Early Amortization Period (as defined in the Supplement for such Paired
Series) commences, the Transferor may, by written notice to the Trustee and the
Servicer, designate a different numerator to be used to determine such
percentage (provided that such numerator is not less than the Class A Invested
Amount as of the last day of the Revolving Period (as defined in the Supplement
for such Paired Series)).
"Class A Floating Allocation Percentage" shall mean, with respect to
--------------------------------------
any Due Period, the percentage equivalent of a fraction, the numerator of which
is equal to the Class A Invested Amount as of the last day of the immediately
preceding Due Period (or the Class A Initial Invested Amount, in the case of the
first Due Period applicable to Series 2000-1) and the denominator of
<PAGE>
which is equal to the greater of (i) the sum of (a) the Aggregate Principal
Receivables in the Trust as of the last day of such immediately preceding Due
Period (or the Closing Date, in the case of the first Due Period applicable to
Series 2000-1) and (b) the Excess Funding Amount at the end of such last day and
(ii) the sum of the numerators used to calculate the corresponding invested
percentages for all Series outstanding as of the date on which such
determination is being made; provided, however, that, with respect to any Due
-------- -------
Period in which Additional Accounts are included as Accounts pursuant to Section
2.6(a) or Section 2.6(b), the amount calculated in clause (i) above shall be
increased by the amount of Principal Receivables in such Additional Accounts as
of the Additional Account Cut Off Date on and after the Additional Account
Closing Date applicable to such Additional Accounts.
"Class A Initial Invested Amount" shall mean the aggregate initial
-------------------------------
principal amount of the Class A Certificates, which is $365,000,000.
"Class A Interest Rate Cap" shall mean the master agreement dated as
-------------------------
of February 25, 2000 between the Trust and the Interest Rate Cap Provider, as
supplemented by the schedule attached thereto and the confirmation dated as of
February 25, 2000 between the Trust and the Interest Rate Cap Provider, relating
to the Class A Certificates and for the exclusive benefit of the Class A
Certificateholders, or any Replacement Interest Rate Cap or Qualified Substitute
Arrangement.
"Class A Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.3(a).
"Class A Invested Amount" shall mean, as of any date, an amount equal
-----------------------
to (a) the Class A Initial Invested Amount, minus (b) the aggregate amount
-----
deposited into the Principal Funding Account prior to such date as Class A
Monthly Principal (excluding interest and other investment earnings on such
amount), minus (c) the aggregate amount of principal payments made to the Class
-----
A Certificateholders prior to such date, minus (d) the excess, if any, of the
-----
aggregate amount of Class A Investor Charge Offs for all prior Distribution
Dates over the sum of the aggregate amount of Class A Investor Charge Offs
----
reimbursed prior to such date pursuant to Section 4.8(b) and, without
duplication, the aggregate amount of the reductions of the Series Adjustment
Amounts allocated to the Class A Invested Amount prior to such date pursuant to
Section 4.7(f); provided, however, that the Class A Invested Amount may not be
-------- -------
reduced below zero.
"Class A Investor Charge Offs" shall have the meaning specified in
----------------------------
Section 4.7(a).
<PAGE>
"Class A Monthly Interest" shall have the meaning specified in Section
------------------------
4.3(a).
"Class A Monthly Principal" shall have the meaning specified in
-------------------------
Section 4.4(a).
"Class A Notional Amount" shall mean, as of any date, the notional
-----------------------
amount of the Class A Interest Rate Cap as of such date as determined in
accordance with the provisions of the Class A Interest Rate Cap.
"Class A Penalty Rate" shall mean, for any Interest Period, the sum of
--------------------
the Class A Certificate Rate for such Interest Period and 2.00% per annum.
"Class A Required Amount" shall have the meaning specified in Section
-----------------------
4.5(a).
"Class A Servicing Fee" shall have the meaning specified in Section 7
---------------------
of this Series Supplement.
"Class B Additional Interest" shall have the meaning specified in
---------------------------
Section 4.3(b).
"Class B Adjusted Invested Amount" shall mean, as of any date, an
--------------------------------
amount equal to the sum of the Class B Invested Amount as of such date and the
aggregate amount on deposit in the Principal Funding Account on such date in
respect of Class B Monthly Principal (excluding interest and other investment
earnings on such amount).
"Class B Adjustment Amount" shall mean, with respect to any
-------------------------
Distribution Date, an amount equal to the product of (i) the Series Adjustment
Amount for Series 2000-1 as of the end of the preceding Due Period and (ii) the
percentage equivalent of a fraction, the numerator of which is the Class B
Invested Amount and the denominator of which is the Invested Amount, each as of
the last day of the Due Period preceding such preceding Due Period.
"Class B Allocable Amount" shall mean, with respect to any
------------------------
Distribution Date, the sum of the Class B Default Amount with respect to such
Distribution Date and the Class B Adjustment Amount with respect to such
Distribution Date.
"Class B Available Funds" shall mean, with respect to any Due Period,
-----------------------
an amount equal to the sum of (a) the Class B Floating Allocation Percentage
(with respect to any Due Period during the Revolving Period or the Accumulation
Period) or the Class B Fixed Allocation Percentage (with respect to any Due
Period during the Early Amortization Period) of Collections of Finance Charge
Receivables for such Due Period and any other
<PAGE>
amounts that are to be treated as Collections of Finance Charge Receivables for
such Due Period in accordance with the Agreement, (b) the Class B Cap Payment,
if any, deposited in the Collection Account on the Distribution Date immediately
following the last day of such Due Period, (c) the portion of the Principal
Funding Investment Proceeds, if any, withdrawn from the Principal Funding
Account on the Distribution Date immediately following the last day of such Due
Period and included in Class B Available Funds pursuant to Section 4.13(c), (d)
the amount, if any, withdrawn from the Reserve Account on the Distribution Date
immediately following the last day of such Due Period and included in Class B
Available Funds pursuant to Section 4.14(d) and (e) the interest and other
investment earnings, if any (net of losses and investment expenses), on funds on
deposit in the Reserve Account withdrawn from the Reserve Account on the
Distribution Date immediately following the last day of such Due Period and
included in Class B Available Funds pursuant to Section 4.14(e).
"Class B Cap Payment" shall mean, with respect to any Distribution
-------------------
Date, any payment made to the Trust pursuant to the Class B Interest Rate Cap
with respect to such Distribution Date.
"Class B Cap Rate" shall mean 7.50% per annum.
----------------
"Class B Certificate Rate" shall mean, with respect to any Interest
------------------------
Period, a per annum rate of 0.59% in excess of LIBOR, as determined on the
related LIBOR Determination Date.
"Class B Certificateholder" shall mean the Person in whose name a
-------------------------
Class B Certificate is registered in the Certificate Register.
"Class B Certificates" shall mean any one of the Certificates executed
--------------------
by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit B.
---------
"Class B Default Amount" shall mean, with respect to any Distribution
----------------------
Date, an amount equal to the product of (i) the Default Amount for the preceding
Due Period and (ii) the Class B Floating Allocation Percentage for such Due
Period.
"Class B Fixed Allocation Percentage" shall mean, with respect to any
-----------------------------------
Due Period, the percentage equivalent of a fraction, the numerator of which is
equal to the Class B Invested Amount as of the last day of the Revolving Period
and the denominator of which is equal to the greater of (i) the sum of (a) the
Aggregate Principal Receivables in the Trust as of the last day of the
immediately preceding Due Period and (b) the Excess Funding Amount at the end of
such last day and (ii) the sum of the numerators used to calculate the
corresponding invested percentages for all Series outstanding as of the date on
which such determination is being made; provided, however, that,
--------
<PAGE>
with respect to any Due Period in which Additional Accounts are included as
Accounts pursuant to Section 2.6(a) or Section 2.6(b), the amount calculated in
clause (i) above shall be increased by the amount of Principal Receivables in
such Additional Accounts as of the Additional Account Cut Off Date on and after
the Additional Account Closing Date applicable to such Additional Accounts; and,
provided further, that if the Series 2000-1 Certificates are paired with a
- -------- -------
Paired Series and the Early Amortization Period (as defined in the Supplement
for such Paired Series) commences, the Transferor may, by written notice to the
Trustee and the Servicer, designate a different numerator to be used to
determine such percentage (provided that such numerator is not less than the
Class B Invested Amount as of the last day of the Revolving Period (as defined
in the Supplement for such Paired Series)).
"Class B Floating Allocation Percentage" shall mean, with respect to
--------------------------------------
any Due Period, the percentage equivalent of a fraction, the numerator of which
is equal to the Class B Invested Amount as of the last day of the immediately
preceding Due Period (or the Class B Initial Invested Amount, in the case of the
first Due Period applicable to Series 2000-1) and the denominator of which is
equal to the greater of (i) the sum of (a) the Aggregate Principal Receivables
in the Trust as of the last day of such immediately preceding Due Period (or the
Closing Date, in the case of the first Due Period applicable to Series 2000-1)
and (b) the Excess Funding Amount at the end of such last day and (ii) the sum
of the numerators used to calculate the corresponding invested percentages for
all Series outstanding as of the date on which such determination is being made;
provided, however, that, with respect to any Due Period in which Additional
- -------- -------
Accounts are included as Accounts pursuant to Section 2.6(a) or Section 2.6(b),
the amount calculated in clause (i) above shall be increased by the amount of
Principal Receivables in such Additional Accounts as of the Additional Account
Cut Off Date on and after the Additional Account Closing Date applicable to such
Additional Accounts.
"Class B Initial Invested Amount" shall mean the aggregate initial
-------------------------------
principal amount of the Class B Certificates, which is $57,500,000.
"Class B Interest Rate Cap" shall mean the master agreement dated as
-------------------------
of February 25, 2000 between the Trust and the Interest Rate Cap Provider, as
supplemented by the schedule attached thereto and the confirmation dated as of
February 25, 2000 between the Trust and the Interest Rate Cap Provider, relating
to the Class B Certificates and for the exclusive benefit of the Class B
Certificateholders, or any Replacement Interest Rate Cap or Qualified Substitute
Arrangement.
<PAGE>
"Class B Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.3(b).
"Class B Invested Amount" shall mean, as of any date, an amount equal
-----------------------
to (a) the Class B Initial Invested Amount, minus (b) the aggregate amount
-----
deposited into the Principal Funding Account prior to such date as Class B
Monthly Principal (excluding interest and other investment earnings on such
amount), minus (c) the aggregate amount of principal payments made to the Class
-----
B Certificateholders prior to such date, minus (d) the aggregate amount of Class
-----
B Investor Charge Offs for all prior Distribution Dates, minus (e) the amount of
-----
Class B Subordinated Principal Collections allocated on all prior Distribution
Dates pursuant to Section 4.9(a), minus (f) an amount equal to the amount by
-----
which the Class B Invested Amount has been reduced on all prior Distribution
Dates pursuant to Section 4.7(a), plus (g) the sum of the amount of Excess
----
Spread and Shared Excess Finance Charge Collections allocated and available on
all prior Distribution Dates pursuant to Section 4.8(e) for the purpose of
reimbursing amounts deducted pursuant to the foregoing clauses (d), (e) and (f)
and, without duplication, the aggregate amount of the reductions of the Series
Adjustment Amounts allocated to the Class B Invested Amount prior to such date
pursuant to Section 4.7(f); provided, however, that the Class B Invested Amount
-------- -------
may not be reduced below zero.
"Class B Investor Charge Offs" shall have the meaning specified in
----------------------------
Section 4.7(b).
"Class B Monthly Interest" shall have the meaning specified in Section
------------------------
4.3(b).
"Class B Monthly Principal" shall have the meaning specified in
-------------------------
Section 4.4(b).
"Class B Notional Amount" shall mean, as of any date, the notional
-----------------------
amount of the Class B Interest Rate Cap as of such date as determined in
accordance with the provisions of the Class B Interest Rate Cap.
"Class B Penalty Rate" shall mean, for any Interest Period, the sum of
--------------------
the Class B Certificate Rate for such Interest Period and 2.00% per annum.
"Class B Principal Commencement Date" shall mean (i) unless the Early
-----------------------------------
Amortization Period shall have commenced or the Accumulation Period shall have
been suspended in accordance with Section 4.16, the first Distribution Date on
which the aggregate amount on deposit in the Principal Funding Account in
respect of Class A Monthly Principal equals the outstanding principal balance of
the Class A Certificates and (ii) if the Early Amortization Period shall have
commenced or the Accumulation
<PAGE>
Period shall have been suspended in accordance with Section 4.16, the
Distribution Date on which the Class A Certificates are paid in full.
"Class B Required Amount" shall have the meaning specified in Section
-----------------------
4.5(b).
"Class B Servicing Fee" shall have the meaning specified in Section 7
---------------------
of this Series Supplement.
"Class B Subordinated Principal Collections" shall mean, with respect
------------------------------------------
to any Due Period, an amount equal to the product of (i) the Class B Floating
Allocation Percentage (with respect to any Due Period during the Revolving
Period) or the Class B Fixed Allocation Percentage (with respect to any Due
Period during the Accumulation Period or the Early Amortization Period) and (ii)
the aggregate amount of Collections of Principal Receivables for such Due
Period.
"Class D Additional Interest" shall have the meaning specified in
---------------------------
Section 4.3(d).
"Class D Adjustment Amount" shall mean, with respect to any
-------------------------
Distribution Date, an amount equal to the product of (i) the Series Adjustment
Amount for Series 2000-1 as of the end of the preceding Due Period and (ii) the
percentage equivalent of a fraction, the numerator of which is the Class D
Invested Amount and the denominator of which is the Invested Amount, each as of
the last day of the Due Period preceding such preceding Due Period.
"Class D Allocable Amount" shall mean, with respect to any
------------------------
Distribution Date, the sum of the Class D Default Amount with respect to such
Distribution Date and the Class D Adjustment Amount with respect to such
Distribution Date.
"Class D Available Funds" shall mean, with respect to any Due Period,
-----------------------
the Class D Floating Allocation Percentage (with respect to any Due Period
during the Revolving Period or the Accumulation Period) or the Class D Fixed
Allocation Percentage (with respect to any Due Period during the Early
Amortization Period) of Collections of Finance Charge Receivables for such Due
Period and any other amounts that are to be treated as Collections of Finance
Charge Receivables for such Due Period in accordance with the Agreement.
"Class D Certificate Rate" shall mean, with respect to any Interest
------------------------
Period, the rate designated in the letter agreement, dated February 28, 2000,
between the Transferor and the Trustee; provided, however, that the Class D
-------- -------
Certificate Rate shall in no event exceed LIBOR plus 1.20% per annum.
<PAGE>
"Class D Certificateholder" shall mean the Person in whose name a
-------------------------
Class D Certificate is registered in the Certificate Register.
"Class D Certificates" shall mean any one of the Certificates executed
--------------------
by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit D.
---------
"Class D Default Amount" shall mean, with respect to any Distribution
----------------------
Date, an amount equal to the product of (i) the Default Amount for the preceding
Due Period and (ii) the Class D Floating Allocation Percentage for such Due
Period.
"Class D Fixed Allocation Percentage" shall mean, with respect to any
-----------------------------------
Due Period, the percentage equivalent of a fraction, the numerator of which is
equal to the Class D Invested Amount as of the last day of the Revolving Period
and the denominator of which is equal to the greater of (i) the sum of (a) the
Aggregate Principal Receivables in the Trust as of the last day of the
immediately preceding Due Period and (b) the Excess Funding Amount at the end of
such last day and (ii) the sum of the numerators used to calculate the
corresponding invested percentages for all Series outstanding as of the date on
which such determination is being made; provided, however, that, with respect to
-------- -------
any Due Period in which Additional Accounts are included as Accounts pursuant to
Section 2.6(a) or Section 2.6(b), the amount calculated in clause (i) above
shall be increased by the amount of Principal Receivables in such Additional
Accounts as of the Additional Account Cut Off Date on and after the Additional
Account Closing Date applicable to such Additional Accounts; and, provided
--------
further, that if the Series 2000-1 Certificates are paired with a Paired Series
- -------
and the Early Amortization Period (as defined in the Supplement for such Paired
Series) commences, the Transferor may, by written notice to the Trustee and the
Servicer, designate a different numerator to be used to determine such
percentage (provided that such numerator is not less than the Class D Invested
Amount as of the last day of the Revolving Period (as defined in the Supplement
for such Paired Series)).
"Class D Floating Allocation Percentage" shall mean, with respect to
--------------------------------------
any Due Period, the percentage equivalent of a fraction, the numerator of which
is equal to the Class D Invested Amount as of the last day of the immediately
preceding Due Period (or the Class D Initial Invested Amount, in the case of the
first Due Period applicable to Series 2000-1) and the denominator of which is
equal to the greater of (i) the sum of (a) the Aggregate Principal Receivables
in the Trust as of the last day of such immediately preceding Due Period (or the
Closing Date, in the case of the first Due Period applicable to Series 2000-1)
and (b) the Excess Funding Amount at the end of such last day and (ii) the sum
of the numerators used to calculate the corresponding
<PAGE>
invested percentages for all Series outstanding as of the date on which such
determination is being made; provided, however, that, with respect to any Due
-------- -------
Period in which Additional Accounts are included as Accounts pursuant to Section
2.6(a) or Section 2.6(b), the amount calculated in clause (i) above shall be
increased by the amount of Principal Receivables in such Additional Accounts as
of the Additional Account Cut Off Date on and after the Additional Account
Closing Date applicable to such Additional Accounts.
"Class D Initial Invested Amount" shall mean the aggregate initial
-------------------------------
principal amount of the Class D Certificates, which is $30,000,000.
"Class D Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.3(d).
"Class D Invested Amount" shall mean, as of any date, an amount equal
-----------------------
to (a) the Class D Initial Invested Amount, minus (b) the aggregate amount of
-----
principal payments made to the Class D Certificateholders prior to such date,
minus (c) the aggregate amount of Class D Investor Charge Offs for all prior
- -----
Distribution Dates, minus (d) the amount of Class D Subordinated Principal
-----
Collections allocated on all prior Distribution Dates pursuant to Section
4.9(a), (b) or (c), minus (e) an amount equal to the amount by which the Class D
-----
Invested Amount has been reduced on all prior Distribution Dates pursuant to
Section 4.7(a), (b) or (c), plus (f) the sum of the amount of Excess Spread and
----
Shared Excess Finance Charge Collections allocated and available on all prior
Distribution Dates pursuant to Section 4.8(n) for the purpose of reimbursing
amounts deducted pursuant to the foregoing clauses (c), (d) and (e) and, without
duplication, the aggregate amount of the reductions of the Series Adjustment
Amounts allocated to the Class D Invested Amount prior to such date pursuant to
Section 4.7(f); provided, however, that the Class D Invested Amount may not be
-------- -------
reduced below zero.
"Class D Investor Charge Off" shall have the meaning specified in
---------------------------
Section 4.7(d).
"Class D Monthly Interest" shall have the meaning specified in Section
------------------------
4.3(d).
"Class D Monthly Principal" shall have the meaning specified in
-------------------------
Section 4.4(d).
"Class D Penalty Rate" shall mean, for any Interest Period, the sum of
--------------------
the Class D Certificate Rate for such Interest Period and 2.00% per annum.
"Class D Principal Commencement Date" shall mean the Distribution Date
-----------------------------------
on which the Class A Certificates, the Class B
<PAGE>
Certificates and the Collateralized Trust Obligations are paid in full.
"Class D Servicing Fee" shall have the meaning specified in Section 7
---------------------
of this Series Supplement.
"Class D Subordinated Principal Collections" shall mean, with respect
------------------------------------------
to any Due Period, an amount equal to the product of (i) the Class D Floating
Allocation Percentage (with respect to any Due Period during the Revolving
Period) or the Class D Fixed Allocation Percentage (with respect to any Due
Period during the Accumulation Period or the Early Amortization Period) and (ii)
the aggregate amount of Collections of Principal Receivables for such Due
Period.
"Closing Date" shall mean February 28, 2000.
------------
"Code" shall mean the Internal Revenue Code of 1986, as amended.
----
"Collateralized Trust Obligations" shall mean any one of the
--------------------------------
Collateralized Trust Obligations executed by the Transferor and authenticated by
or on behalf of the Trustee, substantially in the form of Exhibit C.
---------
"Controlled Accumulation Amount" shall mean, for any Distribution Date
------------------------------
with respect to the Accumulation Period, $39,166,667; provided, however, that,
-------- -------
if the Accumulation Period Length shall be determined to be less than 12 months
in accordance with Section 4.15, the Controlled Accumulation Amount for any
Distribution Date with respect to the Accumulation Period shall be equal to (i)
the product of (x) $470,000,000 and (y) the Accumulation Period Factor for the
Due Period preceding such Distribution Date divided by (ii) the Required
Accumulation Factor Number with respect to such Distribution Date.
"Controlled Deposit Amount" shall mean, for any Distribution Date with
-------------------------
respect to the Accumulation Period, an amount equal to the sum of the Controlled
Accumulation Amount for such Distribution Date and any Deficit Controlled
Accumulation Amount for the immediately preceding Distribution Date.
"Covered Amount" shall mean, for any Distribution Date with respect to
--------------
the Accumulation Period or the first Special Distribution Date, an amount equal
to (a) the product of (i) the Class A Certificate Rate for the related Interest
Period, (ii) the aggregate amount, if any, on deposit in the Principal Funding
Account as of such Distribution Date in respect of Class A Monthly Principal and
(iii) a fraction, the numerator of which is the actual number of days in such
Interest Period and the denominator of which is 360 plus (b) the product of (i)
----
the Class B Certificate Rate for the related Interest Period, (ii) the
<PAGE>
aggregate amount, if any, on deposit in the Principal Funding Account as of such
Distribution Date in respect of Class B Monthly Principal and (iii) a fraction,
the numerator of which is the actual number of days in such Interest Period and
the denominator of which is 360 plus (c) the product of (i) the CTO Interest
----
Rate for the related Interest Period, (ii) the aggregate amount, if any, on
deposit in the Principal Funding Account as of such Distribution Date in respect
of CTO Monthly Principal and (iii) a fraction, the numerator of which is the
actual number of days in such Interest Period and the denominator of which is
360.
"CTO Additional Interest" shall have the meaning specified in Section
-----------------------
4.3(c).
"CTO Adjusted Invested Amount" shall mean, as of any date, an amount
----------------------------
equal to the sum of the CTO Invested Amount as of such date and the aggregate
amount on deposit in the Principal Funding Account on such date in respect of
CTO Monthly Principal (excluding interest and other investment earnings on such
amount).
"CTO Adjustment Amount" shall mean, with respect to any Distribution
---------------------
Date, an amount equal to the product of (i) the Series Adjustment Amount for
Series 2000-1 as of the end of the preceding Due Period and (ii) the percentage
equivalent of a fraction, the numerator of which is the CTO Invested Amount and
the denominator of which is the Invested Amount, each as of the last day of the
Due Period preceding such preceding Due Period.
"CTO Allocable Amount" shall mean, with respect to any Distribution
--------------------
Date, the sum of the CTO Default Amount with respect to such Distribution Date
and the CTO Adjustment Amount with respect to such Distribution Date.
"CTO Available Funds" shall mean, with respect to any Due Period, an
-------------------
amount equal to the sum of (a) the CTO Floating Allocation Percentage (with
respect to any Due Period during the Revolving Period or the Accumulation
Period) or the CTO Fixed Allocation Percentage (with respect to any Due Period
during the Early Amortization Period) of Collections of Finance Charge
Receivables for such Due Period and any other amounts that are to be treated as
Collections of Finance Charge Receivables for such Due Period in accordance with
the Agreement, (b) the portion of the Principal Funding Investment Proceeds, if
any, withdrawn from the Principal Funding Account on the Distribution Date
immediately following the last day of such Due Period and included in CTO
Available Funds pursuant to Section 4.13(c), (c) the amount, if any, withdrawn
from the Reserve Account on the Distribution Date immediately following the last
day of such Due Period and included in CTO Available Funds pursuant to Section
4.14(d) and (d) the interest and other investment earnings, if any (net of
losses and investment expenses), on funds on deposit
<PAGE>
in the Reserve Account withdrawn from the Reserve Account on the Distribution
Date immediately following the last day of such Due Period and included in CTO
Available Funds pursuant to Section 4.14(e).
"CTO Default" shall mean each event specified in Section 11 of this
-----------
Series Supplement as a CTO Default.
"CTO Default Amount" shall mean, with respect to any Distribution
------------------
Date, an amount equal to the product of (i) the Default Amount for the preceding
Due Period and (ii) the CTO Floating Allocation Percentage for such Due Period.
"CTO Fixed Allocation Percentage" shall mean, with respect to any Due
-------------------------------
Period, the percentage equivalent of a fraction, the numerator of which is equal
to the CTO Invested Amount as of the last day of the Revolving Period and the
denominator of which is equal to the greater of (i) the sum of (a) the Aggregate
Principal Receivables in the Trust as of the last day of the immediately
preceding Due Period and (b) the Excess Funding Amount at the end of such last
day and (ii) the sum of the numerators used to calculate the corresponding
invested percentages for all Series outstanding as of the date on which such
determination is being made; provided, however, that, with respect to any Due
-------- -------
Period in which Additional Accounts are included as Accounts pursuant to Section
2.6(a) or Section 2.6(b), the amount calculated in clause (i) above shall be
increased by the amount of Principal Receivables in such Additional Accounts as
of the Additional Account Cut Off Date on and after the Additional Account
Closing Date applicable to such Additional Accounts; and, provided further, that
-------- -------
if the Series 2000-1 Certificates are paired with a Paired Series and the Early
Amortization Period (as defined in the Supplement for such Paired Series)
commences, the Transferor may, by written notice to the Trustee and the
Servicer, designate a different numerator to be used to determine such
percentage (provided that such numerator is not less than the CTO Invested
Amount as of the last day of the Revolving Period (as defined in the Supplement
for such Paired Series)).
"CTO Floating Allocation Percentage" shall mean, with respect to any
----------------------------------
Due Period, the percentage equivalent of a fraction, the numerator of which is
equal to the CTO Invested Amount as of the last day of the immediately preceding
Due Period (or the CTO Initial Invested Amount, in the case of the first Due
Period applicable to Series 2000-1) and the denominator of which is equal to the
greater of (i) the sum of (a) the Aggregate Principal Receivables in the Trust
as of the last day of such immediately preceding Due Period (or the Closing
Date, in the case of the first Due Period applicable to Series 2000-1) and (b)
the Excess Funding Amount at the end of such last day and (ii) the sum of the
numerators used to calculate the corresponding
<PAGE>
invested percentages for all Series outstanding as of the date on which such
determination is being made; provided, however, that, with respect to any Due
-------- -------
Period in which Additional Accounts are included as Accounts pursuant to Section
2.6(a) or Section 2.6(b), the amount calculated in clause (i) above shall be
increased by the amount of Principal Receivables in such Additional Accounts as
of the Additional Account Cut Off Date on and after the Additional Account
Closing Date applicable to such Additional Accounts.
"CTO Initial Invested Amount" shall mean the aggregate initial
---------------------------
principal amount of the Collateralized Trust Obligations, which is $47,500,000.
"CTO Interest Rate" shall mean, with respect to any Interest Period,
-----------------
the rate designated in the letter agreement, dated February 28, 2000, between
the Transferor and the Trustee; provided, however, that the CTO Interest Rate
-------- -------
shall in no event exceed LIBOR plus 1.20% per annum.
"CTO Interest Shortfall" shall have the meaning specified in Section
----------------------
4.3(c).
"CTO Invested Amount" shall mean, as of any date, an amount equal to
-------------------
(a) the CTO Initial Invested Amount, minus (b) the aggregate amount deposited
-----
into the Principal Funding Account prior to such date as CTO Monthly Principal
(excluding interest and other investment earnings on such amount), minus (c) the
-----
aggregate amount of principal payments made to the CTO Securityholders prior to
such date, minus (d) the aggregate amount of CTO Investor Charge Offs for all
-----
prior Distribution Dates, minus (e) the amount of CTO Subordinated Principal
-----
Collections allocated on all prior Distribution Dates pursuant to Section 4.9(a)
or (b), minus (f) an amount equal to the amount by which the CTO Invested Amount
-----
has been reduced on all prior Distribution Dates pursuant to Section 4.7(a) or
(b), plus (g) the sum of the amount of Excess Spread and Shared Excess Finance
----
Charge Collections allocated and available on all prior Distribution Dates
pursuant to Section 4.8(i) for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (d), (e) and (f) and, without duplication, the
aggregate amount of the reductions of the Series Adjustment Amounts allocated to
the CTO Invested Amount prior to such date pursuant to Section 4.7(f); provided,
--------
however, that the CTO Invested Amount may not be reduced below zero.
- -------
"CTO Investor Charge Off" shall have the meaning specified in Section
-----------------------
4.7(c).
"CTO Monthly Interest" shall have the meaning specified in Section
--------------------
4.3(c).
<PAGE>
"CTO Monthly Principal" shall have the meaning specified in Section
---------------------
4.4(c).
"CTO Penalty Rate" shall mean, for any Interest Period, the sum of the
----------------
CTO Interest Rate for such Interest Period and 2.00% per annum.
"CTO Principal Commencement Date" shall mean (i) unless the Early
-------------------------------
Amortization Period shall have commenced or the Accumulation Period shall have
been suspended in accordance with Section 4.16, the first Distribution Date on
which the aggregate amount on deposit in the Principal Funding Account in
respect of Class A Monthly Principal or Class B Monthly Principal equals the
aggregate outstanding principal balance of the Class A Certificates and the
Class B Certificates and (ii) if the Early Amortization Period shall have
commenced or the Accumulation Period shall have been suspended in accordance
with Section 4.16, the Distribution Date on which the Class A Certificates and
the Class B Certificates are paid in full.
"CTO Required Amount" shall have the meaning specified in Section
-------------------
4.5(c).
"CTO Securityholder" shall mean the Person in whose name a
------------------
Collateralized Trust Obligation is registered in the Certificate Register.
"CTO Servicing Fee" shall have the meaning specified in Section 7 of
-----------------
this Series Supplement.
"CTO Subordinated Principal Collections" shall mean, with respect to
--------------------------------------
any Due Period, an amount equal to the product of (i) the CTO Floating
Allocation Percentage (with respect to any Due Period during the Revolving
Period) or the CTO Fixed Allocation Percentage (with respect to any Due Period
during the Accumulation Period or the Early Amortization Period) and (ii) the
aggregate amount of Collections of Principal Receivables for such Due Period.
"Deficit Controlled Accumulation Amount" shall mean (a) on the first
--------------------------------------
Distribution Date with respect to the Accumulation Period, the excess, if any,
of the Controlled Accumulation Amount for such Distribution Date over the amount
deposited into the Principal Funding Account on or before that Distribution Date
as Class A Monthly Principal, Class B Monthly Principal or CTO Monthly Principal
and (b) on each subsequent Distribution Date with respect to the Accumulation
Period, the excess, if any, of the Controlled Deposit Amount for such subsequent
Distribution Date over the amount deposited into the Principal Funding Account
with respect to that Distribution Date as Class A Monthly Principal, Class B
Monthly Principal or CTO Monthly Principal.
<PAGE>
"Due Period" shall mean the period from and including the first day of
----------
a calendar month to and including the last day of such calendar month (or, in
the case of the first Due Period, the period from and including the Closing Date
to and including March 31, 2000).
"Early Amortization Period" shall mean the period commencing at the
-------------------------
close of business on the day on which an Early Amortization Event with respect
to Series 2000-1 is deemed to have occurred and ending on the earlier of (a) the
date on which the Series 2000-1 Certificates are paid in full and (b) the Stated
Series Termination Date.
"Excess Spread" shall mean, with respect to any Distribution Date, the
-------------
sum of the amounts, if any, specified pursuant to Sections 4.6(a)(iv),
4.6(b)(iii), 4.6(c)(ii) and 4.6(d)(ii) with respect to such Distribution Date.
"Excess Spread Percentage" shall mean, for any Due Period, the amount,
------------------------
if any, expressed as a percentage, by which the Portfolio Yield with respect to
such Due Period exceeds the Base Rate with respect to such Due Period.
"Expected Final Distribution Date" shall mean the February 2003
--------------------------------
Distribution Date.
"Finance Charge Shortfall" shall have the meaning specified in Section
------------------------
4.11.
"Fitch" shall mean Fitch IBCA, Inc.
-----
"Fixed Allocation Percentage" shall mean, with respect to any Due
---------------------------
Period, the sum of the Class A Fixed Allocation Percentage, the Class B Fixed
Allocation Percentage, the CTO Fixed Allocation Percentage and the Class D Fixed
Allocation Percentage, in each case with respect to such Due Period.
"Floating Allocation Percentage" shall mean, with respect to any Due
------------------------------
Period, the sum of the Class A Floating Allocation Percentage, the Class B
Floating Allocation Percentage, the CTO Floating Allocation Percentage and the
Class D Floating Allocation Percentage, in each case with respect to such Due
Period.
"Initial Invested Amount" shall mean the aggregate initial principal
-----------------------
amount of the Series 2000-1 Certificates, which is $500,000,000.
"Interest Period" shall mean, with respect to any Distribution Date,
---------------
the period from and including the Distribution Date immediately preceding such
Distribution Date (or, in the
<PAGE>
case of the first Distribution Date, from and including the Closing Date) to but
excluding such Distribution Date.
"Interest Rate Cap" shall mean either the Class A Interest Rate Cap or
-----------------
the Class B Interest Rate Cap, as applicable.
"Interest Rate Caps" shall mean the Class A Interest Rate Cap and the
------------------
Class B Interest Rate Cap.
"Interest Rate Cap Payment" shall mean, with respect to any
-------------------------
Distribution Date, the Class A Cap Payment and the Class B Cap Payment, if any,
with respect to such Distribution Date.
"Interest Rate Cap Provider" shall mean Bank of America, N.A., in its
--------------------------
capacity as obligor under the Interest Rate Caps, or, if any Replacement
Interest Rate Cap or Qualified Substitute Arrangement is obtained pursuant to
Section 4A of this Series Supplement, any obligor with respect to such
Replacement Interest Rate Cap or Qualified Substitute Arrangement.
"Invested Amount" shall mean, as of any date, an amount equal to the
---------------
sum of the Class A Invested Amount, the Class B Invested Amount, the CTO
Invested Amount and the Class D Invested Amount, in each case as of such date.
"Invested Percentage" shall mean, with respect to any Due Period, (a)
-------------------
when used with respect to Finance Charge Receivables during the Revolving Period
or the Accumulation Period or Principal Receivables during the Revolving Period,
the Floating Allocation Percentage, (b) when used with respect to Finance Charge
Receivables during the Early Amortization Period or Principal Receivables during
the Accumulation Period or the Early Amortization Period, the Fixed Allocation
Percentage and (c) when used with respect to the Default Amount or the Series
Adjustment Amount at any time, the Floating Allocation Percentage.
"Investor Default Amount" shall mean, with respect to any Distribution
-----------------------
Date, an amount equal to the product of (a) the Default Amount for the
immediately preceding Due Period and (b) the Floating Allocation Percentage for
such Due Period.
"Investor Monthly Servicing Fee" shall have the meaning specified in
------------------------------
Section 7 of this Series Supplement.
"LIBOR" shall mean, for any Interest Period, the London interbank
-----
offered rate for one-month dollar deposits determined by the Trustee for such
Interest Period in accordance with Section 4.3A.
<PAGE>
"LIBOR Determination Date" shall mean (i) for the period from and
------------------------
including the Closing Date to and including March 14, 2000, February 24, 2000,
(ii) for the period from and including March 15, 2000 to and including April 16,
2000, March 13, 2000, and (iii) for each subsequent Interest Period, the second
Business Day prior to the Distribution Date on which such Interest Period
commences. For purposes of this definition, a Business Day is any day which is
both a Business Day and a day on which dealings in deposits in United States
dollars are transacted in the London interbank market.
"Minimum Aggregate Principal Receivables" shall have the meaning
---------------------------------------
specified in Section 3 of this Series Supplement.
"Minimum Transferor Interest Percentage" shall have the meaning
--------------------------------------
specified in Section 3 of this Series Supplement.
"Monthly Interest" shall mean, with respect to any Distribution Date,
----------------
the sum of the Class A Monthly Interest, the Class B Monthly Interest, the CTO
Monthly Interest and the Class D Monthly Interest, in each case for such
Distribution Date.
"Paired Series" shall have the meaning specified in Section 19 of this
-------------
Series Supplement.
"Portfolio Yield" shall mean, with respect to any Due Period, the
---------------
annualized percentage equivalent of a fraction, the numerator of which is equal
to (a) the Collections of Finance Charge Receivables for such Due Period that
are allocated to Series 2000-1 (including any interest and other investment
earnings on funds on deposit in the Excess Funding Account applied as
Collections of Finance Charge Receivables for such Due Period), plus (b) any
----
Shared Excess Finance Charge Collections that are allocated to Series 2000-1
with respect to such Due Period, plus (c) the interest and other investment
----
earnings, if any (net of losses and investment expenses), on funds on deposit in
the Spread Account included in Excess Spread for the Distribution Date
immediately following the last day of such Due Period pursuant to Section
4.12(b), plus (d) the portion of the Principal Funding Investment Proceeds, if
----
any, required to be deposited into the Collection Account on the Distribution
Date immediately following the last day of such Due Period pursuant to Section
4.13(c), plus (e) the Reserve Account Draw Amount with respect to such Due
----
Period, plus (f) the interest and other investment earnings, if any (net of
----
losses and investment expenses), on funds on deposit in the Reserve Account
required to be deposited into the Collection Account on the Distribution Date
immediately following the last day of such Due Period pursuant to Section
4.14(e), plus (g) the Interest Rate Cap Payments, if any, required to be
----
deposited in the Collection Account on the Distribution Date immediately
following the last day of such Due Period minus (h) the Investor Default Amount
-----
for the Distribution
<PAGE>
Date immediately following the last day of such Due Period, and the denominator
of which is the Adjusted Invested Amount as of the last day of such Due Period.
"Principal Funding Account" shall have the meaning specified in
-------------------------
Section 4.13(a).
"Principal Funding Investment Proceeds" shall have the meaning
-------------------------------------
specified in Section 4.13(b).
"Principal Shortfall" shall have the meaning specified in Section
-------------------
4.10.
"Qualified Institution" shall mean (i) a depository institution, which
---------------------
may include the Trustee, organized under the laws of the United States or any
one of the states thereof or the District of Columbia (or any domestic branch or
agency of any foreign bank), the deposits in which are insured by the FDIC and
which at all times has a short-term unsecured debt or certificate of deposit
rating of at least A-1+ or P-1 by each Rating Agency or a long-term unsecured
debt rating of at least AAA or Aa2 by each Rating Agency or (ii) a depository
institution, which may include the Trustee, otherwise acceptable to each Rating
Agency.
"Qualified Maturity Agreement" shall mean a written agreement between
----------------------------
the Transferor and a Qualified Institution under which the Qualified Institution
agrees to deposit into the Principal Funding Account on or before the Expected
Final Distribution Date an amount equal to the aggregate outstanding principal
balance of the Class A Certificates, the Class B Certificates and the
Collateralized Trust Obligations as of the Expected Final Distribution Date.
"Qualified Substitute Arrangement" shall have the meaning specified in
--------------------------------
Section 4A(c)(iii) of this Series Supplement.
"Rating Agencies" shall mean Fitch and Moody's.
---------------
"Reference Banks" shall mean the principal London offices of four
---------------
major banks in the London interbank market as may be selected by the Servicer
upon notice to the Trustee.
"Replacement Interest Rate Cap" shall mean one or more Interest Rate
-----------------------------
Caps, which, in combination with all other Interest Rate Caps then in effect,
after giving effect to any planned cancellations of any presently outstanding
Interest Rate Caps, satisfies the conditions set forth in Section 4A of this
Series Supplement.
"Required Accumulation Factor Number" shall mean, with respect to any
-----------------------------------
Distribution Date, a fraction, rounded upwards to
<PAGE>
the nearest whole number, the numerator of which is one and the denominator of
which is equal to the lowest monthly principal payment rate on the Accounts,
expressed as a decimal, for any month during the 12 month period preceding the
date of such calculation (or any lower monthly principal payment rate selected
by the Servicer at its option and in its sole discretion).
"Required Draw Amount" shall have the meaning specified in Section
--------------------
4.12(c).
"Required Reserve Account Amount" shall mean, with respect to any
-------------------------------
Distribution Date prior to the Reserve Account Funding Date, $0, and, with
respect to any Distribution Date on or after the Reserve Account Funding Date,
an amount equal to (a) 0.50% of the aggregate outstanding principal amount of
the Class A Certificates, the Class B Certificates and the CTOs as of the
preceding Distribution Date or (b) such other amount as may be designated by the
Transferor; provided, however, that if any designation pursuant to clause (b)
-------- -------
above is of a lesser amount, (i) the Rating Agency Condition shall have been
satisfied and (ii) the Transferor shall have delivered to the Trustee an
Officer's Certificate to the effect that, based on the facts known to such
officer at such time, in the reasonable belief of such officer, such designation
will not cause an Early Amortization Event or an event that, after the giving of
notice or the lapse of time, would constitute an Early Amortization Event to
occur with respect to Series 2000-1.
"Required Spread Account Amount" shall mean, with respect to any
------------------------------
Distribution Date (i) an amount equal to the product of the Required Spread
Account Percentage for such Distribution Date and the Invested Amount as of the
last day of the preceding Due Period or (ii) such greater amount as may be
designated by the Transferor with respect to such Distribution Date; provided,
--------
however, that (i) if an Early Amortization Event shall have occurred, the
- -------
Required Spread Account Amount with respect to each Distribution Date thereafter
(subject to clause (iii) below) shall equal the greater of the Required Spread
Account Amount with respect to such Distribution Date and the Required Spread
Account Amount with respect to the Distribution Date immediately preceding the
occurrence of such Early Amortization Event, (ii) if a CTO Default shall have
occurred, the Required Spread Account Amount with respect to each Distribution
Date thereafter shall equal the CTO Invested Amount as of such date and (iii) in
no event shall the Required Spread Account Amount with respect to any
Distribution Date exceed the CTO Invested Amount as of such date; and, provided
--------
further, that this definition may be amended at any time and from time to time
- -------
by the Servicer, the Transferor and the Trustee, with the consent of the Holders
of more than 66-2/3% of the CTO Invested Amount, if (x) the Transferor shall
have received written notice from each Rating Agency rating the Collateralized
Trust Obligations
<PAGE>
(with a copy delivered to the Trustee) that such reduction will not result in
the reduction or withdrawal of the then current rating of the Collateralized
Trust Obligations, (y) the Transferor shall have delivered to the Trustee an
Officer's Certificate to the effect that, based on the facts known to such
officer at such time, in the reasonable belief of the Transferor, such reduction
will not cause an Early Amortization Event or an event that, after the giving of
notice or the lapse of time, would constitute an Early Amortization Event to
occur with respect to Series 2000-1 and (z) the Transferor shall have provided
an Opinion of Counsel addressed to the Trustee, dated the date of such
amendment, to the effect that such amendment will not cause any Class of the
Series 2000-1 Investor Certificates as to which an opinion that such Class was
debt was given on the Closing Date to fail to qualify as debt for federal income
tax purposes, cause the Trust to be characterized for federal income tax
purposes as an association taxable as a corporation or otherwise have any
material adverse impact on the federal income tax characterization of any
outstanding Series of Investor Certificates or the federal income taxation of
any Investor Certificateholder or any Certificate Owner.
"Required Spread Account Percentage" shall mean, as of any
----------------------------------
Distribution Date, (a) if the Average Excess Spread Percentage as of such
Distribution Date is greater than or equal to 5.00%, 0.00%, (b) if the Average
Excess Spread Percentage as of such Distribution Date is less than 5.00% but
greater than or equal to 4.50%, 1.25%, (c) if the Average Excess Spread
Percentage as of such Distribution Date is less than 4.50% but greater than or
equal to 4.00%, 1.50%, (d) if the Average Excess Spread Percentage as of such
Distribution Date is less than 4.00% but greater than or equal to 3.00%, 2.00%,
(e) if the Average Excess Spread Percentage as of such Distribution Date is less
than 3.00% but greater than or equal to 2.00%, 3.00%, and (f) if the Average
Excess Spread Percentage as of such Distribution Date is less than 2.00%, 5.00%;
provided, however, that (a) the Required Spread Account Percentage as of any
- -------- -------
Distribution Date will be reduced to 3.00% only if the Spread Account Funding
Condition is satisfied as of such Distribution Date, the Average Excess Spread
Percentage is greater than or equal to 2.00% as of such Distribution Date, the
Average Excess Spread Percentage was greater than or equal to 2.00% as of each
of the two preceding Distribution Dates and a further reduction in the Required
Spread Account Percentage is not otherwise permitted by this proviso, (b) the
Required Spread Account Percentage as of any Distribution Date will be reduced
to 2.00% only if the Spread Account Funding Condition is satisfied as of such
Distribution Date, the Average Excess Spread Percentage is greater than or equal
to 3.00% as of such Distribution Date, the Average Excess Spread Percentage was
greater than or equal to 3.00% as of each of the two preceding Distribution
Dates and a further reduction in the Required Spread Account Percentage is not
otherwise permitted by this proviso,
<PAGE>
(c) the Required Spread Account Percentage as of any Distribution Date will be
reduced to 1.50% only if the Spread Account Funding Condition is satisfied as of
such Distribution Date, the Average Excess Spread Percentage is greater than or
equal to 4.00% as of such Distribution Date, the Average Excess Spread
Percentage was greater than or equal to 4.00% as of each of the two preceding
Distribution Dates and a further reduction in the Required Spread Account
Percentage is not otherwise permitted by this proviso, (d) the Required Spread
Account Percentage as of any Distribution Date will be reduced to 1.25% only if
the Spread Account Funding Condition is satisfied as of such Distribution Date,
the Average Excess Spread Percentage is greater than or equal to 4.50% as of
such Distribution Date, the Average Excess Spread Percentage was greater than or
equal to 4.50% as of each of the two preceding Distribution Dates and a further
reduction in the Required Spread Account Percentage is not otherwise permitted
by this proviso and (e) the Required Spread Account Percentage as of any
Distribution Date will be reduced to 0.00% only if the Spread Account Funding
Condition is satisfied as of such Distribution Date, the Average Excess Spread
Percentage is greater than or equal to 5.00% as of such Distribution Date and
the Average Excess Spread Percentage was greater than or equal to 5.00% as of
each of the two preceding Distribution Dates; and, provided further, that this
-------- -------
definition may be amended at any time and from time to time by the Servicer, the
Transferor and the Trustee, with the consent of the Holders of more than 66-2/3%
of the CTO Invested Amount, if (x) the Transferor shall have received written
notice from each Rating Agency rating the Collateralized Trust Obligations (with
a copy delivered to the Trustee) that such reduction will not result in the
reduction or withdrawal of the then current rating of the Collateralized Trust
Obligations, (y) the Transferor shall have delivered to the Trustee an Officer's
Certificate to the effect that, based on the facts known to such officer at such
time, in the reasonable belief of the Transferor, such reduction will not cause
an Early Amortization Event or an event that, after the giving of notice or the
lapse of time, would constitute an Early Amortization Event to occur with
respect to Series 2000-1 and (z) the Transferor shall have provided an Opinion
of Counsel addressed to the Trustee, dated the date of such amendment, to the
effect that such amendment will not cause any Class of the Series 2000-1
Investor Certificates as to which an opinion that such Class was debt was given
on the Closing Date to fail to qualify as debt for federal income tax purposes,
cause the Trust to be characterized for federal income tax purposes as an
association taxable as a corporation or otherwise have any material adverse
impact on the federal income tax characterization of any outstanding Series of
Investor Certificates or the federal income taxation of any Investor
Certificateholder or any Certificate Owner.
"Reserve Account" shall have the meaning specified in Section 4.14(a).
---------------
<PAGE>
"Reserve Account Draw Amount" shall have the meaning specified in
---------------------------
Section 4.14(c).
"Reserve Account Funding Date" shall mean the Distribution Date
----------------------------
immediately following the Due Period which commences three months prior to the
Accumulation Commencement Due Period, provided that the Reserve Account Funding
Date shall be accelerated to (a) the Distribution Date immediately following the
Due Period which commences four months prior to the Accumulation Commencement
Due Period if the average of the Portfolio Yield minus the Base Rate for any
three consecutive Due Periods is less than 4.00%, (b) the Distribution Date
immediately following the Due Period which commences six months prior to the
Accumulation Commencement Due Period if the average of the Portfolio Yield minus
the Base Rate for any three consecutive Due Periods is less than 3.00% or (c)
the Distribution Date immediately following the Due Period which commences nine
months prior to the Accumulation Commencement Due Period if the average of the
Portfolio Yield minus the Base Rate for any three consecutive Due Periods is
less than 2.00%.
"Reserve Account Surplus" shall mean, as of any Distribution Date, the
-----------------------
amount, if any, by which the amount on deposit in the Reserve Account on such
Distribution Date exceeds the Required Reserve Account Amount with respect to
such Distribution Date.
"Revolving Period" shall mean the period beginning on the Closing Date
----------------
and ending on the earlier of (a) the close of business on the day preceding the
commencement of the Accumulation Period and (b) the close of business on the day
preceding the commencement of the Early Amortization Period.
"Series 2000-1" shall mean the Series the terms of which are specified
-------------
in this Series Supplement.
"Series 2000-1 Certificate" shall mean a Class A Certificate, a Class
-------------------------
B Certificate, a Collateralized Trust Obligation or a Class D Certificate.
"Series 2000-1 Certificateholder" shall mean a Class A
-------------------------------
Certificateholder, a Class B Certificateholder, a CTO Securityholder or a Class
D Certificateholder.
"Series Minimum Transferor Amount" shall mean zero or, if the
--------------------------------
Transferor designates a Minimum Transferor Interest Percentage higher than 0%
pursuant to Section 3 of this Series Supplement, an amount calculated as
follows:
X - X
---
1-Y
<PAGE>
Where
X = Invested Amount (without giving effect to any Series
Adjustment Amount); and
Y = Minimum Transferor Interest
Percentage;
provided, however, that if on a previous date there was a Dilution Amount and
- -------- -------
the Transferor shall not have then or thereafter paid the amount required by
Section 3.8, and there remains an obligation to pay such amount, the Series
Minimum Transferor Amount as of such previous date shall continue to apply.
"Servicing Fee Percentage" shall mean 2.00%.
------------------------
"Shared Excess Finance Charge Collections" shall mean, with respect to
----------------------------------------
any Due Period, the aggregate amount for all outstanding Series in Group One of
Collections of Finance Charge Receivables which the related Supplements specify
are to be treated as "Shared Excess Finance Charge Collections" for such Due
Period.
"Shared Principal Collections" shall mean, with respect to any Due
----------------------------
Period, the aggregate amount for all outstanding Series in Group One of
Collections of Principal Receivables which the related Supplements specify are
to be treated as "Shared Principal Collections" for such Due Period.
"Special Distribution Date" shall mean each Distribution Date with
-------------------------
respect to the Early Amortization Period.
"Spread Account" shall have the meaning specified in Section 4.12(a).
--------------
"Spread Account Draw Amount" shall have the meaning specified in
--------------------------
Section 4.12(c).
"Spread Account Funding Condition" shall mean, as of any Distribution
--------------------------------
Date, that (i) the amount on deposit in and available to be withdrawn from the
Spread Account on such Distribution Date (before giving effect to any withdrawal
to be made from the Spread Account on such Distribution Date or to any reduction
in the Required Spread Account Percentage to be made on such Distribution Date)
is equal to or exceeds the Required Spread Account Amount with respect to such
Distribution Date and (ii) the amount on deposit in and available to be
withdrawn from the Spread Account on each of the two preceding Distribution
Dates (before giving effect to any withdrawal to be made from the Spread Account
on such Distribution Date) was equal to or
<PAGE>
exceeded the Required Spread Account Amount with respect to such Distribution
Date (such Required Spread Account Amount to be calculated using the Required
Spread Account Percentage as of the later of such two preceding Distribution
Dates).
"Spread Account Surplus" shall mean, as of any Distribution Date, the
----------------------
amount, if any, by which the amount on deposit in the Spread Account on such
Distribution Date exceeds the Required Spread Account Amount with respect to
such Distribution Date.
"Stated Series Termination Date" shall mean the February 2006
------------------------------
Distribution Date.
"Subordinated Principal Collections" shall mean, with respect to any
----------------------------------
Due Period, an amount equal to the sum of the Class B Subordinated Principal
Collections, CTO Subordinated Principal Collections and Class D Subordinated
Principal Collections for such Due Period.
"Telerate Page 3750" shall mean the display page currently so
------------------
designated on the Bridge Telerate Market Report (or such other page as may
replace that page on that service for the purpose of displaying comparable rates
or prices).
"Transfer" shall have the meaning specified in Section 12(d) of this
--------
Series Supplement.
SECTION 3. Minimum Transferor Interest Percentage and Minimum
--------------------------------------------------
Aggregate Principal Receivables. The Minimum Transferor Interest Percentage
- -------------------------------
applicable to the Series 2000-1 Certificates shall be 0%; provided, however,
-------- -------
that the Transferor may, in its sole discretion, designate a higher percentage
as the Minimum Transferor Interest Percentage so long as, after giving effect to
such designation and any repurchase of Investor Certificates or designation of
Additional Accounts, the Transferor Amount shall equal or exceed the Minimum
Transferor Amount. The Minimum Aggregate Principal Receivables applicable to
the Series 2000-1 Certificates shall be the Initial Invested Amount or, subject
to the Rating Agency Condition, such lesser amount as may be designated by the
Transferor.
SECTION 4. Reassignment and Transfer Terms. The Series 2000-1
-------------------------------
Certificates may be reassigned and transferred to the Transferor on any
Distribution Date on or after which the Invested Amount is reduced to an amount
less than or equal to 5% of the Initial Invested Amount, subject to the
provisions of Section 12.2 of the Agreement.
Section 4A. Interest Rate Caps. (a) On or prior to the Closing Date,
------------------
the Transferor shall enter into the Class A Interest Rate Cap for the benefit of
the Class A
<PAGE>
Certificateholders and the Class B Interest Rate Cap for the benefit of the
Class B Certificateholders. Except as provided below, each of the Class A
Interest Rate Cap and the Class B Interest Rate Cap provides that it will
terminate on the earlier of the day the outstanding principal balance of the
Class A Certificates or the Class B Certificates, as applicable, is reduced to
zero and the day following the Stated Series Termination Date. The Transferor
does hereby transfer, assign, set-over, and otherwise convey to the Trustee for
the benefit of the Class A Certificateholders and the Class B
Certificateholders, without recourse, all of its rights under the Class A
Interest Rate Cap and the Class B Interest Rate Cap, respectively, and all
proceeds thereof. Such property shall constitute Trust Property for all purposes
of the Agreement. The foregoing transfer, assignment, set-over and conveyance
does not constitute and is not intended to result in a creation or an assumption
by the Trust, the Trustee or any Certificateholder of any obligation of the
Transferor or any other Person in connection with the Interest Rate Caps or
under any agreement or instrument relating thereto.
In connection with such transfer, the Transferor agrees to record and
file, at its own expense, financing statements (and continuation statements with
respect to such financing statements when applicable) with respect to the
Interest Rate Caps for the transfer of general intangibles (as defined in the
UCC in effect in the Relevant UCC State) meeting the requirements of applicable
state law in such manner and in such jurisdictions as are necessary to perfect
the foregoing transfer and assignment by the Transferor to the Trustee, and to
deliver a file-stamped copy of such financing statements or other evidence of
such filings to the Trustee on or prior to the Closing Date. In connection with
such transfer, the Transferor agrees to deliver to the Trustee on or prior to
the Closing Date an executed copy of each of the Interest Rate Caps.
The Transferor hereby grants to the Trustee a security interest in all
of the Transferor's rights under the Interest Rate Caps in order to secure the
payment of the Class A Certificates and Class B Certificates. This Agreement
shall constitute a security agreement under applicable law.
The Trustee hereby acknowledges its acceptance, to the extent validly
transferred, assigned, set-over or otherwise conveyed to the Trustee, for the
benefit of the Class A Certificateholders and the Class B Certificateholders, of
all of the rights previously held by the Transferor under the Class A Interest
Rate Cap and the Class B Interest Rate Cap, respectively, and all proceeds
thereof, and declares that it shall hold such rights upon the trust set forth
herein and in the Agreement, and subject to the terms hereof and thereof, for
the
<PAGE>
benefit of the Class A Certificateholders and the Class B Certificateholders,
respectively.
(b) The Interest Rate Caps shall not require the Trustee or the Trust
to make any payments thereunder, and each Interest Rate Cap shall provide that
(i) the Trustee shall be entitled to receive a payment (determined in accordance
with the respective Interest Rate Cap) from the Interest Rate Cap Provider on or
prior to each Distribution Date if LIBOR for the related Interest Period plus
0.23% exceeds the Class A Cap Rate or LIBOR for the related Interest Period plus
0.59% exceeds the Class B Cap Rate, and (ii) notwithstanding any prior
termination of the Agreement, the Interest Rate Cap Provider shall not, prior to
the date which is one year and one day after the final payment of the Series
2000-1 Certificates, petition or otherwise invoke the process of any
governmental authority for the purpose of commencing or sustaining a case
against the Trust under any federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Trust or any substantial part of
its property or ordering the winding up or liquidation of the affairs of the
Trust. The Interest Rate Caps shall require the Interest Rate Cap Provider to
make a payment on or prior to each Distribution Date to the Trustee, on behalf
of the Class A Certificateholders or the Class B Certificateholders, as
applicable, in an amount equal to the product of (i) the amount by which, in the
case of the Class A Interest Rate Cap, the Class A Certificate Rate for the
related Interest Period exceeds the Class A Cap Rate or, in the case of the
Class B Interest Rate Cap, the Class B Certificate Rate for the related Interest
Period exceeds the Class B Cap Rate, (ii) the Class A Notional Amount or the
Class B Notional Amount, as applicable, for such Interest Period and (iii) the
actual number of days in such Interest Period divided by 360. Payments pursuant
to the Class A Interest Rate Cap shall be deposited in the Collection Account on
each Distribution Date for payment to the Class A Certificateholders on such
Distribution Date. Payments pursuant to the Class B Interest Rate Cap shall be
deposited in the Collection Account on each Distribution Date for payment to the
Class B Certificateholders on such Distribution Date.
(c) In the event that the short-term debt rating of the Interest Rate
Cap Provider is withdrawn or reduced below P-1 by Moody's or A-1+ by Standard &
Poor's or the long-term unsecured debt rating of the Interest Rate Cap Provider
is withdrawn or reduced below Aa3 by Moody's, then within 60 days (in the case
of a withdrawal or reduction by Standard & Poor's) or 30 days (in the case of a
withdrawal or reduction by Moody's) after such decline in the creditworthiness
of the Interest Rate Cap Provider as determined by the applicable Rating Agency
(notice of which the Interest Rate Cap Provider shall be required to provide to
the Trustee and the Rating Agencies promptly upon
<PAGE>
obtaining knowledge thereof), the Interest Rate Caps shall require the Interest
Rate Cap Provider, at its own expense, to either (x) obtain a Replacement
Interest Rate Cap for each Interest Rate Cap under which it is then currently an
obligor or (y) enter into a Qualified Substitute Arrangement.
Upon receipt of notice of any such reduction or withdrawal, the
Servicer shall use its best efforts to either:
(i) with the prior written confirmation of each Rating Agency
that such action will not result in a reduction or withdrawal of the rating
of the Class A Certificates or the Class B Certificates, (1) cause the
Interest Rate Cap Provider to pledge securities in the manner provided by
applicable law or (2) otherwise cause to be pledged securities, which in
each case shall be held by the Trustee, its custodian or its agent free and
clear of the Lien of any third party, in a manner conferring on the Trustee
a perfected first Lien in such securities securing the Interest Rate Cap
Provider's performance of its obligations under the applicable Interest
Rate Cap(s); or
(ii) (A) provide written notice to such Interest Rate Cap
Provider of the Transferor's intention to terminate such Interest Rate Cap
within such 30-day period or 60-day period, as applicable, (B) terminate
such Interest Rate Cap on behalf of the Transferor within such 30-day
period or 60-day period, as applicable, and (C) request the payment to it
of all amounts due under such Interest Rate Cap through the termination
date and deposit any such amounts so received, on the day of receipt, to
the Collection Account for application as Class A Available Funds or Class
B Available Funds, as applicable; provided however, that the Servicer shall
-------- -------
not effect any termination of any Interest Rate Cap unless a Replacement
Interest Rate Cap or Qualified Substitute Arrangement meeting the
requirements of Section 4A(d) has been obtained or will be obtained prior
to or simultaneously with the termination of such Interest Rate Cap; or
(iii) with the prior written confirmation of each Rating
Agency that such action will not result in a reduction or withdrawal of the
rating of the Class A Certificates or the Class B Certificates, establish
any other arrangement satisfactory to the Rating Agency including
collateral, guarantees or letters of credit (a "Qualified Substitute
--------------------
Arrangement");
-----------
provided, however, that in the event at any time any Replacement Interest Rate
- -------- -------
Cap, Qualified Substitute Arrangement or arrangement pursuant to clause (i) of
this sentence shall cease to be satisfactory to the Rating Agency or shall
terminate prior
<PAGE>
to the Expected Final Distribution Date, then the provisions of this Section
4A(c) shall again be applied and in connection therewith the 30-day period or
60-day period, as applicable, referred to above shall commence on the date the
Servicer receives notice of such cessation or termination, as the case may be.
(d) The Servicer shall not at any time effect any termination of any
Interest Rate Cap unless, prior to or simultaneously with the termination
thereof, the Servicer has obtained or shall obtain (i) a Replacement Interest
Rate Cap or Qualified Substitute Arrangement with respect thereto, (ii) to the
extent applicable, an Opinion of Counsel addressed to the Trustee as to the due
authorization, execution and delivery and the validity and enforceability of
such Replacement Interest Rate Cap or Qualified Substitute Arrangement, as the
case may be, and (iii) a letter from the Rating Agencies confirming that the
termination of such Interest Rate Cap and its replacement with such Replacement
Interest Rate Cap or Qualified Substitute Arrangement will not adversely affect
its rating of the Class A Certificates or the Class B Certificates, all such
documents to be delivered to the Trustee.
(e) The Servicer shall notify the Trustee and the Rating Agencies
within five Business Days after obtaining knowledge that the short term
unsecured debt or short term certificate of deposit rating, or long term
unsecured debt or long term certificate of deposit rating, of the Interest Rate
Cap Provider is withdrawn or reduced by Standard & Poor's or Moody's.
(f) Notwithstanding the foregoing, the Servicer may at any time
obtain a Replacement Interest Rate Cap or Qualified Substitute Arrangement,
provided that the Servicer delivers to the Trustee (i) an Opinion of Counsel
addressed to the Trustee as to the due authorization, execution and delivery and
validity and enforceability of such Replacement Interest Rate Cap or Qualified
Substitute Arrangement with respect to the provider thereof and (ii) a letter
from the Rating Agencies confirming that the termination of the then current
Interest Rate Cap and its replacement with such Replacement Interest Rate Cap or
Qualified Substitute Arrangement will not adversely affect their respective
ratings of the Class A Certificates or the Class B Certificates.
(g) The Interest Rate Caps shall provide that the Interest Rate Cap
Provider shall perform the duties of the calculation agent under the Interest
Rate Caps.
SECTION 5. Delivery and Payment for the Certificates. The Trustee
-----------------------------------------
shall deliver the Series 2000-1 Certificates when authenticated in accordance
with Section 6.2 of the Agreement.
<PAGE>
SECTION 6. Form of Delivery of the Series 2000-1 Certificates. The
--------------------------------------------------
Class A Certificates, the Class B Certificates and the Collateralized Trust
Obligations shall be delivered as provided in Section 6.11 of the Agreement. The
Class D Certificates shall be delivered as Registered Certificates as provided
in Section 6.1 of the Agreement. The Class A Certificates and the Class B
Certificates shall be issued in minimum denominations of $1,000 and in integral
multiples of $1,000 in excess thereof. The CTOs shall be issued in minimum
denominations of $250,000 and in integral multiples of $1,000 in excess thereof.
The Class D Certificates shall be issued in minimum denominations of $500,000
and in integral multiples of $1,000 in excess thereof.
SECTION 7. Servicing Compensation. The share of the Monthly Servicing
----------------------
Fee allocable to the Series 2000-1 Certificateholders with respect to any
Distribution Date (the "Investor Monthly Servicing Fee") shall be equal to
------------------------------
one-twelfth of the product of (a) the Servicing Fee Percentage and (b) the
Invested Amount as of the last day of the immediately preceding Due Period;
provided, however, with respect to the first Distribution Date, the Investor
- -------- -------
Monthly Servicing Fee shall be equal to $916,667. The share of the Investor
Monthly Servicing Fee allocable to the Class A Certificateholders with respect
to any Distribution Date (the "Class A Servicing Fee") shall be equal to the
---------------------
product of (a) the Class A Floating Allocation Percentage divided by the
Floating Allocation Percentage, in each case with respect to such Distribution
Date, and (b) the Investor Monthly Servicing Fee with respect to such
Distribution Date; provided, however, that with respect to the first
-------- -------
Distribution Date, the Class A Servicing Fee shall be equal to $669,167. The
share of the Investor Monthly Servicing Fee allocable to the Class B
Certificateholders with respect to any Distribution Date (the "Class B Servicing
-----------------
Fee") shall be equal to the product of (a) the Class B Floating Allocation
- ---
Percentage divided by the Floating Allocation Percentage, in each case with
respect to such Distribution Date, and (b) the Investor Monthly Servicing Fee
with respect to such Distribution Date; provided, however, that with respect to
-------- -------
the first Distribution Date, the Class B Servicing Fee shall be equal to
$105,417. The share of the Investor Monthly Servicing Fee allocable to the CTO
Securityholders with respect to any Distribution Date (the "CTO Servicing Fee")
-----------------
shall be equal to the product of (a) the CTO Floating Allocation Percentage
divided by the Floating Allocation Percentage, in each case with respect to such
Distribution Date, and (b) the Investor Monthly Servicing Fee with respect to
such Distribution Date; provided, however, that with respect to the first
-------- -------
Distribution Date, the CTO Servicing Fee shall be equal to $87,083. The share
of the Investor Monthly Servicing Fee allocable to the Class D
Certificateholders with respect to any Distribution Date (the "Class D Servicing
-----------------
Fee") shall be equal to the product of (a) the Class D Floating Allocation
- ---
Percentage
<PAGE>
divided by the Floating Allocation Percentage, in each case with respect to such
Distribution Date, and (b) the Investor Monthly Servicing Fee with respect to
such Distribution Date; provided, however, that with respect to the first
-------- -------
Distribution Date, the Class D Servicing Fee shall be equal to $55,000. The
Class A Servicing Fee, the Class B Servicing Fee, the CTO Servicing Fee and the
Class D Servicing Fee shall be payable solely to the extent amounts are
available for distribution in respect thereof pursuant to this Series
Supplement. The remainder of the Monthly Servicing Fee shall be paid by the
Transferor or from amounts allocable to other Series (as provided in the
Agreement and the Supplements relating to such other Series) and in no event
shall the Trust, the Trustee or the Series 2000-1 Certificateholders be liable
for the share of the Monthly Servicing Fee to be paid by the Transferor or from
amounts allocable to any other Series.
SECTION 8. Article IV of the Agreement. Any provisions of Article IV
---------------------------
of the Agreement which distribute Collections to the Transferor on the basis of
the Transferor Percentage shall continue to apply irrespective of the issuance
of the Series 2000-1 Certificates. Section 4.1 of the Agreement shall read in
its entirety as provided in the Agreement. Article IV of the Agreement (except
for Section 4.1) as it relates to Series 2000-1 shall read in its entirety as
follows:
ARTICLE IV
Rights of Series 2000-1 Certificateholders and
----------------------------------------------
Allocation and Application of Collections
-----------------------------------------
Section 4.2 Collections and Allocations. (a) Collections of Finance
----------------------------
Charge Receivables with respect to any Due Period shall be allocated to Series
2000-1 in an amount equal to the product of the amount of such Collections and
the applicable Invested Percentage. Collections of Principal Receivables with
respect to any Due Period shall be allocated to Series 2000-1 in an amount equal
to the product of the amount of such Collections and the applicable Invested
Percentage. Collections of Principal Receivables processed on any Business Day
with respect to the Accumulation Period shall be allocated to Series 2000-1 in
an amount equal to the product of the amount of such Collections and the Fixed
Allocation Percentage with respect to the Due Period in which such Business Day
occurs.
(b) The Servicer shall apply, or shall instruct the Trustee to apply,
all Collections, Interest Rate Cap Payments and other funds on deposit in the
Collection Account that are allocated to the Series 2000-1 Certificates as
described in this Article IV. During the Revolving Period and the Accumulation
Period, Collections of Finance Charge Receivables allocable to Series 2000-1
with respect to each Due Period need not be deposited into the Collection
Account on a daily basis after an
<PAGE>
amount equal to Monthly Interest for the following Distribution Date plus, if
----
First North American National Bank is no longer the Servicer, the Investor
Monthly Servicing Fee for such Distribution Date, has been deposited into the
Collection Account. During the Revolving Period, Collections of Principal
Receivables allocable to Series 2000-1 with respect to each Due Period need not
be deposited into the Collection Account on a daily basis; provided, however,
-------- -------
that, in the event that the Minimum Transferor Amount exceeds the Transferor
Amount on any date, such Collections of Principal Receivables shall be deposited
into the Excess Funding Account until the Transferor Amount equals the Minimum
Transferor Amount; and, provided further, that, on any date on which the sum of
-------- -------
the Aggregate Principal Receivables and the Excess Funding Amount is less than
the Aggregate Invested Amount, such Collections of Principal Receivables shall
be deposited into the Excess Funding Account on a daily basis. During the
Accumulation Period, after an amount of Collections of Principal Receivables
allocable to Series 2000-1 equal to the Controlled Deposit Amount with respect
to each Due Period has been deposited into the Collection Account, Collections
of Principal Receivables allocable to Series 2000-1 with respect to each Due
Period need not be deposited into the Collection Account on a daily basis;
provided, however, that, in the event that the Minimum Transferor Amount exceeds
- -------- -------
the Transferor Amount on any date, such Collections of Principal Receivables
shall be deposited into the Excess Funding Account until the Transferor Amount
equals the Minimum Transferor Amount; and, provided further, that, on any date
-------- -------
on which the sum of the Aggregate Principal Receivables and the Excess Funding
Amount is less than the Aggregate Invested Amount, such Collections of Principal
Receivables shall be deposited into the Excess Funding Account on a daily basis.
Notwithstanding the foregoing, the Servicer need not make daily deposits of
Collections into the Collection Account at any time when the requirements of
Section 4.1(e) are satisfied.
Section 4.3 Determination of Monthly Interest. (a) The amount of
---------------------------------
monthly interest ("Class A Monthly Interest") distributable from the Collection
------------------------
Account with respect to the Class A Certificates on any Distribution Date shall
be an amount equal to the product of (i) the Class A Certificate Rate for the
related Interest Period, (ii) the outstanding principal amount of the Class A
Certificates as of the preceding Distribution Date (or, in the case of the first
Distribution Date, as of the Closing Date) and (iii) a fraction, the numerator
of which is the actual number of days in such Interest Period and the
denominator of which is 360.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class A Interest Shortfall"),
--------------------------
of (x) the Class A Monthly Interest for such Distribution Date over (y) the
aggregate amount of funds
<PAGE>
allocated and available to pay such Class A Monthly Interest on such
Distribution Date. If the Class A Interest Shortfall with respect to any
Distribution Date is greater than zero, an additional amount ("Class A
-------
Additional Interest") equal to the product of (i) the Class A Penalty Rate for
- -------------------
the related Interest Period, (ii) such Class A Interest Shortfall (or the
portion thereof which has not theretofore been paid to the Class A
Certificateholders) and (iii) a fraction, the numerator of which is the actual
number of days in such Interest Period and the denominator of which is 360,
shall be payable as provided herein with respect to the Class A Certificates on
each Distribution Date following such Distribution Date to and including the
Distribution Date on which such Class A Interest Shortfall is paid to the Class
A Certificateholders. Notwithstanding anything to the contrary herein, Class A
Additional Interest shall be payable or distributed to the Class A
Certificateholders only to the extent permitted by applicable law.
(b) The amount of monthly interest ("Class B Monthly Interest")
------------------------
distributable from the Collection Account with respect to the Class B
Certificates on any Distribution Date shall be an amount equal to the product of
(i) the Class B Certificate Rate for the related Interest Period, (ii) the
outstanding principal amount of the Class B Certificates as of the preceding
Distribution Date (or, in the case of the first Distribution Date, as of the
Closing Date) and (iii) a fraction, the numerator of which is the actual number
of days in such Interest Period and the denominator of which is 360.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class B Interest Shortfall"),
--------------------------
of (x) the Class B Monthly Interest for such Distribution Date over (y) the
aggregate amount of funds allocated and available to pay such Class B Monthly
Interest on such Distribution Date. If the Class B Interest Shortfall with
respect to any Distribution Date is greater than zero, an additional amount
("Class B Additional Interest") equal to the product of (i) the Class B Penalty
---------------------------
Rate for the related Interest Period, (ii) such Class B Interest Shortfall (or
the portion thereof which has not theretofore been paid to the Class B
Certificateholders) and (iii) a fraction, the numerator of which is the actual
number of days in such Interest Period and the denominator of which is 360,
shall be payable as provided herein with respect to the Class B Certificates on
each Distribution Date following such Distribution Date to and including the
Distribution Date on which such Class B Interest Shortfall is paid to the Class
B Certificateholders. Notwithstanding anything to the contrary herein, Class B
Additional Interest shall be payable or distributed to the Class B
Certificateholders only to the extent permitted by applicable law.
<PAGE>
(c) The amount of monthly interest ("CTO Monthly Interest")
--------------------
distributable from the Collection Account with respect to the Collateralized
Trust Obligations on any Distribution Date shall be an amount equal to the
product of (i) the CTO Interest Rate for the related Interest Period, (ii) the
outstanding principal amount of the Collateralized Trust Obligations as of the
preceding Distribution Date (or, in the case of the first Distribution Date, as
of the Closing Date) and (iii) a fraction, the numerator of which is the actual
number of days in such Interest Period and the denominator of which is 360.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "CTO Interest Shortfall"), of
----------------------
(x) the CTO Monthly Interest for such Distribution Date over (y) the aggregate
amount of funds allocated and available to pay such CTO Monthly Interest on such
Distribution Date. If the CTO Interest Shortfall with respect to any
Distribution Date is greater than zero, an additional amount ("CTO Additional
--------------
Interest") equal to the product of (i) the CTO Penalty Rate for the related
- --------
Interest Period, (ii) such CTO Interest Shortfall (or the portion thereof which
has not theretofore been paid to the CTO Securityholders) and (iii) a fraction,
the numerator of which is the actual number of days in such Interest Period and
the denominator of which is 360, shall be payable as provided herein with
respect to the Collateralized Trust Obligations on each Distribution Date
following such Distribution Date to and including the Distribution Date on which
such CTO Interest Shortfall is paid to the CTO Securityholders. Notwithstanding
anything to the contrary herein, CTO Additional Interest shall be payable or
distributed to the CTO Securityholders only to the extent permitted by
applicable law.
(d) The amount of monthly interest ("Class D Monthly Interest")
------------------------
distributable from the Collection Account with respect to the Class D
Certificates on any Distribution Date shall be an amount equal to product of (i)
the Class D Certificate Rate for the related Interest Period, (ii) the
outstanding principal amount of the Class D Certificates as of the preceding
Distribution Date (or, in the case of the first Distribution Date, as of the
Closing Date) and (iii) a fraction, the numerator of which is the actual number
of days in such Interest Period and the denominator of which is 360.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class D Interest Shortfall"),
--------------------------
of (x) the Class D Monthly Interest for such Distribution Date over (y) the
aggregate amount of funds allocated and available to pay such Class D Monthly
Interest on such Distribution Date. If the Class D Interest Shortfall with
respect to any Distribution Date is greater than zero, an additional amount
("Class D Additional Interest") equal to the product of (i) the Class D Penalty
---------------------------
Rate for the related Interest
<PAGE>
Period, (ii) such Class D Interest Shortfall (or the portion thereof which has
not theretofore been paid to the CTO Securityholders) and (iii) a fraction, the
numerator of which is the actual number of days in such Interest Period and the
denominator of which is 360, shall be payable as provided herein with respect to
the Class D Certificates on each Distribution Date following such Distribution
Date to and including the Distribution Date on which such Class D Interest
Shortfall is paid to the Class D Certificateholders. Notwithstanding anything to
the contrary herein, Class D Additional Interest shall be payable or distributed
to the Class D Certificateholders only to the extent permitted by applicable
law.
Section 4.3A Determination of LIBOR. (a) On each LIBOR Determination
----------------------
Date, the Trustee shall determine LIBOR for the following Interest Period on the
basis of the rate for deposits in United States dollars for a one-month period
which appears on Telerate Page 3750 as of 11:00 a.m., London time, on such LIBOR
Determination Date. If such rate does not appear on Telerate Page 3750, LIBOR
for such Interest Period shall be determined on the basis of the rates at which
deposits in United States dollars are offered by the Reference Banks at
approximately 11:00 a.m., London time, on such LIBOR Determination Date to prime
banks in the London interbank market for a one-month period. The Trustee shall
request the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, the rate
for that LIBOR Determination Date shall be the arithmetic mean of the
quotations. If fewer than two quotations are provided as requested, LIBOR for
that LIBOR Determination Date shall 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 day for loans in United States dollars
to leading European banks for a one-month period.
(b) The Class A Certificate Rate, the Class B Certificate Rate and
the CTO Interest Rate applicable to the then current and the immediately
preceding Interest Periods may be obtained by any Series 2000-1
Certificateholder by telephoning the Trustee at its Corporate Trust Office at
(800) 735-7777.
(c) On each LIBOR Determination Date, the Trustee shall send to the
Servicer by facsimile notification of LIBOR for the following Interest Period.
Section 4.4 Determination of Monthly Principal. (a) The amount of
----------------------------------
monthly principal ("Class A Monthly Principal") distributable or available for
-------------------------
deposit into the Principal Funding Account from the Collection Account with
respect to the Class A Certificates on each Distribution Date, beginning with
the Distribution Date in the month following the month in which the
<PAGE>
Accumulation Period or the Early Amortization Period begins, shall be equal to
the least of (x) the Available Principal Collections on deposit in the
Collection Account and available for distribution with respect to such
Distribution Date, (y) for each Distribution Date with respect to the
Accumulation Period, the Controlled Deposit Amount for such Distribution Date
and (z) the Class A Invested Amount as of such Distribution Date plus the
----
aggregate amount of Collections of Principal Receivables with respect to the
preceding Due Period transferred to the Principal Funding Account prior to such
Distribution Date in respect of Class A Monthly Principal pursuant to Section
4.6(g); provided, however, that, if, as a result of the application of Section
-------- -------
4.16(d), the Accumulation Period shall commence after the later of the last day
of the January 2002 Due Period and the date to which the commencement of the
Accumulation Period may be postponed pursuant to Section 4.15, Class A Monthly
Principal for each Distribution Date with respect to the Accumulation Period
shall be calculated without regard to clause (y) above.
(b) The amount of monthly principal ("Class B Monthly Principal")
-------------------------
distributable or available for deposit into the Principal Funding Account from
the Collection Account with respect to the Class B Certificates on each
Distribution Date, beginning with the Class B Principal Commencement Date, shall
be equal to the least of (x) the Available Principal Collections with respect to
such Distribution Date minus the portion of such Available Principal Collections
-----
applied in respect of Class A Monthly Principal on or before such Distribution
Date, (y) for each Distribution Date with respect to the Accumulation Period,
the Controlled Deposit Amount for such Distribution Date minus the Class A
-----
Monthly Principal with respect to such Distribution Date and (z) the Class B
Invested Amount as of such Distribution Date plus the aggregate amount of
----
Collections of Principal Receivables with respect to the preceding Due Period
transferred to the Principal Funding Account prior to such Distribution Date in
respect of Class B Monthly Principal pursuant to Section 4.6(g); provided,
--------
however, that, if, as a result of the application of Section 4.16(d), the
- -------
Accumulation Period shall commence after the later of the last day of the
January 2002 Due Period and the date to which the commencement of the
Accumulation Period may be postponed pursuant to Section 4.15, Class B Monthly
Principal for each Distribution Date with respect to the Accumulation Period
shall be calculated without regard to clause (y) above.
(c) The amount of monthly principal ("CTO Monthly Principal")
---------------------
distributable or available for deposit into the Principal Funding Account from
the Collection Account with respect to the Collateralized Trust Obligations on
each Distribution Date, beginning with the CTO Principal Commencement Date,
shall be equal to the least of (x) the Available Principal Collections on
deposit in the Collection Account and available
<PAGE>
for distribution with respect to such Distribution Date minus the portion of
-----
such Available Principal Collections applied in respect of Class A Monthly
Principal or Class B Monthly Principal on such Distribution Date, (y) for each
Distribution Date with respect to the Accumulation Period, the Controlled
Deposit Amount for such Distribution Date minus the sum of the Class A Monthly
-----
Principal with respect to such Distribution Date and the Class B Monthly
Principal with respect to such Distribution Date and (z) the CTO Invested Amount
as of such Distribution Date plus the aggregate amount of Collections of
----
Principal Receivables with respect to the preceding Due Period transferred to
the Principal Funding Account prior to such Distribution Date in respect of CTO
Monthly Principal pursuant to Section 4.6(g); provided, however, that, if, as a
-------- -------
result of the application of Section 4.16(d), the Accumulation Period shall
commence after the later of the last day of the January 2002 Due Period and the
date to which the commencement of the Accumulation Period may be postponed
pursuant to Section 4.15, CTO Monthly Principal for each Distribution Date with
respect to the Accumulation Period shall be calculated without regard to clause
(y) above.
(d) The amount of monthly principal ("Class D Monthly Principal")
-------------------------
distributable with respect to the Class D Certificates on each Distribution
Date, beginning with the Class D Principal Commencement Date, shall be equal to
the least of (x) the Available Principal Collections on deposit in the
Collection Account and available for distribution with respect to such
Distribution Date minus the portion of such Available Principal Collections
-----
applied in respect of Class A Monthly Principal, Class B Monthly Principal or
CTO Monthly Principal on such Distribution Date and (y) the Class D Invested
Amount as of such Distribution Date.
Section 4.5 Required Amount. (a) On each Determination Date, the
---------------
Servicer shall determine for the following Distribution Date the amount (the
"Class A Required Amount"), if any, by which (x) the sum of (i) Class A Monthly
-----------------------
Interest for such following Distribution Date, (ii) any Class A Monthly Interest
previously due but not distributed to the Class A Certificateholders on a prior
Distribution Date, (iii) any Class A Additional Interest for such following
Distribution Date and any Class A Additional Interest previously due but not
distributed to the Class A Certificateholders on a prior Distribution Date, (iv)
the Class A Allocable Amount, if any, for such following Distribution Date and
(v) if First North American National Bank is no longer the Servicer, the Class A
Servicing Fee for such following Distribution Date and the amount of any Class A
Servicing Fee previously due but not distributed to the Servicer on a prior
Distribution Date exceeds (y) Class A Available Funds with respect to the
preceding Due Period. In the event that the Class A Required Amount for any
Distribution Date is greater than zero, the Servicer shall give written notice
to
<PAGE>
the Trustee of such positive Class A Required Amount on the date of computation
and all or a portion of the Excess Spread and the Shared Excess Finance Charge
Collections allocable to Series 2000-1 pursuant to Section 4.1(h) with respect
to the preceding Due Period in an amount equal to the Class A Required Amount
for such Distribution Date shall be distributed from the Collection Account on
such Distribution Date pursuant to Section 4.8(a). In the event that the Class A
Required Amount for any Distribution Date exceeds the amount of the Excess
Spread and the Shared Excess Finance Charge Collections allocable to Series
2000-1 with respect to the preceding Due Period, all or a portion of the
Subordinated Principal Collections with respect to such Due Period in an amount
equal to such excess shall be distributed from the Collection Account on such
Distribution Date pursuant to Section 4.9(a).
(b) On each Determination Date, the Servicer shall determine for the
following Distribution Date the amount (the "Class B Required Amount"), if any,
-----------------------
equal to the sum of (x) the amount, if any, by which the sum of (i) Class B
Monthly Interest for such following Distribution Date, (ii) any Class B Monthly
Interest previously due but not distributed to the Class B Certificateholders on
a prior Distribution Date, (iii) any Class B Additional Interest for such
following Distribution Date and any Class B Additional Interest previously due
but not distributed to the Class B Certificateholders on a prior Distribution
Date and (iv) if First North American National Bank is no longer the Servicer,
the Class B Servicing Fee for such following Distribution Date and the amount of
any Class B Servicing Fee previously due but not distributed to the Servicer on
a prior Distribution Date exceeds Class B Available Funds with respect to the
preceding Due Period and (y) the Class B Allocable Amount, if any, for such
following Distribution Date. In the event that the Class B Required Amount for
any Distribution Date is greater than zero, the Servicer shall give written
notice to the Trustee of such positive Class B Required Amount on the date of
computation and all or a portion of the Excess Spread and the Shared Excess
Finance Charge Collections allocable to Series 2000-1 pursuant to Section 4.1(h)
with respect to the preceding Due Period (other than Excess Spread and Shared
Excess Finance Charge Collections applied pursuant to Section 4.8(a) or (b))
shall be distributed from the Collection Account on such Distribution Date
pursuant to Sections 4.8(c) and (d). In the event that the Class B Required
Amount for any Distribution Date exceeds the amount of the Excess Spread and the
Shared Excess Finance Charge Collections allocable to Series 2000-1 with respect
to the preceding Due Period and not applied pursuant to Section 4.8(a) or (b),
all or a portion of the Subordinated Principal Collections with respect to such
Due Period (other than the portion of the Subordinated Principal Collections
applied to fund the Class A Required Amount and other than Class B Subordinated
Principal Collections) in an amount equal to such
<PAGE>
excess shall be distributed from the Collection Account on such Distribution
Date pursuant to Section 4.9(b).
(c) On each Determination Date, the Servicer shall determine for the
following Distribution Date the amount (the "CTO Required Amount"), if any,
-------------------
equal to the sum of (x) the amount, if any, by which the sum of (i) CTO Monthly
Interest for such following Distribution Date, (ii) any CTO Monthly Interest
previously due but not distributed to the CTO Securityholders on a prior
Distribution Date, (iii) any CTO Additional Interest for such following
Distribution Date and any CTO Additional Interest previously due but not
distributed to the CTO Securityholders on a prior Distribution Date and (iv) if
First North American National Bank is no longer the Servicer, the CTO Servicing
Fee for such following Distribution Date and the amount of any CTO Servicing Fee
previously due but not distributed to the Servicer on a prior Distribution Date
exceeds the amount available to make payments with respect thereto pursuant to
Sections 4.6(c)(i) and 4.8(f) with respect to the preceding Due Period and (y)
the amount, if any, by which the CTO Allocable Amount, if any, for such
Distribution Date exceeds the amount available to make payments with respect
thereto pursuant to Section 4.8(h). In the event that the CTO Required Amount
for any Distribution Date is greater than zero, the Servicer shall give written
notice to the Trustee of such positive CTO Required Amount on the date of
computation and all or a portion of the Available Spread Account Amount with
respect to such Distribution Date in an amount equal to such excess shall be
applied to fund the CTO Required Amount. In the event that the CTO Required
Amount for any Distribution Date exceeds the Available Spread Account Amount
with respect to such Distribution Date, all or a portion of the Subordinated
Principal Collections with respect to the preceding Due Period (other than the
portion of the Subordinated Principal Collections applied to fund the Class A
Required Amount or the Class B Required Amount and other than Class B
Subordinated Principal Collections or CTO Subordinated Principal Collections) in
an amount equal to such excess shall be distributed from the Collection Account
on such Distribution Date pursuant to Section 4.9(c).
Section 4.6 Application of Class A Available Funds, Class B Available
---------------------------------------------------------
Funds, CTO Available Funds, Class D Available Funds and Collections of Principal
- --------------------------------------------------------------------------------
Receivables. The Servicer shall apply or shall instruct the Trustee to apply,
- -----------
on each Distribution Date, Class A Available Funds, Class B Available Funds, CTO
Available Funds, Class D Available Funds and Collections of Principal
Receivables allocable to Series 2000-1 on deposit in the Collection Account with
respect to the Due Period immediately preceding such Distribution Date to make
the following distributions:
<PAGE>
(a) On each Distribution Date, Class A Available Funds with respect
to the Due Period immediately preceding such Distribution Date shall be applied
in the following priority:
(i) an amount equal to Class A Monthly Interest for such
Distribution Date, plus the amount of any Class A Monthly Interest
----
previously due but not distributed to the Class A Certificateholders on a
prior Distribution Date, plus the amount of any Class A Additional Interest
----
for such Distribution Date and any Class A Additional Interest previously
due but not distributed to the Class A Certificateholders on a prior
Distribution Date, shall be distributed to the Paying Agent for payment to
the Class A Certificateholders;
(ii) if First North American National Bank is no longer the
Servicer, an amount equal to the Class A Servicing Fee for such
Distribution Date, plus the amount of any Class A Servicing Fee previously
----
due but not distributed to the Servicer on a prior Distribution Date, shall
be distributed to the Servicer;
(iii) an amount equal to the Class A Allocable Amount for such
Distribution Date shall be included in Available Principal Collections with
respect to such Distribution Date; and
(iv) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.8.
(b) On each Distribution Date, Class B Available Funds with respect
to the Due Period immediately preceding such Distribution Date shall be applied
in the following priority:
(i) an amount equal to Class B Monthly Interest for such
Distribution Date plus the amount of any Class B Monthly Interest
----
previously due but not distributed to the Class B Certificateholders on a
prior Distribution Date, plus the amount of any Class B Additional Interest
----
for such Distribution Date and any Class B Additional Interest previously
due but not distributed to the Class B Certificateholders on a prior
Distribution Date, shall be distributed to the Paying Agent for payment to
the Class B Certificateholders;
(ii) if First North American National Bank is no longer the
Servicer, an amount equal to the Class B Servicing Fee for such
Distribution Date, plus the amount of any Class B Servicing Fee previously
----
due but not distributed to the Servicer on a prior Distribution Date, shall
be distributed to the Servicer; and
<PAGE>
(iii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.8.
(c) On each Distribution Date, CTO Available Funds with respect to
the Due Period immediately preceding such Distribution Date shall be applied in
the following priority:
(i) if First North American National Bank is no longer the
Servicer, an amount equal to the CTO Servicing Fee for such Distribution
Date, plus the amount of any CTO Servicing Fee previously due but not
----
distributed to the Servicer on a prior Distribution Date, shall be
distributed to the Servicer; and
(ii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.8.
(d) On each Distribution Date, Class D Available Funds with respect
to the Due Period immediately preceding such Distribution Date shall be applied
in the following priority:
(i) if First North American National Bank is no longer the
Servicer, an amount equal to the Class D Servicing Fee for such
Distribution Date, plus the amount of any Class D Servicing Fee previously
----
due but not distributed to the Servicer on a prior Distribution Date, shall
be distributed to the Servicer; and
(ii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.8.
(e) On each Distribution Date with respect to the Revolving Period,
Available Principal Collections with respect to such Distribution Date shall be
treated as "Shared Principal Collections" with respect to Group One and shall be
applied in accordance with Section 4.1(g) (and shall be retained in the Excess
Funding Account if required by Section 4.1(g)).
(f) On each Distribution Date following the commencement of the
Accumulation Period or the Early Amortization Period, Available Principal
Collections with respect to such Distribution Date shall be applied in the
following priority:
(i) an amount equal to Class A Monthly Principal for such
Distribution Date (minus the aggregate amount of Collections of Principal
-----
Receivables with respect to the preceding Due Period transferred to the
Principal Funding Account in respect of Class A Monthly Principal pursuant
to Section 4.6(g)) shall, during the Accumulation
<PAGE>
Period, be deposited in the Principal Funding Account for payment to the
Class A Certificateholders on the earlier to occur of the Expected Final
Distribution Date or the first Special Distribution Date and, during the
Early Amortization Period, be distributed to the Paying Agent for payment
to the Class A Certificateholders;
(ii) an amount equal to Class B Monthly Principal for such
Distribution Date (minus the aggregate amount of Collections of Principal
-----
Receivables with respect to the preceding Due Period transferred to the
Principal Funding Account in respect of Class A Monthly Principal or Class
B Monthly Principal pursuant to Section 4.6(g)) shall, during the
Accumulation Period, be deposited in the Principal Funding Account for
payment to the Class B Certificateholders on the earlier to occur of the
Expected Final Distribution Date or the first Special Distribution Date
and, during the Early Amortization Period, be distributed to the Paying
Agent for payment to the Class B Certificateholders;
(iii) an amount equal to CTO Monthly Principal for such
Distribution Date (minus the aggregate amount of Collections of Principal
-----
Receivables with respect to the preceding Due Period transferred to the
Principal Funding Account in respect of Class A Monthly Principal, Class B
Monthly Principal or CTO Monthly Principal pursuant to Section 4.6(g))
shall, during the Accumulation Period, be deposited in the Principal
Funding Account for payment to the CTO Securityholders on the earlier to
occur of the Expected Final Distribution Date and the first Special
Distribution Date and, during the Early Amortization Period, be distributed
to the Paying Agent for payment to the CTO Securityholders;
(iv) an amount equal to Class D Monthly Principal for such
Distribution Date shall be distributed to the Paying Agent for payment to
the Class D Certificateholders; and
(v) the balance, if any, shall be treated as "Shared Principal
Collections" with respect to Group One and shall be applied in accordance
with Section 4.1(g) (and shall be retained in the Excess Funding Account if
required by Section 4.1(g)).
(g) On any Business Day during the Accumulation Period, the Servicer
may, in its sole discretion, direct the Trustee to transfer (and the Trustee, at
the written direction of the Servicer, shall transfer) the Collections of
Principal Receivables allocated to Series 2000-1 and on deposit in the
Collection Account on such Business Day to the Principal Funding
<PAGE>
Account; provided, however, that the aggregate amount transferred from the
-------- -------
Collection Account to the Principal Funding Account with respect to any Due
Period pursuant to this Section 4.6(g) shall not exceed the Controlled Deposit
Amount for the following Distribution Date; and, provided further, that if, on
-------- -------
any Determination Date, the Servicer determines that the amount transferred from
the Collection Account to the Principal Funding Account with respect to any Due
Period pursuant to this Section 4.6(g) exceeded the sum of the Class A Monthly
Principal, Class B Monthly Principal and CTO Monthly Principal for the following
Distribution Date, the Trustee shall, at the written direction of the Servicer,
transfer an amount equal to such excess from the Principal Funding Account to
the Collection Account.
Section 4.7 Defaulted Amounts; Adjustment Amounts; Investor Charge
------------------------------------------------------
Offs; Reductions of Adjustment Amounts. (a) On each Determination Date, the
- --------------------------------------
Servicer shall calculate the Class A Required Amount, if any, for the following
Distribution Date. If, on any Distribution Date, the Class A Required Amount
for such Distribution Date exceeds the sum of (x) the amount of Excess Spread
and Shared Excess Finance Charge Collections available to fund the Class A
Required Amount for such Distribution Date pursuant to Section 4.8(a) and (y)
the amount of Subordinated Principal Collections available to fund the Class A
Required Amount for such Distribution Date pursuant to Section 4.9(a), then the
Class D Invested Amount (after giving effect to any reduction thereof pursuant
to Section 4.7(d)) shall be reduced by the amount of such excess, but not by
more than the excess of the Class A Allocable Amount for such Distribution Date
over the sum of the amount of Excess Spread and Shared Excess Finance Charge
Collections used to fund the Class A Allocable Amount for such Distribution Date
and the amount of Subordinated Principal Collections used to fund the Class A
Allocable Amount for such Distribution Date. In the event that such reduction
would cause the Class D Invested Amount to be a negative number, the Class D
Invested Amount shall be reduced to zero and the CTO Invested Amount (after
giving effect to any reduction thereof pursuant to Section 4.7(c)) shall be
reduced by the amount by which the Class D Invested Amount would have been
reduced below zero, but not by more than the excess, if any, of the Class A
Allocable Amount for such Distribution Date over the sum of the amount of such
reduction, if any, of the Class D Invested Amount as of such Distribution Date,
the amount of Excess Spread and Shared Excess Finance Charge Collections used to
fund the Class A Allocable Amount for such Distribution Date and the amount of
Subordinated Principal Collections used to fund the Class A Allocable Amount for
such Distribution Date. In the event that such reduction would cause the CTO
Invested Amount to be a negative number, the CTO Invested Amount shall be
reduced to zero and the Class B Invested Amount (after giving effect to any
reduction thereof pursuant to Section 4.7(b)) shall be reduced by the amount by
which the CTO Invested Amount would have been
<PAGE>
reduced below zero, but not by more than the excess, if any, of the Class A
Allocable Amount for such Distribution Date over the sum of the amount of such
reduction, if any, of the Class D Invested Amount as of such Distribution Date,
the amount of Excess Spread and Shared Excess Finance Charge Collections used to
fund the Class A Allocable Amount for such Distribution Date and the amount of
Subordinated Principal Collections used to fund the Class A Allocable Amount for
such Distribution Date. In the event that such reduction would cause the CTO
Invested Amount to be a negative number, the CTO Invested Amount shall be
reduced to zero and the Class B Invested Amount (after giving effect to any
reduction thereof pursuant to Section 4.7(b)) shall be reduced by the amount by
which the CTO Invested Amount would have been reduced below zero, but not by
more than the excess, if any, of the Class A Allocable Amount for such
Distribution Date over the sum of the aggregate amount of the reductions, if
any, of the Class D Invested Amount and the CTO Invested Amount as of such
Distribution Date, the amount of Excess Spread and Shared Excess Finance Charge
Collections used to fund the Class A Allocable Amount for such Distribution Date
and the amount of Subordinated Principal Collections used to fund the Class A
Allocable Amount for such Distribution Date. In the event that such reduction
would cause the Class B Invested Amount to be a negative number, the Class B
Invested Amount shall be reduced to zero and the Class A Invested Amount shall
be reduced by the amount by which the Class B Invested Amount would have been
reduced below zero, but not by more than the excess, if any, of the Class A
Allocable Amount for such Distribution Date over the sum of the aggregate amount
of the reductions, if any, of the Class D Invested Amount, the CTO Invested
Amount and the Class B Invested Amount for such Distribution Date, the amount of
Excess Spread and Shared Excess Finance Charge Collections used to fund the
Class A Allocable Amount for such Distribution Date and the amount of
Subordinated Principal Collections used to fund the Class A Allocable Amount for
such Distribution Date (a "Class A Investor Charge Off"). Class A Investor
---------------------------
Charge Offs shall thereafter be reimbursed and the Class A Invested Amount
increased (but not by an amount in excess of the aggregate unreimbursed Class A
Investor Charge Offs) on any Distribution Date by the amount of Excess Spread
and Shared Excess Finance Charge Collections allocated and available for that
purpose pursuant to Section 4.8(b) and, without duplication, the aggregate
amount of the reductions of the Series Adjustment Amount allocable to the Class
A Invested Amount pursuant to Section 4.7(f).
(b) On each Determination Date, the Servicer shall calculate the
Class B Required Amount, if any, for the following Distribution Date. If, on
any Distribution Date, the Class B Required Amount for such Distribution Date
exceeds the sum of (x) the amount of Excess Spread and Shared Excess Finance
Charge Collections available to fund the Class B Required Amount for such
Distribution Date pursuant to Section 4.8(c) and (d) and (y) the amount of
Subordinated Principal Collections available to fund the Class B Required Amount
for such Distribution Date pursuant to Section 4.9(b), then the Class D Invested
Amount (after giving effect to any reduction thereof pursuant to Section 4.7(a)
or (d)) shall be reduced by the amount of such excess, but not by more than the
excess of the Class B Allocable Amount for such Distribution Date over the sum
of the amount of Excess Spread and Shared Excess Finance Charge Collections used
to fund the Class B Allocable Amount for such Distribution Date and the amount
of Subordinated Principal Collections used to fund the Class B Allocable Amount
for such Distribution Date. In the event that such reduction would cause the
Class D Invested Amount to be a negative number, the Class D Invested Amount
shall be
<PAGE>
reduced to zero and the CTO Invested Amount (after giving effect to any
reduction thereof pursuant to Section 4.7(a) or (c)) shall be reduced by the
amount by which the Class D Invested Amount would have been reduced below zero,
but not by more than the excess, if any, of the Class B Allocable Amount for
such Distribution Date over the sum of the amount of such reduction, if any, of
the Class D Invested Amount as of such Distribution Date, the amount of Excess
Spread and Shared Excess Finance Charge Collections used to fund the Class B
Allocable Amount for such Distribution Date and the amount of Subordinated
Principal Collections used to fund the Class B Allocable Amount for such
Distribution Date. In the event that such reduction would cause the CTO Invested
Amount to be a negative number, the CTO Invested Amount shall be reduced to zero
and the Class B Invested Amount (after giving effect to any reduction thereof
pursuant to Section 4.7(a)) shall be reduced by the amount by which the CTO
Invested Amount would have been reduced below zero, but not by more than the
excess, if any, of the Class B Allocable Amount for such Distribution Date over
the sum of the aggregate amount of the reductions, if any, of the Class D
Invested Amount and the CTO Invested Amount as of such Distribution Date, the
amount of Excess Spread and Shared Excess Finance Charge Collections used to
fund the Class B Allocable Amount for such Distribution Date and the amount of
Subordinated Principal Collections used to fund the Class B Allocable Amount for
such Distribution Date (a "Class B Investor Charge Off"). Class B Investor
---------------------------
Charge Offs shall thereafter be reimbursed and the Class B Invested Amount
increased (but not by an amount in excess of the aggregate unreimbursed Class B
Investor Charge Offs) on any Distribution Date by the amount of Excess Spread
and Shared Excess Finance Charge Collections allocated and available for that
purpose pursuant to Section 4.8(e) and, without duplication, the aggregate
amount of the reductions of the Series Adjustment Amount allocable to the Class
B Invested Amount pursuant to Section 4.7(f).
(c) On each Determination Date, the Servicer shall calculate the CTO
Allocable Amount, if any, for the following Distribution Date. If, on any
Distribution Date, the CTO Allocable Amount for such Distribution Date exceeds
the sum of (x) the amount of Excess Spread and Shared Excess Finance Charge
Collections available to fund the CTO Allocable Amount for such Distribution
Date pursuant to Section 4.8(h), (y) the Available Spread Account Amount
available to fund the CTO Allocable Amount for such Distribution Date pursuant
to Section 4.12(d) and (z) the amount of Subordinated Principal Collections
available to fund the CTO Allocable Amount for such Distribution Date pursuant
to Section 4.9(c), then the Class D Invested Amount (after giving effect to any
reduction thereof pursuant to Section 4.7(a), (b) or (d)) shall be reduced by
the amount of such excess. In the event that such reduction would cause the
Class D Invested Amount to be a negative number, the Class D Invested Amount
shall be
<PAGE>
reduced to zero and the CTO Invested Amount shall be reduced by the amount by
which the Class D Invested Amount would have been reduced below zero (a "CTO
---
Investor Charge Off"); provided, however, that the CTO Invested Amount shall not
- ------------------- -------- -------
be reduced below zero. CTO Investor Charge Offs shall thereafter be reimbursed
and the CTO Invested Amount increased (but not by an amount in excess of the
aggregate unreimbursed CTO Investor Charge Offs) on any Distribution Date by the
amount of Excess Spread and Shared Excess Finance Charge Collections allocated
and available for that purpose pursuant to Section 4.8(i) and, without
duplication, the aggregate amount of the reductions of the Series Adjustment
Amount allocable to the CTO Invested Amount pursuant to Section 4.7(f).
(d) On each Determination Date, the Servicer shall calculate the
Class D Allocable Amount, if any, for the following Distribution Date. If, on
any Distribution Date, the Class D Allocable Amount for such Distribution Date
exceeds the amount of Excess Spread and Shared Excess Finance Charge Collections
available to fund the Class D Allocable Amount for such Distribution Date
pursuant to Section 4.8(m), then the Class D Invested Amount shall be reduced by
the amount of such excess (a "Class D Investor Charge Off"); provided, however,
--------------------------- -------- -------
that the Class D Invested Amount shall not be reduced below zero. Class D
Investor Charge Offs shall thereafter be reimbursed and the Class D Invested
Amount increased (but not by an amount in excess of the aggregate unreimbursed
Class D Investor Charge Offs) on any Distribution Date by the amount of Excess
Spread and Shared Excess Finance Charge Collections allocated and available for
that purpose pursuant to Section 4.8(n) and, without duplication, the aggregate
amount of the reductions of the Series Adjustment Amount allocable to the Class
D Invested Amount pursuant to Section 4.7(f).
(e) Whenever funds or other amounts are available hereunder in
respect of the Class A Allocable Amount, the Class B Allocable Amount, the CTO
Allocable Amount or the Class D Allocable Amount, as the case may be, such funds
or other amounts shall be applied first to the elimination of any deficiency
resulting from Default Amounts and then to any deficiency resulting from Series
Adjustment Amounts.
(f) Any reduction of the Series Adjustment Amount for Series 2000-1
as a result of the deposit of funds into the Excess Funding Account, the
repurchase or other repayment of Investor Certificates or the increase of
Principal Receivables in the Trust shall be allocated first to the Class A
Certificates, then to the Class B Certificates, then to the Collateralized Trust
Obligations and finally to the Class D Certificates, in each case to the extent
of any unreimbursed reduction of the Invested Amount thereof attributable to
Series Adjustment Amounts.
<PAGE>
Section 4.8 Excess Spread; Shared Excess Finance Charge Collections.
-------------------------------------------------------
The Servicer shall apply, or shall instruct the Trustee to apply, on each
Distribution Date, Excess Spread and Shared Excess Finance Charge Collections
allocable to Series 2000-1 pursuant to Section 4.1(h) with respect to the
preceding Due Period, to make the following distributions in the following
priority:
(a) an amount equal to the Class A Required Amount, if any, with
respect to such Distribution Date shall be distributed by the Trustee to fund
any deficiency pursuant to Sections 4.6(a)(i), (ii) and (iii), in that order of
priority;
(b) an amount equal to the aggregate amount of Class A Investor
Charge Offs which have not been previously reimbursed shall be included in
Available Principal Collections with respect to such Distribution Date;
(c) an amount equal to the amount calculated for such Distribution
Date pursuant to clause (x) of Section 4.5(b) shall be distributed by the
Trustee to fund any deficiency pursuant to Sections 4.6(b)(i) and (ii), in that
order of priority;
(d) an amount equal to the Class B Allocable Amount for such
Distribution Date shall be included in Available Principal Collections with
respect to such Distribution Date;
(e) an amount equal to the aggregate amount by which the Class B
Invested Amount has been reduced pursuant to clauses (d), (e) and (f) of the
definition of "Class B Invested Amount" (but not in excess of the aggregate
amount of such reductions which have not been previously reimbursed) shall be
included in Available Principal Collections with respect to such Distribution
Date;
(f) an amount equal to the CTO Monthly Interest for such Distribution
Date, plus the amount of CTO Monthly Interest previously due but not distributed
----
to the CTO Securityholders on a prior Distribution Date, plus the amount of CTO
----
Additional Interest for such Distribution Date and any CTO Additional Interest
previously due but not distributed to the CTO Securityholders on a prior
Distribution Date shall be distributed to the Paying Agent for payment to the
CTO Securityholders;
(g) if First North American National Bank is the Servicer, an amount
equal to the Class A Servicing Fee, the Class B Servicing and the CTO Servicing
Fee for such Distribution Date plus the amount of any Class A Servicing Fee,
----
Class B Servicing Fee or CTO Servicing Fee previously due but not distributed to
the Servicer on a prior Distribution Date (or, if First North American National
Bank is no longer the Servicer, the portion of the CTO Servicing Fee for such
Distribution Date not paid
<PAGE>
pursuant to Section 4.6(c)(i) plus the portion of any CTO Servicing Fee
----
previously due but not distributed to the Servicer on a prior Distribution Date)
shall be distributed to the Servicer;
(h) an amount equal to the CTO Allocable Amount for such Distribution
Date shall be included in Available Principal Collections with respect to such
Distribution Date;
(i) an amount equal to the aggregate amount by which the CTO Invested
Amount has been reduced pursuant to clauses (d), (e) and (f) of the definition
of "CTO Invested Amount" (but not in excess of the aggregate amount of such
reductions which have not been previously reimbursed) shall be included in
Available Principal Collections with respect to such Distribution Date;
(j) an amount equal to the excess, if any, of the Required Spread
Account Amount with respect to such Distribution Date over the Available Spread
Account Amount with respect to such Distribution Date shall be deposited into
the Spread Account;
(k) an amount equal to the Class D Monthly Interest for such
Distribution Date, plus the amount of Class D Monthly Interest previously due
----
but not distributed to the Class D Certificateholders on a prior Distribution
Date, plus the amount of Class D Additional Interest for such Distribution Date
----
and any Class D Additional Interest previously due but not distributed to the
Class D Certificateholders on a prior Distribution Date shall be distributed to
the Paying Agent for payment to the Class D Certificateholders;
(l) if First North American National Bank is the Servicer, an amount
equal to the Class D Servicing Fee for such Distribution Date (or, if First
North American National Bank is no longer the Servicer, the portion of the Class
D Servicing Fee for such Distribution Date not paid pursuant to Section
4.6(d)(i)), plus the amount of any Class D Servicing Fee previously due but not
----
distributed to the Servicer on a prior Distribution Date, shall be distributed
to the Servicer;
(m) an amount equal to the Class D Allocable Amount for such
Distribution Date shall be included in Available Principal Collections with
respect to such Distribution Date;
(n) an amount equal to the aggregate amount by which the Class D
Invested Amount has been reduced pursuant to clauses (c), (d) and (e) of the
definition of "Class D Invested Amount" (but not in excess of the aggregate
amount of such reductions which have not been previously reimbursed) shall be
included in Available Principal Collections with respect to such Distribution
Date;
<PAGE>
(o) an amount equal to the excess, if any, of the Required Reserve
Account Amount with respect to such Distribution Date over the Available Reserve
Account Amount with respect to such Distribution Date shall be deposited into
the Reserve Account; and
(p) the balance, if any, shall constitute "Shared Excess Finance
Charge Collections" with respect to Group One to be applied in accordance with
Section 4.1(h).
Section 4.9 Subordinated Principal Collections. The Servicer shall
----------------------------------
apply, or shall instruct the Trustee to apply, Subordinated Principal
Collections (applying all Class D Subordinated Principal Collections prior to
applying any CTO Subordinated Principal Collections, and applying all CTO
Subordinated Principal Collections prior to applying any Class B Subordinated
Principal Collections, and applying no Class B Subordinated Principal
Collections with respect to the Class B Required Amount pursuant to clause (b)
below and applying no Class B Subordinated Principal Collections or CTO
Subordinated Principal Collections with respect to the CTO Required Amount
pursuant to clause (c) below) with respect to each Distribution Date to make the
following distributions in the following priority:
(a) an amount equal to the excess, if any, of (i) the Class A
Required Amount, if any, for such Distribution Date over (ii) the amount of
Excess Spread and Shared Excess Finance Charge Collections allocable to Series
2000-1 with respect to the preceding Due Period shall be distributed by the
Trustee to fund any deficiency pursuant to Sections 4.6(a)(i), (ii) and (iii),
in that order of priority;
(b) an amount equal to the excess, if any, of (i) the Class B
Required Amount, if any, for such Distribution Date over (ii) the amount of
Excess Spread and Shared Excess Finance Charge Collections available to fund the
Class B Required Amount for such Distribution Date pursuant to Sections 4.8(c)
and (d) shall be distributed by the Trustee to fund any deficiency pursuant to
Sections 4.6(b)(i) and (ii) and Section 4.8(d), in that order of priority; and
(c) an amount equal to the excess, if any, of (i) the CTO Required
Amount, if any, for such Distribution Date over (ii) the sum of the amount of
Excess Spread and Shared Excess Finance Charge Collections available to fund the
CTO Required Amount for such Distribution Date pursuant to Sections 4.8(f) and
(h) and the amount withdrawn from the Spread Account in respect of the CTO
Required Amount for such Distribution Date shall be distributed by the Trustee
to fund any deficiency pursuant to Section 4.6(c)(i) and Sections 4.8(f) and
(h), in that order of priority.
<PAGE>
Section 4.10 Principal Shortfall. The "Principal Shortfall" for
------------------- -------------------
Series 2000-1 shall be equal to (a) for any Distribution Date with respect to
the Revolving Period, zero, (b) for any Distribution Date with respect to the
Accumulation Period (on or prior to the Expected Final Distribution Date), the
excess, if any, of the Controlled Deposit Amount with respect to such
Distribution Date over the amount of Available Principal Collections with
respect to such Distribution Date (excluding any portion thereof attributable to
Shared Principal Collections) and (c) for any Distribution Date with respect to
the Early Amortization Period, the excess, if any, of the Invested Amount as of
the end of the preceding Due Period over the amount of Available Principal
Collections with respect to such Distribution Date (excluding any portion
thereof attributable to Shared Principal Collections).
On each Distribution Date during the Early Amortization Period, the
Trustee, at the written direction of the Servicer, shall withdraw from the
Excess Funding Account and deposit into the Collection Account an amount equal
to the product of (i) the amount on deposit in the Excess Funding Account, if
any, on such Distribution Date and (ii) the percentage equivalent of a fraction,
the numerator of which is the Principal Shortfall with respect to Series 2000-1
for such Distribution Date and the denominator of which is the aggregate
Principal Shortfalls of all Series then outstanding for such Distribution Date.
The amount withdrawn from the Excess Funding Account shall be included in
Available Principal Collections with respect to such Distribution Date.
Section 4.11 Finance Charge Shortfall. The "Finance Charge
------------------------ --------------
Shortfall" for Series 2000-1 for any Distribution Date shall be equal to the
excess, if any, of (a) the amount required to be paid, without duplication,
pursuant to Sections 4.6(a), 4.6(b), 4.6(c), 4.6(d) and Section 4.8 (a)-(o) on
such Distribution Date over (b) the Collections of Finance Charge Receivables
allocated to Series 2000-1 for the preceding Due Period.
Section 4.12 Spread Account. (a) The Servicer shall establish and
--------------
maintain, in the name of the Trustee, for the benefit of the CTO
Securityholders, with an Eligible Institution a segregated trust account (the
"Spread Account"), bearing a designation clearly indicating that the funds
- ---------------
deposited therein are held for the benefit of the CTO Securityholders. The
Spread Account shall initially be established with the Trustee. The Trustee
shall possess all right, title and interest in all funds on deposit from time to
time in the Spread Account and in all proceeds thereof. The Spread Account
shall be under the sole dominion and control of the Trustee for the benefit of
the CTO Securityholders. If, at any time, the institution holding the Spread
Account ceases to be an Eligible Institution, the Trustee
<PAGE>
(or the Servicer on its behalf) shall within five Business Days establish a new
Spread Account meeting the conditions specified above with an Eligible
Institution and shall transfer any cash and/or any investments to such new
Spread Account. The Trustee, at the written direction of the Servicer, shall
make deposits to and withdrawals from the Spread Account in the amounts and at
the times set forth in this Agreement. The CTO Securityholders shall not be
entitled to reimbursement from the Trust Property for any withdrawals from the
Spread Account except as specifically provided in this Agreement.
(b) Funds on deposit in the Spread Account shall be invested by the
Trustee, at the written direction of the Servicer, in Eligible Investments that
will mature so that such funds will be available for withdrawal on or prior to
the following Distribution Date. The Trustee shall maintain, for the benefit of
the CTO Securityholders, possession of the negotiable instruments or securities,
if any, evidencing such Eligible Investments. No Eligible Investment shall be
disposed of prior to its maturity; provided, however, that the Trustee may sell,
-------- -------
liquidate or dispose of an Eligible Investment before its maturity, if so
directed by the Servicer in writing, the Servicer having reasonably determined
that the interest of the CTO Securityholders may be adversely affected if such
Eligible Investment is held to its maturity. On each Distribution Date, all
interest and other investment earnings (net of losses and investment expenses)
on funds on deposit in the Spread Account shall be included in Excess Spread for
such Distribution Date and applied in accordance with Section 4.8.
(c) On each Determination Date, the Servicer shall calculate the sum
of (i) the CTO Required Amount for the following Distribution Date, (ii) the
aggregate amount by which the CTO Invested Amount would be reduced on such
Distribution Date pursuant to clauses (d), (e) and (f) of the definition of "CTO
Invested Amount" (but for the application of this Section 4.12(c)) and (iii) the
aggregate amount by which the CTO Invested Amount has been reduced on all prior
Distribution Dates pursuant to clauses (d), (e) and (f) of the definition of
"CTO Invested Amount" (but only to the extent that such reductions have not been
previously reimbursed) (the "Spread Account Draw Amount").
--------------------------
(d) On each Distribution Date on which the Spread Account Draw Amount
is greater than zero, the Trustee, at the written direction of the Servicer,
shall withdraw from the Spread Account an amount equal to the lesser of such
Spread Account Draw Amount and the Available Spread Account Amount. The
Trustee, at the written direction of the Servicer, shall apply the amount
withdrawn from the Spread Account on any Distribution Date to fund any
deficiency pursuant to Section 4.5(c), 4.7(c) or 4.8(i), in that order of
priority.
<PAGE>
(e) On each Distribution Date on which the Spread Account Surplus,
after giving effect to all deposits to and withdrawals from the Spread Account
with respect to such Distribution Date, is greater than zero, the Trustee, at
the written direction of the Servicer, shall withdraw from the Spread Account
and pay to the Holder of the Exchangeable Transferor Certificate an amount equal
to such Spread Account Surplus.
(f) Upon the earlier to occur of (i) the termination of the Trust
pursuant to Article XII of the Agreement and (ii) the day on which the
Collateralized Trust Obligations shall have been paid in full, the Trustee, at
the written direction of the Servicer, after the prior payment of all amounts
owing to the CTO Securityholders which are payable from the Spread Account as
provided herein, shall withdraw from the Spread Account and pay to the Holder of
the Exchangeable Transferor Certificate all amounts, if any, on deposit in the
Spread Account, and the Spread Account shall be deemed to have terminated for
all purposes of the Agreement.
Section 4.13 Principal Funding Account. (a) The Servicer shall
-------------------------
establish and maintain, in the name of the Trustee, for the benefit of the
Series 2000-1 Certificateholders, with an Eligible Institution a segregated
trust account (the "Principal Funding Account"), bearing a designation clearly
-------------------------
indicating that the funds deposited therein are held for the benefit of the
Series 2000-1 Certificateholders. The Principal Funding Account shall initially
be established with the Trustee. The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Principal Funding
Account and in all proceeds thereof. The Principal Funding Account shall be
under the sole dominion and control of the Trustee for the benefit of the Series
2000-1 Certificateholders. If, at any time, the institution holding the
Principal Funding Account ceases to be an Eligible Institution, the Trustee (or
the Servicer on its behalf) shall within five Business Days establish a new
Principal Funding Account meeting the conditions specified above with an
Eligible Institution and shall transfer any cash and/or any investments to such
new Principal Funding Account. Pursuant to the authority granted to the
Servicer in Section 3.1(b), the Servicer shall have the power, revocable by the
Trustee, to make withdrawals and payments or to instruct the Trustee to make
withdrawals and payments from the Principal Funding Account for the purposes of
carrying out the Servicer's or the Trustee's duties hereunder.
(b) Funds on deposit in the Principal Funding Account shall be
invested by the Trustee, at the written direction of the Servicer, in Eligible
Investments that will mature so that such funds will be available for withdrawal
on or prior to the following Distribution Date. The Trustee shall maintain, for
the benefit of the Series 2000-1 Certificateholders, possession of
<PAGE>
the negotiable instruments or securities, if any, evidencing such Eligible
Investments. No Eligible Investment shall be disposed of prior to its maturity;
provided, however, that the Trustee may sell, liquidate or dispose of an
- -------- -------
Eligible Investment before its maturity, if so directed by the Servicer in
writing, the Servicer having reasonably determined that the interest of the
Series 2000-1 Certificateholders may be adversely affected if such Eligible
Investment is held to its maturity. On each Distribution Date, all interest and
other investment earnings (net of losses and investment expenses) on funds on
deposit in the Principal Funding Account ("Principal Funding Investment
----------------------------
Proceeds") shall be applied as set forth in Section 4.13(c).
- --------
(c) On each Distribution Date with respect to the Accumulation
Period, the Trustee, at the written direction of the Servicer, shall withdraw
from the Principal Funding Account and deposit into the Collection Account all
Principal Funding Investment Proceeds received during the preceding Due Period.
The Trustee, at the written direction of the Servicer, shall apply the Principal
Funding Investment Proceeds withdrawn from the Principal Funding Account on any
Distribution Date as follows:
(i) an amount equal to the product of (x) the amount
withdrawn and (y) the percentage equivalent of a fraction, the numerator of
which is the aggregate amount on deposit in the Principal Funding Account
as of the last day of the preceding Due Period in respect of Class A
Monthly Principal and the denominator of which is the aggregate amount on
deposit in the Principal Funding Account as of such last day, shall be
included in Class A Available Funds with respect to such preceding Due
Period and applied pursuant to Section 4.6(a);
(ii) an amount equal to the product of (x) the amount
withdrawn and (y) the percentage equivalent of a fraction, the numerator of
which is the aggregate amount on deposit in the Principal Funding Account
as of the last day of the preceding Due Period in respect of Class B
Monthly Principal and the denominator of which is the aggregate amount on
deposit in the Principal Funding Account as of such last day, shall be
included in Class B Available Funds with respect to such preceding Due
Period and applied pursuant to Section 4.6(b); and
(iii) an amount equal to the product of (x) the amount
withdrawn and (y) the percentage equivalent of a fraction, the numerator of
which is the aggregate amount on deposit in the Principal Funding Account
as of the last day of the preceding Due Period in respect of CTO Monthly
Principal and the denominator of which is the aggregate amount on deposit
in the Principal Funding Account as of
<PAGE>
such last day, shall be included in CTO Available Funds with respect to
such preceding Due Period and applied pursuant to Section 4.6(c).
(d) Reinvested interest and other investment earnings on funds on
deposit in the Principal Funding Account shall not be considered to be principal
amounts on deposit therein for purposes of this Agreement.
Section 4.14 Reserve Account. (a) The Servicer shall establish and
---------------
maintain, in the name of the Trustee, for the benefit of the Series 2000-1
Certificateholders, with an Eligible Institution a segregated trust account (the
"Reserve Account"), bearing a designation clearly indicating that the funds
---------------
deposited therein are held for the benefit of the Series 2000-1
Certificateholders. The Reserve Account shall initially be established with the
Trustee. The Trustee shall possess all right, title and interest in all funds
on deposit from time to time in the Reserve Account and in all proceeds thereof.
The Reserve Account shall be under the sole dominion and control of the Trustee
for the benefit of the Series 2000-1 Certificateholders. If, at any time, the
institution holding the Reserve Account ceases to be an Eligible Institution,
the Trustee (or the Servicer on its behalf) shall within five Business Days
establish a new Reserve Account meeting the conditions specified above with an
Eligible Institution and shall transfer any cash and/or any investments to such
new Reserve Account. The Trustee, at the written direction of the Servicer,
shall (i) make withdrawals from the Reserve Account from time to time in an
amount up to the Available Reserve Account Amount at such time, for the purposes
set forth in this Agreement, and (ii) on each Distribution Date (from and after
the Reserve Account Funding Date) prior to the termination of the Reserve
Account, make a deposit into the Reserve Account in the amount specified in, and
otherwise in accordance with, Section 4.8(o).
(b) Funds on deposit in the Reserve Account shall be invested by the
Trustee, at the written direction of the Servicer, in Eligible Investments that
will mature so that such funds will be available for withdrawal on or prior to
the following Distribution Date. The Trustee shall maintain, for the benefit of
the Series 2000-1 Certificateholders, possession of the negotiable instruments
or securities, if any, evidencing such Eligible Investments. No Eligible
Investment shall be disposed of prior to its maturity; provided, however, that
-------- -------
the Trustee may sell, liquidate or dispose of an Eligible Investment before its
maturity, if so directed by the Servicer in writing, the Servicer having
reasonably determined that the interest of the Series 2000-1 Certificateholders
may be adversely affected if such Eligible Investment is held to its maturity.
On each Distribution Date, all interest and other investment earnings (net of
losses and investment expenses) on funds on deposit in
<PAGE>
the Reserve Account shall be retained in the Reserve Account to the extent that
the Available Reserve Account Amount is less than the Required Reserve Amount
and the balance, if any, shall be applied in accordance with Section 4.14(e).
For purposes of determining the availability of funds or the balance in the
Reserve Account for any reason under this Agreement, except as otherwise
provided in the preceding sentence, interest and other investment earnings on
such funds shall be deemed not to be available or on deposit.
(c) On the Determination Date preceding each Distribution Date with
respect to the Accumulation Period (prior to the Expected Final Distribution
Date) and the first Special Distribution Date, the Servicer shall calculate the
amount (the "Reserve Account Draw Amount") if any, by which the Covered Amount
---------------------------
with respect to such Distribution Date or Special Distribution Date exceeds the
Principal Funding Investment Proceeds with respect to such Distribution Date or
Special Distribution Date.
(d) On each Distribution Date on which the Reserve Account Draw
Amount is greater than zero, the Trustee, at the written direction of the
Servicer, shall withdraw from the Reserve Account and deposit into the
Collection Account an amount equal to the lesser of such Reserve Account Draw
Amount and the Available Reserve Account Amount. The Trustee, at the written
direction of the Servicer, shall apply the amount withdrawn from the Reserve
Account on any Distribution Date pursuant to this Section 4.14(d) as follows:
(i) an amount equal to the product of (x) the amount
withdrawn and (y) the percentage equivalent of a fraction, the numerator of
which is the amount calculated pursuant to clause (a) of the definition of
"Covered Amount" for such Distribution Date and the denominator of which is
the Covered Amount for such Distribution Date, shall be included in Class A
Available Funds with respect to the preceding Due Period and applied
pursuant to Section 4.6(a);
(ii) an amount equal to the product of (x) the amount
withdrawn and (y) the percentage equivalent of a fraction, the numerator of
which is the amount calculated pursuant to clause (b) of the definition of
"Covered Amount" for such Distribution Date and the denominator of which is
the Covered Amount for such Distribution Date, shall be included in Class B
Available Funds with respect to the preceding Due Period and applied
pursuant to Section 4.6(b); and
(iii) an amount equal to the product of (x) the amount
withdrawn and (y) the percentage equivalent of a fraction, the numerator of
which is the amount calculated
<PAGE>
pursuant to clause (c) of the definition of "Covered Amount" for such
Distribution Date and the denominator of which is the Covered Amount for
such Distribution Date, shall be included in CTO Available Funds with
respect to the preceding Due Period and applied pursuant to Section 4.6(c).
(e) On each Distribution Date with respect to the Accumulation Period
(prior to the Expected Final Distribution Date) and the first Special
Distribution Date, the Trustee, at the written direction of the Servicer, shall
withdraw from the Reserve Account and deposit into the Collection Account all
interest and other investment earnings (net of losses and investment expenses)
on funds on deposit in the Reserve Account to the extent that the Available
Reserve Account Amount with respect to such Distribution Date exceeds the
Required Reserve Account Amount with respect to such Distribution Date. The
Trustee, at the written direction of the Servicer, shall apply the amount
withdrawn from the Reserve Account on any Distribution Date pursuant to this
Section 4.14(e) as follows:
(i) the amount withdrawn shall, until the Class A
Certificates have been paid in full, be included in Class A Available Funds
with respect to the preceding Due Period and applied pursuant to Section
4.6(a);
(ii) the amount withdrawn shall, after the Class A
Certificates have been paid in full and until the Class B Certificates have
been paid in full, be included in Class B Available Funds with respect to
the preceding Due Period and applied pursuant to Section 4.6(b); and
(iii) the amount withdrawn shall, after the Class B
Certificates have been paid in full and until the Collateralized Trust
Obligations have been paid in full, be included in CTO Available Funds with
respect to the preceding Due Period and applied pursuant to Section 4.6(c).
(f) On each Distribution Date on which the Reserve Account Surplus,
after giving effect to all deposits to and withdrawals from the Reserve Account
with respect to such Distribution Date, is greater than zero, the Trustee, at
the written direction of the Servicer, shall withdraw from the Reserve Account
and pay to the Holder of the Exchangeable Transferor Certificate an amount equal
to such Reserve Account Surplus.
(g) Upon the earliest to occur of (i) the termination of the Trust
pursuant to Article XII of the Agreement, (ii) the day on which the Class A
Certificates, the Class B Certificates and the Collateralized Trust Obligations
shall have been paid in full, (iii) if the Accumulation Period has not
commenced, the occurrence of an Early Amortization Event with respect to Series
<PAGE>
2000-1 and (iv) if the Accumulation Period has commenced, the earlier of the
first Special Distribution Date and the Expected Final Distribution Date, the
Trustee, at the written direction of the Servicer, after the prior payment of
all amounts owing to the Series 2000-1 Certificateholders which are payable from
the Reserve Account as provided herein, shall withdraw from the Reserve Account
and pay to the Holder of the Exchangeable Transferor Certificate all amounts, if
any, on deposit in the Reserve Account, and the Reserve Account shall be deemed
to have terminated for all purposes of the Agreement.
Section 4.15 Postponement of Accumulation Period. The Accumulation
-----------------------------------
Period is scheduled to commence at the end of the day on the last day of the
January 2002 Due Period; provided, however, that, if the Accumulation Period
-------- -------
Length (determined as described below) shall be less than 12 months, the date on
which the Accumulation Period actually commences may, at the option of the
Transferor, be delayed to the first day of any month that is a number of whole
months prior to the Expected Final Distribution Date at least equal to the
Accumulation Period Length and, as a result, the number of Due Periods in the
Accumulation Period shall at least equal the Accumulation Period Length. On
each Determination Date until the Accumulation Period begins, the Servicer shall
determine the "Accumulation Period Length," which shall equal the number of
--------------------------
whole months such that the sum of the Accumulation Period Factors for each month
during such period will be equal to or greater than the Required Accumulation
Factor Number; provided, however, that the Accumulation Period Length shall not
-------- -------
be determined to be less than one month.
Section 4.16 Suspension of Accumulation Period. (a) The Transferor
---------------------------------
may, in its sole discretion, elect to suspend the commencement of the
Accumulation Period. The commencement of the Accumulation Period shall be
suspended upon delivery by the Transferor to the Trustee of (i) an Officer's
Certificate stating that the Transferor has elected to suspend the commencement
of the Accumulation Period and that all conditions precedent to such suspension
set forth in this Section 4.16 have been satisfied, (ii) a copy of an executed
Qualified Maturity Agreement and (iii) an Opinion of Counsel addressed to the
Trustee as to the due authorization, execution and delivery and the validity and
enforceability of such Qualified Maturity Agreement. The Transferor does hereby
transfer, assign, set-over, and otherwise convey to the Trustee for the benefit
of the Class A Certificateholders, the Class B Certificateholders and the CTO
Securityholders, without recourse, all of its rights under any Qualified
Maturity Agreement obtained in accordance with this Section 4.16 and all
proceeds thereof. Such property shall constitute Trust Property for all
purposes of the Agreement. The foregoing transfer, assignment, set-over and
conveyance does not constitute and is not intended to result in a creation or an
assumption by the Trust, the Trustee or any Certificateholder of
<PAGE>
any obligation of the Transferor or any other Person in connection with a
Qualified Maturity Agreement or under any agreement or instrument relating
thereto.
The Trustee hereby acknowledges its acceptance, to the extent validly
transferred, assigned, set-over or otherwise conveyed to the Trustee, for the
benefit of the Class A Certificateholders, the Class B Certificateholders and
the CTO Securityholders, of all of the rights previously held by the Transferor
under any Qualified Maturity Agreement obtained by the Transferor and all
proceeds thereof, and declares that it shall hold such rights upon the trust set
forth herein and in the Agreement, and subject to the terms hereof and thereof,
for the benefit of the Class A Certificateholders, the Class B
Certificateholders and the CTO Securityholders.
(b) The Transferor shall cause the provider of each Qualified
Maturity Agreement to deposit into the Principal Funding Account on or before
the Expected Final Distribution Date an amount equal to the aggregate
outstanding principal balance of the Class A Certificates, the Class B
Certificates and the Collateralized Trust Obligations on such Distribution Date;
provided, however, that the Transferor may instead elect to fund all or a
- -------- -------
portion of such deposit with the proceeds of the issuance of a new Series or
with the Available Principal Collections with respect to such Distribution Date.
The amount deposited shall be applied on the Expected Final Distribution Date
pursuant to Section 4.6(f) as if the commencement of the Accumulation Period had
not been suspended.
(c) Each Qualified Maturity Agreement shall terminate at the close of
business on the Expected Final Distribution Date; provided, however, that the
-------- -------
Transferor may terminate a Qualified Maturity Agreement prior to such
Distribution Date if (i) it obtains a Substitute Qualified Maturity Agreement,
(ii) the provider of the Qualified Maturity Agreement ceases to qualify as a
Qualified Institution and the Transferor is unable to obtain a substitute
Qualified Maturity Agreement or (iii) an Early Amortization Event occurs. In
addition, the Transferor may terminate a Qualified Maturity Agreement prior to
the later of the last day of the January 2002 Due Period and the date to which
the commencement of the Accumulation Period may be postponed pursuant to Section
4.15 (as determined on the Determination Date preceding the date of such
termination), in which case the commencement of the Accumulation Period shall be
determined as if the Transferor had not elected to suspend such commencement.
In the event that the provider of a Qualified Maturity Agreement ceases to
qualify as a Qualified Institution, the Transferor shall use its best efforts to
obtain a substitute Qualified Maturity Agreement.
<PAGE>
(d) If a Qualified Maturity Agreement is terminated prior to the
earlier of the Expected Final Distribution Date and the commencement of the
Early Amortization Period and the Transferor does not obtain a substitute
Qualified Maturity Agreement, the Accumulation Period shall commence on the
latest of (i) the last day of the January 2002 Due Period, (ii) at the election
of the Transferor, the date to which the commencement of the Accumulation Period
may be postponed pursuant to Section 4.15 (as determined on the date of such
termination) and (iii) the first day of the Due Period following the date of
such termination.
SECTION 9. Article V of the Agreement. Article V of the Agreement as
--------------------------
it relates to Series 2000-1 shall read in its entirety as follows:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS
Section 5.1 Distributions. (a) On each Determination Date, the
-------------
Servicer shall deliver to the Trustee and the Paying Agent a certificate
substantially in the form of Exhibit E prepared by the Servicer.
---------
(b) On each Distribution Date, the Paying Agent shall distribute to
each Class A Certificateholder of record as of the preceding Record Date (other
than as provided in Section 12.2 respecting a final distribution) such Class A
Certificateholder's pro rata share of the amounts that are available on such
Distribution Date to pay interest on the Class A Certificates pursuant to this
Agreement.
(c) On the Expected Final Distribution Date and each Special
Distribution Date, the Paying Agent shall distribute to each Class A
Certificateholder of record as of the preceding Record Date (other than as
provided in Section 12.2 respecting a final distribution) such Class A
Certificateholder's pro rata share of the amounts that are available on such
date to pay principal of the Class A Certificates pursuant to this Agreement.
(d) On each Distribution Date, the Paying Agent shall distribute to
each Class B Certificateholder of record as of the preceding Record Date (other
than as provided in Section 12.2 respecting a final distribution) such Class B
Certificateholder's pro rata share of the amounts that are available on such
Distribution Date to pay interest on the Class B Certificates pursuant to this
Agreement.
(e) On the Expected Final Distribution Date and each Special
Distribution Date, the Paying Agent shall distribute to
<PAGE>
each Class B Certificateholder of record as of the preceding Record Date (other
than as provided in Section 12.2 respecting a final distribution) such Class B
Certificateholder's pro rata share of the amounts that are available on such
date to pay principal of the Class B Certificates pursuant to this Agreement.
(f) On each Distribution Date, the Paying Agent shall distribute to
each CTO Securityholder of record as of the preceding Record Date (other than as
provided in Section 12.2 respecting a final distribution) such CTO
Securityholder's pro rata share of the amounts that are available on such
Distribution Date to pay interest on the Collateralized Trust Obligations
pursuant to this Agreement.
(g) On each Distribution Date, the Paying Agent shall distribute to
each CTO Securityholder of record as of the preceding Record Date (other than as
provided in Section 12.2 respecting a final distribution) such CTO
Securityholder's pro rata share of the amounts that are available on such date
to pay principal of the Collateralized Trust Obligations pursuant to this
Agreement.
(h) On each Distribution Date, the Paying Agent shall distribute to
each Class D Certificateholder of record as of the preceding Record Date (other
than as provided in Section 12.2 respecting a final distribution) such Class D
Certificateholder's pro rata share of the amounts that are available on such
Distribution Date to pay interest on the Class D Certificates pursuant to this
Agreement.
(i) On each Distribution Date, beginning with the Distribution Date
on which the Class A Certificates, the Class B Certificates and the
Collateralized Trust Obligations are paid in full, the Paying Agent shall
distribute to each Class D Certificateholder of record as of the preceding
Record Date (other than as provided in Section 12.2 respecting a final
distribution) such Class D Certificateholder's pro rata share of the amounts
that are available on such date to pay principal of the Class D Certificates
pursuant to this Agreement.
(j) Except as provided in Section 12.2 with respect to a final
distribution, distributions to Series 2000-1 Certificateholders hereunder shall
be made by check mailed to each such Certificateholder at such
Certificateholder's address appearing in the Certificate Register without
presentation or surrender of any such Series 2000-1 Certificate or the making of
any notation thereon; provided, however, that, with respect to any such Series
-------- -------
2000-1 Certificates registered in the name of a Clearing Agency, such
distributions shall be made to such Clearing Agency in immediately available
funds.
<PAGE>
Section 5.2 Statements to Series 2000-1 Certificateholders. On each
----------------------------------------------
Distribution Date, the Paying Agent, on behalf of the Trustee, shall forward to
each Series 2000-1 Certificateholder of record as of the preceding Record Date a
statement substantially in the form of Exhibit F prepared by the Servicer
---------
setting forth certain information relating to the Trust and the Series 2000-1
Certificates.
On or before January 31 of each calendar year, beginning with 2001,
the Paying Agent, on behalf of the Trustee, shall furnish or cause to be
furnished to each Person who at any time during the preceding calendar year was
a Series 2000-1 Certificateholder a statement prepared by the Servicer
containing the information which is required to be contained in the monthly
statement referred to in the preceding paragraph, aggregated for such calendar
year or the applicable portion thereof during which such Person was a Series
2000-1 Certificateholder, together with such other information as is required to
be provided by an issuer of indebtedness under the Code and such other customary
information as is necessary to enable the Series 2000-1 Certificateholders to
prepare their tax returns. Such obligation of the Servicer shall be deemed to
have been satisfied to the extent that substantially comparable information
shall have been provided by the Paying Agent pursuant to any requirements of the
Code as from time to time in effect.
[END OF ARTICLE V]
SECTION 10. Early Amortization Events. If any one of the events
-------------------------
specified in Section 9.1 of the Agreement or any one of the following events
shall occur during either the Revolving Period or the Accumulation Period with
respect to the Series 2000-1 Certificates:
(a) failure on the part of the Transferor (x) to make any
payment or deposit required by the terms of the Agreement on or before the date
occurring five Business Days after the date such payment or deposit is required
to be made; or (y) duly to observe or perform in any material respect any other
covenants or agreements of the Transferor set forth in the Agreement that
continues unremedied for a period of 60 days (or, in the case of a covenant
pursuant to Section 4A of this Series Supplement, 30 days) after the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Transferor by the Trustee, or to the Transferor and the
Trustee by the Holders of Series 2000-1 Certificates evidencing not less than
50% of the Invested Amount, and as a result of which the interests of the Series
2000-1 Certificateholders are materially and adversely affected;
(b) any representation or warranty made by the Transferor in the
Agreement shall prove to have been incorrect in
<PAGE>
any material respect when made that continues to be incorrect in any material
respect for a period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Transferor by the Trustee, or to the Transferor and the Trustee by the Holders
of Series 2000-1 Certificates evidencing not less than 50% of the Invested
Amount, and as a result of which the interests of the Series 2000-1
Certificateholders are materially and adversely affected; provided, however,
-------- -------
that if the representation or warranty which was breached relates to any
particular Receivable or group of Receivables, an Early Amortization Event shall
not be deemed to have occurred hereunder if the Transferor shall have accepted
reassignment of such Receivable, or all of such Receivables, if applicable,
during such period (or such longer period not to exceed a total of 180 days as
the Trustee may specify) in accordance with the provisions of the Agreement;
(c) the Transferor or Circuit City shall consent to the
appointment of a trustee, conservator, receiver, liquidator, custodian or other
similar official in any bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities, receivership, conservatorship or similar
proceedings of or relating to the Transferor or Circuit City or of or relating
to all or substantially all of its property; or a decree or order of a court or
agency or supervisory authority having jurisdiction in the premises for the
appointment of a trustee, conservator, receiver, liquidator, custodian or other
similar official in any bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities, receivership, conservatorship or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the Transferor or Circuit City and such decree or order
shall have remained in force undischarged or unstayed for a period of 30 days;
either the Transferor or Circuit City shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take advantage of
any applicable bankruptcy, insolvency, receivership, conservatorship or
reorganization statute, make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations; an involuntary proceeding shall
be commenced or an involuntary petition shall be filed with respect to the
Transferor or Circuit City in a court of competent jurisdiction seeking to take
advantage of any applicable bankruptcy, insolvency, receivership,
conservatorship or reorganization statute and such proceeding or petition shall
continue undismissed for 60 days; or the Transferor shall become unable for any
reason to transfer Receivables to the Trust in accordance with the provisions of
the Agreement;
(d) any Servicer Default shall occur that would have a material
adverse effect on the Holders of the Series 2000-1 Certificates;
<PAGE>
(e) the Transferor shall fail to designate Additional Accounts
or cause the Trust to repurchase Investor Certificates in an amount and within
the time period required by Section 2.6(a) of the Agreement; or
(f) the average of the Portfolio Yields for any three
consecutive Due Periods shall be less than the average of the Base Rates for
such period;
(g) the Interest Rate Cap Provider shall fail to make any
payment under the Class A Interest Rate Cap or the Class B Interest Rate Cap
within five Business Days of the date on which such payment was due; or
(h) the Class A Certificates, the Class B Certificates or the
Collateralized Trust Obligations shall not be paid in full on the Expected Final
Distribution Date;
then, in the case of any event described in clause (a), (b), (d) or (g), an
Early Amortization Event will be deemed to have occurred with respect to the
Series 2000-1 Certificates only if, after any applicable grace period described
in the clauses, either the Trustee or the Holders of Series 2000-1 Certificates
evidencing more than 50% of the Invested Amount, by written notice to the
Transferor and the Servicer (and to the Trustee, if given by such Holders)
declare that an Early Amortization Event has occurred as of the date of such
notice, and, in the case of any event described in Section 9.1 of the Agreement
an Early Amortization Event with respect to all Series, and in the case of any
event described in clause (c), (e), (f) or (h), an Early Amortization Event with
respect to only the Series 2000-1 Certificates, will be deemed to have occurred
without any notice or other action on the part of the Trustee or the Holders of
the Series 2000-1 Certificates immediately upon the occurrence of such event.
SECTION 11. CTO Defaults. If any one of the following events
------------
shall occur with respect to the CTOs:
(a) accrued but unpaid CTO Monthly Interest is not paid in full
to the CTO Securityholders on two consecutive Distribution Dates; or
(b) there is a CTO Investor Charge Off on three consecutive
Distribution Dates;
then a CTO Default will be deemed to have occurred with respect to the
Collateralized Trust Obligations. If a CTO Default has occurred and is
continuing, at the direction of the Holders of more than 50% of the CTO Invested
Amount, (i) before the payment in full of the Class A Certificates and the Class
B Certificates, the Required Spread Account Amount with respect to each
<PAGE>
Distribution Date thereafter shall equal the CTO Invested Amount as of such date
and (ii) following the payment in full of the Class A Certificates and the Class
B Certificates, the Trustee shall sell or cause to be sold an amount of
Principal Receivables and the related Finance Charge Receivables (or interests
therein) up to 110% of the Invested Amount at the close of business on the date
of such sale and pay the proceeds of such sale to the holders of the Series
2000-1 Certificates in final payment of all principal of and accrued interest on
Series 2000-1 (which proceeds will be applied first to the CTO Invested Amount
until the Collateralized Trust Obligations have been paid in full and then to
the Class D Invested Amount until the Class D Certificates have been paid in
full); provided, however, that the amount of such Principal Receivables shall
-------- -------
not exceed the sum of (1) the product of (A) the Transferor Amount on such date
and (B) a fraction, the numerator of which is the Invested Amount on such date
and the denominator of which is the Aggregate Invested Amount on such date and
(2) the Invested Amount on such date. The Transferor may purchase such
Receivables in such case and shall have a right of first refusal with respect
thereto to the extent of a bona fide offer by an unrelated third party for fair
value. Any proceeds of such sale in excess of such principal and interest paid
shall be paid to the Transferor.
SECTION 12. Restrictions on Transfer.
------------------------
(a) Each Collateralized Trust Obligation will bear a legend or
legends substantially in the following form:
EACH PURCHASER OF THIS COLLATERALIZED TRUST OBLIGATION REPRESENTS AND
WARRANTS FOR THE BENEFIT OF FIRST NORTH AMERICAN NATIONAL BANK AND THE TRUSTEE
THAT SUCH PURCHASER IS NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION
3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA")) THAT IS SUBJECT TO TITLE I OF ERISA, (II) A PLAN (AS DEFINED IN
-----
SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE")), THAT IS SUBJECT TO SECTION 4975 OF THE CODE, (III) A GOVERNMENTAL PLAN
----
(AS DEFINED IN SECTION 3(32) OF ERISA) THAT IS SUBJECT TO ANY FEDERAL, STATE OR
LOCAL LAW THAT IS, TO A MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS
INCLUDE "PLAN ASSETS" (AS DESCRIBED IN 29 C.F.R. 2510.3-101) BY REASON OF A
PLAN'S INVESTMENT IN SUCH ENTITY OR (V) A PERSON INVESTING "PLAN ASSETS" (AS
DESCRIBED IN 29 C.F.R. 2510.3-101) OF ANY SUCH PLAN (INCLUDING, FOR PURPOSES OF
CLAUSES (IV) AND (V), INSURANCE COMPANY GENERAL ACCOUNTS BUT EXCLUDING ANY
ENTITY REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED).
THIS COLLATERALIZED TRUST OBLIGATION HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
--------------
OR ANY STATE SECURITIES LAW. THE
<PAGE>
HOLDER OF THIS COLLATERALIZED TRUST OBLIGATION, BY THE PURCHASE HEREOF, AGREES
THAT THIS COLLATERALIZED TRUST OBLIGATION MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) TO THE TRANSFEROR OR (2) PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" WITHIN THE MEANING OF RULE 144A (A "QIB")
---
PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB,
WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A. EACH BENEFICIAL OWNER OF
THIS COLLATERALIZED TRUST OBLIGATION, BY THE ACCEPTANCE OF A BENEFICIAL INTEREST
HEREIN, IF SUCH BENEFICIAL OWNER ACQUIRED SUCH INTEREST IN A TRANSFER DESCRIBED
IN CLAUSE (2) ABOVE, IS DEEMED TO REPRESENT THAT IT IS EITHER A QIB PURCHASING
FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF ANOTHER QIB.
(b) Upon surrender for registration of transfer of a
Collateralized Trust Obligation at the office of the Transfer Agent and
Registrar, accompanied by a certification by the CTO Securityholder
substantially in the form attached as Exhibit G, executed by the registered
owner, in person or by such CTO Securityholder's attorney thereunto duly
authorized in writing, such Collateralized Trust Obligation shall be transferred
upon the Certificate Register, and the Transferor shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferees one or
more new registered Collateralized Trust Obligations of any authorized
denominations and of a like aggregate principal amount and tenor. Each transfer
of a Collateralized Trust Obligation shall be subject to the restrictions set
forth in this Section 12 and to such other restrictions as shall be set forth in
the text of the Collateralized Trust Obligation. Successive registrations of
transfers as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the Certificate Register.
(c) The Transferor may at any time, without the consent of the
Series 2000-1 Certificateholders, (i) sell or transfer all or a portion of the
Class D Certificates, provided that (A) the Transferor shall have given notice
to the Trustee and the Servicer of such proposed sale or transfer at least five
Business Days prior to the consummation of such sale or transfer, (B) no Early
Amortization Event shall have occurred prior to the consummation of such
proposed sale or transfer; (C) the Transferor shall have delivered an Officer's
Certificate dated the date of the consummation of such proposed sale or transfer
to the effect that, in the reasonable belief of the Transferor, such action will
not, based on the facts known to such officer at the time of such certification,
cause an Early Amortization Event to occur with respect to any Series and (D)
the Transferor shall have provided an Opinion of Counsel addressed to the
Trustee,
<PAGE>
dated the date of such certificate, to the effect that such proposed sale or
transfer will not (x) adversely affect the tax characterization as debt of
Investor Certificates of any outstanding Series or Class with respect to which
an Opinion of Counsel addressed to the Trustee was delivered at the time of
their issuance that such Investor Certificates would be characterized as debt,
(y) cause the Trust to be classified, for federal income tax purposes, as an
association (or publicly traded partnership) taxable as a corporation and (z)
cause or constitute an event in which gain or loss would be recognized by any
Certificateholder.
(d) No Class D Certificate or any interest therein may be Transferred
except in accordance with this Section 12. Any sale, conveyance, assignment,
hypothecation, pledge, participation or other transfer (each, a "Transfer") of a
--------
Class D Certificate otherwise permitted by this Section 12 will be permitted
only if it consists of a pro rata percentage interest in all payments made with
respect to such holder's Class D Certificates. No Class D Certificate or any
interest therein may be Transferred to any Person (each, an "Assignee") unless
--------
the Assignee shall have executed and delivered the certification referred to in
subsection 12(e) below and each of the Transferor and the Servicer shall have
granted its prior consent thereto. The consent of the Transferor and the
Servicer shall be granted unless the Transferor reasonably determines that such
Transfer would create a risk that the Trust would be classified for federal or
any applicable state tax purposes as an association or publicly traded
partnership taxable as a corporation; provided, however, that any attempted
-------- -------
Transfer that would cause the number of Holders to exceed ninety-nine shall be
void.
(e) Each initial purchaser of a Class D Certificate or any interest
therein and any Assignee shall certify to the Transferor, the Servicer and the
Trustee that it is either (x)(A) a citizen or resident of the United States, (B)
a corporation, partnership or other entity organized in or under the laws of the
United States or any political subdivision thereof which, if such entity is a
tax-exempt entity, recognizes that payments with respect to the Class D
Certificates may constitute unrelated business taxable income or (C) a person
not described in (A) or (B) whose ownership of the Class D Certificates is
effectively connected with the conduct of a trade or business within the United
States (within the meaning of the Code) and whose ownership of any interest in a
Class D Certificate will not result in any withholding obligation with respect
to any payments with respect to the Class D Certificates by any Person and who
will furnish to the Certificateholder making the Transfer, the Servicer and the
Trustee, a properly executed United States Internal Revenue Service Form 4224
(and agree to provide a new Form 4224 upon the expiration or obsolescence of any
previously delivered form and comparable
<PAGE>
statements in accordance with applicable United States laws) or (y) an estate or
trust the income of which is includible in gross income for United States
federal income tax purposes.
(f) Each initial purchaser of a Class D Certificate or any
interest therein and any Assignee shall certify to the Transferor, the Servicer
and the Trustee that it has neither acquired nor will it Transfer any interest
in a Class D Certificate or cause an interest in a Class D Certificate to be
marketed on or through (i) an "established securities market" within the meaning
of Section 7704(b)(1) of the Code and any treasury regulation thereunder,
including, without limitation, an over-the-counter-market or an interdealer
quotation system that regularly disseminates firm buy or sell quotations or (ii)
a "secondary market" within the meaning of Section 7704(b)(2) of the Code and
any treasury regulation thereunder, including, without limitation, a market
wherein interests in the Class D Certificates are regularly quoted by any Person
making a market in such interests and a market wherein any Person regularly
makes available bid or offer quotes with respect to interests in the Class D
Certificates and stands ready to effect buy or sell transactions at the quoted
price for itself or on behalf of others. In addition, each initial purchaser of
a Class D Certificate or any interest therein and any Assignee shall certify,
prior to any delivery or Transfer to it of a Class D Certificate, that it is not
and will not become, for so long as it holds an interest in a Class D
Certificate, a partnership, Subchapter S corporation or grantor trust for United
States federal income tax purposes. If an initial purchaser of an interest in a
Class D Certificate or an Assignee cannot make the certification described in
the preceding sentence, the Transferor may, in its sole discretion, prohibit a
Transfer to such entity; provided, however, that if the Transferor agrees to
-------- -------
permit such a Transfer, the Transferor, the Servicer or the Trustee may require
additional certifications in order to prevent the Trust from being treated as a
publicly traded partnership. Each Holder acknowledges that special tax counsel
to the Transferor may render Opinions of Counsel from time to time to the
Transferor and others that the Trust will not be treated as a publicly traded
partnership taxable as a corporation, and that such Opinions of Counsel will
rely in part on the accuracy of the certifications in this subsection 11(c).
(g) Each Class D Certificate will bear a legend or legends
substantially in the following form:
EACH PURCHASER OF THIS CLASS D CERTIFICATE REPRESENTS AND WARRANTS FOR
THE BENEFIT OF FIRST NORTH AMERICAN NATIONAL BANK AND THE TRUSTEE THAT SUCH
PURCHASER IS NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS
-----
SUBJECT TO TITLE I OF ERISA, (II) A PLAN (AS DEFINED IN
<PAGE>
SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE")), THAT IS SUBJECT TO SECTION 4975 OF THE CODE, (III) A GOVERNMENTAL PLAN
----
(AS DEFINED IN SECTION 3(32) OF ERISA) THAT IS SUBJECT TO ANY FEDERAL, STATE OR
LOCAL LAW THAT IS, TO A MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS
INCLUDE "PLAN ASSETS" (AS DESCRIBED IN 29 C.F.R. 2510.3-101) BY REASON OF A
PLAN'S INVESTMENT IN SUCH ENTITY OR (V) A PERSON INVESTING "PLAN ASSETS" (AS
DESCRIBED IN 29 C.F.R. 2510.3-101) OF ANY SUCH PLAN (INCLUDING, FOR PURPOSES OF
CLAUSES (IV) AND (V), INSURANCE COMPANY GENERAL ACCOUNTS BUT EXCLUDING ANY
ENTITY REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED).
THIS CLASS D CERTIFICATE MAY NOT BE ACQUIRED, SOLD, TRADED OR
TRANSFERRED, NOR MAY AN INTEREST IN THIS CLASS D CERTIFICATE BE MARKETED, ON OR
THROUGH AN "ESTABLISHED SECURITIES MARKET" WITHIN THE MEANING OF SECTION
7704(b)(1) OF THE CODE AND ANY TREASURY REGULATION THEREUNDER, INCLUDING,
WITHOUT LIMITATION, AN OVER-THE-COUNTER-MARKET OR AN INTERDEALER QUOTATION
SYSTEM THAT REGULARLY DISSEMINATES FIRM BUY OR SELL QUOTATIONS.
THIS CLASS D CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
--------------
SECURITIES LAW. THE HOLDER OF THIS CLASS D CERTIFICATE, BY THE PURCHASE HEREOF,
AGREES THAT THIS CLASS D CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) TO THE TRANSFEROR OR (2) TO A LIMITED NUMBER OF
INSTITUTIONAL "ACCREDITED INVESTORS" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT) AND IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (UPON DELIVERY OF THE DOCUMENTATION REQUIRED
BY THE POOLING AND SERVICING AGREEMENT AND, IF THE TRUSTEE SO REQUIRES, AN
OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE). EACH BENEFICIAL OWNER OF A
CLASS D CERTIFICATE, BY THE ACCEPTANCE OF A BENEFICIAL INTEREST HEREIN, IS
DEEMED TO REPRESENT THAT IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT). THIS
CLASS D CERTIFICATE WILL NOT BE ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT
UPON PRESENTATION OF EVIDENCE SATISFACTORY TO THE TRANSFER AGENT AND REGISTRAR
THAT THE RESTRICTIONS ON TRANSFER SET FORTH IN THE SERIES 2000-1 SUPPLEMENT HAVE
BEEN COMPLIED WITH. THIS CLASS D CERTIFICATE MAY NOT BE REOFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHOUT THE PRIOR WRITTEN CONSENT OF EACH OF
THE TRANSFEROR AND THE SERVICER AND UNLESS AND UNTIL THE TRUSTEE SHALL HAVE
RECEIVED THE CERTIFICATIONS REQUIRED BY THE SERIES 2000-1 SUPPLEMENT.
(h) Upon surrender for registration of transfer of a Class D
Certificate at the office of the Transfer Agent and
<PAGE>
Registrar, accompanied by a certification by the Class D Certificateholder
substantially in the form attached as Exhibit G, executed by the registered
owner, in person or by such Class D Certificateholder's attorney thereunto duly
authorized in writing, and receipt by the Trustee of the written consent of each
of the Transferor and the Servicer to such transfer, such Class D Certificate
shall be transferred upon the Certificate Register, and the Transferor shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferees one or more new registered Class D Certificates of any
authorized denominations and of a like aggregate principal amount and tenor.
Each transfer of a Class D Certificate shall be subject to the restrictions set
forth in this Section 12 and to such other restrictions as shall be set forth in
the text of the Class D Certificates. Successive registrations and registrations
of transfers as aforesaid may be made from time to time as desired, and each
such registration shall be noted on the Certificate Register.
SECTION 13. Tax Characterization of the Collateralized Trust
------------------------------------------------
Obligations and the Class D Certificates. It is the intention of the parties
- ----------------------------------------
hereto that the Collateralized Trust Obligations and the Class D Certificates be
treated under applicable tax law as indebtedness. In the event that either the
Collateralized Trust Obligations or the Class D Certificates are not so treated,
it is the intention of the parties that the Collateralized Trust Obligations or
the Class D Certificates, as the case may be, be treated under applicable tax
law as interests in a partnership that owns the Receivables. In the event that
either the Collateralized Trust Obligations or the Class D Certificates are
treated under applicable tax law as interests in a partnership, it is the
intention of the parties that the Collateralized Trust Obligations or the Class
D Certificates, as the case may be, be treated as guaranteed payments and, if
for any reason they are not so treated, that the Holders of the Collateralized
Trust Obligations or the Class D Certificates, as the case may be, be specially
allocated gross interest income equal to the interest accrued during each
Interest Period on the Collateralized Trust Obligations or the Class D
Certificates, as the case may be.
SECTION 14. Ratification of Master Pooling and Servicing
--------------------------------------------
Agreement. As supplemented by this Series Supplement, the Agreement is in all
- ---------
respects ratified and confirmed and the Agreement as so supplemented by this
Series Supplement shall be read, taken, and construed as one and the same
instrument; provided, however, that pursuant to Section 9.2(a) of the Agreement,
-------- -------
the Trustee shall sell the portion of the Receivables allocable to Series 2000-1
unless instructed not to sell, dispose of or otherwise liquidate the Receivables
by holders of interests aggregating more than 50% of each Class of each Series
(including a majority in interest in each collateral indebtedness interest
<PAGE>
or collateralized trust obligation), each holder of an interest in the
Transferor Interest other than the Transferor and any other Person specified in
a Supplement.
SECTION 15. Counterparts. This Series Supplement may be executed in
------------
any number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and the
same instrument.
SECTION 16. Governing Law. THIS SERIES SUPPLEMENT SHALL BE
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 17. Subordination of Certain Termination Payments.
---------------------------------------------
Notwithstanding anything contained in Section 12.2(c) of the Agreement, upon the
sale of Receivables or interests therein as provided in Section 12.2(c) of the
Agreement, the proceeds of any such sale payable in respect of the Series 2000-1
Certificates shall be payable first to the Class A Certificateholders on a pro
rata basis until all obligations payable in respect of the Class A Certificates
are paid in full, then to the Class B Certificateholders on a pro rata basis
until all obligations payable in respect of the Class B Certificates are paid in
full, then to the CTO Securityholders on a pro rata basis until all obligations
payable in respect of the Collateralized Trust Obligations are paid in full and
then to the Class D Certificateholders on a pro rata basis until all obligations
payable in respect of the Class D Certificates are paid in full.
SECTION 18. FASIT Election. Each Series 2000-1 Certificateholder, by
--------------
acquiring an interest in a Series 2000-1 Certificate, is deemed to consent to
any amendment to the Agreement or this Series Supplement necessary for the
Transferor to elect for the Trust or any portion thereof to be treated as a
financial asset securitization investment trust ("FASIT") within the meaning of
Section 860L of the Code (or any successor provision thereto); provided,
--------
however, that such election may not be made unless such election will
- --------
not adversely affect in any material respect the interests of the CTO
Securityholders and the Transferor delivers to the Trustee an Opinion of Counsel
to the effect that (i) the issuance of FASIT regular interests will not
adversely affect the tax characterization as debt of Investor Certificates of
any outstanding Series or Class with respect to which an Opinion of Counsel was
delivered at the time of their issuance that such Investor Certificates would be
characterized as debt, (ii) following such issuance, the Trust will not be
classified, for federal income tax purposes, as an association (or publicly
traded partnership) taxable as a corporation, and
<PAGE>
(iii) such issuance will not cause or constitute an event in which gain or loss
would be recognized by any Investor Certificateholder.
SECTION 19. Paired Series. Subject to obtaining confirmation by
-------------
each Rating Agency of the then existing ratings of each class of Series 2000-
1 Certificates which is then rated, and prior to the commencement of the Early
Amortization Period, the Series 2000-1 Certificates may be paired with one or
more other Series (each, a "Paired Series"). Each Paired Series either will be
-------------
pre-funded with an initial deposit to a pre-funding account in an amount up to
the initial principal balance of such Paired Series and funded primarily from
the proceeds of the sale of such Paired Series or will have a variable principal
amount. Any such pre-funding account will be held for the benefit of such
Paired Series and not for the benefit of the Series 2000-1 Certificateholders.
As principal is paid or deposited into the Principal Funding Account with
respect to the Series 2000-1 Certificates, either (i) in the case of a pre-
funded Paired Series, an equal amount of funds on deposit in any pre-funding
account for such pre-funded Paired Series will, if requested by the Transferor,
be released (which funds will be distributed to the Transferor) or (ii) in the
case of a Paired Series having a variable principal amount, an interest in such
variable Paired Series in an equal or lesser amount may, if requested by the
Transferor, be sold by the Trust (and the proceeds thereof will, if requested by
the Transferor, be distributed to the Transferor) and, in either case, the
invested amount in the Trust of such Paired Series will increase by up to a
corresponding amount. Upon payment in full of the Series 2000-1 Certificates,
assuming that there have been no unreimbursed charge-offs with respect to any
related Paired Series, the aggregate invested amount of such related Paired
Series will have been increased by an amount up to an aggregate amount equal to
the Invested Amount paid to the Series 2000-1 Certificateholders since the
issuance of such Paired Series. The issuance of a Paired Series will be subject
to the conditions described in subsection 6.9(b) of the Agreement. The
numerator of the Class A Fixed Allocation Percentage, the Class B Fixed
Allocation Percentage, the CTO Fixed Allocation Percentage and the Class D Fixed
Allocation Percentage with respect to allocations of Collections of Principal
Receivables may be changed upon the occurrence of an Early Amortization Event
with respect to (and as defined in the Supplement for) a Paired Series (provided
that such numerator is not less than the Class A Invested Amount, the Class B
Invested Amount, the CTO Invested Amount or the Class D Invested Amount,
respectively, as of the last day of the Revolving Period (as defined in the
Supplement for such Paired Series)).
<PAGE>
SECTION 20. Discount Option. If the Transferor has exercised its
---------------
discount option pursuant to Section 2.8, the Transferor shall not suspend or
terminate such discount option or decrease the Discount Percentage then in
effect unless (i) the Holders of at least 66-2/3% of the CTO Invested Amount
shall have consented to such action or (ii) the amount on deposit in the Spread
Account as of the date of such action equals or exceeds the Required Spread
Account Amount with respect to the preceding Distribution Date (calculated as if
the Transferor had never exercised its discount option or, in the case of a
decrease in the Discount Percentage, as if the lower Discount Percentage had
been in effect at all times since a higher Discount Percentage was in effect).
<PAGE>
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Series Supplement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.
FIRST NORTH AMERICAN NATIONAL BANK,
as Transferor and Servicer
By: /S/ Philip J. Dunn
Name: Philip J. Dunn
Title: Vice President
BANKERS TRUST COMPANY,
as Trustee and Paying Agent
By: /S/ Francisco B. Talavera, Jr.
Name: Francisco B. Talavera, Jr
Title: Assistant Vice President
<PAGE>
Exhibit A
REGISTERED
$365,000,000
No. A-1
CUSIP No. 172937 AG 9
Unless this Class A Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
CIRCUIT CITY CREDIT CARD MASTER TRUST
CLASS A FLOATING RATE ASSET BACKED CERTIFICATE,
SERIES 2000-1
Expected Final Distribution Date:
February 2003 Distribution Date
Each $1,000 minimum denomination represents a
1/365,000 undivided interest in certain assets of the
CIRCUIT CITY CREDIT CARD MASTER TRUST
Evidencing an undivided interest in a trust, the corpus of which consists
primarily of receivables created from time to time in a portfolio of consumer
revolving credit card accounts of
FIRST NORTH AMERICAN NATIONAL BANK
(Not an interest in or obligation of First North American
National Bank, CircuitCity Stores, Inc. or any of their
affiliates)
This certifies that Cede & Co. (the "Class A Certificateholder") is the
registered owner of a fractional undivided interest in certain assets of a trust
(the "Trust") created pursuant to the Master Pooling and Servicing Agreement,
dated as of October 4, 1994 (as amended and supplemented, the "Agreement"), as
supplemented by the Series 2000-1 Supplement, dated as of February 28, 2000 (as
amended and supplemented, the "Series Supplement"), between First North American
National Bank, a national banking association, as Transferor and Servicer, and
Bankers Trust Company, a New York banking corporation, as trustee (the
"Trustee"). The corpus of the Trust consists of (i) receivables (the
"Receivables") created from time to time in a portfolio of consumer revolving
credit card accounts identified under the Agreement (the "Accounts"), (ii) all
monies due or to
<PAGE>
become due in payment of the Receivables, (iii) all proceeds of the Receivables
and proceeds of credit insurance policies relating to the Receivables, (iv) all
monies on deposit in certain bank accounts of the Trust (excluding investment
earnings, unless otherwise specified in the Agreement or any Supplement), (v)
the Transferor's rights under an interest rate cap agreement for the exclusive
benefit of the Class A Certificateholders and the Transferor's rights under an
interest rate cap agreement for the exclusive benefit of the Class B
Certificateholders, (vi) any Enhancement with respect to any Series (or class
thereof) and (vii) all other assets and interests constituting the Trust
Property. Although a summary of certain provisions of the Agreement and the
Series Supplement is set forth below and on the Summary of Terms and Conditions
attached hereto and made a part hereof, this Class A Certificate does not
purport to summarize the Agreement and the Series Supplement and reference is
made to the Agreement and the Series Supplement for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and obligations of the Trustee. To the extent
there is a conflict between this Class A Certificate and the Agreement or the
Series Supplement, the Agreement or the Series Supplement, as applicable, will
control. A copy of the Agreement and the Series Supplement (without schedules)
may be requested from the Trustee by writing to the Trustee at the Corporate
Trust Office: 4 Albany Street, New York, New York 10006, Attention: Corporate
Trust and Agency Group/Structured Finance. To the extent not defined herein, the
capitalized terms used herein have the meanings ascribed to them in the
Agreement or the Series Supplement, as applicable.
This Class A Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement and the Series Supplement, to which
Agreement and Series Supplement, each as amended and supplemented from time to
time, the Class A Certificateholder by virtue of the acceptance hereof assents
and is bound.
It is the intent of the Transferor and the Investor Certificateholders
(and Certificate Owners) that, for Federal, state and local income and franchise
tax purposes only, the Investor Certificates will qualify as indebtedness of the
Transferor secured by the Receivables (unless otherwise specified in the related
Supplement). The Class A Certificateholder (and each Certificate Owner of a
Class A Certificate), by the acceptance of this Class A Certificate (or its
interest therein), is deemed to agree to treat this Class A Certificate for
Federal, state and local income and franchise tax purposes and any other tax
imposed on or measured by income as indebtedness of the Transferor.
<PAGE>
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Class A Certificate shall
not be entitled to any benefit under the Agreement or the Series Supplement or
be valid for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Transferor has caused this Class A Certificate
to be duly executed.
FIRST NORTH AMERICAN NATIONAL BANK
By: ___________________________________
Name: Philip J. Dunn
Title: Vice President
Dated: February 28, 2000
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates described in the within-mentioned
Agreement and Series Supplement.
BANKERS TRUST COMPANY,
as Trustee
By:
__________________________________
Authorized Officer
Dated: February 28, 2000
<PAGE>
CIRCUIT CITY CREDIT CARD MASTER TRUST
CLASS A FLOATING RATE ASSET BACKED CERTIFICATE,
SERIES 2000-1
Summary of Terms and Conditions
This Class A Certificate is one of a Series of Certificates entitled
Circuit City Credit Card Master Trust, Series 2000-1 Certificates (the "Series
2000-1 Certificates"), and one of a class thereof entitled Class A Floating Rate
Asset Backed Certificates, Series 2000-1 (the "Class A Certificates"), each of
which represents a fractional undivided interest in certain assets of the Trust.
The Trust Property is allocated in part to the Investor Certificateholders of
all outstanding Series (the "Certificateholders' Interest") and the interests,
if any, of any Enhancement Providers, with the remainder allocated to the
Transferor. The aggregate interest represented by the Class A Certificates at
any time in the Principal Receivables in the Trust shall not exceed an amount
equal to the Class A Invested Amount at such time. The Class A Initial Invested
Amount is $365,000,000. The Class A Invested Amount on any date will be an
amount equal to (a) the Class A Initial Invested Amount, minus (b) the aggregate
-----
amount deposited into the Principal Funding Account prior to such date as Class
A Monthly Principal (excluding interest and other investment earnings on such
amount), minus (c) the aggregate amount of principal payments made to the Class
-----
A Certificateholders prior to such date, minus (d) the excess, if any, of the
-----
aggregate amount of Class A Investor Charge Offs for all prior Distribution
Dates over the sum of the aggregate amount of Class A Investor Charge Offs
----
reimbursed prior to such date pursuant to the Series Supplement and, without
duplication, the aggregate amount of the reductions of the Series Adjustment
Amounts allocated to the Class A Invested Amount prior to such date pursuant to
the Series Supplement; provided, however, that the Class A Invested Amount may
-------- -------
not be reduced below zero. In addition, classes of the Series 2000-1
Certificates entitled Class B Floating Rate Asset Backed Certificates, Series
2000-1 (the "Class B Certificates"), Collateralized Trust Obligations, Series
2000-1 (the "Collateralized Trust Obligations") and Class D Floating Rate Asset
Backed Certificates, Series 2000-1 (the "Class D Certificates") will be issued.
The Exchangeable Transferor Certificate, which represents the Transferor
Interest, has been issued to First North American National Bank pursuant to the
Agreement.
Subject to the terms and conditions of the Agreement, the Transferor
may from time to time direct the Trustee, on behalf of the Trust, to issue one
or more new Series of Investor Certificates, which will represent fractional
undivided interests in certain Trust Property.
Each Class A Certificate represents the right to receive payments of
(i) interest at the per annum rate of 0.23%
<PAGE>
in excess of LIBOR (as determined on the related LIBOR Determination Date as set
forth in the Series Supplement), accruing from February 28, 2000, payable on
April 17, 2000 and on the 15th day of each month thereafter (or, if such 15th
day is not a Business Day, the next succeeding Business Day) (each, a
"Distribution Date") and (ii) principal on the February 2003 Distribution Date
(and on each Distribution Date thereafter, if the Class A Certificates are not
paid in full on the February 2003 Distribution Date) or, upon the occurrence of
an Early Amortization Event, on each Distribution Date relating to the Early
Amortization Period, in each case funded from a percentage of the payments
received with respect to the Receivables and certain other funds, all as more
fully described in the Agreement and the Series Supplement. Interest on the
Class A Certificates will be calculated on the basis of a 360-day year and the
actual number of days in the relevant Interest Period.
The Class B Certificates, the Collateralized Trust Obligations and the
Class D Certificates are subordinated to the Class A Certificates to the extent
set forth in the Series Supplement.
On each Distribution Date, the Paying Agent shall distribute to each
Class A Certificateholder of record on the last Business Day of the preceding
calendar month (each a "Record Date") such Class A Certificateholder's pro rata
share of such amounts (including amounts on deposit in the Principal Funding
Account) as are payable to the Class A Certificateholders pursuant to the
Agreement and the Series Supplement. Distributions with respect to this Class A
Certificate will be made by the Paying Agent by check mailed to the address of
the Class A Certificateholder of record appearing in the Certificate Register
without the presentation or surrender of this Class A Certificate or the making
of any notation thereon (except for the final distribution in respect of this
Class A Certificate), except that with respect to Class A Certificates
registered in the name of Cede & Co., the nominee for The Depository Trust
Company, distributions will be made to Cede & Co. in the form of immediately
available funds. Final payment of this Class A Certificate will be made only
upon presentation and surrender of this Class A Certificate at the office or
agency specified in the notice of final distribution delivered by the Trustee in
accordance with the Agreement and the Series Supplement.
On any Distribution Date occurring on or after the day on which the
Invested Amount is reduced to an amount less than or equal to 5% of the Initial
Invested Amount, the Class A Certificates are subject to retransfer to the
Transferor. The retransfer price will be equal to the Class A Invested Amount
plus accrued but unpaid interest thereon.
2
<PAGE>
This Class A Certificate does not represent a recourse obligation of,
or an interest in, the Transferor, the Servicer, Circuit City Stores, Inc. or
any of their affiliates and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency or instrumentality. This
Class A Certificate is limited in right of payment to certain Collections with
respect to the Receivables (and certain other amounts), all as more specifically
set forth hereinabove and in the Agreement and the Series Supplement.
The Agreement and any Supplement may, subject to certain conditions
set forth in the Agreement, be amended from time to time by the Servicer, the
Transferor and the Trustee, without the consent of any of the Investor
Certificateholders. The Agreement and any Supplement may also be amended from
time to time by the Servicer, the Transferor and the Trustee, with the consent
of the Holders of Investor Certificates evidencing Undivided Interests
aggregating not less than 66-2/3% of the Invested Amount of all Series adversely
affected, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Agreement or of modifying in any
manner the rights of the Investor Certificateholders of any Series then issued
and outstanding; provided, however, that no such amendment shall (i) reduce in
-------- -------
any manner the amount of, or delay the timing of, distributions which are
required to be made on any Investor Certificate of such Series without the
consent of the related Investor Certificateholders, (ii) change the definition
of or the manner of calculating the Invested Amount, the Invested Percentage,
the applicable available amount under any Enhancement or the Investor Default
Amount of such Series without the consent of the related Investor
Certificateholders or (iii) reduce the aforesaid percentage required to consent
to any such amendment, without the consent of the related Investor
Certificateholders. Any amendment pursuant to this paragraph shall require that
each Rating Agency rating the affected Series confirm that such amendment will
not cause a reduction or withdrawal of the rating of any outstanding Series of
Certificates.
The Class A Certificates are issuable only in minimum denominations of
$1,000 and integral multiples of $1,000. The transfer of this Class A
Certificate shall be registered in the Certificate Register upon surrender of
this Class A Certificate for registration of transfer at any office or agency
maintained by the Transfer Agent and Registrar, and thereupon one or more new
Class A Certificates in authorized denominations representing like aggregate
Undivided Interests in the Trust will be issued to the designated transferee or
transferees.
As provided in the Agreement and subject to certain limitations
therein set forth, Class A Certificates are exchangeable for new Class A
Certificates in authorized
3
<PAGE>
denominations of like aggregate Undivided Interests in the Trust as requested by
the Class A Certificateholder surrendering such Class A Certificates. No service
charge may be imposed for any transfer or exchange but the Transfer Agent and
Registrar and the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
The Trustee, the Paying Agent and the Transfer Agent and Registrar and
any agent of any of them may treat the person in whose name this Class A
Certificate is registered as the owner hereof for all purposes, and neither the
Trustee, the Paying Agent, the Transfer Agent and Registrar, nor any agent of
any of them, shall be affected by notice to the contrary.
THE AGREEMENT AND THIS CLASS A CERTIFICATE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES UNDER THE AGREEMENT AND THIS CLASS A CERTIFICATE
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
4
<PAGE>
ASSIGNMENT
Social Security or other identifying number of assignee
____________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _________________________________________
(name and address of assignee)
the within certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer said
certificate on the books kept for registration thereof, with full power of
substitution in the premises.
Dated:
______________________________*
Signature Guaranteed:
______________________________
______________________
(*) NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Certificate in
every particular, without alteration, enlargement or any change whatsoever.
5
<PAGE>
Exhibit B
REGISTERED
$57,500,000
No. B-1
CUSIP
No. 172937 AH 7
Unless this Class B Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
EACH PURCHASER OF THIS CLASS B CERTIFICATE REPRESENTS AND WARRANTS FOR
THE BENEFIT OF FIRST NORTH AMERICAN NATIONAL BANK AND THE TRUSTEE THAT SUCH
PURCHASER IS NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS
-----
SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION
4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), (III)
----
A GOVERNMENTAL PLAN (AS DEFINED IN SECTION 3(32) OF ERISA) THAT IS SUBJECT TO
ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE
PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, (IV) AN ENTITY
WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" (AS DESCRIBED IN 29 C.F.R. 2510.3-
101) BY REASON OF A PLAN'S INVESTMENT IN SUCH ENTITY OR (V) A PERSON INVESTING
"PLAN ASSETS" (AS DESCRIBED IN 29 C.F.R. 2510.3-101) OF ANY SUCH PLAN
(INCLUDING, FOR PURPOSES OF CLAUSES (IV) AND (V), INSURANCE COMPANY GENERAL
ACCOUNTS BUT EXCLUDING ANY ENTITY REGISTERED UNDER THE INVESTMENT COMPANY ACT OF
1940, AS AMENDED).
6
<PAGE>
CIRCUIT CITY CREDIT CARD MASTER TRUST
CLASS B FLOATING RATE ASSET BACKED CERTIFICATE,
SERIES 2000-1
Expected Final Distribution Date:
February 2003 Distribution Date
Each $1,000 minimum denomination represents a
1/57,500 undivided interest
in certain assets of the
CIRCUIT CITY CREDIT CARD MASTER TRUST
Evidencing an undivided interest in a trust, the corpus of which consists
primarily of receivables created from time to time in a portfolio of consumer
revolving credit card accounts of
FIRST NORTH AMERICAN NATIONAL BANK
(Not an interest in or obligation of First North American National Bank, Circuit
City Stores, Inc. or any of their affiliates)
This certifies that Cede & Co. (the "Class B Certificateholder") is the
registered owner of a fractional undivided interest in certain assets of a trust
(the "Trust") created pursuant to the Master Pooling and Servicing Agreement,
dated as of October 4, 1994 (as amended and supplemented, the "Agreement"), as
supplemented by the Series 2000-1 Supplement, dated as of February 28, 2000 (as
amended and supplemented, the "Series Supplement"), among First North American
National Bank, a national banking association, as Transferor and Servicer, and
Bankers Trust Company, a New York banking corporation, as trustee (the
"Trustee"). The corpus of the Trust consists of (i) receivables (the
"Receivables") created from time to time in a portfolio of consumer revolving
credit card accounts identified under the Agreement (the "Accounts"), (ii) all
monies due or to become due in payment of the Receivables, (iii) all proceeds of
the Receivables and proceeds of credit insurance policies relating to the
Receivables, (iv) all monies on deposit in certain bank accounts of the Trust
(excluding investment earnings, unless otherwise specified in the Agreement or
any Supplement), (v) the Transferor's rights under an interest rate cap
agreement for the exclusive benefit of the Class A Certificateholders and the
Transferor's rights under an interest rate cap agreement for the exclusive
benefit of the Class B Certificateholders, (vi) any Enhancement with respect to
any Series (or class thereof) and (vii) all other assets and interests
constituting the Trust Property. Although a summary of certain provisions of
the Agreement and the Series Supplement is set forth below and on the Summary of
Terms and Conditions attached hereto and made a part hereof, this Class B
Certificate does not purport to summarize the Agreement and the Series
Supplement and reference is made to the Agreement and the Series Supplement for
information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and obligations of
the Trustee. To the extent there is a conflict between this Class B Certificate
and the
7
<PAGE>
Agreement or the Series Supplement, the Agreement or the Series Supplement, as
applicable, will control. A copy of the Agreement and the Series Supplement
(without schedules) may be requested from the Trustee by writing to the Trustee
at the Corporate Trust Office: 4 Albany Street, New York, New York 10006,
Attention: Corporate Trust and Agency Group/Structured Finance. To the extent
not defined herein, the capitalized terms used herein have the meanings ascribed
to them in the Agreement or the Series Supplement, as applicable.
This Class B Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement and the Series Supplement, to which
Agreement and Series Supplement, each as amended and supplemented from time to
time, the Class B Certificateholder by virtue of the acceptance hereof assents
and is bound.
It is the intent of the Transferor and the Investor Certificateholders
(and Certificate Owners) that, for Federal, state and local income and franchise
tax purposes only, the Investor Certificates will qualify as indebtedness of the
Transferor secured by the Receivables (unless otherwise specified in the related
Supplement). The Class B Certificateholder (and each Certificate Owner of a
Class B Certificate), by the acceptance of this Class B Certificate (or its
interest therein), is deemed to agree to treat this Class B Certificate for
Federal, state and local income and franchise tax purposes and any other tax
imposed on or measured by income as indebtedness of the Transferor.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Class B Certificate shall
not be entitled to any benefit under the Agreement or the Series Supplement or
be valid for any purpose.
8
<PAGE>
IN WITNESS WHEREOF, the Transferor has caused this Class B Certificate
to be duly executed.
FIRST NORTH AMERICAN NATIONAL BANK
By:___________________________________
Name: Philip J. Dunn
Title: Vice President
Dated: February 28, 2000
9
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates described in the within-mentioned
Agreement and Series Supplement.
BANKERS TRUST COMPANY,
as Trustee
By:____________________________________
Authorized Officer
Dated: February 28, 2000
10
<PAGE>
CIRCUIT CITY CREDIT CARD MASTER TRUST
CLASS B FLOATING RATE ASSET BACKED CERTIFICATE,
SERIES 2000-1
Summary of Terms and Conditions
This Class B Certificate is one of a Series of Certificates entitled
Circuit City Credit Card Master Trust, Series 2000-1 Certificates (the "Series
2000-1 Certificates"), and one of a class thereof entitled Class B Floating Rate
Asset Backed Certificates, Series 2000-1 (the "Class B Certificates"), each of
which represents a fractional undivided interest in certain assets of the Trust.
The Trust Property is allocated in part to the Investor Certificateholders of
all outstanding Series (the "Certificateholders' Interest") and the interests,
if any, of any Enhancement Providers, with the remainder allocated to the
Transferor. The aggregate interest represented by the Class B Certificates at
any time in the Principal Receivables in the Trust shall not exceed an amount
equal to the Class B Invested Amount at such time. The Class B Initial Invested
Amount is $57,500,000. The Class B Invested Amount on any date will be an
amount equal to (a) the Class B Initial Invested Amount, minus (b) the aggregate
-----
amount deposited into the Principal Funding Account prior to such date as Class
B Monthly Principal (excluding interest and other investment earnings on such
amount), minus (c) the aggregate amount of principal payments made to the Class
-----
B Certificateholders prior to such date, minus (d) the aggregate amount of Class
-----
B Investor Charge Offs for all prior Distribution Dates, minus (e) the amount of
-----
Class B Subordinated Principal Collections allocated on all prior Distribution
Dates pursuant to the Series Supplement, minus (f) an amount equal to the amount
-----
by which the Class B Invested Amount has been reduced on all prior Distribution
Dates pursuant to the Series Supplement, plus (g) the sum of the amount of
----
Excess Spread and Shared Excess Finance Charge Collections allocated and
available on all prior Distribution Dates pursuant to the Series Supplement for
the purpose of reimbursing amounts deducted pursuant to the foregoing clauses
(d), (e) and (f) and, without duplication, the aggregate amount of the
reductions of the Series Adjustment Amounts allocated to the Class B Invested
Amount prior to such date pursuant to the Series Supplement; provided, however,
-------- -------
that the Class B Invested Amount may not be reduced below zero. In addition,
classes of the Series 2000-1 Certificates entitled Class A Floating Rate Asset
Backed Certificates, Series 2000-1 (the "Class A Certificates"), Collateralized
Trust Obligations, Series 2000-1 (the "Collateralized Trust Obligations ") and
Class D Floating Rate Asset Backed Certificates, Series 2000-1 (the "Class D
Certificates") will be issued. The Exchangeable Transferor Certificate, which
represents the Transferor Interest, has been issued to First North American
National Bank pursuant to the Agreement.
11
<PAGE>
Subject to the terms and conditions of the Agreement, the Transferor
may from time to time direct the Trustee, on behalf of the Trust, to issue one
or more new Series of Investor Certificates, which will represent fractional
undivided interests in certain Trust Property.
Each Class B Certificate represents the right to receive payments of
(i) interest at the per annum rate of 0.59% in excess of LIBOR (as determined on
the related LIBOR Determination Date as set forth in the Series Supplement),
accruing from February 28, 2000, payable on April 17, 2000 and on the 15th day
of each month thereafter (or, if such 15th day is not a Business Day, the next
succeeding Business Day) (each, a "Distribution Date") and (ii) principal on the
February 2003 Distribution Date (and on each Distribution Date thereafter, if
the Class B Certificates are not paid in full on the February 2003 Distribution
Date) or, upon the occurrence of an Early Amortization Event, on each
Distribution Date relating to the Early Amortization Period, in each case funded
from a percentage of the payments received with respect to the Receivables and
certain other funds, all as more fully described in the Agreement and the Series
Supplement. Interest on the Class B Certificates will be calculated on the
basis of a 360-day year and the actual number of days in the relevant Interest
Period.
The Class B Certificates are subordinated to the Class A Certificates
to the extent set forth in the Series Supplement. The Collateralized Trust
Obligations and the Class D Certificates are subordinated to the Class A
Certificates and the Class B Certificates to the extent set forth in the Series
Supplement.
On each Distribution Date, the Paying Agent shall distribute to each
Class B Certificateholder of record on the last Business Day of the preceding
calendar month (each, a "Record Date") such Class B Certificateholder's pro rata
share of such amounts (including amounts on deposit in the Principal Funding
Account) as are payable to the Class B Certificateholders pursuant to the
Agreement and the Series Supplement. Distributions with respect to this Class B
Certificate will be made by the Paying Agent by check mailed to the address of
the Class B Certificateholder of record appearing in the Certificate Register
without the presentation or surrender of this Class B Certificate or the making
of any notation thereon (except for the final distribution in respect of this
Class B Certificate), except that with respect to Class B Certificates
registered in the name of Cede & Co., the nominee for The Depository Trust
Company, distributions will be made to Cede & Co. in the form of immediately
available funds. Final payment of this Class B Certificate will be made only
upon presentation and surrender of this Class B Certificate at the office or
agency specified in the notice of final distribution delivered by the Trustee in
accordance with the Agreement and the Series Supplement.
12
<PAGE>
On any Distribution Date occurring on or after the day on which the
Invested Amount is reduced to an amount less than or equal to 5% of the Initial
Invested Amount, the Class B Certificates are subject to retransfer to the
Transferor. The retransfer price will be equal to the Class B Invested Amount
plus accrued but unpaid interest thereon.
This Class B Certificate does not represent a recourse obligation of,
or an interest in, the Transferor, the Servicer, Circuit City Stores, Inc. or
any of their affiliates and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency or instrumentality. This
Class B Certificate is limited in right of payment to certain Collections with
respect to the Receivables (and certain other amounts), all as more specifically
set forth hereinabove and in the Agreement and the Series Supplement.
The Agreement and any Supplement may, subject to certain conditions
set forth in the Agreement, be amended from time to time by the Servicer, the
Transferor and the Trustee, without the consent of any of the Investor
Certificateholders. The Agreement and any Supplement may also be amended from
time to time by the Servicer, the Transferor and the Trustee, with the consent
of the Holders of Investor Certificates evidencing Undivided Interests
aggregating not less than 66-2/3% of the Invested Amount of all Series adversely
affected, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Agreement or of modifying in any
manner the rights of the Investor Certificateholders of any Series then issued
and outstanding; provided, however, that no such amendment shall (i) reduce in
-------- -------
any manner the amount of, or delay the timing of, distributions which are
required to be made on any Investor Certificate of such Series without the
consent of the related Investor Certificateholders, (ii) change the definition
of or the manner of calculating the Invested Amount, the Invested Percentage,
the applicable available amount under any Enhancement or the Investor Default
Amount of such Series without the consent of the related Investor
Certificateholders or (iii) reduce the aforesaid percentage required to consent
to any such amendment, without the consent of the related Investor
Certificateholders. Any amendment pursuant to this paragraph shall require that
each Rating Agency rating the affected Series confirm that such amendment will
not cause a reduction or withdrawal of the rating of any outstanding Series of
Certificates.
The Class B Certificates are issuable only in minimum denominations of
$1,000 and integral multiples of $1,000. The transfer of this Class B
Certificate shall be registered in the Certificate Register upon surrender of
this Class B Certificate for registration of transfer at any office or agency
maintained by the Transfer Agent and Registrar, and thereupon one or more
13
<PAGE>
new Class B Certificates in authorized denominations representing like aggregate
Undivided Interests in the Trust will be issued to the designated transferee or
transferees.
As provided in the Agreement and subject to certain limitations
therein set forth, Class B Certificates are exchangeable for new Class B
Certificates in authorized denominations of like aggregate Undivided Interests
in the Trust as requested by the Class B Certificateholder surrendering such
Class B Certificates. No service charge may be imposed for any transfer or
exchange but the Transfer Agent and Registrar and the Trustee may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith.
The Trustee, the Paying Agent and the Transfer Agent and Registrar and
any agent of any of them may treat the person in whose name this Class B
Certificate is registered as the owner hereof for all purposes, and neither the
Trustee, the Paying Agent, the Transfer Agent and Registrar, nor any agent of
any of them, shall be affected by notice to the contrary.
THE AGREEMENT AND THIS CLASS B CERTIFICATE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES UNDER THE AGREEMENT AND THIS CLASS B CERTIFICATE
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
14
<PAGE>
ASSIGNMENT
Social Security or other identifying number of assignee
____________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _________________________________________
(name and address of
assignee)
the within certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer said
certificate on the books kept for registration thereof, with full power of
substitution in the premises.
Dated:
______________________________*
Signature Guaranteed:
______________________________
______________________
(*) NOTE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within Certificate
in every particular, without alteration, enlargement or any change whatsoever.
15
<PAGE>
Exhibit 10.1
(Multicurrency--Cross Border)
ISDA(R)
International Swap Dealers Association. Inc.
MASTER AGREEMENT
dated as of February 25, 2000
-----------------
Bank of America, N.A. and First North American National Bank
- ------------------------------- -------------------------------------
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:--
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the required
currency. Where settlement is by delivery (that is, other than by payment),
such delivery will be made for receipt on the due date in the manner
customary for the relevant obligation unless otherwise specified in the
relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing, (2)
the condition precedent that no Early Termination Date in respect of the
relevant Transaction has occurred or been effectively designated and (3)
each other applicable condition precedent specified in this Agreement.
Copyright (C)1992 by International Swap Dealers Association, Inc.
<PAGE>
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be
made in the Schedule or a Confirmation by specifying that subparagraph (ii)
above will not apply to the Transactions identified as being subject to the
election, together with the starting date (in which case subparagraph (ii) above
will not, or will cease to, apply to such Transactions from such date). This
election may be made separately for different groups of Transactions and will
apply separately to each pairing of Offices through which the parties make and
receive payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such deduction
or withholding is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, then in effect.
If a party is so required to deduct or withhold, then that party ("X")
will:-
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y
under this Section 2(d)) promptly upon the earlier of determining
that such deduction or withholding is required or receiving
notice that such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy),
or other documentation reasonably acceptable to Y, evidencing
such payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the
payment to which Y is otherwise entitled under this Agreement,
such additional amount as is necessary to ensure that the net
amount actually received by Y (free and clear of Indemnifiable
Taxes, whether assessed against X or Y) will equal the full
amount Y would have received had no such deduction or withholding
been required. However, X will not be required to pay any
additional amount to Y to the extent that it would not be
required to be paid but for:-
(A) the failure by Y to comply with or perform any
agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d);
or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure
would not have occurred but for (I) any action taken by a
taxing authority, or brought in a court of competent
jurisdiction, on or after the date on which a Transaction is
entered into (regardless of whether such action is taken or
brought with respect to a party to this Agreement) or (II) a
Change in Tax Law.
2
<PAGE>
(iii) Liability. If:-
(1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to make
any deduction or withholding in respect of which X would not be
required to pay an additional amount to Y under Section
2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly
against X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(c) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:-
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of
the jurisdiction of its organisation or incorporation and, if relevant
under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to deliver
this Agreement and any other documentation relating to this Agreement that
it is required by this Agreement to deliver and to perform its obligations
under this Agreement and any obligations it has under any Credit Support
Document to which it is a party and has taken all necessary action to
authorise such execution, delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance
do not violate or conflict with any law applicable to it, any provision of
its constitutional documents, any order or judgment of any court or other
agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in full
force and effect and all conditions of any such consents have been complied
with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal, valid
and binding obligations, enforceable in accordance with their respective
terms (subject to applicable bankruptcy, reorganisation, insolvency,
moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding in
equity or at law)).
3
<PAGE>
(b) Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding at
law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(f) is accurate and true.
4. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:-
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:-
(i) any forms, documents or certificates relating to taxation specified
in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to allow
such other party or its Credit Support Provider to make a payment under
this Agreement or any applicable Credit Support Document without any
deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of such
demand), with any such form or document to be accurate and completed in a
manner reasonably satisfactory to such other party and to be executed and
to be delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated,
4
<PAGE>
organised, managed and controlled, or considered to have its seat, or in which a
branch or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the other
party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:-
(i) Failure to Pay or Deliver. Failure by the party to make, when due,
any payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
required to be made by it if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the
party;
(ii) Breach of Agreement. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment
under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
notice of a Termination Event or any agreement or obligation under Section
4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
in accordance with this Agreement if such failure is not remedied on or
before the thirtieth day after notice of such failure is given to the
party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any applicable
grace period has elapsed;
(2) the expiration or termination of such Credit Support Document
or the failing or ceasing of such Credit Support Document to be in
full force and effect for the purpose of this Agreement (in either
case other than in accordance with its terms) prior to the
satisfaction of all obligations of such party under each Transaction
to which such Credit Support Document relates without the written
consent of the other party; or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or challenges
the validity of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made or
repeated by the party or any Credit Support Provider of such party in this
Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have
been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party (1)
defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation
of, an acceleration of obligations under, or an early termination of, that
Specified Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or delivery due
on the last payment, delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at
least three Local Business Days if there is no applicable notice
requirement or grace period) or (3) disaffirms, disclaims, repudiates or
rejects, in whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate it or act
on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event
of default or other similar condition or event (however
5
<PAGE>
described) in respect of such party, any Credit Support Provider of such party
or any applicable Specified Entity of such party under one or more agreements or
instruments relating to Specified Indebtedness of any of them (individually or
collectively) in an aggregate amount of not less than the applicable Threshold
Amount (as specified in the Schedule) which has resulted in such Specified
Indebtedness becoming, or becoming capable at such time of being declared, due
and payable under such agreements or instruments, before it would otherwise have
been due and payable or (2) a default by such party, such Credit Support
Provider or such Specified Entity (individually or collectively) in making one
or more payments on the due date thereof in an aggregate amount of not less than
the applicable Threshold Amount under such agreements or instruments (after
giving effect to any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party:-
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment,
arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a
judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (A)
results in a judgment of insolvency or bankruptcy or the entry of an
order for relief or the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its winding-
up, official management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or becomes subject
to the appointment of an administrator, provisional liquidator,
conservator, receiver, trustee, custodian or other similar official
for it or for all or substantially all its assets; (7) has a secured
party take possession of all or substantially all its assets or has
a distress, execution, attachment, sequestration or other legal
process levied, enforced or sued on or against all or substantially
all its assets and such secured party maintains possession, or any
such process is not dismissed, discharged, stayed or restrained, in
each case within 30 days thereafter; (8) causes or is subject to any
event with respect to it which, under the applicable laws of any
jurisdiction, has an analogous effect to any of the events specified
in clauses (1) to (7) (inclusive); or (9) takes any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support Provider
of such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at
the time of such consolidation, amalgamation, merger or transfer:-
(1) the resulting, surviving or transferee entity fails to assume
all the obligations of such party or such Credit Support Provider
under this Agreement or any Credit Support Document to which it or
its predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event
6
<PAGE>
Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:--
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a result
of a breach by the party of Section 4(b)) for such party (which will be the
Affected Party):-
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in respect
of such Transaction or to comply with any other material provision
of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on which
a Transaction is entered into (regardless of whether such action is taken
or brought with respect to a party to this Agreement) or (y) a Change in
Tax Law, the party (which will be the Affected Party) will, or there is a
substantial likelihood that it will, on the next succeeding Scheduled
Payment Date (1) be required to pay to the other party an additional amount
in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in
respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a
payment from which an amount is required to be deducted or withheld for or
on account of a Tax (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) and no additional amount is required to be paid in
respect of such Tax under Section 2(d)(i)(4) (other than by reason of
Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which the
other party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, such party ("X"), any Credit
Support Provider of X or any applicable Specified Entity of X consolidates
or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and such action does not
constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate, will
be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event"
is specified in the Schedule or any Confirmation as applying, the
occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
7
<PAGE>
6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(l), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying the
nature of that Termination Event and each Affected Transaction and will
also give such other information about that Termination Event as the other
party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality under
Section 5(b)(i)(l) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days after
it gives notice under Section 6(b)(i) all its rights and obligations under
this Agreement in respect of the Affected Transactions to another of its
Offices or Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject to
and conditional upon the prior written consent of the other party, which
consent will not be withheld if such other party's policies in effect at
such time would permit it to enter into transactions with the transferee on
the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or
a Tax Event occurs and there are two Affected Parties, each party will use
all reasonable efforts to reach agreement within 30 days after notice
thereof is given under Section 6(b)(i) on action to avoid that Termination
Event.
(iv) Right to Terminate. If:-
(1) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect to
all Affected Transactions within 30 days after an Affected Party
gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event Upon
Merger occurs and the Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the case
of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected
Party, or the party which is not the Affected Party in the case of a Credit
Event Upon Merger or an Additional Termination Event if there is only one
Affected Party may, by not more than 20 days notice to the other party and
provided that the relevant Termination Event is then
8
<PAGE>
continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section
6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount if
any, payable in respect of an Early Termination Date shall be determined
pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in determining
a Market Quotation, the records of the party obtaining such quotation will
be conclusive evidence of the existence and accuracy of such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in the
Termination Currency, from (and including) the relevant Early Termination
Date to (but excluding) the date such amount is paid, at the Applicable
Rate. Such interest will be calculated on the basis of daily compounding
and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs. the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an
Event of Default:-
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the Non-
defaulting Party the excess, if a positive number, of (A) the sum of
the Settlement Amount (determined by the Non-defaulting Party) in
respect of the Terminated Transactions and the Termination Currency
Equivalent of the Unpaid Amounts owing to the Non-defaulting Party
over (B) the Termination Currency Equivalent of the Unpaid Amounts
owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-defaulting Party's Loss in respect of this Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the sum
of the Settlement Amount (determined by the
9
<PAGE>
Non-defaulting Party) in respect of the Terminated Transactions and
the Termination Currency Equivalent of the Unpaid Amounts owing to
the Non-defaulting Party less (B) the Termination Currency Equivalent
of the Unpaid Amounts owing to the Defaulting Party. If that amount
is a positive number, the Defaulting Party will pay it to the Non-
defaulting Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the Defaulting
Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute value
of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event:-
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
except that, in either case, references to the Defaulting Party and
to the Non-defaulting Party will be deemed to be references to the
Affected Party and the party which is not the Affected Party,
respectively, and, if Loss applies and fewer than all the
Transactions are being terminated, Loss shall be calculated in
respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties:-
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions, and
an amount will be payable equal to (I) the sum of (a) one-half
of the difference between the Settlement Amount of the party
with the higher Settlement Amount ("X") and the Settlement
Amount of the party with the lower Settlement Amount ("Y") and
(b) the Termination Currency Equivalent of the Unpaid Amounts
owing to X less (II) the Termination Currency Equivalent of the
Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all Terminated
Transactions) and an amount will be payable equal to one-half of
the difference between the Loss of the party with the higher
Loss ("X") and the Loss of the party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if it
is a negative number, X will pay the absolute value of that amount to
Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will be
subject to such adjustments as are appropriate and permitted by law to
reflect any payments or deliveries made by one party to the other under
this Agreement (and retained by such other party) during the period from
the relevant Early Termination Date to the date for payment determined
under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate of
loss and not a penalty. Such amount is payable for the loss of bargain and
the loss of protection against future risks and except as otherwise
provided in this Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
10
<PAGE>
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:-
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e). purported
transfer that is not in compliance with this Section will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable law,
any obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into this Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c ) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
11
<PAGE>
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive
the termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in respect
of it) may be executed and delivered in counterparts (including by
facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable and
may be executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange of
electronic messages on an electronic messaging system, which in each case
will be sufficient for all purposes to evidence a binding supplement to
this Agreement. The parties will specify therein or through another
effective means that any such counterpart, telex or electronic message
constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document
12
<PAGE>
to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:-
(i) if in writing and delivered in person or by courier, on the date it
is delivered;
(ii) if sent by telex, on the date the recipient's answerback is received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's
facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), on the date that mail is delivered
or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:-
(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City, if
this Agreement is expressed to be governed by the laws of the State of New
York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or re-
enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any
13
<PAGE>
reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute process
agent acceptable to the other party. The parties irrevocably consent to service
of process given in the manner provided for notices in Section 12. Nothing in
this Agreement will affect the right of either party to serve process in any
other manner permitted by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement:-
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means:-
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
14
<PAGE>
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination
Date and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or
(3) or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference Market-
maker to enter into a transaction (the "Replacement Transaction") that would
have the effect of preserving for such party the economic equivalent of any
payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have
15
<PAGE>
been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation
will be the quotation remaining after disregarding the highest and lowest
quotations. For this purpose, if more than one quotation has the same highest
value or lowest value, then one of such quotations shall be disregarded. If
fewer than three quotations are provided, it will be deemed that the Market
Quotation in respect of such Terminated Transaction or group of Terminated
Transactions cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head or
home office.
"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of:-
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to
any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meaning specified in the Schedule.
16
<PAGE>
"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market
17
<PAGE>
value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b)
above shall be reasonably determined by the party obliged to make the
determination under Section 6(e) or, if each party is so obliged, it shall be
the average of the Termination Currency Equivalents of the fair market values
reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
Bank of America, N.A. First North American National Bank
- ---------------------------------- ---------------------------------------
(Name of Party) (Name of Party)
By: /S/ Roger Heintzelman By: /S/ Philip J. Dunn
- ---------------------------------- ---------------------------------------
Name: Roger Heintzelman Name: Philip J. Dunn
Title: Vice President Title: Vice President
Date: February 25, 2000 Date: February 25, 2000
18
<PAGE>
(Multicurrency--Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
SCHEDULE
to the
Master Agreement
dated as of February 25, 2000
between BANK OF AMERICA, N.A. and FIRST NORTH AMERICAN
NATIONAL BANK
("Party A") ("Party B")
PART 1: Termination Provisions
----------------------
(a) "Specified Entity" means in relation to Party A for the purpose of:-
Section 5(a)(v) (Default under Specified Transaction), none;
Section 5(a)(vi) (Cross Default), none;
Section 5(a)(vii) (Bankruptcy), none; and
Section 5(b)(iv) (Credit Event Upon Merger), none;
in relation to Party B for the purpose of:-
Section 5(a)(v) (Default under Specified Transaction) none;
Section 5(a)(vi) (Cross Default), none;
Section 5(a)(vii) (Bankruptcy), none; and
Section 5(b)(iv) (Credit Event Upon Merger), none.
(b) "Specified Transaction" will have the meaning specified in Section 14.
(c) The "Cross-Default" provisions of Section 5(a)(vi) (as amended in Part
5(g))
will apply to Party A and
will apply to Party B.
In connection therewith, "Specified Indebtedness" will have the meaning
specified in Section 14, except that such term shall not include
obligations in respect of deposits received in the ordinary course of a
party's banking business."
"Threshold Amount" means with respect to Party A an amount equal to three
percent (3%) of Party A's Shareholders' Equity and with respect to Party B,
$10,000,000.
1
<PAGE>
"Shareholders' Equity" means with respect to an entity, at any time, the
sum (as shown in the most recent annual audited financial statements of
such entity) of (i) its capital stock (including preferred stock)
outstanding, taken at par value, (ii) its capital surplus and (iii) its
retained earnings, minus (iv) treasury stock, each to be determined in
accordance with generally accepted accounting principles.
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv)
will apply to Party A
will apply to Party B.
(e) The "Automatic Early Termination" provision of Section 6(a)
will not apply to Party A
will not apply to Party B.
(f) Payments on Early Termination. For the purpose of Section 6(e):
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(g) "Termination Currency" means United States Dollars.
(h) "Additional Termination Event." Additional Termination Event will not
apply.
PART 2: Tax Representations
-------------------
(a) Payer Tax Representations. For the purpose of Section 3(e) of this
Agreement, Party A and Party B will make the following representation:-
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority of any Relevant Jurisdiction to
make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this
Agreement) to be made by it to the other party under this Agreement. In
making this representation, it may rely on (x) the accuracy of any
representations made by the other party pursuant to Section 3(f) of this
Agreement, (y) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness
of any document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of this Agreement and (z) the satisfaction of the agreement of
the other party contained in Section 4(d) of this Agreement, provided that
it shall not be a breach of this representation where reliance is placed on
clause (y) and the other party does not deliver a form or document under
Section 4(a)(iii) by reason of material prejudice to its legal or
commercial position.
(b) Payee Tax Representations. For the purpose of Section 3(f) of this
Agreement, Party A and Party B will make the following representations
specified below, if any:-
(i) The following representations will apply to Party A:
Party A is a national banking association created or organized under
the laws of the United States of America and the federal taxpayer
identification number is 94-1687665.
2
<PAGE>
(ii) The following representations will apply to Party B:
Party B is a national banking association created or organized under
the laws of the United States of America and the federal taxpayer
identification number is 58-1897792.
PART 3: Agreement to Deliver Documents
------------------------------
For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees
to deliver the following documents:
(a) Tax forms, documents or certificates to be delivered are:
<TABLE>
<CAPTION>
Party Form/Document/Certificate Date by which to be delivered
required to
deliver
document
----------- -------------------------------- --------------------------------------
<S> <C> <C>
Party B Internal Revenue Service Form Upon execution and delivery of this
W-9 Agreement
Party A and Any form, document or Upon request
Party B certificate as may be
requested pursuant to Section
4(a)(iii) of this Agreement.
</TABLE>
(b) Other documents to be delivered are:-
<TABLE>
<CAPTION>
Party Form/Document/Certificate Date by Covered by
required to which to be Section 3(d)
deliver delivered Representation
document
------------- -------------------------------------- ------------------ ------------------
<S> <C> <C> <C>
Party A and Certified copies of all corporate Upon execution and Yes
Party B authorizations and any other delivery of this
documents with respect to the Agreement
execution, delivery and performance
of this Agreement and any Credit
Support Document
Party A and Certificate of authority and Upon execution and Yes
Party B specimen signatures of individuals delivery of this
executing this Agreement any Credit Agreement and
Support Document and Confirmations thereafter upon
request of the
other party
</TABLE>
3
<PAGE>
PART 4: Miscellaneous
-------------
(a) Address for Notices. For the purpose of Section 12(a) of this Agreement:-
Address for notice or communications to Party A:
Bank of America, N.A.
Sears Tower
233 South Wacker Drive, Suite 2800
Chicago, IL 60606
Attention: Swap Operations
Telex No.: 49663210 Answerback: NATIONSBANK CHA
Reuters Dealing Code: NBCH
with a copy to:
Bank of America, N.A.
100 N. Tryon St., NC1-007-13-01
Charlotte, North Carolina 28255
Attention: Capital Markets Documentation
(Telex No.: 9663210; Answerback: NATIONSBK CHA)
Facsimile No.: 704-386-4113
Address for notice or communications to Party B:
First North American National Bank
225 Chastain Meadows Court
Kennesaw, Georgia 30144
Attention: Merle Worsham
Telephone No.: 770-423-7900
Facsimile No.: 770-423-7932
with copy to:
Circuit City Stores, Inc.
9954 Mayland Drive
Richmond, Virginia 23233
Attention: Phil Dunn
Telephone No.: 804-527-4000
Facsimile No.: 804-527-4113
(b) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not applicable.
Party B appoints as its Process Agent: Not applicable.
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
4
<PAGE>
(d) Multibranch Party. For the purpose of Section 10 of this Agreement:-
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A.
(f) Credit Support Document. Details of any Credit Support Document:-
Not applicable.
(g) Credit Support Provider.
Credit Support Provider means in relation to Party A: Not applicable.
Credit Support Provider means in relation to Party B: Not applicable.
(h) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to its
conflict of laws doctrine).
(i) Netting of Payments. All amounts payable on the same date, in the same
currency and in respect of the same Transaction shall be netted in
accordance with Section 2(c) of this Agreement. The election contained in
the last paragraph of Section 2(c) of this Agreement shall not apply for
the purposes of this Agreement.
(j) "Affiliate" will have the meaning specified in Section 14 of this
Agreement.
PART 5: Other Provisions
----------------
(a) Set-off. Any amount (the "Early Termination Amount") payable to one party
(the Payee) by the other party (the Payer) under Section 6(e), in
circumstances where there is a Defaulting Party or one Affected Party in
the case where a Termination Event under Section 5(b)(iv) has occurred,
will, at the option of the party ("X") other than the Defaulting Party or
the Affected Party (and without prior notice to the Defaulting Party or the
Affected Party), be reduced by its set-off against any amount(s) (the
"Other Agreement Amount") payable (whether at such time or in the future or
upon the occurrence of a contingency) by the Payee to the Payer
(irrespective of the currency, place of payment or booking office of the
obligation) under any other agreement(s) between the Payee and the Payer or
instrument(s) or undertaking(s) issued or executed by one party to, or in
favor of, the other party (and the Other Agreement Amount will be
discharged promptly and in all respects to the extent it is so set-off). X
will give prompt notice to the other party of any set-off effected under
this Part 5(a), and will deliver a certificate to the other party setting
forth in reasonable detail the calculation of such amount set-off.
For this purpose, either the Early Termination Amount or the Other
Agreement Amount (or the relevant portion of such amounts) may be converted
by X into the currency in which the other is denominated at the rate of
exchange at which such party would be able, acting in a reasonable manner
and in good faith, to purchase the relevant amount of such currency.
5
<PAGE>
If an obligation is unascertained, X may in good faith estimate that
obligation and set-off in respect of the estimate, subject to the relevant
party accounting to the other when the obligation is ascertained.
Nothing in this Part 5(a) shall be effective to create a charge or other
security interest. This Part 5(a) shall be without prejudice and in
addition to any right of set-off, combination of accounts, lien or other
right to which any party is at any time otherwise entitled (whether by
operation of law, contract or otherwise).
(b) Delivery of Confirmations. For each Transaction entered into hereunder,
Party A shall promptly send to Party B a Confirmation via facsimile
transmission. Party B agrees to respond to such Confirmation within two
(2) Business Days, either confirming agreement thereto or requesting a
correction of any error(s) contained therein. Failure by Party A to send a
Confirmation or of Party B to respond within such period shall not affect
the validity or enforceability of such Transaction. Absent manifest error,
there shall be a presumption that the terms contained in such Confirmation
are the terms of the Transaction.
(c) Recording of Conversations. Each party to this Agreement acknowledges and
agrees to the tape recording of conversations between the parties to this
Agreement whether by one or other or both of the parties or their agents,
and that any such tape recordings may be submitted in evidence in any
Proceedings relating to the Agreement.
(d) Section 3(a) of this Agreement is amended by (i) deleting the word "and" at
the end of clause (iv); (ii) deleting the period at the end of clause (v)
and inserting therein "; and " ; and (iii) by inserting the following
additional representation:
"(vi) Eligible Swap Participant. It is an 'eligible swap participant' as
defined under the regulations of the Commodity Futures Trading
Commission, currently at 17 CFR Section 35.1(b)(2)."
(e) Section 3 is revised so as to add the following Section (g) at the end
thereof:
"(g) Relationship Between Parties. Each party represents to the other
party and will be deemed to represent to the other party on the date
on which it enters into a Transaction that (absent a written
agreement between the parties that expressly imposes affirmative
obligations to the contrary for that Transaction):-
(i) Non-Reliance. It is acting for its own account, and it has made
its own independent decisions to enter into that Transaction
and as to whether that Transaction is appropriate or proper for
it based upon its own judgment and upon advice from such
advisors as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as
investment advice or as a recommendation to enter into that
Transaction; it being understood that information and
explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a
recommendation to enter into that Transaction. Further, such
party has not received from the other party any assurance or
guarantee as to the expected results of that Transaction.
6
<PAGE>
(ii) Evaluation and Understanding. It is capable of evaluating and
understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms,
conditions and risks of that Transaction. It is also capable of
assuming, and assumes, the financial and other risks of that
Transaction.
(iii) Status of Parties. The other party is not acting as an agent,
fiduciary or advisor for it in respect of that Transaction."
(f) Waiver of Right to Trial by Jury. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
(g) Cross Default. Section 5(a)(vi) of this Agreement is hereby amended adding
the following after the semicolon at the end thereof:
"provided, however, that notwithstanding the foregoing (but subject to
any provision to the contrary contained in any such agreement or
instrument), an Event of Default shall not occur under either (1) or
(2) above if the default, event of default or other similar condition
or event referred to in (1) or the failure to pay referred to in (2)
is caused not (even in part) by the unavailability of funds but is
caused solely due to a technical or administrative error which has
been remedied within three Business Days after notice of such failure
is given to the party."
Accepted and agreed:
BANK OF AMERICA, N.A. FIRST NORTH AMERICAN NATIONAL BANK
By: /S/ Philip J. Dunn
By: /S/ Roger H. Heintzelman Name: Philip J. Dunn
Name: Roger H. Heintzelman Title: Vice President
Title: Vice President
7
<PAGE>
233 South Wacker Drive, Suite 2800
Chicago, Illinois 60606
Tel 312-234-2732
Fax 312-234-3603
Bank of America
TO: First North American National Bank
1800 PARKWAY PLACE
MARIETTA, GA 30067
ATTN: LISA BALDYGA
TEL: 804-527-4060
FAX: 804-527-4113
FROM: Bank of American, N.A.
233 South Wacker Drive - Suite 2800
Chicago, Illinois 60608
Laurence Weithers / Jim Morrison
Date: 25FEB00
Our Reference No. 143266
Internal Tracking Nos. 3097597
THIS CONFIRMATION SUPERSEDES AND REPLACES ANY PREVIOUSLY SENT CONFIRMATION OF
THIS TRANSACTION.
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into between First North American National Bank and Bank
of America, N.A. (each a "party" and together "the parties") on the Trade Date
specified below (the "Transaction"). This letter agreement constitutes a
"Confirmation" as referred to in the ISDA Master Agreement specified in
paragraph 1 below (the "Agreement").
The definitions and provisions contained in the 1991 ISDA Definitions (as
supplemented by the 1998 Supplement), as published by the International Swaps
and Derivatives Association, Inc., (the "Definitions") are incorporated into
this Confirmation. In the event of any inconsistency between the Definitions
and this Confirmation, this Confirmation will govern. Without prejudice to the
foregoing, references in this Confirmation to the Transaction shall for the
purposes of the Definitions mean the Swap Transaction.
1. This Confirmation evidences a complete binding agreement between the parties
as to the terms of the Transaction to which this Confirmation relates. In
addition, the parties agree to use all reasonable efforts promptly to negotiate,
execute and deliver an agreement in the form of the ISDA Master Agreement
(Multicurrency-Cross Border) (the "ISDA Form"), with such modifications as the
parties will in good faith agree. Upon the execution by the parties of such
<PAGE>
an agreement, this Confirmation will supplement, for a part of, and be subject
to that agreement. All provisions contained or incorporated by reference in that
agreement upon its execution will govern this Confirmation except as expressly
modified below. Until the parties execute and deliver that agreement, this
Confirmation, together with all other documents referring to the ISDA Form (each
a "Confirmation") confirming transactions (each a "Transaction") entered into
between the parties (notwithstanding anything to the contrary in a
Confirmation), shall supplement, for a part of, and be subject to an agreement
in the form of the ISDA Form as if the parties had executed an agreement in such
form (but without any Schedule) on the Trade Date of the first such Transaction
between the parties. In the event of any inconsistency between the provisions of
that agreement and this Confirmation, this Confirmation will prevail for the
purpose of this Transaction.
In this Confirmation "Party A" means Bank of America, N.A. and "Party B"
means First North American National Bank.
2. The terms of this Transaction to which this Confirmation relates are as
follows:
<TABLE>
<S> <C>
Notional Amount: USD 365,000,000.00
Trade Date: 23FEB00
Effective Date: 28FEB00
Termination Date: 15FEB06 subject to adjustment in accordance with the
Modified Following Business Day Convention
Amortization APPLICABLE (See Schedule A attached hereto)
Fixed Amounts:
Fixed Payer: Party B
Fixed Rate Payer Payment
Dates: 25FEB00, subject to adjustment in accordance with the
Modified Following Business Day Convention
Fixed Amount: USD 9,062,658.00
Floating Amounts:
Floating Rate Payer: Party A
Cap Rate: 7.50000%
Floating Rate Payer Payment
Dates: The 15th of each Month, commencing 15APR00 and
ending 15FEB06, subject to adjustment in accordance
with the Modified Following Business Day Convention
Floating Rate for the Initial
</TABLE>
<PAGE>
Calculation Period: 6.10750% (inclusive of Spread)
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 Month
Spread: Plus 0.23000%
Floating Rate Day Count
Fraction: Actual/360
Reset Dates: The first day of each Calculation Period
Business Days: New York, London
Calculation Agent: Party A
3. Recording of Conversations:
Each party to this Transaction acknowledges and agrees to the tape
recording of conversations between the parties to this Transaction whether
by one or other or both of the parties or their agents, and that any such
tape recordings may be submitted in evidence in any Proceedings relating to
the Agreement and/or this Transaction.
4. Account Details:
Payments to Bank of America, N.A.:
USD
NAME: BANK OF AMERICA NA
CITY: NEW YORK
ABA #: 026009599
ATTN: BOFAUS3N
NAME: BANK OF AMERICA NA
CITY: NEW YORK
ACCT: 6550219386
ATTN: RATE DERIVATIVE SETTLEMENTS
Payments to First North American National Bank
USD
NAME: Bankers Trust
CITY: New York
ABA #: 021001033
NAME: Circuit City Master Trust
ACCT: 01419647
<PAGE>
ATTN: Attn: Corporate Trust, Pei Huang
5. Offices:
The Office of Party A for this
Transaction is: Charlotte, NC
The Office of Party B for this
Transaction is: Georgia, USA
Credit Support Document: As per Agreement (and Credit Support Annex if
applicable).
Please confirm that the foregoing correctly sets forth the terms and
conditions of our agreement by responding within three (3) Business Days by
returning via telecopier an executed copy of this Confirmation to the attention
of Global Derivative Operations at (fax no. (312) 234-3503).
Failure to respond within such period shall not affect the validity or
enforceability of this Transaction, and shall be deemed to be an affirmation of
the terms and conditions contained herein, absent manifest error.
Yours Sincerely,
Bank of America, N.A.
/s/ Tracey Bissell
Authorized Signatory
Accepted and confirmed as of the date first written:
First North American National Bank
By: /s/ Michael T. Chalifoux
Name: Michael T. Chalifoux
Title: President
<PAGE>
SCHEDULE A TO CONFIRMATION
AMORTIZATION SCHEDULE
CALCULATION PERIOD NOTIONAL AMOUNT
28FEB00 17APR00 365,000,000.00
17APR00 15MAY00 365,000,000.00
15MAY00 15JUN00 365,000,000.00
15JUN00 17JUL00 365,000,000.00
17JUL00 15AUG00 365,000,000.00
15AUG00 15SEP00 365,000,000.00
15SEP00 16OCT00 365,000,000.00
16OCT00 15NOV00 365,000,000.00
15NOV00 15DEC00 365,000,000.00
15DEC00 16JAN01 365,000,000.00
16JAN01 15FEB01 365,000,000.00
15FEB01 15MAR01 365,000,000.00
15MAR01 17APR01 365,000,000.00
17APR01 15MAY01 365,000,000.00
15MAY01 15JUN01 365,000,000.00
15JUN01 16JUL01 365,000,000.00
16JUL01 15AUG01 365,000,000.00
15AUG01 17SEP01 365,000,000.00
17SEP01 15OCT01 365,000,000.00
15OCT01 15NOV01 365,000,000.00
15NOV01 17DEC01 365,000,000.00
17DEC01 15JAN02 365,000,000.00
15JAN02 15FEB02 365,000,000.00
15FEB02 15MAR02 365,000,000.00
15MAR02 15APR02 365,000,000.00
15APR02 15MAY02 365,000,000.00
15MAY02 17JUN02 365,000,000.00
17JUN02 15JUL02 365,000,000.00
15JUL02 15AUG02 365,000,000.00
15AUG02 16SEP02 365,000,000.00
16SEP02 15OCT02 365,000,000.00
15OCT02 15NOV02 365,000,000.00
15NOV02 16DEC02 365,000,000.00
16DEC02 15JAN03 365,000,000.00
15JAN03 18FEB03 365,000,000.00
18FEB03 17MAR03 355,135,135.00
17MAR03 15APR03 345,270,270.00
14APR03 15MAY03 335,405,405.00
15MAY03 16JUN03 325,540,541.00
16JUN03 15JUL03 315,675,676.00
15JUL03 15AUG03 305,810,811.00
<PAGE>
15AUG03 15SEP03 295,945,946.00
15SEP03 15OCT03 286,061,081.00
15OCT03 17NOV03 276,216,216.00
17NOV03 15DEC03 266,331,351.00
15DEC03 15JAN04 256,406,406.00
15JAN04 17FEB04 246,621,622.00
17FEB04 15MAR04 238,756,757.00
15MAR04 15APR04 226,891,892.00
15APR04 17MAY04 217,027,027.00
17MAY04 15JUN04 207,162,162.00
15JUN04 15JUL04 197,297,237.00
15JUL04 16AUG04 187,632,432.00
16AUG04 15SEP04 177,567,568.00
16SEP04 15OCT04 167,702,703.00
15OCT04 15NOV04 157,837,838.00
15NOV04 15DEC04 147,972,973.00
16DEC04 18JAN05 138,108,108.00
18JAN05 15FEB05 128,243,243.00
15FEB05 15MAR05 118,378,378.00
15MAR05 15APR05 108,513,514.00
15APR05 16MAY05 98,648,649.00
16MAY05 15JUL05 88,783,784.00
15JUL05 15JUL05 78,918,919.00
15JUL05 15AUG05 69,054,054.00
15AUG05 15SEP05 59,189,189.00
15SEP05 17OCT05 49,324,324.00
17OCT05 15NOV05 39,459,459.00
15NOV05 15DEC05 29,394,595.00
15DEC05 17JAN05 19,723,730.00
17JAN06 15FEB06 9,864,865.00
<PAGE>
233 South Wacker Drive, Suite 2800
Chicago, Illinois 60606
Tel 312-234-2732
Fax 312-234-3603
Bank of America
TO: First North American National Bank
1800 PARKWAY PLACE
MARIETTA, GA 30067
ATTN: LISA BALDYGA
TEL: 804-527-4060
FAX: 804-527-4113
FROM: Bank of American, N.A.
233 South Wacker Drive - Suite 2800
Chicago, Illinois 60608
Laurence Weithers / Jim Morrison
Date: 25FEB00
Our Reference No. 143257
Internal Tracking Nos. 3097596
THIS CONFIRMATION SUPERSEDES AND REPLACES ANY PREVIOUSLY SENT CONFIRMATION OF
THIS TRANSACTION.
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into between First North American National Bank and Bank
of America, N.A. (each a "party" and together "the parties") on the Trade Date
specified below (the "Transaction"). This letter agreement constitutes a
"Confirmation" as referred to in the ISDA Master Agreement specified in
paragraph 1 below (the "Agreement").
The definitions and provisions contained in the 1991 ISDA Definitions (as
supplemented by the 1998 Supplement), as published by the International Swaps
and Derivatives Association, Inc., (the "Definitions") are incorporated into
this Confirmation. In the event of any inconsistency between the Definitions and
this Confirmation, this Confirmation will govern. Without prejudice to the
foregoing, references in this Confirmation to the Transaction shall for the
purposes of the Definitions mean the Swap Transaction.
1. This Confirmation evidences a complete binding agreement between the parties
as to the terms of the Transaction to which this Confirmation relates. In
addition, the parties agree to use all reasonable efforts promptly to negotiate,
execute and deliver an agreement in the form of the ISDA Master Agreement
(Multicurrency-Cross Border) (the "ISDA Form"), with such modifications as the
parties will in good faith agree. Upon the execution by the parties of such
<PAGE>
an agreement, this Confirmation will supplement, for a part of, and be subject
to that agreement. All provisions contained or incorporated by reference in that
agreement upon its execution will govern this Confirmation except as expressly
modified below. Until the parties execute and deliver that agreement, this
Confirmation, together with all other documents referring to the ISDA Form (each
a "Confirmation") confirming transactions (each a "Transaction") entered into
between the parties (notwithstanding anything to the contrary in a
Confirmation), shall supplement, for a part of, and be subject to an agreement
in the form of the ISDA Form as if the parties had executed an agreement in such
form (but without any Schedule) on the Trade Date of the first such Transaction
between the parties. In the event of any inconsistency between the provisions of
that agreement and this Confirmation, this Confirmation will prevail for the
purpose of this Transaction.
In this Confirmation "Party A" means Bank of America, N.A. and "Party B"
means First North American National Bank.
2. The terms of this Transaction to which this Confirmation relates are as
follows:
Notional Amount: USD 57,500,000.00
Trade Date: 23FEB00
Effective Date: 28FEB00
Termination Date: 15FEB06 subject to adjustment in accordance
with the Modified Following Business Day
Convention
Amortization APPLICABLE (See Schedule A attached hereto)
Fixed Amounts:
Fixed Payer: Party B
Fixed Rate Payer Payment
Dates: 25FEB00, subject to adjustment in accordance
with the Modified Following Business Day
Convention
Fixed Amount: USD 1,777,975.00
Floating Amounts:
Floating Rate Payer: Party A
Cap Rate: 7.50000%
Floating Rate Payer Payment
Dates: The 15th of each Month, commencing 15APR00 and
ending 15FEB06, subject to adjustment in
accordance with the Modified Following Business
Day Convention
Floating Rate for the Initial
<PAGE>
Calculation Period: 6.48750% (inclusive of Spread)
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 Month
Spread: Plus 0.59000%
Floating Rate Day Count
Fraction: Actual/360
Reset Dates: The first day of each Calculation Period
Business Days: New York, London
Calculation Agent: Party A
3. Recording of Conversations:
Each party to this Transaction acknowledges and agrees to the tape
recording of conversations between the parties to this Transaction whether
by one or other or both of the parties or their agents, and that any such
tape recordings may be submitted in evidence in any Proceedings relating to
the Agreement and/or this Transaction.
4. Account Details:
Payments to Bank of America, N.A.:
USD
NAME: BANK OF AMERICA NA
CITY: NEW YORK
ABA #: 026009593
ATTN: BOFAUS3N
NAME: BANK OF AMERICA NA
CITY: NEW YORK
ACCT: 6550219386
ATTN: RATE DERIVATIVE SETTLEMENTS
Payments to First North American National Bank
USD
NAME: Bankers Trust
CITY: New York
ABA #: 021001033
NAME: Circuit City Master Trust
ACCT: 01419647
<PAGE>
ATTN: Attn: Corporate Trust, Pei Huang
5. Offices:
The Office of Party A for this
Transaction is: Charlotte, NC
The Office of Party B for this
Transaction is: Georgia, USA
Credit Support Document: As per Agreement (and Credit Support Annex if
applicable).
Please confirm that the foregoing correctly sets forth the terms and
conditions of our agreement by responding within three (3) Business Days by
returning via telecopier an executed copy of this Confirmation to the attention
of Global Derivative Operations at (fax no. (312) 234-3503).
Failure to respond within such period shall not affect the validity or
enforceability of this Transaction, and shall be deemed to be an affirmation of
the terms and conditions contained herein, absent manifest error.
Yours Sincerely,
Bank of America, N.A.
/s/ Tracey Bissell
Authorized Signatory
Accepted and confirmed as of the date first written:
First North American National Bank
By: /s/ Michael T. Chalifoux
Name: Michael T. Chalifoux
Title: President
<PAGE>
SCHEDULE A TO CONFIRMATION
AMORTIZATION SCHEDULE
CALCULATION PERIOD NOTIONAL AMOUNT
28FEB00 17APR00 57,500,000.00
17APR00 15MAY00 57,500,000.00
15MAY00 15JUN00 57,500,000.00
15JUN00 17JUL00 57,500,000.00
17JUL00 15AUG00 57,500,000.00
15AUG00 15SEP00 57,500,000.00
15SEP00 16OCT00 57,500,000.00
16OCT00 15NOV00 57,500,000.00
15NOV00 15DEC00 57,500,000.00
15DEC00 16JAN01 57,500,000.00
16JAN01 15FEB01 57,500,000.00
15FEB01 15MAR01 57,500,000.00
15MAR01 17APR01 57,500,000.00
17APR01 15MAY01 57,500,000.00
15MAY01 15JUN01 57,500,000.00
15JUN01 16JUL01 57,500,000.00
16JUL01 15AUG01 57,500,000.00
15AUG01 17SEP01 57,500,000.00
17SEP01 15OCT01 57,500,000.00
15OCT01 15NOV01 57,500,000.00
15NOV01 17DEC01 57,500,000.00
17DEC01 15JAN02 57,500,000.00
15JAN02 15FEB02 57,500,000.00
15FEB02 15MAR02 57,500,000.00
15MAR02 15APR02 57,500,000.00
15APR02 15MAY02 57,500,000.00
15MAY02 17JUN02 57,500,000.00
17JUN02 15JUL02 57,500,000.00
15JUL02 15AUG02 57,500,000.00
15AUG02 16SEP02 57,500,000.00
16SEP02 15OCT02 57,500,000.00
15OCT02 15NOV02 57,500,000.00
15NOV02 16DEC02 57,500,000.00
16DEC02 15JAN03 57,500,000.00
15JAN03 18FEB03 57,500,000.00
18FEB03 17MAR03 55,345,346.00
17MAR03 15APR03 54,391,492.00
14APR03 15MAY03 52,437,438.00
15MAY03 16JUN03 51,283,284.00
16JUN03 15JUL03 49,729,730.00
15JUL03 15AUG03 48,175,676.00
<PAGE>
15AUG03 15SEP03 46,621,622.00
15SEP03 15OCT03 45,067,560.00
15OCT03 17NOV03 43,513,514.00
17NOV03 15DEC03 41,959,459.00
15DEC03 15JAN04 40,405,405.00
15JAN04 17FEB04 38,852,351.00
17FEB04 15MAR04 37,297,297.00
15MAR04 15APR04 35,743,243.00
15APR04 17MAY04 34,189,189.00
17MAY04 15JUN04 32,635,135.00
15JUN04 15JUL04 31,081,081.00
15JULY04 16AUG04 29,527,037.00
16AUG04 15SEP04 27,972,973.00
15SEP04 15OCT04 26,410,919.00
15OCT04 15NOV04 24,864,865.00
15NOV04 15DEC04 23,310,811.00
15DEC04 18JAN05 21,756,757.00
18JAN05 15FEB05 20,202,703.00
15FEB05 15MAR05 18,648,649.00
15MAR05 15APR05 17,094,595.00
15APR05 16MAY05 15,540,541.00
16MAY05 15JUN05 13,986,486.00
15JUN05 15JUL05 12,432,432.00
15JUL05 15AUG05 10,878,378.00
15AUG05 15SEP05 9,374,374.00
15SEP05 17OCT05 7,770,270.00
17OCT05 15NOV05 6,216,216.00
15NOV05 15DEC05 4,662,162.00
15DEC05 17JAN06 3,108,108.00
17JAN06 15FEB06 1,554,054.00
