EXHIBIT 4.2
EXECUTION COPY
________________________________________________________________________________
WILMINGTON TRUST COMPANY AS TRUSTEE OF THE
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I
Issuer
and
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
Indenture Trustee and Securities Intermediary
SERIES 0000-0 XXXXXXXXX SUPPLEMENT
Dated as of November 16, 2000
________________________________________________________________________________
TABLE OF CONTENTS Page
ARTICLE I CREATION OF THE SERIES 2000-1 NOTES.................................................. 1
Section 1.01. Designation...................................................................... 1
ARTICLE II DEFINITIONS.......................................................................... 2
Section 2.01. Definitions...................................................................... 2
ARTICLE III SERVICING FEE AND INTERCHANGE........................................................ 13
Section 3.01. Servicing Compensation; Interchange.............................................. 13
ARTICLE IV RIGHTS OF SERIES 2000-1 NOTEHOLDERS AND ALLOCATION AND
APPLICATION OF COLLECTIONS........................................................... 14
Section 4.01. Collections and Allocations...................................................... 14
Section 4.02. Determination of Monthly Interest................................................ 15
Section 4.03. Determination of Monthly Principal............................................... 16
Section 4.04. Application of Available Funds on Deposit in the Collection Account.............. 16
Section 4.05 Investor Charge-offs............................................................. 19
Section 4.06. Subordinated Principal Collections............................................... 19
Section 4.07. Excess Finance Charge and Administrative Collections............................. 19
Section 4.08. Shared Principal Collections..................................................... 20
Section 4.09. [Reserved]....................................................................... 20
Section 4.10. Principal Funding Account........................................................ 20
Section 4.11. Reserve Account.................................................................. 21
Section 4.12. Determination of LIBOR........................................................... 23
Section 4.13. Investment Instructions.......................................................... 24
Section 4.14. Exchange of Notes for Transferor Amount.......................................... 24
ARTICLE V DELIVERY OF SERIES 2000-1 NOTES; DISTRIBUTIONS; REPORTS TO
SERIES 2000-1 NOTEHOLDERS............................................................ 25
Section 5.01. Delivery and Payment for the Series 2000-1 Notes................................. 25
Section 5.02. Distributions.................................................................... 25
Section 5.03. Reports and Statements to Series 2000-1 Noteholders.............................. 26
ARTICLE VI SERIES 2000-1 AMORTIZATION EVENTS.................................................... 27
Section 6.01. Series 2000-1 Amortization Events................................................ 27
ARTICLE VII REDEMPTION OF SERIES 2000-1 NOTES; SERIES FINAL MATURITY;
FINAL DISTRIBUTIONS.................................................................. 29
Section 7.01. Optional Redemption of Series 2000-1 Notes....................................... 29
Section 7.02. Series Final Maturity............................................................ 29
ARTICLE VIII MISCELLANEOUS PROVISIONS............................................................. 31
Section 8.01. Ratification of Indenture........................................................ 31
Section 8.02. Counterparts..................................................................... 31
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TABLE OF CONTENTS Page
Section 8.03. Governing Law ..................................................................... 31
Section 8.04. Transfer of the O/C Amount......................................................... 31
EXHIBITS
EXHIBIT A-1 FORM OF CLASS A NOTE
EXHIBIT A-2 FORM OF CLASS B NOTE
EXHIBIT B FORM OF MONTHLY PAYMENT INSTRUCTIONS AND NOTIFICATION TO THE
INDENTURE TRUSTEE
EXHIBIT C FORM OF MONTHLY STATEMENT
EXHIBIT D FORM OF MONTHLY SERVICER'S CERTIFICATE
IV
SERIES 0000-0 XXXXXXXXX SUPPLEMENT, dated as of November16, 2000 (the
"Indenture Supplement"), between WILMINGTON TRUST COMPANY, not in its individual
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capacity, but solely as Owner Trustee of the HOUSEHOLD CREDIT CARD MASTER NOTE
TRUST I, a common law trust existing under the laws of the State of Delaware
(herein, the "Issuer" or the "Trust"), and XXXXX FARGO BANK MINNESOTA, NATIONAL
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ASSOCIATION, a national banking association, not in its individual capacity, but
solely as the Indenture Trustee (herein, together with its successors in the
trusts created under the Master Indenture referred to below, the "Indenture
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Trustee") and the Securities Intermediary under the Amended and Restated Master
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Indenture, dated as of November 16, 2000 (the "Indenture") between the Issuer
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and the Indenture Trustee (the Indenture, together with this Indenture
Supplement, the "Agreement").
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The Transferor may direct the Owner Trustee, on behalf of the Issuer, to
issue one or more Series of Notes in accordance with Section 2.12 of the
Indenture. The Transferor has tendered the notice of issuance required by
subsection 2.12(b)(i) of the Indenture and has directed the Owner Trustee, on
behalf of the Issuer, to enter into this Indenture Supplement with the Indenture
Trustee as required by Section 2.12 to provide for the issuance, authentication
and delivery of the Class A Notes, Series 2000-1 and the issuance,
authentication and delivery of the Class B Notes, Series 2000-1 and to specify
the Principal Terms thereof. The Principal Terms of this Series are set forth
in this Indenture Supplement to the Indenture.
ARTICLE I
CREATION OF THE SERIES 2000-1 NOTES
Section 1.01. Designation
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(a) There is hereby created a Series of Notes to be issued pursuant
to the Indenture and this Indenture Supplement to be known as "Household Credit
----------------
Card Master Note Trust I, Series 2000-1" or the "Series 2000-1 Notes." The
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Series 2000-1 Notes shall be issued in two Classes, the first of which shall be
known as the "Class A Series 2000-1 Floating Rate Asset Backed Notes" and the
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second of which shall be known as the "Class B Series 2000-1 Floating Rate Asset
-----------------------------------------
Backed Notes". The Series 2000-1 Notes shall be due and payable on the Series
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2000-1 Final Maturity Date.
(b) Series 2000-1 shall be a Pool One Series and shall be in
Principal Sharing Group One and Excess Finance Charge Sharing Group One, and
shall not be in a Reallocation Group, Shared Enhancement Group or be allocated
Shared Transferor Principal Collections. Series 2000-1 shall not be subordinated
to any other Series. Notwithstanding any provision in the Indenture or in this
Indenture Supplement to the contrary, the first Distribution Date with respect
to Series 2000-1 shall be the December 2000 Distribution Date, and the first Due
Period shall begin on and include November 1, 2000 and end on and include
November 30, 2000.
(c) In the event that any term or provision contained herein shall
conflict with or be inconsistent with any term or provision contained in the
Indenture, the terms and provisions of this Indenture Supplement shall be
controlling. All capitalized terms not otherwise defined herein are defined in
the Indenture, the Transfer and Servicing Agreement or the Trust Agreement.
Each capitalized term defined herein shall relate only to the Series 2000-1
Notes but not any other Series of Notes issued by the Issuer.
[END OF ARTICLE I]
ARTICLE II
DEFINITIONS
Section 2.01. Definitions.
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(a) Whenever used in this Indenture Supplement, the following words
and phrases shall have the following meanings, and the definitions of such terms
are applicable to the singular as well as the plural forms of such terms and the
masculine as well as the feminine and neuter genders of such terms.
"Accumulation Period Factor" shall mean, with respect to any Due
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Period, a fraction, (a) the numerator of which is equal to the sum of (i) the
initial invested amounts of all outstanding Series in Principal Sharing Group
One which are not Variable Funding Series, (ii) the Invested Amount of all
outstanding Variable Funding Series in Principal Sharing Group One which are in
the Revolving Period and (iii) the Invested Amount as of the end of the
Revolving Period for all Outstanding Variable Funding Series in Principal
Sharing Group One which are not in the Revolving Period and (b) the denominator
of which is equal to the sum of (i) the Initial Invested Amount, (ii) the
initial invested amounts of all outstanding Principal Sharing Group One Series
(other than Series 2000-1) that have controlled accumulation periods or
controlled amortization periods (the length of which may be altered in
accordance with the terms of the related Indenture Supplements) and are not
expected to be in their respective revolving periods as of such Due Period and
(iii) the Invested Amount as of the end of the Revolving Period for all
Outstanding Variable Funding Series in Principal Sharing Group One which are not
expected to be in their revolving periods as of such Due Period; provided,
however, that this definition may be changed at anytime if an Officer's
Certificate is delivered indicating that such action will not result in an
Adverse Effect.
"Accumulation Period Length" shall have the meaning assigned such term
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in subsection 4.04(e).
"Additional Interest" shall mean, with respect to any Distribution
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Date, the Class A Additional Interest and the Class B Additional Interest for
such Distribution Date.
"Adjusted Invested Amount" shall mean, with respect to any date of
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determination, an amount equal to the Invested Amount minus the Principal
Funding Account Balance on such date.
"Adjusted Pool One Principal Balance" shall mean an amount equal to
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the greater of (a) the sum of (i) the total amount of Principal Receivables in
Pool One as of the close of business on the last day of the immediately
preceding Due Period (or with respect to the first Due Period, the total amount
of Principal Receivables in Pool One as of the Series 2000-1 Cut-off Date) and
(ii) the principal amount on deposit in the Special Funding Account with respect
to Pool One as of the close of business on such last day (or with respect to the
first Due Period, the Series 2000-1 Cut-off Date) and (b) the sum of the
numerators used to calculate the investor percentages for allocations with
respect to Principal Receivables, Finance Charge and Administrative Receivables
or Defaulted Amounts, as applicable, for all Pool One Series outstanding as of
the date as to which such determination is being made; provided, however, that
with respect to any Due Period in which an Addition Date for an Aggregate
Addition or a Removal Date occurs, the amount in clause (a)(i) above shall be
the sum of the amounts for each day in such Due Period computed as follows and
divided by the number of days in such Due Period: (1) the aggregate amount of
Principal Receivables in Pool One as of the close of business on the last day of
the prior Due Period, for each day in the period from and including the first
day of such Due Period to but
2
excluding the related Additional Cut-Off Date or Removal Date and (2) the
aggregate amount of Principal Receivables in Pool One as of the close of
business on the related Additional Cut-off Date or Removal Date after adjusting
for the aggregate amount of Principal Receivables added to or removed from Pool
One on the related Additional Cut-off Date or Removal Date, as the case may be,
for each day in the period from and including the related Additional Cut-off
Date or Removal Date to and including the last day of such Due Period.
"Administration Fee" shall mean the fee payable to the Administrator
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pursuant to the Administration Agreement, to the extent not paid by the
Transferor.
"Available Investor Finance Charge and Administrative Collections"
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shall mean, with respect to any Due Period, an amount equal to the sum of (a)
the Investor Finance Charge and Administrative Collections, (b) Principal
Funding Investment Proceeds, if any, with respect to the related Distribution
Date, and (c) amounts, if any, to be withdrawn from the Reserve Account which
will be deposited into the Collection Account on the related Distribution Date
to be treated as Available Investor Finance Charge and Administrative
Collections pursuant to subsections 4.11(b) and (d).
"Available Investor Principal Collections" shall mean, with respect to
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any Due Period, an amount equal to the sum of (a) (i) an amount equal to the
Investor Percentage of all Collections of Principal Receivables received during
such Due Period minus (ii) the amount of Subordinated Principal Collections with
respect to such Due Period, (b) any Shared Principal Collections with respect to
other Principal Sharing Group One Series (including any amounts on deposit in
the Special Funding Account with respect to Pool One that are allocated to
Series 2000-1 pursuant to the Agreement for application as Shared Principal
Collections), (c) any Refunding Proceeds and (d) any other amounts which
pursuant to Section 4.04 hereof are to be treated as Available Investor
Principal Collections with respect to the related Distribution Date.
"Available Reserve Account Amount" shall mean, with respect to any
--------------------------------
Distribution Date, the lesser of (a) the amount on deposit in the Reserve
Account on such date (after taking into account any interest and earnings
retained in the Reserve Account pursuant to subsection 4.11(b) on such date, but
before giving effect to any (i) deposit made or to be made pursuant to
subsection 4.04(a)(ix) to the Reserve Account on such date, or (ii) any
withdrawal made or to be made pursuant to subsection 4.11(d), (e) and (f) from
the Reserve Account with respect to such date) and (b) the Required Reserve
Account Amount.
"Base Rate" shall mean, with respect to any Due Period, the product of
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the weighted average of the Class A Note Interest Rate and the Class B Note
Interest Rate (weighted based on the Class A Note Principal Balance and the
Class B Note Principal Balance as of the last day of the prior Due Period)
multiplied by a fraction, the numerator of which is the Note Principal Balance
and the denominator of which is the sum of the Note Principal Balance and the
O/C Amount as of the last day of the prior Due Period plus the Servicing Fee
Rate.
"Class A Additional Interest" shall have the meaning specified in
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subsection 4.02(a).
"Class A Interest Shortfall" shall have the meaning specified in
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subsection 4.02(a).
"Class A Monthly Interest" shall have the meaning specified in
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subsection 4.02(a).
"Class A Note Initial Principal Balance" shall mean $1,103,333,000.
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3
"Class A Note Interest Rate" shall mean a per annum rate of 0.14% in
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excess of LIBOR as determined (i) on November 14, 2000, for the period from and
including the Closing Date through and excluding December 15, 2000 and (ii) on
the related LIBOR Determination Date with respect to each Interest Period
thereafter.
"Class A Note Principal Balance" shall mean, with respect to any date,
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an amount equal to (a) the Class A Note Initial Principal Balance minus (b) the
aggregate amount of any principal payments made to the Class A Noteholders prior
to such date.
"Class A Noteholder" shall mean the Person in whose name a Class A
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Note is registered in the Note Register.
"Class A Notes" shall mean any one of the Notes executed by the Issuer
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and authenticated by or on behalf of the Indenture Trustee, substantially in the
form of Exhibit A-1.
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"Class B Additional Interest" shall have the meaning specified in
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subsection 4.02(b).
"Class B Interest Shortfall" shall have the meaning specified in
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subsection 4.02(b).
"Class B Monthly Interest" shall have the meaning specified in
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subsection 4.02(b).
"Class B Note Initial Principal Balance" shall mean $96,667,000.
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"Class B Note Interest Rate" shall mean a per annum rate of 0.40% in
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excess of LIBOR as determined (i) on November14, 2000, for the period from and
including the Closing Date through and excluding December 15, 2000 and (ii) on
the related LIBOR Determination Date with respect to each Interest Period
thereafter.
"Class B Note Principal Balance" shall mean, with respect to any date,
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the Class B Note Initial Principal Balance, minus the aggregate amount of any
principal payments made to the Class B Noteholders prior to such date.
"Class B Noteholder" shall mean the Person in whose name a Class B
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Note is registered in the Note Register.
"Class B Notes" shall mean any one of the Notes executed by the Issuer
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and authenticated by or on behalf of the Indenture Trustee, substantially in the
form of Exhibit A-2.
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"Closing Date" shall mean November 16, 2000.
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"Controlled Accumulation Amount" shall mean for any Distribution Date
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with respect to the Controlled Accumulation Period, $85,714,286; provided,
however, that if the Accumulation Period Length is determined to be less than 14
Due Periods pursuant to subsection 4.04(e), the Controlled Accumulation Amount
for each Distribution Date with respect to the Controlled Accumulation Period
will be equal to (a) the product of (i) the Class A Note Initial Principal
Balance and the Class B Note Initial Principal Balance and (ii) the Accumulation
Period Factor for such Due Period divided by (b) the Required Accumulation
Factor Number.
"Controlled Accumulation Period" shall mean, unless an Amortization
------------------------------
Event shall have occurred prior thereto, the period commencing at the close of
business on August 31, 2004 or such later date as is determined in accordance
with subsection 4.04(e) and ending on the first to occur of (a) the
4
commencement of the Early Amortization Period, (b) the payment in full of the
Note Principal Balance and (c) the Expected Principal Payment Date.
"Controlled Deposit Amount" shall mean, with respect to any
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Distribution Date with respect to the Controlled Accumulation Period, an amount
equal to the sum of (a) the Controlled Accumulation Amount for such Distribution
Date and (b) any existing Deficit Controlled Accumulation Amount.
"Covered Amount" shall mean an amount, determined as of each
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Distribution Date with respect to any Interest Period during the Controlled
Accumulation Period, equal to the sum of (a) the product of (i) a fraction, the
numerator of which is the actual number of days in such Interest Period and the
denominator of which is 360, times (ii) the Class A Note Interest Rate in effect
with respect to such Interest Period, times (iii) the aggregate amount on
deposit in the Principal Funding Account up to the Class A Note Principal
Balance as of the Record Date preceding such Distribution Date and (b) the
product of (i) a fraction, the numerator of which is the actual number of days
in such Interest Period and the denominator of which is 360, times (ii) the
Class B Note Interest Rate in effect with respect to such Interest Period, times
(iii) the lesser of (A) the aggregate amount on deposit in the Principal Funding
Account in excess of the Class A Note Principal Balance and (B) the Class B Note
Principal Balance, in each case as of the Record Date preceding such
Distribution Date.
"Deficit Controlled Accumulation Amount" shall mean (a) on the first
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Distribution Date during the Controlled Accumulation Period, the excess, if any,
of the Controlled Accumulation Amount for such Distribution Date over the amount
deposited in the Principal Funding Account on such Distribution Date and (b) on
each subsequent Distribution Date with respect to the Controlled 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
on such subsequent Distribution Date.
"Distribution Date" shall mean December 15, 2000 and the fifteenth day
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of each calendar month thereafter, or if such fifteenth day is not a Business
Day, the next succeeding Business Day.
"Early Amortization Period" shall mean the period commencing on the
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first day of the Due Period on which an Amortization Event with respect to
Series 2000-1 is deemed to have occurred or, if the Servicer is required to make
daily deposits into the Collection Account, on the day such Amortization Event
is deemed to have occurred, and ending upon the earlier to occur of (a) the
payment in full of the Note Principal Balance to the Series 2000-1 Noteholders
and (b) the Series 2000-1 Final Maturity Date.
"Eligible Investments" shall mean, with respect to funds allocable to
--------------------
Series 2000-1 in the Collection Account, the Principal Funding Account and the
Reserve Account, "Eligible Investments" as defined in the Indenture, except that
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(a) all references in such definition to "rating satisfactory to the Rating
Agency" shall mean ratings of not less than "A-1+", "P-1" and "F-1+" (whichever
is applicable), unless otherwise specified by the Rating Agency, and (b) all
such investments shall have maturities at the time of the acquisition thereof
occurring no later than the Distribution Date following such date of
acquisition.
"Excess O/C Amount" shall mean, with respect to any Due Period, the
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excess of the O/C Amount over the Required O/C Amount.
"Excess Spread" shall mean with respect to any Due Period, the
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annualized percentage equivalent of a fraction, (a) the numerator of which is
equal to (i) Available Investor Finance Charge and
5
Administrative Collections with respect to such Due Period, plus (ii) any Excess
Finance Charge and Administrative Collections that are allocated to Series 2000-
1 with respect to such Due Period, minus (iii) the amounts distributable
pursuant to subsection 4.04(a)(i) through (viii) with respect to the related
Distribution Date, and (b) the denominator of which is the sum of the Note
Principal Balance and the O/C Amount as of the last day of the immediately
preceding Due Period.
"Expected Principal Payment Date" shall mean the November 2005
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Distribution Date.
"Finance Charge Shortfall" shall have the meaning specified in Section
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4.07.
"Fixed Investor Percentage" shall mean, with respect to any Due
-------------------------
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, (a) the numerator of which is the Adjusted Invested Amount as of the
close of business on the last day of the Revolving Period and (b) the
denominator of which is the Adjusted Pool One Principal Balance.
"Floating Investor Percentage" shall mean, with respect to any Due
----------------------------
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, (a) the numerator of which is the Adjusted Invested Amount as of the
close of business on the last day of the preceding Due Period (or with respect
to the first Due Period, the Initial Invested Amount) and (b) the denominator of
which is the Adjusted Pool One Principal Balance.
"Initial O/C Amount" shall mean $133,333,334.
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"Initial Invested Amount" shall mean $1,333,333,334.
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"Interest Period" shall mean, with respect to any Distribution Date,
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the period from and including the Distribution Date immediately preceding such
Distribution Date (or, in the case of the first Distribution Date, from the
Closing Date) to but excluding such Distribution Date.
"Invested Amount" shall mean, as of any date of determination, an
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amount equal to the Initial Invested Amount minus (a) the amount of principal
previously paid to the Series 2000-1 Noteholders with respect to the Class A
Notes and the Class B Notes (including the principal amount of any Notes
purchased by the Transferor) and any reduction in the O/C Amount pursuant to
Section 4.04(b) or (c), and (b) the amount of unreimbursed Investor Charge-offs
and Subordinated Principal Collections.
"Investor Charge-off" shall have the meaning specified in Section
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4.05.
"Investor Defaulted Amount" shall mean, with respect to any
-------------------------
Distribution Date, an amount equal to the product of (a) the Defaulted Amount
for the related Due Period and (b) the Investor Percentage for such Due Period.
"Investor Finance Charge and Administrative Collections" shall mean,
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with respect to any Distribution Date, an amount equal to the product of (a)
Investor Percentage for the related Due Period and (b) Collections of Finance
Charge and Administrative Receivables deposited in the Collection Account for
the related Due Period.
"Investor Percentage" shall mean, for any Due Period, (a) with respect
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to (i) Finance Charge and Administrative Receivables during any period other
than the Early Amortization Period, (ii) Principal Receivables during the
Revolving Period and (iii) Defaulted Amounts at any time, the Floating Investor
Percentage and (b) with respect to (i) Principal Receivables during any period
other than the
6
Revolving Period and (ii) Finance Charge and Administrative Receivables during
the Early Amortization Period, the Fixed Investor Percentage.
"LIBOR" shall mean, for any Interest Period, the London interbank
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offered rate for one-month United States dollar deposits determined by the
Indenture Trustee for each Interest Period in accordance with the provisions of
Section 4.12.
"LIBOR Determination Date" shall mean (a) November 14, 2000 for the
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period from and including the Closing Date through and including December 15,
2000 and (b) the second London Business Day prior to the commencement of the
second and each subsequent Interest Period.
"London Business Day" shall mean any Business Day on which dealings in
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deposits in United States dollars are transacted in the London interbank market.
"Monthly Administration Fee" shall mean the product of (i) one-twelfth
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of the Administration Fee and (ii) the Floating Investor Percentage.
"Monthly Interest" shall mean, with respect to any Distribution Date,
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the sum of the Class A Monthly Interest and the Class B Monthly Interest for
such Distribution Date.
"Monthly Principal" shall mean the monthly principal distributable in
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respect of the Notes and the O/C Amount as calculated in accordance with Section
4.03.
"Monthly Servicing Fee" shall mean, for any Distribution Date, an
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amount equal to one-twelfth of the product of:
(a) the Servicing Fee Rate;
(b) the Floating Investor Percentage for the related Due Period; and
(c) the total amount of Principal Receivables as of the close of
business on the last day of the immediately preceding Due Period, or with
respect to the first Due Period, the total amount of Principal Receivables as of
the Closing Date, in either case, excluding the principal portion of
Participation Interests;
provided, however, that with respect to any Due Period in which an Addition Date
for an Aggregate Addition or a Removal Date occurs, the amount in clause (c)
above shall be the sum of the amounts for each day in that Due Period computed
as follows and divided by the number of days in that Due Period:
(i) the aggregate amount of Principal Receivables, excluding the
principal portion of participation interests, as of the close of
business on the last day of the prior Due Period, for each day in
the period from and including the first day of that Due Period to
but excluding the related Additional Cut-off Date or Removal
Date; and
(ii) the aggregate amount of Principal Receivables, excluding the
principal portion of participation interests, as of the close of
business on the related Additional Cut-off Date or Removal Date
after adjusting for the aggregate amount of Principal
Receivables, excluding the principal portion of Participation
Interests, added to or removed on the related Additional Cut-off
Date or Removal Date, as the case may be, for each day in the
period from and including the related Additional Cut-off Date or
Removal Date to and including the last day of that Due Period;
7
provided further, that with respect to the first Distribution Date, the Monthly
Servicing Fee will equal $2,222,222.22.
"Monthly Subordination Amount" shall mean with respect to any Due
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Period an amount equal to the sum of:
(a) the lower of (i) the excess of the amounts distributable pursuant
to subsection 4.04(a)(i) over the Available Investor Finance Charge and
Administrative Collections and Excess Finance Charge and Administrative
Collections allocated with respect thereto pursuant to subsection 4.04(a)(i),
and (ii) (1) the product of (I) 17.25% and (II) the Initial Invested Amount
minus (2) any principal payments to the O/C Holder and (3) the amount of
unreimbursed Investor Charge-offs (after giving effect to Investor Charge-offs
for the related Due Period) and unreimbursed Subordinated Principal Collections
(as of the previous Distribution Date); and
(b) the lower of (i) the excess of the amounts distributable pursuant
to subsections 4.04(a)(ii) and 4.04(a)(iii), over the Available Investor Finance
Charge and Administrative Collections and Excess Finance Charge and
Administrative Collections allocated with respect thereto pursuant to
subsections 4.04(a)(ii) and (iii), and (ii)(1) the product of (I) 10% and (II)
the Initial Invested Amount minus (2) any principal payments to the O/C Holder
and (3) the amount of unreimbursed Investor Charge-offs (after giving effect to
Investor Charge-offs for the related Due Period) and unreimbursed Subordinated
Principal Collections, (including amounts allocated pursuant to clause (a) above
with respect to the related Distribution Date).
"Note Principal Balance" shall mean, at any time of determination, the
----------------------
sum of the Class A Note Principal Balance and the Class B Note Principal
Balance.
"O/C Amount" shall mean, with respect to any date, an amount equal to
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(a) the Invested Amount minus (b) the Note Principal Balance.
"O/C Holder" shall mean Household Receivables Funding Inc., III, a
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Delaware corporation, as holder of the Transferor Certificate.
"Pool One" shall mean the pool of Receivables listed on Schedule P1 of
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the Indenture.
"Pool One Series" shall mean Series 2000-1 and each other Series which
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is designated as a Pool One Series in the related Indenture Supplement.
"Principal Funding Account" shall have the meaning set forth in
-------------------------
subsection 4.10(a).
"Principal Funding Account Balance" shall mean, with respect to any
---------------------------------
date of determination, the principal amount, if any, on deposit in the Principal
Funding Account on such date of determination.
"Principal Funding Investment Proceeds" shall mean, with respect to
-------------------------------------
each Distribution Date, the investment earnings on funds in the Principal
Funding Account (net of investment expenses and losses) for the period from and
including the immediately preceding Distribution Date to but excluding such
Distribution Date.
"Principal Sharing Group One" shall mean Series 2000-1 and each other
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Series specified in the related Indenture Supplement to be included in Principal
Sharing Group One.
8
"Rating Agency" shall mean each of Standard & Poor's, Xxxxx'x and
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Fitch.
"Reassignment Amount" shall mean, with respect to any Distribution
-------------------
Date, after giving effect to any deposits and distributions otherwise to be made
on such Distribution Date, the sum of (a) the Note Principal Balance and the O/C
Amount on such Distribution Date, plus (b) Monthly Interest for such
Distribution Date and any Monthly Interest previously due but not distributed to
the Series 2000-1 Noteholders, plus (c) the amount of Additional Interest, if
any, for such Distribution Date and any Additional Interest previously due but
not distributed to the Series 2000-1 Noteholders on a prior Distribution Date.
"Reference Banks" shall mean four major banks in the London interbank
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market selected by the Servicer.
"Refunding Proceeds" shall mean with respect to any Distribution Date,
------------------
any proceeds of the issuance of a new Series of Notes remitted by the
Transferor, with the prior written consent of the Indenture Trustee at least one
Business Day prior to such Distribution Date for deposit into the Collection
Account and application as Available Investor Principal Collections.
"Required Accumulation Factor Number" shall be equal to a fraction,
-----------------------------------
rounded upwards to the nearest whole number, the numerator of which is one and
the denominator of which is equal to the lowest monthly principal payment rate
(calculated based upon Collections of Principal Receivables for any Due Period,
over the amount of Principal Receivables on the first day of such Due Period) on
the Accounts for the 12 months preceding the date of such calculation; provided,
however, that this definition may be changed at any time if the Rating Agency
Condition is satisfied.
"Required O/C Amount" shall mean, as of the Closing Date, the Initial
-------------------
O/C Amount and, as of any Distribution Date thereafter, an amount equal to 10%
of the Adjusted Invested Amount but not less than 3% of the initial invested
amount, after taking into account distributions to be made on such Distribution
Date; provided that (a) if an Amortization Event has occurred, the Required O/C
Amount for any Distribution Date shall equal the amount of such requirement
immediately preceding such Amortization Event, (b) in no event shall the
Required O/C Amount exceed the Class A Note Principal Balance and the Class B
Note Principal Balance on any such date, (c) the Required O/C Amount may be
reduced at any time to a lesser amount if (i) the Rating Agency Condition is
satisfied and (ii) an Officer's Certificate of the Transferor has been delivered
to the effect that in the reasonable belief of the Transferor, such reduction
will not result in an Adverse Effect and (d) the Transferor, in its sole
discretion may increase the Required O/C Amount at any time.
"Required Reserve Account Amount" shall mean, with respect to any
-------------------------------
Distribution Date on or after the Reserve Account Funding Date, an amount equal
to (a) 0.5% of the Class A Note Principal Balance or (b) any other amount
designated by the Transferor; provided, however, that if such designation is of
a lesser amount, the Transferor shall (i) provide the Servicer and the Indenture
Trustee with evidence that the Rating Agency Condition shall have been satisfied
and (ii) deliver to the Indenture Trustee an Officer's Certificate indicating
that such designation will not result in an Adverse Effect.
"Required Transferor Amount" shall have the meaning specified in the
--------------------------
Indenture.
"Required Transferor Percentage" shall mean with respect to Pool One,
------------------------------
(a) initially 7.0% or (b) any other percentage designated by the Transferor;
provided, however, that if such designation is of a lesser amount, the
Transferor shall (i) provide the Servicer and the Indenture Trustee with
evidence that the Rating Agency Condition shall have been satisfied and (ii)
deliver to the Indenture Trustee a
9
certificate of an authorized officer to the effect that, based on the facts
known to such officer at such time, in the reasonable belief of the Transferor,
such designation will not have an Adverse Effect.
"Reserve Account" shall have the meaning specified in subsection
---------------
4.11(a).
"Reserve Account Funding Date" shall mean (a) the third Distribution
----------------------------
Date prior to the scheduled commencement of the Controlled Accumulation Period
if the average Excess Spread for any three consecutive months is 4% or greater,
(b) the fourth Distribution Date prior to the scheduled commencement of the
Controlled Accumulation Period if the average Excess Spread for any three
consecutive months is 3% or greater, but less than 4%, (c) the sixth
Distribution Date prior to the scheduled commencement of the Controlled
Accumulation Period if the average Excess Spread for any three consecutive
months is 2% or greater, but less than 3% and (d) the twelfth Distribution Date
prior to the scheduled commencement of the Controlled Accumulation Period if the
average Excess Spread for any three consecutive months is less than 2%. For
purposes of this definition, Excess Spread shall be determined for each month
beginning 15 months prior to the scheduled commencement of the Controlled
Accumulation Period.
"Reserve Account Surplus" shall mean, as of any Distribution Date
-----------------------
following the Reserve Account Funding Date, the amount, if any, by which the
amount on deposit in the Reserve Account exceeds the Required Reserve Account
Amount.
"Reserve Draw Amount" shall mean, with respect to each Distribution
-------------------
Date relating to the Controlled Accumulation Period or the first Distribution
Date relating to the Early Amortization Period, the amount, if any, by which the
Principal Funding Investment Proceeds for such Distribution Date are less than
the Covered Amount determined as of such Distribution Date.
"Revolving Period" shall mean the period beginning on the Closing Date
----------------
and ending on the earlier of the close of business on the day immediately
preceding the day the Controlled Accumulation Period or the Early Amortization
Period commences.
"Series 2000-1" shall mean the Series of Notes for which the terms are
-------------
specified in this Indenture Supplement.
"Series 2000-1 Accounts" shall mean the Reserve Account and the
----------------------
Principal Funding Account.
"Series 2000-1 Amortization Event" shall have the meaning specified in
--------------------------------
Section 6.01.
"Series 2000-1 Cut-off Date" shall mean the close of business on
--------------------------
October 31, 2000.
"Series 2000-1 Final Maturity Date" shall mean the earliest to occur
---------------------------------
of (a) the August 2008 Distribution Date, (b) the Distribution Date on which the
Notes are paid in full and (c) the termination of the Trust pursuant to Section
11.01 of the Indenture.
"Series 2000-1 Note" shall mean a Class A Note or a Class B Note.
------------------
"Series 2000-1 Noteholder" shall mean a Class A Noteholder or a Class
------------------------
B Noteholder.
"Series 2000-1 Principal Shortfall" shall have the meaning specified
---------------------------------
in Section 4.08.
"Series Adjusted Invested Amount" shall mean, with respect to any Due
-------------------------------
Period:
10
(a) during the Revolving Period, the Invested Amount as of the last
day of the immediately preceding Due Period;
(b) during the Controlled Accumulation Period, the amount specified
in clause (a) above as of the close of business on the last day of the Revolving
Period less unreimbursed Investor Charge-offs thereafter; provided, however,
that on any date, at the option of the Transferor (the exercise of such option
to be evidenced by written instructions from the Transferor to the Servicer and
the Indenture Trustee) and upon ten days written notice to the Rating Agency,
such amount may be reduced below the amount specified for the previous Due
Period to an amount not less than the greater of (i) the Adjusted Invested
Amount as of the last day of the immediately preceding Due Period (less any
amounts deposited into the Principal Funding Account since the last day of the
immediately preceding Due Period) and (ii) an amount that, if used as the
numerator of the Fixed Investor Percentage for the remainder of the Controlled
Accumulation Period, would assure that Available Investor Principal Collections
for this Series plus the product of the aggregate amount of the Shared Principal
Collections during each Due Period multiplied by a fraction the numerator of
which is the Invested Amount of this Series and the denominator of which is the
aggregate invested amount of all Series not scheduled to be in their revolving
period during such Due Period would equal at least 125% of the applicable
Controlled Accumulation Amount for such Due Period for so long as the Invested
Amount is greater than zero, assuming for this purpose that (A) the payment rate
with respect to Collections of Principal Receivables remains constant at the
level of the immediately preceding Due Period, (B) the total amount of Principal
Receivables theretofore conveyed to and in the Trust (and the Special Funding
Amount) remains constant at the level existing on the date of such reduction,
(C) no amortization event with respect to any Series will subsequently occur and
(D) no additional Series (other than any Series being issued on the date of such
reduction) will be subsequently issued; and
(c) during any Early Amortization Period, the Invested Amount as of
the last day of the Revolving Period less unreimbursed Investor Charge-offs
thereafter or, if less, the amount last determined pursuant to clause (b) above
during the Controlled Accumulation Period.
"Series Portfolio Yield" shall mean, with respect to any Due Period,
----------------------
the annualized percentage equivalent of a fraction, (a) the numerator of which
is equal to the sum of (i) Available Investor Finance Charge and Administrative
Collections with respect to such Due Period, plus (ii) any Excess Finance Charge
and Administrative Collections that are allocated to Series 2000-1 with respect
to such Due Period, such sum to be calculated after subtracting the Investor
Defaulted Amount for such Due Period, and (b) the denominator of which is the
sum of the Note Principal Balance and the O/C Amount as of the last day of the
immediately preceding Due Period.
"Servicing Fee Rate" shall mean 2% per annum or such lesser percentage
------------------
as may be specified by the Servicer in an Officer's Certificate filed with the
Indenture Trustee; provided, however, that (a) such Officer's Certificate shall
state that, in the reasonable belief of the Servicer, such change in percentage
will not result in an Adverse Effect and (b) the Servicer shall have provided
written notice of such change to the Rating Agency at least ten days prior to
the date such change is to take effect.
"Subordinated Principal Collections" shall mean with respect to any
----------------------------------
Due Period, Available Investor Principal Collections applied in accordance with
Section 4.06 in an amount not to exceed the lesser of the Monthly Subordination
Amount for the related Due Period and the Invested Amount after giving effect to
any Investor Charge-offs for the related Distribution Date.
"Telerate Page 3750" shall mean the display page currently so
------------------
designated on the Bridge Telerate Capital Markets Report (or such other page as
may replace that page in that service for the purpose of displaying comparable
rates or prices).
11
"Variable Funding Series" shall mean any Series, the invested amount
-----------------------
of which may be increased or decreased subject to the satisfaction of certain
conditions specified in the Indenture Supplement related to such Series.
Each capitalized term defined herein shall relate to the Series 2000-1
Notes and no other Series of Notes issued by the Trust, unless the context
otherwise requires. All capitalized terms used herein and not otherwise defined
herein have the meanings ascribed to them in the Indenture or the Transfer and
Servicing Agreement. In the event that any term or provision contained herein
shall conflict with or be inconsistent with any term or provision contained in
the Indenture or Transfer and Servicing Agreement, the terms and provisions of
this Indenture Supplement shall govern.
The words "hereof," "herein" and "hereunder" and words of similar
------ ------ ---------
import when used in this Indenture Supplement shall refer to this Indenture
Supplement as a whole and not to any particular provision of this Indenture
Supplement; references to any Article, subsection, Section or Exhibit are
references to Articles, subsections, Sections and Exhibits in or to this
Indenture Supplement unless otherwise specified; and the term "including" means
---------
"including without limitation."
----------------------------
[END OF ARTICLE II]
12
ARTICLE III
SERVICING FEE AND INTERCHANGE
Section 3.01. Servicing Compensation; Interchange.
-----------------------------------
(a) Servicing Fee. The share of the Servicing Fee allocable to the
-------------
Series 2000-1 Noteholders with respect to any Distribution Date shall equal the
Monthly Servicing Fee. The portion of the Servicing Fee that is not allocable to
the Series 2000-1 Noteholders shall be paid by the holders of the Transferor
Certificates or the noteholders of other Series (as provided in the related
Indenture Supplements), and in no event shall the Trust, the Owner Trustee, the
Indenture Trustee or the Series 2000-1 Noteholders be liable for the share of
the Servicing Fee to be paid by the holders of the Transferor Certificates or
the noteholders of any other Series.
(b) Interchange. Not later than 1:00 p.m., New York City time, on
-----------
each Transfer Date, the Servicer shall notify the Transferor, the Owner Trustee
and the Indenture Trustee of the amount of Interchange to be included as
Collections of Finance Charge and Administrative Receivables. On each
Distribution Date, the Transferor shall cause to be deposited into the
Collection Account, in immediately available funds, the amount of Interchange to
be so included as Collections of Finance Charge and Administrative Receivables
allocable to Series 2000-1 with respect to the preceding Due Period and such
Interchange shall be treated as a portion of Collections of Finance Charge and
Administrative Receivables allocable to Series 2000-1 for all purposes of this
Indenture Supplement, the Indenture and the Transfer and Servicing Agreement.
Notwithstanding the above, if the Transferor shall have delivered to the
Indenture Trustee an Officer's Certificate stating that the Transferor
reasonably believes that such action will not have an Adverse Effect, the
Transferor may, in lieu of causing the deposit of Interchange into the
Collection Account as set forth above, designate Discount Option Receivables
pursuant to Section 2.12 of the Transfer and Servicing Agreement in an amount
approximately equal to the then current Interchange with respect to the
Accounts.
[END OF ARTICLE III]
13
ARTICLE IV
RIGHTS OF SERIES 2000-1 NOTEHOLDERS
AND ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.01. Collections and Allocations.
---------------------------
(a) Allocations. Collections of Finance Charge and Administrative
-----------
Receivables and Principal Receivables and Defaulted Receivables allocated to
Series 2000-1 pursuant to Article VIII of the Indenture shall be allocated and
distributed as set forth in this Article.
(b) Payments to the Transferor. The Servicer shall on Deposit Dates
--------------------------
direct the Indenture Trustee to withdraw from the Collection Account and pay to
the Transferor the following amounts:
(i) an amount equal to the Transferor Percentage for the related
Due Period of Collections of Finance Charge and Administrative Receivables
to the extent that such amount is then on deposit in the Collection
Account; and
(ii) (A) if the Transferor Amount (determined after giving
effect to any Principal Receivables transferred to the Trust on such
Deposit Date) exceeds zero, an amount equal to the Transferor
Percentage for the related Due Period of Collections of Principal
Receivables that are then on deposit in the Collection Account, and
(B) if the Transferor Amount (determined after giving
effect to any Principal Receivables transferred to the Trust on such
Deposit Date) does not exceed zero, the amount set forth in clause (A)
shall be deposited into the Special Funding Account.
The withdrawals to be made from the Collection Account pursuant to
this subsection 4.01(b) do not apply to deposits into the Collection Account
that do not represent Collections, including payment of the purchase price for
the Receivables or the Notes pursuant to Section 2.06 or 7.01 of the Transfer
and Servicing Agreement or Section 11.04 of the Indenture.
(c) Allocations to the Series 2000-1 Noteholders and to the O/C
-----------------------------------------------------------
Holder. The Servicer shall, prior to the close of business on any Deposit Date,
------
allocate to the Series 2000-1 Noteholders and to the O/C Holder the following
amounts as set forth below:
(i) Allocations of Investor Finance Charge and Administrative
---------------------------------------------------------
Collections. The Servicer shall allocate to the Series 2000-1 Noteholders
-----------
and to the O/C Holder and retain in the Collection Account for application
as provided herein an amount equal to the product of (A) the Investor
Percentage and (B) the aggregate amount of Collections of Finance Charge
and Administrative Receivables deposited in the Collection Account on such
Deposit Date.
(ii) Allocations of Principal Collections. The Servicer shall
------------------------------------
allocate to the Series 2000-1 Noteholders and to the O/C Holder the
following amounts as set forth below:
(A) Allocations During the Revolving Period. During the
---------------------------------------
Revolving Period an amount equal to the product of (I) the Investor
Percentage and (II) the aggregate amount of Collections of Principal
Receivables deposited in the Collection Account on
14
such Deposit Date, shall be allocated to the Series 2000-1 Noteholders
and retained in the Collection Account until applied as provided
herein.
(B) Allocations During the Controlled Accumulation Period.
-----------------------------------------------------
During the Controlled Accumulation Period an amount equal to the
product of (I) the Investor Percentage and (II) the aggregate amount
of Collections of Principal Receivables deposited in the Collection
Account on such Deposit Date shall be allocated to the Series 2000-1
Noteholders and deposited in the Principal Funding Account until
applied as provided herein; provided, however, that if such
Collections with respect to such Due Period exceeds the Controlled
Deposit Amount for the related Distribution Date then such excess
shall be first, retained in the Collection Account for application to
reduce the O/C Amount to the Required O/C Amount, second, if any other
Principal Sharing Series in Principal Sharing Group One is outstanding
and in its amortization period or accumulation period, retained in the
Collection Account for application, to the extent necessary, as Shared
Principal Collections to other Series in Principal Sharing Group One
on the related Distribution Date, and third paid to the holders of the
Transferor Certificates only if the Transferor Amount on such Deposit
Date is greater than the Required Transferor Amount (after giving
effect to all Principal Receivables transferred to the Trust on such
day) and otherwise shall be deposited in the Special Funding Account
for Pool One.
(C) Allocations During the Early Amortization Period. During the
------------------------------------------------
Early Amortization Period, an amount equal to the product of (I) the
Investor Percentage and (II) the aggregate amount of Collections of
Principal Receivables deposited in the Collection Account on such
Deposit Date, shall be allocated to the Series 2000-1 Noteholders and
retained in the Collection Account until applied as provided herein;
provided, however, that after the date on which an amount of such
Collections equal to the Note Principal Balance has been deposited
into the Collection Account and allocated to the Series 2000-1
Noteholders, the excess over such amount shall be first, retained in
the Collection Account for application to reduce the O/C Amount to the
Required O/C Amount, second, if any other Principal Sharing Series in
Principal Sharing Group One is outstanding and in its amortization
period or accumulation period, retained in the Collection Account for
application, to the extent necessary, as Shared Principal Collections
on the related Distribution Date, and third paid to the holders of the
Transferor Certificates only if the Transferor Amount on such date is
greater than the Required Transferor Amount (after giving effect to
all Principal Receivables transferred to the Trust on such day) and
otherwise shall be deposited in the Special Funding Account for Pool
One.
Section 4.02. 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 Notes on
any Distribution Date shall be an amount equal to the product of (i) (A) a
fraction, the numerator of which is the actual number of days in the related
Interest Period and the denominator of which is 360, times (B) the Class A Note
Interest Rate in effect with respect to the related Interest Period and (ii) the
Class A Note Principal Balance as of the close of business on the last day of
the preceding Due Period.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class A Interest Shortfall"),
--------------------------
of (x) the Class A Monthly Interest for such Distribution Date over (y) the
aggregate amount of funds allocated and available to pay such Class A
15
Monthly Interest on such Distribution Date. If the Class A Interest Shortfall
with respect to any Distribution Date is greater than zero, on each subsequent
Distribution Date until such Class A Interest Shortfall is fully paid, an
additional amount ("Class A Additional Interest") equal to the product of (i)
---------------------------
(A) a fraction, the numerator of which is the actual number of days in the
related Interest Period and the denominator of which is 360, times (B) the Class
A Note Interest Rate and (ii) such Class A Interest Shortfall (or the portion
thereof which has not been paid to the Class A Noteholders) shall be payable as
provided herein with respect to the Class A Notes. Notwithstanding anything to
the contrary herein, Class A Additional Interest shall be payable or distributed
to the Class A Noteholders 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 Notes on
any Distribution Date shall be an amount equal to the product of (i) (A) a
fraction, the numerator of which is the actual number of days in the related
Interest Period and the denominator of which is 360, times (B) the Class B Note
Interest Rate in effect with respect to the related Interest Period and (ii) the
Class B Note Principal Balance as of the close of business on the last day of
the preceding Due Period.
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, on each subsequent
Distribution Date until such Class B Interest Shortfall is fully paid, an
additional amount ("Class B Additional Interest") equal to the product of (i)
---------------------------
(A) a fraction, the numerator of which is the actual number of days in the
related Interest Period and the denominator of which is 360, times (B) the Class
B Note Interest Rate and (ii) such Class B Interest Shortfall (or the portion
thereof which has not been paid to the Class B Noteholders) shall be payable as
provided herein with respect to the Class B Notes. Notwithstanding anything to
the contrary herein, Class B Additional Interest shall be payable or distributed
to the Class B Noteholders only to the extent permitted by applicable law.
Section 4.03. Determination of Monthly Principal.
----------------------------------
The amount of monthly principal distributable from the Collection Account
with respect to the Notes and the O/C Amount on each Distribution Date (the
"Monthly Principal"), beginning with the Distribution Date in the month
-----------------
following the month in which the Controlled Accumulation Period or, if earlier,
the Early Amortization Period, begins, shall be equal to the least of (a) the
Available Investor Principal Collections on deposit in the Collection Account
with respect to such Distribution Date, (b) for each Distribution Date with
respect to the Controlled Accumulation Period, the Controlled Deposit Amount and
the Excess O/C Amount for such Distribution Date and (c) the Adjusted Invested
Amount (after taking into account any adjustments to be made on such
Distribution Date pursuant to Sections 4.05 and 4.06).
Section 4.04. Application of Available Funds on Deposit in the Collection
-----------------------------------------------------------
Account. The Servicer shall apply, or shall cause the Indenture Trustee to
-------
apply by written instruction to the Indenture Trustee, on each Distribution
Date, Available Investor Finance Charge and Administrative Collections and
Excess Finance Charge and Administrative Collections allocable to Series 2000-1
in accordance with Section 4.07 and Available Investor Principal Collections on
deposit in the Collection Account with respect to such Distribution Date to make
the following distributions:
(a) On each Distribution Date, an amount equal to the Available
Investor Finance Charge and Administrative Collections and Excess Finance Charge
and Administrative Collections allocable to
16
Series 2000-1 in accordance with Section 4.07 with respect to such Distribution
Date will be distributed or deposited 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 Class A Noteholders on a prior
Distribution Date, plus the amount of any Class A Additional Interest for
such Distribution Date, plus the amount of any Class A Additional Interest
previously due but not distributed to Class A Noteholders on a prior
Distribution Date, shall be distributed to the Paying Agent for payment to
Class A Noteholders on such Distribution Date;
(ii) 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 Class B Noteholders on a prior
Distribution Date, plus the amount of any Class B Additional Interest for
such Distribution Date, plus the amount of any Class B Additional Interest
previously due but not distributed to Class B Noteholders on a prior
Distribution Date, shall be distributed to the Paying Agent for payment to
Class B Noteholders on the applicable Distribution Date;
(iii) (A) if HFC or an Affiliate of HFC is no longer the
Servicer, an amount equal to the Monthly Servicing Fee for such
Distribution Date, plus the amount of any Monthly Servicing Fee previously
due but not distributed to such Servicer on a prior Distribution Date,
shall be distributed to such Servicer and (B) if HFC or an Affiliate of HFC
is no longer the Administrator, an amount equal to the Monthly
Administration Fee for such Distribution Date, plus the amount of any
Monthly Administration Fee previously due but not distributed to such
Administrator on a prior Distribution Date, shall be distributed to such
Administrator;
(iv) an amount equal to the Investor Defaulted Amount for such
Distribution Date shall be treated as a portion of Available Investor
Principal Collections for such Distribution Date;
(v) an amount equal to the sum of the aggregate amount of
Investor Charge-offs and the amount of Subordinated Principal Collections
which have not been previously reimbursed shall be treated as a portion of
Available Investor Principal Collections for such Distribution Date;
(vi) upon the occurrence of an Event of Default with respect
to Series 2000-1 and acceleration of the maturity of the Series 2000-1
Notes pursuant to Section 5.03 of the Indenture, the balance, if any, up to
the outstanding Note Principal Balance shall be treated as a portion of
Available Investor Principal Collections for such Distribution Date for
distribution to the Series 2000-1 Noteholders;
(vii) if HFC or an Affiliate of HFC is the Servicer, an amount
equal to the Monthly Servicing Fee for such Distribution Date that has not
been paid to the Servicer and any Monthly Servicing Fee due but not paid to
the Servicer on a prior Distribution Date shall be paid to the Servicer
(unless such amount has been netted against deposits to the Collection
Account in accordance with Section 8.04 of the Indenture);
(viii) if HFC or an Affiliate of HFC is the Administrator, an
amount equal to the Monthly Administration Fee for such Distribution Date
and any Monthly Administration Fee due but not paid to the Administrator on
a prior Distribution Date shall be paid to the Administrator (unless such
amount has been netted against deposits to the Collection Account in
accordance with Section 8.04 of the Indenture);
17
(ix) on each Distribution Date from and after the Reserve
Account Funding Date, but prior to the date on which the Reserve Account
terminates as described in Section 4.11(f), an amount equal to the excess,
if any, of the Required Reserve Account Amount over the Available Reserve
Account Amount shall be deposited into the Reserve Account; and
(x) the balance, if any, will constitute a portion of Excess
Finance Charge and Administrative Collections for such Distribution Date
and will be available for allocation to other Series in Excess Finance
Charge Sharing Group One or to the Transferor, as set forth in Section
8.08C of the Indenture.
(b) On each Distribution Date with respect to the Revolving Period,
an amount equal to the Available Investor Principal Collections deposited in the
Collection Account for the related Due Period shall be distributed in the
following order of priority:
(i) an amount equal to the excess, if any, of the O/C Amount
over the Required O/C Amount shall be paid to the Transferor, for reduction
of the O/C Amount, to the extent that the Transferor Amount exceeds zero;
and
(ii) the balance of such Available Investor Principal
Collections shall be treated as Shared Principal Collections with respect
to Principal Sharing Group One and applied in accordance with Section 8.05
of the Indenture.
(c) On each Distribution Date with respect to the Controlled
Accumulation Period or the Early Amortization Period, an amount equal to the
Available Investor Principal Collections deposited in the Collection Account for
the related Due Period shall be distributed or deposited in the following order
of priority:
(i) during the Controlled Accumulation Period and prior to
the payment in full of the Class A Notes, the Class B Notes and the O/C
Amount an amount equal to the Monthly Principal for such Distribution Date
shall be first, deposited into the Principal Funding Account in an amount
not to exceed the Controlled Deposit Amount and second, an amount not to
exceed the Excess O/C Amount shall be distributed to the O/C Holder for
reduction of the O/C Amount;
(ii) during the Early Amortization Period, an amount equal to
the Monthly Principal for such Distribution Date shall be distributed to
the Paying Agent for payment to the Class A Noteholders on such
Distribution Date and on each subsequent Distribution Date until the Class
A Note Principal Balance has been paid in full;
(iii) after giving effect to the distribution referred to in
clause (ii) above, during the Early Amortization Period, an amount equal to
the Monthly Principal remaining, if any, shall be distributed to the Paying
Agent for payment to the Class B Noteholders on such Distribution Date and
on each subsequent Distribution Date until the Class B Note Principal
Balance has been paid in full;
(iv) after the Class B Note Principal Balance has been reduced
to zero, during the Early Amortization Period, an amount equal to the O/C
Amount remaining, if any, shall be distributed to the O/C Holder, for
reduction of the O/C Amount, on such Distribution Date and on each
subsequent Distribution Date until the O/C Amount has been paid in full;
and
18
(v) the balance of such Available Investor Principal
Collections shall be treated as Shared Principal Collections with respect
to Principal Sharing Group One and applied in accordance with Section 8.05
of the Indenture.
(d) On the earlier to occur of (i) the first Distribution Date with
respect to the Early Amortization Period and (ii) the Expected Principal Payment
Date, the Indenture Trustee, acting in accordance with instructions from the
Servicer, shall withdraw from the Principal Funding Account and distribute to
the Paying Agent for payment first, to the Class A Noteholders up to the Class
A Note Principal Balance and second, to the Class B Noteholders up to the Class
B Note Principal Balance, the amounts deposited into the Principal Funding
Account pursuant to subsection 4.04(c)(i).
(e) The Controlled Accumulation Period is scheduled to commence at
the close of business on August 31, 2004; provided, however, that, if the
Accumulation Period Length (determined as described below) is less than 14 Due
Periods, the date on which the Controlled Accumulation Period actually commences
will be delayed to the first Business Day of the Due Period that is the number
of whole Due Periods prior to the Expected Principal Payment Date at least equal
to the Accumulation Period Length and, as a result, the number of Due Periods in
the Controlled Accumulation Period will at least equal the Accumulation Period
Length. On the Determination Date immediately preceding the October 2004
Distribution Date, and each Determination Date thereafter until the Controlled
Accumulation Period begins, the Servicer will determine the "Accumulation Period
-------------------
Length" which will equal the number of whole Due Periods such that the sum of
------
the Accumulation Period Factors for each Due Period during such period will be
equal to or greater than the Required Accumulation Factor Number; provided,
however, that the Accumulation Period Length will not be determined to be less
than one Due Period; provided further, however, that the determination of the
Accumulation Period Length may be changed at any time if an Officer's
Certificate is delivered indicating that such action will not result in an
Adverse Effect.
Section 4.05 Investor Charge-offs. On each Determination Date, the
--------------------
Servicer shall calculate the Investor Defaulted Amount, if any, for the related
Distribution Date. If, on any Distribution Date, the Investor Defaulted Amount
for the related Due Period exceeds the amount available therefor pursuant to
Section 4.04(a)(iv) with respect to such Due Period, the Invested Amount will be
reduced by the amount of such excess, but not by more than the Investor
Defaulted Amount for such Distribution Date (such reduction, an "Investor
--------
Charge-off").
----------
Section 4.06. Subordinated Principal Collections. On each Distribution
----------------------------------
Date, the Servicer shall apply, or shall cause the Indenture Trustee to withdraw
from the Collection Account and apply, Subordinated Principal Collections with
respect to such Distribution Date, in an amount equal to the lesser of the (a)
Investor Percentage of all Collections of Principal Receivables received during
the preceding Due Period and (b) the Monthly Subordination Amount for the
preceding Due Period in accordance with the priority set forth in clauses (i)
through (iii) of Section 4.04(a). On each Distribution Date, the Invested
Amount shall be reduced by the amount of Subordinated Principal Collections for
such Distribution Date.
Section 4.07. Excess Finance Charge and Administrative Collections.
----------------------------------------------------
Subject to Section 8.08C of the Indenture, Excess Finance Charge and
Administrative Collections with respect to the Excess Finance Charge Sharing
Series in Excess Finance Charge Sharing Group One for any Distribution Date will
be allocated to Series 2000-1 in an amount equal to the product of (a) the
aggregate amount of Excess Finance Charge and Administrative Collections with
respect to all the Excess Finance Charge Sharing Series in Excess Finance Charge
Sharing Group One for such Distribution Date and (b) a fraction, the numerator
of which is the Finance Charge Shortfall for Series 2000-1 for such Distribution
Date and the denominator of which is the aggregate amount of Finance Charge
Shortfalls for all the Excess Finance
19
Charge Sharing Series in Excess Finance Charge Sharing Group One for such
Distribution Date. The "Finance Charge Shortfall" for Series 2000-1 for any
------------------------
Distribution Date will be equal to the excess, if any, of (a) the full amount
required to be paid, without duplication, pursuant to subsections 4.04(a)(i)
through (ix) on such Distribution Date over (b) the Available Investor Finance
Charge and Administrative Collections with respect to such Distribution Date.
Section 4.08. Shared Principal Collections.
----------------------------
Subject to Section 8.05 of the Indenture, Shared Principal Collections
with respect to the Series in Principal Sharing Group One for any Distribution
Date will be allocated to Series 2000-1 in an amount equal to the product of (a)
the aggregate amount of Shared Principal Collections with respect to all
Principal Sharing Series in Principal Sharing Group One for such Distribution
Date and (b) a fraction, the numerator of which is the Series 2000-1 Principal
Shortfall for such Distribution Date and the denominator of which is the
aggregate amount of Principal Shortfalls for all the Series which are Principal
Sharing Series in Principal Sharing Group One for such Distribution Date. The
"Series 2000-1 Principal Shortfall" will be equal to (a) for any Distribution
---------------------------------
Date with respect to the Revolving Period, zero, (b) for any Distribution Date
with respect to the Controlled Accumulation Period, the excess, if any, of the
Controlled Deposit Amount and the Excess O/C Amount with respect to such
Distribution Date over the amount of Available Investor Principal Collections
for 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 Adjusted Invested Amount
over the amount of Available Investor Principal Collections for such
Distribution Date (excluding any portion thereof attributable to Shared
Principal Collections).
Section 4.09. [Reserved].
--------
Section 4.10. Principal Funding Account.
-------------------------
(a) The Indenture Trustee shall establish and maintain with an
Eligible Institution, which may be the Indenture Trustee, in the name of the
Trust, on behalf of the Trust, for the benefit of the Series 2000-1 Noteholders,
a segregated trust account with the corporate trust department of such Eligible
Institution (the "Principal Funding Account"), bearing a designation clearly
-------------------------
indicating that the funds deposited therein are held for the benefit of the
Series 2000-1 Noteholders. The Indenture 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 Indenture Trustee for the benefit of
the Series 2000-1 Noteholders. If at any time the institution holding the
Principal Funding Account ceases to be an Eligible Institution, the Transferor
shall notify the Indenture Trustee, and the Indenture Trustee upon being
notified (or the Servicer on its behalf) shall, within 10 Business Days, (or
such longer period as to which the Rating Agency has consented) establish a new
Principal Funding Account meeting the conditions specified above with an
Eligible Institution, and shall transfer any cash or any investments to such new
Principal Funding Account. The Indenture Trustee, at the direction of the
Servicer, shall (i) make withdrawals from the Principal Funding Account from
time to time, in the amounts and for the purposes set forth in this Indenture
Supplement, and (ii) on each Distribution Date (from and after the commencement
of the Controlled Accumulation Period) prior to the termination of the Principal
Funding Account, make deposits into the Principal Funding Account in the amounts
specified in, and otherwise in accordance with, subsection 4.04(c)(i).
(b) Funds on deposit in the Principal Funding Account shall be
invested at the direction of the Servicer by the Indenture Trustee in Eligible
Investments. Funds on deposit in the Principal Funding Account on any
Distribution Date, after giving effect to any withdrawals from the Principal
Funding Account on such Distribution Date, shall be invested in such investments
that will
20
mature so that such funds will be available for withdrawal on or prior to the
following Distribution Date. The Indenture Trustee shall:
(i) hold each Eligible Investment that constitutes
investment property through a Securities Intermediary, which Securities
Intermediary shall agree with the Indenture Trustee that (A) such
investment property at all times shall be credited to a securities account
of the Indenture Trustee, (B) all property credited to such securities
account shall be treated as a financial asset, (C) such Securities
Intermediary shall treat the Indenture Trustee as entitled to exercise the
rights that comprise each financial asset credited to such securities
account, (D) such Securities Intermediary shall comply with entitlement
orders originated by the Indenture Trustee without the further consent of
any other person or entity, (E) such Securities Intermediary shall not
agree with any person or entity other than the Indenture Trustee to comply
with entitlement orders originated by any person or entity other than the
Indenture Trustee, (F) such securities account and all property credited
thereto shall not be subject to any lien, security interest, right of set-
off, or encumbrance in favor of such Securities Intermediary or anyone
claiming through such Securities Intermediary (other than the Indenture
Trustee), and (G) such agreement between such Securities Intermediary and
the Indenture Trustee shall be governed by the laws of the State of New
York; and
(ii) maintain possession of each other Eligible Investment
not described in clause (i) above;
provided, that no Eligible Investment shall be disposed of prior to its maturity
date. Terms used in clause (i) above that are defined in the New York UCC and
not otherwise defined herein shall have the meaning set forth in the New York
UCC.
On each Distribution Date with respect to the Controlled Accumulation
Period and on the first Distribution Date with respect to the Early Amortization
Period, the Indenture Trustee, acting at the Servicer's direction given on or
before such Distribution Date, shall transfer from the Principal Funding Account
to the Collection Account the Principal Funding Investment Proceeds on deposit
in the Principal Funding Account for application as Available Investor Finance
Charge and Administrative Collections for such Distribution Date.
Principal Funding Investment Proceeds (including reinvested interest)
shall not be considered part of the amounts on deposit in the Principal Funding
Account for purposes of this Indenture Supplement.
Section 4.11. Reserve Account.
---------------
(a) The Indenture Trustee shall establish and maintain with an
Eligible Institution, which may be the Indenture Trustee in the name of the
Trust, on behalf of the Trust, for the benefit of the Series 2000-1 Noteholders,
a segregated trust account with the corporate trust department of such Eligible
Institution (the "Reserve Account"), bearing a designation clearly indicating
---------------
that the funds deposited therein are held for the benefit of the Series 2000-1
Noteholders. The Indenture 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 Indenture Trustee for the benefit of the Series 2000-1
Noteholders. If at any time the institution holding the Reserve Account ceases
to be an Eligible Institution, the Transferor shall notify the Indenture
Trustee, and the Indenture Trustee upon being notified (or the Servicer on its
behalf) shall, within 10 Business Days (or such longer period as to which the
Rating Agency has consented), establish a new Reserve Account meeting the
conditions specified above with an Eligible Institution, and shall transfer any
cash or any
21
investments to such new Reserve Account. The Indenture Trustee, at the direction
of the Servicer, shall (i) make withdrawals from the Reserve Account from time
to time in an amount up to the Available Reserve Account Amount at such time,
for the purposes set forth in this Indenture Supplement, and (ii) on each
Distribution Date (from and after the Reserve Account Funding Date) prior to
termination of the Reserve Account, make a deposit into the Reserve Account in
the amount specified in, and otherwise in accordance with, subsection
4.04(a)(ix).
(b) Funds on deposit in the Reserve Account shall be invested at the
direction of the Servicer by the Indenture Trustee in Eligible Investments.
Funds on deposit in the Reserve Account on any Distribution Date, after giving
effect to any withdrawals from the Reserve Account on such Distribution Date,
shall be invested in such investments that will mature so that such funds will
be available for withdrawal on or prior to the following Distribution Date. The
Indenture Trustee shall:
(i) hold each Eligible Investment that constitutes investment
property through a Securities Intermediary, which Securities Intermediary
shall agree with the Indenture Trustee that (A) such investment property at
all times shall be credited to a securities account of the Indenture
Trustee, (B) all property credited to such securities account shall be
treated as a financial asset, (C) such Securities Intermediary shall treat
the Indenture Trustee as entitled to exercise the rights that comprise each
financial asset credited to such securities account, (D) such Securities
Intermediary shall comply with entitlement orders originated by the
Indenture Trustee without the further consent of any other person or
entity, (E) such Securities Intermediary shall not agree with any person or
entity other than the Indenture Trustee to comply with entitlement orders
originated by any person or entity other than the Indenture Trustee, (F)
such securities account and all property credited thereto shall not be
subject to any lien, security interest, right of set-off, or encumbrance in
favor of such Securities Intermediary or anyone claiming through such
Securities Intermediary (other than the Indenture Trustee), and (G) such
agreement between such Securities Intermediary and the Indenture Trustee
shall be governed by the laws of the State of New York; and
(ii) maintain possession of each other Eligible Investment not
described in clause (i) above;
provided, that no Eligible Investment shall be disposed of prior to its maturity
date. Terms used in clause (i) above that are defined in the New York UCC and
not otherwise defined herein shall have the meaning set forth in the New York
UCC.
On each Distribution Date, all interest and earnings (net of losses
and investment expenses) accrued since the preceding Distribution Date on funds
on deposit in the Reserve Account shall be retained in the Reserve Account to
the extent that the Available Reserve Account Amount is less than the Required
Reserve Account Amount, and the balance, if any, shall be deposited into the
Collection Account and included in Available Investor Finance Charge and
Administrative Collections for such Distribution Date. For purposes of
determining the availability of funds or the balance in the Reserve Account for
any reason under this Indenture Supplement, except as otherwise provided in the
preceding sentence, investment earnings on such funds shall be deemed not to be
available or on deposit.
(c) On or before each Distribution Date with respect to the Controlled
Accumulation Period and on or before the first Distribution Date with respect to
the Early Amortization Period, the Servicer shall calculate the Reserve Draw
Amount; provided, however, that such amount will be reduced to the extent that
funds otherwise would be available for deposit in the Reserve Account under
Section 4.04(a)(ix) with respect to such Distribution Date.
22
(d) In the event that for any Distribution Date the Reserve Draw
Amount is greater than zero, the Reserve Draw Amount, up to the Available
Reserve Account Amount, shall be withdrawn from the Reserve Account on such
Distribution Date by the Indenture Trustee (acting in accordance with the
instructions of the Servicer) and deposited into the Collection Account for
application as Available Investor Finance Charge and Administrative Collections
for such Distribution Date.
(e) In the event that the Reserve Account Surplus on any
Distribution Date, after giving effect to all deposits to and withdrawals from
the Reserve Account with respect to such Distribution Date, is greater than
zero, the Indenture Trustee, acting in accordance with the instructions of the
Servicer, shall withdraw from the Reserve Account and pay to the Owner Trustee
for distribution in accordance with the Trust Agreement an amount equal to such
Reserve Account Surplus.
(f) Upon the earliest to occur of (i) the termination of the
Trust pursuant to Article VIII of the Trust Agreement, (ii) if the Controlled
Accumulation Period has not commenced, the first Distribution Date relating to
the Early Amortization Period and (iii) if the Controlled Accumulation Period
has commenced, the earlier of the first Distribution Date with respect to the
Early Amortization Period and the Expected Principal Payment Date, the Indenture
Trustee, acting in accordance with the instructions of the Servicer, after the
prior payment of all amounts owing to the Series 2000-1 Noteholders that are
payable from the Reserve Account as provided herein, shall withdraw from the
Reserve Account and pay first, to the O/C Holder for reduction of the O/C Amount
until reduced to zero and second, to the Transferor, all amounts, if any, on
deposit in the Reserve Account and the Reserve Account shall be deemed to have
terminated for purposes of this Indenture Supplement; provided, however, that
following the occurrence of an Event of Default with respect to Series 2000-1
and acceleration of the maturity of the Series 2000-1 Notes pursuant to Section
5.03 of the Indenture, the Servicer shall withdraw from the Reserve Account all
amounts on deposit therein and the Indenture Trustee or the Servicer shall
deposit such amounts in the Collection Account for distribution to the Series
2000-1 Noteholders in accordance with Section 5.02 to fund any shortfalls in
amounts owed to such Series 2000-1 Noteholders.
Section 4.12. Determination of LIBOR.
----------------------
(a) On each LIBOR Determination Date, the Indenture Trustee
shall determine LIBOR on the basis of the rate for deposits in United States
dollars for a one-month period which appears on Telerate Page 3750 as of 11:00
a.m., London time, on such date. If such rate does not appear on Telerate Page
3750, the rate for that LIBOR Determination Date shall be determined on the
basis of the rates at which deposits in United States dollars are offered by the
Reference Banks at approximately 11:00 a.m., London time, on that day to prime
banks in the London interbank market for a one-month period. The Indenture
Trustee shall request the principal London office of each of the Reference Banks
to provide a quotation of its rate. If at least two such quotations are
provided, the rate for that LIBOR Determination Date shall be the arithmetic
mean of the quotations. If fewer than two quotations are provided as requested,
the rate for that LIBOR Determination Date will be the arithmetic mean of the
rates quoted by major banks in New York City, selected by the Servicer, at
approximately 11:00 a.m., New York City time, on that day for loans in United
States dollars to leading European banks for a one-month period.
(b) The Class A Note Interest Rate and Class B Note Interest
Rate applicable to the then current and the immediately preceding Interest
Periods may be obtained by telephoning the Indenture Trustee at its Corporate
Trust Office or such other address and telephone number as shall be designated
by the Indenture Trustee for such purpose by prior written notice by the
Indenture Trustee to each Series 2000-1 Noteholder from time to time.
23
(c) On each LIBOR Determination Date, the Indenture Trustee shall send
to the Servicer and the Administrator by facsimile transmission, notification of
LIBOR for the following Interest Period.
Section 4.13. Investment Instructions. Any investment instructions
-----------------------
required to be given to the Indenture Trustee pursuant to the terms hereof must
be given to the Indenture Trustee no later than 12:00 p.m. (New York City time)
on the date such investment is to be made. In the event the Indenture Trustee
receives such investment instruction later than such time, the Indenture Trustee
may, but shall have no obligation to, make such investment. In the event the
Indenture Trustee is unable to make an investment required in an investment
instruction received by the Indenture Trustee after 12:00 p.m. (New York City
time) on such day, such investment shall be made by the Indenture Trustee on the
next succeeding Business Day. In no event shall the Indenture Trustee be liable
for any investment not made pursuant to investment instructions received after
12:00 p.m. (New York City time) on the day such investment is requested to be
made.
Section 4.14. Exchange of Notes for Transferor Amount. If the Transferor
---------------------------------------
purchases Series 2000-1 Notes from Series 2000-1 Noteholders, the Transferor
may, on any Distribution Date (after giving effect to all required allocations
and payments on such Distribution Date), cancel such purchased Series 2000-1
Notes by delivering a written request to the Indenture Trustee to do so;
provided, however, that the Transferor may only cancel Class A and Class B Notes
it has purchased if the Rating Agency Condition has been satisfied and a credit
enhancement deficiency will not result. The Transferor may in connection with
such cancellation reduce a portion of the O/C Amount and may (but shall not be
required to) cancel such portion of the O/C Amount, provided that the reduction
in the O/C Amount resulting from such cancellation may not result in the O/C
Amount being less than the Required O/C Amount. As a result of any cancellation
of Series 2000-1 Notes pursuant to this Section, (a) the Invested Amount shall
be reduced by (i) the aggregate principal amount of such purchased Series 2000-1
Notes and (ii) the reduction in the O/C Amount and (b) the Transferor Amount
shall be increased in an amount equal to such reduction in the Invested Amount.
[END OF ARTICLE IV]
24
ARTICLE V
DELIVERY OF SERIES 2000-1 NOTES;
DISTRIBUTIONS; REPORTS TO SERIES 2000-1 NOTEHOLDERS
Section 5.01. Delivery and Payment for the Series 2000-1 Notes.
------------------------------------------------
With respect to the Series 2000-1 Notes which are in certificated
form, the Issuer shall execute and the Indenture Trustee shall authenticate the
Series 2000-1 Notes in accordance with Section 2.03 of the Indenture. The
Indenture Trustee shall deliver those Series 2000-1 Notes to or upon the order
of the Trust when so authenticated.
Section 5.02. Distributions.
-------------
(a) On each Distribution Date, the Paying Agent shall distribute
to each Class A Noteholder of record on the related Record Date (other than as
provided in Section 11.02 of the Indenture) such Class A Noteholder's pro rata
share of the amounts held by the Paying Agent that are allocated and available
on such Distribution Date to pay interest on the Class A Notes pursuant to this
Indenture Supplement.
(b) On each Distribution Date, the Paying Agent shall distribute
to each Class A Noteholder of record on the related Record Date such Class A
Noteholder's pro rata share of the amounts held by the Paying Agent that are
allocated and available on such Distribution Date to pay principal of the Class
A Notes pursuant to this Indenture Supplement.
(c) On each Distribution Date, the Paying Agent shall distribute
to each Class B Noteholder of record on the related Record Date (other than as
provided in Section 11.02 of the Indenture) such Class B Noteholder's pro rata
share of the amounts held by the Paying Agent that are allocated and available
on such Distribution Date to pay interest on the Class B Notes pursuant to this
Indenture Supplement.
(d) On each Distribution Date, the Paying Agent shall distribute
to each Class B Noteholder of record on the related Record Date such Class B
Noteholder's pro rata share of the amounts held by the Paying Agent that are
allocated and available on such Distribution Date to pay principal of the Class
B Notes pursuant to this Indenture Supplement.
(e) On each Distribution Date, the Paying Agent shall distribute
to the O/C Holder, in immediately available funds, the amounts held by the
Paying Agent that are allocated and available on such Distribution Date to
reduce the O/C Amount pursuant to this Indenture Supplement.
(f) The distributions to be made pursuant to this Section 5.02
are subject to the provisions of Sections 2.06, 6.01 and 7.01 of the Transfer
and Servicing Agreement, Section 11.02 of the Indenture and Section 7.01 of this
Indenture Supplement.
(g) Except as provided in Section 11.02 of the Indenture with
respect to a final distribution, distributions to Series 2000-1 Noteholders
hereunder shall be made by (i) check mailed to each Series 2000-1 Noteholder (at
such Noteholder's address as it appears in the Note Register), except that with
respect to any Series 2000-1 Notes registered in the name of the nominee of a
Clearing Agency,
25
such distribution shall be made in immediately available funds and (ii) without
presentation or surrender of any Series 2000-1 Note or the making of any
notation thereon.
Section 5.03. Reports and Statements to Series 2000-1 Noteholders .
---------------------------------------------------
(a) On each Distribution Date, the Paying Agent, on behalf of
the Indenture Trustee, shall, provided the Servicer has delivered a statement
substantially in the form of Exhibit C, forward to each Series 2000-1 Noteholder
---------
such statement substantially in the form of Exhibit C prepared by the Servicer.
---------
(b) Not later than the second Business Day preceding each
Distribution Date, the Servicer shall deliver to the Owner Trustee, the
Indenture Trustee, the Paying Agent and each Rating Agency (i) a statement
substantially in the form of Exhibit C prepared by the Servicer and (ii) a
---------
certificate of an Authorized Officer substantially in the form of Exhibit D;
---------
provided that the Servicer may amend the form of Exhibit C and Exhibit D, from
--------- ---------
time to time.
(c) A copy of each statement or certificate provided pursuant to
paragraph (a) or (b) may be obtained by any Series 2000-1 Noteholder by a
request in writing to the Servicer.
(d) On or before January 31 of each calendar year, beginning
with calendar year 2001, the Paying Agent, on behalf of the Indenture 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 Noteholder, a statement prepared by
the Servicer containing the information which is required to be contained in the
statement to Series 2000-1 Noteholders, as set forth in paragraph (a) above,
aggregated for such calendar year together with other information as is required
to be provided by an issuer of indebtedness under the Code. Such obligation of
the Paying Agent shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Paying Agent
pursuant to any requirements of the Code as from time to time in effect.
(e) On or before March 31 of each calendar year, beginning with
March 31, 2001, the Paying Agent, on behalf of the Indenture Trustee, shall
forward to each Series 2000-1 Noteholder copies of each certificate and report
furnished to the Indenture Trustee pursuant to Section 3.05 or 3.06 of the
Transfer and Servicing Agreement.
[END OF ARTICLE V]
26
ARTICLE VI
SERIES 2000-1 AMORTIZATION EVENTS
Section 6.01. Series 2000-1 Amortization Events. If any one of the
---------------------------------
following events shall occur with respect to Series 2000-1:
(a) failure on the part of the Transferor (i) to make any
payment or deposit required by the terms of the Transfer and Servicing
Agreement, the Indenture or this Indenture Supplement on or before the date
occurring five Business Days after the date such payment or deposit is required
to be made therein or herein or (ii) duly to observe or perform any other
covenants or agreements of the Transferor set forth in the Transfer and
Servicing Agreement, the Indenture or this Indenture Supplement, which failure
has an Adverse Effect on the Series 2000-1 Noteholders and which continues
unremedied and continues to materially and adversely affect the interests of the
Series 2000-1 Noteholders 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 Indenture Trustee, or to the Transferor and
the Indenture Trustee by any Holder of the Series 2000-1 Notes;
(b) any representation or warranty made by the Transferor in the
Transfer and Servicing Agreement, or any information contained in a computer
file or microfiche list required to be delivered by the Transferor pursuant to
Section 2.01 or subsection 2.09(h) of the Transfer and Servicing Agreement shall
prove to have been incorrect in any material respect when made or when
delivered, which continues to be incorrect in any material respect for a period
of 60 days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Transferor by the Indenture
Trustee, or to the Transferor and the Indenture Trustee by any Holder of the
Series 2000-1 Notes and as a result of which an Adverse Effect occurs with
respect to the Series 2000-1 Noteholders and such Adverse Effect continues for
the designated period; provided, however, that a Series 2000-1 Amortization
Event pursuant to this subsection 6.01(b) shall not be deemed to have occurred
hereunder if the Transferor has accepted reassignment of the related Receivable,
or all of such Receivables, if applicable, during such period in accordance with
the provisions of the Transfer and Servicing Agreement;
(c) a failure by the Transferor to convey Receivables in
Additional Accounts or Participation Interests to the Trust within five Business
Days after the day on which it is required to convey such Receivables or
Participation Interests pursuant to subsection 2.09(a) of the Transfer and
Servicing Agreement;
(d) any Servicer Default shall occur which has an Adverse Effect
on the Series 2000-1 Noteholders;
(e) the average Series Portfolio Yield for any three consecutive
Due Periods is reduced to a rate which is less than the average of the Base
Rates for such period;
(f) the Class A Note Principal Balance or the Class B Note
Principal Balance shall not be paid in full on the Expected Principal Payment
Date; or
(g) without limiting the foregoing, the occurrence of an Event
of Default with respect to Series 2000-1 and an acceleration of the maturity of
the Series 2000-1 Notes pursuant to Section 5.03 of the Indenture;
27
then, in the case of any event described in subparagraph (a), (b) or (d) after
the applicable grace period, if any, set forth in such subparagraphs, either the
Indenture Trustee or the Holders of Series 2000-1 Notes evidencing more than 50%
of the aggregate Outstanding Amount of Series 2000-1 Notes by notice then given
in writing to the Transferor and the Servicer (and to the Indenture Trustee if
given by the Series 2000-1 Noteholders) may declare that an amortization event
(a "Series 2000-1 Amortization Event") has occurred as of the date of such
--------------------------------
notice, and, in the case of any event described in subparagraph (c), (e), (f) or
(g), a Series 2000-1 Amortization Event shall occur without any notice or other
action on the part of the Indenture Trustee or the Series 2000-1 Noteholders
immediately upon the occurrence of such event.
[END OF ARTICLE VI]
28
ARTICLE VII
REDEMPTION OF SERIES 2000-1 NOTES; SERIES FINAL MATURITY; FINAL DISTRIBUTIONS
Section 7.01. Optional Redemption of Series 2000-1 Notes.
------------------------------------------
(a) On any day occurring on or after the date on which the Note
Principal Balance is reduced to 10% or less of the sum of the Class A Note
Initial Principal Balance and the Class B Note Initial Principal Balance the
Transferor shall have the option to redeem the Series 2000-1 Notes and the O/C
Amount, at a purchase price equal to (i) if such day is a Distribution Date, the
Reassignment Amount for such Distribution Date or (ii) if such day is not a
Distribution Date, the Reassignment Amount for the Distribution Date following
such day.
(b) The Transferor shall give the Servicer and the Indenture
Trustee at least 30 days prior written notice of the date on which the
Transferor intends to exercise such optional redemption. Not later than 1:00
p.m., New York City time, on such day the Transferor shall deposit into the
Principal Funding Account in immediately available funds the excess of the
Reassignment Amount (less the O/C Amount) over the amount, if any, on deposit in
the Principal Funding Account. The remaining Reassignment Amount shall be
distributed to the O/C Holder for reduction of the O/C Amount. Such redemption
option is subject to payment in full of the Reassignment Amount. Following such
deposit into the Principal Funding Account and such distribution to the O/C
Holder in accordance with the foregoing, the Invested Amount for Series 2000-1
shall be reduced to zero and the Series 2000-1 Noteholders shall have no further
interest in or claim against the Trust. The Reassignment Amount shall be
distributed as set forth in subsection 7.02(a).
Section 7.02. Series Final Maturity.
---------------------
(a) The amount to be paid by the Transferor with respect to
Series 2000-1 in connection with (i) a reassignment of Receivables to the
Transferor pursuant to Section 2.06 of the Transfer and Servicing Agreement or
(ii) an Optional Redemption of the Notes pursuant to Section 7.01, shall be the
Reassignment Amount for the first Distribution Date following the Due Period in
which the reassignment obligation arises under the Transfer and Servicing
Agreement. With respect to the Reassignment Amount deposited into the Collection
Account pursuant to Section 7.01 herein or Section 2.06 of the Transfer and
Servicing Agreement or the proceeds from any Foreclosure Remedy pursuant to
Section 5.05 of the Indenture, the Indenture Trustee shall, in accordance with
the written direction of the Servicer, not later than 1:00 p.m. New York City
time, on the related Distribution Date, make deposits or distributions of the
following amounts (in the priority set forth below and, in each case after
giving effect to any deposits and distributions otherwise to be made on such
date) in immediately available funds:
(i) (x) the Class A Note Principal Balance on such Distribution
Date will be distributed to the Paying Agent for payment to the Class A
Noteholders and (y) an amount equal to the sum of (A) Class A Monthly
Interest for such Distribution Date, (B) any Class A Monthly Interest
previously due but not distributed to the Class A Noteholders on a prior
Distribution Date and (C) the amount of Class A Additional Interest, if
any, for such Distribution Date and any Class A Additional Interest
previously due but not distributed to the Class A Noteholders on any prior
Distribution Date, will be distributed to the Paying Agent for payment to
the Class A Noteholders;
29
(ii) (x) the Class B Note Principal Balance on such Distribution
Date will be distributed to the Paying Agent for payment to the Class B
Noteholders and (y) an amount equal to the sum of (A) Class B Monthly
Interest for such Distribution Date, (B) any Class B Monthly Interest
previously due but not distributed to the Class B Noteholders on a prior
Distribution Date and (C) the amount of Class B Additional Interest, if
any, for such Distribution Date and any Class B Additional Interest
previously due but not distributed to the Class B Noteholders on any prior
Distribution Date, will be distributed to the Paying Agent for payment to
the Class B Noteholders; and
(iii) the O/C Amount on such Distribution Date will be distributed
to the Paying Agent for payment to the O/C Holder.
(b) Notwithstanding anything to the contrary in this Indenture
Supplement, the Indenture or the Transfer and Servicing Agreement, all amounts
distributed to the Paying Agent pursuant to subsection 7.02(a) for payment to
the Series 2000-1 Noteholders shall be deemed distributed in full to the Series
2000-1 Noteholders on the date on which such funds are distributed to the Paying
Agent pursuant to this Section and shall be deemed to be a final distribution
pursuant to Section 11.02 of the Indenture.
[END OF ARTICLE VII]
30
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. Ratification of Indenture. As supplemented by this
-------------------------
Indenture Supplement, the Indenture is in all respects ratified and confirmed
and the Indenture as so supplemented by this Indenture Supplement shall be read,
taken and construed as one and the same instrument.
Section 8.02. Counterparts. This Indenture Supplement may be executed in
------------
two or more counterparts, and by different parties on separate counterparts,
each of which shall be an original, but all of which shall constitute one and
the same instrument.
Section 8.03. Governing Law. THIS INDENTURE 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 8.04. Transfer of the O/C Amount. Notwithstanding anything to the
--------------------------
contrary in this Indenture Supplement, no interest in the O/C Amount may be
directed or indirectly sold, assigned, pledged, hypothecated, exchanged,
participated or otherwise transferred (other than in connection with the
transfer upon initial issuance to the Indenture Trustee as security for the
Series 2000-1 Notes) except to a Person who is a "United States person" for
United States federal income tax purposes and only upon the prior delivery of a
Tax Opinion to the Indenture Trustee, and any such transfer in violation of
these requirements shall be null and void ab initio.
[END OF ARTICLE VIII]
[SIGNATURE PAGE FOLLOWS]
31
IN WITNESS WHEREOF, the undersigned have caused this Indenture
Supplement to be duly executed and delivered by their respective duly authorized
officers on the day and year first above written.
WILMINGTON TRUST COMPANY,
not in its individual capacity, but solely
as Owner Trustee on behalf of the
HOUSEHOLD CREDIT CARD MASTER
NOTE TRUST I
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Senior Financial Services Officer
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Indenture Trustee
and Securities Intermediary
By: /s/ Xxxxxxx Xxxxx
-------------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Assistant Vice President
32
EXHIBIT A-1
-----------
REGISTERED $__________
No. R-___ CUSIP NO. __________
Unless this Class A Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to Household
---
Credit Card Master Note Trust I or its agent for registration of transfer,
exchange or payment, and any note issued is registered in the name of [.] or in
such other name as is requested by an authorized representative of DTC (and any
payment is made to [.] 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, [.], has an interest herein.
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I, SERIES 2000-1
FORM OF CLASS A SERIES 2000-1 FLOATING RATE ASSET BACKED NOTE
Wilmington Trust Company, acting not in its individual capacity, but solely
as owner trustee of Household Credit Card Master Note Trust I (herein referred
to as the "Issuer" or the "Trust"), a Delaware common law trust governed by an
------ -----
Amended and Restated Trust Agreement dated as of November 16, 2000, for value
received, hereby promises to pay to [.], or registered assigns, subject to the
following provisions, the principal sum of [.] DOLLARS, on the Series 2000-1
Final Maturity Date, except as otherwise provided below or in the Indenture. The
Issuer will pay interest on the unpaid principal amount of this Note at the
Class A Note Interest Rate on each Distribution Date until the principal amount
of this Note is paid in full. Interest on this Note will accrue for each
Distribution Date from and including the most recent Distribution Date on which
interest has been paid to but excluding such Distribution Date or, for the
initial Distribution Date, from and including the Closing Date to but excluding
such Distribution Date. Interest will be computed on the basis of a 360-day year
and the actual number of days elapsed. Principal of this Note shall be paid in
the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Indenture Trustee, by manual signature, this Note shall not be
entitled to any benefit under the Indenture or the Indenture Supplement referred
to on the reverse hereof, or be valid for any purpose.
A-1-1
IN WITNESS WHEREOF, the Issuer has caused this Class A Note to be duly
executed.
WILMINGTON TRUST COMPANY,
not in its individual capacity, but solely
as Owner Trustee on behalf of the
HOUSEHOLD CREDIT CARD MASTER
NOTE TRUST I
By:
---------------------------------------
Name:
Title:
Dated: [.], 2000
A-1-2
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A Notes described in the within-mentioned Indenture.
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
as Indenture Trustee
By:
-----------------------------------------
Authorized Signatory
A-1-3
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I, SERIES 2000-1
CLASS A SERIES 2000-1 FLOATING RATE ASSET BACKED NOTE
Summary of Terms and Conditions
This Class A Note is one of a duly authorized issue of Notes of the
Issuer, designated as Household Credit Card Master Note Trust I, Series 2000-1
(the "Notes"), issued under an Amended and Restated Master Indenture dated as of
-----
November 16, 2000 (the "Master Indenture"), between the Issuer and Xxxxx Fargo
----------------
Bank Minnesota, National Association, as indenture trustee (the "Indenture
---------
Trustee"), as supplemented by the Indenture Supplement dated as of November 16,
-------
2000 (the "Indenture Supplement"), and representing the right to receive certain
--------------------
payments from the Issuer. The term "Indenture," unless the context otherwise
requires, refers to the Master Indenture as supplemented by the Indenture
Supplement. The Notes are subject to all of the terms of the Indenture. All
terms used in this Note that are defined in the Indenture shall have the
meanings assigned to them in or pursuant to the Indenture. In the event of any
conflict or inconsistency between the Indenture and this Note, the Indenture
shall control.
The Noteholder, by its acceptance of this Note, agrees that it will
look solely to the property of the Trust allocated to the payment of this Note
for payment hereunder and that the Indenture Trustee is not liable to the
Noteholders for any amount payable under the Note or the Indenture or, except as
expressly provided in the Indenture, subject to any liability under the
Indenture.
This Note does not purport to summarize the Indenture and reference is
made to the Indenture for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Indenture Trustee.
The Class A Note Initial Principal Balance is $[]. The Class A Note
Principal Balance will be determined from time to time by the Indenture Trustee
in accordance with the Indenture.
Payments of principal of the Notes shall be payable in accordance with
the provisions of the Indenture.
Subject to the terms and conditions of the Indenture, the Transferor
may, from time to time, direct the Owner Trustee, on behalf of the Trust, to
issue one or more new Series of Notes.
On each Distribution Date, the Paying Agent shall distribute to each
Class A Noteholder of record on the related Record Date (except for the final
distribution in respect of this Class A Note) such Class A Noteholder's pro rata
share of the amounts held by the Paying Agent that are allocated and available
on such Distribution Date to pay interest and principal on the Class A Notes
pursuant to the Indenture Supplement. Except as provided in the Indenture with
respect to a final distribution, distributions to Series 2000-1 Noteholders
shall be made by (i) check mailed to each Series 2000-1 Noteholder (at such
Noteholder's address as it appears in the Note Register), except that with
respect to any Series 2000-1 Notes registered in the name of the nominee of a
Clearing Agency, such distribution shall be made in immediately available funds
and (ii) without presentation or surrender of any Series 2000-1 Note or the
making of any notation thereon. Final payment of this Class A Note will be made
only upon presentation and surrender of this Class A Note at the office or
agency specified in the notice of final distribution delivered by the Indenture
Trustee to the Series 2000-1 Noteholders in accordance with the Indenture.
A-1-4
On any day occurring on or after the date on which the outstanding
principal balance of the Series 2000-1 Notes is reduced to 10% or less of the
initial outstanding principal balance of the Series 2000-1 Notes, the Issuer
shall have the option to redeem the Series 2000-1 Notes, at a purchase price
equal to (i) if such day is a Distribution Date, the Reassignment Amount for
such Distribution Date or (ii) if such day is not a Distribution Date, the
Reassignment Amount for the Distribution Date following such day.
This Class A Note does not represent an obligation of, or an interest
in, the Transferor, Household Finance Corporation, Household Bank (Nevada), N.A.
or any Affiliate of any of them and is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other governmental agency or
instrumentality.
Each Noteholder, by accepting a Note, hereby covenants and agrees that
it will not at any time institute against the Issuer or the Transferor, or join
in instituting against the Issuer or the Transferor, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law.
Except as otherwise provided in the Indenture Supplement, the Class A
Notes are issuable only in minimum denominations of $1,000 and integral
multiples of $1,000. The transfer of this Class A Note shall be registered in
the Note Register upon surrender of this Class A Note for registration of
transfer at any office or agency maintained by the Transfer Agent and Registrar
accompanied by a written instrument of transfer, in a form satisfactory to the
Indenture Trustee or the Transfer Agent and Registrar, duly executed by the
Class A Noteholder or such Class A Noteholder's attorney, and duly authorized in
writing with such signature guaranteed, and thereupon one or more new Class A
Notes in any authorized denominations of like aggregate principal amount will be
issued to the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations
therein set forth, Class A Notes are exchangeable for new Class A Notes in any
authorized denominations and of like aggregate principal amount, upon surrender
of such Notes to be exchanged at the office or agency of the Transfer Agent and
Registrar. No service charge may be imposed for any such exchange but the
Issuer or Transfer Agent and Registrar may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
therewith.
The Issuer, the Transferor, the Indenture Trustee and any agent of the
Issuer, Transferor or the Indenture Trustee shall treat the person in whose name
this Class A Note is registered as the owner hereof for all purposes, and
neither the Issuer, the Transferor, the Indenture Trustee nor any agent of the
Issuer, Transferor or the Indenture Trustee shall be affected by notice to the
contrary.
THIS CLASS A NOTE 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.
A-1-5
ASSIGNMENT
Social Security or other identifying number of assignee________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _____________________________________ the within note and all
(name and address of assignee)
rights thereunder, and hereby irrevocably constitutes and appoints
____________________, attorney, to transfer said note on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: ____________ ______________________ 1/
-
Signature Guaranteed:
______________________
________________________
1/ NOTE: The signature to this assignment must correspond with the name of the
-
registered owner as it appears on the face of the within note in every
particular, without alteration, enlargement or any change whatsoever.
X-0-0
XXXXXXX X-0
-----------
REGISTERED $_________
No. R-__ CUSIP NO. __________
Unless this Class B Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to Household
---
Credit Card Master Note Trust I or its agent for registration of transfer,
exchange or payment, and any note issued is registered in the name [.] or in
such other name as is requested by an authorized representative of DTC (and any
payment is made to [.] 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, [.], has an interest herein.
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I, SERIES 2000-1
FORM OF CLASS B SERIES 2000-1 FLOATING RATE ASSET BACKED NOTE
Wilmington Trust Company, acting not in its individual capacity, but solely
as owner trustee of Household Credit Card Master Note Trust I (herein referred
to as the "Issuer" or the "Trust"), a Delaware common law trust governed by an
------ -----
Amended and Restated Trust Agreement dated as of November 16, 2000, for value
received, hereby promises to pay to [.], or registered assigns, subject to the
following provisions, the principal sum of [.] DOLLARS, on the Series 2000-1
Final Maturity Date, except as otherwise provided below or in the Indenture.
The Issuer will pay interest on the unpaid principal amount of this Note at the
Class B Note Interest Rate on each Distribution Date until the principal amount
of this Note is paid in full. Interest on this Note will accrue for each
Distribution Date from and including the most recent Distribution Date on which
interest has been paid to but excluding such Distribution Date or, for the
initial Distribution Date, from and including the Closing Date to but excluding
such Distribution Date. Interest will be computed on the basis of a 360-day
year and the actual number of days elapsed. Principal of this Note shall be
paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Indenture Trustee, by manual signature, this Note shall not be
entitled to any benefit under the Indenture or the Indenture Supplement referred
to on the reverse hereof, or be valid for any purpose.
A-2-1
IN WITNESS WHEREOF, the Issuer has caused this Class B Note to be duly
executed.
WILMINGTON TRUST COMPANY,
not in its individual capacity, but solely
as Owner Trustee on behalf of the
HOUSEHOLD CREDIT CARD MASTER
NOTE TRUST I
By:
--------------------------------------
Name:
Title:
Dated: [.], 2000
A-2-2
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B Notes described in the within-mentioned Indenture.
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
as Indenture Trustee
By: ____________________________
Authorized Signatory
A-2-3
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I, SERIES 2000-1
CLASS B SERIES 2000-1 FLOATING RATE ASSET BACKED NOTE
Summary of Terms and Conditions
This Class B Note is one of a duly authorized issue of Notes of the
Issuer, designated as Household Credit Card Master Note Trust I, Series 2000-1
(the "Notes"), issued under an Amended and Restated Master Indenture dated as of
-----
November 16, 2000 (the "Master Indenture"), between the Issuer and Xxxxx Fargo
----------------
Bank Minnesota, National Association, as indenture trustee (the "Indenture
---------
Trustee"), as supplemented by the Indenture Supplement dated as of November 16,
-------
2000 (the "Indenture Supplement"), and representing the right to receive certain
--------------------
payments from the Issuer. The term "Indenture," unless the context otherwise
requires, refers to the Master Indenture as supplemented by the Indenture
Supplement. The Notes are subject to all of the terms of the Indenture. All
terms used in this Note that are defined in the Indenture shall have the
meanings assigned to them in or pursuant to the Indenture. In the event of any
conflict or inconsistency between the Indenture and this Note, the Indenture
shall control.
The Noteholder, by its acceptance of this Note, agrees that it will
look solely to the property of the Trust allocated to the payment of this Note
for payment hereunder and that the Indenture Trustee is not liable to the
Noteholders for any amount payable under the Note or the Indenture or, except as
expressly provided in the Indenture, subject to any liability under the
Indenture.
This Note does not purport to summarize the Indenture and reference is
made to the Indenture for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Indenture Trustee.
The Class B Note Initial Principal Balance is $[.]. The Class B Note
Principal Balance will be determined from time to time by the Indenture Trustee
in accordance with the Indenture.
Payments of principal of the Notes shall be payable in accordance with
the provisions of the Indenture.
Subject to the terms and conditions of the Indenture, the Transferor
may, from time to time, direct the Owner Trustee, on behalf of the Trust, to
issue one or more new Series of Notes.
On each Distribution Date, the Paying Agent shall distribute to each
Class B Noteholder of record on the related Record Date (except for the final
distribution in respect of this Class B Note) such Class B Noteholder's pro rata
share of the amounts held by the Paying Agent that are allocated and available
on such Distribution Date to pay interest and principal on the Class B Notes
pursuant to the Indenture Supplement. Except as provided in the Indenture with
respect to a final distribution, distributions to Series 2000-1 Noteholders
shall be made by (i) check mailed to each Series 2000-1 Noteholder (at such
Noteholder's address as it appears in the Note Register), except that with
respect to any Series 2000-1 Notes registered in the name of the nominee of a
Clearing Agency, such distribution shall be made in immediately available funds
and (ii) without presentation or surrender of any Series 2000-1 Note or the
making of any notation thereon. Final payment of this Class B Note will be made
only upon presentation and surrender of this Class B Note at the office or
agency specified in the notice of final distribution delivered by the Indenture
Trustee to the Series 2000-1 Noteholders in accordance with the Indenture.
A-2-4
On any day occurring on or after the date on which the outstanding
principal balance of the Series 2000-1 Notes is reduced to 10% or less of the
initial outstanding principal balance of the Series 2000-1 Notes, the Issuer
shall have the option to redeem the Series 2000-1 Notes, at a purchase price
equal to (i) if such day is a Distribution Date, the Reassignment Amount for
such Distribution Date or (ii) if such day is not a Distribution Date, the
Reassignment Amount for the Distribution Date following such day.
This Class B Note does not represent an obligation of, or an interest
in, the Transferor, Household Finance Corporation, Household Bank (Nevada), N.A.
or any Affiliate of any of them and is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other governmental agency or
instrumentality.
Each Noteholder, by accepting a Note, hereby covenants and agrees that
it will not at any time institute against the Issuer or the Transferor, or join
in instituting against the Issuer or the Transferor, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law.
Except as otherwise provided in the Indenture Supplement, the Class B
Notes are issuable only in minimum denominations of $1,000 and integral
multiples of $1,000. The transfer of this Class B Note shall be registered in
the Note Register upon surrender of this Class B Note for registration of
transfer at any office or agency maintained by the Transfer Agent and Registrar
accompanied by a written instrument of transfer, in a form satisfactory to the
Indenture Trustee or the Transfer Agent and Registrar, duly executed by the
Class B Noteholder or such Class B Noteholder's attorney, and duly authorized in
writing with such signature guaranteed, and thereupon one or more new Class B
Notes in any authorized denominations of like aggregate principal amount will be
issued to the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations
therein set forth, Class B Notes are exchangeable for new Class B Notes in any
authorized denominations and of like aggregate principal amount, upon surrender
of such Notes to be exchanged at the office or agency of the Transfer Agent and
Registrar. No service charge may be imposed for any such exchange but the
Issuer or Transfer Agent and Registrar may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
therewith.
The Issuer, the Transferor, the Indenture Trustee and any agent of the
Issuer, Transferor or the Indenture Trustee shall treat the person in whose name
this Class B Note is registered as the owner hereof for all purposes, and
neither the Issuer, the Transferor, the Indenture Trustee nor any agent of the
Issuer, Transferor or the Indenture Trustee shall be affected by notice to the
contrary.
THIS CLASS B NOTE 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.
A-2-5
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 note and all rights thereunder, and hereby irrevocably constitutes
and appoints ____________________, attorney, to transfer said note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: ____________ ______________________ 2/
-
Signature Guaranteed:
______________________
_____________________________
2/ NOTE: The signature to this assignment must correspond with the name of the
-
registered owner as it appears on the face of the within note in every
particular, without alteration, enlargement or any change whatsoever.
A-2-6
EXHIBIT B
---------
Household Finance Corporation
Household Credit Card Master Note Trust I 2000-1 (RBC Conduit)
Funds Transfer Summary Report
======================================================================================
Due Period September
2000
Distribution Date 16-Oct-2000
From Seller (Household Receivables Funding, Inc. III) to Trustee (Xxxxx Fargo) to Noteholders
Amounts which represent Class A and B monthly interest and principal
Class A Monthly Interest - RBC (Xxxxx Fargo #TBD) 0.00
Class B Monthly Interest - HRFI III (HB#0190047972) 0.00
Class A Invested Amount Decrease - RBC (Xxxxx Fargo #TBD) 0.00
Class B Investment Amount Decrease - HRFI III (HB#0190047972) 0.00
----------------
Subtotal Funds from Seller (HRFI III) 0.00
Investment earnings 0.00
----------------
Total Funds for Trustee Distribution 0.00
Please wire 2000-1 Class A Payments as follows:
Bank Name: Bankers Trust
ABA Number: 000000000
Reference: Household Services 2000-1
Account Name: Old Line Funding Corporation $0.00
Account Number: 00-000-000
Account Name: Thunder Bay Funding Inc.
Account Number: 00-363610 $0.00
-----
TOTAL WIRES $0.00
B-1
EXHIBIT C
---------
FORM OF
MONTHLY SERVICING STATEMENT
(Delivered pursuant to subsection 5.03 (a)
of the Indenture Supplement
HOUSEHOLD FINANCE CORPORATION
HOUSEHOLD RECEIVABLES FUNDING INC. III
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I
Class A and Class B Notes, Series 2000-1
This Certificate relates to the Distribution Date occurring on [ ], 2000
1. Pool One Information.
--------------------
(a) The aggregate amount of Collections processed for the Due Period
preceding such Distribution Date was equal to.................................................... $______
(b) The aggregate amount of such Collections with respect to Principal
Receivables for the Due Period preceding such Distribution Date was
equal to......................................................................................... $______
(i) The total payment rate, [ ( (b) + (c)(ii) + (c)(iii) ) / (f) ], is............................. $______
(c) The aggregate amount of such Collections with respect to Finance
Charge and Administrative Receivables for the Due Period preceding
such Distribution Date was equal to.............................................................. $______
(i) The gross cash yield, [ ((ii)+(iii)+(iv)+(v)) * 12 / (f) ], is.................................. $______
(ii) The amount of such aggregate with respect to Finance Charge was equal to......................... $______
(iii) The amount of such aggregate with respect to fees was equal to.................................... $______
(iv) The amount of such aggregate with respect to Interchange was equal to............................. $______
(v) The amount of such aggregate with respect to other recoveries was equal to........................ $______
(vi) The amount of such aggregate with respect to principal recoveries
was equal to was equal to......................................................................... $______
(d) The Gross Defaulted Amount for the preceding Due Period is........................................ $______
(i) The annualized default rate, (d) *12 / (f), is
(ii) The annualized net default rate, [(d)-(c)(vi)] *12 / (f), is..................................... $______
(e) The Portfolio Yield for such Distribution Date [c(i) - d(ii)].....................................
C-1
(f) The total amount of Principal Receivables in Pool One at the beginning
of the preceding Due Period or, if there were Additions or Removals during the Due
Period, the average balance for such Due Period is equal to.......................................................
(g) The total amount of Principal Receivables in Pool One as of the last day of the
preceding Due Period is...........................................................................................
(h) The total amount of Principal Receivables in Pool One at the beginning
of the preceding Due Period.......................................................................................
(i) The total amount of Finance Charge and Administrative Receivables in
Pool One as of the last day of the preceding Due Period is........................................................
(j) The aggregate outstanding gross balance of the Accounts which were
one payment (1-29 days) delinquent as of the close of business on the last
day of the calendar month preceding such Distribution Date was equal to...........................................
(k) The aggregate outstanding gross balance of the Accounts which were
two payments (30-59 days) delinquent as of the close of business on the last
day of the calendar month preceding such Distribution Date was equal to...........................................
(l) The aggregate outstanding gross balance of the Accounts which were
three or more payments (60+ days) delinquent as of the close of business on the last
day of the calendar month preceding such Distribution Date was equal to...........................................
2. Series 2000-1 Information
-------------------------
(a) The average rate (the weighted average Class A Note Interest Rate and Class B
Note Interest Rate reduced to take into account any payments made pursuant
to interest rate agreements, if any ) is equal to.................................................................
(b) Total investor Collections is equal to............................................................................
(c) Investor Principal Collections is equal to........................................................................
(d) The Floating Investor Percentage for the Due Period preceding such
Distribution Date was equal to....................................................................................
(e) Investor Finance Charge and Administrative Collections is equal to................................................
(f) Investor Defaulted Amount is equal to.............................................................................
(g) The Monthly Servicing Fee is equal to.............................................................................
(h) The Monthly Administration Fee is equal to........................................................................
C-2
(i) The Series Portfolio Yield for the Due Period preceding such
Distribution Date was equal to......................................................
3. Determination of Monthly Interest
---------------------------------
(a) The number of days in the Interest Period is equal to...............................
(b) Class A Note Principal Balance - Average for Interest Period........................
(c) The Class A Note Interest Rate for the Interest Period with respect to
such Distribution Date is equal to..................................................
(d) Class A Monthly Interest is equal to................................................
(e) Class B Note Principal Balance - Average for Interest Period........................
(f) The Class B Note Interest Rate for the Interest Period with respect to
such Distribution Date is equal to..................................................
(g) Class B Monthly Interest is equal to................................................
4. Application of Available Funds
------------------------------
(a) Available Investor Finance Charge and Administrative Collections
(i) The amount of Class A Monthly Interest for such Distribution Date is
equal to............................................................................
The amount of any Class A Monthly Interest previously due but not
distributed on a prior Distribution Date is equal to................................
The amount of Class A Additional Interest for such Distribution Date
is equal to.........................................................................
The amount of any Class A Additional Interest previously due but not
distributed on a prior Distribution Date is equal to................................
(ii) The amount of Class B Monthly Interest for such Distribution Date is
equal to............................................................................
The amount of any Class B Monthly Interest previously due but not
distributed on a prior Distribution Date is equal to................................
The amount of Class B Additional Interest for such Distribution Date
is equal to.........................................................................
The amount of any Class B Additional Interest previously due but not
C-3
distributed on a prior Distribution Date is equal to....................................................
(iii)
(A) If HFC or an Affiliate of HFC is no longer the Servicer, the Monthly Servicing Fee......................
(B) If HFC or an Affiliate of HFC is no longer the Administrator, the Monthly
Administration Fee is equal to..........................................................................
(iv) The Investor Defaulted Amount for such Distribution Date is equal to....................................
(v) The aggregate amount of Investor Charges and the amount of Subordinated
Principal Collections which have not been previously reimbursed is equal to.............................
(vi) After an Event of Default and the acceleration of the Maturity of the Notes, the amount
treated as Available Investor Principal Collections.....................................................
(vii) If HFC or an Affiliate of HFC is the Servicer, the Monthly Servicing Fee
for such Distribution Date..............................................................................
If HFC or an Affiliate of HFC is the Servicer, the Monthly Servicing Fee due
but not paid for a prior Distribution Date..............................................................
(viii) If HFC or an Affiliate of HFC is the Administrator, the Monthly Administration Fee
for such Distribution Date is equal.....................................................................
If HFC or an Affiliate of HFC is the Servicer, the Monthly Servicing Fee due
but not paid for a prior Distribution Date..............................................................
(ix) The amount deposited into the Reserve Account
(x) The balance, if any, to be distributed to the Transferor................................................
5. Other Information
-----------------
(a) The Fixed Investor Percentage is equal to...............................................................
(b) The Series 2000-1 Principal Shortfall is equal to.......................................................
(c) The Pool One Share Principal Collections are equal to...................................................
(d) The total amount to be distributed to Class A Noteholders on
such Distribution Date in payment of principal is equal to..............................................
(e) The total amount to be distributed to Class B Noteholders on
such Distribution Date in payment of principal is equal to..............................................
(f) the total amount to be distributed to the O/C Holder
for reduction of the O/C Amount.........................................................................
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(g) The Subordinated Principal Collections with respect to such
Distribution Date is equal to.........................................................................
(h) The amount applied at 4.04(a)(v) to reimburse previous Subordinated
Principal Collections.................................................................................
(i) The amount of Investor Charge-Offs for such Distribution
Date is equal to......................................................................................
(j) The total amount of reimbursements of Investor Charge-Offs
for such Distribution Date is equal to................................................................
(k) The Invested Amount at the close of business on such
Distribution Date (after giving effect to all payments and adjustments
on such Distribution Date) will be equal to...........................................................
(l) The Class A Note Principal Balance at the close of business on such
Distribution Date (after giving effect to all payments and adjustments
on such Distribution Date) will be equal to...........................................................
(m) The Class B Note Principal Balance at the close of business on such
Distribution Date (after giving effect to all payments and adjustments
on such Distribution Date) will be equal to...........................................................
(n) The O/C Amount at the close of business on such Distribution Date (after giving effect
to all payments and all adjustments on such Distribution Date) will be equal to.......................
(o) Total amount to be on deposit in the Collection Account (after giving effect to
allocations required to be made pursuant to the terms of all other Series now
outstanding and to the payment of the Servicer's fee and funding of investor default
amounts) prior to making distributions on such Distribution Dates is equal to.........................
(p) The total amount to be distributed from the Collection Account to the Transferor
on such Distribution Date (after taking into consideration the amounts which
have been netted with respect to all Series against deposits to the Collection
Account) is equal to..................................................................................
(q) Total amount to be distributed from the Collection Account to the
Servicer in respect of the unpaid Monthly Servicing Fee for the
preceding Due Period on such Distribution Date (after taking into
consideration the amounts which have been netted with respect to this
Series against deposits to the Collection Account) is equal to........................................
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EXHIBIT D
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HOUSEHOLD FINANCE CORPORATION
HOUSEHOLD RECEIVABLES FUNDING INC. III
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I
Class A and Class B Notes,
The undersigned, a duly authorized representative of Household Finance
Corporation, as Servicer (the "Servicer"), pursuant to the Amended and Restated
Transfer and Servicing Agreement, dated as of November 16, 2000 (the "Transfer
--------
and Servicing Agreement"), by and among Household Receivables Funding, Inc. III,
-----------------------
as Transferor, the Servicer, and Wilmington Trust Company, as Owner Trustee,
does hereby certify with respect to the information set forth below as follows:
Capitalized terms used in this Certificate shall have the respective
meanings set forth in the Transfer and Servicing Agreement.
Household Finance Corporation is, as of the date hereof, the Servicer under
the Transfer and Servicing Agreement.
The undersigned is a Servicing Officer.
This Certificate relates to the Distribution Date occurring on [.], 2000.
As of the date hereof, to the best knowledge of the undersigned, no
Amortization Event has been deemed to have occurred on or prior to such
Distribution Date.
As of the date hereof, to the best knowledge of the undersigned, the
Servicer has performed in all material respects all its obligations under the
Transfer and Servicing Agreement through the Due Period preceding such
Distribution Date or, if there has been a default in the performance of any such
obligation, set forth in detail the (i) nature of such default, (ii) the action
taken by the Transferor and Servicer, if any, to remedy such default and (iii)
the current status of each such default; if applicable, insert "None".
As of the date hereof, to the best knowledge of the undersigned, no Lien
has been placed on any of the Receivables other than pursuant to the Indenture (
or, if there is a Lien, such Lien consists of:_______________________________).
The amounts specified to be deposited into and withdrawn from the
Collection Account, as well as the amounts specified to be paid to the
Transferor, the Servicer and the Noteholders are all in accordance with the
requirements of the Transfer and Servicing Agreement, Master Indenture and
Indenture Supplement.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this
Certificate this [.] day of [.], 2000.
HOUSEHOLD FINANCE CORPORATION
as Servicer,
____________________________________
Servicing Officer
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