SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to
Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: October 22, 2001
TARGET RECEIVABLES CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota
(State or other jurisdiction of incorporation)
| 0-26930 | 41-1812153 | |
| (Commission File Number) | (I.R.S. Employer Identification Number) |
Target Receivables Corporation
80 South Eighth Street
14th Floor, Suite 1401
Minneapolis, Minnesota 55402
(612) 370-6530
(Address, including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Office)
On August 22, 2001, the Company entered into a Series 2001-1 Supplement to the Amended and Restated Pooling and Servicing Agreement, dated as of April 28, 2000, as amended (the "Agreement"). The Agreement defines the rights of the holders of both the $750,000,000 Class A Asset Backed Certificates, Series 2001-1 and the $250,000,000 Class B Asset Backed Certificates, Series 2001-1, issued by Target Credit Card Master Trust.
The Monthly Servicer's Certificates for the Monthly Period ended September 1, 2001 and the Monthly Certificateholders' Statements for the Monthly Period ended September 1, 2001, with respect to the Class A Asset Backed Certificates, 6.25% Series 1997-1, the Class B Asset Backed Certificates, Series 1997-1, the Class A Asset Backed Certificates, 5.90% Series 1998-1, the Class B Asset Backed Certificates, Series 1998-1, the Floating Rate Class A Asset Backed Certificates, Series 2001-1, and the Class B Asset Backed Certificates, Series 2001-1, issued by the Target Credit Card Master Trust, were delivered to the Trustee on September 20, 2001, and the Monthly Certificateholders' Statements were then distributed to Certificateholders on September 25, 2001.
The Underwriting Agreement and the related Series 2001-1 Supplement to the Amended and Restated Pooling and Servicing Agreement are filed as Exhibits 1.1 and 4.1 to this report, respectively. The above described Monthly Servicer's Certificates are filed as Exhibits 20.1, 20.3 and 20.5 to this Report. The above described Monthly Certificateholders' Statements are filed as Exhibits 20.2, 20.4 and 20.6 to this Report.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Dated: October 22, 2001 | ||||
TARGET RECEIVABLES CORPORATION |
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By: |
/s/ Stephen C. Kowalke |
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Name: |
Stephen C. Kowalke |
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| Title: | Vice President and Treasurer | |||
| Exhibit Number | Description | |
1.1 |
Underwriting Agreement, dated August 15, 2001, among Target Receivables Corporation, Target Corporation and Lehman Brothers Inc., as representative of the underwriters set forth therein. |
|
4.1 |
Series 2001-1 Supplement, dated as of August 22, 2001, to the Amended and Restated Pooling and Servicing Agreement, dated as of April 28, 2000, as amended between Target Receivables Corporation, Retailers National Bank and Wells Fargo Bank Minnesota, National Association (formerly known as Norwest Bank Minnesota, National Association). |
|
20.1 |
Series 1997-1 Monthly Servicer's Certificate for the Monthly Period ended September 1, 2001. |
|
20.2 |
Series 1997-1 Monthly Certificateholders' Statement for the Monthly Period ended September 1, 2001. |
|
20.3 |
Series 1998-1 Monthly Servicer's Certificate for the Monthly Period ended September 1, 2001. |
|
20.4 |
Series 1998-1 Monthly Certificateholders' Statement for the Monthly Period ended September 1, 2001. |
|
20.5 |
Series 2001-1 Monthly Servicer's Certificate for the Monthly Period ended September 1, 2001. |
|
20.6 |
Series 2001-1 Monthly Certificateholders' Statement for the Monthly Period ended September 1, 2001. |
TARGET
CREDIT CARD MASTER TRUST
SERIES 2001-1
$750,000,000
Floating Rate Class A Asset Backed
Certificates, Series 2001-1
UNDERWRITING AGREEMENT
August 15, 2001
LEHMAN
BROTHERS INC.,
as Representative of the Several Underwriters
3 World Financial Center
New York, NY 10285
Ladies and Gentlemen:
1. Introductory.
Retailers National Bank, a national banking association ("RNB"), from time to time sells, transfers and conveys receivables (the
"Receivables") generated from time to time in a portfolio of open end bank credit card accounts and other rights to Target Capital Corporation, a Minnesota corporation
("TCC"). TCC from time to time sells, transfers and conveys the Receivables and other rights to Target Receivables Corporation, a Minnesota corporation (the
"Transferor"). The Transferor from time to time transfers the Receivables to the Target Credit Card Master Trust (the "Trust"), and the
Transferor and Target Corporation, a Minnesota corporation (the "Company"), propose to cause the Trust to issue to the Transferor $750,000,000 principal amount of Floating
Rate Class A Asset Backed Certificates, Series 2001-1 (the "Certificates"), which the Transferor proposes to sell to the Underwriters pursuant to
the terms hereof, and $250,000,000 principal amount of non-interest bearing Class B Asset Backed Certificates, Series 2001-1 (the "Class B
Certificates"), which the Transferor intends to retain. The Receivables are and will be (i) conveyed to TCC by RNB pursuant to the Amended and Restated Bank Receivables Purchase
Agreement, dated as of April 28, 2000 (the "Bank Receivables Purchase Agreement") between RNB and TCC, (ii) conveyed to the Transferor by TCC pursuant to the
Amended and Restated Receivables Purchase Agreement, dated as of April 28, 2000 (the "Receivables Purchase Agreement") between TCC and the Transferor and
(iii) transferred from the Transferor to the Trust pursuant to (a) an Amended and Restated Pooling and Servicing Agreement among the Transferor, RNB, as Servicer, and Wells Fargo Bank
Minnesota, National Association, as Trustee, dated as of
April 28, 2000 (the "Pooling and Servicing Agreement") and (b) the Series 2001-1 Supplement to the Pooling and Servicing Agreement, to be
dated as of August 22, 2001 (the "Supplement"), among the Transferor, the Servicer and the Trustee. Each Certificate represents a specified percentage undivided
interest in the Trust.
This Underwriting Agreement shall hereinafter be referred to as this "Agreement". This Agreement, the Bank Receivables Purchase Agreement, the Receivables Purchase Agreement, the Pooling and Servicing Agreement and the Supplement shall collectively hereinafter be referred to as the "Basic Documents". Capitalized terms used but not defined herein have the meanings assigned thereto in the Pooling and Servicing Agreement and the Supplement. The Transferor and the Company hereby agree with the several Underwriters named in Schedule A hereto (the "Underwriters") as follows:
2. Representations and Warranties of the Transferor and the Company.
The Transferor and the Company hereby jointly and severally represent and warrant to, and agree with, the several Underwriters that:
(a) A registration statement on Form S-3 (No. 333-95585) relating to the Certificates, including a form of prospectus, has been filed with the Securities and Exchange Commission (the "Commission") and either (i) has been declared effective under the Securities Act of 1933 (the "Act") and is not proposed to be amended or (ii) is proposed to be amended by amendment or post-effective amendment. If such registration statement (the "initial registration statement") has been declared effective, either (i) an additional registration statement (the "additional registration statement") relating to the Certificates may have been filed with the Commission pursuant to
Rule 462(b) ("Rule 462(b)") under the Act and, if so filed, has become effective upon filing pursuant to such Rule and the Certificates all have been duly registered under the Act pursuant to the initial registration statement and, if applicable, the additional registration statement or (ii) such an additional registration statement is proposed to be filed with the Commission pursuant to Rule 462(b) and will become effective upon filing pursuant to such Rule and upon such filing the Certificates will all have been duly registered under the Act pursuant to the initial registration statement and such additional registration statement. If the Transferor does not propose to amend the initial registration statement or, if an additional registration statement has been filed and the Transferor does not propose to amend it and if any post-effective amendment to either such registration statement has been filed with the Commission prior to the execution and delivery of this Agreement, the most recent amendment (if any) to each such registration statement has been declared effective by the Commission or has become effective upon filing pursuant to Rule 462(c) ("Rule 462(c)") under the Act or, in the case of the additional registration statement, Rule 462(b). For purposes of this Agreement, "Effective Time" with respect to the initial registration statement or, if filed prior to the execution and delivery of this Agreement, the additional registration statement means (i) if the Transferor has advised Lehman Brothers Inc. (the "Lead Underwriter") as representative of the Underwriters (the "Representative"), that it does not propose to amend such registration statement, the date and time as of which such registration statement, or the most recent post-effective amendment thereto (if any) filed prior to the execution and delivery of this Agreement, was declared effective by the Commission or has become effective upon filing pursuant to Rule 462(c), or (ii) if the Transferor has advised the Representative that it proposes to file an amendment or post-effective amendment to such registration statement, the date and time as of which such registration statement, as amended by such amendment or post-effective amendment, as the case may be, is declared effective by the Commission. If an additional registration statement has not been filed prior to the execution and delivery of this Agreement but the Transferor has advised the Representative that it proposes to file one, "Effective Time" with respect to such additional registration statement means the date and time as of which such registration statement is filed and becomes effective pursuant to Rule 462(b). "Effective Date" with respect to the initial registration statement or the additional registration statement (if any) means the date of the Effective Time thereof. The initial registration statement, as amended at its Effective Time, including all material incorporated by reference therein, including all information contained in the additional registration statement (if any) and deemed to be a part of the initial registration statement as of the Effective Time of the additional registration statement pursuant to the General Instructions of the Form on which it is filed and including all information (if any) deemed to be a part of the initial registration statement as of its Effective Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act, is hereinafter referred to as the "Initial Registration Statement." The additional registration statement, as amended at its Effective Time, including the contents of the initial registration statement incorporated by reference therein and including all information (if any) deemed to be a part of the additional registration statement as of its Effective Time pursuant to Rule 430A(b), is hereinafter referred to as the "Additional Registration Statement". The Initial Registration Statement and the Additional Registration Statement are hereinafter referred to collectively as the "Registration Statements" and individually as a "Registration Statement". The form of prospectus relating to the Certificates, as first filed with the Commission pursuant to and in accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no such filing is required) as included in a Registration Statement, including all material incorporated by reference in such prospectus, is hereinafter referred to as the "Prospectus". No document has been or will be prepared or distributed in reliance on Rule 434 under the Act.
(b) If the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement: (i) on the Effective Date of the Initial Registration Statement, the Initial Registration Statement conformed in all material respects to the requirements of the Act and the rules and regulations of the Commission (the "Rules and Regulations") and did not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) on the Effective
Date of the Additional Registration Statement (if any), each Registration Statement conformed, or will conform, in all respects to the requirements of the Act and the Rules and Regulations and did not include, or will not include, any untrue statement of a material fact and did not omit, or will not omit, to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and (iii) on the date of this Agreement, the Initial Registration Statement and, if the Effective Time of the Additional Registration Statement is prior to the execution and delivery of this Agreement, the Additional Registration Statement each conforms, and at the time of filing of the Prospectus pursuant to Rule 424(b) or (if no such filing is required) at the Effective Date of the Additional Registration Statement in which the Prospectus is included, each Registration Statement and the Prospectus conforms or will conform, in all material respects to the requirements of the Act and the Rules and Regulations, and neither of such documents includes, or will include, any untrue statement of a material fact or omits, or will omit, to state any material fact required to be stated therein or necessary to make the statements therein not misleading. If the Effective Time of the Initial Registration Statement is subsequent to the execution and delivery of this Agreement: on the Effective Date of the Initial Registration Statement, the Initial Registration Statement and the Prospectus will conform in all material respects to the requirements of the Act and the Rules and Regulations, and neither of such documents will include any untrue statement of a material fact or will omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and no Additional Registration Statement has been or will be filed. The preceding two sentences do not apply to statements in or omissions from a Registration Statement or the Prospectus based upon written information furnished to the Transferor or the Company by any Underwriter through the Representative specifically for use therein, it being understood and agreed that the only such information is that described as such in Section 7(b).
(c) Each of the Transferor and the Company has been duly incorporated and is an existing corporation in good standing under the laws of the State of Minnesota, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus; and each of the Transferor and the Company is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification and where the failure to so qualify might permanently impair title to property material to its operation or its right to enforce a material contract against others or expose it to substantial liability in such jurisdiction.
(d) No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required for the consummation by the Transferor or the Company of the transactions contemplated by this Agreement in connection with the issuance and sale of the Certificates, except such as have been obtained and made under the Act, and except such as may be required under state securities laws.
(e) Neither the Transferor nor the Company is in violation of its Articles of Incorporation or Bylaws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any agreement or instrument to which it is a party or by which it or its properties are bound which would have a material adverse effect on the transactions contemplated in the Basic Documents. The execution, delivery and performance of the Basic Documents and the issuance and sale of the Certificates and compliance with the terms and provisions thereof will not result in a material breach or violation of any of the terms and provisions of, or constitute a default under, any statute, any rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Transferor or the Company or any subsidiary of either of them or any of their properties, or any material agreement or instrument to which the Transferor or the Company or any such subsidiary is a party or by which the Transferor or the Company or any such subsidiary is bound or to which any of the properties of the Transferor or the Company or any such subsidiary is subject, or the Articles of Incorporation or Bylaws of the Transferor or the Company or any such subsidiary, and the Transferor has full power and authority to authorize, issue and sell the Certificates as contemplated by this Agreement and
each of the Transferor and the Company has full power and authority to enter into the Basic Documents to which it is a party.
(f) As of the Closing Date, the representations and warranties of the Transferor in the Basic Documents to which it is a party will be true and correct.
(g) This Agreement has been duly authorized, executed and delivered by the Transferor and the Company.
(h) The Transferor has authorized the conveyance of the Receivables to the Trust, and the Transferor has authorized the Trust to issue and sell the Certificates.
(i) The Company has delivered to you complete and correct copies of its Form 10-Q for the first quarter of 2001 and its Form 10-K for 2000. Except as set forth in or contemplated in the Registration Statement and the Prospectus, there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or other) of either the Transferor or the Company or the credit card business of the Company or its Affiliates since the date of the information provided pursuant to the preceding sentence.
(j) Any taxes, fees and other governmental charges due and payable from or by the Transferor or the Company in connection with the execution, delivery and performance of the Basic Documents and the Certificates and any other agreements contemplated therein shall have been paid or will be paid by the Transferor or the Company, as the case may be, at or prior to the Closing Date to the extent then due.
3. Purchase, Sale and Delivery of Certificates.
On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Transferor agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase from the Transferor, at a purchase price of 99.750% of the principal amount thereof, the respective principal amounts
of Certificates set forth opposite the names of the Underwriters in Schedule A hereto.
The Transferor will deliver against payment of the purchase price the Certificates in the form of one or more permanent global securities in definitive form (the "Global Certificates") deposited with the Trustee as custodian for The Depository Trust Company ("DTC") and registered in the name of Cede & Co., as nominee for DTC. Interests in any permanent global securities will be held only in book-entry form through DTC, except in the limited circumstances described in the Prospectus. Payment for the Certificates shall be made by the Underwriters in Federal (same day) funds by wire transfer to an account previously designated to the Lead Underwriter by the Transferor or the Company at 10:00 a.m. (New York time), on August 22, 2001, or at such other time not later than seven full business days thereafter as the Lead Underwriter and the Transferor determine, such time being herein referred to as the "Closing Date," against delivery to the Trustee as custodian for DTC of the Global Certificates representing all of the Certificates. For purposes of Rule 15c6-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Closing Date (if later than the otherwise applicable settlement date) shall be the settlement date for payment of funds and delivery of the Certificates. The Global Certificates will be made available for checking at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York, at least 24 hours prior to the Closing Date.
4. Offering by Underwriters.
It is understood that the several Underwriters propose to offer the Certificates for sale to the public (which may include selected dealers) as set forth in the Prospectus.
5. Certain Agreements of the Transferor and the Company.
The Transferor and the Company jointly and severally covenant and agree with the several Underwriters that:
(a) If the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement, the Transferor will file the Prospectus with the Commission pursuant to Rule 424(b)(1) (or if applicable, and if insisted to by the Underwriters pursuant to Rule 424(b)(4))
not later than the Commission's close of business on the second business day following the earlier of (A) the date of determination of the offering price or (B) the date the Prospectus is first used after effectiveness in connection with a public offering or sale.
The Transferor will advise the Representative promptly of any such filing pursuant to Rule 424(b). If the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement and an additional registration statement is necessary to register a portion of the Certificates under the Act but the Effective Time thereof has not occurred as of such execution and delivery, the Transferor will file the additional registration statement or, if filed, will file a post-effective amendment thereto with the Commission pursuant to and in accordance with Rule 462(b) on or prior to 10:00 P.M., New York time, on the date of this Agreement or, if earlier, on or prior to the time the Prospectus is printed and distributed to any Underwriter, or will make such filing at such later date as shall have been consented to by the Lead Underwriter.
(b) The Transferor or the Company will advise the Representative promptly of any proposal to amend or supplement the initial or any additional registration statement as filed or the related prospectus, or the Initial Registration Statement, the Additional Registration Statement (if any) or the Prospectus, and will not effect such amendment or supplementation without the Representative's consent; and the Transferor or the Company will also advise the Representative promptly of the effectiveness of each Registration Statement (if its Effective Time is subsequent to the execution and delivery of this Agreement) and of any amendment or supplementation of a Registration Statement or the Prospectus and of the institution by the Commission of any stop order proceeding in respect of a Registration Statement and each of the Transferor and the Company will use its best efforts to prevent the issuance of any such stop order and to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Certificates is required to be delivered under the Act in connection with sales by any Underwriter or dealer, any event occurs as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply with the Act, the Transferor will promptly notify the Representative of such event and will promptly prepare and file with the Commission (subject to the Representative's prior review pursuant to paragraph (b) of this Section 5), at its own expense, an amendment or supplement which will correct such statement or omission, or an amendment which will effect such compliance. Neither the Representative's consent to, nor the Underwriters' delivery of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the Availability Date (as defined below), the Transferor will cause the Trust to make generally available to the Certificateholders an earnings statement of the Trust covering a period of at least 12 months beginning after the Effective Date of the Initial Registration Statement (or, if later, the Effective Date of the Additional Registration Statement) which will satisfy the provisions of Section 11(a) of the Act. For the purpose of the preceding sentence, "Availability Date" means the 45th day after the end of the Trust's fourth fiscal quarter following the fiscal quarter that includes such Effective Date, except that, if such fourth fiscal quarter is the last quarter of the Trust's fiscal year, "Availability Date" means the 90th day after the end of such fourth fiscal quarter.
(e) The Transferor or the Company will furnish to the Representative copies of each Registration Statement (two of which will be signed and will include all exhibits), each related preliminary prospectus, and, so long as delivery of a prospectus relating to the Certificates is required to be delivered under the Act in connection with sales by any Underwriter or dealer, the Prospectus and all amendments and supplements to such documents, in each case as soon as available and in such quantities as the Representative requests. The Prospectus shall be so furnished on or prior to 10:00 A.M., New York time, on the business day following the later of the execution and delivery of this Agreement or the Effective Time of the Initial Registration Statement. All other such documents shall be so furnished as soon as available. The Transferor or the Company will pay the expenses of printing and distributing to the Underwriters all such documents.
(f) The Transferor will cooperate in the qualification of the Certificates for sale and the determination of their eligibility for investment under the laws of such jurisdictions as the Representative designates and in the continuation of such qualifications in effect so long as required for the distribution of the Certificates.
(g) For a period from the date of this Agreement until the retirement of the Certificates (i) RNB, as Servicer, will furnish to the Representative and, upon request, to each of the other Underwriters, copies of each certificate and the annual statements of compliance delivered to the Trustee pursuant to Article III of the Pooling and Servicing Agreement and Section 5.2 of the Supplement and the annual independent certified public accountant's servicing reports furnished to the Trustee pursuant to Article III of the Pooling and Servicing Agreement, by either first-class mail or electronic transfer (including E-mail) as soon as practicable after such statements and reports are furnished to the Trustee, and (ii) any other periodic certificates or reports as may be delivered to the Trustee or the Certificateholders under the Pooling and Servicing Agreement or the Supplement.
(h) So long as any of the Certificates is outstanding, the Transferor will furnish to the Representative by either first-class mail or electronic transfer (including E-mail) as soon as practicable, copies of all documents (A) distributed, or caused to be distributed, by the Transferor to Certificateholders, (B) filed, or caused to be filed, by the Transferor with the Commission pursuant to the Exchange Act, any order of the Commission thereunder or pursuant to a "no-action" letter from the staff of the Commission and (C) from time to time, such other information in the possession of the Transferor concerning the Trust as the Representative may reasonably request. The Transferor will register the Certificates under the Exchange Act within 120 days after the end of the fiscal year of the Trust during which the offering of the Certificates to the public occurred.
(i) The Transferor will pay all expenses incident to the performance of its obligations under this Agreement and will reimburse the Underwriters (if and to the extent incurred by them) for any filing fees and other expenses (including fees and disbursements of their counsel) incurred by them in connection with qualification of the Certificates for sale and determination of their eligibility for investment under the laws of such jurisdictions as the Representative designates and the printing of memoranda relating thereto, for any fees charged by investment rating agencies for the rating of the Certificates, for any travel expenses of the Transferor's officers and employees and any other expenses of the Transferor in connection with attending or hosting meetings with prospective purchasers of the Certificates and for expenses incurred in distributing preliminary prospectuses and the Prospectus (including any amendments and supplements thereto).
(j) To the extent, if any, that the ratings provided with respect to the Certificates by the Rating Agencies is conditional upon the furnishing of documents or the taking of any other action by the Transferor or the Company agreed upon on or prior to the Closing Date, the Transferor or the Company shall furnish such documents and take any such other action.
(k) The Transferor or the Company shall not, until after the Closing Date, offer, sell or contract to sell, directly or indirectly, or file with the Commission a registration statement under the Act relating to, securities substantially similar to the Certificates.
6. Conditions of the Obligations of the Underwriters.
The obligation of the several Underwriters to purchase and pay for the Certificates on the Closing Date will be subject to the accuracy of the representations and warranties on the
part of the Transferor and the Company herein, to the accuracy of the statements of officers of the Transferor and the Company made pursuant to the provisions hereof, to the performance by each of the
Transferor and the Company of its obligations hereunder and to the following additional conditions precedent:
(a) The Representative shall have received a letter, dated the date of delivery thereof (which, if the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement, shall be on or prior to the date of this Agreement or, if the Effective Time of the
Initial Registration Statement is subsequent to the execution and delivery of this Agreement, shall be prior to the filing of the amendment or post-effective amendment to the registration statement to be filed shortly prior to such Effective Time), of Ernst & Young LLP, in form and substance satisfactory to the Underwriters and counsel for the Underwriters, confirming that they are independent public accountants within the meaning of the Act and the applicable published Rules and Regulations thereunder and stating in effect that (i) they have performed certain specified procedures as a result of which they determined that certain information of an accounting, financial or statistical nature (which is limited to accounting, financial or statistical information derived from the general accounting records of RNB) set forth in the Registration Statements and the Prospectus (and any supplements thereto), agrees with the accounting records of RNB, excluding any questions of legal interpretation, and (ii) they have performed certain specified procedures with respect to the accounts.
For purposes of this subsection, (i) if the Effective Time of the Initial Registration Statement is subsequent to the execution and delivery of this Agreement, "Registration Statements" shall mean the initial registration statement as proposed to be amended by the amendment or post-effective amendment to be filed shortly prior to its Effective Time, (ii) if the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement but the Effective Time of the Additional Registration Statement is subsequent to such execution and delivery, "Registration Statements" shall mean the Initial Registration Statement and the additional registration statement as proposed to be filed or as proposed to be amended by the post-effective amendment to be filed shortly prior to its Effective Time, and (iii) "Prospectus" shall mean the prospectus included in the Registration Statements. All financial statements included in material incorporated by reference into the Prospectus shall be deemed included in the Registration Statements for purposes of this subsection.
(b) If the Effective Time of the Initial Registration Statement is not prior to the execution and delivery of this Agreement, such Effective Time shall have occurred not later than 10:00 P.M., New York time, on the date of this Agreement or such later date as shall have been consented to by the Representative. If the Effective Time of the Additional Registration Statement (if any) is not prior to the execution and delivery of this Agreement, such Effective Time shall have occurred not later than 10:00 P.M., New York time, on the date of this Agreement or, if earlier, the time the Prospectus is printed and distributed to any Underwriter, or shall have occurred at such later date as shall have been consented to by the Lead Underwriter. If the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement, the Prospectus shall have been filed with the Commission in accordance with the Rules and Regulations and Section 5(a) of this Agreement. Prior to such Closing Date, no stop order suspending the effectiveness of a Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Transferor, the Company or the Representative, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) any change, or any development or event involving a prospective change, in the condition (financial or other), business, properties or results of operations of any of the Transferor, TCC, the Company or RNB or its credit card business which, in the judgment of a majority in interest of the Underwriters including the Representative, is material and adverse and makes it impractical or inadvisable to proceed with completion of the public offering or the sale of and payment for the Certificates; (ii) any downgrading in the rating of any debt securities of the Company by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act), or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Company (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating) if in the judgment of a majority in interest of the Underwriters including the Representative, the effect of any such downgrading or public announcement makes it impractical or inadvisable to proceed with the completion of the public offering or the sale of and
payment for the Certificates; (iii) any suspension or limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum prices for trading on such exchange, or any suspension of trading of any securities of the Transferor or the Company on any exchange or in the over-the-counter market; (iv) any banking moratorium declared by U.S. Federal or New York authorities; or (v) any outbreak or escalation of major hostilities in which the United States is involved, any declaration of war by Congress or any substantial national or international calamity or emergency if, in the judgment of a majority in interest of the Underwriters including the Representative, the effect of any such outbreak, escalation, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the public offering or the sale of and payment for the Certificates.
(d) You shall have received from James T. Hale, General Counsel for the Transferor, the Company, TCC and RNB, such opinion or opinions dated the Closing Date and satisfactory in form and substance to you and your counsel, substantially to the effect that:
(i) Each of the Transferor, the Company and TCC has been duly incorporated and is validly existing and in good standing under the laws of the State of Minnesota with full corporate power, authority and legal right to own its properties and conduct its business as such properties are currently owned and such business is currently conducted, to execute, deliver and perform its obligations under each of the Basic Documents to which it is a party and, solely with respect to the Transferor, to execute and deliver to the Trustee the Certificates pursuant to the Pooling and Servicing Agreement;
(ii) RNB is a national banking corporation duly organized, validly existing and in good standing under the laws of the United States, and has full corporate power, authority and legal right to execute, deliver and perform its obligations under the Basic Documents to which it is a party and, in all material respects, to own its properties and conduct its business as such properties are presently owned and as such business is presently conducted;
(iii) Each of the Transferor, the Company, TCC and RNB is duly qualified to do business and is in good standing as a foreign corporation (or is exempt from such requirements), and has obtained all necessary licenses and approvals in each jurisdiction in which failure to so qualify or to obtain such licenses and approvals would render any Credit Card Agreement relating to an Account owned by the Credit Card Originator or any Receivable transferred to the Trust by the Transferor unenforceable by the Credit Card Originator, the Transferor, the Servicer or the Trustee and would have a material adverse effect on the interests of the Certificateholders under the Pooling and Servicing Agreement or under any Supplement;
(iv) The Certificates have been duly authorized, executed and delivered by the Transferor and, when duly authenticated by the Trustee in accordance with the terms of the Pooling and Servicing Agreement and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will be validly issued and outstanding and entitled to the benefits provided by the Pooling and Servicing Agreement;
(v) Each of the Basic Documents to which the applicable entity is a party has been duly authorized, executed and delivered by the Transferor, the Company, TCC and/or the Servicer, as the case may be, and constitutes the legal, valid and binding agreement of the Transferor, the Company, TCC and/or the Servicer, as the case may be, enforceable against the Transferor, the Company, TCC and/or the Servicer, as the case may be, in accordance with its terms, except (x) to the extent that the enforceability thereof may be limited by (A) bankruptcy, insolvency, receivership, conservatorship, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting the rights and remedies of creditors generally and the rights of creditors as the same may be applied in the event of bankruptcy, insolvency, receivership, reorganization,moratorium or other similar event in respect of the Transferor, the Company, TCC and/or the Servicer, (B) general principles of equity (regardless of whether considered and applied in a proceeding in equity or in law) and (C) with respect to the Pooling and Servicing Agreement and the Supplement, the
qualification that certain of the remedial provisions of the Pooling and Servicing Agreement and the Supplement may be unenforceable in whole or in part, but the inclusion of such provisions does not affect the validity of the Pooling and Servicing Agreement or the Supplement taken as a whole, and the Pooling and Servicing Agreement and the Supplement, together with applicable law, contain adequate provisions for the practical realization of the benefits of the security created thereby; and (y) such counsel expresses no opinion as to the enforceability of any rights to contribution or indemnification which are violative of public policy underlying any law, rule or regulation;
(vi) No consent, approval, authorization or order of any governmental agency or body is required for (A) the execution, delivery and performance by the Transferor, the Company, TCC or the Servicer of its obligations under any of the Basic Documents or the Certificates to which it is a party, or (B) the issuance or sale of the Certificates, except such as have been obtained under the Act and as may be required under state securities or blue sky laws in connection with the purchase and distribution of the Certificates by the Underwriters;
(vii) None of the execution and delivery of the Basic Documents or the Certificates by the Transferor, the Company, TCC and/or the Servicer, as the case may be, or the performance by the Transferor, the Company, TCC and/or the Servicer, as the case may be, of the transactions therein contemplated or the fulfillment of the terms thereof does or will result in any violation of any statute or regulation or any order or decree of any court or governmental authority binding upon the Transferor, the Company, TCC or the Servicer or the property of the Transferor, the Company, TCC or the Servicer, or conflict with, or result in a breach or violation of any term or provision of, or result in a default under any of the terms and provisions of, the charter or by-laws of the Transferor, the Company, TCC or the Servicer, or any material indenture, loan agreement or other material agreement to which the Transferor, the Company, or the Servicer is a party or by which any of them is bound;
(viii) There are no proceedings or investigations pending or, to the best knowledge of such counsel, threatened against the Transferor, the Company, TCC or RNB, before any court, regulatory body, administrative agency, or other tribunal or governmental instrumentality (i) asserting the invalidity of any of the Basic Documents or the Certificates, (ii) seeking to prevent the issuance of the Certificates or the consummation of any of the transactions contemplated by any of the Basic Documents or the Certificates, (iii) seeking any determination or ruling that, in the reasonable judgment of such counsel, would materially and adversely affect the performance by the Transferor of its obligations under any of the Basic Documents, (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of any of the Basic Documents or the Certificates or (v) seeking to affect adversely the income tax attributes of the Trust under the Federal or applicable state income or franchise tax systems;
(e) You shall have received from Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Transferor, such opinion or opinions dated the Closing Date and satisfactory in form and substance to you and your counsel, substantially to the effect that the Certificates will be treated as indebtedness for Federal income tax purposes and that the Trust will not be classified as an association taxable as a corporation.
(f) You shall have received from Davenport, Evans, Hurwitz & Smith, special South Dakota tax counsel to RNB, such opinion or opinions dated the Closing Date and satisfactory in form and substance to you and your counsel, substantially to the effect that, to the extent that the Certificates will be characterized as debt for Federal income tax purposes, the Certificates will be characterized as debt for South Dakota income tax purposes, and to the effect that, to the extent that the Trust will not be subject to tax at the entity level for Federal income tax purposes, the Trust will not be subject to tax at the entity level for South Dakota income tax purposes.
(g) You shall have received from Faegre & Benson, special Minnesota tax counsel to the Transferor, such opinion or opinions dated the Closing Date and satisfactory in form and substance
to you and your counsel, substantially to the effect that when the Certificates are beneficially owned by a person that is not a member of the Transferor's consolidated group, the certificates will be characterized as debt for Minnesota income tax purposes and to the effect that the Trust will not be subject to tax at the entity level.
(h) You shall have received from Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Transferor, such opinion or opinions dated the Closing Date and satisfactory in form and substance to you and your counsel, substantially to the effect that:
(i) Each of the Pooling and Servicing Agreement and the Supplement constitutes the valid and binding obligation of the Transferor, RNB and the Trustee, enforceable against the Transferor, RNB and the Trustee in accordance with its terms, except (x) to the extent that the enforceability thereof may be limited by (a) bankruptcy, insolvency, receivership, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and the rights of creditors as the same may be applied in the event of the bankruptcy, insolvency, receivership, reorganization, moratorium or other similar event in respect of the Transferor, RNB or the Trustee, (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity) and (c) the qualification that certain of the remedial provisions of the Pooling and Servicing Agreement may be unenforceable in whole or in part, but the inclusion of such provisions does not affect the validity of the Pooling and Servicing Agreement taken as a whole, and the Pooling and Servicing Agreement, together with applicable law, contain adequate provisions for the practical realization of the benefits of the security created thereby and (y) such counsel expresses no opinion as to the enforceability of any rights to contribution or indemnification which are violative of public policy underlying any law, rule or regulation;
(ii) The Bank Receivables Purchase Agreement constitutes the valid and binding obligation of RNB and TCC, enforceable against RNB and TCC in accordance with its terms, except (x) to the extent that the enforceability thereof may be limited by (a) bankruptcy, insolvency, receivership, conservatorship, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and the rights of creditors as the same may be applied in the event of the bankruptcy, insolvency, receivership, conservatorship, reorganization, moratorium or other similar event in respect of RNB or TCC and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity) and (y) such counsel expresses no opinion as to the enforceability of any rights to contribution or indemnification which are violative of public policy underlying any law, rule or regulation;
(iii) The Receivables Purchase Agreement constitutes the valid and binding obligation of TCC and the Transferor, enforceable against TCC and the Transferor in accordance with its terms, except (x) to the extent that the enforceability thereof may be limited by (a) bankruptcy, insolvency, receivership, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and the rights of creditors as the same may be applied in the event of the bankruptcy, insolvency, receivership, reorganization, moratorium or other similar event in respect of TCC and the Transferor and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity) and (y) such counsel expresses no opinion as to the enforceability of any rights to contribution or indemnification which are violative of public policy underlying any law, rule or regulation;
(iv) The Certificates, when executed and authenticated in accordance with the terms of the Pooling and Servicing Agreement and the Supplement and delivered to and paid for by the Underwriters pursuant to this Agreement, will be duly and validly issued and outstanding and will be entitled to the benefits of the Pooling and Servicing Agreement and the Supplement;
(v) This Agreement has been duly authorized, executed and delivered by the Transferor and the Company;
(vi) Neither the execution, delivery or performance by each of the Transferor, the Company, TCC or RNB of the Basic Documents to which it is a party, nor the compliance by each of the Transferor, the Company, TCC or RNB, as the case may be, with the terms and provisions thereof or hereof, will contravene any provision of any applicable law;
(vii) Based on such counsel's review of applicable laws, no governmental approval, which has not been obtained or taken and is not in full force and effect, is required to authorize or is required in connection with the execution, delivery or performance by each of the Transferor, the Company, TCC or RNB, of the Basic Documents to which it is a party;
(viii) The Certificates and the Basic Documents conform in all material respects to the descriptions thereof contained in the Prospectus;
(ix) The Pooling and Servicing Agreement is not required to be qualified under the Trust Indenture Act of 1939, as amended, and the Trust is not required to be registered under the Investment Company Act of 1940, as amended (the "1940 Act");
(x) The statements in the Prospectus under the heading "Legal Aspects of the Receivables," to the extent that they constitute matters of law or legal conclusions with respect thereto, have been reviewed by such counsel and are correct in all material respects;
(xi) The Initial Registration Statement has become effective under the Act, the Additional Registration Statement (if any) was filed and became effective under the Act, and the Prospectus Supplement has been filed with the Commission pursuant to Rule 424(b) thereunder, no stop order suspending the effectiveness of a Registration Statement has been issued and no proceeding for that purpose has been instituted or threatened; and
(xii) Each of the Registration Statements, as of their effective dates, and the Prospectus, as of its date, appeared on its face to be appropriately responsive in all material respects to the requirements of the Act and the General Rules and Regulations under the Act, except that in each case such counsel expresses no opinion as to the financial data included therein or excluded therefrom or the exhibits to a Registration Statement, and such counsel does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in a Registration Statement and the Prospectus.
Such opinion shall also state that such counsel has participated in conferences with officers and representatives of the Transferor, the Company, TCC and RNB, counsel for the Transferor, the Company, TCC and RNB, representatives of the independent accountants of the Transferor, the
Company, TCC and RNB, and the Underwriters at which the contents of the Prospectus and related matters were discussed and, although such counsel need not pass upon, and need not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in the Prospectus and shall have made no independent check or verification thereof, except for those made under the caption "Legal Aspects of the Receivables" to the extent set forth in paragraph (x) above, on the basis of the foregoing, no facts shall have come to such counsel's attention that shall have led such counsel to believe that the Prospectus, as of its date or the date of its opinion, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that such counsel need not express an opinion or belief with respect to the financial statements, schedules and other financial information included in such Prospectus or excluded therefrom.
(i) You shall have received from Davenport, Evans, Hurwitz & Smith special South Dakota counsel to RNB, such opinion or opinions dated the Closing Date and satisfactory in form and substance to you and your counsel, substantially to the effect that:
(i) The security interest created by the Bank Receivables Purchase Agreement in the Receivables has been perfected under Article 9 of the Uniform Commercial Code of South Dakota by the proper filing of UCC-1 financing statements with the appropriate filing offices in South Dakota, and such security interest is of first priority under Article 9 of the South Dakota Uniform Commercial Code; and
(ii) The UCC-1 financing statements have been previously filed, have not been amended or terminated and no other filings or other actions, with respect to TCC's interest in the Receivables, are necessary to perfect the interest of TCC in the Receivables, and the proceeds thereof, conveyed to TCC, except that appropriate continuation statements must be filed in accordance with the applicable state's requirements.
(j) You shall have received from Faegre & Benson, special Minnesota counsel to the Transferor and TCC, such opinion or opinions dated the Closing Date and satisfactory in form and substance to you and your counsel, substantially to the effect that:
(i) Each of the security interest created by the Receivables Purchase Agreement and the security interest created by the Pooling and Servicing Agreement in the Receivables has been perfected under Article 9 of the Uniform Commercial Code of Minnesota by the proper filing of UCC-1 financing statements with the appropriate filing offices in Minnesota, and each such security interest is of first priority under Article 9 of the Minnesota Uniform Commercial Code; and
(ii) The UCC-1 financing statements have been previously filed have not been amended or terminated and (a) no other filings or other actions, with respect to the Transferor's interest in the Receivables, are necessary to perfect the interest of the Transferor in the Receivables, and the proceeds thereof, conveyed to the Transferor thereunder and (b) no other filings or other actions, with respect to the Trustee's interest in the Receivables, are necessary to perfect the interest of the Trustee in the Receivables, and proceeds thereof, against third parties, except, in each case, that appropriate continuation statements must be filed in accordance with the applicable state's requirements.
(k) You shall have received from Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to RNB, TCC and the Transferor, such opinion or opinions dated the Closing Date and satisfactory in form and substance to you and your counsel, substantially to the effect that the Bank Receivables Purchase Agreement creates in favor of TCC a security interest under Article 9 of the Delaware Uniform Commercial Code (the "Delaware UCC") in the rights of RNB in the Receivables, the Receivables Purchase Agreement creates in favor of the Transferor a security interest under Article 9 of the Delaware UCC in the rights of TCC in the Receivables and the Pooling and Servicing Agreement creates in favor of the Trustee a security interest under Article 9 of the Delaware UCC in the rights of the Transferor in the Receivables.
(l) You shall have received from Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Transferor, such opinion or opinions dated the Closing Date and satisfactory in form and substance to you and your counsel, substantially to the effect that:
(i) In a properly presented and argued case in a proceeding under Title 11 of the United States Code, 11 U.S.C. § § 101, et seq. (the "Bankruptcy Code"), if the matter were properly briefed and presented to a court, the court would hold that (1) the transfer of the Receivables by TCC to the Transferor in the manner set forth in the Receivables Purchase Agreement would constitute the sale of the Receivables from TCC to the Transferor, and (2) in the event that TCC were to become a debtor under the Bankruptcy Code, the transfer of Receivables under the Receivables Purchase Agreement would not, after full consideration of all relevant factors, be properly characterized as a pledge of the Receivables to secure a borrowing by TCC from the Transferor, and accordingly, the Receivables and the proceeds thereof would not be part of the estate of TCC under Section 541 of the Bankruptcy Code in such event, and consequently Section 362 of the Bankruptcy Code would not be applicable to the Receivables and the proceeds thereof; and
(ii) If TCC should become a debtor in a case under the Bankruptcy Code, and the Transferor would not otherwise properly be a debtor in a case under the Bankruptcy Code, and if the matter were properly briefed and presented to a court exercising bankruptcy jurisdiction, it would not be a proper exercise by the court of its equitable discretion to disregard the separate corporate existence of the Transferor so as to order substantive consolidation under the Bankruptcy Code of the assets and liabilities of the Transferor with the bankruptcy estate of TCC.
(m) You shall have received from Timothy J. Carlin, Assistant Vice President and Senior Counsel for Wells Fargo & Company, parent of the Trustee, such opinion or opinions dated the Closing Date and satisfactory in form and substance to you and your counsel, substantially to the effect that:
(i) The Trustee is a national banking association duly organized, validly existing and in good standing under the Federal laws of the United States of America;
(ii) The Trustee has all requisite power and authority as a national banking association to execute and deliver, and to perform its obligations under the Pooling and Servicing Agreement and the Supplement and to consummate the transactions contemplated by the Pooling and Servicing Agreement and the Supplement;
(iii) The Trustee's performance of its obligations under the Pooling and Servicing Agreement and the execution, delivery and performance of the Trustee's obligations pursuant to the Supplement by the Trustee does not conflict with or result in a violation of the Articles of Association or By-Laws of the Trustee;
(iv) The Pooling and Servicing Agreement and the Supplement have been duly authorized, executed and delivered by the Trustee; and
(v) The Certificates have been duly authenticated by the Trustee pursuant to the Pooling and Servicing Agreement.
(n) You shall have received a certificate, dated the Closing Date and satisfactory in form and substance to you and your counsel, of the Chairman, President or any Vice President and a principal financial or accounting officer of each of the Transferor, TCC, RNB and the Company, as applicable, in which such officers, to the best of their knowledge after reasonable investigation, shall state that the representations and warranties of the Transferor and the Company, as the case may be, in this Agreement are true and correct, that each of the Transferor and the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date, that the representations and warranties of each of the Transferor, TCC, RNB and the Company, as applicable, in the Basic Documents are true and
correct as of the dates specified therein, that no stop order suspending the effectiveness of a Registration Statement has been issued and no proceedings for that purpose have been instituted or are contemplated by the Commission, that, subsequent to the date of the Prospectus, there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or other), business, properties or results of operations of the Transferor, TCC, RNB or the Company, as the case may be, or its respective credit card business except as set forth in or contemplated by the Prospectus or as described in such certificate and that nothing has come to the attention of the Transferor, TCC, RNB or the Company that would lead the Transferor, TCC, RNB or the Company to believe that a Registration Statement contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(o) You shall have received evidence satisfactory to you and your counsel that the Certificates shall be rated "AAA" by Standard & Poor's Ratings Services and "Aaa" by Moody's Investors Service, Inc.
(p) You shall have received a letter, dated such Closing Date and satisfactory in form and substance to you and your counsel, which meets the requirements of subsection (a) of this Section, except that the specified date referred to in such subsection will be a date not more than five days prior to such Closing Date for the purposes of this subsection (p).
(q) You shall also receive from each counsel rendering an opinion not otherwise addressed to you a letter dated the Closing Date and satisfactory in form and substance to you and your counsel, stating that you may rely on the opinions of such counsel as delivered to Moody's Investors Service, Inc. and Standard & Poor's Ratings Services in connection with the rating of the Certificates.
(r) On the Closing Date, $250,000,000 aggregate principal amount of the Class B Certificates shall have been issued to the Transferor.
(s) All proceedings in connection with the transactions contemplated by this Agreement and the other Basic Documents and all documents incident hereto and thereto shall be reasonably satisfactory in form and substance to you and your counsel, and you and your counsel shall have received such information, certificates and documents as you and your Counsel may reasonably request.
The Transferor will furnish you with such conformed copies of such opinions, certificates, letters and documents as you reasonably request. The Lead Underwriter may in its sole discretion waive on behalf of the Underwriters compliance with any conditions to the obligations of the Underwriters hereunder.
7. Indemnification and Contribution.
(a) The Transferor and the Company, will jointly and severally indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained in a Registration Statement, the Prospectus, or any amendment or supplement thereto, or any related preliminary
prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading
and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that neither the Transferor nor the Company
will be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with written information furnished to the Transferor or the Company by any Underwriter through the Representative specifically
for use
therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in subsection (b) below; and provided further, however, that neither the Transferor nor the Company will be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any preliminary prospectus that was eliminated or remedied in the Prospectus, if a copy of the Prospectus was not sent or given with or prior to the written confirmation of the sale of any Certificate to the person asserting the loss, claim, damage or liability, if required by the Act.
(b) Each Underwriter will severally and not jointly indemnify and hold harmless the Transferor and the Company against any losses, claims, damages or liabilities to which the Transferor or the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement, the Prospectus, or any amendment or supplement thereto, or any related preliminary prospectus, or arise out of or are based upon the omission or the alleged omission to state therein in a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Transferor or the Company by such Underwriter through the Representative specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by the Transferor or the Company in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, it being understood and agreed that the only such information furnished by any Underwriter consists of the following information in the Prospectus Supplement furnished on behalf of each Underwriter: the fifth and sixth paragraphs under the caption "Underwriting" concerning overallotments and stabilizing and the concession and reallowance figures appearing in the second paragraph under the caption "Underwriting".
(c) Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b) above, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action.
(d) If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Transferor and the Company on the one hand and the Underwriters on the other from the offering of the Certificates or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Transferor and/or the Company on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Transferor and the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Transferor and the Company bear to the total underwriting discounts and commissions received by the Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Transferor or the Company on the one hand or by the Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Certificates underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Transferor and the Company under this Section shall be in addition to any liability which the Transferor and the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Underwriters under this Section shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each director of the Transferor and the Company, to each officer of the Transferor and the Company who has signed a Registration Statement and to each person, if any, who controls the Transferor or the Company within the meaning of the Act.
8. Default of Underwriters.
If any Underwriter or Underwriters default in their obligations to purchase Certificates hereunder on the Closing Date and the aggregate principal amount of Certificates that such
defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of the total principal amount of Certificates that the Underwriters are obligated to purchase on such Closing
Date, the Representative may make arrangements satisfactory to the Transferor for the purchase of such Certificates by other persons, including any of the Underwriters, but if no such arrangements are
made by such Closing Date, the nondefaulting Underwriters shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Certificates that such defaulting
Underwriters agreed but
failed to purchase on such Closing Date. If any Underwriter or Underwriters so default and the aggregate principal amount of the Certificates with respect to which such default or defaults occur
exceeds 10% of the total principal amount of the Certificates that the Underwriters are obligated to purchase on such Closing Date and arrangements satisfactory to the Representative and the
Transferor for the purchase of such Certificates by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Transferor or the Company, except as provided in Section 9. As used in this Agreement, the term "Underwriter" includes any person substituted for
an Underwriter under this Section. Nothing herein will relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations . The respective indemnities, agreements, representations, warranties and other statements of the Transferor and the Company and of their respective officers and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Underwriter, the Transferor, the Company or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Certificates. If this Agreement is terminated pursuant to Section 8 or if for any reason the purchase of the Certificates by the Underwriters is not consummated, the Transferor and the Company shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 5 and the respective obligations of the Transferor and the Company and the Underwriters pursuant to Section 7 shall remain in effect, and if any Certificates have been purchased hereunder the representations and warranties in Section 2 and all obligations under Section 5 shall also remain in effect. If the purchase of the Certificates by the Underwriters is not consummated for any reason other than solely because of the termination of this Agreement pursuant to Section 8 or the occurrence of any event specified in clause (iii), (iv) or (v) of Section 6(c), the Transferor and the Company, jointly and severally, will reimburse the Underwriters for all out-of-pocket expenses (including fees and disbursements of counsel) reasonably incurred by them in connection with the offering of the Certificates.
10. Notices.
All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed, sent by E-mail, delivered or telegraphed and confirmed to the
Representative at Lehman Brothers Inc., 3 World Financial Center, New York, New York 10285, Attention: Asset Backed Securities (facsimile no. (212) 526-8579); if sent to the
Transferor, will be mailed, sent by E-mail, delivered or telegraphed and confirmed to it at Target Receivables Corporation, 80 South Eighth Street, 14th floor, Suite 1401, Minneapolis,
Minnesota 55402, Attention of Treasurer, (facsimile no. (612) 370-5508); and if sent to the Company, will be mailed, sent by E-mail, delivered or telegraphed and
confirmed to it at Target Corporation, 777 Nicollet Mall, Minneapolis, Minnesota 55402, Attention of Treasurer (facsimile no. (612) 370-5508); provided; however, that any notice to an Underwriter pursuant to Section 7 will be mailed, sent
by E-mail, delivered or telegraphed and confirmed to such Underwriter.
11. Successors.
This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and controlling persons referred to
in Section 7, and no other person will have any right or obligation hereunder.
12. Representations of Underwriters.
The Representative will act for the several Underwriters in connection with this financing, and any action under this Agreement taken by the Representative will be binding upon all
the Underwriters. Each of the Underwriters represents and warrants to, and agrees with, the Transferor that (w) it has only issued or passed on and shall only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the Certificates to a person who is of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or who is a person to whom the document may otherwise lawfully be issued or passed on, (x) it has complied and shall comply with all applicable
provisions of the Financial Services Act 1986 and other applicable laws and regulations with respect to anything done by it in relation to the Certificates in, from or otherwise involving the United
Kingdom and (y) if that Underwriter is an authorized person under the Financial Services Act 1986, it has only promoted and shall only promote (as that term is defined in Regulation 1.02
of the Financial Services (Promotion of Unregulated Schemes) Regulations 1991) to any person in the United Kingdom the scheme described in the Prospectus if that person is of a kind described either
in Section 76(2) of the Financial Services Act 1986 or in Regulation 1.04 of the Financial Services (Promotion of Unregulated Schemes) Regulations 1991.
13. Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original but all such counterparts shall together constitute one and the same
Agreement.
14. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
The Transferor and the Company hereby submit to the nonexclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
If the foregoing is in accordance with the Representative's understanding of our agreement, kindly sign and return to the Transferor and the Company one of the counterparts hereof, whereupon it will become a binding agreement between the Transferor, the Company and the several Underwriters in accordance with its terms.
| Very truly yours, | ||||
TARGET RECEIVABLES CORPORATION |
||||
By: |
/s/ Stephen C. Kowalke Name: Stephen C. Kowalke Title: Vice President and Treasurer |
|||
TARGET CORPORATION |
||||
By: |
/s/ Stephen C. Kowalke Name: Stephen C. Kowalke Title: Treasurer |
|||
Acting on behalf of itself and as the Representative of the several Underwriters. |
||||
LEHMAN BROTHERS INC. |
||||
By: |
/s/ Nelson Soares Name: Nelson Soares Title: Managing Director |
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| Underwriters |
Principal Amount of Certificates |
|||
|---|---|---|---|---|
| Lehman Brothers Inc. | $ | 187,500,000 | ||
| J.P. Morgan Securities Inc. | 187,500,000 | |||
| Merrill Lynch, Pierce, Fenner & Smith Incorporated | 187,500,000 | |||
| Salomon Smith Barney Inc. | 187,500,000 | |||
| Total | $ | 750,000,000 | ||
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TABLE OF CONTENTS
TARGET RECEIVABLES CORPORATION,
Transferor
RETAILERS NATIONAL BANK,
Servicer
and
WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
on behalf of the Series 2001-1 Certificateholders
SERIES 2001-1 SUPPLEMENT
Dated as of August 22, 2001
to
AMENDED
AND RESTATED
POOLING AND SERVICING AGREEMENT
Dated as of April 28, 2000
TARGET CREDIT CARD MASTER TRUST
$750,000,000
Floating Rate Class A Asset Backed
Certificates, Series 2001-1
$250,000,000
Class B Asset Backed
Certificates, Series 2001-1
| Section 9.4. | Ratification of Agreement | ||
| Section 9.5. | Counterparts | ||
| Section 9.6. | Paired Series | ||
| Section 9.7. | Jurisdiction; Service | ||
| Section 9.8. | Governing Law | ||
| Section 9.9. | Instructions in Writing | ||
| Section 9.10. | Target VISA Automatic Addition Limitation | ||
EXHIBITS |
|||
EXHIBIT A-1 |
FORM OF CLASS A INVESTOR CERTIFICATE |
||
| EXHIBIT A-2 | FORM OF CLASS B INVESTOR CERTIFICATE | ||
| EXHIBIT B | FORM OF MONTHLY SERIES 2001-1 CERTIFICATEHOLDERS' STATEMENT | ||
| EXHIBIT C | FORM OF MONTHLY SERVICER'S CERTIFICATE | ||
SERIES 2001-1 SUPPLEMENT, dated as of August 22, 2001 (this "Supplement") by and among TARGET RECEIVABLES CORPORATION, a corporation organized and existing under the laws of the State of Minnesota, as Transferor (the "Transferor"), RETAILERS NATIONAL BANK, a national banking association organized and existing under the laws of the United States, as Servicer ("RNB" or the "Servicer"), and WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION (formerly known as Norwest Bank Minnesota, National Association), a national banking association organized and existing under the laws of the United States, as trustee (together with its successors in trust thereunder as provided in the Agreement referred to below, the "Trustee") under the Amended and Restated Pooling and Servicing Agreement dated as of April 28, 2000, as amended (the "Agreement") among the Transferor, the Servicer and the Trustee.
Section 6.3 of the Agreement provides, among other things, that the Transferor and the Trustee may at any time and from time to time enter into a supplement to the Agreement for the purpose of authorizing the issuance by the Transferor, for execution and redelivery to the Trustee for authentication, of one or more Series of Certificates.
Pursuant to this Supplement, the Transferor and the Trustee shall create a new Series of Investor Certificates and shall specify the Principal Terms thereof. The Investor Certificates shall not be subordinated to any other Series.
ARTICLE I
CREATION OF THE SERIES 2001-1 CERTIFICATES
Section 1.1. Designation. There is hereby created a Series of Investor Certificates to be issued pursuant to the Agreement and this Supplement to be known generally as the "Series 2001-1 Certificates." The Series 2001-1 Certificates shall be issued in two Classes, which shall be designated generally as the $750,000,000 Floating Rate Class A Asset Backed Certificates, Series 2001-1 (the "Class A Certificates") and the $250,000,000 Class B Asset Backed Certificates, Series 2001-1 (the "Class B Certificates"), subject to any increase in such principal amounts as a result of the issuance of Additional Certificates pursuant to Section 4.10 of this Supplement. The Series 2001-1 Certificates shall be a Principal Sharing Series and shall be included in Group I for purposes of sharing Excess Finance Charge Collections. The Series 2001-1 Certificates shall be entitled to share Excess Transferor Finance Charge Collections and Shared Transferor Principal Collections.
Section 1.2. Delivery and Payment for the Series 2001-1 Certificates.
The Transferor shall execute and deliver the Series 2001-1 Certificates to the Trustee for authentication in accordance with Section 6.1 of the Agreement.
The Trustee shall deliver the Series 2001-1 Certificates to or upon the order of the Transferor when authenticated in accordance with Section 6.2 of the Agreement.
Section 1.3 Form of Delivery of Series 2001-1 Certificates.
(a) The Class A Certificates shall be delivered as Book-Entry Certificates as provided in Sections 6.1, 6.2 and 6.10 of the Agreement and shall be
substantially in the form of Exhibit A-1 hereto. The Class B Certificates shall be delivered as Definitive Certificates as
provided in Sections 6.1, 6.2 and 6.10 of the Agreement and shall be substantially in the form of Exhibit A-2 hereto.
(b) The Depositary for the Class A Certificates shall be the Depositary Trust Company, and the Class A Certificates initially shall be registered in the name of Cede & Co., its nominee.
Section 2.1. Definitions. In the event that any term or provision contained herein shall conflict with or be inconsistent with any provision contained in the Agreement, the terms and provisions of this Supplement shall govern with respect to the Series 2001-1 Certificates. All Article, Section or subsection references herein shall mean Article, Section or subsections of this Supplement except as
otherwise provided herein. All capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Agreement. Each capitalized term defined herein shall relate only to the Series 2001-1 Certificates and to no other Series of Certificates issued by the Trust.
"Accumulation Date" shall mean the first day of the July 2003 Monthly Period.
"Accumulation Period" shall mean, with respect to the Class A Certificates, the period commencing on the Accumulation Date, or such later date as may be specified by the Servicer in accordance with Section 4.12, and continuing to and including the earliest of (x) the Early Amortization Commencement Date, (y) the end of the June 2004 Monthly Period and (z) the date of termination of the Trust pursuant to Section 12.1 of the Agreement.
"Accumulation Period Length" shall have the meaning specified in Section 4.12.
"Additional Certificate Date" shall have the meaning specified in subsection 4.10(a).
"Additional Certificates" shall have the meaning specified in subsection 4.10(a).
"Additional Interest" shall mean, at any time of determination, the sum of Class A Additional Interest and Class B Additional Interest, if any.
"Adjusted Invested Amount" shall mean for any Business Day an amount equal to the sum of the Class A Adjusted Invested Amount plus the Class B Invested Amount.
"Amortization Period Commencement Date" shall mean the earlier of the Accumulation Date, or such later date as may be specified by the Servicer in accordance with Section 4.12, and the Early Amortization Commencement Date.
"Available Reserve Account Amount" shall mean, with respect to any Transfer Date, the lesser of (a) the amount on deposit in the Reserve Account as of such date (before giving effect to any deposit or withdrawals made or to be made pursuant to subsections 4.6(a)(ix) and 4.13(d) to the Reserve Account on such date) and (b) the Required Reserve Account Amount.
"Available Series 2001-1 Finance Charge Collections" shall have the meaning specified in subsection 4.6(a).
"Available Shared Principal Collections" shall mean, for any Monthly Period, Shared Principal Collections available to be allocated to the Certificates from each other Series that has a controlled or scheduled amortization or accumulation period beginning after the July 2004 Distribution Date.
"Base Rate" shall mean, with respect to any Monthly Period, the sum of (i) the annualized percentage equivalent of the weighted average of the Class A Certificate Rate and the Class B Certificate Rate, both for the related Interest Accrual Period (weighted by the Class A Invested Amount and the Class B Invested Amount, both as of the last day of the Monthly Period, or in the case of the first Monthly Period, the Closing Date) and (ii) 2%.
"Business Day" shall mean, for the purpose of determining LIBOR, any Business Day as defined in the Agreement or any day on which banking institutions in London, England, trading in Dollar deposits in the London interbank market, are authorized or obligated by law or executive order to be closed and for all other purposes shall have the meaning provided in the Agreement.
"Carryover Class A Interest" shall mean, with respect to any Distribution Date, (a) any Class A Interest due but not paid on any previous Distribution Date plus (b) any Class A Additional Interest.
"Carryover Class B Interest" shall mean, with respect to any Distribution Date, (a) any Class B Interest due but not paid on any previous Distribution Date plus (b) any Class B Additional Interest.
"Carryover Interest" shall mean, with respect to any Distribution Date, the sum of Carryover Class A Interest and Carryover Class B Interest.
"Class A Additional Interest" shall have the meaning specified in subsection 4.3.
"Class A Adjusted Invested Amount" shall mean for any Business Day an amount equal to the Class A Invested Amount minus the aggregate principal amount on deposit in the Principal Funding Account on such Business Day.
"Class A Certificateholder" shall mean the Person in whose name a Class A Certificate is registered in the Certificate Register.
"Class A Certificateholders' Interest" shall mean, with respect to any date, the portion of the Series 2001-1 Certificateholders' Interest evidenced by the Class A Certificates.
"Class A Certificate Rate" shall mean, with respect to any Interest Accrual Period, a per annum rate equal to one-month LIBOR plus 0.11%.
"Class A Certificates" shall mean any of the certificates executed by the Transferor and authenticated by or on behalf of the Trustee, substantially in the form of Exhibit A-1 hereto.
"Class A Expected Final Payment Date" shall mean the July 2004 Distribution Date.
"Class A Floating Allocation Percentage" shall mean, with respect to any Monthly Period, the percentage equivalent of a fraction, the numerator of which is the Class A Adjusted Invested Amount as of (x) during the Revolving Period or the Accumulation Period with respect to Collections of Finance Charge Receivables and at all times with respect to Defaulted Amounts, the close of business on the last day of the immediately preceding Monthly Period (or, in the case of the first Monthly Period, the Closing Date) and (y) during an Early Amortization Period with respect to Collections of Finance Charge Receivables, the close of business on the last day of the Monthly Period immediately preceding the occurrence of an Early Amortization Event and the denominator of which is the greater of (a) the total amount of Principal Receivables in the Trust plus the amounts on deposit in the Special Funding Account as of the close of business on such date and (b) when used with respect to Collections of Finance Charge Receivables, the sum of the numerators with respect to all Classes of all Series and Participations then outstanding used to calculate the applicable allocation percentage; provided, that such calculations are subject to adjustment upon the direction of the Transferor, in accordance with subsection 2.9(g) of the Agreement, to give effect to additions of Additional Accounts.
"Class A Initial Invested Amount" shall mean the aggregate initial principal amount of the Class A Certificates, which is $750,000,000.
"Class A Interest" shall mean the interest distributable in respect of the Class A Certificates as calculated in accordance with Section 4.3.
"Class A Interest Shortfall" shall have the meaning specified in Section 4.3.
"Class A Invested Amount" shall mean, when used with respect to any date of determination, an amount equal to (a) the Class A Initial Invested Amount, minus (b) the aggregate amount of principal payments made to Class A Certificateholders prior to such date, minus (c) the aggregate amount of Class A Investor Charge-Offs for all prior Distribution Dates, plus (d) the sum of the aggregate amount allocated with respect to Class A Investor Charge-Offs and available on all prior Distribution Dates pursuant to subsection 4.6(a)(vi) and, with respect to such subsection, pursuant to Sections 4.7 and 4.9, for the purpose of reinstating amounts reduced pursuant to the foregoing clause (c), plus (e) the amount of any increase in the Class A Invested Amount resulting from the issuance of Additional Certificates under Section 4.10 and minus (f) the amount of any reduction in the Class A Invested Amount as a result of the purchase by the Transferor and subsequent cancellation of Class A Certificates pursuant to Section 7.4.
"Class A Investor Charge-Offs" shall have the meaning specified in subsection 4.8(b).
"Class A Investor Defaulted Amount" shall mean, with respect to each Distribution Date, an amount equal to the product of (a) the Class A Floating Allocation Percentage applicable on such date and (b) the Defaulted Amount for the related Monthly Period.
"Class A Percentage" shall mean, as of any date of determination, a fraction the numerator of which is the Class A Adjusted Invested Amount and the denominator of which is the sum of the Class A Adjusted Invested Amount and the Class B Invested Amount.
"Class A Principal" shall mean the principal distributable in respect of the Class A Certificates as calculated in accordance with subsection 4.4(a).
"Class A Required Amount" shall mean, with respect to each Distribution Date, the amount determined by the Servicer equal to the excess, if any, of (x) the sum of (i) Class A Interest for the related Monthly Period, (ii) any Carryover Class A Interest previously due but not paid to the Class A Certificateholders on a prior Distribution Date, (iii) the Class A Servicing Fee for the related Monthly Period, (iv) the Class A Investor Defaulted Amount for the related Monthly Period and (v) the Class A Percentage of the Series 2001-1 Allocation Percentage of the adjustment payments required to be made by the Transferor pursuant to Section 3.9 of the Agreement but not made on or prior to the related Distribution Date, over (y) the sum of the Available Series 2001-1 Finance Charge Collections applied with respect to such amounts pursuant to subsection 4.6(a) plus any Excess Finance Charge Collections from other Series in Group I and Excess Transferor Finance Charge Collections allocable to Series 2001-1 and applied with respect to such amounts pursuant to Section 4.7.
"Class A Servicing Fee" shall have the meaning specified in Section 3.1.
"Class B Additional Interest" shall mean the amount, if any, distributable in respect of the Class B Certificates as calculated pursuant to a supplemental agreement entered into in accordance with Section 7.3.
"Class B Certificateholder" shall mean the Person in whose name a Class B Certificate is registered in the Certificate Register.
"Class B Certificateholders' Interest" shall mean, with respect to any date, the portion of the Series 2001-1 Certificateholders' Interest evidenced by the Class B Certificates.
"Class B Certificate Rate" shall mean, with respect to any Interest Accrual Period, a per annum rate equal to 0%; provided, however such interest rate may be increased pursuant to the terms of a supplemental agreement entered into in accordance with Section 7.3.
"Class B Certificates" shall mean any of the certificates executed by the Transferor and authenticated by or on behalf of the Trustee, substantially in the form of Exhibit A-2 hereto.
"Class B Floating Allocation Percentage" shall mean, with respect to any Monthly Period, the percentage equivalent of a fraction, the numerator of which is the Class B Invested Amount as of (x) during the Revolving Period or the Accumulation Period with respect to Collections of Finance Charge Receivables and at all times with respect to Defaulted Amounts, the close of business on the last day of the immediately preceding Monthly Period (or, in the case of the first Monthly Period, the Closing Date) and (y) during an Early Amortization Period with respect to Collections of Finance Charge Receivables, the close of business on the last day of the Monthly Period immediately preceding the occurrence of an Early Amortization Event and the denominator of which is the greater of (a) the total amount of Principal Receivables plus the amount on deposit in the Special Funding Account as of the close of business on such date and (b) when used with respect to Collections of Finance Charge Receivables, the sum of the numerators with respect to all Classes of all Series and Participations then outstanding used to calculate the applicable allocation percentage; provided, that such calculations are subject to adjustment upon the direction of the Transferor, in accordance with subsection 2.9(g) of the Agreement, to give effect to additions of Additional Accounts.
"Class B Initial Invested Amount" shall mean the aggregate initial principal amount of the Class B Certificates, which is $250,000,000.
"Class B Interest" shall mean the interest, if any, distributable in respect of the Class B Certificates as may be calculated pursuant to a supplemental agreement entered into in accordance with Section 7.3.
"Class B Invested Amount" shall mean, when used with respect to any date of determination, an amount equal to (a) the Class B Initial Invested Amount, minus (b) the aggregate amount of principal payments made to Class B Certificateholders prior to such date, minus (c) the aggregate amount of Class B Investor Charge-Offs for all prior Distribution Dates, minus (d) the aggregate amount of Reallocated Class B Principal Collections for which the Class B Invested Amount has been reduced for all prior Distribution Dates, plus (e) the sum of the aggregate amount allocated and available on all prior Distribution Dates pursuant to subsection 4.6(a)(vii) and, with respect to such subsection, pursuant to Section 4.7, for the purpose of reinstating amounts reduced pursuant to the foregoing clauses (c) and (d) plus (f) the amount of any increase in the Class B Invested Amount resulting from the issuance of Additional Certificates under Section 4.10.
"Class B Investor Charge-Offs" shall have the meaning specified in subsection 4.8(a).
"Class B Investor Defaulted Amount" shall mean, with respect to each Distribution Date, an amount equal to the product of (a) the Class B Floating Allocation Percentage applicable on such date and (b) the Defaulted Amount for the related Monthly Period.
"Class B Percentage" shall mean, as of any date of determination, a fraction the numerator of which is the Class B Invested Amount and the denominator of which is the sum of the Class A Adjusted Invested Amount and the Class B Invested Amount.
"Class B Principal" shall mean the principal distributable in respect of the Class B Certificates as calculated in accordance with subsection 4.4(b).
"Class B Principal Allocation Percentage" shall mean, with respect to any Monthly Period, the percentage equivalent of a fraction, the numerator of which is (a) during the Revolving Period, the Class B Invested Amount as of the last day of the immediately preceding Monthly Period (or, in the case of the first Monthly Period, the Closing Date), (b) during the Accumulation Period, the Class B Invested Amount as of the last day of the Revolving Period, and (c) during the Early Amortization Period, the Class B Invested Amount as of the last day of the Revolving Period, or, if less, the last numerator used to calculate the Class B Principal Allocation Percentage in the Accumulation Period, if any, and the denominator of which is the greater of (a)(x) if only one Series is outstanding (i) during the Revolving Period, the sum of the total amount of Principal Receivables in the Trust and the principal amount on deposit in the Special Funding Account as of the last day of the immediately preceding Monthly Period and (ii) during the Accumulation Period and the Early Amortization Period the sum of the total amount of Principal Receivables in the Trust and the principal amount on deposit in the Special Funding Account as of the last day of the Revolving Period and (y), if more than one Series is outstanding, the sum of the total amount of Principal Receivables in the Trust and the principal amount on deposit in the Special Funding Account as of the last day of the immediately preceding Monthly Period (or, in the case of the first Monthly Period, the Closing Date) and (b) the sum of the numerators used to calculate the principal allocation percentages for all Series and Participations outstanding as of the date as to which such determination is being made; provided, that such calculations are subject to adjustment upon the direction of the Transferor, in accordance with subsection 2.9(g) of the Agreement, to give effect to additions of Additional Accounts.
"Class B Servicing Fee" shall have the meaning specified in Section 3.1.
"Closing Date" shall mean August 22, 2001.
"Controlled Accumulation Amount" shall mean $62,500,000, provided that such amount may be increased pursuant to Section 4.10 as a result of the issuance of Additional Certificates; provided,
further, that, if the Accumulation Period is modified pursuant to Section 4.12, (i) the Controlled Accumulation Amount for each Distribution Date with respect to the Accumulation Period shall mean the amount determined in accordance with Section 4.12 on the date on which the Accumulation Period has most recently been modified and (ii) the sum of the Controlled Accumulation Amounts for all Distribution Dates with respect to the modified Accumulation Period shall not be less than the Class A Invested Amount.
"Controlled Deposit Amount" shall mean, with respect to any Distribution Date with respect to the Accumulation Period, an amount equal to the Controlled Accumulation Amount plus the Deficit Controlled Accumulation Amount for the preceding Distribution Date, if any.
"Covered Amount" shall mean, with respect to any Interest Accrual Period prior to the payment in full of the Class A Invested Amount, the product of (a) the Class A Certificate Rate in effect with respect to the related Interest Accrual Period, (b) the Principal Funding Account Balance as of the first day of such Interest Accrual Period, and (c) a fraction the numerator of which is the actual number of days in the related Interest Accrual Period and the denominator of which is 360.
"Deficit Controlled Accumulation Amount" shall mean, on each Distribution Date with respect to the Accumulation Period, the excess, if any, of the Controlled Deposit Amount for such Distribution Date over the amount distributed from the Collection Account as Class A Principal for such Distribution Date.
"Distribution Date" shall mean September 25, 2001, and the 25th day of each month thereafter, or if such day is not a Business Day, the next succeeding Business Day.
"Early Amortization Commencement Date" shall mean earlier of the date on which an Early Amortization Event is deemed to occur or the date on which a Series 2001-1 Early Amortization Event is deemed to occur.
"Early Amortization Event" shall mean any of the events specified in Section 9.1 of the Agreement.
"Early Amortization Period" shall mean the period beginning on the earlier of (a) the day on which a Series 2001-1 Early Amortization Event or an Early Amortization Event occurs or is deemed to have occurred and (b) the Class A Expected Final Payment Date if the Class A Invested Amount has not been paid in full on such date, and ending on the earlier of (i) the date on which the Class A Invested Amount and the Class B Invested Amount have been paid in full and (ii) the Series 2001-1 Termination Date.
"Enhancement" shall mean, with respect to the Class A Certificates, the subordination of the Class B Invested Amount.
"Excess Finance Charge Collections" shall mean, with respect to any Distribution Date, as the context requires, either (x) the amount described in subsection 4.6(a)(x) allocated to the Series 2001-1 Certificates but available to cover shortfalls in amounts paid from Collections of Finance Charge Receivables for other Series, if any, or (y) the aggregate amount of Collections of Finance Charge Receivables allocable to other Series in excess of the amounts necessary to make required payments with respect to such Series, if any, and available to cover shortfalls with respect to the Series 2001-1 Certificates.
"Excess Spread Percentage" shall mean, for any Distribution Date, the amount, if any, by which the Portfolio Yield for the related Monthly Period exceeds the Base Rate for the related Monthly Period.
"Excess Transferor Finance Charge Collections" shall have the meaning specified in subsection 4.2(d).
"Floating Allocation Percentage" shall mean, with respect to any date of determination, the sum of the Class A Floating Allocation Percentage and Class B Floating Allocation Percentage on such date.
"Initial Invested Amount" shall mean the sum of the Class A Initial Invested Amount and the Class B Initial Invested Amount.
"Interest Accrual Period" shall mean, with respect to a Distribution Date, the period from and including the preceding Distribution Date to and excluding such Distribution Date; provided, however, that the initial Interest Accrual Period shall be the period from the Closing Date to and excluding the first Distribution Date.
"Invested Amount" shall mean, as of any date of determination, an amount equal to the sum of (a) the Class A Invested Amount as of such date and (b) the Class B Invested Amount as of such date.
"Investor Certificateholder" shall mean the Holder of record of an Investor Certificate.
"Investor Certificates" shall mean the Class A Certificates and the Class B Certificates; provided, however, that the Class B Certificates shall not be considered to be Investor Certificates for purposes of any Tax Opinion or other opinion relating to tax matters hereunder or under the Agreement for so long as they are held by the Transferor.
"Investor Charge-Offs" shall mean the sum of Class A Investor Charge-Offs and Class B Investor Charge-Offs.
"Investor Defaulted Amount" shall mean, with respect to any Monthly Period, an amount equal to the product of the Defaulted Amount and the Floating Allocation Percentage as of the related Distribution Date.
"Investor Percentage" shall mean, with respect to Principal Receivables, the Principal Allocation Percentage and, with respect to Finance Charge Receivables and Receivables in Defaulted Accounts, the Floating Allocation Percentage.
"LIBOR" shall mean, for any Interest Accrual Period, the London interbank offered rate for one-month Dollar deposits determined by the Trustee for each Interest Accrual Period in accordance with the provisions of Section 4.15 of this Supplement.
"LIBOR Determination Date" shall mean (i) August 20, 2001 for the period from and including the Closing Date to and excluding September 25, 2001 and (ii) the second Business Day prior to the commencement of the second and each subsequent Interest Accrual Period.
"Monthly Period" shall mean with respect to each Distribution Date, the immediately preceding fiscal month of the Transferor, provided, that the first Monthly Period shall begin on the Closing Date and end on the last day of the fiscal month of the Transferor during which the Closing Date occurs.
"Monthly Servicing Fee" shall have the meaning specified in Section 3.1.
"Percentage Allocation" shall have the meaning specified in subsection 4.2(b)(ii)(y).
"Portfolio Yield" shall mean for the Series 2001-1 Certificates, with respect to any Monthly Period, the annualized percentage equivalent of a fraction, the numerator of which is an amount equal to the sum of the Floating Allocation Percentage of collections of Finance Charge Receivables for that Monthly Period, minus if the Required Reserve Account Amount is greater than zero, the excess of the Principal Funding Investment Shortfall over the amount applied from the Reserve Account in accordance with Section 4.13(d), minus the Investor Defaulted Amount for that Monthly Period and the Series 2001-1 Allocation Percentage of any Adjustment Payments not made on or before the related Distribution Date, and the denominator of which is the Adjusted Invested Amount as of the last day of the preceding Monthly Period, or in the case of the first Monthly Period, the Closing Date.
For the first Monthly Period, the initial deposit of $1,800,000 made to the Collection Account on the Closing Date for application as Available Series 2001-1 Finance Charge Collections will be added to the numerator described above.
"Principal Allocation Percentage" shall mean, with respect to any Monthly Period, the percentage equivalent of a fraction, the numerator of which is (a) during the Revolving Period, the Invested Amount as of the last day of the immediately preceding Monthly Period (or, in the case of the first Monthly Period, the Closing Date), (b) during the Accumulation Period, the Invested Amount as of the last day of the Revolving Period; provided, that during the Accumulation Period on the date of issuance of a new Series, at the option of the Transferor, upon satisfaction of the Rating Agency Condition, such amount may be reduced to an amount not less than the greater of (x) the Adjusted Invested Amount on such date and (y) the amount which would result in a Principal Allocation Percentage which when multiplied by the amount of Collections of Principal Receivables for the preceding Monthly Period would equal (I) the Controlled Deposit Amount for such Monthly Period plus 10% of the Controlled Accumulation Amount or, if such date is on or after the Class A Expected Final Payment Date and the Class A Invested Amount has been paid in full, the Class B Invested Amount minus (II) the amount of any Available Shared Principal Collections with respect to such Monthly Period, and (c) during the Early Amortization Period, the Invested Amount as of the last day of the Revolving Period or, if less, the last numerator used to calculate the Principal Allocation Percentage in the Accumulation Period, if any, and the denominator of which is the greater of (a)(x) if only one Series is outstanding (i) during the Revolving Period, the sum of the total amount of Principal Receivables in the Trust and the principal amount on deposit in the Special Funding Account as of the last day of the immediately preceding Monthly Period and (ii) during the Accumulation Period and the Early Amortization Period the sum of the total amount of Principal Receivables in the Trust and the principal amount on deposit in the Special Funding Account as of the last day of the Revolving Period and (y), if more than one Series is outstanding, the sum of the total amount of Principal Receivables in the Trust as of the last day of the immediately preceding Monthly Period, and the principal amount on deposit in the Special Funding Account as of the last day of the immediately preceding Monthly Period (or, in the case of the first Monthly Period, the Closing Date) and (b) the sum of the numerators used to calculate the principal allocation percentages for all Series and Participations outstanding as of the date as to which such determination is being made; provided, further, that such calculations are subject to adjustment upon the direction of the Transferor, in accordance with subsection 2.9(g) of the Agreement, to give effect to additions of Additional Accounts.
"Principal Funding Account" shall have the meaning specified in subsection 4.11(a).
"Principal Funding Account Balance" shall mean, with respect to any date of determination during the Accumulation Period, 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 Interest Accrual Period during the Accumulation Period, the investment earnings on funds on deposit in the Principal Funding Account (net of investment expenses and losses) for such Interest Accrual Period.
"Principal Funding Investment Shortfall" shall mean, with respect to each Interest Accrual Period during the Accumulation Period, the amount, if any, by which the Principal Funding Investment Proceeds are less than the Covered Amount.
"Principal Shortfalls" shall mean on any Distribution Date (x) for Series 2001-1, (i) during the Accumulation Period, the excess of the Controlled Deposit Amount over the aggregate amount applied with respect thereto for such Distribution Date, and (ii) at all other times, the Invested Amount of the class then receiving principal payments after the application of Collections of Principal Receivables on such Distribution Date provided however, that after the Class A Invested Amount has been paid in full, such amount shall be equal to the Class B Invested Amount or (y) for any other Series the amounts specified as such in the Supplement for such other Series.
"Rating Agency" shall mean each of Standard & Poor's and Moody's.
"Reallocated Class B Principal Collections" shall have the meaning specified in Section 4.9.
"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 (i) the sum of the Class A Adjusted Invested Amount and the Class B Invested Amount on such Distribution Date plus (ii) the sum of the Class A Interest and Class B Interest, if any, for such Distribution Date and the Carryover Interest, if any, for such Distribution Date.
"Record Date" shall mean, with respect to any Distribution Date, the last Business Day of the calendar month preceding the month in which such Distribution Date occurs.
"Reference Banks" shall mean four major banks in the London interbank market selected by the Servicer.
"Required Amount" shall have the meaning specified in Section 4.7.
"Required Reserve Account Amount" shall mean, with respect to any Distribution Date on or after the Reserve Account Funding Date, an amount, if any, specified by the Transferor.
"Required Retained Transferor's Percentage" shall mean 2%; provided, however, that such percentage may be adjusted from time to time upon written notice from the Transferor to the Trustee if each Rating Agency initially contracted to rate the Class A Certificates shall have been notified of such amendment and shall have provided notice to the Trustee or the Servicer that such action would not result in a reduction or withdrawal of its rating of the Class A Certificates and such action shall not, as evidenced by a Tax Opinion, cause the Trust to be characterized for Federal income tax purposes as an association or publicly traded partnership taxable as a corporation or otherwise have any material adverse effect on the Federal income taxation of any outstanding Series of Certificates or any Certificate Owner.
"Reserve Account" shall have the meaning specified in subsection 4.13(a).
"Reserve Account Funding Date" shall mean the date specified by the Transferor for the commencement of the funding of the Reserve Account.
"Reserve Account Surplus" shall mean, as of any Transfer 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 have the meaning specified in subsection 4.13(c).
"Revolving Period" shall mean the period from and including the Closing Date to, but not including, the Amortization Period Commencement Date.
"Scheduled Series 2001-1 Termination Date" shall mean the July 2008 Distribution Date.
"Series Accounts" shall mean the Principal Funding Account and the Reserve Account.
"Series Invested Amount" shall mean, for Series 2001-1, as of any date of determination, an amount equal to the sum of (a) the Class A Adjusted Invested Amount as of such date and (b) the Class B Invested Amount as of such date.
"Series 2001-1" shall mean the Series of the Target Credit Card Master Trust represented by the Series 2001-1 Certificates.
"Series 2001-1 Allocation Percentage" shall mean, on any date of determination, the percentage equivalent of a fraction the numerator of which is the sum of the Class A Adjusted Invested Amount and the Class B Invested Amount and the denominator of which is the sum of the invested amounts (or adjusted invested amounts, as applicable) of all then outstanding Series.
"Series 2001-1 Certificateholder" shall mean the holder of record of any Series 2001-1 Investor Certificate.
"Series 2001-1 Certificateholders' Interest" shall have the meaning specified in Section 4.1.
"Series 2001-1 Certificates" shall have the meaning specified in Section 1.1.
"Series 2001-1 Early Amortization Event" shall have the meaning specified in Section 6.1.
"Series 2001-1 Termination Date" shall mean the earlier to occur of (i) the day after the Distribution Date on which the Series 2001-1 Certificates are paid in full, or (ii) the Scheduled Series 2001-1 Termination Date.
"Servicing Base Amount" shall have the meaning specified in Section 3.1.
"Servicing Fee Rate" shall mean 2.00% per annum.
"Shared Principal Collections" shall mean, as the context requires, either (a) the amount allocated to the Series 2001-1 Certificates which, in accordance with subsections 4.6(a)(iii), (iv), (v), (vi) and (vii), 4.6(b) and 4.6(c)(iii), may be applied in accordance with Section 4.4 of the Agreement or (b) the amounts allocated to the investor certificates of other Series which the applicable Supplements for such Series specify are to be treated as "Shared Principal Collections" plus amounts specified in any Participation Supplement with respect to any participation to be treated as Shared Principal Collections which may be applied to cover Principal Shortfalls with respect to the Series 2001-1 Certificates.
"Special Payment Date" shall mean each Distribution Date following the Monthly Period in which an Early Amortization Event occurs with respect to an Early Amortization Period and each Distribution Date following the Class A Expected Final Payment Date.
"Specified Investor Default Amount" shall mean, for any Distribution Date, the sum of (a) the product of (x) 1.5 and (y) the average of the Investor Default Amounts for the three preceding Monthly Periods, and (b) the amount of unreimbursed Class B Investor Charge-Offs for the preceding Monthly Period.
"Shared Transferor Principal Collections" shall have the meaning specified in subsection 4.2(d).
"Telerate Page 3750" shall mean the display designated as page "3750" by Telerate, Inc. (or such other page as may replace Telerate Page 3750 on that service for the purpose of displaying London interbank offered rates of major banks).
"Termination Payment Date" shall mean the earlier of the first Distribution Date following (i) to the extent applicable, the liquidation or sale of the Receivables as a result of an Insolvency Event and (ii) the occurrence of the Scheduled Series 2001-1 Termination Date.
"Transferor Retained Certificates" shall mean investor certificates of any Series, including the Class B Certificates, which the Transferor retains, but only to the extent that and for so long as the Transferor is the Holder of such Certificates.
"Transferor Retained Class" shall mean the Class B Certificates.
Section 3.1. Servicing Compensation. The share of the Servicing Fee allocable to the Series 2001-1 Certificateholders with respect to any Distribution Date (the "Monthly Servicing Fee") shall be equal to one-twelfth of the product of (a) the Servicing Fee Rate and (b) (i) the sum of the Class A Adjusted Invested Amount and the Class B Invested Amount as of the last day of the Monthly Period second preceding such Distribution Date, minus (ii) the product of the amount, if any, on deposit in the Special Funding Account as of the last day of the Monthly Period second preceding such Distribution Date and the Floating Allocation Percentage with respect to such Monthly Period (the amount calculated pursuant to this clause (b) is referred to as the "Servicing Base Amount"); provided, however, that with respect to the first Distribution Date, the Monthly Servicing Fee shall be $654,762. The share of the Monthly Servicing Fee allocable to the Class A Certificateholders with respect to any Distribution Date (the "Class A Servicing Fee") shall be equal to the product of (a) the Class A Percentage and (b) the Monthly Servicing Fee; provided, however, that with respect to the first Distribution Date the Class A Servicing Fee shall be $491,072. The share of the Monthly Servicing Fee allocable to the Class B Certificateholders with respect to any Distribution Date (the "Class B Servicing Fee") shall be equal to the product of (a) the Class B Percentage and (b) the Monthly Servicing Fee; provided, however, that with respect to the first Distribution Date, the Class B Servicing Fee shall be $163,690. The remainder of the Servicing Fee shall be paid from amounts allocable to the Holder of the Transferor Certificate, holders of Participations or the Certificateholders of other Series (as provided in the related Supplements) and in no event shall the Trust, the Trustee or the Series 2001-1 Certificateholders be liable for the share of the Servicing Fee to be paid from amounts allocable to the Holder of the Transferor Certificate, holders of a Participation or the Certificateholders of any other Series. The Monthly Servicing Fee shall be payable to the Servicer solely to the extent amounts are available for distribution in respect thereof pursuant to Section 4.6(a)(ii).
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.1. Rights of Certificateholders. The Series 2001-1 Certificates shall represent undivided interests in the Trust, consisting of the right to receive, to the extent necessary to make the required payments with respect to such Series 2001-1 Certificates at the times and in the amounts specified in this Agreement, (a) the Floating Allocation Percentage and the Principal Allocation Percentage (as applicable from time to time) of Collections, (b) funds distributable to the Series 2001-1 Certificates pursuant to Section 4.2 of the Agreement on deposit in the Special Funding Account, (c) funds on deposit in the Principal Funding Account and (d) funds on deposit in the Reserve Account (for such Series, the "Series 2001-1 Certificateholders' Interest"). The Class B Certificates shall be subordinated to the Class A Certificates to the extent provided in this Article IV. The Class B Certificates will not have the right to receive payments of principal until the Class A Invested Amount has been paid in full, except as provided in Section 7.3.
Section 4.2. Collections and Allocation; Payments on Transferor Certificate.
(a) Collections. The Servicer will apply or will instruct the Trustee to apply all funds on deposit in the Collection Account, the Special Funding Account, the Principal Funding Account and the Reserve Account allocable to the Series 2001-1 Certificates as described in this Article IV and Article IV of the Agreement. In addition, on the Closing Date, the Transferor shall make a deposit to the Collection Account in the amount of $1,800,000, to be allocated to the Series 2001-1 Certificates.
(b) Allocations. The Servicer will apply, or will instruct the Trustee to apply, all collections and other funds that are allocated to the Investor Certificates as follows:
(i) Daily Allocations During the Revolving Period. During the Revolving Period, the Servicer shall, prior to the close of business on any Date of Processing, allocate the following amounts as set forth below:
(x) Allocate to the Investor Certificateholders and deposit in the Collection Account in accordance with Section 4.3(a) of the Agreement an amount equal to the product of (A) the Floating Allocation Percentage and (B) the aggregate amount of Collections of Finance Charge Receivables on such Date of Processing, provided, however, that, with respect to each Monthly Period, such amount shall only be deposited until such time as the amount of Collections of Finance Charge Receivables allocable to Series 2001-1 deposited in the Collection Account equals the amount of Class A Interest, Class B Interest, if any, Carryover Interest, if any, and, at any time that Retailers National Bank is not the Servicer, the Servicing Fee, in each case due on the Distribution Date in the next Monthly Period, and, if on the Distribution Date in the preceding Monthly Period the Excess Spread Percentage was less than 4% or if there were unreimbursed Class B Investor Charge-Offs or unreimbursed Reallocated Class B Principal Collections, the Specified Investor Default Amount determined on the Distribution Date in the preceding Monthly Period.
(y) Allocate to the Investor Certificateholders an amount equal to the product of (A) the Principal Allocation Percentage on such Date of Processing and (B) the aggregate amount of Collections of Principal Receivables on such Date of Processing and deposit in the Collection Account the portion of such amount equal to the product of (x) the Class B Principal Allocation Percentage on that Date of Processing and (y) the total amount of Collections of Principal Receivables on that Date of Processing to the extent that (I) the sum of the Class A Monthly Interest, the Carryover Class A Interest, the Class A Servicing Fee, if RNB is not the Servicer, and the Class A Percentage of the Specified Investor Default Amount determined on the Distribution Date in the preceding Monthly Period if on the Distribution Date in the preceding Monthly Period the Excess Spread Percentage was less than 4% or if there were unreimbursed Class B Investor Charge-Offs or unreimbursed Reallocated Class B Principal Collections, is greater than (II) the amount of Collections of Finance Charge Receivables deposited in the Collection Account on that Date of Processing and on each preceding Date of Processing in that Monthly Period pursuant to subsection 4.2(b)(i)(x).
These Collections of Principal Receivables shall only be retained or deposited in the Collection Account pursuant to this subsection 4.2(b)(i)(y) to the extent that the sum of the Collections of Principal Receivables and the Collections of Finance Charge Receivables retained in the Collection Account pursuant to this subsection 4.2(b)(i) do not exceed the sum of the Class A Monthly Interest, the Carryover Class A Interest, the Class A Servicing Fee, if RNB is not the Servicer, and the Class A Percentage of the Specified Investor Default Amount determined on the Distribution Date in the preceding Monthly Period if the conditions requiring that deposit exist. The excess of the amount of Collections of Principal Receivables on deposit in the Collection Account over the amount required to be retained in the Collection Account and the remainder of the Principal Allocation Percentage of the amount of Collections of Principal Receivables on that Date of Processing shall be paid to the Holder of the Transferor Certificate; provided, however, that the amount to be paid to the Holder of the Transferor Certificate pursuant to this Section 4.2(b)(i)(y) on any Date of Processing shall be first, if any other Principal Sharing Series is outstanding and in its Amortization Period, deposited in the Collection Account for application, to the extent necessary, as Shared Principal Collections on the related Distribution Date and second shall be paid to such Holder only if on such Date of Processing the Transferor Amount (excluding the interest represented by the Supplemental Certificate) is greater than the Required
Retained Transferor Amount and otherwise shall be deposited in the Special Funding Account; provided, further, that such amounts will be paid to the Holder of the Transferor Certificate subject to the obligation of the Transferor to make an amount equal to the Reallocated Class B Principal Collections for each Monthly Period available on the related Distribution Date for application in accordance with Section 4.9.
(ii) Daily Allocations During the Accumulation Period. During the Accumulation Period, the Servicer shall, prior to the close of business on any Date of Processing, allocate the following amounts as set forth below:
(x) Allocate to the Investor Certificateholders and deposit in the Collection Account in accordance with Section 4.3(a) of the Agreement an amount equal to the product of (A) the Floating Allocation Percentage on such Date of Processing and (B) the aggregate amount of Collections of Finance Charge Receivables on such Date of Processing, provided, however, that, with respect to each Monthly Period, such amount shall only be deposited until such time as the amount of Collections of Finance Charge Receivables allocable to Series 2001-1 on deposit in the Collection Account equals the amount of Class A Interest, Class B Interest, if any, Carryover Interest, if any, and, at any time that Retailers National Bank is not the Servicer, the Servicing Fee, in each case due on the Distribution Date in the next Monthly Period, and, if on the Distribution Date in the preceding Monthly Period the Excess Spread Percentage was less than 4% or if there were unreimbursed Class B Investor Charge-Offs or unreimbursed Reallocated Class B Principal Collections, the Specified Investor Default Amount determined on the Distribution Date in the preceding Monthly Period.
(y) During each Monthly Period prior to the Monthly Period in which the Class A Invested Amount is paid in full, allocate to the Class A Certificateholders and deposit in the Collection Account in accordance with Section 4.3(a) of the Agreement an amount equal to the product of (x) the Principal Allocation Percentage on such Date of Processing and (y) the aggregate amount of Collections of Principal Receivables on such Date of Processing (for any such date, a "Percentage Allocation"); provided, however, that with respect to each Monthly Period, such amount shall only be deposited in the Collection Account until such time as the amount of Collections of Principal Receivables allocable to Series 2001-1 deposited in the Collection Account equals the sum of (i) the Controlled Deposit Amount for the related Distribution Date and (ii) the product of the Class B Principal Allocation Percentage on that Date of Processing and the total amount of Collections of Principal Receivables on that Date of Processing to the extent that (A) the sum of the Class A Monthly Interest, the Carryover Class A Interest, the Class A Servicing Fee, if RNB is not the Servicer, and the Class A Percentage of the Specified Investor Default Amount determined on the Distribution Date in the preceding Monthly Period if on the Distribution Date in the preceding Monthly Period the Excess Spread Percentage was less than 4% or if there were unreimbursed Class B Investor Charge-Offs or unreimbursed Reallocated Class B Principal Collections, is greater than (B) the amount of Collections of Finance Charge Receivables deposited in the Collection Account on that Date of Processing and on each preceding Date of Processing in that Monthly Period pursuant to subsection 4.2(b)(ii)(x).
Collections of Principal Receivables allocable to Series 2001-1 will only be retained or deposited in the Collection Account in excess of the Controlled Deposit Amount to the extent that the Collections of Principal Receivables and Collections of Finance Charge Receivables retained in the Collection Account pursuant to this subsection 4.2(b)(ii)(y) do not exceed the sum of the Class A Monthly Interest, the Carryover Class A Interest, the Class A Servicing Fee, if RNB is not the servicer, and the Class A Percentage of the Specified Investor Default Amount determined on the Distribution Date in the preceding Monthly Period if the conditions requiring that deposit exist. The excess of the amount of Collections of Principal Receivables on deposit in the Collection Account over the amount required to be retained in the Collection Account and the remainder of the Principal Allocation Percentage of the
amount of Collections of Principal Receivables on that Date of Processing shall be first, if any other Principal Sharing Series is outstanding and in its Amortization Period, deposited in the Collection Account for application, to the extent necessary, as Shared Principal Collections on the related Distribution Date and second shall not be treated as a Percentage Allocation and shall be paid to the Holder of the Transferor Certificate only if the Transferor Amount (excluding the interest represented by the Supplemental Certificate) on such Date of Processing is greater than the Required Retained 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; provided, further, that such amounts will be paid to the Holder of the Transferor Certificate subject to the obligation of the Transferor to make an amount equal to the Reallocated Class B Principal Collections for each Monthly Period available on the related Distribution Date for application in accordance with Section 4.9.
(iii) Daily Allocations During the Early Amortization Period. During the Early Amortization Period, the Servicer shall, prior to the close of business on any Date of Processing, allocate the following amounts as set forth below:
(x) Allocate to the Investor Certificateholders and deposit in the Collection Account in accordance with Section 4.3(a) of the Agreement an amount equal to the product of (A) the Floating Allocation Percentage on such Date of Processing and (B) the aggregate amount of Collections of Finance Charge Receivables on such Date of Processing.
(y) Allocate to the Investor Certificateholders and deposit in the Collection Account in accordance with Section 4.3(a) of the Agreement an amount equal to the product of (A) the Principal Allocation Percentage on such Date of Processing and (B) the aggregate amount of Collections of Principal Receivables on such Date of Processing; provided, however, that after the date on which an amount of such Collections equal to the Invested Amount has been deposited into the Collection Account and allocated to the Investor Certificateholders, any excess of the amount determined in accordance with this subparagraph (y) shall be first, if any other Principal Sharing Series is outstanding and in its Amortization Period, deposited in the Collection Account for application, to the extent necessary, as Shared Principal Collections on the related Distribution Date and second shall be paid to the Holder of the Transferor Certificate only if on such Date of Processing the Transferor Amount (excluding the interest represented by the Supplemental Certificate) is greater than the Required Retained Transferor Amount and otherwise shall be deposited in the Special Funding Account.
(iv) Monthly Allocations During the Revolving Period and Accumulation Period. During the Revolving Period and Accumulation Period, the Servicer shall, prior to the close of business on any Transfer Date allocate to the Investor Certificateholders and deposit in the Collection Account an amount equal to the sum of (I) (A) the lesser of (1) the sum of (a) the product of (x) the Floating Allocation Percentage with respect to the preceding Monthly Period and (y) the aggregate amount of Collections of Finance Charge Receivables for the related Monthly Period, (b) the amount of Excess Finance Charge Collections allocated to Series 2001-1 for the related Monthly Period and (c) the amount of Excess Transferor Finance Charge Collections allocated to Series 2001-1 for the related Monthly Period and (2) the aggregate of the amounts to be paid on such Distribution Date pursuant to clause (y) of each of clauses (i) through (viii) of Section 4.6(a) and the amount described in Section 4.6(a)(ix), less (B) the daily amounts deposited in the Collection Account during such Monthly Period pursuant to subsections 4.2(b)(i)(x) and 4.2(b)(ii)(x) with respect to the Revolving Period and the Accumulation Period, respectively, (II) the excess of the amount of Reallocated Class B Principal Collections over the amount retained in the Collection Account pursuant to subsections 4.2(b)(i)(y) and 4.2(b)(ii)(y) with respect to the Revolving Period and Accumulation Period, (III) an amount equal to the pro rata portion of Finance Charge Shortfalls, if any, for Group I allocated to Series 2001-1 pursuant to Section 4.5 of the Agreement, not to exceed Excess Finance Charge Collections pursuant to Section 4.6(a)(x) available on the related Distribution Date, (IV) an amount equal to the amount of Shared Principal Collections to be
applied for the benefit of other Principal Sharing Series pursuant to Section 4.4 of the Agreement from amounts that were originally allocated to Series 2001-1, not to exceed (a) during the Revolving Period, the Principal Allocation Percentage of Principal Collections for the related Monthly Period or (b) during the Accumulation Period, the Principal Allocation Percentage of Principal Collections for the related Monthly Period less the amount thereof applied to pay Class A Principal on the related Distribution Date and (V) the amount of Shared Transferor Principal Collections to be applied to make payments of Class A Principal and Class B Principal on the related Distribution Date.
(c) The allocations to be made pursuant to this subsection 4.2 also apply to deposits into the Collection Account that are treated as Collections, including adjustment payments made in accordance with Section 3.9 of the Agreement, payment of the reassignment price pursuant to Section 2.5(b) of the Agreement and proceeds from the sale, disposition or liquidation of the Receivables pursuant to Section 10.2, 12.1 or 12.2 of the Agreement and Section 7.1. Such deposits to be treated as Collections will be allocated as Finance Charge Receivables or Principal Receivables as provided in the Agreement.
(d) Notwithstanding anything herein or in the Agreement, the Supplement for any other Series or any Enhancement Agreement for any Series to the contrary, all amounts designated to be paid to the Transferor or any holder of a Transferor Certificate in such documents, other than amounts allocated to be paid to the holder of any Supplemental Certificate, instead, to the extent that such amounts are derived from Collections of Finance Charge Receivables and other amounts applied like collections of Finance Charge Receivables, including any amounts constituting Excess Finance Charge Collections remaining after application thereof to all Series but prior to payment thereof to the Transferor, shall be deemed to be "Excess Transferor Finance Charge Collections" and to the extent that such amounts are derived from Collections of Principal Receivables, and to the extent of any Excess Transferor Finance Charge Collections remaining after application thereof to each Series designated to be entitled thereto, shall be deemed to be "Shared Transferor Principal Collections."
Section 4.3. Determination of Monthly Interest for the Series 2001-1 Certificates.
The amount of monthly interest (the "Class A Interest") allocable to the Class A Certificates with respect to any Distribution Date shall be
an amount equal to the product of (i) the Class A Certificate Rate for the related Interest Accrual Period, (ii) the outstanding principal balance of the Class A
Certificates as of the close of business on the last day of the preceding Monthly Period, and (iii) a fraction the numerator of which is the actual number of days in the related Interest
Accrual Period and the denominator of which is 360, provided, however, that with respect to the first
Distribution Date after the Closing Date the Class A Interest shall be an amount equal to $2,613,750.
On the Determination Date preceding each Distribution Date, the Servicer shall determine an amount (the "Class A Interest Shortfall") equal to the excess, if any, of (x) the Class A Interest for the Interest Accrual Period applicable to such Distribution Date over (y) the amount available to be paid to the Class A Certificateholders in respect of interest on such Distribution Date. If there is a Class A Interest Shortfall with respect to any Distribution Date, an additional amount ("Class A Additional Interest") shall be payable as provided herein with respect to the Class A Certificates on each Distribution Date following such Distribution Date, to and including the Distribution Date on which such Class A Interest Shortfall is paid to Class A Certificateholders, equal to the product of (i) the Class A Certificate Rate plus 2% per annum, (ii) such Class A Interest Shortfall remaining unpaid, and (iii) a fraction the numerator of which is the actual number of days in the related Interest Accrual Period and the denominator of which is 360. Notwithstanding anything to the contrary herein, Class A Additional Interest shall be payable or distributed to Class A Certificateholders only to the extent permitted by applicable law.
Section 4.4. Determination of Principal Amounts.
(a) The amount of principal (the "Class A Principal") distributable from the Collection Account with respect to the Class A
Certificates on each Distribution Date with respect to the Amortization Period shall be equal to an amount calculated as follows: the sum of (i) an amount equal to the product of the Principal
Allocation Percentage and the aggregate amount of Collections of Principal Receivables (subtracting from such product the amount of Reallocated Class B Principal Collections) with respect to
the preceding Monthly Period, (ii) any amount on deposit in the Special Funding Account that is distributable to the Class A Certificates pursuant to subsection 4.6(d) with respect to
the preceding Monthly Period, (iii) the amount, if any, allocated to the Class A Certificates pursuant to subsections 4.6(a)(iii), (iv), (v), (vi) and (vii) with respect to
the preceding Monthly Period, (iv) the amount of Shared Principal Collections allocated to Series 2001-1 with respect to the preceding Monthly Period pursuant to
Section 4.4 of the Agreement and (v) the amount of Shared Transferor Principal Collections allocated to Series 2001-1 with respect to the preceding Monthly Period
pursuant to subsection 4.5(b); provided, however, that (i) with respect to any Distribution Date
during the Accumulation Period, Class A Principal may not exceed the Controlled Deposit Amount for such Distribution Date and (ii) with respect to any Distribution Date, Class A
Principal may not exceed the Class A Adjusted Invested Amount.
(b) The amount of principal (the "Class B Principal") distributable from the Collection Account with respect to the Class B Certificates on each Distribution Date on and after the Distribution Date on which the Class A Invested Amount is paid in full, shall be an amount equal to the lesser of: (x) the sum of (i) an amount equal to the product of the Principal Allocation Percentage and the aggregate amount of Collections of Principal Receivables (subtracting from such product the amount of Reallocated Class B Principal Collections) with respect to the preceding Monthly Period, (ii) any amount on deposit in the Special Funding Account that is distributable to the Class B Certificates pursuant to subsection 4.6(d) with respect to the preceding Monthly Period, and (iii) the amount, if any, allocated to the Class B Certificates pursuant to subsections 4.6(a)(iv), (v) and (vii) with respect to the preceding Monthly Period, (iv) the amount of Shared Principal Collections allocated to Series 2001-1 with respect to the preceding Monthly Period pursuant to Section 4.4 of the Agreement and (v) the amount of Shared Transferor Principal Collections allocated to Series 2001-1 with respect to the preceding Monthly Period pursuant to subsection 4.5(b), provided, however, that with respect to the Distribution Date on which the Class A Invested Amount is paid in full, the amounts described in clauses (i), (iv) and (v) shall be net of any amount thereof applied to the payment of Class A Principal, and (y) the Class B Invested Amount.
Section 4.5. Shared Principal Collections.
(a) Shared Principal Collections allocated to the Series 2001-1 Certificates and to be applied pursuant to subsection 4.4(a)(iv) and subsection
4.4(b)(v) for any Distribution Date with respect to the Amortization Period shall mean an amount equal to the product of (x) Shared Principal
Collections for all Series for such date and (y) a fraction, the numerator of which is the Principal Shortfall for the Series 2001-1 Certificates for such date and the
denominator of which is the aggregate amount of Principal Shortfalls
for all Series for such date. For any Distribution Date with respect to the Revolving Period, Shared Principal Collections allocated to the Series 2001-1 Certificates shall be zero.
(b) Shared Transferor Principal Collections allocated to the Series 2001-1 Certificates and to be applied pursuant to subsection 4.4(a)(v) and subsection 4.4(b)(vi) for any Distribution Date with respect to the Amortization Period shall mean an amount equal to the product of (x) the aggregate amount of Shared Transferor Principal Collections for such date and (y) a fraction, the numerator of which is the Principal Shortfall for the Series 2001-1 Certificates for such date and the denominator of which is the aggregate amount of Principal Shortfalls for all Series for such date. For any Distribution Date with respect to the Revolving Period, Shared Transferor Principal Collections allocated to the Series 2001-1 Certificates shall be zero.
Section 4.6. Application of Funds on Deposit in the Collection Account for the Certificates.
(a) On each Distribution Date, the Servicer shall instruct the Trustee to withdraw, and the Trustee, acting in accordance with such instructions set forth in the Monthly
Servicer Report, shall withdraw from the Collection Account, or retain therein, as applicable, to the extent of the sum of (x) the Floating Allocation Percentage of Collections of Finance
Charge Receivables collected during the preceding Monthly Period plus (y) any investment earnings on amounts on deposit in the Principal Funding Account deposited in the Collection Account
pursuant to Section 4.11(b) and investment earnings on amounts on deposit in the Reserve Account deposited in the Collection Account pursuant to Section 4.13(b) plus (z) the Reserve Draw
Amount deposited into the Collection Account pursuant to subsection 4.13(d) (such sum, the "Available
Series 2001-1 Finance Charge Collections"; provided that, with respect to the first Distribution Date, the amount
deposited by the Transferor into the Collection Account pursuant to Section 4.2(a) shall also constitute Available Series 2001-1 Finance Charge Collections), the following
amounts, and apply such amounts as follows and in the following priority:
(i) Class A Interest. An amount equal to the lesser of (x) the Available Series 2001-1 Finance Charge Collections for such date and (y) the sum of Class A Interest and Carryover Class A Interest shall be paid to the Class A Certificateholders in accordance with Section 5.1. Notwithstanding anything to the contrary herein, the portion of Carryover Class A Interest that constitutes Class A Additional Interest shall be payable or distributable to Class A Certificateholders only to the extent permitted by applicable law.
(ii) Servicing Fee. An amount equal to the lesser of (x) any Available Series 2001-1 Finance Charge Collections remaining after giving effect to the withdrawal pursuant to subsection 4.6(a)(i) and (y) the Monthly Servicing Fee for such Monthly Period plus any unpaid Monthly Servicing Fees from prior Monthly Periods.
(iii) Class A Investor Defaulted Amount. An amount equal to the lesser of (x) any Available Series 2001-1 Finance Charge Collections remaining after giving effect to the withdrawals pursuant to subsections 4.6(a)(i) and (ii) and (y) the aggregate Class A Investor Defaulted Amount for such Distribution Date, shall be (A) during the Revolving Period, treated as Shared Principal Collections and (B)(I) during the Accumulation Period, on and prior to the date on which an amount equal to the Class A Invested Amount is available in the Principal Funding Account for distribution to the Class A Certificateholders, deposited in the Principal Funding Account, and (II) during the Early Amortization Period, on and prior to the date on which the Class A Invested Amount is paid in full, deposited in the Collection Account, in each case for payment to the Class A Certificateholders to the extent required in accordance with subsections 4.4(a)(iii) and 4.6(c).
(iv) Class B Investor Defaulted Amount. An amount equal to the lesser of (x) any Available Series 2001-1 Finance Charge Collections remaining after giving effect to the withdrawals pursuant to subsections 4.6(a)(i) through (iii) and (y) the aggregate Class B Investor Defaulted Amount for such Distribution Date, shall be (A) during the Revolving Period treated as Shared Principal Collections, (B)(I) during the Accumulation Period, on and prior to the day on which an amount
equal to the Class A Invested Amount is deposited in the Principal Funding Account, retained in the Principal Funding Account, and (II) during the Early Amortization Period, on and prior to the date on which the Class A Invested Amount is paid in full, deposited in the Collection Account, in each case for payment to the Class A Certificateholders to the extent required in accordance with subsections 4.4(a)(iii) and 4.6(c) and (C) on and after the date on which an amount equal to the Class A Invested Amount has been retained in the Principal Funding Account or the Class A Invested Amount has been paid in full, distributed to the Class B Certificateholders to the extent of the Class B Invested Amount.
(v) Adjustment Payment Shortfalls. An amount equal to the lesser of (x) any Available Series 2001-1 Finance Charge Collections remaining after giving effect to the withdrawals pursuant to subsections 4.6(a)(i) through (iv) and (y) an amount equal to the Floating Allocation Percentage of any adjustment payment which the Transferor is required but fails to make pursuant to subsection 3.9(a) of the Agreement shall be, (A) during the Revolving Period, treated as Shared Principal Collections, (B)(I) during the Accumulation Period, on and prior to the day on which an amount equal to the Class A Invested Amount is deposited in the Principal Funding Account, retained in the Principal Funding Account, and (II) during the Early Amortization Period, on and prior to the date on which the Class A Invested Amount is paid in full, deposited in the Collection Account, in each case for payment to the Class A Certificateholders to the extent required in accordance with subsections 4.4(a)(iii) and 4.6(c) and (C) on and after the date on which an amount equal to the Class A Invested Amount has been retained in the Principal Funding Account or the Class A Invested Amount has been paid in full, distributed to the Class B Certificateholders to the extent of the Class B Invested Amount.
(vi) Reimbursement of Class A Investor Charge-Offs. An amount equal to the lesser of (x) any Available Series 2001-1 Finance Charge Collections remaining after giving effect to the withdrawals pursuant to subsections 4.6(a)(i) through (v) and (y) the unreimbursed Class A Investor Charge-Offs, if any, will be applied to reimburse Class A Investor Charge-Offs, and shall be (A) during the Revolving Period, treated as Shared Principal Collections and (B)(I) during the Accumulation Period, on and prior to the day on which an amount equal to the Class A Invested Amount is available in the Principal Funding Account, retained in the Principal Funding Account, and (II) during the Early Amortization Period, on and prior to the date on which the Class A Invested Amount is paid in full, deposited in the Collection Account, in each case for payment to the Class A Certificateholders to the extent required in accordance with subsections 4.4(a)(iii) and 4.6(c).
(vii) Reimbursement of Class B Investor Charge-Offs and Reallocated Class B Principal Collections. An amount equal to the lesser of (x) any Available Series 2001-1 Finance Charge Collections remaining after giving effect to the withdrawals pursuant to subsections 4.6(a)(i) through (vi) and (y) the unreimbursed reductions in the Class B Invested Amount as a result of Class B Investor Charge-Offs and Reallocated Class B Principal Collections, if any, shall be (A) during the Revolving Period treated as Shared Principal Collections, (B)(I) during the Accumulation Period, on and prior to the day on which an amount equal to the Class A Invested Amount is deposited in the Principal Funding Account, retained in the Principal Funding Account, and (II) during the Early Amortization Period, on and prior to the date on which the Class A Invested Amount is paid in full, deposited in the Collection Account, in each case for payment to the Class A Certificateholders to the extent required in accordance with subsections 4.4(a)(iii) and 4.6(c) and (C) on and after the date on which an amount equal to the Class A Invested Amount has been retained in the Principal Funding Account or the Class A Invested Amount has been paid in full, distributed to the Class B Certificateholders to the extent of the Class B Invested Amount.
(viii) Class B Interest. An amount equal to the lesser of (x) any Available Series 2001-1 Finance Charge Collections remaining after giving effect to the withdrawals to subsections 4.6(a)(i) through (vii) and (y) the sum of Class B Interest and Carryover Class B Interest, if any, shall be paid to the Class B Certificateholders. Notwithstanding anything to the contrary herein, the portion of Carryover Class B Interest that constitutes Class B Additional Interest shall be payable or distributable to Class B Certificateholders only to the extent permitted by applicable law.
(ix) Reserve Account. On each Distribution Date from and after the Reserve Account Funding Date, but prior to the date of termination of the Reserve Account as described in subsection 4.13(f), an amount up to the excess, if any, of the Required Reserve Account Amount over the Available Reserve Account Amount shall be deposited into the Reserve Account.
(x) Excess Finance Charge Collections. Any Available Series 2001-1 Finance Charge Collections after giving effect to the withdrawals pursuant to subsection 4.6(a)(i) through (ix) shall be treated as Excess Finance Charge Collections, and the Servicer shall direct the Trustee in writing on each Distribution Date to withdraw such amounts from the Collection Account and to first make such amounts available to pay to Certificateholders of other Series in Group I to the extent of shortfalls, if any, in amounts payable to such certificateholders from Collections of Finance Charge Receivables allocated to such other Series in Group I, and then to pay any unpaid expenses or liabilities of the Trust, and then treated as Excess Transferor Finance Charge Collections.
(b) For each Distribution Date with respect to the Revolving Period, the sum of (x) the product of (i) the Principal Allocation Percentage and (ii) Collections of Principal Receivables with respect to such Distribution Date, minus (y) any Reallocated Class B Principal Collections, will be treated as Shared Principal Collections and applied, for such Distribution Date, as provided in Section 4.4 of the Agreement; provided, however, that if the Class B Invested Amount is reduced in accordance with Section 7.3(a), the amount specified above may be distributed to the Class B Certificateholders in an amount not to exceed such reduction.
(c) For each Distribution Date on and after the Amortization Period Commencement Date, the Trustee, acting pursuant to the Servicer's instructions, will distribute the amount of funds on deposit in the Collection Account available for payment of principal to Series 2001-1 Certificateholders in accordance with Section 4.4 in the following priority:
(i) an amount equal to Class A Principal, subject to the proviso in Section 4.4(a), (x) with respect to the Accumulation Period, to the Principal Funding Account for payment to the Class A Certificateholders on the earlier of the Class A Expected Final Payment Date and the first Special Payment Date or (y) with respect to the Early Amortization Period, to the Class A Certificateholders;
(ii) after the Class A Invested Amount has been paid in full, to the Class B Certificateholders, an amount equal to Class B Principal, subject to the proviso in Section 4.4(b); and
(iii) an amount equal to the sum of (I) the excess, if any, of (A) the sum of the amounts described in subsections 4.4(a)(i) and (iii) over (B) the Class A Principal and (II) the excess, if any, of (A) the sum of the amounts described in subsections 4.4(b)(i) and (iii) over (B) the Class B Principal will be treated as Shared Principal Collections and applied as provided in subsection 4.4 of the Agreement.
(d) On each Distribution Date during the Amortization Period, funds on deposit in the Special Funding Account and distributable to Series 2001-1 as provided in Section 4.2 of the Agreement will be deposited in the Collection Account. Such amounts will be allocated in the following order of priority:
(i) on each Distribution Date until the Class A Invested Amount is paid in full to the Class A Certificateholders in an amount equal to the lesser of the Principal Shortfall and the amount allocated with respect thereto pursuant to Section 4.2 of the Agreement; provided, however, such amount shall not exceed the Class A Principal after subtracting therefrom any amounts to be deposited in the Collection Account with respect thereto pursuant to subsections 4.4(a)(i), (iii),(iv) and (v); and provided, further that during the Accumulation Period such amount shall be deposited in the Principal Funding Account; and
(ii) on each Distribution Date on and after the Distribution Date on which the Class A Invested Amount is paid in full to the Class B Certificateholders in an amount not to exceed the Class B Invested Amount after subtracting therefrom any amounts to be deposited in the Collection Account with respect thereto pursuant to subsections 4.4(b)(i), (iii), (iv), (v) and (vi) to be paid to the Class B Certificateholders.
Section 4.7. Coverage of Required Amount for the Series 2001-1 Certificates.
To the extent that on any Distribution Date payments are being made pursuant to any of subsections 4.6(a)(i) through (ix), respectively, and the full amount to be paid pursuant
to any such subsection receiving payments on such Distribution Date is not paid in full on such Distribution Date, the Servicer shall apply all or a portion of the Excess Finance Charge Collections
from other Series with respect to such Distribution Date allocable to the Series 2001-1 Certificates in an amount equal to the excess of the full amount to be allocated or paid
pursuant to the applicable subsection over the amount applied with respect thereto from Available Series 2001-1 Finance Charge Collections on such Distribution Date (the
"Required Amount"). Excess Finance Charge Collections allocated to the Series 2001-1 Certificates for
any Distribution Date shall mean an amount equal to the product of (x) Excess Finance Charge Collections available from all other Series in Group I for such Distribution Date and (y) a
fraction, the numerator of which is the Required Amount for such Distribution Date and the denominator of which is the aggregate amount of shortfalls in required amounts or other amounts to be paid
from Collections of Finance Charge Receivables for all Series in Group I for such Distribution Date.
In addition, the Servicer shall apply all or a portion of the Excess Transferor Finance Charge Collections with respect to such Distribution Date allocable to the Series 2001-1 Certificates in an amount equal to the unpaid Required Amount after the application of Excess Finance Charge Collections. Excess Transferor Finance Charge Collections allocated to the Series 2001-1 Certificates for any Distribution Date shall mean an amount equal to the product of (x) Excess Transferor Finance Charge Collections available for such Distribution Date and (y) a fraction, the numerator of which is the unpaid Required Amount after the application of Excess Finance Charge Collections for such Distribution Date and the denominator of which is the aggregate amount of shortfalls for such Distribution Date in required amounts or other amounts to be paid from Collections of Finance Charge Receivables for all Series which are designated pursuant to the applicable Series Supplement to be entitled to share Excess Transferor Finance Charge Collections.
Section 4.8. Investor Charge-Offs.
(a) If, on any Determination Date, the aggregate Investor Defaulted Amount and the Series 2001-1 Allocation Percentage of any unpaid adjustment payments
required by Section 3.9 of the Agreement in the preceding Monthly Period exceed the Available Series 2001-1 Finance Charge Collections applied to the payment thereof pursuant
to subsections 4.6(a)(iii), (iv) and (v) plus the amount of Excess Finance Charge Collections and Excess Transferor Finance Charge Collections allocated thereto pursuant to
Section 4.7, plus the amount of Reallocated Class B Principal Collections applied with respect thereto pursuant to Section 4.9, the Class B Invested Amount will be reduced
by the amount by which the remaining aggregate Investor Defaulted Amount
and Series 2001-1 Allocation Percentage of such unpaid adjustment payments exceed the amount applied with respect thereto during such preceding Monthly Period (a "Class B Investor Charge-Off").
(b) In the event that any such reduction of the Class B Invested Amount would cause the Class B Invested Amount to be a negative number, the Class B Invested Amount will be reduced to zero, and the Class A Invested Amount will be reduced by the amount by which the Class B Invested Amount would have been reduced below zero, but not more than the aggregate Investor Defaulted Amount and Series 2001-1 Allocation Percentage of the unpaid adjustment payments required by Section 3.9 of the Agreement for such Monthly Period (a "Class A Investor Charge-Off").
Section 4.9. Reallocated Class B Principal Collections for the Series 2001-1 Certificates.
On each Distribution Date, the Servicer will apply or cause the Trustee to apply from amounts on deposit in the Collection Account an amount equal to the lesser of (i) the
Class B Invested Amount,
(ii) the product of (x) the Class B Principal Allocation Percentage and (y) the amount of Collections of Principal Receivables with respect to the related Monthly Period
and (iii) the Class A Required Amount for such Distribution Date (such amount called "Reallocated Class B Principal Collections") to the components of
the Class A Required Amount in the same priority as amounts are applied to such components from Available Series 2001-1 Finance Charge Collections pursuant to subsection
4.6(a).
Section 4.10. Issuance of Additional Investor Certificates.
(a) During the Revolving Period, the Transferor may, in its discretion and subject to the terms of subsection (b) below, request the Trustee to issue additional
Class A Certificates and Class B Certificates (each such additional certificates, the "Additional Certificates") in an amount and on the date (the
"Additional Certificate Date") determined by the Transferor. Upon issuance, the Additional Certificates will be identical in all respects (except that the principal amount
of such Additional Certificates may be different) to the Certificates currently outstanding and will be equally and ratably entitled to the benefits of this Supplement and the Agreement. As a result
of such issuance, the Class A Invested Amount and the Class B Invested Amount shall be increased pro rata and all the calculations
required pursuant to this Supplement shall, from and after the Additional Certificate Date, be computed using such increased Class A Invested Amount and Class B Invested Amount. The
Controlled Accumulation Amount shall be increased proportionally to reflect the additional principal amount of Class A Certificates and Class B Certificates represented by the Additional
Certificates.
(b) Additional Certificates shall only be issued upon satisfaction of all of the following conditions:
(i) on or before the fifth Business Day immediately preceding the date on which the Additional Certificates are to be issued, the Transferor shall give notice to the Trustee, the Servicer and the Rating Agency of such issuance and the date upon which it is to occur;
(ii) after giving effect to the addition of the Additional Certificates to the Series, the total amount of Principal Receivables in the Trust shall be greater than or equal to the Required Principal Balance;
(iii) on or before the Additional Certificate Date, the Rating Agency Condition shall have been satisfied;
(iv) the Transferor shall have delivered to the Trustee an Officer's Certificate dated as of the Additional Certificate Date, stating that the Transferor reasonably believes that the issuance of such Additional Certificates will not have a material adverse effect on the Class A Certificates or Class B Certificates, however, a dilution of voting rights does not constitute a material adverse effect for the purposes of this Section 4.10;
(v) as of the date of issuance of the Additional Certificates, the amount of unreimbursed Investor Charge-Offs shall be zero; and
(vi) the Transferor shall have delivered to the Trustee a Tax Opinion with respect to such issuance.
Section 4.11. Establishment of the Principal Funding Account for the Certificates.
(a) The Trustee, for the benefit of the holders of the Series 2001-1 Certificates, shall establish and maintain in the name of the Trustee, on behalf of the
Trust, an Eligible Deposit Account bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the holders of the Series 2001-1
Certificates (the "Principal Funding Account"). The Principal Funding Account shall initially be established with the Trustee. The Trustee shall possess all right, title
and interest in all funds on deposit from time to time in the Principal Funding Account and in all proceeds thereof for the benefit of the holders of the Series 2001-1 Certificates.
For purposes of the definition of "Required Retained Transferor Amount" the Principal Funding Account shall be an account specified in clause (i)(b) of the definition thereof. Except as
provided in subsection 4.11(b), the Principal Funding Account shall be under the sole dominion and control of the Trustee for the benefit of the holders of the Series 2001-1
Certificates. If, at any time, the Principal Funding Account ceases to be an Eligible Deposit Account, the Trustee (or the Servicer on its behalf) shall within 10 Business Days establish a new
Principal Funding Account meeting the conditions specified above, transfer any cash and/or any investments to such new Principal Funding Account and from the date such new Principal Funding Account is
established, it shall be, for the Certificates, the "Principal Funding Account."
(b) On each Distribution Date with respect to the Accumulation Period and any Special Payment Date, the Servicer shall withdraw from the Principal Funding Account and deposit in the Collection Account all interest and other investment income (net of losses and investment expenses) on funds then on deposit in the Principal Funding Account. Investment income (including reinvested interest) on funds deposited in the Principal Funding Account and invested pursuant to subsection 4.11(c) shall not be considered to be principal amounts on deposit in the Principal Funding Account for purposes hereof, and shall be treated as Available Series 2001-1 Finance Charge Collections with respect to the related Monthly Period. Funds on deposit in the Principal Funding Account prior to the Class A Expected Final Payment Date shall be invested at the direction of the Transferor by the Trustee in Eligible Investments. Any such investment shall (i) convert or be convertible into cash so that such funds shall be made available for withdrawal on or prior to the next Distribution Date and (ii) shall be held until maturity; provided, however, that the Trustee, at the direction of the Transferor, may sell an investment that is no longer an Eligible Investment prior to its maturity. Any request to the Trustee from the Transferor to invest funds on deposit in the Principal Funding Account shall be in writing and shall certify that the requested investment is an Eligible Investment which converts or is convertible into cash at or prior to the time required hereby.
(c) Pursuant to the authority granted to the Servicer in subsection 3.1(b) of the Agreement, the Servicer shall have the power, revocable by the Trustee, to make withdrawals and payments or to instruct the Trustee to make withdrawals and payments from the Principal Funding Account for the purposes of carrying out of the Servicer's or Trustee's duties hereunder. Pursuant to the authority granted to the Paying Agent in Sections 5.1 and 6.7 of the Agreement, the Paying Agent shall have the power, revocable by the Trustee, to withdraw funds from the Principal Funding Account for the purpose of making distributions to the Certificateholders.
Section 4.12. Accumulation Period.
The Accumulation Period is scheduled to commence on the Accumulation Date; provided, however, that if the Accumulation Period Length
(determined as described below) on any Determination Date on or after the June 2003 Determination
Date is less than 12 months,upon written notice to the Trustee, the Transferor and each Rating Agency, the Servicer, at its option, may elect to modify the date on which the Accumulation Period
actually commences to the first day of the month that is a number of months prior to the month in which the Class A Expected Final Payment Date occurs at least equal to the Accumulation Period
Length (so that, as a result of such election, the number of Monthly Periods in the Accumulation Period will at least equal the Accumulation Period Length); provided, however, that (i) the length of the Accumulation Period will not be less than one
month; (ii) such determination of the Accumulation Period Length shall be made on each Determination Date on and after the April 2003 Determination Date but prior to the commencement of
the Accumulation Period, and any election to shorten the Accumulation
Period shall be subject to the subsequent lengthening of the Accumulation Period to the Accumulation Period Length determined on any subsequent Determination Date, but the Accumulation Period shall in no event commence prior to the Accumulation Date, and (iii) notwithstanding any other provision of the Series 2001-1 Supplement to the contrary, no election to postpone the commencement of the Accumulation Period shall be made after an Early Amortization Event (as defined in the related Supplement) shall have occurred and be continuing with respect to any other Series. The "Accumulation Period Length" will mean a number of months such that the amount available for distribution of principal on the Class A Certificates on the Class A Expected Final Payment Date is expected to equal or exceed the Class A Invested Amount, assuming for this purpose that (1) the payment rate with respect to Collections of Principal Receivables remains constant at the lowest level of such payment rate during the twelve preceding Monthly Periods (or such lower payment rate as the Servicer may select), (2) the total amount of Principal Receivables in the Trust (and the principal amount on deposit in the Special Funding Account, if any) remains constant at the level on such date of determination, (3) no Early Amortization Event with respect to any Series will subsequently occur and (4) no additional Series (other than any Series being issued on such date of determination) will be subsequently issued. Any notice by the Servicer electing to modify the commencement of the Accumulation Period pursuant to this Section 4.12 shall specify (i) the Accumulation Period Length, (ii) the commencement date of the Accumulation Period and (iii) the Controlled Accumulation Amount with respect to each Monthly Period during the Accumulation Period.
Section 4.13. Reserve Account.
(a) The Servicer shall establish and maintain with an Eligible Institution, which may be the Trustee, in the name of the Trustee, on behalf of the Trust, for the benefit of
the Investor Certificateholders, 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 Investor Certificateholders. The Trustee shall possess all right, title and interest in all funds on deposit from
time to time in the Reserve Account and in all proceeds thereof. The Reserve Account shall be under the sole dominion and control of the Trustee for the benefit of the Investor
Certificateholders. If at any time the institution holding the Reserve Account ceases to be an Eligible Institution the Transferor shall notify the Trustee, and the Trustee upon being notified (or the
Servicer on its behalf) shall, within 10 Business Days, establish a new Reserve Account meeting the conditions specified above with an Eligible Institution, and shall transfer any cash or any
investments to such new Reserve Account. The Trustee, at the written direction of the Servicer, shall (i) make withdrawals from the Reserve Account from time to time in an amount up to the
Available Reserve Account Amount at such time, for the purposes set forth in this 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 4.6(a)(ix).
(b) Funds on deposit in the Reserve Account shall be invested by the Transferor (or, at the direction of the Transferor, by the Servicer or the Trustee on behalf of the Transferor) in Eligible Investments. Funds on deposit in the Reserve Account on any Transfer Date, after giving effect to any withdrawals from the Reserve Account on such Transfer Date shall be invested in such investments that will convert or be convertible into cash so that such funds will be available for withdrawal on or prior to the following Transfer Date. The Trustee shall maintain for the benefit of the Investor Certificateholders possession of the negotiable instruments or certificated securities, if any, evidencing such Eligible Investments. No Eligible Investment shall be disposed of prior to its maturity. On each Transfer Date, all interest and earnings (net of losses and investment expenses) accrued since the preceding Transfer Date on funds on deposit in the 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 for application as Available Series 2001-1 Finance Charge Collections on the following Distribution Date. For purposes of determining the availability of funds or the balance in the Reserve Account for any reason under this 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 each Transfer Date with respect to the Accumulation Period prior to the payment in full of the Class A Invested Amount and the first Transfer Date with respect to the Early Amortization Period, the Servicer shall calculate the "Reserve Draw Amount" which shall be equal to the Principal Funding Investment Shortfall with respect to each Transfer Date with respect to the Accumulation Period or the first Transfer Date with respect to the Early Amortization Period.
(d) In the event that for any Transfer 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 Transfer Date by the Trustee (acting in accordance with the written instructions of the Servicer), deposited into the Collection Account and included in Available Series 2001-1 Finance Charge Collections for such Transfer 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 on and prior to such Distribution Date, is greater than zero, the Trustee, acting in accordance with the written instructions of the Servicer, shall withdraw from the Reserve Account, and apply as Excess Finance Charge Collections, an amount equal to such Reserve Account Surplus.
(f) Upon the earliest to occur of (i) the termination of the Trust pursuant to Article XII of the Agreement, (ii) the day on which the Class A Invested Amount is paid in full to the Class A Certificateholders, (iii) if the Accumulation Period has not commenced, the occurrence of a Series 2001-1 Early Amortization Event or a Early Amortization Event and (iv) if the Accumulation Period has commenced, the earlier of the first Transfer Date with respect to the Early Amortization Period and the Class A Expected Final Payment Date, the Trustee, acting in accordance with the written instructions of the Servicer, shall withdraw from the Reserve Account and apply as Available Series 2001-1 Finance Charge Collections, all amounts, if any, on deposit in the Reserve Account and the Reserve Account shall be deemed to have terminated for purposes of this Supplement.
Section 4.14. Defeasance.
On any date prior to the Early Amortization Period on which the following conditions have been satisfied: (i) the Transferor has deposited (x) in the Principal Funding
Account, an amount equal to the outstanding principal balance of the Class A Certificates, which amount will be invested in Eligible Investments and (y) in the Reserve Account an amount
equal to or greater than the Covered Amount, as estimated by the Transferor, for the period from the date of the deposit to the Principal Funding Account through the Class A Expected Final
Payment Date; (ii) the Transferor has delivered to the Trustee an opinion of counsel to the effect that such deposit and termination of obligations as described below will not result in the
Trust being required to register as an "investment company" within the meaning of the Investment Company Act of 1940, as amended, and an opinion of counsel to the effect that following such deposit
none of the Trust, the Reserve Account or the Principal Funding Account will be deemed to be an association (or publicly traded partnership) taxable as a corporation; (iii) the Transferor has
delivered to the Trustee a certificate of an officer of the Transferor stating that the Transferor reasonably believes that such deposit and termination of its obligations will not constitute an Early
Amortization Event or any event that, with the giving of notice or the lapse of time, would constitute an Early Amortization Event or a Series 2001-1 Early Amortization Event to
occur; and (iv) the Rating Agency Condition shall have been satisfied; then, the Series 2001-1 Certificates will no longer be entitled to the security interest of the Trust
in the Receivables and, except those set forth in clause (i) above, other Trust assets ("Defeasance"), and the Investor Percentages applicable to the allocation to
the Series 2001-1 Certificateholders of Collections of Principal Receivables, Finance Charge Receivables and Defaulted Receivables will be reduced to zero. Upon the satisfaction of
the foregoing conditions, the Class B Invested Amount will be reduced to zero.
Section 4.15. Determination of LIBOR
(a) On each LIBOR Determination Date, the 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 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 will 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 Certificate Rate applicable to the then current and the immediately preceding Interest Accrual Periods may be obtained by any Class A Certificateholder by telephoning the Trustee at (612) 667-2484.
(c) On each LIBOR Determination Date, the Trustee shall send to the Servicer by facsimile notification of LIBOR for the following Interest Accrual Period.
ARTICLE V
DISTRIBUTIONS AND REPORTS TO SERIES 2001-1 INVESTOR
CERTIFICATEHOLDERS
(a) On each Distribution Date, the Paying Agent shall distribute to each Class A Certificateholder of record on the related Record Date (other than as provided in Section 12.2 of the Agreement) such Class A Certificateholder's pro rata share of the amounts that are available on such Distribution Date to pay interest on the Class A Certificates pursuant to this Supplement.
(b) On the Class A Expected Final Payment Date and on each Distribution Date thereafter, and on each Distribution Date with respect to the Early Amortization Period, the Paying Agent shall distribute to each Class A Certificateholder of record on the related Record Date (other than as provided in Section 12.2 of the Agreement) such Class A Certificateholder's pro rata share of the amounts that are available on such date to pay principal of the Class A Certificates pursuant to this Supplement up to a maximum amount on any such date equal to the Class A Invested Amount on such date. On each Distribution Date on and after the Distribution Date on which the Class A Invested Amount is paid in full, the Paying Agent shall distribute to each Class B Certificateholder of record on the related Record Date (other than as provided in Section 12.2 of the Agreement) such Class B Certificateholder's pro rata share of the amounts that are available on such date to pay principal of the Class B Certificates pursuant to this Supplement up to a maximum amount on any such date equal to the Class B Invested Amount on such date.
(c) The distributions to be made pursuant to this Section 5.1 are subject to the provisions of Sections 2.6, 10.1 and 12.2 of the Agreement and Section 8.1.
(d) Except as provided in Section 12.2 of the Agreement with respect to a final distribution, distributions to Series 2001-1 Certificateholders hereunder shall be made by check mailed to each Series 2001-1 Certificateholder at such Series 2001-1 Certificateholder's address appearing in the Certificate Register without presentation or surrender of any Series 2001-1 Certificate or the making of any notation thereon; provided, however, that with respect to Series 2001-1 Certificates registered in the name of a Clearing Agency, such distributions shall be made to such Clearing Agency in immediately available funds; provided, further, that the final payment in retirement of the Class A Certificates will be made only upon presentation and surrender of the Class A Certificates at the offices specified in the notice of such final distribution delivered by the Trustee pursuant to Section 12.2 of the Agreement.
Section 5.2. Reports and Statements to Series 2001-1 Certificateholders.
(a) On each Distribution Date, the Paying Agent, on behalf of the Trustee, shall forward to each Class A Certificateholder a statement substantially in the form of Exhibit B prepared by the Servicer.
(b) Not later than each Determination Date, the Servicer shall deliver to the Trustee, the Paying Agent and each Rating Agency (i) statements substantially in the form of Exhibit B prepared by the Servicer and (ii) a certificate of a Servicing Officer substantially in the form of Exhibit C.
(c) On or before January 31 of each calendar year, beginning with calendar year 2002, the Paying Agent, on behalf of the Trustee, shall furnish or cause to be furnished to each Person who at any time during the preceding calendar year was a Series 2001-1 Certificateholder, a statement prepared by the
Servicer containing the information which is required to be contained in the statement to Series 2001-1 Certificateholders, as set forth in paragraph (a) or (b) above, as applicable, aggregated for such calendar year or the applicable portion thereof during which such Person was a Series 2001-1 Certificateholder, together with other information as is required to be provided by an issuer of indebtedness under the Internal Revenue Code. Such obligation of the Servicer 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 Internal Revenue Code as from time to time in effect.
ARTICLE VI
EARLY AMORTIZATION EVENTS
Section 6.1. Series 2001-1 Early Amortization Events. If any one of the following events shall occur with respect to the Series 2001-1 Certificates:
(a) failure on the part of (i) RNB duly to observe or perform in any material respect any covenants or agreements of RNB set forth in the Bank Purchase Agreement, (ii) TCC duly to observe or perform in any material respect any covenants or agreements of TCC set forth in the Receivables Purchase Agreement or (iii) the Transferor (A) to make any payment or deposit required to be made by the Transferor by the terms of (I) the Agreement or (II) this Supplement, on or before the date occurring five Business Days after the date such payment or deposit is required to be made herein, (B) to perform in all material respects the Transferor's covenant not to sell, pledge, assign, or transfer to any person, or grant any unpermitted lien on, any Receivable; or (C) duly to observe or perform in any material respect any covenants or agreements of the Transferor set forth in the Agreement or this Supplement, which failure under clause (i), (ii) or (iii) has a material adverse effect on the Series 2001-1 Certificateholders and which continues unremedied for a period of 60 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Transferor by the Trustee, or to the Transferor and the Trustee by any Holder of Series 2001-1 Certificates;
(b) any representation or warranty made by RNB in the Bank Purchase Agreement, TCC in the Receivables Purchase Agreement or the Transferor in the Agreement or this Supplement (i) shall prove to have been incorrect in any material respect when made, 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 Trustee, or to the Transferor and the Trustee by any Holder of Series 2001-1 Certificates, and (ii) as a result of which the interests of the Series 2001-1 Certificateholders are materially and adversely affected; provided, however, that a Series 2001-1 Early Amortization Event pursuant to this subsection 6.1(b) shall not be deemed to have occurred hereunder if the Transferor has accepted designation of the related Receivable as an Ineligible Receivable during such period in accordance with the provisions of the Agreement;
(c) the average of the Portfolio Yields for any three consecutive Monthly Periods is reduced to a rate which is less than the average of the Base Rates for such three consecutive Monthly Periods;
(d) (i) a failure by TCC or the Transferor to make an Addition within five Business Days after the Required Designation Date or (ii) the Class B Invested Amount shall be less than 5% of the Initial Invested Amount;
(e) any Servicer Default shall occur which would have a material adverse effect on the Series 2001-1 Certificateholders; or
(f) the amount on deposit in the Special Funding Account as a percentage of the sum of the aggregate amount of Principal Receivables plus the amount on deposit in the Special Funding Account shall equal or exceed 30% on the last day of three consecutive Monthly Periods;
then, the Trustee shall within five days publish a notice of such Early Amortization Event and in the case of any event described in subparagraph (a), (b) or (e), after the applicable grace period, if any, set forth in such subparagraphs, the Holders of Series 2001-1 Certificates evidencing undivided interests aggregating more than 50% of the Invested Amount of this Series 2001-1 by notice then given in writing to the Trustee, the Transferor and the Servicer may declare that a early amortization event (a "Series 2001-1 Early Amortization Event") has occurred as of the date of such notice, and in the case of any event described in subparagraphs (c), (d) or (f), a Series 2001-1 Early Amortization Event shall occur without any notice or other action on the part of the Trustee or the Series 2001-1 Certificateholders immediately upon the occurrence of such event. The Trustee shall provide to the Transferor a copy of any notice received from any Holder of Series 2001-1 Certificates and the Transferor shall provide to the RNB or TCC, as applicable, a copy of any notice received from the Trustee or any Holder of Series 2001-1 Certificates under subparagraphs (a) and (b) above if such notice shall relate to a covenant, agreement, representation or warranty by RNB or TCC, respectively.
ARTICLE VII
OPTIONAL REPURCHASE; SERIES TERMINATION;
SALE OF CLASS B CERTIFICATES
Section 7.1. Optional Repurchase. The Series 2001-1 Certificates shall be subject to termination by the Transferor at its option on any Distribution Date on or after the Distribution Date on which the Class A Invested Amount is reduced to an amount less than or equal to 10% of the highest Class A Invested Amount outstanding at any time. The deposit required in connection with any such termination and final distribution shall be equal to the Class A Invested Amount plus accrued and unpaid interest on the Series 2001-1 Certificates through the day prior to the Distribution Date on which the final distribution occurs.
Section 7.2. Series 2001-1 Termination.
(a) If, on the May 2008 Distribution Date, the Invested Amount (after giving effect to all changes therein on such date) would be greater than zero, the Servicer, on
behalf of the Trustee, shall, within the forty-day period which begins on such Distribution Date, solicit bids for the sale of Principal Receivables and the related Finance Charge
Receivables (or interests therein) in the amount specified in subsection 12.2(c) of the Agreement. Such bids shall require that such sale shall (subject to Section 7.2(b)) occur on the
Scheduled Series 2001-1 Termination Date. The Transferor shall be entitled to participate in, and to receive from the Trustee a copy of each other bid submitted in connection with,
such bidding process.
(b) The Servicer, on behalf of the Trustee, shall sell such Receivables (or interests therein) on the Scheduled Series 2001-1 Termination Date to the bidder who made the highest cash purchase offer. The proceeds of any such sale shall be treated as Collections on the Receivables to be allocated to the Series 2001-1 Certificateholders pursuant to the Agreement and this Supplement; provided, however, that the Servicer shall determine conclusively the amount of such proceeds which are allocable to Finance Charge Receivables and the amount of such proceeds which are allocable to Principal Receivables. During the period from the May 2008 Distribution Date to the Scheduled Series 2001-1 Termination Date, the Servicer shall continue to collect payments on the Receivables and allocate and deposit such Collections in accordance with the provisions of the Agreement and this Supplement.
Section 7.3. Reduction of Class B Invested Amount During the Revolving Period; Designation of Class B Certificate Terms; Sale of Class B Certificates.
(a) The Class B Invested Amount may be reduced during the Revolving Period by distributing Collections of Principal Receivables to the Class B Certificateholders
in accordance with Section 4.6(b), provided that (i) the Rating Agency Condition shall have been satisfied with respect to such reduction
and (ii) the Transferor shall have delivered to the Trustee an Officer's Certificate stating that the Transferor reasonably believes that such reduction will not, based on the facts known to
such officer at the time of such certification, cause an Early Amortization Event or any event that, after the giving of notice or the lapse of time or both, would constitute an Early Amortization
Event.
(b) The Transferor may at any time, without the consent of the Investor Certificateholders, (i) sell or transfer all or a portion of the Class B Certificates and (ii) in connection with any such sale or transfer, enter into a supplemental agreement with the Trustee pursuant to which the Transferor and the Trustee may amend the Class B Certificate Rate, set forth the amount of monthly interest due Class B Certificateholders (the "Class B Interest"), provide for the payment of additional amounts (the "Class B Additional Interest") with respect to any shortfall (the "Class B Interest Shortfall") in such Class B Interest and provide for such other provisions with respect to the Class B Certificates as may be specified in such supplemental agreement, provided that in each such case (A) the Transferor shall have given notice to the Trustee, the Servicer and the Rating Agencies of such proposed sale or transfer of the Class B Certificates and such supplemental agreement at least five business days prior to the consummation of such sale or transfer and the execution of such proposed supplemental agreement; (B) the Rating Agency Condition shall have been satisfied; (C) no Early Amortization Event shall have occurred prior to the consummation of such proposed sale or transfer of Class B Certificates or the execution of such supplemental agreement; (D) the Transferor shall have delivered an Officer's Certificate, dated the date of the consummation of such sale or transfer and the effectiveness of such supplemental agreement, to the effect that, in the reasonable belief of the Transferor, such action will not, based on the facts known to such officer at the time of such certification, cause an Early Amortization Event to occur with respect to any Series, and (E) the Transferor will have delivered a Tax Opinion, dated the date of such certificate with respect to such action; provided, further, (i) as a condition to the sale or transfer of all or a portion of the Class B Certificates the transferee shall be required to agree not to institute against, or join any other Person in instituting against, the Trust or the Transferor any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or other proceeding under any federal or state bankruptcy or similar law, for one year and one day after all Investor Certificates are paid in full and (ii) the Class B Certificates may not be sold or transferred, in whole or in part, to Target Capital Corporation.
Section 7.4. Purchase of the Class A Certificates by the Transferor.
The Transferor may from time to time, purchase Class A Certificates on the secondary market and request the Trustee to cancel such Class A Certificates held by the
Transferor and reduce the Class A Invested Amount by a corresponding amount.
ARTICLE VIII
FINAL DISTRIBUTION
Section 8.1. Sale of Receivables or Certificateholders' Interest pursuant to Section 2.6 or 10.1 of the Agreement and Section 7.1 or 7.2 of this Supplement.
(a) The amount to be paid by the Transferor with respect to Series 2001-1 in connection with a reassignment of Receivables to the Transferor pursuant to Section 2.6 of the Agreement or a repurchase of the Certificateholder's Interest pursuant to Section 10.1 shall equal the Reassignment Amount for the first Distribution Date following the Monthly Period in which the reassignment obligation arises under the Agreement.
(b) With respect to the Reassignment Amount deposited into the Collection Account pursuant to Sections 7.1 or 8.1 or any amounts allocable to the Series 2001-1 Certificateholders' Interest deposited into the Collection Account pursuant to Section 7.2, the Trustee shall, not later than 10:00 a.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 Invested Amount on such Distribution Date will be distributed to the Paying Agent for payment to the Class A Certificateholders and (y) an amount equal to the sum of (A) Class A Interest for such Distribution Date, (B) any Class A Interest previously due but not distributed
to the Class A Certificateholders 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 Certificateholders on any prior Distribution Date, will be distributed to the Paying Agent for payment to the Class A Certificateholders, (ii) (x) the Class B Invested Amount on such Distribution Date will be distributed to the Paying Agent for payment to the Class B Certificateholders 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 Certificateholders 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 Certificateholders on any prior Distribution Date, will be distributed to the Paying Agent for payment to the Class B Certificateholders, (iii) any other amounts payable pursuant to subsection 4.6(a) shall be paid in accordance therewith and (iv) the balance, if any, will be distributed to the Holder of the Transferor Certificate.
(c) Notwithstanding anything to the contrary in this Supplement or the Agreement, all amounts distributed to the Paying Agent pursuant to Section 8.1(b) for payment to the Series 2001-1 Certificateholders shall be deemed distributed in full to the Series 2001-1 Certificateholders 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 12.2 of the Agreement.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1. Delivery and Payment for the Series 2001-1 Certificates. The Transferor shall execute and deliver the Series 2001-1 Certificates to the Trustee for authentication in accordance with Section 6.1 of the Agreement. The Trustee shall deliver the Series 2001-1 Certificates to or upon the order of the Transferor when authenticated in accordance with Section 6.2 of the Agreement.
Section 9.2. Form of Delivery of Series 2001-1 Certificates.
The Class A certificates and the Class B Certificates shall be delivered as Registered Certificates as provided in Section 6.1 of the Agreement.
Section 9.3. Legend on Class B Certificates.
Each Class B Certificate will bear a legend substantially in the following form:
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF TARGET RECEIVABLES CORPORATION AND THE TRUSTEE THAT SUCH PURCHASER IS NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") THAT IS SUBJECT TO SECTION 4975 OF THE CODE, (III) A GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY OR (V) A PERSON INVESTING "PLAN ASSETS" OF ANY SUCH PLAN (INCLUDING FOR PURPOSES OF CLAUSES (IV) AND (V), ANY INSURANCE COMPANY GENERAL ACCOUNT, BUT EXCLUDING ANY ENTITY REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED).
THIS CERTIFICATE MAY NOT BE ACQUIRED, SOLD, TRADED OR TRANSFERRED, NOR MAY AN INTEREST IN THIS CERTIFICATE BE MARKETED ON OR THROUGH (I) AN "ESTABLISHED SECURITIES MARKET" WITHIN THE MEANING OF SECTION
7704(b)(1) OF THE CODE AND ANY PROPOSED, TEMPORARY OR FINAL REGULATION THEREUNDER, INCLUDING, WITHOUT LIMITATION, AN OVER-THE-COUNTER MARKET OR AN INTERDEALER QUOTATION SYSTEM THAT REGULARLY DISSEMINATES FIRM BUY OR SELL QUOTATIONS OR (II) A "SECONDARY MARKET" WITHIN THE MEANING OF SECTION 7704(b)(2) OF THE CODE AND ANY PROPOSED, TEMPORARY OR FINAL TREASURY REGULATION THEREUNDER INCLUDING A MARKET WHEREIN INTERESTS IN THE CLASS B CERTIFICATES ARE REGULARLY QUOTED BY ANY PERSON MAKING A MARKET IN SUCH INTERESTS AND A MARKET WHEREIN ANY PERSON REGULARLY MAKES AVAILABLE BID OR OFFER QUOTES WITH RESPECT TO INTERESTS IN THE CLASS B CERTIFICATES AND STANDS READY TO EFFECT BUY OR SELL TRANSACTIONS AT THE QUOTED PRICES FOR ITSELF OR ON BEHALF OF OTHERS.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES OR "BLUE SKY" LAWS OF THE UNITED STATES OR OTHER JURISDICTION. NEITHER THIS CERTIFICATE NOR ANY PORTION HEREOF MAY BE OFFERED, SOLD PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE PROVISIONS OF ANY STATE SECURITIES OR "BLUE SKY" LAWS OF THE UNITED STATES OR OTHER JURISDICTION OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS AND IN ACCORDANCE WITH THE PROVISIONS OF THE SERIES 2001-1 SUPPLEMENT.
Section 9.4. Ratification of Agreement.
As supplemented by this Supplement, the Agreement is in all respects ratified and confirmed and the Agreement as so supplemented by this Supplement shall be read, taken, and construed
as one and the same instrument.
Section 9.5. Counterparts.
This Supplement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all of such counterparts shall together constitute but
one and the same instrument.
Section 9.6. Paired Series.
Subject to satisfaction of the Rating Agency Condition, and prior to the commencement of the Early Amortization Period, the Series 2001-1 Certificates may be paired
with one or more other Series (each a "Paired Series"). Each Paired Series either will be pre-funded with an initial deposit to a prefunding account in an
amount up to the initial principal balance of such Paired Series and primarily from the proceeds of the sale of such Paired Series or will have a variable principal amount. Any such prefunding account
will be held for the benefit of such Paired Series and not for the benefit of the Series 2001-1 Certificateholders. As principal is paid with respect to the
Series 2001-1 Certificates, either (i) in the case of a prefunded Paired Series, an equal amount of funds on deposit in any prefunding account for such prefunded Paired
Series will be released (which funds will be distributed to the Transferor) or (ii) in the case of a Paired Series having a variable principal amount, an interest in such variable Paired Series
in an equal or lesser amount may be sold by the Trust (and the proceeds thereof will be distributed to the Transferor) and, in either case, the invested amount in the Trust of such Paired Series will
increase by up to a corresponding amount. Upon payment in full of the Series 2001-1 Certificates, assuming that there have been no unreimbursed charge-offs with respect
to any related Paired Series, the aggregate invested amount of such related Paired Series will have been increased by an amount up to an aggregate amount equal to the Invested Amount paid to the
Series 2001-1 Certificateholders since the issuance of such Paired Series. The issuance of a Paired Series will be subject to the conditions described in subsection 6.3 of the
Agreement.
Section 9.7. Jurisdiction; Service.
Solely with respect to the Agreement (as supplemented hereby and as further amended, modified or supplemented from time to time) and the transactions and other matters contemplated
thereby or relating thereto, each of the parties hereto hereby irrevocably
and unconditionally agrees (a) to be subject to the jurisdiction of the courts of the State of Delaware and of the federal courts sitting in the State of Delaware, and (b)(i) to the extent such party is not otherwise subject to service of process in the State of Delaware, to appoint and maintain an agent in the State of Delaware as such party's agent for acceptance of legal process, and (ii) that service of process may also be made on such party by prepaid certified mail with a proof of mailing receipt validated by the United States Postal Service constituting evidence of valid service, and that service made pursuant to (b)(i) or (ii) above shall have the same legal force and effect as if served upon such party personally within the State of Delaware. For purposes of implementing the parties' foregoing agreement to appoint and maintain an agent for service of process in the State of Delaware solely in respect of the Agreement and the transactions and other matters contemplated thereby or relating thereto, each such party that has not as of the date hereof already duly appointed such an agent does hereby appoint RL&F Service Corp., One Rodney Square, 10th Floor, Wilmington, Delaware 19801, as such agent.
Section 9.8. GOVERNING LAW. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE 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 9.9. Instructions in Writing.
All instructions or other communications given by the Servicer or any other person to the Trustee pursuant to this Supplement shall be in writing.
Section 9.10. Target VISA Automatic Addition Limitation.
The Transferor shall elect to terminate the inclusion in Accounts of new accounts which would otherwise be Automatic Additional Accounts in accordance with subsection
2.9(d)(i) of the Agreement if on any Determination Date the percentage equivalent of a fraction the numerator of which is the number of Target VISA accounts originated through responses from
obligors who were not previously customers of Target Corporation or any of its subsidiaries (i) to mass mailings of new account solicitations and (ii) to internet advertising on web
sites other than the web sites of Target Corporation or any of its subsidiaries, and the denominator of which is the aggregate number of Target VISA accounts designated to have their Receivables
included in the Trust on that Determination Date, exceeds 15%. If such limitation is exceeded, the Transferor shall deliver to the Trustee, the Servicer and each Rating Agency written notice of the
Automatic Addition Suspension Date or the Automatic Addition Termination Date. If on any subsequent Determination Date such percentage shall be less than 15%, the Transferor may provide notice of a
Restart Date in accordance with subsection 2.9(d) of the Agreement.
Section 9.11. Eligible Investments.
In order to qualify as an "Eligible Investment," each type of investment described in clauses (b), (c), (d) and (f) of the definition of "Eligible Investments" in
Section 1.1 of the Agreement must be rated "A-1+" by Standard & Poor's.
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have caused this Series 2001-1 Supplement to be duly executed by their respective officers as of the day and year first above written.
| TARGET RECEIVABLES CORPORATION, Transferor |
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By: |
/s/ Stephen C. Kowalke |
||
| Name: Stephen C. Kowalke | |||
| Title: Vice President and Treasurer | |||
RETAILERS NATIONAL BANK, Servicer |
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By: |
/s/ Stephen C. Kowalke |
||
| Name: Stephen C. Kowalke | |||
| Title: Assistant Treasurer | |||
WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, Trustee |
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By: |
/s/ S. Dignan |
||
| Name: S. Dignan | |||
| Title: Corporate Trust Officer | |||
FORM OF CLASS A INVESTOR CERTIFICATE
| REGISTERED | $[ ] | |
No. [ ] |
CUSIP NO. 87613F AA 0 |
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.
TARGET CREDIT CARD MASTER TRUST
SERIES 2001-1
FLOATING RATE CLASS A ASSET BACKED CERTIFICATE
Evidencing an undivided interest in a trust, the corpus of which consists of receivables generated from time to time in the ordinary course of business from a portfolio of consumer open end credit card accounts generated or to be generated by Retailers National Bank ("RNB" or the "Servicer") and other assets and interests constituting the Trust under the Agreement described below.
(Not an interest in or a recourse obligation of Target Receivables Corporation, Target Capital Corporation or RNB or any affiliate of any of them.)
This certifies that CEDE & CO. (the "Certificateholder") is the registered owner of a fractional undivided interest in the Target Credit Card Master Trust (the "Trust") issued pursuant to the Amended and Restated Pooling and Servicing Agreement, dated as of April 28, 2000, as amended (the "Pooling and Servicing Agreement"; such term to include any amendment thereto) by and between Target Receivables Corporation, as Transferor (the "Transferor"), RNB, as the Servicer, and Wells Fargo Bank Minnesota, National Association (formerly known as Norwest Bank Minnesota, National Association), as Trustee (the "Trustee"), and the Series 2001-1 Supplement, dated as of August 22, 2001 (the "Series 2001-1 Supplement"), among the Transferor, the Servicer and the Trustee. The Pooling and Servicing Agreement, as supplemented by the Series 2001-1 Supplement, is herein referred to as the "Agreement"). The corpus of the Trust consists of all of the Transferor's right, title and interest in, to and under the Trust Assets (as defined in the Agreement).
This Certificate does not purport to summarize the Agreement and reference is made to that Agreement for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties and obligations of the Trustee. To the extent not defined herein, the capitalized terms used herein have the meanings ascribed to them in the Agreement. This Certificate is one of a class of Certificates entitled "Target Credit Card Master Trust $750,000,000 Floating Rate Class A Asset Backed Certificates, Series 2001-1" (the "Class A Certificates"), each of which represents a fractional undivided interest in the Trust, and is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement, as amended from time to time, the Certificateholder by virtue of the acceptance hereof assents and by which the Certificateholder is bound.
The Transferor has structured the Agreement, the Class A Certificates and the "Target Credit Card Master Trust $250,000,000 Class B Asset Backed Certificates, Series 2001-1" (the "Class B Certificates") with the intention that the Class A Certificates will qualify under applicable tax law as
debt, and both the Transferor and each holder of a Class A Certificate (a "Class A Certificateholder") or any interest therein by acceptance of its Certificate or any interest therein, agrees to treat the Class A Certificates for purposes of federal, state and local income or franchise taxes and any other tax imposed on or measured by income, as debt.
No principal will be payable to the Class A Certificateholders until the earlier of (i) the first Distribution Date in the Early Amortization Period and (ii) the Class A Expected Final Payment Date.
Each Class A Certificate represents the right to receive interest at a per annum rate equal to the London Interbank Offered Rate ("LIBOR") for one-month U.S. Dollar deposits in Europe (determined as set forth in the Pooling and Servicing Agreement) on the applicable LIBOR Determination Date, in each case plus 0.11% per annum (such rate, as in effect from time to time, the "Class A Certificate Rate"). Interest on the Class A Certificates will accrue from the Closing Date and will be distributed on September 25, 2001, and on the 25th day of each month thereafter, or if such day is not a business day, on the next succeeding business day (each, a "Distribution Date"), in an amount equal to the product of (a) the Class A Certificate Rate for the period from and including the preceding Distribution Date to and excluding such Distribution Date (the "Interest Accrual Period"), (b) the outstanding principal balance of the Class A Certificates as of the last day of the preceding Monthly Period (or in the case of the first Distribution Date, the initial Class A Invested Amount) and (c) a fraction, the numerator of which is the actual number of days in the related Interest Accrual Period and the denominator of which is 360.
Principal is scheduled to be paid in full on the July 2004 Distribution Date for the Class A Certificates, but may be paid earlier or later in certain circumstances. Unpaid principal, together with interest, will be payable monthly to Class A Certificateholders following the Class A Expected Final Payment Date to the extent principal has not been paid in full on the Class A Expected Final Payment Date. However, no payments of principal or interest will be made on the Series 2001-1 Certificates after the Series 2001-1 Termination Date, regardless of whether principal and interest have been paid in full with respect thereto. Interest will be distributed to the Class A Certificateholders monthly on each Distribution Date prior to the Series Termination Date. Interest for any Distribution Date will include accrued interest at the Class A Certificate Rate from and including the preceding Distribution Date or, in the case of the first Distribution Date from and including the Closing Date, to but excluding such Distribution Date. Interest for any Distribution Date due but not paid on any Distribution Date will be due on the next succeeding Distribution Date together with, to the extent permitted by applicable law, additional interest on such amount at the Class A Certificate Rate plus 2% per annum.
In general, payments of principal with respect to the Class A Certificates are limited to the Class A Invested Amount, which may be less than the unpaid principal balance of the Class A Certificates. The Class A Expected Final Payment Date is the July 2004 Distribution Date, but principal with respect to the Class A Certificates may be paid earlier or later under certain circumstances described in the Agreement and the Series 2001-1 Supplement. If for one or more months during the Accumulation Period there are not sufficient funds to pay the Controlled Deposit Amount, then to the extent that excess funds are not available on subsequent Distribution Dates with respect to the Accumulation Period to make up for such shortfalls, the final payment of principal of the Class A Certificates will occur later than the Class A Expected Final Payment Date.
Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee, by manual signature, this Certificate shall not be entitled to any benefit under the Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Certificate to be duly executed under its official seal.
| TARGET RECEIVABLES CORPORATION | |||
By: |
|||
Name: Title: |
|||
Dated: ,
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates referred to in the within-mentioned Pooling and Servicing Agreement.
| WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION |
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By: |
|||
Name: Title: |
|||
Exhibit A-2
FORM OF CLASS B INVESTOR CERTIFICATE
| REGISTERED | $[ ] | |
No. [ ] |
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF TARGET RECEIVABLES CORPORATION AND THE TRUSTEE THAT SUCH PURCHASER IS NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") THAT IS SUBJECT TO SECTION 4975 OF THE CODE, (III) A GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY OR (V) A PERSON INVESTING "PLAN ASSETS" OF ANY SUCH PLAN (INCLUDING FOR PURPOSES OF CLAUSES (IV) AND (V), ANY INSURANCE COMPANY GENERAL ACCOUNT, BUT EXCLUDING ANY ENTITY REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED).
THIS CERTIFICATE MAY NOT BE ACQUIRED, SOLD, TRADED OR TRANSFERRED, NOR MAY AN INTEREST IN THIS CERTIFICATE BE MARKETED ON OR THROUGH (I) AN "ESTABLISHED SECURITIES MARKET" WITHIN THE MEANING OF SECTION 7704(b)(1) OF THE CODE AND ANY PROPOSED, TEMPORARY OR FINAL REGULATION THEREUNDER, INCLUDING, WITHOUT LIMITATION, AN OVER-THE-COUNTER MARKET OR AN INTERDEALER QUOTATION SYSTEM THAT REGULARLY DISSEMINATES FIRM BUY OR SELL QUOTATIONS OR (II) A "SECONDARY MARKET" WITHIN THE MEANING OF SECTION 7704(b)(2) OF THE CODE AND ANY PROPOSED, TEMPORARY OR FINAL TREASURY REGULATION THEREUNDER INCLUDING A MARKET WHEREIN INTERESTS IN THE CLASS B CERTIFICATES ARE REGULARLY QUOTED BY ANY PERSON MAKING A MARKET IN SUCH INTERESTS AND A MARKET WHEREIN ANY PERSON REGULARLY MAKES AVAILABLE BID OR OFFER QUOTES WITH RESPECT TO INTERESTS IN THE CLASS B CERTIFICATES AND STANDS READY TO EFFECT BUY OR SELL TRANSACTIONS AT THE QUOTED PRICES FOR ITSELF OR ON BEHALF OF OTHERS.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES OR "BLUE SKY" LAWS OF THE UNITED STATES OR OTHER JURISDICTION. NEITHER THIS CERTIFICATE NOR ANY PORTION HEREOF MAY BE OFFERED, SOLD PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE PROVISIONS OF ANY STATE SECURITIES OR "BLUE SKY" LAWS OF THE UNITED STATES OR OTHER JURISDICTION OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS AND IN ACCORDANCE WITH THE PROVISIONS OF THE SERIES 2001-1 SUPPLEMENT.
TARGET CREDIT CARD MASTER TRUST
SERIES 2001-1
$ CLASS B ASSET BACKED CERTIFICATE
Evidencing an undivided interest in a trust, the corpus of which consists of receivables generated from time to time in the ordinary course of business from a portfolio of consumer open end credit card accounts generated or to be generated by Retailers National Bank ("RNB" or the "Servicer") and other assets and interests constituting the Trust under the Agreement described below.
(Not an interest in or a recourse obligation of Target Receivables Corporation, Target Capital Corporation or RNB or any affiliate of any of them.)
This certifies that Target Receivables Corporation (the "Certificateholder") is the registered owner of a fractional undivided interest in the Target Credit Card Master Trust (the "Trust") issued pursuant to the Amended and Restated Pooling and Servicing Agreement, dated as of April 28, 2000 (the "Pooling and Servicing Agreement," such term to include any amendment thereto) by and between Target Receivables Corporation, as Transferor (the "Transferor"), RNB as the Servicer, and Wells Fargo Bank Minnesota, National Association (formerly known as Norwest Bank Minnesota, National Association), as Trustee (the "Trustee"), and the Series 2001-1 Supplement, dated as of August 22, 2001 (the "Series 2001-1 Supplement"), among the Transferor, RNB, as Servicer and the Trustee. The Pooling and Servicing Agreement, as supplemented by the Series 2001-1 Supplement, is herein referred to as the "Agreement". The corpus of the Trust consists of all of the Transferor's right, title and interest in, to and under the Trust Assets (as defined in the Agreement).
This Certificate does not purport to summarize the Agreement and reference is made to that Agreement for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties and obligations of the Trustee. To the extent not defined herein, the capitalized terms used herein have the meanings ascribed to them in the Agreement. This Certificate is one of a class of Certificates entitled "Target Credit Card Master Trust $250,000,000 Class B Asset Backed Certificates, Series 2001-1" (the "Class B Certificates"), each of which represents a fractional undivided interest in the Trust, and is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement, as amended from time to time, the Certificateholder by virtue of the acceptance hereof assents and by which the Certificateholder is bound.
Unless the Rating Agency Condition and certain other conditions set forth in the Series 2001-1 Supplement are satisfied, (i) no principal will be payable to the Class B Certificateholders until the Class A Invested Amount is paid in full and (ii) no interest will accrue on the unpaid principal amount of the Class B Certificates. Principal is scheduled to be paid in full to the Class A Certificates on the July 2004 Distribution Date.
In general, payments of principal with respect to the Class B Certificates are limited to the Class B Invested Amount, which may be less than the unpaid principal balance of the Class B Certificates.
Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee, by manual signature, this Certificate shall not be entitled to any benefit under the Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Certificate to be duly executed under its official seal.
| TARGET RECEIVABLES CORPORATION | |||
By: |
|||
Name: Title: |
|||
Dated: ,
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the within-mentioned Pooling and Servicing Agreement.
| WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION |
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By: |
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Name: Title: |
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FORM OF MONTHLY SERIES 2001-1 CERTIFICATEHOLDERS' STATEMENT
EXHIBIT C
FORM OF MONTHLY SERVICER'S CERTIFICATE
RETAILERS NATIONAL BANK
TARGET CREDIT CARD MASTER TRUST
SERIES 2001-1
The undersigned, a duly authorized representative of Retailers National Bank, as Servicer ("RNB"), pursuant to the Amended and Restated Pooling and Servicing Agreement, dated as of April 28, 2000 (as may be amended, from time to time, the "Agreement"), as supplemented by the Series 2001-1 Supplement (as amended and supplemented, the "Series Supplement"), dated as of August 22, 2001 among RNB, Target Receivables Corporation and Wells Fargo Bank Minnesota, National Association, does hereby certify as follows:
1. Capitalized terms used in this Certificate have their respective meanings as set forth in the Agreement or the Series Supplement, as applicable.
2. RNB is, as of the date hereof, the Servicer under the Agreement.
3. The undersigned is a Servicing Officer.
4. This Certificate relates to the Distribution Date occurring on , (the " Distribution Date").
5. 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 Agreement through the Monthly 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 Servicer, if any, to remedy such default and (iii) the current status of each such default; if applicable, insert "None"].
6. As of the date hereof, to the best knowledge of the undersigned, no Early Amortization Event occurred on or prior to such Distribution Date.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Certificate this day of .
| RETAILERS NATIONAL BANK, as Servicer |
|||
By: |
|||
| Name: | |||
| Title: | |||
MONTHLY SERVICER'S CERTIFICATE
RETAILERS NATIONAL BANK
TARGET CREDIT CARD MASTER TRUST
SERIES 1997-1
The undersigned, a duly authorized representative of Retailers National Bank, as Servicer ("RNB") pursuant to the Pooling and Servicing Agreement dated as of September 13, 1995 (as may be amended, from time to time, the "Agreement") as supplemented by the Series 1997-1 Supplement (as amended and supplemented, the "Series Supplement"), among RNB, Target Receivables Corporation and Wells Fargo Bank Minnesota, National Association, does hereby certify as follows:
| 1. | Capitalized terms used in this Certificate have their respective meanings as set forth in the Agreement or the Series Supplement, as applicable. | |||
2. |
RNB is, as of the date hereof, the Servicer under the Agreement. |
|||
3. |
The undersigned is a Servicing Officer. |
|||
4. |
This certificate relates to the Distribution Date occuring on September 25, 2001. |
|||
5. |
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 Agreement through the Monthly Period preceding such Distribution Date. |
|||
6. |
As of the date hereof, to the best knowledge of the undersigned, no Early Amortization Event occurred on or prior to such Distribution Date. |
|||
7. |
The aggregate amount of Collections processed for the preceding Monthly Period was equal to $461,712,920.76. |
|||
8. |
The aggregate amount of Collections of Finance Charge Receivables (including Discounted Receivables) for the preceding Monthly Period was equal to $57,489,894.32. |
|||
9. |
The aggregate amount of Collections of Principal Receivables for the preceding Monthly Period was equal to $404,223,026.44. |
|||
10. |
The aggregate amount of the Defaulted Amount for the preceding Monthly Period was equal to $16,068,300.28. |
|||
11. |
The aggregate amount of Recoveries for the preceding Monthly Period was equal to $2,820,062.83. |
|||
12. |
The Portfolio Yield for the preceding Monthly Period was equal to 20.45%. |
|||
13. |
The Base Rate for the preceding Monthly Period was equal to 6.78%. |
|||
14. |
The aggregate amount of Receivables as of the end of the last day of the preceding Monthly Period was equal to $2,744,747,309.66. |
|||
15. |
The balance on deposit in the Collection Account with respect to Collections processed as of the end of the last day of the preceding Monthly Period was equal to $0.00. |
|||
16. |
The aggregate amount of Adjustments for the preceding Monthly Period was equal to $37,854,926.74. |
|||
17. |
The aggregate amount of withdrawals, drawings or payments under any Enhancement to be made with respect to the preceding Monthly Period is equal to $0.00. |
|||
18. |
The total amount to be distributed to Investor Certificateholders on the Distribution Date is equal to $2,083,333.34. |
19. |
The amount to be distributed to Investor Certificateholders on the Distribution Date per $1,000 original principal amount is equal to: |
|||
Class A 5.208 |
||||
20. |
The amount of such distribution allocable to principal is equal to $0.00. |
|||
21. |
The amount of such distribution allocable to principal per $1,000 original principal amount is equal to: |
|||
Class A 0.000 |
||||
22. |
The amount of such distribution allocable to interest is equal to $2,083,333.34. |
|||
23. |
The amount of such distribution allocable to interest per $1,000 original principal amount is equal to: |
|||
Class A 5.208 |
||||
| IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Servicer's Certificate this 20th day of September, 2001. | ||||||
RETAILERS NATIONAL BANK, as servicer |
||||||
By: /s/ Terrence J. Scully Name: Terrence J. Scully Title: Secretary |
||||||
MONTHLY CERTIFICATEHOLDERS' STATEMENT
RETAILERS NATIONAL BANK
TARGET CREDIT CARD MASTER TRUST
SERIES 1997-1
Pursuant to the Pooling and Servicing Agreement, dated as of September 13, 1995 (as may be amended, from time to time, the "Agreement"), as supplemented by the Series 1997-1 Supplement (as amended and Supplemented, the "Series Supplement"), each among Retailers National Bank, as Servicer, Target Receivables Corporation, as Transferor, and Wells Fargo Bank Minnesota, National Association, as Trustee, the Servicer is required to prepare certain information each month regarding distributions to Certificateholders and the performance of the Trust. The information with respect to the applicable Distribution Date and Monthly Period is set forth below.
| Monthly Period: | August 2001 | |||||
| Distribution Date: | September 25, 2001 | |||||
| No. of Days in Period: | 28 |
| A. | ORIGINAL DEAL PARAMETERS | |||||||
(a) |
Class A Initial Invested Amount |
$ |
400,000,000.00 |
76.50 |
% |
|||
| (b) | Class B Initial Invested Amount | 122,875,817.00 | 23.50 | % | ||||
| (c) | Total Initial Invested Amount | $ | 522,875,817.00 | |||||
(d) |
Class A Certificate Rate |
6.25% |
||||||
| (e) | Class B Certificate Rate | 0.00% | ||||||
(f) |
Servicing Fee Rate |
2.00% |
||||||
| (g) | Discount Percentage | 0.00% | ||||||
I. |
RECEIVABLES IN THE TRUST |
|||||||
| (a) | Beginning of the Period Principal Receivables | $ | 2,603,935,021.65 | |||||
| (b) | Beginning of the Period Finance Charge Receivables | 80,709,915.20 | ||||||
| (c) | Beginning of the Period Discounted Receivables | — | ||||||
| (d) | Beginning of the Period Total Receivables (a + b + c) | $ | 2,684,644,936.85 | |||||
(e) |
Removed Principal Receivables |
$ |
— |
|||||
| (f) | Removed Finance Charge Receivables | — | ||||||
| (g) | Removed Total Receivables (e + f) | $ | — | |||||
(h) |
Supplemental Principal Receivables |
$ |
— |
|||||
| (i) | Supplemental Finance Charge Receivables | — | ||||||
| (j) | Supplemental Total Receivables (h + i) | $ | — | |||||
(k) |
End of Period Principal Receivables |
$ |
2,661,816,433.07 |
|||||
| (l) | End of Period Finance Charge Receivables | 82,930,876.59 | ||||||
| (m) | End of Period Discounted Receivables | — | ||||||
| (n) | End of Period Total Receivables (k + l + m) | $ | 2,744,747,309.66 | |||||
II. |
INVESTED AMOUNTS AND ALLOCATION PERCENTAGES |
|||||||
| (a) | Class A Initial Invested Amount | $ | 400,000,000.00 | 76.50 | % | |||
| (b) | Class B Initial Invested Amount | 122,875,817.00 | 23.50 | % | ||||
| (c) | Total Initial Invested Amount (a + b) | $ | 522,875,817.00 | |||||
(d) |
Class A Invested Amount (a - (X.a)) |
$ |
400,000,000.00 |
76.50 |
% |
|||
| (e) | Class B Invested Amount (b - (X.e)) | 122,875,817.00 | 23.50 | % | ||||
| (f) | Total Invested Amount (d + e) | $ | 522,875,817.00 | |||||
(g) |
Class A Adjusted Invested Amount (a - (X.a)-(III.f)) |
$ |
400,000,000.00 |
76.50 |
% |
|||
| (h) | Class B Invested Amount (b - (X.e)) | 122,875,817.00 | 23.50 | % | ||||
| (i) | Total Adjusted Invested Amount (g + h) | $ | 522,875,817.00 | |||||
(j) |
Floating Allocation Percentage |
20.08% |
||||||
| (k) | Class A Floating Allocation Percentage | 15.36% | ||||||
| (l) | Class B Floating Allocation Percentage | 4.72% | ||||||
(m) |
Principal Allocation Percentage |
20.08% |
||||||
| (n) | Class A Principal Allocation Percentage | 15.36% | ||||||
| (o) | Class B Principal Allocation Percentage | 4.72% | ||||||
(p) |
Servicing Fee |
$ |
871,459.70 |
|||||
| (q) | Investor Defaulted Amount (j * (IV.(m))) | $ | 3,226,549.65 | |||||
III. |
TRANSFEROR'S INTEREST, RETAINED INTEREST, SPECIAL FUNDING ACCOUNT, AND PRINCIPAL FUNDING ACCOUNT |
|||||||
| (a) | Transferor's Amount (end of month) | $ | 445,181,411.41 | |||||
| (b) | Required Retained Transferor Amount | $ | 53,236,328.66 | |||||
| (c) | Required Principal Balance | $ | 2,216,635,021.66 | |||||
| (e) | Funds on deposit in Special Funding Account (end of month) | $ | — | |||||
| (f) | Principal on deposit in Principal Funding Account (beginning of month) | $ | — | |||||
| (g) | Principal on deposit in Principal Funding Account (end of month) | $ | — | |||||
IV. |
PERFORMANCE SUMMARY |
|||||||
| COLLECTIONS: | ||||||||
| (a) | Collections of Principal Receivables | $ | 404,223,026.44 | |||||
| (b) | Collections of Finance Charge Receivables (from cardholder payments) | 50,701,555.36 | ||||||
| (c) | Collections of Finance Charge Receivables (from merchant fees, deferred billing fees, collection account interest, interchange fees) | 6,788,338.96 | ||||||
| (d) | Collections of Discount Option Receivables | 0.00 | ||||||
| (e) | Total Finance Charge Collections (b + c + d) | $ | 57,489,894.32 | |||||
| (f) | Total Collections (a + e) | $ | 461,712,920.76 | |||||
DELINQUENCIES AND LOSSES: |
||||||||
| (g) | 2 missed payments | $ | 62,062,117 | |||||
| (h) | 3 missed payments | 40,983,020 | ||||||
| (i) | 4 or more missed payments | 82,785,699 | ||||||
(j) |
Total delinquencies (g + h + i) |
$ |
185,830,835 |
|||||
(k) |
Gross Charge-Offs during the month |
$ |
18,888,363.11 |
|||||
| (l) | Recoveries during the month | $ | 2,820,062.83 | |||||
| (m) | Net Charge-Offs during the month (k - l) | $ | 16,068,300.28 | |||||
V |
NON-U.S. ACCOUNTS |
|||||||
| (a) | Non-US Accounts at end of month | 146,276 | ||||||
| (b) | as a percentage of total (a / c) | 0.37% | ||||||
(c) |
Total number of Accounts in Trust (at end of month) |
39,259,842 |
||||||
VI |
AVAILABLE SERIES 1997-1 FINANCE CHARGE COLLECTIONS AND APPLICATION OF FUNDS |
|||||||
| (a) | Floating Allocation Percentage of Collections of Finance Charge Receivables | $ | 11,544,095.84 | |||||
| (b) | Investment earnings on Principal Funding Account | — | ||||||
| (c) | Investment earnings in Reserve Account deposited in the Collection Account | — | ||||||
| (d) | Reserve draw Amount deposited into the Collection Account | — | ||||||
| (e) | Available Series 1997-1 Finance Charge Collections (a + b + c + d) | $ | 11,544,095.84 | |||||
(i) |
Class A Interest |
2,083,333.34 |
||||||
(ii) |
Servicing Fee |
871,459.70 |
||||||
(iii) |
Class A Investor Defaulted Amount ((IV.m * (II.k)) |
2,468,310.48 |
||||||
(iv) |
Class B Investor Defaulted Amount ((IV.m * (II.l)) |
758,239.17 |
||||||
(v) |
Adjustment Payment Shortfalls |
— |
||||||
(vi) |
Reimbursement of Class A Investor Charge-Offs |
— |
||||||
(vii) |
Reimbursement of Class B Investor Charge-Offs and Reallocated Class B Principal Collections |
— |
||||||
(viii) |
Class B Interest |
— |
||||||
(ix) |
Reserve Account |
— |
||||||
(x) |
Excess Finance Charge Collections |
$ |
5,362,753.15 |
|||||
| (e-i-ii-iii-iv-v-vi-vii-viii-ix) | ||||||||
VII |
YIELD and BASE RATE |
|||||||
Base Rate |
||||||||
(a) |
Base Rate (current month) |
6.78% |
||||||
| (b) | Base Rate (prior month) | 6.78% | ||||||
| (c) | Base Rate (2 months ago) | 6.78% | ||||||
(d) |
3 Month Average Base Rate |
6.78% |
||||||
Portfolio Yield |
||||||||
(e) |
Portfolio Yield (current month) |
20.45% |
||||||
| (f) | Portfolio Yield (prior month) | 22.95% | ||||||
| (g) | Portfolio Yield (2 months ago) | 22.23% | ||||||
(h) |
3 Month Average Portfolio Yield |
21.88% |
||||||
VIII |
PORTFOLIO PERFORMANCE RATES |
|||||||
| (a) | Net Charge-Offs (annualized % of Principal Receivables at beginning of period) | 7.93% | ||||||
| (b) | Monthly Payment Rate (% of Total Receivables at beginning of period (adjusted for number of days in period)) | 18.16% | ||||||
| (c) | Trust Portfolio Yield (annualized) | 28.39% | ||||||
| (d) | Portfolio Yield (3 month average (annualized)) | 21.88% | ||||||
| (e) | Base Rate (3 month average) | 6.78% | ||||||
| (f) | Excess Finance Charge Collections % (d - e) | 15.10% | ||||||
IX |
PRINCIPAL COLLECTIONS |
|||||||
| (a) | Class A Principal Allocation Percentage | 15.36% | ||||||
| (b) | Class A Principal | $ | — | |||||
| (c) | Class B Principal Allocation Percentage | 4.72% | ||||||
| (d) | Class B Principal | $ | — | |||||
| (e) | Total Principal (b + d) | $ | — | |||||
(f) |
Reallocated Principal Collections |
$ |
— |
|||||
| (g) | Shared Principal Collections allocable from other Series, Participation and Transferor Certificate | $ | — | |||||
X |
INVESTOR CHARGE-OFFS |
|||||||
| CLASS A INVESTOR CHARGE-OFFS | ||||||||
| (a) | Class A Investor Charge-Offs | $ | — | |||||
| (b) | Class A Investor Charge-Offs per $1,000 original certificate principal amount | $ | — | |||||
| (c) | Total amount reimbursed in respect of Class A Investor Charge-Offs | $ | — | |||||
| (d) | The amount, if any, by which the outstanding principal balance of the Class A Certificates exceeds the Class A Invested Amount after giving effect to all transactions on such Distribution Date. | $ | — | |||||
CLASS B INVESTOR CHARGE-OFFS |
||||||||
| (e) | Class B Investor Charge-Offs | $ | — | |||||
| (f) | Class B Investor Charge-Offs per $1,000 original certificate principal amount | $ | — | |||||
| (g) | Total amount reimbursed in respect of Class B Investor Charge-Offs | $ | — | |||||
| (h) | The amount, if any, by which the outstanding principal balance of the Class B Certificates exceeds the Class B Invested Amount after giving effect to all transactions on such Distribution Date. | $ | — | |||||
XI |
AMORTIZATION |
|||||||
(a) |
Class A Accumulation Period Length (months) |
2 |
||||||
| (b) | Controlled Accumulation Amount | $ | 200,000,000.00 | |||||
| (c) | Deficit Controlled Accumulation Amount | $ | — | |||||
| (d) | Total Principal on deposit in Principal Funding Account for the benefit of Class A Certificateholders | $ | — | |||||
RETAILERS NATIONAL BANK, |
||||
| as servicer | ||||
By: /s/ Terrence J. Scully |
||||
| Name: Terrence J. Scully | ||||
| Title: Secretary |
MONTHLY SERVICER'S CERTIFICATE
RETAILERS NATIONAL BANK
TARGET CREDIT CARD MASTER TRUST
SERIES 1998-1
The undersigned, a duly authorized representative of Retailers National Bank, as Servicer ("RNB") pursuant to the Pooling and Servicing Agreement dated as of September 13, 1995 (as may be amended, from time to time, the "Agreement") as supplemented by the Series 1998-1 Supplement (as amended and supplemented, the "Series Supplement"), among RNB, Target Receivables Corporation and Wells Fargo Bank Minnesota, National Association, does hereby certify as follows:
| 1. | Capitalized terms used in this Certificate have their respective meanings as set forth in the Agreement or the Series Supplement, as applicable. | |||
2. |
RNB is, as of the date hereof, the Servicer under the Agreement. |
|||
3. |
The undersigned is a Servicing Officer. |
|||
4. |
This certificate relates to the Distribution Date occuring on September 25, 2001. |
|||
5. |
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 Agreement through the Monthly Period preceding such Distribution Date. |
|||
6. |
As of the date hereof, to the best knowledge of the undersigned, no Early Amortization Event occurred on or prior to such Distribution Date. |
|||
7. |
The aggregate amount of Collections processed for the preceding Monthly Period was equal to $461,712,920.76. |
|||
8. |
The aggregate amount of Collections of Finance Charge Receivables (including Discounted Receivables) for the preceding Monthly Period was equal to $57,489,894.32. |
|||
9. |
The aggregate amount of Collections of Principal Receivables for the preceding Monthly Period was equal to $404,223,026.44. |
|||
10. |
The aggregate amount of the Defaulted Amount for the preceding Monthly Period was equal to $16,068,300.28. |
|||
11. |
The aggregate amount of Recoveries for the preceding Monthly Period was equal to $2,820,062.83. |
|||
12. |
The Portfolio Yield for the preceding Monthly Period was equal to 20.45%. |
|||
13. |
The Base Rate for the preceding Monthly Period was equal to 6.51%. |
|||
14. |
The aggregate amount of Receivables as of the end of the last day of the preceding Monthly Period was equal to $2,744,747,309.66. |
|||
15. |
The balance on deposit in the Collection Account with respect to Collections processed as of the end of the last day of the preceding Monthly Period was equal to $0.00. |
|||
16. |
The aggregate amount of Adjustments for the preceding Monthly Period was equal to $37,854,926.74. |
|||
17. |
The aggregate amount of withdrawals, drawings or payments under any Enhancement to be made with respect to the preceding Monthly Period is equal to $0.00. |
|||
18. |
The total amount to be distributed to Investor Certificateholders on the Distribution Date is equal to $1,966,666.67. |
19. |
The amount to be distributed to Investor Certificateholders on the Distribution Date per $1,000 original principal amount is equal to: |
|||
Class A 4.917 |
||||
20. |
The amount of such distribution allocable to principal is equal to $0.00. |
|||
21. |
The amount of such distribution allocable to principal per $1,000 original principal amount is equal to: |
|||
Class A 0.000 |
||||
22. |
The amount of such distribution allocable to interest is equal to $1,966,666.67. |
|||
23. |
The amount of such distribution allocable to interest per $1,000 original principal amount is equal to: |
|||
Class A 4.917 |
||||
| IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Servicer's Certificate this 20th day of September, 2001. | ||||||
RETAILERS NATIONAL BANK, as servicer |
||||||
By: /s/ Terrence J. Scully Name: Terrence J. Scully Title: Secretary |
||||||
MONTHLY CERTIFICATEHOLDERS' STATEMENT
RETAILERS NATIONAL BANK
TARGET CREDIT CARD MASTER TRUST
SERIES 1998-1
Pursuant to the Pooling and Servicing Agreement, dated as of September 13, 1995 (as may be amended, from time to time, the "Agreement"), as supplemented by the Series 1998-1 Supplement (as amended and Supplemented, the "Series Supplement"), each among Retailers National Bank, as Servicer, Target Receivables Corporation, as Transferor, and Wells Fargo Bank Minnesota, National Association, as Trustee, the Servicer is required to prepare certain information each month regarding distributions to Certificateholders and the performance of the Trust. The information with respect to the applicable Distribution Date and Monthly Period is set forth below.
| Monthly Period: | August 2001 | |||||
| Distribution Date: | September 25, 2001 | |||||
| No. of Days in Period: | 28 |
| A. | ORIGINAL DEAL PARAMETERS | |||||||
(a) |
Class A Initial Invested Amount |
$ |
400,000,000.00 |
76.50 |
% |
|||
| (b) | Class B Initial Invested Amount | 122,875,817.00 | 23.50 | % | ||||
| (c) | Total Initial Invested Amount | $ | 522,875,817.00 | |||||
(d) |
Class A Certificate Rate |
5.90% |
||||||
| (e) | Class B Certificate Rate | 0.00% | ||||||
(f) |
Servicing Fee Rate |
2.00% |
||||||
| (g) | Discount Percentage | 0.00% | ||||||
I. |
RECEIVABLES IN THE TRUST |
|||||||
(a) |
Beginning of the Period Principal Receivables |
$ |
2,603,935,021.65 |
|||||
| (b) | Beginning of the Period Finance Charge Receivables | 80,709,915.20 | ||||||
| (c) | Beginning of the Period Discounted Receivables | — | ||||||
| (d) | Beginning of the Period Total Receivables (a + b + c) | $ | 2,684,644,936.85 | |||||
(e) |
Removed Principal Receivables |
$ |
— |
|||||
| (f) | Removed Finance Charge Receivables | — | ||||||
| (g) | Removed Total Receivables (e + f) | $ | — | |||||
(h) |
Supplemental Principal Receivables |
$ |
— |
|||||
| (i) | Supplemental Finance Charge Receivables | — | ||||||
| (j) | Supplemental Total Receivables (h + i) | $ | — | |||||
(k) |
End of Period Principal Receivables |
$ |
2,661,816,433.07 |
|||||
| (l) | End of Period Finance Charge Receivables | 82,930,876.59 | ||||||
| (m) | End of Period Discounted Receivables | — | ||||||
| (n) | End of Period Total Receivables (k + l + m) | $ | 2,744,747,309.66 | |||||
II. |
INVESTED AMOUNTS AND ALLOCATION PERCENTAGES |
|||||||
(a) |
Class A Initial Invested Amount |
$ |
400,000,000.00 |
76.50 |
% |
|||
| (b) | Class B Initial Invested Amount | 122,875,817.00 | 23.50 | % | ||||
| (c) | Total Initial Invested Amount (a + b) | $ | 522,875,817.00 | |||||
(d) |
Class A Invested Amount (a - (X.a)) |
$ |
400,000,000.00 |
76.50 |
% |
|||
| (e) | Class B Invested Amount (b - (X.e)) | 122,875,817.00 | 23.50 | % | ||||
| (f) | Total Invested Amount (d + e) | $ | 522,875,817.00 | |||||
(g) |
Class A Adjusted Invested Amount (a - (X.a)-(III.f)) |
$ |
400,000,000.00 |
76.50 |
% |
|||
| (h) | Class B Invested Amount (b - (X.e)) | 122,875,817.00 | 23.50 | % | ||||
| (i) | Total Adjusted Invested Amount (g + h) | $ | 522,875,817.00 | |||||
(j) |
Floating Allocation Percentage |
20.08% |
||||||
| (k) | Class A Floating Allocation Percentage | 15.36% | ||||||
| (l) | Class B Floating Allocation Percentage | 4.72% | ||||||
(m) |
Principal Allocation Percentage |
20.08% |
||||||
| (n) | Class A Principal Allocation Percentage | 15.36% | ||||||
| (o) | Class B Principal Allocation Percentage | 4.72% | ||||||
(p) |
Servicing Fee |
$ |
871,459.70 |
|||||
| (q) | Investor Defaulted Amount (j * (IV.(m))) | $ | 3,226,549.65 | |||||
III. |
TRANSFEROR'S INTEREST, RETAINED INTEREST, SPECIAL FUNDING ACCOUNT, AND PRINCIPAL FUNDING ACCOUNT |
|||||||
(a) |
Transferor's Amount (end of month) |
$ |
445,181,411.41 |
|||||
| (b) | Required Retained Transferor Amount (end of month) | $ | 53,236,328.66 | |||||
| (c) | Required Principal Balance (end of month) | $ | 2,216,635,021.66 | |||||
| (e) | Funds on deposit in Special Funding Account (end of month) | $ | — | |||||
| (f) | Principal on deposit in Principal Funding Account (beginning of month) | $ | — | |||||
| (g) | Principal on deposit in Principal Funding Account (end of month) | $ | — | |||||
IV. |
PERFORMANCE SUMMARY |
|||||||
COLLECTIONS: |
||||||||
| (a) | Collections of Principal Receivables | $ | 404,223,026.44 | |||||
| (b) | Collections of Finance Charge Receivables (from cardholder payments) | 50,701,555.36 | ||||||
| (c) | Collections of Finance Charge Receivables (from merchant fees, deferred billing fees, collection account interest, interchange fees) | 6,788,338.96 | ||||||
| (d) | Collections of Discount Option Receivables | 0.00 | ||||||
| (e) | Total Finance Charge Collections (b + c + d) | $ | 57,489,894.32 | |||||
| (f) | Total Collections (a + e) | $ | 461,712,920.76 | |||||
DELINQUENCIES AND LOSSES: |
||||||||
| (g) | 2 missed payments | $ | 62,062,117 | |||||
| (h) | 3 missed payments | 40,983,020 | ||||||
| (i) | 4 or more missed payments | 82,785,699 | ||||||
(j) |
Total delinquencies (g + h + i) |
$ |
185,830,835 |
|||||
(k) |
Gross Charge-Offs during the month |
$ |
18,888,363.11 |
|||||
| (l) | Recoveries during the month | $ | 2,820,062.83 | |||||
| (m) | Net Charge-Offs during the month (k - l) | $ | 16,068,300.28 | |||||
V |
NON-U.S. ACCOUNTS |
|||||||
(a) |
Non-US Accounts at end of month |
146,276 |
||||||
| (b) | as a percentage of total (a / c) | 0.37% | ||||||
(c) |
Total number of Accounts in Trust (at end of month) |
39,259,842 |
||||||
VI |
AVAILABLE SERIES 1998-1 FINANCE CHARGE COLLECTIONS AND APPLICATION OF FUNDS |
|||||||
(a) |
Floating Allocation Percentage of Collections of Finance Charge Receivables |
$ |
11,544,095.84 |
|||||
| (b) | Investment earnings on Principal Funding Account | — | ||||||
| (c) | Investment earnings in Reserve Account deposited in the Collection Account | — | ||||||
| (d) | Closing Date deposit into the Collection Account | — | ||||||
| (e) | Available Series 1998-1 Finance Charge Collections (a + b + c + d) | $ | 11,544,095.84 | |||||
(i) |
Class A Interest |
1,966,666.67 |
||||||
(ii) |
Servicing Fee |
871,459.70 |
||||||
(iii) |
Class A Investor Defaulted Amount ((IV.m * (II.k)) |
2,468,310.48 |
||||||
(iv) |
Class B Investor Defaulted Amount ((IV.m * (II.l)) |
758,239.17 |
||||||
(v) |
Adjustment Payment Shortfalls |
— |
||||||
(vi) |
Reimbursement of Class A Investor Charge-Offs |
— |
||||||
(vii) |
Reimbursement of Class B Investor Charge-Offs and Reallocated Class B Principal Collections |
— |
||||||
(viii) |
Class B Interest |
— |
||||||
(ix) |
Reserve Account |
— |
||||||
(x) |
Excess Finance Charge Collections |
$ |
5,479,419.82 |
|||||
| (e-i-ii-iii-iv-v-vi-vii-viii-ix) | ||||||||
VII |
YIELD and BASE RATE |
|||||||
Base Rate |
||||||||
(a) |
Base Rate (current month) |
6.51% |
||||||
| (b) | Base Rate (prior month) | 6.51% | ||||||
| (c) | Base Rate (2 months ago) | 6.51% | ||||||
(d) |
3 Month Average Base Rate |
6.51% |
||||||
Portfolio Yield |
||||||||
(e) |
Portfolio Yield (current month) |
20.45% |
||||||
| (f) | Portfolio Yield (prior month) | 22.95% | ||||||
| (g) | Portfolio Yield (2 months ago) | 22.23% | ||||||
(h) |
3 Month Average Portfolio Yield |
21.88% |
||||||
VIII |
PORTFOLIO PERFORMANCE RATES |
|||||||
(a) |
Net Charge-Offs (annualized % of Principal Receivables at beginning of period) |
7.93% |
||||||
| (b) | Monthly Payment Rate (% of Total Receivables at beginning of period (adjusted for number of days in period)) | 18.16% | ||||||
| (c) | Trust Portfolio Yield (annualized) | 28.39% | ||||||
| (d) | Portfolio Yield (3 month average (annualized)) | 21.88% | ||||||
| (e) | Base Rate (3 month average) | 6.51% | ||||||
| (f) | Excess Finance Charge Collections % (d - e) | 15.37% | ||||||
IX |
PRINCIPAL COLLECTIONS |
|||||||
(a) |
Class A Principal Allocation Percentage |
15.36% |
||||||
| (b) | Class A Principal | $ | — | |||||
| (c) | Class B Principal Allocation Percentage | 4.72% | ||||||
| (d) | Class B Principal | $ | — | |||||
| (e) | Total Principal (b + d) | $ | — | |||||
(f) |
Reallocated Principal Collections |
$ |
— |
|||||
| (g) | Shared Principal Collections allocable from other Series and Participation | $ | — | |||||
X |
INVESTOR CHARGE-OFFS |
|||||||
CLASS A INVESTOR CHARGE-OFFS |
||||||||
| (a) | Class A Investor Charge-Offs | $ | — | |||||
| (b) | Class A Investor Charge-Offs per $1,000 original certificate principal amount | $ | — | |||||
| (c) | Total amount reimbursed in respect of Class A Investor Charge-Offs | $ | — | |||||
| (d) | The amount, if any, by which the outstanding principal balance of the Class A Certificates exceeds the Class A Invested Amount after giving effect to all transactions on such Distribution Date. | $ | — | |||||
CLASS B INVESTOR CHARGE-OFFS |
||||||||
| (e) | Class B Investor Charge-Offs | $ | — | |||||
| (f) | Class B Investor Charge-Offs per $1,000 original certificate principal amount | $ | — | |||||
| (g) | Total amount reimbursed in respect of Class B Investor Charge-Offs | $ | — | |||||
| (h) | The amount, if any, by which the outstanding principal balance of the Class B Certificates exceeds the Class B Invested Amount after giving effect to all transactions on such Distribution Date. | $ | — | |||||
XI |
AMORTIZATION |
|||||||
(a) |
Class A Accumulation Period Length (months) |
12 |
||||||
| (b) | Controlled Accumulation Amount | $ | 33,333,333.34 | |||||
| (c) | Deficit Controlled Accumulation Amount | $ | — | |||||
| (d) | Total Principal on deposit in Principal Funding Account for the benefit of Class A Certificateholders (end of month) | $ | — | |||||
RETAILERS NATIONAL BANK, |
||||
| as servicer | ||||
By: /s/ Terrence J. Scully |
||||
| Name: Terrence J. Scully | ||||
| Title: Secretary |
MONTHLY SERVICER'S CERTIFICATE
RETAILERS NATIONAL BANK
TARGET CREDIT CARD MASTER TRUST
SERIES 2001-1
The undersigned, a duly authorized representative of Retailers National Bank, as Servicer ("RNB") pursuant to the Pooling and Servicing Agreement dated as of September 13, 1995 (as may be amended, from time to time, the "Agreement") as supplemented by the Series 2001-1 Supplement (as amended and supplemented, the "Series Supplement"), among RNB, Target Receivables Corporation and Wells Fargo Bank Minnesota, National Association, does hereby certify as follows:
| 1. | Capitalized terms used in this Certificate have their respective meanings as set forth in the Agreement or the Series Supplement, as applicable. | |||
2. |
RNB is, as of the date hereof, the Servicer under the Agreement. |
|||
3. |
The undersigned is a Servicing Officer. |
|||
4. |
This certificate relates to the Distribution Date occuring on September 25, 2001. |
|||
5. |
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 Agreement through the Monthly Period preceding such Distribution Date. |
|||
6. |
As of the date hereof, to the best knowledge of the undersigned, no Early Amortization Event occurred on or prior to such Distribution Date. |
|||
7. |
The aggregate amount of Collections processed for the preceding Monthly Period was equal to $184,397,169.40. |
|||
8. |
The aggregate amount of Collections of Finance Charge Receivables (including Discounted Receivables) for the preceding Monthly Period was equal to $32,291,597.86. |
|||
9. |
The aggregate amount of Collections of Principal Receivables for the preceding Monthly Period was equal to $152,105,571.54. |
|||
10. |
The aggregate amount of the Defaulted Amount for the preceding Monthly Period was equal to $4,398,856.10. |
|||
11. |
The aggregate amount of Recoveries for the preceding Monthly Period was equal to $810,734.07. |
|||
12. |
The Portfolio Yield for the preceding Monthly Period was equal to 40.52%. |
|||
13. |
The Base Rate for the preceding Monthly Period was equal to 4.77%. |
|||
14. |
The aggregate amount of Receivables as of the end of the last day of the preceding Monthly Period was equal to $2,744,747,309.66. |
|||
15. |
The balance on deposit in the Collection Account with respect to Collections processed as of the end of the last day of the preceding Monthly Period was equal to $0.00. |
|||
16. |
The aggregate amount of Adjustments for the preceding Monthly Period was equal to $15,138,903.16. |
|||
17. |
The aggregate amount of withdrawals, drawings or payments under any Enhancement to be made with respect to the preceding Monthly Period is equal to $0.00. |
|||
18. |
The total amount to be distributed to Investor Certificateholders on the Distribution Date is equal to $2,613,750.00. |
19. |
The amount to be distributed to Investor Certificateholders on the Distribution Date per $1,000 original principal amount is equal to: |
|||
Class A 3.485 |
||||
20. |
The amount of such distribution allocable to principal is equal to $0.00. |
|||
21. |
The amount of such distribution allocable to principal per $1,000 original principal amount is equal to: |
|||
Class A 0.000 |
||||
22. |
The amount of such distribution allocable to interest is equal to $2,613,750.00. |
|||
23. |
The amount of such distribution allocable to interest per $1,000 original principal amount is equal to: |
|||
Class A 3.485 |
||||
| IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Servicer's Certificate this 20th day of September, 2001. | ||||||
RETAILERS NATIONAL BANK, as servicer |
||||||
By: /s/ Terrence J. Scully Name: Terrence J. Scully Title: Secretary |
||||||
MONTHLY CERTIFICATEHOLDERS' STATEMENT
RETAILERS NATIONAL BANK
TARGET CREDIT CARD MASTER TRUST
SERIES 2001-1
Pursuant to the Pooling and Servicing Agreement, dated as of September 13, 1995 (as may be amended, from time to time, the "Agreement"), as supplemented by the Series 2001-1 Supplement (as amended and Supplemented, the "Series Supplement"), each among Retailers National Bank, as Servicer, Target Receivables Corporation, as Transferor, and Wells Fargo Bank Minnesota, National Association, as Trustee, the Servicer is required to prepare certain information each month regarding distributions to Certificateholders and the performance of the Trust. The information with respect to the applicable Distribution Date and Monthly Period is set forth below.
| Monthly Period: | August 2001 | |||||
| Distribution Date: | September 25, 2001 | |||||
| No. of Days in Period: | 11 (partial month) |
| A. | ORIGINAL DEAL PARAMETERS | |||||||
(a) |
Class A Initial Invested Amount |
$ |
750,000,000.00 |
75.00 |
% |
|||
| (b) | Class B Initial Invested Amount | 250,000,000.00 | 25.00 | % | ||||
| (c) | Total Initial Invested Amount | $ | 1,000,000,000.00 | |||||
(d) |
Class A Certificate Rate |
3.69% |
||||||
| (e) | Class B Certificate Rate | 0.00% | ||||||
(f) |
Servicing Fee Rate |
2.00% |
||||||
| (g) | Discount Percentage | 0.00% | ||||||
I. |
RECEIVABLES IN THE TRUST |
|||||||
(a) |
Beginning of the Period Principal Receivables |
$ |
2,635,977,423.47 |
|||||
| (b) | Beginning of the Period Finance Charge Receivables | 83,246,879.28 | ||||||
| (c) | Beginning of the Period Discounted Receivables | — | ||||||
| (d) | Beginning of the Period Total Receivables (a + b + c) | $ | 2,719,224,302.75 | |||||
(e) |
Removed Principal Receivables |
$ |
— |
|||||
| (f) | Removed Finance Charge Receivables | — | ||||||
| (g) | Removed Total Receivables (e + f) | $ | — | |||||
(h) |
Supplemental Principal Receivables |
$ |
— |
|||||
| (i) | Supplemental Finance Charge Receivables | — | ||||||
| (j) | Supplemental Total Receivables (h + i) | $ | — | |||||
(k) |
End of Period Principal Receivables |
$ |
2,661,816,433.07 |
|||||
| (l) | End of Period Finance Charge Receivables | 82,930,876.59 | ||||||
| (m) | End of Period Discounted Receivables | — | ||||||
| (n) | End of Period Total Receivables (k + l + m) | $ | 2,744,747,309.66 | |||||
II. |
INVESTED AMOUNTS AND ALLOCATION PERCENTAGES |
|||||||
(a) |
Class A Initial Invested Amount |
$ |
750,000,000.00 |
75.00 |
% |
|||
| (b) | Class B Initial Invested Amount | 250,000,000.00 | 25.00 | % | ||||
| (c) | Total Initial Invested Amount (a + b) | $ | 1,000,000,000.00 | |||||
(d) |
Class A Invested Amount (a - (X.a)) |
$ |
750,000,000.00 |
75.00 |
% |
|||
| (e) | Class B Invested Amount (b - (X.e)) | 250,000,000.00 | 25.00 | % | ||||
| (f) | Total Invested Amount (d + e) | $ | 1,000,000,000.00 | |||||
(g) |
Class A Adjusted Invested Amount (a - (X.a)-(III.f)) |
$ |
750,000,000.00 |
75.00 |
% |
|||
| (h) | Class B Invested Amount (b - (X.e)) | 250,000,000.00 | 25.00 | % | ||||
| (i) | Total Adjusted Invested Amount (g + h) | $ | 1,000,000,000.00 | |||||
(j) |
Floating Allocation Percentage |
37.94% |
||||||
| (k) | Class A Floating Allocation Percentage | 28.45% | ||||||
| (l) | Class B Floating Allocation Percentage | 9.48% | ||||||
(m) |
Principal Allocation Percentage |
37.94% |
||||||
| (n) | Class A Principal Allocation Percentage | 28.45% | ||||||
| (o) | Class B Principal Allocation Percentage | 9.48% | ||||||
(p) |
Servicing Fee |
$ |
654,762.00 |
|||||
| (q) | Investor Defaulted Amount (j * (IV.(m))) | $ | 1,668,776.09 | |||||
III. |
TRANSFEROR'S INTEREST, RETAINED INTEREST, SPECIAL FUNDING ACCOUNT, AND PRINCIPAL FUNDING ACCOUNT |
|||||||
(a) |
Transferor's Amount (end of month) |
$ |
445,181,411.41 |
|||||
| (b) | Required Retained Transferor Amount (end of month) | $ | 53,236,328.66 | |||||
| (c) | Required Principal Balance (end of month) | $ | 2,216,635,021.66 | |||||
| (e) | Funds on deposit in Special Funding Account (end of month) | $ | — | |||||
| (f) | Principal on deposit in Principal Funding Account (beginning of month) | $ | — | |||||
| (g) | Principal on deposit in Principal Funding Account (end of month) | $ | — | |||||
IV. |
PERFORMANCE SUMMARY |
|||||||
COLLECTIONS: |
||||||||
| (a) | Collections of Principal Receivables | $ | 152,105,571.54 | |||||
| (b) | Collections of Finance Charge Receivables (from cardholder payments) | 25,648,345.49 | ||||||
| (c) | Collections of Finance Charge Receivables (from merchant fees, deferred billing fees, collection account interest, interchange fees) | 6,643,252.37 | ||||||
| (d) | Collections of Discount Option Receivables | 0.00 | ||||||
| (e) | Total Finance Charge Collections (b + c + d) | $ | 32,291,597.86 | |||||
| (f) | Total Collections (a + e) | $ | 184,397,169.40 | |||||
DELINQUENCIES AND LOSSES: |
||||||||
| (g) | 2 missed payments | $ | 62,062,117 | |||||
| (h) | 3 missed payments | 40,983,020 | ||||||
| (i) | 4 or more missed payments | 82,785,699 | ||||||
(j) |
Total delinquencies (g + h + i) |
$ |
185,830,835 |
|||||
(k) |
Gross Charge-Offs during the month |
$ |
5,209,590.17 |
|||||
| (l) | Recoveries during the month | $ | 810,734.07 | |||||
| (m) | Net Charge-Offs during the month (k - l) | $ | 4,398,856.10 | |||||
V |
NON-U.S. ACCOUNTS |
|||||||
(a) |
Non-US Accounts at end of month |
146,276 |
||||||
| (b) | as a percentage of total (a / c) | 0.37% | ||||||
(c) |
Total number of Accounts in Trust (at end of month) |
39,259,842 |
||||||
VI |
AVAILABLE SERIES 2001-1 FINANCE CHARGE COLLECTIONS AND APPLICATION OF FUNDS |
|||||||
(a) |
Floating Allocation Percentage of Collections of Finance Charge Receivables |
$ |
12,250,331.73 |
|||||
| (b) | Investment earnings on Principal Funding Account | — | ||||||
| (c) | Investment earnings in Reserve Account deposited in the Collection Account | — | ||||||
| (d) | Closing Date deposit into the Collection Account | 1,800,000.00 | ||||||
| (e) | Available Series 2001-1 Finance Charge Collections (a + b + c + d) | $ | 14,050,331.73 | |||||
(i) |
Class A Interest |
2,613,750.00 |
||||||
(ii) |
Servicing Fee |
654,762.00 |
||||||
(iii) |
Class A Investor Defaulted Amount ((IV.m * (II.k)) |
1,251,582.07 |
||||||
(iv) |
Class B Investor Defaulted Amount ((IV.m * (II.l )) |
417,194.02 |
||||||
(v) |
Adjustment Payment Shortfalls |
— |
||||||
(vi) |
Reimbursement of Class A Investor Charge-Offs |
— |
||||||
(vii) |
Reimbursement of Class B Investor Charge-Offs and Reallocated Class B Principal Collections |
— |
||||||
(viii) |
Class B Interest |
— |
||||||
(ix) |
Reserve Account |
— |
||||||
(x) |
Excess Finance Charge Collections |
$ |
9,113,043.64 |
|||||
| (e-i-ii-iii-iv-v-vi-vii-viii-ix) | ||||||||
VII |
YIELD and BASE RATE |
|||||||
Base Rate |
||||||||
(a) |
Base Rate (current month) |
4.77% |
||||||
| (b) | Base Rate (prior month) | #N/A | ||||||
| (c) | Base Rate (2 months ago) | #N/A | ||||||
(d) |
3 Month Average Base Rate |
#N/A |
||||||
Portfolio Yield |
||||||||
(e) |
Portfolio Yield (current month) |
40.52% |
||||||
| (f) | Portfolio Yield (prior month) | #N/A | ||||||
| (g) | Portfolio Yield (2 months ago) | #N/A | ||||||
(h) |
3 Month Average Portfolio Yield |
#N/A |
||||||
VIII |
PORTFOLIO PERFORMANCE RATES |
|||||||
(a) |
Net Charge-Offs (annualized % of Principal Receivables at beginning of period) |
5.46% |
||||||
| (b) | Monthly Payment Rate (% of Total Receivables at beginning of period (adjusted for number of days in period)) | 17.83% | ||||||
| (c) | Trust Portfolio Yield (annualized) | 40.09% | ||||||
| (d) | Portfolio Yield (3 month average (annualized)) | #N/A | ||||||
| (e) | Base Rate (3 month average) | #N/A | ||||||
| (f) | Excess Finance Charge Collections % (d - e) | #N/A | ||||||
IX |
PRINCIPAL COLLECTIONS |
|||||||
(a) |
Class A Principal Allocation Percentage |
28.45% |
||||||
| (b) | Class A Principal | $ | — | |||||
| (c) | Class B Principal Allocation Percentage | 9.48% | ||||||
| (d) | Class B Principal | $ | — | |||||
| (e) | Total Principal (b + d) | $ | — | |||||
(f) |
Reallocated Principal Collections |
$ |
— |
|||||
| (g) | Shared Principal Collections allocable from other Series and Participation | $ | — | |||||
X |
INVESTOR CHARGE-OFFS |
|||||||
CLASS A INVESTOR CHARGE-OFFS |
||||||||
| (a) | Class A Investor Charge-Offs | $ | — | |||||
| (b) | Class A Investor Charge-Offs per $1,000 original certificate principal amount | $ | — | |||||
| (c) | Total amount reimbursed in respect of Class A Investor Charge-Offs | $ | — | |||||
| (d) | The amount, if any, by which the outstanding principal balance of the Class A Certificates exceeds the Class A Invested Amount after giving effect to all transactions on such Distribution Date. | $ | — | |||||
CLASS B INVESTOR CHARGE-OFFS |
||||||||
| (e) | Class B Investor Charge-Offs | $ | — | |||||
| (f) | Class B Investor Charge-Offs per $1,000 original certificate principal amount | $ | — | |||||
| (g) | Total amount reimbursed in respect of Class B Investor Charge-Offs | $ | — | |||||
| (h) | The amount, if any, by which the outstanding principal balance of the Class B Certificates exceeds the Class B Invested Amount after giving effect to all transactions on such Distribution Date. | $ | — | |||||
XI |
AMORTIZATION |
|||||||
(a) |
Class A Accumulation Period Length (months) |
12 |
||||||
| (b) | Controlled Accumulation Amount | $ | 62,500,000.00 | |||||
| (c) | Deficit Controlled Accumulation Amount | $ | — | |||||
| (d) | Total Principal on deposit in Principal Funding Account for the benefit of Class A Certificateholders (end of month) | $ | — | |||||
RETAILERS NATIONAL BANK, |
||||
| as servicer | ||||
By: /s/ Terrence J. Scully |
||||
| Name: Terrence J. Scully | ||||
| Title: Secretary |