EXHIBIT 4.2
FORM OF INDENTURE SUPPLEMENT
================================================================================
MBNA CREDIT CARD MASTER NOTE TRUST
as Issuer
SERIES [__________] INDENTURE SUPPLEMENT
dated as of ________ __, _____
to
INDENTURE
dated as of ______________ ____, 2001
THE BANK OF NEW YORK
as Indenture Trustee
================================================================================
TABLE OF CONTENTS
Page
Article I
Definitions and Other Provisions of General Application
Section 1.01. Definitions..................................................................... 1
Section 1.02. Governing Law................................................................... 11
Section 1.03. Counterparts.................................................................... 11
Section 1.04. Ratification of Indenture....................................................... 12
Article II
The Notes
Section 2.01. Creation and Designation........................................................ 13
Section 2.02. New Issuances of Notes.......................................................... 13
Section 2.03. Required Subordinated Amount Conditions to Issuance of a Tranche of a
Senior Class of Notes........................................................... 14
Article III
Allocations, Deposits and Payments
Section 3.01. Allocations of Series [____] Available Funds.................................... 16
Section 3.02. Targeted Deposits to the Interest Funding Account............................... 16
Section 3.03. Allocations of Series [___] Available Funds to Interest Funding
sub-Accounts.................................................................... 17
Section 3.04. Payments Received from Derivative Counterparties for Interest; Other
Deposits to the Interest Funding sub-Accounts................................... 18
Section 3.05. Allocations of Reductions from Investor Charge-Offs to the Nominal
Liquidation Amount of Subordinated Classes...................................... 19
Section 3.06. Allocations of Reimbursements of Nominal Liquidation Amount Deficits............ 20
Section 3.07. Application of Series [ ] Available Principal Amounts......................... 21
Section 3.08. Limit on Reallocations of Series [___] Available Principal Amounts Taken
to Benefit Senior Classes....................................................... 22
Section 3.09. Computation of Amount of Reallocations of Series [___] Available Principal
Amounts Taken from Subordinated Classes; Allocations of Reductions to the
Nominal Liquidation Amount of Subordinated Classes from Reallocations of
Series [___] Available Principal Amounts........................................ 23
Section 3.10. Targeted Deposits of Series [ ] Available Principal Amounts to the
Principal Funding Account....................................................... 24
Section 3.11. Allocations among Principal Funding sub-Accounts................................ 25
-i-
TABLE OF CONTENTS
(continued)
Page
Section 3.12. Payments Received from Derivative Counterparties for Principal; Other
Deposits to Principal Funding sub-Accounts...................................... 26
Section 3.13. Withdrawals from Interest Funding Account....................................... 26
Section 3.14. Withdrawals from Principal Funding Account...................................... 27
Section 3.15. Limit on Repayments of all Tranches............................................. 29
Section 3.16. Calculation of Nominal Liquidation Amount....................................... 29
Section 3.17. Reinvestment in the Collateral Certificate...................................... 30
Section 3.18. Netting of Deposits and Payments................................................ 30
Section 3.19. Pro rata Payments within a Tranche.............................................. 30
Section 3.20. Sale of Receivables for Accelerated Notes....................................... 30
Section 3.21. Calculation of Prefunding Target Amount......................................... 32
Section 3.22. Targeted Deposits to the Class C Reserve Account................................ 34
Section 3.23. Withdrawals from the Class C Reserve Account.................................... 34
Section 3.24. Computation of Interest......................................................... 35
Section 3.25. Excess Available Funds Sharing.................................................. 35
Article IV
Early Redemption of Notes
Section 4.01. Early Redemption Events......................................................... 36
Article V
Amounts and Investments
Section 5.01. Accounts........................................................................ 37
-ii-
EXHIBITS
--------
EXHIBIT A
EXHIBIT B
EXHIBIT C
-iii-
THIS SERIES [________] INDENTURE SUPPLEMENT (this "Indenture
---------
Supplement"), by and between MBNA CREDIT CARD MASTER NOTE TRUST, a statutory
- ----------
business trust organized under the laws of the State of Delaware (the "Issuer"),
------
having its principal office at Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890, and THE BANK OF NEW YORK, a New York banking
corporation ( the "Indenture Trustee"), is made and entered into as of _______
-----------------
__, ______.
Pursuant to this Indenture Supplement, the Issuer and the Trust shall
create a new series of Notes and shall specify the principal terms thereof.
ARTICLE I
Definitions and Other Provisions of General Application
Section 1.01. Definitions. For all purposes of this Indenture
-----------
Supplement, except as otherwise expressly provided or unless the context
otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Indenture,
either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles"
with respect to any computation required or permitted hereunder
means such accounting principles as are generally accepted in the
United States of America at the date of such computation;
(4) all references in this Indenture to designated "Articles,"
"Sections" and other subdivisions are to the designated Articles,
Sections and other subdivisions of this Indenture Supplement as
originally executed. The words "herein," "hereof" and "hereunder"
and other words of similar import refer to this Indenture
Supplement as a whole and not to any particular Article, Section
or other subdivision;
(5) in the event that any term or provision contained herein shall
conflict with or be inconsistent with any term or provision
contained in the Indenture, the terms and provisions of this
Indenture Supplement shall be controlling;
(6) each capitalized term defined herein shall relate only to the
Series [____] Notes and no other Series of Notes issued by the
Issuer; and
(7) "including" and words of similar import will be deemed to be
followed by "without limitation."
1
"Accumulation Commencement Date" means, for each tranche of Notes, the
------------------------------
first Business Day of the month that is twelve (12) months prior to the Expected
Principal Payment Date for such tranche of Notes; provided, however, that, if
-------- -------
the Accumulation Period Length for such tranche of Notes is less than twelve
(12) months, the Accumulation Commencement Date will be the first Business Day
of the month that is the number of whole months prior to such Expected Principal
Payment Date at least equal to the Accumulation Period Length and, as a result,
the number of Monthly Periods during the period from the Accumulation
Commencement Date to such Expected Principal Payment Date will at least equal
the Accumulation Period Length.
"Accumulation Period Factor" means, for any tranche of Notes for each
--------------------------
Monthly Period, a fraction, the numerator of which is equal to the sum of the
initial investor interests of all outstanding Series (as defined in the Pooling
and Servicing Agreement) including the Collateral Certificate, and the
denominator of which is equal to the sum of (a) the Initial Dollar Principal
Amount of such tranche of Notes, (b) the initial investor interests of all
outstanding Series of investor certificates issued by the Master Trust (other
than the Series 2001-__ Collateral Certificate) which are not expected to be in
their revolving periods (as such terms are defined in the Pooling and Servicing
Agreement), (c) the initial investor interests of all outstanding Series of
investor certificates issued by the Master Trust (other than the Series 2001-__
Collateral Certificate) which are not allocating Shared Principal Collections to
other Series of investor certificates issued by the Master Trust and are in
their revolving periods (as such terms are defined in the Pooling and Servicing
Agreement), and (d) the Initial Dollar Principal Amount of any tranche of notes
of the Issuer for which amounts are targeted to be deposited into a principal
funding account with respect to such Monthly Period; provided, however, that
-------- -------
this definition may be changed at any time if the Note Rating Agencies provide
prior written confirmation that a Ratings Effect will not occur with respect to
such change.
"Accumulation Period Length" is defined in Section 3.10(b)(ii).
-------------------------- -------------------
"Aggregate Investor Default Amount" is defined in the Series 2001-__
---------------------------------
Supplement.
"applicable investment category" means the following ratings:
------------------------------
Class A Notes Class B Notes Class C Notes
------------- ------------- -------------
Standard & Poor's AAA or A1+ A, A_ or higher BBB, ___ or higher
Moody's Aaa or P-1 Aaa or P-1 A2, P-2 or higher
Notwithstanding the foregoing, if funds on deposit in an Account are
for the benefit of more than one class of Notes, the rating required for any
investment of those funds will be the rating applicable to the most senior
class.
"Base Rate" means, with respect to any Monthly Period, the annualized
---------
percentage equivalent of a fraction, the numerator of which is equal to the sum
of the targeted deposits to the Interest Funding Account pursuant to Section
-------
3.02 on the related Transfer Date, and the Series [____] Servicing Fee and the
- ----
pro rata portion of the Servicer Interchange (as defined in the Series 2001-__
Supplement) allocable to Notes in Series [___] based on the ratio
2
of the Weighted Average Nominal Liquidation Amount of each tranche of Notes in
Series [___] Outstanding for such Monthly Period to the Weighted Average Nominal
Liquidation Amount of all notes issued by the Issuer backed by the Collateral
Certificate for such Monthly Period, each with respect to the related Transfer
Date, minus payments received with respect to such Monthly Period from a
Derivative Counterparty pursuant to a Derivative Agreement for any tranche of
Notes for interest in Dollars, and the denominator of which is the Weighted
Average Outstanding Dollar Principal Amount of all notes issued by the Issuer
backed by the Collateral Certificate for such Monthly Period.
"Class A Notes" means a Note specified in the applicable terms
-------------
document as belonging to Class A.
"Class A Required Subordinated Amount" means, with respect to any
------------------------------------
tranche of Class A Notes, a Dollar amount of Class B Notes or Class C Notes, as
the case may be, as specified in the applicable terms document for such tranche
of Class A Notes.
"Class A Usage of Class B Required Subordinated Amount" means, with
-----------------------------------------------------
respect to any tranche of Class A Notes, the sum of the following amounts:
(a) the cumulative sum of all Investor Charge-Offs initially
allocated to that tranche of Class A Notes pursuant to Section
-------
3.05(a), and then reallocated to Class B Notes pursuant to Section
------- -------
3.05(d); plus
-------
(b) the cumulative sum, computed on each date while that tranche
of Class A Notes is Outstanding and there is an Investor Charge-Off
allocated to any tranche of Class B Notes pursuant to Section 3.05(a)
---------------
which is not reallocated to Class C Notes pursuant to Section 3.05(c)
---------------
and which resulted in a reduction of the Nominal Liquidation Amount of
a tranche of Class B Notes on that date, of an amount equal to the
product of (A) a fraction, the numerator of which is the Class A
Required Subordinated Amount of Class B Notes for that tranche of
Class A Notes and the denominator of which is the aggregate
Outstanding Dollar Principal Amount of all Class B Notes, times (B)
-----
the aggregate amount of Investor Charge-Offs allocated to Class B
Notes pursuant to Section 3.05(a) which are not reallocated to Class C
---------------
Notes pursuant to Section 3.05(c) and which resulted in a reduction of
---------------
the Nominal Liquidation Amount of a tranche of Class B Notes on that
date; plus
(c) the cumulative sum of all Series [___] Available Principal
Amounts reallocated to the Interest Funding sub-Account for that
tranche of Class A Notes pursuant to Section 3.07(a) that resulted in
---------------
a reduction of the Nominal Liquidation Amount of a tranche of Class B
Notes; plus
(d) the cumulative sum, computed on each date while that tranche
of Class A Notes is Outstanding and Series [___] Available Principal
Amounts are reallocated to pay any amount to the Servicer pursuant to
Section 3.07(a) which resulted in a reduction of the Nominal
---------------
Liquidation Amount of a tranche of Class B Notes on that date, of an
amount equal to the product of (A) a fraction, the
3
numerator of which is the Class A Required Subordinated Amount of
Class B Notes for that tranche of Class A Notes and the denominator of
which is the aggregate Outstanding Dollar Principal Amount of all
Class B Notes, times (B) the aggregate amount of Series [___]
-----
Available Principal Amounts reallocated to pay any amount to the
Servicer pursuant to Section 3.07(a) which resulted in a reduction of
the Nominal Liquidation Amount of a tranche of Class B Notes on that
date; minus
(e) the cumulative sum (such sum not to exceed the sum of the
amounts computed pursuant to clauses (a), (b), (c) and (d) above),
computed on each Transfer Date while that tranche of Class A Notes is
Outstanding, of an amount equal to the product of (A) a fraction, the
numerator of which is the Class A Usage of Class B Required
Subordinated Amount (prior to giving effect to such reimbursement) for
that tranche of Class A Notes and the denominator of which is the
aggregate Class A Usage of Class B Required Subordinated Amount (prior
to giving effect to such reimbursement) of all Class A Notes, times
-----
(B) the aggregate amount of Series [____] Available Funds on such
Transfer Date available after giving effect to the applications
pursuant to Sections 3.01(a) and (b).
---------------- ---
"Class A Usage of Class C Required Subordinated Amount" means, with
-----------------------------------------------------
respect to any tranche of Class A Notes, the sum of the following amounts:
(a) the cumulative sum of all Investor Charge-Offs initially
allocated to that tranche of Class A Notes pursuant to Section
-------
3.05(a), and then reallocated to Class C Notes pursuant to Section
------- -------
3.05(c); plus
-------
(b) the cumulative sum, computed on each date while that tranche
of Class A Notes is Outstanding and there are Investor Charge-Offs
allocated to any tranche of Class C Notes pursuant to Section 3.05(a)
---------------
which results in a reduction of the Nominal Liquidation Amount of
Class C Notes on that date, of an amount equal to the product of (A) a
fraction, the numerator of which is the Class A Required Subordinated
Amount of Class C Notes for that tranche of Class A Notes and the
denominator of which is the aggregate Outstanding Dollar Principal
Amount of all Class C Notes, times (B) the aggregate amount of
-----
Investor Charge-Offs allocated to Class C Notes pursuant to Section
-------
3.05(a) which results in a reduction of the Nominal Liquidation Amount
-------
of a tranche of Class C Notes on that date; plus
(c) the cumulative sum, computed on each date while that tranche
of Class A Notes is Outstanding and there are Investor Charge-Offs
allocated to any tranche of Class B Notes pursuant to Section 3.05(a)
---------------
which is then reallocated to Class C Notes pursuant to Section 3.05(c)
---------------
and which results in a reduction of the Nominal Liquidation Amount of
Class C Notes on that date, of an amount equal to the product of (A) a
fraction, the numerator of which is the Class A Required Subordinated
Amount of Class C Notes for that tranche of Class A Notes and the
denominator of which is the aggregate Outstanding Dollar Principal
Amount of all Class C Notes, times (B) the aggregate amount of
-----
Investor Charge-Offs
4
initially allocated to Class B Notes pursuant to Section 3.05(a) which
---------------
are reallocated to Class C Notes pursuant to Section 3.05(c) and
---------------
results in a reduction of the Nominal Liquidation Amount of a tranche
of Class C Notes on that date; plus
(d) the cumulative sum of all Series [___] Available Principal
Amounts reallocated to the Interest Funding sub-Account for that
tranche of Class A Notes pursuant to Section 3.07(a) that resulted in
---------------
a reduction of the Nominal Liquidation Amount of a tranche of Class C
Notes; plus
(e) the cumulative sum, computed on each date while that tranche
of Class A Notes is Outstanding and Series [___] Available Principal
Amounts are reallocated to the Interest Funding sub-Account for any
tranche of Class B Notes, and that reallocation reduces the Nominal
Liquidation Amount of any tranche of Class C Notes, of an amount equal
to the product of (A) a fraction, the numerator of which is the Class
A Required Subordinated Amount of Class B Notes for that tranche of
Class A Notes and the denominator of which is the aggregate
Outstanding Dollar Principal Amount of all Class B Notes, times (B)
-----
the amount of Series [___] Available Principal Amounts reallocated to
the Interest Funding sub-Account for any tranche of Class B Notes
pursuant to Section 3.07(a) that reduces the Nominal Liquidation
---------------
Amount of any tranche of Class C Notes; plus
(f) the cumulative sum, computed on each date while that tranche
of Class A Notes is Outstanding and Series [___] Available Principal
Amounts are reallocated to pay any amount to the Servicer pursuant to
Section 3.07(a) which resulted in a reduction of the Nominal
---------------
Liquidation Amount of a tranche of Class C Notes on that date, of an
amount equal to the product of (A) a fraction, the numerator of which
is the Class A Required Subordinated Amount of Class C Notes for that
tranche of Class A Notes and the denominator of which is the aggregate
Outstanding Dollar Principal Amount of all Class C Notes, times (B)
-----
the aggregate amount of Series [___] Available Principal Amounts
reallocated to pay any amount to the Servicer pursuant to Section
-------
3.07(a) which resulted in a reduction of the Nominal Liquidation
-------
Amount of a tranche of Class C Notes on that date; minus
(g) the cumulative sum (such sum not to exceed the sum of the
amounts computed pursuant to clauses (a), (b), (c), (d), (e) and (f)
above), computed on each date while that tranche of Class A Notes is
Outstanding and a Nominal Liquidation Amount Deficit of any tranche of
Class C Notes is reimbursed pursuant to Section 3.06(c), of an amount
---------------
equal to the product of (A) a fraction, the numerator of which is the
Class A Usage of Class C Required Subordinated Amount (prior to giving
effect to such reimbursement) for that tranche of Class A Notes and
the denominator of which is the aggregate Class A Usage of Class C
Required Subordinated Amount (prior to giving effect to such
reimbursement) of all Class A Notes, times (B) the aggregate amount of
-----
Series [_____] Available Funds on such Transfer Date available after
giving effect to the applications pursuant to Sections 3.01(a) and
----------------
(b).
---
5
"Class B Notes" means a Note specified in the applicable terms
-------------
document to this Indenture Supplement as belonging to Class B.
"Class B Required Subordinated Amount" means, with respect to any
------------------------------------
tranche of Class B Notes, a Dollar amount of Class C Notes as specified in the
applicable terms document for such tranche of Class B Notes.
"Class B Usage of Class C Required Subordinated Amount" means, with
-----------------------------------------------------
respect to any tranche of Class B Notes, the sum of the following amounts:
(a) the cumulative sum of all Investor Charge-Offs initially
allocated to that tranche of Class B Notes pursuant to Section
-------
3.05(a), and then reallocated to Class C Notes pursuant to Section
------- -------
3.05(b); plus
-------
(b) the cumulative sum, computed on each date while that tranche
of Class B Notes is Outstanding and there are Investor Charge-Offs
allocated to any tranche of Class C Notes pursuant to Section 3.05(a)
---------------
which results in a reduction of the Nominal Liquidation Amount of
Class C Notes on that date, of an amount equal to the product of (A) a
fraction, the numerator of which is the Class B Required Subordinated
Amount of Class C Notes for that tranche of Class B Notes and the
denominator of which is the aggregate Outstanding Dollar Principal
Amount of all Class C Notes, times (B) the aggregate amount of
-----
Investor Charge-Offs allocated to Class C Notes pursuant to Section
-------
3.05(a) which results in a reduction of the Nominal Liquidation Amount
-------
of a tranche of Class C Notes on that date; plus
(c) the cumulative sum, computed on each date while that tranche
of Class B Notes is Outstanding and there are Investor Charge-Offs
allocated to any tranche of Class A Notes pursuant to Section 3.05(a)
---------------
which is then reallocated to Class C Notes pursuant to Section 3.05(c)
---------------
and which results in a reduction of the Nominal Liquidation Amount of
Class C Notes on that date, of an amount equal to the product of (A) a
fraction, the numerator of which is the Class B Required Subordinated
Amount of Class C Notes for that tranche of Class B Notes and the
denominator of which is the aggregate Outstanding Dollar Principal
Amount of all Class C Notes, times (B) the aggregate amount of
-----
Investor Charge-Offs initially allocated to Class B Notes pursuant to
Section 3.05(a) which are reallocated to Class C Notes pursuant to
---------------
Section 3.05(c) and results in a reduction of the Nominal Liquidation
---------------
Amount of a tranche of Class C Notes on that date; plus
(d) the cumulative sum of all Series [___] Available Principal
Amounts reallocated to the Interest Funding sub-Account for that
tranche of Class B Notes pursuant to Section 3.07(a) that resulted in
---------------
a reduction of the Nominal Liquidation Amount of a tranche of Class C
Notes; plus
(e) the cumulative sum, computed on each date while that tranche
of Class B Notes is Outstanding and Series [___] Available Principal
Amounts are
6
reallocated to the Interest Funding sub-Account for any tranche of
Class A Notes, and that reallocation reduces the Nominal Liquidation
Amount of any tranche of Class C Notes, of an amount equal to the
product of (A) a fraction, the numerator of which is the Class B
Required Subordinated Amount of Class C Notes for that tranche of
Class B Notes and the denominator of which is the aggregate
Outstanding Dollar Principal Amount of all Class C Notes, times (B)
-----
the amount of Series [___] Available Principal Amounts reallocated to
the Interest Funding sub-Account for any tranche of Class A Notes
pursuant to Section 3.07(a) that reduces the Nominal Liquidation
---------------
Amount of any tranche of Class C Notes; plus
(f) the cumulative sum, computed on each date while that tranche
of Class B Notes is Outstanding and Series [___] Available Principal
Amounts are reallocated to pay any amount to the Servicer pursuant to
Section 3.07(a) which resulted in a reduction of the Nominal
---------------
Liquidation Amount of a tranche of Class C Notes on that date, of an
amount equal to the product of (A) a fraction, the numerator of which
is the Class B Required Subordinated Amount of Class C Notes for that
tranche of Class B Notes and the denominator of which is the aggregate
Outstanding Dollar Principal Amount of all Class C Notes, times (B)
-----
the aggregate amount of Series [___] Available Principal Amounts
reallocated to pay any amount to the Servicer pursuant to Section
-------
3.07(a) which resulted in a reduction of the Nominal Liquidation
-------
Amount of a tranche of Class C Notes on that date; minus
(g) the cumulative sum (such sum not to exceed the sum of the
amounts computed pursuant to clauses (a), (b), (c), (d), (e) and (f)
above), computed on each date while that tranche of Class B Notes is
Outstanding and a Nominal Liquidation Amount Deficit of any tranche of
Class C Notes is reimbursed pursuant to Section 3.06(c), of an amount
---------------
equal to the product of (A) a fraction, the numerator of which is the
Class B Usage of Class C Required Subordinated Amount (prior to giving
effect to such reimbursement) for that tranche of Class B Notes and
the denominator of which is the aggregate Class B Usage of Class C
Required Subordinated Amount (prior to giving effect to such
reimbursement) of all Class B Notes, times (B) the aggregate amount of
-----
Series [_____] Available Funds on such Transfer Date available after
giving effect to the applications pursuant to Sections 3.01(a) and
----------------
(b).
---
"Class C Note Reserve Account" means the trust account designated as
----------------------------
such and established pursuant to Section 5.01(a).
---------------
"Class C Notes" means a Note specified in the applicable terms
-------------
document as belonging to Class C.
"Controlled Accumulation Amount," for any tranche of Notes with only
-------------------------------
one Expected Principal Payment Date for any Transfer Date, is defined in the
related terms document; provided, however, that if the Accumulation Period
-------- -------
Length with respect to such tranche is determined to be less than twelve (12)
months pursuant to Section 3.10(b)(ii), the Controlled Accumulation Amount for
-------------------
any Transfer Date will be equal to (i) the product of (x) the
7
Initial Dollar Principal Amount of such tranche of Notes and (y) the
Accumulation Period Factor for such Monthly Period divided by (ii) the Required
Accumulation Factor Number.
"Cumulative Series Available Funds Shortfall" means the sum of the
-------------------------------------------
Series Available Funds Shortfalls (as such term is defined in each of the
related Indenture Supplements) for each Excess Available Funds Sharing Series in
Excess Available Funds Sharing Group One.
"Derivative Accrual Date" means, for any Monthly Period with respect
-----------------------
to any tranche of Notes which has a Performing Derivative Agreement for
interest, the date in such Monthly Period corresponding numerically to the next
payment date under the related Derivative Agreement following the end of the
related Monthly Period.
"Finance Charge Receivables" is defined in the Pooling and Servicing
--------------------------
Agreement.
"Interest Funding Account" means the trust account designated as such
------------------------
and established pursuant to Section 5.01(a).
---------------
"Interest Funding sub-Account Earnings" means, with respect to each
-------------------------------------
Transfer Date, the investment earnings on funds in the Interest Funding Account
(net of investment expenses and losses) for the period from and including the
immediately preceding Transfer Date to but excluding such Transfer Date.
"Investor Charge-Offs" means, with respect to any Transfer Date, the
--------------------
aggregate amount, if any, by which the Series [___] Investor Default Amount, if
any, for the preceding Monthly Period exceeds the Series [___] Available Funds
for such Transfer Date available after giving effect to clause (a) and (b) of
Section 3.01.
- ------------
"Nominal Liquidation Amount" means, with respect to any tranche of
--------------------------
Notes, the amount calculated pursuant to Section 3.16 of this Indenture
------------
Supplement. The Nominal Liquidation Amount for Series [____] will be the sum of
the Nominal Liquidation Amounts of all of the tranches of Notes of Series
[____].
"Nominal Liquidation Amount Deficit" means, with respect to any
----------------------------------
tranche of Notes, the excess of the Adjusted Outstanding Dollar Principal Amount
of that tranche over the Nominal Liquidation Amount of that tranche.
"Portfolio Yield" means, with respect to any Monthly Period, the
---------------
annualized percentage equivalent of a fraction, the numerator of which is Series
[____] Available Funds for the related Transfer Date, minus payments received
with respect to such Monthly Period from a Derivative Counterparty pursuant to a
Derivative Agreement for any tranche of Notes for interest in Dollars, minus the
Aggregate Investor Default Amount for such Monthly Period, and the denominator
of which is the Weighted Average Outstanding Dollar Principal Amount of all
notes issued by the Issuer backed by the Collateral Certificate for such Monthly
Period.
"Prefunding Excess Amount" means, with respect to any senior class of
------------------------
Notes for any Monthly Period, after giving effect to all issuances, allocations,
deposits and payments with respect to that Monthly Period, the aggregate amounts
on deposit in the Principal Funding sub-
8
Accounts of the Notes of that class that are in excess of the aggregate amount
targeted to be on deposit in those Principal Funding sub-Accounts pursuant to
Section 3.10.
- ------------
"Prefunding Target Amount" means the amount calculated pursuant to
------------------------
Section 3.21.
- ------------
"Principal Funding Account" means the trust account designated as such
-------------------------
and established pursuant to Section 5.01(a).
---------------
"Principal Funding sub-Account Amount" means, with respect to any
------------------------------------
tranche of Notes as of any date, the amount on deposit in the Principal Funding
sub-Account for such tranche of Notes on such date.
"Principal Funding sub-Account Earnings" means, with respect to each
--------------------------------------
Transfer Date, the investment earnings on funds in the Principal Funding Account
(net of investment expenses and losses) for the period from and including the
immediately preceding Transfer Date to but excluding such Transfer Date.
"Principal Funding sub-Account Earnings Shortfall" means, for any
------------------------------------------------
Transfer Date,
(a) the Principal Funding sub-Account Earnings Target for such
Transfer Date, minus
(b) the Principal Funding sub-Account Earnings for such period.
"Principal Funding sub-Account Earnings Target" means, for any
---------------------------------------------
Transfer Date, with respect to any amount on deposit in a Principal Funding sub-
Account for a tranche of Notes, the Dollar amount of interest that would have
accrued on such deposit (or portion thereof) for the period from and including
the preceding Transfer Date to but excluding such Transfer Date if it had borne
interest at the following rates:
(a) in the case of a tranche of Dollar Interest-bearing Notes, at
the rate of interest applicable to that tranche;
(b) in the case of a tranche of Discount Notes, at the rate of
accretion (converted to an accrual rate) of that tranche;
(c) in the case of a tranche of Notes with a payment due to a
Derivative Counterparty pursuant to a Performing Derivative Agreement
for interest, at the rate at which such payments by the Issuer to the
applicable Derivative Counterparty accrue; and
(d) in the case of a tranche of foreign currency Notes with a
non-Performing Derivative Agreement, at the rate of interest that
would have been payable by the Issuer to the applicable Derivative
Counterparty if such Derivative Agreement had been Performing.
9
More than one of the aforementioned rates of interest may be applicable to
amounts on deposit in a Principal Funding sub-Account for a tranche of Notes.
"Receivables Sales Proceeds" means, with respect to any tranche of
--------------------------
Notes, the proceeds of the sale of Receivables with respect to such tranche
pursuant to Section 3.20. Receivables Sales Proceeds do not constitute
------------
Available Principal Amounts.
"Receivables Sales Proceeds Deposit Amount" means, with respect to any
-----------------------------------------
tranche of Notes in respect of which the Trust has received Receivables Sales
Proceeds, the amount of Receivables Sales Proceeds on deposit in the Principal
Funding sub-Account for such tranche.
"Required Accumulation Factor Number" shall be equal to a fraction,
-----------------------------------
rounded upwards to the nearest whole number, the numerator of which is one and
the denominator of which is equal to the lowest monthly principal payment rate
on the Accounts (as defined in the Pooling and Servicing Agreement), expressed
as a decimal, for the twelve (12) months preceding the date of such calculation;
provided, however, that this definition may be changed at any time if the Note
- -------- -------
Rating Agencies provide prior written confirmation that a Ratings Effect will
not occur with respect to such change.
"Required Subordinated Amount" means, with respect to any tranche of a
----------------------------
senior class of Notes, a Dollar amount of a subordinated class of Notes, as
specified in the applicable terms document for such tranche of the senior class.
"senior class" means (a) with respect to the Class B Notes, the Class
------------
A Notes, and (b) with respect to the Class C Notes, the Class A Notes or Class B
Notes.
"Series Available Funds Shortfall" means, with respect to any Transfer
--------------------------------
Date, the excess, if any, of (a) the aggregate amount targeted to be paid or
applied pursuant to Sections 3.01(a) through (e) for any Transfer Date over (b)
---------------- ---
the Series [____] Available Funds (without giving effect to clause (e) of the
definition thereof) for such Transfer Date; provided, however, that the Issuer,
-------- -------
when authorized by an Officer's Certificate, may amend or otherwise modify this
definition of Series Available Funds Shortfall provided the Note Rating Agencies
confirm in writing that the amendment or modification will not cause a Ratings
Effect.
"Series [____] Available Funds" means, with respect to any Transfer
------- ---------------
Date, the sum of (a) Available Funds allocated to Series [____] pursuant to
Section 501 of the Indenture, (b) payments received with respect to the related
- -----------
Monthly Period under Derivative Agreements for any tranche of Notes for interest
in Dollars, (c) any Principal Funding sub-Account Earnings for such Transfer
Date, (d) any Interest Funding sub-Account Earnings for such Transfer Date, (e)
any amounts to be treated as Series [____] Available Funds pursuant to Sections
--------
3.20(g) and 3.25(a) and (f) any amounts to be treated as Series [___] Available
- ------- -------
Funds pursuant to any terms document.
"Series [____] Available Principal Amounts" means the sum of (a)
------- ---------------------------
Available Principal Amounts allocated to Series [____] pursuant to Section 502
-----------
of the Indenture, (b) any amounts to be treated as Series [____] Available
Principal Amounts pursuant to Section 3.01(c) or 3.01(d), and (c) any amounts to
--------------- -------
be treated as Series [___] Available Principal Amounts pursuant to any terms
document.
10
"Series [____] Investor Default Amount" means, with respect to any
-------------------------------------
Monthly Period, the pro rata portion of the Aggregate Investor Default Amount
allocable to the Series [____] Notes based on the ratio of the Weighted Average
Nominal Liquidation Amount of the Series [____] Notes for such Monthly Period to
the Weighted Average Nominal Liquidation Amount of all notes issued by the
Issuer backed by the Collateral Certificate for such Monthly Period; provided,
--------
however, that in the event of a designation pursuant to the proviso in the
- -------
definition of "Available Funds" (as defined in the Series 2001-__ Supplement),
the portion of the Series [___] Investor Default Amount relating to the
Collections of Finance Charge Receivables so designated will be treated as
Series [___] Investor Default Amount for the Transfer Date or Transfer Dates
immediately following the Monthly Period or Monthly Periods so designated.
"Series [____] Servicing Fee" means, with respect to any Monthly
---------------------------
Period, the pro rata portion of the Net Servicing Fee (as such term is defined
in the Series 2001-__ Supplement) allocable to the Series [____] Notes based on
the ratio of the Weighted Average Nominal Liquidation Amount of the Series
[____] Notes for such Monthly Period to the Weighted Average Nominal Liquidation
Amount of all notes issued by the Issuer backed by the Collateral Certificate
for such Monthly Period.
"Shared Excess Available Funds" means, with respect to any Transfer
-----------------------------
Date with respect to any series of notes, either (a) the amount of Series [___]
Available Funds for such Transfer Date available after application in accordance
with Sections 3.01(a) through (e) or (b) the amounts allocated to the notes of
---------------- ---
other series of notes identified as an Excess Available Funds Sharing Series in
Excess Available Funds Sharing Group One which the applicable Indenture
Supplements for such series specify are to be treated as "Shared Excess
Available Funds."
"Spot Exchange Rate" means, on any day, with respect to any currency
------------------
other than Dollars, the spot rate at which Dollars are offered on such day by
[Name of Bank] in New York, London, or other city that is a money center for
transactions in Dollars and such currency (determined by the Issuer in its
reasonable discretion), as prevailing on a local business day for transactions
in such currency at approximately 11:00 a.m. (local time).
"subordinated class" means (a) with respect to the Class A Notes, the
------------------
Class B Notes or Class C Notes, (b) with respect to the Class B Notes, the Class
C Notes.
"Targeted Principal Deposit Amount" means, with respect to the Series
---------------------------------
[___] Notes for any Transfer Date, the aggregate amount targeted to be deposited
in the Principal Funding Account pursuant to Section 3.10 for such Transfer
Date.
Section 1.02. Governing Law. THIS INDENTURE WILL BE CONSTRUED IN
-------------
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Section 1.03. Counterparts. This Indenture Supplement may be executed
------------
in any number of counterparts, each of which so executed will be deemed to be an
original, but all such counterparts will together constitute but one and the
same instrument.
11
Section 1.04. Ratification of Indenture. As supplemented by this
-------------------------
Indenture Supplement, the Indenture is in all respects ratified and confirmed
and the Indenture as so supplemented by this Indenture Supplement shall be read,
taken and construed as one and the same instrument.
[END OF ARTICLE I]
12
ARTICLE II
The Notes
Section 2.01. Creation and Designation.
(a) There is hereby created a series of Notes to be issued pursuant to the
Indenture and this Indenture Supplement to be known as "MBNA Credit Card Master
Note Trust, Series _______" or the "Series _____ Notes." The Series ______ Notes
are expected to be issued in three classes, the first of which shall be known as
the "Series _____ Class A Notes," the second of which shall be known as the
"Series _____ Class B Notes" and the third of which shall be known as the
"Series ____ Class C Notes."
(b) Series ____ shall be an Excess Available Funds Sharing Series in
Excess Available Funds Sharing Group One and shall not be in any other group.
Series _____ shall not be subordinated to any other series of Notes.
Section 2.02. New Issuances of Notes. The Issuer may issue new
----------------------
tranches of Notes to be included in Series _____, so long as the following
conditions precedent are satisfied:
(i) on or before the date that the new issuance is to occur, the
Issuer will have delivered to the Indenture Trustee and the Note Rating
Agencies an Issuer's Certificate to the effect that the new issuance will
not at the time of its issuance or at a future date cause an Adverse
Effect;
(ii) on or before the date that the new issuance is to occur, the
Issuer will have delivered to the Indenture Trustee and the Note Rating
Agencies an Issuer Tax Opinion and a Master Trust Tax Opinion;
(iii) on or before the date that the new issuance is to occur, the
Issuer will have delivered to the Indenture Trustee a terms document
relating to the applicable class and tranche of Notes;
(iv) on or before the date that the new issuance is to occur, the
Investor Interest of the Collateral Certificate will be increased by an
amount equal to the Initial Dollar Principal Amount of the Notes issued in
the new issuance; and
(v) the conditions specified in Section 310 of the Indenture and
-----------
Section 2.03 of this Indenture Supplement, as applicable, are satisfied;
------------
provided, however, that any one of the aforementioned conditions (other than
- -------- -------
clauses (ii), (iii) and (iv)) may be eliminated as a condition precedent to any
new issuance of Notes if each Note Rating Agency provides written confirmation
that there will be no Ratings Effect with respect to any Outstanding Notes as a
result of the issuance of those Notes.
13
Section 2.03. Required Subordinated Amount Conditions to Issuance of a
--------------------------------------------------------
Tranche of a Senior Class of Notes.
- ----------------------------------
(a) Class A Required Subordinated Amount of Class B Notes. On the issuance
-----------------------------------------------------
date of a tranche of Class A Notes, immediately after giving effect to such
issuance, the available subordinated amount of Class B Notes for such tranche of
Class A Notes must be at least equal to the Class A Required Subordinated Amount
of Class B Notes for such tranche of Class A Notes. For purposes of this
Section, the available subordinated amount of Class B Notes for such tranche of
Class A Notes as of any date means the sum of the following, after giving effect
to any issuances, deposits, allocations, reallocations or payments to be made on
that date:
(i) the aggregate Nominal Liquidation Amount of all tranches of
Class B Notes which are Outstanding on that date; minus
(ii) the aggregate amount of the Class A Required Subordinated
Amount of Class B Notes for all other tranches of Class A Notes which are
Outstanding on that date; plus
(iii) the aggregate amount of all Class A Usage of Class B Required
Subordinated Amount for all other tranches of Class A Notes which are
Outstanding on that date.
(b) Class A Required Subordinated Amount of Class C Notes. On the issuance
-----------------------------------------------------
date of a tranche of Class A Notes, immediately after giving effect to such
issuance, the available subordinated amount of Class C Notes for such tranche of
Class A Notes must be at least equal to the Class A Required Subordinated Amount
of Class C Notes for such tranche of Class A Notes. For purposes of this clause,
the available subordinated amount of Class C Notes for such tranche of Class A
Notes as of any date means the sum of the following, after giving effect to any
issuances, deposits, allocations, reallocations or payments to be made on that
date:
(i) the aggregate Nominal Liquidation Amount of all tranches of
Class C Notes which are Outstanding on that day; minus
(ii) the aggregate amount of the Class A Required Subordinated
Amount of Class C Notes for all other tranches of Class A Notes which are
Outstanding on that date; plus
(iii) the aggregate amount of all Class A Usage of Class C Required
Subordinated Amount for all other tranches of Class A Notes which are
Outstanding on that date.
(c) Class B Required Subordinated Amount of Class C Notes. On the issuance
-----------------------------------------------------
date of a tranche of Class B Notes, immediately after giving effect to such
issuance, the available subordinated amount of Class C Notes for such tranche of
Class B Notes must be at least equal to the Class B Required Subordinated Amount
of Class C Notes for such tranche of Class B Notes. For purposes of this clause,
the available subordinated amount of Class C Notes for such tranche of Class B
Notes as of any date means the sum of the following, after giving effect to any
issuances, deposits, allocations, reallocations or payments to be made on that
date:
14
(i) the aggregate Nominal Liquidation Amount of all tranches of Class
C Notes which are Outstanding on that date; minus
(ii) the aggregate amount of the Class B Required Subordinated Amount
of Class C Notes for all other tranches of Class B Notes which are
Outstanding on that date; plus
(iii) the aggregate amount of all Class B Usage of Class C Required
Subordinated Amount for all other tranches of Class B Notes which are
Outstanding on that date.
[END OF ARTICLE II]
15
ARTICLE III
Allocations, Deposits and Payments
Section 3.01. Allocations of Series [____] Available Funds. On each
--------------------------------------------
Transfer Date, the Indenture Trustee will apply Series [____] Available Funds,
as follows:
(a) first, to make the targeted deposits to the Interest Funding Account
pursuant to Section 3.02;
------------
(b) second, to pay the Series [____] Servicing Fee plus any previously due
and unpaid Series [___] Servicing Fee to the Servicer (as such term is defined
in the Series [____] Supplement);
(c) third, to be treated as Series [____] Available Principal Amounts for
application in accordance with Section 3.07 in an amount equal to the Series
------------
[____] Investor Default Amount, if any, for the preceding Monthly Period;
(d) fourth, to be treated as Series [___] Available Principal Amounts for
application in accordance with Section 3.07 in an amount equal to the Nominal
------------
Liquidation Amount Deficit, if any;
(e) fifth, to make the targeted deposit to the Class C Reserve Account, if
any, pursuant to Section 3.22;
------------
(f) sixth, to be treated as Shared Excess Available Funds for application
in accordance with Section 3.25; and
------------
(g) seventh, to the Issuer.
Section 3.02. Targeted Deposits to the Interest Funding Account. The
-------------------------------------------------
aggregate amount of Series [___] Available Funds targeted to be deposited into
the Interest Funding Account pursuant to Section 3.01(a) on each Transfer Date
---------------
is equal to the sum of the following amounts. A single tranche of Notes may be
entitled to more than one of the following targeted deposits on any Transfer
Date. The targeted deposit on any Transfer Date will also include any shortfall
in the targeted deposit plus any additional interest pursuant to Section 3.02(e)
---------------
with respect to any prior Transfer Date.
(a) Specified Deposits. If the terms document for a tranche of Notes
------------------
specifies a deposit to be made to the Interest Funding sub-Account for that
tranche, the deposit targeted for that tranche of Notes with respect to that
Transfer Date is such specified amount.
(b) Interest Payments. The deposit targeted for any tranche of Outstanding
-----------------
Interest-bearing Notes (other than any tranche of foreign currency Notes that
has a Performing Derivative Agreement) on each Transfer Date will be equal to
the amount of interest accrued on the Outstanding Dollar Principal Amount of
that tranche of Notes during the period from the Monthly Interest Accrual Date
in the related Monthly Period (or, in the case of the first Transfer
16
Date with respect to any tranche of Notes, from the date of issuance of that
tranche of Notes) to but excluding the first Monthly Interest Accrual Date after
the end of that Monthly Period.
(c) Amounts Owed to Derivative Counterparties.
-----------------------------------------
(i) If a tranche of Outstanding Dollar Notes or foreign currency
Notes that has a Performing Derivative Agreement for interest provides for
monthly payments to the applicable Derivative Counterparty, the deposit
targeted for that tranche of Notes on each Transfer Date with respect to
such payment to the Derivative Counterparty is equal to the amount required
to be paid to the applicable Derivative Counterparty on the next payment
date under that Derivative Agreement following the end of the related
Monthly Period.
(ii) If a tranche of Dollar Notes or foreign currency Notes which has
a Performing Derivative Agreement for interest provides for payments less
frequently than monthly to the applicable Derivative Counterparty, the
deposit targeted for that tranche of Notes on each Transfer Date with
respect to such payment to the Derivative Counterparty is equal to the
amount required to be paid to the Derivative Counterparty on the payment
date under that Derivative Agreement following the end of the related
Monthly Period, and allocable to the period from one such Derivative
Accrual Date (or in the case of the first Derivative Accrual Date with
respect to any tranche of Notes, from the date of issuance of that tranche
of Notes) to the next Derivative Accrual Date, taking into account the
applicable interest rate and day count convention under that Derivative
Agreement.
(d) Discount Notes. In the case of a tranche of Outstanding Discount
--------------
Notes, the deposit targeted for that tranche of Notes on each Transfer Date is
equal to the amount of accretion of principal of that tranche of Notes from the
Monthly Principal Accrual Date in the related Monthly Period (or in the case of
the first Transfer Date with respect to any tranche of Notes, from the date of
issuance of that tranche of Notes) to but excluding Monthly Principal Accrual
Date after the end of that Monthly Period.
(e) Additional Interest. Unless otherwise specified in the applicable
-------------------
terms document, the deposit targeted for any tranche of Outstanding Notes (other
than Discount Notes) for any month that has previously due and unpaid interest
will include the interest accrued on that overdue interest from and including
the Monthly Interest Accrual Date in that month to but excluding the Monthly
Interest Accrual Date next following that month at the rate of interest
applicable to the principal of that tranche during that period.
Section 3.03. Allocations of Series [___] Available Funds to Interest
-------------------------------------------------------
Funding sub-Accounts. The aggregate amount to be deposited to the Interest
- --------------------
Funding Account pursuant to Section 3.01(a) for each Monthly Period will be
---------------
allocated, and a portion deposited into the Interest Funding sub-Account for
each tranche of Notes, as follows:
(a) Series [___] Available Funds at Least Equal to Targeted Amounts. If
---------------------------------------------------------------
the amount of funds available for a Monthly Period pursuant to Section 3.01 is
------------
at least equal to the aggregate
17
amount of the deposits and payments targeted by Section 3.02, then the full
------------
amount of each such deposit and payment will be made to the applicable Interest
Funding sub-Accounts.
(b) Series [___] Available Funds are Less than Targeted Amounts. If the
-----------------------------------------------------------
amount of funds available for a Monthly Period pursuant to Section 3.01 is less
------------
than the aggregate amount of the deposits and payments targeted by Section 3.02,
------------
then the amount available will be allocated to each tranche of Notes pro rata
based on the ratio of (A) the aggregate amount of the deposits and payments
targeted by Section 3.02 with respect to that tranche of Notes, to (B) the
------------
aggregate amount of the deposits and payments targeted by Section 3.02 with
------------
respect to all tranches of Notes.
Section 3.04. Payments Received from Derivative Counterparties for
----------------------------------------------------
Interest; Other Deposits to the Interest Funding sub-Accounts. The following
- -------------------------------------------------------------
deposits and payments will be made on the following dates:
(a) Payments Received From Derivative Counterparties for Interest in
----------------------------------------------------------------
Foreign Currencies. Payments received under Derivative Agreements for interest
- ------------------
in foreign currencies will be made directly to the applicable Paying Agent for
payment to the Holders of the applicable tranche of Notes, or as otherwise
specified in the applicable Derivative Agreement.
(b) Other Deposits to the Interest Funding sub-Accounts.
---------------------------------------------------
(i) Class C Reserve Account. Withdrawals made from the Class C
-----------------------
Reserve Account pursuant to Section 3.23(a) will be deposited into the
---------------
applicable Interest Funding sub-Account on the Transfer Date.
(ii) Receivables Sales Proceeds. Receivables Sales Proceeds received
--------------------------
by the Issuer pursuant to Section 3.20(f)(ii) for any tranche of Notes will
-------------------
be deposited into the applicable Interest Funding sub-Account on the date
of receipt by the Issuer.
(iii) Principal Funding sub-Account Earnings.
--------------------------------------
(A) On or prior to each Transfer Date, the Issuer will
calculate
(1) the Principal Funding sub-Account Earnings Target for
each tranche of Notes,
(2) the Principal Funding sub-Account Earnings for each
tranche of Notes, and
(3) the Principal Funding sub-Account Earnings Shortfall
(if any) for the Principal Funding sub-Account for each tranche
of Notes.
(B) If there is any Principal Funding sub-Account Earnings
Shortfall for any Principal Funding sub-Account for that Transfer
Date, or any unpaid Principal Funding sub-Account Earnings Shortfall
for any Principal Funding sub-Account from any earlier Transfer Date,
in each case for any tranche of Notes, the
18
Issuer will notify the Master Trust pursuant to Section ___ of the
-----------
Series 2001-__ Supplement of that amount.
(C) On each Transfer Date, the Indenture Trustee will deposit
or cause to be deposited into each applicable Interest Funding sub-
Account the amount received by the Issuer pursuant to Section ___ of
-----------
the Series 2001-__ Supplement with respect to that Principal Funding
sub-Account, if any.
Section 3.05. Allocations of Reductions from Investor Charge-Offs to
------------------------------------------------------
the Nominal Liquidation Amount of Subordinated Classes. On each Transfer Date
- ------------------------------------------------------
when there is an Investor Charge-Off with respect to the related Monthly Period,
that reduction will be allocated (and reallocated) on that date to each tranche
of Notes as set forth in this Section.
(a) Initially, the amount of such Investor Charge-Off will be allocated to
each tranche of Outstanding Notes pro rata based on the Weighted Average Nominal
Liquidation Amount of that tranche for the related Monthly Period.
(b) Immediately afterwards, the amount of Investor Charge-Offs allocated
to the Class A Notes and Class B Notes will be reallocated to the Class C Notes
as set forth in clause (c), and the amount of Investor Charge-Offs allocated to
the Class A Notes and not reallocated to the Class C Notes will be reallocated
to the Class B Notes as set forth in clause (d), subject in each case to the
limits of clauses (c) and (d). Any amount of Investor Charge-Offs which cannot
be reallocated to a subordinated class as a result of the limits in clauses (c)
and (d) will reduce the Nominal Liquidation Amount of the tranche of Notes to
which it was initially allocated pursuant to clause (a).
(c) (i) The reallocation in clause (b) of Investor Charge-Offs from any
tranche of Class A Notes or Class B Notes to the Class C Notes is subject to the
following limits:
(A) After giving effect to such reallocation from that tranche
of Class A Notes and reallocations from Class B Notes, that tranche's
Class A Usage of Class C Required Subordinated Amount (computed after
giving effect to the allocation to Class C Notes pursuant to clauses
(a) and (b), but prior to giving effect to any reallocations of Series
[___] Available Principal Amounts on such date) will not exceed that
tranche's Class A Required Subordinated Amount of Class C Notes.
(B) After giving effect to such reallocation from that tranche
of Class B Notes and reallocations from Class A Notes, that tranche's
Class B Usage of Class C Required Subordinated Amount will not exceed
that tranche's Class B Required Subordinated Amount of Class C Notes.
(ii) The amount permitted to be reallocated to tranches of Class C
Notes pursuant to clause (b) will be applied to each tranche of Class C
Notes pro rata based on the ratio of (A) the Weighted Average Nominal
Liquidation Amount of that tranche of Class C Notes for the related Monthly
Period to (B) the aggregate Weighted Average Nominal Liquidation Amount of
all tranches of Class C Notes (in each case computed
19
after giving effect to the allocation to the Class C Notes pursuant to
clause (a)) for the related Monthly Period.
(iii) No such reallocation will reduce the Nominal Liquidation Amount
of any tranche of Class C Notes below zero.
(d) (i) The reallocation in clause (b) of Investor Charge-Offs from any
tranche of Class A Notes to the Class B Notes is subject to the limit that after
giving effect to such reallocation from that tranche of Class A Notes, that
tranche's Class A Usage of Class B Required Subordinated Amount (computed after
giving effect to the allocation to Class B Notes pursuant to clauses (a) and
(b), but prior to giving effect to any reallocations of Series [___] Available
Principal Amounts on such date) will not exceed that tranche's Class A Required
Subordinated Amount of Class B Notes.
(ii) The amount permitted to be reallocated to tranches of Class B
Notes pursuant to clause (b) will be applied to each tranche of Class B
Notes pro rata based on the ratio of (A) the Weighted Average Nominal
Liquidation Amount of that tranche of Class B Notes for the related Monthly
Period to (B) the aggregate Weighted Average Nominal Liquidation Amount of
all tranches of Class B Notes (in each case computed after giving effect to
the allocation to the Class C Notes and Class B Notes pursuant to clause
(a) and the reallocation pursuant to the Class C Notes pursuant to clause
(c)) for the related Monthly Period.
(iii) No such reallocation will reduce the Nominal Liquidation Amount
of any tranche of Class B Notes below zero.
(e) In the case of each tranche of Notes, the Nominal Liquidation Amount
of each such tranche will be reduced by an amount equal to the Investor Charge-
Offs which are allocated or reallocated to that tranche of Notes, less the
amount of Investor Charge-Offs that are reallocated from that tranche of Notes
to Notes of a subordinated class of Notes.
Section 3.06. Allocations of Reimbursements of Nominal Liquidation
----------------------------------------------------
Amount Deficits. If, as of any Transfer Date, there are Series [___] Available
- ---------------
Funds available pursuant to Section 3.01(d) to reimburse any Nominal Liquidation
---------------
Amount Deficits as of such Transfer Date, such funds will be allocated to each
tranche of Notes as follows:
(a) first, to each tranche of Class A Notes pro rata based on the ratio of
the Nominal Liquidation Amount Deficit thereof to the aggregate Nominal
Liquidation Amount Deficits of all tranches of Class A Notes, but in no event
will the Nominal Liquidation Amount of such a tranche of Notes be increased
above the Adjusted Outstanding Dollar Principal Amount of such tranche,
(b) second, to each tranche of Class B Notes pro rata based on the ratio
of the Nominal Liquidation Amount Deficit thereof to the aggregate Nominal
Liquidation Amount Deficit of all tranches of Class B Notes, but in no event
will the Nominal Liquidation Amount of such a tranche of Notes be increased
above the Adjusted Outstanding Dollar Principal Amount of such tranche,
20
(c) third, to each tranche of Class C Notes pro rata based on the ratio of
the Nominal Liquidation Amount Deficit thereof to the aggregate Nominal
Liquidation Amount Deficit of all tranches of Class C Notes, but in no event
will the Nominal Liquidation Amount of such a tranche of Notes be increased
above the Adjusted Outstanding Dollar Principal Amount of such tranche.
Section 3.07. Application of Series [_] Available Principal Amounts.
-----------------------------------------------------
On each Transfer Date, the Indenture Trustee will apply Series [____] Available
Principal Amounts as follows:
(a) first, with respect to each Monthly Period,
(i) first, if after giving effect to deposits to be made with respect
to such Monthly Period pursuant to Sections 3.01(a) and (b), any tranche of
---------------- ---
Class A Notes or Class B Notes has not received the full amount targeted to
be deposited pursuant to Section 3.02 with respect to that Monthly Period
------------
or the Servicer has not received the full amount to be paid pursuant to
Section 3.01(b), then from such Series [__] Available Principal Amounts, to
---------------
the extent the reallocation thereof under this clause (a) will result in
the reduction of the Nominal Liquidation Amount (determined after giving
effect to the application of Sections 3.05 and 3.06, but prior to giving
------------- ----
effect to any deposits into the Principal Funding Account on such date) of
tranches of Class C Notes Outstanding, the following amounts will be
allocated in the following priority:
(1) first, in an amount equal to the lesser of the
amount of such funds and the amount of the deficiency in the
targeted amount to be deposited into the Interest Funding sub-
Account of each tranche of Class A Notes, to be allocated to the
Interest Funding sub-Accounts of Class A Notes pro rata based on
the amount of such deficiencies;
(2) second, in an amount equal to the lesser of the
amount of such funds (after giving effect to clause (1)) and the
amount of the deficiency in the targeted amount to be deposited
into the Interest Funding sub-Account of each tranche of Class B
Notes, to be allocated to the Interest Funding sub-Accounts of
Class B Notes pro rata based on the amount of such deficiencies;
and
(3) third, in an amount equal to the lesser of the
amount of such funds (after giving effect to clauses (1) and (2))
and the amount of the deficiency in the amount to be paid to the
Servicer pursuant to Section 3.01(b), to be allocated and paid to
---------------
the Servicer;
provided, however, that such reallocations will be subject to the limits of
- -------- -------
Sections 3.08 and 3.09.
- ------------- ----
(ii) second, with respect to each Monthly Period, if after giving
effect to deposits to be made with respect to such Monthly Period pursuant
to Sections 3.01(a) and (b) and clause (a)(i) above, any tranche of Class A
---------------- ---
Notes has not received the full amount targeted to be deposited pursuant to
Section 3.02 or the Servicer has not received the full amount to be paid
------------
pursuant to Section 3.01(b), then from such remaining Series [___]
---------------
21
Available Principal Amounts, to the extent the reallocation thereof under
this clause (a) will result in the reduction of the Nominal Liquidation
Amount (determined after giving effect to the application of Sections 3.05
-------------
and 3.06, but prior to giving effect to any deposits into the Principal
----
Funding Account on such date) of tranches of Class B Notes Outstanding, the
following amounts will be allocated in the following priority:
(1) first, in an amount equal to the lesser of the
amount of such funds and the amount of the remaining deficiency
in the targeted amount to be deposited into the Interest Funding
sub-Account of each tranche of Class A Notes, will be reallocated
to the Interest Funding sub-Accounts of Class A Notes pro rata
based on the amount of such remaining deficiencies;
(2) second, in an amount equal to the lesser of the
amount of such funds (after giving effect to clause (1)) and the
amount of the remaining deficiency in the amount to be paid to
the Servicer pursuant to Section 3.01(b), to be allocated and
---------------
paid to the Servicer;
provided, however, that such reallocations will be subject to the limits of
- -------- -------
Sections 3.08 and 3.09.
- ------------- ----
(b) second, to make the targeted deposits to the Principal Funding Account
pursuant to Section 3.10; and
------------
(c) third, to the Issuer for reinvestment in the Investor Interest of the
Collateral Certificate.
Section 3.08. Limit on Reallocations of Series [___] Available
------------------------------------------------
Principal Amounts Taken to Benefit Senior Classes. For any Monthly Period, the
- -------------------------------------------------
aggregate amount of the Series [___] Available Principal Amounts reallocated
pursuant to Section 3.07(a) to make payments or deposits pursuant to Sections
--------------- --------
3.01(a) and (b) will be subject to the following limitations:
- ------- ---
(a) Limit on Reallocations to a tranche of Class A Notes from Class C
-----------------------------------------------------------------
Notes. Series [___] Available Principal Amounts, the reallocation of which
- -----
results in the reduction of the Nominal Liquidation Amount of the Class C Notes
pursuant to Section 3.09, may be reallocated pursuant to Section 3.07(a) to make
------------ ---------------
deposits into the Interest Funding sub-Account for a tranche of Class A Notes or
pursuant to Section 3.07(b) to fund deficiencies in payments to the Servicer
---------------
only to the extent that the Class A Usage of Class C Required Subordinated
Amount (determined after giving effect to any Investor Charge-Offs and any
reallocations of Series [___] Available Principal Amounts on such date) is not
greater than the Class A Required Subordinated Amount of Class C Notes for that
tranche of Class A Notes.
(b) Limit on Reallocations to a tranche of Class A Notes from Class B
-----------------------------------------------------------------
Notes. Series [___] Available Principal Amounts, the reallocation of which
- -----
results in the reduction of the Nominal Liquidation Amount of the Class B Notes
pursuant to Section 3.09, may be reallocated pursuant to Section 3.07(a) to make
------------ ---------------
deposits into the Interest Funding sub-Account for a tranche of Class A Notes or
pursuant to Section 3.07(b) to fund deficiencies in payments to the Servicer
---------------
only to the extent that the Class A Usage of Class B Required Subordinated
Amount is not
22
greater than the Class A Required Subordinated Amount of Class B Notes for that
tranche of Class A Notes.
(c) Limit on Reallocations to a tranche of Class B Notes from Class C
-----------------------------------------------------------------
Notes. Series [___] Available Principal Amounts, the reallocation of which
- -----
results in the reduction of the Nominal Liquidation Amount of the Class C Notes
pursuant to Section 3.09, may be reallocated pursuant to Section 3.07(a) to make
------------ ---------------
deposits into the Interest Funding sub-Account for a tranche of Class B Notes or
pursuant to Section 3.07(b) to fund deficiencies in payments to the Servicer
---------------
only to the extent that the Class B Usage of Class C Required Subordinated
Amount (determined after giving effect to any Investor Charge-Offs and any
reallocations of Series [____] Available Principal Amounts on such date) is not
greater than the Class B Required Subordinated Amount of Class C Notes for that
tranche of Class B Notes.
Section 3.09. Computation of Amount of Reallocations of Series [___]
------------------------------------------------------
Available Principal Amounts Taken from Subordinated Classes; Allocations of
- ---------------------------------------------------------------------------
Reductions to the Nominal Liquidation Amount of Subordinated Classes from
- -------------------------------------------------------------------------
Reallocations of Series [___] Available Principal Amounts. The aggregate amount
- ---------------------------------------------------------
of Series [___] Available Principal Amounts that may be reallocated pursuant to
Section 3.07(a) with respect to any Monthly Period will be equal to the lesser
- ---------------
of (1) the largest amount that will not result in a violation of Section 3.08
------------
and (2) the largest amount that may be reallocated to result in the reduction of
the Nominal Liquidation Amount (determined after giving effect to any Investor
Charge-Offs) of the subordinated classes of Notes that will not result in a
violation of this Section.
(a) Each reallocation of Series [___] Available Principal Amounts
deposited to the Interest Funding sub-Account of a senior class of Notes
pursuant to Section 3.07(a) or paid to the Servicer pursuant to Section 3.07(b)
--------------- ---------------
will reduce the Nominal Liquidation Amount of each tranche of Class C Notes pro
rata based on the ratio of (1) the Weighted Average Nominal Liquidation Amount
of such tranche of Class C Notes for such Monthly Period to (2) the aggregate
Weighted Average Nominal Liquidation Amount of all tranches of Class C Notes for
such Monthly Period; provided, however, that
-------- -------
(i) amounts reallocated to the Interest Funding sub-Account for
Class A Notes and Class B Notes or paid to the Servicer will be treated pro
rata under this clause (a) based on the amounts reallocated;
(ii) any allocation of any such reduction that would otherwise have
reduced the Nominal Liquidation Amount of a tranche of Class C Notes below
zero will be reallocated to the remaining tranches of Class C Notes as set
forth in this clause (a), but in no event will the Nominal Liquidation
Amount of any tranche of Class C Notes be reduced below zero; and
(iii) any portion of any reallocation of Series [___] Available
Principal Amounts deposited pursuant to Section 3.07(a) that cannot be
---------------
allocated to the Nominal Liquidation Amount of Class C Notes pursuant to
this clause (a) will be allocated to the Nominal Liquidation Amount of
Class B Notes pursuant to clause (b) of this Section to the extent
permitted by clause (b);
23
(b) Each reallocation of Series [___] Available Principal Amounts
deposited to the Interest Funding sub-Accounts of the Class A Notes or paid to
the Servicer pursuant to Section 3.07(a) which does not result in the reduction
---------------
of the Nominal Liquidation Amount of Class C Notes will reduce the Nominal
Liquidation Amount (determined after giving effect to any Investor Charge-Offs)
of each tranche of Class B Notes pro rata based on the ratio of (1) the Weighted
Average Nominal Liquidation Amount of such tranche of Class B Notes for such
Monthly Period to (2) the aggregate Weighted Average Nominal Liquidation Amounts
of all tranches of Class B Notes for such Monthly Period; provided, however,
-------- -------
that any allocation of any such reduction that would otherwise have reduced the
Nominal Liquidation Amount of a tranche of Class B Notes below zero will be
reallocated to the remaining tranches of Class B Notes as set forth in this
clause (b), but in no event will the Nominal Liquidation Amount of any tranche
of Class B Notes be reduced below zero.
Section 3.10. Targeted Deposits of Series [ ] Available Principal
---------------------------------------------------
Amounts to the Principal Funding Account. The amount of the deposit targeted for
- ----------------------------------------
any tranche of Notes with respect to any Monthly Period to be deposited into the
Principal Funding sub-Account for that tranche will be the sum of (i) the amount
determined pursuant to clause (a), (b), (c) or (d) with respect to such tranche
for such Monthly Period, as applicable, or if more than one such clause is
applicable, the [highest] amount determined pursuant to any one of such clauses,
and (ii) any deposit targeted pursuant to clause (i) with respect to such
tranche for any prior Monthly Period but for which the full targeted deposit was
not made, but in no case more than the Nominal Liquidation Amount of such
tranche (computed immediately before giving effect to such deposit but after
giving effect to any Investor Charge-Offs and any reallocations of Series [____]
Available Principal Amounts on such date).
(a) Principal Payment Date. With respect to the Monthly Period immediately
----------------------
preceding each Principal Payment Date, the deposit targeted for that tranche of
Notes, unless otherwise specified in the related terms agreement, is equal to
the Nominal Liquidation Amount (determined after giving effect to any Investor
Charge-Offs and any reallocations of Series [___] Available Principal Amounts on
such date) of that tranche of Notes as of such Principal Payment Date.
(b) Budgeted Deposits.
-----------------
(i) Subject to Section 3.10(d), with respect to each Monthly Period,
---------------
beginning with the Accumulation Commencement Date, the deposit targeted to
be made into the Principal Funding sub-Account for that tranche will be the
Controlled Accumulation Amount for that tranche specified in the applicable
terms document, or if no such amount is specified, beginning with the
twelfth Monthly Period before the Monthly Period in which the Expected
Principal Payment Date of that tranche of Notes occurs, an amount equal to
one-twelfth of the expected Outstanding Dollar Principal Amount of such
tranche of Notes as of such Expected Principal Payment Date.
(ii) Notwithstanding anything to the contrary in clause (i), on or
before the Transfer Date immediately preceding the first Business Day of
the month that is twelve (12) months prior to the final or only Expected
Principal Payment Date of any tranche of Notes, and each Determination Date
thereafter until the Accumulation Commencement
24
Date, the Issuer will determine the "Accumulation Period Length" which will
--------------------------
equal the number of whole months such that the sum of the Accumulation
Period Factors for each month during such period will be equal to or
greater than the Required Accumulation Factor Number; provided, however,
-------- -------
that the Accumulation Period Length will not be determined to be less than
one month; provided further, however, that the determination of the
-------- ------- -------
Accumulation Period Length may be changed at any time if the Note Rating
Agencies provide prior written confirmation that a Ratings Effect will not
occur with respect to such change.
(c) Prefunding of the Principal Funding Account of Senior Classes. If the
-------------------------------------------------------------
Issuer determines as of the end of the preceding Monthly Period with respect to
any Class A Notes or Class B Notes that, after giving effect to all allocations
and payments with respect to that Monthly Period, the Prefunding Target Amount
of that class is greater than zero, the targeted deposit to the Principal
Funding sub-Accounts for the affected classes will be the Prefunding Target
Amount for Series [___].
(d) Event of Default, Early Redemption Event, Other Optional or Mandatory
---------------------------------------------------------------------
Redemption. If any tranche of Notes has been accelerated during a Monthly
- ----------
Period after the occurrence of an Event of Default, or if an Early Redemption
Event with respect to any tranche of Notes occurs during such Monthly Period, or
with respect to the Monthly Period immediately preceding any other date fixed
for any other mandatory or optional redemption of any tranche of Notes, the
deposit targeted for that tranche of Notes with respect to that Monthly Period
and each following Monthly Period is equal to Nominal Liquidation Amount of that
tranche of Notes as of the Monthly Principal Accrual Date occurring immediately
after that Monthly Period.
Section 3.11. Allocations among Principal Funding sub-Accounts. The
------------------------------------------------
aggregate amount of the deposits to be made to the Principal Funding Account for
each tranche of Notes pursuant to Section 3.10 for each Monthly Period will be
------------
allocated, and a portion deposited in the Principal Funding sub-Account for each
tranche of Notes, as follows:
(a) Series [_____] Available Principal Amounts Equal to Targeted Amount.
-------------------------------------------------------------------
If Series [____] Available Principal Amounts are equal to the aggregate amount
of Series [____] Available Principal Amounts targeted to be deposited into the
Principal Funding Account for all tranches of Notes pursuant to Section 3.10,
------------
then that targeted amount is deposited in the Principal Funding sub-Account
established for each tranche.
(b) Series [_____] Available Principal Amounts Are Less Than Targeted
-----------------------------------------------------------------
Amounts. If Series [____] Available Principal Amounts are less than the sum of
- -------
the aggregate amount of Series [____] Available Principal Amounts targeted to be
deposited into the Principal Funding Account for all tranches of Notes pursuant
to Section 3.10, then the amount available will be deposited in the Principal
------------
Funding sub-Account established for each tranche in the following priority:
(i) first, the amount available will be allocated to the Class A
notes pro rata based on the ratio of (A) the amount to be deposited into
the Principal Funding sub-Account for such tranche of Class A Notes
pursuant to Section 3.10, to (B) the aggregate
------------
25
amount to be deposited into the Principal Funding sub-Account for all
tranches of Class A Notes pursuant to Section 3.10;
------------
(ii) then, the amount available after the application in clause (i)
above will be allocated to the Class B notes, pro rata based on the ratio
of (A) the amount targeted to be deposited into the Principal Funding sub-
Account for such tranche of Class B Notes pursuant to Section 3.10, to (B)
------------
the aggregate amount targeted to be deposited into the Principal Funding
sub-Account for all tranches of Class B Notes pursuant to Section 3.10; and
------------
(iii) then, the amount available after the application in clauses (i)
and (ii) above will be allocated to the Class C notes, pro rata based on
the ratio of (A) the amount targeted to be deposited into the Principal
Funding sub-Account for such tranche of Class C Notes pursuant to Section
-------
3.10, to (B) the aggregate amount targeted to be deposited into the
----
Principal Funding sub-Account for all tranches of Class C Notes pursuant to
Section 3.10.
------------
Section 3.12. Payments Received from Derivative Counterparties for
----------------------------------------------------
Principal; Other Deposits to Principal Funding sub-Accounts. The following
- -----------------------------------------------------------
additional amounts will be deposited into the Principal Funding sub-Accounts on
the following dates:
(a) Payments Received from Derivative Counterparties. Payments received
------------------------------------------------
under Derivative Agreements for principal in foreign currencies for any tranche
of Notes will be made directly to the applicable Paying Agent for payment to the
Holders of the applicable tranche of Notes, or as otherwise specified in the
applicable Derivative Agreement.
(b) Class C Reserve sub-Account. Withdrawals made from the Class C Reserve
---------------------------
sub-Account for any tranche of Notes pursuant to Section 3.23(b) will be
---------------
deposited into the applicable Principal Funding sub-Account on the Transfer
Date.
(c) Receivables Sale Proceeds. Receivables Sales Proceeds received
-------------------------
pursuant to Section 3.20(f)(i) for any tranche of Notes will be deposited into
------------------
the applicable Principal Funding sub-Account on the date of receipt by the
Issuer.
Section 3.13. Withdrawals from Interest Funding Account. Withdrawals
-----------------------------------------
made pursuant to this Section 3.13 with respect to any tranche of Notes will be
------------
made from the Interest Funding sub-Account established for that tranche only
after all allocations and reallocations have been made pursuant to Sections
--------
3.02, 3.03, 3.04 and 3.07, but in no event by more than the amount on deposit in
- ---- ---- ---- ----
the applicable Interest Funding sub-Account. A single tranche of Notes may be
entitled to more than one of the following withdrawals in any month.
(a) Withdrawals for Dollar Notes. On each Interest Payment Date (or as
----------------------------
specified in the applicable terms document) with respect to each tranche of
Dollar Notes, an amount equal to the interest due on the applicable tranche of
Notes on such Interest Payment Date (including any overdue and additional
interest with respect to prior Interest Payment Dates) will be withdrawn from
that Interest Funding sub-Account and remitted to the applicable Paying Agent or
as otherwise provided in the applicable terms document.
26
(b) Withdrawals for Foreign Currency Notes with a non-Performing
------------------------------------------------------------
Derivative Agreement. On each Interest Payment Date (or as specified in the
- --------------------
applicable terms document) with respect to a tranche of foreign currency Notes
that has a non-Performing Derivative Agreement for interest, an amount equal to
the lesser of (i) the amount of Dollars necessary to be converted at the
applicable Spot Exchange Rate to pay the foreign currency interest due
(including any overdue and additional interest with respect to prior Interest
Payment Dates) on that tranche of Notes on such Interest Payment Date and (ii)
the amount that would have been payable to the applicable Derivative
Counterparty with respect to that Interest Payment Date if the applicable
Derivative Agreement had been Performing (including any overdue payments and any
additional interest on overdue payments) will be withdrawn from that Interest
Funding sub-Account and converted to the applicable foreign currency at the Spot
Exchange Rate and remitted to the applicable Paying Agent.
(c) Withdrawals for Discount Notes. On each applicable Principal Payment
------------------------------
Date, with respect to each tranche of Discount Notes, an amount equal to the
amount of the accretion of principal of that tranche of Notes from the prior
Principal Payment Date (or, in the case of the first Principal Payment Date, the
date of issuance of that tranche) to but excluding the applicable Principal
Payment Date will be withdrawn from that Interest Funding sub-Account and
invested in the Investor Interest of the Collateral Certificate pursuant to
Section 3.17.
- ------------
(d) Withdrawals for Payments to Derivative Counterparties. On each date on
-----------------------------------------------------
which a payment is required to be made to the Derivative Counterparty under the
applicable Derivative Agreement (or as specified in the applicable terms
document) with respect to any tranche of Notes which has a Performing Derivative
Agreement for interest, an amount equal to the amount of the payment to be made
to the Derivative Counterparty under the applicable Derivative Agreement
(including any overdue payment and any additional interest on overdue payments)
will be withdrawn from that Interest Funding sub-Account and paid to the
applicable Derivative Counterparty or as otherwise provided in the applicable
Derivative Agreement.
(e) Payment to the Issuer. After payment in full of any tranche of Notes,
---------------------
any amount remaining on deposit in the applicable Interest Funding sub-Account
will be paid to the Issuer.
If the aggregate amount available for withdrawal from an Interest Funding
sub-Account for any tranche of Notes is less than all withdrawals required to be
made from that Interest Funding sub-Account for that tranche in a month, then
the amounts on deposit will be withdrawn and, if payable to more than one
Person, applied pro rata based on the amounts of the withdrawals required to be
made.
Section 3.14. Withdrawals from Principal Funding Account. Withdrawals
------------------------------------------
made pursuant to this Section 3.14 with respect to any tranche of Notes will be
------------
made from the Principal Funding sub-Accounts established for that tranche only
after all allocations and reallocations have been made pursuant to Sections
--------
3.10, 3.11 and 3.12.
- ---- ---- ----
In no event will the amount of the withdrawal be more than the amount on
deposit in the applicable Principal Funding sub-Account. A single tranche may be
entitled to more than one of the following withdrawals with respect to any
Monthly Period.
27
(a) Withdrawals for Dollar Notes with no Derivative Agreement for
-------------------------------------------------------------
Principal. On each applicable Principal Payment Date (or as specified in the
- ---------
applicable terms document) with respect to each tranche of Dollar Notes which
has no Derivative Agreement for principal, an amount equal to the principal due
on the applicable tranche of Notes on the applicable Principal Payment Date will
be withdrawn from such Principal Funding sub-Account and remitted to the
applicable Paying Agent(s) or as otherwise provided by the applicable terms
document.
(b) Withdrawals for Notes with Performing Derivative Agreements for
---------------------------------------------------------------
Principal. On each date on which a payment is required under the applicable
- ---------
Derivative Agreement (or as specified in the applicable terms document) with
respect to any tranche of Notes which has a Performing Derivative Agreement for
principal, an amount equal to the amount of the payment to be made under the
applicable Derivative Agreement will be withdrawn from such Principal Funding
sub-Account and paid to the applicable Derivative Counterparty or as otherwise
provided by the applicable terms document. The Issuer will direct the applicable
Derivative Counterparty to remit its payments under the applicable Derivative
Agreement to the applicable Paying Agent(s) or as otherwise provided by the
applicable terms document.
(c) Withdrawals for Foreign Currency Notes with non-Performing Derivative
---------------------------------------------------------------------
Agreements for Principal. On each Principal Payment Date with respect to a
- ------------------------
tranche of foreign currency Notes that has a non-Performing Derivative Agreement
for principal (or as specified in the applicable terms document), an amount
equal to [the lesser of (i)] the amount of Dollars necessary to be converted at
the applicable Spot Exchange Rate to pay the foreign currency principal due on
such tranche of Notes on the applicable Principal Payment Date [and (ii) the
amount that would have been payable to the applicable Derivative Counterparty
with respect to that Principal Payment Date if the applicable Derivative
Agreement had been Performing (including any overdue payments)] will be
withdrawn from such sub-Account and converted to the applicable foreign currency
at the Spot Exchange Rate and remitted to the applicable Paying Agent(s).
(d) Withdrawal of Prefunding Excess Amount. If the Issuer on any date
--------------------------------------
determines as of the end of any Monthly Period with respect to any class of
Class A Notes or Class B Notes that, after giving effect to all issuances,
deposits, allocations, reallocations and payments with respect to that Monthly
Period, the Prefunding Excess Amount of that class is greater than zero, that
amount will be withdrawn from the Principal Funding sub-Account of that class of
Notes and paid to the Master Trust to increase the Investor Interest of the
Collateral Certificate. Such withdrawals will be allocated among the Principal
Funding sub-Account of the tranches of Notes of that class so that, after giving
effect thereto, no such Principal Funding sub-Account will have an amount on
deposit less than the amount then targeted to be on deposit in such Principal
Funding sub-Account.
(e) Legal Maturity Date. On the Legal Maturity Date of any tranche,
-------------------
amounts on deposit in the Principal Funding sub-Account of any tranche of a
subordinated class of Notes may be applied to pay principal of that tranche or
to make a payment under a Derivative Agreement with respect to principal of that
tranche, if after giving effect to any deposits, allocations, reallocations,
sales of Receivables or other payments to be made on that date, any amount is on
deposit in such Principal Funding sub-Account.
28
(f) Payment to the Issuer. Upon payment in full of any tranche of Notes,
---------------------
any remaining amount on deposit in the applicable Principal Funding sub-Account
will be paid to the Issuer.
If the aggregate amount available for withdrawal from a Principal
Funding sub-Account for any tranche of Notes is less than all withdrawals
required to be made from that Principal Funding sub-Account for that tranche in
a month, then the amounts on deposit will be withdrawn and, if payable to more
than one Person, applied pro rata based on the amounts of the withdrawals
required to be made.
Section 3.15. Limit on Repayments of all Tranches. No amounts on
-----------------------------------
deposit in a Principal Funding sub-Account for any tranche of Class A Notes or
Class B Notes will be applied to pay principal of that tranche or to make a
payment under a Derivative Agreement with respect to principal of that tranche
in excess of the highest Outstanding Dollar Principal Amount of that tranche
minus any unreimbursed reductions in the Nominal Liquidation Amount of that
tranche. In the case of any tranche of Class C Notes, no amounts on deposit in a
Principal Funding sub-Account or, if applicable, a Class C Reserve Account for
any such tranche will be applied to pay principal of that tranche or to make a
payment under a Derivative Agreement with respect to principal of that tranche
in excess of the highest Outstanding Dollar Principal Amount of that tranche,
minus any unreimbursed reductions in the Nominal Liquidation Amount of that
tranche. No amounts on deposit in a Principal Funding sub-Account of any tranche
of Notes will be applied to pay principal on that tranche or to make a payment
with respect to principal of that tranche that would result in a payment in
excess of the highest Outstanding Dollar Principal Amount of that tranche.
Section 3.16. Calculation of Nominal Liquidation Amount. On or prior
-----------------------------------------
to each Transfer Date the Issuer shall calculate the Nominal Liquidation Amount
of each tranche of Outstanding Notes in Series [_____] which shall be the
following amount:
(a) as of the date of issuance of such tranche of Notes, the Initial
Dollar Principal Amount of such tranche of Notes; and
(b) thereafter, the sum of, without duplication:
(i) the Nominal Liquidation Amount of such tranche of Notes
immediately after the prior date of determination; plus
(ii) with respect to any tranche of Discount Notes, the
aggregate amount of any accretions of principal on that tranche paid to the
Master Trust for investment in the Investor Interest pursuant to Section
-------
3.17(a) since the prior date of determination; plus
-------
(iii) the aggregate amount withdrawn from the Principal Funding
sub-Account pursuant to Section 3.14(d) for such tranche since the prior
---------------
date of determination; plus
(iv) such tranche's allocable share of all reimbursements of its
Nominal Liquidation Amount Deficit pursuant to Section 3.01(d) since the
---------------
prior date of determination; minus
29
(v) such tranche's allocable share of all reallocations of
Series [___] Available Principal Amounts pursuant to Section 3.07(a) and
---------------
(b) since the prior date of determination, determined as set forth in
Section 3.09; minus
------------
(vi) the amount of the reduction of the Nominal Liquidation
Amount of such tranche resulting from an allocation of Investor Charge-Offs
since the prior date of determination, determined as set forth in Section
-------
3.05; minus
----
(vii) the amount deposited in the applicable Principal Funding
sub-Account for such tranche (after giving effect to any deposits,
allocations, reallocations or withdrawals to be made on that day) since the
prior date of determination;
provided, however, that (1) the Nominal Liquidation Amount of a tranche of Notes
- -------- -------
may never be less than zero, (2) the Nominal Liquidation Amount of any tranche
of Notes may never be greater than the Adjusted Outstanding Dollar Principal
Amount of such tranche and (3) the Nominal Liquidation Amount of any tranche of
Notes that has caused a sale of Receivables pursuant to Section 3.23 will be
------------
zero.
The Nominal Liquidation Amount for Series ___ will be the sum of the
Nominal Liquidation Amounts of all of the tranches of Notes of Series ___.
Section 3.17. Reinvestment in the Collateral Certificate.
------------------------------------------
(a) The amount of principal accreted on any tranche of Discount Notes
available pursuant to Section 3.13(b) will be paid to the Master Trust to
---------------
increase the Investor Interest of the Collateral Certificate.
(b) The Prefunding Excess Amount, if any, withdrawn from the
Principal Funding Account will be paid to the Master Trust to increase the
Investor Interest of the Collateral Certificate.
Section 3.18. Netting of Deposits and Payments. The Issuer, in its
--------------------------------
sole discretion, may make all deposits to Interest Funding sub-Account and
Principal Funding sub-Account pursuant to Sections 3.02 and 3.10 with respect to
------------- ----
any Monthly Period net of, and after giving effect to, (a) all reallocations to
be made pursuant to Section 3.07(a), (b) all payments to be made to Derivative
---------------
Counterparties pursuant to Sections 3.13 and 3.14, (c) all reinvestments in the
------------- ----
Investor Interest of the Collateral Certificate to be made pursuant to Section
-------
3.17 and (d) all payments to the Issuer pursuant to Section 3.07(c).
- ---- ---------------
Section 3.19. Pro rata Payments within a Tranche. All payments of
----------------------------------
principal, interest or other amounts to Holders of the Notes of a single tranche
will be made pro rata based on the Stated Principal Amount of their Notes.
Section 3.20. Sale of Receivables for Accelerated Notes.
-----------------------------------------
(a) (i) If a tranche of Notes has been accelerated pursuant to
Section 702 of the Indenture following an Event of Default, the Indenture
- -----------
Trustee may, and at the direction of the Majority Holders of that tranche of
Notes will, cause the Master Trust to sell Principal
30
Receivables and the related Finance Charge Receivables (or interests therein) as
set forth in this Section 3.20.
------------
(ii) Such a sale will be permitted only if at least one of the
following conditions is met:
(A) the Holders of 90% of the aggregate Outstanding Dollar
Principal Amount of the accelerated tranche of Notes consent; or
(B) the net proceeds of such sale (plus amounts on deposit in the
applicable sub-Accounts and payments to be received from any applicable
Derivative Agreement) would be sufficient to pay all amounts due on the
accelerated tranche of Notes; or
(C) the Indenture Trustee does not determine that the funds to be
allocated to the accelerated Notes, including (1) Series [____]
Available Funds and Series [____] Available Principal Amounts allocable
to the accelerated tranche of Notes, (2) payments to be received from
any applicable Derivative Agreement and (3) amounts on deposit in the
applicable sub-Accounts, is likely to be sufficient to make payments on
the accelerated tranche of Notes when due and 662/3% of the Holders of
the accelerated tranche of Notes consent to the sale.
(iii) In the case of an acceleration of a tranche of Notes of a
subordinated class, if the provisions of Section ____ would prevent the
------------
payment of the accelerated tranche of subordinated Notes, such sale will be
delayed until a level of prefunding of the Principal Funding sub-Accounts
for the senior classes of Notes of that series has been reached such that
the amount of such deficiency in the required subordination of a senior
class of Notes is no longer required to provide subordination protection
for the senior classes of Notes.
(b) If the Nominal Liquidation Amount with respect to any tranche of Notes
is greater than zero on its Legal Maturity Date (after giving effect to deposits
and distributions otherwise to be made on that Legal Maturity Date), the Issuer
will cause the Master Trust to sell Principal Receivables and the related
Finance Charge Receivables (or interests therein) on that Legal Maturity Date in
an amount up to the Nominal Liquidation Amount of the affected tranche plus any
past due interest on the affected tranche.
(c) Sales proceeds received with respect to a tranche of Notes received
pursuant to clause (b) will be allocated in the following priority:
(i) first, to be deposited in the Principal Funding sub-Account for
that tranche of Notes, an amount up to the Adjusted Outstanding Dollar
Principal Amount immediately before giving effect to such deposit; and
(ii) second, to be deposited in the Interest Funding sub-Account of
that tranche of Notes, the balance of such sales proceeds.
(d) Any amount remaining on deposit in the Interest Funding sub-Account for
a tranche of Notes that has caused a sale of Receivables pursuant to this
Section 3.20 after final
- ------------
31
payment thereof pursuant to Section 503 of the Indenture, will be treated as
-----------
Series [____] Available Funds.
Section 3.21. Calculation of Prefunding Target Amount.
---------------------------------------
(a) With respect to all tranches of Class A Notes, the Prefunding Target
Amount means the greater of the amount computed under clause (i) or (ii) for the
applicable Monthly Period:
(i) The Prefunding Target Amount for tranches of Class A Notes with
respect to Class B Notes as of the end of any Monthly Period is equal to an
amount, not less than zero, equal to
(A) the product of (x) the aggregate Outstanding Dollar
Principal Amount of Class A Notes as of the end of that Monthly Period
times (y) one minus a fraction the numerator of which is the sum, such
-----
sum not to exceed the denominator in this clause (a)(i)(A), of
(1) the aggregate Adjusted Outstanding Dollar Principal
Amount of all tranches of Outstanding Class B Notes of that
series, other than tranches which have (A) had Early Redemption
Events or other mandatory or optional redemption events in which
such tranches are to be redeemed in full, (B) had Events of
Default, or (C) reached their final or only Expected Principal
Payment Date, in each case, in or with respect to that Monthly
Period or earlier Monthly Periods; plus
(2) the aggregate amount of all Class A Usage of Class B
Required Subordinated Amount by any Outstanding tranche of Class
A Notes
and the denominator of which is the aggregate amount of the Class A
Required Subordinated Amount of Class B Notes for all tranches of
Class A Notes of that series which are Outstanding as of the end of
that Monthly Period, minus
(B) the aggregate amount on deposit in the Principal Funding
sub-Accounts for all Outstanding tranches of Class A Notes as of the
end of that Monthly Period.
(ii) The Prefunding Target Amount for tranches of Class A Notes with
respect to Class C Notes as of the end of any Monthly Period is equal to an
amount, not less than zero, equal to
(A) the product of (x) the aggregate Outstanding Dollar
Principal Amount of Class A Notes as of the end of that Monthly Period
times (y) one minus a fraction, the numerator of which is the sum,
-----
such sum not to exceed the denominator in this clause (a)(ii)(A), of
32
(1) the aggregate Adjusted Outstanding Dollar Principal
Amount of all tranches of Outstanding Class C Notes of that
series, other than tranches which have (A) had Early Redemption
Events or other mandatory or optional redemption events in which
such tranches are to be redeemed in full, (B) had Events of
Default, or (C) reached their final or only Expected Principal
Payment Date, in each case, in or with respect to that Monthly
Period or earlier Monthly Periods; plus
(2) the aggregate amount of all Class A Usage of Class C
Required Subordinated Amount by any Outstanding tranche of Class
A Notes
and the denominator of which is the aggregate amount of the Class A
Required Subordinated Amount of Class C Notes for all tranches of
Class A Notes which are Outstanding as of the end of that Monthly
Period, minus
(B) the aggregate amount on deposit in the Principal Funding
sub-Accounts for all Outstanding tranches of Class A Notes as of the
end of that Monthly Period.
(b) With respect to all tranches of Class B Notes, the Prefunding Target
Amount means with respect to Class C Notes as of the end of any Monthly Period
an amount, not less than zero, equal to
(i) the product of (x) the aggregate Outstanding Dollar Principal
Amount of Class B Notes as of the end of that Monthly Period times (y) one
-----
minus a fraction, the numerator of which is the sum, such sum not to exceed
the denominator in this clause (b)(i), of
(A) the aggregate Adjusted Outstanding Dollar Principal Amount
of all tranches of Outstanding Class C Notes, other than tranches
which have (A) had Early Redemption Events or other mandatory or
optional redemption events in which such tranches are to be redeemed
in full, (B) had Events of Default, or (C) reached their final or only
Expected Principal Payment Date, in each case, in or with respect to
that Monthly Period or earlier Monthly Periods; plus
(B) the aggregate amount of all Class B Usage of Class C
Required Subordinated Amount by any Outstanding tranche of Class B
Notes
and the denominator of which is the aggregate amount of the Class B
Required Subordinated Amount of Class C Notes for all tranches of Class B
Notes which are Outstanding as of the end of that Monthly Period, minus
(ii) the aggregate amount on deposit in the Principal Funding sub-
Accounts for all Outstanding tranches of Class B Notes as of the end of
that Monthly Period.
33
Section 3.22. Targeted Deposits to the Class C Reserve Account.
------------------------------------------------
(a) The aggregate deposit targeted to be made to the Class C Reserve
Account with respect to each Monthly Period is an amount equal to the sum of
Class C Reserve sub-Account deposits, if any, targeted to be made for each
specified tranche of Class C Notes. The amount of any such deposit and the
circumstances that require that a deposit be made will be set forth in the terms
document for such tranche of Class C Notes. Unless another time is specified
for making such deposits in the terms document for each such tranche of Class C
Notes, these deposits will be made on each Transfer Date.
(b) If the amount of funds available for a Monthly Period pursuant to
Section 3.01(e) is at least equal to the aggregate amount of the deposits
- ---------------
targeted by clause (a) above, then the full amount of each such deposit will be
made.
(c) If the amount of funds available for a Monthly Period pursuant to
Section 3.01(e) is less than the aggregate amount of deposits targeted by clause
- ---------------
(a) above, then the amount available will be allocated to each tranche of Class
C Notes pro rata based on the ratio of the amount targeted to be deposited into
the Class C Reserve Account with respect to that tranche to the aggregate amount
targeted to be deposited into the Class C Reserve Account with respect to all
tranches of Class C Notes with respect to such Monthly Period.
Section 3.23. Withdrawals from the Class C Reserve Account.
--------------------------------------------
Withdrawals for any tranche of Class C Notes will be made from the applicable
Class C Reserve sub-Account as specified below.
(a) Interest; Payments with Respect to Derivative Agreements for Interest,
----------------------------------------------------------------------
Accretion on Discount Notes. If the amount on deposit in the Interest Funding
- ---------------------------
sub-Account for any tranche of Class C Notes is insufficient to pay in full the
amounts for which withdrawals are required under Section 3.13, on each Transfer
------------
Date an amount equal to that deficiency will be withdrawn from the Class C
Reserve sub-Account for such tranche and deposited into that Interest Funding
sub-Account.
(b) Payments of Principal; Payments with Respect to Derivative Agreements
---------------------------------------------------------------------
for Principal. If the amount on deposit in the Principal Funding sub-Account
- -------------
for any tranche of Class C Notes is insufficient to pay in full the amounts for
which withdrawals are required under Section 3.14, an amount equal to the lesser
------------
of (i) that deficiency, and (ii) the amount any Nominal Liquidation Amount
Deficits for that tranche of Class C Notes will be withdrawn from that Class C
Reserve sub-Account for such tranche and deposited into that Principal Funding
sub-Account on the Transfer Date before the date of the applicable withdrawal
required pursuant to Section 3.14.
------------
(c) Payment to Issuer. If on any Transfer Date with respect to which no
-----------------
Class C Notes have been accelerated, the aggregate amount on deposit in the
Class C Reserve Account exceeds the amount required to be on deposit in the
Class C Reserve Account, the amount of such excess will be withdrawn from the
Class C Reserve Account and be paid to the Issuer. Upon payment in full of any
tranche of Class C Notes, any amount on deposit in the applicable Class C
Reserve sub-Account will be paid to the Issuer.
34
Section 3.24. Computation of Interest.
-----------------------
(a) Unless otherwise provided as contemplated in Section 301 of the
-----------
Indenture, (i) interest on the Notes computed at a fixed rate will be calculated
on the basis of a 360-day year of twelve 30-day months and (ii) interest on
Notes computed on the basis of a floating or periodic rate will be calculated on
the basis of a 360-day year for the actual number of days elapsed.
(b) Unless otherwise specified in this Indenture Supplement or the
applicable terms document, interest for any period will be calculated form and
including the first day of such period, to but excluding the last day of such
period.
Section 3.25. Excess Available Funds Sharing.
------------------------------
(a) Shared Excess Available Funds allocable to Series [___] on any
Transfer Date shall be treated as Series [____] Available Funds for such
Transfer Date.
(b) Shared Excess Available Funds allocable to Series [____] with respect
to any Transfer Date shall mean an amount equal to the Series Available Funds
Shortfall, if any, with respect to Series [____] for such Transfer Date;
provided, however, that if the aggregate amount of Shared Excess Available Funds
- -------- -------
for all Excess Available Funds Sharing Series in Excess Available Funds Sharing
Group One for such Transfer Date is less than the Cumulative Series Available
Funds Shortfall for such Transfer Date, then Shared Excess Available Funds
allocable to the Series [____] on such Transfer Date shall equal the product of
(i) Shared Excess Available Funds for all Excess Available Funds Sharing Series
in Excess Available Funds Sharing Group One for such Transfer Date and (ii) a
fraction, the numerator of which is the Series Available Funds Shortfall with
respect to Series [____] for such Transfer Date and the denominator of which is
the aggregate amount of Cumulative Series Available Funds Shortfall for all
Excess Available Funds Sharing Series in Excess Available Funds Sharing Group
One for such Transfer Date.
[END OF ARTICLE III]
35
ARTICLE IV
Early Redemption of Notes
Section 4.01. Early Redemption Events. In addition to the events
-----------------------
identified as Early Redemption Events in Section 1201 of the Indenture, if at
------------
any time the average of the Portfolio Yields for any three consecutive Monthly
Periods is less than the average of the Base Rates for such period, an "Early
Redemption Event" with respect to each tranche of Series [___] Notes will be
deemed to have occurred.
[END OF ARTICLE IV]
36
ARTICLE V
Accounts and Investments
Section 5.01. Accounts.
--------
(a) Accounts; Deposits to and Distributions from Accounts. On or before
-----------------------------------------------------
the Closing Date, the Indenture Trustee will cause to be established and
maintained three Qualified Accounts denominated as follows: the "Interest
--------
Funding Account," the "Principal Funding Account" and the "Class C Reserve
- --------------- ------------------------- ---------------
Account" in the name of the Indenture Trustee, bearing a designation clearly
- -------
indicating that the funds deposited therein are held for the benefit of the
Series [____] Noteholders (or, in the case of the Class C Reserve Account, for
the benefit of the Class C Noteholders). The Interest Funding Account,
Principal Funding Account and the Class C Reserve Account constitute
Supplemental Accounts and shall be under the sole dominion and control of the
Indenture Trustee for the benefit of the Series [____] Noteholders (or, in the
case of the Class C Reserve Account, for the benefit of the Class C
Noteholders). If, at any time, the institution holding either the Interest
Funding Account, Principal Funding Account or the Class C Reserve Account ceases
to be a Qualified Institution, the Issuer will within ten (10) Business Days (or
such longer period, not to exceed thirty (30) calendar days, as to which each
Note Rating Agency may consent) establish a new Interest Funding Account,
Principal Funding Account or Class C Reserve Account, as the case may be, that
is a Qualified Account and shall transfer any cash and/or investments to such
new Interest Funding Account, Principal Funding Account or Class C Reserve
Account, as the case may be. From the date such new Interest Funding Account,
Principal Funding Account or Class C Reserve Account is established, it will be
the "Interest Funding Account," "Principal Funding Account" or "Class C Reserve
Account," as the case may be. Each tranche of Notes will have its own sub-
Account within the Interest Funding Account, the Principal Funding Account and
the Class C Reserve Account. The Interest Funding Account, the Principal Funding
Account and the Class C Reserve Account will receive deposits pursuant to
Article III.
(b) All payments to be made from time to time by the Indenture Trustee to
Noteholders out of funds in the Interest Funding Account, the Principal Funding
Account or the Class C Reserve Account pursuant to this Indenture Supplement
will be made by the Indenture Trustee to the Paying Agent not later than 12:00
noon on the applicable Interest Payment Date or Principal Payment Date but only
to the extent of available funds in the applicable sub-Account or as otherwise
provided in Article III.
[END OF ARTICLE V]
37
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
MBNA CREDIT CARD NOTE TRUST,
by[ ], as Owner Trustee and not in its
individual capacity
By:________________________________________
Name:
Title:
Attest:
THE BANK OF NEW YORK, as Indenture Trustee
and not in its individual capacity
By:________________________________________
Name:
Title:
Attest:
38
STATE OF DELAWARE )
)ss:
COUNTY OF CASTLE )
On [ ], [ ], before me personally came , to me known, who, being by me
duly sworn, did depose and say that he resides at ; that he is of MBNA Credit
Card Note Trust, one of the parties described in and which executed the above
instrument; that he knows the corporate seal of said corporation; that the seal
affixed to that instrument is such corporate seal; that it was affixed by
authority of the board of directors of the corporation; and that he signed his
name thereto by like authority.
_____________________________
Name
_____________________________
[Notarial Seal]
39
STATE OF NEW YORK )
)ss:
COUNTY OF NEW YORK )
On [ ], [ ], before me personally came [ ], to me known, who, being
by me duly sworn, did depose and say that he resides at [ ]; that he is of The
Bank of New York, one of the parties described in and which executed the above
instrument; that he knows the corporate seal of said corporation; that the seal
affixed to that instrument is such corporate seal; that it was affixed by
authority of the board of directors of the corporation; and that he signed his
name thereto by like authority.
_______________________
Name
_______________________
[Notarial Seal]
40