WORLD FINANCIAL NETWORK NATIONAL BANK,
Transferor and Servicer
and
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
Trustee
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of January 17, 1996 and hereby
amended and restated as of September 17, 1999.
TABLE OF CONTENTS
|| Page
ARTICLE I DEFINITIONS.......................................................1
SECTION 1.1. Definitions............................................1
SECTION 1.2. Other Interpretive Provisions.........................22
ARTICLE II CONVEYANCE OF RECEIVABLES.......................................23
SECTION 2.1. Conveyance of Receivables.............................23
SECTION 2.2. Acceptance by Trustee.................................25
SECTION 2.3. Representations and Warranties of Transferor
Relating to Transferor..........................25
SECTION 2.4. Representations and Warranties of Transferor
Relating to Transaction Documents and the
Receivables.....................................27
SECTION 2.5. Reassignment of Ineligible Receivables................29
SECTION 2.6. Reassignment of Receivables in Trust Portfolio........30
SECTION 2.7. Covenants of Transferor...............................31
SECTION 2.8. Addition of Accounts.................................35
SECTION 2.9. Removal of Accounts...................................40
SECTION 2.10. Discount Option......................................43
SECTION 2.11. Additional Transferors...............................43
SECTION 2.12. Additional Credit Card Originators...................43
ARTICLE III ADMINISTRATION AND SERVICING...................................44
SECTION 3.1. Acceptance of Appointment and Other Matters
Relating to Servicer............................44
SECTION 3.2. Servicing Compensation................................45
SECTION 3.3. Representations, Warranties and Covenants of
Servicer........................................45
SECTION 3.4. Reports to Trustee....................................49
SECTION 3.5. Annual Certificate of Servicer........................50
SECTION 3.6. Annual Servicing Report of Independent Public
Accountants; Copies of Reports Available........50
SECTION 3.7. Tax Treatment.........................................51
SECTION 3.8. Notices to WFN........................................51
SECTION 3.9. Adjustments...........................................51
ARTICLE IV RIGHTS OF HOLDERS; ALLOCATIONS..................................53
SECTION 4.1. Rights of Holders.....................................53
SECTION 4.2. Establishment of Collection Account and Excess
Funding Account.................................53
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SECTION 4.3. Collections and Allocations...........................55
SECTION 4.4. Shared Principal Collections..........................56
SECTION 4.5. Excess Finance Charge Collections.....................57
ARTICLE V DISTRIBUTIONS AND REPORTS........................................57
ARTICLE VI THE CERTIFICATES.................................................57
SECTION 6.1. The Certificates......................................57
SECTION 6.2. Authentication of Certificates........................58
SECTION 6.3. New Issuances.........................................58
SECTION 6.4. Registration of Transfer and Exchange of
Certificates..........................................60
SECTION 6.5. Mutilated, Destroyed, Lost or Stolen Certificates.....65
SECTION 6.6. Persons Deemed Owners.................................66
SECTION 6.7. Appointment of Paying Agent...........................66
SECTION 6.8. Access to List of Registered Holders' Names and
Addresses.............................................67
SECTION 6.9. Authenticating Agent..................................67
SECTION 6.10. Book-Entry Certificates..............................68
SECTION 6.11. Notices to Clearing Agency...........................69
SECTION 6.12. Definitive Certificates..............................69
SECTION 6.13. Global Certificate...................................70
SECTION 6.14. Uncertificated Classes...............................70
SECTION 6.15. CUSIP Numbers.......................................70
ARTICLE VII OTHER MATTERS RELATING TO TRANSFEROR...........................71
SECTION 7.1. Liability of Transferor...............................71
SECTION 7.2. Merger or Consolidation of, or Assumption of
the Obligations of, Transferor..................71
SECTION 7.3. Limitations on Liability of Transferor................72
SECTION 7.4. Liabilities...........................................73
ARTICLE VIII OTHER MATTERS RELATING TO SERVICER............................73
SECTION 8.1. Liability of Servicer.................................73
SECTION 8.2. Merger or Consolidation of, or Assumption of
the Obligations of, Servicer....................73
SECTION 8.3. Limitation on Liability of Servicer and Others........74
SECTION 8.4. Servicer Indemnification of the Trust and Trustee.....75
SECTION 8.5. Servicer Not to Resign................................75
SECTION 8.6. Access to Certain Documentation and Information
Regarding the Receivables.......................76
SECTION 8.7. Delegation of Duties..................................76
ARTICLE IX EARLY AMORTIZATION EVENTS.......................................76
SECTION 9.1. Early Amortization Events.............................76
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SECTION 9.2. Additional Rights upon Certain Events.................77
ARTICLE X SERVICER DEFAULTS................................................78
SECTION 10.1. Servicer Defaults....................................78
SECTION 10.2. Trustee to Act; Appointment of Successor.............81
SECTION 10.3. Notification to Holders..............................83
SECTION 10.4. Waiver of Past Defaults..............................83
ARTICLE XI TRUSTEE.........................................................83
SECTION 11.1. Duties of Trustee....................................83
SECTION 11.2. Certain Matters Affecting Trustee....................85
SECTION 11.3. Trustee Not Liable for Recitals in Certificates......87
SECTION 11.4. Trustee Not to Own Certificates......................87
SECTION 11.5. Servicer to Pay Trustee's Fees and Expenses..........87
SECTION 11.6. Eligibility Requirements for Trustee.................88
SECTION 11.7. Resignation or Removal of Trustee....................88
SECTION 11.8. Successor Trustee....................................89
SECTION 11.9. Merger or Consolidation of Trustee...................89
SECTION 11.10. Appointment of Co-Trustee or Separate Trustee.......89
SECTION 11.11. Tax Return..........................................91
SECTION 11.12. Trustee May Enforce Claims Without Possession
of Certificates..............................91
SECTION 11.13. Suits for Enforcement...............................91
SECTION 11.14. Rights of Holders to Direct Trustee.................92
SECTION 11.15. Representations and Warranties of Trustee...........92
SECTION 11.16. Maintenance of Office or Agency.....................92
SECTION 11.17. Confidentiality.....................................93
ARTICLE XII TERMINATION....................................................94
SECTION 12.1. Termination of Trust.................................94
SECTION 12.2. Final Distribution...................................94
SECTION 12.3. Transferor's Termination Rights......................95
ARTICLE XIII MISCELLANEOUS PROVISIONS......................................96
SECTION 13.1. Amendment; Waiver of Past Defaults...................96
SECTION 13.2. Protection of Right, Title and Interest to Trust.....98
SECTION 13.3. Limitation on Rights of Holders......................99
SECTION 13.4. GOVERNING LAW.......................................100
SECTION 13.5. Notices, Payments...................................100
SECTION 13.6. Rule 144A Information...............................100
SECTION 13.7. Severability of Provisions..........................101
SECTION 13.8. Certificates Nonassessable and Fully Paid...........101
SECTION 13.9. Further Assurances..................................101
SECTION 13.10. Nonpetition Covenant...............................101
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SECTION 13.11. No Waiver; Cumulative Remedies.....................101
SECTION 13.12. Counterparts.......................................102
SECTION 13.13. Third-Party Beneficiaries..........................102
SECTION 13.14. Actions by Holders.................................102
SECTION 13.15. Merger and Integration.............................102
EXHIBITS
Exhibit A Form of Transferor Certificate
Exhibit B Form of Assignment of Receivables in
Supplemental Accounts
Exhibit C Form of Reassignment of Receivables in
Removed Accounts
Exhibit D Form of Annual Servicer's Certificate
Exhibit E-1 Private Placement Legend
Exhibit E-2 Form of Undertaking Letter
Exhibit E-3 ERISA Legend
Exhibit F-1 Form of Opinion of Counsel with respect
to Amendments
Exhibit F-2 Form of Opinion of Counsel with respect
to Addition of Supplemental Accounts
||
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POOLING AND SERVICING AGREEMENT, dated as of January 17, 1996 and
amended and restated as of September 17, 1999 between WORLD FINANCIAL
NETWORK NATIONAL BANK, a national banking association ("WFN"), as
Transferor and as Servicer, and ▇▇▇▇▇▇ TRUST AND SAVINGS BANK, an Illinois
banking corporation replacing the Bank of New York, as Trustee.
Background
World Financial Network National Bank, as Transferor and Servicer,
originally entered into this Agreement (the "Existing Agreement") with The
Bank of New York, as trustee, as of January 17, 1997. Pursuant to Section
11.7 of the Existing Agreement, The Bank of New York is resigning as
trustee, and Servicer is appointing ▇▇▇▇▇▇ Trust and Savings Bank as the
replacement trustee.
Transferor also wishes to amend certain terms of the Existing
Agreement, in accordance with the requirements of Section 13.1(a) thereof,
and the conditions specified in such Section have been satisfied.
In consideration of the mutual agreements herein contained, each
party agrees as follows for the benefit of the other parties, the Holders
and any Enhancement Provider to the extent provided herein and in any
Supplement, and the Existing Agreement is amended and restated as follows:
Agreement
ARTICLE I DEFINITIONS
SECTION 1.1. Definitions. When used in this Agreement, the
following words and phrases have the following meanings. The definitions of
such terms are applicable to the singular as well as the plural forms of
such terms and to the masculine as well as to the feminine and neuter
genders of such terms.
"Account" means each Initial Account, each Automatic Additional
Account and each Supplemental Account, but excludes any Account all the
Receivables in which are either reassigned or assigned to Transferor or its
designee or Servicer in accordance with this Agreement and any inactive
Accounts which in accordance with the Credit Card Guidelines have been
removed from the computer records of the Credit Card Originator. The term
"Account" includes each account into which an Account is transferred (a
"Transferred Account") so long as (a) such transfer is made in accordance
with the Credit Card Guidelines and (b) such Transferred Account can be
traced or identified, by reference to or by way of the Account Schedule
delivered to Trustee pursuant to Section 2.1 or 2.8(d), as an account into
which an Account has been transferred. The term "Account" includes an
1
Automatic Additional Account or a Supplemental Account only from and after
its Addition Date and includes any Removed Account only prior to its
Removal Date.
"Account Schedule" means a computer file or microfiche list
containing a true and complete list of Accounts, identified by account
number and setting forth the Receivable balance as of (a) the Trust Cut Off
Date (for the Account Schedule delivered on the Initial Closing Date), (b)
the end of the related Monthly Period (for any Account Schedule relating to
Automatic Additional Accounts) or (c) the related Addition Cut Off Date
(for any Account Schedule delivered in connection with any designation of
Supplemental Accounts).
"Acquired Portfolio Receivable" means any receivable acquired by
Transferor from an Other Originator in connection with Transferor's
acquisition of a portfolio of revolving credit card accounts from such
Other Originator (prior to the transfer of such receivable to the Trust
pursuant to this Agreement).
"Addition" means the designation of additional Eligible Accounts
to be included as Accounts pursuant to Section 2.8(a), (b) or (c) or of
Participation Interests to be included as Trust Assets pursuant to Section
2.8(b) or (c), as applicable.
"Addition Cut Off Date" means the date as of which any
Supplemental Accounts or Participation Interests are designated for
inclusion in the Trust, as specified in the related Assignment.
"Addition Date" means (a) as to Supplemental Accounts, the date on
which the Receivables in such Supplemental Accounts are conveyed to the
Trust pursuant to Section 2.8(b) or (c), as applicable, (b) as to Automatic
Additional Accounts, the date on which such accounts are created or
otherwise become Automatic Additional Accounts and (c) as to Participation
Interests, the date from and after which such Participation Interests are
to be included as Trust Assets pursuant to Section 2.8(b) or (c).
"Additional Account" means an Automatic Additional Account or a
Supplemental Account.
"Additional Limitation Event" means the occurrence of either of
the following events on any Determination Date:
(1) the average of the default ratio for that
Determination Date and the preceding two Determination Dates is
greater than 1.25%, where the "default ratio" for any
Determination Date equals the percentage equivalent of a fraction
(A) the numerator of which is the aggregate of the Default Amounts
for all Accounts that became Defaulted Accounts during the related
2
Monthly Period and (B) the denominator of which is the total
Receivables as of the end of the sixth preceding Monthly Period; or
(2) the average of the payment rate for that
Determination Date and the preceding two Determination Dates is
less than 10%, where the "payment rate" for any Determination Date
equals the percentage equivalent of a fraction (A) the numerator
of which is the aggregate Collections received during the related
Monthly Period and (B) the denominator of which is equal to the
total Receivables held by the Trust at the close of business for
the Monthly Period immediately prior to such related Monthly
Period.
"Adjusted Invested Amount" is defined, as to any Series, in the
related Supplement.
"Affiliate" means, as to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For this purpose, "control" means the power to direct the
management and policies of a Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and
"controlling" and "controlled" have correlative meanings.
"Agreement" means this Pooling and Servicing Agreement and, for
purposes of any Series, the related Supplement.
"Amortization Period" means, as to any Series or any Class within
a Series, any period specified in the related Supplement during which a
share of principal collections is set aside to repay the principal
investment in that Series (excluding repayments of a Variable Interest
during its revolving period).
"Applicants" is defined in Section 6.8.
"Appointment Date" is defined in Section 9.2(a).
"Approved Portfolio" means any Identified Portfolio and any
additional portfolio that is designated as an Approved Portfolio pursuant
to Section 2.8(e).
"Assignment" is defined in Section 2.8(d)(ii).
"Authorized Newspaper" means any newspaper or newspapers of
general circulation in the Borough of Manhattan, The City of New York
printed in the English language (and, with respect to any Series or Class,
if and so long as the Investor Certificates of such Series or Class are
listed on the Luxembourg Stock Exchange and such exchange shall so require,
in Luxembourg, printed in any language satisfying the requirements of such
3
exchange) and customarily published on each business day at such place,
whether or not published on Saturdays, Sundays or holidays.
"Automatic Addition Suspension Date" is defined in Section 2.8(a).
"Automatic Addition Termination Date" is defined in Section 2.8(a).
"Automatic Additional Account" means each open end credit card
account in any Approved Portfolio that is established pursuant to a Credit
Card Agreement coming into existence after (a) the Trust Cut Off Date (in
the case of an account in the Identified Portfolio) or (b) the Addition Cut
Off Date relating to the first Addition Date on which receivables from
accounts in the applicable portfolio are transferred to the Trust (in the
case of an account in any other Approved Portfolio) and, in either case,
prior to the Automatic Addition Termination Date or an Automatic Addition
Suspension Date, or subsequent to a Restart Date. In addition, accounts in
an Approved Portfolio that were in existence, but were not Eligible
Accounts, on (x) the Trust Cut Off Date (in the case of an account in the
Identified Portfolio) or (y) the Addition Cut Off Date relating to the
first Addition Date on which receivables from accounts in the applicable
portfolio are transferred to the Trust (in the case of an account in any
other Approved Portfolio) but which, in either case, become Eligible
Accounts prior to the Automatic Addition Termination Date or an Automatic
Addition Suspension Date, or subsequent to a Restart Date, shall also be
"Automatic Additional Accounts" and shall be deemed, for purposes of the
definition of "Eligible Account" and Section 2.8(a), to have been created
on the first day after the Trust Cut Off Date or applicable Addition Cut
Off Date on which they are Eligible Accounts.
"Automatic Addition Limitation Event" means the occurrence of
either of the following events on any Determination Date:
(1) the average of the default ratio for that
Determination Date and the preceding two Determination Dates is
greater than 1%, where the "default ratio" for any Determination
Date equals the percentage equivalent of a fraction (A) the
numerator of which is the aggregate of the Default Amounts for all
Accounts that became Defaulted Accounts during the related Monthly
Period and (B) the denominator of which is the total Receivables
as of the end of the sixth preceding Monthly Period; or
(2) the average of the payment rate for that
Determination Date and the preceding two Determination Dates is
less than 10%, where the "payment rate" for any Determination Date
equals the percentage equivalent of a fraction (A) the numerator
of which is the aggregate Collections received during the related
Monthly Period and (B) the denominator of which is equal to the
total Receivables held by the Trust
4
at the close of business for the Monthly Period immediately prior
to such related Monthly Period.
"Base Rate" is defined, as to any Series, in the related Supplement.
"Bearer Certificate" is defined in Section 6.1.
"Benefit Plan" is defined in Section 6.4(c).
"Book-Entry Certificates" means beneficial interests in the
Investor Certificates, ownership and transfers of which shall be made
through book entries by a Clearing Agency as described in Section 6.10.
"Business Day" means any day other than (a) a Saturday or Sunday,
(b) any other day on which national banking associations or state banking
institutions in New York, New York, Chicago, Illinois or Columbus, Ohio are
authorized or obligated by law, executive order or governmental decree to
be closed or (c) for purposes of any particular Series, any other day
specified in the related Supplement.
"Certificate" means an Investor Certificate, a Supplemental
Certificate or the Transferor Certificate.
"Certificate Owner" means, with respect to a Book-Entry
Certificate, the Person who is the owner of such Book-Entry Certificate, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly or as an
indirect participant, in accordance with the rules of such Clearing
Agency).
"Certificate Register" is defined in Section 6.4.
"Class" means any class of Investor Certificates of any Series.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" means, as to any Series, the date on which that Series
is issued.
"Collection Account" is defined in Section 4.2.
5
"Collections" means all payments (including Recoveries of
Principal Receivables or Finance Charge Receivables and Insurance Proceeds,
whether or not treated as Recoveries) received by Servicer with respect to
the Receivables, including In-Store Payments, in the form of cash, checks
(to the extent collected), wire transfers or other form of payment in
accordance with the Credit Card Agree ment in effect from time to time on
any Receivables. If so specified in any Supplement, Collections shall also
include any payments received by Servicer with respect to Participation
Interests.
"Commission" means the Securities and Exchange Commission.
"Corporate Trust Office" is defined in Section 11.16.
"Coupon" is defined in Section 6.1.
"Credit Card Agreement" means, as to any Account, the agreements
between the Credit Card Originator that owns the Account (including WFN as
assignee of an Other Originator) and the related Obligor that govern the
Account, as amended or otherwise modified from time to time.
"Credit Card Guidelines" means the written policies and procedures
of the Credit Card Originator relating to the operation of its consumer
revolving lending business, including written policies and procedures for
determining the creditworthiness of credit card customers, the extension of
credit to credit card customers and the maintenance of credit card accounts
and collection of related receivables, as amended or otherwise modified
from time to time.
"Credit Card Originator" means (i) WFN and/or any transferee of
the Accounts from WFN or (ii) any other originator of Accounts which is
designated from time to time pursuant to Section 2.12 and, directly or
indirectly, enters into a receivables purchase agreement with Transferor.
"Credit Card Processing Agreement" means one or more agreements
between the Credit Card Originator (including WFN as assignee of an Other
Originator) and a Merchant pursuant to which the Credit Card Originator
agrees to extend open end credit card accounts to customers of the Merchant
and the Merchant agrees to allow purchases to be made at its retail
establishments, or in its catalogue sales business, under such accounts.
"Daily Report" is defined in Section 3.4(a).
"Date of Processing" means, as to any transaction, the Business
Day on which the transaction is first recorded on Servicer's computer file
of consumer revolving accounts (without regard to the effective date of
such recordation).
6
"Debtor Relief Laws" means Title 11 of the United States Code and
all other applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, suspension of
payments, readjustment of debt, marshalling of assets or similar debtor
relief laws of the United States, any state or any foreign country from
time to time in effect, affecting the rights of creditors generally.
"Defaulted Receivable" means, as to any date of determination, all
Principal Receivables in any Account which are charged off as uncollectible
on that date in accordance with the Credit Card Guidelines and Servicer's
customary and usual servicing procedures for servicing open end credit card
account receivables comparable to the Receivables. A Principal Receivable
in any Account shall become a Defaulted Receivable on the day on which such
Principal Receivable is recorded as charged off in accordance with the
Credit Card Guidelines.
"Definitive Certificates" is defined in Section 6.10.
"Definitive Euro-Certificates" is defined in Section 6.13.
"Depository Agreement" means, as to any Series or Class, any
agreement among Transferor, Trustee and any applicable Clearing Agency.
"Determination Date" means, unless otherwise specified in any
Supplement with respect to the related Series, the second Business Day
preceding each Distribution Date.
"Discount Option Receivables" means, on any Date of Processing on
and after the date on which Transferor's exercise of its discount option
pursuant to Section 2.10 takes effect, the sum of (a) the aggregate
Discount Option Receivables at the end of the prior day (which amount,
prior to the date on which Transferor's exercise of its discount option
takes effect and with respect to Receivables generated prior to such date,
shall be zero), plus (b) any New Discount Option Receivables created on
such day, minus (c) any Discount Option Receivables Collections received on
such Date of Processing.
"Discount Option Receivables Collections" means on any Date of
Processing on and after the date on which Transferor's exercise of its
discount option pursuant to Section 2.10 takes effect, the product of (a) a
fraction the numerator of which is the amount of the Discount Option
Receivables and the denominator of which is the sum of the Principal
Receivables plus the amount of Discount Option Receivables in each case
(for both numerator and denominator) at the end of the prior Monthly Period
and (b) Collections of Principal Receivables, prior to any reduction for
Finance Charge Receivables which are Discount Option Receivables, received
on such Date of Processing.
7
"Discount Percentage" is defined in Section 2.10.
"Distribution Date" means, with respect to any Series, the date
specified in the related Supplement.
"Document Delivery Date" means the Initial Closing Date in the
case of Initial Accounts, the Addition Date in the case of Supplemental
Accounts and the Removal Date in the case of Removed Accounts.
"Early Amortization Event" means, as to any Series, each event
specified in Section 9.1 and each additional event, if any, specified in
the relevant Supplement as an Early Amortization Event for that Series.
"Eligible Account" means an open end credit card account in an
Approved Portfolio owned by the Credit Card Originator that, as of the
Trust Cut Off Date (in the case of an Initial Account), the date of
creation thereof (in the case of an Automatic Additional Account) or the
related Addition Cut Off Date (in the case of a Supplemental Account):
(a) is in existence and is serviced by the Credit Card
Originator or any Affiliate of the Credit Card Originator;
(b) is payable in United States dollars;
(c) except as provided below, has not been identified as
an account (i) the credit cards for which have been reported to
the Credit Card Originator or the related Other Originator (if
any) as lost or stolen or (ii) the Obligor of which is the subject
of a bankruptcy proceeding;
(d) none of the Receivables in which have been, sold,
pledged, assigned or otherwise conveyed to any Person (except by
an Other Originator to Transferor or otherwise pursuant to this
Agreement), unless any such pledge or assignment is released on or
before the Initial Closing Date or the Addition Date, as
applicable;
(e) except as provided below, none of the Receivables in
which are Defaulted Receivables or have been identified by the
Credit Card Originator or the related Other Originator (if any),
or by the relevant Obligor to the Credit Card Originator or the
related Other Originator (if any), as having been incurred as a
result of fraudulent use of a credit card; and
(f) has an Obligor who has provided as his or her most
recent billing address, an address located in the United States or
a United States military address, provided that an account shall
not fail to be an "Eligible Account"
8
solely due to the Obligor having provided a billing address not
satisfying the foregoing if as of the Trust Cut Off Date (in the
case of an Initial Account), the end of the most recently ended
Monthly Period (in the case of an Automatic Additional Account) or
the related Addition Cut Off Date (in the case of a Supplemental
Account) the aggregate Principal Receivables in Accounts the most
recent billing address for which does not satisfy the foregoing
made up less than 2% (or any higher percentage as to which the
Rating Agency Condition has been satisfied) of the aggregate
Principal Receivables.
Notwithstanding the foregoing, Eligible Accounts may include accounts, the
receivables in which have been written off, or as to which the Credit Card
Originator or related Other Originator (if any) believes the related
Obligor is bankrupt and certain receivables that have been identified by
the Obligor as having been incurred as a result of fraudulent use of credit
cards or any credit cards have been reported to the Credit Card Originator
or the related Other Originator (if any) as lost or stolen, so long as (1)
the balance of all receivables included in such accounts is reflected on
the books and records of the Credit Card Originator (and is treated for
purposes of this Agreement) as "zero" and (2) charging privileges with
respect to all such accounts have been canceled and are not reinstated.
"Eligible Deposit Account" means either (a) a segregated account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the
laws of the United States or any one of the states thereof, including the
District of Columbia (or any domestic branch of a foreign bank), and acting
as a trustee for funds deposited in such account, so long as any of the
securities of such depository institution shall have a credit rating from
each of ▇▇▇▇▇'▇, S&P and, if rated by Fitch, Fitch in one of its generic
credit rating categories that signifies investment grade.
"Eligible Institution" means (a) a depository institution (which
may be Trustee or an affiliate) organized under the laws of the United
States or any one of the states thereof (i) that has either (A) a long-term
unsecured debt rating of "A2" or better by Moody's or (B) a certificate of
deposit rating of "P-1" by Moody's, (ii) that has either (A) a long-term
unsecured debt rating of "AAA" by S&P or (B) a certificate of deposit
rating of at least "A-1+" by S&P, (iii) that, if rated by Fitch, has either
(A) a long-term unsecured debt rating of "AAA" by Fitch or (B) a
certificate of deposit rating of at least "F-1+" by Fitch and (iv) the
deposits of which are insured by the FDIC or (b) any other institution that
is acceptable to each Rating Agency, Servicer and Trustee.
"Eligible Investments" means book-entry securities, negotiable
instruments or securities represented by instruments in bearer or
registered form which evidence:
9
(a) direct obligations of, and obligations fully
guaranteed as to timely payment of principal and interest by, the
United States of America;
(b) demand deposits, time deposits or certificates of
deposit (having original maturities of no more than 365 days) of
depository institutions or trust companies incorporated under the
laws of the United States of America or any state thereof (or
domestic branches of foreign banks) and subject to supervision and
examination by federal or state banking or depository institution
authorities; provided that at the time of the Trust's investment
or contractual commitment to invest therein, the short-term debt
rating of such depository institution or trust company shall be in
the highest investment category of each of Moody's, S&P and, if
rated by Fitch, Fitch;
(c) commercial paper or other short-term obligations
having, at the time of the Trust's investment or contractual
commitment to invest therein, a rating from each of Moody's, S&P
and, if rated by Fitch, Fitch in its highest investment category;
(d) demand deposits, time deposits and certificates of
deposit which are fully insured by the FDIC, with a Person the
commercial paper of which has a credit rating from each of
Moody's, S&P and, if rated by Fitch, Fitch in its highest
investment category;
(e) notes or bankers acceptances (having original
maturities of no more than 365 days) issued by any depository
institution or trust company referred to in clause (b);
(f) investments in money market funds (including funds of
Trustee or its affiliates as well as funds for which Trustee and
its affiliates may receive compensation) rated in the highest
investment category by each of Moody's, S&P and, if rated by
Fitch, Fitch or otherwise approved in writing by each Rating
Agency;
(g) time deposits, other than as referred to in clause
(d), with a Person the commercial paper of which has a credit
rating from each of Moody's, S&P and, if rated by Fitch, Fitch in
its highest investment category; or
(h) any other investments approved in writing by each
Rating Agency, provided that making such investments shall not
cause the Trust to be required to register as an investment
company within the meaning of the Investment Company Act.
10
"Eligible Receivable" means a Receivable:
(a) that has arisen under an Eligible Account;
(b) that was created in compliance with the Credit Card
Guidelines and all Requirements of Law applicable to the Credit
Card Originator (or, in the case of an Acquired Portfolio
Receivable, the related Other Originator) the failure to comply
with which would have a material adverse effect on Investor
Holders, and pursuant to a Credit Card Agreement that complies
with all Requirements of Law applicable to the Credit Card
Originator (and, in the case of an Acquired Portfolio Receivable,
the related Other Originator during the time prior to the transfer
of such Acquired Portfolio Receivable to Transferor), the failure
to comply with which would have a material adverse effect on
Investor Holders;
(c) with respect to which all consents, licenses,
approvals or authorizations of, or registrations with, any
Governmental Authority required to be obtained or made by the
Credit Card Originator (and, in the case of an Acquired Portfolio
Receivable, the related Other Originator with respect to such
actions prior to the transfer of such Acquired Portfolio
Receivable to Transferor) in connection with the creation of such
Receivable or the execution, delivery and performance by the
Credit Card Originator (and, in the case of an Acquired Portfolio
Receivable, the related Other Originator with respect to such
actions prior to the transfer of such Acquired Portfolio
Receivable to Transferor) of the related Credit Card Agreement,
have been duly obtained or made and are in full force and effect
as of the date of creation of such Receivable, but failure to
comply with this clause (c) shall not cause a Receivable not to be
an Eligible Receivable if, and to the extent that, the failure to
so obtain or make any such consent, license, approval,
authorization or registration would not have a material adverse
effect on the Investor Holders;
(d) as to which, at the time of its transfer to the
Trust, Transferor or the Trust will have good and marketable title
free and clear of all Liens (other than any Lien permitted by
Section 2.7(b));
(e) that is the subject of a valid transfer and
assignment (or the grant of a security interest) from Transferor
to the Trust of all Transferor's right, title and interest
therein;
(f) that at and after the time of transfer to the Trust
is the legal, valid and binding payment obligation of the Obligor
thereof, legally enforceable against such Obligor in accordance
with its terms, except as enforceability
11
may be limited by applicable Debtor Relief Laws, and by general
principles of equity (whether considered in a suit at law or in
equity);
(g) that constitutes an account, a general intangible or
chattel paper;
(h) as to which, at the time of its transfer to the
Trust, Transferor has not taken any action which, or failed to
take any action the omission of which, would, at the time of
transfer to the Trust, impair the rights therein of the Trust or
the Holders;
(i) that, at the time of its transfer to the Trust, has
not been waived or modified except as permitted in accordance with
Section 3.3(h);
(j) that, at the time of its transfer to the Trust, is
not subject to any right of rescission, setoff, counterclaim or
any other defense of the Obligor (including the defense of usury),
other than defenses arising out of Debtor Relief Laws and except
as such enforceability may be limited by general principles of
equity (whether considered in a suit at law or equity) or as to
which Servicer makes an adjustment pursuant to Section 3.9; and
(k) as to which, at the time of its transfer to the
Trust, the Transferor has satisfied all obligations to be
fulfilled at the time it is transferred to the Trust.
"Eligible Servicer" means Trustee, a wholly owned subsidiary of
Trustee or an entity that, at the time of its appointment as Servicer: (a)
is servicing a portfolio of consumer open end credit card accounts or other
consumer open end credit accounts; (b) is legally qualified and has the
capacity to service the Accounts; (c) is qualified (or licensed) to use the
software that is then being used to service the Accounts or obtains the
right to use, or has its own, software which is adequate to perform its
duties under this Agreement; (d) has, in the reasonable judgment of
Trustee, the ability to professionally and competently service a portfolio
of similar accounts; and (e) has a net worth of at least $50,000,000 as of
the end of its most recent fiscal quarter.
"Enhancement" means the rights and benefits provided to the
Investor Holders of any Series or Class pursuant to any letter of credit,
surety bond, cash collateral account, guaranty collateral invested amount,
spread account, guaranteed rate agreement, maturity guaranty facility, tax
protection agreement, interest rate swap agreement, interest rate cap
agreement or other similar arrangement. The subordination of any Class to
another Class, or a cross support feature which requires collections on
Receivables allocated to one Series to be paid as principal and/or interest
with respect to another Series shall be deemed to be an Enhancement for the
Class or Series benefitting from the subordination or cross support
feature.
12
"Enhancement Agreement" means any agreement, instrument or
document governing any Enhancement or pursuant to which any Enhancement is
issued or outstanding.
"Enhancement Provider" means the Person or Persons providing any
Enhancement, other than the Investor Holders of any Class which is
subordinated to another Class.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"Excess Finance Charge Collections" means all amounts that any
Supplement designates as "Excess Finance Charge Collections."
"Excess Funding Account" is defined in Section 4.2.
"Exchange Act" means the Securities Exchange Act of 1934.
"FDIC" means the Federal Deposit Insurance Corporation.
"Finance Charge Receivables" means, with respect to any Monthly
Period, the sum of (a) all amounts billed to the Obligors on any Account at
the beginning of such Monthly Period in respect of Periodic Finance
Charges, (b) Late Fees, return check fees and any other fees that may after
the Trust Cut Off Date be charged with respect to any Account, to the
extent that Servicer designates such fees to be treated as Finance Charge
Receivables in an Officer's Certificate delivered to Trustee and (c)
Discount Option Receivables. Except as otherwise specified in any
Supplement as to the related Series, Recoveries shall be treated as
Collections of Finance Charge Receivables .
"Finance Charge Shortfalls" is defined, as to any Series, in the
related Supplement.
"Fitch" means Fitch IBCA, Inc.
"Global Certificate" is defined in Section 6.13.
"Governmental Authority" means the United States of America, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Group" means, with respect to any Series, the group of Series, if
any, in which the related Supplement specifies such Series is to be
included.
13
"Holding" means Alliance Data Systems Corporation, a Delaware
corporation.
"Holder" means an Investor Holder or a Person in whose name the
Transferor Certificate is registered.
"Identified Portfolio" means any Accounts owned from time to time
by WFN and included in the private label credit card programs of Lane
▇▇▇▇▇▇, Inc., ▇▇▇▇▇▇ New York, Inc., Express, Inc., Structure, Inc.,
Victoria's Secret Stores, Inc., Victoria's Secret Catalogue, Inc., The
Limited, Abercrombie & Fitch, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇, Inc. and Brylane, L.P.
(but limited, in the case of Brylane, L.P., to accounts related to the Lane
▇▇▇▇▇▇, ▇▇▇▇▇▇ New York and Roamans catalogues). To avoid doubt, the
foregoing programs include all cards issued under the insignia of "Limited
Fashion Group."
"Ineligible Receivables" is defined in Section 2.5(a).
"Initial Account" means each open end credit card account in the
Identified Portfolio existing on the Trust Cut Off Date and identified in
the Account Schedule delivered on the Initial Closing Date.
"Initial Closing Date" means January 17, 1996.
"Insolvency Event" is defined in Section 9.1(a).
"Insolvency Proceeds" is defined in Section 9.2(b).
"Insurance Proceeds" means any amounts recovered by Servicer
pursuant to any credit insurance policies covering any Obligor with respect
to Receivables under such Obligor's Account.
"Internal Revenue Code" means the Internal Revenue Code of 1986.
"Invested Amount" is defined, as to any Series, in the related
Supplement.
"Investment Company Act" means the Investment Company Act of 1940.
"Investor Certificate" means any one of the certificates
(including the Bearer Certificates, the Registered Certificates or any
Global Certificate) executed by Transferor and authenticated by or on
behalf of Trustee, substantially in the form attached to the related
Supplement, other than the Transferor Certificate and the Supplemental
Certificates, if any.
14
"Investor Holder" means the Person in whose name a Registered
Certificate is registered in the Certificate Register or the holder of any
Bearer Certificate (or the Global Certificate, as the case may be) or
Coupon.
"Investor Interest" is defined in Section 4.1.
"Investor Percentage" is defined, as to any Series, in the related
Supplement.
"Investor Servicing Fee" is defined, as to any Series, in the related
Supplement.
"Involuntary Removal" is defined in Section 2.9(a).
"In-Store Payments" is defined in Section 2.1.
"Late Fees" means the fees specified in the Credit Card Agreement
applicable to each Account for late fees with respect to such Account.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, participation or equity interest, deposit arrangement,
encumbrance, lien (statutory or other), preference, priority or other
security agreement or preferential arrangement of any kind or nature
whatsoever, including any conditional sale or other title retention
agreement, excluding any lien or filing pursuant to this Agreement;
provided that any assignment or transfer pursuant to Section 6.3(c) or (d)
or Section 7.2 shall not constitute a Lien.
"Majority Holders" means the Holders of Investor Certificates
evidencing more than 50% of the aggregate unpaid principal amount of all
outstanding Investor Certificates.
"Merchant" means each of (a) Bath & Body Works, Inc., Brylane,
L.P., Cacique, Inc., Lane ▇▇▇▇▇▇, Inc., ▇▇▇▇▇▇ New York, Inc., Express,
Inc., Structure, Inc., Victoria's Secret Stores, Inc., Victoria's Secret
Catalogue, Inc., The Limited Stores, Inc., Limited Too, Inc., Abercrombie &
Fitch, Inc., and ▇▇▇▇▇ ▇▇▇▇▇▇, Inc. and (b) any other Person that operates
retail establishments at which, or a catalogue sales business in which,
goods or services may be purchased under an Account.
"Merchant Adjustment Payments" is defined in Section 3.9(a).
"Minimum Transferor Amount" means, as of any date of
determination, the sum of (a) the product of (i) the sum of (A) the
aggregate Principal Receivables and (B) the amounts on deposit in the
Excess Funding Account and (ii) the Required Retained Transferor Percentage
plus (b) any additional amounts specified in the Supplement for any
outstanding Series.
15
"Monthly Period" means as to each Distribution Date, the
immediately preceding calendar month, unless otherwise defined in any
Supplement.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"New Discount Option Receivables" means, as of any date of
determination, the product of the Discount Percentage and the amount of
Principal Receivables (before subtracting Finance Charge Receivables which
are Discount Option Receivables) arising on such date of determination.
"Notice Date" is defined in Section 2.8(d)(i).
"Notices" is defined in Section 13.5(a).
"Obligor" means, as to any Account, the Person or Persons
obligated to make payments on such Account, including any guarantor.
"Officer's Certificate" means a certificate delivered to Trustee
signed by the Chairman of the Board, President, any Vice President or the
Treasurer or any Assistant Treasurer of Transferor or Servicer, as the case
may be.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for, or an employee of, the Person providing the opinion and
which counsel shall be reasonably acceptable to Trustee.
"Other Originator" means any Person from which Transferor acquires
a portfolio of credit card accounts any or all of which are subsequently
designated as Additional Accounts.
"Participation Interests" is defined in Section 2.8(b).
"Paying Agent" means any paying agent and co-paying agent
appointed pursuant to Section 6.7.
"Periodic Finance Charges" means any finance charges (due to
periodic rate) applicable to any Account.
"Person" means any legal person, including any individual,
corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization,
governmental entity or other entity of similar nature.
"Portfolio Yield" is defined, as to any Series, in the related
Supplement.
16
"Principal Receivable" means all Receivables other than Finance
Charge Receivables. In calculating the aggregate amount of Principal
Receivables on any day, the amount of Principal Receivables shall not
include Defaulted Receivables and shall be reduced by the aggregate amount
of credit balances in the Accounts on such day.
"Principal Sharing Series" means a Series that, pursuant to the
Supplement therefor, is entitled to receive Shared Principal Collections.
"Principal Shortfalls" is defined, as to any Series, in the related
Supplement.
"Principal Terms" means, with respect to any Series: (a) its name
or designation; (b) its initial principal amount (or method for calculating
such amount) and its invested amount in the Trust; (c) its interest rate
(or method for the determination thereof); (d) the payment date or dates
and the date or dates from which interest shall accrue; (e) the method for
allocating Collections to Holders of such Series; (f) the designation of
any Series Accounts and the terms governing the operation of any such
Series Accounts; (g) the percentage used to calculate the servicing fee
with respect thereto; (h) the provider, if any, and the terms of any form
of Enhancement with respect thereto; (i) the terms on which the Investor
Certificates of such Series may be repurchased by Transferor or any
Affiliate of Transferor or remarketed to other investors; (j) the Series
Termination Date; (k) the number of Classes of Investor Certificates of
such Series and, if such Series consists of more than one Class, the rights
and priorities of each such Class; (l) the extent to which the Investor
Certificates of such Series will be issuable in temporary or permanent
global form (and, in such case, the depositary for such Global Certificate
or Certificates, the conditions, if any, upon which such Global
Certificates may be exchanged, in whole or in part, for Definitive
Certificates, and the manner in which any interest payable on a Global
Certificate will be paid); (m) whether the Investor Certificates of such
Series may be issued as Bearer Certificates and any limitation imposed
thereon; (n) the priority of such Series with respect to any other Series;
(o) the Group, if any, to which such Series belongs; (p) whether or not
such Series is acting as a paired Series with another existing Series; and
(q) any other terms of such Series.
"Rating Agency" means, as to each Series, the rating agency or
agencies, if any, specified in the related Supplement.
"Rating Agency Condition" means, with respect to any action, that
each Rating Agency, if any, shall have notified Transferor, Servicer and
Trustee in writing that such action will not result in a reduction or
withdrawal of the rating, if any, of any outstanding Series or Class with
respect to which it is a Rating Agency.
"Reassignment" is defined in Section 2.9.
17
"Receivable" means any amount owing from time to time by an
Obligor under an Account, including amounts owing for purchases of goods
and services, and amounts payable as Finance Charge Receivables. A
Receivable shall be deemed to have been created at the end of the day on
the Date of Processing of such Receivable. Receivables which become
Defaulted Receivables shall not be shown on Servicer's records as amounts
payable (and shall cease to be included as Receivables) on the day on which
they become Defaulted Receivables.
"Record Date" means, as to any Distribution Date, the date specified
in the related Supplement.
"Recoveries" means (a) all amounts received by Servicer with
respect to Principal Receivables that have previously become Defaulted
Receivables and with respect to Finance Charge Receivables that have been
charged off as uncollectible (including Insurance Proceeds) and (b)
proceeds of any collateral securing any Receivable, in each case less
related collection expenses.
"Registered Certificates" is defined in Section 6.1.
"Registered Holder" means the Holder of a Registered Certificate.
"Removal Date" is defined in Section 2.9(a).
"Removal Notice Date" is defined in Section 2.9(a).
"Removed Accounts" is defined in Section 2.9.
"Required Principal Balance" means, as of any date of
determination, the sum of the numerators used at such date to calculate the
Investor Percentage with respect to Principal Receivables for all Series
outstanding on such date, less the amount on deposit in the Excess Funding
Account as of the date of determination.
"Required Retained Transferor Percentage" means, as of any date of
determination, 4% or, if less, the highest of the Required Retained
Transferor Percentages specified in the Supplements for all outstanding
Series.
"Requirements of Law" means, as to any Person, the certificate of
incorporation or articles of association and by-laws or other
organizational or governing documents of such Person, and any law, treaty,
rule or regulation, or determination of an arbitrator or Governmental
Authority, in each case applicable to or binding upon such Person or to
which such Person is subject, whether Federal, state or local.
18
"Responsible Officer" means any officer within the Corporate Trust
Office, including any vice president, assistant vice president, assistant
secretary or any other officer of Trustee customarily performing functions
similar to those performed by any of the above-designated officers and
having direct responsibility for the administration of this Pooling and
Servicing Agreement and also, with respect to a particular matter, any
other officer to whom any corporate trust matter is referred at Trustee's
Corporate Trust Office because of such officer's knowledge of and
familiarity with the particular subject.
"Restart Date" is defined in Section 2.8(a).
"Rule 144A" means Rule 144A under the Securities Act, as such Rule
may be amended from time to time.
"S&P" means Standard & Poor's Ratings Service, a division of the
McGraw Hill Companies, Inc.
"Securities Act" means the Securities Act of 1933.
"Series" means any series of Investor Certificates established
pursuant to a Supplement.
"Series Account" means any deposit, trust, escrow or similar
account maintained for the benefit of the Investor Holders of any Series or
Class, as specified in any Supplement.
"Series Servicing Fee Percentage" is defined, as to any Series, in
the related Supplement.
"Series Termination Date" is defined, as to any Series, in the related
Supplement.
"Service Transfer" is defined in Section 10.1.
"Servicer" means WFN, in its capacity as Servicer pursuant to this
Agreement, and, after any Service Transfer, the Successor Servicer.
"Servicer Default" is defined in Section 10.1.
"Servicing Fee" means, as to any Series, the servicing fee specified
in Section 3.2.
"Servicing Officer" means any officer of Servicer involved in, or
responsible for, the administration and servicing of the Receivables whose
19
name appears on a list of servicing officers furnished to Trustee by
Servicer on the Initial Closing Date, as such list may from time to time be
amended.
"Shared Principal Collections" means all amounts that any Supplement
designates as "Shared Principal Collections."
"Specified Portfolio" means each of the portfolios of Accounts
relating to each of the following private label credit card programs:
Samuel's Jewelers, Inc., BryLane Home, La Redoute, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or
Colombia Emeralds; provided that each such portfolio shall cease to be
included as a Specified Portfolio if the Rating Agency Condition is
satisfied as to that portfolio.
"Specified Transferor Amount" means, as of any date of
determination, 0 or, if more, the highest amount identified as the
"Specified Transferor Amount" in the Supplement for any outstanding Series.
"Subject Certificate" is defined in Section 6.4(d).
"Successor Servicer" is defined in Section 10.2(a).
"Supplement" means, as to any Series, a supplement to this
Agreement, executed and delivered in connection with the original issuance
of the Investor Certificates of such Series pursuant to Section 6.3, and
all amendments thereof and supplements thereto.
"Supplemental Account" is defined in Section 2.8(b).
"Supplemental Certificate" is defined in Section 6.3(c).
"Tax Opinion" means, with respect to any action, an Opinion of
Counsel to the effect that, for Federal income tax purposes, (a) such
action will not adversely affect the tax characterization as debt of
Investor Certificates of any outstanding Series or Class with respect to
which an Opinion of Counsel was delivered at the time of their issuance
that such Investor Certificates would be characterized as debt, (b) such
actions will not cause the Trust to be classified, for federal income tax
purposes, as an association (or publicly traded partnership) taxable as a
corporation and (c) such action will not cause or constitute an event in
which gain or loss would be recognized by any Investor Holder.
"Termination Notice" is defined in Section 10.1.
"The Limited" means The Limited, Inc., a Delaware corporation.
20
"Transaction Documents" means, at any time, this Agreement, the
Supplement for each outstanding Series, any document pursuant to which any
outstanding purchased interest is sold as permitted by Section 6.3(b) and
any other document designated as a Transaction Document in any Supplement
or any document pursuant to which any outstanding purchased interest is
sold as permitted by Section 6.3(b).
"Transfer Agent and Registrar" is defined in Section 6.4.
"Transfer Date" means the Business Day immediately preceding each
Distribution Date.
"Transferor" means WFN and additional transferors, if any,
designated in accordance with Section 2.11 or 6.3(d).
"Transferor Amount" means, on any date of determination, the
result of (a) the aggregate amount of Principal Receivables on such day,
plus the principal amount on deposit in the Excess Funding Account on such
day, minus (b) the sum of the Invested Amounts (or, as to any Series that
has an Adjusted Invested Amount, the Adjusted Invested Amount) with respect
to all Series (but not of any Supplemental Certificates) then outstanding
(and of any purchased interest sold pursuant to Section 6.3(b)), plus (c)
the principal amount on deposit in the Principal Accounts (as defined in
the various Supplements) for each Series, to the extent not deducted in
calculating an Adjusted Invested Amount for the related Series.
"Transferor Certificate" means the certificate executed by
Transferor and authenticated by or on behalf of Trustee, substantially in
the form of Exhibit A.
"Transferor Interest" is defined in Section 4.1.
"Transferor Percentage" means as to Finance Charge Receivables,
Defaulted Receivables and Principal Receivables, 100% less the sum of the
applicable Investor Percentages for all outstanding Series.
"Transferor Retained Certificate" means any Certificate in any
Class of Investor Certificates that is designated as a "Transferor Retained
Class" in any Supplement.
"Transferred Account" is defined in the definition of "Account."
"Trust" means the Trust created by this Agreement, which shall be
known as the World Financial Network Credit Card Master Trust.
"Trust Assets" is defined in Section 2.1.
21
"Trust Cut Off Date" means January 12, 1996.
"Trustee" means ▇▇▇▇▇▇ Trust and Savings Bank, an Illinois banking
corporation, in its capacity as trustee of the Trust, or any successor
trustee appointed as herein provided.
"UCC" means the Uniform Commercial Code, as in effect in the State
of Ohio and in any other State where the filing of a financing statement is
required to perfect Transferor's or the Trust's interest in the Receivables
and the proceeds thereof or in any other specified jurisdiction.
"United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.
"Variable Interest" means either of (a) any Investor Certificate
that is designated as a variable funding certificate in the related
Supplement and (b) any purchased interest sold as permitted by Section
6.3(b).
"Welsh, Carson, ▇▇▇▇▇▇▇▇ & ▇▇▇▇ Partnerships" means each Welsh,
Carson, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ limited partnership, as now constituted or as the
same may be constituted in the future and any partner, partnership or
affiliate of any of them.
"WFN" is defined in the preamble.
SECTION 1.2. Other Interpretive Provisions. With respect to any
Series, all terms used and not defined herein are used as defined in the
related Supplement. All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document delivered
pursuant hereto unless otherwise defined therein. For purposes of this
Agreement and all such certificates and other documents, unless the context
otherwise requires: (a) accounting terms not otherwise defined in this
Agreement, and accounting terms partly defined in this Agreement to the
extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles; (b) terms defined in Article 9 of
the UCC and not otherwise defined in this Agreement are used as defined in
that Article; (c) any reference to each Rating Agency shall only apply to
any specific rating agency if such rating agency is then rating any
outstanding Series; (d) references to any amount as on deposit or
outstanding on any particular date means such amount at the close of
business on such day; (e) the words "hereof," "herein" and "hereunder" and
words of similar import refer to this Agreement (or the certificate or
other document in which they are used) as a whole and not to any particular
provision of this Agreement (or such certificate or document); (f)
references to any Section, Schedule or Exhibit are references to Sections,
Schedules and Exhibits in or to this Agreement (or the certificate or other
22
document in which the reference is made), and references to any paragraph,
subsection, clause or other subdivision within any Section or definition
refer to such paragraph, subsection, clause or other subdivision of such
Section or definition; (g) the term "including" means "including without
limitation"; (h) references to any law or regulation refer to that law or
regulation as amended from time to time and include any successor law or
regulation; (i) references to any agreement refer to that agreement as
amended from time to time; (j) references to any Person include that
Person's permitted successors and assigns; and (k) headings are for
purposes of reference only and shall not otherwise affect the meaning or
interpretation of any provision hereof. The agreements, representations and
warranties of WFN in this Agreement, in its respective capacities as
Transferor and Servicer, shall be deemed to be the separate agreements,
representations and warranties of WFN only so long as it remains a party to
this Agreement in such capacity (but the foregoing shall not impair rights
arising during or with respect to the time that such Person was a party to
this Agreement in such capacity).
ARTICLE II CONVEYANCE OF RECEIVABLES
SECTION 2.1. Conveyance of Receivables. (a) By execution of this
Agreement, Transferor transfers, assigns, sets over and otherwise conveys
to the Trust, for the benefit of the Holders, all of its right, title and
interest in, to and under (i) the Receivables existing at the close of
business on the Trust Cut Off Date and thereafter arising from time to time
in the Initial Accounts and the Receivables existing on each applicable
Addition Date and thereafter arising from time to time in the Automatic
Additional Accounts, all Recoveries allocable to the Trust as provided
herein, all moneys due or to become due and all amounts received with
respect to, and proceeds of, any of the foregoing, and (ii) without
limiting the generality of the foregoing or the following, all of
Transferor's rights to receive payments made by any Merchant under any
Credit Card Processing Agreement on account of amounts received by such
Merchant in payment of Receivables ("In-Store Payments") and all proceeds
of such rights. Such property, together with all moneys on deposit in the
Collection Account, the Excess Funding Account, the Series Accounts, any
Enhancement and the security interest granted pursuant to Section 3.9(a)
shall constitute the assets of the Trust (the "Trust Assets"). The
foregoing does not constitute and is not intended to result in the creation
or assumption by the Trust, Trustee, any Investor Holders or any
Enhancement Provider of any obligation of the Credit Card Originator,
Servicer, Transferor or any other Person in connection with the Accounts or
the Receivables or under any agreement or instrument relating there to,
including any obligation to obligors, merchant banks, merchants clearance
systems or insurers. If the foregoing transfer, assignment, setover and
conveyance is not deemed to be an absolute assignment of the subject
property to the Trustee, for the benefit of the Investor Holders, then it
shall be deemed to constitute a grant of a security interest in such
property to the Trustee, for the benefit of the Investor Holders, and the
Transferor Interest shall be deemed to represent Transferor's equity in the
collateral granted.
23
(b) Transferor agrees to record and file, at its own expense,
financing statements (and continuation statements when applicable) with
respect to the Receivables now existing and hereafter created in Accounts
owned by the Credit Card Originator and other Trust Assets meeting the
requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect, and maintain the perfection of,
the assignment of such Receivables to the Trust, and to deliver a file
stamped copy of each such financing statement or other evidence of such
filing (which may, for purposes of this Section 2.1 consist of telephone
confirmation of such filing promptly followed by delivery to Trustee of a
file-stamped copy) to Trustee on or prior to the Initial Closing Date, in
the case of such Receivables arising in the Initial Accounts and Automatic
Additional Accounts included in the Identified Portfolio, and (if any
additional filing is so necessary) the applicable Addition Date, in the
case of such Receivables arising in Supplemental Accounts and any related
Automatic Additional Accounts. Trustee shall be under no obligation
whatsoever to file or maintain such financing or continuation statements or
to make any other filing under the UCC in connection with such assignment.
(c) Transferor further agrees, at its own expense, (i) on or prior
to (A) the Automatic Addition Termination Date or any Automatic Addition
Suspension Date, or subsequent to a Restart Date, in the case of the
Initial Accounts and any Additional Accounts designated pursuant hereto
prior to such date, (B) the applicable Addition Date, in the case of
Supplemental Accounts and (C) the applicable Removal Date, in the case of
Removed Accounts, to indicate in the appropriate computer files that
Receivables created in connection with the Accounts owned by the Credit
Card Originator (other than Removed Accounts) have been conveyed to the
Trust pursuant to this Agreement for the benefit of the Holders (or
conveyed to Transferor or its designee in accordance with Section 2.9, in
the case of Removed Accounts) by including in such computer files the code
identifying each such Account (or, in the case of Removed Accounts, either
including such a code identifying the Removed Accounts only if the removal
occurs prior to the Automatic Addition Termination Date or an Automatic
Addition Suspension Date, or subsequent to a Restart Date, or deleting such
code thereafter) and (ii) on or prior to the date referred to in clauses
(i)(A), (B) or (C), as applicable, to deliver to Trustee an Account
Schedule (provided that such Account Schedule shall be provided in respect
of Automatic Additional Accounts on or prior to the Determination Date
relating to the Monthly Period during which their respective Addition Dates
occur), specifying for each such Account, as of the Automatic Addition
Termination Date or Automatic Addition Suspension Date, in the case of
clause (i)(B), the applicable Addition Cut Off Date, in the case of
Supplemental Accounts, and the Removal Date, in the case of Removed
Accounts, its account number, the aggregate amount outstanding in such
Account and the aggregate amount of Principal Receivables outstanding in
such Account. Such Account Schedule shall be supplemented from time to time
to reflect Supplemental Accounts and Removed Accounts. Once the code
referenced in clause (i) of this paragraph has been included with respect
24
to any Account, Transferor further agrees not to alter such code during the
remaining term of this Agreement unless and until (x) such Account becomes
a Removed Account, (y) a Restart Date has occurred on which the Transferor
starts including Automatic Additional Accounts as Accounts or (z)
Transferor shall have delivered to Trustee at least 30 days' prior written
notice of its intention to do so and has taken such action as is necessary
or advisable to cause the interest of Trustee in the Receivables and other
Trust Assets to continue to be perfected with the priority required by this
Agreement.
SECTION 2.2. Acceptance by Trustee. (a) Trustee accepts on behalf
of the Trust all right, title and interest to the property, now existing
and hereafter created, conveyed to the Trust pursuant to Section 2.1 and
declares that it shall maintain such right, title and interest, upon the
trust herein set forth, for the benefit of all Holders.
(b) Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement or any Supplement.
SECTION 2.3. Representations and Warranties of Transferor Relating
to Transferor. Transferor represents and warrants to the Trust as of each
Closing Date as follows:
(a) Organization and Good Standing. Transferor is a
national banking association validly existing in good standing
under the laws of the United States, and has full corporate power,
authority and legal right to own its properties and conduct its
business as presently owned and conducted, to execute, deliver and
perform its obligations under each Transaction Document and to
execute and deliver to Trustee the Certificates. Transferor's
deposits are insured by the FDIC.
(b) Due Qualification. Transferor is duly qualified to do
business and is in good standing as a foreign corporation (or is
exempt from such requirements), and has obtained all necessary
licenses and approvals in each jurisdiction in which failure to so
qualify or to obtain such licenses and approvals would render any
Credit Card Agreement or any Receivable transferred to the Trust
by Transferor unenforceable by the Credit Card Originator,
Transferor, Servicer or Trustee and would have a material adverse
effect on the interests of the Holders hereunder or under any
Supplement.
(c) Due Authorization. The execution, delivery and
performance of this Agreement and each Supplement by Transferor,
the execution and delivery to Trustee of the Certificates by
Transferor and the consummation by Transferor of the transactions
provided for in each Transaction Document have been duly
authorized by Transferor by all necessary corporate action on
the part of Transferor.
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(d) No Conflict. The execution and delivery by Transferor
of each Transaction Document and the Certificates, the performance
by Transferor of the transactions contemplated by each Transaction
Document and the fulfillment by Transferor of the terms hereof and
thereof will not conflict with, result in any breach of any of the
material terms and provisions of, or constitute (with or without
notice or lapse of time or both) a material default under, any
indenture, contract, agreement, mortgage, deed of trust, or other
instrument to which Transferor is a party or by which it or any of
its properties are bound.
(e) No Violation. The execution and delivery by
Transferor of each Transaction Document and the Certificates, the
performance by Transferor of the transactions contemplated by this
Agreement and each Supplement and the fulfillment by Transferor of
the terms hereof and thereof will not conflict with or violate any
Requirements of Law applicable to Transferor.
(f) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of Transferor,
threatened against Transferor, before any court, regulatory body,
administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of any Transaction
Document or the Certificates, (ii) seeking to prevent the issuance
of the Certificates or the consummation of any of the transactions
contem plated by any Transaction Document or the Certificates,
(iii) seeking any determination or ruling that, in the reasonable
judgment of Transferor, would materially and adversely affect the
performance by Transferor of its obligations under any Transaction
Document, (iv) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of
any Transaction Document or the Certificates or (v) seeking to
affect adversely the income tax attributes of the Trust under the
Federal or applicable state income or franchise tax systems.
(g) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any
governmental body or official required in connection with the
execution and delivery by Transferor of each Transaction Document
and the Certificates, the performance by Transferor of the
transactions contemplated by each Transaction Document and the
fulfillment by Transferor of the terms hereof and thereof, have
been obtained.
(h) Insolvency. No Insolvency Event with respect to
Transferor has occurred. Transferor did not (i) execute the
Transaction Documents, (ii) grant to the Trustee the security
interests described in Sections 2.1 and 3.9, (iii) cause, permit,
or suffer the perfection or attachment of such a security
interest, (iv) otherwise effectuate or consummate any transfer
to Trustee pursuant to any Transaction Document or (v) acquire
its interest in the Trust, in each case:
(A) in contemplation of insolvency;
(B) with a view to preferring one creditor over
another or to preventing the application of its assets in
the manner required by applicable law or regulations;
26
(C) after committing an act of insolvency; or
(D) with any intent to hinder, delay, or defraud
itself or its creditors.
(i) Trustee. Trustee is not an insider or Affiliate of
Transferor.
The representations and warranties of Transferor set forth in this
Section 2.3 shall survive the transfer and assignment by Transferor of the
respective Receivables to the Trust. Upon discovery by Transferor, Servicer
or Trustee of a breach of any of the representations and warranties by
Transferor set forth in this Section 2.3, the party discovering such breach
shall give prompt written notice to the others and to each Enhancement
Provider, if any, entitled thereto pursuant to the relevant Supplement.
Transferor agrees to cooperate with Servicer and Trustee in attempting to
cure any such breach. For purposes of the representations and warranties
set forth in this Section 2.3, each reference to a Supplement shall be
deemed to refer only to those Supplements in effect as of the relevant
Closing Date.
SECTION 2.4. Representations and Warranties of Transferor Relating
to Transaction Documents and the Receivables. (a) Representations and
Warranties. Transferor represents and warrants to the Trust as of the date
of this Agreement, each Closing Date and, with respect to Additional
Accounts, the related Addition Date that:
(i) each Transaction Document and, in the case of
Supplemental Accounts, the related Assignment, each constitutes a
legal, valid and binding obligation of Transferor, enforceable
against Transferor in accordance with its terms, except as such
enforceability may be limited by applicable Debtor Relief Laws now
or hereafter in effect and by general principles of equity
(whether considered in a suit at law or in equity);
(ii) as of the Automatic Addition Termination Date or any
Automatic Addition Suspension Date and as of each subsequent
Addition Date with re spect to Supplemental Accounts, and as of
the applicable Removal Date with respect to the Removed Accounts,
the Account Schedule delivered pursuant to this Agreement, as
supplemented to such date, is an accurate and complete listing in
all material respects of all the Accounts as of such Automatic
Addition Termination Date, such Automatic Addition Suspension
Date, the related Addition Cut Off Date or such Removal Date, as
the case may be, and the information contained therein with
respect to the identity of such Accounts and the Receivables
existing in such Accounts is true and correct in all material
respects as of such specified date;
(iii) Transferor is the legal and beneficial owner of all
right, title and interest in each Receivable and Transferor has
the full right to transfer such Receivables to the Trust, and each
Receivable conveyed to the Trust by Transferor has been conveyed
to the Trust free and clear of any Lien of any Person claiming
through or under Transferor or any of its Affiliates (other than
Liens permitted under Section 2.7(b)) and in compliance, in all
material respects, with all Requirements of Law applicable to
Transferor;
(iv) all authorizations, consents, orders or approvals of
or registrations or declarations with any Governmental Authority
required to be obtained, effected or given by Transferor in
connection with the conveyance by Transferor of Receivables to the
Trust have been duly obtained, effected or given and are in full
force and effect;
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(v) this Agreement or, in the case of Supplemental
Accounts, the related Assignment constitutes either a valid
transfer and assignment to the Trust of all right, title and
interest of Transferor in the Receivables and other Trust Assets
conveyed to the Trust by Transferor and all monies due or to
become due with respect thereto and the proceeds thereof or a
grant of a security interest in such property to the Trustee, for
the benefit of the Investor Holders, which, in the case of
existing Receivables and the proceeds thereof, is enforceable upon
execution and delivery of this Agreement, or, with respect to then
existing Receivables in Additional Accounts, as of the applicable
Addition Date, and which will be enforceable with respect to such
Receivables hereafter and thereafter created and the proceeds
thereof upon such creation, in each case except as such
enforceability may be limited by applicable Debtor Relief Laws,
now or hereafter in effect, and by general principles of equity
(whether considered in a suit at law or in equity). Upon the
filing of the financing statements pursuant to Section 2.1 and, in
the case of Receivables hereafter created and the proceeds
thereof, upon the creation thereof, the Trust shall have a first
priority security interest in such property and proceeds except
for Liens permitted under Section 2.7(b);
(vi) except as otherwise expressly provided in this
Agreement or any Supplement, neither Transferor nor any Person
claiming through or under Transferor has any claim to or interest
in the Collection Account, the Excess Funding Account, any Series
Account or any Enhancement;
(vii) on the Trust Cut Off Date, with respect to each
Initial Account, on the date of its creation or the date it
otherwise becomes an Automatic Additional Account, with respect to
each Automatic Additional Account and, on the applicable Addition
Cut Off Date, with respect to each related Supplemental Account,
each such Account is an Eligible Account;
(viii) on the Trust Cut Off Date, each Receivable then
existing is an Eligible Receivable, on the date of creation of
each Automatic Additional Account or the date the related account
otherwise becomes an Automatic Additional Account, each Receivable
contained in such Automatic Additional Account is an Eligible
Receivable and, on the applicable Addition Cut Off Date, each
Receivable contained in any related Supplemental Account is an
Eligible Receivable; and
(ix) as of the date of the creation of any new
Receivable, such Receivable is an Eligible Receivable.
(b) Notice of Breach. The representations and warranties of
Transferor set forth in this Section 2.4 shall survive the transfer and
assignment by Transferor of Receivables to the Trust. Upon discovery by
Transferor, Servicer or Trustee of a breach of any of the representations
and warranties by Transferor set forth in this Section 2.4, the party
discovering such breach shall give prompt written notice to the others and
to each Enhancement Provider, if any, entitled thereto pursuant to the
relevant Supplement. Transferor agrees to cooperate with Servicer and
Trustee in attempting to cure any such breach. For purposes of the
representations and warranties set forth in this Section 2.4, each
reference to a Supplement shall be deemed to refer only to those
Supplements in effect as of the date of the relevant representations or
warranties.
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SECTION 2.5. Reassignment of Ineligible Receivables. (a)
Reassignment of Receivables. If (i) any representation or warranty of
Transferor contained in Section 2.4(a)(ii), (iii), (iv), (vii), (viii) or
(ix) is not true and correct in any material respect as of the date
specified therein with respect to any Receivable transferred to the Trust
by Transferor or any Account and as a result of such breach any Receivables
in the related Account become Defaulted Receivables or the Trust's rights
in, to or under such Receivables or the proceeds of such Receivables are
impaired or such proceeds are not available for any reason to the Trust
free and clear of any Lien, unless cured within 60 days (or such longer
period, not in excess of 150 days, as may be agreed to by Trustee) after
the earlier to occur of the discovery thereof by Transferor or
receipt by Transferor or a designee of Transferor of notice thereof given
by Trustee, or (ii) it is so provided in Section 2.7(a) with respect to any
Receivables transferred to the Trust by Transferor, then such Receivable
shall be designated an "Ineligible Receivable" and shall be assigned a
principal balance of zero for the purpose of determining the aggregate
amount of Principal Receivables on any day; provided that such Receivables
will not be deemed to be Ineligible Receivables but will be deemed Eligible
Receivables and such Principal Receivables shall be included in determining
the aggregate Principal Receivables in the Trust if, on any day prior to
the end of such 60-day or longer period, (x) either (A) in the case of an
event described in clause (i), the relevant representation and warranty
shall be true and correct in all material respects as if made on such day
or (B) in the case of an event described in clause (ii), the circumstances
causing such Receivable to become an Ineligible Receivable shall no longer
exist and (y) Transferor shall have delivered an Officer's Certificate
describing the nature of such breach and the manner in which the relevant
representation and warranty became true and correct.
(b) Price of Reassignment. On and after the date of its
designation as an Ineligible Receivable, each Ineligible Receivable shall
not be given credit in determining the aggregate amount of Principal
Receivables used to calculate the Transferor Amount or the Investor
Percentages applicable to any Series. If, following the exclusion of such
Principal Receivables from the calculation of the Transferor Amount, the
Transferor Amount would be less than the Specified Transferor Amount,
Transferor shall make a deposit into the Excess Funding Account in
immediately available funds prior to the next succeeding Business Day in an
amount equal to the amount by which the Transferor Amount would be less
than the Specified Transferor Amount (up to the amount of such Principal
Receivables). The payment of such deposit amount in immediately available
funds shall otherwise be considered payment in full of all of the
Ineligible Receivables.
The obligation of Transferor to make the deposits, if any,
required to be made to the Excess Funding Account as provided in this
Section, shall constitute the sole remedy respecting the event giving rise
to such obligation available to Holders (or Trustee on behalf of the
Holders) or any Enhancement Provider.
SECTION 2.6. Reassignment of Receivables in Trust Portfolio. If
any representation or warranty of Transferor set forth in Section 2.3(a),
(b) or (c) or Section 2.4(a)(i), (v) or (vi) is not true and correct in any
material respect and such breach has a material adverse effect on the
Investor Interest in the Receivables transferred to the Trust by
Transferor, then either Trustee or the Majority Holders, by notice then
given to Transferor and Servicer (and to Trustee if given by the Investor
Holders), may direct Transferor to accept a reassignment of the Receivables
transferred to the Trust by Transferor if such breach and any material
adverse effect caused by such breach is not cured within 60 days of such
notice (or within such longer period, not in excess of 150 days, as may be
29
specified in such notice), and upon those conditions Transferor shall be
obligated to accept such reassignment on the terms set forth below;
provided that such Receivables will not be reassigned to Transferor if, on
any day prior to the end of such 60-day or longer period (i) the relevant
representation and warranty shall be true and correct in all material
respects as if made on such day and (ii) Transferor shall have delivered an
Officer's Certificate describing the nature of such breach and the manner
in which the relevant representation and warranty became true and correct.
Transferor shall deposit in the Collection Account in immediately
available funds not later than 12:00 noon, New York City time, on the first
Distribution Date following the Monthly Period in which such reassignment
obligation arises, in payment for such reassignment, an amount equal to the
sum of the amounts specified therefor with respect to each outstanding
Series in the related Supplement. Notwithstanding anything to the contrary
in this Agreement, such amounts shall be distributed on such Distribution
Date in accordance with Article IV and each Supplement. The payment of such
deposit amount in immediately available funds shall otherwise be considered
payment in full of all of the Receivables.
Upon the deposit, if any, required to be made to the Collection
Account as provided in this Section or Section 2.5, Trustee, on behalf of
the Trust, shall automatically and without further action be deemed to
transfer, assign, set over and otherwise convey to Transferor or its
designee, without recourse, representation or warranty (except for the
warranty that since the date of transfer by Transferor, Trustee has not
sold, transferred or encumbered any such Receivables or interest therein),
all the right, title and interest of the Trust in and to the applicable
Receivables, all moneys due or to become due and all amounts received with
respect thereto and all proceeds thereof. Trustee shall execute such
documents and instruments of transfer or assignment and take such other
actions as shall reasonably be requested by Transferor to effect the
conveyance of such Receivables pursuant to this Section. The obligation of
Transferor to accept reassignment of any Receivables, and to make the
deposits, if any, required to be made to the Collection Account as provided
in this Section, shall constitute the sole remedy respecting the event
giving rise to such obligation available to Holders (or Trustee on behalf
of the Holders).
SECTION 2.7. Covenants of Transferor. Transferor covenants as follows:
(a) Receivables to be Accounts, General Intangibles or
Chattel Paper. Except in connection with the enforcement or
collection of an Account, Transferor will take no action to cause
any Receivable transferred by it to the Trust to be evidenced by
any instrument and, if any such Receivable is so evidenced
(whether or not in connection with the enforcement or collection
of an Account), it shall be deemed to be an Ineligible Receivable
in accordance with Section 2.5(a) and shall be reassigned to
Transferor in accordance with Section 2.5(b).
30
(b) Security Interests. Except for the conveyances
hereunder, Transferor will not sell, pledge, assign or transfer or
otherwise convey to any other Person, or grant, create, incur,
assume or suffer to exist any Lien on any Receivable, whether now
existing or hereafter created, or any interest therein; Transferor
will immediately notify Trustee of the existence of any Lien on
any Receivable of which Transferor has knowledge; and Transferor
shall defend the right, title and interest of the Trust in, to and
under the Receivables, whether now existing or hereafter created,
against all claims of third parties claiming through or under
Transferor; provided that nothing in this Section 2.7(b) shall
prevent or be deemed to prohibit Transferor from suffering to
exist upon any of the Receivables any Liens for taxes if such
taxes shall not at the time be due and payable or if Transferor
shall currently be contesting the validity thereof in good faith
by appropriate proceedings and shall have set aside on its books
adequate reserves with respect thereto. Notwithstanding the
foregoing, nothing in this Section 2.7(b) shall be construed to
prevent or be deemed to prohibit the transfer of the Transferor
Certificate and certain other rights of Transferor in accordance
with this Agreement and any related Supplement.
(c) Transferor Interest. Except as otherwise permitted
herein, including in Sections 2.11, 6.3 and 7.2, Transferor agrees
not to transfer, assign, exchange or otherwise convey or pledge,
hypothecate or otherwise grant a security interest in the
Transferor Interest (or any interest therein) represented by the
Transferor Certificate (or any interest therein) or any
Supplemental Certificate (or any interest therein) and any such
attempted transfer, assignment, exchange, conveyance, pledge,
hypothecation or grant shall be void.
(d) Delivery of Collections or Recoveries. If Transferor
is not Servicer, and Transferor receives Collections or
Recoveries, then Transferor agrees to pay Servicer all such
Collections and Recoveries as soon as practicable after receipt
thereof but in no event later than two Business Days after the
Date of Processing by Transferor.
(e) Notice of Liens. Transferor shall notify Trustee and
each Enhancement Provider, if any, entitled to such notice
pursuant to the relevant Supplement promptly after becoming aware
of any Lien on any Receivable other than the conveyances hereunder
or Liens permitted under Section 2.7(b).
(f) Continuous Perfection. Transferor shall not change
its name, identity or structure in any manner that might cause any
financing or continuation statement filed pursuant to this
Agreement to be misleading within the meaning of Section 9-402(7)
of the UCC (or any other then
31
applicable provision of the UCC) unless Transferor shall have
delivered to Trustee at least 30 days prior written notice thereof
and, no later than 30 days after making such change, shall have
taken all action necessary or advisable to amend such financing
statement or continuation statement so that it is not misleading.
Transferor shall not change its chief executive office or change
the location of its principal records concerning the Receivables,
the Trust Assets or the Collections unless it has delivered to
Trustee at least 30 days prior written notice of its intention to
do so and has taken such action as is necessary or advisable to
cause the interest of Trustee in the Receivables and other Trust
Assets to continue to be perfected with the priority required by
this Agreement.
(g) Credit Card Agreement and Guidelines. Transferor
shall comply with and perform its obligations under the Credit
Card Agreements relating to the Accounts and the Credit Card
Guidelines except insofar as any failure to comply or perform
would not materially or adversely affect the rights of the Trust
or the Holders under any Transaction Document or the Certificates.
Transferor may change the terms and provisions of the Credit Card
Agreements or the Credit Card Guidelines in any respect (including
the reduction of the required minimum monthly payment, the
calculation of the amount, or the timing, of charge offs and
Periodic Finance Charges and other fees assessed thereon), but
only if such change is made applicable to any comparable segment
of the revolving credit card accounts owned and serviced by
Transferor which have characteristics the same as, or
substantially similar to, the Accounts that are the subject of
such change, except as otherwise restricted by an endorsement,
sponsorship or other agreement between Transferor and an unrelated
third party or by the terms of the Credit Card Agreements.
(h) Official Records. The resolutions of Transferor's
Board of Directors approving each of the Transaction Documents and
all documents relating thereto are and shall be continuously
reflected in the minutes of Transferor's Board of Directors. Each
of the Transaction Documents and all documents relating thereto
are and shall, continuously from the time of their respective
execution by Transferor, be official records of Transferor.
(i) Account Allocations. If Transferor is unable for any
reason to transfer Receivables to the Trust in accordance with the
provisions of this Agreement (including by reason of the
application of the provisions of Section 9.2 or an order by any
Federal governmental agency having regulatory authority over
Transferor or any court of competent jurisdiction that Transferor
not transfer any additional Principal Receivables to the Trust)
then, in any such event: (A) Transferor agrees to allocate and pay
to the Trust, after the date of such inability, all Collections
with respect to Principal
32
Receivables, all Discount Option Receivables Collections, and all
amounts which would have constituted Collections with respect to
Principal Receivables and all Discount Option Receivables
Collections but for Transferor's inability to transfer such
Receivables (up to an aggregate amount equal to the amount of
Principal Receivables and the Discount Option Receivables Amount
in the Trust on such date); (B) Transferor agrees to have such
amounts applied as Collections in accordance with Article IV; and
(C) for only so long as all Collections and all amounts which
would have constituted Collections are allocated and applied in
accordance with clauses (A) and (B), Principal Receivables and
Discount Option Receivables (and all amounts which would have
constituted Principal Receivables or Discount Option Receivables,
as the case may be, but for Transferor's inability to transfer
Receivables to the Trust) that are charged off as uncollectible in
accordance with this Agreement shall continue to be allocated in
accordance with Article IV, and all amounts that would have
constituted Principal Receivables or Discount Option Receivables,
as the case may be, but for Transferor's inability to transfer
Receivables to the Trust shall be deemed to be Principal
Receivables or Discount Option Receivables, as the case may be,
for the purpose of calculating the applicable Investor Percentage
with respect to any Series. If Transferor is unable pursuant to
any Requirement of Law to allocate Collections as described above,
Transferor agrees that it shall in any such event allocate, after
the occurrence of such event, payments on each Account with
respect to the principal balance of such Account first to the
oldest principal balance of such Account and to have such payments
applied as Collections in accordance with Article IV. The parties
hereto agree that Finance Charge Receivables, whenever created,
accrued in respect of Principal Receivables that have been
conveyed to the Trust, or that would have been conveyed to the
Trust but for the above described inability to transfer such
Receivables, shall continue to be a part of the Trust
notwithstanding any cessation of the transfer of additional
Principal Receivables and Discount Option Receivables to the
Trust, and Collections with respect thereto shall continue to be
allocated and paid in accordance with Article IV.
(j) Periodic Finance Charges and Other Fees. Transferor
hereby agrees that, except as otherwise required by any
Requirement of Law, or as is deemed by Transferor to be necessary
in order for Transferor to maintain its credit card business,
based upon a good faith assessment by Transferor, in its sole
discretion, of the nature of the competition in the credit card
business, it shall not at any time reduce the Periodic Finance
Charges assessed on any Receivable or other fees on any Account
if, as a result of such reduction, Transferor's reasonable
expectation of the Portfolio Yield for any Series as of such date
would be less than the then Base Rate for that Series.
33
(k) Notices of Certain Events. Transferor shall promptly
notify each Rating Agency after Transferor obtains knowledge that:
(i) the Welsh, Carson, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ Partnerships and The
Limited and its Affiliates (in the aggregate) fail to own a
majority of the outstanding common stock of Holding (provided that
common stock owned by employees, either individually or through
employee stock ownership or other stock based benefit plans, shall
not be included in the calculation of ownership interests for this
purpose); (ii) any Merchant whose program gives rise to more than
10% of the Principal Receivables (measured as of the end of the
most recent Monthly Period) terminates its private label credit
card program with the Bank; (iii) the Trustee gives a resignation
notice pursuant to Section 11.7; or (iv) an Additional Limitation
Event or an Automatic Addition Limitation Event occurs.
SECTION 2.8. Addition of Accounts. (a) Automatic Additional
Accounts. Subject to the limitations specified below in this Section 2.8(a)
and to any further limitations specified in any Supplement, Automatic
Additional Accounts shall be included as Accounts from and after the date
upon which they are created, and all Receivables in Automatic Additional
Accounts, whether such Receivables are then existing or thereafter created,
shall be transferred automatically to the Trust upon their creation. For
all purposes of this Agreement, all receivables relating to Automatic
Additional Accounts shall be treated as Receivables upon their creation and
shall be subject to the eligibility criteria specified in the definitions
of "Eligible Receivable" and "Eligible Account." Transferor may elect at
any time to terminate the inclusion in Accounts of new accounts which would
otherwise be Automatic Additional Accounts as of any Business Day (the
"Automatic Addition Termination Date"), or suspend any such inclusion as of
any Business Day (an "Automatic Addition Suspension Date") until a date
(the "Restart Date") to be notified in writing by Transferor to Trustee by
delivering to Trustee, Servicer and each Rating Agency ten days prior
written notice of such election at least 10 days prior to such Automatic
Addition Termination Date, Automatic Addition Suspension Date or Restart
Date, as the case may be. Promptly after each of an Automatic Addition
Termination Date, an Automatic Addition Suspension Date and a Restart Date,
Transferor and Trustee agree to execute, and Transferor agrees to record
and file at its own expense, an amendment to the financing statements
referred to in Section 2.1 to specify the accounts then subject to this
Agreement (which specification may incorporate a list of accounts by
reference) and, except in connection with any such filing made after a
Restart Date, to release any security interest in any accounts created
after the Automatic Addition Termination Date or Automatic Addition
Suspension Date. Notwithstanding the foregoing, during any period after an
Automatic Addition Limitation Event has occurred and before the Rating
Agency Condition has been satisfied as to the resumption of treating new
accounts as Automatic Additional Accounts, no new accounts that would
34
otherwise be Automatic Additional Accounts shall be treated as such on any
Addition Date if the number of such Automatic Additional Accounts would
exceed an amount equal to the greater of:
(i) the excess (if any) of (1) 20% of the aggregate
number of Accounts determined as of the first day of the fiscal
year of Transferor in which the Addition Date occurs over (2) the
aggregate amount of Automatic Additional Accounts and Supplemental
Accounts the Addition Date for which has occurred since the first
day of such fiscal year; and
(ii) the excess (if any) of (1) 15% of the aggregate
number of Accounts determined as of the first day of the fiscal
quarter of Transferor in which the Addition Date occurs over (2)
the aggregate amount of Automatic Additional Accounts and
Supplemental Accounts the Addition Date for which has occurred
since the first day of such fiscal quarter.
In addition, during any period after an Additional Limitation
Event has occurred and before the Rating Agency Condition has been
satisfied as to the resumption of treating new accounts as Automatic
Additional Accounts, no new accounts that would otherwise be Automatic
Additional Accounts shall be treated as such on any Addition Date if:
(i) the aggregate balance of Receivables in Automatic
Additional Accounts and Supplemental Accounts designated during a
twelve month (or shorter) period beginning on the Additional
Limitation Event (or any anniversary thereof) would exceed an
amount equal to the excess (if any) of 20% of the aggregate
balance of Receivables determined as of the first day after the
Additional Limitation Event (or such anniversary); or
(ii) the aggregate balance of Receivables in Automatic
Additional Accounts and Supplemental Accounts designated during a
three month (or shorter) period beginning on the Additional
Limitation Event (or the first day of the third month commencing
thereafter or of any ensuing third month) would exceed 15% of the
aggregate balance of Receivables determined as of the first day
after the occurrence of the Additional Limitation Event (or the
first day of such third month or ensuing third month).
In addition, no new accounts arising in a Specified Portfolio will
be treated as an Automatic Additional Account if, as a result of doing so,
the aggregate amount of Principal Receivables in Accounts in the Specified
Portfolios would exceed 10% of the aggregate amount of Principal
Receivables in the Trust.
(b) Required Additions of Supplemental Accounts. If during any
period of thirty consecutive days, the Transferor Amount averaged over that
35
period is less than the Minimum Transferor Amount for that period,
Transferor shall designate additional Eligible Accounts ("Supplemental
Accounts") to be included as Accounts in a sufficient amount such that the
average of the Transferor Amount as a percentage of the average amount of
Principal Receivables for such 30-day period, computed by assuming that the
amount of the Principal Receivables of such Supplemental Accounts shall be
deemed to be outstanding in the Trust during each day of such 30-day
period, is at least equal to the Minimum Transferor Amount. In addition, if
on any Record Date the aggregate amount of Principal Receivables plus
amounts on deposit in the Excess Funding Account is less than the Required
Principal Balance, Transferor shall designate Supplemental Accounts from
any Approved Portfolio to be included as Accounts in a sufficient amount
such that the aggregate amount of Principal Receivables plus amounts on
deposit in the Excess Funding Account will be equal to or greater than the
Required Principal Balance. Receivables from all such Supplemental Accounts
shall be transferred to the Trust on or before the tenth Business Day
following such thirty-day period or Record Date, as the case may be. In
lieu of, or in addition to, designating Supplemental Accounts as required
above, Transferor may convey to the Trust participations or trust
certificates representing undivided legal or beneficial interests in a pool
of assets primarily consisting of receivables arising under revolving
credit card accounts or other revolving credit accounts owned by Transferor
or any of its Affiliates and collections thereon ("Participation
Interests"). Any addition of Participation Interests to the Trust (whether
pursuant to this paragraph (b) or paragraph (c) below) shall be effected by
an amendment hereto, dated the applicable Addition Date, pursuant to
subsection 13.1(a).
(c) Permitted Additions. In addition to its obligation under
paragraph (b), Transferor may, but shall not be obligated to, from time to
time designate Supplemental Accounts or Participation Interests to be
included as Trust Assets, in either case as of the applicable Addition
Date.
(d) Certain Conditions for Additions of Supplemental Accounts and
Participation Interests. Transferor agrees that any transfer of Receivables
from Supplemental Accounts or Participation Interests under paragraphs (b)
or (c) shall occur only upon satisfaction of the following conditions (to
the extent applicable):
(i) on or before the tenth Business Day prior to the
Addition Date (the "Notice Date"), Transferor shall give Trustee,
each Rating Agency and Servicer written notice that such
Supplemental Accounts or Participation Interests will be included,
which notice shall specify the approximate aggregate amount of the
Receivables or Participation Interests to be transferred; and, in
the case of any transfer pursuant to paragraph (c), the Rating
Agency Condition shall have been satisfied;
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(ii) on or before the Addition Date, Transferor shall
have delivered to Trustee a written assignment (including an
acceptance by Trustee on behalf of the Trust for the benefit of
the Investor Holders) in substantially the form of Exhibit B (the
"Assignment") and Transferor shall have indicated in its computer
files that the Receivables created in connection with the
Supplemental Accounts have been transferred to the Trust and,
within five Business Days thereafter, Transferor shall have
delivered to Trustee an Account Schedule listing such Supplemental
Accounts, which as of the date of such Assignment, shall be deemed
incorporated into and made a part of such Assignment and this
Agreement;
(iii) Transferor shall represent and warrant that (x)
each Supplemental Account is, as of the Addition Date, an Eligible
Account, and each Receivable in such Supplemental Account is, as
of the Addition Date, an Eligible Receivable, (y) no selection
procedures believed by Transferor to be materially adverse to the
interests of the Investor Holders were utilized in selecting the
Additional Accounts from the available Eligible Accounts in an
Approved Portfolio, and (z) as of the Addition Date, Transferor is
not insolvent;
(iv) Transferor shall represent and warrant that, as of
the Addition Date, the Assignment constitutes either (x) a valid
transfer and assignment to the Trust of all right, title and
interest of Transferor in and to the Receivables then existing and
thereafter created in the Supplemental Accounts, and all proceeds
of such Receivables and Insurance Proceeds relating thereto and
such Receivables and all proceeds thereof and Insurance Proceeds
and Recoveries relating thereto will be held by the Trust free and
clear of any Lien of any Person claiming through or under
Transferor or any of its Affiliates, except for (i) Liens
permitted under Section 2.7(b), (ii) the interest of Transferor as
Holder of the Transferor Certificate and (iii) Transferor's right
to receive interest accruing on, and investment earnings in
respect of, the Excess Funding Account, or any Series Account as
provided in this Agreement and any related Supplement or (y) a
grant of a security interest in such property to the Trustee, for
the benefit of the Investor Holders, which is enforceable with
respect to then existing Receivables in the Supplemental Accounts,
the proceeds thereof and Insurance Proceeds and Recoveries
relating thereto upon the conveyance of such Receivables to the
Trust, and which will be enforceable with respect to the
Receivables thereafter created in respect of Supplemental Accounts
conveyed on such Addition Date, the proceeds thereof and Insurance
Proceeds and Recoveries relating thereto upon such creation; and
(z) if the Assignment constitutes the grant of a security interest
to the Trustee in such property, upon the filing of a financing
statement as described in Section 2.1 with respect to such
Supplemental Accounts and in the case of the Receivables
thereafter created
37
in such Supplemental Accounts and the proceeds thereof, and
Insurance Proceeds and Recoveries relating thereto, upon such
creation, the Trust shall have a first priority perfected security
interest in such property (subject to Section 9-306 of the UCC),
except for Liens permitted under Section 2.7(b);
(v) Transferor shall deliver an Officer's Certificate to
Trustee confirming the items set forth in clause (ii); and
(vi) Transferor shall deliver an Opinion of Counsel with
respect to the Receivables in the Supplemental Accounts to Trustee
(with a copy to each Rating Agency) substantially in the form of
Exhibit F-2.
(e) Additional Approved Portfolios. The Transferor may from time
to time designate additional portfolios of accounts as "Approved
Portfolios" if the Rating Agency Condition is satisfied with respect to
that designation (except as to any Series or Class that expressly waives
this requirement in the applicable Supplement). Transferor agrees that
prior to any transfer of Receivables from Automatic Additional Accounts
arising in a portfolio that is designated as an Approved Portfolio pursuant
to the immediately preceding sentence Transferor shall satisfy the
following requirements:
(i) on or before the tenth Business Day prior to the
Addition Date, Transferor shall give Trustee, each Rating Agency
and Servicer written notice that such Automatic Additional
Accounts will be included;
(ii) on or before the Addition Date, Transferor shall
have delivered to Trustee a written Assignment (including an
acceptance by Trustee on behalf of the Trust for the benefit of
the Investor Holders) substantially in the form of Exhibit B (with
appropriate modifications) and Transferor shall have indicated in
its computer files that the Receivables created in connection with
the Automatic Additional Accounts have been transferred to the
Trust;
(iii) Transferor shall represent and warrant that (x)
each Automatic Additional Account is, as of the Addition Date, an
Eligible Account, and each Receivable in such Automatic Additional
Account is, as of the Addition Date, an Eligible Receivable, (y)
no selection procedures believed by Transferor to be materially
adverse to the interests of the Investor Holders were utilized in
selecting the new Approved Portfolio, and (z) as of the Addition
Date, Transferor is not insolvent;
(iv) Transferor shall represent and warrant that, as of
the Addition Date, the Assignment constitutes either (x) a valid
transfer and assignment to the Trust of all right, title and
interest of Transferor in and to the Receivables then existing and
thereafter created in the Automatic Additional
38
Accounts, and all proceeds of such Receivables and Insurance
Proceeds relating thereto and such Receivables and all proceeds
thereof and Insurance Proceeds and Recoveries relating thereto
will be held by the Trust free and clear of any Lien of any Person
claiming through or under Transferor or any of its Affiliates,
except for (i) Liens permitted under Section 2.7(b), (ii) the
interest of Transferor as Holder of the Transferor Certificate and
(iii) Transferor's right to receive interest accruing on, and
investment earnings in respect of, the Excess Funding Account, or
any Series Account as provided in this Agreement and any related
Supplement or (y) a grant of a security interest in such property
to the Trustee, for the benefit of the Investor Holders, which is
enforceable with respect to then existing Receivables in the
Automatic Additional Accounts, the proceeds thereof and Insurance
Proceeds and Recoveries relating thereto upon the conveyance of
such Receivables to the Trust, and which will be enforceable with
respect to the Receivables thereafter created in respect of
Automatic Additional Accounts conveyed on such Addition Date, the
proceeds thereof and Insurance Proceeds and Recoveries relating
thereto upon such creation; and (z) if the Assignment constitutes
the grant of a security interest to the Trustee in such property,
upon the filing of a financing statement as described in Section
2.1 with respect to such Automatic Additional Accounts and in the
case of the Receivables thereafter created in such Automatic
Additional Accounts and the proceeds thereof, and Insurance
Proceeds and Recoveries relating thereto, upon such creation, the
Trust shall have a first priority perfected security interest in
such property (subject to Section 9-306 of the UCC), except for
Liens permitted under Section 2.7(b);
(v) Transferor shall deliver an Officer's Certificate to
Trustee confirming the items set forth in clause (ii); and
(vi) Transferor shall deliver an Opinion of Counsel with
respect to the Receivables in the Automatic Additional Accounts to
Trustee (with a copy to each Rating Agency) substantially in the
form of Exhibit F-2 (with appropriate modifications).
SECTION 2.9. Removal of Accounts. (a) On any day of any Monthly
Period Transferor shall have the right to require the reassignment to it or
its designee of all the Trust's right, title and interest in, to and under
the Receivables then existing and thereafter created, all moneys due or to
become due and all amounts received with respect thereto and all proceeds
thereof in or with respect to the Accounts then owned by the Credit Card
Originator and designated by Transferor (the "Removed Accounts") or
Participation Interests (unless otherwise set forth in the applicable
Supplement), upon satisfaction of the following conditions:
39
(i) on or before the tenth Business Day
immediately preceding the Removal Date (the "Removal
Notice Date") Transferor shall have given Trustee,
Servicer, each Rating Agency and any Enhancement Provider
entitled thereto pursuant to the relevant Supplement
written notice of such removal and specifying the date
for removal of the Removed Accounts and Participation
Interests (the "Removal Date"); Transferor shall provide
each Rating Agency with such additional information
relating to such removal as the Rating Agency shall
reasonably request;
(ii) with respect to Removed Accounts, on or
prior to the date that is 10 Business Days after the
Removal Date, Transferor shall have delivered to Trustee
an Account Schedule listing the Removed Accounts and
specifying for each such Account, as of the Removal
Notice Date, its account number, the aggregate amount
outstanding, and the aggregate amount of Principal
Receivables outstanding in such Account;
(iii) with respect to Removed Accounts,
Transferor shall have represented and warranted as of the
Removal Date that the list of Removed Accounts delivered
pursuant to paragraph (ii), as of the Removal Date, is
true and complete in all material respects;
(iv) with respect to any removal pursuant to
Section 2.9(b) that is being made as a result of the
applicable Merchant exercising a purchase right as to
which Transferor has no reasonable control (an
"Involuntary Removal"), Transferor shall use reasonable
efforts to satisfy the Rating Agency Condition; and as to
any other removal, the Rating Agency Condition shall have
been satisfied;
(v) Transferor shall have delivered to Trustee
and any Enhancement Provider entitled thereto pursuant to
the relevant Supplement an Officer's Certificate, dated
as of the Removal Date, to the effect that Transferor
reasonably believes that (A) in the case of any removal
other than an Involuntary Removal, such removal will not,
based on the facts known to such officer at the time of
such certification, then or thereafter cause an Early
Amortization Event to occur with respect to any Series,
(B) in the case of any Involuntary Removal, Transferor
has used reasonable efforts to avoid having such removal
result in an Early Amortization Event and (C) in either
case, no selection procedure believed by Transferor to be
materially adverse to the interests of the Investor
Holders has been used in removing Removed Accounts from
among any pool of Accounts or Participation Interests of
a similar type (it being understood that
40
Transferor will not be deemed to have used such an
adverse selection procedure in connection with any
Involuntary Removal);
(vi) Transferor shall not use a selection
procedure intended to include a disproportionately higher
level of Defaulted Receivables in the Removed Accounts
than exist in the Accounts and shall not remove such
Accounts for the intended purpose of mitigating losses to
the Trust;
(vii) in the case of any removal pursuant to
Section 2.9(a), the aggregate Principal Receivables in
the Removed Accounts shall not exceed the lesser of (A)
the excess of the Transferor Amount over the Minimum
Transferor Amount or (B) the excess of the aggregate
amount of Principal Receivables plus amounts on deposit
in the Excess Funding Account over the Required Principal
Balance, all measured as of the end of the most recently
ended Monthly Period;
(viii) in the case of any removal pursuant to
Section 2.9(b), the removal shall not cause the
Transferor Amount to be less than the Minimum Transferor
Amount or cause the sum of the aggregate Principal
Receivables plus the Excess Funding Account balance to be
less than the Required Principal Balance; and
(ix) such removal shall not cause a decrease in
the sum of the Invested Amounts for all outstanding
Series.
Upon satisfaction of the above conditions, Trustee shall execute
and deliver to Transferor or its designee a written reassignment in
substantially the form of Exhibit C (the "Reassignment") and shall, without
further action, be deemed to transfer, assign, set over and otherwise
convey to Transferor or its designee, effective as of the Removal Date,
without recourse, representation or warranty, all the right, title and
interest of the Trust in and to the Receivables arising in the Removed
Accounts or the Participation Interests, all moneys due and to become due
and all amounts received with respect thereto and all proceeds thereof. In
addition, Trustee shall execute such other documents and instruments of
transfer or assignment and take such other actions as shall reasonably be
requested by Transferor to effect the conveyance of Receivables pursuant to
this Section.
(b) Transferor may from time to time designate as Removed Accounts
any Accounts designated for purchase by a Merchant pursuant to the terms of
the related Credit Card Processing Agreement, provided that no Account
included in the Identified Portfolio may be designated a Removed Account
until the Series 1996-A and Series 1996-B Certificates have been paid in
full pursuant to this Section 2.9(b). Any Trust's repurchase of the
41
Receivables in Removed Accounts designated pursuant to this Section 2.9(b)
shall be effected in the manner and at a price determined in accordance
with Section 2.5(b), as if the Receivables being repurchased were
Ineligible Receivables. Amounts deposited in the Collection Account in
connection therewith shall be deemed to be Collections of Principal
Receivables and shall be applied in accordance with the terms of Article IV
and each Supplement.
SECTION 2.10. Discount Option. (a) Transferor shall have the
option to designate at any time a fixed or floating percentage (the
"Discount Percentage") of the amount of Receivables arising in the Accounts
on or after the date such designation becomes effective that would
otherwise constitute Principal Receivables (prior to subtracting from
Principal Receivables, Finance Charge Receivables that are Discount Option
Receivables) to be treated as Finance Charge Receivables. Transferor may
from time to time increase (subject to the limitations described below),
reduce or eliminate the Discount Percentage for Discount Option Receivables
arising in the Accounts on and after the date of such change. Transferor
must provide 30 days' prior written notice to Servicer, Trustee and each
Rating Agency of any such increase, reduction or elimination, and such
increase, reduction or elimination shall become effective on the date
specified therein only if (i) Transferor has delivered to Trustee an
Officer's Certificate to the effect that, based on the facts known to such
officer at the time, Transferor reasonably believes that such increase,
reduction or elimination will not at the time of its occurrence cause an
Early Amortization Event, or an event which with notice or the lapse of
time would constitute an Early Amortization Event, to occur with respect to
any Series and (ii) in the case of any increase, the Discount Percentage
shall not exceed 3% after giving effect to that increase, unless the Rating
Agency Condition has been satisfied with respect to the increase.
(b) On each Date of Processing after the date on which the
Transferor's exercise of its discount option takes effect, the Transferor
shall treat Discount Option Receivables Collections as Collections of
Finance Charge Receivables.
SECTION 2.11. Additional Transferors. Transferor may designate
additional or substitute Persons to be included as Transferors under this
Agreement by an amendment to this Agreement (which amendment shall be
subject to Section 13.1 and to any applicable restrictions in the
Supplement for any outstanding Series) and, in connection with such
designation, the initial Transferor shall surrender the Transferor
Certificate to Trustee in exchange for a newly issued Transferor
Certificate reflecting such additional Transferor's interest in the
Transferor Interest; provided that prior to any such designation and
issuance the conditions set forth in Section 6.3(c) shall have been
satisfied.
SECTION 2.12. Additional Credit Card Originators. Transferor may
designate additional Persons as Credit Card Originators under this Agreement
by an amendment to this Agreement(which amendment shall be subject to Section
42
13.1 and to any applicable restrictions in the Supplement for any
outstanding Series).
ARTICLE III ADMINISTRATION AND SERVICING
SECTION 3.1. Acceptance of Appointment and Other Matters Relating to
Servicer. (a) WFN is appointed, and agrees to act, as Servicer.
(b) Servicer shall service and administer the Receivables, shall
collect payments due under the Receivables and shall charge off as
uncollectible Receivables, all in accordance with its customary and usual
servicing procedures for servicing credit card and other consumer open end
credit receivables comparable to the Receivables and in accordance with the
Credit Card Guidelines. Servicer shall have full power and authority,
acting alone or through any party properly designated by it hereunder, to
do any and all things in connection with such servicing and administration
which it may deem necessary or desirable. Without limiting the generality
of the foregoing, subject to Section 10.1 and provided WFN is Servicer,
Servicer or its designee (rather than Trustee) is hereby authorized and
empowered (i) to make withdrawals and payments or to instruct Trustee to
make withdrawals and payments from the Collection Account and any Series
Account, as set forth in this Agreement or any Supplement, and (ii) to take
any action required or permitted under any Enhancement, as set forth in
this Agreement or any Supplement. Without limiting the generality of the
foregoing and subject to Section 10.1, Servicer or its designee is
authorized and empowered to make any filings, reports, notices,
applications and registrations with, and to seek any consents or
authorizations from, the Commission and any state securities authority on
behalf of the Trust as may be necessary or advisable to comply with any
Federal or state securities laws or reporting requirements. Trustee shall
furnish Servicer with any powers of attorney or other documents necessary
or appropriate to enable Servicer to carry out its servicing and
administrative duties hereunder.
(c) Servicer shall not be obligated to use separate servicing
procedures, offices, employees or accounts for servicing the Receivables
from the procedures, offices, employees and accounts used by Servicer in
connection with servicing other credit card receivables.
(d) Servicer shall comply with and perform its servicing
obligations with respect to the Accounts and Receivables in accordance with
the Credit Card Agreements relating to the Accounts and the Credit Card
Guidelines except insofar as any failure to so comply or perform would not
materially and adversely affect the Trust or the Investor Holders.
(e) Servicer shall be liable for the payment, without
reimbursement, of all expenses incurred in connection with the Trust and
43
the servicing activities hereunder including expenses related to
enforcement of the Receivables, fees and disbursements of Trustee, any
Paying Agent and any Transfer Agent and Registrar (including the reasonable
fees and expenses of its counsel) in accordance with Section 11.5, fees and
disbursements of independent accountants and all other fees and expenses,
including the costs of filing UCC continuation statements and the costs and
expenses relating to obtaining and maintaining the listing of any Investor
Certificates on any stock exchange, that are not expressly stated in this
Agreement to be payable by the Trust, the Investor Holders of a Series or
Transferor (other than Federal, state, local and foreign income, franchise
and other taxes, if any, or any interest or penalties with respect thereto,
assessed on the Trust).
(f) Servicer shall maintain fidelity bond or other appropriate
insurance coverage insuring against losses through wrongdoing of its
officers and employees who are involved in the servicing of credit card
receivables covering such actions and in such amounts as Servicer believes
to be reasonable from time to time.
SECTION 3.2. Servicing Compensation. As full compensation for its
servicing activities hereunder and as reimbursement for any expense
incurred by it in connection therewith, Servicer shall be entitled to
receive a servicing fee (the "Servicing Fee") with respect to each Monthly
Period, payable monthly on the related Distribution Date, in an amount
equal to one-twelfth of the product of (a) the weighted average of the
Series Servicing Fee Percentages with respect to each outstanding Series
(based upon the Series Servicing Fee Percentage for each Series and the
Invested Amount (or such other amount as specified in the related
Supplement) of such Series, in each case as of the last day of the prior
Monthly Period) and (b) the amount of Principal Receivables on the last day
of the prior Monthly Period. The share of the Servicing Fee allocable to
the Investor Interest of each Series with respect to any Monthly Period
(the "Investor Servicing Fee") will be determined in accordance with the
relevant Supplement. The portion of the Servicing Fee with respect to any
Monthly Period not so allocated to the Investor Interest of a particular
Series, or otherwise allocated in any Supplement, shall be paid from
Finance Charge Collections allocable to Transferor on the related
Distribution Date. In no event shall the Trust, Trustee, the Investor
Holders of any Series or any Enhancement Provider be liable for the share
of the Servicing Fee with respect to any Monthly Period to be paid by
Transferor.
SECTION 3.3. Representations, Warranties and Covenants of
Servicer. WFN, in its capacity as initial Servicer, hereby makes, and any
Successor Servicer by its appointment hereunder shall make, on each Closing
Date (and on the date of any such appointment), the following
representations, warranties and covenants to the Trust:
(a) Organization and Good Standing. Servicer is a national
banking association (or with respect to such Successor Servicer,
such other corporate
44
entity as may be applicable) duly organized, validly existing and
in good standing under the laws of the United States, and has full
corporate power, authority and legal right to execute, deliver and
perform its obligations under this Agreement and each Supplement
and, in all material respects, to own its properties and conduct
its business as such properties are presently owned and as such
business is presently conducted.
(b) Due Qualification. Servicer is duly qualified to do
business and is in good standing as a foreign corporation (or is
exempt from such require ments), and has obtained all necessary
licenses and approvals in each jurisdiction in which failure to so
qualify or to obtain such licenses and approvals would have a
material adverse effect on the interests of the Investor Holders
hereunder or under any Supplement.
(c) Due Authorization. The execution, delivery, and
performance of this Agreement and each Supplement have been duly
authorized by Servicer by all necessary corporate action on the
part of Servicer.
(d) Binding Obligation. This Agreement and each
Supplement constitutes a legal, valid and binding obligation of
Servicer, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereinafter in effect, affecting the enforcement of creditors'
rights in general (or with respect to such Successor Servicer,
such other corporate entity as may be applicable) and except as
such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(e) No Violation. The execution and delivery of this
Agreement and each Supplement by Servicer, the performance of the
transactions contemplated by this Agreement and each Supplement
and the fulfillment of the terms hereof and thereof applicable to
Servicer, will not conflict with, violate, result in any breach of
any of the material terms and provisions of, or constitute (with
or without notice or lapse of time or both) a material default
under, any Requirement of Law applicable to Servicer or any
indenture, contract, agreement, mortgage, deed of trust or other
instrument to which Servicer is a party or by which it or any of
its properties are bound.
(f) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of Servicer,
threatened against Servicer before any court, regulatory body,
administrative agency or other tribunal or governmental
instrumentality seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions
contemplated by this Agreement or any Supplement, seeking any
determination or ruling that,
45
in the reasonable judgment of Servicer, would materially and
adversely affect the performance by Servicer of its obligations
under this Agreement or any Supplement, or seeking any
determination or ruling that would materially and adversely affect
the validity or enforceability of this Agreement or any
Supplement.
(g) Compliance with Requirements of Law. Servicer shall
duly satisfy all obligations on its part to be fulfilled under or
in connection with the Receivables and the related Accounts, will
maintain in effect all qualifications required under Requirements
of Law in order to properly service the Receivables and the
related Accounts and will comply in all material respects with all
other Requirements of Law in connection with servicing the
Receivables and the related Accounts, the failure to comply with
which would have a material adverse effect on the interests of the
Investor Holders.
(h) No Rescission or Cancellation. Servicer shall not
permit any rescission or cancellation of a Receivable except as
ordered by a court of competent jurisdiction or other Governmental
Authority or in the ordinary course of its business and in
accordance with the Credit Card Guidelines. Servicer shall reflect
any such rescission or cancellation in its computer file of
revolving credit card accounts. In addition, Servicer may waive
the accrual and/or payment of certain Finance Charge Receivables
in respect of certain past due Accounts, the Obligors of which
have enrolled with a consumer credit counseling service, and the
Receivables in such Accounts shall not fail to be Eligible
Receivables solely as a result of such waiver.
(i) Protection of Holders' Rights. Servicer shall take no
action which, nor omit to take any action the omission of which,
would materially impair the rights of Holders in any Receivable or
Account, nor shall it, except in the ordinary course of its
business and in accordance with the Credit Card Guidelines,
reschedule, revise or defer Collections due on the Receivables.
(j) Receivables Not to Be Evidenced by Promissory Notes.
Except in connection with its enforcement or collection of an
Account, Servicer will take no action to cause any Receivable to
be evidenced by any instrument, other than an instrument that,
taken together with one or more other writings, constitutes
chattel paper and, if any Receivable is so evidenced (whether or
not in connection with the enforcement or collection of an
Account), it shall be reassigned or assigned to Servicer as
provided in this Section.
(k) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any
governmental body or official required in connection with the
execution and delivery by Servicer of this
46
Agreement and each Supplement, the performance by Servicer of the
transactions contemplated by this Agreement and each Supplement
and the fulfillment by Servicer of the terms hereof and thereof,
have been obtained; provided that Servicer makes no representation
or warranty as to state securities or "blue sky" laws.
(l) Maintenance of Records and Books of Account. Servicer
shall maintain and implement administrative and operating
procedures (including the ability to recreate records evidencing
the Receivables in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, computer
records and other information, reasonably necessary or advisable
for the collection of all the Receivables. Such documents, books
and computer records shall reflect all facts giving rise to the
Receivables, all payments and credits with respect thereto, and,
to the extent required pursuant to Section 2.1, such documents,
books and computer records shall indicate the interests of the
Trust in the Receivables.
For purposes of the representations and warranties set forth in
this Section 3.3, each reference to a Supplement shall be deemed to refer
only to those Supplements in effect as of the relevant Closing Date or the
date of appointment of a Successor Servicer, as applicable.
If any of the representations, warranties or covenants of Servicer
contained in paragraph (g), (h), (i) or (j) with respect to any Receivable
or the related Account is breached, and as a result of such breach the
Trust's rights in, to or under any Receivables in the related Account or
the proceeds of such Receivables are materially impaired or such proceeds
are not available for any reason to the Trust free and clear of any Lien,
then no later than the expiration of 60 days (or such longer period, not in
excess of 150 days, as may be agreed to by Trustee) from the earlier to
occur of the discovery of such event by Servicer, or receipt by Servicer of
notice of such event given by Trustee, all Receivables in the Account or
Accounts to which such event relates shall be reassigned or assigned to
Servicer as set forth below; provided that such Receivables will not be
reassigned or assigned to Servicer if, on any day prior to the end of such
60-day or longer period, (i) the relevant representation and warranty shall
be true and correct, or the relevant covenant shall have been complied
with, in all material respects and (ii) Servicer shall have delivered an
Officer's Certificate describing the nature of such breach and the manner
in which such breach was cured.
Servicer shall effect such assignment by making a deposit into the
Collection Account in immediately available funds prior to the next
succeeding Business Day in an amount equal to the amount of such
Receivables, which deposit shall be considered a Collection with respect to
such Receivables and shall be applied in accordance with Article IV and
each Supplement.
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Upon each such assignment to Servicer, Trustee, on behalf of the
Trust, shall automatically and without further action be deemed to
transfer, assign, set over and otherwise convey to Servicer, without
recourse, representation or warranty (except for the warranty that since
the date of transfer by Transferor, Trustee has not sold, transferred or
encumbered any such Receivables or interest therein), all right, title and
interest of the Trust in and to such Receivables, all moneys due or to
become due and all amounts received with respect thereto and all proceeds
thereof. Trustee shall execute such documents and instruments of transfer
or assignment and take such other actions as shall be reasonably requested
by Servicer to effect the conveyance of any such Receivables pursuant to
this Section. The obligation of Servicer to accept assignment of such
Receivables, and to make the deposits, if any, required to be made to the
Excess Funding Account or the Collection Account as provided in the
preceding paragraph, shall constitute the sole remedy respecting the event
giving rise to such obligation available to Holders (or Trustee on behalf
of Holders) or any Enhancement Provider.
SECTION 3.4. Reports to Trustee.
(a) Daily Reports. On the second Business Day immediately
following each Date of Processing, Servicer shall prepare and make
available at the office of Servicer for inspection by Trustee a report (the
"Daily Report") that shall set forth (i) the aggregate amounts of
Collections, Collections with respect to Principal Receivables and
Collections with respect to Finance Charge Receivables processed by
Servicer on such Date of Processing, (ii) the aggregate amount of Defaulted
Receivables for such Date of Processing, and (iii) the aggregate amount of
Principal Receivables in the Trust as of such Date of Processing.
(b) Monthly Servicer's Certificate. Unless otherwise stated in any
Supplement as to the related Series, on each Determination Date, Servicer
shall forward to Trustee, the Paying Agent, each Rating Agency and each
Enhancement Provider, if any, a certificate of a Servicing Officer setting
forth (i) the aggregate amounts for the preceding Monthly Period with
respect to each of the items specified in clause (i) of Section 3.4(a),
(ii) the aggregate Defaulted Receivables and Recoveries for the preceding
Monthly Period, (iii) a calculation of the Portfolio Yield and Base Rate
for each Series then outstanding, (iv) the aggregate amount of Receivables
and the balance on deposit in the Collection Account (or any subaccount
thereof) or any Series Account applicable to any Series then outstanding
with respect to Collections processed as of the end of the last day of the
preceding Monthly Period, (v) the aggregate amount of adjustments from the
preceding Monthly Period, (vi) the aggregate amount, if any, of
withdrawals, drawings or payments under any Enhancement with respect to
each Series required to be made with respect to the previous Monthly
Period, (vii) the sum of all amounts payable to the Investor Holders on the
succeeding Distribution Date in respect of interest and principal
48
payable with respect to the Investor Certificates and (viii) such other
amounts, calculations, and/or information as may be required by any
relevant Supplement.
(c) Transferred Accounts. Servicer covenants and agrees hereby to
deliver to Trustee, on or prior to the Automatic Addition Termination Date
or any Automatic Addition Suspension Date (but in the latter case, prior to
a Restart Date) within a reasonable time period after any Transferred
Account is created, but in any event not later than 15 days after the end
of the month within which the Transferred Account is created, a notice
specifying the new account number for any Transferred Account and the
replaced account number.
SECTION 3.5. Annual Certificate of Servicer. Servicer shall
deliver to Trustee, each Rating Agency and each Enhancement Provider, if
any, entitled thereto pursuant to the relevant Supplement, on or before the
90th day following the end of the Servicer's fiscal year 1996 and each
subsequent fiscal year, an Officer's Certificate (with appropriate
insertions) substantially in the form of Exhibit D.
SECTION 3.6. Annual Servicing Report of Independent Public
Accountants; Copies of Reports Available. (a) On or before the 90th day
following the end of the Servicer's fiscal year 1996 and each subsequent
fiscal year, Servicer shall cause a firm of nationally recognized
independent public accountants (who may also render other services to
Servicer or Transferor) to furnish a report (addressed to Trustee) to
Trustee, Servicer and each Rating Agency to the effect that they have
applied certain procedures with Servicer and such firm has examined certain
documents and records relating to the servicing of Accounts under this
Agreement and each Supplement, compared the information contained in
Servicer's certificates delivered pursuant to this Agreement during the
period covered by such report with such documents and records and that, on
the basis of such agreed upon procedures (and assuming the accuracy of any
reports generated by Servicer's third party agents), such servicing was
conducted in compliance with this Agreement during the period covered by
such report (which shall be the prior calendar year, or the portion thereof
falling after the Initial Closing Date), except for such exceptions, errors
or irregularities as such firm shall believe to be immaterial and such
other exceptions, errors or irregularities as shall be set forth in such
report. Such report shall set forth the agreed upon procedures performed. A
copy of such report shall be delivered to each Enhancement Provider, if
any, entitled thereto pursuant to the relevant Supplement.
(b) On or before the 90th day following the end of the Servicer's
fiscal year 1996 and each subsequent fiscal year, Servicer shall cause a
firm of nationally recognized independent public accountants (who may also
render other services to Servicer or Transferor) to furnish a report to
Trustee, Servicer and each Rating Agency to the effect that they have
applied certain procedures agreed upon with Servicer to compare the
mathematical calculations of certain amounts set forth in Servicer's
Certificates delivered pursuant to Section 3.4(c) during the period covered
49
by such report with Servicer's computer reports which were the source of
such amounts and that on the basis of such agreed upon procedures and
comparison, such amounts are in agreement, except for such exceptions as
they believe to be immaterial and such other exceptions as shall be set
forth in such statement. A copy of such report shall be delivered to each
Enhancement Provider, if any, entitled thereto pursuant to the relevant
Supplement.
(c) A copy of each certificate and report provided pursuant to
Section 3.4(c), 3.5 or 3.6 may be obtained by any Investor Holder or
Certificate Owner by a request to Trustee addressed to the Corporate Trust
Office.
(d) In the event such firm rendering a report under this Section
3.6 requires the Trustee to agree to the procedures performed by such firm,
the Servicer shall direct the Trustee in writing to so agree; it being
understood and agreed that the Trustee will deliver such letter of
agreement in conclusive reliance upon the direction of the Servicer, and
the Trustee makes no independent inquiry or investigation as to, and shall
have no obligation or liability in respect of, the sufficiency, validity or
correctness of such procedures.
SECTION 3.7. Tax Treatment. Transferor has entered into this
Agreement, and the Certificates will be issued, with the intention that for
Federal, state and local income and franchise tax purposes, the Investor
Certificates (except Transferor Retained Certificates which are held by
Transferor) of each Series will qualify as debt secured by the Receivables.
Transferor, by entering into this Agreement, each Holder, by the acceptance
of its Certificate (and each Certificate Owner, by its acceptance of an
interest in the applicable Certificate), agree to treat such Investor
Certificates for Federal, state and local income and franchise tax purposes
as debt. Each Holder of such Investor Certificate agrees that it will cause
any Certificate owner acquiring an interest in a Certificate through it to
comply with this Agreement as to treatment as debt under applicable tax
law, as described in this Section 3.7. Furthermore, subject to Section
11.11, or unless Transferor shall determine that the filing of returns is
appropriate, Trustee shall treat the Trust as a security device only and
shall not file tax returns or obtain an employer identification number on
behalf of the Trust.
SECTION 3.8. Notices to WFN. If WFN is no longer acting as
Servicer, any Successor Servicer shall deliver to WFN each certificate and
report required to be provided thereafter pursuant to Section 3.4(c), 3.5
or 3.6.
SECTION 3.9. Adjustments. (a) If Servicer adjusts downward the
amount of any Receivable because of a rebate, refund, unauthorized charge
or billing error to an accountholder, or because such Receivable was
created in respect of merchandise which was refused or returned by an
accountholder, or if Servicer otherwise adjusts downward the amount of any
50
Receivable without receiving Collections therefor or charging off such
amount as uncollectible, then, in any such case, the amount of Principal
Receivables used to calculate the Transferor Interest or the Investor
Percentages applicable to any Series will be reduced by the amount of the
adjustment. Similarly, the amount of Principal Receivables used to
calculate the Transferor Amount and the Investor Percentages applicable to
any Series will be reduced by the amount of any Principal Receivable which
was discovered as having been created through a fraudulent or counterfeit
charge or with respect to which the covenant of Transferor contained in
Section 2.7(b) has been breached. Any adjustment required pursuant to
either of the two preceding sentences shall be made on the first Business
Day after the Date of Processing for the event giving rise to such
adjustment. If, following the exclusion of such Principal Receivables from
the calculation of the Transferor Amount, the Transferor Amount would be
less than the Specified Transferor Amount, not later than the close of
business on such first Business Day, Transferor shall make a deposit into
the Excess Funding Account in immediately available funds in an amount
equal to the amount by which the Transferor Amount would be less than the
Specified Transferor Amount (up to the amount of such Principal
Receivables). Any amount deposited into the Excess Funding Account pursuant
to the preceding sentence shall be considered Collections of Principal
Receivables and shall be applied in accordance with Article IV and each
Supplement.
To secure its obligations to make deposits required by this
Section 3.9(a), Transferor hereby grants to Trustee, for the benefit of the
Investor Holders, a security interest in (i) its rights to receive payments
from any Merchant under any Credit Card Processing Agreement on account of
rebates, refunds, unauthorized charges, refused or returned merchandise or
any other event or circumstance that causes Servicer to adjust downward the
amount of any Receivable without receiving Collections therefor or charging
off such amount as uncollectible ("Merchant Adjustment Payments"), (ii) any
collateral security granted to, or guaranty for the benefit of, WFN with
respect to Merchant Adjustment Payments, (iii) all amounts received from
any Merchant or guarantor on account of Merchant Adjustment Payments and
(iv) all proceeds of such rights and such amounts. Except as otherwise
required by any Supplement, Transferor may permit or require Merchant
Adjustment Payments owed by any Merchant to be netted against amounts owed
by Transferor to that Merchant.
(b) If (i) Servicer makes a deposit into the Collection Account in
respect of a Collection of a Receivable and such Collection was received by
Servicer in the form of a check which is not honored for any reason or (ii)
Servicer makes a mistake with respect to the amount of any Collection and
deposits an amount that is less than or more than the actual amount of such
Collection, Servicer shall appropriately adjust the amount subsequently
deposited into the Collection Account to reflect such dishonored check or
mistake. Any Receivable in respect of which a dishonored check
51
is received shall be deemed not to have been paid. Notwithstanding the
first two sentences of this paragraph, any adjustments made pursuant to
this paragraph will be reflected in a current report but will not change
any amount of Collections previously reported pursuant to Section 3.4(c).
ARTICLE IV RIGHTS OF HOLDERS; ALLOCATIONS
SECTION 4.1. Rights of Holders. The Investor Certificates shall
represent fractional undivided interests in the Trust, which, with respect
to each Series, shall consist of the right to receive, to the extent
necessary to make the required payments with respect to the Investor
Certificates of such Series at the times and in the amounts specified in
the related Supplement, the portion of Collections allocable to Investor
Holders of such Series pursuant to this Agreement and such Supplement,
funds on deposit in the Collection Account allocable to Holders of such
Series pursuant to this Agreement and such Supplement, funds on deposit in
any related Series Account and funds available pursuant to any related
Enhancement (the "Investor Interest"), it being understood that, unless
otherwise specified in the Supplements with respect to each affected
Series, the Investor Certificates of any Series or Class shall not
represent any interest in any Series Account or Enhancement for the benefit
of any other Series or Class. The Transferor Certificate shall represent
the ownership interest in the remainder of the Trust Assets not allocated
pursuant to this Agreement or any Supplement to the Investor Interest,
including the right to receive Collections with respect to the Receivables
and other amounts at the times and in the amounts specified in this
Agreement or any Supplement to be paid to Transferor or on behalf of the
Holder of the Transferor Certificate (the "Transferor Interest"); provided
that (x) the Transferor Certificate shall not represent any interest in the
Collection Account, any Series Account or any Enhancement, except as
specifically provided in this Agreement or any Supplement and (y) if this
Agreement or, in the case of Supplemental Accounts, the related Assignment
is deemed to constitute a grant to the Trustee, for the benefit of the
Investor Holders, of a security interest in the Receivables and other Trust
Assets, then the Transferor Certificate shall be deemed to represent
Transferor's equity in the collateral granted.
SECTION 4.2. Establishment of Collection Account and Excess
Funding Account. Servicer, for the benefit of the Holders, shall establish
and maintain in the name of Trustee, on behalf of the Trust, two Eligible
Deposit Accounts (the "Collection Account" and the "Excess Funding
Account"), each bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Holders. The Collection
Account and the Excess Funding Account shall initially be established with
Trustee. Trustee shall possess all right, title and interest in all funds
on deposit from time to time in the Collection Account and the Excess
Funding Account and in all proceeds thereof for the benefit of the Holders.
The Collection Account and the Excess Funding Account shall be under the
52
sole dominion and control of Trustee for the benefit of the Holders. Except
as expressly provided in this Agreement, Trustee agrees that it shall have
no right of set-off or banker's lien against, and no right to otherwise
deduct from, any funds held in the Collection Account or the Excess Funding
Account for any amount owed to it by the Trust, any Holder or any
Enhancement Provider. If at any time the Collection Account or the Excess
Funding Account ceases to be an Eligible Deposit Account, Trustee (or
Servicer on its behalf) shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which the Rating Agency
Condition is satisfied) establish a new Eligible Deposit Account meeting
the conditions specified above and transfer any cash or any investments
from the affected account to such new account, and from the date such new
account is established, it shall be the "Collection Account" or the "Excess
Funding Account," as the case may be.
Funds on deposit in the Collection Account and the Excess Funding
Account shall, at the direction of Servicer, be invested by Trustee in
Eligible Investments selected by Servicer, except that funds on deposit in
either such account on any Transfer Date need not be invested through the
immediately following Distribution Date. All such Eligible Investments
shall be held by Trustee for the benefit of the Holders. Trustee shall
maintain for the benefit of the Holders possession of the negotiable
instruments or securities, if any, evidencing such Eligible Investments.
Investments of funds representing Collections collected during any Monthly
Period shall be invested in Eligible Investments that will mature so that
all funds will be available at the close of business on the Transfer Date
following such Monthly Period. No Eligible Investment shall be disposed of
prior to its maturity unless Servicer so directs and either (i) such
disposal will not result in a loss of all or part of the principal portion
of such Eligible Investment or (ii) prior to the maturity of such Eligible
Investment, a default occurs in the payment of principal, interest or any
other amount with respect to such Eligible Investment. On each Distribution
Date, all interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Collection Account and the
Excess Funding Account shall be treated as Collections of Finance Charge
Receivables with respect to the last day of the related Monthly Period,
except as otherwise specified in any Supplement. For purposes of
determining the availability of funds or the balances in the Collection
Account or the Excess Funding Account for any reason under this Agreement,
all investment earnings net of investment expenses and losses on such funds
shall be deemed not to be available or on deposit. In no event shall the
Trustee be liable for the selection of investments or for investment losses
incurred thereon. The Trustee shall have no liability in respect of losses
incurred as a result of the liquidation of any such investment prior to its
stated maturity or the failure of the party directing such investment to
provide timely written investment direction. The Trustee shall have no
obligation to invest or reinvest any amounts held hereunder in the absence
of such written investment direction.
53
Unless otherwise directed by Servicer, funds on deposit in the
Excess Funding Account will be withdrawn and paid to Transferor on any day
to the extent that the Transferor Amount exceeds the Specified Transferor
Amount on such day. On any Transfer Date on which one or more Series is in
an Amortization Period, Servicer shall determine the aggregate amounts of
Principal Shortfalls, if any, with respect to each such Series that is a
Principal Sharing Series (after giving effect to the allocation and payment
provisions in the Supplement with respect to each such Series), and
Servicer shall instruct Trustee to withdraw such amount from the Excess
Funding Account (up to an amount equal to the lesser of (x) the amount on
deposit in the Excess Funding Account after application of the preceding
sentence on that day and (y) the amount, if any, by which the Transferor
Amount would be less than zero if there were no funds on deposit in the
Excess Funding Account on that day) on such Transfer Date and allocate such
amount among each such Series as specified in each related Supplement.
SECTION 4.3. Collections and Allocations. (a) Servicer shall
apply, or instruct Trustee to apply, all funds on deposit in the Collection
Account as described in this Article IV and in each Supplement. Except as
otherwise provided below and in each Supplement, Servicer shall deposit
Collections into the Collection Account no later than the second Business
Day following the Date of Processing of such Collections. Except as
otherwise required by any Supplement, Transferor may permit or require
payments owed by any Merchant with respect to In-Store Payments to be
netted against amounts owed by Transferor to that Merchant, and Transferor
shall deposit into the Collection Account on each Business Day an amount
equal to the aggregate amount of In-Store Payments netted against amounts
owed by Transferor to the various Merchants on that Business Day.
Subject to the express terms of any Supplement, but
notwithstanding anything else in this Agreement to the contrary, if WFN
remains Servicer and (x) for so long as WFN maintains a short term debt
rating of A-1 or better by S&P, P-1 or better by ▇▇▇▇▇'▇, if rated by
Fitch, F-1 or better by Fitch, and, if rated by any other Rating Agency,
the equivalent rating by that Rating Agency (or such other rating below ▇-
▇, P-1 or such equivalent rating, as the case may be, which is satisfactory
to each Rating Agency, if any), (y) with respect to Collections allocable
to any Series, any other conditions specified in the related Supplement are
satisfied or (z) WFN has provided to Trustee a letter of credit covering
collection risk of Servicer acceptable to each Rating Agency (as evidenced
by a letter from each Rating Agency to the effect that the Rating Agency
Condition has been satisfied), if any, Servicer need not make the daily
deposits of Collections into the Collection Account as provided in the
preceding paragraph, but may make a single deposit in the Collection
Account in immediately available funds not later than 12:00 noon, New York
City time, on the related Transfer Date.
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(b) On each Date of Processing, Collections of Finance Charge
Receivables and of Principal Receivables shall be allocated to the Investor
Interest of each Series in accordance with the related Supplement. On each
Determination Date, Defaulted Receivables will be allocated to the Investor
Interest of each Series in accordance with the related Supplement.
(c) Throughout the existence of the Trust, unless otherwise stated
in any Supplement, on each Date of Processing Servicer shall allocate to
Transferor an amount equal to the product of (A) the Transferor Percentage
and (B) the aggregate amount of Collections allocated to Principal
Receivables and Finance Charge Receivables, respectively, on that Date of
Processing; provided that, if the Transferor Amount (determined after
giving effect to any transfer of Principal Receivables to the Trust on such
date), is less than or equal to the Specified Transferor Amount, Servicer
shall not allocate to Transferor any such amounts that otherwise would be
allocated to Transferor, but shall instead deposit such funds in the Excess
Funding Account. Unless otherwise stated in any Supplement, neither
Servicer nor Transferor need deposit any amounts allocated to the
Transferor pursuant to the foregoing into the Collection Account and shall
pay, or be deemed to pay, such amounts as collected to Transferor.
The payments to be made to Transferor, pursuant to this Section
4.3(c) do not apply to deposits to the Collection Account or other amounts
that do not represent Collections, including payment of the purchase price
for Receivables pursuant to Section 2.6 or 10.1, proceeds from the sale,
disposition or liquidation of Receivables pursuant to Section 9.2 or 12.2
or payment of the purchase price for the Investor Interest of a specific
Series pursuant to the related Supplement.
SECTION 4.4. Shared Principal Collections. On each Business Day,
Shared Principal Collections may, at the option of Transferor, be applied
(or held in the Collection Account for later application) as principal with
respect to any Variable Interest or, so long as either no Series is in an
Amortization Period or no Series that is in an Amortization Period will
have a Principal Shortfall on the related Transfer Date (assuming no Early
Amortization Event occurs), withdrawn from the Collection Account and paid
to Transferor; and on each Transfer Date, (a) Servicer shall allocate
Shared Principal Collections not previously so applied or paid to each
applicable Principal Sharing Series, pro rata, in proportion to the
Principal Shortfalls, if any, with respect to each such Series, and any
remainder may, at the option of Transferor, be applied as principal with
respect to any Variable Interest and (b) Servicer shall withdraw from the
Collection Account and pay to Transferor any amounts representing Shared
Principal Collections remaining after the allocations and applications
referred to in clause (a); provided that, if, on any day the Transferor
Amount (determined after giving effect to any transfer of Principal
Receivables to the Trust on such day), is less than or equal to the
Specified Transferor Amount, Servicer shall not distribute to Transferor
55
any Shared Principal Collections that otherwise would be distributed to
Transferor, but shall deposit such funds in the Excess Funding Account to
the extent required so that the Transferor Amount equals the Specified
Transferor Amount. Notwithstanding the foregoing, during any Amortization
Period for any Series (other than a Variable Interest), Transferor may not
apply Shared Principal Collections as principal with respect to any
Variable Interest, unless such application of principal is made on any
Transfer Date or related Distribution Date after the application of Shared
Principal Collections pursuant to the various Supplements.
SECTION 4.5. Excess Finance Charge Collections. On each Transfer
Date, (a) for each Group, Servicer shall allocate the aggregate amount for
all outstanding Series in such Group of the amounts which the related
Supplements specify are to be treated as "Excess Finance Charge
Collections" for such Transfer Date to each Series in such Group, pro rata,
in proportion to the Finance Charge Shortfalls, if any, with respect to
each such Series, and (b) Servicer shall on the related Distribution Date
withdraw (or shall instruct Trustee in writing to withdraw) from the
Collection Account and pay to Transferor an amount equal to the excess, if
any, of (x) the aggregate amount for all outstanding Series in a Group of
the amounts which the related Supplements specify are to be treated as
"Excess Finance Charge Collections" for such Distribution Date over (y) the
aggregate amount for all outstanding Series in such Group which the related
Supplements specify are "Finance Charge Shortfalls", for such Distribution
Date.
THE REMAINDER OF ARTICLE IV IS RESERVED AND SHALL BE
SPECIFIED IN ANY SUPPLEMENT WITH RESPECT TO ANY SERIES
ARTICLE V DISTRIBUTIONS AND REPORTS
DISTRIBUTIONS SHALL BE MADE TO, AND REPORTS SHALL BE
PROVIDED TO, HOLDERS AS SET FORTH IN THE APPLICABLE
SUPPLEMENT.
ARTICLE VI THE CERTIFICATES
SECTION 6.1. The Certificates. The Investor Certificates of any
Series or Class may be issued in bearer form ("Bearer Certificates") with
attached interest coupons and any other applicable coupon (collectively,
the "Coupons") or in fully registered form ("Registered Certificates") and
shall be substantially in the form of the exhibits with respect thereto
attached to the applicable Supplement. The Transferor Certificate will be
issued in registered form and shall upon issue, be executed and delivered
by Transferor to Trustee for authentication and redelivery as provided in
Section 6.2. Except as otherwise provided in Section 6.3 or in any
Supplement, Bearer Certificates shall be issued in minimum denominations of
$5,000 and Registered Certificates shall be issued in minimum denominations
56
of $1,000 and in integral multiples of $1,000 in excess thereof. If
specified in any Supplement, the Investor Certificates of any Series or
Class shall be issued upon initial issuance as a single certificate
evidencing the aggregate original principal amount of such Series or Class
as described in Section 6.13. The Transferor Certificate shall initially be
a single certificate and shall initially represent the entire Transferor
Interest. Each Certificate shall be executed by manual or facsimile
signature on behalf of Transferor by its President, Treasurer or any Vice
President. Certificates bearing the manual or facsimile signature of an
individual who was, at the time when such signature was affixed, authorized
to sign on behalf of Transferor shall not be rendered invalid,
notwithstanding that such individual ceased to be so authorized prior to
the authentication and delivery of such Certificates or does not hold such
office at the date of such Certificates. No Certificates shall be entitled
to any benefit under this Agreement, or be valid for any purpose, unless
there appears on such Certificate a certificate of authentication
substantially in the form provided for herein executed by or on behalf of
Trustee by the manual or facsimile signature of a duly authorized
signatory, and such certificate of authentication upon any Certificate
shall be conclusive evidence, and the only evidence, that such Certificate
has been duly authenticated and delivered hereunder. Bearer Certificates
shall be dated the applicable Closing Date. All Registered Certificates and
the Transferor Certificate shall be dated the date of their authentication.
SECTION 6.2. Authentication of Certificates. Trustee shall
authenticate and deliver the Investor Certificates of each Series and Class
that are issued upon original issuance to or upon the order of Transferor
against payment to Transferor of the purchase price therefor. Trustee shall
authenticate and deliver the Transferor Certificate to Transferor
simultaneously with its delivery of the Investor Certificates of the first
Series to be issued hereunder. If specified in the related Supplement for
any Series or Class, Trustee shall authenticate and deliver outside the
United States the Global Certificate that is issued upon original issuance
thereof.
SECTION 6.3. New Issuances. (a) Transferor may from time to time
direct Trustee, on behalf of the Trust, to authenticate one or more new
Series of Investor Certificates. The Investor Certificates of all
outstanding Series shall be equally and ratably entitled as provided herein
to the benefits of this Agreement without preference, priority or
distinction, all in accordance with the terms and provisions of this
Agreement and the applicable Supplement except, with respect to any Series
or Class, as provided in the related Supplement.
(b) On or before the Closing Date for any new Series, the parties
hereto will execute and deliver a Supplement specifying the Principal Terms
of the new Series. Such Supplement may modify or amend the terms of this
Agreement solely as applied to the new Series and may grant the Holders of
the Investor Certificates in that Series, or an agent or other
representative of such Holders, notice and consultation rights with respect
s
57
to any rights or actions of Trustee. Trustee' obligation to authenticate
the Investor Certificates of a new Series and to execute and deliver the
related Supplement is subject to the satisfaction of the following
conditions (except that the conditions set forth in clauses (i), (iii),
(iv) and (v) shall not be applicable to the issuance of the first Series):
(i) on or before the fifth Business Day immediately
preceding the Closing Date, Transferor shall have given Trustee,
Servicer, each Rating Agency and any Enhancement Provider entitled
thereto pursuant to the relevant Supplement notice of such
issuance and the Closing Date;
(ii) Transferor shall have delivered to Trustee the
related Supplement, executed by each party hereto other than
Trustee;
(iii)Transferor shall have delivered to Trustee any
related Enhancement Agreement executed by each of the parties
thereto, other than Trustee;
(iv) the Rating Agency Condition shall have been
satisfied with respect to such issuance;
(v) Transferor shall have delivered to Trustee and any
Enhancement Provider entitled thereto pursuant to the relevant
Supplement an Officer's Certificate, dated the applicable Closing
Date, to the effect that Transferor reasonably believes that such
issuance will not, based on the facts known to such officer at the
time of such certification, then or thereafter cause an Early
Amortization Event to occur with respect to any Series;
(vi) Transferor shall have delivered to Trustee and each
Rating Agency a Tax Opinion, dated the Closing Date, with respect
to such issuance; and
(vii) Transferor shall have delivered to Trustee an
Officer's Certificate stating that (A) the Transferor Amount shall
not be less than the Minimum Transferor Amount and (B) the
aggregate Principal Receivables plus the Excess Funding Account
balance shall not be less than the Required Principal Balance, in
each case as of the Closing Date and after giving effect to such
issuance.
Upon satisfaction of the above conditions, Trustee shall execute the
Supplement and authenticate the Investor Certificates of such Series upon
execution thereof by Transferor. Upon satisfaction of the above conditions
(mutatis mutandis), Transferor may also cause Trustee to enter into one or
more agreements pursuant to which Trustee shall sell purchased interests in
the Receivables and other Trust Assets to one or more purchasers. Such
agreement(s) shall specify terms similar to Principal Terms
58
for any such purchased interests and may grant the purchaser(s) of such
interests, or an agent or other representative of such purchaser(s), notice
and consultation rights with respect to any rights or actions of Trustee.
Any such purchased interests shall be treated as a Series of Investor
Certificates for purposes of all voting and allocation provisions, and
calculations of the Transferor Amount and Transferor Percentage, under this
Agreement.
(c) Transferor may surrender the Transferor Certificate to Trustee
in exchange for a newly issued Transferor Certificate and one or more
additional certificates (each a "Supplemental Certificate"), the terms of
which shall be defined in a Supplement (which Supplement shall be subject
to Section 13.1(a) to the extent that it amends any of the terms of this
Agreement), to be delivered to or upon the order of Transferor (or the
Holder of a Supplemental Certificate, in the case of the transfer or
exchange thereof, as provided below), upon satisfaction of the following
conditions:
(i) the Rating Agency Condition shall have been satisfied
with respect to such exchange (or transfer, exchange or pledge as
provided below); and
(ii) Transferor shall have delivered to Trustee and each
Rating Agency a Tax Opinion, dated the date of such exchange (or
transfer, exchange or pledge as provided below), with respect
thereto.
Any Supplemental Certificate may be transferred or exchanged, and the
Transferor Certificate may be pledged, only upon satisfaction of the
conditions set forth in clauses (ii) and (iii).
(d) The Transferor Certificate (or any interest therein) may be
transferred to a Person which is a member of the "affiliated group" as
defined in Internal Revenue Code Section 1504(a) of which WFN is a member
without the consent or approval of the Holders of the Investor
Certificates, provided that (i) the Rating Agency Condition shall have been
satisfied with respect to such transfer, (ii) Transferor shall have
delivered to Trustee and each Rating Agency a Tax Opinion, dated the date
of such transfer, with respect thereto and (iii) Transferor shall have
delivered to Trustee an Officer's Certificate stating that the Transferor
Amount shall not be less than the Minimum Transferor Amount. In connection
with any such transfer, the Person to whom the Transferor Certificate is
transferred will, by its acquisition and holding of an interest in the
Transferor Certificate, assume all of the rights and obligations of
Transferor as described in this Agreement and in any Supplement or
amendment thereto (including the right under this paragraph (d) with
respect to subsequent transfers of an interest in the Transferor
Certificate).
SECTION 6.4. Registration of Transfer and Exchange of Certificates.
(a) Trustee shall cause to be kept at the office or agency to be maintained
59
in accordance with the provisions of Section 11.16 a register (the
"Certificate Register") in which, subject to such reasonable regulations as
it may prescribe, a transfer agent and registrar (which may be Trustee)
(the "Transfer Agent and Registrar") shall provide for the registration of
the Registered Certificates and of transfers and exchanges of the
Registered Certificates as herein provided. The Transfer Agent and
Registrar shall initially be ▇▇▇▇▇▇ Trust and Savings Bank (replacing the
Bank of New York) and any co-transfer agent and co-registrar chosen by
Transferor and acceptable to Trustee, including, if and so long as any
Series or Class is listed on the Luxembourg Stock Exchange and such
exchange shall so require, a co-transfer agent and co-registrar in
Luxembourg. So long as any Investor Certificates are outstanding,
Transferor shall maintain a Transfer Agent and Registrar in New York City.
Any reference in this Agreement to the Transfer Agent and Registrar shall
include any co- transfer agent and co-registrar unless the context requires
otherwise.
Trustee may revoke such appointment and remove any Transfer Agent
and Registrar if Trustee determines in its sole discretion that such
Transfer Agent and Registrar failed to perform its obligations under this
Agreement in any material respect. Any Transfer Agent and Registrar shall
be permitted to resign as Transfer Agent and Registrar upon 30 days' notice
to Transferor, Trustee and Servicer; provided that such resignation shall
not be effective and such Transfer Agent and Registrar shall continue to
perform its duties as Transfer Agent and Registrar until Trustee has
appointed a successor Transfer Agent and Registrar reasonably acceptable to
Transferor.
Subject to paragraph (c), upon surrender for registration of
transfer of any Registered Certificate at any office or agency of the
Transfer Agent and Registrar maintained for such purpose, one or more new
Registered Certificates (of the same Series and Class) in authorized
denominations of like aggregate fractional undivided interests in the
Investor Interest shall be executed, authenticated and delivered, in the
name of the designated transferee or transferees.
At the option of a Registered Holder, Registered Certificates (of
the same Series and Class) may be exchanged for other Registered
Certificates of authorized denominations of like aggregate fractional
undivided interests in the Investor Interest, upon surrender of the
Registered Certificates to be exchanged at any such office or agency;
Registered Certificates, including Registered Certificates received in
exchange for Bearer Certificates, may not be exchanged for Bearer
Certificates. At the option of the Holder of a Bearer Certificate, subject
to applicable laws and regulations, Bearer Certificates may be exchanged
for other Bearer Certificates or Registered Certificates (of the same
Series and Class) of authorized denominations of like aggregate fractional
undivided interests in the Investor Interest, upon surrender of the Bearer
Certificates to be exchanged at an office or agency of the Transfer Agent
and Registrar located outside the United States. Each Bearer Certificate
surrendered pursuant to this Section shall have attached thereto all
60
unmatured Coupons; provided that any Bearer Certificate, so surrendered
after the close of business on the Record Date preceding the relevant
payment date or distribution date after the expected final payment date
need not have attached the Coupon relating to such payment date or
distribution date (in each case, as specified in the applicable
Supplement).
Whenever any Investor Certificates are so surrendered for
exchange, Transferor shall execute, Trustee shall authenticate and the
Transfer Agent and Registrar shall deliver (in the case of Bearer
Certificates, outside the United States) the Investor Certificates which
the Investor Holder making the exchange is entitled to receive. Every
Investor Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in a
form satisfactory to Trustee or the Transfer Agent and Registrar duly
executed by the Investor Holder or the attorney-in-fact thereof duly
authorized in writing.
No service charge shall be made for any registration of transfer
or exchange of Investor Certificates, but the Transfer Agent and Registrar
may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any such transfer or
exchange.
All Investor Certificates (together with any Coupons) surrendered
for registration of transfer and exchange or for payment shall be canceled
and disposed of in a manner satisfactory to Trustee. Trustee shall cancel
and destroy any Global Certificate upon its exchange in full for Definitive
Euro-Certificates and shall deliver a certificate of destruction to
Transferor. Such certificate shall also state that a certif icate or
certificates of a foreign Clearing Agency to the effect required by the
applicable Supplement was received with respect to each portion of the
Global Certificate exchanged for Definitive Euro-Certificates.
Transferor shall execute and deliver to Trustee Bearer
Certificates and Registered Certificates in such amounts and at such times
as are necessary to enable Trustee to fulfill its responsibilities under
this Agreement, each Supplement and the Certificates.
(b) The Transfer Agent and Registrar will maintain at its expense
in the City of New York and an office or agency where Investor Certificates
may be surrendered for registration of transfer or exchange (except that
Bearer Certificates may not be surrendered for exchange at any such office
or agency in the United States). If and so long as any Series or Class is
listed on the Luxembourg Stock Exchange an agent shall be appointed, at the
Servicer's expense, in Luxembourg.
(c) (i) Registration of transfer of Investor Certificates
containing (x) a legend substantially to the effect set forth on Exhibit
E-1 shall be effected only if such transfer is made pursuant to an
effective registration statement under the Securities
61
Act or is exempt from the registration requirements under the Securities
Act and (y) a legend substantially to the effect set forth on Exhibit E-3
shall be effected only if such transfer is made to a Person that is not (1)
an employee benefit plan or other plan, trust or account (including an
individual retirement account) within the meaning of Section 3.3 of ERISA,
whether or not subject to ERISA (including, without limitation, Foreign and
governmental plans) or described by Section 4975(e)(1) of the Internal
Revenue Code or (2) any collective investment fund, insurance company
separate or general account or other entity whose underlying assets include
"plan assets" of the foregoing by reason of a plan's investment in such
entity (each, a "Benefit Plan") unless it is an insurance company using the
assets of its general account and, at the time of acquisition and
throughout its holding of the certificate (a) it is not a service provider
to the trust or an affiliate of the foregoing, and would not otherwise be
excluded under 29 C.F.R. 2510.3.101(f)(1), and (b) each of the accounts to
which such certificate is allocated is an insurance company general account
(1) that is eligible for and meets the requirements of Department of Labor
Prohibited Transaction Class Exemption 95-60 and (2) of which less than 25%
of the assets are (or represent) assets of a Benefit Plan. If registration
of a transfer is to be made in reliance upon an exemption from the
registration requirements under the Securities Act, the transferor or the
transferee shall deliver, at its expense, to Transferor, Servicer and
Trustee, an investment letter from the transferee, substantially in the
form of the investment representation letter attached hereto as Exhibit
E-2, and no registration of transfer shall be made until such letter is so
delivered.
Investor Certificates issued upon registration or transfer of, or
Investor Certificates issued in exchange for, Investor Certificates bearing
a legend referred to above shall also bear such legend unless Transferor,
Servicer, Trustee and the Transfer Agent and Registrar receive an Opinion
of Counsel, satisfactory to each of them, to the effect that such legend
may be removed.
Whenever an Investor Certificate containing a legend referred to
above is presented to the Transfer Agent and Registrar for registration of
transfer, the Transfer Agent and Registrar shall promptly seek instructions
from Servicer regarding such transfer and shall be entitled to receive
instructions signed by a Servicing Officer prior to registering any such
transfer. Transferor hereby agrees to indemnify the Transfer Agent and
Registrar and Trustee and their respective officers, directors, agents and
employees and to hold each of them harmless against any loss, liability or
expense incurred without negligence or bad faith on their part arising out
of or in connection with actions taken or omitted by them in relation to
any such instructions furnished pursuant to this paragraph. The preceding
sentence shall survive the termination of this Agreement and the earlier
removal or resignation of the Trustee.
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(ii) Registration of transfer of Investor Certificates containing
a legend to the effect set forth on Exhibit E-3 shall be effected only if
such transfer is made to a Person which is not a Benefit Plan, unless such
Person is an insurance company meeting the specific requirements set forth
in subsection (i) immediately above. By accepting and holding any such
Investor Certificate, an Investor Holder shall be deemed to have
represented and warranted that it is not a Benefit Plan, unless such Person
is an insurance company meeting the specific requirements set forth in
subsection (i) immediately above. By acquiring any interest in a Book-Entry
Certificate which contains such legend, a Certificate Owner shall be deemed
to have represented and warranted that it is not a Benefit Plan, unless
such Person is an insurance company meeting the specific requirements set
forth in subsection (i) immediately above.
(iii) If so requested by Transferor, Trustee will make available
to any prospective purchaser of Investor Certificates who so requests, a
copy of a letter provided to Trustee by or on behalf of Transferor relating
to the transferability of any Series or Class to a Benefit Plan.
(d) Notwithstanding any other provision of this Agreement, any
Certificate for which an Opinion of Counsel has not been issued opining on
the treatment of such Certificates as debt for Federal income tax purposes
(each, a "Subject Certificate") shall be subject to the following. No
transfer (or purported transfer) of all or any part of a Subject
Certificate (or any economic interest therein), whether to another
Certificateholder or to a person who is not a Certificateholder, shall be
effective, and any such transfer (or purported transfer) shall be void ab
initio, and no Person shall otherwise become a Holder of a Subject
Certificate if (i) at the time of such transfer (or purported transfer) any
Subject Certificates are traded on an established securities market or
readily tradeable on a secondary market or the substantial equivalent
thereof or (ii) after such transfer (or purported transfer) the Trust would
have more than 100 Holders of Subject Certificates and the Subject
Certificates have been issued in a transaction or transactions that were
not required to be registered under the Securities Act, and to the extent
such offerings or sales were not required to be registered under the
Securities Act by reason of Regulation S (17 CFR 230.901 through 230.904 or
any successor thereto) such offerings or sales would not have been required
to be registered under the Securities Act if the interests so offered or
sold had been offered and sold within the United States. For purposes of
clause (i) of the preceding sentence, an established securities market is a
national securities exchange that is either registered under Section 6 of
the Exchange Act or exempt from registration because of the limited volume
of transactions, a foreign securities exchange that, under the law of the
jurisdiction where it is organized, satisfies regulatory requirements that
are analogous to the regulatory requirements of the Exchange Act, a
regional or local exchange, or an interdealer quotation system that
regularly disseminates firm buy or sell quotations by identified brokers or
dealers by electronic means or otherwise. For purposes of such clause (i),
63
Subject Certificates are readily tradeable on a secondary market or the
substantial equivalent thereof if (1) Subject Certificates (or interests
therein) are regularly quoted by any person, such as a broker or dealer,
making a market in the interests; (2) any person regularly makes available
to the public (including customers or subscribers) bid or offer quotes with
respect to Subject Certificates (or interests therein) and stands ready to
effect buy or sell transactions at the quoted prices for itself or on
behalf of others; (3) the holders of Subject Certificates have a readily
available, regular, and ongoing opportunity to sell or exchange the Subject
Certificates (or interests therein) through a public means of obtaining or
providing information of offers to buy, sell, or exchange such interests;
or (4) prospective buyers and sellers otherwise have the opportunity to
buy, sell, or exchange Subject Certificates (or interests therein) in a
time frame and with the regularity and continuity that is comparable to
that described in clauses (1), (2) and (3) of this sentence. For purposes
of determining whether the Trust will have more than 100 Holders of Subject
Certificates, each Person indirectly owning an interest in the Trust
through a partnership (including any entity treated as a partnership for
federal income tax purposes), a grantor trust or an S corporation (each
such entity a "flow-through entity") shall be treated as a Holder of a
Subject Certificate unless Servicer determines in its sole discretion,
after consulting with qualified tax counsel, that less than substantially
all of the value of the beneficial owner's interest in the flow-through
entity is attributable to the flow-through entity's interest (direct or
indirect) in the Trust.
SECTION 6.5. Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate (together, in the case of Bearer
Certificates, with all unmatured Coupons (if any) appertaining thereto) is
surrendered to the Transfer Agent and Registrar, or the Transfer Agent and
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Transfer Agent
and Registrar and Trustee such security or indemnity as may be required by
them to save each of them harmless, then, in the absence of notice to
Trustee that such Certificate has been acquired by a bona fide purchaser,
Transferor shall execute, Trustee shall authenticate and the Transfer Agent
and Registrar shall deliver (in the case of Bearer Certificates, outside
the United States), in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certifi cate of like tenor and
aggregate fractional undivided interest. In connection with the issuance of
any new Certificate under this Section, Trustee or the Transfer Agent and
Registrar may require the payment by the Holder of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of Trustee
and Transfer Agent and Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at
any time.
64
SECTION 6.6. Persons Deemed Owners. Trustee, the Paying Agent, the
Transfer Agent and Registrar and any agent of any of these may (a) prior to
due presentation of a Registered Certificate for registration of transfer,
treat the Person in whose name any Registered Certificate is registered as
the owner of such Registered Certificate for the purpose of receiving
distributions pursuant to the applicable Supplement and for all other
purposes whatsoever, and (b) treat the bearer of a Bearer Certificate or
Coupon as the owner of such Bearer Certificate or Coupon for the purpose of
receiving distributions pursuant to the applicable Supplement and for all
other purposes whatsoever; and, in any such case, neither Trustee, the
Paying Agent, the Transfer Agent and Registrar nor any agent of any of
these shall be affected by any notice to the contrary. Notwithstanding the
foregoing, in determining whether the Holders of the requisite Investor
Certificates have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Certificates owned by Transferor,
Servicer, any other Holder of the Transferor Certificate, Trustee or any
Affiliate thereof, shall be disregarded and deemed not to be outstanding,
except that, in determining whether Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Certificates which a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. Certificates so
owned which have been pledged in good faith shall not be disregarded and
may be regarded as outstanding if the pledgee establishes to the
satisfaction of Trustee the pledgee's right so to act with respect to such
Certificates and that the pledgee is not Transferor, Servicer, any other
Holder of the Transferor Certificate or any Affiliate thereof.
SECTION 6.7. Appointment of Paying Agent. The Paying Agent shall
make distributions to Investor Holders from the Collection Account or any
applicable Series Account pursuant to the provisions of the applicable
Supplement and shall report the amounts of such distributions to Trustee.
Any Paying Agent shall have the revocable power to withdraw funds from the
Collection Account or any applicable Series Account for the purpose of
making the distributions referred to above. Trustee may revoke such power
and remove the Paying Agent if Trustee determines in its sole discretion
that the Paying Agent shall have failed to perform its obligations under
this Agreement or any Supplement in any material respect. The Paying Agent
shall initially be Trustee, and any co-paying agent chosen by Transferor
and acceptable to Trustee, including, if and so long as any Series or Class
is listed on the Luxembourg Stock Exchange and such exchange so requires, a
co-paying agent in Luxembourg or another western European city. Any Paying
Agent shall be permitted to resign as Paying Agent upon 30 days' notice to
Trustee. If any Paying Agent shall resign, Trustee shall appoint a
successor to act as Paying Agent. Trustee shall cause each successor or
additional Paying Agent to execute and deliver to Trustee an instrument in
which such successor or additional Paying Agent shall agree with Trustee
that it will hold all sums, if any, held by it for payment to the Investor
Holders in trust for the benefit of the Investor Holders entitled thereto
until such sums shall be paid to such Investor Holders. The Paying Agent
65
shall return all unclaimed funds to Trustee and upon removal shall also
return all funds in its possession to Trustee. The provisions of Sections
11.1, 11.2, 11.3 and 11.5 shall apply to Trustee also in its role as Paying
Agent, for so long as Trustee shall act as Paying Agent. Any reference in
this Agreement to the Paying Agent shall include any co-paying agent unless
the context requires otherwise.
SECTION 6.8. Access to List of Registered Holders' Names and
Addresses. Trustee will furnish or cause to be furnished by the Transfer
Agent and Registrar to Servicer or the Paying Agent, within five Business
Days after receipt by Trustee of a request therefor, a list in such form as
Servicer or the Paying Agent may reasonably require, of the names and
addresses of the Registered Holders. If any Holder or group of Holders of
Investor Certificates of any Series or all outstanding Series, as the case
may be, evidencing not less than 10% of the aggregate unpaid principal
amount of such Series or all outstanding Series, as applicable (the
"Applicants"), apply to Trustee, and such application states that the
Applicants desire to communicate with other Investor Holders with respect
to their rights under this Agreement or any Supplement or under the
Investor Certificates and is accompanied by a copy of the communication
which such Applicants propose to transmit, then Trustee, after having been
indemnified to its reasonable satisfaction by such Applicants for its costs
and expenses shall afford or shall cause the Transfer Agent and Registrar
to afford such Applicants access during normal business hours to the most
recent list of Registered Holders of such Series or all outstanding Series,
as applicable, held by Trustee, within five Business Days after the receipt
of such application. Such list shall be as of a date no more than 45 days
prior to the date of receipt of such Applicants' request.
Every Registered Holder, by receiving and holding a Registered
Certificate, agrees with Trustee that neither Trustee, the Transfer Agent
and Registrar, nor any of their respective agents, shall be held
accountable by reason of the disclosure of any such information as to the
names and addresses of the Registered Holders hereunder, regardless of the
sources from which such information was derived.
SECTION 6.9. Authenticating Agent. (a) Trustee may appoint one or
more authenticating agents with respect to the Certificates which shall be
authorized to act on behalf of Trustee in authenticating the Certificates
in connection with the issuance, delivery, registration of transfer,
exchange or repayment of the Certificates. Whenever reference is made in
this Agreement to the authentication of Certificates by Trustee or
Trustee's certificate of authentication, such reference shall be deemed to
include authentication on behalf of Trustee by an authenticating agent and
certificate of authentication executed on behalf of Trustee by an
authenticating agent. Each authenticating agent must be acceptable to
Transferor and Servicer.
(b) Any institution succeeding to the corporate agency business of
an authenticating agent shall continue to be an authenticating agent
66
without the execution or filing of any power or any further act on the part
of Trustee or such authenticating agent. An authenticating agent may at any
time resign by giving notice of resignation to Trustee and to Transferor.
Trustee may at any time terminate the agency of an authenticating agent by
giving notice of termination to such authenticating agent and to
Transferor. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time an authenticating agent shall cease to
be acceptable to Trustee or Transferor, Trustee promptly may appoint a
successor authenticating agent. Any successor authenticating agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an authenticating agent. No successor authenticating
agent shall be appointed unless acceptable to Trustee and Transferor.
Transferor agrees to pay to each authenticating agent from time to time
reasonable compensation for its services under this Section. The provisions
of Sections 11.1, 11.2 and 11.3 shall be applicable to any authenticating
agent.
(c) Pursuant to an appointment made under this Section, the
Certificates may have endorsed thereon, in lieu of Trustee's certificate of
authentication, an alternate certificate of authentication in substantially
the following form:
This is one of the Certificates described in the Pooling and
Servicing Agreement.
--------------------------------
--------------------------------
as Authenticating Agent
for Trustee,
By: ----------------------------
Authorized Officer
SECTION 6.10. Book-Entry Certificates. Unless otherwise specified
in the related Supplement for any Series or Class, the Investor
Certificates, upon original issuance, shall be issued in the form of one or
more typewritten Investor Certificates representing the Book-Entry
Certificates, to be delivered to the Clearing Agency, by, or on behalf of,
Transferor. The Investor Certificates shall initially be registered on the
Certificate Register in the name of the Clearing Agency or its nominee, and
no Certificate Owner will receive a definitive certificate representing
such Certificate Owner's interest in the Investor Certificates, except as
provided in Section 6.12. Unless and until definitive, fully registered
67
Investor Certificates ("Definitive Certificates") have been issued to the
applicable Certificate Owners pursuant to Section 6.12 or as otherwise
specified in any such Supplement:
(a) the provisions of this Section shall be in full force
and effect;
(b) Transferor, Servicer and Trustee may deal with the
Clearing Agency and the Clearing Agency Participants for all
purposes (including the making of distributions) as the authorized
representatives of the respective Certificate Owners;
(c) to the extent that the provisions of this Section
conflict with any other provisions of this Agreement, the
provisions of this Section shall control; and
(d) the rights of the respective Certificate Owners shall
be exercised only through the Clearing Agency and the Clearing
Agency Participants and shall be limited to those established by
law and agreements between such Certificate Owners and the
Clearing Agency or the Clearing Agency Participants. Pursuant to
the Depository Agreement, unless and until Definitive Certificates
are issued pursuant to Section 6.12, the Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and
receive and transmit distributions of principal and interest on
the related Investor Certificates to such Clearing Agency
Participants.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Investor
Holders evidencing a specified percentage of the aggregate unpaid principal
amount of Investor Certificates, such direction or consent may be given by
Certificate Owners (acting through the Clearing Agency and the Clearing
Agency Participants) owning Investor Certificates evidencing the requisite
percentage of principal amount of Investor Certificates.
SECTION 6.11. Notices to Clearing Agency. Whenever any notice or
other communication is required to be given to Investor Holders of any
Series or Class with respect to which Book-Entry Certificates have been
issued, unless and until Definitive Certificates shall have been issued to
the related Certificate Owners, Trustee shall give all such notices and
communications to the applicable Clearing Agency.
SECTION 6.12. Definitive Certificates. If Book-Entry Certificates
have been issued with respect to any Series or Class and (a) Transferor
advises Trustee that the Clearing Agency is no longer willing or able to
discharge properly its responsibilities under the Depository Agreement with
respect to such Series or Class and Trustee or Transferor is unable to
engage a qualified successor, (b) Transferor, at its option,
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advises Trustee that it elects to terminate the book-entry system with
respect to such Series or Class through the Clearing Agency or (c) after
the occurrence of a Servicer Default, Certificate Owners of such Series or
Class evidencing not less than 50% of the aggregate unpaid principal amount
of such Series or Class advise Trustee and the Clearing Agency through the
Clearing Agency Participants that the continuation of a book-entry system
with respect to the Investor Certificates of such Series or Class through
the Clearing Agency is no longer in the best interests of the Certificate
Owners with respect to such Certificates, then Trustee shall notify all
Certificate Owners of such Certificates, through the Clearing Agency, of
the occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners requesting the same. Upon surrender to
Trustee of any such Certificates by the Clearing Agency, accompanied by
registration instructions from the Clearing Agency for registration,
Transferor shall execute and Trustee shall authenticate and deliver such
Definitive Certificates. Neither Transferor nor Trustee shall be liable for
any delay in delivery of such instructions and may conclusively rely on,
and shall be fully protected in relying on, such instructions. Upon the
issuance of such Definitive Certificates all references herein to
obligations imposed upon or to be performed by the Clearing Agency shall be
deemed to be imposed upon and performed by Trustee, to the extent
applicable with respect to such Definitive Certificates and Trustee shall
recognize the Holders of such Definitive Certificates as Investor Holders
hereunder.
SECTION 6.13. Global Certificate. If specified in the related
Supplement for any Series, or Class, the Investor Certificates for such
Series or Class will initially be issued in the form of a single temporary
global Certificate (the "Global Certificate") in bearer form, without
interest coupons, in the denomination of the aggregate principal amount of
such Series or Class and substantially in the form set forth in the exhibit
with respect thereto attached to the related Supplement. The Global
Certificate will be executed by Transferor and authenticated by Trustee
upon the same conditions, in substantially the same manner and with the
same effect as the Definitive Certificates. The Global Certificate may be
exchanged for Bearer or Registered Certificates in definitive form (the
"Definitive Euro-Certificates") pursuant to any applicable Supplement.
SECTION 6.14. Uncertificated Classes. Unless otherwise specified
in any Supplement, the provisions of this Article VI and Article XII
relating to the registration, form, execution, authentication, delivery,
presentation, cancellation and surrender of Certificates shall not apply to
any uncertificated Certificates.
SECTION 6.15. CUSIP Numbers. The Transferor in issuing the
Certificates may use "CUSIP" or "private placement" numbers (if then
generally in use), and, if so, the Trustee shall indicate the "CUSIP" or
"private placement" numbers of the Certificates in notices of redemption
and related materials as a convenience to Holders; provided that any such
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notice may state that no representation is made as to the correctness of
such numbers either as printed on the Certificates or as contained in any
notice of redemption and related materials.
ARTICLE VII OTHER MATTERS RELATING TO TRANSFEROR
SECTION 7.1. Liability of Transferor. Transferor shall be liable
for its obligations, covenants, representations and warranties under this
Agreement and any Supplement, but only to the extent of the obligations
specifically undertaken by it in its capacity as Transferor.
SECTION 7.2. Merger or Consolidation of, or Assumption of the
Obligations of, Transferor. (a) Transferor shall not consolidate with or
merge into any other corporation or convey or transfer its properties and
assets substantially as an entirety to any Person unless:
(i) the corporation formed by such consolidation or into
which Transferor is merged or the Person which acquires by
conveyance or transfer the properties and assets of Transferor
substantially as an entirety shall be, if Transferor is not the
surviving entity, a corporation organized and existing under the
laws of the United States of America or any State or the District
of Columbia, and, if Transferor is not the surviving entity, such
corporation shall expressly assume, by an agreement supplemental
hereto, executed and delivered to Trustee, in form reasonably
satisfactory to Trustee, the performance of every covenant and
obligation of Transferor hereunder, including its obligations
under Section 7.4;
(ii) Transferor has delivered to Trustee (A) an Officer's
Certificate stating that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section
and that all conditions precedent herein provided for relating to
such transaction have been complied with, and (B) an Opinion of
Counsel to the effect that such supplemental agreement is a valid
and binding obligation of such surviving entity enforceable
against such surviving entity in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally from time to time in effect
and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in
equity);
(iii) Transferor shall have delivered to Trustee and each
Rating Agency a Tax Opinion, dated the date of such consolidation,
merger, conveyance or transfer, with respect thereto;
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(iv) in connection with any merger or consolidation, or
any conveyance or transfer referred to above, the business entity
into which Transferor shall merge or consolidate, or to which such
conveyance or transfer is made, shall be (x) a business entity
that may not become a debtor in any case, action or other
proceeding under Title 11 of the United States Code or (y) a
special-purpose corporation, the powers and activities of which
shall be limited to the performance of Transferor's obligations
under this Agreement and any Supplement; and
(v) if Transferor is not the surviving entity, the
surviving entity shall file new UCC-1 financing statements with
respect to the interest of the Trust in the Receivables.
(b) This Section 7.2 shall not be construed to prohibit or in any
way limit Transferor's ability to effectuate any consolidation or merger
pursuant to which Transferor would be the surviving entity.
(c) Transferor shall notify each Rating Agency promptly after any
consolidation, merger, conveyance or transfer effected pursuant to this
Section 7.2;
(d) The obligations of Transferor hereunder shall not be
assignable nor shall any Person succeed to the obligations of Transferor
hereunder except in each case in accordance with (i) the provisions of the
foregoing paragraphs, (ii) Sections 2.11 or 6.3(d), or (iii) conveyances,
mergers, consolidations, assumptions, sales or transfers to other entities
(1) for which Transferor delivers an Officer's Certificate to Trustee
indicating that Transferor reasonably believes that such action will not
adversely affect in any material respect the interests of any Investor
Holder, (2) which meet the requirements of clause (ii) of paragraph (a) and
(3) for which such purchaser, transferee, pledgee or entity shall expressly
assume, in an agreement supplemental hereto, executed and delivered to
Trustee in writing in form satisfactory to Trustee, the performance of
every covenant and obligation of Transferor thereby conveyed.
SECTION 7.3. Limitations on Liability of Transferor. Subject to
Sections 7.1 and 7.4, neither Transferor, any Holder of the Transferor
Certificate nor any of their directors, officers, employees or agents of
Transferor acting in such capacities shall be under any liability to the
Trust, Trustee, the Holders, any Enhancement Provider or any other Person
for any action taken or for refraining from the taking of any action in
good faith in their capacities as Transferor pursuant to this Agreement;
provided that this provision shall not protect Transferor, any Holder of
the Transferor Certificate or any such Person against any liability which
would otherwise be imposed by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. Transferor and any director,
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officer, employee or agent of Transferor may rely in good faith on any
document of any kind prima facie properly executed and submitted by any
Person (other than Transferor) respecting any matters arising hereunder.
SECTION 7.4. Liabilities. Notwithstanding Sections 7.3, 8.3 and
8.4, Transferor by entering into this Agreement, and any Holder of any
interest in the Transferor Certificate by its acceptance thereof, agree to
be liable, directly to the injured party, for the entire amount of any
losses, claims, damages or liabilities (other than those that would be
incurred by an Investor Holder if the Investor Certificates were notes
secured by the Receivables, for example, as a result of the performance of
the Receivables, market fluctuations, a shortfall or failure to make
payment under any Enhancement or other similar market or investment risks
associated with ownership of the Investor Certificates) arising out of or
based on the arrangement created by this Agreement or the actions of
Servicer taken pursuant hereto (to the extent Trust Assets remaining after
the Investor Holders and Enhancement Providers, if any, have been paid in
full are insufficient to pay any such losses, claims, damages or
liabilities) as though this Agreement created a partnership under the
Delaware Revised Uniform Partnership Act in which Transferor and such
Holder of the Transferor Certificate were general partners.
ARTICLE VIII OTHER MATTERS RELATING TO SERVICER
SECTION 8.1. Liability of Servicer. Servicer shall be liable under
this Agreement only to the extent of the obligations specifically undertaken
by Servicer in its capacity as Servicer.
SECTION 8.2. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. (a) Servicer shall not consolidate with or merge
into any other corporation or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) the corporation formed by such consolidation or into
which Servicer is merged or the Person which acquires by
conveyance or transfer the properties and assets of Servicer
substantially as an entirety shall be, if Servicer is not the
surviving entity, a corporation organized and existing under the
laws of the United States of America or any State or the District
of Columbia, and, if Servicer is not the surviving entity, such
corporation shall expressly assume, by an agreement supplemental
hereto, executed and delivered to Trustee, in form reasonably
satisfactory to Trustee, the performance of every covenant and
obligation of Servicer hereunder;
(ii) Servicer has delivered to Trustee (A) an Officer's
Certificate stating that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section
and that all conditions
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precedent herein provided for relating to such transaction have
been complied with, and (B) an Opinion of Counsel to the effect
that such supplemental agreement is a valid and binding obligation
of such surviving entity enforceable against such surviving entity
in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally from time to time in effect and except as such
enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity); and
(iii) either (x) the corporation formed by such
consolidation or into which Servicer is merged or the Person which
acquired by conveyance or transfer the properties and assets of
Servicer substantially as an entirety shall be an Eligible
Servicer (taking into account, in making such determination, the
experience and operations of the predecessor Servicer) or (y) upon
the effectiveness of such consolidation, merger, conveyance or
transfer, a Suc cessor Servicer shall have assumed the obligations
of Servicer in accordance with this Agreement.
(b) This Section 8.2 shall not be construed to prohibit or in any
way limit Servicer's ability to effectuate any consolidation or merger
pursuant to which Servicer would be the surviving entity.
(c) Servicer shall notify each Rating Agency promptly after any
consolidation, merger, conveyance or transfer effected pursuant to this
Section 8.2.
SECTION 8.3. Limitation on Liability of Servicer and Others.
Except as provided in Sections 8.4 and 11.5, neither Servicer nor any of
the directors, officers, employees or agents of Servicer in its capacity as
Servicer shall be under any liability to the Trust, Trustee, the Holders,
any Enhancement Providers or any other person for any action taken or for
refraining from the taking of any action in good faith in its capacity as
Servicer pursuant to this Agreement; provided that this provision shall not
protect Servicer or any such Person against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard
of obligations and duties hereunder. Servicer and any director, officer,
employee or agent of Servicer may rely in good faith on any document of any
kind prima facie properly executed and submitted by any Person (other than
Servicer) respecting any matters arising hereunder. Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action
which is not incidental to its duties as Servicer in accordance with this
Agreement and which in its reasonable judgment may involve it in any
expense or liability. Servicer may, in its sole discretion, undertake any
such legal action which it may deem necessary or desirable for the benefit
73
of the Holders with respect to this Agreement and the rights and duties of
the parties hereto and the interests of the Holders hereunder.
SECTION 8.4. Servicer Indemnification of the Trust and Trustee.
Servicer shall indemnify and hold harmless the Trust and Trustee and its
officers, directors, employees and agents, from and against any loss,
liability, expense, damage or injury (i) suffered or sustained by reason of
any acts or omissions of Servicer with respect to the Trust pursuant to
this Agreement, and (ii) arising from or incurred in connection with the
Trustee's administration of this Trust and the performance of its duties
hereunder under the Series Supplements or any transaction or document
contemplated in connection herewith or therewith including any judgment,
award, settlement, reasonable attorneys' fees and expenses and other costs
or expenses incurred in connection with the defense of any action,
proceeding or claim; provided that (a) Servicer shall not indemnify Trustee
if such acts, omissions or alleged acts or omissions constitute or are
caused by fraud, negligence, or willful misconduct by Trustee, (b) Servicer
shall not indemnify the Trust, the Investor Holders or the Certificate
Owners for any liabilities, costs or expenses of the Trust with respect to
any action taken by Trustee at the request of the Investor Holders, (c)
Servicer shall not indemnify the Trust, the Investor Holders or the
Certificate Owners as to any losses, claims or damages incurred by any of
them in their capacities as investors, including losses with respect to
market or investment risks associated with ownership of the Investor
Certificates or losses incurred as a result of Defaulted Receivables and
(d) Servicer shall not indemnify the Trust, the Investor Holders or the
Certificate Owners for any liabilities, costs or expenses of the Trust, the
Investor Holders or the Certificate Owners arising under any tax law,
including any Federal, state, local or foreign income or franchise taxes or
any other tax imposed on or measured by income (or any interest or
penalties with respect thereto or arising from a failure to comply
therewith) required to be paid by the Trust, the Investor Holders or the
Certificate Owners in connection herewith to any taxing authority.
Indemnification pursuant to this Section shall not be payable from the
Trust Assets. The provisions of this indemnity shall run directly to and be
enforceable by an indemnitee subject to the limitations hereof. This
Section 8.4 shall survive the termination of this Agreement and the earlier
removal or resignation of the Trustee.
SECTION 8.5. Servicer Not to Resign. Servicer shall not resign
from the obligations and duties hereby imposed on it except (x) upon the
determination that (i) the performance of its duties hereunder is no longer
permissible under Require ments of Law (other than the charter and by-laws
of Servicer) and (ii) there is no reasonable action which Servicer could
take to make the performance of its duties hereunder permissible under such
Requirements of Law or (y) as may be required, in connection with
Servicer's consolidation with, or merger into any other corporation or
Servicer's conveyance or transfer of its properties and assets
substantially as an entirety to any person in each case, in accordance with
Section 8.2. Any determination permitting the resignation of Servicer
74
pursuant to clause (x) above shall be evidenced by an Opinion of Counsel to
such effect delivered to Trustee. No resignation shall become effective
until Trustee or a Successor Servicer shall have assumed the
responsibilities and obligations of Servicer in accordance with Section
10.2. If within 120 days of the date of the determination that Servicer may
no longer act as Servicer, and if Trustee is unable to appoint a Successor
Servicer, Trustee shall serve as Successor Servicer. Notwithstanding the
foregoing, Trustee shall, if it is legally unable so to act, petition a
court of competent jurisdiction to appoint any established institution
having a net worth of not less than $50,000,000 and whose regular business
includes the servicing of credit card accounts as the Successor Servicer
hereunder. Trustee shall give prompt notice to each Rating Agency and each
Enhancement Provider, if any, entitled thereto under the applicable
Supplement upon the appointment of a Successor Servicer.
SECTION 8.6. Access to Certain Documentation and Information
Regarding the Receivables. Servicer shall provide to Trustee access to the
documentation regarding the Accounts and the Receivables in such cases
where Trustee is required in connection with the enforcement of the rights
of Holders or by applicable statutes or regulations to review such
documentation, such access being afforded without charge but only (a) upon
reasonable request, (b) during normal business hours, (c) subject to
Servicer's normal security and confidentiality procedures and (d) at
reasonably accessible offices in the continental United States designated
by Servicer. Nothing in this Section shall derogate from the obligation of
each Credit Card Originator, Transferor, Trustee and Servicer to observe
any applicable law prohibiting disclosure of information regarding the
Obligors, and the failure of Servicer to provide access as provided in this
Section as a result of such obligation shall not constitute a breach of
this Section.
SECTION 8.7. Delegation of Duties. In the ordinary course of
business, Servicer may at any time delegate any duties hereunder to any
Person who agrees to conduct such duties in accordance with the Credit Card
Guidelines and this Agreement. Any such delegations shall not relieve
Servicer of its liability and responsibility with respect to such duties,
and shall not constitute a resignation within the meaning of Section 8.5,
and Servicer shall remain jointly and severally liable with such Person for
any amounts which would otherwise be payable pursuant to this Article VIII
as if Servicer had performed such duty; provided that in the case of any
significant delegation to a Person other than an Affiliate of WFN, at least
30 days' prior written notice shall be given to Trustee, each Rating Agency
and each Enhancement Provider, if any, entitled thereto pursuant to the
relevant Supplement, of such delegation to any entity that is not an
Affiliate of Servicer.
ARTICLE IX EARLY AMORTIZATION EVENTS
SECTION 9.1. Early Amortization Events. Each of the following shall
constitute an "Early Amortization Event" with respect to each Series:
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(a) Transferor shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to all or substantially all of
its property, or a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against
Transferor; or Transferor shall admit in writing its inability to
pay its debts generally as they become due, file a petition to
take advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations (each such event an
"Insolvency Event");
(b) the Trust shall become an "investment company" within
the meaning of the Investment Company Act; or
(c) Transferor shall become unable for any reason to
transfer Receivables to the Trust pursuant to this Agreement.
SECTION 9.2. Additional Rights upon Certain Events. (a) If an
Insolvency Event occurs with respect to Transferor or any Holder of the
Transferor Certificate (excluding any Supplemental Certificate), Transferor
shall on the day any such event occurs (the "Appointment Date"),
immediately cease to transfer Principal Receivables, or interests in
Principal Receivables represented by any Participation Interests to the
Trust and shall promptly give notice to Trustee thereof. Notwithstanding
any cessation of the transfer to the Trust of additional Principal
Receivables or any Participation Interests, Principal Receivables or any
Participation Interests transferred to the Trust prior to the occurrence of
such Insolvency Event and Collections in respect of such Principal
Receivables and Participation Interests, and Finance Charge Receivables
whenever created accrued in respect of such Principal Receivables, shall
continue to be a part of the Trust. Upon the Appointment Date, this
Agreement and the Trust shall be deemed to have terminated, subject to the
liquidation, winding up and dissolution procedures described below. Within
15 days of the Appointment Date, Trustee shall (i) publish a notice in an
Authorized Newspaper that an Insolvency Event has occurred, that the Trust
has terminated, and that Trustee intends to sell, dispose of or otherwise
liquidate the Receivables and any Participation Interests on commercially
reasonable terms and in a commercially reasonable manner and (ii) give
notice to Investor Holders and each Enhancement Provider, if any, or other
Person entitled thereto pursuant to the relevant Supplement describing the
provisions of this Section. Trustee shall then promptly sell, dispose of or
otherwise liquidate the Receivables and any Participation Interests in a
commercially reasonable manner and on commercially reasonable terms, which
shall include the solicitation of competitive bids. The Trustee shall be
76
entitled to hire and consult with financial advisors and agents in
connection with such sale, disposition or liquidation, at the expense of
the Servicer and/or the Trust. Trustee may obtain a prior determination
from any conservator, receiver or liquidator that the terms and manner of
any proposed sale, disposition or liquidation are commercially reasonable
and may conclusively rely on such determination. The provisions of Sections
9.1 and 9.2 shall not be deemed to be mutually exclusive.
(b) The proceeds from the sale, disposition or liquidation of the
Receivables and any Participation Interests pursuant to paragraph (a)
("Insolvency Proceeds") shall be immediately deposited in the Collection
Account. Insolvency Proceeds shall be allocated to Finance Charge
Receivables and Principal Receivables in the same proportion such
Receivables bore to one another on the prior Determination Date, although
Trustee shall, in consultation with the Servicer, determine conclusively
the amount of the Insolvency Proceeds which are deemed to be Finance Charge
Receivables and Principal Receivables. The Insolvency Proceeds shall be
allocated and distributed to Investor Holders in accordance with Article IV
and each such Supplement.
ARTICLE X SERVICER DEFAULTS
SECTION 10.1. Servicer Defaults. If any one of the following events
(a "Servicer Default") shall occur and be continuing:
(a) any failure by Servicer to make any payment, transfer
or deposit or to give instructions or notice to Trustee pursuant
to this Agreement or any Supplement on or before the date
occurring five Business Days after the date such payment, transfer
or deposit or such instruction or notice is required to be made or
given, as the case may be, under this Agreement or any Supplement;
(b) failure on the part of Servicer to duly observe or
perform in any material respect any other covenants or agreements
of Servicer set forth in this Agreement or any Supplement which
has a material adverse effect on the interests hereunder of the
Investor Holders of any Series or Class (which determination shall
be made without regard to whether funds are then available
pursuant to any Enhancement) and which continues unremedied for a
period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given
to Servicer by Trustee, or to Servicer and Trustee by Holders of
Investor Certificates evidencing not less than 25% of the
aggregate unpaid principal amount of all Investor Certificates
(or, with respect to any such failure that does not relate to all
Series, 25% of the aggregate unpaid principal amount of all Series
to which such failure relates); or Servicer shall delegate its
duties under this
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Agreement, except as permitted by Sections 8.2 and 8.7, a
Responsible Officer of Trustee has actual knowledge of such
delegation and such delegation continues unremedied for 15 days
after the date on which written notice thereof, requiring the same
to be remedied, shall have been given to Servicer by Trustee, or
to Servicer and Trustee by Holders of Investor Certificates
evidencing not less than 25% of the aggregate unpaid principal
amount of all Investor Certificates;
(c) any representation, warranty or certification made by
Servicer in this Agreement or any Supplement or in any certificate
delivered pursuant to this Agreement or any Supplement shall prove
to have been incorrect when made, which has a material adverse
effect on the rights of the Investor Holders of any Series or
Class (which determination shall be made without regard to whether
funds are then available pursuant to any Enhancement) and which
continues to be incorrect in any material respect for a period of
60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to
Servicer by Trustee, or to Servicer and Trustee by the Holders of
Investor Certificates evidencing not less than 25% of the
aggregate unpaid principal amount of all Investor Certificates
(or, with respect to any such representation, warranty or
certification that does not relate to all Series, 25% of the
aggregate unpaid principal amount of all Series to which such
representation, warranty or certification relates); or
(d) Servicer shall fail generally to, or admit in writing
its inability to, pay its debts as they become due; or a
proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief
in respect of Servicer in an involuntary case under any Debtor
Relief Law, or for the appointment of a receiver, liquidator,
assignee, trustee, custodian, sequestrator, conservator or other
similar official of such Person or for any substantial part of its
property, or for the winding-up or liquidation of its affairs and,
if instituted against Servicer, any such proceeding shall continue
undismissed or unstayed and in effect, for a period of 60
consecutive days, or any of the actions sought in such proceeding
shall occur; or the commencement by Servicer, of a voluntary case
under any Debtor Relief Law, or such Person's consent to the entry
of an order for relief in an involuntary case under any Debtor
Relief Law, or consent to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian,
sequestrator, conservator or other similar official of such Person
or for any substantial part of its property, or any general
assignment for the benefit of creditors; or such Person or any
Subsidiary of such Person shall have taken any corporate action in
furtherance of any of the foregoing actions;
then, in the event of any Servicer Default, so long as the Servicer Default
shall not have been remedied, either Trustee or the Holders of Investor
4
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Certificates evidencing more than 50% of the aggregate unpaid principal
amount of all Investor Certificates, by notice given to Servicer (and to
Trustee and any Enhancement Provider entitled thereto pursuant to the
relevant Supplement if given by the Investor Holders) (a "Termination
Notice"), may terminate all but not less than all the rights and
obligations of Servicer, as Servicer, under this Agreement and in and to
the Receivables and the proceeds thereof; provided that if within 60 days
of receipt of a Termination Notice Trustee is unable to obtain any bids
from Eligible Servicers in accordance with Section 10.2(c) to act as a
Successor Servicer and receives an Officer's Certificate of Servicer to the
effect that Servicer cannot in good faith cure the Servicer Default which
gave rise to the Termination Notice, Trustee shall offer Transferor the
right at its option to purchase the Investor Interest on the Distribution
Date occurring in the next calendar month. The purchase price for the
Investor Interest shall be equal to the sum of the amounts specified
therefor with respect to each outstanding Series in the related Supplement.
Transferor shall notify Trustee prior to the Record Date for the related
Distribution Date of the purchase if it is exercising such option. If it
exercises such option, Transferor shall (x) deliver to Trustee an Opinion
of Counsel (which must be an independent outside counsel) to the effect
that, in reliance on certain certificates to the effect that the
Receivables constitute fair value for consideration paid therefor and as to
the solvency of Transferor, the purchase would not be considered a
fraudulent conveyance and (y) deposit the purchase price into the
Collection Account not later than 12:00 noon, New York City time, on such
Distribution Date in immediately available funds. The purchase price shall
be allocated and distributed to Investor Holders in accordance with Article
IV and each Supplement.
After receipt by Servicer of such Termination Notice, and on the
date that a Successor Servicer shall have been appointed by Trustee
pursuant to Section 10.2, all authority and power of Servicer under this
Agreement shall pass to and be vested in the Successor Servicer (a "Service
Transfer"); and, without limitation, Trustee is hereby authorized and
empowered (upon the failure of Servicer to cooperate) to execute and
deliver, on behalf of Servicer, as attorney-in-fact or otherwise, all
documents and other instruments upon the failure of Servicer to execute or
deliver such documents or instruments, and to do and accomplish all other
acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights. Servicer agrees to cooperate with Trustee and
the Successor Servicer in effecting the termination of the responsibilities
and rights of Servicer to conduct servicing hereunder including the
transfer to the Successor Servicer of all authority of Servicer to service
the Receivables provided for under this Agreement, including all authority
over all Collections which shall on the date of transfer be held by
Servicer for deposit, or which have been deposited by Servicer, in the
Collection Account, or which shall thereafter be received with respect to
the Receivables, and in assisting the Successor Servicer and in enforcing
all rights to Insurance Proceeds. Servicer shall promptly transfer its
electronic records relating to the Receivables to the Successor Servicer in
such electronic form as the Successor Servicer may reasonably
79
request and shall promptly transfer to the Successor Servicer all other
records, correspondence and documents necessary for the continued servicing
of the Receivables in the manner and at such times as the Successor
Servicer shall reasonably request. To the extent that compliance with this
Section 10.1 shall require Servicer to disclose to the Successor Servicer
information of any kind which Servicer reasonably deems to be confidential,
the Successor Servicer shall be required to enter into such customary
licensing and confidentiality agreements as Servicer shall deem appropriate
to protect its interests.
Notwithstanding the foregoing, any delay in or failure of
performance under Section 10.1(a) for a period of five Business Days or
under Section 10.1(b) or (c) for a period of 60 days (in addition to any
period provided in Section 10.1(a), (b) or (c)) shall not constitute a
Servicer Default until the expiration of such additional five Business Days
or 60 days, respectively, if such delay or failure could not be prevented
by the exercise of reasonable diligence by Servicer and such delay or
failure was caused by an act of God or the public enemy, acts of declared
or undeclared war, public disorder, rebellion or sabotage, epidemics,
landslides, lightning, fire, hurricanes, earthquakes, floods or similar
causes. The preceding sentence shall not relieve Servicer from the
obligation to use its best efforts to perform its obligations in a timely
manner in accordance with this Agreement and any Supplement and Servicer
shall provide Trustee, each Rating Agency, any Enhancement Provider
entitled thereto pursuant to the relevant Supplement, Transferor and the
Investor Holders with an Officer's Certificate giving immediate notice of
such failure or delay by it, together with a description of its efforts to
so perform its obligations.
SECTION 10.2. Trustee to Act; Appointment of Successor. (a) On and
after the receipt by Servicer of a Termination Notice pursuant to Section
10.1, Servicer shall continue to perform all servicing functions under this
Agreement until the date specified in the Termination Notice or otherwise
specified by Trustee or until a date mutually agreed upon by Servicer and
Trustee. Trustee shall, as promptly as possible after the giving of a
Termination Notice, appoint an Eligible Servicer as a successor servicer
(the "Successor Servicer"), and such Successor Servicer shall accept its
appointment by a written assumption in a form acceptable to Trustee. If a
Successor Servicer has not been appointed or has not accepted its
appointment at the time when Servicer ceases to act as Servicer, Trustee
without further action shall automatically be appointed the Successor
Servicer. Trustee may delegate any of its servicing obligations to an
Affiliate of Trustee or agent in accordance with Section 3.1(b) and 8.7.
Notwithstanding the foregoing, Trustee shall, if it is legally unable so to
act, petition a court of competent jurisdiction to appoint any established
institution having a net worth of not less than $50,000,000 and whose
regular business includes the servicing of credit card receivables as the
Successor Servicer hereunder. Trustee shall give prompt notice to each
Rating Agency and each Enhancement Provider, if any, entitled thereto
pursuant to the applicable Supplement upon the appointment of a Successor
Servicer.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to Servicer with respect to servicing functions
under this Agreement and shall be subject to all the responsibilities,
duties and liabilities (except for liabilities arising during the period of
time when the prior Servicer was performing and acting as Servicer)
relating thereto placed on Servicer by the terms and provisions hereof, and
all references in this Agreement to Servicer shall be deemed to refer to
the Successor Servicer.
(c) In connection with any Termination Notice, Trustee will review
any bids which it obtains from Eligible Servicers and shall be permitted to
appoint any Eligible Servicer submitting such a bid as a Successor Servicer
for servicing compensation not in excess of the aggregate Servicing Fees
for all Series; provided, however, that the Holder of the Transferor
Certificate shall be responsible for payment of the portion of such
aggregate Servicing Fees allocable to the Holder of the Transferor
Certificate and that no such monthly compensation paid out of Collections
shall be in excess of such aggregate Servicing Fees. Each Holder of the
Transferor Certificate agrees that, if WFN (or any Successor Servicer) is
terminated as Servicer hereunder, the portion of the Collections in respect
of Finance Charge Receivables that Transferor is entitled to receive
pursuant to this Agreement or any Supplement shall be reduced by an amount
sufficient to pay Transferor's share (determined by reference to the
Supplements with respect to any outstanding Series) of the compensation of
the Successor Servicer.
(d) All authority and power granted to the Successor Servicer
under this Agreement shall automatically cease and terminate upon
termination of the Trust pursuant to Section 12.1 and shall pass to and be
vested in Transferor and, without limitation, Transferor is hereby
authorized and empowered to execute and deliver, on behalf of the Successor
Servicer, as attorney-in-fact or otherwise, all documents and other
instruments, and to do and accomplish all other acts or things necessary or
appropriate to effect the purposes of such transfer of servicing rights.
The Successor Servicer agrees to cooperate with Transferor in effecting the
termination of the responsibilities and rights of the Successor Servicer to
conduct servicing on the Receivables. The Successor Servicer shall transfer
its electronic records relating to the Receivables to Transferor in such
electronic form as Transferor may reasonably request and shall transfer all
other records, correspondence and documents to Transferor in the manner and
at such times as Transferor shall reasonably request. To the extent that
compliance with this Section 10.2 shall require the Successor Servicer to
disclose to Transferor information of any kind which the Successor Servicer
deems to be confidential, Transferor shall be required to enter into such
customary licensing and confidentiality agreements as the Successor
Servicer shall deem appropriate to protect its interests.
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SECTION 10.3. Notification to Holders. Within two Business Days
after Servicer becomes aware of any Servicer Default, Servicer shall give
notice thereof to Trustee, each Rating Agency and any Enhancement Provider
entitled thereto pursuant to the relevant Supplement and Trustee shall give
notice to the Investor Holders. Upon any termination or appointment of a
Successor Servicer pursuant to this Article, Trustee shall give prompt
notice thereof to the Investor Holders.
SECTION 10.4. Waiver of Past Defaults. The Holders of Investor
Certificates evidencing undivided interests in the Trust aggregating more
than 66-2/3% of the Invested Amount of each Series then outstanding
affected by any default by Servicer may, on behalf of all Holders of
Certificates of such affected Series, waive any default by Servicer in the
performance of its obligations hereunder and its consequences, except a
default in the failure to make any required deposits or payments of
interest or principal with respect to any Series of Certificates. Upon any
such waiver of a past default, such default shall cease to exist, and any
default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
ARTICLE XI TRUSTEE
SECTION 11.1. Duties of Trustee. (a) Trustee, prior to the
occurrence of a Servicer Default and after the curing of all Servicer
Defaults which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement and no
implied covenants or obligations shall be read into this Agreement against
the Trustee. If a Servicer Default has occurred (which has not been cured
or waived) Trustee shall exercise such of the rights and powers vested in
it by this Agreement, and use the same degree of care and skill in its
exercise, as a prudent person would exercise or use under the circumstances
in the conduct of such person's own affairs.
(b) Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to
determine whether they conform to the requirements of this Agreement.
Trustee shall give prompt written notice to the Holders of any material
lack of conformity of any such instrument to the applicable requirements of
this Agreement discovered by Trustee which would entitle a specified
percentage of the Holders to take any action pursuant to this Agreement.
(c) Subject to Section 11.1(a), no provision of this Agreement
shall be construed to relieve Trustee from liability for its own negligent
action, its own negligent failure to act or its own misconduct; provided
that:
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(i) Trustee shall not be personally liable for an error
of judgment made in good faith by a Responsible Officer or
Responsible Officers of Trustee, unless it shall be proved that
Trustee was negligent in ascertaining the pertinent facts;
(ii) Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of the Holders of Investor
Certificates relating to the time, method and place of conducting
any proceeding for any remedy available to Trustee, or exercising
any trust or power conferred upon Trustee, under this Agreement;
provided that, such direction is delivered by the Holder of
Investor Certificates evidencing the percentage of the aggregate
unpaid principal amount of Investor Certificates of all Series to
which such action relates required for such action by this
Agreement; and
(iii) Trustee shall not be charged with knowledge of (x)
any failure by Servicer referred to in Section 10.1 or (y) any
Early Amortization Event unless a Responsible Officer of Trustee
obtains actual knowledge of such failure or Early Amortization
Event or Trustee receives written notice of such failure or Early
Amortization Event from Servicer, any Holders of Investor
Certificates evidencing not less than 25% of the aggregate unpaid
principal amount of all Investor Certificates (or, with respect to
any such failure that does not relate to all Series, 25% of the
aggregate unpaid principal amount of all Investor Certificates of
all Series to which such failure relates, or the Enhancement
Providers, if any, for all Series to which such failure relates).
(d) Trustee shall not be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or powers
hereunder or thereunder, if there is reasonable ground for believing that
the repayment of such funds or indemnity reasonably satisfactory to it
against such risk or liability is not reasonably assured to it, and none of
the provisions contained in this Agreement shall in any event require
Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of Servicer under this Agreement except during such
time, if any, as Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, Servicer in accordance with this
Agreement.
(e) Trustee shall have no power to vary the corpus of the Trust,
except as expressly provided in this Agreement.
(f) If the Paying Agent or the Transfer Agent and Registrar shall
fail to perform any obligation, duty or agreement in the manner or on the
day required to be performed by the Paying Agent or the Transfer Agent and
Registrar, as the case may be, under this Agreement, Trustee shall be
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obligated promptly upon knowledge of a Responsible Officer thereof and
receipt of appropriate records, if any, to perform such obligation, duty or
agreement in the manner so required.
(g) If Transferor has agreed to transfer any of its receivables
(other than the Receivables) to another Person, upon the written request of
Transferor, Trustee will enter into such intercreditor agreements with the
transferee of such receivables as are customary and necessary to separately
identify the rights of the Trust and such other Person in Transferor's
receivables; provided that Trustee shall not be required to enter into any
intercreditor agreement which could adversely affect the interests of the
Holders and, upon the request of Trustee, Transferor will deliver an
Opinion of Counsel on any matters relating to such intercreditor agreement,
reasonably requested by Trustee.
SECTION 11.2. Certain Matters Affecting Trustee. Except as otherwise
provided in Section 11.1:
(a) Trustee may conclusively rely on and shall be fully
protected in acting on, or in refraining from acting in accord
with, any resolution, Officer's Certificate, certificate of
auditors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, appraisal, bond or other
paper or document reasonably believed by it to be genuine and to
have been signed or presented to it pursuant to this Agreement by
the proper party or parties. The Trustee need not investigate any
fact or matter stated in the document;
(b) Trustee may consult with counsel selected by it, and
any advice of such counsel, or Opinion of Counsel shall be full
and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(c) Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement or any
Enhancement Agreement, or to institute, conduct or defend any
litigation hereunder or thereunder or in relation to this
Agreement or any Enhancement Agreement, at the request, order or
direction of any of the Holders, pursuant to the provisions of
this Agreement or any Enhancement Agreement, unless such Holders
shall have offered to Trustee security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities
which may be incurred therein or thereby; nothing contained herein
shall, however, relieve Trustee of the obligations, upon the
occurrence of any Servicer Default (which has not been cured) to
exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in its
exercise, as a prudent person
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would exercise or use under the circumstances in the conduct of such
person's own affairs;
(d) Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it
to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(e) Trustee shall not be bound to make any investigation
into the facts of matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested
in writing to do so by Holders of Investor Certificates evidencing
more than 25% of the aggregate unpaid principal amount of all
Investor Certificates (or, with respect to any such matters that
do not relate to all Series, 25% of the aggregate unpaid principal
amount of the Investor Certificates of all Series to which such
matters relate);
(f) Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, custodians or nominees, and Trustee
shall not be responsible for any misconduct or negligence on the
part of any such agent, attorney, custodian or nominee appointed
with due care by it hereunder;
(g) except as may be required by Section 11.1(a), Trustee
shall not be required to make any initial or periodic examination
of any documents or records related to the Receivables or the
Accounts for the purpose of establishing the presence or absence
of defects, the compliance by Transferor with its representations
and warranties or for any other purpose;
(h) Money held by the Trustee in trust hereunder need not
be segregated from other funds except to the extent required by
law. The Trustee shall be under no liability for interest on any
money received by it hereunder;
(i) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel. The
Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on such Officers' Certificate or
Opinion of Counsel;
(j) The Trustee shall not be required to give any bond or
surety in respect of the performance of its powers and duties
hereunder;
(k) The Trustee shall not be bound to ascertain or
inquire as to the performance or observance of any covenants,
conditions or agreements on the part of the Transferor or the
Servicer;
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(l) The permissive rights of the Trustee to do things
enumerated in this Agreement shall not be construed as a duty and
the Trustee shall not be answerable for other than its negligence
or willful default; and
(m) In the event that the Trustee is also acting as
Paying Agent or Transfer Agent and Registrar hereunder, the rights
and protections afforded to the Trustee pursuant to this Article
XI shall also be afforded to such Paying Agent or Transfer Agent
or Registrar.
SECTION 11.3. Trustee Not Liable for Recitals in Certificates.
Trustee assumes no responsibility for the correctness of the recitals
contained herein and in the Certificates (other than the certificate of
authentication on the Certificates). Except as set forth in Section 11.15,
Trustee makes no representations as to the validity or sufficiency of this
Agreement or any Supplement or of the Certificates (other than the
certificate of authentication on the Certificates) or of any Receivable or
related document. Trustee shall not be accountable for the use or
application by Transferor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to
Transferor or the Holder of the Transferor Certificate in respect of the
Receivables or deposited in or withdrawn from the Collection Account, any
Series Accounts or any other accounts hereafter established to effectuate
the transactions contemplated by this Agreement and in accordance with this
Agreement.
SECTION 11.4. Trustee Not to Own Certificates. Trustee shall not
in its individual capacity, but may in a fiduciary capacity, become the
owner or pledgee of Investor Certificates. If Trustee becomes the owner or
pledgee of Investor Certificates in a fiduciary capacity it shall have the
same rights as it would have if it were not Trustee.
SECTION 11.5. Servicer to Pay Trustee's Fees and Expenses.
Servicer covenants and agrees to pay to Trustee from time to time, and
Trustee shall be entitled to receive, reasonable compensation (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the
execution of the trust hereby created and in the exercise and performance
of any of the powers and duties hereunder of Trustee, and Servicer will pay
or reimburse Trustee (without reimbursement from the Collection Account or
otherwise) upon its request for all reasonable expenses or disbursements
incurred or made by Trustee in accordance with any of the provisions of
this Agreement or any Enhancement Agreement (including the reasonable fees
and expenses of its agents, any co-trustee and counsel) except any such
expense, disbursement or advance as may arise from its own negligence,
willful misconduct or bad faith and except as provided in the following
sentence. If Trustee is appointed Successor Servicer pursuant to Section
10.2, the provisions of this Section 11.5 shall not apply to expenses,
disbursements and advances made or incurred by Trustee in its capacity
86
as Successor Servicer. When the Trustee incurs expenses or renders services
in connection with an Insolvency Event or a Servicer Default under Section
10.1(d), such expenses (including the fees and expenses of its counsel and
agents) and the compensation for such services are intended to constitute
expenses of administration under any bankruptcy law or law relating to
creditors rights generally.
The obligations of Servicer under Section 8.4 and this Section
11.5 shall survive the termination of the Trust and the resignation or
removal of Trustee.
SECTION 11.6. Eligibility Requirements for Trustee. Trustee shall
at all times be a bank, trust company or a corporation organized and doing
business under the laws of the United States of America or any state
thereof authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000 and subject
to supervision or examination by Federal or state authority and maintain
any credit or deposit rating required by any Rating Agency (as of the date
hereof Baa3 for ▇▇▇▇▇'▇) that is not an Affiliate of the Transferor. If
such bank or corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section 11.6, the
combined capital and surplus of such bank or corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report
of condition so published. In case at any time Trustee shall cease to be
eligible in accordance with the provisions of this Section 11.6, Trustee
shall resign immediately in the manner and with the effect specified in
Section 11.7.
SECTION 11.7. Resignation or Removal of Trustee. (a) Trustee may
at any time resign and be discharged from the trust hereby created by
giving written notice thereof to Servicer. Upon receiving such notice of
resignation, Transferor shall promptly appoint a successor trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor trustee.
If no successor trustee shall have been so appointed and have accepted
within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
(b) If at any time Trustee shall cease to be eligible in
accordance with the provisions of Section 11.6 and shall fail to resign
after written request therefor by Servicer or Transferor, or if at any time
Trustee shall be legally unable to act, or shall be adjudged a bankrupt or
insolvent, or a receiver of Trustee or of its property shall be appointed,
or any public officer shall take charge or control of Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, in which event Servicer shall remove Trustee and promptly
appoint a successor trustee by written instrument, in duplicate, one copy
of which instrument shall be delivered to Trustee so removed and one copy
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to the successor trustee. If no successor trustee shall have been so
appointed and have accepted within 30 days of the giving of such notice of
removal, the removed trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
(c) Any resignation or removal of Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 11.7
shall not become effective until acceptance of appointment by the successor
trustee as provided in Section 11.8 and any liability of Trustee arising
hereunder shall survive such appointment of a successor trustee.
SECTION 11.8. Successor Trustee. (a) Any successor trustee
appointed as provided in Section 11.7 shall execute, acknowledge and
deliver to Transferor, to Servicer and to its predecessor Trustee an
instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee shall become effective
and such successor trustee, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if
originally named as Trustee herein. Upon payment in full of all fees and
expenses due and owing to it hereunder, the predecessor Trustee shall
deliver to the successor trustee all documents and statements held by it
hereunder, and Transferor and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the successor
trustee all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in
this Section 11.8 unless at the time of such acceptance such successor
trustee shall be eligible under Section 11.6.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section, such successor trustee shall provide notice of
such succession hereunder to all Investor Holders and Servicer shall
provide such notice to each Rating Agency and any Enhancement Provider
entitled thereto pursuant to the relevant Supplement.
SECTION 11.9. Merger or Consolidation of Trustee. Any Person into
which Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which Trustee shall be a party, or any Person succeeding
to the corporate trust business of Trustee, shall be the successor of
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 11.6, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, anything herein
to the contrary notwithstanding.
SECTION 11.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction
88
in which any part of the Trust may at the time be located, Trustee shall
have the power and may execute and deliver all instruments to appoint one or
more Persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in such Person
or Persons, in such capacity and for the benefit of the Holders, such title to
the Trust, or any part thereof, and, subject to the other provisions of
this Section 11.10, such powers, duties, obligations, rights and trusts as
Trustee may consider necessary or desirable; provided, that Trustee shall
exercise due care in the appointment of any co-trustee. No co-trustee or
separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 11.6 and no notice to
Holders of the appointment of any co-trustee or separate trustee shall be
required under Section 11.8.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon Trustee shall be conferred or imposed upon and
exercised or performed by Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee
or co-trustee is not authorized to act separately without Trustee
joining in such act) except to the extent that under any laws of
any jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to
Servicer hereunder) Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the
Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article XI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested
with the estates or property specified in its instrument of appointment,
either jointly with Trustee or separately, as may be provided therein,
subject to all the provisions of this Agreement, specifically including
every provision of this Agreement relating to the conduct of, affecting the
89
liability of, or affording protection to, Trustee. Every such instrument
shall be filed with Trustee and a copy thereof given to Servicer.
(d) Any separate trustee or co-trustee may at any time constitute
Trustee its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect to
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and
be exercised by Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 11.11. Tax Return. If the Trust is required to file tax
returns, Servicer shall prepare or shall cause to be prepared any tax
returns required to be filed by the Trust and shall remit such returns to
Trustee for signature at least five days before such returns are due to be
filed; Trustee shall promptly sign such returns and deliver such returns
after signature to Servicer and such returns shall be filed by Servicer.
Servicer in accordance with each Supplement shall also prepare or shall
cause to be prepared all tax information required by law to be distributed
to Investor Holders. Trustee upon request, will furnish Servicer with all
such information known to Trustee as may be reasonably required in
connection with the preparation of all tax returns of the Trust. In no
event shall Trustee or Servicer (except as provided in Sections 7.4 or 8.4)
be liable for any liabilities, costs or expenses of the Trust or the
Investor Holders arising under any tax law, including Federal, state, local
or foreign income or excise taxes or any other tax imposed or measured by
income (or any interest or penalty with respect thereto or arising from a
failure to comply therewith).
SECTION 11.12. Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by Trustee
shall be brought in its own name as trustee. Any recovery of judgment
shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of Trustee, its agents and counsel, be
for the ratable benefit of the Holders in respect of which such judgment
has been obtained.
SECTION 11.13. Suits for Enforcement. If a Servicer Default shall
occur and be continuing, Trustee, in its discretion may, subject to the
provisions of Sections 10.1 and 11.14, proceed to protect and enforce its
rights and the rights of the Holders under this Agreement by a suit, action
or proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in
aid of the execution of any power granted in this Agreement or for the
enforcement of any other legal, equitable or other remedy as Trustee, being
90
advised by counsel, shall deem most effectual to protect and enforce any of
the rights of Trustee or the Holders.
SECTION 11.14. Rights of Holders to Direct Trustee. Holders of
Investor Certificates evidencing more than 50% of the aggregate unpaid
principal amount of all Investor Certificates (or, with respect to any
remedy, trust or power that does not relate to all Series, 50% of the
aggregate unpaid principal amount of the Investor Certificates of all
Series to which such remedy, trust or power relates) shall have the right
to direct the time, method, and place of conducting any proceeding for any
remedy available to Trustee, or exercising any trust or power conferred on
Trustee relating to such proceeding; provided that, subject to Section
11.1, Trustee shall have the right to decline to follow any such direction
if Trustee being advised by counsel determines that the action so directed
may not lawfully be taken, or if Trustee in good faith shall, by a
Responsible Officer or Responsible Officers of Trustee, determine that the
proceedings so directed would be illegal or involve it in personal
liability and provided further that nothing in this Agreement shall impair
the right of Trustee to take any action deemed proper by Trustee and which
is not inconsistent with such direction.
SECTION 11.15. Representations and Warranties of Trustee. Trustee
represents and warrants as of each Closing Date that:
(a) Trustee is an Illinois banking corporation organized,
existing and in good standing under the laws of the State of
Illinois;
(b) Trustee has full power, authority and right to
execute, deliver and perform this Agreement and has taken all
necessary action to authorize the execution, delivery and
performance by it of this Agreement; and
(c) this Agreement has been duly executed and delivered
by Trustee and is a binding obligation of Trustee enforceable
against Trustee in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect affecting the enforcement of creditors'
rights in general and except as such enforceability may be limited
by general principles of equity (whether considered in a suit at
law or in equity).
SECTION 11.16. Maintenance of Office or Agency. Trustee will
maintain at its expense an office or agency (the "Corporate Trust Office")
where notices and demands to or upon Trustee in respect of the Certificates
and this Agreement may be served in Chicago, Illinois, in the case of
Registered Certificates and Holders thereof. The Corporate Trust Office
shall initially be located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention Indenture Trust Administration (facsimile No.
(▇▇▇) ▇▇▇-▇▇▇▇). Trustee will give prompt notice to Servicer and to
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Investor Holders of any change in the location of the Certificate Register
or any such office or agency.
SECTION 11.17. Confidentiality. Information provided by the Credit
Card Originator or Transferor to Trustee related to the transaction
effected hereunder, including all information related to the Obligors with
respect to the Receivables, and any computer software provided to Trustee
in connection with the transaction effected hereunder or under any
Supplement, in each case whether in the form of documents, reports, lists,
tapes, discs or any other form, shall be "Confidential Information."
Trustee and its agents, representatives or employees shall at all times
maintain the confidentiality of all Confidential Information and shall not,
without the prior written consent of the Credit Card Originator or
Transferor, as applicable, disclose to third parties (including Holders) or
use such information to compete or assist any other Person in competing
with the Credit Card Originator or Transferor or in any manner whatsoever,
in whole or in part, except as expressly permitted under this Agreement or
under any Supplement or as required to fulfill an obligation of Trustee
under this Agreement or under any Supplement, in which case such
Confidential Information shall be revealed only to the extent expressly
permitted or only to Trustee's agents, representatives and employees who
need to know such Confidential Information to the extent required for the
purpose of fulfilling an obligation of Trustee under this Agreement or
under any Supplement. Notwithstanding the above, Confidential Information
may be disclosed to the extent required by law, statute, rule, regulation
or legal process (including any subpoena, civil investigative demand or
similar demand or request of any court, regulatory authority, arbitrator or
arbitration to which the Trustee or an affiliate or an officer, director,
employee or shareholder thereof is a party), provided that Trustee gives
prompt written notice to the Credit Card Originator or Transferor, as
applicable, of the nature and scope of such disclosure. Notwithstanding
anything herein to the contrary, the foregoing shall not be construed to
prohibit (i) disclosure of any and all information that is or become
publicly known, or information obtained by the Trustee from sources other
than the Servicer or the Transferor, (ii) disclosure of any and all
information (A) to any government agency or regulatory body having or
claiming authority to regulate or oversee any aspects of the Trustee's
business or that of its affiliates, (B) in any preliminary or final
offering circular, registration statement or contract or other document
pertaining to the transactions contemplated herein approved in advance by
the Servicer or the Transferor or (C) to any affiliate, independent or
internal auditor, or attorney of the Trustee having a need to know the
same, provided that the Trustee advises such recipient of the confidential
nature of the information being disclosed, or (iii) any other disclosure
authorized by the Servicer or the Transferor.
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ARTICLE XII TERMINATION
SECTION 12.1. Termination of Trust. The Trust and the respective
obligations and responsibilities of Transferor, Servicer and Trustee
created hereby (other than the obligation of Trustee to make payments to
Investor Holders as hereinafter set forth) shall terminate, except with
respect to the duties described in Sections 7.4, 8.4 and 12.2(b), upon the
earlier of (i) January 1, 2021, (ii) the day following the Distribution
Date on which the Invested Amount for each Series is zero (provided that
Transferor has delivered a written notice to Trustee electing to terminate
the Trust) and (iii) the date provided in Section 9.2.
SECTION 12.2. Final Distribution. (a) Servicer shall give Trustee
at least 30 days prior notice of the Distribution Date on which the
Investor Holders of any Series or Class may surrender their Investor
Certificates for payment of the final distribution on and cancellation of
such Investor Certificates (or, in the event of a final distribution
resulting from the application of Section 2.6, 9.2 or 10.1, notice of such
Distribution Date promptly after Servicer has determined that a final
distribution will occur, if such determination is made less than 30 days
prior to such Distribution Date). Such notice shall be accompanied by an
Officer's Certificate setting forth the information specified in Section
3.5 covering the period during the then current Servicer fiscal year
through the date of such notice. Not later than the fifth day of the month
in which the final distribution in respect of such Series or Class is
payable to Investor Holders, Trustee shall provide notice to Investor
Holders of such Series or Class specifying (i) the date upon which final
payment of such Series or Class will be made upon presentation and
surrender of Investor Certificates of such Series or Class at the office or
offices therein designated, (ii) the amount of any such final payment and
(iii) that the Record Date otherwise applicable to such payment date is not
applicable, payments being made only upon presentation and surrender of
such Investor Certificates at the office or offices therein specified
(which, in the case of Bearer Certificates, shall be outside the United
States). Trustee shall give such notice to the Transfer Agent and Registrar
and the Paying Agent at the time such notice is given to Investor Holders.
(b) Notwithstanding a final distribution to the Investor Holders
of any Series or Class (or the termination of the Trust), except as
otherwise provided in this paragraph, all funds then on deposit in the
Collection Account, the Excess Funding Account and any Series Account
allocated to such Investor Holders shall continue to be held in trust for
the benefit of such Investor Holders and the Paying Agent or Trustee shall
pay such funds to such Investor Holders upon surrender of their Investor
Certificates (and any excess shall be paid in accordance with any relevant
Enhancement Agreement). If all such Investor Holders shall not surrender
their Investor Certificates for cancellation within six months after the
date specified in the notice from Trustee described in paragraph (a),
Trustee shall give a second notice to the remaining such Investor Holders
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to surrender their Investor Certificates for cancellation and receive the
final distribution with respect thereto (which surrender and payment, in
the case of Bearer Certificates, shall be outside the United States). If
within one year after the second notice all such Investor Certificates
shall not have been surrendered for cancellation, Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining such Investor Holders concerning surrender of their
Investor Certificates, and the cost thereof shall be paid out of the funds
in the Collection Account or any Series Account held for the benefit of
such Investor Holders. Trustee and the Paying Agent shall pay to Transferor
any moneys held by them for the payment of principal or interest that
remains unclaimed for two years. After payment to Transferor, Investor
Holders entitled to the money must look to Transferor for payment as
general creditors unless an applicable abandoned property law designates
another Person.
(c) If the Invested Amount with respect to any Series is greater
than zero on its Series Termination Date or such earlier date as is
specified in the related Supplement (after giving effect to deposits and
distributions otherwise to be made on such date), Trustee will sell or
cause to be sold on such Series Termination Date, in accordance with the
procedures and subject to the conditions described in such Supplement,
Principal Receivables and the related Finance Charge Receivables (or, if a
Tax Opinion is obtained, interests therein) in an amount up to 110% of the
Invested Amount with respect to such Series on such date (after giving
effect to such deposits and distributions; provided that in no event shall
such amount exceed an amount of Principal Receivables (and all associated
Finance Charge Receivables) equal to the sum of (i) the product of (A)
Transferor Percentage, (B) the aggregate outstanding Principal Receivables,
and (C) a fraction the numerator of which is the related Investor
Percentage of Collections of Finance Charge Receivables and the denominator
of which is the sum of all Investor Percentages with respect to Collections
of Finance Charge Receivables of all Series outstanding and (ii) the
Invested Amount of such Series). The proceeds from any such sale shall be
allocated and distributed in accordance with the applicable Supplement.
SECTION 12.3. Transferor's Termination Rights. Upon the
termination of the Trust pursuant to Section 12.1 and the surrender of the
Transferor Certificate and any Supplemental Certificate, Trustee shall
assign and convey to the holder of the Transferor Certificate Transferor or
its designee, without recourse, representation or warranty, all right,
title and interest of the Trust in the Receivables, whether then existing
or thereafter created, all moneys due or to become due and all amounts
received with respect thereto and all proceeds thereof, except for amounts
held by Trustee pursuant to Section 12.2(b). Trustee shall execute and
deliver such instruments of transfer and assignment, in each case without
recourse, as shall be reasonably requested by Transferor to vest in
Transferor or its designee all right, title and interest which the Trust
had in the Receivables and such other related assets.
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ARTICLE XIII MISCELLANEOUS PROVISIONS
SECTION 13.1. Amendment; Waiver of Past Defaults. (a) This
Agreement or any Supplement may be amended from time to time (including in
connection with (i) adding covenants, restrictions or conditions of
Transferor, such further covenants, restrictions or conditions as its Board
of Directors and Trustee shall consider to be for the benefit or protection
of the Investor Holders, and to make the occurrence, or the occurrence and
continuance, of a default in any of such additional covenants, restrictions
or conditions a default or Early Amortization Event permitting the
enforcement of all or any of the several remedies provided in this
Agreement as herein set forth; provided, however, that in respect of any
such additional covenant, restriction or condition such amendment may
provide for a particular period of grace after default or may provide for
an immediate enforcement upon such default or may limit the remedies
available to Trustee upon such default, (ii) curing any ambiguity or
correcting or supplementing any provision contained herein or in any
Supplement which may be defective or inconsistent with any other provision
contained herein or in any Supplement or to surrender any right or power
conferred upon Transferor, (iii) the issuance of a Supplemental
Certificate, (iv) the addition of a Participation Interest or receivables
arising in VISA, MasterCard or any other type of open end revolving credit
card account to the Trust, (v) the assumption by another entity, in
accordance with the provisions of this Agreement, of Transferor's
obligations hereunder, or (vi) the provision of additional Enhancement for
the benefit of Holders of any Series) by Servicer, Transferor and Trustee
without the consent of such Holders as provided for in the applicable
Supplement, provided that (x) Transferor shall have delivered to Trustee an
Officer's Certificate to the effect that Transferor reasonably believes
that such action shall not adversely affect in any material respect the
interests of any Investor Holder, (y) the Rating Agency Condition shall
have been satisfied with respect to any such amendment and (z) a Tax
Opinion is delivered in connection with any such amendment. The designation
of additional or substitute Transferors or additional Credit Card
Originators pursuant to Section 2.11 or 2.12 shall be subject to this
Section 13.1 only to the extent that the supplement to this Agreement
providing for such designation amends any of the terms of this Agreement.
(b) This Agreement or any Supplement may also be amended from time
to time by Servicer, Transferor and Trustee, with the consent of the
Holders of Investor Certificates (acting for themselves or through any
designated agents, as provided for in any applicable Supplement) evidencing
not less than 66-2/3% of the aggregate unpaid principal amount of the
Investor Certificates of all adversely affected Series and, unless the
Rating Agency Condition is satisfied, of each Class of each such Series,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or any Supplement or of
modifying in any manner the rights of the Holders; provided, however, that
no such amendment shall (i) reduce in any manner the amount of or delay the
95
timing of any distributions to be made to any Investor Holders or deposits
of amounts to be so distributed or the amount available under any
Enhancement without the consent of each affected Holder (provided that any
amendment of the terms of an Early Amortization Event shall not be deemed
to be within the scope of this clause (i)), (ii) change the definition of
or the manner of calculating the interest of any Investor Holder without
the consent of each affected Investor Holder (acting for themselves or
through any designated agents, as provided for in any applicable
Supplement) or (iii) reduce the aforesaid percentage required to consent to
any such amendment without the consent of each Investor Holder (acting for
themselves or through any designated agents, as provided for in any
applicable Supplement) and, unless the Rating Agency Condition is
satisfied, of each Class of each such Series. Any amendment to be effected
pursuant to this paragraph shall be deemed to adversely affect all
outstanding Series, other than any Series with respect to which such action
shall not, as evidenced by an Opinion of Counsel for Transferor, addressed
and delivered to Trustee, adversely affect in any material respect the
interests of any Investor Holder of such Series. Trustee may, but shall not
be obligated to, enter into any such amendment which affects Trustee's
rights, duties or immunities under this Agreement or otherwise.
(c) Promptly after the execution of any such amendment or consent
(other than an amendment pursuant to paragraph (a)), Trustee shall furnish
notification of the substance of such amendment to each Investor Holder;
and Servicer shall furnish prior notification of the substance of such
amendment to (i) each Rating Agency and (ii) each Enhancement Provider, if
any, entitled thereto pursuant to the relevant Supplement.
(d) It shall not be necessary for the consent of Investor Holders
under this Section to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Investor Holders shall be
subject to such reasonable requirements as Trustee may prescribe.
(e) Any Supplement executed in accordance with the provisions of
Section 6.3 shall not be considered an amendment to this Agreement for the
purposes of this Section.
(f) The Holders of Investor Certificates evidencing more than
66-2/3% of the aggregate unpaid principal amount of the Investor
Certificates of each Series, or, with respect to any Series with two or
more Classes, of each Class (or, with respect to any default that does not
relate to all Series, 66-2/3% of the aggregate unpaid principal amount of
the Investor Certificates of each Series to which such default relates or,
with respect to any such Series with two or more Classes, of each Class)
may, on behalf of all Holders, waive any default by Transferor or Servicer
96
in the performance of their obligations hereunder and its consequences,
except the failure to make any distributions required to be made to
Investor Holders or to make any required deposits of any amounts to be so
distributed. Upon any such waiver of a past default, such default shall
cease to exist, and any default arising therefrom shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived.
SECTION 13.2. Protection of Right, Title and Interest to Trust.
(a) Transferor shall cause this Agreement, all amendments and supplements
hereto and all financing statements and continuation statements and any
other necessary documents covering the Holders, and Trustee's right, title
and interest to the Trust to be promptly recorded, registered and filed,
and at all times to be kept recorded, registered and filed, all in such
manner and in such places as may be required by law fully to preserve and
protect the right, title and interest of the Holders and Trustee hereunder
to all property comprising the Trust Assets. Transferor shall deliver to
Trustee file- stamped copies of, or filing receipts for, any document
recorded, registered or filed as provided above, as soon as available
following such recording, registration or filing.
(b) Within 30 days after Transferor makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with paragraph (a) seriously
misleading within the meaning of Section 9-402(7) (or any comparable
provision) of the UCC, Transferor shall give Trustee notice of any such
change and shall file such financing statements or amendments as may be
necessary to continue the perfection of the Trust's security interest in
the Receivables and the proceeds thereof.
(c) Transferor and Servicer will give Trustee prompt notice of any
relocation of any office from which it services Receivables or keeps
records concerning the Receivables or of its principal executive office and
whether, as a result of such relocation, the applicable provisions of the
UCC would require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing statement and
shall file such financing statements or amendments as may be necessary to
perfect or to continue the perfection of the Trust's security interest in
the Receivables and the proceeds thereof. Transferor and Servicer will at
all times maintain each office from which it services Receivables and its
principal executive offices within the United States.
(d) Transferor will deliver to Trustee and any Enhancement
Provider entitled thereto pursuant to the relevant Supplement: (i) upon the
execution and delivery of each amendment of this Agreement or any
Supplement, an Opinion of Counsel to the effect specified in Exhibit F-1;
(ii) on each Addition Date on which any Supplemental Accounts are to be
97
designated as Accounts pursuant to Section 2.8(a) or (b), an Opinion of
Counsel to the effect specified in Exhibit F-2, and on each Addition Date
on which any Participation Interests are to be included in the Trust
pursuant to Section 2.8(a) or (b), an Opinion of Counsel covering the same
substantive legal issues addressed by Exhibit F-2 but conformed to the
extent appropriate to relate to Participation Interests; and (iii) on or
before March 31 of each year, beginning with March 31, 1996, an Opinion of
Counsel to the effect specified in Exhibit F-2.
SECTION 13.3. Limitation on Rights of Holders. (a) The death or
incapacity of any Holder shall not operate to terminate this Agreement or
the Trust, nor shall such death or incapacity entitle such Holders' legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(b) No Investor Holder shall have any right to vote (except as
expressly provided in this Agreement) or in any manner otherwise control
the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the
terms of the Certificates, be construed so as to constitute the Investor
Holders from time to time as partners or members of an association, nor
shall any Investor Holder be under any liability to any third person by
reason of any action by the parties to this Agreement pursuant to any
provision hereof.
(c) No Investor Holder shall have any right by virtue of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless
such Investor Holder previously shall have made, and unless the Holders of
Investor Certificates evidencing more than 50% of the aggregate unpaid
principal amount of all Investor Certificates (or, with respect to any such
action, suit or proceeding that does not relate to all Series, 50% of the
aggregate unpaid principal amount of the Investor Certificates of all
Series which such action, suit or proceeding relates) shall have made
written request to Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and Trustee, for 60 days
after its receipt of such request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it
being understood and intended, and being expressly covenanted by each
Investor Holder with every other Investor Holder and Trustee, that no one
or more Investor Holders shall have any right in any manner whatever by
virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb or prejudice the rights of Holders of any
other of the Investor Certificates, or to obtain or seek to obtain priority
over or preference to any other Investor Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the
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equal, ratable and common benefit of all Investor Holders except as
otherwise expressly provided in this Agreement. For the protection and
enforcement of the provisions of this Section, each and every Investor
Holder and Trustee shall be entitled to such relief as can be given either
at law or in equity.
SECTION 13.4. GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
SECTION 13.5. Notices, Payments. (a) All demands notices,
instructions, directions, consents and communications (collectively,
"Notices") under this Agreement shall be in writing and shall be deemed to
have been duly given if personally delivered at, mailed by registered mail,
return receipt requested, or sent by facsimile transmission (i) in the case
of Transferor or Servicer, to WFN, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ (facsimile no. 614/729-4899), (ii) in the
case of Trustee, ▇▇▇▇▇▇ Trust and Savings Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention Indenture Trustee
Administration (facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇ (iii) in the case of the
Paying Agent or the Transfer Agent and Registrar, to Trustee at the address
above and (iv) to any other Person as specified in any Supplement; or, as
to each party, at such other address or facsimile number as shall be
designated by such party in a written notice to each other party.
(b) Any Notice required or permitted to be given to a Holder of
Registered Certificates shall be given by first-class mail, postage
prepaid, at the address of such Holder as shown in the Certificate
Register. No Notice shall be required to be mailed to a Holder of Bearer
Certificates or Coupons but shall be given as provided below. Any Notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Investor Holder
receives such Notice. In addition, (i) if and so long as any Series or
Class is listed on the Luxembourg Stock Exchange and such Exchange shall so
require, any Notice to Investor Holders shall be published in an Authorized
Newspaper of general circulation in Luxembourg within the time period
prescribed in this Agreement and (ii) in the case of any Series or Class
with respect to which any Bearer Certificates are outstanding, any Notice
required or permitted to be given to Investor Holders of such Series or
Class shall be published in an Authorized Newspaper within the time period
prescribed in this Agreement.
SECTION 13.6. Rule 144A Information. For so long as any of the
Investor Certificates of any Series or Class are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, each of
99
Transferor, Trustee, Servicer and any Enhancement Provider agree to
cooperate with each other to provide to any Investor Holders of such Series
or Class and to any prospective purchaser of Certificates designated by
such Investor Holder, upon the request of such Investor Holder or
prospective purchaser, any information required to be provided to such
holder or prospective purchaser to satisfy the condition set forth in Rule
144A(d)(4) under the Securities Act.
SECTION 13.7. Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall for
any reason whatsoever be held invalid, then such provisions shall be deemed
severable from the remaining provisions of this Agreement and shall in no
way affect the validity or enforceability of the remaining provisions or of
the Certificates or the rights of the Holders.
SECTION 13.8. Certificates Nonassessable and Fully Paid. It is the
intention of the parties to this Agreement that the Holders shall not be
personally liable for obligations of the Trust, that the interests in the
Trust represented by the Certificates shall be nonassessable for any losses
or expenses of the Trust or for any reason whatsoever and that Certificates
upon authentication thereof by Trustee pursuant to Section 6.2 are and
shall be deemed fully paid.
SECTION 13.9. Further Assurances. Transferor and Servicer agree to
do and perform, from time to time, any and all acts and to execute any and
all further instruments required or reasonably requested by Trustee more
fully to effect the purposes of this Agreement, including the execution of
any financing statements or continuation statements relating to the
Receivables for filing under the provisions of the UCC of any applicable
jurisdiction.
SECTION 13.10. Nonpetition Covenant. Notwithstanding any prior
termination of this Agreement, Servicer, Trustee, Transferor, each Holder
and each Enhancement Provider, if any, and each Holder of a Supplemental
Certificate shall not, prior to the date which is one year and one day
after the last day on which any Investor Certificates shall have been
outstanding, with respect to the Trust, petition or otherwise invoke or
cause the Trust to invoke the process of any Governmental Authority for the
purpose of commencing or sustaining a case against the Trust under any
Federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Trust or any substantial part of its property or
ordering the winding-up or liquidation of the affairs of the Trust;
provided, however, that nothing herein shall prohibit the Trustee from
filing proofs of claim or otherwise participating in such proceedings
instituted by any other person.
SECTION 13.11. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of Trustee or the Holders, any right,
100
remedy, power or privilege under this Agreement shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges provided under this
Agreement are cumulative and not exhaustive of any rights, remedies, powers
and privileges provided by law.
SECTION 13.12. Counterparts. This Agreement may be executed in two
or more counterparts (and by different parties on separate counterparts),
each of which shall be an original, but all of which together shall
constitute one and the same instrument.
SECTION 13.13. Third-Party Beneficiaries. This Agreement will
inure to the benefit of and be binding upon the parties hereto, the
Holders, any Enhancement Provider (to the extent provided in this Agreement
and the related Supplement) and their respective successors and permitted
assigns. Except as otherwise expressly provided in this Agreement
(including Section 7.4), no other Person will have any right or obligation
hereunder.
SECTION 13.14. Actions by Holders. (a) Wherever in this Agreement
a provision is made that an action may be taken or a Notice given by
Holders, such action or Notice may be taken or given by any Holder, unless
such provision requires a specific percentage of Holders.
(b) Any Notice, request, authorization, direction, consent, waiver
or other act by the Holder of a Certificate shall bind such Holder and
every subsequent Holder of such Certificate and of any Certificate issued
upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done or omitted to be done by Trustee
or Servicer in reliance thereon, whether or not notation of such action is
made upon such Certificate.
SECTION 13.15. Merger and Integration. Except as specifically
stated otherwise herein, this Agreement sets forth the entire understanding
of the parties relating to the subject matter hereof, and all prior
understandings, written or oral, are superseded by this Agreement.
101
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused
this Agreement to be duly executed by their respective officers as of the
day and year first above written.
WORLD FINANCIAL NETWORK
NATIONAL BANK, as
Transferor and Servicer,
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By---------------------------------------
Name:▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Treasurer
▇▇▇▇▇▇ TRUST AND SAVINGS
BANK, not in its individual capacity,
but solely as Trustee
/s/ E. ▇▇▇ ▇▇▇▇▇▇▇▇▇
By--------------------------------------
Name: E. ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
102
EXHIBIT A
FORM OF TRANSFEROR CERTIFICATE
THIS TRANSFEROR CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS TRANSFEROR CERTIFICATE NOR
ANY PORTION HEREOF MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE
REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM SUCH REGISTRATION PROVISIONS.
THIS TRANSFEROR CERTIFICATE IS NOT PERMITTED TO BE TRANSFERRED,
ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN COMPLIANCE
WITH THE TERMS OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
No. R-1 One Unit
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
TRANSFEROR CERTIFICATE
THIS CERTIFICATE REPRESENTS AN INTEREST
IN CERTAIN ASSETS OF THE
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
(Not an interest in or obligation of Transferor
or any affiliate thereof)
This certifies that WORLD FINANCIAL NETWORK NATIONAL BANK
is the registered owner of a fractional interest in the assets of a trust
(the "Trust") not allocated to the Investor Interest or the interest of any
Holder of a Supplemental Certificate pursuant to the Pooling and Servicing
Agreement dated as of January 17, 1996 (as amended and supplemented, the
"Agreement"), between World Financial Network National Bank, a national
banking association, as Transferor ("Transferor") and as Servicer, and
▇▇▇▇▇▇ Trust and Savings Bank, an Illinois banking corporation (as
successor to The Bank of New York), as trustee ("Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings
ascribed to them in the Agreement.
This Certificate is the Transferor Certificate issued under, and
is subject to, the Agreement. By accepting this Certificate, its Holder
assents to, and is bound by, the Agreement.
Exhibit A, Page 1
Transferor has entered into the Agreement, and this Certificate is
issued, with the intention that, for Federal, state and local income and
franchise tax purposes only, the Investor Certificates (except Transferor
Retained Certificates which are held by Transferor) will qualify as debt
secured by the Receivables. Transferor, by entering into the Agreement and
the Holder of the Transferor Certificate by acceptance of this Transferor
Certificate, agree to treat such Investor Certificates for Federal, state
and local income and franchise tax purposes as debt under applicable tax
law.
Unless the certificate of authentication hereon has been executed
by or on behalf of Trustee, by manual or facsimile signature, this
Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.
IN WITNESS WHEREOF, the Holder of the Transferor Certificate has
caused this Certificate to be duly executed.
WORLD FINANCIAL NETWORK
NATIONAL BANK,
as Transferor,
By ------------------------------------------
Name:
Title:
Dated:
Exhibit A, Page 2
DATED:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Transferor Certificate described in the
within-mentioned Pooling and Servicing Agreement dated as of January 17,
1996 between World Financial Network National Bank as Transferor and
Servicer and ▇▇▇▇▇▇ Trust and Savings Bank, as Trustee.
▇▇▇▇▇▇ TRUST AND SAVINGS
BANK
as Trustee,
By----------------------------------------------
Authorized Signatory
or
By---------------------------------------------
as Authenticating Agent
for Trustee,
By---------------------------------------------
Authorized Signatory
Exhibit A, Page 3
EXHIBIT B
FORM OF ASSIGNMENT OF RECEIVABLES IN SUPPLEMENTAL
ACCOUNTS
(As required by Section 2.8 of
the Pooling and Servicing Agreement)
ASSIGNMENT No. _______ OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS
dated as of _____________, ___1/ by and among WORLD FINANCIAL NETWORK
NATIONAL BANK, a national banking association, as
Transferor ("Transferor") and as Servicer ("Servicer"), and ▇▇▇▇▇▇ Trust
and Savings Bank, (as successor to The Bank of New York), an Illinois
banking corporation ("Trustee"), pursuant to the Pooling and Servicing
Agreement referred to below.
WITNESSETH
WHEREAS Transferor, Servicer and Trustee are parties to the
Pooling and Servicing Agreement dated as of January 17, 1996 and amended
and restated as of September 17, 1999 (as may be amended and supplemented
from time to time, the "Agreement");
WHEREAS, pursuant to the Agreement, Transferor wishes to designate
Supplemental Accounts owned by the Credit Card Originator to be included as
Accounts and to convey the Receivables of such Supplemental Accounts,
whether now existing or hereafter created, to the Trust as part of the
corpus of the Trust (as each such term is defined in the Agreement); and
WHEREAS Trustee is willing to accept such designation and conveyance
subject to the terms and conditions hereof;
NOW, THEREFORE, Transferor, Servicer and Trustee hereby agree as
follows:
1. Defined Terms. All capitalized terms used herein shall have the
meanings ascribed to them in the Agreement unless otherwise defined herein.
"Addition Date" means, with respect to the Supplemental Accounts
designated hereby, ________, ____.
----------------
1/ To be dated as of the applicable Addition Date.
Exhibit B, Page 1
"Addition Cut Off Date" means, with respect to the Supplemental
Accounts designated hereby, ________, ____.
2. Designation of Supplemental Accounts. On or before the Document
Delivery Date, Transferor will deliver to Trustee an Account Schedule
containing a true and complete schedule identifying all such Supplemental
Accounts specifying for each such Account, as of the Addition Cut Off Date,
its account number, the aggregate amount outstanding in such Account and
the aggregate amount of Principal Receivables outstanding in such Account,
which Account Schedule shall supplement any other Account Schedule
previously delivered to Trustee pursuant to the Agreement.
3. Conveyance of Receivables. Transferor does hereby transfer,
assign, set over and otherwise convey to the Trust, for the benefit of the
Holders, all its right, title and interest in, to and under the Receivables
of such Supplemental Accounts existing at the close of business on the
Addition Date and thereafter created from time to time until the
termination of the Trust, all monies due or to become due and all amounts
received with respect thereto and all proceeds thereof. The foregoing does
not constitute and is not intended to result in the creation or assumption
by the Trust, Trustee, any Investor Holder or any Enhancement Provider of
any obligation of Servicer, Transferor, the Credit Card Originator or any
other Person in connection with the Accounts, the Receivables or under any
agreement or instrument relating thereto, including any obligation to
Obligors, merchant banks, merchants clearance systems or insurers.
Transferor agrees to record and file, at its own expense,
financing statements (and continuation statements when applicable) with
respect to the Receivables now in Supplemental Accounts, meeting the
requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect, and maintain perfection of, the
assignment of such Receivables to the Trust, and to deliver a file-stamped
copy of each such financing statement or other evidence of such filing to
Trustee on or prior to the Addition Date. Trustee shall be under no
obligation whatsoever to file or maintain such financing or continuation
statements or to make any other filing under the UCC in connection with
such assignment.
In connection with such assignment, Transferor further agrees, at
its own expense, on or prior to the date of this Assignment, to cause the
Credit Card Originator to indicate in the appropriate computer files that
Receivables created in connection with the Supplemental Accounts and
designated hereby have been conveyed to the Trust pursuant to the Agreement
and this Assignment for the benefit of the Holders.
Transferor does hereby grant to Trustee a security interest in all
of its right, title and interest in and to the Receivables now existing and
Exhibit B, Page 2
hereafter created in the Supplemental Accounts, all monies due or to become
due and all amounts received with respect thereto and all proceeds thereof.
This Assignment constitutes a security agreement under the UCC.
4. Acceptance by Trustee. Trustee hereby acknowledges its
acceptance on behalf of the Trust of all right, title and interest to the
property, now existing and hereafter created, conveyed to the Trust
pursuant to Section 3(a) of this Assignment, and declares that it shall
maintain such right, title and interest, upon the trust set forth in the
Agreement for the benefit of all Holders. Trustee further acknowledges
that, prior to or simultaneously with the execution and delivery of this
Assignment, Transferor delivered to Trustee the Account Schedule described
in Section 2 of this Assignment.
5. Representations and Warranties of Transferor. Transferor hereby
represents and warrants to Trustee, on behalf of the Trust, as of the date
of this Assignment and as of the Addition Date that:
(a) Legal, Valid and Binding Obligation. This Assignment
constitutes a legal, valid and binding obligation of Transferor
enforceable against Transferor in accordance with its terms,
except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement
of creditors' rights in general and except as such enforceability
may be limited by general principles of equity (whether considered
in a suit at law or in equity);
(b) Eligibility of Accounts. Each Supplemental Account
designated hereby is an Eligible Account;
(c) Insolvency. As of each of the Addition Cut Off Date
and the Addition Date, no Insolvency Event with respect to the
Credit Card Originator or Transferor has occurred and the transfer
by Transferor of Receivables arising in the Supplemental Accounts
to the Trust has not been made in contemplation of the occurrence
thereof;
(d) Early Amortization Event. Transferor reasonably
believes that (A) the addition of the Receivables arising in the
Supplemental Accounts will not, based on the facts known to
Transferor, then or thereafter cause an Early Amortization Event
to occur with respect to any Series and (B) no selection procedure
was utilized by Transferor which would result in the selection of
Supplemental Accounts (from among the available Eligible Accounts
owned by the Credit Card Originator) that would be materially less
favorable to the interests of the Investor Holders of any Series
as of the Addition Date than a random selection;
Exhibit B, Page 3
(e) Security Interest. Either this Assignment constitutes
a valid transfer and assignment to the Trust of all right, title
and interest of Transferor in the Receivables and other Trust
Assets conveyed to the Trust by Transferor and all monies due or
to become due and all amounts received with respect thereto and
the proceeds thereof, or this Assignment constitutes a grant of a
security interest in such property to the Trustee, for the benefit
of the Investor Holders, which, in the case of existing
Receivables and the proceeds thereof, is enforceable upon
execution and delivery of this Assignment, and which will be
enforceable with respect to such Receivables hereafter created and
the proceeds thereof upon such creation. Upon the filing of the
financing statements described in Section 3 of this Assignment
and, in the case of the Receivables hereafter created and the
proceeds thereof, upon the creation thereof, the Trust shall have
a first priority security interest in such property except for
Liens permitted under Section 2.7(b) of the Agreement;
(f) No Conflict. The execution and delivery by Transferor
of this Assignment, the performance of the transactions
contemplated by this Assignment and the fulfillment of the terms
hereof applicable to Transferor, will not conflict with or violate
any Requirements of Law applicable to Transferor or conflict with,
result in any breach of any of the material terms and provisions
of, or constitute (with or without notice or lapse of time or
both) a material default under, any indenture, contract,
agreement, mortgage, deed of trust or other instrument to which
Transferor is a party or by which it or its properties are bound;
(g) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of Transferor,
threatened against Transferor before any court, regulatory body,
administrative agency or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Assignment,
(ii) seeking to prevent the consummation of any of the
transactions contemplated by this Assignment, (iii) seeking any
determination or ruling that, in the reasonable judgment of
Transferor, would materially and adversely affect the performance
by Transferor of its obligations under this Assignment, (iv)
seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Assignment
or (v) seeking to affect adversely the income tax attributes of
the Trust under the Federal, or applicable state income or
franchise tax systems; and
(h) All Consents. All authorizations, consents, orders or
approvals or other actions of any Person or of any court or other
governmental authority required to be obtained by Transferor in
connection with the execution and delivery of this Assignment by
Transferor and the performance of the
Exhibit B, Page 4
transactions contemplated by this Assignment by Transferor, have been
obtained.
6. Ratification of Agreement. As supplemented by this Assignment,
the Agreement is in all respects ratified and confirmed and the Agreement
as so supplemented by this Assignment shall be read, taken and construed as
one and the same instrument.
7. Counterparts. This Assignment may be executed in two or more
counterparts, and by different parties on separate counterparts, each of
which shall be an original, but all of which shall constitute one and the
same instrument.
8. GOVERNING LAW. THIS ASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT
OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused
this Assignment to be duly executed by their respective officers as of the
day and year first above written.
WORLD FINANCIAL NETWORK
NATIONAL BANK,
as Transferor and Servicer,
By -----------------------------------------------
Name:
Title:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
not in its individual capacity, but solely as
Trustee,
By-----------------------------------------------
Name:
Title:
Exhibit B, Page 5
EXHIBIT C
FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
(As required by Section 2.9 of
the Pooling and Servicing Agreement)
REASSIGNMENT No. _______ OF RECEIVABLES dated as of
_________, ____1/ by and among WORLD FINANCIAL NETWORK NATIONAL
BANK, a national banking association, as Transferor ("Transferor") and as
Servicer ("Servicer") and ▇▇▇▇▇▇ Trust and Savings Bank (as successor to
The Bank of New York), an Illinois banking corporation ("Trustee"),
pursuant to the Pooling and Servicing Agreement referred to below.
WITNESSETH:
WHEREAS Transferor, Servicer and Trustee are parties to the
Pooling and Servicing Agreement dated as of January 17, 1996 (as may be
amended and supplemented from time to time, the "Agreement");
WHEREAS pursuant to the Agreement, Transferor wishes to remove
from the Trust all Receivables in certain designated Accounts owned by the
Credit Card Originator (the "Removed Accounts") and to cause Trustee to
reconvey the Receivables of such Removed Accounts, whether now existing or
hereafter created, from the Trust to Transferor; and
WHEREAS Trustee is willing to accept such designation and to
reconvey the Receivables in the Removed Accounts subject to the terms and
conditions hereof;
NOW, THEREFORE, Transferor, Servicer and Trustee hereby agree as
follows:
1. Defined Terms. All terms defined in the Agreement and used
herein shall have such defined meanings when used herein, unless otherwise
defined herein.
"Removal Date" means, with respect to the Removed Accounts
designated hereby, ____________, _____.
"Removal Notice Date" means, with respect to the Removed Accounts,
____________, ___.
-------------
1/ To be dated as of the Removal Date.
Exhibit C, Page 1
2. Designation of Removed Accounts. On or before the date that is
10 Business Days after the Removal Date, Transferor will deliver to Trustee
an Account Schedule identifying all Accounts the Receivables of which are
being removed from the Trust, specifying for each such Account, as of the
Removal Notice Date, its account number, the aggregate amount outstanding
in such Account and the aggregate amount of Principal Receivables in such
Account, which Account Schedule shall supplement any Account Schedule
previously delivered to Trustee pursuant to the Agreement.
3. Conveyance of Receivables. (a) Trustee does hereby transfer,
assign, set over and otherwise convey to Transferor, without
representation, warranty or recourse, on and after the Removal Date, all
right, title and interest of the Trust in, to and under the Receivables
existing at the close of business on the Removal Date and thereafter
created from time to time in the Removed Accounts designated hereby, all
monies due or to become due and all amounts received with respect thereto
and all proceeds thereof.
(b) In connection with such transfer, Trustee agrees to execute
and deliver to Transferor on or prior to the date this Reassignment is
delivered, applicable termination statements with respect to the
Receivables existing at the close of business on the Removal Date and
thereafter created from time to time in the Removed Accounts reassigned
hereby and the proceeds thereof evidencing the release by the Trust of its
interest in the Receivables in the Removed Accounts, and meeting the
requirements of applicable state law, in such manner and such jurisdictions
as are necessary to terminate such interest.
4. Representations and Warranties of Transferor. Transferor hereby
represents and warrants to Trustee, on behalf of the Trust, as of the
Removal Date:
(a) Legal, Valid and Binding Obligation. This Reassignment
constitutes a legal, valid and binding obligation of Transferor enforceable
against Transferor, in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors, rights in general and except as
such enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity);
only for removals pursuant to Section 2.9(a) of the Agreement
(b) Early Amortization Event. Transferor reasonably believes that
(A) the removal of the Receivables existing in the Removed Accounts will
not, based on the facts known to Transferor, then or thereafter cause an
Early Amortization Event to occur with respect to any Series and (B) no
selection procedure was utilized by Transferor which would result in a
Exhibit C, Page 2
selection of Removed Accounts from among any pools of Accounts of a similar
type that would be materially adverse to the interests of the Investor
Holders of any Series as of the Removal Date; and
(c) List of Removed Accounts. The list of Removed Accounts
delivered pursuant to Section 2.9(a)(ii) of the Agreement, as of the
Removal Date, is true and complete in all material respects.
only if removals pursuant to Section 2.9(a)
(d) Defaulted Receivables. No selection procedure was utilized by
Transferor with the intent to include a disproportionately higher level of
Defaulted Receivables in the Removed Accounts than exist in the Accounts or
to remove Accounts for the intended purpose of mitigating losses to the
Trust.
(e) Receivables Tests. The aggregate Principal Receivables in the
Removed Accounts did not exceed the lesser of (i) the excess of the
Transferor Amount over the Minimum Transferor Amount or (ii) the excess of
the aggregate amount of Principal Receivables plus amounts on deposit in
the Excess Funding Account over the Required Principal Balance, all
measured as of the end of the most recently ended Monthly Period.
(f) Invested Amounts. Such removal shall not cause a decrease in
the sum of the Invested Amounts for all outstanding Series.
5. Ratification of Agreement. As supplemented by this
Reassignment, the Agreement is in all respects ratified and confirmed and
the Agreement as so supplemented by this Reassignment shall be read, taken
and construed as one and the same instrument.
6. Counterparts. This Reassignment may be executed in two or more
counterparts, and by different parties on separate counterparts, each of
which shall be an original, but all of which shall constitute one and the
same instrument.
7. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Exhibit C, Page 3
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused
this Reassignment to be duly executed by their respective officers as of
the day and year first above written.
WORLD FINANCIAL NETWORK
NATIONAL BANK,
as Transferor and Servicer,
By ---------------------------------------------
Name:
Title:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
not in its individual capacity, but solely as
Trustee,
By---------------------------------------------
Name:
Title:
Exhibit C, Page 4
EXHIBIT D
FORM OF ANNUAL SERVICER'S CERTIFICATE
(To be delivered on or before the
90th day following the end of the fiscal year
of Transferor beginning with December 31, 1996,
pursuant to Section 3.5 of the Pooling and
Servicing Agreement referred to below)
WORLD FINANCIAL NETWORK NATIONAL BANK
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
The undersigned, a duly authorized representative of World
Financial Network National Bank, as Servicer ("WFN"), pursuant to the
Pooling and Servicing Agreement dated as of January 17, 1996 (as may be
amended and supplemented from time to time, the "Agreement"), among WFN, as
Transferor and as Servicer, and ▇▇▇▇▇▇ Trust and Savings Bank (as successor
to The Bank of New York), as Trustee, does hereby certify that:
1. WFN is, as of the date hereof, Servicer under the Agreement.
Capitalized terms used in this Certificate have their respective meanings
as set forth in the Agreement.
2. The undersigned is a Servicing Officer who is duly authorized
pursuant to the Agreement to execute and deliver this Certificate to
Trustee.
3. A review of the activities of Servicer during the fiscal year
ended __________, ____, and of its performance under the Agreement was
conducted under my supervision.
4. Based on such review, Servicer has, to the best of my
knowledge, performed in all material respects its obligations under the
Agreement throughout such year and no default in the performance of such
obligations has occurred or is continuing except as set forth in paragraph
5.
5. The following is a description of each default in the
performance of Servicer's obligations under the provisions of the Agreement
known to me to have been made by Servicer during the fiscal year ended
___________, _____, which sets forth in detail (i) the nature of each such
default, (ii) the action taken by Servicer, if any, to remedy each such
default and (iii) the current status of each such default: if applicable,
insert "None."
Exhibit D, Page 1
IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate this ______ day of ____________, 19___.
WORLD FINANCIAL NETWORK
NATIONAL BANK,
as Servicer,
By --------------------------------------
Name:
Title:
Exhibit D, Page 2
EXHIBIT E-1
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"). NEITHER THIS CERTIFICATE NOR
ANY PORTION HEREOF MAY BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE SECURITIES ACT
AND ANY APPLICABLE PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE
TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
EXHIBIT E-2
FORM OF UNDERTAKING LETTER
Date
Trustee Bank
Attention:
World Financial Network
National Bank
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention:
Re: Purchase of $___________1/ principal amount of
World Financial Network Credit Card Master Trust,
Class __, __% Floating Rate Asset Backed
Certificates, Series
Dear Sirs:
In connection with our purchase of the above-referenced Asset
Backed Certificates (the "Certificates") we confirm that:
(i) we understand that the Certificates are not being
registered under the Securities Act of 1933, as amended (the
"Securities Act"), and are being sold to us in a transaction that
is exempt from the registration requirements of the Securities
Act;
(ii) any information we desire concerning the
Certificates or any other matter relevant to our decision to
purchase the certificates is or has been made available to us;
(iii) we have such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and
risks of an investment in the Certificates, and we (and any
account for which we are purchasing under paragraph (iv)) are able
to bear the economic risk of an investment in the Certificates; we
(and any account for which we are
_________________
1/ Not less than $250,000 minimum principal amount.
Exhibit E-2, Page 1
purchasing under paragraph (iv)) are an "accredited investor" (as
such term is defined in Rule 501(a)(1), (2) or (3) of Regulation D
under the Securities Act); and we are not, and none of such
accounts is, a Benefit Plan;
(iv) we are acquiring the Certificates for our own
account or for accounts as to which we exercise sole investment
discretion and not with a view to any distribution of the
Certificates, subject, nevertheless, to the understanding that the
disposition of our property shall at all times be and remain
within our control;
(v) we agree that the Certificates must be held
indefinitely by us unless subsequently registered under the
Securities Act or an exemption from any registration requirements
of that Act and any applicable state securities laws available;
(vi) we agree that if at some future time we wish to
dispose of or exchange any of the Certificates (such disposition
or exchange not being currently foreseen or contemplated), we will
not transfer or exchange any of the Certificates unless
(A)(1) the sale is of at least U.S. $250,000
principal amount of Certificates to an Eligible Purchaser
(as defined below), (2) a letter to substantially the
same effect as paragraphs (i), (ii), (iii), (iv), (v) and
(vi) of this letter is executed promptly by the purchaser
and (3) all offers or solicitations in connection with
the sale, whether directly or through any agent acting on
our behalf, are limited only to Eligible Purchasers and
are not made by means of any form of general solicitation
or general advertising whatsoever; or
(B) the Certificates are transferred pursuant to
Rule 144 under the Securities Act by us after we have
held them for more than three years; or
(C) the Certificates are sold in any other
transaction that does not require registration under the
Securities Act and, if Transferor, Servicer, Trustee or
the Transfer Agent and Registrar so requests, we
theretofore have furnished to such party an Opinion of
Counsel satisfactory to such party, in form and substance
satisfactory to such party, to such effect; or
(D) the Certificates are transferred pursuant to
an exception from the registration requirements of the
Securities Act under Rule 144A under the Securities Act;
or
Exhibit E-2, Page 2
(E) The Certificates are not transferred to any
Benefit Plan (as defined below), unless the transferee is
an insurance company general account that represents and
warrants that at the time of acquisition and throughout
its holding of the certificate (a) it is not a service
provider to the trust or an affiliate of the foregoing,
and would not otherwise be excluded under 29 C.F.R.
2510.3.101(f)(1), and (b) each of the accounts to which
such certificate is allocated is an insurance company
general account (1) that is eligible for and meets the
requirements of Department of Labor Prohibited
Transaction Class Exemption 95-60 and (2) of which less
than 25% of the assets are (or represent) assets of a
Benefit Plan.2/
(vii) we understand that the Certificates will bear a legend to
substantially the following effect:
"THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"). NEITHER THIS CERTIFICATE NOR
ANY PORTION HEREOF MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE SECURITIES ACT
AND ANY APPLICABLE PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE
TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN."
"THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A
BENEFIT PLAN (AS DEFINED BELOW) UNLESS IT IS AN INSURANCE COMPANY USING THE
ASSETS OF ITS GENERAL ACCOUNT AND, AT THE TIME OF ACQUISITION AND
THROUGHOUT ITS HOLDING OF THE CERTIFICATE (A) IT IS NOT A SERVICE PROVIDER
TO THE TRUST OR AN AFFILIATE OF THE FOREGOING, AND WOULD NOT OTHERWISE BE
EXCLUDED UNDER 29 C.F.R. 2510.3.101(F)(1), AND (B) EACH OF THE ACCOUNTS TO
WHICH SUCH CERTIFICATE IS ALLOCATED IS AN INSURANCE COMPANY GENERAL ACCOUNT
(1) THAT IS ELIGIBLE FOR AND MEETS THE REQUIREMENTS OF DEPARTMENT OF LABOR
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 AND (2) OF WHICH
----------------
2/ This bracketed text should be included only if the
Certificate(s) to be purchased include the legend
specified on Exhibit E-3.
Exhibit E-2, Page 3
LESS THAN 25% OF THE ASSETS ARE (OR REPRESENT) ASSETS OF A
BENEFIT PLAN."*/
The first paragraph of this legend may be removed if Transferor, Servicer,
Trustee and the Transfer Agent and Registrar have received an Opinion of
Counsel satisfactory to them, in form and substance satisfactory to them,
to the effect that such paragraph may be removed.
"Eligible Purchaser" means either an Eligible Dealer or a
corporation, partnership or other entity which we have reasonable grounds
to believe and do believe can make representations with respect to itself
to substantially the same effect as the representations set forth herein.
"Eligible Dealer" means any corporation or other entity the principal
business of which is acting as a broker and/or dealer in securities.
"Benefit Plan" means any "employee benefit plan" within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended (whether or not subject to ERISA and including foreign and
governmental plans), any plan, trust or account (including an individual
retirement plan) described in Section 4975(e)(1) of the Internal Revenue
Code of 1986, as amended, or any collective investment fund, insurance
company separate or general account or other entity deemed to hold plan
assets of the foregoing by reason of any such plan's investment in such
entity. Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Pooling and Servicing Agreement, dated
as of January 17, 1996, between World Financial Network National Bank and
▇▇▇▇▇▇ Trust and Savings Bank.
Very truly yours,
-------------------------------------------
(Name of Purchaser
By:---------------------------------------
(Authorized Officer)
------------------------
*/ This bracketed text should be included only if the Certificate(s)
to be purchased include the legend specified on Exhibit E-3.
Exhibit E-2, Page 4
EXHIBIT E-3
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE
ACCOUNT OF A BENEFIT PLAN (AS DEFINED BELOW) UNLESS IT IS
AN INSURANCE COMPANY USING THE ASSETS OF ITS GENERAL
ACCOUNT AND, AT THE TIME OF ACQUISITION AND THROUGHOUT
ITS HOLDING OF THE CERTIFICATE (A) IT IS NOT A SERVICE
PROVIDER TO THE TRUST OR AN AFFILIATE OF THE FOREGOING,
AND WOULD NOT OTHERWISE BE EXCLUDED UNDER 29 C.F.R.
2510.3.101(F)(1), AND (B) EACH OF THE ACCOUNTS TO WHICH SUCH
CERTIFICATE IS ALLOCATED IS AN INSURANCE COMPANY GENERAL
ACCOUNT (1) THAT IS ELIGIBLE FOR AND MEETS THE
REQUIREMENTS OF DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION 95-60 AND (2) OF WHICH LESS
THAN 25% OF THE ASSETS ARE (OR REPRESENT) ASSETS OF A
BENEFIT PLAN.1/
------------------
1/ The following text should be included in any Certificate in which the
above legend appears:
"The Certificates may not be acquired by or for the account of any
"employee benefit plan" within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (whether or not subject
to ERISA and including foreign and governmental plans), any plan, trust or
account (including an individual retirement plan) described in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended, or any
collective investment fund, insurance company separate or general account
or other entity deemed to hold plan assets of the foregoing by reason of
any such plan's investment in such entity (each, a "Benefit Plan"), unless
the purchaser or transferee is an insurance company general account that
represents and warrants that at the time of acquisition and throughout its
holding of the certificate (a) it is not a service provider to the trust or
an affiliate of the foregoing, and would not otherwise be excluded under 29
C.F.R. 2510.3.101(f)(1), and (b) each of the accounts to which such
certificate is allocated is an insurance company general account (1) that
is eligible for and meets the requirements of Department of Labor
Prohibited Transaction Class Exemption 95-60 and (2) of which less than 25%
of the assets are (or represent) assets of a Benefit Plan. By accepting and
holding this Certificate, the Holder hereof shall be deemed to have
represented and warranted that it is not, and is not acting on behalf of, a
Benefit Plan unless it is an insurance company meeting the foregoing
requirements. By acquiring an interest in this Certificate, each applicable
Certificate Owner shall be deemed to have represented and warranted that it
is not, and is not acting on behalf of, a Benefit Plan."
By accepting and holding this Certificate, the Holder hereof shall be
deemed to have represented and warranted that it is not, and is not acting
on behalf of, a Benefit Plan. By acquiring any interest in this
Certificate, each applicable Certificate Owner shall be deemed to have
represented and warranted that it is not, and is not acting on behalf of, a
Benefit Plan.
Exhibit E-3, Page 1
EXHIBIT F-1
FORM OF OPINION OF COUNSEL WITH RESPECT
TO AMENDMENTS
Provisions to be included in
Opinion of Counsel to be delivered pursuant
to Section 13.2(d)(i)
The opinions set forth below may be subject to all the
qualifications, assumptions, limitations and exceptions taken or made in
the Opinions Of Counsel delivered on any applicable Closing Date.
(i) The amendment to the Pooling and Servicing Agreement,
Supplement, attached hereto as Schedule 1 (the "Amendment"), has
been duly authorized, executed and delivered by Transferor and
Servicer and constitutes the legal, valid and binding agreement of
Transferor and Servicer, respectively, enforceable in accordance
with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
other laws from time to time in effect affecting creditors' rights
generally or the rights of creditors of national banking
associations. The enforceability of the respective obligations of
Transferor and Servicer is also subject to general principles of
equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law)
(ii) The Amendment has been entered into in accordance
with the terms and provisions of Section 13.1 of the Pooling and
Servicing Agreement.
EXHIBIT F-2
FORM OF OPINION OF COUNSEL WITH RESPECT
TO ADDITION OF SUPPLEMENTAL ACCOUNTS
Provisions to be included in
Opinion of Counsel to be
delivered pursuant to
Section 13.2(d)(ii) or (iii)
The opinions set forth below may be subject to appropriate
qualifications, assumptions, limitations and exceptions. Paragraphs 1-4 are
not required if the opinion is being delivered solely under Section
13.2(d)(iii).
1. The Receivables arising in such Supplemental Accounts
constitute either general intangibles, accounts or chattel paper.
2. The Pooling and Servicing Agreement creates in favor of the
Trust either a security interest or an ownership interest in Transferor's
rights in the Receivables in such Supplemental Accounts and the proceeds
thereof (the "Specified Assets").
3. If the transfer of the Specified Assets from Transferor to
Trustee pursuant to the provisions of the Pooling and Servicing Agreement
constitutes a sale of the Specified Assets to Trustee by Transferor, such
transfer, to the extent Ohio law is applied, transfers all right, title and
interest of Transferor in and to the Specified Assets to Trustee.
4. If the transfer of the Specified Assets from Transferor to
Trustee does not constitute a sale, the security interest in the Specified
Assets created by the Pooling and Servicing Agreement will be perfected by
the filing of the Financing Statements as described and defined in such
opinion. Based solely upon our review of the UCC Searches as described and
defined in such opinion, we hereby confirm to you that no Person other than
Trustee has filed any financing statement with the Filing Offices as
described and defined in such opinion that covers the Specified Assets and
that would have priority over the security interest, if any, of the Trustee
by virtue of such filing.
5. No further filings or actions are required under the UCC or
other Ohio law prior to _______, ____ , in order to maintain the perfection
and priority of the security interest created by the Pooling and Servicing
Agreement in favor of the Trust in Transferor's rights in the Receivables
and the proceeds thereof.
Exhibit F-2