EXHIBIT 4.6
================================================================================
SECOND AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of October 24, 2002
--------------------------
FIRST NATIONAL FUNDING LLC,
Transferor,
FIRST NATIONAL BANK OF OMAHA,
Servicer
and
THE BANK OF NEW YORK,
Trustee
================================================================================
FIRST BANKCARD MASTER CREDIT CARD TRUST
================================================================================
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01. Definitions............................................................1
Section 1.02. Other Definitional Provisions.........................................19
ARTICLE II
CONVEYANCE OF RECEIVABLES; ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Receivables.............................................21
Section 2.02. Acceptance by Trustee.................................................22
Section 2.03. Representations and Warranties of the Transferor......................23
Section 2.04. Representations and Warranties of the Transferor Relating to the
Agreement and the Receivables.........................................25
Section 2.05. Covenants of the Transferor...........................................31
Section 2.06. Addition of Accounts..................................................36
Section 2.07. Removal of Accounts...................................................38
Section 2.08. Discount Option Receivables...........................................40
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 3.01. Acceptance of Appointment and Other Matters Relating to the
Servicer..............................................................40
Section 3.02. Servicing Compensation................................................42
Section 3.03. Representations, Warranties and Covenants of the Servicer.............43
Section 3.04. Reports and Records for the Trustee...................................46
Section 3.05. Annual Servicer's Certificate.........................................47
Section 3.06. Annual Independent Accountants' Servicing Report......................47
Section 3.07. Tax Treatment.........................................................48
Section 3.08. Notices to the Transferor.............................................48
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION AND APPLICATION OF
COLLECTIONS
Section 4.01. Rights of Certificateholders..........................................48
Section 4.02. Establishment of Accounts.............................................49
Section 4.03. Collections and Allocations...........................................52
ARTICLE V
ARTICLE V IS RESERVED AND SHALL BE SPECIFIED IN ANY SUPPLEMENT WITH RESPECT
TO ANY SERIES..........................................................................56
ARTICLE VI
THE CERTIFICATES
Section 6.01. The Certificates......................................................56
Section 6.02. Authentication of Certificates........................................57
Section 6.03. Registration of Transfer and Exchange of Certificates.................57
Section 6.04. Mutilated, Destroyed, Lost or Stolen Certificates.....................60
Section 6.05. Persons Deemed Owners.................................................61
Section 6.06. Appointment of Paying Agent...........................................61
Section 6.07. Access to List of Certificateholders' Names and Addresses.............62
Section 6.08. Authenticating Agent..................................................63
Section 6.09. Tender of Exchangeable Transferor Certificate.........................64
Section 6.10. Book-Entry Certificates...............................................66
Section 6.11. Notices to Clearing Agency............................................67
Section 6.12. Definitive Certificates...............................................67
Section 6.13. Global Certificate....................................................67
Section 6.14. Meetings of Certificateholders........................................68
Section 6.15. Transfers of Certain Certificates.....................................68
Section 6.16. Trust Tax Election....................................................68
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
Section 7.01. Liability of the Transferor...........................................69
Section 7.02. Merger or Consolidation of, or Assumption of the Obligations of, the
Transferor............................................................69
Section 7.03. Limitation on Liability...............................................70
Section 7.04. Liabilities...........................................................70
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
Section 8.01. Liability of the Servicer.............................................71
Section 8.02. Merger or Consolidation of, or Assumption of the Obligations of, the
Servicer..............................................................71
Section 8.03. Limitation on Liability of the Servicer and Others....................72
Section 8.04. Servicer Indemnification of the Trust and the Trustee.................72
Section 8.05. The Servicer Not To Resign............................................73
ii
Section 8.06. Access to Certain Documentation and Information Regarding the
Receivables...........................................................73
Section 8.07. Delegation of Duties..................................................74
Section 8.08. Examination of Records................................................74
ARTICLE IX
PAY OUT EVENTS
Section 9.01. Pay Out Events........................................................74
Section 9.02. Additional Rights Upon the Occurrence of Certain Events...............75
ARTICLE X
SERVICER DEFAULTS
Section 10.01. Servicer Defaults.....................................................76
Section 10.02. Trustee To Act; Appointment of Successor..............................78
Section 10.03. Notification to Certificateholders....................................80
Section 10.04. Waiver of Past Defaults...............................................80
ARTICLE XI
THE TRUSTEE
Section 11.01. Duties of Trustee.....................................................80
Section 11.02. Certain Matters Affecting the Trustee.................................82
Section 11.03. Trustee Not Liable for Recitals in Certificates.......................83
Section 11.04. Trustee May Own Certificates..........................................84
Section 11.05. The Servicer To Pay Trustee's Fees and Expenses.......................84
Section 11.06. Eligibility Requirements for Trustee..................................84
Section 11.07. Resignation or Removal of Trustee.....................................84
Section 11.08. Successor Trustee.....................................................85
Section 11.09. Merger or Consolidation of Trustee....................................85
Section 11.10. Appointment of Co-Trustee or Separate Trustee.........................86
Section 11.11. Tax Returns...........................................................87
Section 11.12. Trustee May Enforce Claims Without Possession of Certificates.........87
Section 11.13. Suits for Enforcement.................................................87
Section 11.14. Rights of Certificateholders To Direct Trustee........................88
Section 11.15. Representations and Warranties of Trustee.............................88
Section 11.16. Maintenance of Office or Agency.......................................88
ARTICLE XII
TERMINATION
Section 12.01. Termination of Trust..................................................88
Section 12.02. Optional Purchase From Collections....................................90
iii
Section 12.03. Final Payment With Respect to Any Series..............................90
Section 12.04. Termination Rights of Holder of Exchangeable Transferor Certificate...91
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01. Amendment.............................................................92
Section 13.02. Protection of Right, Title and Interest to Trust......................93
Section 13.03. Limitation on Rights of Certificateholders............................94
Section 13.04. Governing Law.........................................................95
Section 13.05. Notices...............................................................95
Section 13.06. Severability of Provisions............................................96
Section 13.07. Assignment............................................................96
Section 13.08. Certificates Nonassessable and Fully Paid.............................96
Section 13.09. Further Assurances....................................................96
Section 13.10. No Waiver; Cumulative Remedies........................................96
Section 13.11. Counterparts..........................................................96
Section 13.12. Third-party Beneficiaries.............................................96
Section 13.13. Actions by Certificateholders.........................................97
Section 13.14. Rule 144A Information.................................................97
Section 13.15. Merger and Integration................................................97
Section 13.16. Headings..............................................................97
Section 13.17. No Bankruptcy Petition................................................97
EXHIBIT A FORM OF EXCHANGEABLE TRANSFEROR CERTIFICATE
EXHIBIT B FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL
ACCOUNTS
EXHIBIT C FORM OF MONTHLY SERVICER'S CERTIFICATE
EXHIBIT D FORM OF ANNUAL SERVICER'S CERTIFICATE
EXHIBIT E FORM OF OPINION OF COUNSEL REGARDING ADDITIONAL
ACCOUNTS
EXHIBIT F FORM OF ANNUAL OPINION OF COUNSEL
EXHIBIT G FORM OF REASSIGNMENT OF RECEIVABLES
EXHIBIT H FORM OF RECONVEYANCE OF RECEIVABLES
SCHEDULE 1 LIST OF ACCOUNTS--COMPUTER LIST OR MICROFICHE
DELIVERED SEPARATELY
iv
THIS SECOND AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT, dated
as of October 24, 2002, is made by and among FIRST NATIONAL FUNDING LLC, a
Nebraska limited liability company, as Transferor, FIRST NATIONAL BANK OF OMAHA,
a national banking association, as Servicer, and THE BANK OF NEW YORK, a New
York banking corporation, as Trustee, and amends and restates the Pooling and
Servicing Agreement, dated as of August 1, 1995, by and between First National
Bank of Omaha, as Transferor and Servicer, and the First National Bank of
Chicago (now known as Bank One, National Association), as Trustee, as amended
and restated as of June 26, 1997, as further amended (the "Existing PSA").
PRELIMINARY STATEMENTS
A. On April 16, 2002, The Bank of New York became the successor to Bank
One, National Association, as Trustee under the Existing PSA.
B. The parties desire to amend the Existing PSA, and to restate it in
its entirety, in order to, among other things, provide for the substitution of
First National Funding LLC for First National Bank of Omaha, in its capacity as
Transferor.
In consideration of the mutual agreements contained herein, the
Existing PSA is hereby amended and restated in its entirety as follows and each
party agrees as follows for the benefit of the other parties and the
Certificateholders:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
"Account" shall mean each VISA(1)and MasterCard(1) credit card account
established pursuant to a Credit Card Agreement identified by account number and
by the Receivable balance as of October 14, 2002 in the Account Schedule
delivered on or before October 24, 2002, and as of each Addition Date in each
computer file or microfiche list delivered to the Trustee by the Servicer
pursuant to Section 2.01 or Section 2.06, including each Transferred Account and
excluding (a) any Account all the Receivables in which are either reassigned or
assigned to the Transferor or its designee or the Servicer in accordance with
this Agreement and (b) any inactive Accounts which in accordance with the Credit
Card Guidelines have been removed from the computer records of the Transferor.
An Additional Account shall be an Account only from and after the Addition Date
with respect thereto and a Removed Account shall be an Account only prior to the
Removal Date with respect thereto.
"Account Information" shall have the meaning specified in subsection
2.02(b).
-----------------
(1)VISA and MasterCard are registered trademarks of VISA USA, Inc. and of
MasterCard International Incorporated, respectively.
"Addition Date" shall mean each date as of which Additional Accounts
will be included as Accounts pursuant to Section 2.06.
"Additional Accounts" shall have the meaning specified in subsection
2.06(a).
"Adjustment Amount" shall have the meaning specified in subsection
4.03(c).
"Affiliate" of any Person shall mean any other Person controlling,
controlled by or under common control with such Person.
"Aggregate Investor Default Amount" shall have, with respect to any
Series of Certificates, the meaning stated in the related Supplement.
"Aggregate Investor Interest" shall mean, as of any date of
determination, the sum of the Investor Interests of all Series of Certificates
issued and outstanding on such date of determination.
"Aggregate Investor Percentage" with respect to Principal Receivables,
Finance Charge Receivables and Receivables in Defaulted Accounts, as the case
may be, shall mean, as of any date of determination, the sum of the Investor
Percentages with respect to such items of all Series of Certificates issued and
outstanding on such date of determination; provided, however, that the Aggregate
Investor Percentage shall not exceed 100%.
"Agreement" shall mean this Second Amended and Restated Pooling and
Servicing Agreement and all amendments hereof and supplements hereto, including
any Supplement.
"Amortization Period" shall mean, with respect to any Series, the
period following the related Revolving Period, which shall be the controlled
amortization period, the rapid amortization period, or other amortization or
accumulation period, in each case as defined with respect to such Series in the
related Supplement.
"Annual Membership Fee" shall have the meaning specified in the Credit
Card Agreement applicable to each Account for annual membership fees or similar
terms.
"Annual Servicer's Certificate" shall mean a certificate substantially
in the form of Exhibit D.
"Applicants" shall have the meaning specified in Section 6.07.
"Appointment Day" shall have the meaning specified in subsection
9.02(a).
"Assignment" shall have the meaning specified in subsection
2.06(c)(ii).
"Authorized Newspaper" shall mean a newspaper of general circulation in
the Borough of Manhattan, the City of New York (and in such other cities as
shall be specified in the Supplements) printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
2
"Automatic Additional Accounts" shall have the meaning specified in
subsection 2.06(b).
"Average" shall mean as to any Class A Interest or Collateral Interest
(in each case, as defined in any Supplement) or the Investor Interest, for any
period, an amount equal to (a) the sum of the aggregate amount of such
Interest(s) at the end of each day during such period divided by (b) the number
of days in such period.
"Average Principal Receivables" shall mean, for any period, an amount
equal to (a) the sum of the aggregate amount of Principal Receivables at the end
of each day during such period divided by (b) the number of days in such period.
"Bank Portfolio" shall mean the MasterCard and VISA accounts originated
by FNBO or FNBSD, as the case may be.
"Bearer Certificates" shall have the meaning specified in Section 6.01.
"Bearer Rules" shall mean the provisions of the Internal Revenue Code,
in effect from time to time, governing the treatment of bearer obligations,
including Sections 163(f), 871, 881, 1441, 1442 and 4701, and any regulations
thereunder, including, to the extent applicable to any Series, Proposed or
Temporary Regulations.
"BIF" shall mean the Bank Insurance Fund administered by the FDIC.
"Book-Entry Certificates" shall mean 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, provided that
after the occurrence of a condition whereupon book-entry registration and
transfer are no longer authorized and Definitive Certificates are to be issued
to the Certificate Owners, such certificates shall no longer be "Book-Entry
Certificates."
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions in New York, New York, Chicago, Illinois,
Yankton, South Dakota, or Omaha, Nebraska (or with respect to any Series, any
additional city specified in the related Supplement) are authorized or obligated
by law or executive order to be closed.
"Cash Advance Fees" shall have the meaning specified in the Credit Card
Agreement applicable to each Account for cash advance fees or similar terms.
"Certificate" shall mean any one of the Investor Certificates of any
Series or the Exchangeable Transferor Certificate.
"Certificateholder" or "Holder" shall mean the Person in whose name a
Certificate is registered in the Certificate Register and, if applicable, the
holder of any Bearer Certificate or Coupon, as the case may be.
"Certificate Interest" shall mean interest payable in respect of the
Investor Certificates of any Series pursuant to Article IV of the Supplement for
such Series.
3
"Certificate Owner" shall mean, with respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such Book-Entry
Certificate, as may be 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 Principal" shall mean principal payable in respect of the
Investor Certificates of any Series pursuant to Article IV of this Agreement.
"Certificate Rate" shall mean, with respect to any Series of
Certificates, the percentage (or formula on the basis of which such rate shall
be determined) stated in the related Supplement, provided that unless otherwise
provided in a Supplement, such rate shall be calculated on the basis of actual
days elapsed and a 365-day or 366-day year, as the case may be.
"Certificate Register" shall mean the register maintained pursuant to
Section 6.03, providing for the registration of the Certificates and transfers
and exchanges thereof.
"Class" shall mean, with respect to any Series, any one of the classes
of Investor Certificates of that Series as specified in the related Supplement.
"Clearing Agency" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency or Foreign Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency or Foreign Clearing Agency.
"Closing Date" shall mean, with respect to any Series, the date of
issuance of such Series of Certificates, as specified in the related Supplement.
"Collection Account" shall have the meaning specified in subsection
4.02(a).
"Collections" shall mean all payments (including Insurance Proceeds and
recoveries, net of expense of collection, on Defaulted Accounts) received by the
Servicer or Transferor in respect of the Receivables, in the form of cash,
checks, wire transfers, ATM transfers or other form of payment in accordance
with the Credit Card Agreement in effect from time to time on any Receivables. A
Collection processed on an Account in excess of the aggregate amount of
Receivables in such Account as of the Date of Processing of such Collection
shall be deemed to be a payment in respect of Principal Receivables to the
extent of such excess. Collections of recoveries, net of expenses of collection,
on Defaulted Accounts shall be deemed to be Collections of Finance Charge
Receivables. Interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Excess Funding Account will be
deemed Collections of Finance Charge Receivables, as set forth in subsection
4.02(e). Collections with respect to any Monthly Period shall include the amount
of Interchange (if any) allocable to any Series of Certificates pursuant to any
Supplement with respect to such Monthly Period (to the extent received by the
Trust and deposited into the Finance Charge Account or any Series Account, as
the case may be, on the Transfer Date following such Monthly Period), to be
applied as if such Collections were Finance Charge Receivables for all purposes.
The amount of
4
Collections by check which is dishonored by the drawee bank of such check shall
be subtracted from the Collections of Principal Receivables in the Monthly
Period in which the dishonor occurs.
"Corporate Trust Office" shall mean the principal corporate office of
the Trustee at which, at any particular time, its corporate trust business shall
be administered, which office at the date hereof is located at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, except that for purposes of
subsection 6.03(d) and Section 11.16, such term shall mean the office or agency
of the Trustee in the Borough of Manhattan, the City of New York, which office
at the date hereof is located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Coupon" shall have the meaning specified in Section 6.01.
"Credit Adjustment" shall have the meaning specified in subsection
4.03(c).
"Credit Card Agreement" shall mean the Agreement and Federal Truth in
Lending Statement for MasterCard and VISA credit card accounts between any
Obligor and the Credit Card Originator, as such agreements may be amended,
modified or otherwise changed from time to time.
"Credit Card Guidelines" shall mean the written policies and procedures
of FNBO relating to the operation of its credit card business, including,
without limitation, the policies and procedures for determining the
creditworthiness of credit card customers, the extension of credit to credit
card customers, its debt deferral and debt cancellation programs and relating to
the maintenance of credit card accounts and collection of credit card
receivables, as such policies and procedures may be amended from time to time.
"Credit Card Originator" means (a) FNBO or FNBSD, as applicable, and
(b) with respect to Financial Institution Accounts, the originator of such
Accounts.
"Cut Off Date" shall mean July 31, 1995.
"Date of Processing" shall mean, with respect to any transaction, the
date on which such transaction is first recorded on the Servicer's computer
master file of VISA and MasterCard accounts (without regard to the effective
date of such recordation).
"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.
"Default Amount" shall mean, with respect to any Distribution Date, the
aggregate amount of Principal Receivables (other than Ineligible Receivables) in
Accounts which become Defaulted Accounts during the Related Monthly Period.
"Defaulted Account" shall mean each Account with respect to which, in
accordance with the Credit Card Guidelines or the Servicer's customary and usual
servicing procedures for
5
servicing credit card receivables comparable to the Receivables, the Servicer
has charged off the Receivables in such Account as uncollectible. An Account
shall become a Defaulted Account on the day on which such Receivables are
recorded as charged off as uncollectible on the Servicer's computer master file
of VISA and MasterCard accounts. Notwithstanding any other provision hereof, any
Receivables in a Defaulted Account that are Ineligible Receivables shall be
treated as Ineligible Receivables rather than Receivables in Defaulted Accounts.
"Definitive Certificate" shall have the meaning specified in Section
6.10.
"Delinquent" shall mean as to any Account (other than a Defaulted
Account), the failure to have received the minimum monthly payment on the
respective due date of such payment, and "Delinquency" shall mean the
continuation of such failure beyond such due date.
"Depository" shall have the meaning specified in Section 6.10.
"Depository Agreement" shall mean, with respect to each Series, the
agreement among the Transferor, the Trustee and the Clearing Agency, or as
otherwise provided in the related Supplement.
"Determination Date" shall mean the fourth Business Day prior to each
Transfer Date.
"Discount Option Receivables" shall mean, on any Date of Processing on
and after the date on which the Transferor's exercise of its discount option
pursuant to Section 2.08 takes effect, the sum of (a) the aggregate Discount
Option Receivables at the end of the prior Date of Processing (which amount,
prior to the date on which the Transferor's exercise of its discount option
takes effect, shall be zero) plus (b) any new Discount Option Receivables
created on such Date of Processing minus (c) any Discount Option Receivables
Collections received on such Date of Processing. Discount Option Receivables
created on any Date of Processing shall mean the product of the amount of any
Principal Receivables created on such Date of Processing (without giving effect
to Discount Option Receivables) and the then applicable Discount Percentage.
"Discount Option Receivable Collections" shall mean, on any Date of
Processing on and after the date on which the Transferor's exercise of its
discount option pursuant to Section 2.08 takes effect, the product of (a) a
fraction the numerator of which is the amount of Discount Option Receivables and
the denominator of which is the sum of the Principal Receivables and the
Discount Option Receivables, in each case on the last day of the Preceding
Monthly Period, and (b) Collections of Principal Receivables (without giving
effect to Discount Option Receivables) on such Date of Processing.
"Discount Percentage" shall mean the percentage designated by the
Transferor pursuant to Section 2.08.
"Distribution Account" shall have the meaning specified in subsection
4.02(c).
"Distribution Date" shall mean, unless otherwise specified in any
Supplement for the related Series, the fifteenth day of the calendar month
following the Closing Date for such Series
6
and the fifteenth day of each month thereafter, or, if such fifteenth day is not
a Business Day, the next succeeding Business Day.
"Dollars," "$" or "U.S. $" shall mean United States dollars.
"Draft Fees" shall have the meaning specified in the Credit Card
Agreement applicable to each Account for any draft fees or similar terms.
"Effective Date" means October 24, 2002.
"Eligible Account" shall mean, as of the Cut Off Date (or, with respect
to Additional Accounts as of the relevant Addition Date), each Account owned by
FNBO:
(a) which was in existence, maintained or initially opened at
least six months prior to its selection for inclusion in the Trust;
(b) which is payable in Dollars;
(c) the Obligor of which is not the U.S. government or any
state or local governmental entity and has provided, as its most recent
billing address, an address located in the United States or its
territories or possessions, except that up to 1% (or any higher
percentage as to which the Rating Agency Condition has been satisfied)
of the aggregate Principal Receivables as of the most recently ended
Monthly Period may have obligors who have provided billing addresses
outside of those jurisdictions;
(d) which FNBO has not classified on its electronic records as
counterfeit, canceled, fraudulent, stolen or lost;
(e) which has either been originated by FNBO or is a Financial
Institutions Account;
(f) the Receivables of which FNBO has not charged off in its
customary and usual manner for charging off such Receivables as of the
Cut Off Date (or, with respect to Additional Accounts, as of the
relevant Addition Date);
(g) was originated in the ordinary course of business;
(h) which is not more than 30 days Delinquent;
(i) which is free and clear of all liens that are equal or
prior to the interest of the Trustee;
(j) that is not subject to any agreement by FNBO restricting
its ability to alter the terms of the account or granting to a third
party a right to acquire the account upon the occurrence of specified
events; and
(k) as to any Series, which meets any additional requirements
set forth in the respective Supplement for such Series.
7
"Eligible Receivable" shall mean each Receivable:
(a) which has arisen under an Eligible Account;
(b) which was created in compliance, in all material respects,
with all Requirements of Law applicable to the Credit Card Originator
and pursuant to a Credit Card Agreement which complies, in all material
respects, with all Requirements of Law applicable to the Credit Card
Originator;
(c) with respect to which all consents, licenses, approvals or
authorizations of, or registrations or declarations with, any
Governmental Authority required to be obtained, effected or given by
the Credit Card Originator in connection with the creation of such
Receivable or the execution, delivery and performance by the Credit
Card Originator of the Credit Card Agreement pursuant to which such
Receivable was created, have been duly obtained, effected or given and
are in full force and effect as of such date of creation;
(d) as to which, upon the transfer of such Receivable to the
Trust, the Trust will have good and marketable title thereto, free and
clear of all Liens (other than Liens permitted pursuant to subsection
2.05(b));
(e) which is the legal, valid and binding payment obligation
of the Obligor thereon, enforceable against such obligor 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);
(f) which constitutes an "account" under and as defined in
Article 9 of the UCC;
(g) as to which, at the time of its transfer to the Trust,
neither the Transferor nor the Credit Card Originator has 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;
(h) that, at the time of its transfer to the Trust, has not
been waived or modified except as would be permitted in accordance with
Section 3.03(h) or Section 3.03(i);
(i) 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) or in
connection with Credit Adjustments pursuant to Section 3.02 of the
Receivables Purchase Agreement;
(j) as to which, at the time of its transfer to the Trust,
each of the Transferor and the Credit Card Originator has satisfied all
obligations to be fulfilled at the time it is transferred to the Trust;
and
8
(k) as to any Series, which meets any additional requirements
set forth in the respective Supplement for such Series.
"Enhancement" shall mean, with respect to any Series, the cash
collateral account, collateral invested amount, letter of credit, guaranteed
rate agreement, maturity guaranty facility, tax protection agreement, interest
rate swap or any other contract or agreement for the benefit of the
Certificateholders of such Series (or Certificateholders of a Class within such
Series) as designated in the applicable Supplement.
"Enhancement Provider" shall mean, with respect to any Series, the
Person, if any, designated as such in the related Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Excess Finance Charge Collections" shall mean Collections of Finance
Charge Receivables allocated to a Series which are not required to fund payments
or deposits to or for the benefit of Certificateholders of such Series on the
related Distribution Date, as determined in accordance with the terms of the
applicable Supplement.
"Excess Funding Account" shall mean the account established in
accordance with subsection 4.02(e).
"Excess Funding Amount" shall mean the amount on deposit in the Excess
Funding Account, exclusive of interest (including reinvested interest) and other
investment income and earnings on funds on deposit in the Excess Funding
Account.
"Excess Principal Collections" shall mean Collections of Principal
Receivables allocated to a Series which are not required to fund payments to or
for the benefit of Certificateholders of such Series on the related Distribution
Date, as determined in accordance with the terms of the applicable Supplement.
"Exchange" shall mean either of the procedures described under Section
6.09.
"Exchange Date" shall have the meaning, with respect to any Series
issued pursuant to an Exchange, specified in Section 6.09.
"Exchange Notice" shall have the meaning, with respect to any Series
issued pursuant to an Exchange, specified in Section 6.09.
"Exchangeable Transferor Certificate" shall mean the certificate
executed by the Transferor and authenticated by the Trustee, substantially in
the form of Exhibit A and exchangeable as provided in Section 6.09, provided
that at any time there shall be only one Exchangeable Transferor Certificate.
"Existing PSA" is defined in the recitals to this Agreement.
9
"Extended Trust Termination Date" shall have the meaning specified in
subsection 12.01(a).
"FAS 140" shall mean the Statement of Financial Accounting Standards
No. 140, as amended, modified, supplemented or replaced from time to time.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"Finance Charge Account" shall have the meaning specified in subsection
4.02(b).
"Finance Charge Receivables" shall mean (i) Receivables created in
respect of the Periodic Finance Charges, Annual Membership Fees, fees for
insufficient fund checks received in payment on Accounts, overlimit fees, Cash
Advance Fees, Late Fees and other similar fees and charges, including Special
Fees to the extent such Special Fees are categorized as Finance Charge
Receivables; (ii) Discount Option Receivables; and (iii) Collections consisting
of recoveries, net of expenses of collection, on Receivables in Defaulted
Accounts. Finance Charge Receivables with respect to any Monthly Period shall
include the amount of Interchange (if any) allocable to any Series of
Certificates pursuant to any Supplement with respect to such Monthly Period (to
the extent received by the Trust and deposited into the Collection Account, the
Finance Charge Account or any Series Account, as the case may be, on the
Transfer Date following such Monthly Period).
"Financial Institutions Accounts" shall mean revolving credit card
accounts acquired by FNBO from third-party financial institutions.
"FNBO" shall mean First National Bank of Omaha.
"FNBSD" shall mean First National Bank South Dakota.
"Foreign Clearing Agency" shall mean any non-United States clearing
agency specified in the applicable Supplement.
"Global Certificate" shall have the meaning specified in Section 6.13.
"Governmental Authority" shall mean 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" shall mean, with respect to any Series, the group of Series in
which the related Supplement specifies such Series is to be included.
"Ineligible Receivable" shall have the meaning specified in subsection
2.04(d)(iii).
"Initial Closing Date" shall mean August 8, 1995.
"Initial Investor Interest" shall mean, with respect to any Series of
Certificates, the amount stated in the related Supplement.
10
"Insolvency Event" shall have the meaning specified in subsection
9.02(a).
"Insurance Proceeds" shall mean any amounts recovered pursuant to any
credit insurance policies or debt cancellation or debt deferral programs
covering any Obligor with respect to Receivables under such Obligor's Account,
including amounts recovered through reserves established in connection with such
programs.
"Interchange" shall mean interchange fees payable to FNBO, in its
capacity as credit card issuer, through VISA USA, Inc. and MasterCard
International Incorporated.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended from time to time.
"Investor Account" shall mean each of the Collection Account, Finance
Charge Account, the Principal Account, the Excess Funding Account and the
Distribution Account.
"Investor Certificate" shall mean any one of the certificates
(including, without limitation, the Bearer Certificates, the Registered
Certificates or the Global Certificates) executed by the Transferor (or its
predecessor) and authenticated by the Trustee substantially in the form (or
forms in the case of a Series with multiple classes) of the investor certificate
attached to the related Supplement.
"Investor Certificateholder" shall mean the Holder of record of an
Investor Certificate.
"Investor Charge Off" shall have, with respect to each Series, the
meaning specified in the applicable Supplement.
"Investor Default Amount" shall have, with respect to any Series of
Certificates, the meaning stated in the related Supplement.
"Investor Exchange" shall have the meaning specified in subsection
6.09(b).
"Investor Interest" shall have, with respect to any Series of
Certificates, the meaning stated in the related Supplement.
"Investor Monthly Servicing Fee" shall have, with respect to each
Series, the meaning specified in Section 3.02.
"Investor Percentage" shall have, with respect to Principal
Receivables, Finance Charge Receivables and Receivables in Defaulted Accounts,
and any Series of Certificates, the meaning stated in the related Supplement.
"Late Fees" shall have the meaning specified in the Credit Card
Agreement applicable to each Account for late fees or similar terms.
11
"Lien" shall mean 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, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing; provided,
however, that any assignment pursuant to Section 7.02 shall not be deemed to
constitute a Lien.
"Maximum Addition Amount" shall mean, with respect to any Addition
Date, an aggregate principal balance as of such Addition Date of eligible
Additional Accounts not in excess of either (a) the product of (i) 15% and (ii)
the aggregate amount of Principal Receivables determined as of the first day of
the third preceding Monthly Period, minus the aggregate amount of Principal
Receivables in all of the Accounts that have been designated as Additional
Accounts since the first day of the third preceding Monthly Period (measured for
each such Additional Account as of the date such Additional Account was added to
the Trust), or (b) the product of (i) 20% and (ii) the aggregate amount of
Principal Receivables determined as of the first day of the calendar year in
which such Addition Date occurs, minus the aggregate amount of Principal
Receivables in all of the Accounts that have been designated as Additional
Accounts since the first day of such calendar year (measured, for each such
Additional Account, as of the date each such Additional Account was added to the
Trust).
"Minimum Aggregate Principal Receivables" shall mean, as of any date of
determination, an amount equal to the sum of the Initial Investor Interests for
all outstanding Series on such date, minus the amount of any permanent reduction
during any Revolving Period of any Investor Interest of any Series pursuant to
the Supplement thereof, minus the aggregate amount of principal previously paid
to Investors during any Amortization Period.
"Minimum Transferor Interest" shall mean, on any date of determination,
7% (or such higher percentage as may be specified in any Supplement or, upon
satisfaction of the Rating Agency Condition for each outstanding Series, such
lower percentage as may be specified by the Transferor in a notice to the
Trustee and the Servicer) of the aggregate Principal Receivables on that date of
determination.
"Monthly Period" shall mean, unless otherwise defined in any
Supplement, the period from and including the first day of a calendar month to
and including the last day of a calendar month.
"Monthly Servicer's Certificate" shall mean a certificate substantially
in the form of Exhibit C.
"Monthly Servicing Fee" shall have the meaning specified in Section
3.02.
"Monthly Transferor Servicing Fee" shall have the meaning specified in
Section 3.02.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
12
"Notice Date" shall have the meaning specified in subsection
2.06(c)(i).
"Obligor" shall mean, with respect to any Account, the Person or
Persons obligated to make payments with respect to such Account, including any
guarantor thereof.
"Officer's Certificate" shall mean a certificate signed by any vice
president or more senior officer of the Transferor or Servicer and delivered to
the Trustee.
"Offshore Securities Market" shall mean any established securities
market organized under the laws of a country other than the United States in
which Investor Certificates are listed, including, without limitation, the
Eurobond market, as regulated by the Association of International Bond Dealers;
the Amsterdam Stock Exchange; the Australian Stock Exchange Limited; the Bourse
de Bruxelles; the Frankfurt Stock Exchange; The Stock Exchange of Hong Kong
Limited; The International Stock Exchange of the United Kingdom and the Republic
of Ireland, Ltd.; the Johannesburg Stock Exchange; the Bourse de Luxembourg; the
▇▇▇▇▇ ▇▇▇▇▇▇ di Milan; the Montreal Stock Exchange; the Bourse de Paris; the
Stockholm Stock Exchange; the Tokyo Stock Exchange; the Toronto Stock Exchange;
the Vancouver Stock Exchange; and the Zurich Stock Exchange.
"Opinion of Counsel" shall mean a written opinion of counsel, who may
be counsel for or an employee of the Person providing the opinion, and who shall
be reasonably acceptable to the Trustee.
"Paying Agent" shall mean any paying agent appointed pursuant to
Section 6.06 and shall initially be the Trustee.
"Pay Out Commencement Date" shall mean, with respect to each Series,
the date on which (a) a Trust Pay Out Event is deemed to occur pursuant to
Section 9.01 or (b) a Series Pay Out Event is deemed to occur pursuant to the
Supplement for such Series.
"Pay Out Event" shall mean, with respect to each Series, a Trust Pay
Out Event or a Series Pay Out Event.
"Perfection Representations and Warranties" means the representations
and warranties set forth below:
(a) General. This Agreement creates a valid and continuing security
interest (as defined in the applicable UCC) in the Receivables and the proceeds
thereof in favor of the Trust, which (i) in the case of existing Receivables and
the proceeds thereof, is enforceable upon execution of this Agreement against
creditors of and purchasers from the Transferor, or with respect to then
existing Receivables in Additional Accounts, as of the applicable Addition Date,
and which will be enforceable with respect to Receivables hereafter and
thereafter created and the proceeds thereof upon such creation, in each case 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) and (ii) upon filing of the financing statements
described in subparagraph (d) below and, in the case of Receivables hereafter
created, upon the creation thereof, will be prior to all other Liens (other than
Liens permitted pursuant to subparagraph (c) below).
13
(b) Accounts. The Receivables constitute "accounts" within the meaning
of UCC Section 9-102.
(c) Creation. Immediately prior to the conveyance of the Receivables
pursuant to this Agreement, the Transferor owns and has good and marketable
title to the Receivables free and clear of any Lien, claim or encumbrance of any
Person; provided that nothing in this clause (c) shall prevent or be deemed to
prohibit the Transferor from suffering to exist upon any of the Receivables any
Liens for any taxes if such taxes shall not at the time be due and payable or if
the Transferor or the RPA Seller, as applicable, 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.
(d) Perfection. The Transferor has caused or will have caused, within
ten days of the Effective Date, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
applicable law in order to perfect the security interest granted by the
Transferor to the Trust under this Agreement in the Receivables arising in the
Accounts designated to the Trust as of the Effective Date, and (if any
additional filing is so necessary) within 10 days of the applicable Addition
Date, in the case of such Receivables arising in Additional Accounts.
(e) Priority. Other than the security interest granted to the Trust
pursuant to this Agreement, the Transferor has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Receivables.
The Transferor has not authorized the filing of and is not aware of any
financing statements against the Transferor that include a description of
collateral covering the Receivables other than any financing statement (i)
relating to the security interest granted to Trust hereunder or (ii) that has
been terminated.
"Periodic Finance Charges" shall have the meaning specified in the
Credit Card Agreement applicable to each Account for finance charges (due to
periodic rate) or any similar term.
"Permitted Investments" shall mean, unless otherwise provided in the
Supplement with respect to any Series (a) negotiable instruments or securities
represented by instruments in bearer or registered form which evidence (i)
obligations of or fully guaranteed as to timely payment of principal and
interest by the United States of America; (ii) time deposits or certificates of
deposit of any depository institution or trust company incorporated under the
laws of the United States of America or any state thereof and subject to
supervision and examination by federal or state banking or depository
institution authorities; provided, however, that at the time of the Trust's
investment or contractual commitment to invest therein, the certificates of
deposit or short-term deposits of such depository institution or trust company
shall have a credit rating from Moody's and Standard & Poor's of "P-1" and
"A-1+," respectively; (iii) commercial paper having, at the time of the Trust's
investment or contractual commitment to invest therein, a rating from Moody's
and Standard and Poor's of "P-1" and "A-1+," respectively; (iv) bankers
acceptances issued by any depository institution or trust company described in
clause (a)(ii) above; and (v) investments in money market or common trust funds
rated "AAA-m" or "AAA-mg" by Standard & Poor's and "Aaa" by Moody's or otherwise
approved in writing by each Rating Agency; (b) demand deposits in the name of
the Trust or the Trustee in any depository institution
14
or trust company referred to in clause (a)(ii) above; and (c) any other
investment if each Rating Agency confirms in writing that such investment will
not adversely affect its then current rating of the Investor Certificates.
"Person" shall mean any legal person, including any individual,
corporation, partnership, joint venture, association, limited liability company,
joint-stock company, trust, unincorporated organization, governmental entity or
other entity of similar nature.
"Pool Factor" shall mean, unless any Series is issued in more than one
Class as stated in any related Supplement, a number carried out to seven
decimals representing the ratio of the applicable Investor Interest as of such
Record Date (determined after taking into account any reduction in the Investor
Interest which will occur on the following Distribution Date) to the applicable
Initial Investor Interest.
"Pool Index File" shall mean the file on the Servicer's computer system
that identifies MasterCard and VISA accounts which file is designated by the
Servicer as its "Pool Index File."
"Portfolio Reassignment Price" shall have the meaning specified in
subsection 2.04(e).
"Principal Account" shall have the meaning specified in subsection
4.02(b).
"Principal Receivable" shall mean each Receivable other than (i)
Finance Charge Receivables, (ii) Receivables in Defaulted Accounts, and (iii)
Discount Option Receivables. A Receivable shall be deemed to have been created
at the end of the day on the Date of Processing of such Receivable. In
calculating the aggregate amount of Principal Receivables on any day, the amount
of Principal Receivables shall be reduced by the aggregate amount of credit
balances in the Accounts on such day. Any Receivables which the Transferor is
unable to transfer as provided in subsection 2.05(d) shall not be included in
calculating the aggregate amount of Principal Receivables.
"Principal Shortfall" is defined, as to any Series, in the related
Supplement.
"Principal Terms" shall have the meaning, with respect to any Series
issued pursuant to an Exchange, specified in subsection 6.09(c).
"QSPE" shall mean a "qualifying SPE" within the meaning of FAS 140.
"Qualified Institution" shall have the meaning specified in subsection
4.02(a)(iii).
"Rating Agency" shall mean, with respect to each Series and as of any
date of determination, the rating agency or agencies, if any, specified in the
related Supplement and rating such Series as of such date of determination.
"Rating Agency Condition" shall mean the notification in writing by
each Rating Agency for each outstanding Series that has rated such Series at the
Transferor's request, that the action in question will not result in the Rating
Agency's reducing or withdrawing its then existing rating(s) of the applicable
Investor Certificates and delivery of a copy of such notification to the
Trustee.
15
"Reassignment" shall have the meaning specified in subsection
2.07(b)(ii).
"Reassignment Date" shall have the meaning specified in subsection
2.04(e).
"Receivable" shall mean any amount owing by the Obligors under
Accounts, including, without limitation, amounts due in connection with the sale
of goods and services, cash advances, access checks, Annual Membership Fees,
Cash Advance Fees, Periodic Finance Charges, Late Fees, fees for insufficient
funds checks given in payment on the Accounts, overlimit fees and Special Fees,
if any.
"Receivables Purchase Agreement" means the Receivables Purchase
Agreement, dated as of October 24, 2002, between RPA Seller and Transferor.
"Record Date" shall mean, with respect to any Distribution Date, the
last day of the preceding Monthly Period.
"Registered Certificates" shall have the meaning specified in Section
6.01.
"Related Monthly Period" shall mean the Monthly Period immediately
preceding a Monthly Period in which a specified Distribution Date, Determination
Date or Transfer Date occurs.
"Removal Date" shall mean the date on which Receivables in certain
designated Removed Accounts will be reassigned by the Trustee to the Transferor.
"Removal Notice Date" shall mean the day no later than the fifth
Business Day prior to a Removal Date.
"Removed Accounts" shall have the meaning specified in subsection
2.07(a).
"Requirements of Law" for any Person shall mean the certificate of
incorporation or articles of association and bylaws 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 (including, without limitation, usury laws, the
federal Truth in Lending Act and Regulation Z and Regulation B of the Board of
Governors of the Federal Reserve System).
"Responsible Officer" shall mean, as to the Trustee, any officer within
the Corporate Trust Office (or any successor group of the Trustee), including
any Vice President, any Assistant Secretary or any other officer of the Trustee
customarily performing functions similar to those performed by any person who at
the time shall be an above-designated officer and also, with respect to a
particular officer to whom any corporate trust matter is referred because of
such officer's knowledge of and familiarity with the particular subject, and as
to any other Person, any Vice President or higher officer.
"Revolving Period" shall have, with respect to each Series, the meaning
specified in the related Supplement.
16
"RPA Seller" means FNBO, in its capacity as RPA Seller under the
Receivables Purchase Agreement.
"SAIF" shall mean the Savings Association Insurance Fund administered
by the FDIC.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Series" shall mean any series of Investor Certificates, which may
include within any such Series, a Class or Classes of Investor Certificates
subordinate to another such Class or Classes of Investor Certificates.
"Series Account" shall mean any account or accounts established
pursuant to a Supplement for the benefit of such Series.
"Series Pay Out Event" shall have, with respect to any Series, the
meaning specified pursuant to the Supplement for the related Series.
"Series Servicing Fee Percentage" shall mean, with respect to any
Series, the amount specified in the related Supplement.
"Series Termination Date" shall mean, with respect to any Series of
Certificates, the date stated in the related Supplement.
"Servicer" shall mean initially First National Bank of Omaha, and its
permitted successors and assigns, and thereafter any Person appointed as
successor as herein provided to service the Receivables.
"Servicer Default" shall have the meaning specified in Section 10.01.
"Servicer Letter of Credit" shall mean a letter of credit supporting
the Servicer's obligations regarding Collections which is delivered to the
Trustee in accordance with subsection 4.03(a)(ii).
"Service Transaction Fees" shall have the meaning specified in the
Credit Card Agreement applicable to each Account for any service transaction
fees or similar terms.
"Servicing Officer" shall mean any officer of the Servicer involved in,
or responsible for, the administration and servicing of the Receivables whose
name appears on a list of servicing officers furnished to the Trustee by the
Servicer, as such list may from time to time be amended.
"Special Fees" shall mean Receivables which are Draft Fees, Service
Transaction Fees, lost card fees, statement request fees, copy request fees,
foreign ATM fees, balance transfer fees, check fees, stop payment fees, skip
payment fees, return payment fees and any other fees which are not now but from
time to time may be assessed on the Accounts. On or after the date on which any
of such Special Fees begin to be assessed on the Accounts, the Transferor may
designate in an Officer's Certificate whether such Special Fees shall be treated
as Receivables.
17
"Standard & Poor's" or "S&P" shall mean Standard & Poor's Ratings
Service, a division of the McGraw Hill Companies, Inc.
"Successor Servicer" shall have the meaning specified in subsection
10.02(a).
"Supplement" shall mean, with respect to any Series, a supplement to
this Agreement complying with the terms of Section 6.09 of this Agreement,
executed in conjunction with any issuance of any Series of Certificates (or, in
the case of the issuance of Certificates on the Initial Closing Date, the
Supplement executed in connection with the issuance of such Certificates).
"Termination Notice" shall have, with respect to any Series, the
meaning specified in subsection 10.01(d).
"Transaction Documents" means, at any time, this Agreement, the
Receivables Purchase Agreement, the Supplement for each outstanding Series, any
documents pursuant to which any outstanding Investor Certificate is sold as
permitted by Section 6.09 and any other document designated as a Transaction
Document in any of the foregoing.
"Transfer Agent and Registrar" shall have the meaning specified in
Section 6.03 and shall initially be the Trustee's Corporate Trust Office.
"Transfer Date" shall mean, with respect to any Series, the Business
Day immediately prior to each Distribution Date.
"Transferor" shall mean First National Funding LLC, a Nebraska limited
liability company.
"Transferor Exchange" shall have the meaning specified in subsection
6.09(b).
"Transferor Interest" shall mean, on any date of determination, the
aggregate amount of Principal Receivables, plus the Excess Funding Amount, in
each case at the end of the day immediately prior to such date of determination,
minus the Aggregate Investor Interest at the end of such day.
"Transferor Percentage" shall mean, on any date of determination, when
used with respect to Principal Receivables, Finance Charge Receivables and
Receivables in Defaulted Accounts, a percentage equal to 100% minus the
Aggregate Investor Percentage with respect to such categories of Receivables.
"Transferred Account" shall mean an Account (i) for which a new credit
account number has been issued under circumstances not requiring standard
application and credit evaluation procedures under the Credit Card Guidelines
and (ii) which can be traced or identified by reference to or by way of the
computer files or microfiche lists delivered to the Trustee pursuant to Section
2.01 or 2.06 as an account into which an Account has been transferred.
"Trust" shall mean the trust created by this Agreement, the corpus of
which shall consist of the Receivables now existing or hereafter created and all
moneys due or to become due with respect thereto, all proceeds (as defined in
Section 9-102 of the UCC) of the Receivables and
18
Insurance Proceeds relating thereto, the right to receive certain amounts paid
or payable as Interchange (if provided for in any Supplement), such funds as
from time to time are deposited in the Collection Account, the Excess Funding
Account, the Finance Charge Account, the Principal Account, the Distribution
Account and any Series Account and the rights to any Enhancement with respect to
any Series.
"Trust Assets" shall have the meaning specified in Section 2.01.
"Trustee" shall mean The Bank of New York, a New York banking
corporation, and its successors and any corporation resulting from, or surviving
any consolidation or merger to which it or its successors may be a party and any
successor trustee appointed as herein provided.
"Trust Extension" shall have the meaning specified in subsection
12.01(a).
"Trust Pay Out Event" shall have, with respect to each Series, the
meaning specified in Section 9.01.
"Trust Termination Date" shall mean the earlier to occur of (a) unless
a Trust Extension shall have occurred, the day after the Distribution Date with
respect to any Series following the date on which funds shall have been
deposited in the Distribution Account or the applicable Series Account for the
payment of Investor Certificateholders of each Series then issued and
outstanding sufficient to pay in full the Aggregate Investor Interest plus
interest accrued at the applicable Certificate Rate through the end of the
related interest accrual period prior to the Distribution Date with respect to
each such Series, (b) if a Trust Extension shall have occurred, the Extended
Trust Termination Date, and (c) July 31, 2020.
"UCC" shall mean the Uniform Commercial Code, as in effect in the State
of Nebraska and in any other state where filing of a financing statement is
required under any Transaction Document or in any other specified jurisdiction.
"Undivided Interest" shall mean the undivided interest of any
Certificateholder in the Trust.
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in any Supplement or this Agreement
shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined
therein.
(b) As used herein and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not
defined in Section 1.01, and accounting terms partially defined in
Section 1.01 to the extent not defined, shall have the respective
meanings given to them under generally accepted accounting principles
or regulatory accounting principles, as applicable. To the extent that
the definitions of accounting terms herein are inconsistent with the
meanings of such terms under generally accepted accounting principles
or regulatory accounting principles, the definitions contained herein
shall control.
19
(c) The agreements, representations and warranties of FNBO in
this Agreement and in any Supplement in each of its capacities as
Transferor and Servicer made prior to the Effective Date, shall be
deemed to be the agreements, representations and warranties of FNBO
solely in each such capacity for so long as FNBO acts in each such
capacity under this Agreement.
(d) The words "thereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to any
Supplement or this Agreement as a whole and not to any particular
provision of this Agreement or any Supplement.
(e) Section, subsection, schedule and exhibit references
contained in this Agreement or any supplement are references to
sections, subsections, schedules and exhibits in or to this Agreement
or any supplement unless otherwise specified.
(f) The Monthly Servicer Certificate, the form of which is
attached as Exhibit C to this Agreement, and the Annual Servicer
Certificate, the form of which is attached as Exhibit D to this
Agreement, shall be in substantially the form of Exhibit C or Exhibit
D, as the case may be, with such changes as the Servicer may determine
to be necessary or desirable; provided, however, that no such change
shall serve to exclude information required by this Agreement or any
Supplement. The Servicer shall, upon making such determination, deliver
to the Trustee and each Rating Agency an Officer's Certificate to which
shall be annexed the form of the related Exhibit, as so changed. Upon
the delivery of such Officer's Certificate to the Trustee, the related
Exhibit, as so changed, shall for all purposes of this Agreement
constitute such Exhibit. The Trustee may conclusively rely upon such
Officer's Certificate in determining whether the related Exhibit, as
changed, conforms to the requirements of this Agreement.
(g) All references to Investor Certificates, Investor
Certificateholders, Certificateholders and Holders in this Agreement
and, unless otherwise required by the context, in the Transaction
Documents, shall include the Collateralized Trust Obligations and the
CTO Securityholders, as applicable, each as defined in the Supplements
for Series 2000-2 and Series 2001-1; provided, however, that, as
specified in such Supplements, the Collateralized Trust Obligations do
not represent Undivided Interests in the Trust except for the purposes
specified in such Supplements; and provided, further, that in
determining whether the Holders of Investor Certificates representing
the requisite percentage of the unpaid Initial Investor Interest have
given any request, demand, authorization, direction, notice, consent or
waiver hereunder, Investor Certificates owned by the Transferor, FNBO,
the Servicer or any of their Affiliates shall be disregarded, except
that in determining whether the Trustee shall be protected in relying
on any such action, only Investor Certificates that a Responsible
Officer of the Trustee actually knows to be so owned shall be so
disregarded. Investor Certificates so owned that have been pledged in
good faith may be included if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect
to such Investor Certificates and that the pledgee is not the
Transferor, FNBO, the Servicer or any Affiliate of any of the foregoing
Persons. In making any such determination, the Trustee may conclusively
rely on the representations of the pledgee and shall not be required to
undertake any independent investigation.
20
ARTICLE II
CONVEYANCE OF RECEIVABLES; ISSUANCE OF CERTIFICATES
SECTION 2.01. CONVEYANCE OF RECEIVABLES. The Transferor does hereby
transfer, assign, set over, grant and otherwise convey to the Trust for the
benefit of the Certificateholders, without recourse, all of its right, title and
interest in and to (i) the Receivables now existing and hereafter created and
arising in connection with the Accounts, (ii) all moneys due or to become due
with respect thereto (including all Finance Charge Receivables), (iii)
recoveries (net of expenses of collection) on Defaulted Accounts, (iv) Insurance
Proceeds relating to such Receivables, (v) any Enhancement provided in
accordance with the terms of any Supplement, (vi) all of its rights, remedies,
powers and privileges under the Receivables Purchase Agreement and (vii) all
proceeds of any of the foregoing (collectively, the "Trust Assets").
In connection with such transfer, assignment, setover, grant and
conveyance, the Transferor agrees to record and file, at its own expense,
financing statements (including any continuation statements with respect to such
financing statement when applicable) with respect to the Receivables now
existing and hereafter created for the transfer of accounts (as defined in the
UCC) 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 the Receivables to the Trust, and to deliver a file-stamped copy
of each such financing statement or continuation statement or other evidence of
such filing (which may, for purposes of this Section 2.01, consist of telephone
confirmation of such filing) to the Trustee on or prior to the date of issuance
of the Certificates, and in the case of any continuation statements filed
pursuant to this Section 2.01, as soon as practicable after receipt thereof by
the Transferor. The foregoing transfer, assignment, setover, grant and
conveyance to the Trust shall be made to the Trustee, on behalf of the Trust,
and each reference in this Agreement to such transfer, assignment, setover,
grant and conveyance shall be construed accordingly.
In connection with such transfer, the Transferor agrees, at its own
expense, on or prior to the Initial Closing Date (i) to indicate in the Pool
Index File maintained in its computer files that Receivables created in
connection with the Accounts (other than any Additional Accounts) have been
transferred to the Trust pursuant to this Agreement for the benefit of the
Certificateholders by identifying such Accounts in the Pool Index File by
setting the trust indicator flag to "1," and to cause FNBO to make a similar
notation in its computer files, and (ii) to deliver to the Trustee a computer
file or microfiche list containing a true and complete list of all such
Accounts, identified by account number and setting forth the Receivable balance
as of the Cut Off Date. Such file or list shall be marked as Schedule 1 to this
Agreement, delivered to the Trustee as confidential and proprietary, and is
hereby incorporated into and made a part of this Agreement. The Transferor and
the Servicer each agree not to alter the file designation referenced in clause
(i) of this paragraph with respect to any Account during the term of this
Agreement unless and until such Account becomes a Removed Account.
The parties intend that the transfer shall be deemed to be a sale, but
if, and to the extent that, such transfer is not deemed to be a sale, the
Transferor shall be deemed hereunder to have granted, and does hereby so grant,
to the Trustee a first priority perfected security interest in all of the
Transferor's right, title and interest in, and under the Receivables now
existing and
21
hereafter created and arising in connection with the Accounts (other than
Receivables in Additional Accounts), all payments on such Receivables received
after the Cut Off Date, all Insurance Proceeds relating thereto and all proceeds
thereof (including recoveries, net of expenses of collection on Defaulted
Accounts) and Investor Accounts and that this Agreement shall constitute a
security agreement under applicable law.
Pursuant to the request of the Transferor, the Trustee shall cause
Certificates in authorized denominations evidencing the entire interest in the
Trust to be duly authenticated and delivered to or upon the order of the
Transferor pursuant to Section 6.02.
By executing this Agreement and the Receivables Purchase Agreement, the
parties hereto and thereto do not intend to cancel, release or in any way impair
the conveyances previously made by FNBO and FNBSD, as "Transferor" and
"Co-Transferor" under the Existing PSA. Without limiting the foregoing, the
parties hereto acknowledge and agree as follows:
(i) The Trust created by and maintained under the Existing PSA
shall continue to exist and be maintained under this Agreement.
(ii) All series of Investor Certificates issued under the
Existing PSA shall constitute Series issued and outstanding under this
Agreement, and any Supplement executed in connection with such Series
shall constitute a Supplement executed hereunder.
(iii) All references to the Existing PSA in any other
instruments or documents shall be deemed to constitute references to
this Agreement. All references in such instruments or documents to FNBO
or FNBSD as "Transferor" or "Co-Transferor" of receivables and related
assets under the Existing PSA shall be deemed to constitute references
to the Transferor in such capacity hereunder.
(iv) The Transferor hereby assumes and agrees to perform all
obligations of FNBO or FNBSD, as "Transferor" or "Co-Transferor" (but
not as "Servicer"), under or in connection with the Existing PSA (as
amended and restated by this Agreement) and any Supplements to the
Existing PSA.
(v) To the extent this Agreement requires that certain actions
are to be taken as of the Initial Closing Date or another date prior to
the Effective Date, execution of such action by FNBO or FNBSD under the
Existing PSA shall constitute satisfaction of such requirement.
SECTION 2.02. ACCEPTANCE BY TRUSTEE.
(a) The Trustee hereby acknowledges its acceptance, on behalf
of the Trust, of all right, title and interest previously held by the
Transferor in and to the Receivables now existing and hereafter created
and arising in connection with the Accounts (other than Receivables in
Additional Accounts), all moneys due or to become due with respect
thereto (including all Finance Charge Receivables), all proceeds of
such Receivables (including recoveries, net of expenses of collection,
on Defaulted Accounts), Insurance Proceeds relating to such
Receivables, and the proceeds thereof, and declares that it shall
22
maintain such right, title and interest, upon the Trust herein set
forth, for the benefit of all Certificateholders. The Trustee further
acknowledges that, prior to or simultaneously with the execution and
delivery of this Agreement, the Servicer delivered to the Trustee the
computer file or microfiche list described in the third paragraph of
Section 2.01.
(b) The Trustee hereby agrees not to disclose to any Person
any of the account numbers or other information contained in the
computer files or microfiche lists delivered to the Trustee by the
Servicer pursuant to Sections 2.01, 2.06 and 2.07 ("Account
Information") except as is required in connection with the performance
of its duties hereunder or in enforcing the rights of the
Certificateholders or to a Successor Servicer appointed pursuant to
Section 10.02 or as mandated pursuant to any Requirement of Law
applicable to the Trustee. The Trustee agrees (i) to take such measures
as shall be reasonably requested by the Transferor to protect and
maintain the security and confidentiality of such information, and, in
connection therewith, shall allow the Transferor to inspect the
Trustee's security and confidentiality arrangements from time to time
during normal business hours; and (ii) not to use any of the Account
Information to compete, directly or indirectly, with the Transferor. In
the event that the Trustee is required by law to disclose any Account
Information, the Trustee shall provide the Transferor with prompt
written notice, unless such notice is prohibited by law, of any such
request or requirements so that the Transferor or the affected Credit
Card Originator may request a protective order or other appropriate
remedy. The Trustee shall make best efforts to provide the Transferor
with written notice no later than five Business Days prior to any
disclosure pursuant to this subsection 2.02(b).
(c) The 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. Neither the Trust nor the Trustee
accepts any duty or obligation of the Transferor hereunder to any
Person, including, but not limited to any duty or obligation to any
Obligor.
SECTION 2.03. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR. The
Transferor hereby represents and warrants to the Trust as of the Effective Date,
each Closing Date and, with respect to Additional Accounts, the related Addition
Date:
(a) ORGANIZATION AND GOOD STANDING. The Transferor is a
limited liability company validly existing in good standing under the
laws of the State of Nebraska and has full power, authority and legal
right to own its properties and conduct its business as presently owned
and conducted, and to execute, deliver and perform its obligations
under this Agreement and each other Transaction Document to which the
Transferor is a party and to execute and deliver to the Trustee the
Certificates pursuant hereto.
(b) DUE QUALIFICATION. The Transferor is duly qualified to do
business and is in good standing (or is exempt from such requirement)
in any state required in order to conduct business, and has obtained
all necessary licenses and approvals with respect to the Transferor
required under federal and Nebraska law; provided, however, that no
representation or warranty is made with respect to any qualifications,
licenses or
23
approvals which the Trustee would have to obtain to do business in any
state in which the Trustee seeks to enforce any Receivable.
(c) DUE AUTHORIZATION. The execution, delivery and performance
of this Agreement and each other Transaction Document to which the
Transferor is a party and the execution and delivery to the Trustee of
the Certificates by the Transferor and the consummation of the
transactions provided for in this Agreement and each such other
Transaction Document have been duly authorized by the Transferor by all
necessary limited liability company action on its part.
(d) NO CONFLICTS. The execution and delivery of this
Agreement, the Certificates and each other Transaction Document to
which the Transferor is a party, the performance of the transactions
contemplated by this Agreement and each such Transaction Document and
the fulfillment 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 the Transferor is a party
or by which it or any of its properties are bound.
(e) NO VIOLATION. The execution and delivery of this
Agreement, the Certificates and each other Transaction Document to
which the Transferor is a party, the performance of the transactions
contemplated by this Agreement and each such Transaction Document and
the fulfillment of the terms hereof and thereof, will not conflict with
or violate in any material way any Requirements of Law applicable to
the Transferor.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the best knowledge of the Transferor, threatened against
the Transferor before any court, regulatory body, administrative
agency, or other tribunal or governmental instrumentality (i) asserting
the invalidity of this Agreement, the Certificates or any other
Transaction Document, (ii) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions
contemplated by this Agreement, the Certificates and each such
Transaction Document, (iii) seeking any determination or ruling that,
in the reasonable judgment of the Transferor, would materially and
adversely affect the performance by the Transferor of its obligations
under this Agreement or any other Transaction Document, (iv) seeking
any determination or ruling that would materially and adversely affect
the validity or enforceability of this Agreement, the Certificates or
any other Transaction Document or (v) seeking to affect adversely the
income tax attributes of the Trust.
(g) ELIGIBILITY OF ACCOUNTS. As of the Cut Off Date and each
Addition Date prior to the date hereof, each Account was an Eligible
Account and no selection procedures adverse to the Investor
Certificateholders have been employed in selecting the Accounts from
among the Eligible Accounts.
(h) ALL CONSENTS REQUIRED. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental
body or official required in
24
connection with the execution and delivery by the Transferor of this
Agreement, the Certificates and each other Transaction Document to
which the Transferor is a party, the performance by the Transferor of
the transactions contemplated by this Agreement and each such other
Transaction Document, and the fulfillment of the terms hereof and
thereof, have been obtained; provided, however, that no representation
or warranty is made as to state securities or blue sky laws regarding
the distribution of the Certificates.
(i) INSOLVENCY. The Transferor is not insolvent and no
Insolvency Event with respect to the Transferor has occurred, and the
transfers of the Receivables and the other Trust Assets by the
Transferor to the Trust contemplated hereby have not been made in
contemplation of such insolvency or Insolvency Event.
For the purposes of the representations and warranties made by
the Transferor in this Section 2.03, "Certificates" shall mean the
Certificates issued during the period commencing on December 31, 1995,
and ending on the date hereof. The representations and warranties set
forth in this Section 2.03 shall survive the transfer and assignment of
the respective Receivables to the Trust, and termination of the rights
and obligations of the Servicer pursuant to Section 10.01. The
Transferor hereby represents and warrants to the Trust, with respect to
any Series of Certificates, as of its Closing Date, unless otherwise
stated in such Supplement, that the representations and warranties of
the Transferor set forth in Section 2.03, are true and correct as of
such date (for the purposes of such representations and warranties,
"Certificates" shall mean the Certificates issued on the related
Closing Date). Upon discovery by the Transferor, the Servicer or the
Trustee of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give prompt written
notice to the others.
SECTION 2.04. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR RELATING
TO THE AGREEMENT AND THE RECEIVABLES.
(a) BINDING OBLIGATION; VALID TRANSFER AND ASSIGNMENT. The
Transferor hereby represents and warrants to the Trust that, as of the
Effective Date, each Closing Date and, with respect to Additional
Accounts, the related Addition Date:
(i) This Agreement and each other Transaction
Document to which the Transferor is a party constitutes and,
in the case of Additional Accounts, when the related
Assignment is executed and delivered on behalf of RPA Seller,
will constitute, a legal, valid and binding obligation of the
Transferor, enforceable against the Transferor in accordance
with its terms, except (A) 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
the rights of creditors of national banking associations, and
(B) as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or
in equity).
(ii) This Agreement (as supplemented by Assignments
made pursuant to Section 2.06) constitutes either (A) a valid
transfer, assignment, setover and conveyance to the Trust of
all right, title and interest of the Transferor in and to
25
the Receivables now existing (or, with respect to Additional
Accounts, existing on the applicable Addition Date) and
hereafter (or thereafter) created and arising in connection
with the Accounts, and all proceeds of such Receivables and
Insurance Proceeds relating thereto, and such Receivables
and all proceeds thereof and Insurance Proceeds relating
thereto will be held by the Trust free and clear of any Lien
except for (1) Liens permitted under subsection 2.05(b), (2)
the interest of the Transferor as Holder of the Exchangeable
Transferor Certificate and (3) the Servicer's right, if any,
to interest accruing on, and investment earnings, if any, in
respect of the Finance Charge Account, the Collection
Account, the Principal Account or any Series Account, as
provided in this Agreement or the related Supplement, or (B)
a grant of a security interest (as defined in the UCC) in
such property to the Trust, which is enforceable with
respect to the existing Receivables, the proceeds thereof
and Insurance Proceeds relating thereto upon execution and
delivery of this Agreement, or, with respect to Receivables
then existing in Additional Accounts, upon execution and
delivery of the related Assignment, and which will be
enforceable with respect to such Receivables hereafter (or
thereafter) created, the proceeds thereof and Insurance
Proceeds relating thereto, upon such creation. If this
Agreement (as supplemented by Assignments made pursuant to
Section 2.06) constitutes the grant of a security interest
to the Trust in such property, all actions necessary under
the applicable UCC in any jurisdiction to be taken to give
the Trustee a first priority perfected security interest in
the Receivables and proceeds thereof (subject to Section
9-315 of the UCC), except for Liens permitted under
subsection 2.05(b), have been taken. Neither the Transferor
nor any Person (other than the Trustee) shall have any claim
to or interest in the Collection Account, the Excess Funding
Account, the Principal Account, the Finance Charge Account,
the Distribution Account or any Series Account, or the
Enhancement for any Series, except for the Servicer's
rights, if any, to receive interest accruing on, and
investment earnings in respect of, the Finance Charge
Account, the Collection Account and Principal Account as
provided in this Agreement (or, if applicable, any Series
Account as provided in any Supplement) and, if this
Agreement constitutes the grant of a security interest in
such property, except for the interest of the Transferor in
such property as a debtor for purposes of the UCC and the
interests of the Transferor as Holder of the Exchangeable
Transferor Certificate.
(b) ELIGIBILITY OF RECEIVABLES. The Transferor hereby
represents and warrants to the Trust as of the Initial Closing Date,
the Effective Date, each Closing Date and, with respect to Additional
Accounts, the related Addition Date that:
(i) Each Account designated as an Account is an
Eligible Account as of the date of such designation, all then
existing Receivables in each such Account are Eligible
Receivables as of the date of such designation and, as of the
date of creation of any new Receivable in an Account, such
Receivable will be an Eligible Receivable.
(ii) Each Receivable then existing has been conveyed
to the Trust free and clear of any Lien (other than Liens
permitted under subsection 2.05(b)) and in
26
compliance, in all material respects, with all Requirements
of Law applicable to the Transferor, FNBO and/or the Credit
Card Originator.
(iii) With respect to each Receivable then existing,
all consents, orders, licenses, approvals or authorizations of
or registrations or declarations with any Governmental
Authority required to be obtained, effected or given by the
Transferor, FNBO or the Credit Card Originator in connection
with the conveyance of such Receivable to the Trust have been
duly obtained, effected or given and are in full force and
effect.
(iv) On each day on which any new Receivable is
created, the Transferor shall be deemed to represent and
warrant to the Trust that (A) each Receivable created on such
day is an Eligible Receivable, (B) each Receivable created on
such day has been conveyed to the Trust in compliance, in all
material respects, with all Requirements of Law applicable to
the Transferor or FNBO, (C) with respect to each such
Receivable, all consents, licenses, approvals or
authorizations of or registrations or declarations with, any
Governmental Authority required to be obtained, effected or
given by the Transferor or FNBO in connection with the
conveyance of such Receivable to the Trust have been duly
obtained, effected or given and are in full force and effect
and (D) the representations and warranties set forth in
subsections 2.04(a) and 2.04(b)(ii) are true and correct with
respect to each Receivable created on such day as if made on
such day.
(v) As of the Effective Date, and as of each Addition
Date with respect to Additional Accounts, and as of each
Removal Date with respect to Removed Accounts, Schedule 1 to
this Agreement, as supplemented by the related computer files
or microfiche lists delivered pursuant to Section 2.06 or
Section 2.07 in connection with each Addition Date or Removal
Date, is an accurate and complete listing in all material
respects of all the Accounts as of each such date (or, with
respect to the Schedule delivered on the Effective Date, as of
the most recent month end) and the information contained
therein with respect to the identity of such Accounts and the
Receivables existing thereunder is true and correct in all
material respects as of each such specified date.
(vi) The Transferor is the legal and beneficial owner
of all right, title and interest in each Receivable and
Transferor has the full right, power and authority to transfer
such Receivables to the Trust.
(c) NOTICE OF BREACH. The representations and warranties set
forth in this Section 2.04 shall survive the transfer and assignment of
the respective Receivables to the Trust. Upon discovery by the
Transferor, the Servicer or the Trustee of a breach of any of the
representations and warranties set forth in this Section 2.04, the
party discovering such breach shall give prompt written notice to the
other parties mentioned above. The Transferor agrees to cooperate with
the Servicer and the Trustee in attempting to cure any such breach.
27
(d) TRANSFER OF INELIGIBLE RECEIVABLES.
(i) Automatic Removal. In the event of a breach with
respect to a Receivable of any representations and warranties
set forth in subsection 2.04(b)(ii), or in the event that a
Receivable is not an Eligible Receivable as a result of the
failure to satisfy the conditions set forth in clause (d) of
the definition of Eligible Receivable, and any of the
following three conditions is met: (A) as a result of such
breach or event such Receivable is charged off as
uncollectible or the Trust's rights in, to or under such
Receivable or its proceeds are impaired or the proceeds of
such Receivable are not available for any reason to the Trust
free and clear of any Lien, except Liens permitted under
subsection 2.05(b); (B) the Lien upon the subject Receivable
(1) arises in favor of the United States of America or any
State or any agency or instrumentality thereof and involves
taxes or liens arising under Title IV of ERISA or (2) has been
consented to by the Transferor or the applicable Credit Card
Originator; or (C) the unsecured short-term debt rating of
FNBO is not at least "P-1" by ▇▇▇▇▇'▇ and the Lien upon the
subject Receivable ranks prior to the Lien created pursuant to
this Agreement, then, upon the earlier to occur of the
discovery of such breach or event by the Transferor or the
Servicer or receipt by the Transferor of written notice of
such breach or event given by the Trustee, Receivables of the
Account containing such ineligible Receivable shall be
automatically removed from the Trust on the terms and
conditions set forth in subsection 2.04(d)(iii).
(ii) Removal After Cure Period. In the event of a
breach of any of the representations and warranties set forth
in subsection 2.04(b) other than a breach or event as set
forth in clause (d)(i) above, and as a result of such breach
the related Account becomes a Defaulted Account or the Trust's
rights in, to or under the Receivable or its proceeds are
impaired or the proceeds of such Receivable are not available
for any reason to the Trust free and clear of any Lien, except
Liens permitted under subsection 2.05(b), then upon the
expiration of 60 days (or such longer period as may be agreed
to by the Trustee in its sole discretion, but in no event
later than 150 days) from the earlier to occur of the
discovery of any such event by either the Transferor or the
Servicer, or receipt by the Transferor of written notice of
any such event given by the Trustee, the Receivables of the
Account containing such ineligible Receivable shall be removed
from the Trust on the terms and conditions set forth in
subsection 2.04(d)(iii); provided, however, that no such
removal shall be required to be made if, on any day within
such applicable period, such representations and warranties
with respect to such Receivable shall then be true and correct
in all material respects as if such Receivable had been
created on such day.
(iii) Procedures for Removal. When the provisions of
subsection 2.04(d)(i) or (ii) above require removal of a
Receivable, the Transferor shall accept reassignment of such
Receivable (an "Ineligible Receivable") by directing the
Servicer to deduct the principal balance of each such
Ineligible Receivable from the Principal Receivables in the
Trust and to decrease the Transferor Interest by such amount.
On and after the date of such removal, each Ineligible
28
Receivable shall be deducted from the aggregate amount of
Principal Receivables used in the calculation of any Investor
Percentage, the Transferor Percentage or the Transferor
Interest. In the event that the exclusion of an Ineligible
Receivable from the calculation of the Transferor Interest
would cause the Transferor Interest to be reduced below the
Minimum Transferor Interest or would cause the aggregate
Principal Receivables in the Trust to be less than the Minimum
Aggregate Principal Receivables, or would otherwise not be
permitted by law, the Transferor shall immediately, but in no
event later than 10 Business Days after such event, make a
deposit in the Excess Funding Account in immediately available
funds prior to the next succeeding Transfer Date in an amount
sufficient to cure any such shortfall. The portion of such
deposit allocated to the Investor Certificates of each Series
shall be distributed to the Investor Certificateholders of
each Series in the manner specified in Article IV, if
applicable, on the Distribution Date relating to the Monthly
Period in which such deposit is made. Upon the reassignment to
the Transferor of an Ineligible Receivable, the Trust shall
automatically and without further action be deemed to
transfer, assign, set over and otherwise convey to the
Transferor, without recourse, representation or warranty, all
the right, title and interest of the Trust in and to such
Ineligible Receivable, all moneys due or to become due with
respect thereto and all proceeds thereof and Insurance
Proceeds relating thereto and Interchange (if any) allocated
to such Ineligible Receivable pursuant to any Supplement. Such
reassigned Ineligible Receivable shall be treated by the Trust
as collected in full as of the date on which it was
transferred. The Trustee shall execute such documents and
instruments of transfer or assignment and take other actions
as shall reasonably be requested by the Transferor to evidence
the conveyance of such Ineligible Receivable pursuant to this
subsection 2.04(d)(iii). The obligation of the Transferor set
forth in this subsection 2.04(d)(iii), or the automatic
removal of such Receivable from the Trust, as the case may be,
shall constitute the sole remedy respecting any breach of the
representations and warranties set forth in the
above-referenced subsections with respect to such Receivable
available to Certificateholders or the Trustee on behalf of
Certificateholders.
(iv) Proceeds Held by Servicer. For the purposes of
subsections 2.04(d)(i) and (ii) above, proceeds of a
Receivable shall not be deemed to be impaired hereunder solely
because such proceeds are held by the Servicer (if the
Servicer is FNBO or the Transferor) for more than the
applicable period under Section 9-315 of the UCC.
(e) REASSIGNMENT OF TRUST PORTFOLIO. In the event of a breach
of any of the representations and warranties set forth in subsections
2.03(a), (b) or (c) or subsection 2.04(a) which has a material adverse
effect on the Receivables or the availability of the proceeds of the
Receivables to the Trust, either the Trustee or the Holders of Investor
Certificates evidencing more than 50% of the aggregate unpaid Initial
Investor Interests of all Series, by notice then given in writing to
the Transferor (and to the Trustee and the Servicer, if given by the
Investor Certificateholders), may direct the Transferor to accept
reassignment of an amount of Principal Receivables (as specified below)
within 60 days of such notice (or within such longer period as may be
specified in
29
such notice), and the Transferor shall be obligated to accept
reassignment of such Principal Receivables on a Transfer Date specified
by the Transferor (as to such Transfer Date, the "Reassignment Date")
occurring within such applicable period on the terms and conditions set
forth below; provided, however, that no such reassignment shall be
required to be made if, at any time during such applicable period, the
representations and warranties contained in subsections 2.03(a), (b) or
(c) or subsection 2.04(a), as applicable, shall then be true and
correct in all material respects. The Transferor shall deposit in
next-day funds on the Reassignment Date an amount equal to the
reassignment deposit amount for such Receivables in the Distribution
Account or Series Account, as provided in the related Supplement, for
distribution to the Investor Certificateholders pursuant to Article
XII. The reassignment deposit amount with respect to each Series for
such reassignment, unless otherwise stated in the related Supplement,
shall be equal to (i) the unpaid Initial Investor Interest of such
Series at the end of the day on the last day of the Monthly Period
preceding the Reassignment Date, less the amount, if any, previously
allocated for payment of principal, or paid as principal to such
Certificateholders on the related Distribution Date in the Monthly
Period in which the Reassignment Date occurs, plus (ii) an amount equal
to all interest accrued but unpaid on the Investor Certificates of such
Series at the applicable Certificate Rate through such last day, less
the amount, if any, previously allocated for payment of interest or
paid as interest to the Certificateholders of such Series on the
related Distribution Date in the Monthly Period in which the
Reassignment Date occurs (the "Portfolio Reassignment Price"). Payment
of the reassignment deposit amount with respect to each Series, and all
other amounts in the Distribution Account or the applicable Series
Account in respect of the preceding Monthly Period shall be considered
a prepayment in full of the Receivables represented by the Investor
Certificates. On the Reassignment Date on which such amount has been
deposited in full into the Distribution Account or the applicable
Series Account, the Receivables and all moneys due or to become due
with respect thereto and all proceeds of the Receivables and Insurance
Proceeds relating thereto and Interchange (if any) allocated to the
Receivables pursuant to any Supplement shall be released to the
Transferor after payment of all amounts otherwise due hereunder on or
prior to such dates and the Trustee shall execute and deliver such
instruments of transfer or assignment, in each case without recourse,
representation or warranty, as shall be prepared by and as are
reasonably requested by the Transferor to vest in the Transferor, or
its designee or assignee, all right, title and interest of the Trust in
and to the Receivables, all moneys due or to become due with respect
thereto and all proceeds of the Receivables and Insurance Proceeds
relating thereto and Interchange (if any) allocated to the Receivables
pursuant to any Supplement. If the Trustee or the Investor
Certificateholders give notice directing the Transferor to accept
reassignment as provided above, the obligation of the Transferor to
accept reassignment of the Receivables and pay the reassignment deposit
amount pursuant to this subsection 2.04(e) shall constitute the sole
remedy respecting a breach of the representations and warranties
contained in subsections 2.03(a), (b) or (c) and subsection 2.04(a)
available to the Investor Certificateholders or the Trustee on behalf
of the Investor Certificateholders.
(f) PERFECTION REPRESENTATIONS AND WARRANTIES. The Transferor
hereby makes the Perfection Representations and Warranties to the
Trust. The rights and remedies with respect to any breach of the
Perfection Representations and Warranties
30
made under this Section 2.04(f) shall be continuing and shall survive
any termination of this Agreement. Neither the Trust nor the Trustee
shall waive a breach of any Perfection Representation and Warranty. In
order to evidence the interests of the Transferor and the Trust under
this Agreement, the Transferor and the Servicer shall, from time to
time take such action, and execute and deliver such instruments
(including, without limitation, such actions or filings as are
requested by the Trustee and financing statements under the UCC as
enacted and then in effect in any other jurisdiction in which the
Transferor is organized, has its principal place of business or
maintains any books, records, files, or other information concerning
the Receivables) in order to maintain and perfect, as a first priority
interest, the security interest in the Receivables. The Transferor
hereby authorizes each of the Servicer and the Trustee to file
financing statements under the UCC without the Transferor's signature
where allowed by applicable law.
SECTION 2.05. COVENANTS OF THE TRANSFEROR. The Transferor hereby
covenants that:
(a) RECEIVABLES TO BE ACCOUNTS. The Transferor will take no
action to cause any Receivable to be evidenced by any instrument (as
defined in the UCC). Each Receivable shall be payable pursuant to a
contract which does not create a Lien on any goods purchased
thereunder. The Transferor will take no action to cause any Receivable
to be anything other than an "account" (as defined in the UCC).
(b) SECURITY INTERESTS. Except for the conveyances hereunder,
the Transferor will not sell, pledge, assign or transfer 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; the Transferor will immediately notify the Trustee of
the existence of any Lien on any Receivable; and the 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; provided, however, that nothing in this
subsection 2.05(b) shall prevent or be deemed to prohibit the
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 the 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; and, provided
further, that nothing in this subsection 2.05(b) shall prevent the
Transferor from granting a Lien solely on the Transferor's Interest as
Holder of the Exchangeable Transferor Certificate.
(c) CREDIT CARD AGREEMENTS AND ACCOUNT GUIDELINES. The
Transferor shall enforce the covenant in the Receivables Purchase
Agreement requiring FNBO to comply with and perform its obligations
under the Credit Card Agreements relating to the Accounts and the
Credit Card Guidelines and all applicable rules and regulations of VISA
USA, Inc. and MasterCard International Incorporated except insofar as
any failure to comply or perform would not materially and adversely
affect the rights and interests of the Trustee or the
Certificateholders hereunder or under the Certificates or any other
Transaction Documents. Except as expressly provided in any Supplement,
the Transferor may permit FNBO to change the terms and conditions of
the Credit Card Agreements or the Credit Card Guidelines in any respect
(including, without limitation, the reduction of the required minimum
monthly payment, the calculation of the amount, or the timing, of
31
charge-offs and the Periodic Finance Charges and other fees to be
assessed thereon) only if such change (i) would not, in the reasonable
belief of the Transferor, cause a Pay Out Event to occur, and (ii) is
made applicable to a substantial portion of the comparable segment of
the revolving credit card accounts owned and serviced by FNBO 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
FNBO and an unrelated third party or by the terms of the Credit Card
Agreements; provided, however, with respect to FNBO, that clause (ii)
shall be deemed to be satisfied at any time that the Transferor
Interest exceeds 14% of the Principal Receivables; and provided,
further, that for purposes of FNBO's debt deferral and debt
cancellation program, the requirements of subsection 2.05(c)(ii) shall
be deemed to be satisfied if the opportunity to initiate the change is
made available to a substantial portion of the comparable segment of
the revolving credit card accounts owned and serviced by FNBO which
have characteristics the same as, or substantially similar to, the
Accounts to which such opportunity is made available.
(d) ACCOUNT ALLOCATIONS. In the event that the Transferor is
unable for any reason to transfer Receivables to the Trust in
accordance with the provisions of this Agreement (including, without
limitation, by reason of the application of the provisions of Section
9.02 or an order by any federal governmental agency having regulatory
authority over the Transferor or FNBO or any court of competent
jurisdiction that the Transferor not transfer any additional Principal
Receivables to the Trust) then, in any such event, (i) the Transferor
agrees to allocate and pay to the Trust, after the date of such
inability, all Collections with respect to Principal Receivables, and
all amounts which would have constituted Collections with respect to
Principal Receivables but for the Transferor's inability to transfer
such Receivables (up to an aggregate amount equal to the amount of
Principal Receivables in the Trust on such date); (ii) the Transferor
agrees to have such amounts applied as Collections in accordance with
Article IV; and (iii) for only so long as all Collections and all
amounts which would have constituted Collections are allocated and
applied in accordance with clauses (i) and (ii) above, Principal
Receivables (and all amounts which would have constituted Principal
Receivables but for the Transferor's inability to transfer Receivables
to the Trust) that are written 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 but for the Transferor's inability to transfer Receivables
to the Trust shall be deemed to be Principal Receivables for the
purpose of calculating (A) the applicable Investor Percentage with
respect to any Series and (B) the Aggregate Investor Percentage
thereunder. If the Transferor is unable pursuant to any Requirement of
Law to allocate Collections as described above, the 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
32
transfer of additional Principal Receivables to the Trust and
Collections with respect thereto shall continue to be allocated and
paid in accordance with Article IV.
(e) DELIVERY OF COLLECTIONS. The Transferor agrees to pay to
the Servicer all payments received by the Transferor in respect of the
Receivables as soon as practicable after receipt thereof by the
Transferor but, in any event, no later than two Business Days after the
Date of Processing.
(f) CONVEYANCE OF ACCOUNTS. The Transferor covenants and
agrees that, except as provided in Section 2.05(b), it will not convey,
assign, exchange or otherwise transfer the Accounts to any Person prior
to the termination of this Agreement pursuant to Article XII; provided,
however, that the Transferor shall not be prohibited hereby from
conveying, assigning, exchanging or otherwise transferring the Accounts
in connection with a transaction complying with the provisions of
Section 7.02.
(g) RECEIVABLES PURCHASE AGREEMENT. The Transferor, in its
capacity as purchaser of Receivables from the RPA Seller under the
Receivables Purchase Agreement, shall enforce the covenants and
agreements of the RPA Seller as set forth in the Receivables Purchase
Agreement, including its agreement to designate Additional Accounts as
and when required in order for the Transferor to fulfill its
undertakings in Section 2.06. The Transferor shall not amend, waive or
otherwise modify the Receivables Purchase Agreement except in
accordance with its terms.
(h) OFFICIAL RECORDS. The resolutions of the Board of
Directors of the Transferor's Managing Member approving each of the
Transaction Documents and all documents relating thereto are and shall
be continuously reflected in the minutes of the Board of Directors of
the Transferor's Managing Member and in the official records of the
Transferor. Each of the Transaction Documents and all documents
relating thereto are and shall, continuously from the time of their
respective execution by the Transferor, be official records of the
Transferor.
(i) TRANSFEROR INTEREST. Except as otherwise permitted herein,
including in Sections 6.03 and 7.02, the 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) and any such attempted transfer, assignment,
exchange, conveyance, pledge, hypothecation or grant shall be void.
(j) PERIODIC FINANCE CHARGES AND OTHER FEES. The Transferor
hereby agrees that, except as otherwise required by any Requirement of
Law, or as is deemed by FNBO to be necessary in order for it to
maintain its credit card business, based upon a good faith assessment
by FNBO of the nature of the competition in the credit card business,
it shall not at any time permit FNBO to reduce the Periodic Finance
Charges assessed on any Receivable or other fees on any Account if, as
a result of such reduction, the 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) COVENANTS REGARDING OPERATIONS. The Transferor shall:
(i) Not incur, assume or guarantee any indebtedness
other than the Transferor's obligations with respect to or
contemplated by the Transaction Documents.
(ii) Not engage in any business or activity other
than as permitted in its articles of organization.
(iii) Not consolidate or merge with or into any other
entity or convey or transfer its properties and assets
substantially as an entirety to any entity other than as
specifically permitted by the Transaction Documents.
(iv) Not dissolve or liquidate, in whole or in part.
(v) Not commingle its funds or assets with those of
any other individual or entity.
(vi) Not hold itself out as being liable for the
debts of any other party and not pay from its assets any
obligations or indebtedness of any other individual or entity.
(vii) Pay from its assets all obligations and
indebtedness of any kind incurred by the Transferor.
(viii) Not form, or cause to be formed, any
subsidiaries.
(ix) Not file any voluntary petition or consent to
the filing of any petition in or institute any bankruptcy,
reorganization, arrangement, insolvency or liquidation
proceeding or other proceeding under any federal or state
bankruptcy or similar law on behalf of itself without the
prior unanimous written consent of all of its members,
including the Independent Member (as defined in its Operating
Agreement).
(x) Not permit its managing member to withdraw.
(xi) At all times have at least one managing member
which shall have each of the characteristics of the
Independent Member as set forth on Appendix A to its Operating
Agreement.
(xii) Act solely in its name and through its duly
authorized agents in the conduct of its business, and shall
conduct its business so as not to mislead others as to the
identity of the entity with which they are concerned.
(xiii) Transact business with any Affiliate, if at
all, on an arms length basis and pursuant to enforceable
agreements. To the extent that the Transferor and any of its
members or affiliates have offices in contiguous space, there
shall be fair and appropriate allocation of overhead costs
(including rent) among them,
34
and each such entity shall bear its fair share of such
expenses. For purposes of this covenant and the definition of
the term "Affiliate", the term "control" means the possession,
directly or indirectly, of the power to direct or the cause
the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or
otherwise.
(xiv) Maintain separate records and books of account
and financial statements and shall not commingle its records
and books of account with the records and books of account of
any entity. The Transferor shall use separate stationery,
invoices and checks.
(xv) Make no asset distributions, including, without
limitation, any distribution of dividends, except to the
extent of cash on hand in excess of that needed to cover the
expected cash needs of the Transferor.
(xvi) Observe all organizational formalities in its
relations with its members.
(xvii) Notwithstanding any other provisions of this
Agreement, not terminate, dissolve or liquidate while owing
any amount under the Transaction Documents despite the
occurrence of any event which might terminate the continued
membership of a member in the Transferor, including the
following:
(A) a member:
(1) makes an assignment for the benefit
of creditors;
(2) files a voluntary petition in
bankruptcy;
(3) is adjudged bankrupt or insolvent,
or has entered against it an order for
relief, in any bankruptcy or insolvency
proceeding;
(4) files a petition or answer seeking
for itself any reorganization, arrangement,
composition, readjustment, liquidation,
dissolution or similar relief under any
statute, law or regulation;
(5) files an answer or other pleading
admitting or failing to contest the material
allegations of a petition filed against it
in any proceeding of this nature;
(6) seeks, consents to or acquiesces in
the appointment of a trustee, receiver or
liquidator of the member or of all or any
substantial part of its properties; or
(B) 120 days after the commencement of any
proceeding against the member seeking reorganization,
arrangement, composition,
35
readjustment, liquidation, dissolution or similar
relief under any statute, law or regulation, if the
proceeding has not been dismissed, or if within 90
days after the appointment without the member's
consent or acquiescence of a trustee, receiver or
liquidator of the member or of all or any substantial
part of its properties, the appointment is not
vacated or stayed, or within 90 days after the
expiration of any such stay, the appointment is not
vacated.
SECTION 2.06. ADDITION OF ACCOUNTS.
(a) If, (i) during any Monthly Period, the Transferor Interest
averaged over that period is less than the Minimum Transferor Interest
(calculated using the Average Principal Receivables for such Monthly
Period as the aggregate Principal Receivables on the date of
determination), the Transferor shall designate additional eligible
MasterCard or VISA accounts ("Additional Accounts") to be included as
Accounts in a sufficient amount such that the average of the Transferor
Interest as a percentage of the Average Principal Receivables for such
Monthly Period, computed by assuming that the amount of the Average
Principal Receivables of such Additional Accounts shall be deemed to be
outstanding in the Trust during each day of such Monthly Period, is at
least equal to the Minimum Transferor Interest, or (ii) on any Record
Date the aggregate amount of Principal Receivables in the Trust is less
than the Minimum Aggregate Principal Receivables, Transferor shall
designate Additional Accounts to be included as Accounts in a
sufficient amount such that the aggregate amount of Principal
Receivables will be equal to or greater than the Minimum Aggregate
Principal Receivables. Receivables from such Additional Accounts shall
be transferred to the Trust on or before the tenth Business Day
following such Monthly Period or Record Date; provided, however, that
to the extent the Transferor designates Additional Accounts with
Principal Receivables substantially in excess of the amount of
Principal Receivables required under this subsection 2.06(a), such
excess shall be deemed to be optional Additional Accounts under
subsection 2.06(b) below and will be permitted to be so designated
solely to the extent permitted by subsection 2.06(b).
(b) In addition to its obligation under subsection 2.06(a),
the Transferor may, but shall not be obligated to, designate from time
to time certain Additional Accounts (the "Automatic Additional
Accounts") to be included as Accounts, provided that the Transferor
shall not make more than one such designation in any one Monthly
Period; and provided, further, that such Automatic Additional Accounts
shall not exceed the Maximum Addition Amount or include Financial
Institutions Accounts unless the Transferor shall have received the
notice from the Rating Agencies required by subsection 2.06(c)(vii)
below.
(c) The Transferor agrees that any such transfer of
Receivables from Additional Accounts, under subsection 2.06(a) or (b)
shall satisfy the following conditions (to the extent provided below):
(i) on or before the fifth Business Day prior to the
Addition Date with respect to additions pursuant to subsection
2.06(a) and on or before the tenth
36
Business Day prior to the Addition Date with respect to
additions pursuant to subsection 2.06(b) (the "Notice Date"),
the Transferor shall give the Trustee, each Rating Agency and
the Servicer written notice that such Additional Accounts will
be included, which notice shall specify the approximate
aggregate amount of the Receivables to be transferred;
(ii) on or before the Addition Date, the Transferor
shall have delivered to the Trustee a written assignment
(including an acceptance by the Trustee on behalf of the Trust
for the benefit of the Investor Certificateholders) in
substantially the form of Exhibit B (the "Assignment") and the
Transferor shall direct the Servicer to indicate in its
computer files (and to cause FNBO to indicate in its computer
files) that the Receivables created in connection with the
Additional Accounts have been transferred to the Trust and,
within five Business Days thereafter, the Servicer shall have
delivered to the Trustee a computer file or microfiche list
containing a true and complete list of all Additional
Accounts, identified by account number and the aggregate
amount of the Receivables in such Additional Accounts, as of
the Addition Date, which computer file or microfiche list
shall be as of the date of such Assignment, shall be
incorporated into and made a part of such Assignment and this
Agreement, and shall be subject to the Trustee's
confidentiality obligations under Section 2.02 hereof;
(iii) the Transferor shall represent and warrant that
(A) each Additional Account is, as of the Addition Date, an
Eligible Account, and each Receivable in such Additional
Account, is, as of the Addition Date, an Eligible Receivable,
(B) no selection procedures believed by the Transferor to be
materially adverse to the interests of the Investor
Certificateholders were utilized in selecting the Additional
Accounts from the available Eligible Accounts and (C) as of
the Addition Date, the Transferor is not insolvent;
(iv) the Transferor shall represent and warrant that,
as of the Addition Date, the Assignment constitutes either (A)
a valid transfer and assignment to the Trust of all right,
title and interest of the Transferor in and to the Receivables
then existing and thereafter created in the Additional
Accounts, and all proceeds (as defined in the UCC) of such
Receivables and Insurance Proceeds relating thereto and such
Receivables and all proceeds thereof and Insurance Proceeds
relating thereto will be held by the Trust free and clear of
any Lien, except for (1) Liens permitted under subsection
2.05(b), (2) the interest of the Transferor as Holder of the
Exchangeable Transferor Certificate and (3) the Servicer's
right, if any, to receive interest accruing on, and investment
earnings in respect of, the Finance Charge Account, the
Collection Account, the Principal Account, or any Series
Account as provided in this Agreement and any related
Supplement or (B) a grant of a first priority security
interest (as defined in the UCC) in such property to the
Trust, which is enforceable with respect to then existing
Receivables of the Additional Accounts, the proceeds (as
defined in the UCC) thereof and Insurance Proceeds 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 Additional Accounts conveyed
on such Addition Date, the proceeds (as
37
defined in the UCC) thereof and Insurance Proceeds relating
thereto upon such creation;
(v) the Transferor shall deliver an Officer's
Certificate substantially in the form of Schedule 2 to Exhibit
B to the Trustee (with a copy thereof to each Rating Agency)
confirming the items set forth in paragraph (ii) above; it
being understood that the Trustee may conclusively rely on
such Officer's Certificate, shall have no duty to make
inquiries with regard to the matters set forth therein and
shall incur no liability in so relying;
(vi) the Transferor shall deliver an Opinion of
Counsel with respect to the Receivables in the Additional
Accounts to the Trustee (with a copy to any of the Rating
Agencies which shall have requested in writing such copies)
substantially in the form of Exhibit E; and
(vii) with respect to Financial Institutions Accounts
or Accounts in excess of the Maximum Addition Amount, the
Transferor shall have received notice from each Rating Agency
that the inclusion of such accounts as Additional Accounts
pursuant to subsection 2.06(b) will not result in the
reduction or withdrawal of its then existing rating of any
Series of Investor Certificates then issued and outstanding.
SECTION 2.07. REMOVAL OF ACCOUNTS.
(a) Subject to the conditions set forth below, the Transferor
may, but shall not be obligated to, designate Receivables from Accounts
for deletion and removal ("Removed Accounts") from the Trust; provided,
however, that the Transferor shall not make more than one such
designation in any one Monthly Period. On or before the fifth Business
Day (the "Removal Notice Date") prior to the date on which the
designated Removed Accounts will be reassigned by the Trustee to the
Transferor (the "Removal Date"), the Transferor shall give the Trustee
and the Servicer written notice that the Receivables from such Removed
Accounts are to be reassigned to the Transferor.
(b) The Transferor shall be permitted to designate and require
reassignment to it of the Receivables from Removed Accounts only upon
satisfaction of the following conditions:
(i) the removal of any Receivables of any Removed
Accounts on any Removal Date shall not, in the reasonable
belief of the Transferor, (A) cause a Pay Out Event to occur;
provided, however, that for the purposes of this subsection
2.07(b)(i), the Receivables of each Removed Account shall be
considered to have been removed as of the Removal Date, (B)
cause the Transferor Interest as a percentage of the aggregate
amount of Principal Receivables to be less than the Minimum
Transferor Interest on such Removal Date, or (C) result in the
failure to make any payment specified in the related
Supplement with respect to any Series;
38
(ii) on or prior to the Removal Date, the Transferor
shall have delivered to the Trustee for execution a written
assignment in substantially the form of Exhibit G (the
"Reassignment") and, within five Business Days thereafter, the
Transferor shall have delivered to the Trustee a computer file
or microfiche list containing a true and complete list of all
Removed Accounts identified by account number and the
aggregate amount of the Receivables in such Removed Accounts
as of the Removal Date, which computer file or microfiche list
shall as of the Removal Date modify and amend and be made a
part of this Agreement;
(iii) the Transferor shall represent and warrant as
of each Removal Date that (x)(i) Accounts (or administratively
convenient groups of Accounts, such as billing cycles) were
chosen for removal randomly or otherwise not on a basis
intended to select particular accounts or groups of accounts
for any reason other than administrative convenience and (ii)
no selection procedure was used by the Transferor which is
materially adverse to the interests of the Investor
Certificateholders or (y) Accounts were identified for removal
because of a third-party cancellation, or expiration without
renewal, of an affinity, private-label, agent bank or similar
arrangement;
(iv) on or before the tenth Business Day prior to the
Removal Date, each Rating Agency shall have received notice of
such proposed removal of the Receivables of such Accounts and
the Transferor shall have received notice prior to the Removal
Date from such Rating Agency that such proposed removal will
not result in a downgrade or withdrawal of its then current
rating of any outstanding Series of the Investor Certificates;
(v) on any Removal Notice Date, the amount of the
Principal Receivables of the Removed Accounts to be reassigned
to the Transferor on the related Removal Date shall not equal
or exceed 5% of the aggregate amount of the Principal
Receivables on such Removal Date, provided that if any Series
has been paid in full, the Principal Receivables in such
Removed Accounts may equal the Initial Investor Interest of
such Series; and
(vi) the Transferor shall have delivered to the
Trustee an Officer's Certificate confirming the items set
forth in clauses (i) through (v) above. The Trustee may
conclusively rely on such Officer's Certificate, shall have no
duty to make inquiries with regard to the matters set forth
therein and shall incur no liability in so relying.
Upon satisfaction of the above conditions, the Trustee shall
execute and deliver the Reassignment to the Transferor, and the
Receivables from the Removed Accounts shall no longer constitute a part
of the Trust.
39
SECTION 2.08. DISCOUNT OPTION RECEIVABLES.
(a) The Transferor shall have the option to designate a
percentage (the "Discount Percentage") of the Principal Receivables in
all or certain of the Accounts created on and after such date of
designation to be treated as Finance Charge Receivables ("Discount
Option Receivables") in accordance with the provisions of this Section
2.08. The Discount Percentage shall not apply to Finance Charges, or
any other fees and charges (other than Insurance Proceeds) or to
Receivables in or recoveries of Defaulted Accounts. The Discount
Percentage may be fixed or variable and shall not exceed 4%.
(b) Discount Option Receivables shall be considered Finance
Charge Receivables for all purposes hereunder, including for the
purposes of allocating Collections pursuant to Article IV.
(c) The Transferor shall have the option to increase the
Discount Percentage to a percentage not greater than 4%, to reduce the
Discount Percentage, to apply the Discount Percentage to Principal
Receivables created in Accounts not previously subject to the Discount
Percentage and to cease to apply the Discount Percentage to Principal
Receivables created in Accounts previously subject to the Discount
Percentage; provided, however, that the Transferor shall not change any
existing Discount Option Receivables into Principal Receivables and the
Transferor shall not increase the Discount Percentage during any Rapid
Amortization Period or if such increase would cause the Transferor
Interest to be less than the Minimum Transferor Interest or would cause
the aggregate amount of Principal Receivables in the Trust to be less
than the Minimum Aggregate Principal Receivables.
(d) The Transferor shall provide to the Servicer, the Trustee
and each Rating Agency 30 days' prior written notice of any
designation, increase or reduction of the Discount Percentage, and such
designation, increase or reduction shall become effective on the date
specified in such notice unless such designation, increase or reduction
in the reasonable belief of the Transferor would cause a Pay Out Event,
or an event which, with notice or the lapse of time or both, would
constitute a Pay Out Event, to occur; provided, however, that the
Rating Agency Condition shall have been satisfied.
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.01. ACCEPTANCE OF APPOINTMENT AND OTHER MATTERS RELATING TO
THE SERVICER.
(a) FNBO agrees to act as the Servicer under this Agreement.
The Investor Certificateholders of each Series by their acceptance of
the related Certificates consent to FNBO's acting as Servicer.
(b) The Servicer shall service and administer the Receivables
and shall collect payments due under the Receivables in accordance with
its customary and usual servicing procedures for servicing credit card
receivables comparable to the Receivables and in
40
accordance with the Credit Card Guidelines and 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 and subject to Section
10.01, the Servicer is hereby authorized and empowered (i) to make
withdrawals from the Collection Account or any Investor Account or
Series Account to the extent and as set forth in this Agreement and the
applicable Supplement, (ii) unless such power and authority is revoked
by the Trustee on account of the occurrence of a Servicer Default
pursuant to Section 10.01, to instruct the Trustee to make withdrawals
and payments, from the Finance Charge Account, the Principal Account
and any Series Account, in accordance with such instructions as set
forth in this Agreement, (iii) unless such power and authority is
revoked by the Trustee on account of the occurrence of a Servicer
Default pursuant to Section 10.01, to instruct the Trustee in writing,
as set forth in this Agreement, (iv) to execute and deliver, on behalf
of the Trust for the benefit of the Certificateholders, any and all
instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with
respect to the Receivables and, after the Delinquency of any Receivable
and to the extent permitted under and in compliance with applicable law
and regulations, to commence enforcement proceedings with respect to
such Receivables and (v) to make any filings, reports, notices,
applications, registrations with, and to seek any consents or
authorizations from, the Securities and Exchange 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 or
reporting requirements. The Trustee agrees that it shall promptly
follow the instructions of the Servicer to withdraw funds from the
Principal Account, the Finance Charge Account or any Series Account and
to take any action required under any Enhancement at such time as
required under this Agreement. The Trustee shall execute at the
Servicer's written request such documents prepared by the Transferor
and acceptable to the Trustee as may be necessary or appropriate to
enable the Servicer to carry out its servicing and administrative
duties hereunder.
(c) In the event that the Transferor is unable for any reason
to transfer Receivables to the Trust in accordance with the provisions
of this Agreement (including, without limitation, by reason of the
application of the provisions of Section 9.02 or the order of any
federal governmental agency having regulatory authority over the
Transferor or any court of competent jurisdiction that the Transferor
not transfer any additional Principal Receivables to the Trust) then,
in any such event, (i) the Servicer agrees to allocate, after such
date, all Collections with respect to Principal Receivables, and all
amounts which would have constituted Collections with respect to
Principal Receivables but for the Transferor's inability to transfer
such Receivables (up to an aggregate amount equal to the aggregate
amount of Principal Receivables in the Trust as of such date) in
accordance with subsection 2.05(e); (ii) the Servicer agrees to apply
such amounts as Collections in accordance with Article IV; and (iii)
for only so long as all Collections and all amounts which would have
constituted Collections are allocated and applied in accordance with
clauses (i) and (ii) above, Principal Receivables and all amounts which
would have constituted Principal Receivables but for the Transferor's
inability to transfer Receivables to the Trust that are written off as
uncollectible in accordance with this Agreement shall continue to be
allocated in accordance with Article IV and all amounts
41
which would have constituted Principal Receivables but for the
Transferor's inability to transfer Receivables to the Trust shall be
deemed to be Principal Receivables for the purpose of calculating the
applicable Investor Percentage thereunder. If the Servicer is unable
pursuant to any Requirement of Law to allocate payments on the Accounts
as described above, the Servicer 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 which have been conveyed to the
Trust, or which 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 to the Trust and Collections with
respect thereto shall continue to be allocated and paid in accordance
with Article IV.
(d) The 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 the Servicer in connection with servicing other credit card
receivables.
(e) The Servicer shall maintain fidelity bond 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 the Servicer believes to
be reasonable from time to time.
(f) The relationship of the Servicer (and of any successor to
the Servicer as servicer under this Agreement) to the Trustee under
this Agreement is intended by the parties to be that of an independent
contractor and not that of a joint venturer, partner or agent of the
Trustee.
SECTION 3.02. SERVICING COMPENSATION. As compensation for its servicing
activities hereunder and reimbursement for its expenses as set forth in the
immediately following paragraph, the Servicer shall be entitled to receive a
monthly servicing fee in respect of any Monthly Period or portion thereof prior
to the termination of the Trust pursuant to Section 12.01 (with respect to each
Monthly Period, the "Monthly Servicing Fee"). The share of the Monthly Servicing
Fee allocable to each Series of Investor Certificateholders with respect to any
Monthly Period (or portion thereof) shall be payable on the related Distribution
Date and, with respect to each Series (unless otherwise provided in the related
Supplement), shall be equal to one-twelfth of the product of (a) the applicable
Series Servicing Fee Percentage per annum and (b) the Investor Interest of such
Series as of the last day of the Monthly Period preceding such Distribution Date
(the "Investor Monthly Servicing Fee") and shall be paid to the Servicer
pursuant to Article IV. The servicing fee payable by the Holder of the
Exchangeable Transferor Certificate shall be equal to the product of one-twelfth
of the product of (i) the Transferor Interest and (ii) the weighted average of
the Series Servicing Fee Percentages with respect to each Series of Investor
Certificates then outstanding (the "Monthly Transferor Servicing Fee"). The
Monthly Servicing Fee shall equal the sum of (A) the aggregate amount of
Investor Monthly Servicing Fees with respect to each Series then outstanding and
(B) the Monthly Transferor
42
Servicing Fee. The Investor Monthly Servicing Fee with respect to any Series is
payable in arrears on the related Transfer Date (unless otherwise provided in
the related Supplement) and the Monthly Transferor Servicing Fee is payable in
arrears no later than the last Transfer Date with respect to any Series
occurring in a Monthly Period. The Monthly Transferor Servicing Fee and, unless
otherwise provided in a Supplement, each Investor Monthly Servicing Fee, shall
be calculated on the basis of actual days elapsed and a year of 365 days or 366
days, as the case may be. The compensation payable to the Servicer hereunder,
including the Monthly Servicing Fee, may not be transferred except to a
Successor Servicer.
The Servicer's expenses include the amounts due to the Trustee pursuant
to Section 11.05 and the reasonable fees and disbursements of independent public
accountants and all other expenses incurred by the Servicer in connection with
its activities hereunder, provided that the Servicer shall not be liable for any
liabilities, costs or expenses of the Trust, the Investor Certificateholders or
the Certificate Owners arising under any tax law, including without limitation
any federal, state or local 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). The Servicer shall be required to
pay such expenses for its own account and shall not be entitled to any payment
therefor other than the Monthly Servicing Fee.
SECTION 3.03. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SERVICER. FNBO, as initial Servicer, hereby makes, and any Successor Servicer by
its appointment hereunder shall make (with such changes as shall be applicable
to the Successor Servicer), the following representations, warranties and
covenants on which the Trustee has relied in accepting the Receivables in trust
and in authenticating the Certificates issued as of the date hereof:
(a) ORGANIZATION AND GOOD STANDING. The Servicer is a national
banking association 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 own its properties and conduct its
credit card business as such properties are presently owned and such
business is presently conducted, and to execute, deliver and perform
its obligations under this Agreement and the other Transaction
Documents to which it is a party.
(b) DUE QUALIFICATION. The Servicer is not required to qualify
nor register as a foreign corporation in any state in order to service
the Receivables as required by this Agreement and the other Transaction
Documents to which it is a party, other than such states as to which
the Servicer has so qualified or failure to so qualify would not have a
material adverse effect on the Servicer's ability to perform its
obligations hereunder, and has obtained all licenses and approvals
necessary in order to so service the Receivables as required under
federal and Nebraska law.
(c) DUE AUTHORIZATION. The execution, delivery and performance
of this Agreement and the other Transaction Documents to which it is a
party have been duly authorized by the Servicer by all necessary
corporate action on the part of the Servicer and this Agreement, and
each such other Transaction Document, will remain, from the time of its
execution, an official record of the Servicer.
43
(d) BINDING OBLIGATION. This Agreement and each other
Transaction Document to which the Servicer is a party constitutes a
legal, valid and binding obligation of the 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 and the rights of creditors of national
banking associations.
(e) NO VIOLATION. The execution and delivery of this Agreement
and each other Transaction Document to which the Servicer is a party by
the Servicer, and the performance of the transactions contemplated by
this Agreement and each such other Transaction Document and the
fulfillment of the terms hereof and thereof applicable to the 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 default under any Requirement of Law
applicable to the Servicer or any indenture contract, agreement,
mortgage, deed of trust or other instrument to which the Servicer is a
party or by which it is bound.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the best knowledge of the Servicer, threatened against
the 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 and the other Transaction
Documents, seeking any determination or ruling that, in the reasonable
judgment of the Servicer, would materially and adversely affect the
performance by the Servicer of its obligations under this Agreement or
any other Transaction Document to which it is a party, or seeking any
determination or ruling that would materially and adversely affect the
validity or enforceability of this Agreement or any other Transaction
Document.
(g) COMPLIANCE WITH REQUIREMENTS OF LAW. The Servicer shall
duly satisfy all obligations on its part to be fulfilled under or in
connection with each Receivable and the related Account, will maintain
in effect all qualifications required under Requirements of Law in
order to service properly each Receivable and the related Account and
will comply in all material respects with all other Requirements of Law
in connection with servicing each Receivable and the related Account,
the failure to comply with which would have a material adverse effect
on the Certificateholders or any Enhancement Provider.
(h) NO RESCISSION OR CANCELLATION. The 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. The Servicer shall reflect any such rescission
or cancellation in its computer file of revolving credit card accounts.
(i) PROTECTION OF HOLDERS' RIGHTS. The 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
44
business and in accordance with the Credit Card Guidelines, reschedule,
revise or defer Collections due on the Receivables, except as permitted
in subsection 3.03(h).
(j) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES.
Except in connection with its enforcement or collection of an Account,
the 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 the 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 the Servicer of this Agreement and each other Transaction Document
to which it is a party, the performance by the Servicer of the
transactions contemplated by this Agreement and the other Transaction
Documents and the fulfillment by the Servicer of the terms hereof and
thereof have been obtained; provided that the Servicer makes no
representation or warranty as to state securities or "blue sky" laws.
(l) MAINTENANCE OF RECORDS AND BOOKS OF ACCOUNT. The 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 2.01,
such computer records shall indicate the interests of the Trustee in
the Receivables.
If any of the representations, warranties or covenants of the Servicer
contained in paragraph (g), (h), (i) or (j) of this Section 3.03 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 from the earlier to occur of the discovery
of such event by the Servicer, or receipt by the Servicer of notice of such
event given by the Trustee, all Receivables in the Account or Accounts to which
such event relates shall be reassigned or assigned to the Servicer as set forth
below; provided that such Receivables will not be reassigned or assigned to the
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) the Servicer shall have delivered to the Trustee an Officer's Certificate
describing the nature of such breach and the manner in which such breach was
cured. The Trustee will have no duty to monitor for such events, but will
provide notice to the Servicer only upon its receipt of such notice from another
party.
45
The 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 aggregate 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 of this Agreement and each
Supplement.
Upon each such assignment to the Servicer, the Trust shall
automatically and without further action be deemed to transfer, assign, set over
and otherwise convey to the Servicer, without recourse, representation or
warranty 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. The Trust shall execute such documents and instruments
of transfer or assignment and take such other actions as shall be reasonably
requested by the Servicer to effect the conveyance of any such Receivables
pursuant to this Section. The obligation of the Servicer to accept assignment of
such Receivables, and to make the deposits, if any, required to be made to the
Collection Account as provided in the preceding paragraph, shall constitute the
sole remedy respecting the event giving rise to such obligation available to the
Trust, the Certificateholders or any Enhancement Provider.
SECTION 3.04. REPORTS AND RECORDS FOR THE TRUSTEE.
(a) DAILY REPORTS. On each Business Day, the Servicer, with
prior notice, shall prepare and make available at the office of the
Servicer for inspection by the Trustee a record setting forth (i) the
aggregate amount of Collections processed by the Servicer on the
preceding Business Day and (ii) the aggregate amount of Receivables as
of the close of business on the preceding Business Day.
(b) MONTHLY SERVICER'S CERTIFICATE. Unless otherwise stated in
the related Supplement with respect to any Series, on each
Determination Date the Servicer shall forward, as provided in Section
13.05, to the Trustee, the Paying Agent, any Enhancement Provider and
each Rating Agency, a certificate of a Servicing Officer in the form of
Exhibit C (which includes any Schedule thereto specified as such in the
applicable Supplement) for each Series setting forth the following
information for the preceding Monthly Period: (i) the aggregate amount
of Collections processed for the Trust, (ii) the aggregate amount of
Collections of Principal Receivables processed, (iii) the aggregate
amount of Collections of Finance Charge Receivables processed, (iv) the
aggregate Investor Percentage of Collections of Principal Receivables,
(v) the aggregate Investor Percentage of Collections of Finance Charge
Receivables, (vi) the aggregate amount of Principal Receivables in
Accounts which became Defaulted Accounts, (vii) the aggregate Investor
Percentage of Principal Receivables in Accounts which became Defaulted
Accounts, (viii) the Interchange allocated to the Trust, (ix) the
aggregate amount of Recoveries for the Trust, (x) the aggregate
Adjustment Amount for the Trust, (xi) the aggregate amount of
Receivables in the Trust at the end of the Monthly Period, (xii) the
aggregate amount of the Collections of Principal Receivables allocated
to such Series, (xiii) the aggregate amount of Collections of Finance
Charge Receivables allocated to such Series, (xiv) the aggregate
amount, if any, of withdrawals, drawings or payments under any
Enhancement, if any, for such Series required to be made pursuant to
the related Transaction Documents, (xv) the sum of all amounts payable
to the Investor
46
Certificateholders of each Series on the succeeding Distribution Date
in respect of Certificate Principal and Certificate Interest, (xvi) for
months during which the Servicer is required to make deposits of
Collections after the Distribution Date, the balance on deposit in the
Finance Charge Account and the Principal Account or any Series Account
(not covered elsewhere in the certificate) applicable to any Series
outstanding on such Determination Date with respect to Collections
processed by the Servicer during the preceding Monthly Period and
(xvii) such other matters as are set forth in Exhibit C or the
applicable Supplement.
SECTION 3.05. ANNUAL SERVICER'S CERTIFICATE. On or before March 31 of
each calendar year, the Servicer will deliver, as provided in Section 13.05, to
the Trustee, any Enhancement Provider and the Rating Agency, an Officer's
Certificate substantially in the form of Exhibit D stating that (a) a review of
the activities of the Servicer during the 12-month period ending on December 31
of the prior calendar year, and of its performance under this Agreement was made
under the supervision of the officer signing such certificate, (b) to the best
of such officer's knowledge based on such review, the Servicer has fully
performed all its obligations under this Agreement throughout such period, or,
if there has been a default in the performance of any such obligation,
specifying each such default known to such officer and the nature and status
thereof, (c) during such period, for each outstanding Series, the Servicer
prepared the monthly reports required by Section 3.04(b) and each other monthly
report required by the applicable Supplement in accordance with Section 3.04(b)
and the applicable provisions of each such Supplement, (d) the amounts included
in such reports agree with the computer records of the Servicer and (e) the
calculated amounts included in such reports are mathematically correct and made
in accordance with the applicable definitions in this Agreement and the other
applicable Transaction Documents. A copy of such certificate may be obtained by
any Investor Certificateholder by a request in writing to the Trustee addressed
to the Corporate Trust Office.
SECTION 3.06. ANNUAL INDEPENDENT ACCOUNTANTS' SERVICING REPORT.
(a) On or before March 31 of each calendar year, beginning
with March 31, 2003, the Servicer shall provide to the Trustee, any
Enhancement Provider and each Rating Agency a copy of the report
required by 12 C.F.R. Section 363.3(b) (or any comparable successor
regulation) from a firm of nationally recognized independent certified
public accountants (who may also render other services to the Servicer
or the Transferor) to the effect that, in accordance with attestation
standards established by the American Institute of Certified Public
Accountants, such firm has examined the Servicer's assertion that it
maintained effective internal accounting controls during the preceding
calendar year, and that such firm is of the opinion that the Servicer's
assertion is fairly stated in all material respects, based on the
criteria established in "Internal Control--Integrated Framework" issued
by the Committee of Sponsoring Organizations of the ▇▇▇▇▇▇▇▇
Commission. Unless otherwise provided with respect to any Series in the
related Supplement, a copy of such report may be obtained by any
Investor Certificateholder by a request in writing to the Trustee
addressed to the Corporate Trust Office.
(b) On or before March 31 of each calendar year, beginning
with March 31, 2003, the Servicer shall cause a firm of nationally
recognized independent certified public accountants (who may also
render other services to the Servicer or the Transferor)
47
to furnish a report (or reports) to the Trustee, prepared using
attestation standards established by the American Institute of
Certified Public Accountants, to the effect that they have examined the
Servicer's assertions for each outstanding Series made pursuant to
subsections 3.05(c), (d) and (e) above, and have concluded that such
assertions are fairly stated in all material respects, except for such
exceptions as shall be set forth in such report. The Servicer shall
also provide copies of the report for each Series to each Rating Agency
and Enhancement Provider. A copy of such report may be obtained by any
Investor Certificateholder by a request in writing to the Trustee
addressed to the Corporate Trust Office.
SECTION 3.07. TAX TREATMENT. The Transferor has structured this
Agreement and the Investor Certificates with the intention that the Investor
Certificates will qualify under applicable federal, state, local and foreign tax
law as indebtedness of the Transferor. The Transferor, the Servicer, the Holder
of the Exchangeable Transferor Certificate (and any Person acquiring an interest
in the Exchangeable Transferor Certificate), each Investor Certificateholder,
and each Certificate Owner, agree to treat and to take no action inconsistent
with the treatment of the Investor Certificates (or beneficial interest therein)
as indebtedness of the Transferor for purposes of federal, state, local and
foreign income or franchise taxes and any other tax imposed on or measured by
income. Each Investor Certificateholder and the Holder of the Exchangeable
Transferor Certificate (and any Person acquiring an interest in the Exchangeable
Transferor Certificate), by acceptance of its Certificate and each Certificate
Owner, by acquisition of a beneficial interest in a Certificate, agree to be
bound by the provisions of this Section 3.07. Each Certificateholder agrees that
it will cause any Certificate Owner (and any Person acquiring an interest in the
Exchangeable Transferor Certificate) acquiring an interest in a Certificate
through it to comply with this Agreement as to treatment as indebtedness under
applicable tax law, as described in this Section 3.07. The Trustee agrees that
it shall not file a tax return on behalf of the Trust or apply for a taxpayer
identification number for the Trust except in compliance with a directive or
order from a Governmental Authority requiring such action to be taken.
SECTION 3.08. NOTICES TO THE TRANSFEROR. In the event that FNBO is no
longer acting as Servicer, any Successor Servicer appointed pursuant to Section
10.02 shall deliver or make available to the Transferor each certificate and
report required to be prepared, forwarded or delivered thereafter pursuant to
Sections 3.04, 3.05 and 3.06.
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
SECTION 4.01. RIGHTS OF CERTIFICATEHOLDERS. Each Series of Investor
Certificates shall represent Undivided Interests in the Trust, including the
benefits of any Enhancement issued with respect to such Series and the right to
receive the Collections and other amounts at the times and in the amounts
specified in this Article IV to be deposited in the Investor Accounts or to be
paid to the Investor Certificateholders of such Series; provided, however, that
the aggregate interest represented by such Certificates at any time in the
Principal Receivables shall not exceed an amount equal to the Investor Interest
at such time. The Exchangeable Transferor Certificate shall represent the
remaining Undivided Interest in the Trust, including the right to receive the
48
Collections and other amounts at the times and in the amounts specified in this
Article IV to be paid to the Holder of the Exchangeable Transferor Certificate;
provided, however, that the aggregate interest represented by such Exchangeable
Transferor Certificate at any time in the Principal Receivables shall not exceed
the Transferor Interest at such time and such Certificate shall not represent
any interest in the Investor Accounts, except as provided in this Agreement, or
the benefits of any Enhancement issued with respect to any Series.
SECTION 4.02. ESTABLISHMENT OF ACCOUNTS.
(a) THE COLLECTION ACCOUNT. The Servicer, for the benefit of
the Certificateholders, shall establish and maintain in the name of the
Trustee, on behalf of the Trust, a non-interest-bearing segregated
account (the "Collection Account") bearing a designation clearly
indicating that the funds deposited therein are held in trust for the
benefit of the Certificateholders, or shall cause such Collection
Account to be established and maintained, with an office or branch of
(i) the Servicer, (ii) a depository institution or trust company (which
may include the Trustee or an Affiliate of the Servicer) organized
under the laws of the United States of America or any one of the states
thereof or the District of Columbia and with deposit insurance provided
by BIF or SAIF; provided, however, that at all times the certificates
of deposit, short-term deposits or commercial paper or the long-term
unsecured debt obligations (other than such obligation whose rating is
based on collateral or on the credit of a Person other than such
institution or trust company) of such depository institution or trust
company shall have a credit rating from Moody's and Standard & Poor's
of not less than "P-1" and "A-1," respectively, in the case of the
certificates of deposit, short-term deposits or commercial paper, or a
rating from Moody's of not less than "Aa3" and from Standard & Poor's
of not less than "AA" in the case of the long-term unsecured debt
obligations, or (iii) a depository institution, which may include the
Servicer or the Trustee, which is acceptable to each Rating Agency, as
evidenced by a letter from such Rating Agency (as to an institution
described in clause (ii) or (iii), a "Qualified Institution");
provided, further, that upon the failure of the Servicer to be a
Qualified Institution, the Collection Account shall not be permitted to
be maintained with the Servicer. Pursuant to authority granted to it
pursuant to subsection 3.01(b), the Servicer shall have the revocable
power to withdraw funds from the Collection Account for the purposes of
carrying out its duties hereunder. The Servicer is hereby authorized to
withdraw from the Collection Account any funds not required by this
Agreement to be deposited into the Collection Account.
(b) THE FINANCE CHARGE AND PRINCIPAL ACCOUNTS. The Trustee,
for the benefit of the Investor Certificateholders, shall establish and
maintain with a Qualified Institution, which may include the Trustee,
in the name of the Trust two segregated trust accounts (the "Finance
Charge Account" and the "Principal Account," respectively), bearing a
designation clearly indicating that the funds therein are held for the
benefit of the Investor Certificateholders. The Trustee shall possess
all right, title and interest in all funds on deposit from time to time
in the Finance Charge Account and the Principal Account and in all
proceeds thereof. The Finance Charge Account and the Principal Account
shall be under the sole dominion and control of the Trustee for the
benefit of the Investor Certificateholders. Pursuant to authority
granted to it hereunder, the Servicer shall have the revocable power to
instruct the Trustee to withdraw funds from the Finance
49
Charge Account and Principal Account for the purpose of carrying out
the Servicer's duties hereunder. The Trustee at all times shall
maintain accurate records reflecting each transaction in the Principal
Account and the Finance Charge Account and that funds held therein
shall at all times be held in trust for the benefit of the Investor
Certificateholders.
(c) THE DISTRIBUTION ACCOUNT. The Trustee, for the benefit of
the Investor Certificateholders of each Series, shall cause to be
established and maintained in the name of the Trust, with an office or
branch of a Qualified Institution (other than FNBO), a
non-interest-bearing segregated demand deposit account (the
"Distribution Account") bearing a designation clearly indicating that
the funds deposited therein are held in trust for the benefit of the
Investor Certificateholders. The Trustee shall possess all right, title
and interest in all funds on deposit from time to time in the
Distribution Account and in all proceeds thereof. The Distribution
Account shall be under the sole dominion and control of the Trustee for
the benefit of the Investor Certificateholders.
(d) ADMINISTRATION OF COLLECTION ACCOUNT, PRINCIPAL ACCOUNT,
FINANCE CHARGE ACCOUNT. Funds on deposit in the Principal Account and
the Finance Charge Account shall, to the extent reasonably practicable,
be invested in Permitted Investments. Funds on deposit in the
Collection Account may, at the direction of the Servicer, be invested
in Permitted Investments. Any such investment shall mature and such
funds shall be available for withdrawal on or prior to the Transfer
Date following the Record Date occurring in the Monthly Period in which
such funds were processed for collection. The Trustee shall maintain
for the benefit of the Investor Certificateholders possession of the
negotiable instruments or securities evidencing the Permitted
Investments described in clause (a) of the definition thereof from the
time of purchase thereof until maturity. At the end of each month, all
interest and earnings (net of losses and investment expenses) on funds
on deposit in the Collection Account or the Principal Account and the
Finance Charge Account shall be deposited by the Trustee in a separate
deposit account with a Qualified Institution in the name of the
Servicer, or a Person designated in writing by the Servicer, which
shall not constitute a part of the Trust, or shall otherwise be turned
over by the Trustee to the Servicer not less frequently than monthly.
Subject to the restrictions set forth above, the Servicer, or a Person
designated in writing by the Servicer, of which the Trustee shall have
received written notification thereof, shall have the authority to
instruct the Trustee with respect to the investment of funds on deposit
in the Collection Account, the Principal Account and the Finance Charge
Account. For purposes of determining the availability of funds or the
balances in the Collection Account, the Finance Charge Account and the
Principal Account for any reason under this Agreement, all investment
earnings on such funds shall be deemed not to be available or on
deposit.
(e) EXCESS FUNDING ACCOUNT. The Trustee, for the benefit of
the Certificateholders, shall establish and maintain or cause to be
established and maintained in the name of the Trustee, on behalf of the
Trust, with a Qualified Institution a segregated trust account, which
may be a subaccount of the Collection Account, bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Investor Certificateholders (the "Excess Funding
Account"). The Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Excess Funding Account
and in all proceeds thereof. The Excess Funding Account shall be
50
under the sole dominion and control of the Trustee for the benefit of
the Investor Certificateholders. If, at any time, the institution
holding the Excess Funding Account ceases to be a Qualified
Institution, the Trustee (or the Servicer on its behalf) shall within
30 Business Days establish a new Excess Funding Account meeting the
conditions specified above with a Qualified Institution and shall
transfer any cash and/or any investments to such new Excess Funding
Account, and from the date such new Excess Funding Account is
established, it shall be the "Excess Funding Account." Pursuant to the
authority granted to the Servicer in Section 3.01(b), the Servicer
shall have the power, revocable by the Trustee, to make withdrawals and
payments from the Excess Funding Account and to instruct the Trustee to
make withdrawals and payments from the Excess Funding Account for the
purposes of carrying out the Servicer's or the Trustee's duties
hereunder. Pursuant to the authority granted to the Paying Agent in
Section 6.06(a), the Paying Agent shall have the power, revocable as
set forth in Section 6.06(a), to make withdrawals and payments from the
Excess Funding Account for purposes of making distributions to Investor
Certificateholders.
At the written direction of the Servicer, funds on deposit in
the Excess Funding Account to be invested shall be invested by the
Trustee in Permitted Investments selected by the Servicer. All such
Permitted Investments shall be held by the Trustee for the benefit of
the Investor Certificateholders. The Trustee shall maintain for the
benefit of the Investor Certificateholders possession of the negotiable
instruments or securities, if any, evidencing such Permitted
Investments. Funds on deposit in the Excess Funding Account on any date
(after giving effect to any withdrawals from the Excess Funding Account
on such date) will be invested in Permitted Investments that will
mature so that funds will be available at the close of business on the
next Business Day following such date.
On each Business Day, the Servicer shall determine the amount
by which the Transferor Interest exceeds the Minimum Transferor
Interest on such date and shall instruct the Trustee to withdraw such
amount from the Excess Funding Account on such day and pay such amount
to the Holder of the Exchangeable Transferor Certificate.
Notwithstanding the foregoing, no funds shall be withdrawn from the
Excess Funding Account for distribution to the Holder of the
Exchangeable Transferor Certificate on any day on which the aggregate
Principal Receivables in the Trust are less than the Minimum Aggregate
Principal Receivables.
On each Determination Date, the Servicer shall instruct the
Trustee to withdraw on the next succeeding Distribution Date from the
Excess Funding Account and deposit in the Collection Account all
interest and other investment earnings (net of losses and investment
expenses) on funds on deposit in the Excess Funding Account, for
application as Collections of Finance Charge Receivables with respect
to the Related Monthly Period. Interest (including reinvested interest)
and other investment income and earnings on funds on deposit in the
Excess Funding Account shall not be considered part of the Excess
Funding Amount for purposes of this Agreement.
On each Determination Date on which one or more Series in a particular
Group is in an Amortization Period, the Servicer shall determine the
aggregate amount of Principal
51
Shortfalls, if any, with respect to each Series in such Group (after
giving effect to the allocation and payment provisions in subsection
4.03(e) and in the Supplement with respect to each such Series on the
next succeeding Distribution Date), and the Servicer shall instruct the
Trustee to withdraw such amount (up to the Excess Funding Amount) from
the Excess Funding Account on the next succeeding Distribution Date and
allocate such amount among each such Series in the applicable Group as
Excess Principal Collections as specified in each related Supplement.
SECTION 4.03. COLLECTIONS AND ALLOCATIONS.
(a) COLLECTIONS. Collections shall be allocated and
distributed as indicated below:
(i) Except as provided below, the Servicer shall
deposit all Collections in the Collection Account as promptly
as possible after the Date of Processing of such Collections,
but in no event later than the second Business Day following
such Date of Processing. In the event of the insolvency of the
Servicer, then, immediately upon the occurrence of such event
and thereafter, the Servicer shall deposit all Collections
into the Collection Account which shall be established and
maintained with a Qualified Institution other than the
Servicer in accordance with subsection 4.02(a), and in no such
event shall the Servicer deposit any Collections thereafter
into any account established, held or maintained with the
Servicer. The Servicer shall allocate such amounts to each
Series of Investor Certificates and to the Holder of the
Exchangeable Transferor Certificate in accordance with this
Article IV and shall withdraw the required amounts from the
Collection Account or pay such amounts to the Holder of the
Exchangeable Transferor Certificate in accordance with this
Article IV, in both cases as modified by any Supplement. The
Servicer shall make such deposits or payments on the date
indicated therein by wire transfer or as otherwise provided in
the Supplement for any Series of Certificates with respect to
such Series.
(ii) Notwithstanding anything in this Agreement to
the contrary, for so long as, and only so long as, FNBO shall
remain the Servicer hereunder, and (A) the Servicer provides
to the Trustee a letter of credit covering collection and
payment obligations of the Servicer acceptable to each Rating
Agency, as evidenced by a letter from such Rating Agency (the
"Servicer Letter of Credit"), or (B) the Servicer shall have
and maintain a certificate of deposit or short-term deposit
rating of not less than "P-1" by Moody's and of not less than
"A-1" by Standard & Poor's (or such other rating below "A-1"
or "P-1," as the case may be, which is satisfactory to each
Rating Agency), or (C) such other arrangement is made by the
Servicer which is acceptable to the Rating Agencies, and the
Rating Agency Condition has been satisfied as to such
alternate arrangement, the Servicer need not deposit
Collections into the Collection Account as provided in
subsection 4.03(a)(i) above, or deposit amounts from the
Collection Account into the Principal Account or the Finance
Charge Account or any Series Account, as provided in
subsection 4.03(a)(i), but may make a single deposit in the
Collection Account in immediately available funds not later
than noon, Chicago time, on the
52
Transfer Date following the Related Monthly Period. Subject to
the express terms of any Supplement, but notwithstanding
anything else in this Agreement to the contrary, with respect
to any Monthly Period, whether the Servicer is required to
make deposits of Collections pursuant to subsection 4.03(a)(i)
above or the preceding sentence of this subsection
4.03(a)(ii), (1) the Servicer will only be required to deposit
Collections into the Collection Account up to the aggregate
amount of Collections required to be deposited into any Series
Account or, without duplication, distributed on or prior to
the related Distribution Date to Investor Certificateholders
or to any Enhancement Provider pursuant to the terms of any
Supplement or agreement whereby the Enhancement is provided,
and (2) if at any time prior to such Distribution Date the
amount of Collections deposited in the Collection Account
exceeds such required amount, the Servicer will be permitted
to withdraw the excess from the Collection Account for
distribution to the Transferor or payments pursuant to Section
3.02. The Servicer shall give prompt written notice to the
Trustee within five Business Days of a downgrading by Moody's
or Standard & Poor's of the Servicer's certificate of deposit
or short-term rating below "P-1" and "A-1," as the case may
be.
(iii) Prior to the termination of the Servicer Letter
of Credit, if on any Transfer Date the Servicer shall not be
making in full the remittances of Collections required to be
made by the Servicer pursuant to subsection 4.03(a)(i) or
(ii), the Servicer shall by 9:00 a.m. (Chicago time) on such
Transfer Date notify the Trustee of such failure pursuant to
an Officer's Certificate certifying that such remittances will
not be made in full and specifying the shortfall between the
amount that is required to be remitted by the Servicer to the
Distribution Account and the amount of funds that will
actually be so remitted. The Trustee shall not later than
11:00 a.m. (Chicago time) on such Transfer Date draw on the
Servicer Letter of Credit, if any, in accordance with the
terms thereof, in the amount of such shortfall. The Trustee
shall deposit into the Distribution Account the amount
received from the issuer of the Servicer Letter of Credit in
respect of such drawing. Amounts deposited by the Trustee
pursuant to this Section shall be deemed to constitute the
Servicer remittances of Collections to the Distribution
Account with respect to which the draw on the Servicer Letter
of Credit was made. In the event a draw is made on the
Servicer Letter of Credit or to the extent that Collections
required to be deposited into the Collection Account or any
Series Account equals or exceeds in the aggregate 90% of the
amount of the Servicer Letter of Credit or such other higher
percentage as agreed in writing by the Rating Agencies, the
Servicer shall, commencing on the Distribution Date to which
such draw relates, remit Collections as required by subsection
4.03(a)(i). The Servicer Letter of Credit may be terminated by
the Servicer at its sole option (A) upon 15 Business Days'
prior notice to the Trustee, the Rating Agencies, the
Transferor, the Enhancement Providers and the issuer of the
Servicer Letter of Credit, and (B) upon delivery to the
Trustee of an Officer's Certificate of the Servicer certifying
that, as of the date the Servicer Letter of Credit terminates,
all amounts which would have been required to be deposited
into the Collection Account pursuant to Section 4.03 had the
Servicer Letter of Credit not been in effect shall have been
so deposited. The Servicer shall, commencing on the date
53
the Servicer Letter of Credit is terminated, remit Collections
as required by Section 4.03. The Trustee shall surrender the
Servicer Letter of Credit to the issuer thereof promptly
following the earlier of (1) the termination date under the
Servicer Letter of Credit, (2) the appointment of a Successor
Servicer or (3) the termination of the Trust.
(b) ALLOCATIONS FOR THE EXCHANGEABLE TRANSFEROR CERTIFICATE.
Throughout the existence of the Trust, unless otherwise stated in any
Supplement, the Servicer shall allocate to the Holder of the
Exchangeable Transferor Certificate an amount equal to the product of
(i) the Transferor Percentage and (ii) the aggregate amount of such
Collections allocated to Principal Receivables and Finance Charge
Receivables, respectively, in respect of each Monthly Period.
Notwithstanding anything in this Agreement to the contrary, unless
otherwise stated in any Supplement, the Servicer need not deposit this
amount or any other amounts so allocated to the Exchangeable Transferor
Certificate pursuant to any Supplement into the Collection Account and
shall pay, or be deemed to pay, such amounts as collected to the Holder
of the Exchangeable Transferor Certificate; provided, however, that
amounts so allocated to the Transferor shall be deposited to the Excess
Funding Account, as collected, to the extent that the Transferor
Interest is less than the Minimum Transferor Interest.
(c) ADJUSTMENTS FOR MISCELLANEOUS CREDITS AND FRAUDULENT
CHARGES. For each Monthly Period, the Servicer shall be obligated to
reduce, on a net basis, the aggregate amount of Principal Receivables
used to calculate the Transferor Interest and the Minimum Aggregate
Principal Receivables (a "Credit Adjustment") with respect to any
Principal Receivable (i) which was created in respect of merchandise
refused or returned by the Obligor thereunder or as to which the
Obligor thereunder has asserted a counterclaim or defense, (ii) which
is reduced by the Servicer by any rebate, refund, charge-back or
adjustment (including Servicer errors), (iii) which was created as a
result of a fraudulent or counterfeit charge or (iv) which was credited
pursuant to a debt cancellation or debt deferral program and not
recovered during such Monthly Period from Collections from insurance
proceeds or reserves funded by fees generated through such programs. In
the event that the inclusion of the amount of a Credit Adjustment in
the calculation of the Transferor Interest or the aggregate Principal
Receivables in the Trust would cause the Transferor Interest to be an
amount less than the Minimum Transferor Interest, or cause the
aggregate Principal Receivables in the Trust to be less than the
Minimum Aggregate Principal Receivables, the Transferor shall make a
deposit, no later than the earlier of (A) the Business Day following
the Date of Processing of such Credit Adjustment, and (B) the last day
of the Monthly Period in which such Date of Processing occurs, to the
Excess Funding Account in immediately available funds in an amount
sufficient to cure any such shortfall. Any amount deposited into the
Excess Funding Account in connection with the adjustment of a
Receivable as specified above shall be applied in accordance with
Article IV and the terms of each Supplement. In the event that the
Transferor shall fail to pay to the Servicer for deposit into the
Excess Funding Account any amount required to be so paid pursuant to
this Section 4.03 or subsection 2.04(d)(iii) (an "Adjustment Amount"),
and shall not have subsequently paid such Amount, Collections of
Principal Receivables shall not be distributed or otherwise released to
the Transferor hereunder, but shall instead be deposited to the Excess
Funding
54
Account until an amount equal to the Adjustment Amount has been so
deposited. The Adjustment Amount shall be reduced to the extent of such
deposits. In addition, in the event that the Transferor shall
repurchase the Receivables or the Certificates of any Series pursuant
to this Agreement, including pursuant to Article XII, the purchase
price with respect to any Series shall include the Adjustment Amount
allocable to such Series, if any.
In the event that the Servicer adjusts upwards the principal
amount of any Receivable, the aggregate Principal Receivables shall be
increased by the amount of such upward adjustment.
(d) TRANSFER OF DEFAULTED ACCOUNTS. Unless otherwise provided
in any Supplement, on the last day of each Monthly Period, the Trust
shall automatically and without further action or consideration be
deemed to transfer, set over, and otherwise convey to the Transferor,
without recourse, representation or warranty, all the right, title and
interest of the Trust in and to Receivables in Accounts which became
Defaulted Accounts during such Monthly Period, all moneys due or to
become due with respect thereto, all proceeds thereof (other than
recoveries, net of expenses of collection, and Insurance Proceeds
relating thereto) and Interchange (if any) allocable to the Trust with
respect to such Receivables.
(e) EXCESS PRINCIPAL COLLECTIONS. On each Distribution Date,
Excess Principal Collections from each Group shall be allocated to each
outstanding Series in such Group pro rata based on the Principal
Shortfall, if any, for each such Series in such Group, and then, at the
option of the Transferor, any remainder may be applied as principal
with respect to any Series of variable funding Certificates in such
Group. The Servicer shall pay any remaining Excess Principal
Collections on any Business Day to the Holder of the Exchangeable
Transferor Certificate, provided that if the Transferor Interest as
determined on such Business Day (after giving effect to any Principal
Receivables transferred to the Trust on such date) does not exceed the
Minimum Transferor Interest on such date, then such remaining Excess
Principal Collections shall be deposited in the Excess Funding Account
to be held and/or distributed as provided in subsection 4.02(e).
(f) EXCESS FINANCE CHARGE COLLECTIONS. On each Distribution
Date, Excess Finance Charge Collections from each Group shall be
allocated by the Servicer to each outstanding Series in such Group pro
rata based on the Finance Charge Shortfalls (as defined in the related
Supplements) for all such Series in such Group. The Servicer shall pay
any Excess Finance Charge Collections remaining on such Distribution
Date after payment in full of Finance Charge Shortfalls for all Series
in such Group to the Holder of the Exchangeable Transferor Certificate.
(g) UNCOVERED DILUTIONS. For Series 1997-2, 2000-1, 2000-2,
2000-3 and 2001-1, in the event that there is an Adjustment Amount on
any Distribution Date (after all other withdrawals and deposits have
been made), the Investor Interest for each such Series shall be reduced
by a pro rata portion of such Adjustment Amount, starting with the most
junior Investor Certificate or, for Series 2000-2 and 2001-1, the CTO
Interest
55
(as defined in the applicable Supplement), and continuing until the
full Adjustment Amount has been applied, through each more senior
Class. For purposes of this Section 4.03(g), any such Adjustment Amount
shall be reduced by an amount equal to the Transferor Interest as of
the related Determination Date (after giving effect to reductions
thereto, under Section 4.03(c) or otherwise, on such date). The
Adjustment Amount shall be allocated by the Servicer to each
outstanding Series pro rata by multiplying the Adjustment Amount times
a fraction, the numerator of which is the applicable Investor
Percentage for Finance Charge Receivables for such Series for the
Related Monthly Period and the denominator of which is the sum of such
Investor Percentages for all outstanding Series (calculated on a
weighted average basis if such Investor Percentage has been reset
during the Related Monthly Period). Thereafter, any such reductions in
the applicable Investor Interest may be reinstated to the extent of any
monies available under the applicable Supplement for the reimbursement
of Investor Charge Offs and not required for reimbursement of Investor
Charge Offs, in the reverse order in which such reductions were
originally imposed. This subsection 4.03(g) shall be deemed to amend
the Supplement for each such Series. Adjustment Amounts allocable to
any other Series shall be applied and reimbursed as specified in the
applicable Supplement.
ARTICLE V
ARTICLE V IS RESERVED AND SHALL BE SPECIFIED IN ANY
SUPPLEMENT WITH RESPECT TO ANY SERIES
ARTICLE VI
THE CERTIFICATES
SECTION 6.01. THE CERTIFICATES. Subject to Sections 6.10 and 6.13, the
Investor Certificates of each Series and any Class thereof may be issued in
bearer form (the "Bearer Certificates") or in fully registered form (the
"Registered Certificates"). Such Certificates may be issued in discount form, or
with attached interest coupons and a special coupon (collectively, the
"Coupons"), and shall be substantially in the form of the exhibits with respect
thereto attached to the related Supplement. The Exchangeable Transferor
Certificate shall be substantially in the form of Exhibit A. The Investor
Certificates and the Exchangeable Transferor Certificate shall, upon issue
pursuant hereto or to Section 6.09 or Section 6.10, be executed and delivered by
the Transferor to the Trustee for authentication and redelivery as provided in
Sections 2.01 and 6.02. Any Investor Certificate shall be issuable in a minimum
denomination of $20,000 Undivided Interest and shall not be subdivided for
resale into Undivided Interests smaller than an Undivided Interest the initial
offering price for which would have been at least $20,000, unless otherwise
specified in any Supplement, and shall be issued upon original issuance in an
original principal amount equal to the Initial Investor Interest. The
Exchangeable Transferor Certificate shall also be issued as a single
certificate. Each Certificate shall be executed by manual or facsimile signature
on behalf of the Transferor by its Chairman, President or any Executive Vice
President. Certificates bearing the manual or facsimile signature of the
individual who was, at the time when such signature was affixed, authorized to
sign on behalf of the Transferor or the Trustee shall not be rendered invalid,
notwithstanding that such individual has ceased to be so authorized prior to the
authentication and delivery of such
56
Certificates or does not hold such office at the date of such Certificates. No
Certificate 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 the Trustee by the manual signature of a duly authorized signatory,
and such certificate upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication
except Bearer Certificates which shall be dated the applicable Issuance Date as
provided in the related Supplement.
SECTION 6.02. AUTHENTICATION OF CERTIFICATES.
(a) Contemporaneously with the initial assignment and transfer
of the Receivables, whether now existing or hereafter created (other
than Receivables in Additional Accounts) and the other components to
the Trust, the Trustee shall authenticate and deliver the Exchangeable
Transferor Certificate to the Transferor simultaneously with its
delivery to the Transferor of the initial Series of Investor
Certificates.
(b) Upon purchase of the Investor Interest, the Trustee shall
authenticate and deliver the initial Series of Investor Certificates,
upon the written order of the Transferor, to the underwriters for the
sale of the Book-Entry Certificates evidenced by such Investor
Certificates, and against payment to the Transferor of the Initial
Investor Interest (net of any purchase or underwriting discount). Upon
the receipt of such payment and the issuance of the Investor
Certificates, such Investor Certificates shall be fully paid and
nonassessable.
(c) Upon an Exchange as provided in Section 6.09 and the
satisfaction of certain other conditions specified therein, the Trustee
shall authenticate and deliver the Investor Certificates of additional
Series (with the designation provided in the related Supplement), upon
the order of the Transferor, to the persons designated in such
Supplement. Upon the order of the Transferor, the Certificates of any
Series shall be duly authenticated by or on behalf of the Trustee, in
authorized denominations equal to (in the aggregate) the Initial
Investor Interest of such Series of Investor Certificates.
(d) If specified in the related Supplement for any Series, the
Trustee shall authenticate and deliver outside the United States the
Global Certificate that is issued upon original issuance thereof, upon
the written order of the Transferor, to the Depository against payment
of the purchase price therefor.
(e) If specified in the related Supplement for any Series, the
Trustee shall authenticate Book-Entry Certificates that are issued upon
original issuance thereof, upon the written order of the Transferor, to
a Clearing Agency or its nominee as provided in Section 6.10 against
payment of the purchase price thereof.
SECTION 6.03. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) The Trustee shall cause to be kept at the office or agency
to be maintained by a transfer agent and registrar (the "Transfer Agent
and Registrar"), in accordance with
57
the provisions of Section 11.16, a register (the "Certificate
Register") in which, subject to such reasonable regulations as it may
prescribe, the Transfer Agent and Registrar shall provide for the
registration of the Investor Certificates of each Series (unless
otherwise provided in the related Supplement) and of transfers and
exchanges of the Investor Certificates as herein provided. The Trustee
is hereby initially appointed Transfer Agent and Registrar for the
purposes of registering the Investor Certificates and transfers and
exchanges of the Investor Certificates as herein provided. If any form
of Investor Certificate is issued as a Global Certificate, the Trustee
may, or if and so long as any Series of Investor Certificates are
listed on an Offshore Securities Market and such exchange shall so
require, the Trustee shall appoint a co-transfer agent and co-registrar
in the location required by the Offshore Securities Market. Any
reference in this Agreement to the Transfer Agent and Registrar shall
include any co-transfer agent and co-registrar unless the context
otherwise requires. The Trustee shall be permitted to resign as
Transfer Agent and Registrar upon 30 days' written notice to the
Servicer; provided, however, that such resignation shall not be
effective until the appointment by the Transferor of a successor
Transfer Agent and Registrar, and acceptance of the appointment by such
successor.
Upon surrender for registration of transfer of any Certificate
at any office or agency of the Transfer Agent and Registrar, the
Transferor shall execute, subject to the provisions of subsection
6.03(c), and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Certificates
in authorized denominations of like aggregate Undivided Interests,
provided that the provisions of this paragraph shall not apply to
Bearer Certificates.
At the option of an Investor Certificateholder, Investor
Certificates may be exchanged for other Investor Certificates of the
same Series in authorized denominations of like aggregate Undivided
Interests, upon surrender of the Investor Certificates to be exchanged
at any such office or agency. At the option of any Holder of Registered
Certificates, Registered Certificates may be exchanged for other
Registered Certificates of the same Series in authorized denominations
of like aggregate Undivided Interests in the Trust, upon surrender of
the Registered Certificates to be exchanged at any office or agency of
the Transfer Agent and Registrar maintained for such purpose. At the
option of a Bearer Certificateholder, subject to applicable laws and
regulations (including without limitation, the Bearer Rules), Bearer
Certificates may be exchanged for other Bearer Certificates or
Registered Certificates of the same Series in authorized denominations
of like aggregate Undivided Interests in the Trust, in the manner
specified in the Supplement for such Series, 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 6.03 shall have
attached thereto (or be accompanied by) all unmatured Coupons, provided
that any Bearer Certificate so surrendered after the close of business
on the Record Date (of, if the Record Date is not a Business Day, after
the close of business of the Business Day immediately preceding the
Record Date) preceding the relevant Distribution Date after the related
Series Termination Date need not have attached the Coupons relating to
such Distribution Date.
58
Whenever any Investor Certificates of any Series are so
surrendered for exchange, the Transferor shall execute, and the Trustee
shall authenticate and (unless the Transfer Agent and Registrar is
different than the Trustee, in which case the Transfer Agent and
Registrar shall) deliver, the Investor Certificates of such Series
which the Certificateholder 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 the Trustee and the Transfer Agent
and Registrar duly executed by the Certificateholder thereof or his
attorney-in-fact duly authorized in writing.
The preceding provisions of this Section 6.03 notwithstanding,
the Trustee or the Transfer Agent and Registrar, as the case may be,
shall not be required to register the transfer of or exchange any
Investor Certificate of any Series for a period of 15 days preceding
the due date for any payment with respect to the Investor Certificates
of such Series.
Unless otherwise provided in the related Supplement, no
service charge shall be made for any registration of transfer or
exchange of 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 transfer or exchange
of Certificates.
All Investor Certificates (together with any Coupons attached
to Bearer Certificates) surrendered for registration of transfer and
exchange shall be canceled by the Transfer Agent and Registrar and
disposed of in a manner satisfactory to the Trustee and the Transferor.
The Trustee shall cancel and destroy the Global Certificates upon its
exchange in full for Definitive Certificates and shall deliver a
certificate of destruction to the Transferor. Such certificate shall
also state that a certificate or certificates of each Foreign Clearing
Agency to the effect referred to in Section 6.13 was received with
respect to each portion of the Global Certificate exchanged for
Definitive Certificates.
The Transferor shall execute and deliver to the Trustee or the
Transfer Agent and Registrar, as applicable, Bearer Certificates and
Registered Certificates in such amounts and at such times as are
necessary to enable the Trustee to fulfill its responsibilities under
this Agreement and the Certificates.
(b) Except as provided in Section 6.09 or 7.02 or in any
Supplement, in no event shall the Exchangeable Transferor Certificate
or any interest therein be transferred hereunder, in whole or in part,
unless the Transferor shall have consented in writing to such transfer
and unless the Trustee shall have received (i) confirmation in writing
from each Rating Agency that such transfer will not result in a
lowering or withdrawal of its then existing rating of any Series of
Investor Certificates, and (ii) an Opinion of Counsel to the effect
that (A) the conveyed interest in the Exchangeable Transferor
Certificate will be treated as either debt or an interest in a
partnership for federal income tax purposes and that the conveyance of
such interest will not cause the Trust to be characterized for federal
income tax purposes as an association taxable as a corporation or as a
publicly traded partnership or otherwise have any material adverse
impact on the federal or applicable state income taxation of any
outstanding Series of Investor
59
Certificates or any Certificate Owner and (B) such transfer will not
cause or constitute an event in which gain or loss would be recognized
for federal income tax purposes by any Investor Certificateholder.
(c) Unless otherwise provided in the related Supplement,
registration of transfer of Registered Certificates containing a legend
relating to the restrictions on transfer of such Registered
Certificates (which legend shall be set forth in the Supplement
relating to such Investor Certificates) shall be effected only if the
conditions set forth in such related Supplement are satisfied.
Whenever a Registered Certificate containing the legend set
forth in the related Supplement is presented to the Transfer Agent and
Registrar for registration of transfer, the Transfer Agent and
Registrar shall promptly seek instructions from the Servicer regarding
such transfer. The Transfer Agent and Registrar and the Trustee shall
be entitled to receive written instructions signed by a Servicing
Officer prior to registering any such transfer or authenticating new
Registered Certificates, as the case may be. The Servicer hereby agrees
to indemnify the Transfer Agent and Registrar and the Trustee 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 reliance on
any such written instructions furnished pursuant to this subsection
6.03(c).
(d) If specified in any Supplement, the Transfer Agent and
Registrar will maintain at its expense in the Borough of Manhattan, the
City of New York (and subject to this Section 6.03, if specified in the
related Supplement for any Series, any other city designated in such
Supplement) an office or offices or an agency or agencies where
Investor Certificates of such Series may be surrendered for
registration of transfer or exchange.
SECTION 6.04. 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
the Trustee such security or indemnity as may be required by them to save each
of them and the Transferor harmless, then, in the absence of notice to the
Trustee that such Certificate has been acquired by a bona fide purchaser, the
Transferor shall execute and the Trustee shall authenticate and (unless the
Transfer Agent and Registrar is different from the Trustee, in which case the
Transfer Agent and Registrar shall) deliver (in compliance with applicable law),
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor and aggregate Undivided Interest.
In connection with the issuance of any new Certificate under this Section 6.04,
the Trustee or the Transfer Agent and Registrar may require the payment 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 the
Trustee and the Transfer Agent and Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section 6.04 shall constitute complete and
indefeasible evidence of ownership in the Trust, as if
60
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 6.05. PERSONS DEEMED OWNERS.
(a) Prior to due presentation of a Certificate for
registration of transfer, the Trustee, the Paying Agent, the Transfer
Agent and Registrar and any agent of any of them may treat the Person
in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to
Article V (as described in any Supplement) and for all other purposes
whatsoever, and neither the Trustee, the Paying Agent, the Transfer
Agent and Registrar nor any agent of any of them shall be affected by
any notice to the contrary. In the case of a Bearer Certificate, the
Trustee, the Paying Agent, the Transfer Agent and Registrar and any
agent of any of them may treat the holder of a Bearer Certificate or
Coupon as the owner of such Bearer Certificate or Coupon for the
purpose of receiving distributions pursuant to Article IV and Article
XII and for all other purposes whatsoever, and neither the Trustee, the
Paying Agent, the Transfer Agent and Registrar nor any agent of any of
them shall be affected by any notice to the contrary.
(b) Notwithstanding (a) above, in determining whether the
holders of Investor Certificates evidencing the requisite Undivided
Interests have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Investor Certificates owned by the
Transferor, the Servicer or any Affiliate thereof shall be disregarded
and deemed not to be outstanding, except that, in determining whether
the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only
Investor Certificates which a Responsible Officer in the Corporate
Trust Office of the Trustee knows to be so owned shall be so
disregarded. Investor Certificates so owned that have been pledged in
good faith shall not be disregarded as outstanding, if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so
to act with respect to such Investor Certificates and that the pledgee
is not the Transferor, the Servicer or an Affiliate thereof.
SECTION 6.06. APPOINTMENT OF PAYING AGENT.
(a) The Paying Agent shall make distributions to Investor
Certificateholders from the appropriate account or accounts maintained
for the benefit of Certificateholders as specified in this Agreement or
the related Supplement for any Series pursuant to Articles IV and V
hereof. Any Paying Agent shall have the revocable power to withdraw
funds from such appropriate account or accounts for the purpose of
making distributions referred to above. The Trustee (or the Servicer if
the Trustee is the Paying Agent) may revoke such power and remove the
Paying Agent, if the Trustee (or the Servicer if the Trustee is the
Paying Agent) determines in its sole discretion that the Paying Agent
shall have failed to perform its obligations under this Agreement in
any material respect or for other good cause. The Trustee (or the
Servicer if the Trustee is the Paying Agent) shall notify the Rating
Agencies of the removal of any Paying Agent. The Paying Agent, unless
the Supplement with respect to any Series states otherwise, shall
initially be the Trustee. If any form of Investor Certificate is issued
as a Global Certificate, or if and so
61
long as any Series of Investor Certificates are listed on any Offshore
Securities Market and such exchange shall so require, the Trustee shall
appoint a co-paying agent in the location required by such Offshore
Securities Market. The Trustee shall be permitted to resign as Paying
Agent upon 30 days' written notice to the Servicer. In the event that
the Trustee shall no longer be the Paying Agent, the Trustee shall
appoint a successor to act as Paying Agent (which shall be a bank or
trust company). The provisions of Sections 11.01, 11.02 and 11.03 shall
apply to the Trustee also in its role as Paying Agent, for so long as
the 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.
If specified in the related Supplement for any Series, so long
as the Investor Certificates of such Series are outstanding, the
Transferor shall maintain a co-paying agent in New York City (for
Registered Certificates only) or any other city designated in such
Supplement. If and so long as any Series of Investor Certificates is
listed on any Offshore Securities Market and such exchange so requires,
the Transferor shall maintain a co-paying agent in the location
required by such Offshore Securities Market.
(b) The Trustee shall cause the Paying Agent (other than
itself) to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee that such Paying Agent
will hold all sums, if any, held by it for payment to the
Certificateholders in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to such
Certificateholders and shall agree, and if the Trustee is the Paying
Agent it hereby agrees, that it shall comply with all requirements of
the Internal Revenue Code regarding the withholding by the Trustee of
payments in respect of federal income taxes due from Certificate
Owners.
SECTION 6.07. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES. The Trustee will furnish or cause to be furnished by the Transfer
Agent and Registrar to the Servicer or the Paying Agent, within five Business
Days after receipt by the Trustee of a request therefor from the Servicer or the
Paying Agent, respectively, in writing, a list in such form as the Servicer or
the Paying Agent may reasonably require, of the names and addresses of the
Investor Certificateholders as of the most recent Record Date for payment of
distributions to Investor Certificateholders. Unless otherwise provided in the
related Supplement, holders of Investor Certificates evidencing Undivided
Interests aggregating not less than 10% of the Investor Interest of the Investor
Certificates of any Series (the "Applicants") may apply in writing to the
Trustee, and if such application states that the Applicants desire to
communicate with other Investor Certificateholders of any Series with respect to
their rights under this Agreement or under the Investor Certificates and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee, after having been adequately indemnified 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 Certificateholders held by the Trustee and
shall give the Servicer notice that such request has been made, 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 Applicant's
request. Every Certificateholder, by receiving and holding a Certificate, agrees
with the Trustee that neither the Trustee, the Transfer Agent and Registrar nor
any of their respective agents shall be held
62
accountable by reason of the disclosure of any such information as to the names
and addresses of the Certificateholders hereunder, regardless of the source from
which such information was obtained.
SECTION 6.08. AUTHENTICATING AGENT.
(a) The Trustee may appoint one or more authenticating agents
with respect to the Certificates which shall be authorized to act on
behalf of the 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 the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed
to include authentication on behalf of the Trustee by an authenticating
agent and a certificate of authentication executed on behalf of the
Trustee by an authenticating agent. Each authenticating agent must be
acceptable to the Transferor.
(b) Any institution succeeding to the corporate agency
business of an authenticating agent shall continue to be an
authenticating agent without the execution or filing of any paper or
any further act on the part of the Trustee or such authenticating
agent.
(c) An authenticating agent may at any time resign by giving
written notice of resignation to the Trustee and to the Transferor. The
Trustee may at any time, with or without cause, terminate the agency of
an authenticating agent by giving notice of termination to such
authenticating agent and to the 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 the
Trustee or the Transferor, the 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 the
Trustee and the Transferor.
(d) The Trustee agrees to pay each authenticating agent from
time to time reasonable compensation for its services under this
Section 6.08, and the Trustee shall be entitled to be reimbursed and
the Servicer shall reimburse the Trustee for such reasonable payments
actually made, subject to the provisions of Section 11.05.
(e) The provisions of Sections 11.01, 11.02 and 11.03 shall be
applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section 6.08,
the Certificates may have endorsed thereon, in lieu of the Trustee's
certificate of authentication, an alternate certificate of
authentication in substantially the following form:
63
This is one of the certificates described in the within mentioned
Pooling and Servicing Agreement.
______________________________________,
as Authenticating Agent for the Trustee
By____________________________________,
Authorized Officer
SECTION 6.09. TENDER OF EXCHANGEABLE TRANSFEROR CERTIFICATE.
(a) Upon any Exchange, the Trustee shall issue to the Holder
of the Exchangeable Transferor Certificate under Section 6.01, for
execution and redelivery to the Trustee for authentication under
Section 6.02, one or more new Series of Investor Certificates. Any such
Series of Investor Certificates shall be substantially in the form
specified in the related Supplement and shall bear, upon its face, the
designation for such Series to which it belongs, as selected by the
Transferor. Except as specified in any Supplement for a related Series,
all Investor Certificates of any Series shall rank pari passu and be
equally and ratably entitled as provided herein to the benefits hereof
(except that the Enhancement provided for any Series shall not be
available for any other Series) without preference, priority or
distinction on account of the actual time or times of authentication
and delivery, all in accordance with the terms and provisions of this
Agreement and the related Supplement.
(b) The Holder of the Exchangeable Transferor Certificate may
tender the Exchangeable Transferor Certificate to the Trustee in
exchange for (i) one or more newly issued Series of Investor
Certificates and (ii) a reissued Exchangeable Transferor Certificate
(any such tender, a "Transferor Exchange"). In addition, to the extent
permitted for any Series of Investor Certificates as specified in the
related Supplement, the Investor Certificateholders of such Series may
tender their Investor Certificates and the Holder of the Exchangeable
Transferor Certificate may tender the Exchangeable Transferor
Certificate to the Trustee pursuant to the terms and conditions set
forth in such Supplement in exchange for (i) one or more newly issued
Series of Investor Certificates and (ii) a reissued Exchangeable
Transferor Certificate (an "Investor Exchange"). The Transferor
Exchange and Investor Exchange are referred to collectively herein as
an "Exchange." The Holder of the Exchangeable Transferor Certificate
may perform an Exchange by notifying the Trustee, in writing at least
five days in advance (an "Exchange Notice") of the date upon which the
Exchange is to occur (an "Exchange Date"). Any Exchange Notice shall
state the designation of any Series to be issued on the Exchange Date
and, with respect to each such Series: (A) its Initial Investor
Interest (or the method for calculating such Initial Investor
Interest), (B) its Certificate Rate (or the method for allocating
interest payments or other cash flows to such Series), if any, (C) the
Enhancement Provider, if any, with respect to such Series, and (D) the
excess of the Principal Receivables in the Trust over the Minimum
Transferor Interest after giving effect to the Exchange. On the
Exchange Date, the Trustee shall authenticate and deliver any such
Series of Investor Certificates only upon delivery to it of the
following: (A) a
64
Supplement satisfying the criteria set forth in subsection 6.09(c)
executed by the Transferor and specifying the Principal Terms of such
Series, (B) the applicable Enhancement, if any, (C) the agreement, if
any, pursuant to which the Enhancement Provider agrees to provide the
Enhancement, if any, (D) an Opinion of Counsel to the effect that the
newly issued Series of Investor Certificates will be treated as debt or
as a partnership interest (in which case such opinion shall also state
that the Trust will not be taxable as a corporation or a publicly
traded partnership) for federal income tax purposes and that the
issuance of the newly issued Series of Investor Certificates will not
adversely affect the federal income tax characterization of the Holder
of any outstanding Series of Investor Certificates or any Certificate
Owner, (E) written confirmation from each Rating Agency that the
Exchange will not result in such Rating Agency's reducing or
withdrawing its rating on any then outstanding Series or Class as to
which it is a Rating Agency, (F) an Officer's Certificate signed by a
Vice President (or any more senior officer) of the Transferor that on
the Exchange Date (1) the Transferor, after giving effect to the
Exchange, would not be required to add Additional Accounts pursuant to
subsection 2.06(a) and (2) after giving effect to such Exchange, the
Transferor Interest would be at least equal to the Minimum Transferor
Interest, and (G) the existing Exchangeable Transferor Certificate or
applicable Investor Certificates, as the case may be. Upon satisfaction
of such conditions, the Trustee shall cancel the existing Exchangeable
Transferor Certificate or applicable Investor Certificates, as the case
may be, and issue, as provided above, such Series of Investor
Certificates and a new Exchangeable Transferor Certificate, dated the
Exchange Date. There is no limit to the number of Exchanges that may be
performed under this Agreement.
(c) In conjunction with an Exchange, the parties hereto shall
execute a Supplement, which shall specify the relevant terms with
respect to any newly issued Series of Investor Certificates, which may
include without limitation: (i) its name or designation, (ii) an
Initial Investor Interest or the method of calculating the Initial
Investor Interest, (iii) the Certificate Rate (or formula for the
determination thereof), (iv) the Closing Date, (v) the rating agency or
agencies rating such Series, (vi) the name of the Clearing Agency, if
any, (vii) the rights of the Holder of the Exchangeable Transferor
Certificate that have been transferred to the Holders of such Series
pursuant to such Exchange (including any rights to allocations of
Collections of Finance Charge Receivables and Principal Receivables),
(viii) the interest payment date or dates and the date or dates from
which interest shall accrue, (ix) the method of allocating Collections
with respect to Principal Receivables for such Series and, if
applicable, with respect to other Series and the method by which the
principal amount of Investor Certificates of such Series shall amortize
or accrete and the method for allocating Collections with respect to
Finance Charge Receivables and Receivables in Defaulted Accounts, (x)
the names of any accounts to be used by such Series and the terms
governing the operation of any such account, (xi) the Series Servicing
Fee Percentage, (xii) the Minimum Transferor Interest, the Series
Termination Date, (xiii) the terms of any Enhancement with respect to
such Series, (xiv) the Enhancement Provider, if applicable, (xv) the
base rate applicable to such Series, (xvi) the terms on which the
Certificates of such Series may be repurchased or remarketed to other
investors, (xvii) any deposit into any account provided for such
Series, (xviii) the number of Classes of such Series, and if more than
one Class, the rights and priorities of each such Class, (xix) whether
Interchange or other
65
fees will be included in the funds available to be paid for such
Series, (xx) the priority of any Series with respect to any other
Series, (xxi) the rights, if any, of the holders of the Exchangeable
Transferor Certificate that have been transferred to the holders of
such Series, (xxii) the Pool Factor, (xxiii) the Minimum Aggregate
Principal Receivables, (xxiv) whether such Series will be part of a
Group, (xxv) any other relevant terms of such Series (including whether
or not such Series will be pledged as collateral for an issuance of any
other securities, including commercial paper) (as to all such terms,
the "Principal Terms" of such Series). The terms of such Supplement may
modify or amend the terms of this Agreement solely as applied to such
new Series. If on the date of the issuance of such Series there is
issued and outstanding one or more Series of Investor Certificates and
no Series of Investor Certificates is currently rated by a Rating
Agency, then as a condition to such Exchange a nationally recognized
investment banking firm or commercial bank shall also deliver to the
Trustee an officers certificate stating, in substance, that the
Exchange will not have an adverse effect on the timing or distribution
of payments to such other Series of Investor Certificates then issued
and outstanding.
SECTION 6.10. BOOK-ENTRY CERTIFICATES. Unless otherwise provided in any
related Supplement, the Investor Certificates, upon original issuance, shall be
issued in the form of typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the depository specified in such Supplement
(the "Depository") which shall be the Clearing Agency or Foreign Clearing
Agency, by or on behalf of such Series. The Investor Certificates of each Series
shall, unless otherwise provided in the related Supplement, initially be
registered on the Certificate Register in the name of the nominee of the
Clearing Agency or Foreign Clearing Agency. No Certificate Owner will receive a
definitive certificate representing such Certificate Owner's interest in the
related Series of Investor Certificates, except as provided in Section 6.12 or
in the respective Supplement. Unless and until definitive, fully registered
Investor Certificates of any Series ("Definitive Certificates") have been issued
to Certificate Owners pursuant to Section 6.12:
(a) the provisions of this Section 6.10 shall be in full force
and effect with respect to each such Series;
(b) the Transferor, the Servicer, the Paying Agent, the
Transfer Agent and Registrar and the Trustee may deal with the Clearing
Agency and the Clearing Agency Participants for all purposes (including
the making of distributions on the Investor Certificates of each such
Series) as the authorized representatives of the Certificate Owners;
(c) to the extent that the provisions of this Section 6.10
conflict with any other provisions of this Agreement, the provisions of
this Section 6.10 shall control with respect to each such Series; and
(d) the rights of Certificate Owners of each such Series shall
be exercised only through the Clearing Agency or Foreign Clearing
Agency and the applicable Clearing Agency Participants and shall be
limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency or Foreign Clearing Agency
and/or the Clearing Agency Participants. Pursuant to the Depository
Agreement
66
applicable to a Series, unless and until Definitive Certificates of
such Series are issued pursuant to Section 6.12, the initial Clearing
Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit distributions of principal and
interest on the Investor Certificates to such Clearing Agency
Participants.
SECTION 6.11. NOTICES TO CLEARING AGENCY. Whenever notice or other
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to Certificate Owners
pursuant to Section 6.12, the Trustee shall give all such notices and
communications specified herein to be given to Holders of the Investor
Certificates to the Clearing Agency or Foreign Clearing Agency for distribution
to Holders of Investor Certificates.
SECTION 6.12. DEFINITIVE CERTIFICATES. If (a)(i) the Transferor advises
the Trustee in writing that the Clearing Agency or Foreign Clearing Agency is no
longer willing or able to discharge properly its responsibilities under the
applicable Depository Agreement, and (ii) the Trustee or the Transferor is
unable to locate a qualified successor; or (b) the Transferor, at its option,
advises the Trustee in writing that it elects to terminate the book-entry system
through the Clearing Agency or Foreign Clearing Agency with respect to any
Series of Certificates; or (c) after the occurrence of a Servicer Default,
Certificate Owners of a Series representing beneficial interests aggregating not
less than 50% of the Investor Interest of such Series advise the Trustee and the
applicable Clearing Agency or Foreign Clearing Agency through the applicable
Clearing Agency Participants in writing that the continuation of a book-entry
system through the applicable Clearing Agency or Foreign Clearing Agency is no
longer in the best interests of the Certificate Owners, the Trustee shall notify
all Certificate Owners of such Series, through the applicable Clearing Agency
Participants, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners of such Series requesting the
same. Upon surrender to the Trustee of the Investor Certificates of such Series
by the applicable Clearing Agency or Foreign Clearing Agency, accompanied by
registration instructions from the applicable Clearing Agency or Foreign
Clearing Agency for registration, the Trustee shall issue the Definitive
Certificates of such Series. Neither the Transferor nor the Trustee shall be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Certificates of such Series, all references herein to obligations
imposed upon or to be performed by the applicable Clearing Agency or Foreign
Clearing Agency shall be deemed to be imposed upon and performed by the Trustee,
to the extent applicable with respect to such Definitive Certificates, and the
Trustee shall recognize the Holders of the Definitive Certificates of such
Series as Certificateholders of such Series hereunder.
SECTION 6.13. GLOBAL CERTIFICATE. If specified in the related
Supplement for any Series, the Investor Certificates may be initially issued in
the form of a single temporary Global Certificate (the "Global Certificate") in
bearer form, without interest coupons, in the denomination of the Initial
Investor Interest and substantially in the form attached to the related
Supplement. Unless otherwise specified in the related Supplement, the provision
of this Section 6.13 shall apply to such Global Certificate. The Global
Certificate will be authenticated by the 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 in the manner described in
the related Supplement for Registered or Bearer Certificates in definitive form.
67
SECTION 6.14. MEETINGS OF CERTIFICATEHOLDERS. To the extent provided by
the Supplement for any Series issued in whole or in part in Bearer Certificates,
the Servicer, the Transferor or the Trustee may at any time call a meeting of
the Certificateholders of such Series, to be held at such time and at such place
as the Servicer, the Transferor or the Trustee, as the case may be, shall
determine, for the purpose of approving a modification of or amendment to, or
obtaining a waiver of, any covenant or condition set forth in this Agreement
with respect to such Series or in the Certificates of such Series, subject to
Section 13.01 of this Agreement.
SECTION 6.15. TRANSFERS OF CERTAIN CERTIFICATES.
(a) Notwithstanding any other provision of this Agreement, any
Certificate (including Exchangeable Transferor Certificates) for which
an Opinion of Counsel has not been issued opining that such
Certificates would be treated as debt for federal income tax purposes
(each, a "Subject Certificate") shall be subject to the next succeeding
paragraph.
(b) 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; (ii) after such transfer
(or purported transfer) the Trust would have more than 100 Holders of
Subject Certificates; or (iii) the Subject Certificates have been
issued in a transaction or transactions that were required to be
registered under the Securities Act of 1933 (the "1933 Act"), and to
the extent such offerings or sales were required to be registered under
the 1933 Act by reason of Regulation S (17 C.F.R. 230.901 through
230.904 or any successor thereto) such offerings or sales would not
have been required to be registered under the 1933 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 described in
Treasury Regulation 1-7704-1(b). 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 the Servicer determines, 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 6.16. TRUST TAX ELECTION. No Person, including the Trustee,
shall have the authority to make an election under Treasury Regulation
301.7701-3(c) to cause the Trust to be classified as an association taxable as a
corporation.
68
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
SECTION 7.01. LIABILITY OF THE TRANSFEROR. The Transferor shall be
liable in accordance herewith solely to the extent of the obligations
specifically undertaken by the Transferor.
SECTION 7.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE TRANSFEROR.
(a) The Transferor shall not consolidate with or merge into,
or convey or transfer its properties and assets substantially as an
entirety to, any other Person, unless:
(i) the corporation formed by such consolidation or
into which the Transferor is merged or the Person which
acquires by conveyance or transfer the properties and assets
of the Transferor substantially as an entirety shall be, if
the Transferor is not the surviving entity, organized and
existing under the laws of the United States of America or any
state, and shall be either (1) a business entity that may not
become a debtor in a proceeding under Title 11 of the United
States Code or (2) a bankruptcy-remote special-purpose entity,
the powers and activities of which shall be limited to the
performance of Transferor's obligations under this Agreement
and under the other Transaction Documents and shall expressly
assume, by an agreement supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee,
the performance of every covenant and obligation of the
Transferor, as applicable hereunder and thereunder, and shall
benefit from all the rights granted to the Transferor, as
applicable hereunder and thereunder. To the extent that any
right, covenant or obligation of the Transferor, as applicable
hereunder, is inapplicable to the successor entity, such
successor entity shall be subject to such covenant or
obligation, or benefit from such right, as would apply, to the
extent practicable, to such successor entity. In furtherance
hereof, in applying this Section 7.02 to a successor entity,
Section 9.02 hereof shall be applied by reference to events of
involuntary liquidation, receivership or conservatorship
applicable to such successor entity as shall be set forth in
the Officer's Certificate described in subsection 7.02(a);
(ii) the Transferor shall have delivered to the
Trustee an Officer's Certificate signed by a Vice President
(or any more senior officer) of the Transferor stating that
such consolidation, merger, conveyance or transfer and such
supplemental agreement comply with this Section 7.02 and that
all conditions precedent herein provided for relating to such
transaction have been complied with and an Opinion of Counsel
that such supplemental agreement is legal, valid and binding;
and
(iii) the Servicer shall have delivered notice to the
Rating Agencies of such consolidation, merger, conveyance or
transfer and the Rating Agency Condition shall have been met.
69
(b) The obligations of the Transferor hereunder shall not be
assignable nor shall any Person succeed to the obligations of the
Transferor hereunder except for mergers, consolidations, assumptions or
transfers in accordance with the provisions of the foregoing paragraph.
SECTION 7.03. LIMITATION ON LIABILITY. The directors, officers,
employees or agents of the Transferor shall not be under any liability to the
Trust, the Trustee, the Certificateholders, any Enhancement Provider or any
other Person hereunder or pursuant to any document delivered hereunder, it being
expressly understood that all such liability is expressly waived and released as
a condition of, and as consideration for, the execution of this Agreement and
any Supplement and the issuance of the Certificates; provided, however, that
this provision shall not protect the officers, directors, employees or agents of
the Transferor 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.
Except as provided in Section 7.04, the Transferor shall not be under any
liability to the Trust, the Trustee, the Certificateholders, any Enhancement
Provider or any other Person for any action taken or for refraining from the
taking of any action in its capacity as Transferor pursuant to this Agreement or
any Supplement whether arising from express or implied duties under this
Agreement or any Supplement; provided, however, that this provision shall not
protect the Transferor 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. The Transferor and any director, officer, employee or agent may rely
in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder.
SECTION 7.04. LIABILITIES.
(a) The Transferor shall indemnify and hold harmless the Trust and the
Trustee, its officers, directors, employees and agents from and against
any reasonable loss, liability, expense, damage or injury suffered or
sustained by reason of any acts, omissions or alleged acts or omissions
arising out of or based upon the arrangement created by this Agreement
or any Supplement or any other Transaction Document; provided, however,
that the Transferor shall not indemnify the Trustee if such acts,
omissions or alleged acts or omissions constitute or are caused by
fraud, negligence or willful misconduct by the Trustee; and provided,
further, that the Transferor shall not indemnify the Trust, the
Investor Certificateholders or the Certificate Owners for any
liabilities, costs or expenses of the Trust with respect to any action
taken by the Trustee at the direction of Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than
50% of the Investor Interest of the respective Series; and provided,
further, that the Transferor shall not indemnify the Trust, the
Investor Certificateholders or the Certificate Owners as to any losses,
claims or damages that would be incurred by any of them 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 such
secured notes; and provided, further, that the Transferor shall not
indemnify the Trust, the Investor Certificateholders or the Certificate
Owners for any liabilities, costs or expenses of the
70
Trust, the Investor Certificateholders or the Certificate Owners for
any liabilities, costs or expenses of the Trust, the Trustee or the
Investor Certificateholders arising under any tax law, including,
without limitation, 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 Certificateholders or the Certificate Owners in connection
herewith to any taxing authority.
(b) The Transferor shall be liable directly to and shall
indemnify the injured party for all losses, claims, damages,
liabilities and expenses of the Trust to the extent that the Transferor
would be liable if the Trust were a partnership under the Delaware
Revised Uniform Limited Partnership Act in which the Transferor were a
general partner; provided, however, that the Transferor shall not be
liable for (i) any losses incurred by a Certificateholder or a
Certificate Owner in its capacity as an investor in the Certificates or
(ii) any liabilities, costs or expenses of the Investor
Certificateholders or the Certificate Owners arising under any tax law,
including, without limitation, 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 Investor
Certificateholders or the Certificate Owners in connection herewith to
any taxing authority.
(c) Any indemnification under this Section 7.04 shall not be
payable from the assets of the Trust. The provisions of this indemnity
shall run directly to and be enforceable by an injured party subject to
the limitations hereof. Any injured party seeking indemnification
hereunder shall give the Transferor prompt written notice of any
potential loss, liability, expense, damage or injury, including actual
or threatened litigation. The Transferor shall be entitled to assume
the defense of and to negotiate the settlement of any such claim. The
obligations of the Transferor under this subsection 7.04 shall be
evidenced by the Exchangeable Transferor Certificate, which shall be
deemed to be a separate Class of Certificate from all other
Certificates issued by the Trust.
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
SECTION 8.01. LIABILITY OF THE SERVICER. The Servicer shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer in such capacity herein.
SECTION 8.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE SERVICER. The 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:
(a) the corporation formed by such consolidation or into which the
Servicer is merged or the Person which acquires by conveyance or
transfer the properties and assets of the Servicer substantially as an
entirety shall be a corporation organized and existing
71
under the laws of the United States of America or any State or the
District of Columbia, and shall be a state or national banking
association or other entity which is not subject to the bankruptcy laws
of the United States of America and, if the Servicer is not the
surviving entity, shall expressly assume, by an agreement supplemental
hereto, executed and delivered to the Trustee in form satisfactory to
the Trustee, the performance of every covenant and obligation of the
Servicer hereunder (to the extent that any right, covenant or
obligation of the Servicer, as applicable hereunder, is inapplicable to
the successor entity, such successor entity shall be subject to such
covenant or obligation, or benefit from such right, as would apply, to
the extent practicable, to such successor entity);
(b) the Servicer shall have delivered to the Trustee an
Officer's Certificate that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section 8.02
and that all conditions precedent herein provided for relating to such
transaction have been complied with and an Opinion of Counsel that such
supplemental agreement is legal, valid and binding with respect to the
Servicer; and
(c) the Servicer shall have delivered notice to the Rating
Agencies of such consolidation, merger, conveyance or transfer.
SECTION 8.03. LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS. The
directors, officers, employees or agents of the Servicer shall not be under any
liability to the Trust, the Trustee, the Certificateholders, any Enhancement
Provider or any other Person hereunder or pursuant to any document delivered
hereunder, it being expressly understood that all such liability is expressly
waived and released as a condition of, and as consideration for, the execution
of this Agreement and any Supplement and the issuance of the Certificates;
provided, however, that this provision shall not protect the directors,
officers, employees and agents of the Servicer 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. Except as provided in Section 8.04, and except
as provided by the RPA Seller in Section 5(n) of the RPA, the Servicer shall not
be under any liability to the Trust, the Trustee, its officers, directors,
employees and agents, the Certificateholders 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 or any Supplement; provided,
however, that this provision shall not protect the Servicer 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 its
reckless disregard of its obligations and duties hereunder or under any
Supplement. The Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to
service the Receivables in accordance with this Agreement which in its
reasonable opinion may involve it in any expense or liability.
SECTION 8.04. SERVICER INDEMNIFICATION OF THE TRUST AND THE TRUSTEE.
The Servicer shall indemnify and hold harmless the Trust and the Trustee, its
officers, directors, employees and agents, from and against any reasonable loss,
liability, expense, damage or injury suffered or sustained by reason of any acts
or omissions or alleged acts or omissions of the Servicer with
72
respect to activities of the Trust or the Trustee pursuant to this Agreement or
any other Transaction Document, including, but not limited to any judgment,
award, settlement, reasonable attorneys' fees and other costs or expenses
incurred in connection with the defense of any actual or threatened action,
proceeding or claim; provided, however, that the Servicer shall not indemnify
the Trustee if such acts, omissions or alleged acts or omissions constitute or
are caused by fraud, negligence, or willful misconduct by the Trustee; and
provided, further, that the Servicer shall not indemnify the Trust, the Investor
Certificateholders or the Certificate Owners for any liabilities, costs or
expenses of the Trust with respect to any action taken by the Trustee at the
direction of Holders of Investor Certificates evidencing Undivided Interests
aggregating not less than 50% of the Investor Interest of the respective Series;
and provided, further, that the Servicer shall not indemnify the Trust, the
Investor Certificateholders or the Certificate Owners as to any losses, claims
or damages that would be incurred by any of them 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 such secured notes; and provided, further, that the
Servicer shall not indemnify the Trust, the Investor Certificateholders or the
Certificate Owners for any liabilities, costs or expenses of the Trust, the
Investor Certificateholders or the Certificate Owners arising under any tax law,
including, without limitation, 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 Certificateholders or
the Certificate Owners in connection herewith to any taxing authority. Any such
indemnifications under this Section 8.04 shall not be payable from the assets of
the Trust. The provisions of this indemnity shall run directly to and be
enforceable by an injured party subject to the limitations hereof. Any injured
party seeking indemnification hereunder shall give the Servicer prompt written
notice of any potential loss, liability, expense, damage or injury, including
actual or threatened litigation. The Servicer shall be entitled to assume the
defense of and to negotiate the settlement of any such claim.
SECTION 8.05. THE SERVICER NOT TO RESIGN. The Servicer shall not resign
from the obligations and duties hereby imposed on it except upon determination
that (a) the performance of its duties hereunder is no longer permissible under
applicable law and (b) there is no reasonable action which the Servicer could
take to make the performance of its duties hereunder permissible under
applicable law. Any such determination permitting the resignation of the
Servicer shall be evidenced as to clause (a) above by an Opinion of Counsel to
such effect delivered to the Trustee. No such resignation shall become effective
until the Trustee or a Successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section
10.02 hereof. If the Trustee is unable within 120 days of the date of such
determination to appoint a Successor Servicer, the Trustee shall (i) serve as
Successor Servicer hereunder until such time as a Successor Servicer shall have
been appointed and assumed the obligations of the Servicer in accordance with
Section 10.02 hereunder or (ii) if the Trustee is legally unable so to act,
petition a court of competent jurisdiction to appoint a Successor Servicer in
accordance with Section 10.02 such that the appointment is made within the
120-day period.
SECTION 8.06. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
THE RECEIVABLES. The Servicer shall provide to the Trustee access to the
documentation regarding
73
the Accounts and the Receivables in such cases where the Trustee is required in
connection with the enforcement of the rights of the Investor
Certificateholders, 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 the
Servicer's normal security and confidentiality procedures, and (d) at offices
designated by the Servicer. Nothing in this Section 8.06 shall derogate from the
obligation of FNBO, the Transferor, the Trustee or the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors and
the failure of the Servicer to provide access as provided in this Section 8.06
as a result of such obligations shall not constitute a breach of this Section
8.06.
SECTION 8.07. DELEGATION OF DUTIES. It is understood and agreed by the
parties hereto that the Servicer may delegate certain of its duties hereunder to
any Affiliate which is wholly owned by the Servicer or its parent, First
National of Nebraska, Inc. In the ordinary course of business, the 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. Any such delegations
shall not relieve the Servicer of its liability and responsibility with respect
to such duties and shall not constitute a resignation within the meaning of
Section 8.05 hereof. If any such delegation is to a party other than an
Affiliate, as permitted above, notification thereof shall be given to each
Rating Agency.
SECTION 8.08. EXAMINATION OF RECORDS. The Servicer shall clearly and
unambiguously identify each Account (including any Additional Account designated
pursuant to Section 2.06) in its computer or other records to reflect that the
Receivables arising in such Account have been conveyed to the Trust pursuant to
this Agreement. The Servicer shall, prior to the sale or transfer to a third
party of any receivable held in its custody, examine its computer and other
records to determine that such receivable is not a Receivable.
ARTICLE IX
PAY OUT EVENTS
SECTION 9.01. PAY OUT EVENTS. If any one of the following events (each,
a "Trust Pay Out Event") shall occur:
(a) the Transferor or FNBO 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 the Transferor or FNBO, and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days; or
the Transferor or FNBO 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; or the Transferor shall become unable for
any reason to transfer Receivables to the Trust in
74
accordance with the provisions of this Agreement; or FNBO shall become
unable for any reason to transfer Receivables to the Transferor in
accordance with the provisions of the Receivables Purchase Agreement;
or
(b) the Trust shall become subject to regulation by the
Securities and Exchange Commission as an "investment company" within
the meaning of the Investment Company Act;
then a Pay Out Event with respect to all Series of Certificates shall occur
without any notice or other action on the part of the Trustee or the Investor
Certificateholders immediately upon the occurrence of such event. Upon receipt
by the Trustee of a written notice that a Pay Out Event has occurred, the
Trustee will notify each Rating Agency of the occurrence of such Pay Out Event.
SECTION 9.02. ADDITIONAL RIGHTS UPON THE OCCURRENCE OF CERTAIN EVENTS.
(a) If the Transferor or FNBO shall consent to the appointment
of a conservator, receiver or liquidator for the winding-up or
liquidation of its affairs, or a decree or order of a court, agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver or liquidator for the winding-up
or liquidation of its affairs shall have been entered against the
Transferor or FNBO (an "Insolvency Event"), the Transferor shall on the
day of such Insolvency Event (the "Appointment Day") immediately cease
to transfer Principal Receivables to the Trust and shall promptly give
notice to the Trustee of such Insolvency Event. Notwithstanding any
cessation of the transfer to the Trust of additional Principal
Receivables, Finance Charge Receivables, whenever created, accrued in
respect of Principal Receivables which have been transferred to the
Trust shall continue to be a part of the Trust, and Collections with
respect thereto shall continue to be allocated and paid in accordance
with Article IV. Within 15 days of the Appointment Day, the Trustee
shall (i) publish a notice in an Authorized Newspaper that an
Insolvency Event has occurred and that the Trustee intends to sell,
dispose of or otherwise liquidate the Receivables in a commercially
reasonable manner and (ii) send written notice to the Investor
Certificateholders describing the provisions of this Section 9.02 and
requesting instructions from such Holders. Unless within 90 days from
the day notice pursuant to clause (i) above is first published, the
Trustee shall have received written instructions of Holders of Investor
Certificates evidencing more than 50% of each Class of the Investor
Interest of each Series issued and outstanding to the effect that such
Certificateholders disapprove of the liquidation of the Receivables and
wish to continue having Principal Receivables transferred to the Trust
as before such Insolvency Event, the Trust shall terminate and the
Trustee shall sell, dispose of or otherwise liquidate the Receivables
in a commercially reasonable manner and on commercially reasonable
terms, which shall include the solicitation of competitive bids. The
Trustee may obtain a prior determination from any such conservator,
receiver or liquidator that the terms and manner of any proposed sale,
disposition or liquidation are commercially reasonable. The provisions
of Sections 9.01 and 9.02 shall not be deemed to be mutually exclusive.
75
(b) Notwithstanding the termination of the Trust in accordance
with subsection 9.02(a), the rights of the Certificateholders to
amounts due hereunder shall continue until payment in full of such
amounts. The proceeds from the sale, disposition or liquidation of the
Receivables pursuant to subsection (a) above shall be treated as
Collections on the Receivables and shall be allocated and deposited in
accordance with the provisions of Article IV, provided that the Trustee
shall determine conclusively in its sole discretion the amount of such
proceeds which are allocable to Finance Charge Receivables and the
amount of such proceeds which are allocable to Principal Receivables.
(c) The Trustee may appoint an agent or agents to assist with
its responsibilities pursuant to this Article IX with respect to
competitive bids.
ARTICLE X
SERVICER DEFAULTS
SECTION 10.01. SERVICER DEFAULTS. If any one of the following events
(subject to the last paragraph of this Section 10.01, a "Servicer Default")
shall occur and be continuing:
(a) any failure by the Servicer to make any payment, transfer
or deposit or to give instructions or notice to the Trustee pursuant to
Article IV or to instruct the Trustee to make any required drawing,
withdrawal or payment under any Enhancement on or before the later of
(i) the date occurring 10 Business Days after the date such payment,
transfer, deposit, withdrawal or drawing or such instruction or notice
is required to be made or given, as the case may be, under the terms of
this Agreement, or (ii) three Business Days after written notice of
such failure shall have been given to the Servicer;
(b) failure on the part of the Servicer duly to observe or
perform in any respect any other covenants or agreements of the
Servicer set forth in this Agreement, which has a material adverse
effect on the Investor Certificateholders of any Series and which
continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Trustee, or to the
Servicer and the Trustee by the Holders of Investor Certificates
evidencing Undivided Interests aggregating not less than 25% of the
unpaid Initial Investor Interest of any Series adversely affected
thereby and continues to materially adversely affect such Investor
Certificateholders for such period; or the Servicer shall delegate its
duties under this Agreement, except as permitted by Section 8.07;
(c) any representation, warranty or certification made by the
Servicer in this Agreement or in any certificate delivered pursuant to
this Agreement shall prove to have been incorrect when made, which has
a material adverse effect on the Investor Certificateholders of any
Series 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
the Servicer by the Trustee, or to the Servicer and the Trustee by the
Holders of Investor Certificates evidencing
76
Undivided Interests aggregating not less than 25% of the unpaid Initial
Investor Interest of any Series adversely affected thereby and
continues to materially adversely affect such Investor
Certificateholders for such period; or
(d) the Servicer 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 the Servicer or of or relating to all or
substantially all of its property; or a decree or order of a court or
agency or supervisory authority having jurisdiction in the premises for
the appointment of a 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 the Servicer, and such decree
or order shall have remained in force undischarged or unstayed for a
period of 60 days; or the Servicer 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
any assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations;
then, so long as such Servicer Default shall not have been remedied or waived,
either the Trustee, or the Holders of Investor Certificates evidencing more than
50% of the aggregate unpaid Initial Investor Interests of all outstanding
Series, by notice then given in writing to the Servicer (and to the Trustee if
given by the Investor Certificateholders) (a "Termination Notice"), may
terminate all of the rights and obligations (other than unsatisfied obligations
for acts or omissions during its tenure as Servicer) of the Servicer as Servicer
under this Agreement. After receipt by the Servicer of such Termination Notice,
and on the date that a Successor Servicer shall have been appointed by the
Trustee pursuant to Section 10.02, all authority and power of the Servicer under
this Agreement shall pass to and be vested in a Successor Servicer; and, without
limitation, the Trustee is hereby authorized and empowered (upon the failure of
the Servicer to cooperate) to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments upon the
failure of the 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 and obligations. The Servicer
agrees to cooperate with the Trustee and such Successor Servicer in effecting
the termination of the responsibilities and rights of the Servicer to conduct
servicing hereunder, including, without limitation, the transfer to such
Successor Servicer of all authority of the Servicer to service the Receivables
provided for under this Agreement, including, without limitation, all authority
over all Collections which shall on the date of transfer be held by the Servicer
for deposit, or which have been deposited by the Servicer, in the Collection
Account, the Finance Charge Account or the Principal Account and any Series
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 and Interchange (if any) applicable to the Trust. The Servicer shall
promptly transfer its electronic records or electronic copies thereof relating
to the Receivables to the Successor Servicer in such electronic form as the
Successor Servicer may reasonably 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 10.01 shall require the Servicer to disclose to the Successor
Servicer information of any kind which the Servicer reasonably deems to be
confidential, the
77
Successor Servicer shall be required to enter into such customary licensing and
confidentiality agreements as the Servicer shall deem necessary to protect its
interests. The Servicer shall, on the date of any servicing transfer, transfer
all of its rights and obligations under the Enhancement with respect to any
Series to the Successor Servicer. The Servicer being terminated shall bear all
costs of a Service Transfer, including but not limited to those of the Trustee
reasonably allocable to specific employees and overhead, legal fees and
expenses, accounting and financial consulting fees and expenses, and costs of
amending this Agreement, if necessary.
Notwithstanding the foregoing, a delay in or failure of performance
referred to in subsection 10.01(a) for a period of 10 Business Days or under
subsection 10.01(b) or (c) for a period of 60 days, shall not constitute a
Servicer Default if such delay or failure could not be prevented by the exercise
of reasonable diligence by the 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, riot or sabotage, epidemics, landslides, lightning, fire,
hurricanes, tornadoes, earthquakes, nuclear disasters or meltdowns, floods,
power outages or similar causes. The preceding sentence shall not relieve the
Servicer from using its best efforts to perform its obligations in a timely
manner in accordance with the terms of this Agreement and the Servicer shall
provide the Trustee, any Enhancement Provider, the Transferor and the Holders of
Investor Certificates with an Officer's Certificate giving prompt notice of such
failure or delay by it, together with a description of the cause of such failure
or delay and its efforts so to perform its obligations.
SECTION 10.02. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
(a) On and after the receipt by the Servicer of a Termination
Notice pursuant to Section 10.01, the Servicer shall continue to
perform all servicing functions under this Agreement until the date
specified in the Termination Notice or otherwise specified by the
Trustee in writing or, if no such date is specified in such Termination
Notice, or otherwise specified by the Trustee, until a date mutually
agreed upon by the Servicer and Trustee. The Trustee shall notify each
Rating Agency of such removal of the Servicer. The Trustee shall, as
promptly as possible after the giving of a Termination Notice, appoint
a successor servicer (the "Successor Servicer"), and such Successor
Servicer shall accept its appointment by a written assumption in a form
acceptable to the Trustee. The Trustee may obtain bids from any
potential successor servicer. If the Trustee is unable to obtain any
bids from any potential successor servicer and the Servicer delivers an
Officer's Certificate to the effect that it cannot in good faith cure
the Servicer default which gave rise to a transfer of servicing, and
the Trustee is legally unable to act as Successor Servicer, then the
Trustee shall notify each Enhancement Provider of the proposed sale of
the Receivables and shall offer such Enhancement Provider the
opportunity to bid on the Receivables at a price at least equal to the
Aggregate Investor Interest plus all accrued and unpaid interest on the
Investor Certificates. The proceeds of such sale shall be deposited in
the Distribution Account or any Series Account, as provided in the
related Supplement, for distribution to the Investor Certificateholders
of each outstanding Series pursuant to Section 12.03 of this Agreement.
In the event that a Successor Servicer has not been appointed and has
not accepted its appointment at the time when the Servicer ceases to
act as Servicer, the Trustee without further action shall automatically
be appointed the Successor Servicer. Notwithstanding the above, the
78
Trustee shall, if it is legally unable so to act, petition a court of
competent jurisdiction to appoint any established financial institution
having, in the case of an entity that is subject to risk-based capital
adequacy requirements, risk-based capital of at least $50,000,000 or,
in the case of an entity that is not subject to risk-based capital
requirements, having a net worth of not less than $50,000,000 and whose
regular business includes the servicing of VISA or MasterCard credit
card receivables as the Successor Servicer hereunder. The Trustee shall
notify each Rating Agency upon the appointment of a Successor Servicer.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to servicing
functions under this Agreement and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof, and all references in this
Agreement to the Servicer shall be deemed to refer to the Successor
Servicer. Any Successor Servicer, by its acceptance of its appointment,
will automatically agree to be bound by the terms and provisions of
each Enhancement. Notwithstanding the above, or anything in this
Section 10.02 to the contrary, the Trustee, if it becomes Servicer
pursuant to this Section, shall have no responsibility or obligation
(i) to repurchase or substitute any Account or Receivable, (ii) for any
representation or warranty of the Servicer hereunder, and (iii) for any
act or omission of either a predecessor or successor Servicer other
than the Trustee. The Trustee may conduct any activity required of it
as Servicer hereunder through an Affiliate or through an agent. Neither
the Trustee nor any other successor Servicer shall be deemed to be in
default hereunder due to any act or omission of a predecessor Servicer,
including but not limited to failure to timely deliver to the Trustee
any Monthly Servicer's Certificate, any funds required to be deposited
to the Trust Fund, or any breach of its duty to cooperate with a
transfer of servicing as required by Section 10.01.
(c) In connection with such appointment and assumption, the
Trustee shall be entitled to such compensation, or may make such
arrangements for the compensation of the Successor Servicer out of
Collections, as it and such Successor Servicer shall agree; provided,
however, that no such compensation shall be in excess of the Monthly
Servicing Fee permitted to the Servicer pursuant to Section 3.02. The
Transferor agrees that if the Servicer is terminated hereunder, it will
agree to deposit a portion of the Collections in respect of Finance
Charge Receivables that it is entitled to receive pursuant to Article
IV to pay its share 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 12.01 and shall pass to
and be vested in the Transferor and, without limitation, the 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
the 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 the Transferor in such
electronic form as the Transferor may reasonably request and shall
transfer all other records, correspondence and documents to the
Transferor in the manner and at such
79
times as the Transferor shall reasonably request. To the extent that
compliance with this Section 10.02 shall require the Successor Servicer
to disclose to the Transferor information of any kind which the
Successor Servicer deems to be confidential, the Transferor shall be
required to enter into such customary licensing and confidentiality
agreements as the Successor Servicer shall reasonably deem necessary to
protect its interests.
(e) Nothing in this Agreement shall be construed to require
any Successor Servicer to assume or succeed to any duty or obligation
of the Transferor.
SECTION 10.03. NOTIFICATION TO CERTIFICATEHOLDERS. Within two Business
Days after the Servicer becomes aware of any Servicer Default, the Servicer
shall give prompt written notice thereof to the Trustee and any Enhancement
Provider and the Trustee shall give notice to the Investor Certificateholders at
their respective addresses appearing in the Certificate Register. Upon any
termination or appointment of a Successor Servicer pursuant to this Article X,
the Trustee shall give prompt written notice thereof to Investor
Certificateholders at their respective addresses appearing in the Certificate
Register.
SECTION 10.04. WAIVER OF PAST DEFAULTS. The Holders of Investor
Certificates evidencing not less than 66 2/3% of the unpaid Initial Investor
Interest of each Series adversely affected by any default by the Servicer or
Transferor may, on behalf of all Certificateholders of such Series, waive any
default (whether or not a Servicer Default) by the Servicer or Transferor in the
performance of its obligations hereunder and its consequences, except a default
in the failure to make any required payments to Certificateholders, which
default does not result from the failure of the Paying Agent (other than FNBO as
Paying Agent) to perform its obligations to make any required deposits or
payments of interest and principal in accordance with Article IV, in which case
the default may be waived only by all Holders of Investor Certificates of each
Series adversely affected by that default. 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
THE TRUSTEE
SECTION 11.01. DUTIES OF TRUSTEE.
(a) The Trustee, prior to the occurrence of any Servicer
Default and after the curing or waiving 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. If a
Responsible Officer has received written notice that a Servicer Default
has occurred (which has not been cured or waived), the 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; provided, however, that if the Trustee is
acting as Successor Servicer, it shall in such capacity use the same
standard of care and skill as are
80
required of the Servicer under this Agreement; and provided, further,
that for purposes of determining the standard of care required of the
Trustee under this subsection 11.01(a), the appointment of a Successor
Trustee shall be deemed a cure of the Servicer Default which occasioned
such appointment.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee which are specifically required to
be furnished pursuant to any provision of this Agreement, shall examine
them to determine whether they substantially conform on their face to
the requirements of this Agreement, but shall not be required to verify
the accuracy of the contents thereof or to verify any calculations
contained therein.
(c) Subject to subsection 11.01(a), no provision of this
Agreement shall be construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure to act or its own
wilful misconduct; provided, however, that:
(i) the Trustee shall not be personally liable for an
error of judgment made in good faith by a Responsible Officer
or Responsible Officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(ii) the Trustee shall not be charged with knowledge
of any failure by the Servicer referred to in clauses (a) and
(b) of Section 10.01 unless a Responsible Officer of the
Trustee obtains actual knowledge of such failure or the
Trustee receives written notice of such failure from the
Servicer or any Holders of Investor Certificates evidencing
Undivided Interests aggregating not less than 10% of the
Investor Interest of any Series adversely affected thereby.
(d) The 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, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity 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 the Trustee to perform, or be
responsible for the manner of performance of, any of the obligations
under this Agreement of the Transferor at any time or of the Servicer
except during such time, if any, as the Trustee shall be the Successor
Servicer.
(e) Except for actions expressly authorized by this Agreement,
the Trustee shall take no action reasonably likely to impair the
interests of the Trust in any Receivable now existing or hereafter
created or to impair the value of any Receivable now existing or
hereafter created.
(f) Except as provided in this subsection 11.01(f), the
Trustee shall have no power to vary the corpus of the Trust, including,
without limitation, the power to (i) accept any substitute obligation
for a Receivable initially assigned to the Trust under Section 2.01 or
2.06 hereof, (ii) add any other investment, obligation or security to
the
81
Trust, except for an addition permitted under Section 2.06 or (iii)
withdraw from the Trust any Receivables, except for a withdrawal
permitted under Sections 2.07, 9.02, 10.02, 12.01 or 12.02 or
subsections 2.04(d), 2.04(e) or Article IV.
(g) In the event that 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, the Trustee shall be obligated promptly to perform such
obligation, duty or agreement in the manner so required, but shall not
be obligated to expend its own funds in so performing.
(h) If the Transferor has agreed to transfer any of its credit
card receivables (other than the Receivables) to another Person, upon
the written request of the Transferor, the Trustee will enter into such
intercreditor agreements with the transferee of such receivables as are
customary and necessary to identify separately the rights, if any, of
the Trust and such other Person in the Transferor's credit card
receivables, provided that the Trustee shall not be required to enter
into any intercreditor agreement which could adversely affect the
interests of the Certificateholders and, upon the request of the
Trustee, the Transferor will deliver an Opinion of Counsel on any
matters relating to such intercreditor agreement, reasonably requested
by the Trustee.
(i) The 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 evidencing Undivided Interests aggregating more than 50%
of the Investor Interest of any Series relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee in
relation to such Series, under this Agreement.
SECTION 11.02. CERTAIN MATTERS AFFECTING THE TRUSTEE. Except as
otherwise provided in Section 11.01:
(a) the Trustee may rely on and shall be protected in acting
on, or in refraining from acting in accord with, any assignment of
Receivables in Additional Accounts, the initial report, the Monthly
Servicer's Certificates, the Annual Servicer's Certificates, the
monthly payment instructions and notification to the Trustee, the
monthly Certificateholder's statements, any resolution, Officer's
Certificate, certificate of auditors or any other certificate,
statement, instrument, opinions report, notice, request, consent,
order, appraisal, bond or other paper or document 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;
(b) the Trustee may consult with counsel, and any 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 Opinion of Counsel;
82
(c) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement or any
Enhancement, or to institute, conduct or defend any litigation
hereunder or in relation hereto, at the request, order or direction of
any of the Certificateholders or any Enhancement Provider, pursuant to
the provisions of this Agreement, unless such Certificateholders or
Enhancement Provider shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
may be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee of the obligations, upon the occurrence of
any Servicer Default (which has not been cured or waived), to exercise
such of the rights and powers vested in it by this Agreement and any
Enhancement, and to 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 his own affairs;
(d) the 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) the Trustee shall not be bound to make any investigation
into the facts of matters stated or computations contained in any
assignment of Receivables in Additional Accounts, the initial report,
the Monthly Servicer's Certificate, the Annual Servicer's Certificate,
the monthly payment instructions and notification to the Trustee, the
monthly Certificateholder's statement, any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested in
writing so to do by Holders of Investor Certificates evidencing
undivided interests aggregating more than 50% of the Investor Interest
of any Series which could be adversely affected if the Trustee does not
perform such acts;
(f) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian, and the Trustee shall not
be responsible for any misconduct or negligence on the part of any such
agent, attorney or custodian appointed by it with due care and in
accordance with the terms of this Agreement; and
(g) except as may be required by subsection 11.01(a), the
Trustee shall not be required to make any initial or periodic
examinations 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 the Transferor with its representations and
warranties or for any other purpose.
SECTION 11.03. TRUSTEE NOT LIABLE FOR RECITALS IN CERTIFICATES. The
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, the Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates (other than the certificate of authentication on the Certificates)
or of any Receivable or related document. The Trustee shall not be accountable
for the use or application by the Transferor of any of the Certificates or of
the proceeds of such Certificates, or for the use or application of any funds
paid to the Transferor in respect of the Receivables or deposited in or
83
withdrawn from the Collection Account, the Principal Account or the Finance
Charge Account, or any Series Account by the Servicer.
SECTION 11.04. TRUSTEE MAY OWN CERTIFICATES. The Trustee may not in its
individual capacity, but may in a fiduciary capacity, become the owner or
pledgee of Investor Certificates, and the Trustee may transact banking business
with the Transferor or the Servicer, in each case with the same rights as it
would have if it were not the Trustee.
SECTION 11.05. THE SERVICER TO PAY TRUSTEE'S FEES AND EXPENSES. The
Servicer covenants and agrees to pay to the Trustee from time to time, and the
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 the Trustee, and, subject to Section 8.04, the Servicer will
pay or reimburse the Trustee (without reimbursement from any Investor Account,
any Series Account or otherwise) upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Agreement except any such expense, disbursement or
advance as may arise from its own negligence or bad faith and except as provided
in the following sentence. If the Trustee is appointed Successor Servicer
pursuant to Section 10.02, the provisions of this Section 11.05 shall not apply
to expenses, disbursements and advances made or incurred by the Trustee in its
capacity as Successor Servicer.
The obligations of the Servicer under this Section 11.05 shall survive
the termination of the Trust and the resignation or removal of the Trustee.
SECTION 11.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee
hereunder shall at all times be 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 long-term unsecured debt
rating of at least "Baa3" by ▇▇▇▇▇'▇ and "BBB" by Standard & Poor's having, in
the case of an entity that is subject to risk-based capital adequacy
requirements, risk-based capital of at least $50,000,000 or, in the case of an
entity that is not subject to risk-based capital adequacy requirements, having a
combination capital and surplus of at least $50,000,000 and subject to
supervision or examination by federal or state authority. If such 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 11.06, the combined capital and surplus of such
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 the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 11.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 11.07.
SECTION 11.07. RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may at any time resign and be discharged from
the Trust hereby created by giving written notice thereof to the
Servicer. Upon receiving such notice of resignation, the Servicer shall
promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the
resigning
84
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 the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.06 hereof and shall fail
to resign after written request therefor by the Transferor, or if at
any time the Trustee shall be legally unable to act, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the
Transferor may, but shall not be required to, remove the Trustee and
promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee.
(c) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this
Section 11.07 shall not become effective until acceptance of
appointment by the successor trustee as provided in Section 11.08
hereof and any liability of the Trustee arising hereunder shall survive
such appointment of a successor trustee.
SECTION 11.08. SUCCESSOR TRUSTEE.
(a) Any successor trustee appointed as provided in Section
11.07 hereof shall execute, acknowledge and deliver to the Transferor
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. The
predecessor Trustee shall deliver to the successor trustee all
documents and statements held by it hereunder, and the 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 11.08 unless at the time of such acceptance such
successor trustee shall be eligible under the provisions of Section
11.06 hereof.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section 11.08, such successor trustee shall mail
notice of such succession hereunder to all Certificateholders at their
addresses as shown in the Certificate Register.
SECTION 11.09. MERGER OR CONSOLIDATION OF TRUSTEE. Any Person into
which the 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 the Trustee shall be a party, or any Person succeeding to
the corporate trust business of the Trustee, shall be the successor of the
85
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 11.06 hereof, 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 in which any part of the Trust may at the time be located,
the 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 Certificateholders, 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 the Trustee may consider necessary or desirable. No co-trustee or
separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 11.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 11.08 hereof.
(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 the Trustee shall be conferred or
imposed upon and exercised or performed by the 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 the 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 the
Servicer hereunder), the 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
the Trustee;
(ii) no trustee hereunder shall be personally liable
by reason of any act or omission of any other trustee
hereunder; and
(iii) the 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 the 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 the Trustee or
separately, as may be provided therein, subject to all the provisions
of this Agreement,
86
specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to,
the Trustee. Every such instrument shall be filed with the Trustee and
a copy thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee as 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 the
Trustee, to the extent permitted by law, without the appointment of a
new or successor trustee.
SECTION 11.11. TAX RETURNS. In the event the Trustee receives a
directive or order from a Governmental Authority pursuant to Section 3.07 that
the Trust shall be required to file tax returns, the Trustee, as soon as
practicable after it is made aware of such requirement, shall prepare or cause
to be prepared any tax returns required to be filed by the Trust and, to the
extent possible, shall file such returns at least five days before such returns
are due to be filed. The Trustee is hereby authorized to sign any such return on
behalf of the Trust. The Servicer shall prepare or shall cause to be prepared
all tax information required by law to be distributed to Certificateholders and
shall deliver such information to the Trustee at least five days prior to the
date it is required by law to be distributed to Certificateholders. The
Servicer, upon request, will furnish the Trustee with all such information known
to the Servicer as may be reasonably required in connection with the preparation
of all tax returns of the Trust. In no event shall the Trustee or the Servicer
be liable for any liabilities, costs or expenses of the Trust, the Investor
Certificateholders or the Certificate Owners arising under any tax law,
including, without limitation, federal, state, local or foreign income or excise
taxes or any other tax imposed on 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 any Series
of Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the 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 the Trustee, its agents and counsel, be for the
ratable benefit of any Series of Certificateholders in respect of which such
judgment has been obtained.
SECTION 11.13. SUITS FOR ENFORCEMENT. If a Servicer Default shall occur
and be continuing, the Trustee, in its discretion may, subject to the provisions
of Section 10.01, proceed to protect and enforce its rights and the rights of
any Series of Certificateholders 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 the Trustee, being advised by
counsel, shall deem most effectual to protect and enforce any of the rights of
the Trustee or any Series of Certificateholders.
87
SECTION 11.14. RIGHTS OF CERTIFICATEHOLDERS TO DIRECT TRUSTEE. Holders
of Investor Certificates evidencing Undivided Interests aggregating more than
50% of the Aggregate Investor Interest (or, with respect to any remedy, trust or
power that does not relate to all Series, 50% of the aggregate Investor Interest
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 the Trustee, or exercising any trust
or power conferred on the Trustee; provided, however, that, subject to Section
11.01, the Trustee shall have the right to decline to follow any such direction
if the Trustee being advised by counsel determines that the action so directed
may not lawfully be taken, or if the Trustee in good faith shall, by a
Responsible Officer or Responsible Officers of the Trustee, determine that the
proceedings so directed would be illegal or involve it in personal liability or
be unduly prejudicial to the rights of Certificateholders not parties to such
direction; and provided, further, that nothing in this Agreement shall impair
the right of the Trustee to take any action deemed proper by the Trustee and
which is not inconsistent with such direction of such Holders of Investor
Certificates.
SECTION 11.15. REPRESENTATIONS AND WARRANTIES OF TRUSTEE. The Trustee
represents and warrants that:
(a) the Trustee is a New York banking corporation with trust
powers and is organized, existing and authorized to engage in the
business of banking under the laws of the United States;
(b) the 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 the
Trustee.
SECTION 11.16. MAINTENANCE OF OFFICE OR AGENCY. If required by any
Supplement, the Trustee will maintain at its expense in the Borough of
Manhattan, the City of New York an office or offices, or agency or agencies,
where notices and demands to or upon the Trustee in respect of the Certificates
and this Agreement may be served. The Trustee will give prompt written notice to
the Servicer and to Certificateholders (or in the case of Holders of Bearer
Certificates in the manner provided for in the related Supplement) of any change
in the location of the Certificate Register or any such office or agency.
ARTICLE XII
TERMINATION
SECTION 12.01. TERMINATION OF TRUST.
(a) The respective obligations and responsibilities of the
Transferor, the Servicer and the Trustee created hereby (other than the
obligation of the Trustee to make payments to Certificateholders as
hereafter set forth) shall terminate, except with respect to the duties
described in Sections 2.04(d), 2.04(e), 7.04, 8.04 and 11.05 and
subsection 12.03(b), on the Trust Termination Date; provided, however,
that the Trust shall not
88
terminate on the date specified in clause (a) of the definition of
"Trust Termination Date" if each of the Servicer and the Holder of the
Exchangeable Transferor Certificate notify the Trustee in writing, not
later than five Business Days preceding such date, that they desire
that the Trust not terminate on such date, which notice (such notice, a
"Trust Extension") shall specify the date on which the Trust shall
terminate (such date, the "Extended Trust Termination Date"); provided,
however, that the Extended Trust Termination Date shall be not later
than July 31, 2020. The Servicer and the Holder of the Exchangeable
Transferor Certificate may, on any date following the Trust Extension,
so long as no Series of Certificates is outstanding, deliver a notice
in writing to the Trustee changing the Extended Trust Termination Date.
(b) In the event that (i) the Trust has not terminated by the
last Distribution Date occurring in the second month preceding the
Trust Termination Date, and (ii) the Investor Interest of any Series
(after giving effect to all transfers, withdrawals, deposits and
drawings to occur on such date and the payment of principal on any
Series of Certificates to be made on the related Distribution Date
during such month pursuant to Article IV) would be greater than zero,
the Servicer shall sell within 30 days after such Transfer Date all the
Receivables. The Servicer shall notify each Enhancement Provider of the
proposed sale of the Receivables and shall provide each Enhancement
Provider (other than the Transferor, FNBO or any of their Affiliates)
an opportunity to bid on the Receivables. The proceeds of any such sale
shall be treated as Collections on the Receivables and shall be
allocated and deposited in accordance with Article IV; provided,
however, that the Trustee shall determine conclusively in its sole
discretion the amount of such proceeds which are allocable to Finance
Charge Receivables and the amount of such proceeds which are allocable
to Principal Receivables. During such 30-day period, the Servicer shall
continue to collect payments on the Receivables and allocate and
deposit such payments in accordance with the provisions of Article IV.
(c) All principal or interest with respect to any Series of Investor
Certificates shall be due and payable no later than the Series
Termination Date with respect to such Series. Unless otherwise provided
in a Supplement, in the event that the Investor Interest of any Series
of Certificates is greater than zero on its Series Termination Date
(after giving effect to all transfers, withdrawals, deposits and
drawings to occur on such date and the payment of principal to be made
on such Series on such date), the Trustee will sell or cause to be
sold, and pay the proceeds to all Certificateholders of such Series pro
rata in final payment of all principal of and accrued interest on such
Series of Certificates, an amount of Principal Receivables and the
related Finance Charge Receivables (or interests therein) up to 110% of
the Investor Interest of such Series at the close of business on such
date (but not more than the applicable Investor Percentage of Principal
Receivables and the related Finance Charge Receivables on such date for
such Series). The Trustee shall notify each Enhancement Provider of the
proposed sale of such Receivables and shall provide each Enhancement
Provider (other than the Transferor, FNBO or any of their Affiliates)
an opportunity to bid on such Receivables. Any proceeds of such sale in
excess of such principal and interest paid to the Certificateholders of
such Series shall be paid to the Holder of the Exchangeable Transferor
Certificate. Upon such Series Termination Date with respect to the
applicable
89
Series of Certificates, final payment of all amounts allocable to any
Investor Certificates of such Series shall be made in the manner
provided in Section 12.03.
SECTION 12.02. OPTIONAL PURCHASE FROM COLLECTIONS.
(a) If so provided in any Supplement, the Servicer may, but
shall not be obligated to, cause a final distribution to be made in
respect of the related Series of Certificates on a Distribution Date
specified in such Supplement by depositing from Collections into the
Distribution Account or the applicable Series Account, not later than
the Transfer Date preceding such Distribution Date, for application in
accordance with Section 12.03, the amount specified in such Supplement;
provided, however, that if the short-term deposits or long-term
unsecured debt obligations of the Servicer (or, if neither such
deposits nor such obligations of the Servicer are rated by ▇▇▇▇▇'▇,
then the short-term deposits or long-term unsecured debt obligations of
the holding company of the Servicer so long as such holding company is
First National of Nebraska, Inc.) are not rated at the time of such
purchase of Receivables at least "P-3" or "Baa3," respectively, by
▇▇▇▇▇'▇, no such event shall occur unless the Servicer shall deliver an
Opinion of Counsel reasonably acceptable to the Trustee that such
deposit into the Distribution Account or any Series Account as provided
in the related Supplement would not constitute a fraudulent conveyance
of the Servicer. To the extent permitted by FAS 140, the Servicer's
rights under this Section 12.02(a) may be exercised by any of its
Affiliates, which may include the Transferor.
(b) The amount deposited pursuant to subsection 12.02(a) shall
be paid to the Investor Certificateholders of the related Series
pursuant to Section 12.03 on the related Distribution Date following
the date of such deposit. All Certificates of a Series which are
purchased pursuant to subsection 12.02(a) shall be delivered upon such
purchase to, and be canceled by, the Transfer Agent and Registrar and
be disposed of in a manner satisfactory to the Trustee and the
Transferor. The Investor Interest of each Series which is purchased
pursuant to subsection 12.02(a) shall, for the purposes of the
definition of "Transferor Interest," be deemed to be equal to zero on
the Distribution Date following the making of the deposit, and the
Transferor Interest shall thereupon be deemed to have been increased by
the Investor Interest of such Series.
SECTION 12.03. FINAL PAYMENT WITH RESPECT TO ANY SERIES.
(a) Written notice of any termination specifying the
Distribution Date upon which the Investor Certificateholders of any
Series may surrender their Certificates for payment of the final
distribution with respect to such Series and cancellation shall be
given (subject to at least two Business Days' prior notice from the
Servicer to the Trustee) by the Trustee to Investor Certificateholders
of such Series mailed not later than the fifth day of the month of such
final distribution (or in the manner provided by the Supplement
relating to such Series) specifying (i) the Distribution Date (which
shall be the Distribution Date in the month (A) in which the deposit is
made pursuant to subsections 2.04(e), 9.02(b), 10.02(c), or subsection
12.02(a) of the Agreement or such other Section as may be specified in
the related Supplement or (B) in which the related Series Termination
Date occurs) upon which final payment of such Investor Certificates
90
will be made upon presentation and surrender of such Investor
Certificates at the office or offices therein designated (which, in the
case of Bearer Certificates, shall be outside the United States), (ii)
the amount of any such final payment and (iii) that the Record Date
otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the
Investor Certificates at the office or offices therein specified. The
Servicer's notice to the Trustee in accordance with the preceding
sentence shall be accompanied by an Officer's Certificate setting forth
the information specified in Article V of this Agreement covering the
period during the then current calendar year through the date of such
notice and setting forth the date of such final distribution. The
Trustee shall give such notice to the Transfer Agent and Registrar and
the Paying Agent at the time such notice is given to such Investor
Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to
subsection 12.01(a) or the occurrence of the Series Termination Date
with respect to any Series, all funds then on deposit in the Finance
Charge Account, the Principal Account, the Distribution Account or any
Series Account applicable to the related Series shall continue to be
held in trust for the benefit of the Certificateholders of the related
Series and the Paying Agent or the Trustee shall pay such funds to the
Certificateholders of the related Series upon surrender of their
Certificates (which surrenders and payments, in the case of Bearer
Certificates, shall be made only outside the United States). In the
event that all of the Investor Certificateholders of any Series shall
not surrender their Certificates for cancellation within six months
after the date specified in the above-mentioned written notice, the
Trustee shall give a second written notice (or, in the case of Bearer
Certificates, publication notice) to the remaining Investor
Certificateholders of such Series upon receipt of the appropriate
records from the Transfer Agent and Registrar to surrender their
Certificates for cancellation and receive the final distribution with
respect thereto. If, within one and one-half years after the second
notice with respect to a Series, all the Investor Certificates of such
Series shall not have been surrendered for cancellation, the Trustee
may take appropriate steps, or may appoint an agent to take appropriate
steps, to contact the remaining Investor Certificateholders of such
Series concerning surrender of their Certificates, and the cost thereof
shall be paid out of the funds in the Distribution Account or any
Series Account held for the benefit of such Investor
Certificateholders. The Trustee and the Paying Agent shall pay to the
Transferor upon request any moneys held by them for the payment of
principal or interest which remains unclaimed for two years. After
payment to the Transferor, Investor Certificateholders entitled to the
moneys must look to the Transferor for payment as general creditors
unless an applicable abandoned property law designates another Person.
(c) All Certificates surrendered for payment of the final
distribution with respect to such Certificates and cancellation shall
be canceled by the Transfer Agent and Registrar and be disposed of in a
manner satisfactory to the Trustee and the Transferor.
SECTION 12.04. TERMINATION RIGHTS OF HOLDER OF EXCHANGEABLE TRANSFEROR
CERTIFICATE. Upon the termination of the Trust pursuant to Section 12.01, and
after payment of all amounts due hereunder on or prior to such termination and
the surrender of the Exchangeable Transferor Certificate, the Trustee shall
execute a written reconveyance substantially in the form
91
of Exhibit H pursuant to which it shall reconvey to the Holder of the
Exchangeable Transferor Certificate (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 with
respect thereto (including all accrued interest theretofore posted as Finance
Charge Receivables) and all proceeds thereof and Insurance Proceeds relating
thereto and Interchange (if any) allocable to the Trust pursuant to any
Supplement, except for amounts held by the Trustee pursuant to subsection
12.03(b). The Trustee shall execute and deliver such instruments of transfer and
assignment, in each case without recourse, as shall be reasonably requested by
the Holder of the Exchangeable Transferor Certificate to vest in such Holder all
right, title and interest which the Trust had in the Receivables.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01. AMENDMENT.
(a) This Agreement or any Supplement may be amended in writing
from time to time by the Servicer, the Transferor and the Trustee,
without the consent of any of Certificateholders, provided that such
action shall not, as evidenced by an Opinion of Counsel for the
Transferor addressed and delivered to the Trustee, adversely affect in
any material respect the interests of any Investor Certificateholder;
provided, further, that each Rating Agency shall have notified the
Transferor, the Servicer and the Trustee in writing that such action
will not result in a reduction or withdrawal of the rating of any
outstanding Series or Class to which it is a Rating Agency; and
provided, further, such amendment would not cause the Trust to fail to
be a QSPE.
(b) This Agreement or any Supplement may also be amended in
writing from time to time by the Servicer, the Transferor and the
Trustee with the consent of the Holders of Investor Certificates
evidencing not less than 66 2/3% of the unpaid Initial Investor
Interest of each outstanding Series adversely affected by such
amendment 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 modifying in any manner the rights of Investor
Certificateholders of any Series then issued and outstanding; provided,
however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, distributions which are required to
be made on, or the amount available under any Credit Enhancement for,
any Investor Certificates of such Series without the consent of each
Investor Certificateholder of such Series, (ii) change the definition
of or the manner of calculating the Investor Interest, the Investor
Percentage or the Investor Default Amount of such Series without the
consent of each Investor Certificateholder of such Series or (iii)
reduce the aforesaid percentage required to consent to any such
amendment, without the consent of each Investor Certificateholder of
all Series adversely affected. The Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Trustee's
rights, duties or immunities under this Agreement or otherwise.
92
(c) Notwithstanding anything in this Section 13.01 to the
contrary, the Series Supplement with respect to any Series may be
amended on the items and in accordance with the procedures provided in
such Series Supplement. No Supplement shall be amended without the
consent of the Holders specified in such Supplement if the effect of
such amendment would be to cause the Trust to fail to be a QSPE.
(d) Promptly after the execution of any such amendment (other
than an amendment pursuant to paragraph (a)), the Trustee shall furnish
notification of the substance of such amendment to each Investor
Certificateholder of each Series adversely affected and to each Rating
Agency providing a rating for such Series and any Enhancement Provider
for such Series.
(e) It shall not be necessary for the consent of Investor
Certificateholders under this Section 13.01 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 Certificateholders shall be subject to such
reasonable requirements as the Trustee may prescribe.
(f) Any Series Supplement executed and delivered pursuant to
Section 6.09 and any amendments regarding the addition to or removal of
Receivables from the Trust as provided in Sections 2.06 and 2.07,
executed in accordance with the provisions hereof, shall not be
considered amendments to this Agreement for the purpose of subsections
13.01(a) and (b).
(g) In connection with any amendment, the Trustee may request
an Opinion of Counsel from the Transferor or Servicer to the effect
that the amendment is authorized or permitted, or complies with all
requirements of this Agreement.
(h) This Agreement may not be amended to add an additional
Transferor unless each Rating Agency shall have notified the
Transferor, the Servicer and the Trustee in writing that such action
will not result in a reduction or withdrawal of the rating of any
outstanding Series or Class to which it is a Rating Agency.
SECTION 13.02. PROTECTION OF RIGHT, TITLE AND INTEREST TO TRUST.
(a) The Servicer shall cause this Agreement, all amendments
hereto and/or all financing statements and continuation statements and
any other necessary documents covering the Certificateholders and the
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 Certificateholders or the Trustee, as the case may be,
hereunder to all property comprising the Trust. The Servicer shall
deliver to the 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. The
Transferor shall cooperate fully with the Servicer in
93
connection with the obligations set forth above and will execute any
and all documents reasonably required to fulfill the intent of this
subsection 13.02(a).
(b) Within 30 days after the Transferor makes any change in
its name, identity or organizational structure which would make any
financing statement or continuation statement filed in accordance with
paragraph (a) above materially misleading within the meaning of the
UCC, the Transferor shall give the Trustee and the Servicer notice of
any such change and the Servicer 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) Each of the Transferor and the Servicer will give the
Trustee prompt written notice of any relocation of any office from
which it services Receivables or keeps records concerning the
Receivables or of its jurisdiction of organization and whether, as a
result of such change, 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 the
Servicer 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. Each of the Transferor and
the Servicer will at all times maintain each office from which it
services Receivables and its principal executive office within the
United States of America.
(d) The Servicer will deliver to the Trustee and each
Enhancement Provider: (i) upon each date that any Additional Accounts
are to be included in the Accounts pursuant to Section 2.06, an Opinion
of Counsel substantially in the form of Exhibit E; and (ii) on or
before March 31 of each year, beginning with March 31, 1998, an Opinion
of Counsel, substantially in the form of Exhibit F.
SECTION 13.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust, nor shall such death
or incapacity entitle such Certificateholders, 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 Certificateholder shall have any right to vote (except
with respect to the Investor Certificateholders as provided in Section
13.01 hereof) 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 Certificateholders
from time to time as partners or members of an association; nor shall
any Certificateholder be under any liability to any third person by
reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
94
(c) No Certificateholder 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 Certificateholder previously shall have given
written notice to the Trustee, and unless the Holders of Certificates
evidencing Undivided Interests aggregating more than 50% of the
Investor Interest of any Series which may be adversely affected but for
the institution of such suit, action or proceeding, shall have made
written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered
to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and
the Trustee, for 60 days after its receipt of such notice, 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 Certificateholder with every other
Certificateholder and the Trustee, that no one or more
Certificateholders shall have the 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 the
Certificateholders of any other of the Certificates, or to obtain or
seek to obtain priority over or preference to any other such
Certificateholder, or to enforce any right under this Agreement, except
in the manner herein provided and for the equal, ratable and common
benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 13.03, each and every
Certificateholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
SECTION 13.04. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Nebraska 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 13.05. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at, sent by facsimile to, sent by courier at or mailed by
registered mail, return receipt requested, to (a) in the case of the Transferor,
to First National Funding LLC, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, with a copy to ▇▇▇▇▇ ▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; (b) in the case of the Servicer, to First National Bank
of Omaha, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, with a copy to ▇▇▇▇▇ ▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇; (c) in the case of the Trustee, to the Corporate Trust Office; (d) in the
case of the Enhancement Provider for a particular Series, the address, if any,
specified in the Supplement relating to such Series; and (e) in the case of the
Rating Agency for a particular Series, the address, if any, specified in the
Supplement relating to such Series; or, as to each party, at such other address
as shall be designated by such party in a written notice to each other party.
Unless otherwise provided with respect to any Series in the related Supplement
any notice required or permitted to be mailed to a Certificateholder shall be
given by first-class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register, or with respect to any
notice required or permitted to be made to the holders of Bearer Certificates,
by publication in the manner provided in the related Supplement. If and so long
as any Series or Class is listed on any Offshore Securities Market and such
Exchange shall so require, any Notice to Investor Certificateholders shall be
published in the manner required by such Offshore Securities Market. Any notice
so mailed within the time
95
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the Certificateholder receives such notice.
SECTION 13.06. 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 covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or rights of the Certificateholders thereof.
SECTION 13.07. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 8.02, this Agreement may not be
assigned by the Servicer without (a) the prior consent of Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 66 2/3% of
the Investor Interest of each Series on a Series by Series basis and (b) prior
written notice of such assignment to each Rating Agency for an outstanding
Series that has rated such Series at Transferor's request.
SECTION 13.08. CERTIFICATES NONASSESSABLE AND FULLY PAID. It is the
intention of the parties to this Agreement that the Certificateholders shall not
be personally liable for obligations of the Trust, that the Undivided Interests
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 the Trustee pursuant to Sections 2.01 and 6.02 are and
shall be deemed fully paid.
SECTION 13.09. FURTHER ASSURANCES. The Transferor and the 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 the Trustee more
fully to effect the purposes of this Agreement, including, without limitation,
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. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of the Trustee, any Enhancement Provider
or the Investor Certificateholders, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
SECTION 13.11. 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 13.12. THIRD-PARTY BENEFICIARIES. This Agreement will inure to
the benefit of and be binding upon the parties hereto, the Certificateholders
and, to the extent provided in the related Supplement, to the Enhancement
Provider named therein, and the respective successors
96
and permitted assigns. Except as otherwise provided in this Article XIII, no
other Person will have any right or obligation hereunder.
SECTION 13.13. ACTIONS BY CERTIFICATEHOLDERS.
(a) Wherever in this Agreement a provision is made that an
action may be taken or a notice, demand or instruction given by
Investor Certificateholders, such action, notice or instruction may be
taken or given by any Investor Certificateholder, unless such provision
requires a specific percentage of Investor Certificateholders.
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other act by a Certificateholder shall bind such
Certificateholders and every subsequent holder of such 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 the Trustee or the Servicer in reliance thereon, whether or
not notation of such action is made upon such Certificate.
SECTION 13.14. RULE 144A INFORMATION. For so long as any of the
Investor Certificates of any Series or any Class are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, each of the
Transferor, the Servicer, the Trustee and the Enhancement Provider for such
Series agree to cooperate with each other to provide to any Investor
Certificateholders of such Series or Class and to any prospective purchaser of
Certificates designated by such an Investor Certificateholder upon the request
of such Investor Certificateholder 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 13.15. 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. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
SECTION 13.16. HEADINGS. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
SECTION 13.17. NO BANKRUPTCY PETITION. Notwithstanding any prior
termination of this Agreement, each of the Servicer, each Enhancement Provider,
if any, each Holder and the Transferor (with respect to the Trust only),
severally and not jointly, hereby covenants and agrees that it will not at any
time institute against, solicit or join or cooperate with or encourage any
institution against the Trust or the Transferor of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under any United States federal or state bankruptcy or
similar law. Nothing in this Section 13.17 shall preclude, or be deemed to
estop, any of the foregoing Persons from taking (to the extent such action is
otherwise permitted to be taken by such Person hereunder) or omitting to take
any action in (a) any case or proceeding with respect to the Trust or the
Transferor voluntarily filed or commenced by or on behalf of the Trust or the
Transferor, respectively, under or pursuant to
97
any such law or (b) any involuntary case or proceeding pertaining to the Trust
or the Transferor, as applicable, under or pursuant to any such law.
[Remainder of page intentionally left blank]
98
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Agreement to be duly executed by their respective officers as of the
day and year first above written.
FIRST NATIONAL FUNDING LLC, as
Transferor
By First National Funding Corporation, its
Managing Member
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Title Senior Vice President
----------------------------------------
FIRST NATIONAL BANK OF OMAHA, as
Servicer
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Title Senior Vice President
----------------------------------------
THE BANK OF NEW YORK, as Trustee
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
Name ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Title Agent
----------------------------------------
POOLING AND SERVICING AGREEMENT SIGNATURE PAGE
EXHIBIT A
FORM OF EXCHANGEABLE TRANSFEROR CERTIFICATE
No. [ ] One Unit
FIRST BANKCARD MASTER CREDIT CARD TRUST
ASSET BACKED CERTIFICATE
THIS CERTIFICATE WAS ISSUED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE ACT), AND MAY BE SOLD ONLY PURSUANT TO A
REGISTRATION STATEMENT EFFECTIVE UNDER THE ACT OR AN EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE ACT. IN ADDITION, THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO RESTRICTIONS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. A COPY OF THE POOLING AND SERVICING AGREEMENT WILL
BE FURNISHED TO THE HOLDER OF THIS CERTIFICATE BY THE TRUSTEE UPON WRITTEN
REQUEST.
This Certificate represents an
Undivided Interest in the
First Bankcard Master Credit Card Trust
Evidencing an Undivided Interest in a trust, the corpus of which consists of a
portfolio of MasterCard(2) and VISA(1) credit card receivables generated or
acquired by First National Bank of Omaha and transferred to First National
Funding LLC and other assets and interests constituting the Trust under the
Pooling and Servicing Agreement described below.
(Not an interest in or an obligation of
First National Bank of Omaha
or any Affiliate thereof.)
This certifies that [ ] (the "Holder")
is the registered owner of an undivided interest in a trust (the "Trust"), the
corpus of which consists of a portfolio of receivables (the "Receivables") now
existing or hereafter created under selected MasterCard and VISA credit card
accounts (the "Accounts") generated or acquired by First National Bank of Omaha,
a national banking association organized under the laws of the United States,
and transferred to First National Funding LLC (the "Transferor"), all monies due
in payment of the Receivables, all proceeds of such Receivables and Insurance
Proceeds relating to the Receivables, and the other assets and interests
constituting the Trust pursuant to a Second Amended and Restated Pooling and
Servicing Agreement dated as of _________________, 2002, as supplemented by any
Supplement relating to a Series of Investor Certificates (the "Pooling and
Servicing Agreement"), by and between First National Funding LLC, as Transferor,
First National Bank of Omaha, as Servicer, and The Bank of New York, as Trustee
(the "Trustee").
--------------------------
(2) MasterCard and VISA are registered trademarks of MasterCard
International Incorporated and of VISA USA, Inc., respectively.
This Certificate is the Exchangeable Transferor Certificate issued
under and is subject to the terms, provisions and conditions of the Pooling and
Servicing Agreement, to which Pooling and Servicing Agreement, as amended from
time to time, the Holder by virtue of the acceptance hereof assents and by which
the Holder is bound.
This Certificate does not represent an obligation of, or any interest
in, First National Bank of Omaha, the Transferor or the Servicer, and neither
the Certificates nor the Accounts or Receivables are insured or guaranteed by
the Federal Deposit Insurance Corporation or any other governmental agency. This
Certificate is limited in right of payment to certain Collections respecting the
Receivables, all as more specifically set forth hereinabove and in the Pooling
and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement, or be valid
for any purpose.
IN WITNESS WHEREOF, First National Funding LLC has caused this
Certificate to be duly executed under its official seal.
FIRST NATIONAL FUNDING LLC, as
Transferor
By First National Funding Corporation, its
Managing Member
By
------------------------------------------
Name
----------------------------------------
Title
---------------------------------------
Date: , 20
--------- --
A-2
FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Certificate of Authentication
This is the Exchangeable Transferor Certificate referred to in the
within mentioned Pooling and Servicing Agreement.
THE BANK OF NEW YORK, as Trustee
By
-----------------------------------
Name
---------------------------------
Title
--------------------------------
A-3
EXHIBIT B
FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL ACCOUNTS
ASSIGNMENT NO. [ ] OF RECEIVABLES IN ADDITIONAL ACCOUNTS, dated as of
[ ], 20[ ] by and between FIRST NATIONAL FUNDING LLC, a Nebraska limited
liability company ("Transferor"), and THE BANK OF NEW YORK, a New York banking
corporation (the "Trustee"), pursuant to the Pooling and Servicing Agreement
referred to below.
WITNESSETH:
WHEREAS, Transferor and the Trustee are parties to the Second Amended
and Restated Pooling and Servicing Agreement dated as of [ ], 2002
(hereinafter as such agreement may have been, or may from time to time be,
amended, supplemented or otherwise modified, the "Pooling and Servicing
Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, Transferor
wishes to designate Additional Accounts to be included as Accounts and to convey
the Receivables of such Additional 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 Pooling and Servicing Agreement); and
WHEREAS, the Trustee is willing to accept such designation and
conveyance subject to the terms and conditions hereof;
NOW, THEREFORE, Transferor and the Trustee hereby agree as follows:
1. Defined Terms. All terms defined in the Pooling and Servicing
Agreement and used herein shall have such defined meanings when used herein,
unless otherwise defined herein.
"Addition Date" shall mean, with respect to the Additional
Accounts designated hereby, [ ], 20[ ].
"Notice Date" shall mean, with respect to the Additional
Accounts designated hereby, [ ], 20[ ] (which shall be a date
on or prior to the fifth Business Day prior to the Addition Date with
respect to additions pursuant to Subsection 2.06(a) of the Pooling and
Servicing Agreement and the tenth Business Day prior to the Addition
Date with respect to additions pursuant to Subsection 2.06(b) of the
Pooling and Servicing Agreement).
2. Designation of Additional Accounts. Transferor shall deliver to the
Trustee not later than five Business Days after the Addition Date, a computer
file or microfiche list containing a true and complete list of each MasterCard
and VISA account which as of the Addition Date shall be deemed to be an
Additional Account, such accounts being identified by account number and by the
amount of Receivables in such accounts as of the close of business on the
Addition Date. Such list shall be delivered five Business Days after the date of
this
Assignment and shall be marked as Schedule 1 to this Assignment and, as of the
Addition Date, shall be incorporated into and made a part of this Assignment.
3. Conveyance of Receivables.
(a) Transferor does hereby transfer, assign, set-over and
otherwise convey to the Trust for the benefit of the
Certificateholders, without recourse on and after the Addition
Date, all right, title and interest of Transferor in and to
the Receivables now existing and hereafter created in the
Additional Accounts designated hereby, all monies due or to
become due with respect thereto (including all Finance Charge
Receivables) and all proceeds of such Receivables and
Insurance Proceeds relating thereto.
(b) In connection with such transfer, Transferor agrees to record
and file, at its own expense, a financing statement with
respect to the Receivables now existing and hereafter created
in the Additional Accounts designated hereby (which may be a
single financing statement with respect to all such
Receivables) for the transfer of accounts as defined in
Section 9-102 of the UCC meeting the requirements of
applicable law in such manner and such jurisdiction as are
necessary to perfect the assignment of such Receivables to the
Trust, and to deliver a file-stamped copy of such financing
statement or other evidence of such filing (which may, for
purposes of this Section 3, consist of telephone confirmation
of such filing) to the Trustee on or prior to the date of the
Assignment.
(c) In connection with such transfer, Transferor further agrees,
at its own expense, on or prior to the date of this Assignment
to have FNBO, as Servicer, indicate in its computer files that
Receivables created in connection with the Additional Accounts
designated hereby have been transferred to the Trust pursuant
to this Assignment for the benefit of the Certificateholders.
(d) The parties intend that the transfer shall be deemed to be a
sale, but if, and to the extent that, such transfer is not
deemed to be a sale, Transferor shall be deemed hereunder to
have granted, and does hereby so grant, to the Trustee a first
priority perfected security interest in all of Transferor's
right, title and interest in, and under the Receivables now
existing and hereafter created and arising in connection with
the Additional Accounts, all payments on such Receivables
received after the Addition Date, all Insurance Proceeds
relating thereto and all proceeds thereof (including
recoveries, net of expenses of collection on Defaulted
Accounts) and that this Assignment shall constitute a security
agreement under applicable law.
4. Acceptance by Trustee. The Trustee hereby acknowledges its
acceptance on behalf of the Trust for the benefit of the Certificateholders of
all right, title and interest previously held by Transferor in and to the
Receivables now existing and hereafter created, and declares that it shall
maintain such right, title and interest, upon the trust herein set forth, for
the benefit of all Certificateholders.
B-2
5. Representations and Warranties of Transferor. Transferor hereby
represents and warrants to the Trust as of the Addition Date:
(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 the rights of
creditors of national banking associations 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 and Receivables. Each Additional
Account designated hereby is an Eligible Account and each
Receivable in such Additional Account is an Eligible
Receivable.
(c) Selection Procedures. No selection procedures believed by
Transferor to be materially adverse to the interests of the
Investor Certificateholders were utilized in selecting the
Additional Accounts designated hereby from the available
[Financial Institutions Accounts] [Accounts owned by FNBO]
constituting Eligible Accounts [and in connection with its
acquisition of Financial Institution Accounts added to the
Trust, Transferor has conducted a due diligence review of the
accounts of each selling third-party financial institution,
including a review of its origination policies and a review of
a random sample of its recently processed account
applications. Based on such diligence reviews, such Financial
Institution Accounts were originated under origination
policies which do not differ significantly from those used by
FNBO.]
(d) Insolvency. Transferor is not insolvent and, after giving
effect to the conveyance set forth in Section 3 of the
Assignment, will not be insolvent.
(e) Security Interest. This Assignment constitutes either (i) a
valid transfer and assignment to the Trust of all right, title
and interest of Transferor in and to Receivables existing and
hereafter created in the Additional Accounts designated
hereby, and all proceeds (as defined in the UCC), of such
Receivables and Insurance Proceeds relating thereto, and such
Receivables and any proceeds thereof and Insurance Proceeds
relating thereto will be held by the Trust free and clear of
any Lien except for (x) Liens permitted under Subsection
2.05(b) of the Pooling and Servicing Agreement, (y) the
interest of the Holder of the Exchangeable Transferor
Certificate and (z) Servicer's right to receive interest
accruing on, and investment earnings in respect of, the
Finance Charge Account, the Collection Account, the Principal
Account or any Series Account as provided in the Pooling and
Servicing Agreement and any related Supplement; or (ii) it
constitutes a grant of a first priority security interest (as
defined in the UCC) in such property to the Trust, which is
enforceable with respect to the existing Receivables of the
Additional Accounts designated hereby, the proceeds (as
defined in the UCC) thereof and Insurance Proceeds relating
thereto upon the
B-3
conveyance of such Receivables to the Trust, and which will be
enforceable with respect to the Receivables thereafter created
in respect of Additional Accounts designated hereby, the
proceeds (as defined in the UCC) thereof and Insurance
Proceeds relating thereto, upon such creation.
(f) Required Rating Agency Representations. To the extent this
Assignment constitutes a grant of a security interest, with
respect to existing Receivables in the Additional Accounts:
(i) This Assignment creates a valid and continuing
security interest (as defined in the UCC) in such
Receivables and proceeds thereof and Insurance
Proceeds relating thereto in favor of the Trustee,
which security interest is prior to all other Liens
(except Liens permitted under Subsection 2.05(b) of
the Pooling and Servicing Agreement), and is
enforceable as such as against creditors of and
purchasers from the Transferor;
(ii) Such Receivables constitute "accounts" within the
meaning of the UCC;
(iii) Transferor owns and has good and marketable title to
such Receivables free and clear of any Lien, claim or
encumbrance of any Person (except Liens permitted
under Subsection 2.05(b) of the Pooling and Servicing
Agreement);
(iv) Transferor has caused or will have caused, within ten
days, the filing of all appropriate financing
statements in the proper filing office in the
appropriate jurisdictions under applicable law in
order to perfect the security interest in such
Receivables granted to the Trustee hereunder;
(v) Other than the security interest granted to the
Trustee pursuant to this Assignment, Transferor has
not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of such
Receivables and has not authorized the filing of and
is not aware of any financing statements against
Transferor that include a description of collateral
covering the Receivables other than any financing
statement (i) relating to the security interest
granted the Trustee hereunder or (ii) that has been
terminated and Transferor is not aware of any
judgment or tax lien filings against Transferor;
(vi) The representations made in clauses (i) through (v)
above will be true with respect to Receivables
hereafter created in respect of Additional Accounts
designated hereby upon such creation; and
(vii) Transferor confirms and agrees that the foregoing
representations and warranties shall survive the
execution and delivery of this Assignment and that
any breach thereof may not be waived without prior
written confirmation from each Rating Agency that
none of its ratings on
B-4
outstanding Investor Certificates or related
commercial paper shall be adversely affected by such
waiver.
6. Conditions Precedent. The acceptance by the Trustee set forth in
Section 4 and the amendment of the Pooling and Servicing Agreement set forth in
Section 7 are subject to the satisfaction, on or prior to the Addition Date, of
the following conditions precedent:
(a) Officer's Certificate. Transferor shall have delivered to the
Trustee a certificate of a Vice President or more senior
officer substantially in the form of Schedule 2 hereto,
certifying that (i) all requirements set forth in Section 2.06
of the Pooling and Servicing Agreement for designating
Additional Accounts and conveying the Principal Receivables of
such Accounts, whether now existing or hereafter created, have
been satisfied and (ii) each of the representations and
warranties made by Transferor in Section 5 is true and correct
as of the Addition Date. The Trustee may conclusively rely on
such Officer's Certificate, shall have no duty to make
inquiries with regard to the matters set forth therein, and
shall incur no liability in so relying.
(b) Opinion of Counsel. Transferor shall have delivered to the
Trustee an Opinion of Counsel with respect to the Additional
Accounts designated hereby substantially in the form of
Exhibit E to the Pooling and Servicing Agreement.
(c) Additional Information. Transferor shall have delivered to the
Trustee such information as was reasonably requested by the
Trustee to satisfy itself as to the accuracy of the
representation and warranty set forth in Subsection 5(d) to
this Assignment.
7. Amendment of the Pooling and Servicing Agreement. The Pooling and
Servicing Agreement is hereby amended to provide that all references therein to
the "Pooling and Servicing Agreement", to "this Agreement" and "herein" shall be
deemed from and after the Addition Date to be a dual reference to the Pooling
and Servicing Agreement as supplemented by this Assignment. Except as expressly
amended hereby, all of the representations, warranties, terms, covenants and
conditions of the Pooling and Servicing Agreement shall remain unamended and
shall continue to be, and shall remain, in full force and effect in accordance
with its terms and except as expressly provided herein shall not constitute or
be deemed to constitute a waiver of compliance with or a consent to
noncompliance with any term or provision of the Pooling and Servicing Agreement.
8. 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 together shall constitute one and the
same instrument.
9. Governing Law. This Assignment shall be governed by and construed in
accordance with the laws of the State of Nebraska, without regard to its
conflict of law provisions.
B-5
IN WITNESS WHEREOF, the undersigned have caused this Assignment of
Receivables in Additional Accounts to be duly executed and delivered by their
respective duly authorized officers on the day and year first above written.
FIRST NATIONAL FUNDING LLC, as
Transferor
By First National Funding Corporation, its
Managing Member
By
------------------------------------------
Name
----------------------------------------
Title
---------------------------------------
THE BANK OF NEW YORK, as Trustee
By
------------------------------------------
Name
----------------------------------------
Title
---------------------------------------
ACKNOWLEDGED AND AGREED:
SERVICER:
FIRST NATIONAL BANK OF OMAHA
By
-------------------------------------------
Name
-----------------------------------------
Title
----------------------------------------
EXHIBIT C
FORM OF MONTHLY SERVICER'S CERTIFICATE
FIRST BANKCARD MASTER CREDIT CARD TRUST SERIES [ ]
MONTHLY PERIOD ENDING:
The undersigned, a duly authorized representative of First National Bank of
Omaha ("FNBO"), as Servicer pursuant to the Amended and Restated Pooling and
Servicing Agreement dated as of , and the Series [ ] Supplement dated
as of (collectively, as amended, the "Pooling and Servicing Agreement")
by and between FNBO, as Servicer, First National Funding LLC, as Transferor, and
The Bank of New York, as trustee (the "Trustee"), does hereby certify as
follows:
(a) Capitalized terms used in this Certificate have their respective meanings
set forth in the Pooling and Servicing Agreement. References herein to certain
sections and subsections are references to the respective sections and
subsections of the Pooling and Servicing Agreement. This Certificate is
delivered pursuant to Articles III, IV and V of the Pooling and Servicing
Agreement.
(b) FNBO is the Servicer under the Pooling and Servicing Agreement.
(c) The undersigned is a Servicing Officer.
(d) The date of this Certificate is a Determination Date under the Pooling and
Servicing Agreement relating to the Distribution Date (the
"Distribution Date").
(e) To the knowledge of the undersigned, there are no Liens on any Receivables
in the Trust except as described below:
[If applicable, insert "None".]
(f) To the knowledge of the undersigned, no Series [ ] Pay Out Event and no
Trust Pay Out Event has occurred except as described below:
[If applicable, insert "None"]
(g) As of the date hereof the Available Spread Account Amount equals the
Required Spread Account Amount and, if the Reserve Account Funding Date has
occurred, the Available Reserve Account Amount equals the Required Reserve
Account Amount.
A. INFORMATION REGARDING THE PERFORMANCE OF THE TRUST
1. Principal Receivables
(a) Beginning of Monthly Period Principal Receivables
---------------
(b) End of Monthly Period Principal Receivables
--------------
(c) Average Principal Receivables
---------------
2. End of Monthly Period Trust Receivables
---------------
3. Delinquent Balances
Delinquency Aggregate Account Percentage of
Category Balance Total Receivables
--------------------------------------------------------------------------------
(a) 30 to 59 days
---------------------------------------------
(b) 60 to 89 days
---------------------------------------------
(c) 90 to 119 days
---------------------------------------------
(d) 120 to 149 days
---------------------------------------------
(e) 150 or more days
---------------------------------------------
Total:
---------------------------------------------
4. Aggregate amount of Collections
---------------
(a) Total Collections
---------------
(b) Total Collections of Principal Receivables
---------------
(c) Total Collections of Finance Charge Receivables
---------------
(d) Aggregate Investor Percentage for Outstanding
Series
---------------
(e) Aggregate Investor Percentage of Collections of
Principal Receivables
---------------
(f) Aggregate Investor Percentage of Collections of
Finance Charge Receivables
---------------
5. Aggregate amount of Principal Receivables in Accounts
which became Defaulted Accounts during the Monthly
Period
---------------
6. Calculation of Interchange allocable to the Trust for
the Monthly Period
---------------
(a) Sales net of cash advances during the Monthly
Period on all FNBO MasterCard and VISA(1) accounts
---------------
(b) Sales net of cash advances during the Monthly
Period on Accounts transferred to the Trust
---------------
(c) Total amount of Interchange paid or payable to
FNBO with respect to the Monthly Period
---------------
(d) Amount of Interchange allocable to the Trust with
respect to the Monthly Period ([c]/[b/a])
---------------
7. The aggregate amount of Collections of Finance Charge
Receivables in the Trust for the Monthly Period
-----------------
(1) MasterCard and VISA are registered trademarks of MasterCard International
Incorporated and of VISA USA, Inc., respectively.
C-2
(a) Interchange
---------------
(b) Recoveries
---------------
(c) Finance Charges and Fees
---------------
(d) Discount Receivables
---------------
Total
---------------
8. Aggregate Amount of Adjustment Amounts for the Monthly
Period
---------------
B. INFORMATION REGARDING THE SERIES [ ] SECURITIES
1. Investor Interest at the close of business on the
Distribution Date during the Monthly Period
(a) Class A Interest
---------------
(b) Class B Interest
---------------
(c) [CTO[Collateral] Interest
---------------
Total Investor Interest
---------------
2. Investor Principal Balances at the close of business
on the Distribution Date during the Monthly Period
(a) Class A Investor Principal Balance
---------------
(b) Class B Investor Principal Balance
---------------
(c) [CTO[Collateral] Investor Principal Balance
---------------
Total Investor Principal Balance
---------------
3. Fixed Investor Percentage for the Monthly Period
(a) Class A Fixed Percentage
---------------
(b) Class B Fixed Percentage
---------------
(c) [CTO[Collateral] Fixed Percentage
---------------
Total Fixed Investor Percentage
---------------
4. Floating Investor Percentage for the Monthly Period
(a) Class A Floating Percentage
---------------
(b) Class B Floating Percentage
---------------
(c) [CTO[Collateral] Floating Percentage
---------------
Total Floating Investor Percentage
---------------
5. Investor Principal Collections processed during the
Monthly Period and allocated to the Series
---------------
6. Excess Principal Collections from other Group I Series
allocated to the Series as Shared Principal Collections
---------------
7. Aggregate amounts treated as Available Principal
Collections pursuant to subsections [4.08 (a)(iv), (v),
(vii), (viii)] as added by the related Series Supplement
---------------
8. Reallocated Principal Collections pursuant to Section
[4.10]
---------------
C-3
9. AVAILABLE PRINCIPAL COLLECTIONS (5+6+7+8)
---------------
10. Principal Funding Investment Proceeds
---------------
11. Investor Finance Charge Collections (including
Interchange and Recoveries) processed during the Monthly
Period
---------------
12. Excess Finance Charge Collections from Group I allocated
to the Series
---------------
13. Reserve Account withdrawals pursuant to Section [4.15(b)
or (d)] as added by the related Series Supplement
---------------
14. AVAILABLE FINANCE CHARGE COLLECTIONS (10+11+12+13)
---------------
15. Excess amounts from Spread Account to be treated as
Available Finance Charge Collections pursuant to Section
[4.16(h)] as added by the related Series Supplement
---------------
16. The aggregate amount of all Principal Receivables in
Accounts which became Defaulted Accounts during the
Monthly Period which were allocated to the Series
(a) Default Amount
---------------
(b) Floating Investor Percentage (B.4 above)
---------------
Total Investor Default Amount
---------------
17. The aggregate amount of Adjustment Amounts allocated to
the Series for the Monthly Period
(a) Adjustment Amount
---------------
(b) Series allocation percentage pursuant to Section
[4.03(g)] as added by the related Series Supplement
---------------
(c) Total Series Adjustment Amount
---------------
18. The aggregate amount of Investor Charge-Offs (including
any Adjustment Amounts not covered by the Transferor
Interest) for the Monthly Period
(a) Class A Investor Charge-Offs
---------------
(b) Class B Investor Charge-Offs
---------------
(c) [CTO[Collateral] Investor Charge-Offs
---------------
Total Investor Charge-Offs
---------------
19. Investor Servicing Fee for the Monthly Period payable to
the Servicer
---------------
20. Ratings of the Class A Certificates
---------------
C-4
▇▇▇▇▇'▇ ---------------
S&P ---------------
Fitch ---------------
21. Ratings of the Class B Certificates
▇▇▇▇▇'▇ ---------------
S&P ---------------
Fitch ---------------
22. Ratings of the Collateralized Trust Obligations
▇▇▇▇▇'▇ ---------------
S&P ---------------
Fitch ---------------
23. Certificate Rate for the Monthly Period
(a) Class A Certificate Rate ---------------
(b) Class B Certificate Rate ---------------
(c) Collateral Certificate Rate ---------------
24. Adjustment for Uncovered Dilutions
(a) Adjustment Amount for Trust ---------------
(b) Adjustment Amount allocated to the Series ---------------
(c) Adjustment Amount allocated and applied to reduce
Collateral Investor Principal Balance ---------------
(d) Adjustment Amount allocated and applied to reduce
Class B Investor Principal Balance ---------------
(e) Adjustment Amount allocated and applied to reduce
Class A Investor Principal Balance ---------------
C. QUARTERLY NET YIELD
1. Base Rate for the Monthly Period ---------------
2. Portfolio Yield for the Monthly Period ---------------
3. Net Yield for the Monthly Period (Portfolio Yield MINUS
Base Rate) ---------------
4. Quarterly Net Yield for the related Distribution Date ---------------
D. INFORMATION REGARDING THE PRINCIPAL ACCUMULATION ACCOUNT
1. Opening Principal Accumulation Account Balance on the
Distribution Date for the Monthly Period ---------------
2. Controlled Deposit Amount to be deposited to the
Principal Accumulation Account on the Distribution
Date for the Monthly Period
(a) Controlled Accumulation Amount ---------------
(b) Accumulation Shortfall ---------------
(c) Controlled Deposit Amount (a+b) ---------------
C-5
3. Amounts withdrawn from the Principal Accumulation
Account for distribution to Investors on the related
Distribution Date
(a) Distribution in reduction of the Class A Interest ---------------
(b) Distribution in reduction of the Class B Interest ---------------
(c) Distribution in reduction of the Collateral Interest ---------------
4. Principal Accumulation Account ending balance after
deposit/withdrawal on the Distribution Date for the
Monthly Period ---------------
E. INFORMATION REGARDING THE SPREAD ACCOUNT
1. Opening Available Spread Account Amount on the
Distribution Date for the Monthly Period ---------------
2. Aggregate amount required to be withdrawn pursuant to
Section [4.16(c)] as added by the related Series
Supplement for distribution to Collateral
Securityholders pursuant to Section [4.08(a)(vi)] as
added by the related Series Supplement ---------------
3. Aggregate amount required to be withdrawn pursuant to
Section [4.16(d)] as added by the related Series
Supplement for distribution in reduction of the
Collateral Investor Principal Balance ---------------
4. Spread Account percentage for the Distribution Date
for the Monthly Period, calculated pursuant to Section
[4.16(g)] as added by the related Series Supplement ---------------
5. Closing Required Spread Account Amount for the
Distribution Date for the Monthly Period (using Spread
Account Percentage calculated pursuant to Section
[4.16(g))] as added by the related Series Supplement ---------------
6. Amount required to be treated as Available Finance
Charge Collections pursuant to Section [4.16(h)] as
added by the related Series Supplement ---------------
7. Amount on deposit in Spread Account after required
withdrawals on the Distribution Date for the Monthly
Period (1-(2+3+6)) ---------------
8. Spread Account Deficiency, if any (5 MINUS 7) ---------------
9. Amounts deposited pursuant to Section [4.08(a)(ix) or
4.15(c)] as added by the related Series Supplement ---------------
10. Remaining Spread Account Deficiency, if any (8 minus
9) ---------------
C-6
F. INFORMATION REGARDING THE RESERVE ACCOUNT
1. Reserve Account Funding Date ---------------
2. Opening Available Reserve Account Amount on the
Distribution Date for the Monthly Period ---------------
3. Aggregate amount required to be withdrawn pursuant to
Section 4.15 for inclusion in Available Finance Charge
Collections:
(a) Covered Amount ---------------
(b) Principal Funding Investment Proceeds ---------------
(c) Reserve Draw Amount (a MINUS b) ---------------
4. Required Reserve Account Amount ---------------
5. Reserve Account Surplus (4-(2-3)) ---------------
G. INFORMATION REGARDING CONTROLLED ACCUMULATION PERIOD
(REQUIRED ON AND AFTER DISTRIBUTION DATE)
1. Accumulation Period Length (months) ---------------
H. AGGREGATE OPENING AND CLOSING BALANCE ON DEPOSIT AND
WITHDRAWALS FROM ANY OTHER ENHANCEMENT ACCOUNTS
1. Opening Balance ---------------
2. Withdrawals pursuant to Section [ ] ---------------
3. Closing Balance ---------------
IN WITNESS thereof, the undersigned has duly executed and delivered this
Certificate the day of , .
FIRST NATIONAL BANK OF OMAHA
Servicer
By --------------------------------
Name --------------------------------
Title --------------------------------
C-7
Schedule To Monthly
Servicer's Certificate*
FIRST NATIONAL FUNDING LLC
---------------
FIRST BANKCARD MASTER CREDIT CARD TRUST
---------------
*A separate schedule may be attached for each Series, with appropriate
changes and additions to reflect the specifics of the related Series Supplement.
EXHIBIT D
FORM OF ANNUAL SERVICER'S CERTIFICATE
FIRST NATIONAL BANK OF OMAHA
---------------
FIRST BANKCARD MASTER CREDIT CARD TRUST
The undersigned, a duly authorized representative of First National
Bank of Omaha ("FNBO"), as Servicer pursuant to the Second Amended and Restated
Pooling and Servicing Agreement dated as of , 2002 (the "Pooling and
Servicing Agreement") by and between FNBO, First National Funding LLC ("FNF"),
as Transferor, and The Bank of New York, as trustee (the "Trustee"), does hereby
certify that:
1. FNBO is Servicer under the Pooling and Servicing Agreement.
2. The undersigned is duly authorized pursuant to the Pooling and
Servicing Agreement to execute and deliver this Certificate to the Trustee.
3. This Certificate is delivered pursuant to Section 3.05 of the
Pooling and Servicing Agreement.
4. A review of the activities of the Servicer during the twelve-month
period ending on December 31, [ ], was conducted under our supervision.
5. Based on such review, the Servicer has, to the best of our
knowledge, fully performed all its obligations under the Pooling and Servicing
Agreement throughout such period and no default in the performance of such
obligations has occurred or is continuing except as set forth in Paragraph 6
below.
6. The following is a description of each default in the performance of
the Servicer's obligations under the provisions of the Pooling and Servicing
Agreement, including any Supplement known to us to have been made during such
period which sets forth in detail (i) the nature of each such default, (ii) the
action taken by the Servicer, if any, to remedy each such default and (iii) the
current status of each such default:
[If applicable, insert "None".]
7. (a) During such period, for each outstanding Series, the Servicer
prepared the monthly reports required by Section 3.04(b) of the Pooling and
Servicing Agreement and each other monthly report required by the applicable
Supplement in accordance with Section 3.04(b) and the applicable provisions of
each such Supplement, (b) the amounts included in such reports agree with the
computer records of the Servicer and (c) the calculated amounts included in such
reports are mathematically correct and made in accordance with the applicable
definitions in this Agreement and the other applicable Transaction Documents,
except as set forth in paragraph 6 above.
IN WITNESS WHEREOF, the undersigned has duly executed this certificate
this day of , .
FIRST NATIONAL BANK OF OMAHA, as Servicer
By
-------------------------------------
Name
------------------------------------
Title
-----------------------------------
D-2
EXHIBIT E
FORM OF OPINION OF COUNSEL REGARDING ADDITIONAL ACCOUNTS
The opinions set forth below may be subject to appropriate
qualifications, assumptions, limitations and exceptions.
1. The Additional Account Receivables constitute "accounts" (as defined
in Section 9-102 of the UCC) and the provisions of the Assignment and Pooling
and Servicing Agreement, as supplemented and amended, (together, the
"Agreements") are effective to create a valid security interest in FNBO's
interests in the Additional Account Receivables and the proceeds thereof in
favor of the Trustee for the benefit of the Certificateholders to secure the
payment obligations under the Agreement to the extent such obligations
constitute indebtedness.
2. The security interest created by the Agreements in the Additional
Account Receivables and the proceeds thereof has been perfected under Article 9
of the Uniform Commercial Code of Nebraska as a result of the filing of the
Financing Statement with the Secretary of State of Nebraska, and as of the date
of the Lien Searches, such security interest is of first priority under Article
9 of the Nebraska Uniform Commercial Code.
3. The Financing Statement is in appropriate form for filing and has
been duly filed in the appropriate filing office in Nebraska, all fees and taxes
payable in connection with said filing of the Financing Statement have been paid
in full, and no other filings or actions, with respect to the interests of the
Trustee in the Additional Account Receivables, are necessary to perfect the
interest of the Trustee in the Additional Account Receivables, and the proceeds
thereof, conveyed to the Trustee, except that appropriate continuation
statements must be filed in accordance with the applicable laws of Nebraska.
4. The perfection and priority of the security interest granted to the
Trustee in the Additional Account Receivables and the proceeds thereof is not
affected by an increase or decrease in the relative interests in the Additional
Account Receivables of the Holder of the Exchangeable Transferor Certificate and
of the Investor Certificateholders.
EXHIBIT F
FORM OF ANNUAL OPINION OF COUNSEL
The opinions set forth below may be subject to appropriate
qualifications, assumptions, limitations and exceptions.
1. No further filings or actions are required under the UCC or other
Nebraska law prior to _______, ____, in order to maintain the perfection and
priority of the security interest created by Agreements in favor of the Trust in
Transferor's rights in the Receivables and the proceeds thereof (the "Specified
Assets"). 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 the
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 of the Trustee by virtue of such filing.
2. Confirmation or update, as applicable, of the FIRREA analysis
delivered on the most recent Closing Date.
EXHIBIT G
FORM OF REASSIGNMENT OF RECEIVABLES
REASSIGNMENT NO. OF RECEIVABLES (the "Reassignment"), dated as of
, , by and between FIRST NATIONAL FUNDING LLC, a Nebraska limited
liability company, and THE BANK OF NEW YORK, a New York banking corporation (the
"Trustee"), pursuant to the Pooling and Servicing Agreement referred to below.
W I T N E S S E T H :
WHEREAS, the Bank and the Trustee are parties to the Second Amended and
Restated Pooling and Servicing Agreement, dated as of , 2002, (hereinafter
as such agreement may have been, or may from time to time be, amended,
supplemented or otherwise modified, the "Pooling and Servicing Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, the
Transferor wishes to remove all Receivables from certain designated Accounts
(the "Removed Accounts") and to cause the Trustee to reconvey the Receivables of
such Removed Accounts, whether now existing or hereafter created, from the Trust
to the Transferor (as each such term is defined in the Pooling and Servicing
Agreement); and
WHEREAS, the 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, the Transferor and the Trustee hereby agree as follows:
1. Defined Terms. All terms defined in the Pooling and Servicing
Agreement and used herein shall have such defined meanings when used herein,
unless otherwise defined herein.
"Removal Date" shall mean, with respect to the Removed
Accounts designated hereby, , .
"Removal Notice Date" shall mean, with respect to the Removed
Accounts designated hereby, , (which shall be a date on
or prior to the fifth Business Day prior to the Removal Date).
2. Designation of Removed Accounts. The Transferor shall deliver to the
Trustee, not later than five Business Days after the Removal Date, a computer
file or microfiche list containing a true and complete list of each MasterCard
and VISA account which as of the Removal Date shall be deemed to be a Removed
Account, such accounts being identified by account number and by the aggregate
amount of Receivables in such accounts as of the close of business on the
Removal Date. Such list shall be marked as Schedule I to this Reassignment and
shall be incorporated into and made a part of this Reassignment as of the
Removal Date.
3. Conveyance of Receivables.
(a) The Trustee does hereby reconvey to the Transferor,
without recourse on and after the Removal Date, all right, title and
interest of the Trust in and to the Receivables now existing and
hereafter created in the Removed Accounts designated hereby, all monies
due or to become due with respect thereto (including all Finance Charge
Receivables), all proceeds (as defined in Section 9-102 of the UCC) of
such Receivables and Insurance Proceeds relating thereto.
(b) In connection with such transfer, the Trustee agrees to
execute and deliver to the Transferor on or prior to the date of this
Reassignment, a termination statement with respect to the Receivables
now existing and hereafter created in the Removed Accounts designated
hereby (which may be a single termination statement with respect to all
such Receivables) evidencing the release by the trust of its Lien on
the Receivables in the Removed Accounts, and meeting the requirements
of applicable state law, in such manner and such jurisdictions as are
necessary to remove such Lien.
4. Representations and Warranties of the Bank. The Transferor hereby
represents and warrants to the Trust as of the Removal Date:
(a) Legal, Valid and Binding Obligation. This Reassignment
constitutes a legal, valid and binding obligation of the Transferor
enforceable against the 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 the rights of creditors of national banking associations
and except as such enforceability may be limited by general principles
of equity (whether considered in a suit at law or in equity).
(b) Selection Procedures. No selection procedures believed by
the Transferor to be materially adverse to the interests of the
Investor Certificateholders were utilized in selecting the Removed
Accounts designated hereby.
5. Conditions Precedent. The amendment of the Pooling and Servicing
Agreement set forth in Section 6 hereof is subject to the satisfaction, on or
prior to the Removal Date, of the following condition precedent:
The Transferor shall have delivered to the Trustee an
Officer's Certificate certifying that (i) as of the Removal Date, all
requirements set forth in Section 2.07 of the Pooling and Servicing
Agreement for designating Removed Accounts and reconveying the
Receivables of such Removed Accounts, whether now existing or hereafter
created, have been satisfied, and (ii) each of the representations and
warranties made by the Transferor in Section 4 hereof is true and
correct as of the Removal Date. The Trustee may conclusively rely on
such Officer's Certificate, shall have no duty to make inquiries with
regard to the matters set forth therein and shall incur no liability in
so relying.
6. Amendment of the Pooling and Servicing Agreement. The Pooling and
Servicing Agreement is hereby amended to provide that all references therein to
the "Pooling and Servicing Agreement," to "this Agreement" and "herein" shall be
deemed from and after the Removal Date
G-2
to be a dual reference to the Pooling and Servicing Agreement as supplemented by
this Reassignment. Except as expressly amended hereby, all of the
representations, warranties, terms, covenants and conditions of the Pooling and
Servicing Agreement shall remain unamended and shall continue to be, and shall
remain, in full force and effect in accordance with its terms and except as
expressly provided herein shall not constitute or be deemed to constitute a
waiver of compliance with or a consent to non-compliance with any term or
provision of the Pooling and Servicing Agreement.
7. 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 together shall constitute one and the
same instrument.
8. Governing Law. This Reassignment shall be construed in accordance
with the laws of the State of Nebraska, without reference to its conflict of law
provisions.
IN WITNESS WHEREOF, the undersigned have caused this Reassignment of
Receivables to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
FIRST NATIONAL FUNDING LLC, as
Transferor
By First National Funding Corporation, its
Managing Member
By
-------------------------------------------
Name
-----------------------------------------
Title
----------------------------------------
THE BANK OF NEW YORK, as Trustee
By
---------------------------------------------
Name
-------------------------------------------
Title
------------------------------------------
G-3
Schedule I
to Reassignment
of Receivables
REMOVED ACCOUNTS
EXHIBIT H
FORM OF RECONVEYANCE OF RECEIVABLES
RECONVEYANCE of RECEIVABLES, dated as of , 20 by and between
FIRST NATIONAL FUNDING LLC, a Nebraska limited liability company (the
"Transferor"), and THE BANK OF NEW YORK, a New York banking corporation (the
"Trustee"), pursuant to the Pooling and Servicing Agreement referred to below.
W I T N E S S E T H :
WHEREAS, the Transferor and the Trustee are parties to the Second
Amended and Restated Pooling and Servicing Agreement dated as of , 2002
(hereinafter as such agreement may have been, or may from time to time be,
amended, supplemented or otherwise modified, the "Pooling and Servicing
Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, the
Transferor wishes to cause the Trustee to reconvey all of the Receivables and
proceeds thereof, whether now existing or hereafter created, from the Trust to
the Transferor pursuant to the terms of Section 12.04 of the Pooling and
Servicing Agreement upon termination of the Trust pursuant to Subsection
12.01(a) of the Pooling and Servicing Agreement (as each such term is defined in
the Pooling and Servicing Agreement);
WHEREAS, the Trustee is willing to reconvey the Receivables subject to
the terms and conditions hereof;
NOW THEREFORE, the Transferor and the Trustee hereby agree as follows:
1. Defined Terms. All terms defined in the Pooling and Servicing
Agreement and used herein shall have such defined meanings when
used herein, unless otherwise defined herein.
"Reconveyance Date" shall mean , 20 .
2. Return of Lists of Accounts. The Trustee shall deliver to the
Transferor, not later than three Business Days after the Reconveyance Date, each
and every computer file or microfiche list of Accounts delivered to the Trustee
pursuant to the terms of the Pooling and Servicing Agreement.
3. Conveyance of Receivables.
(a) The Trustee does hereby convey to the Transferor, without
recourse, on and after the Reconveyance Date, all right, title and
interest of the Trust in and to each and every Receivable now existing
and hereafter created in the Accounts, all monies due or to become due
with respect thereto (including all Finance Charge Receivables), all
proceeds (as defined in Section 9-102 of the UCC) of such receivables
and Insurance Proceeds relating to such Receivables, except for
amounts, if any, held by the Trustee pursuant to Subsection 12.03(b) of
the Pooling and Servicing Agreement.
(b) In connection with such transfer, the Trustee agrees to
execute and deliver to the Transferor on or prior to the date of this
Reconveyance, such UCC termination statements as the Transferor may
reasonably request, evidencing the release by the Trust of its lien on
the Receivables.
4. Counterparts. This Reconveyance 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.
5. Governing Law. This Reconveyance shall be construed in accordance
with the laws of the State of Nebraska without reference to its conflict of law
provisions.
IN WITNESS WHEREOF, the undersigned have caused this Reconveyance of
Receivables to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
FIRST NATIONAL FUNDING LLC, as
Transferor
By First National Funding Corporation, its
Managing Member
By
-------------------------------------------
Name
-----------------------------------------
Title
----------------------------------------
THE BANK OF NEW YORK, as Trustee
By
---------------------------------------------
Name
-------------------------------------------
Title
------------------------------------------
H-2
SCHEDULE 1
LIST OF ACCOUNTS
Delivered to Trustee only