EXHIBIT 4.7
EXECUTION COPY
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CAPITAL ONE FUNDING, LLC,
as Transferor,
CAPITAL ONE BANK,
as Servicer,
and
THE BANK OF NEW YORK,
as the Trustee
CAPITAL ONE MASTER TRUST
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of September 30, 1993, as amended and restated as of August 1, 2002
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ARTICLE I Definitions ............................................................................ 1
Section 1.01. Definitions ..................................................................... 1
Section 1.02. Other Definitional Provisions and Rules of Construction ......................... 21
ARTICLE II Transfer of Receivables ................................................................ 22
Section 2.01. Transfer of Receivables. ........................................................ 22
Section 2.02. Acceptance by Trustee ........................................................... 25
Section 2.03. Representations and Warranties of the Transferor Relating to the Transferor ..... 25
Section 2.04. Representations and Warranties of the Transferor Relating to the Agreement
and Any Supplement and the Receivables .......................................... 27
Section 2.05. Reassignment of Ineligible Receivables .......................................... 29
Section 2.06. Reassignment of Receivables in Trust Portfolio .................................. 31
Section 2.07. Covenants of the Transferor ..................................................... 32
Section 2.08. Addition of Accounts ............................................................ 35
Section 2.09. Removal of Accounts ............................................................. 39
Section 2.10. Account Allocations ............................................................. 41
Section 2.11. Discount Option ................................................................. 41
ARTICLE III Administration and Servicing of Receivables ............................................ 42
Section 3.01. Acceptance of Appointment and Other Matters Relating to the Servicer ............ 42
Section 3.02. Servicing Compensation .......................................................... 43
Section 3.03. Representations, Warranties and Covenants of the Servicer ....................... 44
Section 3.04. Reports and Records for the Trustee ............................................. 47
Section 3.05. Annual Certificate of Servicer .................................................. 48
Section 3.06. Annual Servicing Report of Independent Public Accountants; Copies of
Reports Available ............................................................... 48
Section 3.07. Tax Treatment ................................................................... 48
Section 3.08. Notices to Capital One .......................................................... 49
Section 3.09. Adjustments ..................................................................... 49
Section 3.10. Reports to the Commission ....................................................... 49
ARTICLE IV Rights of Certificateholders and Allocation and Application or Collections ............ 50
Section 4.01. Rights of Certificateholders .................................................... 50
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TABLE OF CONTENTS
(continued)
Page
Section 4.02. Establishment of Collection Account and Excess Funding Account .............. 50
Section 4.03. Collections and Allocations ................................................. 53
Section 4.04. Shared Principal Collections ................................................ 55
Section 4.05. Excess Finance Charges ...................................................... 55
ARTICLE V Distributions and Reports to Certificateholders ................................... 55
ARTICLE VI The Certificates .................................................................. 55
Section 6.01. The Certificates ............................................................ 55
Section 6.02. Authentication of Certificates .............................................. 56
Section 6.03. New Issuances ............................................................... 56
Section 6.04. Registration of Transfer and Exchange of Certificates ....................... 58
Section 6.05. Mutilated, Destroyed, Lost or Stolen Certificates ........................... 61
Section 6.06. Persons Deemed Owners ....................................................... 61
Section 6.07. Appointment of Paying Agent ................................................. 62
Section 6.08. Access to List of Registered Certificateholders' Names and Addresses ........ 62
Section 6.09. Authenticating Agent ........................................................ 63
Section 6.10. Book-Entry Certificates ..................................................... 64
Section 6.11. Notices to Clearing Agency .................................................. 64
Section 6.12. Definitive Certificates ..................................................... 65
Section 6.13. Global Certificate; Exchange Date ........................................... 65
Section 6.14. Meetings of Certificateholders .............................................. 67
ARTICLE VII Other Matters Relating to the Transferor .......................................... 69
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. Limitations on Liability of the Transferor .................................. 70
Section 7.04. Liabilities ................................................................. 70
Section 7.05. Assumption of the Transferor's Obligations .................................. 70
ARTICLE VIII Other Matters Relating to the Servicer ............................................ 71
Section 8.01. Liability of the Servicer ................................................... 71
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TABLE OF CONTENTS
(continued)
Page
Section 8.02. Merger or Consolidation of, or Assumption of the Obligations
of, the Servicer ............................................................ 72
Section 8.03. Limitation on Liability of the Servicer and Others .......................... 72
Section 8.04. Servicer Indemnification of the Transferor, the Trust and the Trustee ....... 73
Section 8.05. The Servicer Not To Resign .................................................. 73
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 ................................................................... 74
Section 9.01. Pay Out Events .............................................................. 74
Section 9.02. Additional Rights upon the Occurrence of Certain Events ..................... 75
ARTICLE X Servicer Defaults ................................................................ 76
Section 10.01. Servicer Defaults ........................................................... 76
Section 10.02. Trustee To Act; Appointment of Successor .................................... 78
Section 10.03. Notification to Certificateholders .......................................... 80
ARTICLE XI The Trustee ...................................................................... 80
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 ................................................ 83
Section 11.05. The Servicer To Pay Trustee's Fees and Expenses ............................. 83
Section 11.06. Eligibility Requirements for Trustee ........................................ 83
Section 11.07. Resignation or Removal of Trustee ........................................... 84
Section 11.08. Successor Trustees .......................................................... 84
Section 11.09. Merger or Consolidation of Trustee .......................................... 85
Section 11.10. Appointment of Co-Trustee or Separate Trustee ............................... 85
Section 11.11. Tax Returns ................................................................. 86
Section 11.12. Trustee May Enforce Claims Without Possession of Certificates ............... 86
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TABLE OF CONTENTS
(continued)
Page
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 ..................... 89
Section 11.17. Confidentiality ..................................... 89
ARTICLE XII Termination .............................................. 89
Section 12.01. Termination of Trust ................................ 89
Section 12.02. Final Distribution .................................. 89
Section 12.03. Transferor's Termination Rights ..................... 91
Section 12.04. Defeasance .......................................... 91
ARTICLE XIII Miscellaneous Provisions ................................. 91
Section 13.01. Amendment; Waiver of Past Defaults .................. 91
Section 13.02. Protection of Right, Title and Interest to Trust .... 93
Section 13.03. Limitation on Rights of Certificateholders .......... 93
Section 13.04. GOVERNING LAW ....................................... 94
Section 13.05. Notices; Payments ................................... 94
Section 13.06. Rule 144A Information ............................... 95
Section 13.07. Severability of Provisions .......................... 96
Section 13.08. Assignment .......................................... 96
Section 13.09. Certificates Nonassessable and Fully Paid ........... 96
Section 13.10. Further Assurances .................................. 96
Section 13.11. Nonpetition Covenant ................................ 96
Section 13.12. No Waiver; Cumulative Remedies ...................... 96
Section 13.13. Counterparts ........................................ 97
Section 13.14. Third-Party Beneficiaries ........................... 97
Section 13.15. Actions by Certificateholders ....................... 97
Section 13.16. Merger and Integration .............................. 97
Section 13.17. Headings ............................................ 97
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EXHIBITS
Exhibit A Form of Base Certificate
Exhibit B Form of Assignment of Receivables in Additional Accounts
Exhibit C Form of Reassignment of Receivables in Removed Accounts
Exhibit D Form of Annual Servicer's Certificate
Exhibit E-1 Private Placement Legend
Exhibit E-2 Representation Letter
Exhibit E-3 ERISA Legend
Exhibit F Form of Depositary Agreement
Exhibit G-1 Form of Certificate of Foreign Clearing Agency
Exhibit G-2 Form of Alternate Certificate to be delivered to Foreign Clearing
Agency
Exhibit G-3 Form of Certificate to be delivered to Foreign Clearing Agency
Exhibit H-1 Form of Opinion of Counsel with respect to Amendments
Exhibit H-2 Form of Opinion of Counsel with respect to Accounts
Exhibit I Form of Assumption Agreement
SCHEDULES
Schedule 1 List of Accounts [Deemed Incorporated]
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AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT, dated as of
September 30, 1993, as amended and restated as of August 1, 2002, among CAPITAL
ONE BANK, a Virginia banking corporation, as Servicer, CAPITAL ONE FUNDING, LLC,
a Virginia limited liability company, as Transferor and THE BANK OF NEW YORK, a
New York banking corporation, as the Trustee.
WHEREAS this Pooling and Servicing Agreement was, prior to the
amendments contained herein, most recently amended and restated on April 9,
2001, and as amended and restated on April 9, 2001, was among Capital One Bank,
as a seller, and as Servicer, Capital One, F.S.B., a federal savings bank, as a
seller, and the Trustee (the "Prior PSA");
WHEREAS Capital One Bank, as seller, has determined to form Capital One
Funding, LLC, a wholly-owned subsidiary of Capital One Bank, and to substitute
Capital One Funding, LLC, as the Transferor under this Agreement, in place of
Capital One Bank, as a seller and Capital One, F.S.B., as a seller;
WHEREAS to provide for the substitution of Capital One Funding, LLC, as
Transferor under this Agreement and for other purposes, the parties hereto agree
to and do hereby amend and restate the Pooling and Servicing Agreement as of
August 1, 2002 to read in its entirety as set forth herein;
NOW, THEREFORE in consideration of the mutual agreements herein
contained, this Agreement is hereby amended and restated to read in its entirety
as follows and each party agrees as follows for the benefit of the other
parties, the Certificateholders and any Series Enhancer (to the extent provided
herein and in any Supplement):
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 (a) each Initial Account, (b) each
Additional Account, and (c) each Related Account. The term "Account" shall refer
to an Additional Account only from and after the Addition Date with respect
thereto, and the term "Account" shall refer to any Removed Account only prior to
the Removal Date with respect thereto.
"Account Owner" shall mean Capital One and its successors and
assigns under the Capital One Receivables Purchase Agreement, or F.S.B. and its
successors and assigns under the F.S.B. Receivables Purchase Agreement, or any
other entity which originated an Account pursuant to a Lending Agreement and
owns such Account.
"Account Schedule" shall mean a computer file or microfiche list
containing a true and complete list of (i) Accounts, identified by account
number, and setting forth, with respect to each Account, the aggregate amount
outstanding in such Account, the aggregate amount of Principal Receivables
outstanding in such Account and any amount on deposit in
and/or credited to any related Deposit Account, each (a) on the Initial Cut-Off
Date (for the Account Schedule delivered on the Substitution Date), (b) on or
prior to the Determination Date immediately succeeding the related Monthly
Period (for any Account Schedule relating to Automatic Additional Accounts) and
(c) on the Additional Cut-Off Date (for any Account Schedule relating to
Additional Accounts designated under Section 2.08(a) or (b)), and (ii)
Participation Interests, identified with particularity, and setting forth
comparable information.
"Accumulation Period" shall mean, with respect to any Series, the
period, if any, specified as such in the related Supplement.
"Act" shall mean the Securities Act of 1933, as amended.
"Addition" shall mean the designation of additional Eligible
Accounts to be included as Accounts or Participation Interests to be included as
Trust Assets pursuant to Section 2.08(a), (b) or (c).
"Addition Date" shall mean (i) with respect to Additional
Accounts designated under Section 2.08(a) or (b), the date from and after which
such Additional Accounts are included as Accounts pursuant to such Section, (ii)
with respect to Automatic Additional Accounts, the later of the dates on which
such Automatic Additional Accounts are originated or designated, and (iii) with
respect to Participation Interests, the date from and after which such
Participation Interests are to be included as Trust Assets pursuant to Section
2.08(a) or (b).
"Addition Discount Receivables" shall mean, as of any applicable
Addition Date, the amount of Principal Receivables in Additional Accounts
designated by the Transferor to be treated as Finance Charge Receivables;
provided, however, that the Transferor may not make such designation unless (i)
the Transferor shall have received written notice from each Rating Agency that
such designation will not have a Ratings Effect and shall have delivered copies
of each such written notice to the Servicer and the Trustee and (ii) the
Transferor shall have delivered to the Trustee and any Series Enhancer entitled
thereto pursuant to the relevant Supplement an Officer's Certificate of the
Transferor, to the effect that the Transferor reasonably believes that the
designation will not, based on the facts known to such officer at the time of
the certification, then cause a Pay Out Event or any event that, after the
giving of notice or the lapse of time, would constitute a Pay Out Event to occur
with respect to any Series.
"Additional Account" shall mean each VISA(R) and MasterCard(R)*
consumer revolving credit card account or other consumer revolving credit
account established pursuant to a Lending Agreement, which account is designated
pursuant to Section 2.08(a), (b) or (c) to be included as an Account and is
identified on the Account Schedule delivered to the Trustee by the Transferor.
"Additional Cut-Off Date" shall mean (i) with respect to
Additional Accounts designated under Section 2.08(a) or (b), the date specified
as such in the notice delivered with respect thereto, (ii) with respect to
Automatic Additional Accounts, the later of the dates on
______________
* VISA(R) and MasterCard(R) are registered trademarks of VISA USA, Inc. and of
MasterCard International Incorporated, respectively.
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which such Automatic Additional Accounts are originated or designated, and (iii)
with respect to Participation Interests, the date specified as such in the
notice delivered with respect thereto.
"Additional Transferor" shall have the meaning specified in
Section 2.08(f).
"Adjustment Payment" shall have the meaning specified in Section
3.09(a).
"Affiliate" shall mean, with respect to any specified Person, any
other Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" shall mean the
power to direct the management and policies of a Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" shall have meanings correlative to
the foregoing.
"Aggregate Addition Limit" shall mean the number of accounts
designated as Automatic Additional Accounts, without prior Rating Agency
consent, and designated as Additional Accounts pursuant to Sections 2.08(a) and
2.08(b), without the prior Rating Agency notice described under Section
2.08(d)(v), which would either (x) with respect to any three (3) consecutive
Monthly Periods, commencing with the three (3) Monthly Periods ending December
1993, equal 15% of the number of Accounts at the end of the ninth Monthly Period
preceding the commencement of such three (3) Monthly Periods (or, the Trust
Cut-Off Date, whichever is later) and (y) with respect to any twelve (12)
Monthly Periods, equal 20% of the number of Accounts as of the first day of such
twelve (12) Monthly Periods (or, the Trust Cut-Off Date, whichever is later).
"Agreement" shall mean this Amended and Restated Pooling and
Servicing Agreement, and all amendments hereof and supplements hereto,
including, with respect to any Series or Class, the related Supplement.
"Applicants" shall have the meaning specified in Section 6.08.
"Appointment Date" shall have the meaning specified in Section
9.02(a).
"Assignment" shall have the meaning specified in Section 2.08(d).
"Assumption Agreement" shall have the meaning specified in
Section 7.05.
"Assuming Entity" shall have the meaning specified in Section
7.05.
"Authorized Newspaper" shall mean any newspaper or newspapers of
general circulation (including The Bond Buyer or The Wall Street Journal) in the
Borough of Manhattan, The City of New York, printed in the English language
(and, with respect to any Series or Class, if and so long as the Investor
Certificates of such Series or Class are listed on the Luxembourg Stock Exchange
and such exchange shall so require, in Luxembourg, printed in any language
satisfying the requirements of such exchange) and customarily published on each
Business Day at such place, whether or not published on Saturdays, Sundays or
holidays.
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"Automatic Additional Account" shall mean each VISA and
MasterCard consumer revolving credit card account or other consumer revolving
credit account established pursuant to a Lending Agreement, which account is
designated pursuant to Section 2.08(c) to be included as an Account and is
identified on the Account Schedule delivered to the Trustee by the Transferor.
"Banks" shall mean Capital One Bank and Capital One, F.S.B., and
their permitted successors and assigns.
"Base Certificate" shall mean, if the Transferor elects to
evidence its interest in the Transferor's Interest in certificated form pursuant
to Section 6.01, a certificate executed by the Transferor and authenticated by
or on behalf of the Trustee, substantially in the form of Exhibit A, as the same
may be modified in accordance with Section 2.08(f).
"Bearer Certificates" shall have the meaning specified in Section
6.01.
"Benefit Plan" shall have the meaning specified in Section
6.04(c).
"Book-Entry Certificates" shall mean Investor Certificates that
are registered in the name of a Clearing Agency or a Foreign Clearing Agency, or
the nominee of either such entity, ownership and transfers of which shall be
made through book entries by such Clearing Agency or such Foreign Clearing
Agency as described in Section 6.10.
"Business Day" shall mean any day other than (a) a Saturday or
Sunday or (b) any other day on which national banking associations or state
banking institutions in New York, New York, Richmond, Virginia, Falls Church,
Virginia, or, if an Assuming Entity shall be any Additional Transferor
designated pursuant to Section 2.08(f), any other State in which the principal
executive offices of such Assuming Entity or Additional Transferor are located,
are authorized or obligated by law, executive order or governmental decree to be
closed.
"Capital One" shall mean Capital One Bank, a Virginia banking
corporation and its permitted successors and assigns.
"Capital One Receivables Purchase Agreement" shall mean the
Receivables Purchase Agreement dated as of August 1, 2002 between Capital One
and Funding, and acknowledged and accepted by the Trustee, as amended and
supplemented from time to time.
"Cash Advance Fees" shall mean fees or charges for cash advances,
as specified in the Lending Agreement applicable to each Account.
"Certificate" shall mean any one of the Investor Certificates or
the Transferor Certificates.
"Certificate Owner" shall mean, with respect to a Book-Entry
Certificate, the Person who is the owner of a security entitlement with respect
to such Book-Entry Certificate, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly or as an indirect participant, in accordance with the rules of
such Clearing Agency).
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"Certificate Rate" shall mean, with respect to any Series or
Class, the certificate rate specified therefor in the related Supplement.
"Certificate Register" shall mean the register maintained
pursuant to Section 6.04, providing for the registration of the Registered
Certificates and the Transferor Certificates and transfers and exchanges
thereof.
"Certificateholder" or "Holder" shall mean an Investor
Certificateholder, a Person in whose name a Transferor Certificate is registered
in the Certificate Register, or any Person recorded as the owner of any part of
an interest in the Transferor's Interest.
"Certificateholders' Interest" shall have the meaning specified
in Section 4.01.
"Class" shall mean, with respect to any Series, any one of the
classes of Investor Certificates of that Series.
"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 effects book-entry transfers and pledges of securities deposited
with the Clearing Agency pursuant to the rules and regulations of such Clearing
Agency.
"Clearstream" shall mean Clearstream Banking, societe anonyme, a
professional depository incorporated under the laws of Luxembourg, and any
successor thereto.
"Closing Date" shall mean, with respect to any Series, the
closing date specified in the related Supplement.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
"Collection Account" shall have the meaning specified in Section
4.02.
"Collections" shall mean (a) all payments by or on behalf of
Obligors (including Insurance Proceeds) received in respect of the Receivables,
in the form of cash, checks, wire transfers, electronic transfers, ATM transfers
or any other form of payment in accordance with the related Lending Agreement in
effect from time to time, (b) amounts, if any, withdrawn from a Deposit Account
in accordance with an Assignment and (c) with respect to any Monthly Period, (i)
the Interchange received with respect to such Monthly Period, (ii) all
Recoveries received during such Monthly Period and (iii) all payments of annual
membership fees (including in the case of the first Monthly Period the
unamortized portion of annual membership fees relating to the period prior to
the Trust Cut-Off Date determined in accordance with Section 3.04(d) hereof)
with respect to the Accounts during such Monthly Period.
"Commission" shall have the meaning specified in Section 3.01(b).
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"Controlled Amortization Period" shall mean, with respect to
any Series, the period, if any, specified as such in the related Supplement.
"Corporate Trust Office" shall have the meaning specified in
Section 11.16.
"Coupon" shall have the meaning specified in Section 6.01.
"Date of Processing" shall mean, with respect to any
transaction, the date on which such transaction is first recorded under the
Servicer's (or, in the case of the Transferor, the Transferor's) computer file
of consumer revolving credit accounts (without regard to the effective date of
such recordation).
"Debtor Relief Laws" shall mean (a) the United States
Bankruptcy Code and (b) all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization,
suspension of payments, readjustment of debt, marshalling of assets, assignment
for the benefit of creditors and similar debtor relief laws from time to time in
effect in any jurisdiction affecting the rights of creditors generally or the
rights of creditors of banks.
"Defaulted Amount" shall mean, with respect to any Monthly
Period, an amount (which shall not be less than zero) equal to (a) the amount of
Principal Receivables which became Defaulted Receivables in such Monthly Period,
minus (b) the sum of (i) the amount of any Defaulted Receivables included in any
Account the Receivables in which the Transferor or the Servicer became obligated
to accept reassignment or assignment in accordance with the terms of this
Agreement during such Monthly Period and (ii) the excess, if any, for the
immediately preceding Monthly Period of the sum computed pursuant to this clause
(b) for such Monthly Period over the amount of Principal Receivables which
became Defaulted Receivables in such Monthly Period; provided, however, that, if
an Insolvency Event occurs with respect to the Transferor, the amount of such
Defaulted Receivables which are subject to reassignment to the Transferor in
accordance with the terms of this Agreement shall not be added to the sum so
subtracted and, if any of the events described in Section 10.01(d) occur with
respect to the Servicer, the amount of such Defaulted Receivables which are
subject to reassignment or assignment to the Servicer in accordance with the
terms of this Agreement shall not be added to the sum so subtracted.
"Defaulted Receivables" shall mean, with respect to any
Monthly Period, all Principal Receivables in any Account which are charged off
as uncollectible in such Monthly Period in accordance with the Lending
Guidelines and the Servicer's customary and usual servicing procedures for
servicing consumer revolving credit card and other consumer revolving credit
account receivables comparable to the Receivables other than due to any
Adjustment Payment. For purposes of this definition, a Principal Receivable in
any Account shall become a Defaulted Receivable on the day on which such
Principal Receivable is recorded as charged off on the Servicer's computer
master file of consumer revolving credit accounts.
"Defeasance" shall have the meaning specified in Section
12.04.
"Defeased Series" shall have the meaning specified in Section
12.04.
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"Definitive Certificates" shall have the meaning specified in
Section 6.10.
"Definitive Euro-Certificates" shall have the meaning
specified in Section 6.13.
"Deposit Account" shall have the meaning specified in the
Receivables Purchase Agreements.
"Deposit Date" shall mean each day on which the Servicer
deposits Collections in the Collection Account.
"Depositaries" shall mean the Person specified in the
applicable Supplement, in its capacity as depositary for the respective accounts
of any Clearing Agency or any Foreign Clearing Agencies.
"Depositary Agreement" shall mean, with respect to any Series
or Class, the agreement among the Transferor, the Trustee and the initial
Clearing Agency substantially in the form of Exhibit F.
"Determination Date" shall mean the fourth Business Day prior
to each Distribution Date.
"Discount Option Receivables" shall have the meaning specified
in Section 2.11.
"Discount Option Receivables 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 2.11 takes effect, the product of (a) a
fraction the numerator of which is the amount of the Discount Option Receivables
and the denominator of which is the sum of the Principal Receivables (other than
Discount Option Receivables) and the Discount Option Receivables in each case
(for both numerator and denominator) at the end of the prior Monthly Period and
(b) Collections of Principal Receivables that arise in the Accounts on such day
on or after the date such option is exercised that would otherwise be Principal
Receivables.
"Discount Percentage" shall have the meaning specified in
Section 2.11.
"Distribution Date" shall mean the 15th day of each calendar
month during the term hereof, or, if such 15th day is not a Business Day, the
next succeeding Business Day.
"Early Amortization Period" shall mean, with respect to any
Series, the period beginning at the close of business on the Business Day
immediately preceding the day on which a Pay Out Event is deemed to have
occurred with respect to such Series, and ending upon the earlier to occur of
(i) the payment in full to the Investor Certificateholders of such Series of the
Invested Amount with respect to such Series and the payment in full to any
applicable Series Enhancer with respect to such Series of the Enhancement
Invested Amount, if any, with respect to such Series and (ii) the Series
Termination Date with respect to such Series.
"Eligible Account" shall mean a MasterCard or VISA consumer
revolving credit card account or other consumer revolving credit account owned
by an Account Owner which (i) in the case of the Initial Accounts, as of the
cut-off date related to its date of designation as an
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"Account" under the Prior PSA or (ii) in the case of the Additional Accounts, as
of the applicable Additional Cut-Off Date, in each case, meets the following
requirements: (a) is in existence and maintained by the Account Owner; (b) is
payable in United States dollars; (c) has not been identified by the Account
Owner as an account the credit cards or checks, if any, with respect to which
have been lost or stolen; (d) the Obligor on which has provided, as his or her
most recent billing address, an address located in the United States (or its
territories or possessions or a military address); (e) has not been, and does
not have any Receivables which have been, sold, pledged, assigned or otherwise
conveyed to any Person (except pursuant to the Receivables Purchase Agreements,
the Prior PSA or this Agreement); (f) except as provided below, does not have
any Receivables which are Defaulted Receivables; (g) does not have any
Receivables which have been identified by the Transferor, the Account Owner or
the relevant Obligor as having been incurred as a result of the fraudulent use
of any related credit card or check; (h) relates to an Obligor who is not
identified by the Account Owner or by the Transferor in its computer files as
being the subject of a voluntary or involuntary bankruptcy proceeding; and (i)
is not an account with respect to which the Obligor has requested discontinuance
of responsibility. Eligible Accounts may include accounts, the receivables of
which have been written off; provided that (a) the balance of all receivables
included in such accounts is reflected on the books and records of the
Transferor (and is treated for purposes of this Agreement) as "zero," and (b)
charging privileges with respect to all such accounts have been canceled in
accordance with the Lending Guidelines of the Account Owner and will not be
reinstated by the Account Owner or the Servicer.
"Eligible Deposit Account" shall mean either (a) a segregated
account with an Eligible Institution (other than any Account Owner) or (b) a
segregated trust account with the corporate trust department of a depository
institution (other than any Account Owner) organized under the laws of the
United States or any one of the states thereof, including the District of
Columbia (or any domestic branch of a foreign bank), or a trust company
acceptable to each Rating Agency, and acting as a trustee for funds deposited in
such account, so long as any of the securities of such depository institution or
trust company shall have a credit rating from each Rating Agency in one of its
generic credit rating categories which signifies investment grade.
"Eligible Institution" shall mean (a) a depository institution
(which may be the Trustee) organized under the laws of the United States or any
one of the states thereof, including the District of Columbia (or any domestic
branch of a foreign bank), which at all times (i) has either (x) a long-term
unsecured debt rating of A2 or better by Moody's or (y) a certificate of deposit
rating of P-1 by Moody's, (ii) has either (x) a long-term unsecured debt rating
of AAA by Standard & Poor's or (y) a certificate of deposit rating of A-l+ by
Standard & Poor's, (iii) has either (x) if rated by Fitch, a long-term unsecured
debt rating of A- by Fitch or (y) a certificate of deposit rating of F1 by Fitch
and (iv) is a member of the FDIC or (b) any other institution that is acceptable
to Moody's, Standard & Poor's and Fitch.
"Eligible Investments" shall mean instruments, investment
property or other property, other than securities issued by the Banks or any
Affiliate thereof, which evidence:
(a) direct obligations of, and obligations fully guaranteed
as to timely payment of principal and interest by, the United States of
America;
8
(b) demand deposits, time deposits or certificates of
deposit (having original maturities of no more than 365 days) of
depository institutions or trust companies incorporated under the laws
of the United States of America or any one of the states thereof,
including the District of Columbia (or any domestic branch of a foreign
bank), and subject to supervision and examination by federal or state
banking or depository institution authorities; provided that at the
time of the Trust's investment or contractual commitment to invest
therein, the short-term debt rating of such depository institution or
trust company shall be in the highest ratings investment category of
each Rating Agency;
(c) commercial paper or other short-term obligations having,
at the time of the Trust's investment or contractual commitment to
invest therein, a rating from each Rating Agency in its highest ratings
investment category;
(d) demand deposits, time deposits and certificates of
deposit which are fully insured by the FDIC, with a Person the
commercial paper of which has a credit rating from each Rating Agency
in its highest ratings investment category;
(e) notes or bankers' acceptances (having original
maturities of no more than 365 days) issued by any depository
institution or trust company referred to in (b) above;
(f) investments in money market funds rated in the highest
ratings investment category by each Rating Agency or otherwise Approved
in writing by each Rating Agency;
(g) time deposits (having maturities of not more than thirty
(30) days), other than as referred to in clause (d) above, with a
Person the commercial paper of which has a credit rating from each
Rating Agency in its highest ratings investment category; or
(h) any other investments approved in writing by each Rating
Agency.
"Eligible Receivable" shall mean each Receivable:
(a) which has arisen in an Eligible Account;
(b) which was created in compliance in all material aspects
with the Lending Guidelines and all Requirements of Law applicable to
the Account Owner, the failure to comply with which would have a
material adverse effect on Investor Certificateholders, and pursuant to
a Lending Agreement which complies with all Requirements of Law
applicable to the Account Owner, the failure to comply with which would
have a material adverse effect on Investor Certificateholders;
(c) with respect to which all material consents, licenses,
approvals or authorizations of, or registrations or declarations with,
any Governmental Authority required to be obtained, effected or given
by the Account Owner or the Transferor in connection with the creation
of such Receivable or the execution, delivery and performance by the
Account Owner or the Transferor of its obligations, if any, under the
related Lending Agreement have been duly obtained, effected or given
and are in full force and effect;
9
(d) as to which, at the time of its transfer to the Trustee,
the Transferor or the Trustee will have good and marketable title, free
and clear of all Liens (including a prior Lien of the Account Owner but
excluding any Lien for municipal or other local taxes if such taxes are
not then due and payable or if the Transferor is then contesting the
validity thereof in good faith by appropriate proceedings and has set
aside on its books adequate reserves with respect thereto);
(e) which has been the subject of either a valid transfer
and assignment from a Transferor to the Trustee of all of the
Transferor's right, title and interest therein (including any proceeds
thereof), or the grant of a first priority perfected security interest
therein (and in the proceeds thereof), effective until the termination
of the Trust, subject to Section 2.07(b);
(f) which at and after the time of transfer to the Trustee
is the legal, valid and binding payment obligation of the Obligor
thereon, legally enforceable against such Obligor in accordance with
its terms, except as such enforceability may be limited by applicable
Debtor Relief Laws and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in
equity);
(g) which constitutes an "account" as defined in Article 9
of the New York UCC and the Virginia UCC;
(h) which, at the time of its transfer to the Trustee, has
not been waived or modified;
(i) which, at the time of its transfer to the Trustee, is
not subject to any right of rescission, setoff, counterclaim or any
other defense of the Obligor (including the defense of usury), other
than defenses arising out of applicable Debtor Relief Laws and except
as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or equity);
(j) as to which, at the time of its transfer to the Trustee,
the Transferor has satisfied all obligations on its part to be
fulfilled; and
(k) as to which, at the time of its transfer to the Trustee,
the Transferor has not taken any action which, or failed to take any
action the omission of which, would, at the time of its transfer to the
Trustee, impair in any material respect the rights of the Trust or the
Certificateholders therein.
"Eligible Servicer" shall mean the Trustee, a wholly-owned
subsidiary of the Trustee, or an entity which, at the time of its appointment as
Servicer, (a) is servicing a portfolio of consumer revolving credit card
accounts or other consumer revolving credit accounts, (b) is legally qualified
and has the capacity to service the Accounts, (c) is qualified (or licensed) to
use the software that the Servicer is then currently using to service the
Accounts or obtains the right to use, or has its own, software which is adequate
to perform its duties under this Agreement, (d) has, in the reasonable judgment
of the Trustee, demonstrated the ability to professionally and competently
service a portfolio of similar accounts in accordance with customary standards
of
10
skill and care and (e) has a net worth of at least $50,000,000 as of the end of
its most recent fiscal quarter.
"Enhancement Agreement" shall mean any agreement, instrument
or document governing the terms of any Series Enhancement or pursuant to which
any Series Enhancement is issued or outstanding.
"Enhancement Invested Amount," with respect to any Series,
shall have the meaning specified in the related Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Euroclear Operator" shall mean Euroclear Bank S.A./N.V., as
operator of the Euroclear System, and any successor thereto.
"Excess Finance Charges" shall have the meaning specified in
Section 4.05.
"Excess Funding Account" shall have the meaning specified in
Section 4.02.
"Exchange Date" shall mean, with respect to any Series, any
date that is after the related Series Issuance Date, in the case of Definitive
Euro-Certificates in registered form, or upon presentation of certification of
non-United States beneficial ownership (as described in Section 6.13), in the
case of Definitive Euro-Certificates in bearer form.
"Excluded Series" shall mean any Series designated as such in
the relevant Supplement.
"Finance Charge Receivables" shall mean, with respect to any
Monthly Period, all amounts billed to the Obligors on any Account at the
beginning of such Monthly Period and in respect of (i) Periodic Rate Finance
Charges, (ii) Cash Advance Fees, (iii) Late Charge Fees, (iv) Overlimit Fees,
(v) Returned Check Charges, (vi) Discount Option Receivables, if any, and (vii)
all other incidental and miscellaneous fees and charges (other than annual
membership fees) billed on the Accounts from time to time. Collections of
Finance Charge Receivables with respect to any Monthly Period shall include (i)
the Interchange received with respect to such Monthly Period, (ii) all
Recoveries received during such Monthly Period, (iii) the portion, determined
pursuant to Section 3.04(d), of payments of annual membership fees amortized
(rather than billed) with respect to the Accounts during such Monthly Period and
(iv) the portion, determined pursuant to Section 3.04(e), of payments of
Addition Discount Receivables to be deposited into the Collection Account with
respect to such Monthly Period.
"Finance Charge Shortfalls" shall have the meaning specified
in Section 4.05.
"Fitch" shall mean Fitch, Inc., or any successor thereto.
"Floating Allocation Percentage" shall mean, with respect to
any Series, the floating allocation percentage specified in the related
Supplement.
11
"Foreign Clearing Agency" shall mean Clearstream and the
Euroclear Operator.
"F.S.B." shall mean Capital One, F.S.B., a federal savings
bank, and its permitted successors and assigns.
"F.S.B. Receivables Purchase Agreement" shall mean the
Receivables Purchase Agreement dated as of August 1, 2002 between F.S.B. and
Funding and acknowledged and accepted by the Trustee, as amended and
supplemented from time to time.
"Funding" shall mean Capital One Funding, LLC, a Virginia
limited liability company, and its permitted successors and assigns.
"Funds Collateral" shall mean all Funds Collateral as defined
in the Receivables Purchase Agreements that secures a Receivable sold to Funding
pursuant to such Receivables Purchase Agreements.
"Global Certificate" shall have the meaning specified in
Section 6.13(a).
"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 and having jurisdiction over the
applicable Person.
"Group" shall mean, with respect to any Series, the group of
Series, if any, in which the related Supplement specifies such Series is to be
included.
"Ineligible Receivables" shall have the meaning specified in
Section 2.05(a).
"Initial Account" shall mean each VISA and MasterCard consumer
revolving credit card account existing on the Trust Cut-Off Date and established
pursuant to a Lending Agreement, which account is identified on the Account
Schedule delivered to the Trustee by the Transferor on the Substitution Date.
"Insolvency Event" shall have the meaning specified in Section
9.01.
"Insolvency Proceeds" shall have the meaning specified in
Section 9.02(c).
"Insurance Proceeds" shall mean all Insurance Proceeds as
defined in the Receivables Purchase Agreements that are paid to the Transferor
as provided in the Receivables Purchase Agreements.
"Interchange" shall mean interchange fees paid to the
Transferor pursuant to the Receivables Purchase Agreements.
"Invested Amount" shall mean, with respect to any Series and
for any date, an amount equal to the invested amount specified in the related
Supplement.
12
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended.
"Investor Certificateholder" shall mean, subject to Section
6.06, the Person in whose name a Registered Certificate is registered in the
Certificate Register or the bearer of any Bearer Certificate (or the Global
Certificate, as the case may be) or Coupon.
"Investor Certificates" shall mean any one of the certificates
(including the Bearer Certificates, the Registered Certificates or any Global
Certificate) executed by the Transferor and authenticated by or on behalf of the
Trustee, substantially in the form attached to the related Supplement, other
than the Transferor Certificates.
"Late Charge Fees" shall have the meaning specified in the
Lending Agreement applicable to each Account for late payment fees or similar
terms with respect to such Account.
"Lending Agreement" shall mean, with respect to a consumer
revolving credit account, the agreements between the Account Owner and the
related Obligor governing the terms and conditions of such account, as such
agreements may be amended, modified or otherwise changed from time to time in
conformance with all Requirements of Law, the failure to comply with which would
have a material adverse effect on the interests hereunder of Investor
Certificateholders, and as distributed (including any amendments and revisions
thereto) to holders of such account.
"Lending Guidelines" shall mean the Account Owner's
established policies and procedures (a) relating to the operation of its credit
card business, which are applicable to its entire portfolio of VISA and
MasterCard and other consumer revolving credit accounts and are consistent with
reasonably prudent practice, including the established policies and procedures
for determining the creditworthiness of credit card or other consumer revolving
credit account customers, and the extension of credit to credit card and other
consumer revolving credit account customers and (b) relating to the maintenance
of credit card and other consumer revolving credit accounts and the collection
of receivables with respect thereto, as such policies and procedures may be
amended, modified, or otherwise changed from time to time in conformance with
all Requirements of Law, the failure to comply with which would have a material
adverse effect on the interests hereunder of Investor Certificateholders.
"Lien" shall mean any security interest, mortgage, deed of
trust, pledge, hypothecation, assignment, participation, equity interest,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever, including any conditional sale or other title retention
agreement or any financing lease having substantially the same economic effect
as any of the foregoing, excluding any lien or filing pursuant to the
Receivables Purchase Agreements, the Prior PSA or this Agreement; provided,
however, that any assignment or transfer pursuant to Section 6.03(c), Section
7.02 or Section 7.05 shall not be deemed to constitute a Lien.
"Manager" shall mean the lead manager, manager or co-manager
or person performing a similar function with respect to an offering of
Definitive Euro-Certificates.
13
"MasterCard" shall mean MasterCard International Incorporated
or any successor thereto.
"Miscellaneous Payments" shall mean, with respect to any
Monthly Period, the sum of Adjustment Payments and Transfer Deposit Amounts
deposited in the Collection Account with respect to such Monthly Period.
"Monthly Period" shall mean, with respect to each Distribution
Date, a period of approximately thirty (30) days, that (a) contains a full set
of processing cycles with respect to the Accounts, (b) commences on the day
immediately succeeding the last day of the immediately preceding Monthly Period
and (c) ends prior to the Determination Date for such Distribution Date;
provided, however, that the initial Monthly Period with respect to any Series
will commence on the cut-off date as specified in the related Supplement with
respect to such Series.
"Monthly Servicing Fee" shall have the meaning specified in
Section 3.02.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc., or any
successor thereto.
"Non-Code Entity" shall mean a savings and loan association, a
national banking association, a bank or other entity that is not eligible to be
a debtor under Title 11 of the United States Code.
"Notices" shall have the meaning specified in Section
13.05(a).
"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, unless otherwise specified
in this Agreement, a certificate delivered to the Trustee signed by any Vice
President or more senior officer of the Transferor or by any Vice President or
more senior officer of the Servicer, as the case may be, or, in the case of a
Successor Servicer, a certificate signed by any Vice President or more senior
officer or the financial controller (or an officer holding an office with
equivalent or more senior responsibilities) of such Successor Servicer, and
delivered to the Trustee.
"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.
"Overlimit Fees" shall have the meaning specified in the
Lending Agreement applicable to each Account for overlimit fees or similar
terms.
"Participation Interests" shall mean participations
representing undivided interests in a pool of assets primarily consisting of
receivables in revolving credit card accounts or other revolving credit accounts
owned by an Account Owner or any Affiliate thereof and collections thereon.
14
"Pay Out Event" shall mean, with respect to any Series, each event
specified in Section 9.01 and each additional event, if any, specified in the
relevant Supplement as a Pay Out Event with respect to such Series.
"Paying Agent" shall mean any paying agent and co-paying agent
appointed pursuant to Section 6.07, which shall be, as of the date hereof, The
Bank of New York.
"Periodic Rate" shall mean the periodic rate or rates determined in the
manner described in the Lending Agreement applicable to each Account.
"Periodic Rate Finance Charges" shall mean finance charges based on the
Periodic Rate or any similar term specified in the Lending Agreement applicable
to each Account.
"Permitted Activities" means the primary activities of the Trust, which
are:
(a) holding Receivables and the other Trust Assets, which assets
cannot be contrary to the status of the Trust as a qualified special
purpose entity under existing accounting literature, including passive
derivative financial instruments that pertain to beneficial interests
issued or sold to parties other than the Transferor, their affiliates or
their agents;
(b) issuing Certificates and other interests in the Trust;
(c) receiving Collections and making payments on such Certificates and
interests in accordance with the terms of this Agreement and any
Supplement; and
(d) engaging in other activities that are necessary or incidental to
accomplish these limited purposes, which activities cannot be contrary to
the status of the Trust as a qualified special purpose entity under
existing accounting literature.
"Person" shall mean any person or entity, including any individual,
corporation, partnership, limited liability company, joint venture, association,
joint-stock company, trust, unincorporated organization, Governmental Authority
or other entity of similar nature.
"Principal Allocation Percentage" shall mean, with respect to any
Series, the principal allocation percentage specified in the related Supplement.
"Principal Receivables" shall mean all Receivables other than Finance
Charge Receivables, but shall not include Defaulted Receivables or amounts
billed as annual membership fees. 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 Principal Receivables which the Transferor is unable to transfer as provided
in Section 2.10 shall not be included in calculating the aggregate amount of
Principal Receivables, except to the extent so provided in Section 2.10.
"Principal Sharing Series" shall mean a Series that, pursuant to the
Supplement therefor, is entitled to, receive Shared Principal Collections.
15
"Principal Shortfalls" shall have the meaning specified in Section
4.04.
"Principal Terms" shall mean, with respect to any Series, (i) the name
or designation; (ii) the initial principal amount (or method for calculating
such amount) and the Invested Amount of such Series; (iii) the Certificate Rate
(or method for the determination thereof) and the manner, if any, in which such
rate may be adjusted from time to time; (iv) the interest payment date or dates
and the manner, if any, in which the interest payment date or dates may be reset
from time to time and the date or dates from which interest shall accrue; (v)
the method for allocating collections to Certificateholders of such Series; (vi)
the designation of any Series Accounts and the terms governing the operation of
any such Series Accounts; (vii) the method of calculating the servicing fee with
respect thereto; (viii) the provider and the terms of any form of Series
Enhancement with respect thereto; (ix) the terms on which the Investor
Certificates of such Series may be exchanged for Investor Certificates of
another Series, repurchased by the Transferor or remarketed to other investors;
(x) the Series Termination Date; (xi) the number of Classes of Investor
Certificates of such Series and, if such Series consists of more than one Class,
the rights and priorities of each such Class; (xii) the extent to which the
Investor Certificates of such Series will be issuable in temporary or permanent
global form (and, in such case, the depositary for such Global Certificate or
Certificates, the terms and conditions, if any, upon which such Global
Certificate may be exchanged, in whole or in part, for Definitive Certificates,
and the manner in which any interest payable on a temporary or Global
Certificate will be paid); (xiii) whether the Investor Certificates of such
Series may be issued as Bearer Certificates and any limitations imposed thereon;
(xiv) the priority of such Series with respect to any other Series; (xv) the
Rating Agency or Rating Agencies, if any, rating the Series; (xvi) the name of
the Clearing Agency, if any; (xvii) the base rate applicable to any Series;
(xviii) the minimum amount of Principal Receivables required to be maintained
through the designation of Additional Accounts; (xix) any deposit into any
account maintained for the benefit of Certificateholders; (xx) the rights of the
holders of the Transferor's Interest that have been transferred to the holders
of such Series; (xxi) the Group, if any, to which such Series belongs; (xxii)
whether or not such Series is a Principal Sharing Series; and (xxiii) any other
terms of such Series.
"Prior PSA" shall have the meaning specified in the recitals of this
Agreement.
"Rating Agency" shall mean, with respect to any outstanding Series or
Class, each statistical rating agency, as specified in the applicable
Supplement, selected by the Transferor to rate the Investor Certificates of such
Series or Class.
"Ratings Effect" shall mean, with respect to any action and any Rating
Agency, that such action will not result in such Rating Agency reducing or
withdrawing its rating of any outstanding Series or Class of Certificates with
respect to which it is a Rating Agency.
"Reassignment" shall have the meaning specified in Section 2.09.
"Receivables" shall mean all amounts payable by Obligors on any
Account, from time to time, including amounts payable for Principal Receivables,
Finance Charge Receivables and annual membership fees, but only to the extent
that such amounts payable have been conveyed by the applicable Account Owner to
the Transferor pursuant to the related Receivables
16
Purchase Agreement; provided, however, that such amounts shall not be included
as or deemed Receivables on and after the day on which they become Defaulted
Receivables; provided further, however, that for purposes of determining the
amount of Principal Receivables in the Trust and the deduction of the principal
amount of (x) Ineligible Receivables from such total amount of Principal
Receivables as required by subsection 2.05(b) and (y) Defaulted Receivables from
such total amount of Principal Receivables as required by Section 3.03, the
foregoing proviso shall not apply.
"Receivables Purchase Agreements" shall mean (i) the Capital One
Receivables Purchase Agreement, (ii) the F.S.B. Receivable Purchase Agreement
and (iii) any future receivables purchase agreement substantially in the form of
the agreement specified in (i) and (ii) above, entered into between Funding and
an Account Owner; provided, that (A) Funding shall have received written notice
from each Rating Agency that the execution and delivery of such future
receivables purchase agreement will not have a Ratings Effect and (B) Funding
shall have delivered to the Trustee an Officer's Certificate of Funding to the
effect that such officer reasonably believes that the execution and delivery of
such future receivables purchase agreement will not have an Adverse Effect.
"Record Date" shall mean, with respect to any Distribution Date, the
last Business Day of the preceding Monthly Period, except as otherwise provided
with respect to a Series in the related Supplement.
"Recoveries" shall mean all Recoveries as defined in the Receivables
Purchase Agreements that are paid to the Transferor as provided in the
Receivables Purchase Agreements.
"Registered Certificateholder" shall mean the Holder of a Registered
Certificate.
"Registered Certificates" shall have the meaning specified in Section
6.01.
"Related Account" shall mean each VISA and MasterCard consumer
revolving credit card account or other consumer revolving credit account which
is related to an Account and which (a) was established in compliance with the
Lending Guidelines pursuant to a Lending Agreement; (b) the related Obligor or
Obligors are the same Person or Persons as the Obligor or Obligors of such
Account; (c) is originated (i) as a result of the credit card with respect to
such Account being lost or stolen; (ii) as a result of the related Obligor
requesting a change in his or her billing cycle; (iii) as a result of the
related Obligor requesting the discontinuance of responsibility with respect to
such Account; (iv) as a result of the related Obligor requesting a product
change; or (v) for any other reasons permitted by the Lending Guidelines; and
(d) can be traced or identified by reference to or by way of the Account
Schedule and the computer or other records of the Account Owner.
"Removal Date" shall have the meaning specified in Section 2.09(a).
"Removal Notice Date" shall have the meaning specified in Section
2.09(a).
"Removed Accounts" shall have the meaning specified in Section 2.09.
"Required Designation Date" shall have the meaning specified in Section
2.08(a).
17
"Required Principal Balance" shall mean, as of any date of
determination, (a) the sum of the "Initial Invested Amount" (as defined in the
relevant Supplement) of the Investor Certificates of each Series outstanding on
such date plus, as of such date of determination, the aggregate amounts of any
increases in the Invested Amounts of each prefunded Series outstanding (in each
case, other than any Series or portion thereof which is designated in the
relevant Supplement as then being an Excluded Series) minus (b) the principal
amount on deposit in the Excess Funding Account on such date; provided, however,
if at any time the only Series outstanding are Excluded Series and a Pay Out
Event has occurred with respect to one or more of such Series, the Required
Principal Balance shall mean (a) the sum of the "Invested Amount" (as defined in
the relevant Supplement) of each such Excluded Series as of the earliest date on
which any such Pay Out Event is deemed to have occurred, minus (b) the principal
amount on deposit in the Excess Funding Account.
"Required Transferor's Interest" shall mean, with respect to any date,
an amount equal to the product of the Required Transferor's Percentage and the
aggregate amount of Principal Receivables in the Trust.
"Required Transferor's Percentage" shall mean 5%; provided, however,
that the Transferor may reduce the Required Transferor's Percentage upon (w)
thirty (30) days prior notice to the Trustee, each Rating Agency and any Series
Enhancer entitled to receive such notice pursuant to the relevant Supplement,
(x) receipt of written notice by the Transferor from each Rating Agency that
such reduction will not have a Ratings Effect, (y) delivery by the Transferor of
copies of each such written notice to the Servicer and the Trustee and (z)
delivery to the Trustee and each such Series Enhancer of an Officer's
Certificate of the Transferor stating that the Transferor reasonably believes
that such reduction will not, based on the facts known to such officer at the
time of such certification, then cause a Pay Out Event or any event that, after
the giving of notice or the lapse of time, would constitute a Pay Out Event to
occur with respect to any Series; provided further that the Required
Transferor's Percentage shall not at any time be less than the Specified
Percentage.
"Requirements of Law" with respect to any Person shall mean the
certificate of incorporation, certificate of formation or articles of
association and by-laws, limited liability company agreement 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 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, when used with respect to the
Trustee, any officers within the corporate trust administration of the Trustee,
including any Vice President, any Assistant Vice President, any Assistant
Treasurer, any trust officer, or any other officer of the Trustee who
customarily performs functions similar to those performed by any of the
above-designated officers and also, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
18
"Revolving Credit Agreement" shall mean the Revolving Credit Agreement
by and between the Bank and Funding, dated as of August 1, 2002, as such
agreement may be amended from time to time in accordance therewith, or any
substantially similar agreement entered into between any lender and Funding.
"Returned Check Charges" shall mean the charges specified in the
Lending Agreement payable for returned payment checks drawn on an Account.
"Revolving Period" shall mean, with respect to any Series, the period
specified as such in the related Supplement.
"Rule 144A" shall mean Rule 144A under the Act, as such Rule may be
amended from time to time.
"Secured Account" shall mean an Account owned by the Account Owner
under which the payment obligations of the Obligor are secured by the Funds
Collateral.
"Series" shall mean any series of Investor Certificates established
pursuant to a Supplement.
"Series Account" shall mean any deposit, securities, trust, escrow or
similar account maintained for the benefit of the Investor Certificateholders of
any Series or Class, as specified in any Supplement.
"Series Enhancement" shall mean the rights and benefits provided to the
Investor Certificateholders of any Series or Class pursuant to any letter of
credit, surety bond, cash collateral guaranty, cash collateral account,
insurance policy, spread account, reserve account, guaranteed rate agreement,
maturity liquidity facility, tax protection agreement, interest rate swap
agreement, interest rate cap agreement, currency exchange agreement, other
derivative securities agreement or other similar arrangement. The subordination
of any Class or Series to another Class or Series shall be deemed to be a Series
Enhancement.
"Series Enhancer" shall mean the Person or Persons providing any Series
Enhancement, other than the Investor Certificateholders of any Class or Series
which is subordinated to another Class or Series.
"Series Issuance Date" shall mean, with respect to any Series, the date
on which the Investor Certificates of such Series are to be originally issued in
accordance with Section 6.03 and the related Supplement.
"Series Termination Date" shall mean, with respect to any Series, the
termination date specified in the related Supplement.
"Service Transfer" shall have the meaning specified in Section 10.01.
"Servicer" shall mean Capital One, in its capacity as Servicer pursuant
to this Agreement, and, after any Service Transfer, the Successor Servicer.
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"Servicer Default" shall have the meaning specified in Section 10.01.
"Servicing Fee" shall have the meaning specified in Section 3.02.
"Servicing Fee Rate" shall mean, with respect to any Series, the servicing
fee rate specified in the related Supplement.
"Servicing Officer" shall mean any officer of the Servicer who is involved
in, or responsible for, the administration and servicing of the Receivables and
whose name appears on a list of servicing officers furnished to the Transferor
and the Trustee by the Servicer, as such list may from time to time be amended.
"Shared Principal Collections" shall have the meaning specified in Section
4.04.
"Specified Percentage" shall mean 2%.
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, or any
successor thereto.
"Substitution Date" shall mean August 1, 2002.
"Successor Servicer" shall have the meaning specified in Section 10.02(a).
"Supplement" shall mean, with respect to any Series, a Supplement to this
Agreement, executed and delivered in connection with the original issuance of
the Investor Certificates of such Series pursuant to Section 6.03, and all
amendments thereof and supplements thereto.
"Supplemental Certificate" shall have the meaning specified in Section
6.03(c).
"Tax Opinion" shall mean with respect to any action, an Opinion of Counsel
to the effect that, for federal and Virginia income and franchise tax purposes
(and, if there has been an assumption of the Servicer's obligations under this
Agreement, for income and franchise tax purposes of the jurisdiction in which
the assuming entity engages in its principal servicing activities, if other than
Virginia) (a) such action will not affect the tax characterization as debt of
Investor Certificates of any outstanding Series or Class that were characterized
as debt at the time of their issuance, (b) following such action the Trust will
not be deemed to be an association (or publicly traded partnership) taxable as a
corporation and (c) such action will not cause a taxable event to any Investor
Certificateholders.
"Termination Notice" shall have the meaning specified in Section 10.01.
"Transfer Agent and Registrar" shall have the meaning specified in Section
6.04.
"Transfer Date" shall mean the Business Day immediately preceding each
Distribution Date.
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"Transfer Deposit Amount" shall mean, with respect to any Distribution
Date, the amount, if any, deposited into the Collection Account on such
Distribution Date in connection with the reassignment of an Ineligible
Receivable pursuant to Section 2.05 or 2.07(a) or the reassignment or assignment
of a Receivable pursuant to Section 3.03.
"Transfer Restriction Event" shall have the meaning specified in Section
2.10.
"Transferor" shall mean Funding and any permitted successors and assigns
thereof under this Agreement and any Additional Transferor.
"Transferor Certificates" shall mean, collectively, the Base Certificate
and any outstanding Supplemental Certificates.
"Transferor's Interest" shall have the meaning specified in Section 4.01.
"Transferor's Participation Amount" shall mean at any time of determination
an amount equal to the total amount of Principal Receivables and the principal
amount on deposit in the Excess Funding Account and any Principal Funding
Account (as defined in any Supplement) in the Trust at such time minus the
aggregate Invested Amounts and Enhancement Invested Amounts, if any, for all
outstanding Series at such time.
"Trust" shall mean the Capital One Master Trust heretofore created and
continued by this Agreement.
"Trust Assets" shall have the meaning specified in Section 2.01.
"Trust Cut-Off Date" shall mean July 26, 2002.
"Trustee" shall mean The Bank of New York in its capacity as trustee on
behalf of the Trust, or its successor in interest, or any successor trustee
appointed as herein provided.
"UCC" shall mean the Uniform Commercial Code, as amended from time to time,
as in effect in the applicable jurisdiction.
"Unallocated Principal Collections" shall have the meaning specified in
Section 4.03(c).
"unamortized annual membership fees" shall have the meaning specified in
Section 3.04(d).
"United States" shall mean the United States of America (including any one
of the states thereof and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.
"U.S. Alien" or "United States Alien" shall mean any corporation,
partnership, individual or fiduciary that, as to the United States, and for
United States income tax purposes, is (i) a foreign corporation, (ii) a foreign
partnership one or more of the members of which is, as to the United States, a
foreign corporation, a nonresident alien individual or a nonresident alien
21
fiduciary of a foreign estate or trust, (iii) a nonresident alien individual or
(iv) a nonresident alien fiduciary of a foreign estate or trust.
"U.S. person" or "United States person" shall mean a citizen or resident of
the United States, a corporation, partnership or other entity created or
organized in or under the laws of the United States, or an estate or trust the
income of which is subject to United States Federal income taxation regardless
of its source.
"VISA" shall mean VISA U.S.A., Inc., or any successor thereto.
Section 1.02. Other Definitional Provisions and Rules of Construction.
(a) With respect to any Series, all terms used herein and not otherwise
defined herein shall have meanings ascribed to them in the related Supplement.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document made
or delivered pursuant hereto or thereto, accounting terms not defined in this
Agreement or in any such certificate or other document, and accounting terms
partly defined in this Agreement or in any such certificate or other document 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 in this
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles or
regulatory accounting principles, the definitions contained in this Agreement or
in any such certificate or other document shall control.
(d) The agreements, representations and warranties of Funding and any
Additional Transferor in this Agreement in its capacity as Transferor shall be
deemed to be the agreements, representations and warranties of Funding and any
such Additional Transferor solely in such capacity for so long as Funding and
any such Additional Transferor act in such capacity under this Agreement; the
agreements, representations and warranties of Capital One in this Agreement as
Servicer shall be deemed to be the agreements, representations and warranties of
Capital One solely in such capacity for so long as Capital One acts in such
capacity under this Agreement.
(e) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; references to any Section,
Schedule or Exhibit are references to Sections, Schedules and Exhibits in or to
this Agreement unless otherwise specified; and the term "including" means
"including without limitation."
(f) All references herein to laws, statutes, acts and regulations shall
mean such laws, statutes, acts and regulations as amended or recodified from
time to time.
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(g) All references herein (including the terms defined in Section
1.01) to the singular shall include the plural and vice versa, unless the
context requires otherwise.
(h) All references herein to the masculine, feminine or neuter
gender shall include all other genders.
ARTICLE II
Transfer of Receivables
Section 2.01. Transfer of Receivables. By execution of this
Agreement, the Transferor hereby transfers, assigns, sets over and otherwise
conveys to the Trustee all of its right, title and interest, whether now owned
or hereafter acquired, in, to and under the Receivables existing at the close of
business on the Trust Cut-Off Date, in the case of Receivables arising in the
Initial Accounts (including Related Accounts with respect to such Initial
Accounts), and at the close of business on the related Additional Cut-Off Date,
in the case of Receivables arising in the Additional Accounts (including Related
Accounts with respect to such Additional Accounts), and in each case thereafter
created from time to time in such Accounts until the termination of the Trust,
the Funds Collateral securing such Receivables, all Interchange allocable to the
Trust as provided herein, all Recoveries and Insurance Proceeds allocable to all
of the foregoing, all Participation Interests and related property conveyed to
the Trustee pursuant to an Assignment, all Collections with respect to all of
the foregoing, all monies due or to become due and all amounts received or
receivable with respect to all of the foregoing and all proceeds (including
"proceeds" as defined in the UCC) thereof. The Transferor does hereby further
transfer, assign, set over and otherwise convey to the Trustee all of its
rights, remedies, powers, privileges and claims under or with respect to the
Receivables Purchase Agreements (whether arising pursuant to the terms of the
Receivables Purchase Agreements or otherwise available to the Transferor at law
or in equity), including the rights of the Transferor to enforce the Receivables
Purchase Agreements and to give or withhold any and all consents, requests,
notices, directions, approvals, extensions or waivers under or with respect to
the Receivable Purchase Agreements to the same extent as the Transferor could
but for the assignment and security interest granted to the Trustee. The
property described in the two preceding sentences, together with all monies and
other property on deposit in the Collection Account, the Excess Funding Account,
the Series Accounts and any Series Enhancement shall constitute the assets of
the Trust (the "Trust Assets"). The foregoing does not constitute and is not
intended to result in the creation or assumption by the Trust, the Trustee, any
Investor Certificateholder or any Series Enhancer of any obligation of the
Transferor, the Servicer, an Account Owner or any other Person in connection
with the Accounts, the Receivables or the Funds Collateral or under any
agreement or instrument relating thereto, including any obligation to Obligors,
merchant banks, merchants' clearance systems, VISA, MasterCard or insurers.
The Transferor agrees to record and file, at its own expense,
financing statements (and amendments thereto when applicable) with respect to
the Trust Assets meeting the requirements of applicable state law in such manner
and in such jurisdictions as are necessary to perfect, and maintain the
perfection of, the assignment of such Trust Assets to the Trustee, and to
deliver a file stamped copy of each such financing statement or amendment or
other evidence of such filing to the Trustee on or prior to the Substitution
Date, in the case of Trust Assets relating
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to the Initial Accounts, and (if any additional filing is so necessary) on or
prior to the applicable Addition Date, in the case of Trust Assets relating to
Additional Accounts and Participation Interests. The Trustee shall be under no
obligation whatsoever to file such financing statements or amendments thereto or
to make any other filing under the UCC in connection with such assignment.
The Transferor further agrees, at its own expense, (i) on or prior
to (A) the Substitution Date, in the case of the Initial Accounts, and (B) the
applicable Addition Date, in the case of the Additional Accounts and the
Participation Interests, to indicate in its books and records (including the
appropriate computer files) that Receivables created in connection with the
Accounts (other than Removed Accounts), the Participation Interests and the
related Trust Assets have been conveyed to the Trustee pursuant to this
Agreement and (ii) on or prior to each such date referred to in clause (i), to
deliver to the Trustee an Account Schedule (provided that such Account Schedule
shall be provided in respect of Automatic Additional Accounts on or prior to the
Determination Date immediately succeeding the related Monthly Period during
which their respective Addition Dates occur). Each Account Schedule, as
supplemented from time to time, shall be marked as Schedule 1 to this Agreement
and is hereby incorporated into and made a part of this Agreement. Once the
books and records (including the appropriate computer files) referenced in
clause (i) of this paragraph have been indicated with respect to any Account or
Participation Interest, the Transferor further agrees not to alter such
indication during the remaining term of this Agreement, other than pursuant to
Section 2.09 with respect to Removed Accounts, unless and until the Transferor
shall have delivered to the Trustee at least thirty (30) days prior written
notice of its intention to do so and has taken such action as is necessary or
advisable to cause the interest of the Trustee in the Trust Assets to continue
to be perfected with the priority required by this Agreement, and has delivered
to the Trustee an Opinion of Counsel to such effect.
The parties to this Agreement intend that the conveyance of the
Trust Assets pursuant to this Agreement constitute a sale, and not a secured
borrowing, for accounting purposes. Nevertheless, this Agreement also shall
constitute a security agreement under applicable law, and the Transferor hereby
grants to the Trustee a first priority perfected security interest in all of the
Transferor's right, title and interest, whether now owned or hereafter acquired,
in, to and under the Receivables, the Funds Collateral and the other Trust
Assets, and all money, accounts, general intangibles, chattel paper,
instruments, documents, goods, investment property, deposit accounts, letters of
credit, letter-of-credit rights and oil, gas and other minerals consisting of,
arising from or related to the Trust Assets, and all proceeds thereof, to secure
its obligations hereunder.
By executing this Agreement and any Receivables Purchase
Agreement, the parties hereto and thereto do not intend to cancel, release or in
any way impair the conveyance made by Capital One or F.S.B. in their respective
capacities as a "Seller" under the Prior PSA. Without limiting the foregoing,
the parties hereto acknowledge and agree as follows:
(a) The Trust created by and maintained under the Prior PSA shall
continue to exist and be maintained under this Agreement.
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(b) All series of investor certificates issued under the Prior PSA
shall constitute Series issued and outstanding under this Agreement, and any
supplement existing in connection with such series shall constitute a Supplement
executed hereunder.
(c) All references to the Prior PSA in any other instruments or
documents shall be deemed to constitute references to this Agreement. All
references in such instruments or documents to Capital One or F.S.B in their
respective capacities as a "Seller" of receivables and related assets under the
Prior PSA shall be deemed to include reference to Funding in such capacity
hereunder.
(d) Subject to clause (f) below, Funding hereby agrees to perform
all obligations of Capital One and F.S.B., in their respective capacities as a
"Seller" (but not, in the case of Capital One, as "Servicer"), under or in
connection with the Prior PSA (as amended and restated by this Agreement) and
any Supplements to the Prior PSA.
(e) To the extent this Agreement requires that certain actions are
to be taken as of a date prior to the date of this Agreement, Capital One's or
F.S.B.'s, as applicable, taking of such action under the Prior PSA shall
constitute satisfaction of such requirement.
(f) All representations, warranties and covenants of Capital One
or F.S.B., as applicable, made in Article II in the Prior PSA and in any
Assignment of Additional Accounts with respect to receivables and related assets
transferred to the Trustee prior to the Substitution Date, shall remain in full
force and effect with respect to Capital One or F.S.B., as applicable.
Section 2.02. Acceptance by Trustee.
(a) The Trustee hereby acknowledges its acceptance of all right,
title and interest to the Trust Assets conveyed to the Trustee pursuant to
Section 2.01 and declares that it shall maintain such right, title and interest,
upon the trust herein set forth, for the benefit of all Certificateholders. The
Trustee further acknowledges that, on or prior to the Substitution Date, the
Transferor delivered to the Trustee the Account Schedule relating to the Initial
Accounts.
(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 marked as Schedule 1 or otherwise delivered to the Trustee from
time to time, except (i) to a Successor Servicer or as required by a Requirement
of Law applicable to the Trustee, (ii) in connection with the performance of the
Trustee's duties hereunder, (iii) in enforcing the rights of Certificateholders
or (iv) as requested by any Person in connection with the financing statements
filed pursuant to this Agreement, the Prior PSA or the Receivables Purchase
Agreements. The Trustee agrees to take such measures as shall be reasonably
requested by any Account Owner or the Transferor to protect and maintain the
security and confidentiality of such information and, in connection therewith,
will allow the Account Owner and the Transferor to inspect the Trustee's
security and confidentiality arrangements from time to time during normal
business hours. The Trustee shall provide the Account Owner and the Transferor
with notice thirty (30) days prior to any disclosure pursuant to this Section
2.02.
25
(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 or any Supplement.
(d) The Trustee hereby agrees not to use any information it
obtains pursuant to this Agreement, including any of the account numbers or
other information contained in any Account Schedule delivered by the Transferor
to the Trustee, directly or indirectly, to compete or assist any Person in
competing with the Transferor or with any Account Owner in its business.
Section 2.03. Representations and Warranties of the Transferor
Relating to the Transferor. The Transferor hereby represents and warrants to the
Trust as of the Substitution Date and as of each Closing Date (but only if it
was a Transferor on such date):
(a) Organization and Good Standing. The Transferor is a limited
liability company, validly existing under the laws of the Commonwealth of
Virginia, and has, in all material respects, full power and authority to own its
properties and conduct its business as such properties are presently owned and
such business is presently conducted, and to execute, deliver and perform its
obligations under the Receivables Purchase Agreements and under this Agreement
and each Supplement 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 as a foreign company (or is exempt from such
requirements), and has obtained all necessary licenses and approvals, in each
jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would render any Receivable unenforceable by the Transferor, the
Servicer or the Trustee or would have a material adverse effect on the interests
of the Certificateholders hereunder or under any Supplement; provided, however,
that no representation or warranty is made with respect to any qualifications,
licenses or approvals which the Trustee has or may be required at any time to
obtain, if any, in connection with the transactions contemplated hereby.
(c) Due Authorization. The execution, delivery and performance by
the Transferor of this Agreement and each Supplement, the execution and delivery
by the Transferor to the Trustee of the Certificates and the consummation by the
Transferor of the transactions provided for in this Agreement and each
Supplement have been duly authorized by the Transferor by all necessary
corporate action on the part of the Transferor.
(d) No Conflict. The execution and delivery by the Transferor of
this Agreement, each Supplement and the Certificates, the performance by the
Transferor of the transactions contemplated by this Agreement and each
Supplement and the fulfillment by the Transferor of the terms hereof and thereof
applicable to the Transferor will not conflict with or violate the articles of
incorporation, articles of association or certificate of formation or by-laws or
limited liability company agreement of the Transferor or conflict with, result
in any breach of any of the 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.
26
(e) No Violation. The execution and delivery by the Transferor of
this Agreement, each Supplement and the Certificates, the performance by the
Transferor of the transactions contemplated by this Agreement and each
Supplement and the fulfillment by the Transferor of the terms hereof and thereof
applicable to the Transferor will not conflict with or violate 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, any Supplement or the Certificates, (ii) seeking to prevent the
issuance of the Certificates or the consummation by the Transferor of any of the
transactions contemplated by this Agreement, any Supplement or the Certificates,
(iii) seeking any determination or ruling that, in the reasonable judgment of
the Transferor, would materially and adversely affect the performance of its
obligations under this Agreement or any Supplement, (iv) seeking any
determination or ruling that would materially and adversely affect the validity
or enforceability of this Agreement, any Supplement or the Certificates or (v)
seeking to affect adversely the income tax attributes of the Trust under the
federal or any state income or franchise tax systems.
(g) All Consents Required. All authorizations, consents, orders or
other actions of any Person or of any Governmental Authority required to be
obtained by the Transferor in connection with the execution and delivery by the
Transferor of this Agreement, each Supplement and the Certificates, the
performance by the Transferor of the transactions contemplated by this Agreement
and each Supplement and the fulfillment by the Transferor of the terms hereof
and thereof, have been obtained, except such as are required by state securities
or "Blue Sky" laws in connection with the distribution of the Certificates.
(h) Insolvency. No Insolvency Event with respect to the Transferor
has occurred and the transfer of the Receivables by the Transferor to the
Trustee has not been made in contemplation of the occurrence thereof.
The representations and warranties set forth in this Section 2.03
shall survive the transfer and assignment of the Trust Assets to the Trustee.
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 2.03, the party
discovering such breach shall give prompt written notice to the others and to
each Series Enhancer entitled thereto pursuant to the relevant Supplement within
three (3) Business Days following such discovery. The Transferor agrees to
cooperate with the Servicer and the Trustee in attempting to cure any such
breach. For purposes of the representations and warranties set forth in this
Section 2.03, each reference to a Supplement shall be deemed to refer only to
those Supplements in effect as of the date of the relevant representations or
warranties.
Section 2.04. Representations and Warranties of the Transferor
Relating to the Agreement and Any Supplement and the Receivables.
(a) Representations and Warranties. The Transferor hereby
represents and warrants to the Trust as of the Substitution Date and each
subsequent Closing Date, and with
27
respect to any Additional Accounts, on each related Addition Date occurring
after the Substitution Date (but only if it was a Transferor on such date) that:
(i) the Receivables Purchase Agreements, this Agreement, each
Supplement and, in the case of Additional Accounts, the related
Assignment, each 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
Debtor Relief Laws and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in
equity);
(ii) as of the Trust Cut-Off Date, with respect to the Initial
Accounts, as of the related Additional Cut-Off Date, with respect to
Additional Accounts, and as of the applicable Removal Notice Date, with
respect to the Removed Accounts, Schedule 1 to this Agreement and the
related Account Schedule, as supplemented to such date, is an accurate
and complete listing in all material respects of all the Accounts as of
the Trust Cut-Off Date, such Additional Cut-Off Date or such Removal
Notice Date, as the case may be, and the information contained therein
with respect to the identity of such Accounts and the Receivables
existing in such Accounts is true and correct in all material respects
as of the Trust Cut-Off Date, such Additional Cut-Off Date or such
Removal Notice Date, as the case may be;
(iii) each Receivable has been transferred by the Transferor to
the Trustee free and clear of any Lien (other than Liens permitted
under subsection 2.07(b));
(iv) all consents, licenses or approvals of or registrations or
declarations with any Governmental Authority required to be obtained,
effected or given by the Transferor in connection with the transfer by
the Transferor of Receivables to the Trustee have been duly obtained,
effected or given and are in full force and effect;
(v) subject, in each case pertaining to proceeds, to
Section 9-315 of the UCC, and further subject to any Liens permitted
under subsection 2.07(b), each of this Agreement and, in the case of
Additional Accounts, the related Assignment constitutes either (x) a
valid sale, transfer and assignment to the Trustee of all right, title
and interest of the Transferor in the Receivables and the proceeds
thereof or (y) a grant of a "security interest" (as defined in the UCC)
in such property to the Trustee, which, in the case of existing
Receivables and the proceeds thereof, is enforceable upon execution and
delivery of this Agreement, or, with respect to then existing
Receivables in Additional Accounts, as of the applicable Addition Date,
and which will be enforceable with respect to such Receivables
hereafter and thereafter created and the proceeds thereof upon such
creation. Upon the filing of the financing statements pursuant to
Section 2.01 and, in the case of Receivables hereafter created and the
proceeds thereof, upon the creation thereof, the Trustee shall have a
first priority perfected security or ownership interest in such
Receivables and proceeds except for Liens permitted under Section
2.07(b);
(vi) except as otherwise expressly provided in this Agreement or
any Supplement, neither the Transferor nor any Person claiming through
or under the
28
Transferor has any claim to or interest in the Collection Account, any
Series Account or any Series Enhancement;
(vii) on the applicable Additional Cut-Off Date, each related
Additional Account is an Eligible Account;
(viii) on the applicable Additional Cut-Off Date, each Receivable
then existing in each related Additional Account is an Eligible
Receivable; and
(ix) upon the creation of any new Receivable transferred by the
Transferor to the Trustee, such Receivable is an Eligible Receivable.
(b) Representations and Warranties of the Transferor Relating
to Security Interest. The Transferor hereby makes the following representations
and warranties with respect to Receivables transferred by it, and each of the
following representations and warranties shall survive until the termination of
this Agreement and each shall speak as of the Substitution Date and, with
respect to Receivables in Additional Accounts, as of the related Addition Date.
None of the following representations and warranties shall be waived by any of
the parties to this Agreement unless each Rating Agency shall have notified the
Transferor, the Servicer and the Trustee in writing that such waiver will not
have a Ratings Effect.
(i) This Agreement creates a valid and continuing security
interest (as defined in the applicable UCC) in favor of the Trustee in the
Receivables, and the Funds Collateral securing such Receivables, described in
Section 2.01 (the "Collateral"), which security interest is prior to all other
Liens except as otherwise permitted hereunder, and is enforceable as such
against creditors of and purchasers from the Transferor.
(ii) The Receivables transferred by the Transferor constitute
"accounts" within the meaning of the applicable UCC.
(iii) At the time of its transfer of any item of Collateral to
the Trustee pursuant to this Agreement, the Transferor owned and had good and
marketable title to such item of Collateral free and clear of any Lien except as
otherwise permitted hereunder.
(iv) The Transferor has caused or will have caused, within ten
(10) days of the execution of this Agreement, 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
the Receivables granted by the Transferor to the Trustee pursuant to this
Agreement.
(v) Other than the security interest granted to the Trustee
pursuant to this Agreement or an Assignment, the Transferor has not pledged,
assigned, sold, granted a security interest in, or otherwise conveyed the
Receivables described in Section 2.01 of this Agreement. The Transferor has not
authorized the filing of and is not aware of any financing statements against
the Transferor that include a description of such Receivables other than any
financing statement relating to the transfer of such Receivables to the Trustee
pursuant to this Agreement or an Assignment, or that has been terminated. The
Transferor is not aware of any judgment or tax lien filings against the
Transferor.
29
(c) Notice of Breach. The representations and warranties of the
Transferor set forth in this Section 2.04 shall survive the transfer and
assignment by the Transferor of Trust Assets to the Trustee. Upon discovery by
the Transferor, the Servicer or the Trustee of a breach of any of the
representations and warranties by the Transferor set forth in this Section 2.04,
the party discovering such breach shall give prompt written notice to the others
and to each Series Enhancer entitled thereto pursuant to the relevant Supplement
within three (3) Business Days following such discovery. The Transferor agrees
to cooperate with the Servicer and the Trustee in attempting to cure any such
breach. For purposes of the representations and warranties set forth in this
Section 2.04, each reference to a Supplement shall be deemed to refer only to
those Supplements in effect as of the date of the relevant representations or
warranties.
Section 2.05. Reassignment of Ineligible Receivables.
(a) Reassignment of Receivables. In the event (i) any
representation or warranty of the Transferor contained in Section 2.04(a)(ii),
(iii), (iv), (vii), (viii) or (ix) is not true and correct in any material
respect as of the date specified therein (individually or together with any
other breach or breaches then existing) and such breach has a material adverse
effect on the Certificateholders' Interest of all Series in any Receivables
transferred to the Trustee (which determination shall be made without regard to
the availability of funds under any Series Enhancement) and remains uncured for
sixty (60) days (or such longer period, not in excess of 150 days, as may be
agreed to by the Trustee) after the earlier to occur of the discovery thereof by
the Transferor or receipt by the Transferor of notice thereof given by the
Trustee, or (ii) it is so provided in Section 2.07(a) with respect to any
Receivables transferred to the Trustee by the Transferor, then the Transferor
shall accept reassignment of all Receivables in the related Account ("Ineligible
Receivables") on the terms and conditions set forth in paragraph (b) below;
provided, however, that such Receivables will not be deemed to be Ineligible
Receivables and will not be reassigned to the Transferor if, on any day prior to
the end of such 60-day or longer period, (x) either (A) in the case of an event
described in clause (i) above the relevant representation and warranty shall be
true and correct in all material respects as if made on such day or (B) in the
case of an event described in clause (ii) above the circumstances causing such
Receivable to become an Ineligible Receivable shall no longer exist and (y) the
Transferor shall have delivered to the Trustee an Officer's Certificate of the
Transferor describing the nature of such breach and the manner in which the
relevant representation and warranty became true and correct.
(b) Price of Reassignment. The Servicer shall deduct the portion
of such Ineligible Receivables reassigned to the Transferor which are Principal
Receivables from the aggregate amount of Principal Receivables used to calculate
the Transferor's Participation Amount, the Transferor's Interest and the
Floating Allocation Percentage and the Principal Allocation Percentage
applicable to any Series. In the event that, following the exclusion of such
Principal Receivables from the calculation of the Transferor's Participation
Amount, the Transferor's Participation Amount would be a negative number, not
later than 12:00 noon, Richmond, Virginia time, on the first Distribution Date
following the Monthly Period in which such reassignment obligation arises, the
Transferor shall make a deposit in immediately available funds in an amount
equal to the principal portion and the interest portion of the amount by which
the Transferor's Participation Amount would be below zero (up to the amount of
such Principal Receivables) into the Excess Funding Account and the Collection
Account, respectively. Any
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amount deposited into the Excess Funding Account and the Collection Account,
respectively, in connection with the reassignment of an Ineligible Receivable
shall be considered a Transfer Deposit Amount and shall be applied in accordance
with Article IV and the terms of each Supplement.
Upon the deposit, if any, required to be made to the Excess
Funding Account and the Collection Account, respectively, as provided in this
Section 2.05 and the reassignment of Ineligible Receivables, the Trustee shall
automatically and without further action sell, transfer, assign, set-over and
otherwise convey to the Transferor or its designee, without recourse,
representation or warranty, all the right, title and interest of the Trustee and
the Trust in and to such Ineligible Receivables, the Funds Collateral securing
such Ineligible Receivables, all Recoveries and Insurance Proceeds allocable to
all of the foregoing, all Collections with respect to all of the foregoing, all
monies due or to become due and all proceeds thereof. The Trustee shall execute
such documents and instruments of transfer or assignment and take such other
actions as shall reasonably be requested by the Transferor to effect the
transfer of such Ineligible Receivables pursuant to this Section 2.05. The
obligation of the Transferor to accept reassignment of any Ineligible
Receivables, and to make the deposits, if any, required to be made to the Excess
Funding Account and the Collection Account, respectively, as provided in this
Section 2.05, shall constitute the sole remedy respecting the event giving rise
to such obligation available to Investor Certificateholders (or the Trustee on
behalf of the Investor Certificateholders) or any Series Enhancer.
Section 2.06. Reassignment of Receivables in Trust Portfolio. In
the event any representation or warranty of the Transferor set forth in Section
2.03 or Section 2.04(a)(i), (v) or (vi) is not true and correct in any material
respect and such breach has a material adverse effect on the Certificateholders'
Interest of all Series in the Receivables, then either the Trustee or the
Holders of Investor Certificates evidencing not less than 50% of the aggregate
unpaid principal amount of all outstanding Investor Certificates, by notice then
given to the Transferor, the Servicer (and the Trustee if given by the Investor
Certificateholders), may direct the Transferor to accept a reassignment of the
Receivables if such breach and any material adverse effect caused by such breach
is not cured within sixty (60) days of such notice (or within such longer
period, not in excess of 150 days, as may be specified in such notice), and upon
those conditions the Transferor shall be obligated to accept such reassignment
on the terms set forth below; provided, however, that such Receivables will not
be reassigned to the Transferor if, on any day prior to the end of such 60-day
or longer period (i) the relevant representation and warranty shall be true and
correct in all material respects as if made on such day and (ii) the Transferor
shall have delivered to the Trustee an Officer's Certificate of the Transferor
describing the nature of such breach and the manner in which the relevant
representation and warranty became true and correct and the breach of such
representation and warranty shall no longer materially adversely affect the
interests of the Investor Certificateholders.
The Transferor shall deposit in the Collection Account in
immediately available funds not later than 12:00 noon, Richmond, Virginia time,
on the first Distribution Date following the Monthly Period in which such
reassignment obligation arises, in payment for such reassignment, an amount
equal to the sum of the amounts specified therefor with respect to each
outstanding Series in the related Supplement. Notwithstanding anything to the
contrary in this
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Agreement, such amounts shall be distributed on such Distribution Date in
accordance with Article IV and the terms of each Supplement.
Upon the deposit, if any, required to be made to the Collection
Account as provided in this Section 2.06 and the reassignment of the applicable
Receivables, the Trustee shall automatically and without further action sell,
transfer, assign, set over and otherwise convey to the Transferor or its
designee, without recourse, representation or warranty, all the right, title and
interest of the Trustee and the Trust in and to such Receivables, the Funds
Collateral securing such Receivables, all Recoveries and Insurance Proceeds
allocable to all of the foregoing, all Collections with respect to all of the
foregoing, all monies due or to become due and all amounts received with respect
thereto and all proceeds thereof. The Trustee shall execute such documents and
instruments of transfer or assignment and take such other actions as shall
reasonably be requested by the Transferor to effect the conveyance of such
Receivables pursuant to this Section 2.06. The obligation of the Transferor to
accept reassignment of any Receivables and to make the deposits, if any,
required to be made to the Collection Account as provided in this Section 2.06
shall constitute the sole remedy respecting the event giving rise to such
obligation available to the Certificateholders (or the Trustee on behalf of the
Certificateholders) or any Series Enhancer.
Section 2.07. Covenants of the Transferor. The Transferor hereby
covenants as follows:
(a) Receivables Not to be Evidenced by Instruments or Chattel
Paper. The Transferor will take no action to cause or permit any Receivable to
be evidenced by any instrument or chattel paper (as defined in the UCC) and, if
any such Receivable is so evidenced, except for any action by the Servicer or an
Account Owner, it shall be deemed to be an Ineligible Receivable in accordance
with Section 2.05(a) and shall be reassigned to the Transferor in accordance
with Section 2.05(b); provided, however, that Receivables evidenced by
instruments or chattel paper taken from Obligors in the ordinary course of
business of the Servicer's collection efforts shall not be deemed Ineligible
Receivables solely as a result thereof.
(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 of which it has knowledge; and the Transferor shall defend the
right, title and interest of the Trustee in, to and under the Receivables,
whether now existing or hereafter created, against all claims of third parties
claiming through or under the Transferor; provided, however, that nothing in
this Section 2.07(b) shall prevent or be deemed to prohibit the Transferor from
suffering to exist upon any of the Receivables any Liens for municipal or other
local 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.
(c) Transferor's Interest. Except for the conveyances hereunder,
in connection with any transaction permitted by Section 7.02 or 7.05 and as
provided in Sections 2.08(f) and 6.03, the Transferor agrees not to transfer,
assign, exchange, convey, pledge,
32
hypothecate or otherwise grant a security interest in the Transferor's Interest,
whether represented by the Base Certificate or any Supplemental Certificate or
by any uncertificated interest in the Transferor's Interest, and any such
attempted transfer, assignment, exchange, conveyance, pledge, hypothecation or
grant shall be void; provided, however, that nothing in this Section 2.07(c)
shall prevent the recorded owner of an interest in the Transferor's Interest,
whether uncertificated or represented by a certificate, from granting to an
Affiliate a participation interest or other beneficial interest in the rights to
receive cash flows related to the Transferor's Interest, if (i) such interest
does not grant such Affiliate any rights hereunder or delegate to such Affiliate
any obligations or duties hereunder, (ii) the transferor of such interest
obtains the prior written consent of the Transferor and (iii) after giving
effect to such transfer, the aggregate interest in the Transferor's Interest
owned directly by the Transferor represents an undivided ownership interest in
two percent (2.0%) or more of the Trust Assets.
(d) Delivery of Collections. In the event that the Transferor
receives Collections, the Transferor agrees to deliver to the Servicer all such
Collections as soon as practicable after receipt thereof but in no event later
than two (2) Business Days after the Date of Processing by the Transferor.
(e) Notice of Liens. The Transferor shall notify the Trustee and
each Series Enhancer entitled to such notice pursuant to the relevant Supplement
promptly after becoming aware of any Lien on any Receivable other than the
conveyances hereunder or Liens permitted under Section 2.07(b).
(f) Enforcement of Receivables Purchase Agreements Covenants. The
Transferor shall enforce the covenants and agreements of an Account Owner in the
Receivables Purchase Agreements, including the covenants set forth in
subsections 5.01(f) and (g).
(g) [Reserved].
(h) [Reserved].
(i) Interchange. On or prior to each Determination Date, the
Transferor shall notify the Servicer of the amount of Interchange to be included
as Collections of Finance Charge Receivables with respect to the preceding
Monthly Period, which shall be equal to the amount of Interchange paid to the
Transferor pursuant to the Receivables Purchase Agreements with respect to such
Monthly Period.
(j) [Reserved]
(k) Separate Corporate Existence. The Transferor shall:
(i) Maintain in full effect its existence, rights and franchises
as a limited liability company under the laws of the state of its formation and
will obtain and preserve its qualification to do business in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement and the Receivables Purchase Agreements and
each other instrument or agreement necessary or appropriate to proper
administration hereof and to permit and effectuate the transactions contemplated
hereby.
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(ii) Except as provided herein, maintain its own deposit,
securities and other account or accounts, separate from those of any Affiliate
of the Transferor, with financial institutions. The funds of the Transferor will
not be diverted to any other Person or for other than the company use of the
Transferor, and, except as may be expressly permitted by this Agreement or the
Receivables Purchase Agreements, the funds of the Transferor shall not be
commingled with those of any other Person.
(iii) Ensure that, to the extent that it shares the same officers
or other employees as any of its members or other Affiliates, the salaries of
and the expenses related to providing benefits to such officers and other
employees shall be fairly allocated among such entities, and each such entity
shall bear its fair share of the salary and benefit costs associated with all
such common officers and employees.
(iv) Ensure that, to the extent that it jointly contracts with
any of its members or other Affiliates to do business with vendors or service
providers or to share overhead expenses, the costs incurred in so doing shall be
allocated fairly among such entities, and each such entity shall bear its fair
share of such costs. To the extent that the Transferor contracts or does
business with vendors or service providers where the goods and services provided
are partially for the benefit of any other Person, the costs incurred in so
doing shall be fairly allocated to or among such entities for whose benefit the
goods and services are provided, and each such entity shall bear its fair share
of such costs.
(v) Ensure that all material transactions between the
Transferor and any of its Affiliates shall be only on an arm's-length basis and
shall not be on terms more favorable to either party than the terms that would
be found in a similar transaction involving unrelated third parties.
(vi) Maintain a principal executive and administrative office
through which its business is conducted and a telephone number separate from
those of its members and other Affiliates. To the extent that the Transferor and
any of its members or other Affiliates have offices in contiguous space, there
shall be fair and appropriate allocation of overhead costs (including rent)
among them, and each such entity shall bear its fair share of such expenses.
(vii) Conduct its affairs strictly in accordance with its
certificate of formation and limited liability company agreement and observe all
necessary, appropriate and customary company formalities, including, but not
limited to, holding all regular and special members' and directors' meetings
appropriate to authorize all action, keeping separate and accurate minutes of
such meetings, passing all resolutions or consents necessary to authorize
actions taken or to be taken, and maintaining accurate and separate books,
records and accounts, including, but not limited to, intercompany transaction
accounts. Regular members' and directors' meetings shall be held at least
annually.
(viii) Ensure that its board of directors shall at all times
include at least one Independent Director (for purposes hereof, "Independent
Director" shall mean any member of the board of directors of the Transferor that
is not and has not at any time been (x) an officer, agent, advisor, consultant,
attorney, accountant, employee, member or shareholder of any Affiliate of the
Transferor which is not a special purpose entity, (y) a director of any
Affiliate of
34
the Transferor other than an independent director of any Affiliate which is a
special purpose entity or (z) a member of the immediate family of any of the
foregoing).
(ix) Ensure that decisions with respect to its business and daily
operations shall be independently made by the Transferor (although the officer
making any particular decision may also be an officer or director of an
Affiliate of the Transferor) and shall not be dictated by an Affiliate of the
Transferor.
(x) Act solely in its own company name and through its own
authorized officers and agents, and no Affiliate of the Transferor shall be
appointed to act as agent of the Transferor. The Transferor shall at all times
use its own stationery and business forms and describe itself as a separate
legal entity.
(xi) Other than as provided in the Revolving Credit Agreement,
ensure that no Affiliate of the Transferor shall advance funds or loan money to
the Transferor, and no Affiliate of the Transferor will otherwise guaranty debts
of the Transferor.
(xii) Other than organizational expenses and as expressly provided
herein, pay all expenses, indebtedness and other obligations incurred by it
using its own funds.
(xiii) Not enter into any guaranty, or otherwise become liable, with
respect to or hold its assets or creditworthiness out as being available for the
payment of any obligation of any Affiliate of the Transferor nor shall the
Transferor make any loans to any Person.
(xiv) Ensure that any financial reports required of the Transferor
shall comply with generally accepted accounting principles and shall be issued
separately from, but may be consolidated with, any reports prepared for any of
its Affiliates so long as such consolidated reports contain footnotes describing
the effect of the transactions between the Transferor and such Affiliate and
also state that the assets of the Transferor are not available to pay creditors
of the Affiliate.
(xv) Ensure that at all times it is adequately capitalized to engage
in the transactions contemplated in its certificate of formation and its limited
liability company agreement.
Section 2.08. Addition of Accounts.
(a) Required Additions. (i) If, as of the close of business on the
last Business Day of any Monthly Period, (x) the Transferor's Participation
Amount is less than the Required Transferor's Interest or (y) the aggregate
amount of Principal Receivables is less than the Required Principal Balance,
each on such date, the Transferor shall on or prior to the close of business on
the tenth Business Day following the last Business Day of such Monthly Period
(the "Required Designation Date"), unless the Transferor's Participation Amount
exceeds the Required Transferor's Interest as of the close of business on any
day after the last Business Day of such Monthly Period and prior to the Required
Designation Date, designate additional Eligible Accounts to be included as
Accounts as of the Required Designation Date or any earlier date in a sufficient
amount such that, after giving effect to such addition, (x) the Transferor's
Participation Amount as of the close of business on the Addition Date is at
least equal to the Required
35
Transferor's Interest and (y) the aggregate amount of Principal Receivables
equals or exceeds the Required Principal Balance, each on such date. The failure
of any condition set forth in paragraph (c) or (d) below, as the case may be,
shall not relieve the Transferor of its obligation pursuant to this paragraph;
provided, however, that the failure of the Transferor to transfer Receivables to
the Trustee as provided in this paragraph solely as a result of the
unavailability of a sufficient amount of Eligible Receivables shall not
constitute a breach of this Agreement; provided further that any such failure
which has not been timely cured (as specified in the related Supplement) will
nevertheless result in the occurrence of a Pay Out Event with respect to each
Series for which, pursuant to the Supplement therefor, a failure by the
Transferor to convey Receivables in Additional Accounts or Participation
Interests to the Trustee by the day on which it is required to convey such
Receivables or Participation Interests pursuant to Section 2.08(a) constitutes a
"Pay Out Event" (as defined in such Supplement).
(ii) In lieu of, or in addition to, designating Additional Accounts
pursuant to clause (i) above, the Transferor may, subject to the conditions
specified in paragraph (d) below, convey to the Trustee Participation Interests.
The addition of Participation Interests in the Trust pursuant to this paragraph
(a) or paragraph (b) below shall be effected by an amendment hereto, dated the
applicable Addition Date, pursuant to Section 13.01(a).
(b) Permitted Additions. The Transferor may from time to time, at its
sole discretion, subject to the conditions specified in paragraph (c) or (d)
below, as the case may be, designate additional Eligible Accounts to be included
as Accounts or Participation Interests to be included as Trust Assets, in either
case as of the applicable Addition Date.
(c) Automatic Additional Accounts. (i)The Transferor may from time to
time, at its sole discretion, subject to and in compliance with the limitations
specified in clause (ii) below and the applicable conditions specified in
paragraph (d) below, designate Eligible Accounts to be included as Accounts as
of the applicable Addition Date. For purposes of this paragraph, Eligible
Accounts shall be deemed to include only consumer revolving credit card accounts
or other consumer revolving credit accounts which are (x) originated by an
Account Owner or any Affiliate of an Account Owner and (y) of a type included as
Initial Accounts or which have previously been included in any Addition which
has been effected in accordance with all of the conditions specified in
paragraph (d) below.
(ii) The Transferor shall not be permitted to designate Automatic
Additional Accounts pursuant to clause (i) above with respect to any of the
three (3) consecutive Monthly Periods commencing in January, April, July and
October of each calendar year unless on or before the first Business Day of such
three (3) consecutive Monthly Periods, the Transferor shall have requested each
Rating Agency to notify, and each Rating Agency shall have notified, the
Transferor, the Servicer and the Trustee of the limitations (other than the
limitations described in this Agreement), if any, to the right of the Transferor
to designate Automatic Additional Accounts during such three (3) consecutive
Monthly Periods; provided, however, that on or before twenty (20) days following
the last Business Day of such three (3) consecutive Monthly Periods, the
Transferor shall have received written confirmation from each Rating Agency that
each such designation of Automatic Additional Accounts will not have a Ratings
Effect and shall have delivered copies of each such confirmation to the Servicer
and the Trustee. Unless Standard & Poor's otherwise consents, the number of
Automatic Additional Accounts plus the
36
number of Accounts added pursuant to Section 2.08(a), without the prior notice
of Standard & Poor's as described under Section 2.08(d)(v), shall not at any
time exceed the Aggregate Addition Limit; provided, however, if the Aggregate
Addition Limit is exceeded for purposes of Section 2.08(a), the Transferor shall
have delivered written notice to Moody's of any such Addition. Unless Moody's
otherwise consents, the number of Automatic Additional Accounts added pursuant
to Section 2.08(c), without prior notice of Moody's as described under Section
2.08(d)(v), shall not at any time exceed the Aggregate Addition Limit.
(ii) On or before March 31, June 30, September 30 and December 31 of
each calendar year, commencing on December 31, 2002, the Transferor shall have
delivered to the Trustee, each Rating Agency and any Series Enhancer entitled
thereto pursuant to the relevant Supplement an Opinion of Counsel in accordance
with Section 13.02(d), with respect to the Automatic Additional Accounts
included as Accounts during the preceding three-month period confirming the
creation and perfection of the security interest granted by the Transferor in
the Receivables in such Automatic Additional Accounts; provided, however, if the
long-term unsecured debt rating or certificate of deposit rating of the related
Account Owner is withdrawn or reduced below BBB- by Standard & Poor's (and only
for so long as the applicable rating is below BBB- by Standard & Poor's), the
Transferor shall have delivered to the Trustee, each Rating Agency and any
Series Enhancer entitled thereto pursuant to the relevant Supplement an Opinion
of Counsel in accordance with Section 13.02(d) on or before the last Business
Day of each calendar month, commencing on the last Business Day of the calendar
month immediately following the month in which such withdrawal or reduction
occurs, with respect to the Automatic Additional Accounts owned by such Account
Owner included as Accounts during the preceding one-month period confirming the
creation and perfection of the security interest granted by the Transferor in
the Receivables in such Automatic Additional Accounts. Such Opinion of Counsel
shall be provided by outside counsel. If such Opinion of Counsel with respect to
any Automatic Additional Accounts is not so received, the ability of the
Transferor to designate Automatic Additional Accounts will be suspended until
such time as each Rating Agency otherwise consents in writing or such accounts
are removed from the Trust. If the applicable Transferor is unable to deliver
such Opinion of Counsel with respect to the Receivables in any Automatic
Additional Account, such inability shall be deemed to be a breach of the
representation in Section 2.04(a)(viii) with respect to the Receivables in such
Automatic Additional Account for purposes of Section 2.05.
(d) Conditions to Addition. On the Addition Date with respect to any
Additional Accounts or Participation Interests, the Trustee shall acquire the
Receivables in such Additional Accounts (and such Additional Accounts shall be
Accounts for purposes of this Agreement) or shall acquire such Participation
Interests, in each case as of the close of business on the applicable Addition
Date, subject to the satisfaction of the following conditions (provided,
however, that the conditions set forth in clauses (i), (v), (vi) and (vii) shall
not apply to the transfer to the Trustee of Receivables in Automatic Additional
Accounts which are governed by Section 2.08(c)):
(i) on or before the fifth Business Day immediately preceding the
Addition Date, the Transferor shall have given the Trustee, the Servicer, each
Rating Agency and any Series Enhancer entitled thereto pursuant to the relevant
Supplement written notice that the Additional Accounts or Participation
Interests will be included and specifying the applicable
37
Addition Date, the Additional Cut-Off Date, the approximate number of accounts
or other assets expected to be added and the approximate aggregate balances
expected to be outstanding in the accounts or other assets to be added;
(ii) in the case of Additional Accounts, the Transferor shall have
delivered to the Trustee copies of UCC financing statements covering such
Additional Accounts, if necessary to perfect the Trustee's interest in the
Receivables arising therein;
(iii) in the case of Additional Accounts, to the extent required by
Section 4.03, the Transferor shall have deposited in the Collection Account, or
caused to be deposited into the Collection Account, all Collections with respect
to such Additional Accounts since the Additional Cut-Off Date (plus an amount
representing unamortized annual membership fees for such Additional Accounts
determined as of such Additional Cut-Off Date in accordance with Section
3.04(d));
(iv) as of each of the Additional Cut-Off Date and the Addition
Date, no Insolvency Event with respect to the Transferor or the applicable
Account Owner shall have occurred nor shall the transfer of the Receivables
arising in the Additional Accounts or of the Participation Interests to the
Trustee have been made in contemplation of the occurrence thereof;
(v) (A) except in the case of an Addition pursuant to Section
2.08(a), the Transferor shall have received written notice from each Rating
Agency that such Addition will not have a Ratings Effect and shall have
delivered copies of each such written notice to the Servicer and the Trustee,
and (B) in the case of an Addition pursuant to Section 2.08(a) during any of the
three (3) consecutive Monthly Periods commencing in January, April, July and
October of each calendar year, if applicable, the Transferor shall have
received, to the extent not previously received, not later than 20 days
following the last Business Day of the relevant three (3) consecutive Monthly
Periods, written notice from each Rating Agency that such Addition will not have
a Ratings Effect and shall have delivered copies of each such written notice to
the Servicer and the Trustee; provided, however, that in the case of an Addition
pursuant to Section 2.08(a) which would exceed the Aggregate Addition Limit, the
Transferor shall have provided each Rating Agency with at least 15 days prior
written notice of such Addition and at or prior to the end of such 15-day
period, each Rating Agency shall have notified the Transferor in writing that
such Addition will not have a Ratings Effect, and the Transferor shall have
delivered copies of such written notice to the Servicer and the Trustee;
(vi) the Transferor shall have delivered to the Trustee, each Rating
Agency and any Series Enhancer entitled thereto pursuant to the relevant
Supplement an Opinion of Counsel that for federal and Virginia income and
franchise tax purposes (and, if there has been an assumption of the Servicer's
obligations under this Agreement for income and franchise tax purposes of the
jurisdiction in which the assuming entity engages in its principal servicing
activities, if other than Virginia), such Addition will not cause a taxable
event to the holders of the Certificates;
(vii) the Transferor shall have delivered to the Trustee, each Rating
Agency and any Series Enhancer entitled thereto pursuant to the relevant
Supplement an Opinion of Counsel, dated the Addition Date, in accordance with
Section 13.02(d);
38
(viii) the Transferor shall have delivered to the Trustee and any
Series Enhancer entitled thereto pursuant to the relevant Supplement an
Officer's Certificate of the Transferor, dated the Addition Date, to the effect
that (A) the Transferor reasonably believes that such Addition will not, based
on the facts known to such officer at the time of such certification, then cause
a Pay Out Event or any event that, after the giving of notice or the lapse of
time would constitute a Pay Out Event to occur with respect to any Series and
(B) in the case of Additional Accounts no selection procedure was utilized by
the Transferor that would result in a selection of Additional Accounts (from the
Eligible Accounts available to the Transferor) that would be materially adverse
to the interests of the Certificateholders of any Series as of the date of the
Addition; and
(ix) the Transferor shall have delivered to the Trustee a written
assignment executed by the Transferor and the Trustee, substantially in the form
of Exhibit B (an "Assignment"), and an Account Schedule containing a true and
complete list of the related Additional Accounts or Participation Interests.
(e) Representations and Warranties. The Transferor hereby
represents and warrants to the Trustee as of the related Addition Date as to the
matters relating to it set forth in paragraph (d)(iv) and (viii) above and that,
in the case of Additional Accounts, the related Account Schedule is, as of the
applicable Additional Cut-Off Date, true and complete in all material respects.
(f) Additional Transferors. The Transferor may designate Affiliates
of the Transferor to be included as a Transferor ("Additional Transferors")
under this Agreement by an amendment hereto pursuant to Section 13.01(a). Any
Additional Transferor may cease to transfer newly arising Receivables to the
Trustee so long as each Rating Agency provides written notice that such
cessation will not have a Ratings Effect. If any Transferor elects to have all
or a portion of its interest in the Transferor's Interest evidenced by the Base
Certificate as provided in Section 6.01 hereof, then in connection with such
designation, the Transferor shall surrender the Base Certificate to the Trustee
in exchange for a newly issued Base Certificate modified to reflect such
Additional Transferor's Interest. If the Transferor elects to have its interest
in the Transferor's Interest be uncertificated as provided in Section 6.01, the
Transferor shall instruct the Trustee in writing to register the Additional
Transferor as the owner of the appropriate interest in the Transferor's Interest
on the books and records of the Trust. Prior to any such designation of an
Additional Transferor and, if applicable, exchange of certificates, the
conditions set forth in Section 6.03(c) shall have been satisfied.
Section 2.09. Removal of Accounts. (a) On any day of any Monthly
Period the Transferor shall have the right to require the reassignment to it or
its designee of all the Trustee's right, title and interest in, to and under the
Receivables then existing and thereafter created in Accounts designated by the
Transferor (the "Removed Accounts"), the Funds Collateral securing such
Receivables, all Recoveries and Insurance Proceeds allocable to all of the
foregoing, all Collections with respect to all of the foregoing, all monies due
or to become due and all amounts received or receivable with respect to all of
the foregoing and all proceeds thereof, upon satisfaction of the following
conditions:
39
(i) on or before the fifth Business Day immediately preceding the Removal
Date (the "Removal Notice Date"), the Transferor shall have given the Trustee,
the Servicer, each Rating Agency and any Series Enhancer entitled thereto
pursuant to the relevant Supplement written notice of such removal and
specifying the date for removal of the Removed Accounts (the "Removal Date");
(ii) on the Removal Date, the Transferor shall have amended Schedule 1 by
delivering to the Trustee an Account Schedule containing a true and complete
list of the Removed Accounts specifying for each such Account, as of the Removal
Notice Date, its account number, the aggregate amount outstanding in such
Account, the aggregate amount of Principal Receivables outstanding in such
Account and, for any Funds Collateral relating to such Account, the account
number for, and the amount of funds on deposit in, the applicable Deposit
Account;
(iii) the Transferor shall have represented and warranted as of the Removal
Date that the list of Removed Accounts delivered pursuant to paragraph (ii)
above, as of the Removal Notice Date, is true and complete in all material
respects;
(iv) the Transferor shall have received written notice from each Rating
Agency that such removal will not have a Ratings Effect and shall have delivered
copies of each such written notice to the Servicer and the Trustee;
(v) the Transferor shall have delivered to the Trustee and any Series
Enhancer entitled thereto pursuant to the relevant Supplement an Officer's
Certificate of the Transferor, dated the Removal Date, to the effect that the
Transferor reasonably believes that such removal will not based on the facts
known to such officer at the time of such certification, then cause a Pay Out
Event or any event that, after the giving of notice or the lapse of time, would
constitute a Pay Out Event to occur with respect to any Series; and
(vi) the aggregate amount of Principal Receivables to be removed shall not
equal or exceed 5% of the aggregate amount of Principal Receivables in the
Trust.
(b) Upon satisfaction of the above conditions, the Transferor and the
Trustee shall execute and deliver a written reassignment in substantially the
form of Exhibit C (the "Reassignment"), and the Trustee shall, without further
action, sell, transfer, assign, set over and otherwise convey to the Transferor
or its designee, on the Removal Date, without recourse, representation or
warranty, all the right, title and interest of the Trustee in and to the
Receivables existing at the close of business on the Removal Notice Date and
thereafter created in the Removed Accounts, the Funds Collateral securing such
Receivables, all Recoveries and Insurance Proceeds allocable to all of the
foregoing, all Collections with respect to all of the foregoing, all monies due
or to become due and all amounts received or receivable with respect to all of
the foregoing and all proceeds thereof. In addition, the Trustee shall execute
such other documents and instruments of transfer or assignment and take such
other actions as shall reasonably be requested by the Transferor to effect the
conveyance of Receivables pursuant to this Section 2.09.
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In addition to the foregoing, on the date when any Receivable in an Account
becomes a Defaulted Receivable (including any related Finance Charge
Receivables), the Trustee shall automatically and without further action or
consideration transfer, set over and otherwise convey to the Transferor, without
recourse, representation or warranty, all right, title and interest of the
Trustee in and to the Defaulted Receivables (including any related Finance
Charge Receivables) in such Account, the Funds Collateral securing such
Receivables, all Insurance Proceeds allocable to all of the foregoing, all
Collections with respect to all of the foregoing, all monies due or to become
due and all amounts received or receivable with respect to all of the foregoing
and all proceeds thereof; provided that Recoveries of such Defaulted Receivables
shall be applied as provided herein. The Trustee shall execute and deliver such
instruments of transfer and assignment (including any UCC termination
statements), in each case without recourse, as shall be reasonably requested by
the Transferor to vest in the Transferor or its designee all right, title and
interest that the Trustee had in such Defaulted Receivables (including any
related Finance Charge Receivables).
In addition to the foregoing, the Transferor may designate Removed Accounts
as provided in and subject to the terms and conditions contained in this Section
2.09 if the Removed Accounts are designated in response to a third-party action
or decision not to act and not the unilateral action of the Transferor.
(c) In addition to the foregoing requirements, except for Removed Accounts
described in the second and third paragraphs of Section 2.09(b), there shall be
no more than one Removal Date in any Monthly Period; for each Removal Date, the
Accounts to be designated as Removed Accounts shall be selected at random by the
Transferor and the Removed Accounts shall not, as of the Removal Notice Date,
contain Principal Receivables which in the aggregate exceed an amount equal to
the positive difference, if any, between the Transferor's Interest and the
Required Transferor's Interest.
Section 2.10. Account Allocations. In the event that any Transferor is
unable for any reason to transfer Receivables to the Trustee in accordance with
the provisions of this Agreement, including by reason of the application of the
provisions of Section 9.02 or any binding order of any Governmental Authority (a
"Transfer Restriction Event"), then, in any such event, (a) the Transferor
agrees (except as prohibited by any such order) to allocate and pay to the
Trustee, after the date of such inability, all Collections, including
Collections of Receivables transferred to the Trustee prior to the occurrence of
such event, and all amounts which would have constituted Collections but for the
Transferor's inability to transfer Receivables (up to an aggregate amount equal
to the amount of Receivables in the Trust on such date), (b) the Transferor
agrees that such amounts will be applied as Collections in accordance with
Article IV and the terms of each Supplement and (c) for so long as the
allocation and application of all Collections and all amounts that would have
constituted Collections are made in accordance with clauses (a) and (b) above,
Principal Receivables and all amounts which would have constituted Principal
Receivables but for the Transferor's inability to transfer Receivables to the
Trustee and Principal Receivables and all amounts which would have constituted
Principal Receivables as aforesaid that are written off as uncollectible in
accordance with this Agreement shall continue to be allocated in accordance with
Article IV and the terms of each Supplement. For the purpose of the immediately
preceding sentence, the Transferor shall treat the first received Collections
with respect to the Accounts as allocable to the Trustee until the Trustee shall
have been allocated and
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paid Collections in an amount equal to the aggregate amount of Principal
Receivables in such Accounts as of the date of the occurrence of such event. If
the Transferor is unable pursuant to any Requirements of Law to allocate
Collections as described above, the Transferor agrees that, after the occurrence
of such event, payments on each Account with respect to the principal balance of
such Account shall be allocated first to the oldest principal balance of such
Account and shall have such payments applied as Collections in accordance with
Article IV and the terms of each Supplement. The parties hereto agree that
Finance Charge Receivables, whenever created, accrued in respect of Principal
Receivables which have been conveyed to the Trustee shall continue to be a part
of the Trust notwithstanding any cessation of the transfer of additional
Principal Receivables to the Trustee and Collections with respect thereto shall
continue to be allocated and paid in accordance with Article IV and the terms of
each Supplement.
Section 2.11. Discount Option.
(a) The Transferor shall have the option to designate at any time a
percentage, which may be a fixed percentage or a variable percentage based on a
formula (the "Discount Percentage"), of the amount of Receivables arising in the
Accounts on or after the date such designation becomes effective that would
otherwise constitute Principal Receivables to be treated as Finance Charge
Receivables ("Discount Option Receivables"). The Transferor shall also have the
option of reducing or withdrawing the Discount Percentage, at any time and from
time to time, on and after the date such designation becomes effective. The
Transferor shall provide to the Servicer, the Trustee, any Series Enhancer and
each Rating Agency thirty (30) days prior written notice of such designation (or
reduction or withdrawal), and such designation (or reduction or withdrawal)
shall become effective on the date designated therein only if (i) the Transferor
shall have delivered to the Trustee and each Series Enhancer entitled thereto
pursuant to the relevant Supplement an Officer's Certificate of the Transferor
stating that the Transferor reasonably believes that such designation (or
reduction or withdrawal) will not, based on the facts known to such officer at
the time of such certification, then cause a Pay Out Event or any event that,
after the giving of notice or the lapse of time, would constitute a Pay Out
Event to occur with respect to any Series, (ii) the Transferor shall have
received written notice from each Rating Agency that such designation (or
reduction or withdrawal) will not have a Ratings Effect and shall have delivered
copies of each such written notice to the Servicer and the Trustee and (iii) in
the case of a reduction or withdrawal, the Transferor shall have delivered to
the Trustee an Officer's Certificate of the Transferor to the effect that, in
the reasonable belief of the Transferor, such reduction or withdrawal shall not
have adverse regulatory or other accounting implications for the Transferor.
(b) On each Date of Processing after the date on which the Transferor's
exercise of its discount option takes effect, the Transferor shall, to the
extent required by Section 4.03, (i) deposit into the Collection Account in
immediately available funds an amount equal to the product of (a) the aggregate
Floating Allocation Percentages with respect to all Series and (b) the aggregate
amount of the Discount Option Receivable Collections processed on such day and
(ii) pay to the Holders of the Transferor Certificates, and if any owner of an
interest in the Transferor's Interest elects to have such interest be
uncertificated as provided in Section 6.01 hereof, then to the recorded owner of
such uncertificated interest in the Transferor's Interest, the balance of such
Discount Option Receivables Collections. The deposit made by the Transferor into
the Collection Account under the preceding sentence shall be considered a
payment of such
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Discount Option Receivables and shall be applied as Finance Charge Receivables
in accordance with Article IV and the terms of each Supplement.
ARTICLE III
Administration and Servicing of Receivables
Section 3.01. Acceptance of Appointment and Other Matters Relating to the
Servicer.
(a) Capital One agrees to act as the Servicer under this Agreement and the
Certificateholders by their acceptance of Certificates consent to Capital One
acting as Servicer.
(b) The Servicer shall service and administer the Receivables, shall
collect payments due under the Receivables and shall charge off as uncollectible
Receivables, all in accordance with its customary and usual servicing procedures
for servicing consumer revolving credit card and other consumer revolving credit
receivables comparable to the Receivables and in accordance with the Lending
Guidelines. The Servicer shall have full power and authority, acting alone or
through any Person properly designated by it hereunder, to do any and all things
in connection with such servicing and administration which it may deem necessary
or desirable. Without limiting the generality of the foregoing, subject to
Section 10.01, the Servicer is hereby authorized and empowered (i) to make
withdrawals and payments or to instruct the Trustee to make withdrawals and
payments from the Collection Account and any Series Account, as set forth in
this Agreement or any Supplement, and (ii) to take any action required or
permitted under any Series Enhancement, as set forth in this Agreement or any
Supplement. Without limiting the generality of the foregoing and subject to
Section 10.01, the Servicer is hereby authorized and empowered, at the expense
of the Transferor, to make any filings, reports, notices, applications and
registrations with, and to seek any consents or authorizations from, the
Securities and Exchange Commission (the "Commission") and any state securities
authority on behalf of the Trust as may be necessary or advisable to comply with
any Federal or state securities laws or reporting requirements. The Trustee
shall furnish, within a reasonable period of time, the Servicer with any powers
of attorney or other documents necessary or appropriate to enable the Servicer
to carry out its servicing and administrative duties hereunder.
(c) 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 and consumer revolving credit
receivables.
(d) The Servicer shall comply with and perform its servicing obligations
with respect to the Accounts and Receivables in accordance with the Lending
Agreements relating to the Accounts and the Lending Guidelines and all
applicable rules and regulations of VISA, MasterCard and any other similar
entity or organization relating to any other type of revolving credit card
accounts included as Accounts, except insofar as any failure to so comply or
perform would not materially and adversely affect the Trust or the Investor
Certificateholders.
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(e) The Servicer shall pay out of its own funds, without reimbursement, all
expenses incurred in connection with the servicing activities hereunder
including expenses related to enforcement of the Receivables, fees and
disbursements of the Trustee, any Paying Agent and any Transfer Agent and
Registrar (including the reasonable fees and expenses of its counsel) in
accordance with Section 11.05 and fees and disbursements of independent
accountants for the Servicer.
(f) The Transferor will use its best efforts to obtain and maintain the
listing of the Investor Certificates of any Series or Class on any specified
securities exchange. The Transferor shall give notice to the Trustee on the date
on which such Investor Certificates are approved for such listing and within
three (3) Business Days following receipt of notice by the Transferor of any
actual, proposed or contemplated delisting of such Investor Certificates by any
such securities exchange. The Trustee or the Transferor, each in its sole
discretion, may terminate any listing on any such securities exchange at any
time subject to the notice requirements set forth in the preceding sentence.
Section 3.02. Servicing Compensation. As full compensation for its
servicing activities hereunder and as reimbursement for any expense incurred by
it in connection therewith, the Servicer shall be entitled to receive a
servicing fee (the "Servicing Fee") with respect to each Monthly Period, payable
monthly on the related Distribution Date, in an amount equal to one-twelfth of
the product of (a) the weighted average of the Servicing Fee Rates with respect
to each outstanding Series (based upon the Servicing Fee Rate for each Series
and the outstanding principal amount of each Series) and (b) the amount of
Principal Receivables on the last day of the prior Monthly Period. The share of
the Servicing Fee allocable to (i) the Certificateholders' Interest of a
particular Series with respect to any Monthly Period (the "Monthly Servicing
Fee") and (ii) the Enhancement Invested Amount, if any, of a particular Series
with respect to any Monthly Period will each be determined in accordance with
the relevant Supplement. The portion of the Servicing Fee with respect to any
Monthly Period not so allocated to the Certificateholders' Interest or the
Enhancement Invested Amount, if any, of a particular Series shall be paid by the
Transferor on the related Distribution Date and in no event shall the Trust, the
Trustee, the Investor Certificateholders of any Series or any Series Enhancer be
liable for the share of the Servicing Fee with respect to any Monthly Period
allocable to the Transferor.
Section 3.03. Representations, Warranties and Covenants of the Servicer.
Capital One, as Servicer, hereby makes, and any Successor Servicer by its
appointment hereunder shall make, on each Closing Date on which it is the
Servicer (and on the date of any such appointment), the following
representations, warranties and covenants:
(a) Organization and Good Standing. The Servicer is a state banking
corporation validly existing under the laws of the Commonwealth of Virginia or
another state or a state banking association, a national banking association or
a corporation validly existing under the laws of its jurisdiction of
incorporation and has, in all material respects, full power and authority to
execute, deliver and perform its obligations under this Agreement and each
Supplement and to own its properties and conduct its servicing business as such
properties are presently owned and as such business is presently conducted.
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(b) Due Qualification. The Servicer is duly qualified to do business and is
in good standing as a foreign corporation (or is exempt from such requirements),
and has obtained all necessary licenses and approvals, in each jurisdiction in
which the servicing of the Receivables as required by the Agreement requires
such qualification except where failure to so qualify or to obtain such licenses
and approvals would not have a material adverse effect on its ability to perform
its obligations hereunder or under any Supplement.
(c) Due Authorization. The execution, delivery, and performance by the
Servicer of this Agreement, each Supplement and the other agreements and
instruments executed or to be executed by the Servicer as contemplated hereby,
have been duly authorized by the Servicer by all necessary corporate action on
the part of the Servicer and this Agreement and each Supplement will remain,
from the time of its execution, an official record of the Servicer.
(d) Binding Obligation. This Agreement and each Supplement constitutes a
legal, valid and binding obligation of the Servicer, enforceable against the
Servicer in accordance with its terms, except as enforceability may be limited
by applicable Debtor Relief Laws and general principles of equity.
(e) No Conflict and No Violation. The execution and delivery of this
Agreement and each Supplement by the Servicer, and the performance by the
Servicer of the transactions contemplated by this Agreement and each Supplement
and the fulfillment by the Servicer of the terms hereof and thereof applicable
to the Servicer, will not conflict with or violate or result in any breach of,
or constitute (with or without notice or lapse of time or both) a default under,
any indenture, contract, agreement, mortgage, deed of trust or other instrument
to which the Servicer is a party or by which it or any of its properties are
bound. The execution and delivery of this Agreement by the Servicer, the
performance by the Servicer of the transactions contemplated by this Agreement
and the fulfillment by the Servicer of the terms hereof applicable to the
Servicer will not conflict with or violate any Requirements of Law applicable to
the Servicer.
(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 Governmental
Authority seeking to prevent the issuance of the Certificates or the
consummation of any of the transactions contemplated by this Agreement or any
Supplement, or seeking any determination or ruling that would materially and
adversely affect the performance by the Servicer of its obligations under this
Agreement or any Supplement.
(g) Compliance with Requirements of Law. The Servicer shall duly satisfy
all obligations on its part to be fulfilled under or in connection with the
Receivables and the related Accounts, will maintain in effect all qualifications
required under Requirements of Law in order to properly service the Receivables
and the related Accounts and will comply in all material respects with all other
Requirements of Law in connection with servicing the Receivables and the related
Accounts, the failure to comply with which would have a material adverse effect
on the interests of the Certificateholders.
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(h) No Rescission or Cancellation. The Servicer shall not authorize any
rescission or cancellation of a Receivable except as ordered by a court of
competent jurisdiction or other Governmental Authority or in accordance with the
Lending Guidelines.
(i) Protection of Rights. The Servicer shall take no action which, nor omit
to take any action the omission of which, would substantially impair the rights
of the Trustee in any Receivable, nor shall it, except in the ordinary course of
its business and in accordance with the Lending Guidelines, reschedule, revise
or defer Collections due on the Receivables.
(j) Receivables Not To Be Evidenced by Instruments or Chattel Paper. The
Servicer will take no action to cause any Receivable to be evidenced by any
instrument or chattel paper (as defined in the UCC) and, if any Receivable is so
evidenced as a result of the Servicer's action, it shall be deemed to be an
Ineligible Receivable and shall be assigned to the Servicer as provided in this
Section 3.03; provided, however, that Receivables evidenced by instruments or
chattel paper taken from Obligors in the ordinary course of the Servicer's
collection efforts shall not be deemed Ineligible Receivables solely as a result
thereof.
(k) All Consents. All approvals, authorizations, consents, orders or other
actions of any Person or of any Governmental Authority required to be obtained
by the Servicer in connection with the execution and delivery by the Servicer of
this Agreement and each Supplement, the performance by the Servicer of the
transactions contemplated by this Agreement and each Supplement and the
fulfillment by the Servicer of the terms hereof and thereof, have been obtained.
For purposes of the representations and warranties set forth in this
Section 3.03, each reference to a Supplement shall be deemed to refer only to
those Supplements in effect as of the relevant Closing Date or the date of
appointment of a Successor Servicer, as applicable.
In the event any of the representations, warranties or covenants of the
Servicer contained in paragraph (g), (h), (i) or (j) with respect to any
Receivable or the related Account is breached, and such breach has a material
adverse effect on the Trustee's interest in the Receivables (which determination
shall be made without regard to the availability of funds under any Series
Enhancement) and remains uncured for sixty (60) days (or such longer period, not
in excess of 150 days, as may be agreed to by the Trustee) from the earlier to
occur of the discovery of such event by the Servicer, or receipt by the Servicer
of written notice of such event given by the Transferor or the Trustee, all
Receivables in the Account or Accounts to which such event relates shall be
assigned to the Servicer on the terms and conditions set forth below; provided,
however, that such Receivables will not be 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 Transferor and the Trustee a certificate of an
authorized officer of the Servicer describing the nature of such breach and the
manner in which such breach was cured.
The Servicer shall effect such assignment by making a deposit into the
Collection Account in immediately available funds on the Transfer Date following
the Monthly Period in which such assignment obligation arises in an amount equal
to the amount of such Receivables,
46
which deposit shall be considered a Transfer Deposit Amount and shall be applied
in accordance with Article IV and the terms of each Supplement.
Upon each such assignment to the Servicer, the Trustee shall automatically
and without further action sell, transfer, assign, set over and otherwise convey
to the Servicer, without recourse, representation or warranty, all right, title
and interest of the Trustee in and to such Receivables, the Funds Collateral
securing such Receivables, all Recoveries and Insurance Proceeds allocable to
all of the foregoing, all Collections with respect to all of the foregoing, all
monies due or to become due and all amounts received with respect to all of the
foregoing and all proceeds thereof. The Trustee 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 transfer of any such
Receivables pursuant to this Section 3.03. The obligation of the Servicer to
accept assignment and transfer of any 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 Investor Certificateholders (or the
Trustee) or any Series Enhancer, except as provided in Section 8.04.
Section 3.04. Reports and Records for the Trustee.
(a) Daily Records. On each Business Day, the Servicer shall make or cause
to be made available at the office of the Servicer during normal business hours
for inspection by the Transferor and the Trustee upon request a record setting
forth (i) the Collections in respect of Principal Receivables and in respect of
Finance Charge Receivables processed by the Servicer on the second preceding
Business Day in respect of the Accounts and (ii) the amount of Receivables as of
the close of business on the second preceding Business Day in each Account. The
Servicer shall, at all times, maintain its computer files with respect to the
Accounts in such a manner so that the Accounts may be specifically identified
and shall make available to the Transferor and the Trustee at the office of the
Servicer on any Business Day during normal business hours any computer programs
necessary to make such identification.
(b) Monthly Servicer's Certificate. Not later than the third Business Day
preceding each Distribution Date, the Servicer shall, with respect to each
outstanding Series, deliver to the Trustee, the Transferor, the Paying Agent,
each Rating Agency and each Series Enhancer entitled thereto pursuant to the
relevant Supplement a certificate of a Servicing Officer in substantially the
form set forth in the related Supplement.
(c) Related Accounts. The Servicer covenants and agrees hereby to deliver
to the Trustee, within a reasonable time period after it receives notice that a
Related Account has been created, but in any event not later than 15 days after
the end of the month within which it receives notice that such Related Account
has been created, a notice specifying the new account number for such Related
Account.
(d) Annual Membership Fees. On or prior to each Determination Date, the
Servicer shall deliver to the Trustee and the Transferor a certificate of a
Servicing Officer setting forth (or shall set forth in the Monthly Servicer's
Certificate) (a) the amount of annual membership fees to be included as
Collections of Finance Charge Receivables with respect to the
47
preceding Monthly Period, which shall be equal to the amount of annual
membership fees transferred to the Trustee during the preceding 12 Monthly
Periods (or during the equivalent monthly periods occurring prior to the first
Monthly Period) divided by 12 and (b) the portion of such annual membership fees
("unamortized annual membership fees") which have not been treated as
Collections of Finance Charge Receivables with respect to the preceding Monthly
Period.
(e) Addition Discount Receivables. On or prior to each Determination Date,
the Servicer shall deliver to the Trustee and the Transferor a certificate of a
Servicing Officer setting forth (or shall set forth in the Monthly Servicer's
Certificate) (a) the amount of Addition Discount Receivables to be included as
Collection of Finance Charge Receivables with respect to the preceding Monthly
Period, as calculated in accordance with the formula set forth in the applicable
Assignment or accretion designation letter delivered by the Transferor to the
Trustee and the Servicer and (b) the portion of such Addition Discount
Receivables which have not been treated as Collections of Finance Charge
Receivables with respect to the preceding Monthly Period.
(f) Certain Recoveries. On or prior to each Determination Date, the
Servicer shall deliver to the Trustee and the Transferor a certificate of a
Servicing Officer setting forth (or shall set forth in the Monthly Servicer's
Certificate) (a) the amount of Recoveries equal to the net proceeds of any sale
or initial securitization (excluding any residual payments from such
securitization) of Defaulted Receivables (including the related Finance Charge
Receivables) to be included as Collections of Finance Charge Receivables with
respect to the preceding Monthly Period, which shall be equal to the amount of
any such Recoveries received during the preceding three (3) Monthly Periods
divided by three (3) and (b) the portion of any such Recoveries ("unamortized
Recoveries") which have not been treated as Collections of Finance Charge
Receivables with respect to the preceding Monthly Period.
Section 3.05. Annual Certificate of Servicer. The Servicer shall deliver to
the Trustee, the Transferor, each Rating Agency and each Series Enhancer
entitled thereto pursuant to the relevant Supplement, on or before May 31 of
each calendar year, beginning with May 31, 2003, an Officer's Certificate of the
Servicer (with appropriate insertions) substantially in the form of Exhibit D.
Section 3.06. Annual Servicing Report of Independent Public Accountants;
Copies of Reports Available.
(a) On or before May 31 of each calendar year, beginning with May 31, 2003,
the Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Servicer or the
Transferor) to furnish a report (addressed to the Trustee) to the Trustee, the
Servicer, the Transferor and each Rating Agency to the effect that they have
attested to the assertion of authorized officers of the Servicer that the
Servicer is in compliance with the terms and conditions set forth in Sections
3.02, 3.04, 3.09, 4.02, 4.03, 4.04, 4.05 and 8.08 of the Agreement and the
applicable provisions of each Supplement and such assertion is fairly stated in
all material respects. A copy of such report shall be delivered by the Servicer
to each Series Enhancer entitled thereto pursuant to the relevant Supplement.
48
(b) On or before May 31 of each calendar year, beginning with May 31, 2003,
the Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Servicer or the
Transferor) to furnish a report to the Trustee, the Servicer, the Transferor and
each Rating Agency to the effect that they have applied certain procedures
agreed upon with the Servicer to compare the mathematical calculations of
certain amounts set forth in the Servicer's certificates delivered pursuant to
Section 3.04(b) during the period covered by such report with the Servicer's
computer reports, which were the source of such amounts, and report all
differences regardless of materiality. A copy of such report shall be delivered
by the Servicer to each Series Enhancer entitled thereto pursuant to the
relevant Supplement.
Section 3.07. Tax Treatment. The Transferor has entered into this
Agreement, and the Certificates will be issued, with the intention that, for
Federal, state and local income and franchise tax purposes only, the Investor
Certificates of each Series which are characterized as indebtedness at the time
of their issuance will qualify as indebtedness of the Transferor secured by the
Receivables. The Transferor, by entering into this Agreement, and each
Certificateholder, by the acceptance of any such Certificate (and each
Certificate Owner, by its acceptance of an interest in the applicable
Certificate), agree to treat such Investor Certificates for Federal, state and
local income and franchise tax purposes as indebtedness of the Transferor.
Section 3.08. Notices to Capital One. In the event that Capital One is no
longer acting as Servicer, any Successor Servicer shall deliver to Capital One
each certificate and report required to be provided thereafter pursuant to
Section 3.04(b), 3.05 or 3.06.
Section 3.09. Adjustments.
(a) If the Servicer adjusts downward the amount of any Principal Receivable
(other than any Ineligible Receivable to be reassigned or assigned to the
Transferor or the Servicer pursuant to this Agreement) because of a rebate,
refund, unauthorized charge or billing error to an accountholder, or because
such Principal Receivable was created in respect of merchandise which was
refused or returned by an accountholder, or if the Servicer otherwise adjusts
downward the amount of any Principal Receivable without receiving Collections
therefor or charging off such amount as uncollectible, then, in any such case
(other than cases resulting from Servicer error), the amount of Principal
Receivables used to calculate the Transferor's Participation Amount, the
Transferor's Interest and the Floating Allocation Percentage and the Principal
Allocation Percentage applicable to any Series will be reduced by the amount of
the adjustment. Similarly, the amount of Principal Receivables used to calculate
the Transferor's Participation Amount, the Transferor's Interest and the
Floating Allocation Percentage and the Principal Allocation Percentage
applicable to any Series will be reduced by the amount of any Principal
Receivable which was discovered as having been created through a fraudulent or
counterfeit charge. Any adjustment required pursuant to either of the two (2)
preceding sentences shall be made on or prior to the end of the Monthly Period
in which such adjustment obligation arises. In the event that, following the
exclusion of such Principal Receivables from the calculation of the Transferor's
Participation Amount, the Transferor's Participation Amount would be a negative
number, not later than the close of business on the fifth (5th) succeeding
Business Day following such adjustment, the Transferor shall make a deposit into
the Collection Account in immediately available funds in an amount equal to the
amount by which the
49
Transferor's Participation Amount would be below zero (up to the amount of such
Principal Receivables). Any amount deposited into the Collection Account
pursuant to the preceding sentence shall be considered an "Adjustment Payment"
and shall be applied in accordance with Article IV and the terms of each
Supplement.
(b) If (i) the Servicer makes a deposit into the Collection Account in
respect of a Collection of a Receivable and such Collection was received by the
Servicer in the form of a check which is not honored for any reason or (ii) the
Servicer makes a mistake with respect to the amount of any Collection and
deposits an amount that is less than or more than the actual amount of such
Collection, the Servicer shall appropriately adjust the amount subsequently
deposited into the Collection Account to reflect such dishonored check or
mistake. Any Receivable in respect of which a dishonored check is received shall
be deemed not to have been paid.
Section 3.10. Reports to the Commission. The Servicer shall, on behalf of
the Trust and at the expense of the Transferor, cause to be filed with the
Commission any periodic reports required to be filed under the provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder. The Transferor shall, at the expense of the Servicer,
cooperate in any reasonable request of the Transferor in connection with such
filings.
ARTICLE IV
Rights of Certificateholders and Allocation
and Application or Collections
Section 4.01. Rights of Certificateholders. The Investor Certificates shall
represent fractional undivided interests in the Trust, which, with respect to
each Series, shall consist of the right to receive, to the extent necessary to
make the required payments with respect to such Series at the times and in the
amounts specified in the related Supplement, the portion of Collections
allocable to such Series pursuant to this Agreement and such Supplement, funds
on deposit in the Collection Account or the Excess Funding Account allocable to
such Series pursuant to this Agreement and such Supplement, funds on deposit in
any related Series Account and funds available pursuant to any related Series
Enhancement (collectively, with respect to all Series, the "Certificateholders'
Interest"), it being understood that the Investor Certificates of any Series or
Class shall not represent any interest in any Series Account or Series
Enhancement for the benefit of any other Series or Class. The Transferor
Certificates shall represent the ownership interest in the remainder of the
Trust Assets not allocated pursuant to this Agreement or any Supplement to the
Certificateholders' Interest, including the right to receive Collections with
respect to the Receivables and other amounts at the times and in the amounts
specified in this Agreement or any Supplement to be paid to the Transferor on
behalf of all of the holders of the Transferor Certificates (the "Transferor's
Interest"); provided, however, that if any Transferor or any Additional
Transferor elects to have all or a portion of its interest in the Transferor's
Interest be uncertificated as provided in Section 6.01 hereof, then such
uncertificated interest, together with any Transferor Certificates, shall
represent the "Transferor's Interest"; provided further that the Transferor
Certificates, or any uncertificated interest in the Transferor's Interest, shall
not represent any interest in the Collection Account, the Excess Funding
Account, any Series
50
Account or any Series Enhancement, except as specifically provided in this
Agreement or any Supplement; provided further that the foregoing shall not be
construed to limit the Trustee's obligation to make payments to the Transferor
and the Servicer as and when required under this Agreement and any Supplement.
Section 4.02. Establishment of Collection Account and Excess Funding
Account. The Servicer, for the benefit of the Certificateholders, shall
establish and maintain in the name of the Trustee an Eligible Deposit Account
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Certificateholders (the "Collection Account"). The
Collection Account currently is maintained with The Bank of New York. The
Trustee shall possess all right, title and interest in all funds and property
from time to time on deposit in or credited to the Collection Account and in all
proceeds thereof. The Collection Account shall be under the sole dominion and
control of the Trustee. Except as expressly provided in this Agreement, the
Servicer agrees that it shall have no right of setoff or banker's lien against,
and no right to otherwise deduct from, any funds or property held in the
Collection Account for any amount owed to it by the Trustee, the Trust, any
Certificateholder or any Series Enhancer. If, at any time, the Collection
Account ceases to be an Eligible Deposit Account, the Trustee (or the Servicer
on its behalf) shall within ten (10) Business Days (or such longer period, not
to exceed thirty (30) calendar days, as to which each Rating Agency may consent)
establish a new Collection Account meeting the conditions specified above,
transfer any funds or property to such new Collection Account and from the date
such new Collection Account is established, it shall be the "Collection
Account."
Funds on deposit in the Collection Account (other than amounts deposited
pursuant to Section 2.06, 9.02, 10.01 or 12.02) shall at the direction of the
Servicer be invested by the Trustee in Eligible Investments selected by the
Servicer. All such Eligible Investments shall be held by the Trustee. The
Trustee shall (i) hold each Eligible Investment that constitutes investment
property through a securities intermediary, which securities intermediary shall
agree with the Trustee that (A) such investment property shall at all times be
credited to a securities account of the Trustee, (B) such securities
intermediary shall treat the Trustee as entitled to exercise the rights that
comprise each financial asset credited to such securities account, (C) all
property credited to such securities account shall be treated as a financial
asset, (D) such securities intermediary shall comply with entitlement orders
originated by the Trustee without the further consent of any other person or
entity, (E) such securities intermediary shall not agree with any person or
entity other than the Trustee to comply with entitlement orders originated by
any person or entity other than the Trustee, (F) such securities account and the
property credited thereto shall not be subject to any lien or encumbrance on,
security interest in, or right of set-off in favor of such securities
intermediary or anyone claiming through it (other than the Trustee), (G) such
agreement shall be governed by the laws of the State of New York, and (H) the
State of New York shall be the securities intermediary's jurisdiction for
purposes of the UCC; and (ii) maintain possession of each other Eligible
Investment not described in clause (i) above in the State of New York, separate
and apart from all other property held by the Trustee. Terms used in clause (i)
above that are defined in the New York UCC and not otherwise defined herein
shall have the meaning set forth in the New York UCC. Investments of funds
representing Collections collected during any Monthly Period shall be invested
in Eligible Investments that will mature so that all funds will be available at
the close of business on the Transfer Date following such Monthly Period. No
Eligible Investment shall be disposed of prior to its maturity. Unless
51
directed by the Servicer, funds deposited in the Collection Account on a
Transfer Date with respect to the next following Distribution Date are not
required to be invested overnight. On each Distribution Date, all interest and
other investment earnings (net of losses and investment expenses) on funds on
deposit in the Collection Account shall be paid to or at the direction of the
Transferor, except as otherwise specified in any Supplement. For purposes of
determining the availability of funds or the balances in the Collection Account
for any reason under this Agreement, all investment earnings net of investment
expenses and losses on such funds shall be deemed not to be available or on
deposit.
The Servicer, for the benefit of the Certificateholders, shall establish
and maintain in the name of the Trustee an Eligible Deposit Account bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Certificateholders (the "Excess Funding Account"). The Excess
Funding Account currently is maintained with The Bank of New York. The Trustee
shall possess all right, title and interest in all funds and property from time
to time on deposit in or credited to the Excess Funding Account and in all
proceeds thereof. The Excess Funding Account shall be under the sole dominion
and control of the Trustee. Except as expressly provided in this Agreement, the
Servicer agrees that it shall have no right of setoff or banker's lien against,
and no right to otherwise deduct from, any funds held in the Excess Funding
Account for any amount owed to it by the Trustee, the Trust, any
Certificateholder or any Series Enhancer. If, at any time, the Excess Funding
Account ceases to be an Eligible Deposit Account, the Trustee (or the Servicer
on its behalf) shall within ten (10) Business Days (or such longer period, not
to exceed thirty (30) calendar days, as to which each Rating Agency may consent)
establish a new Excess Funding Account meeting the conditions specified above,
transfer any funds and property to such new Excess Funding Account and from the
date such new Excess Funding Account is established, it shall be the "Excess
Funding Account."
Funds on deposit in the Excess Funding Account shall at the direction of
the Servicer be invested by the Trustee in Eligible Investments selected by the
Servicer. All such Eligible Investments shall be held by the Trustee. The
Trustee shall (i) hold each Eligible Investment that constitutes investment
property through a securities intermediary, which securities intermediary shall
agree with the Trustee that (A) such investment property shall at all times be
credited to a securities account of the Trustee, (B) such securities
intermediary shall treat the Trustee as entitled to exercise the rights that
comprise each financial asset credited to such securities account, (C) all
property credited to such securities account shall be treated as a financial
asset, (D) such securities intermediary shall comply with entitlement orders
originated by the Trustee without the further consent of any other person or
entity, (E) such securities intermediary shall not agree with any person or
entity other than the Trustee to comply with entitlement orders originated by
any person or entity other than the Trustee, (F) such securities account and the
property credited thereto shall not be subject to any lien or encumbrance on,
security interest in, or right of set-off in favor of such securities
intermediary or anyone claiming through it (other than the Trustee), (G) such
agreement shall be governed by the laws of the State of New York, and (H) the
State of New York shall be the securities intermediary's jurisdiction for
purposes of the UCC; and (ii) maintain possession of each other Eligible
Investment not described in clause (i) above in the State of New York, separate
and apart from all other property held by the Trustee. Terms used in clause (i)
above that are defined in the New York UCC and not otherwise defined herein
shall have the meaning set forth in the New York UCC. Funds on
52
deposit in the Excess Funding Account on any Distribution Date will be invested
in Eligible Investments that will mature so that all funds will be available at
the close of business on the Transfer Date following such Monthly Period. No
Eligible Investment shall be disposed of prior to its maturity. Unless directed
by the Servicer, funds deposited in the Excess Funding Account on a Transfer
Date with respect to the next following Distribution Date are not required to be
invested overnight. On each Distribution Date, all interest and other investment
earnings (net of losses and investment expenses) on funds on deposit in the
Excess Funding Account shall be treated as Collections of Finance Charge
Receivables with respect to the last day of the related Monthly Period. Funds on
deposit in the Excess Funding Account will be withdrawn and paid to the
Transferor on any Business Day to the extent that the Transferor's Participation
Amount exceeds the Required Transferor's Interest and the aggregate amount of
Principal Receivables exceeds the Required Principal Balance on such date;
provided, however, that, if an Accumulation Period, Controlled Amortization
Period or Early Amortization Period has commenced and is continuing with respect
to one or more outstanding Series, any funds on deposit in the Excess Funding
Account shall be treated as Shared Principal Collections and shall be allocated
and distributed in accordance with Section 4.04 and the terms of the Supplements
for the Principal Sharing Series. For purposes of determining the availability
of funds or the balances in the Excess Funding Account for any reason under this
Agreement, all investment earnings net of investment expenses and losses on such
funds shall be deemed not to be available or on deposit.
Section 4.03. Collections and Allocations.
(a) The Servicer will apply or will instruct the Trustee to apply all funds
on deposit in the Collection Account as described in this Article IV and in each
Supplement. Except as otherwise provided below, the Servicer shall deposit
Collections into the Collection Account no later than the second Business Day
following the Date of Processing of such Collections or, in the case of any
Collections consisting of Interchange, not later than 12:00 noon, Richmond,
Virginia time, on each Distribution Date. Subject to the express terms of any
Supplement, but notwithstanding anything else in this Agreement to the contrary,
for so long as Capital One remains the Servicer and (x) maintains a certificate
of deposit rating of A-1 or better by Standard & Poor's and P-1 by Moody's, or
(y) Capital One has provided to the Transferor and the Trustee a letter of
credit covering collection risk of the Servicer acceptable to the Rating Agency
(as evidenced by a letter from the Rating Agency), the Servicer need not make
the daily deposits of Collections into the Collection Account as provided in the
preceding sentence, but may make a single deposit in the Collection Account in
immediately available funds not later than 12:00 noon, Richmond, Virginia time,
on the Transfer Date immediately preceding the Distribution Date or, in the case
of any Collections consisting of Interchange, not later than 12:00 noon,
Richmond, Virginia time, on each Distribution Date. Subject to the first proviso
in Section 4.04, 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 the first or the second preceding
sentence, (i) the Servicer will only be required to deposit Collections into the
Collection Account up to (x) 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
Series Enhancer pursuant to the terms of any Supplement or Enhancement Agreement
plus (y) the aggregate amount of the portion of Collections representing annual
membership fees (including any annual membership
53
fees relating to the period prior to the Trust Cut-Off Date) which will not have
been amortized in accordance with Section 3.04(d) with respect to the end of
such Monthly Period plus (z) the aggregate amount of the portion of Collections
representing Recoveries which will not have been amortized in accordance with
Section 3.04(f) with respect to the end of such Monthly Period and (ii) if at
any time prior to such Distribution Date the amount of Collections deposited in
the Collection Account exceeds the amount required to be deposited pursuant to
clause (i) above, the Servicer shall withdraw the excess from the Collection
Account and pay it to the Holder of the Transferor's Interest.
(b) (i) Collections of Finance Charge Receivables will be allocated to the
Certificateholders' Interest of a Series in an amount equal to the product of
the amount of such Collections and the Floating Allocation Percentage of such
Series, (ii) the Defaulted Amount will be allocated to the Certificateholders'
Interest of a Series in an amount equal to the product of such Defaulted Amount
and the Floating Allocation Percentage of such Series, (iii) Collections of
Principal Receivables will be allocated to the Certificateholders' Interest of
such Series in an amount equal to the product of the amount of such Collections
and the Principal Allocation Percentage of such Series and (iv) Miscellaneous
Payments will be allocated to the Certificateholders' Interest of such Series in
an amount equal to the product of the amount of such Miscellaneous Payments and
a fraction the numerator of which is the Invested Amount and Enhancement
Invested Amount, if any, of such Series and the denominator of which is the sum
of the Invested Amounts and the Enhancement Invested Amount, if any, for all
outstanding Series, in each case for such Monthly Period. Collections of
Receivables with respect to any Monthly Period will be allocated by the Servicer
first to annual membership fees transferred to the Trustee during the preceding
Monthly Period, second to Finance Charge Receivables, to the extent of Finance
Charge Receivables billed during the preceding Monthly Period, and third to
Principal Receivables. Subject to Sections 4.03(c) and 4.04, amounts not
allocated to the Certificateholders' Interest of any Series will be allocated to
the Transferor's Interest.
(c) On the earlier of (A) the second Business Day after the Date of
Processing and (B) the day on which the Servicer actually deposits any
Collections into the Collection Account or, in the case of any Collections
consisting of Interchange, not later than 12:00 noon, Richmond, Virginia time,
on each Distribution Date, the Servicer will pay to the Transferor (i) the
Transferor's allocable portion of Collections of Finance Charge Receivables and
(ii) the Transferor's allocable portion of Collections of Principal Receivables;
provided, however, that in the case of Collections of Principal Receivables
allocated to the Transferor's Interest, such amount shall only be paid to the
Transferor if the Transferor's Participation Amount exceeds the Required
Transferor's Interest and the aggregate amount of Principal Receivables exceeds
the Required Principal Balance, but otherwise such amounts shall be deposited
into the Excess Funding Account. Collections consisting of annual membership
fees or Recoveries resulting from the sale or securitization of Defaulted
Receivables (including the related Finance Charge Receivables) which have not
yet been amortized in accordance with Section 3.04(d) or (e), as the case may
be, and which are therefore not treated as Collections of Finance Charge
Receivables or Principal Receivables, shall not be paid to the Transferor or
allocated to the Certificateholders' Interest.
54
The payments to be made to the Transferor pursuant to this Section 4.03(c)
do not apply to deposits to the Collection Account or other amounts that do not
represent Collections, including Miscellaneous Payments, payment of the
acquisition price for Receivables pursuant to Section 2.06 or 10.01, proceeds
from the sale, disposition or liquidation of Receivables pursuant to Section
9.02 or 12.02 or payment of the purchase price for the Certificateholders'
Interest of a specific Series pursuant to the related Supplement.
(d) The Principal Receivables in Additional Accounts added during any
Monthly Period having an Additional Cut-Off Date as of any day during the
preceding Monthly Period shall be treated as Principal Receivables outstanding
on and after such Additional Cut-Off Date for purposes of calculating the
Floating Allocation Percentage and Principal Allocation Percentage for the
Monthly Period in which such Additional Accounts are added. Any such
recalculation of the Floating Allocation Percentage and Principal Allocation
Percentage for a Monthly Period shall be effective only on and after the
Addition Date, but the Servicer shall determine the amounts of Collections and
the Defaulted Amounts which would have been allocated to the Certificateholders'
Interest of each Series for the portion of such Monthly Period preceding such
Addition Date as if such recalculated Floating Allocation Percentage and
Principal Allocation Percentage had been in effect and shall adjust the amounts
to be allocated for the remainder of such Monthly Period so that the amounts
allocated to the Certificateholders' Interest of each Series and the
Transferor's Interest are equal to the amounts which would have been allocated
to them if such recalculated percentages had been in effect for the entire
Monthly Period.
Section 4.04. Shared Principal Collections. On each Distribution Date, (a)
the Servicer shall allocate Shared Principal Collections to each Principal
Sharing Series, pro rata, in proportion to the Principal Shortfalls, if any,
with respect to each such Series and (b) the Servicer shall withdraw from the
Collection Account or the Excess Funding Account and pay to the Transferor an
amount equal to the excess, if any, of (x) the aggregate amount for all
outstanding Series of Collections of Principal Receivables and Miscellaneous
Payments which the related Supplements or this Agreement specify are to be
treated as "Shared Principal Collections" for such Distribution Date over (y)
the aggregate amount for all outstanding Principal Sharing Series which the
related Supplements specify are "Principal Shortfalls" for such Distribution
Date; provided, however, that such amounts shall be paid to the Transferor only
if the Transferor's Participation Amount for such Distribution Date exceeds the
Required Transferor's Interest and the aggregate amount of Principal Receivables
exceeds the Required Principal Balance, but otherwise such amounts shall be
deposited into the Excess Funding Account.
Section 4.05. Excess Finance Charges. On each Distribution Date, (a) the
Servicer shall allocate Excess Finance Charges with respect to the Series in a
Group to each Series in such Group, pro rata, in proportion to the Finance
Charge Shortfalls, if any, with respect to each such Series and (b) the Servicer
shall withdraw (or shall instruct the Trustee to withdraw) from the Collection
Account and pay to the Transferor an amount equal to the excess, if any, of (x)
the aggregate amount for all outstanding Series in a Group of the amounts which
the related Supplements specify are to be treated as "Excess Finance Charges"
for such Distribution Date over (y) the aggregate amount for all outstanding
Series in such Group which the related Supplements specify are "Finance Charge
Shortfalls" for such Distribution Date; provided, however, that the sharing of
Excess Finance Charges among Series in a Group will
55
continue only until such time, if any, at which the Transferor shall deliver to
the Trustee an Officer's Certificate of the Transferor to the effect that the
continued sharing of Excess Finance Charges among Series in any Group would have
adverse regulatory implications with respect to the Transferor. Following the
delivery by the Transferor of such an Officer's Certificate to the Trustee there
will not be any further sharing of Excess Finance Charges among Series in any
Group.
ARTICLE V
Distributions and Reports to Certificateholders
Distributions shall be made to, and reports shall be provided to,
Certificateholders as set forth in the applicable Supplement.
ARTICLE VI
The Certificates
Section 6.01. The Certificates. The Investor Certificates of any Series or
Class may be issued in bearer form ("Bearer Certificates") with attached
interest coupons and any other applicable coupon (collectively, the "Coupons")
or in fully registered form ("Registered Certificates") and shall be
substantially in the form of the exhibits with respect thereto attached to the
applicable Supplement. The Transferor may elect at any time, by written notice
to the Trustee, to have all or a portion of its interest in the Transferor's
Interest be (i) an uncertificated interest or (ii) evidenced by a certificate.
If the Transferor elects to have all or a portion of its interest in the
Transferor's Interest be uncertificated, it shall deliver to the Trustee for
cancellation any Base Certificate previously issued. If the Transferor elects to
have all or a portion of its interest in the Transferor's Interest be evidenced
by a certificate, the Base Certificate will be issued in registered form,
substantially in the form of Exhibit A, and shall upon issue be executed and
delivered by the Transferor to the Trustee for authentication and redelivery as
provided in Section 6.02. The Trustee shall keep with the books and records of
the Trust a register, of each Person owning any uncertificated interest in the
Transferor's Interest. Except as otherwise provided in Section 6.03 or in any
Supplement, Bearer Certificates shall be issued in minimum denominations of
$1,000 and Registered Certificates shall be issued in minimum denominations of
$1,000 and in integral multiples of $1,000 in excess thereof. If specified in
any Supplement, the Investor Certificates of any Series or Class shall be issued
upon initial issuance as a single certificate evidencing the aggregate original
principal amount of such Series or Class as described in Section 6.13. The Base
Certificate shall be a single certificate and shall initially represent the
entire Transferor's Interest. Each Certificate shall be executed by manual or
facsimile signature on behalf of the Transferor by its respective President or
any Vice President. Certificates bearing the manual or facsimile signature of an
individual who was, at the time when such signature was affixed, authorized to
sign on behalf of the Transferor shall not be rendered invalid, notwithstanding
that such individual ceased to be so authorized prior to the authentication and
delivery of such Certificates or does not hold such office at the date of such
Certificates. Any Certificate which was executed by the manual or facsimile
signature of a duly authorized officer of Capital One, F.S.B. or other Person
which was the Transferor at the time of execution of the Certificate, shall not
be rendered invalid, notwithstanding that Capital One,
56
F.S.B. or other Person ceases to be the Transferor under this Agreement. No
Certificates shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by or on
behalf of 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. Bearer Certificates shall be dated the Series Issuance Date. All
Registered Certificates and the Transferor Certificates shall be dated the date
of their authentication.
Section 6.02. Authentication of Certificates. The Trustee shall
authenticate and deliver the Investor Certificates of each Series and Class that
are issued upon original issuance to or upon the order of the Transferor against
payment to the Transferor of the purchase price therefor. The Trustee shall
authenticate and deliver the Base Certificate to the Transferor simultaneously
with its delivery of the Investor Certificates of the first Series to be issued
hereunder. If specified in the related Supplement for any Series or Class, the
Trustee shall authenticate and deliver outside the United States the Global
Certificate that is issued upon original issuance thereof.
Section 6.03. New Issuances.
(a) The Transferor may from time to time direct the Trustee to
authenticate one or more new Series of Investor Certificates. The Investor
Certificates of all outstanding Series shall be equally and ratably entitled as
provided herein to the benefits of this Agreement without preference, priority
or distinction, all in accordance with the terms and provisions of this
Agreement and the applicable Supplement except, with respect to any Series or
Class, as provided in the related Supplement.
(b) On or before the Series Issuance Date relating to any new Series, the
parties hereto will execute and deliver a Supplement which will specify the
Principal Terms of such new Series. The terms of such Supplement may modify or
amend the terms of this Agreement solely as applied to such new Series. The
obligation of the Trustee to authenticate the Investor Certificates of such new
Series and to execute and deliver the related Supplement is subject to the
satisfaction of the following conditions:
(i) on or before the fifth Business Day immediately preceding the Series
Issuance Date, the Transferor shall have given the Trustee, the Servicer, each
Rating Agency and any Series Enhancer entitled thereto pursuant to the relevant
Supplement notice of such issuance and the Series Issuance Date;
(ii) the Transferor shall have delivered to the Trustee the related
Supplement, in form satisfactory to the Trustee, executed by each party hereto
other than the Trustee;
(iii) the Transferor shall have delivered to the Trustee any related
Enhancement Agreement executed by each of the parties thereto, other than the
Trustee;
(iv) the Transferor shall have received written notice from each Rating
Agency that such issuance will not have a Ratings Effect and shall have
delivered copies of each such written notice to the Servicer and the Trustee;
57
(v) the Transferor shall have delivered to the Trustee and any Series
Enhancer entitled thereto pursuant to the relevant Supplement an Officer's
Certificate of the Transferor, dated the Series Issuance Date, to the effect
that the Transferor reasonably believes that such issuance will not, based on
the facts known to such officer at the time of such certification, then cause a
Pay Out Event or any event that, after the giving of notice or the lapse of
time, would constitute a Pay Out Event to occur with respect to any Series;
(vi) the Transferor shall have delivered to the Trustee, each Rating
Agency and any Series Enhancer entitled thereto pursuant to the relevant
Supplement a Tax Opinion, dated the Series Issuance Date, with respect to such
issuance; and
(vii) the Transferor shall have delivered to the Trustee and any Series
Enhancer entitled thereto pursuant to the relevant Supplement an Officer's
Certificate of the Transferor, dated the Series Issuance Date to the effect that
the Transferor's Participation Amount (excluding the interest represented by any
Supplemental Certificate) shall not be less than the Specified Percentage of the
total amount of Principal Receivables, in each case as of the Series Issuance
Date, and after giving effect to such issuance.
Upon satisfaction of the above conditions, the Trustee shall execute the
Supplement and authenticate the Investor Certificates of such Series upon
execution thereof by the Transferor.
(c) If the Transferor elects to have all or a portion of its interest in
the Transferor's Interest evidenced by the Base Certificate as provided in
Section 6.01 hereof, then the Transferor may surrender the Base Certificate to
the Trustee in exchange for a newly issued Base Certificate and one or more
additional certificates (each, a "Supplemental Certificate"), the terms of which
shall be defined in a Supplement (which Supplement shall be subject to Section
13.01(a) to the extent that it amends any of the terms of this Agreement), to be
delivered to or upon the order of the Transferor (or the Holder of a
Supplemental Certificate, in the case of the transfer or exchange thereof, as
provided below), upon satisfaction of the following conditions:
(i) the Transferor shall have received written notice from each Rating
Agency that such exchange (or transfer or exchange as provided below) will not
have a Ratings Effect and shall have delivered copies of each such written
notice to the Servicer and the Trustee; and
(ii) the Transferor shall have delivered to the Trustee, each Rating
Agency and any Series Enhancer entitled thereto pursuant to the relevant
Supplement a Tax Opinion dated the date of such exchange (or transfer or
exchange as provided in the next sentence), with respect thereto.
Any Supplemental Certificate may be transferred or exchanged only upon
satisfaction of the conditions set forth in clauses (i) and (ii) above.
Notwithstanding anything in this Agreement to the contrary and subject to
the related Supplement, any Holder of a Supplemental Certificate that is an
Affiliate of the Transferor may elect at any time, by written notice to the
Trustee, to have its interest in the Transferor's Interest be (i) an
uncertificated interest or (ii) evidenced by a certificate. If the Holder of a
Supplemental Certificate elects to have its interest in the Transferor's
Interest be uncertificated, it shall deliver to the Trustee for cancellation any
Supplemental Certificate
58
previously issued and the Trustee shall make the appropriate entry in the books
and records of the Trust registering such uncertificated interest in the
Transferor's Interest. If the recorded owner of any such uncertificated interest
elects to have its interest in the Transferor's Interest be evidenced by a
certificate, a Supplemental Certificate will be issued in registered form and in
the form provided in the related Supplement.
Section 6.04. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at the office or agency to be
maintained in accordance with the provisions of Section 11.16 a register (the
"Certificate Register") in which, subject to such reasonable regulations as it
may prescribe, a transfer agent and registrar (which may be the Trustee) (the
"Transfer Agent and Registrar") shall provide for the registration of the
Registered Certificates and of transfers and exchanges of the Registered
Certificates as herein provided. The Transfer Agent and Registrar shall be, as
of the date hereof, The Bank of New York and any co-transfer agent and
co-registrar chosen by the Transferor and acceptable to the Trustee, including
if and so long as any Series or Class is listed on the Luxembourg Stock Exchange
and such exchange shall so require, a co-transfer agent and co-registrar in
Luxembourg. So long as any Investor Certificates are outstanding, the Transferor
shall maintain a co-transfer agent and co-registrar in New York City. Any
reference in this Agreement to the Transfer Agent and Registrar shall include
any co-transfer agent and co-registrar unless the context requires otherwise.
The Trustee may revoke such appointment and remove any Transfer Agent and
Registrar if the Trustee determines in its sole discretion that such Transfer
Agent and Registrar failed to perform its obligations under this Agreement in
any material respect. Any Transfer Agent and Registrar shall be permitted to
resign as Transfer Agent and Registrar upon thirty (30) days notice to the
Transferor, the Trustee and the Servicer; provided, however, that such
resignation shall not be effective and such Transfer Agent and Registrar shall
continue to perform its duties as Transfer Agent and Registrar until the
Transferor has appointed a successor Transfer Agent and Registrar reasonably
acceptable to the Trustee.
Subject to paragraph (c) below, upon surrender for registration of transfer
of any Registered Certificate at any office or agency of the Transfer Agent and
Registrar maintained for such purpose, one or more new Registered Certificates
(of the same Series and Class) in authorized denominations of like aggregate
fractional undivided interests in the Certificateholders' Interest shall be
executed, authenticated and delivered, in the name of the designated transferee
or transferees.
At the option of a Registered Certificateholder, Registered Certificates
(of the same Series and Class) may be exchanged for other Registered
Certificates of authorized denominations of like aggregate fractional undivided
interests in the Certificateholders' Interest, upon surrender of the Registered
Certificates to be exchanged at any such office or agency; Registered
Certificates, including Registered Certificates received in exchange for Bearer
Certificates, may not be exchanged for Bearer Certificates. At the option of the
Holder of a Bearer Certificate, subject to applicable laws and regulations,
Bearer Certificates may be exchanged for other Bearer Certificates or Registered
Certificates (of the same Series and Class) of authorized denominations of like
aggregate fractional undivided interests in the
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Certificateholders' Interest, upon surrender of the Bearer Certificates to be
exchanged at an office or agency of the Transfer Agent and Registrar located
outside the United States. Each Bearer Certificate surrendered pursuant to this
Section shall have attached thereto all unmatured Coupons; provided that any
Bearer Certificate, so surrendered after the close of business on the Record
Date preceding the relevant payment date or distribution date after the expected
final payment date need not have attached the Coupon relating to such payment
date or distribution date (in each case, as specified in the applicable
Supplement).
Whenever any Investor Certificates are so surrendered for exchange, the
Transferor shall execute, the Trustee shall authenticate and the Transfer Agent
and Registrar shall deliver (in the case of Bearer Certificates, outside the
United States) the Investor Certificates which the Investor 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 or the
Transfer Agent and Registrar duly executed by the Investor Certificateholder or
the attorney-in-fact thereof duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Investor Certificates, but the Transfer Agent and Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any such transfer or exchange.
All Investor Certificates (together with any Coupons) surrendered for
registration of transfer and exchange or for payment shall be canceled and
disposed of in a manner satisfactory to the Trustee. The Trustee shall cancel
and destroy any Global Certificate upon its exchange in full for Definitive
Euro-Certificates and shall deliver a certificate of destruction to the
Transferor. Such certificate shall also state that a certificate or certificates
of a 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 Euro-Certificates.
The Transferor shall execute and deliver to the Trustee 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, each
Supplement and the Certificates.
(b) The Transfer Agent and Registrar will maintain at its expense in each
of the Borough of Manhattan, the City of New York, and, if and so long as any
Series or Class is listed on the Luxembourg Stock Exchange, Luxembourg, an
office or agency where Investor Certificates may be surrendered for registration
of transfer or exchange (except that Bearer Certificates may not be surrendered
for exchange at any such office or agency in the United States).
(c) (i) Registration of transfer of Investor Certificates containing a
legend substantially to the effect set forth on Exhibit E-1 shall be effected
only if such transfer (x) is made pursuant to an effective registration
statement under the Act, or is exempt from the registration requirements under
the Act, and (y) is made to a Person which is not an employee benefit plan,
trust or account, including an individual retirement account, that is subject to
ERISA or that is described in Section 4975(e)(1) of the Code or an entity whose
underlying
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assets include plan assets by reason of a plan's investment in such entity (a
"Benefit Plan"). In the event that registration of a transfer is to be made in
reliance upon an exemption from the registration requirements under the Act, the
transferor or the transferee shall deliver, at its expense, to the Transferor,
the Servicer and the Transfer Agent and Registrar, an investment letter from the
transferee, substantially in the form of the investment and ERISA representation
letter attached hereto as Exhibit E-2, and no registration of transfer shall be
made until such letter is so delivered.
Investor Certificates issued upon registration or transfer of, or Investor
Certificates issued in exchange for, Investor Certificates bearing the legend
referred to above shall also bear such legend unless the Transferor, the
Servicer, the Trustee and the Transfer Agent and Registrar receive an opinion of
counsel, satisfactory to each of them, to the effect that such legend may be
removed.
Whenever an Investor Certificate containing the legend referred to above is
presented to the Transfer Agent and Registrar for registration of transfer, the
Transfer Agent and Registrar shall promptly seek instructions from the
Transferor regarding such transfer and shall be entitled to receive instructions
signed by an officer of the Transferor prior to registering any such transfer.
The Transferor hereby agree 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 relation to any such
instructions furnished pursuant to this clause (i). The Transferor's obligations
pursuant to this Section 6.04(c)(i) shall not constitute a claim against the
Transferor to the extent the Transferor does not have funds sufficient to make
payment of such obligations.
(i) Registration of transfer of Investor Certificates containing a legend
to the effect set forth on Exhibit E-3 shall be effected only if such transfer
is made to a Person which is not a Benefit Plan. By accepting and holding any
such Investor Certificate, an Investor Certificateholder shall be deemed to have
represented and warranted that it is not a Benefit Plan. By acquiring any
interest in a Book-Entry Certificate which contains such legend, a Certificate
Owner shall be deemed to have represented and warranted that it is not a Benefit
Plan.
(ii) If so requested by the Transferor, the Trustee will make available to
any prospective purchaser of Investor Certificates who so requests, a copy of a
letter provided to Trustee by or on behalf of the Transferor relating to the
transferability of any Series or Class to a Benefit Plan.
Section 6.05. 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) in
the case of a destroyed, lost or stolen Certificate, 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 harmless, then, in the absence of
notice to the Trustee that such Certificate has been acquired by a protected
purchaser, the Transferor shall execute, the Trustee shall authenticate and the
Transfer Agent and Registrar shall deliver (in the case of Bearer
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Certificates, outside the United States), in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and aggregate fractional undivided interest. In connection with the
issuance of any new Certificate under this Section 6.05, the Trustee or the
Transfer Agent and Registrar may require the payment by the Certificateholder 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 Transfer Agent and Registrar) connected therewith.
Any duplicate Certificate issued pursuant to this Section 6.05 shall constitute
complete and indefeasible evidence of ownership in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
Section 6.06. Persons Deemed Owners. The Trustee, the Transferor, the
Servicer, the Paying Agent, the Transfer Agent and Registrar and any agent of
any of them may (a) prior to due presentation of a Registered Certificate for
registration of transfer, treat the Person in whose name any Registered
Certificate is registered as the owner of such Registered Certificate for the
purpose of receiving distributions pursuant to the terms of the applicable
Supplement and for all other purposes whatsoever, and (b) treat the bearer of a
Bearer Certificate or Coupon as the owner of such Bearer Certificate or Coupon
for the purpose of receiving distributions pursuant to the terms of the
applicable Supplement and for all other purposes whatsoever; and, in any such
case, neither the Trustee, the Transferor, the Servicer, the Paying Agent, the
Transfer Agent and Registrar nor any agent of any of them shall be affected by
any notice to the contrary. Notwithstanding the foregoing, in determining
whether the Holders of the requisite Investor Certificates have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
certificates owned by any Transferor, the Servicer, any other holder of a
Transferor Certificate, the Trustee 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 Certificates which the
Trustee actually knows to be so owned shall be so disregarded. Certificates so
owned which have been pledged in good faith shall not be disregarded and may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Certificates and that
the pledgee is not a Transferor, the Servicer, any other holder of a Transferor
Certificate or any Affiliate thereof.
Section 6.07. Appointment of Paying Agent. The Paying Agent shall make
distributions to Investor Certificateholders from the Collection Account or any
applicable Series Account pursuant to the provisions of the applicable
Supplement and shall report the amounts of such distributions to the Trustee.
Any Paying Agent shall have the revocable power to withdraw funds from the
Collection Account or any applicable Series Account for the purpose of making
the distributions referred to above. The Trustee may revoke such power and
remove the Paying Agent if the Trustee determines in its sole discretion that
the Paying Agent shall have failed to perform its obligations under this
Agreement or any Supplement in any material respect. The Paying Agent shall be,
as of the date hereof, The Bank of New York and any co-paying agent chosen by
the Transferor and acceptable to the Trustee, including, if and so long as any
Series or Class is listed on the Luxembourg Stock Exchange and such exchange so
requires, a co-paying agent in Luxembourg or another western European city. Any
Paying Agent shall be permitted to resign as Paying Agent upon thirty (30) days
notice to the Trustee, the Servicer and the Transferor. In the event that any
Paying Agent shall resign, the Transferor shall appoint a
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successor to act as Paying Agent, reasonably acceptable to the Trustee. The
initial and each successor or additional Paying Agent shall execute and deliver
to the Trustee an instrument in which such successor or additional Paying Agent
shall agree with the Trustee that: (i) it will hold all sums, if any, held by it
for payment to the Investor Certificateholders in trust for the benefit of the
Investor Certificateholders entitled thereto until such sums shall be paid to
such Investor Certificateholders and (ii) during the continuance of any Pay Out
Event or Servicer Default, upon the written request of the Trustee, it will
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Investor Certificates. The Paying Agent shall return
all unclaimed funds to the Trustee and upon removal shall also return all funds
in its possession to the Trustee. If and for so long as the Trustee shall act as
Paying Agent, the provisions of Sections 11.01, 11.02, 11.03 and 11.05 shall
apply to the Trustee also in its role as Paying Agent. Any reference in this
Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.
Section 6.08. Access to List of Registered Certificateholders' Names and
Addresses. The Trustee will furnish or cause to be furnished by the Transfer
Agent and Registrar to the Servicer, the Transferor or the Paying Agent, within
five (5) Business Days after receipt by the Trustee of a request therefor, a
list in such form as the Servicer, the Transferor or the Paying Agent, may
reasonably require, of the names and addresses of the Registered
Certificateholders. If any Holder or group of Holders of Investor Certificates
of any Series or all outstanding Series, as the case may be, evidencing not less
than 10% of the aggregate unpaid principal amount of such Series or all
outstanding Series, as applicable (the "Applicants"), apply to the Trustee, and
such application states that the Applicants desire to communicate with other
Investor Certificateholders with respect to their rights under this Agreement or
any Supplement or under the Investor Certificates and is accompanied by a copy
of the communication which such Applicants propose to transmit, then 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 Registered Certificateholders of such Series or all outstanding Series,
as applicable held by the Trustee, within five (5) Business Days after the
receipt of such application. Such list shall be as of a date no more than
forty-five (45) days prior to the date of receipt of such Applicants' request.
Every Registered Certificateholder, by receiving and holding a Registered
Certificate, agrees with the Trustee that neither the Trustee, the Servicer, the
Transferor, the Transfer Agent and Registrar, nor any of their respective
agents, shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Registered Certificateholders
hereunder regardless of the sources from which such information was derived.
Section 6.09. 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 certificate of
authentication executed on behalf of the
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Trustee by an authenticating agent. Each authenticating agent must be acceptable
to the Transferor and the Servicer.
(a) 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 power or any further act on the part of the Trustee
or such authenticating agent. An authenticating agent may at any time resign by
giving notice of resignation to the Trustee, the Servicer and the Transferor.
The Trustee may at any time terminate the agency of an authenticating agent by
giving notice of termination to such authenticating agent and to the Transferor
and the Servicer. 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 a 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. The
Transferor agrees to pay to each authenticating agent from time to time
reasonable compensation for its services under this Section 6.09. The provisions
of Sections 11.01, 11.02 and 11.03 shall be applicable to any authenticating
agent.
(b) Pursuant to an appointment made under this Section 6.09, 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:
This is one of the Certificates described in the Pooling and Servicing
Agreement.
------------------------------------
------------------------------------
as Authenticating Agent
for the Trustee
by
------------------------------------
Authorized Officer
Section 6.10. Book-Entry Certificates. Unless otherwise specified in the
related Supplement for any Series or Class, the Investor Certificates, upon
original issuance, shall be issued in the form, of one or more typewritten
Investor Certificates representing the Book-Entry Certificates, to be delivered
to the Clearing Agency, by, or on behalf of, the Transferor. The Investor
Certificates shall initially be registered on the Certificate Register in the
name of the Clearing Agency or its nominee, and no Certificate Owner will
receive a definitive certificate representing such Certificate Owner's interest
in the Investor Certificates, except as provided in Section 6.12. Unless and
until definitive, fully registered Investor Certificates ("Definitive
Certificates") have been issued to the applicable Certificate Owners pursuant to
Section 6.12 or as otherwise specified in any such Supplement:
(a) the provisions of this Section 6.10 shall be in full force and effect;
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(b) the Transferor, the Servicer and the Trustee may deal with the Clearing
Agency and the Clearing Agency Participants for all purposes (including the
making of distributions) as the authorized representatives of the respective
Certificate Owners;
(c) to the extent that the provisions of this Section 6.10 conflict with
any other provisions of this Agreement, the provisions of this Section 6.10
shall control; and
(d) the rights of the respective Certificate Owners shall be exercised only
through the Clearing Agency and the Clearing Agency Participants and shall be
limited to those established by law and agreements between such Certificate
Owners and the Clearing Agency and/or the Clearing Agency Participants. Pursuant
to the Depositary Agreement, unless and until Definitive Certificates are issued
pursuant to Section 6.12, the Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit distributions of
principal and interest on the related Investor Certificates to such Clearing
Agency Participants.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Investor Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
Investor Certificates, such direction or consent may be given by Certificate
Owners (acting through the Clearing Agency and the Clearing Agency Participants)
owning Investor Certificates evidencing the requisite percentage of principal
amount of Investor Certificates.
Section 6.11. Notices to Clearing Agency. Whenever any notice or other
communication is required to be given to Investor Certificateholders of any
Series or Class with respect to which Book-Entry Certificates have been issued,
unless and until Definitive Certificates shall have been issued to the related
Certificate Owners, the Trustee shall give all such notices and communications
to the applicable Clearing Agency.
Section 6.12. Definitive Certificates. If Book-Entry Certificates have been
issued with respect to any Series or Class and (a) the Transferor advises the
Trustee that the Clearing Agency is no longer willing or able to discharge
properly its responsibilities under the Depositary Agreement with respect to
such Series or Class and the Trustee or the Transferor is unable to locate a
qualified successor, (b) the Transferor, at its option, advises the Trustee that
it elects to terminate the book-entry system with respect to such Series or
Class through the Clearing Agency or (c) after the occurrence of a Servicer
Default, Certificate Owners of such Series or Class evidencing not less than 50%
of the aggregate unpaid principal amount of such Series or Class advise the
Trustee, the Transferor and the Clearing Agency through the Clearing Agency
Participants that the continuation of a book-entry system with respect to the
Investor Certificates of such Series or Class through the Clearing Agency is no
longer in the best interests of the Certificate Owners with respect to such
Certificates, then the Trustee shall notify all Certificate Owners of such
Certificates, through the Clearing Agency, of the occurrence of any such event
and of the availability of Definitive Certificates to Certificate Owners
requesting the same. Upon surrender to the Trustee of any such Certificates by
the Clearing Agency, accompanied by registration instructions from the Clearing
Agency for registration, the Transferor shall execute and the Trustee shall
authenticate and deliver such Definitive Certificates. 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
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instructions. Upon the issuance of such Definitive Certificates all references
herein to obligations imposed upon or to be performed by the Clearing Agency
shall be deemed to be imposed upon and performed by the Trustee, to the extent
applicable with respect to such Definitive Certificates and the Trustee shall
recognize the Holders of such Definitive Certificates as Investor
Certificateholders hereunder.
Section 6.13. Global Certificate; Exchange Date.
(a) If specified in the related supplement for any Series or Class, the
Investor Certificates for such Series or Class will initially be issued in the
form of a single temporary global Certificate (the "Global Certificate") in
bearer form, without interest coupons, in the denomination of the entire
aggregate principal amount of such Series or Class and substantially in the form
set forth in the exhibit with respect thereto attached to the related
Supplement. The Global Certificate will be executed by the Transferor and
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 as described below for Bearer or Registered
Certificates in definitive form (the "Definitive Euro-Certificates").
(b) The Manager shall, upon its determination of the date of completion of
the distribution of the Investor Certificates of such Series or Class, so advise
the Trustee, the Transferor, the Depositaries, and each Foreign Clearing Agency
forthwith. Without unnecessary delay, but in any event not prior to the Exchange
Date, the Transferor will execute and deliver to the Trustee at its London
office or its designated agent outside the United States definitive Bearer
Certificates in an aggregate principal amount equal to the entire aggregate
principal amount of such Series or Class. All Bearer Certificates so issued and
delivered will have Coupons attached. The Global Certificate may be exchanged
for an equal aggregate principal amount of Definitive Euro-Certificates only on
or after the Exchange Date. An institutional investor that is a U.S. Person may
exchange the portion of the Global Certificate beneficially owned by it only for
an equal aggregate principal amount of Registered Certificates bearing the
applicable legend set forth in the form of Registered Certificate attached to
the related Supplement and having a minimum denomination of $500,000, which may
be in temporary form if the Transferor so elects. The Transferor may waive the
$500,000 minimum denomination requirement if it so elects. Upon any demand for
exchange for Definitive Euro-Certificates in accordance with this paragraph, the
Transferor shall cause the Trustee to authenticate and deliver the Definitive
Euro-Certificates to the Holder (x) outside the United States, in the case of
Bearer Certificates, and (y) according to the instructions of the Holder, in the
case of Registered Certificates, but in either case only upon presentation to
the Trustee of a written statement substantially in the form of Exhibit G-1 with
respect to the Global Certificate or portion thereof being exchanged signed by a
Foreign Clearing Agency and dated on the Exchange Date or a subsequent date, to
the effect that it has received in writing or by tested telex a certification
substantially in the form of (i) in the case of beneficial ownership of the
Global Certificate or a portion thereof being exchanged by a United States
institutional investor pursuant to the second preceding sentence, the
certificate in the form of Exhibit G-2 signed by the Manager which sold the
relevant Certificates or (ii) in all other cases, the certificate in the form of
Exhibit G-3, the certificate referred to in this clause (ii) being dated on the
earlier of the first actual payment of interest in respect of such Certificates
and the date of the delivery of such Certificate in definitive form. Upon
receipt of such certification, the Trustee shall cause the Global Certificate to
be
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endorsed in accordance with paragraph (d) below. Any exchange as provided in
this Section 6.13 shall be made free of charge to the holders and the beneficial
owners of the Global Certificate and to the beneficial owners of the Definitive
Euro-Certificates issued in exchange, except that a person receiving Definitive
Euro-Certificates must bear the cost of insurance, postage, transportation and
the like in the event that such person does not receive such Definitive
Euro-Certificates in person at the offices of a Foreign Clearing Agency.
(c) The delivery to the Trustee by a Foreign Clearing Agency of any written
statement referred to above may be relied upon by the Transferor and the Trustee
as conclusive evidence that a corresponding certification or certifications has
or have been delivered to such Foreign Clearing Agency pursuant to the terms of
this Agreement.
(d) Upon any such exchange of all or a portion of the Global Certificate
for a Definitive Euro-Certificate or Certificates, such Global Certificate shall
be endorsed by or on behalf of the Trustee to reflect the reduction of its
principal amount by an amount equal to the aggregate principal amount of such
Definitive Euro-Certificate or Certificates. Until so exchanged in full, such
Global Certificate shall in all respects be entitled to the same benefits under
this Agreement as Definitive Euro-Certificates authenticated and delivered
hereunder except that the beneficial owners of such Global Certificate shall not
be entitled to receive payments of interest on the Certificates until they have
exchanged their beneficial interests in such Global Certificate for Definitive
Euro-Certificates.
Section 6.14. Meetings of Certificateholders.
(a) If at the time any Bearer Certificates are issued and outstanding with
respect to any Series or Class to which any meeting described below relates, the
Transferor or the Trustee may at any time call a meeting of Investor
Certificateholders of any Series or Class or of all Series, to be held at such
time and at such place as 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,
any Supplement or the Investor Certificates or of taking any other action
permitted to be taken by Investor Certificateholders hereunder or under any
Supplement. Notice of any meeting of Investor Certificateholders, setting forth
the time and place of such meeting and in general terms the action proposed to
be taken at such meeting, shall be given in accordance with Section 13.05, the
first mailing and publication to be not less than twenty (20) nor more than 180
days prior to the date fixed for the meeting. To be entitled to vote at any
meeting of Investor Certificateholders a person shall be (i) a Holder of one or
more Investor Certificates of the applicable Series or Class or (ii) a person
appointed by an instrument in writing as proxy by the Holder of one or more such
Investor Certificates. The only persons who shall be entitled to be present or
to speak at any meeting of Investor Certificateholders shall be the persons
entitled to vote at such meeting and their counsel and any representatives of
the Transferor, the Servicer and the Trustee and their respective counsel.
(b) At a meeting of Investor Certificateholders, persons entitled to vote
Investor Certificates evidencing a majority of the aggregate unpaid principal
amount of the applicable Series or Class or all outstanding Series, as the case
may be, shall constitute a quorum. No business shall be transacted in the
absence of a quorum, unless a quorum is present
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when the meeting is called to order. In the absence of a quorum at any such
meeting, the meeting may be adjourned for a period of not less than ten (10)
days; in the absence of a quorum at any such adjourned meeting, such adjourned
meeting may be further adjourned for a period of not less than ten (10) days; at
the reconvening of any meeting further adjourned for lack of a quorum, the
persons entitled to vote Investor Certificates evidencing at least 25% of the
aggregate unpaid principal amount of the applicable Series or Class or all
outstanding Series, as the case may be, shall constitute a quorum for the taking
of any action set forth in the notice of the original meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided above except
that such notice must be given not less than five (5) days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage of the aggregate
principal amount of the outstanding applicable Investor Certificates which shall
constitute a quorum.
(c) Any Investor Certificateholder who has executed an instrument in
writing appointing a person as proxy shall be deemed to be present for the
purposes of determining a quorum and be deemed to have voted; provided that such
Investor Certificateholder shall be considered as present or voting only with
respect to the matters covered by such instrument in writing. Subject to the
provisions of Section 13.01, any resolution passed or decision taken at any
meeting of Investor Certificateholders duly held in accordance with this Section
6.14 shall be binding on all Investor Certificateholders whether or not present
or represented at the meeting.
(d) The holding of Bearer Certificates shall be proved by the production of
such Bearer Certificates or by a certificate, satisfactory to the Transferor,
executed by any bank, trust company or recognized securities dealer, wherever
situated, satisfactory to the Transferor. Each such certificate shall be dated
and shall state that on the date thereof a Bearer Certificate bearing a
specified serial number was deposited with or exhibited to such bank, trust
company or recognized securities dealer by the person named in such certificate.
Any such certificate may be issued in respect of one or more Bearer Certificates
specified therein. The holding by the person named in any such certificate of
any Bearer Certificate specified therein shall be presumed to continue for a
period of one year from the date of such certificate unless at the time of any
determination of such holding (i) another certificate bearing a later date
issued in respect of the same Bearer Certificate shall be produced, (ii) the
Bearer Certificate specified in such certificate shall be produced by some other
person or (iii) the Bearer Certificate specified in such certificate shall have
ceased to be outstanding. The appointment of any proxy shall be proved by having
the signature of the person executing the proxy guaranteed by any bank, trust
company or recognized securities dealer satisfactory to the Transferor and the
Trustee.
(e) The Trustee shall appoint a temporary chairman of the meeting. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the holders of Investor Certificates evidencing a majority of the
aggregate unpaid principal amount of Investor Certificates of the applicable
Series or Class or all outstanding Series, as the case may be, represented at
the meeting. No vote shall be cast or counted at any meeting in respect of any
Investor Certificate challenged as not outstanding and ruled by the chairman of
the meeting to be not outstanding. The chairman of the meeting shall have no
right to vote except as an Investor Certificateholder or proxy. Any meeting of
Investor Certificateholders duly called at
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which a quorum is present may be adjourned from time to time, and the meeting
may be held as so adjourned without further notice.
(f) The vote upon any resolution submitted to any meeting of Investor
Certificateholders shall be by written ballot on which shall be subscribed the
signatures of Investor Certificateholders or proxies and on which shall be
inscribed the serial number or numbers of the Investor Certificates held or
represented by them. The permanent chairman of the meeting shall appoint two (2)
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports in duplicate of all votes cast at the meeting. A
record in duplicate of the proceedings of each meeting of Investor
Certificateholders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was published as provided above. The record shall be
signed and verified by the permanent chairman and secretary of the meeting and
one of the duplicates shall be delivered to the Transferor and the other to the
Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
ARTICLE VII
Other Matters Relating to the Transferor
Section 7.01. Liability of the Transferor. The Transferor shall be liable
in all respects for the obligations, covenants, representations and warranties
of the Transferor arising under or related to this Agreement or any Supplement.
The Transferor shall be liable only to the extent of the obligations
specifically undertaken by it in its capacity as 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 any other
corporation or entity or convey or transfer its properties and assets
substantially as an entirety to any Person unless:
(i) (x) the corporation or other entity 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, a corporation
or limited liability company organized and existing under the laws of the United
States of America or any State or the District of Columbia, and shall be a
savings association, a national banking association, a bank or other entity
which is not eligible to be a debtor in a case under Title 11 of the United
States Code or a special purpose corporation or other special purpose entity
whose powers and activities are limited to substantially the same degree as
provided in the governing documents of Funding, and, if the Transferor is not
the surviving entity, such surviving entity shall expressly assume, by an
agreement supplemental hereto, executed and delivered to the Trustee and the
Servicer, in form satisfactory to the
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Trustee, the performance of every covenant and obligation of the Transferor
hereunder, including its obligations under Section 7.04; and (y) the Transferor
has delivered to the Trustee an Officer's Certificate of the Transferor and an
Opinion of Counsel each stating that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section, that such
supplemental agreement is a valid and binding obligation of such surviving
entity enforceable against such surviving entity in accordance with its terms,
except as such enforceability may be limited by applicable Debtor Relief Laws
and except as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity), and that all conditions
precedent herein provided for relating to such transaction have been complied
with;
(ii) if the surviving entity is a Non-Code Entity, the Transferor shall
have delivered notice of such consolidation, merger, conveyance or transfer to
each Rating Agency or, if the surviving entity is not a Non-Code Entity, the
Transferor shall have received written notice from each Rating Agency that such
consolidation, merger, conveyance or transfer will not have a Ratings Effect and
shall have delivered copies of each such written notice to the Servicer and the
Trustee; and
(iii) the Transferor shall have delivered to the Trustee, each Rating
Agency and any Series Enhancer entitled thereto pursuant to the relevant
Supplement a Tax Opinion, dated the date of such consolidation, merger,
conveyance or transfer, with respect thereto.
(b) The obligations of the Transferor hereunder shall not be assignable nor
shall any Person succeed to the obligations of the Transferor hereunder except
in each case in accordance with the provisions of the foregoing paragraph or
Section 7.05.
Section 7.03. Limitations on Liability of the Transferor. Subject to
Sections 7.01 and 7.04, neither the Transferor nor any of the directors,
officers, employees or agents of the Transferor acting in such capacity shall be
under any liability to the Trust, the Trustee, the Certificateholders, any
Series Enhancer or any other Person for any action taken or for refraining from
the taking of any action in good faith in such capacity pursuant to this
Agreement; provided, however, that this provision shall not protect the
Transferor or any such Person against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of reckless disregard of its obligations
and duties hereunder. The Transferor and any director, officer, employee or
agent of the Transferor may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person (other than the Transferor)
respecting any matters arising hereunder.
Section 7.04. Liabilities. Notwithstanding Section 7.03 (and
notwithstanding Sections 8.03 and 8.04), by entering into this Agreement, the
Transferor agrees to be liable, directly to the injured party, for the entire
amount of any losses, claims, damages or liabilities (other than those incurred
by an Investor Certificateholder in the capacity of an investor in the Investor
Certificates or those which arise from any action by any Investor
Certificateholder) arising out of or based on the arrangement created by this
Agreement (to the extent Trust Assets remaining after the Investor
Certificateholders and Series Enhancers have been paid in full are insufficient
to pay such losses, claims, damages or liabilities) and the actions of the
Transferor
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taken pursuant hereto as though this Agreement created a partnership under the
New York Uniform Partnership Act in which the Transferor was a general partner.
The Transferor's obligations pursuant to this Section 7.04 shall not constitute
a claim against the Transferor to the extent the Transferor does not have funds
sufficient to make payment of such obligations. In the event of the appointment
of a Successor Servicer, the Successor Servicer will (from its own assets and
not from the assets of the Trust) indemnify and hold harmless the Transferor
against and from any losses, claims, damages and liabilities of the Transferor
as described in this Section 7.04 arising from the actions or omissions of such
Successor Servicer.
Section 7.05. Assumption of the Transferor's Obligations. Notwithstanding
the provisions of Section 7.02, the Transferor may assign, convey and transfer
all of its remaining interest in the Receivables arising in the Accounts, its
interest in the Participation Interests and its Transferor's Interest
(collectively, the "Assigned Assets"), together with all of its obligations
under this Agreement or relating to the transactions contemplated hereby
(collectively, the "Assumed Obligations"), to another entity (the "Assuming
Entity") which may be an entity that is not affiliated with the Transferor, and
the Transferor may assign, convey and transfer the Assigned Assets and the
Assumed Obligations to the Assuming Entity, without the consent or approval of
the holders of any Certificates, upon satisfaction of the following conditions:
(a) the Assuming Entity, the Transferor and the Trustee shall have entered
into an assumption agreement (the "Assumption Agreement") providing for the
Assuming Entity to assume the Assumed Obligations, including the obligation
under this Agreement to transfer the Receivables arising under the Accounts and
the Receivables arising under any Additional Accounts to the Trustee, and the
Transferor shall have delivered to the Trustee an Officer's Certificate of the
Transferor and an opinion of Counsel each stating that such transfer and
assumption comply with this Section 7.05, that such Assumption Agreement is a
valid and binding obligation of such Assuming Entity enforceable against such
Assuming Entity in accordance with its terms, except as such enforceability may
be limited by applicable Debtor Relief Laws and except as such enforceability
may be limited by general principles of equity (whether considered in a suit at
law or in equity), and that all conditions precedent herein provided for
relating to such transaction have been complied with;
(b) each provider of Series Enhancement, if any, shall have consented to
such transfer and assumption;
(c) the Transferor or the Assuming Entity shall have delivered to the
Trustee copies of UCC financing statements covering such Accounts to perfect the
Trustee's interest in the Receivables arising herein;
(d) if the Assuming Entity is a Non-Code Entity, the Transferor shall have
delivered notice of such transfer and assumption to each Rating Agency or, if
the Assuming Entity is not a Non-Code Entity, the Transferor shall have received
written notice from each Rating Agency that such transfer and assumption will
not have a Ratings Effect and shall have delivered copies of each such written
notice to the Servicer and the Trustee;
(e) the Trustee shall have received an Opinion of Counsel with respect to
clause (c) above and as to certain other matters specified in Exhibit H-2; and
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(f) the Trustee shall have received a Tax Opinion.
Upon such transfer to and assumption by the Assuming Entity, the Transferor
shall surrender the Base Certificate, if any, evidencing its interest in the
Trust to the Transfer Agent and Registrar for registration of transfer and the
Transfer Agent and Registrar shall issue a new Base Certificate, if applicable,
in the name of the Assuming Entity. Notwithstanding such assumption, the
Transferor shall continue to be liable for all representations and warranties
and covenants made by it and all obligations performed or to be performed by it
in its capacity as a Transferor prior to such transfer.
ARTICLE VIII
Other Matters Relating to the Servicer
Section 8.01. Liability of the Servicer. The Servicer shall be liable under
this Article only to the extent of the obligations specifically undertaken by
the Servicer in its capacity as Servicer.
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 entity or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:
(a) (i) the entity 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, if the
Servicer is not the surviving entity, an entity organized and existing under the
laws of the United States of America or any State or the District of Columbia,
and, if the Servicer is not the surviving entity, such entity shall expressly
assume, by an agreement supplemental hereto, executed and delivered to the
Trustee and the Transferor, in form satisfactory to the Trustee and the
Transferor, the performance of every covenant and obligation of the Servicer
hereunder;
(i) the Servicer has delivered to the Trustee and the Transferor an
Officer's Certificate of the Servicer and an Opinion of Counsel each stating
that such consolidation, merger, conveyance or transfer and such supplemental
agreement comply with this Section 8.02, that such supplemental agreement is a
valid and binding obligation of such surviving entity enforceable against such
surviving entity in accordance with its terms, except as such enforceability may
be limited by applicable Debtor Relief Laws and except as such enforceability
may be limited by general principles of equity (whether considered in a suit at
law or in equity), and that all conditions precedent herein provided for
relating to such transaction have been complied with;
(b) if the surviving entity is a Non-Code Entity, the Servicer shall have
delivered notice of such consolidation, merger, conveyance or transfer to each
Rating Agency or, if the surviving entity is not a Non-Code Entity, the Servicer
shall have received written notice from each Rating Agency that such assignment
and succession will not have a Ratings Effect and shall have delivered copies of
each such notice to the Transferor and the Trustee; and
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(c) the entity 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 an Eligible
Servicer.
Section 8.03. Limitation on Liability of the Servicer and Others. Except as
provided in Section 8.04, neither the Servicer nor any of the directors,
officers, employees or agents of the Servicer in its capacity as Servicer shall
be under any liability to the Transferor, the Trust, the Trustee, the
Certificateholders, any Series Enhancer or any other person for any action taken
or for refraining from the taking of any action in good faith in its capacity as
Servicer pursuant to this Agreement; provided, however, that this provision
shall not protect the Servicer or any such Person against any liability which
would otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of reckless disregard
of its obligations and duties hereunder. The Servicer and any director, officer,
employee or agent of the Servicer may rely in good faith on any document of any
kind prima facie properly executed and submitted by any Person (other than the
Servicer) 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 as Servicer in accordance with this Agreement and
which in its reasonable judgment may involve it in any expense or liability. The
Servicer may, in its sole discretion but only within the scope of its role as
Servicer, undertake any such legal action which it may deem necessary or
desirable for the benefit of the Certificateholders with respect to this
Agreement and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder.
Section 8.04. Servicer Indemnification of the Transferor, the Trust and the
Trustee. The Servicer shall indemnify and hold harmless the Transferor, the
Trust and the Trustee from and against any loss, liability, expense, damage or
injury suffered or sustained by reason of any acts or omissions of the Servicer
with respect to the Trust pursuant to this Agreement, including any judgment,
award, settlement, reasonable attorneys' fees and other costs or expenses
incurred in connection with the defense of any action, proceeding or claim.
Indemnification pursuant to this Section 8.04 shall not be payable from the
Trust Assets.
Section 8.05. The Servicer Not To Resign. Except as provided in Section
8.02, the Servicer shall not resign from the obligations and duties hereby
imposed on it except upon determination that (i) the performance of its duties
hereunder is no longer permissible under Requirements of Law (other than the
charter and by-laws of the Servicer) and (ii) there is no reasonable action
which the Servicer could take to make the performance of its duties hereunder
permissible under such Requirements of Law. Any determination permitting the
resignation of the Servicer shall be evidenced by an Officer's Certificate of
the Servicer and an Opinion of Counsel to such effect delivered to the
Transferor and the Trustee. No 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. If within 120 days
of the date of the determination that the Servicer may no longer act as Servicer
the Trustee is unable to appoint a Successor Servicer, the Trustee shall serve
as Successor Servicer. Notwithstanding the foregoing, the Trustee shall, if it
is legally unable so to act, petition a court of competent jurisdiction to
appoint any established institution having a net worth of not less than
$50,000,000 and whose regular business includes the servicing of credit card
accounts and who has the ability to service the Receivables as the Successor
Servicer hereunder. The Trustee shall give prompt
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notice to the Transferor and each Rating Agency and each Series Enhancer
entitled thereto under the terms of the applicable Supplement upon the
appointment of a Successor Servicer.
Section 8.06. Access to Certain Documentation and Information Regarding the
Receivables. The Servicer shall provide to the Trustee and the Transferor access
to the documentation regarding the Accounts and the Receivables in such cases
where the Trustee or the Transferor is required in connection with the
enforcement of the rights of the Transferor or 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 the Servicer's principal office or at the
Servicer's office in the continental United States where the documentation
regarding the Accounts and the Receivables normally is kept. Nothing in this
Section 8.06 shall derogate from the obligation of the Transferor, the Trustee
and 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 obligation shall not
constitute a breach of this Section 8.06.
Section 8.07. Delegation of Duties. 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 Lending Guidelines and this
Agreement; provided, however, in the case of significant delegation to a Person
other than any Affiliate of the Servicer or Electronic Data Services, (i) at
least thirty (30) days prior written notice shall be given to the Trustee, the
Transferor, each Rating Agency and each Series Enhancer entitled thereto
pursuant to the relevant Supplement, of such delegation and (ii) at or prior to
the end of such 30-day period the Servicer shall not have received a notice in
writing from a Rating Agency that such delegation will have a Ratings Effect.
Any such delegation 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.
Section 8.08. Examination of Records. The Transferor and the Servicer shall
clearly and unambiguously indicate in their computer files or other records that
the Trust Assets have been conveyed to the Trustee, pursuant to this Agreement.
The Transferor and 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 shall
occur with respect to any Series:
(a) an Account Owner shall consent to the appointment of a conservator,
receiver, trustee or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
an Account Owner 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, receiver,
trustee or
74
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 an Account Owner; or an Account Owner
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; provided that an Insolvency
Event shall be a Pay Out Event with respect to an Account Owner only if, at the
time such Insolvency Event occurs, Receivables transferred by an Account Owner
are then included in the Trust;
(b) the Transferor (or any Additional Transferor) shall consent to the
appointment of a conservator, receiver, trustee or liquidator in any insolvency,
bankruptcy, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Transferor 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, receiver, trustee or liquidator in any insolvency, bankruptcy,
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 the Transferor shall admit in writing
its inability to pay its debts generally as they become due, file a petition to
take advantage of any applicable insolvency, bankruptcy or reorganization
statute, make an assignment for the benefit of its creditors or voluntarily
suspend payment of its obligations (any such event described in this clause (b)
or in clause (a) above, an "Insolvency Event");
(c) the Trust shall become an "investment company" within the meaning of
the Investment Company Act; or
(d) a Transfer Restriction Event as defined in the Receivables Purchase
Agreements shall occur between an Account Owner and the Transferor;
then, in the case of any such event, a Pay Out Event shall occur with respect to
such Series without any notice or other action on the part of the Trustee or the
Investor Certificateholders, immediately upon the occurrence of such event.
Section 9.02. Additional Rights upon the Occurrence of Certain Events.
(a) If an Insolvency Event occurs with respect to the Transferor or the
Transferor violates Section 2.07(c) for any reason, the Transferor shall on the
day any such Insolvency Event or violation occurs (the "Appointment Date"),
immediately cease to transfer Principal Receivables to the Trustee and shall
promptly give notice to the Trustee and the Servicer thereof. Notwithstanding
any cessation of the transfer to the Trustee of additional Principal
Receivables, Principal Receivables transferred to the Trustee prior to the
occurrence of such Insolvency Event and Collections in respect of such Principal
Receivables and Finance Charge Receivables whenever created, accrued in respect
of such Principal Receivables, shall continue to be a part of the Trust. So long
as any Series issued prior to April 1, 2001 remains Outstanding, within fifteen
(15) days after receipt of such notice by the Trustee of the occurrence of such
Insolvency Event or violation of Section 2.07(c), the Trustee shall (i) publish
a notice in an Authorized Newspaper that an Insolvency Event or violation has
occurred and that the Trustee intends to sell, dispose of or otherwise liquidate
the Receivables and (ii) give notice to Investor
75
Certificateholders and each Series Enhancer entitled thereto pursuant to the
relevant Supplement describing the provisions of this Section 9.02 and
requesting instructions from such Holders. Unless the Trustee shall have
received instructions within ninety (90) days from the date notice pursuant to
clause (i) above is first published from (x) Holders of Investor Certificates
evidencing more than 50% of the aggregate unpaid principal amount of each Series
or, with respect to any Series with two (2) or more Classes, of each Class, to
the effect that such Investor Certificateholders disapprove of the liquidation
of the Receivables and wish to continue having Principal Receivables transferred
to the Trustee as before such Insolvency Event or violation, (y) to the extent
provided in the relevant Supplement, the Series Enhancer with respect to such
Series, to such effect, and (z) each holder (other than the Transferor) of a
Transferor Certificate to such effect, the Trustee shall promptly use its best
efforts to sell, dispose of or otherwise liquidate the Receivables by the
solicitation of competitive bids and on terms equivalent to the best purchase
offer as determined by the Trustee. 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.
(b) If an Insolvency Event occurs with respect to any Additional
Transferor or any such Additional Transferor violates Section 2.07(c) for any
reason, such Additional Transferor shall on the day any such Insolvency Event or
violation occurs (the "Appointment Date"), immediately cease to transfer
Principal Receivables to the Trustee and shall promptly give notice to the
Trustee and the Servicer thereof. Notwithstanding any cessation of the transfer
to the Trustee of additional Principal Receivables, Principal Receivables
transferred to the Trustee prior to the occurrence of such Insolvency Event and
Collections in respect of such Principal Receivables and Finance Charge
Receivables whenever created, accrued in respect of such Principal Receivables,
shall continue to be a part of the Trust.
(c) The proceeds from the sale, disposition or liquidation of the
Receivables pursuant to paragraph (a) ("Insolvency Proceeds") shall be
immediately deposited in the Collection Account. The Trustee shall determine
conclusively the amount of the Insolvency Proceeds which are deemed to be
Finance Charge Receivables and Principal Receivables. The Insolvency Proceeds
shall be allocated and distributed to Investor Certificateholders in accordance
with Article IV and the terms of each Supplement and the Trust shall terminate
immediately thereafter.
ARTICLE X
Servicer Defaults
Section 10.01. Servicer Defaults. If any one of the following events (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 the terms of this
Agreement or any Supplement on or before the date occurring ten (10) Business
Days after the date such payment, transfer or deposit or such instruction or
notice is required to be made or given, as the case may be, under the terms of
this Agreement or any Supplement;
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(b) failure on the part of the Servicer duly to observe or perform in any
material respect any other covenants or agreements of the Servicer set forth in
this Agreement or any Supplement which has a material adverse effect on the
interests hereunder of the Investor Certificateholders of any Series or Class
(which determination shall be made without regard to whether funds are then
available pursuant to any Series Enhancement) and which continues unremedied for
a period of sixty (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 the Transferor, or to the Servicer, the Transferor
and the Trustee by Holders of Investor Certificates evidencing not less than 10%
of the aggregate unpaid principal amount of all Investor Certificates (or, with
respect to any such failure that does not relate to all Series, 10% of the
aggregate unpaid principal amount of all Series to which such failure relates);
or the Servicer shall delegate its duties under this Agreement, except as
permitted by Sections 8.02 and 8.07, a Responsible Officer of the Trustee has
actual knowledge of such delegation and such delegation continues unremedied for
15 days after the date on which written notice thereof, requiring the same to be
remedied, shall have been given to the Servicer by the Trustee or the
Transferor, or to the Servicer, the Transferor and the Trustee by Holders of
Investor Certificates evidencing not less than 10% of the aggregate unpaid
principal amount of all Investor Certificates;
(c) any representation, warranty or certification made by the Servicer in
this Agreement or any Supplement or in any certificate delivered pursuant to
this Agreement or any Supplement shall prove to have been incorrect when made,
which has a material adverse effect on the rights of the Investor
Certificateholders of any Series or Class (which determination shall be made
without regard to whether funds are then available pursuant to any Series
Enhancement) and which continues to be incorrect in any material respect for a
period of sixty (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 the Transferor, or to the Servicer, the Transferor
and the Trustee by the Holders of Investor Certificates evidencing not less than
10% of the aggregate unpaid principal amount of all Investor Certificates (or,
with respect to any such representation, warranty or certification that does not
relate to all Series, 10% of the aggregate unpaid principal amount of all Series
to which such representation, warranty or certification relates); or
(d) the Servicer shall consent to the appointment of a conservator,
receiver, trustee 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, receiver,
trustee 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 sixty (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, in the event of any Servicer Default, so long as the Servicer Default
shall not have been remedied, either the Trustee, the Transferor or the Holders
of Investor Certificates evidencing more than 50% of the aggregate unpaid
principal amount of all outstanding Series, by written
77
notice then given to the Servicer (and to the Trustee, the Transferor, and any
Series Enhancer entitled thereto pursuant to the relevant Supplement if given by
the Investor Certificateholders) (a "Termination Notice"), may terminate all but
not less than all the rights and obligations of the Servicer as Servicer under
this Agreement and in and to the Receivables and the proceeds thereof; provided,
however, if within sixty (60) days of receipt of a Termination Notice the
Trustee does not receive any bids from Eligible Servicers in accordance with
Section 10.02(c) to act as a Successor Servicer and receives an Officer's
Certificate of the Servicer to the effect that the Servicer cannot in good faith
cure the Servicer Default which gave rise to the Termination Notice, the Trustee
shall grant a right of first refusal to the Transferor which would permit the
Transferor at its option to purchase the Certificateholders' Interest on the
Distribution Date in the next calendar month; provided further, however, the
foregoing right of first refusal shall not apply in the case of a Servicer
Default set forth in subsection 10.01(d). The purchase price for the
Certificateholders' Interest shall be equal to the sum of the amounts specified
therefor with respect to each outstanding Series in the related Supplement. The
Transferor shall notify the Trustee prior to the Record Date for the
Distribution Date of the purchase if they are exercising such option. If it
exercises such option, the Transferor shall (x) deliver to the Trustee an
Opinion of Counsel (which must be an independent outside counsel) to the effect
that, in reliance on certain certificates to the effect that the Receivables
constitute fair value for consideration paid therefor and as to the solvency of
the Transferor, the purchase would not be considered a fraudulent conveyance and
(y) deposit the purchase price into the Collection Account not later than 12:00
noon, Richmond, Virginia time, on such Distribution Date in immediately
available funds. The purchase price shall be allocated and distributed to
Investor Certificateholders in accordance with Article IV and the terms of each
Supplement.
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. 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 the transfer to such Successor Servicer of all
authority of the Servicer to service the Receivables provided for under this
Agreement, including all authority over all Collections which shall on the date
of transfer be held by the Servicer for deposit, or which have been deposited by
the Servicer, in the Collection Account, or which shall thereafter be received
with respect to the Receivables, and in assisting the Successor Servicer and in
enforcing all rights to Insurance Proceeds. The Servicer shall promptly transfer
its electronic records relating to the Receivables to the Successor Servicer in
such electronic form as the Successor Servicer may reasonably 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
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Successor Servicer shall be required to enter into such customary licensing and
confidentiality agreements as the Servicer shall deem necessary to protect its
interests.
Notwithstanding the foregoing, any delay in or failure of performance
under Section 10.01(a) for a period of five (5) Business Days or under Section
10.01(b) or (c) for a period of sixty (60) days (in addition to any period
provided in Section 10.01(a), (b) or (c)) shall not constitute a Servicer
Default until the expiration of such additional five (5) Business Days or sixty
(60) days, respectively, 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
or terrorism, public disorder, rebellion or sabotage, epidemics, landslides,
lightning, fire, hurricanes, earthquakes, floods or similar causes. The
preceding sentence shall not relieve the Servicer from using its best efforts to
perform its respective obligations in a timely manner in accordance with the
terms of this Agreement and any Supplement and the Servicer shall provide the
Trustee, each Rating Agency, any Series Enhancer entitled thereto pursuant to
the relevant Supplement, each Holder of a Transferor Certificate and the
Investor Certificateholders with an Officer's Certificate of the Servicer giving
prompt notice of such failure or delay by it, together with a description of its
efforts to so 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 and the Transferor or until a date
mutually agreed upon by the Servicer, the Transferor and Trustee. The Trustee
shall as promptly as possible after the giving of a Termination Notice appoint
an Eligible Servicer as a successor servicer (the "Successor Servicer"), and
such Successor Servicer shall accept its appointment by a written assumption in
a form acceptable to the Trustee and the Transferor. In the event that a
Successor Servicer has not been appointed or 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. The
Trustee may delegate any of its servicing obligations to an Affiliate of the
Trustee or agent in accordance with Sections 3.01(b) and 8.07. Notwithstanding
the foregoing, the Trustee shall, if it is legally unable so to act, petition a
court of competent jurisdiction to appoint any established institution having a
net worth of not less than $50,000,000 and whose regular business includes the
servicing of credit card receivables and who has the ability to service the
Receivables as the Successor Servicer hereunder. The Trustee shall give prompt
notice to the Transferor, each Rating Agency and each Series Enhancer entitled
thereto pursuant to the applicable Supplement upon the appointment of a
Successor Servicer.
(b) Upon its appointment, the Successor Servicer shall be the successor
in all respects to 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.
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(c) In connection with any Termination Notice, the Trustee will review
any bids which it obtains from Eligible Servicers and shall be permitted to
appoint any Eligible Servicer submitting such a bid as a Successor Servicer for
servicing compensation not in excess of the aggregate Servicing Fees for all
Series; provided, however, that the Transferor shall be responsible for payment
of the Transferor's portion of such aggregate Servicing Fees and that no such
monthly compensation paid out of Collections shall be in excess of such
aggregate Servicing Fees. Each holder of a Transferor Certificate agrees that,
if Capital One (or any Successor Servicer) is terminated as Servicer hereunder,
the portion of the Collections in respect of Finance Charge Receivables that the
Transferor is entitled to receive pursuant to this Agreement or any Supplement
shall be reduced by an amount sufficient to pay the Transferor's share
(determined by reference to the Supplements with respect to any outstanding
Series) of the compensation of the Successor Servicer.
(d) All authority and power granted to the 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 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 Servicer agrees to cooperate with the Transferor in
effecting the termination of the responsibilities and rights of the Servicer to
conduct servicing on the Receivables. The 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 times
as the Transferor shall reasonably request. To the extent that compliance with
this Section 10.02 shall require the Servicer to disclose to the Transferor
information of any kind which the Servicer deems to be confidential, the
Transferor shall be required to enter into such customary licensing and
confidentiality agreements as the Servicer shall deem necessary to protect its
interests.
Section 10.03. Notification to Certificateholders. Within two (2)
Business Days after the Servicer becomes aware of any Servicer Default, the
Servicer shall give notice thereof to the Trustee, the Transferor, each Rating
Agency and any Series Enhancer entitled thereto pursuant to the relevant
Supplement and the Trustee shall give notice to the Investor Certificateholders.
Upon any termination or appointment of a Successor Servicer pursuant to this
Article X, the Trustee shall give prompt notice thereof to the Transferor and to
the Investor Certificateholders.
ARTICLE XI
The Trustee
Section 11.01. Duties of Trustee. (a) The Trustee, prior to the
occurrence of a Servicer Default and after the curing of all Servicer Defaults
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. If 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
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degree of care and skill in its exercise, as a prudent person would exercise or
use under the circumstances in the conduct of such person's own affairs.
(b) 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
conform to the requirements of this Agreement. The Trustee shall give prompt
written notice to the Certificateholders of any material lack of conformity of
any such instrument to the applicable requirements of this Agreement discovered
by the Trustee which would entitle a specified percentage of the
Certificateholders to take any action pursuant to this Agreement.
(c) Subject to Section 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 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;
(ii) 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 more than
50% of the aggregate unpaid principal amount of all Investor Certificates (or,
with respect to any such action that does not relate to all Series, 50% of the
aggregate unpaid principal amount of the Investor Certificates of all Series to
which such action relates) 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, under this Agreement; and
(iii) 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, the
Transferor or any Holders of Investor Certificates evidencing not less than 10%
of the aggregate unpaid principal amount of all Investor Certificates (or, with
respect to any such failure that does not relate to all Series, 10% of the
aggregate unpaid principal amount of all Investor Certificates of all Series to
which such failure relates, or the Series Enhancers for all Series to which such
failure relates).
(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 hereunder or
thereunder, 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 of the Servicer under this
Agreement except during such time, if any, as the Trustee shall be the successor
to, and be vested with the rights, duties, powers and privileges of, the
Servicer in accordance with the terms of this Agreement.
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(e) Except for actions expressly authorized by this Agreement, the
Trustee shall take no action reasonably likely to (i) impair the interests of
the Trustee or the Trust in any Receivable now existing or hereafter created or
(ii) impair the value of any Receivable now existing or hereafter created.
(f) The Trustee shall have no power to vary the corpus of the Trust,
except as expressly provided in this Agreement.
(g) Subject to Section 11.01(d), 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 as soon as possible upon knowledge of
a Responsible Officer thereof and receipt of appropriate records, if any, to
perform such obligation, duty or agreement in the manner so required.
(h) If an Account Owner has agreed to transfer any of its receivables
(other than the Receivables) to another Person, upon the written request of such
Account Owner, the Trustee will enter into such intercreditor agreements with
the transferee of such receivables as are customary and necessary to separately
identify the rights of the Trust and such other Person in such Account Owner's
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, such Account Owner will
deliver an Opinion of Counsel on any matters relating to such intercreditor
agreement, reasonably requested by the Trustee.
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 resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document 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 advice of such counsel,
or Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel;
(c) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement or any Enhancement Agreement, or
to institute, conduct or defend any litigation hereunder or thereunder or in
relation to this Agreement or any Enhancement Agreement, at the request, order
or direction of any of the Certificateholders, pursuant to the provisions of
this Agreement or any Enhancement Agreement, unless such Certificateholders
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
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Default (which has not been cured) to exercise such of the rights and powers
vested in it by this Agreement, and to use the same degree of care and skill in
its exercise, as a prudent person would exercise or use under the circumstances
in the conduct of such person's 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 in 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 more than 25% of the aggregate unpaid principal amount
of all Investor Certificates (or, with respect to any such matters that do not
relate to all Series, 25% of the aggregate unpaid principal amount of the
Investor Certificates of all Series to which such matters relate);
(f) 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 with due care by it hereunder; provided, however, that the Trustee
shall not hold any Eligible Investment through an agent or nominee except as
expressly permitted by Section 4.02; and
(g) except as may be required by Section 11.01(a) hereof, the Trustee
shall not be required to make any initial or periodic examination of any
documents or records related to the Receivables or the Accounts for the purpose
of establishing the presence or absence of defects, the compliance by each
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 any
Supplement 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 or the Holders of the Transferor
Certificates in respect of the Receivables or deposited in or withdrawn from the
Collection Account, any Series Accounts or any other accounts hereafter
established to effectuate the transactions contemplated by this Agreement and in
accordance with the terms of this Agreement.
Section 11.04. Trustee May Own Certificates. Subject to Section 6.06, the
Trustee in its individual or any other capacity may become the owner or pledgee
of Investor Certificates with the same rights as it would have if it were not
the Trustee.
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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 the Servicer will pay or reimburse the
Trustee (without reimbursement from the Collection 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
or any Enhancement Agreement (including the reasonable fees and expenses of its
agents, any co-trustee and counsel) except any such expense, disbursement or
advance as may arise from its own negligence 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 Section 8.04 and 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 bank or a corporation organized and doing
business under the laws of the United States of America or any state thereof
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000 and subject to supervision or
examination by Federal or state authority and maintain any credit or deposit
rating required by any Rating Agency (as of the date hereof Baa3 for ▇▇▇▇▇'▇).
If such bank or corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section 11.06, the combined capital and
surplus of such bank or corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. In
case at any time 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, the Transferor
and each Rating Agency. Upon receiving such notice of resignation, the
Transferor shall promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted within thirty (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 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
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purpose of rehabilitation, conservation or liquidation, the Transferor shall
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 and any liability of the Trustee arising
hereunder shall survive such appointment of a successor trustee.
Section 11.08. Successor Trustees.
(a) Any successor trustee appointed as provided in Section
11.07 shall execute, acknowledge and deliver to the Transferor, to the Servicer
and to its predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor Trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as Trustee herein. The predecessor Trustee shall deliver to the successor
trustee all documents and statements held by it hereunder, and the Transferor,
the Servicer 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 success or
trustee shall be eligible under the provisions of Section 11.06.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section 11.08, such successor trustee shall provide notice of
such succession hereunder to all Investor Certificateholders and the Servicer
shall provide such notice to each Rating Agency and any Series Enhancer entitled
thereto pursuant to the relevant Supplement.
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
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 11.06, 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
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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; provided, however, that the Trustee shall exercise due
care in the appointment of any co-trustee. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 11.06 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 11.08.
(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, 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 Transferor and the Servicer.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect to this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by 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 Trust shall be
required to file tax returns, the Servicer, at the expense of the Transferor,
shall prepare or shall cause to be prepared
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any tax returns required to be filed by the Trust and shall remit such returns
to the Trustee for signature at least five (5) days before such returns are due
to be filed; the Trustee shall promptly sign such returns and deliver such
returns after signature to the Servicer and such returns shall be filed, with a
copy to the Transferor, by the Servicer. The Servicer in accordance with the
terms of each Supplement shall also prepare or shall cause to be prepared all
tax information required by law to be distributed to Investor
Certificateholders. The Trustee, upon request, will furnish the Servicer with
all such information known to the Trustee as may be reasonably required in
connection with the preparation of all tax returns of the Trust. In no event
shall the Trustee, the Servicer (except as provided in Section 8.04) or the
Transferor be liable for any liabilities, costs or expenses of the Trust or the
Investor Certificateholders arising under any tax law, including 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 the
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 the Certificateholders in respect of which such judgment has
been obtained.
Section 11.13. Suits for Enforcement.
(a) If a Servicer Default shall occur and be continuing, the
Trustee, in its discretion may, subject to the provisions of Sections 10.01 and
11.14, proceed to protect and enforce its rights and the rights of the
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 the
Certificateholders.
(b) In case there shall be pending, relative to the Transferor
or any other obligor upon the Certificates of the affected Series or any Person
having or claiming an ownership interest in the Trust Assets, proceedings under
Title 11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or other similar law, now or hereafter in effect, or in
case a receiver, conservator, assignee, trustee in bankruptcy or reorganization,
liquidator, sequestrator, custodian or other similar official shall have been
appointed for or taken possession of the Transferor or its property or such
other obligor or Person, or in case of any other comparable judicial proceedings
relative to the Transferor or the property of the Trust or such other obligor or
Person, the Trustee, regardless whether the principal of any Certificates shall
then be due and payable as therein expressed or by declaration or otherwise and
regardless whether the Trustee shall have made any demand pursuant to the
provisions of this Section 11.13, shall be entitled and empowered, by
intervention in such proceedings or otherwise:
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(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the
Certificates of such Series, and to file such other papers or documents
as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for reasonable compensation to the Trustee
and each predecessor Trustee, and their respective agents, attorneys
and counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor
Trustee, except as a result of negligence or bad faith) and of the
Certificateholders of such Series, allowed in any proceedings relative
to the Transferor or other obligor upon the Certificates, or to the
property of the Transferor or such other obligor;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Certificateholders of such Series, in any
election of a trustee or a standby trustee in arrangement,
reorganization, liquidation or other bankruptcy or insolvency
proceedings or a Person performing similar functions in comparable
proceedings; and
(iii) to collect and receive any monies or other property
payable or deliverable on any such claims, and to distribute all
amounts received with respect to the claims of the Certificateholders
of such Series and of the Trustee on their behalf and to file such
proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee or the Holders of
the Certificates of such Series, allowed in any judicial proceedings
relative to the Transferor;
and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by each of such Certificateholders to
make payments to the Trustee, and, in the event that the Trustee shall consent
to the making of payments directly to such Certificateholders, to pay to the
Trustee such amounts as shall be sufficient to cover reasonable compensation to
the Trustee, each predecessor Trustee and their respective agents, attorneys and
counsel (including disbursements), and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of negligence or bad faith.
(c) Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Certificateholder any plan of reorganization, arrangement, adjustment or
composition affecting the Investor Certificates or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Certificateholder in any such proceeding; provided, however, that the Trustee
may, on behalf of the Investor Certificateholders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditor's or
other similar committee.
Section 11.14. Rights of Certificateholders To Direct Trustee.
Holders of Investor Certificates evidencing more than 50% of the aggregate
unpaid principal amount of all Investor Certificates (or, with respect to any
remedy, trust or power that does not relate to all Series, 50% of the aggregate
unpaid principal amount of the Investor Certificates of all Series to which such
remedy, trust or power relates) shall have the right to direct the time, method,
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee relating to such
proceeding; provided, however, that, subject to
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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.
Section 11.15. Representations and Warranties of Trustee. The
Trustee represents and warrants as of each Closing Date that:
(a) the Trustee is a banking corporation organized, existing
and in good standing under the laws of the State of New York;
(b) the Trustee has full power, authority and right to
execute, deliver and perform this Agreement and each Supplement, and has taken
all necessary action to authorize the execution, delivery and performance by it
of this Agreement and each Supplement; and
(c) this Agreement and each Supplement has been duly executed
and delivered by the Trustee.
Section 11.16. Maintenance of Office or Agency. The Trustee
will maintain at its expense an office or agency (the "Corporate Trust Office")
where notices and demands to or upon the Trustee in respect of the Certificates
and this Agreement may be served (a) in the Borough of Manhattan, The City of
New York, in the case of Registered Certificates and Holders thereof, and (b) in
London or Luxembourg, in the case of Bearer Certificates and Holders thereof, if
and for so long as any Bearer Certificates are outstanding. The Corporate Trust
Office shall initially be located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇. The Trustee will give prompt notice to the Servicer, the Transferor and
Investor Certificateholders of any change in the location of the Certificate
Register or any such office or agency.
Section 11.17. Confidentiality. Information provided by the
Transferor or an Account Owner to the Trustee related to the transaction
effected hereunder, including all information related to the Obligors with
respect to the Receivables, and any computer software provided to the Trustee in
connection with the transaction effected hereunder or under any Supplement, in
each case whether in the form of documents, reports, lists, tapes, discs or any
other form, shall be "Confidential Information." The Trustee and its agents,
representatives or employees shall at all times maintain the confidentiality of
all Confidential Information and shall not, without the prior written consent of
the Transferor or such Account Owner, disclose to third parties (including
Certificateholders) or use such information, in any manner whatsoever, in whole
or in part, except as expressly permitted under this Agreement or under any
Supplement or as required to fulfill an obligation of the Trustee under this
Agreement or under any Supplement, in which case such Confidential Information
shall be revealed only to the extent expressly permitted or only to the
Trustee's agents, representatives and employees who need to know such
Confidential Information to the extent required for the purpose of fulfilling an
obligation of the Trustee under this Agreement or under any Supplement.
Notwithstanding the above, Confidential Information may be disclosed to the
extent required by law or legal process,
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provided that the Trustee gives prompt written notice to the Transferor or such
Account Owner of the nature and scope of such disclosure.
ARTICLE XII
Termination
Section 12.01. Termination of Trust. The Trust and 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
Investor Certificateholders as hereinafter set forth) shall terminate, except
with respect to the duties described in Sections 7.04, 8.04 and 12.02(b), upon
the earlier of (i) September 1, 2030, (ii) the day following the Distribution
Date on which the Invested Amount and Enhancement Invested Amount for each
Series is zero and (iii) the time provided in Section 9.02(c).
Section 12.02. Final Distribution.
(a) The Servicer shall give the Transferor and the Trustee at
least thirty (30) days prior notice of the Distribution Date on which the
Investor Certificateholders of any Series or Class may surrender their Investor
Certificates for payment of the final distribution on and cancellation of such
Investor Certificates (or, in the event of a final distribution resulting from
the application of Section 2.06, 9.02 or 10.01, notice of such Distribution Date
promptly after the Servicer has determined that a final distribution will occur,
if such determination is made less than thirty (30) days prior to such
Distribution Date). Such notice shall be accompanied by an Officer's Certificate
of the Servicer setting forth the information specified in Section 3.05 covering
the period during the then-current calendar year through the date of such
notice. Not later than the fifth day of the month in which the final
distribution in respect of such Series or Class is payable to Investor
Certificateholders, the Trustee shall provide notice to Investor
Certificateholders of such Series or Class specifying (i) the date upon which
final payment of such Series or Class will be made upon presentation and
surrender of Investor Certificates of such Series or Class at the office or
offices therein designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such payment date is not
applicable, payments being made only upon presentation and surrender of such
Investor Certificates at the office or offices therein specified (which, in the
case of Bearer Certificates, shall be outside the United States). The Trustee
shall give such notice to the Transfer Agent and Registrar, the Transferor and
the Paying Agent at the time such notice is given to Investor
Certificateholders.
(b) Notwithstanding a final distribution to the Investor
Certificateholders of any Series or Class (or the termination of the Trust),
except as otherwise provided in this paragraph, all funds then on deposit in the
Collection Account and any Series Account allocated to such Investor
Certificateholders shall continue to be held in trust for the benefit of such
Investor Certificateholders and the Paying Agent or the Trustee shall pay such
funds to such Investor Certificateholders upon surrender of their Investor
Certificates (and any excess shall be paid in accordance with the terms of any
relevant Enhancement Agreement). In the event that all such Investor
Certificateholders shall not surrender their Investor Certificates for
cancellation within six (6) months after the date specified in the notice from
the Trustee described in
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paragraph (a), the Trustee shall give a second notice to the remaining such
Investor Certificateholders to surrender their Investor Certificates for
cancellation and receive the final distribution with respect thereto (which
surrender and payment, in the case of Bearer Certificates, shall be outside the
United States). If within one year after the second notice all such Investor
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining such Investor Certificateholders concerning surrender of
their Investor Certificates, and the cost thereof shall be paid out of the funds
in the Collection Account or any Series Account held for the benefit of such
Investor Certificateholders. The Trustee and the Paying Agent shall pay to the
Transferor any moneys held by them for the payment of principal or interest that
remains unclaimed for two (2) years. After payment to the Transferor, Investor
Certificateholders entitled to the money must look to the Transferor for payment
as general creditors unless an applicable abandoned property law designates
another Person.
(c) In the event that the Invested Amount (or Enhancement
Invested Amount) with respect to any Series is greater than zero on the related
Series Termination Date or such earlier date as is specified in the related
Supplement (after giving effect to deposits and distributions otherwise to be
made on such date), the Trustee will sell or cause to be sold on such Series
Termination Date, in accordance with the procedures and subject to the
conditions described in such Supplement, Principal Receivables and the related
Finance Charge Receivables (or interests therein) in an amount equal to the
Invested Amount and the Enhancement Invested Amount, if any, with respect to
such Series on such date (after giving effect to such deposits and
distributions; provided, however, that in no event shall such amount exceed such
Series' allocable share of Receivables on such Series Termination Date). The
proceeds from any such sale shall be allocated and distributed in accordance
with the terms of the applicable Supplement.
Section 12.03. Transferor's Termination Rights. Upon the
termination of the Trust pursuant to Section 12.01 and, if any part of the
Transferor's Interest is then evidenced by a certificate, the surrender of such
part of the Transferor Certificates, the Trustee shall sell, assign and convey
to the Transferor or its designee, without recourse, representation or warranty,
all right, title and interest of the Trust in the Receivables and all other
Trust Assets except for amounts held by the Trustee pursuant to Section
12.02(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 Transferor to vest in the Transferor or their designee all right, title and
interest which the Trust had in the Receivables and such other Trust Assets.
Section 12.04. Defeasance. If so provided in the applicable
Supplement:
(a) The Transferor may at its option be discharged from its
obligations hereunder with respect to any Series or all outstanding Series (the
"Defeased Series") on the date the applicable conditions set forth in Section
12.04(c) are satisfied ("Defeasance"); provided, however, that the following
rights, obligations, powers, duties and immunities shall survive with respect to
the Defeased Series until otherwise terminated or discharged hereunder: (i) the
rights of Holders of Investor Certificates of the Defeased Series to receive,
solely from the trust fund provided for in Section 12.04(c), payments in respect
of principal of and interest on such Investor Certificates when such payments.
are due; (ii) the Transferor's obligations with respect to such Certificates
under Sections 6.04 and 6.05; (iii) the rights, powers, trusts, duties and
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immunities of the Trustee, the Paying Agent and the Transfer Agent and Registrar
hereunder; and (iv) this Section 12.04.
(b) Subject to Section 12.04(c), the Transferor at its option
may cause Collections allocated to the Defeased Series and available to acquire
additional Receivables to be applied to acquire Eligible Investments rather than
additional Receivables.
(c) The following shall be the conditions to Defeasance under
Section 12.04(a): (i) the Transferor irrevocably shall have deposited or caused
to be deposited with the Trustee, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee, as trust funds in
trust for making the payments described below, (A) Dollars in an amount, or (B)
Eligible Investments which through the scheduled payment of principal and
interest in respect thereof will provide, not later than the due date of payment
thereon, money in an amount, or (C) a combination thereof, in each case
sufficient to pay and discharge, and, which shall be applied by the Trustee to
pay and discharge, all remaining scheduled interest and principal payments on
all outstanding Investor Certificates of the Defeased Series on the dates
scheduled for such payments in this Agreement and the applicable Supplements and
all amounts owing to the Series Enhancers with respect to the Defeased Series;
(ii) prior to its first exercise of its right pursuant to this Section 12.04
with respect to a Defeased Series to substitute money or Eligible Investments
for Receivables, the Transferor shall have delivered to the Trustee a Tax
Opinion with respect to such deposit and termination of obligations and an
Opinion of Counsel to the effect that such deposit and termination of
obligations will not result in the Trust being required to register as an
"investment company" within the meaning of the Investment Company Act; (iii) the
Transferor shall have delivered to the Trustee and each Series Enhancer entitled
thereto pursuant to the relevant Supplement an Officer's Certificate of the
Transferor stating that the Transferor reasonably believes that such deposit and
termination of obligations will not, based on the facts known to such officer at
the time of such certification, then cause a Pay Out Event or any event that,
with the giving of notice or the lapse of time, would constitute a Pay Out Event
to occur with respect to any Series; and (iv) the Transferor shall have received
written notice from each Rating Agency that such deposit and termination of
obligations will not have a Ratings Effect and shall have delivered copies of
each such written notice to the Servicer and the Trustee.
ARTICLE XIII
Miscellaneous Provisions
Section 13.01. Amendment; Waiver of Past Defaults.
(a) This Agreement or any Supplement may be amended from time
to time (including in connection with (v) the issuance of a Supplemental
Certificate, (w) the addition of Participation Interests to the Trust, (x) the
designation of an Additional Transferor, (y) the assumption by an Assuming
Entity of the Transferor's obligations hereunder, or (z) the provision of
additional Series Enhancement for the benefit of Certificateholders of any
Series) by the Servicer, the Transferor and the Trustee without the consent of
any of the Certificateholders; provided that (i) the Transferor shall have
received written notice from each Rating Agency that such amendment will not
have a Ratings Effect and shall have delivered copies of each such
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written notice to the Servicer and the Trustee, (ii) if such amendment relates
to the provision of additional Series Enhancement for any Series, each
Transferor shall have delivered to the Trustee and each provider of Series
Enhancement an Officer's Certificate of the Transferor stating that the
Transferor reasonably believes that such amendment will not based on the facts
known to such officer at the time of such certification, have a material adverse
effect on the interests of the Certificateholders, (iii) in the case of an
amendment relating to the assumption by the Assuming Entity of a Transferor's
obligation, all other conditions to such assumption specified herein shall have
been satisfied and (iv) the conditions set forth in Section 13.02(d) shall have
been satisfied; provided further that an amendment pursuant to this Section
13.01(a) shall not effect a significant change in the Permitted Activities of
the Trust.
(b) This Agreement or any Supplement may also be amended from
time to time by the Servicer, the Transferor and the Trustee, (A) in the case of
a significant change in the Permitted Activities of the Trust, with the consent
of Holders of Investor Certificates evidencing Undivided Interests aggregating
not less than 50% of the Invested Amount of each outstanding Series affected by
such change, and (B) in all other cases with the consent of the Holders of
Investor Certificates evidencing not less than 66 2/3% of the aggregate unpaid
principal amount of the Investor Certificates of all adversely affected Series,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or any Supplement or of
modifying in any manner the rights of the Certificateholders; provided, however,
that no such amendment shall (i) reduce in any manner the amount of or delay the
timing of any distributions to be made to Investor Certificateholders or
deposits of amounts to be so distributed or the amount available under any
Series Enhancement without the consent of each affected Certificateholder, (ii)
change the definition of or the manner of calculating the interest of any
Investor Certificateholder without the consent of each affected Investor
Certificateholder, (iii) reduce the aforesaid percentage required to consent to
any such amendment without the consent of each Investor Certificateholder or
(iv) adversely affect the rating of any Series or Class by any Rating Agency
without the consent of the Holders of Investor Certificates of such Series or
Class evidencing not less than 66 2/3% of the aggregate unpaid principal amount
of the Investor Certificates of such Series or Class. Any amendment to be
effected pursuant to this paragraph shall be deemed to adversely affect all
outstanding Series, other than any Series with respect to which such action
shall not, as evidenced by an Opinion of Counsel for the Transferor, addressed
and delivered to the Trustee, adversely affect in any material respect the
interests of any Investor Certificateholder of such Series. 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.
(c) Promptly after the execution of any such amendment or
consent (other than an amendment pursuant to paragraph (a)), the Trustee shall
furnish notification of the substance of such amendment to each Investor
Certificateholder, and the Servicer shall furnish notification of the substance
of such amendment to each Rating Agency and each Series Enhancer entitled
thereto pursuant to the relevant Supplement.
(d) 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
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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.
(e) Any Supplement executed in accordance with the provisions
of Section 6.03 shall not be considered an amendment to this Agreement for the
purposes of this Section 13.01.
(f) The Holders of Investor Certificates evidencing more than
66 2/3% of the aggregate unpaid principal amount of the Investor Certificates of
each Series, or, with respect to any Series with two (2) or more Classes, of
each Class (or, with respect to any default that does not relate to all Series,
66 2/3% of the aggregate unpaid principal amount of the Investor Certificates of
each Series to which such default relates or, with respect to any such Series
with two (2) or more classes, of each Class) may, on behalf of all
Certificateholders, waive any default by the Transferor or the Servicer in the
performance of their obligations hereunder and its consequences, except the
failure to make any distributions required to be made to Investor
Certificateholders or to make any required deposits of any amounts to be so
distributed. Upon any such waiver of a past default, such default shall cease to
exist, and any default arising therefrom shall be deemed to have been remedied
for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to the
extent expressly so waived.
Section 13.02. Protection of Right, Title and Interest to Trust.
(a) The Transferor shall cause this Agreement, all amendments
and supplements hereto and all financing statements and amendments thereto and
any other necessary documents covering the Certificateholders' and the Trustee's
right, title and interest to the Trust and the Trust Assets 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
and the Trustee hereunder to all property comprising the Trust and the Trust
Assets. The Transferor 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 connection with the
obligations set forth above and will execute any and all documents reasonably
required to fulfill the intent of this paragraph.
(b) The Transferor shall not change its name or its type or
jurisdiction of organization unless it has first (i) made all filings in all
relevant jurisdictions under the UCC and other applicable law as are necessary
to continue and maintain the first-priority perfected ownership or security
interest of the Trustee in the Trust Assets, and (ii) delivered to the Trustee,
with a copy to any Series Enhancer, an Opinion of Counsel to the effect that all
necessary filings have been made under the UCC in all relevant jurisdictions as
are necessary to continue and maintain the first-priority perfected ownership or
security interest of the Trustee in the Trust Assets.
(c) The Transferor and the Servicer will at all times maintain
each office from which it services Receivables within the United States.
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(d) The Transferor will deliver to the Trustee and any Series
Enhancer entitled thereto pursuant to the relevant Supplement: (i) upon the
execution and delivery of each amendment of this Agreement or any Supplement, an
Opinion of Counsel to the effect specified in Exhibit H-1; (ii) on each Addition
Date on which any Additional Accounts (other than Automatic Additional Accounts)
are to be designated as Accounts pursuant to Section 2.08(a) or (b) and on each
date specified in Section 2.08(c)(iii) with respect to the inclusion of
Automatic Additional Accounts as Accounts, an Opinion of Counsel substantially
in the form of Exhibit H-2, and on each Addition Date on which any Participation
Interests are to be included in the Trust pursuant to Section 2.08(a) or (b), an
Opinion of Counsel covering the same substantive legal issues addressed by
Exhibit H-2 but conformed to the extent appropriate to relate to Participation
Interests; and (iii) on or before April 30 of each year, beginning with April
30, 2003, an Opinion of Counsel substantially in the form of Exhibit H-2.
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 Investor Certificateholder shall have any right to vote
(except as expressly provided in this Agreement) or in any manner otherwise
control the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to constitute the Investor
Certificateholders from time to time as partners or members of an association,
nor shall any Investor 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.
(c) No Investor 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
Investor Certificateholder previously shall have made, and unless the Holders of
Investor Certificates evidencing more than 50% of the aggregate unpaid principal
amount of all Investor Certificates (or, with respect to any such action, suit
or proceeding that does not relate to all Series, 50% of the aggregate unpaid
principal amount of the Investor Certificates of all Series to which such
action, suit or proceeding relates) shall have made, a request to 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 sixty (60) days after such request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted by
each Investor Certificateholder with every other Investor Certificateholder and
the Trustee, that no one or more Investor Certificateholders shall have any
right in any manner whatever by virtue or by availing itself or themselves of
any provisions of this Agreement to affect, disturb or prejudice the rights of
the holders of any other of the Investor Certificates, or to obtain or seek to
obtain priority over or preference to any other such Investor Certificateholder,
or to enforce any right under this Agreement, except in the manner herein
95
provided and for the equal, ratable and common benefit of all Investor
Certificateholders except as otherwise expressly provided in this Agreement. For
the protection and enforcement of the provisions of this Section 13.03, each and
every Investor 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 NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 13.05. Notices; Payments.
(a) All demands, notices, instructions, directions and
communications (collectively, "Notices") under this Agreement shall be in
writing and shall be deemed to have been duly given if personally delivered at,
mailed by certified mail, return receipt requested and postage prepaid, or sent
by facsimile transmission or by such other means acceptable to the recipient (i)
in the case of Capital One Bank, as the Servicer, to Capital One Bank, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, with a
copy to Director of Securitization (facsimile nos. ▇▇▇-▇▇▇-▇▇▇▇ and
▇▇▇-▇▇▇-▇▇▇▇), (ii) in the case of Capital One Funding, LLC, as the Transferor,
to Capital One Funding, LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, (iii) in the case of the Trustee,
to The Bank of New York, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Administration (facsimile no. 212-815-2493), (iv) in
the case of ▇▇▇▇▇'▇, to ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
ABS Monitoring (facsimile no. 212-298-7139), (v) in the case of Standard &
Poor's, to ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset Backed
Group (facsimile nos. 212-438-2648 and ▇▇▇-▇▇▇-▇▇▇▇), (vi) in the case of Fitch,
to ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset Backed
Surveillance (facsimile no. 212-635-0476), (vii) in the case of the Paying Agent
or the Transfer Agent and Registrar, to The Bank of New York, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Administration
(facsimile no. 212-815-2493), and (viii) to any other Person as specified in any
Supplement; or, as to each party, at such other address or facsimile number as
shall be designated by such party in a written notice to each other party.
(b) Any Notice required or permitted to be given to a Holder of
Registered Certificates shall be given by first-class mail, postage prepaid, at
the address of such Holder as shown in the Certificate Register. No Notice shall
be required to be mailed to a Holder of Bearer Certificates or Coupons but shall
be given as provided below. Any Notice so mailed within the time prescribed in
this Agreement shall be conclusively presumed to have been duly given, whether
or not the Investor Certificateholder receives such Notice. In addition, (a) if
and so long as any Series or Class is listed on the Luxembourg Stock Exchange
and such exchange shall so require, any Notice to Investor Certificateholders
shall be published in an Authorized Newspaper of general circulation in
Luxembourg within the time period prescribed in this Agreement and (b) in the
case of any Series or Class with respect to which any Bearer Certificates are
outstanding, any Notice required or permitted to be given to Investor
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Certificateholders of such Series or Class shall be published in an Authorized
Newspaper within the time period prescribed in this Agreement.
(c) All Notices to be given to Funding, as Transferor, shall be
deemed given if the Notice is provided to the address of Funding. All payments
hereunder to Funding, as Transferor, or Capital One, as the Servicer, shall be
made to such account as such party may specify in writing. All payments
hereunder to the Transferor shall be deemed made if made to the account of
Funding, as the case may be, as provided above.
Section 13.06. Rule 144A Information. For so long as any of the
Investor Certificates of any Series or Class are "restricted securities" within
the meaning of Rule 144(a)(3) under the Act, the Transferor, the Trustee, the
Servicer and any Series Enhancer 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 Act.
Section 13.07. Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such provisions shall be deemed
severable from the remaining provisions of this Agreement and shall in no way
affect the validity or enforceability of the remaining provisions or of the
Certificates or the rights of the Certificateholders.
Section 13.08. Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Section 7.05 or Section 8.02,
this Agreement may not be assigned by the Servicer unless the Servicer shall
have (i) delivered notice to each Rating Agency of such assignment and (ii)
received the prior consent of Holders of Investor Certificates evidencing not
less than 66?% of the aggregate unpaid principal amount of all outstanding
Investor Certificates.
Section 13.09. 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 interests in the
Trust represented by the Certificates shall be nonassessable for any losses or
expenses of the Trust or for any reason whatsoever and that Certificates upon
authentication thereof by the Trustee pursuant to Section 6.02 are and shall be
deemed fully paid.
Section 13.10. 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 the
execution of any financing statements or amendments thereto relating to the
Trust Assets for filing under the provisions of the UCC of any applicable
jurisdiction.
Section 13.11. Nonpetition Covenant. Notwithstanding any prior
termination of this Agreement, the Servicer, the Trustee, the Transferor, each
Series Enhancer and each holder of a Supplemental Certificate shall not, prior
to the date which is one year and one day after the termination of this
Agreement with respect to the Trust, acquiesce, petition or otherwise invoke or
cause the Trust to invoke the process of any Governmental Authority for the
purpose of
97
commencing or sustaining a case against the Trust under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Trust or any substantial part of its property or ordering the winding-up or
liquidation of the affairs of the Trust.
Notwithstanding any prior termination of this Agreement, neither
the Servicer, the Trustee, any Series Enhancer, any holder of a Supplemental
Certificate nor the Certificateholders shall institute, or join in instituting a
proceeding against the Transferor under any Debtor Relief Law or other
proceedings under any United States federal or state bankruptcy or similar law.
Section 13.12. No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Trustee, the Transferor,
the Servicer or the Certificateholders, any right, remedy, power or privilege
under this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
provided under this Agreement are cumulative and not exhaustive of any rights,
remedies, powers and privileges provided by law.
Section 13.13. Counterparts. This Agreement may be executed in
two (2) 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 13.14. Third-Party Beneficiaries. This Agreement will
inure to the benefit of and be binding upon the parties hereto, the
Certificateholders, any Series Enhancer (to the extent provided in this
Agreement and the related Supplement) and their respective successors and
permitted assigns. Except as otherwise expressly provided in this Agreement, no
other Person will have any right or obligation hereunder.
Section 13.15. Actions by Certificateholders.
(a) Wherever in this Agreement a provision is made that an
action may be taken or a Notice given by Certificateholders, such action or
Notice may be taken or given by any Certificateholder, unless such provision
requires a specific percentage of Certificateholders.
(b) Any Notice, request, authorization, direction, consent,
waiver or other act by the Holder of a Certificate shall bind such Holder and
every subsequent Holder of such Certificate and of any Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done or omitted to be done by the Trustee, the Transferor
or the Servicer in reliance thereon, whether or not notation of such action is
made upon such Certificate.
Section 13.16. 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.
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Section 13.17. Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
99
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.
CAPITAL ONE FUNDING, LLC,
as Transferor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
CAPITAL ONE BANK,
as Servicer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Manager of Securitization
THE BANK OF NEW YORK,
not in its individual capacity but
solely as the Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
Acknowledged and Accepted:
CAPITAL ONE BANK,
as a Seller under the Prior PSA
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Manager of Securitization
CAPITAL ONE, F.S.B.,
as a Seller under the Prior PSA
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Manager of Securitization
2
EXHIBIT A
FORM OF BASE CERTIFICATE
THIS BASE CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. NEITHER THIS BASE CERTIFICATE NOR ANY PORTION HEREOF MAY BE
OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS.
THIS BASE CERTIFICATE IS NOT PERMITTED TO BE TRANSFERRED, ASSIGNED,
EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN COMPLIANCE WITH THE TERMS
OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
No. R- One Unit
CAPITAL ONE MASTER TRUST
BASE CERTIFICATE
THIS CERTIFICATE REPRESENTS AN INTEREST
IN CERTAIN ASSETS OF THE
CAPITAL ONE MASTER TRUST
Evidencing an interest in a trust, the corpus of which consists primarily of
receivables generated from time to time in the ordinary course of business in a
portfolio of revolving credit card accounts and other revolving credit accounts
owned by Capital One Bank (the "Bank"), Capital One, F.S.B. (the "Savings
Bank"), (the Bank and the Savings Bank are collectively referred to herein as
the "Banks"), and, in certain circumstances, certain Additional Account Owners
(as defined in the Pooling and Servicing Agreement referred to below).
(Not an interest in or obligation of the Transferor
or any affiliate thereof)
This certifies that CAPITAL ONE FUNDING, LLC ("Funding") is the
registered owner of a fractional interest in the assets of a trust (the "Trust")
not allocated to the Certificateholders' Interest or the interest of any holder
of a Supplemental Certificate pursuant to the Amended and Restated Pooling and
Servicing Agreement, dated as of September 30, 1993, as amended and restated as
of August 1, 2002 (as amended and supplemented, the "Agreement"), among the
Bank, a Virginia banking corporation, as the Servicer, Funding, a Virginia
limited liability company, as Transferor (the "Transferor"), and The Bank of New
York, a New York banking corporation, as Trustee (the "Trustee"). The corpus of
the Trust consists of (i) a portfolio of all receivables (the "Receivables")
existing in the consumer revolving credit card accounts and other consumer
revolving credit accounts identified under the Agreement from time to time (the
"Accounts"), (ii) all Receivables generated under the Accounts from time to time
thereafter, (iii) funds collected or to be collected from accountholders in
respect of the Receivables, (iv) all funds which are from time to time on
deposit in the Collection Account and in the Series Accounts, (v) an interest in
any Funds Collateral relating to secured accounts,
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(vi) the benefits of any Series Enhancements issued and to be issued by Series
Enhancers with respect to one or more Series of Investor Certificates, (vii) the
rights, remedies, powers, privileges and claims of the Transferor with respect
to (A) the Receivables Purchase Agreement dated as of August 1, 2002 between the
Bank and Funding and (B) the Receivables Purchase Agreement dated as of August
1, 2002, between the Savings Bank and Funding, and (viii) all other assets and
interests constituting the Trust Assets. Although a summary of certain
provisions of the Agreement is set forth below, this Certificate does not
purport to summarize the Agreement and reference is made to the Agreement for
information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and obligations of
the Trustee. A copy of the Agreement may be requested from the Trustee by
writing to the Trustee at the Corporate Trust Office. To the extent not defined
herein, the capitalized terms used herein have the meanings ascribed to them in
the Agreement.
This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement, as amended and
supplemented from time to time, the Transferor by virtue of the acceptance
hereof assents and is bound.
The Receivables consist of Principal Receivables which arise generally
from the purchase of merchandise and services and amounts advanced to
cardholders as cash advances and Finance Charge Receivables which arise
generally from Periodic Finance Charges, Late Charges, annual membership fees
and other fees and charges with respect to the Accounts.
This Certificate is the Base Certificate, which represents the
Transferor's Interest in certain assets of the Trust, including the right to
receive a portion of the Collections and other amounts at the times and in the
amounts specified in the Agreement. The aggregate interest represented by the
Base Certificate at any time in the Receivables in the Trust shall not exceed
the Transferor's Interest at such time. In addition to the Base Certificate, (i)
Investor Certificates will be issued to investors pursuant to the Agreement,
which will represent the Certificateholders' Interest, and (ii) Supplemental
Certificates may be issued pursuant to the Agreement, which will represent that
portion of the Transferor's Interest not allocated to the Transferor. This Base
Certificate shall not represent any interest in the Collection Account or the
Series Accounts, except as expressly provided in the Agreement, or any Series
Enhancements.
The Transferor has entered into the Agreement, and this Certificate is
issued, with the intention that, for Federal, state and local income and
franchise tax purposes only, the Investor Certificates will qualify as
indebtedness of the Transferor secured by the Receivables. The Transferor, by
entering into the Agreement and by the acceptance of this Certificate, agrees to
treat such Investor Certificates for Federal, state and local income and
franchise tax purposes as indebtedness.
Subject to certain conditions and exceptions specified in the
Agreement, the obligations created by the Agreement and the Trust created
thereby shall terminate upon the earlier of (i) September 1, 2030, (ii) the day
following the Distribution Date on which the Invested Amount and Enhancement
Invested Amount, if any, for each Series is zero and (iii) the time provided in
Section 9.02(c) of the Agreement.
A-2
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-3
IN WITNESS WHEREOF, the Transferor has caused this Certificate to be
duly executed.
CAPITAL ONE FUNDING, LLC,
as Transferor
By _____________________________
Name:
Title:
Dated: _______ __, 20__
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Base Certificate described in the within-mentioned
Agreement.
THE BANK OF NEW YORK,
as Trustee,
By _____________________________
Authorized Officer
Or
By _____________________________,
as Authenticating Agent
for the Trustee
By ______________________________
Authorized Officer
A-5
EXHIBIT B
FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL ACCOUNTS
(As required by Section 2.08 of
the Pooling and Servicing Agreement)
ASSIGNMENT No. ___ OF RECEIVABLES IN ADDITIONAL ACCOUNTS, dated as of
_______ __, 20__/1/ (the "Assignment"), by and among CAPITAL ONE BANK, a
Virginia banking corporation, as Servicer (the "Servicer"), CAPITAL ONE FUNDING,
LLC, a Virginia limited liability company, as Transferor (the "Transferor), and
THE BANK OF NEW YORK, a New York banking corporation, as Trustee (the
"Trustee"), pursuant to the Pooling and Servicing Agreement referred to below.
WITNESSETH
WHEREAS, the Transferor, the Servicer and the Trustee are parties to
the Amended and Restated Pooling and Servicing Agreement, dated as of September
30, 1993, as amended and restated as of August 1, 2002 (as amended and
supplemented from time to time, the "Agreement");
WHEREAS, pursuant to the Agreement, [Capital One Funding, LLC] (the
"Transferor") wishes to designate Additional Accounts (which may include Secured
Accounts) owned by the Transferor to be included as Accounts and to convey the
(i) Receivables of such Additional Accounts, whether existing on the Additional
Cut-Off Date or thereafter created, and (ii), with respect to Additional
Accounts that are Secured Accounts, the Funds Collateral relating to such
Additional Accounts, to the Trust as part of the corpus of the Trust; and
WHEREAS, the Trustee is willing to accept such designation and
conveyance subject to the terms and conditions hereof; and
WHEREAS, the Servicer is willing to service the Receivables hereby
conveyed under the terms and conditions specified in the Agreement and herein.
NOW, THEREFORE, the Transferor, the Servicer and the Trustee hereby
agree as follows:
1. Defined Terms. All capitalized terms used herein shall have the
meanings ascribed to them in the Agreement unless otherwise defined herein.
"Additional Account" shall have the meaning specified in Section 2 of
this Assignment.
"Addition Date" shall mean, with respect to the Additional Accounts
designated hereby, _______ __, 20__.
____________________
/1/ To be dated as of the applicable Document Delivery Date
B-1
"Additional Cut-Off Date" shall mean, with respect to the Additional
Accounts designated hereby, _______ __, 20__.
2. Designation of Additional Accounts. The Transferor does hereby
deliver to the Trustee herewith a computer file or a microfiche list containing
a true and complete schedule identifying all of the Additional Accounts
(including any Secured Accounts) designated hereby (the "Additional Accounts")
specifying for each Additional Account, as of the Additional Cut-Off Date, its
account number, the collection status, the aggregate amount of Receivables
outstanding in such Additional Account, the aggregate amount of Principal
Receivables outstanding in such Additional Account and, for any Funds Collateral
with respect to Additional Accounts that are Secured Accounts, if any, the
account number for, and the amount of funds on deposit in, the Deposit Account
with respect to such Additional Account, which computer file or microfiche list
shall supplement Schedule 1 to the Agreement. Such computer file or microfiche
list shall be, as of the date of this Assignment, incorporated into and made
part of this Agreement and the Agreement and is marked as Schedule 1 to this
Assignment.
3. Conveyance. (a) The Transferor does hereby transfer, assign, set
over and otherwise convey to the Trustee, without recourse, all of its right,
title and interest in, to and under the Receivables of the Additional Accounts
existing at the close of business on the Additional Cut-Off Date and thereafter
created from time to time until the termination of the Trust, the Funds
Collateral, if any, relating to such Additional Accounts, all moneys due or to
become due and all amounts received or receivable with respect thereto and all
proceeds (including "proceeds" as defined in the UCC and including Insurance
Proceeds and Recoveries) thereof, and the related Interchange payable pursuant
to Section 2.07(i) of the Agreement. This paragraph 3(a) does not constitute and
is not intended to result in the creation or assumption by the Trust, the
Trustee, any Investor Certificateholder or any Series Enhancer of any obligation
of the Servicer, the Transferor or any other Person in connection with the
Accounts, the Receivables, the Funds Collateral or under any agreement or
instrument relating thereto, including any obligation to Obligors, merchant
banks, merchants clearance systems, VISA, MasterCard or insurers.
(b) In connection with such transfer, assignment, set over and
conveyance, the Transferor agrees to record and file, at its own expense,
financing statements (and continuation statements when applicable) with respect
to the Receivables and the Funds Collateral, if any, now existing or hereafter
created in such Additional Accounts, meeting the requirements of applicable
state law in such manner and in such jurisdictions as are necessary or
appropriate to perfect, and maintain the perfection of, the sale and assignment
of such Receivables and Funds Collateral to the Trust, and to deliver a file
stamped copy of each such financing statement or other evidence of such filing
to the Trustee on or prior to the Addition Date. The Trustee shall be under no
obligation whatsoever to file such financing statement, continuation statement
or amendment to such financing statement, or make any other filing under the UCC
in connection with such sale and assignment.
(c) In connection with such conveyance, the Transferor has, at its own
expense, on or prior to the date of this Assignment, to indicate clearly and
unambiguously in its computer files, and to cause the Depository to indicate in
its files, that all Receivables created in connection with, and all Funds
Collateral, if any, relating to, the Additional Accounts have been
B-2
conveyed to the Trustee pursuant to the Agreement and this Assignment for the
benefit of the Certificateholders.
(d) In connection with such conveyance, the Transferor further agrees,
at its own expense, on or prior to the date of this Assignment, to deliver to
the Trustee a fully executed consent and agreement, substantially in the form of
Exhibit B hereto (the "Acknowledgment and Consent"), from each Depository.
(e) The parties hereto intend that the transfer of Receivables, any
Funds Collateral, and other property pursuant to this Assignment constitute a
sale, and not a secured borrowing, for accounting purposes. If the transfer
pursuant to this Assignment is not deemed to be a sale, the Transferor shall be
deemed hereunder to have granted and does hereby grant to the Trustee a security
interest in all of its right, title and interest, whether now owned or hereafter
acquired, in, to and under the Receivables of the Additional Accounts existing
at the close of business on the Additional Cut-Off Date and thereafter created
from time to time until the termination of the Trust, the Funds Collateral, if
any, relating to the Additional Accounts, all moneys due or to become due and
all amounts received or receivable with respect thereto and all proceeds
(including "proceeds" as defined in the UCC and including Insurance Proceeds and
Recoveries) thereof and the related Interchange payable pursuant to Section
2.07(i) of the Agreement. This Assignment constitutes a security agreement under
the UCC.
(f) The Transferor hereby appoints the Trustee as its attorney-in-fact
with full authority in the place and stead of the Transferor and in the name of
the Transferor or otherwise from time to time in the Trustee's discretion to
take any action and to execute any instrument that the Trustee may deem
necessary or advisable to accomplish the purposes of this Assignment, including,
without limitation, to ask, demand, collect, ▇▇▇ for, recover, compromise,
receive and give acquittances and receipts for moneys due or to become due under
or in connection with the Funds Collateral, receive, endorse and collect all
drafts or other instruments and documents made payable to the Transferor in
connection therewith or representing any payment, dividend or other distribution
in respect of the Funds Collateral or any part thereof and to give full
discharge for the same and the Trustee may as such attorney-in-fact, file any
claims or take any action or institute any proceedings which the Trustee may
deem to be necessary or desirable for the collection thereon or to enforce
compliance with the terms and conditions of this Assignment and the Agreement.
4. Acceptance by Trustee. The Trustee hereby acknowledges its
acceptance on behalf of the Trust of all right, title and interest to the
property, now existing and hereafter created, conveyed to the Trust pursuant to
Section 3 of this Assignment, and declares that it shall maintain such right,
title and interest, upon the trust set forth in the Agreement for the benefit of
all Certificateholders. The Trustee further acknowledges that, prior to or
simultaneously with the execution and delivery of this Assignment, the
Transferor delivered to the Trustee the computer file or microfiche list
described in Section 2 of this Assignment.
5. Withdrawal of Funds from the Deposit Account. (a) Acting in
accordance with its customary and usual servicing procedures for servicing
Secured Accounts and in accordance with the Lending Guidelines, the Servicer
shall, upon withdrawing funds from a Deposit Account, apply an amount up to the
aggregate amount of Principal Receivables
B-3
outstanding in the Additional Account for which such amounts are being
withdrawn, plus any Finance Charge Receivables related to such Additional
Account, and deposit such amount into the Collection Account for treatment as
Collections of Principal Receivables and Finance Charge Receivables,
respectively. Any proceeds of the Funds Collateral received by the Transferor
shall be held in trust by the Transferor for and as the Trustee's property and
shall not be commingled with the Transferor's other funds or properties.
(b) The Transferor shall, at its own cost and expense, maintain
satisfactory and complete records of the Funds Collateral, including, without
limitation, a record of all deposits made by or on behalf of each Obligor into
the Deposit Account, all credits granted and debits made with respect to such
Obligor's interest in the Deposit Account, and all other dealings with the
Deposit Account. The Transferor will deliver and turn over to the Trustee or to
its representatives at any time on demand of the Trustee the Deposit Documents.
6. Representations and Warranties of the Transferor. The Transferor
hereby represents and warrants to the Trustee, on behalf of the Trust, as of the
date of this Assignment and as of the Addition Date, that:
(a) Legal, Valid and Binding Obligation. This Assignment constitutes a
legal, valid and binding obligation of the Transferor enforceable against
the Transferor in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, receivership, conservatorship or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general or the rights of creditors of a Virginia limited liability company
and except as such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity).
(b) Eligibility of Accounts. Each Additional Account designated hereby
is an Eligible Account.
(c) No Lien. Each Receivable created in connection with, and all Funds
Collateral relating to, the Additional Accounts have been transferred to
the Trust free and clear of any Lien other than (i) Liens permitted under
subsection 2.07(b) of the Agreement, (ii) any tax or governmental lien or
other nonconsensual lien and (iii) with respect to Funds Collateral, Liens
granted in favor of the Transferor by an Obligor.
(d) Classification. The Receivables created in connection with the
Additional Accounts (together with the Transferor's interest in the related
Funds Collateral) constitute "accounts" under and as defined in Article 9
of the UCC;
(e) Federal Deposit Insurance. Each Obligor of a Secured Account holds
a beneficial ownership interest in the Funds sufficient to afford such
Obligor separate federal deposit insurance with respect to the portion of
the Deposit Account attributable to such Obligor.
(f) Insolvency. As of each of the Additional Cut-Off Date and the
Addition Date, no Insolvency Event with respect to the Transferor has
occurred and the transfer by
B-4
the Transferor of Receivables arising in the Additional Accounts to the
Trust has not been made in contemplation of the occurrence thereof.
(g) Pay Out Event. The Transferor reasonably believes that the
addition of the Receivables arising in the Additional Accounts will not,
based on the facts known to the Transferor, cause a Pay Out Event or any
event that, after giving of notice or the lapse of time, would constitute a
Pay Out Event to occur with respect to any Series.
(h) Security Interest. This Assignment constitutes a valid sale,
transfer and assignment to the Trustee of all right, title and interest of
the Transferor in the Receivables now existing or hereafter created in the
Additional Accounts and the Funds Collateral, if any, relating to the
Additional Accounts, all moneys due or to become due and all amounts
received with respect thereto and the proceeds (including "proceeds" as
defined in the UCC as in effect in the Commonwealth of Virginia and
including Insurance Proceeds and Recoveries) thereof, and the Interchange
payable pursuant to Section 2.07(i) of the Agreement or, if this Assignment
does not constitute a sale of such property, it constitutes a grant of a
security interest in such property to the Trustee, which, in the case of
existing Receivables, Funds Collateral and the proceeds thereof is
enforceable upon execution and delivery of this Assignment, and which will
be enforceable with respect to such Receivables and Funds Collateral
hereafter created and the proceeds thereof upon such creation. Upon the
filing of the financing statements described in Section 3 of this
Assignment and, in the case of the Receivables and Funds Collateral
hereafter created and the proceeds thereof, upon the creation thereof, the
Trustee shall have a first priority perfected security or ownership
interest in the Transferor's rights in such property and proceeds.
(i) No Conflict. The execution and delivery by the Transferor of this
Assignment, the performance of the transactions contemplated by this
Assignment and the fulfillment of the terms hereof applicable to the
Transferor, will not conflict with or violate the articles of incorporation
or bylaws of the Transferor or conflict with, result in any breach of any
of the 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 its properties are bound.
(j) 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 Assignment, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Assignment, (iii) seeking any
determination or ruling that, in the reasonable judgment of the Transferor,
would materially and adversely affect the performance by the Transferor of
its obligations under this Assignment or (iv) seeking any determination or
ruling that would materially and adversely affect the validity or
enforceability of this Assignment.
(k) All Consents. All authorizations, consents, orders or other
actions of any Person or of any Governmental Authority required to be
obtained by the Transferor in
B-5
connection with the execution and delivery of this Assignment by the
Transferor and the performance of the transactions contemplated by this
Assignment by the Transferor, have been obtained.
(l) No Material Adverse Effect. None of the terms of this Assignment,
including the addition to the Trust of the Receivables created in
connection with, and the Funds Collateral relating to, the Additional
Accounts, will have a material adverse effect on the interests of the
Certificateholders.
7. Covenants of the Transferor. The Transferor hereby covenants and
agrees with the Trustee, on behalf of the Trust, as follows:
(a) Transfers, Liens, Etc. Except for the conveyances hereunder, and
except as otherwise provided under the Agreement, the Transferor shall not
sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien upon or with respect to any
Receivable created in connection with, or the Funds Collateral relating to,
the Additional Accounts, whether now existing or hereafter created.
(b) Notice of Liens. The Transferor shall notify the Trustee and each
Series Enhancer entitled to such notice pursuant to the relevant Supplement
promptly after becoming aware of any Lien on any Receivable created in
connection with, or on the Funds Collateral relating to, the Additional
Accounts, other than (i) the conveyances hereunder, (ii) Liens permitted
under Section 2.07(b) of the Agreement, (iii) any tax or governmental lien
or other nonconsensual lien or (iv) with respect to Funds Collateral, Liens
granted in favor of the Seller by an Obligor.
(c) Federal Deposit Insurance. The Transferor will maintain or cause
to be maintained records regarding each Obligor's beneficial ownership
interest in the Funds sufficient to afford such Obligor separate federal
deposit insurance with respect to the portion of the Deposit Account
attributable to such Obligor.
(d) Location of Deposit Account. The Transferor shall not move the
location of any Deposit Account without the prior written consent of
Moody's, Standard & Poor's and Fitch.
(e) Servicer Default. If the Servicer is the Depository, the
Transferor shall, upon the occurrence of a Servicer Default, immediately
move the location of the Deposit Account to an Eligible Institution.
8. Covenant of Servicer. The Servicer hereby covenants and agrees
with the Trustee, on behalf of the Trust, that it will take no action which, nor
omit to take any action the omission of which, would substantially impair the
rights of the Certificateholders in the Receivables created in connection with,
or the Funds Collateral relating to, the Additional Accounts.
B-6
9. Reassignment of Receivables and Funds Collateral.
(a) The parties hereto hereby agree that any reassignment or
assignment of Receivables to the Transferor or the Servicer required
pursuant to Section 2.05, 2.06 or 3.03 of the Agreement shall include the
Receivables of the Additional Accounts and the Funds Collateral, if any,
related to such Receivables.
(b) In the event any representation or warranty of the Transferor
contained in Section 6(c), (d) or (e) hereof is not true and correct in any
material respect as of the date hereof or the date specified therein, as
applicable, and such breach (individually or together with any other breach
or breaches then existing) has a material adverse effect on the
Certificateholders' Interests of all Series in the Receivables of the
Additional Accounts or related Funds Collateral, if any, transferred to the
Trust (which determination shall be made without regard to the availability
of funds under any Series Enhancement) and remains uncured for 60 days (or
such longer period, not in excess of 150 days, as may be agreed to by the
Trustee) after the earlier to occur of the discovery thereof by the
Transferor or receipt by the Transferor of notice thereof given by the
Trustee, then the remedy provided under Section 2.05 of the Agreement
(including the proviso thereto) shall apply with respect to each of the
Receivables and the related Funds Collateral, if any, transferred to the
Trust pursuant to this Assignment as if set forth herein.
(c) In the event any representation or warranty of the Transferor
contained in Section 6(h) hereof is not true and correct in any material
respect and such breach has a material adverse effect on the
Certificateholders' Interests of all Series in the Receivables of the
Additional Accounts or the related Funds Collateral, if any, then the
remedy provided under Section 2.06 of the Agreement (including the proviso
thereto) shall apply with respect to each of the Receivables and the
related Funds Collateral, if any, transferred to the Trust pursuant to this
Assignment as if set forth herein.
10. Ratification of Agreement. As amended and supplemented by this
Assignment, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Assignment shall be read, taken and
construed as one and the same instrument.
11. Counterparts. This Assignment may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which shall constitute one and the same
instrument.
12. GOVERNING LAW. THIS ASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
B-7
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Assignment to be duly executed by their respective officers as of
the day and year first above written.
CAPITAL ONE BANK,
as Servicer
By_____________________________________
Name:
Title:
CAPITAL ONE FUNDING, LLC
as Transferor
By_____________________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By_____________________________________
Name:
Title:
B-8
EXHIBIT C
FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
(As required by Section 2.09 of
the Pooling and Servicing Agreement)
REASSIGNMENT OF RECEIVABLES, dated as of _______ __, 20__, by and
among CAPITAL ONE BANK, a Virginia banking corporation, as Servicer (the
"Servicer"), CAPITAL ONE, LLC, a Virginia limited liability company as
Transferor (the "Transferor"), and The Bank of New York, a New York banking
corporation, as Trustee (the "Trustee"), pursuant to the Pooling and Servicing
Agreement referred to below.
WITNESSETH:
WHEREAS, the Transferor, the Servicer and the Trustee are parties to
the Amended and Restated Pooling and Servicing Agreement, dated as of September
30, 1993, as amended and restated as of August 1, 2002 (as amended and
supplemented, the "Agreement");
WHEREAS, pursuant to the Agreement, [Capital One, LLC] (the
"Transferor") wishes to remove from the Trust all Receivables in certain
designated 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; 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 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, _______ __, 20__.
2. Designation of Removed Accounts. On or before the date that is 10
Business Days after the Removal Date, the Transferor will deliver to the Trustee
a computer file or microfiche list containing a true and complete list of the
Accounts designated for removal hereby (the "Removed Accounts") specifying for
each such Account, as of the Removal Date, its account number, the aggregate
amount outstanding in such Account, the aggregate amount of Principal
Receivables in such Account and, for any Funds Collateral relating to such
Account, the account number for, and the amount of funds on deposit in, the
applicable Deposit Account, which computer file or microfiche list shall be
marked as Schedule 1 to this Reassignment and shall supplement Schedule 1 to the
Agreement.
C-1
3. Conveyance of Receivables. (a) The Trustee does hereby release its
lien on and security interest in, and does hereby sell, transfer, assign, set
over and otherwise convey to the Transferor, without recourse, all of its right,
title and interest of the Trust in, to and under the Receivables existing at the
close of business on the Removal Date and thereafter created from time to time
in the Removed Accounts, the Funds Collateral, if any, relating to such
Additional Accounts, all moneys due or to become due and all amounts received or
receivable with respect thereto and all proceeds (including "proceeds" as
defined in the UCC and including Insurance Proceeds and Recoveries) thereof, and
the related Interchange otherwise payable pursuant to Section 2.07(i) of the
Agreement.
(b) In connection with such transfer, the Trustee agrees to execute
and deliver to the Transferor on or prior to the date this Reassignment is
delivered, applicable termination statements with respect to the Receivables
existing at the close of business on the Removal Date and thereafter created
from time to time in the Removed Accounts and the proceeds thereof evidencing
the release by the Trust of its interest in such Receivables and proceeds, and
meeting the requirements of applicable state law, in such manner and such
jurisdictions as are necessary to terminate such interest.
4. Representations and Warranties of the Transferor. The Transferor
hereby represents and warrants to the Trustee, on behalf of the Trust, as of the
Removal Date:
(a) Legal, Valid and Binding Obligation. This Reassignment constitutes
a legal, valid and binding obligation of the Transferor enforceable against the
Transferor, in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
receivership, conservatorship or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general or the rights of
creditors of a Virginia limited liability company, and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity); and
(b) Pay Out Event. The Transferor reasonably believes that (A) the
removal of the Receivables existing in the Removed Accounts will not, based on
the facts known to the Transferor, cause a Pay Out Event or any event that,
after giving of notice or the lapse of time, would constitute a Pay Out Event to
occur with respect to any Series and (B) no selection procedure reasonably
believed by the Transferor to be materially adverse to the interests of the
Investor Certificateholders was used in selecting the Removed Accounts.
(c) List of Removed Accounts. The list of Removed Accounts delivered
pursuant to Section 2.09(a) of the Agreement, as of the Removal Date, is true
and complete in all material respects.
5. Ratification of Agreement. As amended and supplemented by this
Reassignment, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Reassignment shall be read, taken and
construed as one and the same instrument.
C-2
6. Counterparts. This Reassignment may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which shall constitute one and the same
instrument.
7. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, Transferor and the Trustee have caused this
Reassignment to be duly executed by their respective officers as of the day and
year first above written.
CAPITAL ONE, LLC,
as Transferor
By ________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By ________________________
Name:
Title:
C-3
EXHIBIT D
FORM OF ANNUAL SERVICER'S CERTIFICATE
(To be delivered on or before May 31 of
each calendar year beginning with May 31, 1994,
pursuant to Section 3.05 of the Pooling and
Servicing Agreement referred to below)
CAPITAL ONE BANK
________________________
CAPITAL ONE MASTER TRUST
________________________
The undersigned, a duly authorized representative of Capital One Bank,
as Servicer (the "Bank"), pursuant to the Amended and Restated Pooling and
Servicing Agreement, dated as of September 30, 1993, as amended and restated as
of August 1, 2002 (as amended and supplemented, the "Agreement"), among the
Bank, as Servicer, Capital One Funding, LLC, as Transferor, and The Bank of New
York, as Trustee, does hereby certify that:
1. The Bank is, as of the date hereof, the Servicer under the
Agreement. Capitalized terms used in this Certificate have their respective
meanings as set forth in the Agreement.
2. The undersigned is a Servicing Officer who is duly authorized
pursuant to the Agreement to execute and deliver this Certificate to the
Trustee.
3. A review of the activities of the Servicer during the calendar year
ended December 31, 20__, and of its performance under the Agreement was
conducted under my supervision.
4. Based on such review, the Servicer has, to the best of my knowledge,
performed in all material respects its obligations under the Agreement
throughout such year and no default in the performance of such obligations has
occurred or is continuing except as set forth in paragraph 5 below.
5. The following is a description of each default in the performance of
the Servicer's obligations under the provisions of the Agreement known to me to
have been made by the Servicer during the year ended December 31, 20__, 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."]
D-1
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
this ____ day of _______, 20__.
CAPITAL ONE BANK,
as Servicer
By ___________________
Name:
Title:
D-2
EXHIBIT E-1
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"). NEITHER THIS CERTIFICATE NOR ANY PORTION
HEREOF MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE REGISTRATION
PROVISIONS OF THE 1933 ACT AND ANY APPLICABLE PROVISIONS OF ANY STATE BLUE SKY
OR SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION
PROVISIONS. THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS
SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A BENEFIT
PLAN (AS DEFINED BELOW).
E-1-1
EXHIBIT E-2
[FORM OF REPRESENTATION LETTER]
[Date]
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Capital One Bank
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Capital One Funding, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Purchase of $ /1/ principal amount of Capital One
Master Trust Series [ ] [%] [Floating Rate] Asset
Backed Certificates
Dear Ladies and Gentlemen:
In connection with our purchase of the above Asset Backed Certificates
(the "Certificates") we confirm that:
(i) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "1933 Act"), and are
being sold to us in a transaction that is exempt from the registration
requirements of the 1933 Act;
(ii) any information we desire concerning the Certificates or any
other matter relevant to our decision to purchase the Certificates is or
has been made available to us;
(iii) we have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an
investment in the Certificates, and we (and any account for which we are
purchasing under paragraph (iv) below) are able to bear the economic risk
of an investment in the Certificates; we (and any account for which we are
purchasing under paragraph (iv) below) are an "accredited investor" (as
such term is defined in Rule 501(a)(1), (2) or (3) of Regulation D under
the ▇▇▇▇ ▇▇▇); and we are not, and none of such accounts is, a Benefit
Plan;
(iv) we are acquiring the Certificates for our own account or for
accounts as to which we exercise sole investment discretion and not with a
view to any distribution of
______________________
/1/ Not less than $250,000 minimum principal amount.
E-2-1
the Certificates, subject, nevertheless, to the understanding that the
disposition, of our property shall at all times be and remain within
our control;
(v) we agree that the Certificates must be held indefinitely
by us unless subsequently registered under the 1933 Act or an exemption
from any registration requirements of that Act and any applicable state
securities law is available;
(vi) we agree that in the event that at some future time we
wish to dispose of or exchange any of the Certificates (such
disposition or exchange not being currently foreseen or contemplated),
we will not transfer or exchange any of the Certificates unless:
(A)(1) the sale is of at least U.S. $250,000 principal
amount of Certificates to an Eligible Purchaser (as defined
below), (2) a letter to substantially the same effect as
paragraphs (i), (ii), (iii), (iv), (v) and (vi) of this
letter is executed promptly by the purchaser and (3) all
offers or solicitations in connection with the sale, whether
directly or through any agent acting on our behalf, are
limited only to Eligible Purchasers and are not made by means
of any form of general solicitation or general advertising
whatsoever; or
(B) the Certificates are transferred pursuant to Rule
144 under the 1933 Act by us after we have held them for more
than three (3) years; or
(C) the Certificates are sold in any other transaction
that does not require registration under the 1933 Act and, if
the Transferor, the Servicer, the Trustee or the Transfer
Agent and Registrar so requests, we theretofore have
furnished to such party an opinion of counsel satisfactory to
such party, in form and substance satisfactory to such party,
to such effect; or
(D) the Certificates are transferred pursuant to an
exception from the registration requirements of the 1933 Act
under Rule 144A under the 1933 Act; and
(vii) we understand that the Certificates will bear a legend
to substantially the following effect:
"THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "1933 ACT"). NEITHER THIS CERTIFICATE NOR
ANY PORTION HEREOF MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF
THE 1933 ACT AND ANY APPLICABLE PROVISIONS OF ANY STATE BLUE SKY OR
SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH
PROVISIONS. THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN
CONDITIONS SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN."
["THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF
REPRESENTS AND WARRANTS, FOR THE BENEFIT OF CAPITAL ONE
E-2-2
FUNDING, LLC, THAT SUCH HOLDER IS NOT (1) AN EMPLOYEE BENEFIT PLAN THAT
IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, (2) A PLAN OR OTHER ARRANGEMENT (INCLUDING AN INDIVIDUAL
RETIREMENT ACCOUNT OR ▇▇▇▇▇ PLAN) THAT IS SUBJECT TO SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR (3) AN ENTITY WHOSE
UNDERLYING ASSETS INCLUDE "PLAN ASSETS" UNDER THE PLAN ASSET REGULATION
BY REASON OF ANY SUCH PLAN'S INVESTMENT IN THE ENTITY."]
The first paragraph of this legend may be removed if the Transferor, the
Servicer, the Trustee and the Transfer Agent and Registrar have received an
opinion of counsel satisfactory to them, in form and substance satisfactory to
them, to the effect that such paragraph may be removed.
"Eligible Purchaser" means either an Eligible Dealer or a
corporation, partnership or other entity which we have reasonable grounds to
believe and do believe can make representations with respect to itself to
substantially the same effect as the representations set forth herein. "Eligible
Dealer" means any corporation or other entity the principal business of which is
acting as a broker and/or dealer in securities. "Benefit Plan" means any
employee benefit plan, trust or account, including an individual retirement
account, that is subject to the Employee Retirement Income Security Act of 1974
or that is described in Section 4975(e)(1) of the Internal Revenue Code of 1986
or an entity whose underlying assets include plan assets by reason of a plan's
investment in such entity. Capitalized terms used but not defined herein shall
have the meanings given to such terms in the Pooling and Servicing Agreement,
dated as of September 30, 1993, as amended and restated as of August 1, 2002,
among Capital One Bank, as servicer, Capital One Funding, LLC, as transferor,
and The Bank of New York, as trustee.
Very truly yours,
_______________________
(Name of Purchaser)
by
---------------------
(Authorized Officer)
E-2-3
EXHIBIT E-3
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF REPRESENTS AND WARRANTS,
FOR THE BENEFIT OF CAPITAL ONE FUNDING, LLC, THAT SUCH HOLDER IS NOT (1) AN
EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, (2) A PLAN OR OTHER ARRANGEMENT (INCLUDING AN
INDIVIDUAL RETIREMENT ACCOUNT OR ▇▇▇▇▇ PLAN) THAT IS SUBJECT TO SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR (3) AN ENTITY WHOSE UNDERLYING
ASSETS INCLUDE "PLAN ASSETS" UNDER THE PLAN ASSET REGULATION BY REASON OF ANY
SUCH PLAN'S INVESTMENT IN THE ENTITY
E-3-1
EXHIBIT G-1
(FORM OF CLEARANCE SYSTEM CERTIFICATE
TO BE GIVEN TO THE TRUSTEE BY EUROCLEAR OR
CLEARSTREAM FOR DELIVERY OF DEFINITIVE CERTIFICATES
IN EXCHANGE FOR A PORTION OF A
TEMPORARY GLOBAL SECURITY]
CAPITAL ONE MASTER TRUST,
Series [_] [ %] [Floating Rate]
Asset Backed Certificates
[Insert title or sufficient description
of Certificates to be delivered]
We refer to that portion of the temporary Global Certificate
in respect of the above-captioned issue which is herewith submitted to be
exchanged for definitive Certificates (the "Submitted Portion") as provided in
the Amended and Restated Pooling and Servicing Agreement, dated as of September
30, 1993, as amended and restated as of August 1, 2002 (as amended and
supplemented, the "Agreement") in respect of such issue. This is to certify that
(i) we have received a certificate or certificates, in writing or by tested
telex, with respect to each of the-persons appearing in our records as being
entitled to a beneficial interest in the Submitted Portion and with respect to
such persons beneficial interest either (a) from such person, substantially in
the form of Exhibit G-2 to the Agreement, or (b) from _________, substantially
in the form of to the Agreement, and (ii) the Submitted Portion
includes no part of the temporary Global Certificate excepted in such
certificates.
We further certify that as of the date hereof we have not
received any notification from any of the persons giving such certificates to
the effect that the statements made by them with respect to any part of the
Submitted Portion are no longer true and cannot be relied on as of the date
hereof.
G-1-1
We understand that this certificate is required in connection
with certain securities and tax laws in the United States of America. If
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate or a copy thereof to any interested party in
such proceedings.
Dated: , /1/ [Euroclear Bank, S.A./N.V.,
as operator of the
Euroclear System]/2/
[Clearstream Banking, societe anonyme]/2/
by _____________________________
____________________________
/1/ To be dated on the Exchange Date.
/2/ Delete the inappropriate reference.
G-1-2
EXHIBIT G-2
FORM OF CERTIFICATE TO BE DELIVERED
TO EUROCLEAR OR CLEARSTREAM
BY [INSERT NAME OF MANAGER]
WITH RESPECT TO REGISTERED CERTIFICATES SOLD TO
QUALIFIED INSTITUTIONAL BUYERS]
CAPITAL ONE MASTER TRUST,
Series [ ] [ %] [Floating Rate]
Asset Backed Certificates
In connection with the initial issuance and placement of the above
referenced Asset Backed Certificates (the "Certificates"), an institutional
investor in the United States ("institutional investor") is purchasing U.S.
$___________ aggregate principal amount of the Certificates held in our account
at [Euroclear Bank, S.A./N.V., as operator of the Euroclear System] [Clearstream
Banking, societe anonyme] on behalf of such investor.
We reasonably believe that such institutional investor is a qualified
institutional buyer as such term is defined under Rule 144A of the Securities
Act of 1933, as amended.
[We understand that this certificate is required in connection with
United States laws. We irrevocably authorize you to produce this certificate or
a copy hereof to any interested party in any administrative or legal proceedings
or official inquiry with respect to the matters covered by this certificate.]
The Definitive Certificates in respect of this certificate are to be
issued in registered form in the minimum denomination of U.S. $500,000 and such
Definitive Certificates (and, unless the Pooling and Servicing Agreement or
Supplement relating to the Certificates otherwise provides, any Certificates
issued in exchange or substitution for or on registration of transfer of
Certificates) shall bear the following legend:
"THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS CERTIFICATE NOR ANY PORTION
HEREOF MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR
TO U.S. PERSONS (EACH AS DEFINED HEREIN), EXCEPT IN COMPLIANCE WITH THE
REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
SUCH REGISTRATION PROVISIONS. THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO
CERTAIN CONDITIONS SET FORTH IN THE AMENDED AND RESTATED POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. THIS CERTIFICATE CANNOT BE EXCHANGED FOR A BEARER
CERTIFICATE."
Dated: _______ __, 20__
[ ],
by __________________________
Authorized Officer
G-2-1
EXHIBIT G-3
[FORM OF CERTIFICATE TO BE DELIVERED
TO EUROCLEAR OR CLEARSTREAM BY A BENEFICIAL OWNER
OF CERTIFICATES, OTHER THAN A QUALIFIED INSTITUTIONAL BUYER]
CAPITAL ONE MASTER TRUST,
Series [ ] [ %] [Floating Rate]
Asset Backed Certificates
This is to certify that as of the date hereof and except as provided in
the third paragraph hereof, the above-captioned Certificates held by you for our
account (i) are owned by a person that is a United States person, or (ii) are
owned by a United States person that is (A) the foreign branch of a United
States financial institution (as defined in U.S. Treasury Regulations Section
1.165-12(c)(1)(v)) (a "financial institution") purchasing for its own account or
for resale, or (B) a United States person who acquired the Certificates through
the foreign branch of a financial institution and who holds the Certificates
through the financial institution oh the date hereof (and in either case (A) or
(B), the financial institution hereby agrees to comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder), or (iii) are owned by a financial
institution for purposes of resale during the Restricted Period (as defined in
U.S. Treasury Regulations Section 1.163-5(6)(2)(i)(D)(7)). In addition,
financial institutions described in clause (iii) of the preceding sentence
(whether or not also described in clause (i) or (ii)) certify that they have not
acquired the Certificates for purposes of resale directly or indirectly to a
United States person or to a person within the United States or its possessions.
We undertake to advise you by tested telex if the above statement as to
beneficial ownership is not correct on the date of delivery of the
above-captioned Certificates in bearer form with respect to such of said
Certificates as then appear in your books as being held for our account.
This certificate excepts and does not relate to U.S. $_______ principal
amount of Certificates held by you for our account, as to which we are not yet
able to certify beneficial ownership. We understand that delivery of Definitive
Certificates in such principal amount cannot be made until we are able to so
certify.
We understand that this certificate is required in connection with
certain securities and tax laws in the United States of America. If
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate or a copy thereof to any interested party in
such proceedings. As used herein, "United States" means the United States of
America (including the States and the District of Columbia), its territories,
its possessions and other areas subject to its jurisdiction; and "United States
person" means a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States, or any political subdivision thereof, or an estate or trust the
income of which is subject to United States federal income taxation regardless
of its source.
G-3-1
Dated: /1/ by ______________________________
As, or as agent for, the
beneficial owner(s) of the
interest in the Certificates to
which this certificate relates.
_______________
/1/ This Certificate must be dated on the earliest of the date of the first
actual payment of interest in respect of the Certificates and the date of the
delivery of the Certificates in definitive form.
G-3-2
EXHIBIT H-1
FORM OF OPINION OF COUNSEL
WITH RESPECT TO AMENDMENTS
Provisions to be included in
Opinion of Counsel to be delivered pursuant
to Section 13.02(d)(i)
The opinions to the effect of the matters set forth below may be subject
to all the qualifications, assumptions, limitations and exceptions taken or made
in the Opinions of Counsel delivered on any applicable Closing Date and may
reflect the form and substance of such previously delivered Opinions of Counsel.
(i) The amendment to the [Pooling and Servicing Agreement],
[Supplement], attached hereto as Schedule 1 (the "Amendment"), has been duly
authorized, executed and delivered by the Transferor and constitutes the legal,
valid and binding agreement of the Transferor, enforceable in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws from time to
time in effect affecting creditors' rights generally or the rights of creditors
of Virginia banking corporations or federal savings banks, as the case may be.
The enforceability of the Transferor's obligations is also subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(ii) The Amendment has been entered into in accordance with the terms
and provisions of Section 13.01 of the Pooling and Servicing Agreement.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF COUNSEL
WITH RESPECT TO ACCOUNTS
Provisions to be included in
opinion of Counsel to be
delivered pursuant to
Section 13.02(d)(ii) or (iii)
The opinions to the effect of the matters set forth below may be subject
to all the qualifications, assumptions, limitations and exceptions taken or made
in the Opinions of Counsel delivered on any applicable Closing Date and may
reflect the form and substance of such previously delivered Opinions of Counsel.
1. The Receivables constitute "accounts," as defined in the UCC.
2. The Amended and Restated Pooling and Services Agreement creates in
favor of the Trustee a security interest in the Receivables and the proceeds
thereof. Such security interest is perfected and of first priority.
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EXHIBIT I
FORM OF ASSUMPTION AGREEMENT
ASSUMPTION AGREEMENT (the "Agreement"), dated as of _______
__, 20__ (the "Assumption Date"), by and among CAPITAL ONE BANK, a Virginia
banking corporation (the "Bank"),CAPITAL ONE FUNDING, LLC, a Virginia limited
liability company ("Funding"), [____________] (the "Assuming Entity"), a
[_________], and THE BANK OF NEW YORK, a New York banking corporation (the
"Trustee"), pursuant to the Pooling and Servicing Agreement referred to below.
WHEREAS, Funding and the Trustee are parties to the Amended
and Restated Pooling and Servicing Agreement, dated as of September 30, 1993, as
amended and restated as of August 1, 2002 (hereinafter as such agreement may
have been, or from time to time be, amended, supplemented or otherwise modified,
the "Pooling and Servicing Agreement");
WHEREAS, Funding wishes to assign; transfer and convey all of
its consumer revolving credit card accounts and other revolving credit accounts
and the receivables arising thereunder, which may include all, but not loss than
all, of the Accounts and Funding's remaining interest in the receivables arising
thereunder, its interest in the Participation Interests and its Transferor's
Interest (collectively, the "Assigned Assets"), together with all servicing
functions and other obligations under the Pooling and Servicing Agreement or
relating to the transactions contemplated thereby (collectively, the "Assumed
Obligations") pursuant to Section 7.05 of the Pooling and Servicing Agreement;
WHEREAS, pursuant to the Pooling and Servicing Agreement, the
Assuming Entity and Funding must comply with the provisions of Section 7.05
thereof in order for the bank to transfer such Assigned Assets and Assumed
obligations to the Assuming Entity; and
WHEREAS, the Trustee is willing to accept an assumption by the
Assuming Entity subject to the terms and conditions hereof and of the Pooling
and Servicing Agreement.
NOW, THEREFORE, Funding, the Assuming Entity 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.
2. Designation of Accounts. In connection with such
conveyance, the Assuming Entity agrees, at its own expense, on or prior to the
Assumption Date, to deliver to the Trustee, a computer file or microfiche list
containing a true and complete list of all such Accounts or Participation
Interests transferred by the Funding to the Assuming Entity pursuant to this
Agreement, specifying (x) for each such Account, as of the Assumption Date, (i)
its account
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number, (ii) the collection status, (iii) the aggregate amount of Receivables
outstanding in such Account and (iv) the aggregate amount of Principal
Receivables outstanding in such Account and (y) for each such Participation
Interests, as of the Assumption Date, information comparable to the information
delivered under (x) above. Such file shall be marked as Schedule 1 to this
Agreement and, as of the Assumption Date, shall be incorporated into and made a
part of this Agreement.
3. Assumption of Assigned Assets and Assumed Obligations. (a)
The Assuming Entity hereby agrees that on and after the Assumption Date it shall
be bound by all the provisions and requirements of and assume all of the
responsibilities and duties under the Pooling and Servicing Agreement applicable
to the Servicer.
(b) In connection with such assumption, the Assuming Entity
agrees to record and file at its own expense, any financing statements (and
continuation statements with respect to such financing statements when
applicable) with respect to (i) the Receivables now existing and created on or
after the Assumption Date in the Accounts designated hereby (which may be a
single financing statement with respect to all such Receivables) for the
transfer of or the grant of a security interest in "accounts" or as defined in
the UCC as in effect in the State of [ ] and (ii) all other Trust Assets as
defined in Section 2.01 of the Pooling and Servicing Agreement now existing and
created an or after the Assumption Date, meeting the requirements of applicable
state law in such manner and in such jurisdiction as are necessary to perfect
the transfer and assignment of such Receivables and other Trust Assets to the
Trustee, and to deliver a file-stamped copy of such financing statement or
financing statements or other evidence of such filing (which may, for purposes
of this Section 3, consist of telephone confirmation of such filing, confirmed
within 24 hours in writing) to the Trustee on or prior to the Assumption Date.
(c) In connection with such transfer, the Assuming Entity further
agrees, at its own expense, on or prior to the date of this Agreement to clearly
indicate in its computer files that Receivables created In connection with the
Accounts or Participation Interests designated hereby have been conveyed to the
Trust pursuant to the Pooling and Servicing Agreement and this Agreement for the
benefit of the Investor Certificateholders.
4. Accepted by Trustee. The Trustee hereby acknowledges its
acceptance on behalf of the Trust of such assumption. The Trustee further
acknowledges that, prior to or simultaneously with the execution and delivery of
this Agreement, the Assuming Entity delivered to the Trustee the computer, file,
or microfiche list described in Section 2 of this Agreement. The foregoing
assumption does not constitute and is not intended to result in a creation or an
assumption by the Trust, the Trustee or any Investor Certificateholder of any
obligation of the Servicer, Funding, the Assuming Entity or any other Person in
connection with the Account, the Receivables or any agreement or instrument
relating thereto, including, without limitation, any obligation to any obligors,
merchant banks, merchants clearance system, VISA, MasterCard or insurers, except
as expressly provided herein.
5. Representations and Warranties of the Assuming Entity and
Funding. In addition to the representations and warranties deemed to have been
made by the Assuming Entity in respect of the Accounts and Receivables
thereunder pursuant to Section 7.05 of the Pooling
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and Servicing Agreement, the Assuming Entity and the Banks hereby also represent
and warrant to the Trust as of the Assumption Date:
(a) Legal, Valid and Binding Obligation. This Agreement
constitutes a legal, valid, and binding Obligation of the Assuming Entity and
Funding, enforceable against the Assuming Entity and Funding in accordance with
its terms, subject to bankruptcy, insolvency, reorganization, moratorium,
receivership, conservatorship or other similar laws now or hereafter in affect
affecting creditors' rights in general and the rights of creditors of a Virginia
limited liability company and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in equity).
(b) Insolvency. None of the Assuming Entity or Funding is
insolvent or bankrupt; and, after giving effect to the conveyance of the
Assigned Assets and the Assumed Obligations to the Assuming Entity by Funding,
neither the Assuming Entity nor Funding will be insolvent or bankrupt;
(c) Security Interest. The security interest of the Trustee in
the Receivables and other Trust Assets continues to remain in full force and
effect and has not been interrupted or impaired by the signing of this Agreement
and such security interest remains prior to all others except as set forth in
the Pooling and Servicing Agreement; and
(d) Qualification. The Assuming Entity (i) is legally
qualified to service the Accounts, (ii) is eligible to maintain the Collection
Account as set forth in Section 4.02 of the Pooling and Servicing Agreement and
(iii) is qualified to use the software that the Servicer is currently using to
service the Account or has obtained the right to use or has its own software
that is adequate to perform its duties as Servicer under the Pooling and
Servicing Agreement.
6. Conditions Precedent. The acceptance of 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
Assumption Date, of the conditions precedent referred to in Section 7.05 of the
Pooling and Servicing Agreement and of the following additional conditions
precedent:
(a) Funding shall have transferred the Base Certificate to the
Assuming Entity as set forth in Section 7.05 of the Pooling and Servicing
Agreement and references to the Bank as it relates to the Base Certificate shall
refer to only the Assuming Entity.
(b) The payment of any other consideration has been completed
as certified by the Assuming Entity to the Trustee.
(c) The Assuming Entity shall have delivered to the Trustee an
Officer's Certificate, dated the Assumption Date, stating that the Assuming
Entity is eligible to maintain the Collection Account pursuant to section 4.02
of the Pooling and Servicing Agreement.
(d) The Assuming Entity shall have delivered to the Trustee an
Officer's Certificate, dated the Assumption Date, in which an officer of the
Assuming Entity shall state that the representations and warranties of the
Assuming Entity in its capacity as Transferor under Section 2.03 and Section
7.04 of the Pooling and Servicing Agreement are true and correct.
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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 Assumption Date to be a dual
reference to the Pooling and Servicing Agreement as supplemented by this
Agreement and all other Supplements thereto. The Assuming Entity and Funding
hereby agree that from and after the Assumption Date the term "Transferor" in
the Pooling and Servicing Agreement shall refer to the Assuming Entity. 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, the
execution and delivery of this Agreement by the Trustee 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.
8. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
9. Counterparts. This Agreement may be executed in two (2) or
more counterparts (and by different parties on eparate counterparts), each of
which shall be an original, but all of which together shall constitute but one
and the same instrument.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed and delivered by their respective duly authorized officers
on the day and year first above written.
CAPITAL ONE BANK
By ________________________
Name:
Title:
CAPITAL ONE FUNDING, LLC
By ________________________
Name:
Title:
[ASSUMING ENTITY],
By ________________________
Name:
Title:
THE BANK OF NEW YORK, as
Trustee,
By ________________________
Title:
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SCHEDULE 1
List of Accounts
[Original list delivered to Trustee]
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