Exhibit 4.1
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AMERICAN EXPRESS RECEIVABLES FINANCING
CORPORATION
and
AMERICAN EXPRESS CENTURION BANK
Transferors
AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.
Servicer
and
THE BANK OF NEW YORK
Trustee
on behalf of the Certificateholders
of the American Express Master Trust
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AMENDED AND RESTATED MASTER POOLING AND SERVICING AGREEMENT
Dated as of May 1, 1998
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TABLE OF CONTENTS
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Page
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Article I DEFINITIONS.......................................................................1
Section 1.01 Definitions..................................................................1
Section 1.02 Other Definitional Provisions...............................................16
Article II APPOINTMENT OF TRUSTEE; CONVEYANCE OF RECEIVABLES
ISSUANCE OF CERTIFICATES.......................................................18
Section 2.01 Appointment of Trustee; Conveyance of Receivables...........................18
Section 2.02 Acceptance by Trustee.......................................................19
Section 2.03 Representations and Warranties..............................................20
Section 2.04 Representations and Warranties of the Transferors Relating
to the Agreement and any Supplement and the Receivables.....................22
Section 2.05 Covenants of the Transferors................................................27
Section 2.06 Addition of Accounts........................................................29
Section 2.07 Removal of Accounts.........................................................32
Article III ADMINISTRATION AND SERVICING OF RECEIVABLES......................................34
Section 3.01 Acceptance of Appointment and Other Matters Relating to
the Servicer................................................................34
Section 3.02 Servicing Compensation......................................................35
Section 3.03 Representations, Warranties and Covenants of the Servicer...................36
Section 3.05 Annual Servicer's Certificate...............................................40
Section 3.07 Tax Treatment...............................................................40
Section 3.08 Adjustments.................................................................41
Section 3.09 Remittance Processing Procedures............................................42
Article IV RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION AND APPLICATION OF COLLECTIONS.......43
Section 4.01 Establishment of Collection Account and Special Funding
Account and Allocations with Respect to the Exchangeable
Transferor's Certificates...................................................43
Article V [ARTICLE V IS RESERVED AND MAY BE SPECIFIED IN ANY SUPPLEMENT WITH RESPECT
TO ANY SERIES]...................................................................47
Article VI THE CERTIFICATES.................................................................48
Section 6.01 The Certificates............................................................48
Section 6.02 Authentication of Certificates..............................................48
Section 6.03 Registration of Transfer and Exchange of Certificates.......................49
Section 6.04 Mutilated, Destroyed, Lost, or Stolen Certificates..........................52
Section 6.05 Persons Deemed Owners.......................................................52
Section 6.06 Appointment of Paying Agent.................................................53
Section 6.07 Access to List of Certificateholders' Names and Addresses...................53
Section 6.08 Authenticating Agent........................................................54
Section 6.09 Tender of Exchangeable Transferor Certificate...............................55
Section 6.10 Global Certificate; Euro Certificate Exchange Date..........................56
Section 6.11 Book-Entry Certificates.....................................................58
Section 6.12 Notices to Clearing Agency..................................................59
Section 6.13 Definitive Certificates.....................................................59
Section 6.14 Meetings of Certificateholders..............................................59
Article VII OTHER MATTERS RELATING TO THE TRANSFERORS........................................62
Section 7.01 Liability of the Transferors................................................62
Section 7.02 Merger or Consolidation of, or Assumption of the
Obligations of, a Transferor................................................62
Section 7.03 Limitation on Liability of the Transferors..................................62
Section 7.04 Liabilities.................................................................63
Article VIII OTHER MATTERS RELATING TO THE SERVICER...........................................64
Section 8.01 Liability of the Servicer...................................................64
Section 8.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer................................................64
Section 8.03 Limitation on Liability of the Servicer and Others..........................64
Section 8.04 Indemnification of the Trust and the Trustee................................65
Section 8.05 The Servicer Not to Resign..................................................65
Section 8.06 Access to Certain Documentation and Information
Regarding the Receivables...................................................66
Section 8.07 Delegation of Duties........................................................66
Section 8.08 Examination of Records......................................................66
Article IX PAY OUT EVENTS...................................................................67
Section 9.01 Pay Out Events..............................................................67
Section 9.02 Additional Rights Upon the Occurrence of Certain Events.....................67
Article X SERVICER DEFAULTS...............................................................70
Section 10.01 Servicer Defaults...........................................................70
Section 10.02 Trustee to Act; Appointment of Successor....................................72
Section 10.03 Notification to Certificateholders..........................................73
Section 10.04 Waiver of Past Defaults.....................................................73
Article XI THE TRUSTEE.....................................................................75
Section 11.01 Duties of Trustee...........................................................75
Section 11.02 Certain Matters Affecting the Trustee.......................................76
Section 11.03 Trustee Not Liable for Recitals in Certificates.............................78
Section 11.04 Trustee May Own Certificates................................................79
Section 11.05 The Servicer to Pay Trustee's Fees and Expenses.............................79
Section 11.06 Eligibility Requirements for Trustee........................................79
Section 11.07 Resignation or Removal of Trustee...........................................79
Section 11.08 Successor Trustee...........................................................80
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Section 11.09 Merger or Consolidation of Trustee..........................................80
Section 11.10 Appointment of Co-Trustee or Separate Trustee...............................81
Section 11.11 Tax Returns.................................................................82
Section 11.12 Trustee May Enforce Claims Without Possession of
Certificates................................................................82
Section 11.13 Suits for Enforcement.......................................................82
Section 11.14 Rights of Certificateholders to Direct Trustee..............................83
Section 11.15 Representations and Warranties of Trustee...................................83
Section 11.16 Maintenance of Office or Agency.............................................83
Section 11.17 Indemnification of the Trustee..............................................83
Article XII TERMINATION.....................................................................85
Section 12.01 Termination of Trust........................................................85
Section 12.02 Optional Purchase; Final Termination Date of Investor
Certificates of any Series..................................................85
Section 12.03 Final Payment with Respect to any Series....................................86
Section 12.04 Transferor's Termination Rights.............................................87
Article XIII MISCELLANEOUS PROVISIONS........................................................89
Section 13.01 Amendment...................................................................89
Section 13.02 Protection of Right, Title and Interest to Trust............................90
Section 13.03 Limitation on Rights of Certificateholders..................................91
Section 13.04 Governing Law...............................................................92
Section 13.05 Notices.....................................................................92
Section 13.06 Severability of Provisions..................................................93
Section 13.07 Assignment..................................................................93
Section 13.08 Certificates Nonassessable and Fully Paid...................................93
Section 13.09 Further Assurances..........................................................94
Section 13.10 No Waiver; Cumulative Remedies..............................................94
Section 13.11 Counterparts................................................................94
Section 13.12 Third-Party Beneficiaries...................................................94
Section 13.13 Actions by Certificateholders...............................................94
Section 13.14 Merger and Integration......................................................94
Section 13.15 Headings....................................................................95
Section 13.16 Certificates and Opinions of Counsel........................................95
Section 13.17 Effect of Amendment No. 3...................................................95
EXHIBITS
Exhibit A: Form of Exchangeable Transferor Certificate
Exhibit B: Form of Assignment of Receivables in Additional Accounts
Exhibit C: Form of Reassignment of Receivables
Exhibit D: Form of Initial Report
Exhibit E: Form of Monthly Servicer's Certificate
Exhibit F: Form of Annual Servicer's Certificate
Exhibit G: Form of Opinion of Counsel with Respect to the Pooling
and Servicing Agreement and Additional Accounts
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Exhibit H: Form of Annual Opinion of Counsel
Exhibit I: Account Receivables
Exhibit J: Form of Depositary Agreement (Letter of Representations)
Exhibit K: Form of Lock Box Letter
Exhibit L: Form of Opinion of Counsel with Respect to Servicer
Deposit of Collateral
SCHEDULES
Schedule 1: List of Accounts
Schedule 2: Collection Account
Schedule 3: Fees and Charges included in Receivables
Schedule 4: List of Lock Box Banks
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AMENDED AND RESTATED MASTER POOLING AND SERVICING AGREEMENT,
dated as of May 1, 1998, among AMERICAN EXPRESS RECEIVABLES FINANCING
CORPORATION, a Delaware corporation, and AMERICAN EXPRESS CENTURION BANK, a
Utah-chartered industrial loan company, as Transferors, and AMERICAN EXPRESS
TRAVEL RELATED SERVICES COMPANY, INC., a corporation organized under the laws
of the State of New York, as Servicer and THE BANK OF NEW YORK, a banking
corporation organized under the laws of New York, as Trustee.
Reference is made to that certain Master Pooling and
Servicing Agreement, dated as of June 30, 1992 (the "Original Pooling
Agreement"), among American Express Receivables Financing Corporation, as
Transferor; American Express Travel Related Services Company, Inc., as
Servicer; and The Bank of New York, as Trustee. The parties hereto wish to
amend and restate the Original Pooling Agreement in its entirety in order to,
among other things, provide for the addition of American Express Centurion
Bank, a Utah-chartered industrial loan company, as a Transferor thereunder.
Therefore, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree, for
the benefit of each other and for the benefit of the Certificateholders and
the Enhancement Providers, to amend and restate Article I through and
including Article XIII of the Original Pooling Agreement in their entirety to
read as follows:
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 the portion of each American Express(R)
Card, American Express(R) Gold Card and Platinum Card(R) account, the full
receivable balance of which is due upon receipt of a monthly billing
statement, established pursuant to an Account Agreement between an Account
Originator and any Person, and in each case identified by account number and
by the Receivable balance as of the applicable Cut-Off Date or Additional
Account Cut-Off Date in each computer file or microfiche list delivered to the
Trustee by the Servicer on behalf of the Transferors on the Closing Date and
pursuant to Section 2.01 and Section 2.06, as applicable. The definition of
Account shall include any account or accounts (each, a "Related Account")
having the following characteristics: (a) (i) such Related Account was
originated in accordance with the Account Guidelines; (ii) the obligor with
respect to such Related Account is the same Person as the Obligor of the
Account related to such Related Account; (iii) such Related Account is
originated as a result of the card associated with an Account being lost or
stolen or as a result of conversions from one type of Account from or into
another type of Account or as a result of the consolidation of an Obligor's
accounts with either of the Account Originators into one account; and (iv)
such Related Account can be traced to, or identified with an Account
identified by account number on the computer file or microfiche list delivered
to the Trustee pursuant to Section 2.01 or 2.06, by reference to or by way of
the computer or other records of a Transferor or (b) (i) such Related Account
is an Account with respect to which a new account number has
been issued under circumstances not requiring standard application and credit
evaluation procedures under the Account Guidelines; and (ii) such Related
Account can be traced or identified as an account into which an Account has
been transferred by reference to or by way of the computer file or microfiche
list delivered to the Trustee pursuant to Sections 2.01 or 2.06. The term
"Account" shall be deemed to refer to an Additional Account only from and
after the Additional Account Closing Date with respect thereto, and the term
"Account" shall be deemed to refer to any Removed Account only prior to the
Removal Date with respect thereto.
"Account Agreements" shall mean the Agreements attached as
Exhibit I, as such agreements may be amended from time to time.
"Account Guidelines" shall mean, with respect to the
Accounts of each Account Originator, the policies and procedures of such
Account Originator, relating to the operation of its consumer charge card
businesses, including, without limitation, the policies and procedures for
determining the creditworthiness of customers, the extension of privileges and
relating to the maintenance of accounts and collection of receivables, as such
policies and procedures may be amended from time to time.
"Account Originator" shall mean each of TRS and Centurion
Bank.
"Accumulation Period" with respect to any Series, the period
following the Revolving Period which shall be the Controlled Accumulation
Period or the Early Accumulation Period (each as defined in the related
Supplement).
"Additional Account Closing Date" shall mean each date on
which Additional Accounts will be included as Accounts pursuant to Section
2.06.
"Additional Account Cut-Off Date" shall mean with respect to
any Additional Account the last day of the Due Period preceding the Additional
Account Closing Date.
"Additional Account Selection Date" shall have the meaning
set forth in Section 2.06.
"Additional Accounts" shall have the meaning set forth in
Section 2.06.
"Adjustment Payment" shall have the meaning specified in
Section 3.08(a).
"Affiliate" of any Person shall mean any other Person
directly or indirectly controlling, controlled by or under common control with
such Person.
"Aggregate Invested Amount" shall mean with respect to any
date of determination the sum of the Invested Amounts with respect to all
Series of Investor Certificates then outstanding.
"Aggregate Invested Percentage" shall mean with respect to
any date of determination the sum of the applicable Invested Percentages with
respect to all Series of Investor Certificates then outstanding.
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"Agreement" shall mean the Original Pooling Agreement, as
(i) with respect to each Series, supplemented by each related Supplement and
(ii) amended by this Amended and Restated Master Pooling and Servicing
Agreement and as the same may be further amended, supplemented or otherwise
modified from time to time.
"Amortization Period" shall mean, with respect to any
Series, the period following the Revolving Period which shall be the
Controlled Amortization Period, Early Amortization Period or Rapid
Amortization Period (each as defined in any related Supplement).
"Annual Membership Fees" shall mean any annual fees
specified in the various Account Agreements as they may, from time to time be
amended.
"Applicants" shall have the meaning specified in Section
6.07.
"Appointment Day" shall have the meaning specified in
Section 9.02.
"Authorized Newspaper" shall mean one or more newspapers of
general circulation in the Borough of Manhattan, The City of New York printed
in the English language and customarily published on each Business Day,
whether or not published on Saturdays, Sundays and holidays.
"Average Monthly Privileged Assets Billed Amount" shall mean
for any calendar month, the average amount billed for such month under the
Privileged Assets Program to all American Express Cardmembers who are enrolled
in the Privileged Assets Program, whether or not their related Accounts are
included in the Trust.
"Bearer Certificates" shall mean any certificates issued in
bearer form.
"Bearer Rules" shall mean the provisions of the Internal
Revenue Code, in effect from time to time, governing the treatment of bearer
obligations, including sections 163(f), 871, 881, 1441, 1442 and 4701, and any
regulations thereunder including, to the extent applicable to any Series
proposed or temporary regulations.
"Book-Entry Certificates" shall mean beneficial interests in
the Investor Certificates, ownership and transfers of which shall be evidenced
or made through book entries by a Clearing Agency as described in Section
6.10; provided, that after the occurrence of a condition whereupon book-entry
registration and transfer are no longer permitted and Definitive Certificates
are issued to the Certificate Owners , such Definitive Certificates shall
replace Book-Entry Certificates.
"Business Day" shall mean (i) 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, or any other State in
which the principal executive offices of RFC, Centurion Bank, the Trustee, or
other Account Owner, as the case may be, are located, are authorized or
obligated by law, executive order or governmental decree to be closed or (c)
for purposes of any particular Series, any other day specified in the
applicable Series Supplement and (ii) with respect to the determination of
LIBOR, a London business Day.
"Cardmember" shall mean the Obligor of an American Express
Card account.
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"Cedel" shall mean Cedel Bank, societe anonyme, or any
successor thereto.
"Centurion Bank" shall mean American Express Centurion Bank,
a Utah-chartered industrial loan company and its successors.
"Certificate" shall mean one of any Series of the Investor
Certificates or the Exchangeable Transferor Certificates.
"Certificateholder" or "Holder" shall mean the Person in
whose name a Certificate is registered in the Certificate Register.
"Certificate Interest" shall mean interest payable with
respect to the applicable Series of Investor Certificates pursuant to Section
4.06.
"Certificate Owner" shall mean, with respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such Book-Entry
Certificate, as reflected on the books of the Clearing Agency, or on the books
of a Person maintaining an account with such Clearing Agency (directly or as
an indirect participant, in accordance with the rules of such Clearing
Agency).
"Certificate Principal" shall mean principal payable with
respect to the applicable Series of Investor Certificates pursuant to the
applicable Supplement.
"Certificate Rate" shall mean, with respect to any Series of
Certificates, the percentage (or formula on the basis of which such rate shall
be determined) stated in the applicable Supplement; provided that, unless
otherwise provided in the applicable Supplement, in each case such rate shall
be calculated on the basis of a 360-day year consisting of twelve 30-day
months.
"Certificate Register" shall mean the register maintained
pursuant to Section 6.03, providing for the registration of the applicable
Certificates and transfers and exchanges thereof.
"Clearing Agency" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended, or any successor provision thereto.
"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.
"Closing Date" shall mean, with respect to any Series, the
date of issuance of such Series of Certificates, as specified in the related
Supplement.
"Collection Account" shall have the meaning specified in
Section 4.01.
"Collections" shall mean all payments (excluding Recoveries)
received by the Servicer with respect to the Receivables, in the form of cash,
checks, wire transfers, ATM transfers or other form of payment in accordance
with the related Account Agreement in effect from time to time on any
Receivable.
4
"Common Depositary" shall mean the Person appointed as such
as specified in the related Supplement, in its capacity as common depositary
for the respective accounts of a Foreign Clearing Agency.
"Controlled Accumulation Period" with respect to any Series,
shall have the meaning specified in the applicable Supplement.
"Controlled Amortization Period" with respect to any Series,
shall have the meaning specified in the applicable Supplement.
"Conveyance" shall have the meaning set forth in Section
7.05.
"Corporate Trust Office" shall mean the principal office of
the Trustee in The City of New York at which at any particular time its
corporate business shall be administered, which office at the date of the
execution of this Agreement is located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department - Attn: Asset Backed Finance
Unit.
"CRC" shall mean Credco Receivables Corp., a Delaware
corporation, and its successors.
"Cut-Off Date" shall mean, for each Account, other than
Additional Accounts, the close of business on June 30, 1992.
"Date of Processing" shall mean, with respect to any
transaction, the Business Day after such transaction is first output in
written form under the Servicer's customary and usual servicing practices,
from the Servicer's computer file of Accounts (without regard to the effective
date of such recordation).
"Default Amount" shall mean, for any Due Period, the product
of (a) the amount of the Receivables in all Accounts which became Defaulted
Accounts during such Due Period at the time such Accounts became Defaulted
Accounts plus any Receivables created in such Due Period on Defaulted Accounts
minus Recoveries, if any, received in such Due Period and (b) one minus the
Yield Factor.
"Defaulted Account" shall mean each Account with respect to
which, in accordance with the Account Guidelines pursuant to which such
Account is governed or the customary and usual servicing procedures of the
Servicer for servicing receivables comparable to the Receivables, the Servicer
has charged off the Receivables in such Account as uncollectible; in any
event, an Account shall be deemed a Defaulted Account no later than when such
Account becomes 360 days past due from the date of the initial billing
statement. Notwithstanding any other provision hereof, any Receivables in a
Defaulted Account which are Ineligible Receivables shall be treated as
Ineligible Receivables rather than Receivables in Defaulted Accounts.
"Definitive Certificates" shall have the meaning specified
in Section 6.11.
"Definitive Euro-Certificates" shall have the meaning
specified in Section 6.10.
5
"Depository Agreement" shall mean the agreement among the
Transferor, the Trustee and the initial Clearing Agency, dated as of the
Initial Closing Date, in the form attached hereto as Exhibit J.
"Determination Date" shall mean the fifth Business Day prior
to each Distribution Date.
"Distribution Date" shall mean, with respect to the Series
1992-1 Certificates and the 1992-2 Certificates, September 15, 1992 and the
fifteenth day of each calendar month thereafter, or, if such fifteenth day is
not a Business Day, the next succeeding Business Day and, with respect to any
other Series of Certificates, the date specified in the applicable Supplement.
"Due Period" shall mean, unless otherwise provided in a
Supplement, with respect to each Distribution Date, (i) prior to and including
the May 1998 Distribution Date, the period from and including the first day of
the immediately preceding calendar month and ending at the close of business
on the last day of such calendar month, (ii) for the June 1998 Distribution
Date, the period from and including May 1, 1998 to and including May 27, 1998,
and (iii) commencing with the July 1998 Distribution Date, the period (a) from
and including the day following the last day of the eighth billing cycle
applicable to the Accounts ending during the second preceding calendar month
(b) to and including the last day of the eighth billing cycle applicable to
the Accounts ending in the calendar month immediately preceding the month in
which such Distribution Date shall occur; provided, however, that the initial
Due Period with respect to any Series will commence on the Closing Date with
respect to such Series.
"Early Accumulation Period" with respect to any Series,
shall have the meaning specified in the applicable Supplement.
"Early Amortization Event" with respect to any Series issued
prior to May 1, 1998, shall have the same meaning as the meaning specified in
Section 9.01 for the term "Pay Out Event".
"Early Amortization Period" with respect to any Series,
shall have the meaning specified in the applicable Supplement.
"Eligible Account" shall mean each Account which as of its
Selection Date (or, with respect to Additional Accounts, as of the relevant
Additional Account Selection Date) (i) is an Account and was in existence and
owned by an Account Originator at the close of business on its Selection Date
and whose billed balance is payable in full each month, (ii) is payable in
United States dollars, (iii) is not classified by such Account Originator as
fraudulent, (iv) the card or cards related to which have not been reported
lost or stolen, (v) was created or purchased in accordance with or under
underwriting and credit standards no less stringent than those generally
applied by such Account Originator, (vi) has not been identified by such
Account Originator in its computer files as having a deceased Obligor or
having been cancelled due to the Obligor's bankruptcy or insolvency, (vii) is
not classified by such Account Originator as having been charged off, (viii)
the Obligor of which is a natural person and (ix) has not been identified by
such Account Originator as having been charged off.
6
Notwithstanding the foregoing, with respect to Additional
Accounts, Eligible Accounts may include Accounts, the Receivables of which
have been written off, or with respect to which the Servicer believes the
related Obligor is bankrupt or insolvent, in each case as of the related
Additional Account Selection Date and/or Additional Account Cut-Off Date;
provided that (a) the balance of all Receivables included in such Accounts is
reflected on the books and records of the Account Originator (and is treated
for purposes of this Agreement) as "zero", and (b) charging privileges with
respect to all such Accounts have been cancelled in accordance with the
Account Guidelines applicable thereto.
"Eligible Institution" shall mean a depositary institution,
which may include the Trustee, organized under the laws of the United States
or any one of the States thereof including the District of Columbia, the
deposits in which are insured by the FDIC and which at all times has a
short-term unsecured debt rating of at least A-l+ or P-1 by the applicable
Rating Agency; provided, however, that an institution which shall have
corporate trust powers and which maintains the Collection Account, any
principal funding account, any interest funding account or any other account
maintained for the benefit of Certificateholders as a fully segregated trust
account with the trust department of such institution shall not be required to
meet the foregoing rating requirements, and need only at all times have a
long-term unsecured debt rating of at least Baa3 by Moody's so long as ▇▇▇▇▇'▇
is a Rating Agency.
"Eligible Investments" shall mean (a) negotiable instruments
or securities represented by instruments in bearer or registered or in
book-entry form which evidence (i) obligations fully guaranteed by the United
States of America; (ii) time deposits in, or bankers acceptances issued by,
any depositary institution or trust company incorporated under the laws of the
United States of America or any state thereof and subject to supervision and
examination by Federal or state banking or depositary institution authorities,
provided, however, that at the time of the Trust's investment or contractual
commitment to invest therein, the certificates of deposit or short-term
deposits, if any, or long-term unsecured debt obligations (other than such
obligation whose rating is based on collateral or on the credit of a Person
other than such institution or trust company) of such depositary institution
or trust company shall have a credit rating from Moody's and Standard & Poor's
of P-1 and A-l+, respectively, in the case of the certificates of deposit or
short-term deposits, or a rating not lower than one of the two highest
investment categories granted by Moody's and AAA by Standard & Poor's in the
case of long-term unsecured debt obligations; (iii) certificates of deposit
having, at the time of the Trust's investment or contractual commitment to
invest therein, a rating from Moody's and Standard & Poor's of P-1 and A-l+
respectively; (iv) investments in money market funds rated in the highest
investment category (in case of Standard & Poor's, such rating category being
AAAm or AAAm-G) or otherwise approved in writing by the applicable Rating
Agencies, (b) demand deposits in the name of the Trust or the Trustee on
behalf of the Trust in any depositary institution or trust company referred to
in (a)(ii) above, (c) commercial paper (having original or remaining
maturities of no more than 270 days) having, at the time of the Trust's
investment or contractual commitment to invest therein, a credit rating from
Moody's and Standard & Poor's of P-1 and A-l+, respectively, (d) Eurodollar
time deposits having a credit rating from Moody's and Standard & Poor's of P-1
and A-1+, respectively, and (e) repurchase agreements involving any of the
Eligible Investments described in clauses (a)(i) , (a)(iii) and (d) hereof so
long as the other party to the repurchase agreement has at the time of the
Trust's investment therein a rating from Moody's and Standard & Poor's of P-1
and A-1+, respectively.
7
"Eligible Receivable" shall mean each Receivable:
(i) which has arisen under an Eligible Account;
(ii) which was created in compliance with all requirements
of law and pursuant to an agreement which complies with all requirements of
law in either case the failure to comply with which would have a material
adverse effect upon Certificateholders;
(iii) with respect to which all material consents, licenses,
approvals or authorizations of, or registrations with, any governmental
authority required to be obtained or given by an Account Originator in
connection with the creation of such Receivable or the execution, delivery and
performance by such Account Originator of the related agreement have been duly
obtained or given and are in full force and effect as of such date of
creation;
(iv) as to which at the time of the transfer of such
Receivable to the Trust, the Trust will have good and marketable title, free
and clear of all liens, encumbrances, charges and security interests (except
those permitted by subsection 2.05(b));
(v) which has been the subject of either a valid transfer
and assignment from a Transferor to the Trust of all of such Transferor's
right, title and interest therein or the grant of a first priority perfected
security interest therein (and in the proceeds thereof to the extent set forth
in Section 9-306 of the UCC as in effect in the Relevant UCC State), effective
until the termination of the Trust;
(vi) which will at all times be the legal, valid and binding
payment obligation of the Obligor thereof enforceable against such Obligor in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws, now or hereafter in effect, affecting the enforcement of creditors'
rights in general and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity);
(vii) which constitutes either an "account" or a "general
intangible" under and as defined in Article 9 of the UCC as then in effect in
the Relevant UCC State;
(viii) which, at the time of its transfer to the Trust, has
not been waived or modified except as permitted hereunder;
(ix) which is not subject to any right of rescission,
setoff, counterclaim or other defense (including the defense of usury), other
than defenses arising out of applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights in general;
(x) as to which the related Account Originator and
Transferor have satisfied all obligations to be fulfilled at the time it is
transferred to the Trust; and
8
(xi) as to which the related Account Originator and
Transferor have done nothing, at the time of its transfer to the Trust, to
impair the rights of the Trust or Certificateholders therein.
"Enhancement" shall mean, with respect to any Series or
class of Certificates within a Series, any letter of credit, guaranteed rate
agreement, maturity guaranty facility, cash collateral account, cash
collateral guaranty, tax protection agreement, interest rate swap, interest
rate cap or other contract or agreement for the benefit of Certificateholders
of such Series or class, as applicable.
"Enhancement Provider" shall mean, with respect to any
Series, that Person designated as such in the applicable Supplement.
"Estimated Trust Privileged Assets Billed Amounts" shall
mean, for any calendar month, the product of (i) the number of Accounts that
were enrolled in the Privileged Assets Program at the end of such calendar
month, (ii) the Average Monthly Privileged Assets Billed Amount for such month
and (iii) 1.25; provided, that if the Servicer has modified its computer
programs such that it can determine the actual Privileged Assets Billed
Amounts billed with respect to the Accounts, such actual amounts shall
constitute the Estimated Trust Privileged Assets Billed Amounts.
"Euro-Certificate Exchange Date" shall mean with respect to
any Series, the date specified in the applicable Supplement.
"Euroclear Operator" shall mean ▇▇▇▇▇▇ Guaranty Trust
Company of New York, Brussels office as operator of the Euroclear System or
any successor thereto.
"Excess Allocation Series" shall mean any Series that,
pursuant to the Supplement related to such Series, is entitled to receive
certain excess Yield Collections as more fully described in such Supplement.
"Excess Principal Collections" shall mean, with respect to a
Distribution Date, the aggregate amount for all outstanding Series of
Principal Collections which the related Supplements specify are to be treated
as "Excess Principal Collections" for such Distribution Date.
"Exchange" shall mean the procedure described under Section
6.09.
"Exchangeable Transferor Certificate" shall mean the
certificate executed by the Transferors and authenticated by the Trustee,
substantially in the form of Exhibit A and exchangeable as provided in Section
6.09 for one or more Series of Investor Certificates and the reissued
Exchangeable Transferor Certificate.
"Exchange Date" shall have the meaning, with respect to any
Series issued pursuant to an Exchange, specified in Section 6.09.
"Exchange Notice" shall have the meaning, with respect to
any Series issued pursuant to an Exchange, specified in Section 6.09.
9
"FDC" shall mean First Data Corporation, a Delaware
corporation, or any of its subsidiaries.
"FDIC" shall mean the Federal Deposit Insurance Corporation,
or any successor thereto.
"Final Termination Date" shall have the meaning specified in
subsection 12.01(a).
"Foreign Clearing Agency" shall mean with respect to any
Series, Cedel or the Euroclear Operator or any other established clearing
agency for securities outside the United States designated in the applicable
Supplement.
"Global Certificate" shall have the meaning set forth in
subsection 6.10(a).
"Governmental Authority" shall mean the United States of
America, any state or other political subdivision thereof and any United
States entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Ineligible Receivable" shall have the meaning specified in
subsection 2.04(d).
"Initial Closing Date" shall mean August 3, 1992.
"Initial Invested Amount" shall mean, with respect to any
Series, the amount stated in the applicable Supplement.
"Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended from time to time.
"Invested Amount" shall mean, with respect to any Series,
the meaning specified in the applicable Supplement.
"Invested Percentage" shall have, with respect to each
Series, the meaning set forth in the applicable Supplement.
"Investor Certificate" shall mean any one of the
certificates executed by (i) prior to May 1, 1998, the Transferor or (ii)
after May 1, 1998, the Transferors and, in each case, authenticated by the
Trustee and substantially in the form attached to the applicable Supplement.
"Investor Certificateholder" shall mean the holder of record
of an Investor Certificate.
"Investor Charge-Offs" shall have, with respect to each
Series, the meaning specified in the applicable Supplement.
"Investor Default Amount" shall mean, with respect to each
Series for any Due Period, an amount equal to the product of (a) the Default
Amount and (b) the related Floating Allocation Percentage for such Due Period.
10
"Investor Monthly Servicing Fee" shall have, with respect to
each Series, the meaning specified in Section 3.02.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, participation, deposit arrangement, encumbrance,
lien (statutory or other), preference, priority right or interest or other
security agreement or preferential arrangement of any kind or nature
whatsoever, including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing and the filing of any financing
statement under the Uniform Commercial Code (other than any such financing
statement filed for informational purposes only) or comparable law of any
jurisdiction to evidence any of the foregoing; provided, however, that any
assignment pursuant to Section 7.02 hereof shall not be deemed to constitute a
Lien.
"Lock Box Letters" shall mean such letters, in substantially
the form of Exhibit K hereto, delivered by TRS as Servicer to the Trustee
pursuant to Section 3.09 hereof.
"Manager" shall mean the managing underwriter of any Series.
"Minimum Transferor Percentage" shall mean, with respect to
any Due Period with respect to any Series, the percentage specified in the
applicable Supplement.
"Minimum Trust Principal Component" shall mean the aggregate
of the amounts set forth in each Supplement for each outstanding Series as the
"Minimum Trust Principal Component" for such Series.
"Monthly Servicing Fee" shall have the meaning specified in
Section 3.02.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"Obligor" shall mean, with respect to any Account, the
Person or Persons obligated to make payments with respect to such Account,
including any guarantor thereof.
"Officer's Certificate" shall mean a certificate signed by
any Vice President or more senior officer of either of the Transferor or the
Servicer and delivered to the Trustee.
"Opinion of Counsel" shall mean a written opinion of
independent counsel, who may be counsel for either of the Transferors, and
which shall be reasonably acceptable to the Trustee.
"Original Pooling Agreement" shall mean the Master Pooling
and Servicing Agreement, dated as of June 30, 1992, among RFC, TRS and the
Trustee related to the establishment of the Trust, as supplemented by any
Supplement.
"PA Removal Date" means the Determination Date on which
designated Accounts are removed pursuant to subsection 2.07(c).
"Paying Agent" shall mean any paying agent appointed
pursuant to Section 6.06 and shall initially be the Trustee.
11
"Payment Service Centers" shall mean the service centers
operated by TRS for the purpose of receiving and processing Cardmember
remittances in respect of Accounts, currently located in Chicago, Illinois and
any additional service centers operated by TRS or any agent of TRS from time
to time. TRS agrees to provide prompt notice to the Trustee of any additional
Payment Service Centers.
"Pay Out Event" shall have, with respect to each Series, the
meaning specified in Section 9.01.
"Person" shall mean any legal person, including any
individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, Governmental Authority or other
entity of similar nature.
"Principal Collections" shall mean Collections other than
Yield Collections.
"Principal Funding Account" with respect to any Series,
shall have the meaning specified in the applicable Supplement.
"Principal Funding Account" shall have, with respect to each
Series, the meaning, if any, specified in the applicable Supplement.
"Principal Shortfalls" shall mean, with respect to a
Distribution Date, the aggregate amount for all outstanding Series which the
related Supplements specify are "Principal Shortfalls" for such Distribution
Date.
"Principal Terms" shall have the meaning, with respect to
any Series issued pursuant to an Exchange, specified in Section 6.09.
"Privileged Assets Applied Dilution Factor" for a Due Period
shall mean the percentage equal to (i) the highest Privileged Assets Monthly
Dilution Rate for the rolling 12 month period ending with the calendar month
in which the last day of such Due Period occurs plus (ii) the product of the
Standard Deviation Factor and 3. The Standard Deviation Factor shall mean the
square root of the result of (a) the sum of the square of the differences
between the Privileged Assets Monthly Dilution Rate for each month occurring
in such 12 month period and the average Privileged Assets Monthly Dilution
Rate for such 12 month period divided by (b) 12.
"Privileged Assets Billed Amounts" shall mean amounts billed
under the Privileged Assets Program to Cardmembers enrolled in such Program.
"Privileged Assets Calculated Amount" shall mean, for a Due
Period, the product of (i) one minus the Yield Factor, (ii) the Estimated
Trust Privileged Assets Billed Amounts for the calendar month in which the
last day of the preceding Due Period occurs and (iii) the Privileged Assets
Applied Dilution Factor for such preceding Due Period.
"Privileged Assets Monthly Dilution Rate" for a calendar
month shall mean one minus the Privileged Assets Monthly Payment Rate for such
month; provided, that for this purpose the Privileged Assets Monthly Payment
Rate shall be capped at 100%.
12
"Privileged Assets Monthly Payment Rate" for a calendar
month shall be calculated by dividing the total remittances received under the
entire Privileged Assets Program during such calendar month by the total
Privileged Assets Billed Amounts for the prior month.
"Privileged Assets Program" shall mean the program offered
by an Account Originator in conjunction with one or more of its affiliated
insurance subsidiaries, currently called "Privileged Assets", pursuant to
which Cardmembers who enter into an annuity contract with the insurance
affiliate can choose a monthly contribution amount, which amount is billed to
their American Express(R) Card, American Express(R) Gold Card or Platinum
Card(R) Accounts. Payment of such billed contribution amounts is voluntary.
"Rapid Amortization Period" with respect to any Series,
shall have the meaning specified in the applicable Supplement.
"Rating Agency" shall mean, with respect to any Series, each
statistical rating agency or agencies selected by the Transferors to rate the
Investor Certificates of such Series.
"Receivable" shall mean any amount owing by the Obligor
under an Account (including Defaulted Accounts), including any Related Account
or Additional Account, from time to time (including, without limitation,
amounts owing for the payment of merchandise and services and Annual
Membership Fees) and the administrative fees and charges described on Schedule
3 hereto). In calculating the aggregate amount of Receivables on any day, the
amount of Receivables shall be reduced by the aggregate amount of credit
balances, and other adjustments stated in Section 3.08 hereof, in the Accounts
on such day. Any Receivables which the Transferor is unable to transfer as
provided in subsection 2.05(d) shall not be included in calculating the
aggregate amount of Receivables. For purposes of the computer file or
microfiche list to be delivered to the Trustee pursuant to Section 2.01 and
2.06, for purposes of Schedule 1 to this Agreement and Schedule 1 to each
Assignment of Receivables in Additional Accounts in the form of Exhibit B to
this Agreement and for purposes of calculating the amount of the Receivables
on any day, including without limitation, in the reports to be delivered
pursuant to Section 3.04(c), to calculate the amount of Receivables
transferred to the Trust and for purposes of any calculation using the term
"Receivables", the Privileged Assets Billed Amounts may be treated in the same
manner as Receivables and included in all such calculations and reports,
subject to the requirements provided in the definition of "Trust Principal
Component" and Section 2.07(c). Privileged Assets Billed Amounts shall not
constitute Receivables but shall be treated as aforesaid, and the Transferor
and Servicer representations and warranties shall not apply to the Privileged
Assets Billed Amounts. Receivables in a Defaulted Account will cease to be
included as Receivables at such time as they are sold as part of the
Servicer's collection efforts.
"Receivable Purchase Agreement" shall mean the receivable
purchase agreement, dated as of June 30, 1992, between RFC, as purchaser, and
TRS as seller as amended from time to time.
"Record Date" shall mean, unless otherwise specified with
respect to a Series in the applicable Supplement, with respect to any
Distribution Date, the last Business Day of the immediately preceding calendar
month.
13
"Recoveries" shall mean all amounts received with respect to
Receivables in Defaulted Accounts, net of expenses allocable thereto,
including the net proceeds of any sale of such Receivables.
"Related Account" shall have the meaning specified for such
term contained in the definition of the term "Account" herein.
"Relevant UCC State" shall mean all jurisdictions where UCC
filing is required to perfect and maintain the security interest of the
Trustee.
"Remittance Banks" shall mean the institutions holding
accounts into which TRS shall deposit payments received through the Payment
Service Centers from Cardmembers in respect of Accounts.
"Removal Date" shall mean the date on which the Receivables
in certain designated Removed Accounts will be reassigned by the Trustee to a
Transferor.
"Removal Notice Date" shall mean the tenth Business Day
prior to a Removal Date.
"Removed Accounts" shall have the meaning set forth in
Section 2.07.
"Removed PA Accounts" means the Accounts that are designated
for deletion and removal on the PA Removal Date pursuant to subsection 2.07(c)
"Repurchase Terms" shall mean, with respect to any Series
issued pursuant to an Exchange, the terms and conditions under which the
Transferors may repurchase such Series of Certificates pursuant to Section
12.02.
"Requirements of Law" for any Person shall mean the
certificate of incorporation or articles of association and by-laws or other
organizational or governing documents of such Person, and any law, treaty,
rule or regulation, or determination of an arbitrator or Governmental
Authority, in each case applicable to or binding upon such Person or to which
such Person is subject, whether Federal, state or local (including, without
limitation, usury laws, the Federal Truth in Lending Act and Regulation Z and
Regulation B of the Board of Governors of the Federal Reserve System).
"Responsible Officer" shall mean any officer of the Trustee
assigned by it to administer its corporate trust matters.
"Revolving Period" shall mean, with respect to each Series,
the period from and including the date of initial issuance of the Investor
Certificates of such Series to, but not including, the day on which an
Amortization Period or an Accumulation Period for such Series commences.
"RFC" shall mean American Express Receivables Financing
Corporation, a Delaware corporation, and its successors.
14
"Selection Date" shall mean, for each Account, the close of
business on the cycle billing date for such Account occurring in the monthly
period beginning on the close of business on March 1, 1992 and ending at the
close of business on March 31, 1992.
"Series" shall mean any Series of Investor Certificates,
each as designated in the applicable Supplement.
"Series Factor" shall mean, unless any Series is issued in
more than one class as stated in any related Supplement with respect to any
Series and any Due Period, a number carried out to eight decimals (and rounded
to seven decimals) representing the ratio of the applicable Invested Amount as
of the end of the last day of the preceding Due Period to the applicable
Initial Invested Amount.
"Servicer" shall mean initially TRS and thereafter any
Person appointed as successor as herein provided to service the Receivables.
"Servicer Default" shall have the meaning specified in
Section 10.01.
"Service Transfer" shall have the meaning specified in
Section 10.01.
"Servicing Fee Percentage" shall mean, with respect to any
Series, the percentage specified in the applicable Supplement.
"Servicing Officer" shall mean any officer of the Servicer
involved in, or responsible for, the administration and servicing of the
Receivables whose name appears on a list of servicing officers furnished to
the Trustee by the Servicer, as such list may from time to time be amended.
"Special Funding Account" shall have the meaning set forth
in Section 4.01.
"Standard & Poor's" shall mean Standard & Poor's, a division
of the ▇▇▇▇▇▇-▇▇▇▇ Company, or any successor thereto.
"Stated Series Termination Date" shall mean, with respect to
any Series, the date stated in the applicable Supplement as the termination
date for such Series.
"Successor Servicer" shall have the meaning specified in
Section 10.02.
"Supplement" shall mean, with respect to any Series, a
supplement to this Agreement complying with the terms of Section 6.09,
executed in conjunction with any issuance of any Series.
"Termination Notice" shall have, with respect to any Series,
the meaning specified in Section 10.01.
"Transferee's Certificate" shall have the meaning set forth
in Section 7.05.
"Transfer Agent and Registrar" shall have the meaning
specified in Section 6.03 and shall initially be the Trustee.
15
"Transferor Amount" shall mean, on any date of
determination, the Trust Principal Component at the end of the day immediately
prior to such date of determination, minus the Aggregate Invested Amount at
the end of such day and plus the principal amount on deposit in the Special
Funding Account and in any principal funding account at the end of such day.
"Transferor Interest" shall have the meaning specified in
Section 4.01(a).
"Transferor Percentage" shall mean, on any date of
determination, when used with respect to Principal Collections, Yield
Collections and Receivables in Defaulted Accounts or otherwise, one hundred
percent minus the sum for all Outstanding Series of the Invested Percentages
calculated on such date with respect to such categories of Receivables as
calculated by the Servicer.
"Transferor" shall mean either RFC or Centurion Bank, in
each case, as a transferor of Receivables.
"TRS" shall mean American Express Travel Related Services
Company, Inc., a New York corporation and its successors and assigns.
"Trust" shall mean the trust created by this Agreement, the
corpus of which shall consist of the Trust Property.
"Trust Average Monthly Payment Rate" for a Due Period means
Collections on Receivables, excluding Recoveries for such Due period, divided
by the aggregate amount of billed Receivables as of the beginning of such Due
Period.
"Trustee" shall mean the institution executing this
Agreement as trustee, or its successor in interest, or any successor trustee
appointed as herein provided.
"Trust Principal Component" shall mean, for any Due Period,
the product of the aggregate amount of Receivables at the end of the prior Due
Period and one minus the Yield Factor or, for any other date of determination,
the product of the aggregate amount of Receivables as of the date so specified
in this Agreement and one minus the Yield Factor; provided, however, that
there shall be subtracted from each such product the Privileged Assets
Calculated Amount for the prior Due Period for the purpose of calculating (A)
the Transferor Amount as a percentage of the Trust Principal Component
pursuant to Section 2.06(a)(1), (B) the Trust Principal Component pursuant to
Section 2.06(a)(2), (C) the Transferor Amount as a percentage of the Trust
Principal Component pursuant to Section 2.07(a) and 2.07(b)(iii), (D) the
Trust Principal Component and the Transferor Amount as a percentage of the
Trust Principal Component pursuant to Section 2.07(c), (E) the Transferor
Amount as a percentage of the Trust Principal Component pursuant to the fourth
sentence of Section 3.08(a), (F) the Transferor Amount as a percentage of the
Trust Principal Component pursuant to Section 4.01(f), (G) the Trust Principal
Component pursuant to Section 6.09(b), (H) the Transferor Amount as a
percentage of the Trust Principal Component pursuant to Section 9.01(d) and
(I) any amount for any other purpose with respect to a Series as specified in
the related Supplement.
"Trust Property" shall have the meaning specified in Section
2.01.
16
"UCC" shall mean the Uniform Commercial Code, as amended
from time to time, as in effect in any specified jurisdiction.
"Undistributed Principal Collections" shall have the meaning
specified in subsection 4.01(f).
"Undivided Interest" shall mean the undivided interest of
any Certificateholder in the Trust.
"Yield Collections" shall mean an amount equal to
Collections received with respect to each Account multiplied by the Yield
Factor.
"Yield Factor" shall mean, initially, 3.0% and thereafter
such amount as is determined pursuant to subsection 2.05(g).
Section 1.02 Definitional Provisions
(a) All terms defined in any Supplement or this Agreement
shall have the defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined therein. The
definitions of all terms defined herein shall include the singular as well as
the plural form of such terms and the masculine of such terms as well as the
feminine and neuter genders of such terms.
(b) As used herein and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
Section 1.01, and accounting terms partly defined in Section 1.01 to the
extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles on the date of determination. To the
extent that the definitions of accounting terms herein are inconsistent with
the meanings of such terms under generally accepted accounting principles, the
definitions contained herein shall control.
(c) The agreements and representations and warranties of TRS
in this Agreement in its capacity as Servicer, shall be deemed to be the
agreements, representations and warranties of TRS solely in such capacity for
so long as it acts in such capacity under this Agreement.
(d) The words "hereof," "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to any Supplement or
this Agreement as a whole and not to any particular provision of such
Supplement or this Agreement, as the case may be; Section, subsection,
Schedule and Exhibit references contained in this Agreement or any Supplement
are references to Sections, subsections, Schedules and Exhibits in or to this
Agreement or any Supplement unless otherwise specified; and the word
"including" means including without limitation.
[END OF ARTICLE I]
17
ARTICLE II
APPOINTMENT OF TRUSTEE;
CONVEYANCE OF RECEIVABLES
ISSUANCE OF CERTIFICATES
Section 2.01 Appointment of Trustee; Conveyance of Receivables.
(a) The Transferors appoint and authorize The Bank of New York to act as
Trustee as provided herein and to exercise such powers under this Agreement as
are delegated to the Trustee by the terms hereof together with all such powers
as are reasonably incidental thereto. The Trustee hereby accepts such
appointment and agrees to exercise such powers and perform such functions on
behalf of the Certificateholders from time to time as are specifically
delegated to the Trustee by the terms hereof.
(b) RFC does hereby transfer, assign, set-over, and
otherwise convey to the Trust for the benefit of the Certificateholders,
without recourse, all right, title and interest of RFC in and to the
Receivables, now existing and hereafter created, all monies due or to become
due with respect thereto (including Recoveries) on and after the Cut-Off Date,
all proceeds of such Receivables, and all right, title and interest of RFC in,
to and under the Receivable Purchase Agreement. Centurion Bank does hereby
transfer, assign, set-over, and otherwise convey to the Trust for the benefit
of the Certificateholders, without recourse, all right, title and interest of
Centurion Bank in and to the Receivables, now existing and hereafter created,
all monies due or to become due with respect thereto (including Recoveries) on
and after the Cut-Off Date and all proceeds of such Receivables. The property
described in the two immediately preceding sentences, together with all monies
as are from time to time deposited in the Collection Account, the Special
Funding Account and any other account or accounts maintained for the benefit
of the Certificateholders and all monies as are from time to time available
under any Enhancement for any Series for payment to Certificateholders shall
constitute the property of the Trust (the "Trust Property"). The foregoing
transfers, assignments, set-overs and conveyances do not constitute and are
not intended to result in a creation or an assumption by the Trust, the
Trustee or any Certificateholder of any obligation of the Servicer, either
Transferor or any other Person in connection with the Accounts, the
Receivables or under any agreement or instrument relating thereto including,
without limitation, any obligation to any Obligors, merchant service
establishments or insurers.
In connection with such transfer, each Transferor agrees to
record and file, at its own expense, financing statements (and continuation
statements with respect to such financing statements when applicable) with
respect to the Receivables now existing and hereafter created for the transfer
of accounts and general intangibles (both as defined in the UCC in effect in
the Relevant UCC State) meeting the requirements of applicable state law in
such manner and in such jurisdictions as are necessary to perfect the
transfers and assignments of the Receivables by such Transferor to the Trust,
and to deliver a file-stamped copy of such financing statements or other
evidence of such filings to the Trustee on or prior to the Closing Date.
In connection with such transfer, the Servicer agrees, on
behalf of the Transferors, at its own expense, to indicate clearly and
unambiguously in its computer files that the Receivables created in connection
with the Accounts (other than any Additional Account) have been transferred to
the Trust pursuant to this Agreement for the benefit of the Certificateholders.
18
On behalf of the Transferors, the Servicer further agrees to deliver to the
Trustee (a) a computer file or microfiche list containing a true and complete
list of all such Accounts, identified by account number and by Receivables
balance as of the applicable Cut-Off Date and (b) within twenty Business Days
of any request by the Trustee, a new computer file or microfiche list
containing a true and complete list of all Accounts identified as described in
the preceding clause (a). Such files or lists shall be marked as Schedule 1 to
this Agreement, delivered to the Trustee as confidential and proprietary, and
are hereby incorporated into and made a part of this Agreement. The Servicer
agrees, on behalf of the Transferors, at its own expense, by the end of the
Due Period in which any Related Accounts have been originated to indicate
clearly and unambiguously in its computer files that the Receivables created
in connection with the Related Accounts have been transferred to the Trust
pursuant to this Agreement for the benefit of the Certificateholders.
Each Transferor hereby grants to the Trustee a first
priority perfected security interest in all of such Transferor's right, title
and interest in and to the Receivables, now existing and hereafter created,
all monies due or to become due with respect thereto on and after the Cut-Off
Date applicable to the Receivables conveyed to the Trust by such Transferor
(including Recoveries), all proceeds of such Receivables, such funds as are
from time to time deposited in the Collection Account, the Special Funding
Account and any other account or accounts maintained for the benefit of
Certificateholders, and the benefits of any Enhancement for any Series for
payment to Certificateholders. This Agreement shall constitute a security
agreement under applicable law.
Pursuant to the request of the Transferors, the Trustee has
caused Certificates in authorized denominations evidencing the entire interest
in the Trust to be duly authenticated and delivered to or upon the order of
the Transferor pursuant to Section 6.02.
Section 2.02 Acceptance by Trustee. (a) The Trustee hereby
acknowledges its acceptance, to the extent validly transferred, assigned, set
over or otherwise conveyed to the Trust as provided in subsection 2.01(b)
hereof, on behalf of the Trust, of all right, title and interest previously
held by each Transferor in and to the Receivables, now existing and hereafter
created, all monies due or to become due with respect thereto on and after the
Cut-Off Date applicable to the Receivables conveyed to the Trust by such
Transferor (including Recoveries), all proceeds of such Receivables, such
funds as are from time to time deposited in the Collection Account, the
Special Funding Account, and any other account or accounts maintained for the
benefit of Certificateholders, and benefits of any Enhancement for any Series
and declares that it shall hold such right, title and interest, upon the trust
herein set forth, and subject to the terms hereof for the benefit of all
Certificateholders. The Trustee further acknowledges that, prior to or
simultaneously with the execution and delivery of this Agreement, the Servicer
delivered to the Trustee, on behalf of the Transferors, the computer files or
microfiche lists represented by the Servicer to be the computer files or
microfiche lists described in the fourth paragraph of Section 2.01.
(b) The Trustee hereby agrees not to disclose to any Person
(including any Certificateholder or Certificate Owner) any of the account
numbers or other information contained in the computer files or microfiche
lists delivered to the Trustee by the Servicer on behalf of the Transferors
pursuant to Sections 2.01 and 2.06, except as is required in connection with
the performance of its duties hereunder or in enforcing the rights of the
Certificateholders or
19
to a successor Servicer appointed pursuant to Sections 8.05 or 10.02 or a
successor Trustee appointed pursuant to Section 11.08. The Trustee agrees to
take such measures as shall be reasonably requested by the Transferors to
protect and maintain the security and confidentiality of such information,
and, in connection therewith, shall allow the Transferor or the Servicer on
behalf of the Transferor to inspect the Trustee's security and confidentiality
arrangements from time to time during normal business hours. The Trustee shall
provide the Transferors with written notice five Business Days prior to any
disclosure pursuant to this subsection 2.02(b).
(c) The Trustee shall have no power to create, assume or
incur indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement.
Section 2.03 Representations and Warranties. Except as otherwise
provided below, each Transferor hereby severally represents and warrants to
the Trustee, on behalf of the Trust, with respect to any Series of
Certificates, as of the date of any Supplement and the related Closing Date,
unless otherwise stated in such Supplement that:
(i) Organization and Good Standing. As to RFC, that RFC is a
corporation duly organized and validly existing in good standing
under the laws of the State of Delaware, and has full corporate
power, authority and legal right 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 this Agreement, any Supplement and the Receivable
Purchase Agreement and to execute and deliver to the Trustee the
Certificates pursuant hereto. As to Centurion Bank, that Centurion
Bank is a Utah-chartered industrial loan company, duly organized and
validly existing in good standing under the laws of the State of
Utah, and has full corporate power, authority and legal right 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 this Agreement and
any Supplement and to execute and deliver to the Trustee the
Certificates pursuant hereto.
(ii) Due Qualification. Such Transferor is duly qualified to
do business and is in good standing as a foreign corporation, and has
obtained all necessary licenses and approvals, in each jurisdiction
in which failure to so qualify or to obtain such licenses and
approvals would have a material adverse effect on the conduct of its
business or render any Receivable unenforceable; provided, however,
that no representation or warranty is made with respect to any
qualifications, licenses or approvals which the Trustee would have to
obtain to do business in any state in which the Trustee seeks to
enforce any Receivable.
(iii) Due Authorization. As to RFC, that the execution and
delivery of this Agreement, any Supplement and the Receivable
Purchase Agreement and the execution and delivery to the Trustee of
the Certificates and the consummation of the transactions provided
for in this Agreement, any Supplement and the Receivable Purchase
Agreement have been duly authorized by RFC by all necessary corporate
action on the part of RFC. As to Centurion Bank, that the execution
and delivery of this Agreement and any Supplement and the execution
and delivery to the Trustee of the Certificates and the consummation
of the transactions provided for in this Agreement and any Supplement
20
have been duly authorized by Centurion Bank by all necessary
corporate action on the part of Centurion Bank.
(iv) No Violation. As to RFC, that the execution and
delivery of this Agreement, any Supplement, the Receivable Purchase
Agreement and the Certificates, the performance of the transactions
contemplated by this Agreement, any Supplement and the Receivable
Purchase Agreement and the fulfillment of the terms hereof will not
conflict with, violate or result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or
lapse of time or both) a material default under, any Requirement of
Law applicable to RFC or any material indenture, contract, agreement,
mortgage, deed of trust, or other instrument to which RFC is a party
or by which it or any of its properties are bound. As to Centurion
Bank, the execution and delivery of this Agreement, any Supplement
and the Certificates, the performance of the transactions
contemplated by this Agreement and any Supplement and the fulfillment
of the terms hereof will not conflict with, violate or result in any
breach of any of the material terms and provisions of, or constitute
(with or without notice or lapse of time or both) a material default
under, any Requirement of Law applicable to Centurion Bank or any
material indenture, contract, agreement, mortgage, deed of trust, or
other instrument to which Centurion Bank is a party or by which it or
any of its properties are bound.
(v) No Proceedings. As to RFC, there are no proceedings or
investigations pending or, to the best knowledge of RFC, threatened
against RFC, before any court, regulatory body, administrative
agency, arbitrator or other tribunal or governmental instrumentality
(i) asserting the invalidity of this Agreement, any Supplement, the
Receivable Purchase Agreement or the Certificates, (ii) seeking to
prevent the issuance of the Certificates or the consummation of any
of the transactions contemplated by this Agreement, any Supplement,
the Receivable Purchase Agreement or the Certificates, (iii) seeking
any determination or ruling that, in the reasonable judgment of RFC,
would materially and adversely affect the performance by RFC of its
obligations under this Agreement, any Supplement or the Receivable
Purchase Agreement, (iv) seeking any determination or ruling that
would materially and adversely affect the validity or enforceability
of this Agreement, any Supplement, the Receivable Purchase Agreement
or the Certificates or (v) seeking to affect adversely the Federal or
State of New York income tax attributes of the Trust. There are no
proceedings or investigations pending or, to the best knowledge of
Centurion Bank, threatened against Centurion Bank, before any court,
regulatory body, administrative agency, arbitrator 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 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 Centurion Bank, would materially and
adversely affect the performance by Centurion Bank 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 Federal or
State of New York income tax attributes of the Trust.
21
(vi) Eligibility of Accounts. As of the Selection Date
applicable to each Account, such Account was an Eligible Account.
(vii) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any
Governmental Authority required to be obtained on or prior to the
date as of which this representation is being made in connection with
the execution and delivery of this Agreement, any Supplement, the
Receivable Purchase Agreement and the Certificates, the performance
of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof, have been obtained.
(viii) Amount of Receivables; Computer File. As of the June
30, 1992 Cut-Off Date, the amount of Receivables was $2,433,528,576.
The computer files or microfiche lists delivered pursuant to Section
2.01 hereof, at the time of their delivery, were complete and
accurately reflected the information regarding the Receivables under
the Accounts in all material respects.
The representations and warranties set forth in this Section
2.03 shall survive the transfer and assignment of the Receivables to the
Trust, and termination of the rights and obligations of the Servicer pursuant
to Section 10.01. Upon discovery by any of the Transferors, the Servicer or
the Trustee of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give prompt written notice
to the others.
Section 2.04 Representations and Warranties of the Transferors Relating to the
Agreement and any Supplement and the Receivables.
(a) Binding Obligation; Valid Transfer And Assignment. Each
Transferor hereby severally represents and warrants to the Trustee, on behalf
of the Trust, with respect to any Series of Certificates, as of the date of
any Supplement and the related Closing Date, unless otherwise stated in such
Supplement that:
(i) As to RFC, each of this Agreement, any Supplement and
the Receivable Purchase Agreement, constitutes a legal, valid and
binding obligation of RFC, enforceable against RFC, in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect affecting the enforcement of creditors' rights and except as
such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity). As to Centurion,
each of this Agreement and any Supplement to which Centurion Bank
shall be a party constitutes a legal, valid and binding obligation of
Centurion Bank, enforceable against Centurion Bank, in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect affecting the enforcement of creditors' rights and except as
such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(ii) This Agreement constitutes either (A) a valid transfer
and assignment to the Trust of all right, title and interest of such
Transferor in and to the Receivables now existing and hereafter
created, all monies due or to become due with respect thereto on and
after the Cut-Off Date applicable to the Receivables conveyed by such
Transferor to
22
the Trust, Recoveries, and all proceeds (as defined in the UCC as in
effect in the Relevant UCC State) of such Receivables, such funds as
are from time to time deposited in the Collection Account, Special
Funding Account and any other account or accounts maintained for the
benefit of Certificateholders and the benefits of any Enhancement,
and such Receivables and all proceeds thereof will be held by the
Trust free and clear of any Lien of any Person claiming through or
under such Transferor or any of its Affiliates except for (x) Liens
permitted under subsection 2.05(b), (y) the interest of such
Transferor as a holder of the Exchangeable Transferor Certificate and
(z) any right of the holder of the Exchangeable Transferor
Certificate to receive interest accruing on, and investment earnings
with respect to, the Collection Account or any other account or
accounts maintained for the benefit of Certificateholders as provided
in this Agreement and any Supplement or (B) a grant of a security
interest (as defined in the UCC as in effect in the Relevant UCC
State) in such property to the Trustee on behalf of the Trust, which
is enforceable with respect to existing Receivables (other than
Receivables in Additional Accounts) and the proceeds thereof to the
extent set forth in Section 9-306 of the UCC in effect in the
Relevant UCC State upon execution and delivery of this Agreement, and
which will be enforceable with respect to such Receivables thereafter
created, and the proceeds thereof to such extent, upon such creation.
If this Agreement constitutes the grant of a security interest to the
Trust in such property, upon the filing of the applicable financing
statements and in the case of the Receivables hereafter created and
proceeds thereof upon such creation, the Trust shall have a first
priority perfected security interest in such property to the extent
set forth in Section 9-306 of the UCC in effect in the Relevant UCC
State relating to such Receivables, except for Liens permitted under
subsection 2.05(b) hereunder. Neither such Transferor nor any Person
claiming through or under such Transferor shall have any claim to or
interest in the Collection Account or any other account or accounts
maintained for the benefit of Certificateholders, except for any
right of the Transferors to receive interest accruing on, and
investment earnings with respect to, any such account as provided in
this Agreement and any Supplement and, if this Agreement constitutes
the grant of a security interest in such property, except for the
interest of such Transferor in such property as a debtor for purposes
of the UCC as in effect in the Relevant UCC State. The Receivable
Purchase Agreement constitutes a transfer to RFC of all right, title
and interest of TRS in and to the Receivables purported to be sold
thereunder, whether then existing or thereafter created in the
applicable Accounts and the proceeds thereof.
(b) Eligibility of Receivables. Each Transferor hereby
severally represents and warrants to the Trustee, on behalf of the Trust as of
the Cut-Off Date applicable to the Receivables conveyed by such Transferor to
the Trust and on each Additional Account Cut-Off Date applicable to
Receivables to be conveyed by it to the Trust that (i) each such Receivable
then existing is an Eligible Receivable, (ii) all material information with
respect to the Accounts and Receivables provided to the Trustee by such
Transferor was true and correct in all material respects as of the Selection
Date or the related Additional Account Selection Date, (iii) each Receivable
then existing has been conveyed to the Trust free and clear of any Lien of any
Person claiming through or under such Transferor or any of its Affiliates
(other than Liens permitted under subsection 2.05(b)) and in compliance, in
all material respects, with all Requirements of Law applicable to such
Transferor, (iv) with respect to each such Receivable then existing, all
consents, licenses, approvals or authorizations of or registrations or
declarations with any
23
Governmental Authority required to be obtained, effected or given by such
Transferor, in connection with the conveyance of such Receivable to the Trust
have been duly obtained, effected or given and are in full force and effect,
(v) as of the Initial Closing Date, and, as of the applicable Additional
Account Cut-Off Date with respect to Additional Accounts, Schedule 1 to this
Agreement is and will be an accurate and complete listing of all the Accounts
in all material respects as of such Cut-Off Date or applicable Additional
Account Cut-Off Date, as the case may be, and the information contained
therein with respect to the identity of such Accounts and the Receivables
existing thereunder is and will be true and correct in all material respects
as of such applicable Cut-Off Date or Additional Account Cut-Off Date and (vi)
no selection procedure believed by such Transferor to be adverse to the
interests of the Investor Certificateholders have been used in selecting the
initial Accounts. On each day on which any new Receivable is created, such
Transferor shall be deemed to represent and warrant to the Trust that (A) each
Receivable created on such day is an Eligible Receivable, (B) each Receivable
created on such day has been conveyed to the Trust in compliance, in all
material respects, with all Requirements of Law applicable to such Transferor,
(C) with respect to each such Receivable, all consents, licenses, approvals or
authorizations of or registrations or declarations with any Governmental
Authority required to be obtained, effected or given by such Transferor, in
connection with the conveyance of such Receivable to the Trust have been duly
obtained, effected or given and are in full force and effect and (D) the
representations and warranties set forth in subsection 2.04(a) are true and
correct with respect to each Receivable created on such day as if made on such
day.
(c) Notice of Breach. The representations and warranties set
forth in this Section 2.04 shall survive the transfer and assignment of the
Receivables to the Trust and the termination of the rights and obligations of
the Servicer pursuant to Section 10.01. Upon discovery by either Transferor,
the Servicer or the Trustee of a breach of any of the representations and
warranties set forth in this Section 2.04, the party discovering such breach
shall give prompt written notice to the others.
(d) Transfer of Ineligible Receivables.
(i) Automatic Removal. In the event of a breach with respect
to a Receivable of any of the representations and warranties set
forth in subsection 2.04(b)(iii) or in the event that a Receivable is
not an Eligible Receivable as a result of the failure to satisfy the
conditions set forth in clause (iv) of the definition of an Eligible
Receivable, and either of the following two conditions is met:
(A) the Lien upon the subject Receivable (1) ranks prior to
the Lien created pursuant to this Agreement, (2) arises in favor of the United
States of America or any state or any agency or instrumentality thereof or
involves taxes or liens arising under Title IV of the Employee Retirement
Income Security Act of 1974, or (3) has been consented to by TRS or either
Transferor; or
(B) the Lien on the subject Receivable is not of the types
described in clause (A) above, and as a result of such breach or event such
Receivable becomes a Receivable in a Defaulted Account, or the related
Transferor's or the Trust's rights in, to or under such Receivable or its
proceeds are materially impaired or the proceeds of such Receivable are not
available for any reason to the Trust free and clear of any Lien except Liens
permitted pursuant to subsection 2.05(b);
24
then, upon the earlier to occur of the discovery of such breach or event by
such Transferor or the Servicer or receipt by the Transferors or the Servicer
of written notice of such breach or event given by the Trustee, each such
Receivable or, at the option of such Transferor, all such Receivables with
respect to the related Account shall be automatically removed from the Trust
on the terms and conditions set forth below in subsection 2.04(d)(iii).
(ii) Removal after Cure Period. In the event of a breach of
any of the representations and warranties set forth in subsection
2.04(b)(i) , (ii) , (iv) or (v) with respect to a Receivable (other
than in the event that a Receivable is not an Eligible Receivable as
a result of the failure to satisfy the conditions set forth in clause
(iv) of the definition of Eligible Receivable), and as a result of
such breach or event such Receivable becomes a Receivable which is
not an Eligible Receivable, the Account related to such Receivable
becomes a Defaulted Account or the Trust's rights in, to or under
such Receivable or its proceeds are materially impaired or the
proceeds of such Receivable are not available for any reason to the
Trust free and clear of any Lien except Liens permitted pursuant to
subsection 2.05(b), then, upon the expiration of 60 days or any
longer period agreed upon by the Trustee (not to exceed an additional
60 days) from the earlier to occur of the discovery of any such event
by the Transferors or the Servicer, or receipt by the Transferors or
the Servicer of written notice of any such event given by the
Trustee, each such Receivable or, at the option of the Transferors,
all such Receivables with respect to the related Account, shall be
removed from the Trust on the terms and conditions set forth in
subsection 2.04(d)(iii); provided, however, that no such removal
shall be required to be made if, on any day within such applicable
period, (A) such representations and warranties with respect to such
Receivable shall then be true and correct in all material respects as
if such Receivable had been created on such day, and (B) such
Receivable is an Eligible Receivable, the related Account is no
longer a Defaulted Account as the result of the breach of such
representation and warranty (including those implied by law), and the
Trust's rights in, to or under such Receivable or its proceeds are no
longer impaired as the result of the breach of such representation
and warranty, and the proceeds of such Receivable have become
available to the Trust free and clear of all Liens resulting in the
breach of such representation or warranty, as applicable.
(iii) Removal Terms and Conditions. When required or
permitted with respect to a Receivable (an "Ineligible Receivable")
by the provisions of subsection 2.04(d)(i) or subsection 2.04(d)(ii)
above, the Transferors shall remit to the Servicer, for deposit into
the Special Funding Account, the balance of such Receivable within
two Business Days of the date on which such Receivable became an
Ineligible Receivable. Any such deposit into the Special Funding
Account in connection with the reassignment of an Ineligible
Receivable shall be considered a payment in full of the Ineligible
Receivable and such deposit shall be applied in accordance with the
provisions of Article IV. Upon the reassignment to the Transferors of
an Ineligible Receivable, the Trust shall, without further action be
deemed to transfer, assign, set-over and otherwise convey to the
Transferors, without recourse, representation or warranty (including
those implied by law), all the right, title and interest of the Trust
in and to such Ineligible Receivable, all monies due or to become due
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
Transferors to effect the conveyance
25
of such Ineligible Receivable pursuant to this subsection and as
shall be specified in an Opinion of Counsel delivered to the Trustee
to the effect that such documents and instruments comply herewith. In
the event that on any day within 60 days, or any longer period agreed
upon by the Trustee (not to exceed an additional 60 days), of the
date on which the removal of Receivables which are not Eligible
Receivables from the Trust pursuant to this Section is effected, (A)
the applicable representations and warranties with respect to such
Receivable shall be true and correct in all material respects on such
date and (B) the Receivable is an Eligible Receivable, the Account
corresponding to the Receivable is no longer a Defaulted Account and
the Trust's rights in, to or under such Receivable or its proceeds
are no longer impaired as a result of the breach of such
representation or warranty and the proceeds of such Receivable are
available to the Trust free and clear of all Liens resulting in the
breach of such representation and warranty, or (C) either Transferor
has cured the breach of the representation or warranty, as
applicable, the Transferors may, but shall not be required to, direct
the Servicer to include such Receivable in the Trust. Upon
reinclusion of a Receivable in the Trust pursuant to this subsection,
the Transferors shall have been deemed to have made the applicable
representations and warranties in subsection 2.04(b) as of the date
of such addition, as if the Receivable had been created on such date,
and shall execute all such necessary documents and instruments of
transfer or assignment and take such other actions as shall be
necessary to effect and perfect the reconveyance of such Receivable
to the Trust. The obligation of the Transferors set forth in this
subsection shall constitute the sole remedy respecting any breach of
the representations and warranties set forth in the above-referenced
subsections with respect to such Receivable available to
Certificateholders or the Trustee on behalf of Certificateholders.
Notwithstanding any other provision of this subsection
2.04(d), a reassignment of an Ineligible Receivable shall not occur if the
Transferors fail to make the deposit required by this subsection 2.04(d) with
respect to such Ineligible Receivable.
(iv) No Impairment. For the purposes of subsections
2.04(d)(i) and 2.04(d)(ii) above, proceeds of a Receivable shall not
be deemed to be impaired hereunder solely because such proceeds are
held by the Servicer for more than the applicable period under
Section 9-306(3) of the UCC as in effect in the Relevant UCC State.
(e) Reassignment of Trust Portfolio. In the event of (1) a
breach of any of the representations or warranties set forth in subsection
2.03(i) or 2.04(a) or (2) a material amount of Receivables are not Eligible
Receivables, and in either case such event has a material adverse effect on
Investor Certificateholders, either the Trustee or the Holders of Investor
Certificates evidencing Undivided Interests aggregating more than 50% of the
Aggregate Invested Amount, by notice then given in writing to the Transferors
(and to the Trustee and the Servicer, if given by the Investor
Certificateholders), may direct the Transferors to accept reassignment of all
Receivables within 60 days of such notice, or within such longer period as may
be specified in such notice (not to exceed an additional 60 days) and the
Transferors shall be obligated to accept such reassignment on a Distribution
Date specified by the Transferors occurring within such applicable period on
the terms and conditions set forth below; provided, however, that no such
reassignment shall be required to be made if, on the Business Day prior to
such Distribution Date the representations and warranties contained in
subsection 2.03(i) and 2.04(a) shall then be true and correct in all material
respects, or there shall no longer be a material amount of Receivables
26
which are not Eligible Receivables, as the case may be. The Transferors shall
deposit on the Business Day prior to the Distribution Date (in immediately
available funds) an amount equal to the reassignment deposit amount for such
Receivables in the Collection Account for distribution to the Investor
Certificateholders pursuant to Section 12.03. The deposit amount for such
reassignment shall be equal to the Aggregate Invested Amount on the Record
Date related to the applicable Distribution Date on which such deposit is made
(less the aggregate principal amount on deposit in any principal funding
account) plus an amount equal to all accrued but unpaid interest on the
Certificates of all Series at the applicable certificate rates through the end
of the interest accrual periods of such Series. Payment of the reassignment
deposit amount and all other amounts in the Collection Account in respect of
the preceding Due Period shall be considered a prepayment in full of all such
Receivables. On the Distribution Date with respect to which such amount has
been deposited in full into the Collection Account, the Receivables and all
monies due or to become due with respect thereto and all proceeds relating
thereto shall be released to the Transferors and the Trustee shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, representation or warranty, as shall be reasonably requested by the
Transferors to vest in the Transferors or their designees or assignees, all
right, title and interest of the Trust in and to the Receivables, all monies
due or to become due with respect thereto and all proceeds thereof and as
shall be specified in an Opinion of Counsel delivered to the Trustee to the
effect that such documents and instruments comply herewith. If the Trustee or
the Investor Certificateholders give a notice directing the Transferors to
accept reassignment as provided herein, the obligation of the Transferors to
accept reassignment of the Receivables pursuant to this subsection 2.04(e)
shall constitute the sole remedy respecting a breach of the representations
and warranties contained in subsection 2.03(i) or 2.04(a) or there being a
material amount of Receivables which are not Eligible Receivables available to
the Investor Certificateholders or the Trustee on behalf of the Investor
Certificateholders.
(f) Nothing contained in this Section 2.04 shall create an
obligation on the part of the Trustee to verify the accuracy or continued
accuracy of the representations or warranties contained in this Section 2.04.
The Trustee shall have no obligation to give any notice pursuant to this
Section 2.04 unless it has actual knowledge of facts which would permit the
giving of such notice.
Section 2.05 Covenants of the Transeferor. Each Transferor hereby
severally covenants that:
(a) Receivables Not to be Evidenced by Promissory Notes or
Chattel Paper. Such Transferor will take no action to cause any Receivable to
be evidenced by any instrument (as defined in the UCC as in effect in the
Relevant UCC State). Each Receivable shall be payable pursuant to a contract
which does not create a Lien on any goods purchased thereunder.
(b) Security Interests. Except for the conveyances
hereunder, such 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; such Transferor will notify the Trustee of the existence of any Lien
on any Receivable transferred by such Transferor immediately upon discovery
thereof; and such Transferor will defend the right, title and interest of the
Trust in, to and under the Receivables, whether now existing or hereafter
created, against all claims of third parties claiming through or under such
Transferor; provided, however, that nothing in this subsection 2.05(b) shall
prevent or
27
be deemed to prohibit TRS or either Transferor from suffering to exist upon
any of the Receivables any Liens for municipal or other local taxes and other
governmental charges if such taxes or governmental charges shall not at the
time be due and payable or if TRS or such 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;
provided, further, that nothing in this subsection shall prohibit the
Transferors from participating an interest in the Exchangeable Transferor
Certificate pursuant to subsection 6.03(b) hereof.
(c) Account Agreements and Guidelines. Such Transferor shall
cause the Account Originators to comply with and perform its obligations under
the applicable Account Agreements relating to the Accounts and the Account
Guidelines except insofar as any failure so to comply or perform would not
materially and adversely affect the rights of the Trust or the Investor
Certificateholders hereunder or under the Certificates. Subject to compliance
with all Requirements of Law the failure to comply with which would have a
material adverse effect on the Investor Certificateholders, an Account
Originator may change the terms and provisions of its Account Agreements or
its Account Guidelines in any respect (including, without limitation, the
calculation of the amount, or the timing, of Charge-Offs) as follows: (a) if
such Account Originator owns a comparable segment of accounts then such change
shall be made applicable to such comparable segment of the accounts owned and
serviced by it that have characteristics the same as, or substantially similar
to, the Accounts that are the subject of such change, and (b) if such Account
Originator does not own such a comparable segment, then it will not make any
such change with the intent to materially benefit itself, or any Transferor
over the Investor Certificateholders.
(d) Account Allocations. In the event that such Transferor
is unable for any reason to transfer Receivables to the Trust in accordance
with the provisions of this Agreement (including, without limitation, by
reason of the application of the provisions of Section 9.02 or an order of any
court of competent jurisdiction that such Transferor not transfer any
additional Receivables to the Trust) then, in any such event, (A) such
Transferor agrees (except as prohibited by any such order) to allocate and pay
to the Trust, after the date of such inability, all Principal Collections, and
all amounts which would have constituted Principal Collections but for such
Transferor's inability to transfer such Receivables (up to an aggregate amount
equal to the amount of Trust Principal Component in the Trust on such date);
(B) such Transferor agrees to have such amounts applied as Collections in
accordance with Article IV, and (C) for only so long as the allocation and
application of all Collections and all amounts which would have constituted
Collections are made in accordance with clauses (A) and (B) above, Principal
Collections and all amounts which would have constituted Principal Collections
but for such Transferor's inability to transfer Receivables to the Trust which
are charged off as uncollectible in accordance with this Agreement shall
continue to be allocated in accordance with the related Supplement, and all
amounts which would have constituted Principal Collections but for such
Transferor's inability to transfer Receivables to the Trust shall be deemed to
be Principal Collections for the purpose of calculating the applicable
Invested Percentage thereunder. If such Transferor is unable pursuant to any
Requirement of Law to allocate Collections as described above, such Transferor
agrees that it shall, in any such event, allocate, after the date that it
becomes unable to do so, payments on each Account with respect to the balance
of such Account first to the oldest receivable in such Account and to have
such payments applied as Collections in accordance with Article IV.
28
(e) Delivery of Collections. In the event that such
Transferor receives Collections, such Transferor agrees to pay to the Servicer
all payments received by it with respect to Collections on the Receivables as
soon as practicable after receipt thereof by it, but in no event later than
two Business Days after the receipt by it thereof.
(f) Notice of Liens. Such Transferor shall notify the
Trustee promptly after becoming aware of any Lien on any Receivable other than
the conveyances hereunder.
(g) Change in Yield Factor. Provided that no Pay Out Event
shall have occurred and be continuing, without notice to or the consent of
Certificateholders of any Series, the Transferors may, upon ten Business Days
prior written notice to the Servicer and the Trustee, require that the Yield
Factor be changed from and after the close of business on the date set forth
in such notice as of the effective date of such change. The Transferors may
not increase the Yield Factor above 5.0%. Any such change shall be subject to
the satisfaction of the following conditions:
(i) Such change in the Yield Factor shall not, in the
reasonable belief of the Transferors cause a Pay Out Event to occur
or an event which, with notice or the lapse of time or both would
constitute a Pay Out Event.
(ii) Such change in the Yield Factor shall not cause the
Yield Factor to be reduced below the initial Yield Factor.
(iii) The Rating Agencies shall have received ten Business
Days' notice of such proposed change and the Transferors shall have
received written confirmation that such proposed change shall not
cause the downgrade or withdrawal of any rating assigned to any
outstanding Series by Moody's (if Moody's shall then be a Rating
Agency).
(iv) Each Transferor shall deliver to the Trustee an
Officer's Certificate confirming the items set forth in paragraphs
(i) through (iii) above and the Trustee may conclusively rely on such
Officer's Certificates, shall have no duty to make inquiries with
regard to the matters set forth therein and shall incur no liability
in so relying.
In the event that the Servicer is not required to make daily deposits
of Collections in the Collection Account at the date of such change,
the Transferors may specify either the first day of the current Due
Period or the first day of the next succeeding Due Period as the
effective date of such change. If the Servicer is then required to
make daily deposits of Collections in the Collection Account at the
time of such change, the Transferors may specify that the date upon
which all of the conditions specified in this subsection 2.05(g) have
been complied with is the effective date of this change.
Section 2.06 Addition of Accounts.
(a) If, (1) as of the end of any two consecutive Due
Periods, the Transferor Amount as a percentage of the Trust Principal
Component is less than the Minimum Transferor Percentage, the Transferors
shall designate additional Eligible Accounts (the "Additional Accounts") to be
included as Accounts in a sufficient amount such that the Transferor Amount as
a percentage of the Trust Principal Component after giving effect to such
addition at least equals
29
the Minimum Transferor Percentage, or (2) as of the end of any Due Period, the
Trust Principal Component is less than the Minimum Trust Principal Component,
then the Transferor shall designate Additional Accounts to be included as
Accounts in a sufficient amount such that the Trust Principal Component will
be equal to or greater than the Minimum Trust Principal Component. Receivables
from such Additional Accounts shall be transferred to the Trust, in the case
of subclause (i), on or before 15 days following the Determination Date
related to the second of such Due Periods and, in the case of subclause (2),
on or before 15 days following such Determination Date (the "Additional
Account Closing Date").
(b) In addition to its obligation under subsection 2.06(a),
the Transferors may, but shall not be obligated to, designate from time to
time Additional Accounts to be included as Accounts.
(c) The Transferors agree that any such transfers of
Receivables from Additional Accounts under subsection 2.06(a) or (b) shall
satisfy the following conditions:
(i) On or before the tenth Business Day prior to the
Additional Account Closing Date, the Transferors shall give the
Trustee and the Servicer written notice that such Additional Accounts
will be included and specifying the approximate aggregate amount of
the Receivables to be transferred;
(ii) On or prior to the Additional Account Closing Date, the
Transferors shall have delivered to the Trustee a written assignment
(and the Trustee shall have accepted such assignment on behalf of the
Trust for the benefit of the Investor Certificateholders and any
Enhancement Provider) in substantially the form of Exhibit B (the
"Assignment") and shall have clearly indicated in their respective
computer files that the Receivables created in connection with the
Additional Accounts have been transferred to the Trust and the
Servicer shall have delivered to the Trustee a computer file or
microfiche list represented by the Servicer to contain a true and
complete list of all Additional Accounts identified by account number
and by Receivable balance in such Additional Accounts as of the
Additional Account Cut-Off Date, which computer file or microfiche
list shall be as of the date of such Assignment incorporated into and
made a part of such Assignment and this Agreement;
(iii) The Transferors shall severally represent and warrant
that (x) each Additional Account was, as of the date of its selection
(the "Additional Account Selection Date"), an Eligible Account, (y)
no selection procedures believed by the Transferors to be materially
adverse to the interests of any Series of Investor Certificates or
any Enhancement Provider were utilized in selecting the Additional
Accounts from the available Eligible Accounts in each Transferor's
portfolio; and (z) as of the Additional Account Closing Date, neither
Transferor is insolvent or will be made insolvent by the transfer of
the Receivables of such Additional Accounts;
(iv) The Transferors shall represent and warrant, that, as
of the Additional Account Closing Date, the Assignment constitutes
either (x) a valid transfer and assignment to the Trust of all right,
title and interest of the Transferors in and to the Receivables then
existing and thereafter created in the Additional Accounts, all
monies due or to become due with respect thereto on and after the
Additional Account Cut-Off
30
Date, Recoveries and all proceeds of such Receivables to the extent
set forth in Section 9-306 of the UCC as in effect in the Relevant
UCC State, and such Receivables and all proceeds thereof will be
conveyed to the Trust free and clear of any Lien of any Person
claiming through or under either Transferor or any of its Affiliates,
except for (i) Liens permitted under subsection 2.05(b) hereunder,
(ii) the interest of the holder of the Exchangeable Transferor
Certificate and (iii) any right of the holder of the Exchangeable
Transferor Certificate to receive interest accruing on, and
investment earnings with respect to, the Collection Account and any
other account or accounts maintained for the benefit of
Certificateholders as provided in this Agreement and any Supplement
or (y) a grant of a security interest (as defined in the UCC as in
effect in the Relevant UCC State) in such property to the Trustee on
behalf of the Trust, which is enforceable with respect to then
existing Receivables of the Additional Accounts, and the proceeds
thereof to the extent set forth in Section 9-306 of the UCC as in
effect in the Relevant UCC State upon the conveyance of such
Receivables to the Trust, and which will be enforceable with respect
to the Receivables thereafter created in respect of Additional
Accounts, and the proceeds (to the extent set forth in Section 9-306
of the UCC as in effect in the Relevant UCC State) thereof upon such
creation; and (z) if the Assignment constitutes the grant of a
security interest to the Trust in such property, upon the filing of
financing statements as described in Section 2.01 with respect to
such Additional Accounts and in the case of such Receivables of
Additional Accounts thereafter created and the proceeds thereof to
the extent set forth in Section 9-306 of the UCC in effect in the
Relevant UCC State, upon such creation, the Trust shall have a first
priority perfected security interest in such property, except for
Liens permitted under subsection 2.05(b) hereunder;
(v) Each Transferor shall deliver to the Trustee (with a
copy to the Rating Agencies) an Officer's Certificate confirming the
items set forth in paragraphs (ii), (iii) and (iv) above and (vii)
below and the Trustee may conclusively rely on such Officer's
Certificate, shall have no duty to make inquiries with regard to the
matters set forth therein and shall incur no liability in so relying;
(vi) The Transferors shall deliver to the Trustee and each
Rating Agency an Opinion of Counsel with respect to the Receivables
in the Additional Accounts substantially in the form of Part One of
Exhibit G; and
(vii) The Rating Agencies shall have received ten (10)
Business Days' notice of such proposed addition of Additional
Accounts; in the event that Additional Accounts are being added
pursuant to subsection 2.06(b), the Transferors shall have received
written confirmation from Moody's (if Moody's shall then be a Rating
Agency) that such addition would not result in a downgrade or
withdrawal of its then current rating of any outstanding Series of
Investor Certificates; and, in the event that the number of
Additional Accounts designated with respect to any three consecutive
Due Periods would exceed 15% of the number of Accounts as of the
first day of the calendar year during which such Due Periods commence
or the number of Additional Accounts designated during any such
calendar year would exceed 20% of the number of Accounts as of the
first day of such calendar year, the Transferors shall have received
written confirmation from Standard & Poor's, (if Standard & Poor's
shall then be a Rating Agency) that such addition would not result in
a downgrade or withdrawal of its then current rating of any
outstanding Series of Investor Certificates.
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Section 2.07 Removal of Accounts.
(a) Subject to the conditions set forth below, on each
Determination Date on which the Transferor Amount as a percentage of the Trust
Principal Component exceeds 20% at the end of the related Due Period, the
Transferors may, but shall not be obligated to, designate, from time to time,
Accounts for deletion and removal ("Removed Accounts") from the Accounts;
provided, however, that the Transferors shall not make more than one such
designation in any Due Period. On or before the tenth Business Day (the
"Removal Notice Date") prior to the date on which the designated Removed
Accounts will be reassigned by the Trustee to the Transferors (the "Removal
Date"), the Transferors shall give the Trustee and the Servicer written notice
that the Receivables from such Removed Accounts are to be reassigned to the
Transferors.
(b) The Transferors shall be permitted to designate and
require reassignment to them of Receivables from Removed Accounts only upon
satisfaction of the following conditions:
(i) On or prior to the Removal Date, the Transferors shall
have delivered to the Trustee for execution a written instrument of
reassignment in substantially the form of Exhibit C (the
"Reassignment") and a computer file or microfiche list containing a
true and complete list of all Removed Accounts identified by account
number and by the aggregate balance of the Receivables in such
Removed Accounts as of the Removal Notice Date, which computer file
or microfiche list shall as of the Removal Date modify and amend and
be made a part of this Agreement;
(ii) The Transferors shall severally represent and warrant
that no selection procedures believed by the Transferors to be
materially adverse to the interests of any outstanding Series of
Investor Certificates or any Enhancement Provider were utilized in
selecting the Removed Accounts to be removed from the Trust;
(iii) The removal of any Receivables of any Removed Accounts
on any Removal Date shall not, (a) in the reasonable belief of the
Transferors, cause a Pay Out Event to occur or an event, which with
notice or lapse of time or both would constitute a Pay Out Event, to
occur and (b) cause the Transferor Amount as a percentage of the
Trust Principal Component to be less than the Minimum Transferor
Percentage on such Removal Date;
(iv) The Rating Agencies shall have received ten Business
Days' notice of such proposed removal of Accounts and the Transferors
shall have received written notice from the Rating Agencies that such
removal would not result in a downgrade or withdrawal of the then
current rating of any outstanding Series of the Investor
Certificates; and
(v) Each Transferor shall have delivered to the Trustee and
the Rating Agencies an Officer's Certificate confirming the items set
forth in (i) through (iv) above. The Trustee may conclusively rely on
such Officer's Certificates, shall have no duty to make inquiries
with regard to the matters set forth therein and shall incur no
liability in so relying.
32
Upon satisfaction of the above conditions, the Trustee shall
execute and deliver the Reassignment to the Transferors, and the Receivables
from the Removed Accounts shall no longer constitute a part of the Trust.
(c) The Transferors shall be required to designate Accounts
for deletion and removal from the Accounts and to require the Trustee to
reassign the designated Accounts to the Transferor on a Determination Date
(the "PA Removal Date") no later than 120 days after the first Determination
Date in which:
(i) Estimated Trust Privileged Assets Billed Amounts for the
month in which the last day of the second preceding Due Period occurs
exceed 1% of Trust Principal Component for the Due Period immediately
preceding such Determination Date, unless the Transferor Amount as a
percentage of the Trust Principal Component for such immediately
preceding Due Period equals or exceeds 17%; or
(ii) The average of the Privileged Assets Monthly Payment
Rates for the six month period ending on the last day of the second
preceding Due Period does not equal at least 110% of the Trust
Average Monthly Payment Rate for the Due Period immediately preceding
such Determination Date, unless the Transferor Amount as a percentage
of the Trust Principal Component for such immediately preceding Due
Period equals or exceeds 17%.
The Accounts that shall be designated for deletion and
removal pursuant to this Subsection 2.07(c) (the "Removed PA Accounts") shall
consist of all Accounts that are enrolled in the Privileged Assets Program as
of a date 60 days or less prior to the PA Removal Date; provided, that the
Transferors shall not be required to designate for removal more Accounts than
is necessary to reduce the Estimated Trust Privileged Assets Billed Amounts
determined under Section 2.07(c)(i) to 0.50% of the Trust Principal Component.
Upon satisfaction of the requirements of subsection
2.07(b)(i) with respect to the PA Removed Accounts and the delivery by the
Transferors to the Trustee and the Rating Agencies of an Officer's Certificate
confirming such item, the Trustee shall execute and deliver the Reassignment
to the Transferors, and the Receivables from the Removed PA Accounts shall no
longer constitute a part of the Trust. The Trustee may conclusively rely on
such Officer's Certificate, shall have no duty to make inquiries with regard
to the matters set forth therein and shall incur no liability in so relying.
[END OF ARTICLE II]
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ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.01 Acceptance of Appointment and Other Matters Relating to
the Servicer.
(a) TRS has agreed to act, and has acted, as the Servicer
under the Original Pooling Agreement, and TRS hereby agrees to act as the
Servicer under this Agreement. Investor Certificateholders by their acceptance
of the Investor Certificates shall be deemed to consent to TRS acting as
Servicer.
(b) The Servicer shall service and administer the
Receivables and shall collect payments due under the Receivables in accordance
with its customary and usual servicing procedures for servicing consumer
charge card receivables comparable to the Receivables and in accordance with
the applicable Account Guidelines and shall have full power and authority,
acting alone or through any party properly designated by it hereunder, to do
any and all things in connection with such servicing and administration which
it may deem necessary or desirable. Without limiting the generality of the
foregoing and subject to Section 10.01, the Servicer is hereby authorized and
empowered (i) to make withdrawals and payments and to instruct the Trustee to
make withdrawals and payments from the Collection Account, the Special Funding
Account or any other account or accounts maintained for the benefit of the
Certificateholders as set forth in this Agreement and any Supplement, (ii)
unless such power and authority is revoked by the Trustee on account of the
occurrence of a Servicer Default pursuant to Section 10.01 of the Agreement to
instruct the Trustee to take any action permitted or required under any
Enhancement at such time as set forth in this Agreement and any Supplement
(iii) to execute and deliver, on behalf of the Trust for the benefit of the
Certificateholders, any and all instruments of satisfaction or cancellation,
or of partial or full release or discharge, and all other comparable
instruments, with respect to the Receivables and, after the delinquency of any
Receivable and to the extent permitted under and in compliance with applicable
law and regulations, to commence enforcement proceedings with respect to such
Receivables, (iv) to make any filings, reports, notices of applications, or
registrations with, and to seek any consents or authorizations from, the
Securities and Exchange Commission and any state securities laws authority on
behalf of the Trust as may be necessary or advisable to comply with any
Federal or state securities laws or reporting requirements and (v) to delegate
its servicer, collection, enforcement and administrative duties hereunder with
respect to the Accounts and the Receivables to FDC or other Person who agrees
to conduct such duties in accordance with the Account Guidelines; provided,
however, that the Servicer shall notify each Rating Agency in writing of any
significant delegation of its duties to a Person other than FDC and which is
not in the ordinary course of the Servicer's business. No such delegation will
relieve the Servicer of its liability and responsibility with respect to such
duties. The Trustee shall promptly follow the written instructions of the
Servicer to withdraw funds from the Collection Account, the Special Funding
Account and any other account or accounts maintained for the benefit of
Certificateholders and with regard to any Enhancement. The Trustee shall
furnish the Servicer with any powers of attorney and other documents necessary
or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder and the Trustee shall not be held responsible
for any act or omission by the Servicer in its use of such powers of attorney.
34
(c) In the event that a Transferor is unable for any reason
to transfer Receivables to the Trust in accordance with the provisions of this
Agreement (including, without limitation, by reason of the application of the
provisions of Section 9.02 or the order of any court of competent jurisdiction
that such Transferor not transfer any additional Receivables to the Trust)
then, in any such event, (A) the Servicer agrees to allocate, after such date,
all Principal Collections, and all amounts which would have constituted
Principal Collections but for such Transferor's inability to transfer such
Receivables (up to an aggregate amount equal to the Trust Principal Component
in the Trust as of such date) in accordance with subsection 2.05(d) and to
apply such amounts as Collections in accordance with Article IV and (B) for
only so long as all Collections and all amounts which would have constituted
Collections are allocated and applied in accordance with clause (A) above,
Principal Collections and all amounts which would have constituted Principal
Collections but for such Transferor's inability to transfer Receivables to the
Trust which are charged off as uncollectible in accordance with this Agreement
shall continue to be allocated in accordance with Article IV and all amounts
which would have constituted Principal Collections but for such Transferor's
inability to transfer Receivables to the Trust shall be deemed to be Principal
Collections for the purpose of calculating the applicable Invested Percentage
thereunder; provided, that if the Servicer is unable pursuant to any
Requirement of Law to allocate payments on the Accounts as described above,
the Servicer agrees that it shall, in any such event, allocate, after the date
that the Transferor becomes unable to do so, payments on the Accounts with
respect to the receivables in such Accounts first to the oldest receivables in
such Accounts.
(d) The Servicer shall not be obligated to use separate
servicing procedures, offices, employees or accounts for servicing the
Receivables from the procedures, offices, employees and accounts used by the
Servicer in connection with servicing other consumer charge card receivables.
(e) The Servicer shall maintain fidelity bond coverage
insuring against losses through wrongdoing of its officers and employees who
are involved in the servicing of Receivables covering such actions with such
insurers and in such amounts as the Servicer believes to be reasonable from
time to time.
(f) The Servicer shall apply payments received by the
Servicer in respect of Accounts to Receivables and to Privileged Assets Billed
Amounts in accordance with the applicable guidelines provided in the
authorization agreement pursuant to which Cardmembers enroll in the Privileged
Assets Program or as otherwise determined by the Servicer pursuant to a
Cardmember request in accordance with the Servicer's practices for the
Privileged Assets Program; provided, that in no event shall payments be
applied as annuity contributions under the Privileged Assets Program in
priority to past due card charges.
Section 3.02 Servicing Compensation As compensation for its servicing
activities hereunder and reimbursement for its expenses as set forth in the
immediately following paragraph, the Servicer shall be entitled to receive a
monthly servicing fee in respect of any Due Period (or portion thereof) prior
to the termination of the Trust pursuant to Section 12.01 (the "Monthly
Servicing Fee"), payable in arrears on each Distribution Date in an amount
equal to the sum of, with respect to all Series then outstanding, one-twelfth
of the product of the applicable Servicing Fee Percentages and the sum of an
allocable portion of the Transferor Amount and the Invested Amount of each
Series each as of the last day of the second preceding Due Period. The
35
share of the Monthly Servicing Fee allocable to each Series of Investor
Certificateholders with respect to any Due Period (or portion thereof) shall
be equal to one-twelfth of the product of (A) the Servicing Fee Percentage for
such Series and (B) the Invested Amount of such Series (after subtracting from
the Invested Amount the aggregate amount of any deposits previously made into
any principal funding account) on the last day of the second preceding Due
Period (or, in the case of the first Distribution Date, the Initial Invested
Amount) with respect to any such Series, the "Investor Monthly Servicing Fee")
and shall be paid to the Servicer pursuant to the applicable Supplement. The
remainder of the Monthly Servicing Fee shall be paid by the Transferor and in
no event shall the Trust, the Trustee or the Investor Certificateholders be
liable for the share of the Monthly Servicing Fee to be paid by the
Transferors. In the case of the first Due Period, the Monthly Servicing Fee
and the Investor Monthly Servicing Fee shall accrue from the initial Cut-Off
Date.
The Servicer's expenses include the amounts due to the
Trustee pursuant to Section 11.05 and the reasonable fees and disbursements of
independent accountants and all other expenses incurred by the Servicer in
connection with its activities hereunder, and include, without limitation, all
other fees and expenses of the Trust provided for in Section 8.04 hereof;
provided, that the Servicer shall not be liable for any liabilities, costs or
expenses of the Trust, the Investor Certificateholders or the Certificate
owners arising under any tax law, including without limitation any Federal,
state or local income or franchise taxes or any other tax imposed on or
measured by income (or any interest or penalties with respect thereto or
arising from a failure to comply therewith), except to the extent incurred as
a result of the Servicer's violation of the provisions of this Agreement. The
Servicer shall be required to pay such expenses for its own account and shall
not be entitled to any payment therefor other than the Monthly Servicing Fee.
Section 3.03 Representations, Warrants and Covenants of the Servicer.
TRS, as initial Servicer, hereby makes, and any successor Servicer by its
appointment hereunder shall make, the following representations, warranties
and covenants with respect to any Series of Certificates, as of the date of
the related Supplement and its Closing Date unless otherwise stated in such
Supplement, on which the Trustee has relied in accepting the Receivables and
the other property conveyed pursuant to Section 2.01 in trust and in
authenticating the Certificates:
(a) Organization and Good Standing. The Servicer is a
corporation duly organized, validly existing and in good standing under the
laws of the State of New York, and has full corporate power, authority and
legal right 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 this Agreement and any Supplement.
(b) Due Qualification. The Servicer is duly qualified to do
business and is in good standing (or is exempt from such requirements) as a
foreign corporation in any state where such qualification is necessary in
order to service the Receivables as required by this Agreement and any
Supplement and has obtained all necessary licenses and approvals as required
under Federal and state law, and if the Servicer shall be required by any
Requirement of Law to so qualify or register or obtain such license or
approval, then it shall do so except where the failure to obtain such license
or approval does not materially affect the Servicer's ability to perform its
obligations hereunder or the enforceability of any Receivable.
36
(c) Due Authorization. The execution, delivery, and
performance of this Agreement and any Supplement, and the consummation of the
transactions provided in this Agreement and any Supplement have been duly
authorized by the Servicer by all necessary corporate action on the part of
the Servicer.
(d) Binding Obligation. This Agreement and any Supplement
constitute a legal, valid and binding obligation of the Servicer, enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereinafter in effect,
affecting the enforcement of creditors' rights in general and as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity).
(e) No Violation. The execution and delivery of this
Agreement and any Supplement by the Servicer, and the performance of the
transactions contemplated by this Agreement and any Supplement and the
fulfillment of the terms hereof applicable to the Servicer, will not conflict
with, violate, result in any breach of any of the material terms and
provisions of, or constitute (with or without notice or lapse of time or both)
a material default under, any Requirement of Law applicable to the Servicer or
any material indenture contract, agreement, mortgage, deed of trust or other
instrument to which the Servicer is a party or by which it is bound.
(f) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of the Servicer, threatened
against the Servicer before any court, regulatory body, administrative agency
or other tribunal or governmental instrumentality seeking to prevent the
issuance of the Certificates or the consummation of any of the transactions
contemplated by this Agreement or any Supplement, seeking any determination or
ruling that, in the reasonable judgment of the Servicer, would materially and
adversely affect the performance by the Servicer of its obligations under this
Agreement or any Supplement, or seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this
Agreement or any Supplement.
(g) Compliance with Requirements of Law. The Servicer shall
duly satisfy its obligations in all material respects on its part to be
fulfilled under or in connection with each Receivable and the corresponding
Account, will maintain in effect all material qualifications required under
Requirements of Law in order to service properly each Receivable and the
corresponding Account and will comply in all material respects with all other
Requirements of Law in connection with servicing each Receivable and the
related Account the failure to comply with which would have a material adverse
effect on the Certificateholders.
(h) No Rescission or Cancellation. Except in connection with
an Adjustment Payment pursuant to Section 3.08, the Servicer shall not permit
any rescission or cancellation of any Receivable except as ordered by a court
of competent jurisdiction or other Governmental Authority.
(i) Protection of Certificateholders' Rights. The Servicer
shall take no action which, nor omit to take any action the omission of which,
would impair the rights of Certificateholders in any Receivable or the rights
of any Enhancement Provider, nor shall it
37
reschedule, revise, waive or defer payments due on any Receivable except in
accordance with the applicable Account Guidelines.
(j) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any Governmental
Authority required in connection with the execution and delivery by the
Servicer of this Agreement, the performance by the Servicer of the
transactions contemplated by this Agreement and the fulfillment by the
Servicer of the terms hereof, have been obtained, except such as are required
by state securities or "Blue Sky" laws in connection with the distribution of
any Series.
(k) Receivables Not to be Evidenced by Promissory Notes or
Chattel Paper. The Servicer will take no action to cause any Receivable to be
evidenced by any instrument (as defined in the UCC as in effect in the
Relevant UCC State). Each Receivable shall be payable pursuant to a contract
which does not create a Lien on any merchandise purchased thereunder.
In the event of a breach of any of the representations and
warranties set forth in subsection 3.03(g), (h), (i) or (j) with respect to a
Receivable, and such breach has a material adverse effect on the
Certificateholders' Interest in such Receivable then, upon the expiration of
60 days or any longer period agreed upon by the Trustee (not to exceed an
additional 60 days) from the earlier to occur of the discovery of any such
event by the Servicer, or receipt by the Servicer of written notice of any
such event given by the Trustee, each such Receivable or, at the option of the
Transferors, all such Receivables with respect to the related Account, shall
be assigned and transferred to the Servicer upon the deposit on the Business
Day preceding the Distribution Date related to the Due Period in which such
assignment obligation arose by the Servicer in the Collection Account of an
amount equal to the balance of any such Receivable provided, however, that if
the Servicer is then required pursuant to subsection 4.01(g) to deposit funds
into the Collection Account more frequently than monthly, the Servicer shall
make such deposit no later than two Business Days after the obligation to
accept such assignment arose. Any such deposit into the Collection Account in
connection with any such assignment of a Receivable shall be considered a
payment in full of such Receivable and such deposit shall be applied in
accordance with the provisions of Article IV. Upon the assignment to the
Servicer of such a Receivable, the Trust shall, without further action be
deemed to transfer, assign, set-over and otherwise convey to the Servicer,
without recourse, representation or warranty (including those implied by law),
all the right, title and interest of the Trust in and to such Receivable, all
monies due or to become due 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 Servicer
to effect the conveyance of any such Receivable pursuant to this Section and
as shall be specified in an Opinion of Counsel delivered to the Trustee to the
effect that such documents and instruments comply herewith. The obligation of
the Servicer set forth in this Section shall constitute the sole remedy
respecting any breach of the representations and warranties set forth in the
above referenced subsections with respect to such Receivable available to
Certificateholders or the Trustee on behalf of Certificateholders.
Notwithstanding any other provision of this Section 3.03, no assignment of a
Receivable to the Servicer pursuant to this Section 3.03 shall occur if the
Servicer fails to make the deposit required by this Section 3.03 with respect
to such Receivable.
38
Section 3.04 Reports and Records for the Trustee.
(a) Initial Report. On the day on which a Series of the
Investor Certificates are issued (the "Closing Date"), the Servicer shall
prepare and deliver, as provided in Section 13.05, to the Trustee and the
Rating Agencies, an Officer's Certificate substantially in the form of Exhibit
D setting forth the Trust Principal Component as of the end of the Due Period
immediately preceding the Closing Date.
(b) Daily Reports. For so long as deposits of Collections
are required to be made daily by the Servicer pursuant to Section 4.01(g), on
each Business Day commencing on the Closing Date the Servicer shall prepare,
and make available for inspection by the Trustee and maintain at the office of
the Servicer a record setting forth the aggregate amount of Collections
processed by the Servicer on the immediately preceding Business Day.
(c) Monthly Servicer's Certificate. On each Determination
Date the Servicer shall forward, as provided in Section 13.05, to the Trustee,
the Paying Agent and the Rating Agencies, an Officer's Certificate signed by a
Servicing officer substantially in the form of Exhibit E (with the Monthly
Certificateholder's Statement required pursuant to the applicable Supplement
attached) setting forth the following information (which, in the case of
clauses (iii) , (iv) and (v) below, will be stated on the basis of an original
principal amount of $1,000 per Certificate): (i) the aggregate amount of
Collections processed for the Due Period for such Determination Date and the
aggregate amount of Yield Collections and the aggregate amount of Principal
Collections processed during such Due Period; (ii) the Invested Percentage on
the last day of the preceding Due Period of each Series of Certificates with
respect to Principal Collections, the Invested Percentage on the last day of
the preceding Due Period of each Series of Certificates with respect to Yield
Collections and Defaulted Receivables; (iii) for each Series and for each
class within any such Series, the total amount to be distributed to Investor
Certificateholders on the next succeeding Distribution Date; (iv) for each
Series and for each class within any such Series, the amount of such
distribution allocable to principal; (v) for each Series and for each class
within any such Series, the amount of such distribution allocable to interest;
(vi) the aggregate outstanding balance of the Accounts which were delinquent
by 30 to 59, 60 to 89, 90 to 119 and by 120 days or more as of the close of
business on the last day of the Due Period immediately preceding such
Distribution Date (calculated from the day a charge is first included within
an unpaid "Previous Balance" on any monthly billing statement and is
determined by reference to each such Account's billing cycle closing date
occurring immediately prior to such last day); (vii) for each Series and each
class within a Series, the Investor Default Amount for the immediately
preceding Due Period; (viii) for each Series and each class within a Series,
the amount of the Investor Charge-Offs and the amount of the reimbursements of
Investor Charge-Offs for such Distribution Date; (ix) for each Series, the
Investor Monthly Servicing Fee for such Distribution Date; (x) for each
Series, the existing Deficit Controlled Amortization Amount, if applicable;
(xi) the aggregate amount of Receivables in the Trust at the close of business
on the last day of the Due Period preceding such Distribution Date; (xii) for
each Series, the Invested Amount at the close of business on the last day of
the Due Period immediately preceding such Distribution Date; (xiii) the
available amount of any Enhancement for each Series; (xiv)for each Series and
each class within a Series, the Series Factor as of the end of the related Due
Period; (xv) the Yield Factor or Yield Factors applicable with respect to the
related Due Period; (xvi) whether a Pay Out Event with respect to any Series
shall have occurred during or with respect to the related Due Period; and
(xvii) the Special Funding Account balance, if any. The
39
Trustee shall be under no duty to recalculate, verify or recompute the
information supplied to it under this Section 3.04.
Section 3.05 Annual Servicer's Certificate. The Servicer will deliver,
as provided in Section 13.05, to the Trustee and the Rating Agencies on or
before March 31 of each calendar year, beginning with 1993, an Officer's
Certificate substantially in the form of Exhibit F stating (a) that a review
of the activities of the Servicer during the preceding calendar year and of
its performance under this Agreement was made under the supervision of the
officer signing such certificate and (b) that, to the best of such officer's
knowledge, based on such review, either there has occurred no event which,
with the giving of notice or passage of time or both, would constitute a
Servicer Default and the Servicer has fully performed all its obligations
under this Agreement throughout such year, or, if there has occurred such
event or a Pay Out Event, specifying each such event known to such officer and
the nature and status thereof. A copy of such officer's Certificate may be
obtained by any Investor Certificateholder or Certificate Owner by a request
in writing to the Trustee addressed to the Corporate Trust Office.
Section 3.06 Annual Independent Public Accountants' Servicing Report.
(a) On or before March 31 of each calendar year, beginning
with 1993, 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, as provided in Section 13.05, a report
to the Trustee, the Rating Agencies and, as required, any Enhancement Provider
to the effect that such firm has applied certain procedures agreed upon with
the Servicer to certain documents and records relating to the administration
and servicing of Accounts under this Agreement and any Supplement, and that,
based upon such agreed upon procedures such firm will provide a report stating
that the servicing was conducted in compliance with Article III and IV and
Section 8.08 of this Agreement and any Supplement, except for such exceptions
or errors as they believe to be immaterial and such other exceptions as shall
be set forth in such statement. A copy of such report may be obtained by any
Investor Certificateholder by a request in writing to the Trustee addressed to
the Corporate Trust Office.
(b) On or before March 31 of each calendar year, beginning
with 1993 the Servicer shall cause a firm of nationally recognized independent
public accountants (who may also render other services to the Servicer or
Transferor) to furnish, as provided in Section 13.05, a report prepared using
generally accepted auditing standards to the Trustee, any Enhancement
Provider, as required, and the Rating Agencies to the effect that they have
compared the mathematical calculations of each amount set forth in the monthly
certificates forwarded by the Servicer pursuant to subsection 3.04(c) during
the period covered by such report (which shall be the period from January 1 of
the preceding calendar year to and including December31 of such calendar year)
with the Servicer's computer reports which were the source of such amounts and
that on the basis of such comparison, such accountants are of the opinion that
such amounts are in agreement, except for such exceptions as they believe to
be immaterial and such other exceptions as shall be set forth in such
statement. A copy of such report may be obtained by any Investor
Certificateholder or Certificate Owner by a request in writing to the Trustee
addressed to the Corporate Trust Office.
Section 3.07 Tax Treatment. The Transferors have structured this
Agreement and the Investor Certificates (other than any Investor Certificates
held by the Transferors) have been (or
40
will be) issued with the intention that such Investor Certificates will
qualify under applicable tax law as indebtedness of the Transferors, and the
Transferors, any entity acquiring any direct or indirect interest in the
Exchangeable Transferor Certificate and each Investor Certificateholder (or
Certificate Owner) by acceptance of its Certificate (or, in the case of a
Certificate Owner by virtue of such Certificate Owner's acquisition of a
beneficial interest therein) agree to treat such Investor Certificates (or
beneficial interest therein) for purposes of Federal, state and local income
or franchise taxes and any other tax imposed on or measured by income as
indebtedness. Each Certificateholder agrees that it will cause any Certificate
Owner acquiring an interest in a Certificate through it to comply with this
Agreement as to treatment as indebtedness for certain tax purposes.
Section 3.08 Adjustments. (a) If the Servicer adjusts downward the
amount of any Receivable because of a rebate, refund, unauthorized charge or
billing error to an Obligor, because such Receivable was created in respect of
merchandise which was refused or returned by an Obligor, or if the Servicer
otherwise adjusts downward the amount of any Receivable without receiving
Collections therefor or without charging off such amount as uncollectible,
then, in any such case, the amount of the Trust Principal Component used to
calculate the Transferor Amount, the Transferor Interest and the Floating
Allocation Percentage and the Fixed Allocation Percentage applicable to any
Series will be reduced by the product of one minus the Yield Factor and the
amount of such adjustment. Similarly, the amount of the Trust Principal
Component used to calculate the Transferor Amount, the Transferor Interest and
the Floating Allocation Percentage and the Fixed Allocation Percentage
applicable to any Series will be reduced by the product of one minus the Yield
Factor and the amount of any Receivable which was discovered as having been
created through a fraudulent or counterfeit charge or with respect to which
the covenant contained in subsection 2.05(b) was breached. Any adjustment
required pursuant to either of the two preceding sentences shall be made on or
prior to the end of the Due Period in which such adjustment obligation arises.
In the event that, following any such exclusion, the Transferor Amount as a
percentage of the Trust Principal Component would be less than 3%, within two
Business Days of the date on which such adjustment obligation arises, the
Transferor shall pay to the Servicer, for deposit into the Special Funding
Account, in immediately available funds in an amount equal to the amount by
which the Transferor Amount would be reduced below the product of 3% and the
Trust Principal Component. Any amount deposited into the Special Funding
Account in connection with the adjustment of a Receivable (an "Adjustment
Payment") shall be applied in accordance with Article IV and the terms of each
Supplement. In the event that the Servicer adjusts upwards the amount of any
Receivable, the Trust Principal Component shall be increased by the product of
such upward adjustment and one minus the Yield Factor.
(b) If (i) the Servicer makes a deposit into the Special
Funding 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 Special Funding 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. Notwithstanding the
first two sentences of this paragraph, no adjustments shall be made
41
pursuant to this paragraph that will change any amount of Collections
previously reported pursuant to Section 3.04(c).
(c) Any Privileged Assets Billed Amounts that remain unpaid
60 days after the date of their initial billing statement shall be treated by
the Servicer in the same manner as a Receivable which the Servicer has
adjusted downward without receiving Collections therefor or without charging
off such amount as uncollectible in accordance with Section 3.08(a), and such
adjustment shall be made on or prior to the end of the Due Period in which
such adjustment obligation arises.
Section 3.09 Remittance Processing Procedures. (a) TRS, as initial
Servicer, hereby represents and warrants to the Trustee (it being acknowledged
that the Trustee has relied on such representation and warranty in accepting
the Receivables and the other property conveyed pursuant to Section 2.01 in
trust and in authenticating the Certificates) that the Remittance Banks listed
on Schedule 4 hereto are, as of the original Cut-Off Date, the only
institutions holding any accounts into which TRS deposits payments received
through the Payment Service Centers from Obligors in respect of Accounts. TRS
shall be permitted to replace or delete banks from any new schedule and shall
promptly provide a revised schedule to the Trustee, and prior to depositing
any payments received from Obligors in respect of Accounts with any new bank,
it shall deliver to the Trustee the Lock Box Letter referred to in Section
3.09(b) below executed by TRS and acknowledged by such bank (each such bank, a
"Lock Box Bank").
(a) TRS covenants and agrees that, for the term of this
Agreement, unless otherwise agreed to by the Trustee, it shall deposit all
payments received through the Payment Service Centers from Obligors in respect
of Accounts only into accounts maintained at banks which are Remittance Banks.
TRS agrees to provide prompt notice to the Trustee of any additional Payment
Service Centers.
(b) Within ninety (90) days of the Initial Closing Date,
TRS, as initial Servicer, shall deliver to the Trustee, with respect to all
accounts maintained at Lock Box Banks into which payments from Obligors in
respect of Accounts are deposited, Lock Box Letters in substantially the form
of Exhibit K attached hereto, each of which shall be executed on behalf of TRS
and acknowledged by the respective Lock Box Bank.
(c) The Trustee, on behalf of Certificateholders,
acknowledges that the accounts maintained by TRS at the Lock Box Banks will
contain funds in addition to payments made by Obligors in respect of Accounts
and that the conduct of TRS' business as presently conducted will depend on
the prompt receipt by TRS of such funds. The Trustee shall have no right,
title or interest in any funds on deposit in such accounts to the extent that
such funds do not represent payments made by Obligors in respect of Accounts
and to the extent the Trustee is exclusively responsible for instructions to
the Lock Box Banks, the Trustee shall instruct the Lock Box Banks to
immediately remit such funds to the Transferors.
[END OF ARTICLE III]
42
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
Section 4.01 Establishment of Collection Account and Special Funding
Account and Allocations with Respect to the Exchangeable Transferor's
Certificates.
(a) The Collection Account. The Trustee, for the benefit of
the Certificateholders, shall establish and maintain or cause to be
established and maintained in the name of the Trustee, on behalf of the Trust,
with an Eligible Institution a segregated account (the "Collection Account"),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Certificateholders. The Trustee shall possess all
right, title and interest in all funds on deposit from time to time in the
Collection Account and in all proceeds thereof. The Collection Account shall
be under the sole dominion and control of the Trustee for the benefit of the
Investor Certificateholders. If, at any time, the institution holding the
Collection Account ceases to be an Eligible Institution, the Trustee (or the
Servicer on its behalf) shall within five Business Days establish a new
Collection Account meeting the conditions specified above with an Eligible
Institution, transfer any cash and/or any investments to such new Collection
Account and from the date such new Collection Account is established, it shall
be the Collection Account. Pursuant to the authority granted to the Servicer
in subsection 3.01(b), the Servicer shall have the power, revocable by the
Trustee, to make withdrawals and payments from the Collection Account and to
instruct the Trustee to make withdrawals and payments from the Collection
Account for the purposes of carrying out the Servicer's or Trustee's duties
hereunder.
Each Series of Investor Certificates shall represent
interests in the Trust, including the benefits of any Enhancement to be
provided by an Enhancement Provider issued with respect to such Series as
indicated in the Supplement relating to such Series and the right to receive
Collections and other amounts at the times and in the amounts specified in
this Article IV to be deposited in the Collection Account and any other
accounts maintained for the benefit of the Certificateholders or paid to the
Investor Certificateholders. The Exchangeable Transferor Certificates shall
represent the interest in the Trust not represented by any Series of Investor
Certificates then outstanding, including the right to receive Collections and
other amounts at the times and in the amounts specified in this Article IV to
be paid to the Transferors (the "Transferor Interest"), provided, however,
that such Exchangeable Transferor Certificate shall not represent any interest
in the Collection Account and any other accounts maintained for the benefit of
the Certificateholders or the benefits of any Enhancement to be provided by an
Enhancement Provider issued with respect to any Series, except as specifically
provided in this Article IV.
(b) Administration of the Collection Account. At the written
direction of the Servicer, funds on deposit in the Collection Account to be so
invested shall be invested by the Trustee in Eligible Investments. All such
Eligible Investments shall be held by the Trustee for the benefit of the
Certificateholders. Investments of funds representing Collections collected
during any Due Period shall be invested in Eligible Investments that will
mature so that such funds will be available before 11:00 a.m. (New York City
time) on the Distribution Date related to such Due Period. Any funds on
deposit in the Collection Account to be so invested shall be
43
invested solely in Eligible Investments. All Eligible Investments shall be
held to maturity. The Trustee shall maintain possession of the negotiable
instruments or securities, if any, evidencing the Eligible Investments
described in clause (a) of the definition thereof from the time of purchase
thereof until the time of maturity. 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 the Holder of the
Exchangeable Transferor Certificate, provided, however, that for Distribution
Dates with respect to any Rapid Amortization Period or Early Amortization
Period such interest and earnings shall be considered Yield Collections
hereunder.
(c) Identification of Account. Schedule 2, which is hereby
incorporated into and made a part of this Agreement, identifies the Collection
Account by setting forth the account number of such account, the account
designation of such account and the name of the institution with which such
account has been established.
(d) Allocations For the Exchangeable Transferor Certificate.
Throughout the existence of the Trust, the Servicer shall allocate to the
Holder of the Exchangeable Transferor Certificate an amount equal to the
product of (A) the Transferor Percentage and (B) the aggregate amount of such
Collections allocated to Principal Collections and Yield Collections,
respectively, in respect of such Due Period. Notwithstanding anything to the
contrary in subsection 4.01 (g), unless specified in any Supplement, the
Servicer need not deposit this amount, and any other amounts so allocated to
the Exchangeable Transferor Certificate pursuant to any Supplement, into the
Collection Account and shall pay such amounts as collected to the Holder of
the Exchangeable Transferor Certificate.
(e) Allocations of Collections Between Yield Collections and
Principal Collections. At all times and for all purposes of this Agreement and
any Supplement, the Servicer shall allocate all Collections received for any
period between Yield Collections and Principal Collections. Such Collections
shall be allocated such that the product of (i) such Collections and (ii) the
Yield Factor in effect with respect to such period shall be considered Yield
Collections and the remainder of such Collections shall be considered
Principal Collections.
(f) Undistributed Principal Collections. On each
Distribution Date, (A) the Servicer shall allocate Excess Principal
Collections to each Series as set forth in the related Supplement and (B) the
Servicer shall withdraw from the Collection Account and pay to the Transferors
(i) an amount equal to the excess, if any, of (x) the aggregate amount for all
outstanding Series of Principal Collections which the related Supplements
specify are to be treated as "Excess Principal Collections" for such
Distribution Date over (y) the aggregate amount for all outstanding Series
which the related Supplements specify are "Principal Shortfalls" for such
Distribution Date and, without duplication, (ii) the aggregate amount for all
outstanding Series of that portion of Principal Collections which the related
Supplements specify are to be allocated and paid to the Transferors with
respect to such Distribution Date; provided, however, that such amounts shall
be paid to the Transferors only if the Transferor Amount (determined after
giving effect to any Receivables transferred to the Trust on such date)
exceeds 3% of the Trust Principal Component. The amount held in the Collection
Account as a result of the proviso in the preceding sentence ("Undistributed
Principal Collections") shall be paid to the Transferors at the time the
Transferor Amount as a percentage of the Trust Principal Component
44
exceeds 3%; provided, however, that any Undistributed Principal Collections on
deposit in the Collection Account at any time during which any Series is in
its Amortization Period or Accumulation Period shall be allocated and
distributed in accordance with the terms of each Supplement.
(g) Collections. All payments received by the Servicer in
respect of Accounts and applied by the Servicer to payment of Privileged
Assets Billed Amounts shall be treated in the same manner as Collections with
respect to the Receivables for purposes of this Agreement. The Servicer will
apply all Collections with respect to the Receivables for each Due Period as
described in this Article IV and each Supplement. Except as otherwise provided
below, the Servicer shall deposit Collections into the Collection Account on
the Date of Processing of such Collections. Subject to the express terms of
any Supplement, but notwithstanding anything else in this Agreement to the
contrary, for so long as, and only so long as, TRS or an Affiliate of TRS
shall be the Servicer hereunder and (i) maintain a short-term credit rating
(which may be an implied rating) of P-1 by Moody's and of A-1 by Standard &
Poor's, or (ii) obtain a guarantee with respect to the Servicer's deposit and
payment obligations hereunder pursuant to a guaranty in form and substance
acceptable to each Rating Agency provided the guarantor maintains a short-term
credit rating of P-1 by Moody's and of A-1+ by Standard & Poor's, or (iii)
obtains a written notification from each Rating Agency to the effect that such
Rating Agency does not intend to downgrade or withdraw its then current rating
of any outstanding Series of Certificates despite the Servicer's inability to
satisfy the rating requirement specified in clause (i), and for two Business
Days following any reduction of either such rating or failure to satisfy the
conditions of either clause (ii) or (iii), the Servicer may, but need not,
deposit Collections or amounts received from the Transferors pursuant to
subsection 2.04(d)(iii) or subsection 3.08(a) into the Collection Account or
make payments to the holder of the Exchangeable Transferor Certificate prior
to the close of business on the Date of Processing, but rather may make a
single deposit in the Collection Account in immediately available funds on the
Business Day prior to each Distribution Date in an amount equal to the sum of
amounts received from the Transferors pursuant to subsection 2.04(d)(iii) and
subsection 3.08(a) with respect to the Due Period for each such Distribution
Date and the Collections with respect to the Due Period for each such
Distribution Date to the extent such amounts and Collections are allocated to
the Investor Certificateholders in accordance with Article IV. Collections
shall not be required to be invested in Eligible Investments until such time
as they are deposited into the Collection Account. The Servicer shall notify
the Trustee of any downgrade or withdrawal of its short-term credit rating.
Should the Servicer be required to make daily deposits of
Collections into the Collection Account pursuant to this subsection, during
any Amortization Period or Accumulation Period, the Servicer may cease
depositing Principal Collections received in any Due Period and allocable to a
Series in any Amortization Period or Accumulation Period at such time as an
amount of Principal Collections allocable to such Series and deposited into
the Collection Account or Principal Funding Account, as applicable, equals the
amount of principal scheduled or permitted to be paid or deposited on the next
succeeding Distribution Date with respect to such Series. Principal
Collections allocable to such Series in excess of such amount shall, subject
to the provisos in subsection 4.01(f) and the next succeeding paragraph, be
distributed on a daily basis as they are collected to the Transferors.
45
Should the Servicer be required to make daily deposits of
Collections into the Collection Account pursuant to this subsection, during
any Amortization Period or Accumulation Period, the Servicer may cease
depositing Excess Principal Collections received with respect to a Due Period
at such time as such Excess Principal Collections deposited into the
Collection Account or Principal Funding Account, as applicable, with respect
to each Series in an Amortization Period or Accumulation Period together with
Principal Collections allocable to such Series and deposited into the
Collection Account with respect to such Due Period equals the amount of
principal scheduled or permitted to be paid or deposited with respect to such
Series on the next succeeding Distribution Date.
Should the Servicer be required to make daily deposits of
Collections in the Collection Account or Principal Funding Account pursuant to
this subsection, Excess Principal Collections in excess of amounts allocable
to Series which are in their Amortization Period or Accumulation Period and
deposited in the Collection Account or Principal Funding Account, as
applicable, pursuant to the preceding sentence shall, subject to the provisos
in subsection 4.01(f), be distributed to the Transferors on a daily basis.
(h) The Special Funding Account. The Trustee, for the
benefit of the Certificateholders, shall establish and maintain or cause to be
established and maintained in the name of the Trustee, on behalf of the Trust,
with an Eligible Institution a segregated account (the "Special Funding
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders. The Trustee shall
possess all right, title and interest in all funds on deposit from time to
time in the Special Funding Account and in all proceeds thereof. The Special
Funding Account shall be under the sole dominion and control of the Trustee
for the benefit of the Investor Certificateholders. If, at any time, the
institution holding the Special Funding Account ceases to be an Eligible
Institution, the Trustee (or the Servicer on its behalf) shall within five
Business Days establish a new Special Funding Account meeting the conditions
specified above with an Eligible Institution, transfer any cash and/or any
investments to such new Special Funding Account and from the date such new
Special Funding Account is established, it shall be the Special Funding
Account. Pursuant to the authority granted to the Servicer in subsection
3.01(b), the Servicer shall have the power, revocable by the Trustee, to make
withdrawals and payments from the Special Funding Account and to instruct the
Trustee to make withdrawals and payments from the Special Funding Account for
the purposes of carrying out the Servicer's or Trustee's duties hereunder.
(i) Administration of the Special Funding Account. At the
written direction of the Servicer, funds on deposit in the Special Funding
Account to be so invested shall be invested by the Trustee in Eligible
Investments. All such Eligible Investments shall be held by the Trustee for
the benefit of the Certificateholders. Investments of funds representing
Collections collected during any Due Period shall be invested in Eligible
Investments that will mature so that such funds will be available before 11:00
a.m. (New York City time) on the Distribution Date related to such Due Period.
Any funds on deposit in the Special Funding Account to be so invested shall be
invested solely in Eligible Investments. All Eligible Investments shall be
held to maturity. The Trustee shall maintain possession of the negotiable
instruments or securities, if any, evidencing the Eligible Investments
described in clause (a) of the definition thereof from the time of purchase
thereof until the time of maturity. On each Distribution Date, all interest
and other investment earnings (net of losses and investment expenses) on funds
on deposit in the Special Funding Account shall be paid to the Holder of the
Exchangeable Transferor Certificate,
46
provided, however, that for Distribution Dates with respect to any Rapid
Amortization Period or Early Amortization Period such interest and earnings
shall be considered Yield Collections hereunder. The Servicer shall deposit
all amounts received from the Transferors pursuant to subsection 2.04(d)(iii)
and all Adjustment Payments received from the Transferors pursuant to
subsection 3.08(a) in the Special Funding Account on the Date of Processing of
such payments.
The Transferors may, at their option, instruct the Trustee
to deposit into the Special Funding Account Trust Excess Principal Collections
which are otherwise payable to the Transferors pursuant to the provisions set
forth above. On each Business Day on which funds are on deposit in the Special
Funding Account and on which no Series is in an Early Accumulation Period or
Early Amortization Period, the Servicer shall determine the amount (if any) by
which the Transferor Amount as a percentage of the Trust Principal Component
exceeds the Minimum Transferor Percentage on such date and may instruct the
Trustee to withdraw any such excess from the Special Funding Account and pay
such amount to the Transferors; provided, however, that, if an Accumulation
Period or Amortization Period has commenced and is continuing with respect to
one or more outstanding Series, any funds on deposit in the Special Funding
Account shall be treated as Trust Excess Principal Collections and shall be
allocated and distributed in accordance with this Article IV and the terms of
each Supplement.
Schedule 2 identifies the Special Funding Account by setting forth
the account number of such account, the account designation of such account
and the name of the institution with which such account has been established.
[THE REMAINDER OF ARTICLE IV IS RESERVED
AND MAY BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
ARTICLE V
[ARTICLE V IS RESERVED AND
MAY BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
47
ARTICLE VI
THE CERTIFICATES
Section 6.01 The Certificates. Subject to Sections 6.10 and 6.11, the
Investor Certificates of each Series and any class thereof may be issued in
bearer form (the "Bearer Certificates") with attached interest coupons and a
special coupon (collectively, the "Coupons") or in fully registered form (the
"Registered Certificates"), and shall be substantially in the form of the
exhibits with respect thereto attached to the applicable Supplement. The
Exchangeable Transferor Certificate shall be substantially in the form of
Exhibit A. The Investor Certificates and the Exchangeable Transferor
Certificate shall, upon issue pursuant hereto or to Section 6.09 or Section
6.11, be executed and delivered by the Transferors to the Trustee for
authentication and redelivery as provided in Section 6.02. Any Investor
Certificates shall be issued in minimum denominations of $1,000 and in
integral multiples of $1,000 in excess thereof, unless otherwise specified in
any Supplement. If specified in the related Supplement for any Series, the
Investor Certificates shall be issued upon initial issuance as a single
certificate in an original principal amount equal to the Initial Invested
Amount as described in Section 6.10. The Exchangeable Transferor Certificate
may also be issued in two or more certificates. Each Certificate shall be
executed by manual or facsimile signature on behalf of the Transferors by
their respective Chairman of the Board, President, Vice Chairman of the Board
or any Vice President. Certificates bearing the manual or facsimile signature
of the individual who was, at the time when such signature was affixed,
authorized to sign on behalf of each such Transferor or the Trustee shall not
be rendered invalid, notwithstanding that such individual has ceased to be so
authorized prior to the authentication and delivery of such Certificates or
does not hold such office at the date of such Certificates. No Certificate
shall be entitled to any benefit under this Agreement or any applicable
Supplement or be valid for any purpose unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein executed by or on behalf of the Trustee by the manual signature of
a duly authorized signatory, and such certificate upon any Certificate shall
be conclusive evidence, and the only evidence that such Certificate has been
duly authenticated and delivered hereunder. All Certificates shall be dated
the date of their authentication, except Bearer Certificates which shall be
dated the Issuance Date.
Section 6.02 Authentication of Certificates. Contemporaneously with the
assignment and transfer of the Receivables, whether now existing or hereafter
created, and the other Trust Property to the Trust, the Trustee shall
authenticate and deliver the initial Series of Investor Certificates that is
issued upon original issuance, upon the order of the Transferors, to the
underwriters, The Trustee shall authenticate and deliver the Exchangeable
Transferor Certificate to the Transferors simultaneously with its delivery of
the initial Series of Investor Certificates. Upon an Exchange as provided in
Section 6.09 of the Agreement and the satisfaction of certain other conditions
specified therein, the Trustee shall authenticate and deliver the Investor
Certificates of additional Series (with the designation provided in the
applicable Supplement), upon the order of the Transferors, to the Persons
designated in such Supplement. Upon the order of the Transferors, the
Certificates of any Series shall be duly authenticated by or on behalf of the
Trustee, in authorized denominations equal to (in the aggregate) the Initial
Invested Amount of such Series of Investor Certificates. If specified in the
related Supplement for any Series, the Trustee shall authenticate and deliver
outside the United States the Global Certificate that is
48
issued upon original issuance thereof, upon the written order of the
Transferors, to the Common Depositary as provided in Section 6.10 against
payment of the purchase price therefor. If specified in the related Supplement
for any Series, the Trustee shall authenticate Book-Entry Certificates that
are issued upon original issuance thereof, upon the written order of the
Transferors, to a Clearing Agency or its nominee as provided in Section 6.11
against payment of the purchase price thereof.
Section 6.03 Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at the office or
agency to be maintained by a transfer agent and registrar (which may be the
Trustee) (the "Transfer Agent and Registrar") in accordance with the
provisions of subsection 6.03(c) of the Agreement a register (the "Certificate
Register") in which, subject to such reasonable regulations as it may
prescribe, the Transfer Agent and Registrar shall provide for the registration
of the Registered Certificates and of transfers and exchanges of the
Registered Certificates as herein provided. The Trustee is hereby initially
appointed Transfer Agent and Registrar for the purpose of registering the
Registered Certificates and transfers and exchanges of the Registered
Certificates as herein provided. The Trustee shall be permitted to resign as
Transfer Agent and Registrar upon 30 days' written notice to the Transferors
and the Servicer; provided, however, that such resignation shall not be
effective and the Trustee shall continue to perform the duties of Transfer
Agent and Registrar until the Transferors have appointed a successor Transfer
Agent and Registrar acceptable to the Transferors and the Trustee. If
specified in the related Supplement for any Series of Certificates, the
Transferors shall appoint any co-transfer agent and co-registrar chosen by the
Transferors, and acceptable to the Trustee, including, if and so long as the
Registered Certificates are listed on the Luxembourg Stock Exchange or other
stock exchange and such exchange shall so require, a co-transfer agent and
co-registrar in Luxembourg or the location required by such other stock
exchange. If specified in such related Supplement, so long as the Registered
Certificates relating to such Supplement are outstanding, the Transferors
shall maintain a co-transfer agent and co-registrar in New York City or any
other city designated in such Supplement and 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.
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, the Transferors shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferee one or more new Registered Certificates in authorized
denominations of the same Series representing like aggregate Undivided
Interests in the Trust; provided, however, that the provisions of this
paragraph shall not apply to Bearer Certificates.
At the option of any Registered Certificateholder,
Registered Certificates may be exchanged for other Registered Certificates of
the same Series in authorized denominations of like aggregate Undivided
Interests in the Trust, upon surrender of the Registered Certificates to be
exchanged at any office or agency of the Transfer Agent and Registrar
maintained for such purpose. At the option of a Bearer Certificateholder,
subject to applicable laws and regulations, Bearer Certificates may be
exchanged for other Bearer Certificates or Registered Certificates of the same
Series in authorized denominations of like aggregate Undivided Interests in
the Trust, 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
49
pursuant to this Section 6.03 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 Distribution Date after
the related Series Termination Date need not have attached the Coupon relating
to such Distribution Date.
The preceding provisions of this Section 6.03 notwithstanding
the Trustee or the Transfer Agent and Registrar, as the case may be, shall not
be required to register the transfer of or exchange of any Certificate of any
Series for a period of 15 days preceding the due date for any payment with
respect to the Certificates of such Series.
Whenever any Investor Certificates of any Series are so
surrendered for exchange, the Transferors shall execute, and 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
of such Series which the Certificateholder making the exchange is entitled to
receive. Every Investor Certificate presented or surrendered for registration
of transfer or exchange shall be accompanied by a written instrument of
transfer in a form satisfactory to the Trustee and the Transfer Agent and
Registrar duly executed by the Certificateholder thereof or his attorney duly
authorized in writing.
Except as provided in any Supplement, no service charge
shall be made for any registration of transfer or exchange of Investor
Certificates, but the Transfer Agent and Registrar and the Trustee or any
co-transfer agent and co-registrar or co-trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Investor Certificates.
All Investor Certificates (together with any Coupons
attached to Bearer Certificates) surrendered for registration of transfer or
exchange shall be cancelled by the Transfer Agent and Registrar and disposed
of in a manner satisfactory to the Trustee and the Transferors. The Trustee
shall cancel and mutilate the Global Certificate upon its exchange in full for
Definitive Certificates and shall deliver such cancelled and mutilated Global
Certificate to the Transferors. The Trustee shall also forward to the
Transferors a copy of each certificate of each Foreign Clearing Agency to the
effect referred to in Section 6.10 of the Agreement which was received by the
Trustee with respect to each portion of the Global Certificate exchanged for
Definitive Certificates.
The Transferors shall execute and deliver to the Trustee or
the Transfer Agent and Registrar, as applicable, Bearer Certificates and
Registered Certificates in such amounts and at such times as are necessary to
enable the Trustee to fulfill its responsibilities under this Agreement and
the Certificates.
(b) Except as provided in Sections 6.09 and 7.02, the
Transferors' interest in the Exchangeable Transferor Certificate shall not be
sold, transferred, assigned, exchanged, pledged, participated or otherwise
conveyed, unless (A) (i) the Servicer has delivered to the Trustee an
Officer's Certificate stating that such sale, transfer, assignment, exchange,
pledge or conveyance will not, while any Series of Certificates remains
outstanding, reduce the Transferors' retained interest in the Exchangeable
Transferor Certificate below the Minimum Transferor Percentage for any Series
then outstanding and (ii) the Trustee receives prior to such sale, transfer,
assignment, exchange, pledge, participation or conveyance written confirmation
from each
50
Rating Agency that such transfer, assignment, exchange, pledge, participation
or conveyance will not result in such Rating Agency's reducing or withdrawing
its rating on any then outstanding Series rated by it or (B) such transfer,
assignment, exchange, pledge or conveyance is made to CRC and, in the case of
(A), the Trustee receives prior thereto an Opinion of Counsel to the effect
that (x) the conveyed interest in the Transferor Exchangeable Certificate will
be treated as either debt or an interest in a partnership for Federal income
tax purposes and that the conveyance of such interest will not cause the Trust
to be characterized for Federal income tax purposes as an association taxable
as a corporation or otherwise have any material adverse impact on the Federal
or applicable state income taxation of any outstanding Series of Investor
Certificates or any Certificate Owner and (y) such transfer will not cause a
taxable event for federal income tax purposes to any Investor
Certificateholder.
(c) The Transfer Agent and Registrar will maintain at its
expense in the Borough of Manhattan, the City of New York (and, if specified
in the related Supplement for any Series, Luxembourg (or subject to Section
6.03(a) of the Agreement any other city designated in such Supplement)), an
office or offices or agency or agencies 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).
(d) Unless otherwise provided in any related Supplement,
registration of transfer of Registered Certificates containing a legend
relating to the restrictions on transfer of such Registered Certificates
(which legend shall be set forth in the Supplement relating to such Investor
Certificates) shall be effected only if:
(i) (a) the sale is of at least U.S $500,000 principal
amount of such Certificates and (b) a letter from the purchaser
satisfactory to counsel to the Servicer is executed and received; or
(ii) (a) the Registered Certificates are transferred in
compliance with Rule 144 (or any amendment thereto) or Rule 144A (or
any amendment thereto) under the United States Securities Act of
1933, as amended, and (b) a letter from the purchaser satisfactory to
counsel to the Servicer is executed and received; or
(iii) the Registered Certificates are sold or otherwise
transferred in any other transaction that does not require
registration under the United States Securities Act of 1933 as
amended, and, if the Transferor, the Servicer, the Trustee, the
Transfer Agent or Registrar so request, an Opinion of Counsel
satisfactory to it, in form and substance satisfactory to it, is
furnished to such effect.
Registered Certificates issued upon registration of transfer
of, or Registered Certificates issued in exchange for, Registered 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 a Registered Certificate containing the legend set
forth in the related Supplement is presented to the Transfer Agent and
Registrar for registration of transfer, the Transfer Agent and Registrar shall
promptly seek written instructions from the Servicer
51
regarding such transfer. The Transfer Agent and Registrar and the Trustee
shall be entitled to receive written instructions signed by a Servicing
Officer prior to registering any such transfer or authenticating new Retired
Certificates, as the case may be. The Servicer hereby agrees to indemnify the
Transfer Agent and Registrar and the Trustee and to hold each of them harmless
against any loss, liability or expense incurred without bad faith on their
part arising out of or in connection with actions taken or omitted by them in
reliance on and in accordance with any such written instructions furnished
pursuant to this subsection 6.03(d).
Section 6.04 Mutilated, Destroyed, Lost, or Stolen Certificates. If
(a) any mutilated Certificate (together, in the case of Bearer Certificates,
with all unmatured Coupons (if any) appertaining thereto) is surrendered to
the Transfer Agent and Registrar, or the Transfer Agent and Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Transfer Agent and Registrar,
the Trustee and the Transferors 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 bona fide purchaser, the
Transferors shall execute and the Trustee shall authenticate and the Transfer
Agent and Registrar shall deliver (in the case of Bearer Certificates, outside
the United States), in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
aggregate Undivided Interest, if applicable, In connection with the issuance
of any new Certificate under this Section 6.04, the Trustee or the Transfer
Agent and Registrar may require the payment by the Certificateholder of a sum
sufficient to cover any tax or other governmental expenses (including the fees
and expenses of the Trustee and Transfer Agent and Registrar) connected
therewith. Any duplicate Certificate issued pursuant to this Section 6.04
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 6.05 Persons Deemed Owners. Prior to due presentation of a
Certificate (other than a Bearer Certificate) for registration of transfer,
the Trustee, the Paying Agent, the Transfer Agent and Registrar and any agent
of any of them may treat the person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Article IV hereof and for all other purposes
whatsoever, and neither the Trustee,, the Paying Agent, the Transfer Agent and
Registrar nor any agent of any of them shall be affected by any notice to the
contrary, In. the case of a Bearer Certificate, the Trustee, the Paying Agent,
the Transfer Agent and Registrar and any agent of any of them may treat the
bearer of a Bearer Certificate or Coupon as the owner of such Bearer
Certificate or Coupon for the purpose of receiving distributions pursuant to
Article IV and for all other purposes whatsoever, and neither the Trustee, the
Paying Agent, the Transfer Agent and Registrar nor any agent of any of them
shall be affected by any notice to the contrary. Notwithstanding the foregoing
provisions of this Section 6.05, in determining whether the holders of the
requisite interests have given any request, demand, authorization, direction,
notice, consent or waiver hereunder Certificates owned by the Transferor, the
Servicer or any affiliate thereof (as defined in Rule 405 under the Securities
Act of 1933, as amended), 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 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
52
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 the United
States, the Servicer or an affiliate thereof (as defined above).
Section 6.06 Appointment of Paying Agent. The Paying Agent shall make
distributions to Investor Certificateholders from the Collection Account (or
any other account or accounts maintained for the benefit of Certificateholders
as specified in the related Supplement for any Series) pursuant to Articles IV
and V hereof. Any Paying Agent shall have the revocable power to withdraw
funds from the Collection Account (or any other account or accounts maintained
for the benefit of Certificateholders as specified in the related Supplement
for any Series) for the purpose of making 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 in any material respect. The
Paying Agent shall initially be the Trustee and any co-paying agent chosen by
the Transferors and acceptable to the Trustee, including, if and so long as
any Series of Investor Certificates is listed on the Luxembourg Stock Exchange
or other stock exchange and such exchange so requires, a co-paying agent in
Luxembourg or the location of such other stock exchange. The Trustee shall be
permitted to resign as Paying Agent upon 30 days' written notice to the
Servicer and the Transferors. The Transferors shall notify the Rating Agencies
of any resignation or replacement of the Paying Agent. In the event that the
Trustee shall no longer be the Paying Agent, the Transferors shall appoint a
successor to act as Paying Agent and such successor shall be acceptable to the
Trustee. The Trustee shall cause the initial Paying Agent and each successor
Paying Agent or any additional Paying Agent appointed by the Transferors to
execute and deliver to the Trustee an instrument in which such initial or
successor Paying Agent or additional Paying Agent shall agree with the Trustee
that, as Paying Agent, such initial or successor Paying Agent or additional
Paying Agent 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
Certificateholders. The Paying Agent shall return all unclaimed funds to the
Trustee and upon removal of a Paying Agent shall also return all funds in its
possession to the Trustee. The provisions of Sections 11.01, 11.02 and 11.03
of the Agreement shall apply to the Trustee also in its role as Paying Agent,
for so long as the Trustee shall act as Paying Agent. Any reference in this
Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.
If specified in the related Supplement for any Series, so
long as the Investor Certificates of such Series are outstanding, the
Transferors shall, if the Paying Agent is not located in New York City,
appoint a co-paying agent in New York City (for Registered Certificates only)
acceptable to the Trustee or any other city designated in such Supplement
which, if and so long as any Series of Investor Certificates is listed on the
Luxembourg Stock Exchange or other stock exchange and such exchange so
requires, shall be in Luxembourg or the location required by such other stock
exchange.
Section 6.07 Access to List of Certificateholders' Names and Addresses.
The Trustee will furnish or cause to be furnished by the Transfer Agent and
Registrar to the Servicer or the Paying Agent (or any agent thereof), within
five Business Days after receipt by the Trustee of a request therefor from the
Servicer or the Paying Agent, respectively, in writing, a list in the form
maintained by the Trustee, of the names and addresses of the Investor
Certificateholders (other than Bearer Certificateholders). If Holders
representing Undivided Interests in the Trust
53
aggregating not less than 10% of the Invested Amount of the Investor
Certificates of such Series (the "Applicants") apply in writing to the
Trustee, and such application states that the Applicants desire to communicate
with other Investor Certificateholders of such Series with respect to their
rights under this Agreement or under the Investor Certificates and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee, after having been adequately indemnified by such
Applicants for its costs and expenses, shall afford or shall cause the
Transfer Agent and Registrar to either afford such Applicants access during
normal business hours to the most recent list of Certificateholders (other
than Bearer Certificateholders) held by the Trustee, or mail or cause to be
mailed such list within five Business Days after the receipt of such
application. Such list shall be as of a date no more than 45 days prior to the
date of receipt of such Applicants' request.
Every Certificateholder, by receiving and holding a
Certificate agrees with the Trustee that neither the Trustee, the Transfer
Agent and Registrar, nor any of their respective agents shall be held
accountable by reason of the disclosure of any such information as to the
names and addresses of the Certificateholder, (other than Bearer
Certificateholders) hereunder, regardless of the sources from which such
information was derived.
Section 6.08 Authenticating Agent.
(a) The Trustee may appoint one or more authenticating
agents with respect to the Certificates which shall be authorized to act on
behalf of the Trustee in authenticating the Certificates in connection with
the issuance, delivery, registration of transfer, exchange or repayment of the
Certificates. Whenever reference is made in this Agreement to the
authentication of Certificates by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication on
behalf of the Trustee by an authenticating agent and a certificate of
authentication executed on behalf of the Trustee by an authenticating agent.
Each authenticating agent must be reasonably acceptable to the Transferors.
(b) Any institution succeeding to the corporate agency
business of an authenticating agent shall continue to be an authenticating
agent without the execution or filing of any paper or any further act on the
part of the Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by giving
written notice of resignation to the Trustee and to the Transferor. The
Trustee may at any time terminate the agency of an authenticating agent by
giving notice of termination to such authenticating agent and to the
Transferors. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time an authenticating agent shall cease to be
acceptable to the Trustee or the Transferors, 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 Transferors.
(d) The Servicer agrees to pay, on behalf of the Trust, to
each authenticating agent from time to time reasonable compensation for its
services under this Section 6.08.
54
(e) The provisions of Sections 11.01, 11.02 and 11.03 of the
Agreement shall be applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section 6.08,
the Certificates may have endorsed thereon, in lieu of the Trustee's
certificate of authentication, an alternate certificate of authentication, in
substantially the following form:
This is one of the Certificates described in the Master
Pooling and Servicing Agreement.
------------------------------------------
------------------------------------------
as Authenticating Agent
for the Trustee,
By:
---------------------------------------
Authorized Officer
Section 6.09 Tender of Exchangeable Transferor Certificate.
(a) Upon any Exchange, the Trustee shall issue to the
Transferors under Section 6.01 of the Agreement for execution and redelivery
to the Trustee for authentication under Section 6.02 of the Agreement one or
more new Series of Investor Certificates. Any such Series of Investor
Certificates shall be substantially in the form specified in the applicable
Supplement and shall bear, upon its face, the designation for such Series to
which it belongs so selected by the Transferors. Except as specified in any
Supplement for a related Series, all Investor Certificates of any Series shall
be equally and ratably entitled as provided herein to the benefits hereof
without preference, priority or distinction on account of the actual time or
times of authentication and delivery, all in accordance with the terms and
provisions of this Agreement and the applicable Supplement.
(b) The Transferors may tender the Exchangeable Transferor
Certificate to the Trustee in exchange for (i) one or more newly issued Series
of Investor Certificates and (ii) a reissued Exchangeable Transferor
Certificate (any such tender an "Exchange"). The Transferors may perform an
Exchange by notifying the Trustee, in writing at least three days in advance
(an "Exchange Notice") of the date upon which the Exchange is to occur (an
"Exchange Date"). Any Exchange Notice shall state the designation of any
Series to be issued on the Exchange Date and, with respect to each such
Series: (x) its Initial Invested Amount (or the method for calculating such
Initial Invested Amount), if any, which, in the aggregate, at any time, may
not be greater than the current principal amount of the Exchangeable
Transferor Certificate less the product of the Minimum Transferor Percentage
and. the Trust Principal Component at such time, and (y) its Certificate Rate
(or the method for allocating interest payments or other cash flow to such
Series), if any. On the Exchange Date, the Trustee shall only authenticate and
deliver any such Series upon delivery to it of the following: (A) a Supplement
in form satisfactory to the Trustee executed by the Transferors and specifying
the Principal Terms of such Series, (B) the applicable Enhancement, if any,
(C) an opinion of Counsel to the effect that the newly issued Series of
Investor Certificates will be characterized as either indebtedness or an
interest in a partnership
55
under existing law for Federal income tax purposes and that the issuance of
the newly issued Series of Investor Certificates will not have any material
adverse impact on the Federal income tax characterization of any outstanding
Series of Investor Certificates that have been the subject of a previous
opinion of tax counsel, (D) an agreement, if any, pursuant to which the
Enhancement Provider agrees to provide Enhancement, (E) written confirmation
from each Rating Agency that the Exchange will not result in such Rating
Agency's reducing or withdrawing its rating on any then outstanding Series
rated by it and (F) the existing Exchangeable Transferor Certificate. Upon
satisfaction of such conditions, the Trustee shall cancel the existing
Exchangeable Transferor Certificate and issue, as provided above, such Series
of Investor Certificates and new Exchangeable Transferor Certificate, dated
the Exchange Date.
(c) In conjunction with an Exchange, the parties hereto
shall execute a Supplement, which shall specify the relevant terms with
respect to any Series of Investor Certificates, which may include, without
limitation: (i) its name or designation, (ii) an Initial Invested Amount or
the method of calculating the Initial Invested Amount, (iii) a Certificate
Rate (or formula for the determination thereof), (iv) the rights of the
Holders of the Exchangeable Transferor Certificate that have been transferred
to the Holders of such Series pursuant to such Exchange (including any rights
to allocations of Yield Collections and Principal Collections), (v) the
interest payment date or dates and the date or dates from which interest shall
accrue, (vi) the method of allocating Principal Collections for such Series
and, if applicable, with respect to other Series and the method by which the
principal amount of Investor Certificates of such Series shall amortize or
accrete and the method for allocating Yield Collections and Receivables in
Defaulted Accounts, (vii) the names of any accounts to be used by such Series
and the terms governing the operation of any such account, (viii) the
Servicing Fee Percentage, (ix) the Minimum Transferor Percentage, (x) the
Minimum Trust Principal Component, (xi) the Series Termination Date, (xii) the
terms of any Enhancement, (xiii) the Enhancement Provider, (xiv) the base
rate, if any, (xv) the Repurchase Terms or the terms on which the Certificates
of such Series may be remarketed to other investors, (xvi) any deposit into
any account provided for such Series, (xvii) the number of Classes of such
Series, and if more than one Class, the rights and priorities of each such
Class, (xviii) the extent to which the Investor Certificates will be issuable
in temporary or permanent global form, and in such case, the depository 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, (xix) whether the Certificates
may be issued in bearer form and any limitations imposed thereon, (xx) the
priority of any Series with respect to any other Series, (xxi) whether such
Series will be an Excess Allocation Series, and (xxii) any other relevant
terms of such Series (all such terms, the "Principal Terms" of such Series).
If on the date of the issuance of such Series there is issued and outstanding
no Series of Investor Certificates which is currently rated by a Rating
Agency, then as a condition to such Exchange a nationally recognized
investment banking firm or commercial bank shall also deliver to the Trustee
an officer's certificate stating, in substance, that the Exchange will not
have an adverse effect on the timing or distribution of payments to such other
Series of Investor Certificates then issued and outstanding.
Section 6.10 Global Certificate; Euro Certificate Exchange Date.
(a) If specified in the related Supplement for any Series,
the Investor Certificates may be initially issued in the form of a single
temporary Global Certificate (the "Global
56
Certificate") in bearer form, without interest coupons, in the denomination of
the Initial Invested Amount and substantially in the form attached to the
applicable Supplement. Unless otherwise specified in the applicable
Supplement, the provisions of this Section 6.10 shall apply to such Global
Certificate. The Global Certificate will be authenticated by the Trustee upon
the same conditions, in substantially the same manner and with the same effect
as the Definitive Certificates, The Global Certificate may be exchanged as
described below for Bearer and/or Registered Certificates in definitive form
(the "Definitive Euro-Certificates"). Notwithstanding the foregoing, no
Certificates shall be issued in bearer form unless the Transferors have
determined, and deliver an Opinion of Counsel to the Trustee substantially to
the effect that, the terms and procedures governing issuance and transfer of
such Certificates result in favorable treatment to Investor Certificateholders
under the Bearer Rules.
(b) The Manager shall, upon its determination of the date of
completion of the distribution of the Certificates, so advise the Trustee, the
Transferors, the Common Depositary, and each Foreign Clearing Agency in
writing forthwith. Without unnecessary delay, but prior to the
Euro-Certificate Exchange Date, the Transferors will execute and deliver to
the Trustee at its office or designated agent outside the United States
definitive Bearer Certificates in an aggregate principal amount equal to the
Initial Invested Amount. 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 Euro-Certificate Exchange Date. Notwithstanding the preceding sentence, a
United States institutional investor may at any time exchange the portion of
the Global Certificate beneficially owned by it for an equal aggregate
principal amount of Registered Certificates bearing the applicable legend set
forth in the related Supplement and having, a minimum denomination of
$500,000, which may be in temporary form if the Transferors so elect. A United
States institutional investor will be required to deliver to the Transferors,
the Trustee and the Manager at the time of its purchase of Registered
Certificates a signed certificate substantially in the form attached to the
Supplement for the related Series. Upon any demand for exchange for Definitive
Certificates in accordance with this paragraph, the Transferors shall cause
the Trustee to authenticate and deliver the Definitive 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 only upon presentation to the Trustee of a written
statement, substantially in the form attached to the Supplement for the
related Series with respect to the Global Certificate or portion thereof being
exchanged, signed by a Foreign Clearing Agency, 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 attached to the
Supplement for the related Series signed by the Manager (which sold the
relevant Certificates) or (ii) in all other cases, the alternative certificate
attached to the Supplement for the related Series, the alternative certificate
referred to in this clause (ii) being dated no earlier than 15 days prior to
the Euro-Certificate Exchange Date and signed by or on behalf of the person
appearing in the records of a Foreign Clearing Agency as the beneficial owner
of the Global Certificate or portion thereof being exchanged. Upon receipt of
such certification, the Trustee shall cause the Global Certificate to be
endorsed in accordance with paragraph (d) below. Unless otherwise provided in
the applicable Supplement, any exchange as provided in this subsection 6.10(b)
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
57
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 6.11 Book-Entry Certificates. Unless otherwise provided in
any related Supplement, the Investor Certificates, upon original issuance,
will be issued in the form of the requisite number of typewritten Certificates
representing the Book-Entry Certificates, to be delivered to The Depository
Trust Company, the initial Clearing Agency, by, or on behalf of the
Transferors. The Investor Certificates shall initially be registered on the
Certificate Register in the name of CEDE & Co., the nominee of the Clearing
Agency, and no Certificate owner will receive a definitive certificate
representing such Certificate owner's interest in the Investor Certificates,
except as provided in Section 6.13 of the Agreement. Unless and until
definitive, fully registered Investor Certificates (the "Definitive
Certificates") have been issued to Certificate Owners pursuant to Section 6.13
of the Agreement:
(i) the provision of this Section 6.11 shall be in full
force and effect;
(ii) the Transferor, the Servicer, the Paying Agent, the
Transfer Agent and Registrar and the Trustee may deal with the
Clearing Agency and the Clearing Agency Participants for all purposes
(including the making of distributions on the Investor Certificates)
as the authorized representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section 6.11
conflict with any other provisions of this Agreement, the provisions
of this Section 6.11 shall control;
(iv) the rights of 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 Depository Agreement,
unless and until Definitive Certificates are issued pursuant to
Section 6.13 of the Agreement, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and
receive and transmit distributions of principal and interest on the
Investor Certificates to such Clearing Agency Participants; and
58
(v) whenever this Agreement requires or permits actions to
be taken based upon instructions or directions of a specified
percentage of the Invested Amount of any or all Series of
Certificates outstanding, the Clearing Agency shall be deemed to
represent such percentage only to the extent that it has received
instructions to such effect from Certificate Owners and/or Clearing
Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in Investor
Certificates.
Section 6.12 Notices to Clearing Agency. Whenever notice or other
communication to the Investor Certificateholders is required under this
Agreement, unless and until Definitive Certificates shall have been issued to
Certificate Owners pursuant to Section 6.13 of the Agreement, the Trustee, the
Servicer and the Paying Agent shall give all such notices and communications
specified herein to be given to Holders of the Investor Certificates to the
Clearing Agencies.
Section 6.13 Definitive Certificates. If Book-Entry Certificates have
been issued pursuant to Section 6.11 and if (i)(A) the Transferors advise the
Trustee in writing that the Clearing Agency is no longer willing or able to
discharge properly its responsibilities under the Depository Agreement, and
(B) the Trustee or the Transferors are unable to locate a qualified successor,
(ii) the Transferors at their option, advise the Trustee in writing that they
elects to terminate the book-entry system through the Clearing Agency with
respect to the Certificates or (iii) after the occurrence of a Servicer
Default, Certificate Owners representing beneficial interests aggregating more
than 50% of the Invested Amount, of any Series advise the Trustee and the
Clearing Agency through the Clearing Agency Participants in writing that the
continuation of a book-entry system through the Clearing Agency is no longer
in the best interests of the Certificate Owners, the Trustee shall notify all
Certificate Owners, through each applicable 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 the
Investor Certificates by the Clearing Agency, accompanied by registration
instructions from the Clearing Agency for registration the Trustee shall issue
the Definitive Certificates. Neither the Transferors, the Transfer Agent and
Registrar nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying
on, such instructions. Upon the issuance of Definitive Certificates 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 the Definitive Certificates as
Certificateholders hereunder.
Section 6.14 Meetings of Certificateholders.
(a) Unless not permitted by the Supplement for any Series
issued in whole or in part in Bearer Certificates, the Transferors, the
Servicer or the Trustee may at any time call a meeting of the
Certificateholders of such Series or of all Series, to be held at such time
and at such place as the Transferors, the Servicer or the Trustee, as the case
may be, shall determine, for the purpose of approving a modification of or
amendment to, or obtaining a waiver of, any covenant or condition set forth in
this Agreement with respect to such Series or in the Certificates of such
Series, subject to Section 13.01 of the Agreement. References in this Section
to Certificateholders shall be deemed to refer to the Exchangeable Transferor
Certificates and only those Series of Investor Certificates for which this
Section 6.14 is applicable. Notice of any
59
meeting of 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 of the Agreement and at least
once in an Authorized Newspaper and, if and for so long as the Certificates
are listed on the Luxembourg Stock Exchange or other stock exchange and such
exchange so requires, in a newspaper of general circulation in Luxembourg
(which newspaper shall be printed in the English or French language and
customarily published on each business day in Luxembourg) or the location
required by such other stock exchange, the first publication to be not less
that 20 nor more than 180 days prior to the date fixed for the meeting. To be
entitled to vote at any meeting of Certificateholders, a person shall be (i) a
Holder of one or more Certificates of the applicable Series or (ii) a person
appointed by an instrument in writing as proxy by the Holder of one or more
Certificates. The only Persons who shall be entitled to be present or to speak
to any meeting of Certificateholders shall be the Persons entitled to vote at
such meeting and their counsel and any representatives of the Transferors, the
Servicer and the Trustee and their respective counsels.
(b) At a meeting of Investor Certificateholders, persons
entitled to vote Investor Certificates evidencing Undivided Interests
aggregating a majority of the Invested Amount of the applicable Series 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
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 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 10 days; at the
reconvening of any meeting further adjourned for lack of a quorum, the Persons
entitled to vote at least 25% in Undivided Interest of the applicable Series
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 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 Investor Certificates which
shall constitute a quorum.
(c) Any 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 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 of the Agreement, 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 the Investor
Certificateholders whether or not present or represented at the meeting.
The holding of Bearer Certificates shall be proved by the production of such
Bearer Certificates or by a certificate, satisfactory to the Servicer and the
Trustee, executed by any bank, trust company or recognized securities dealer,
wherever situated, satisfactory to the Servicer and the Trustee. 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
60
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 Trustee. The holding of Registered
Certificates shall be proved by the Certificate Register or by a certificate
or certificates of the Transfer Agent and Registrar.
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 a majority in Undivided Interest of the Certificates of such
Series represented at the meeting. No vote shall be cast or counted at any
meeting in respect of any 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 a Certificateholder or proxy.
Any meeting of Certificateholders duly called at which a quorum is present may
be adjourned from time to time, and the meeting may be held as so adjourned
without further notice.
(d) The vote upon any resolution submitted to any meeting of
Certificateholders shall be by written ballot on which shall be subscribed the
signatures of the Certificateholders or proxies and on which shall be
inscribed the serial number or numbers of the Certificates held or represented
by them. The permanent chairman of the meeting shall appoint two 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 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 Servicer 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.
[END OF ARTICLE VI]
61
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFERORS
Section 7.01 Liability of the Transferors. Each Transferor shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by such Transferor.
Section 7.02 Merger or Consolidation of, or Assumption of the
Obligations of, a Transferor. Neither Transferor shall consolidate with or
merge into any other corporation or convey or transfer its properties and
assets substantially as an entirety to any Person, unless:
(i) the corporation formed by such consolidation or into
which such Transferor is merged or the Person which acquires by
conveyance or transfer the properties and assets of such Transferor
substantially as an entirety shall be organized and existing under
the laws of the United States of America or any State or the District
of Columbia, and if such Transferor is not the surviving entity,
shall expressly assume, by an agreement supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee,
the performance of every covenant and obligation of such Transferor,
as applicable hereunder and shall benefit from all the rights granted
to such Transferor, as applicable hereunder. (To the extent that any
right, covenant or obligation of such Transferor, is inapplicable to
the successor entity, such successor entity shall be subject to such
covenant or obligation, or benefit from such right, as would apply,
to the extent practicable, to such successor entity.);
(ii) such Transferor has delivered to the Trustee an
Officer's Certificate signed by a Vice President of such Transferor
and an Opinion of Counsel each stating that such consolidation,
merger, conveyance or transfer and such supplemental agreement comply
with this Section 7.02 and that all conditions precedent herein
provided for relating to such transaction have been complied with;
and
(iii) the Rating Agencies have advised the Transferors and
the Trustee that the rating of the Certificates, after giving effect
to such assignment and succession, will not be lowered or withdrawn.
(b) The obligations of each Transferor hereunder shall not
be assignable nor shall any Person succeed to the obligations of either
Transferor hereunder except in each case in accordance with the provisions of
the foregoing paragraph.
Section 7.03 Limitation on Liability of the Transferors. The
directors, officers, employees or agents of the Transferors shall not be under
any liability to the Trust, the Trustee, the Certificateholders or any other
Person hereunder or pursuant to any document delivered hereunder, it being
expressly understood that all such liability is expressly waived and released
as a condition of, and as consideration for, the execution of this Agreement
and any Supplement and the issuance of the Certificates; provided, however,
that this provision shall not protect the officers, directors, employees or
agents of the Transferors against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
62
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Except as provided in Section 7.04, neither
Transferor will be under any liability to the Trust, the Trustee, the
Certificateholders or any other Person for any action taken or for refraining
from the taking of any action in its capacity as a Transferor pursuant to this
Agreement or any Supplement whether arising from express or implied duties
under this Agreement or any Supplement; provided, however, that this provision
shall not protect a Transferor against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Each Transferor may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder.
Section 7.04 Liabilities. Notwithstanding Section 7.03, by entering
into this Agreement, each of RFC and Centurion Bank, jointly and severally,
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 a
Certificateholder in the capacity of an investor in the Investor Certificates)
arising out of or based on the arrangement created by this Agreement and the
actions of the Servicer taken pursuant hereto as though this Agreement created
a partnership under the Uniform Partnership Act. Each of RFC and Centurion
Bank, jointly and severally, agrees to pay, indemnify and hold harmless each
Investor Certificateholder against and from any and all such losses, claims,
damages and liabilities except to the extent that they arise from any action
by such Investor Certificateholder. Subject to Sections 8.03 and 8.04, in the
event of a Service Transfer, the Successor Servicer will indemnify and hold
harmless RFC and Centurion Bank for any losses, claims, damage and liabilities
of RFC or Centurion Bank, as applicable, as described in this Section 7.04
arising from the actions or omissions of such Successor Servicer. The amount
of each Transferor's liability under this Section 7.04 shall be subordinate to
the security interest of the Trust in the Receivables and shall be payable
from the assets of such Transferor at the time such liability is asserted and
at any time thereafter.
[END OF ARTICLE VII]
63
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
Section 8.01 Liability of the Servicer. The Servicer shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer in such capacity herein.
Section 8.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer. The Servicer shall not consolidate with or merge
into any other corporation or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) the corporation formed by such consolidation or into
which the Servicer is merged or the Person which acquires by
conveyance or transfer the properties and assets of the Servicer
substantially as an entirety shall be a corporation organized and
existing 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, shall expressly assume, by an agreement supplemental hereto,
executed and delivered to the Trustee, the performance of every
covenant and obligation of the Servicer hereunder. (To the extent
that any right, covenant or obligation of the Transferor, is
inapplicable to the successor entity, such successor entity shall be
subject to such covenant or obligation, or benefit from such right,
as would apply, to the extent practicable, to such successor entity);
and
(ii) the Servicer has delivered to the Trustee an officer's
Certificate and an Opinion of Counsel each stating that such
consolidation,, merger, conveyance or transfer and such supplemental
agreement comply with this Section 8.02 and that all conditions
precedent herein provided for relating to such transaction have been
complied with. The Servicer shall promptly advise the Rating Agencies
in writing of any such merger, consolidation, conveyance or transfer.
Section 8.03 Limitation on Liability of the Servicer and Others. The
directors, officers, employees or agents of the Servicer shall not be under
any liability to the Trust, the Transferors, the Trustee, the
Certificateholders, or any other Person hereunder or pursuant to any document
delivered hereunder, it being expressly understood that all such liability is
expressly waived and released as a condition of, and as consideration for, the
execution of this Agreement and any Supplement and the issuance of the
Certificates; provided, however, that this provision shall not protect the
directors, officers, employees and agents of the Servicer against any
liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties hereunder or by
reason of reckless disregard of
64
obligations and duties hereunder. Except as provided in Section 8.04, the
Servicer shall not be under any liability to the Trust, the Trustee, the
Certificateholders or any other Person for any action taken or for refraining
from the taking of any action in its capacity as Servicer pursuant to this
Agreement or any Supplement whether arising from express or implied duties
under this Agreement or any Supplement; provided, however, that this provision
shall not protect the Servicer against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. The Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Receivables in accordance with this
Agreement or any Supplement which in its reasonable opinion may involve it in
any expense or liability.
Section 8.04 Indemnification of the Trust and the Trustee. The
Servicer shall indemnify and hold harmless the Trust, for the benefit of the
Certificateholders, and the Trustee, including its officers, directors and
employees from and against any loss, liability, expense, damage or injury
arising out of or relating to any claims, actions or proceedings brought or
asserted by third parties which are suffered or sustained by reason of any
acts or omissions of the Servicer pursuant to this Agreement or any
Supplement, including but not limited to any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim;
provided, however, that the Servicer shall not indemnify the Trust, the
Trustee or its officers, directors or employees or the Investor
Certificateholders for any liability, cost or expense of the Trust or the
Trustee or its officers, directors or employees if any such claims, actions or
proceedings relate to any action taken by the Trustee at the request of the
Investor Certificateholders or any Federal, state or local income or franchise
taxes (or any interest or penalties with respect thereto) required to be paid
by the Trustee or the Investor Certificateholders in connection herewith to
any taxing authority. Subject to Sections 7.01 and 7.04 and subsection
10.02(b) of the Agreement, any indemnification pursuant to this Section shall
only be from the assets of the Servicer. The provisions of this indemnity
shall run directly to and be enforceable by an injured party subject to the
limitations hereof and shall survive the termination of the Agreement and
payment in full of the certificates.
Section 8.05 The Servicer Not to Resign. The Servicer shall
not resign from the obligations and duties hereby imposed on it as such except
(a) upon determination that (i) the performance of its duties hereunder is or
will become impermissible under applicable law, regulation or order and (ii)
there is no reasonable action which the Servicer could take to make the
performance of its duties hereunder permissible under applicable law, or (b)
upon the satisfaction of the following conditions, (i) the assumption, by an
agreement supplemental hereto, executed by and delivered to the Trustee, of
the obligations and duties of the Servicer hereunder by the proposed successor
Servicer, (ii) the written confirmation by the Rating Agencies that the then
rating of any Series of Certificates then outstanding will not, solely as a
result of such transfer, be reduced or withdrawn, (iii) the delivery to the
Trustee of an Opinion of Counsel substantially to the effect that (A) such
transfer will not adversely affect the treatment of any Series of Certificates
then outstanding after such transfer as debt for Federal and state income tax
purposes, and (B) such transfer will not have any material adverse impact on
the federal or state income taxation of the Trust or an Investor
Certificateholder or any Certificate Owner, and (iv) the proposed successor
Servicer has a net worth of not less than $50,000,000 and its regular business
includes the servicing of charge card or revolving credit receivables. Any
determination pursuant to clause (a) of this Section permitting the
resignation of the Servicer shall be evidenced as to clause (a)(i) of this
Section by an Opinion of Counsel to such effect delivered to the Trustee.
Notwithstanding anything in this Agreement or any Supplement to the contrary,
any Successor Servicer appointed under clause (b) of this Section shall be
65
deemed to be a Successor Servicer as defined hereunder. No such resignation
shall become effective until the Trustee or its duly appointed agent (which
may not be the outgoing Servicer) or a Successor Servicer shall have assumed
the responsibilities and obligations of the Servicer in accordance with
Section 10.02 hereof. If the Trustee is unable within 120 days of the date of
such determination to appoint a Successor Servicer pursuant to subsection
10.02(a), the Trustee or its duly appointed agent (which may not be the
outgoing Servicer) shall serve as Successor Servicer hereunder but the Trustee
shall have continued authority to appoint another Person as Successor
Servicer.
Section 8.06 Access to Certain Documentation and Information
Regarding the Receivables. The Servicer shall provide to the Trustee access to
the documentation regarding the Accounts and the Receivables in such cases
where the Trustee is required in connection with the enforcement of the rights
of the Investor Certificateholders, or by applicable statutes or regulations,
to review such documentation such access being afforded without charge but
only (i) upon reasonable request, (ii) during normal business hours, (iii)
subject to such security and confidentiality procedures as the Servicer may
deem reasonably necessary and (iv) at offices designated by the Servicer.
Nothing in this Section 8.06 shall derogate from the obligation of the
Transferors, the Trustee or the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Obligors and the failure
of the Servicer to provide access as provided in this Section 8.06 as a result
of such obligation shall not constitute a breach of this Section 8.06.
Section 8.07 Delegation of Duties. It is understood and agreed by the
parties hereto that the Servicer may delegate its duties hereunder to any
Person who agrees to conduct such duties in accordance with the applicable
Account Guidelines. The fees of any Person to whom such duties are delegated
are, and shall continue to be, for the account of the Servicer. Any such
delegations do not and shall not relieve the Servicer of its liability and
responsibility with respect to such duties, and do not and shall not
constitute a resignation within the meaning of Section 8.05 hereof. If any
such additional delegation is to a Person other than FDC or a subsidiary of
FDC or American Express Company or otherwise is not in the ordinary course of
business, notification thereof shall be given to each Rating Agency.
Section 8.08 Examination of Records. The Transferors and the Servicer
shall clearly and unambiguously identify each Account (including any
Additional Account designated pursuant to Section 2.06) in its computer or
other records to reflect that the Receivables arising in such Account have
been conveyed to the Trust pursuant to this Agreement. The Transferors 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.
[END OF ARTICLE VIII]
66
ARTICLE IX
PAY OUT EVENTS
Section 9.01 Pay Out Events. Unless modified with respect to any
Series of Investor Certificates by any related Supplement, if any one of the
following events shall occur:
(a) any of RFC, Centurion Bank or TRS shall consent to the
appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to it or relating to all or substantially all of
its property, or a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against any
of RFC, Centurion Bank or TRS and such decree or order shall have remained in
force undischarged or unstayed for a period of 60 days; or any of RFC,
Centurion Bank or TRS shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations; or
either Transferor shall become unable for any reason to transfer Receivables
to the Trust in accordance with the provisions of this Agreement;
(b) the Trust shall become an "investment company" within
the meaning of the Investment Company Act of 1940, as amended;
(c) after any applicable grace period, a failure by either
Transferor to convey the Receivables in Additional Accounts to the Trust when
required; and
(d) on any Determination Date, the Transferor Amount as of
the last day of the prior Due Period was less than 3.0% of the Trust Principal
Component as of the last day of the prior Due Period; then, a Pay Out Event
with respect to all Series of Certificates then outstanding shall occur
without any notice or other action on the part of the Trustee or all Investor
Certificateholders immediately upon the occurrence of such event. The Trustee
shall advise the Rating Agencies in writing of the occurrence of any Pay Out
Event.
Section 9.02 Additional Rights Upon the Occurrence of Certain Events.
(a) If any of RFC, Centurion Bank or TRS voluntarily goes
into liquidation or consents to the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, marshaling of assets
and liabilities or similar proceedings of or relating to any of RFC, Centurion
Bank or TRS or of or relating to all or substantially all their respective
property, or a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against any of RFC,
Centurion Bank or TRS; or any of RFC, Centurion Bank or TRS shall admit in
writing its inability to pay
67
its debts generally as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors or voluntarily suspend payment of its
obligations; or either Transferor shall become unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of this
Agreement (such voluntary liquidation, appointment entering of such decree,
admission, filing, making, suspension or inability, a "Dissolution Event"),
the Transferors or TRS shall promptly give notice of such event to the
Trustee, and TRS shall on the day of such appointment, voluntary liquidation,
entering of such decree, admission, filing, making, suspension or inability,
as the case may be (the "Appointment Day"), immediately cease to sell
Receivables to RFC under the Receivable Purchase Agreement and the Transferors
will immediately cease to transfer Receivables to the Trust hereunder. Within
15 days of the receipt by the Trustee of the notice of a Dissolution Event,
the Trustee shall (i) publish a notice in an Authorized Newspaper that a
Dissolution Event has occurred and that the Trustee intends to sell, dispose
of or otherwise liquidate the Receivables in a commercially reasonable manner
and (ii) send written notice to the Investor Certificateholders describing the
provisions of this Section 9.02 and requesting instructions from such Holders,
which notice shall request each Investor Certificateholder to advise the
Trustee in writing that it elects one of the following options: (A) the
Investor Certificateholder wishes the Trustee to instruct the Servicer not to
sell, dispose of or otherwise liquidate the Receivables, or (B) the Investor
Certificateholder wishes the Trustee to instruct the Servicer to sell, dispose
of or otherwise liquidate the Receivables and to instruct the Servicer to
reconstitute the Trust upon the same terms and conditions set forth herein, or
(C) the Investor Certificateholder refuses to advise the Trustee as to the
specific action the Trustee shall instruct the Servicer to take. If after 90
days from the day notice pursuant to clause (i) above is first published (the
"Publication Date"), the Trustee shall not have received written instructions
of Holders of Investor Certificates representing Undivided Interests
aggregating in excess of 50% of the related Invested Amount of each Series (or
in the case of a series having more than one class of investor certificates,
each class of such series) to the effect that the Trustee shall not instruct
the Servicer to sell, dispose of, or otherwise liquidate the Receivables and
to instruct the Servicer to reconstitute the Trust upon the same terms and
conditions as set forth herein, the Trustee shall instruct the Servicer to
proceed to sell, dispose of, or otherwise liquidate the Receivables in a
commercially reasonable manner and on commercially reasonable terms, which
shall include the solicitation of competitive bids and the Servicer shall
proceed to consummate the sale, liquidation or disposition of the Receivables
as provided above with the highest bidder for the Receivables. If, however,
with respect to the portion of the Receivables allocable to any outstanding
Series, the holders of more than 50% of the principal amount of each class of
such Series instruct the Trustee not to sell the portion of the Receivables
allocable to such Series, the Trust shall continue with respect to such Series
pursuant to the terms of the Agreement and the Supplement. The portion of the
Receivables allocable to any Series shall be determined in the same manner as
such determination would be made pursuant to Section 12.02(c). The Transferors
or any of their respective Affiliates shall be permitted to bid for the
Receivables. In addition the Transferors or any of their respective Affiliates
shall have the right to match any bid by a third person and be granted the
right to purchase the Receivables at such matched bid price. The Trustee may
obtain a prior determination from the conservator or receiver 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.
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(b) The proceeds from the sale, disposition or liquidation
of the Receivables pursuant to subsection (a) above shall be treated as
Collections on the Receivables and shall be allocated and deposited in
accordance with the provisions of Article IV; provided that the Trustee shall
determine conclusively without liability for such determination the amount of
such proceeds which are allocable to Yield Collections and the amount of such
proceeds which are allocable to Principal Collections. On the day following
the Distribution Date on which such proceeds are distributed to the Investor
Certificateholders, the Trust shall terminate.
[END OF ARTICLE IX]
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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 to make
such payment, transfer or deposit or to give notice to the Trustee as to any
required drawing or payment under any Enhancement on or before the date
occurring five Business Days after the date such payment, transfer, deposit or
drawing or such instruction or notice is required to be made or given, as the
case may be, under the terms of this Agreement or any Supplement; provided,
however, that any such failure caused by a nonwillful act of the Servicer
shall not constitute a Servicer Default if the Servicer promptly remedies such
failure within five Business Days after receiving notice of such failure or
otherwise becoming aware of such failure;
(b) failure on the part of the Servicer duly to observe or
perform any other covenants or agreements of the Servicer set forth in this
Agreement or any Supplement, which has a material adverse effect on the
Certificateholders of any Series then outstanding and which continues
unremedied for a period of 60 days after the date on which the written notice
of such failure requiring the same to be remedied shall have been given to the
Servicer and which continues to materially adversely affect the rights of the
Holders of Investor Certificates of any Series; the Servicer shall delegate
its duties under this Agreement, except as permitted by Section 8.07;
(c) any representation, warranty or certification made by
the Servicer in this Agreement or 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 Certificateholders of any Series then outstanding and which continues to
be incorrect in any material respect and which continues to affect materially
and adversely the rights of the Certificateholders of any Series for a period
of 60 days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Servicer by the Trustee,
or to the Servicer and the Trustee by the Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the Invested
Amount of any Series adversely affected thereby; or
(d) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property, or
a decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, marshaling of assets
and liabilities or similar proceedings, or for the winding-up or liquidation
of its affairs, shall have been entered against the Servicer and such decree
or order shall have remained in force undischarged or unstayed for a period of
60 days; or the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make any assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations;
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then, so long as such Servicer Default shall not have been remedied, either
the Trustee or the Holders of Investor Certificates evidencing Undivided
Interests aggregating more than 50% of the Aggregate Invested Amount, by
notice then given in writing to the Servicer (and to the Trustee if given by
the Investor Certificateholders) (a "Termination Notice"), may terminate all
of the rights and obligations of the Servicer as Servicer under this Agreement
and in and to the Receivables and the proceeds thereof and appoint a new
Servicer (a "Service Transfer"). The rights and interests of the Transferor
Interest will not be affected by any Service Transfer. The Trustee, upon
giving or receiving a Termination Notice shall immediately notify the Rating
Agencies and any Enhancement Provider of such notice. 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 Service Transfer. The Servicer agrees to cooperate with the
Trustee and such Successor Servicer in effecting the termination of the
responsibilities and rights of the Servicer to conduct servicing hereunder,
including, without limitation, the transfer to such Successor Servicer of all
authority of the Servicer to service the Receivables provided for under this
Agreement, including, without limitation, all authority over all Collections
which shall on the date of transfer be held by the Servicer for deposit, or
which have been deposited by the Servicer, in the Collection Account, or which
shall thereafter be received with respect to the Receivables, and in assisting
the Successor Servicer and in enforcing all rights to Recoveries. 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 Successor Servicer shall be required to enter into such
customary licensing and confidentiality agreements as the Servicer shall deem
necessary to protect its interest.
Notwithstanding the foregoing, a delay in or failure of
performance referred to in subsection 10.01(a) for a period of 10 Business
Days after the applicable grace period or under subsection 10.01(b) or (c) for
a period of 60 Business Days after the applicable grace period, shall not
constitute a Servicer Default if such delay or failure could not be prevented
by the exercise of reasonable diligence by the Servicer and such delay or
failure was caused by an act of God or the public enemy, acts of declared or
undeclared war, public disorder, rebellion, riot or sabotage, epidemics,
landslides, lightning, fire, hurricanes, tornadoes, earthquakes, nuclear
disasters or meltdowns, floods, power outages or similar causes. The preceding
sentence shall not relieve the Servicer from using its best efforts to perform
its obligations in a timely manner in accordance with the terms of this
Agreement and the Servicer shall provide the Trustee, any Enhancement
Provider, the Transferors and the Holders of Investor Certificates with an
Officer's Certificate giving prompt notice of such failure or delay by it,
together with a description of the cause of such failure or delay and its
efforts so to perform its obligations. The Servicer shall immediately notify
the Trustee in writing of any Servicer Default.
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Section 10.02 Trustee to Act; Appointment of Successor.
(a) On and after the receipt by the Servicer of a
Termination Notice pursuant to Section 10.01, the Servicer shall continue to
perform all servicing functions under this Agreement until the date specified
in the Termination Notice or otherwise specified by the Trustee in writing or,
if no such date is specified in such Termination Notice, or otherwise
specified by the Trustee, until a date mutually agreed upon by the Servicer
and Trustee (not to exceed 90 days from the date of delivery of such notice).
The Trustee shall as promptly as possible after the giving of a Termination
Notice appoint a successor servicer (the "Successor Servicer"), with the
consent of any Enhancement Provider, and such Successor Servicer shall accept
its appointment by a written assumption in a form acceptable to the Trustee,
the Transferors and any Enhancement Provider. The Transferors shall have the
right to nominate to the Trustee the name of a potential successor servicer
which nominee shall be selected by the Trustee as the Successor Servicer,
subject to the consent of any Enhancement Provider. The Trustee may obtain
bids from any potential successor servicer. If the Trustee is unable to obtain
any bids from any potential successor servicer and the Servicer delivers an
Officer's Certificate to the effect that it cannot in good faith cure the
Servicer Default which gave rise to a transfer of servicing, then the Trustee
shall offer the Transferors the right to accept reassignment of all the
Receivables; provided, however, that no such reassignment shall occur unless
the Transferors shall deliver to the Trustee and the Rating Agencies an
Opinion of Counsel reasonably acceptable to the Trustee that such reassignment
would not constitute a fraudulent conveyance by the Transferor. The
reassignment deposit amount for such a reassignment shall be equal to the
Aggregate Invested Amount (less the aggregate principal amount on deposit in
any principal funding account), plus (i) accrued interest thereon, at the
applicable Certificate Rate (through the end of the Due Period for the
subsequent Distribution Date of reassignment), and (ii) any unpaid amounts
payable to any Enhancement Provider under the applicable Enhancement
agreement. In the event that a Successor Servicer has not been appointed and
has not accepted its appointment at the time when the Servicer ceases to act
as Servicer, the Trustee (as trustee hereunder) without further action shall
automatically be appointed the Successor Servicer. Notwithstanding the above,
the Trustee shall, if it is legally unable so to act, petition a court of
competent jurisdiction to appoint any established financial institution having
a net worth of not less than $50,000,000 and whose regular business includes
the servicing of charge card or revolving credit receivables as the Successor
Servicer hereunder. Notwithstanding anything to the contrary in this
Agreement, the entire amount of the reassignment deposit amount shall be
distributed to the Investor Certificateholders of the related Series on the
subsequent Distribution Date for such Series pursuant to Section 12.03 (except
for the applicable Repayment Amount and other amounts payable to any
Enhancement Provider under the applicable Enhancement agreement, which amounts
shall be distributed to such Enhancement Provider.)
(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;
provided, however, that, the outgoing Servicer shall not be relieved of any
liability hereunder for its actions prior to the transfer of servicing
hereunder; and provided further, that, (i) the outgoing Servicer shall not
indemnify the Trust or the Trustee under Section 8.04 for acts, omissions or
alleged acts or omissions by a Successor
72
Servicer and (ii) the outgoing Servicer shall not pay or reimburse the Trustee
pursuant to Section 11.05 for any expense, disbursement or advance of the
Trustee related to or arising as a result of the negligence or bad faith of
the Successor Servicer. Any Successor Servicer, by its acceptance of its
appointment, will automatically agree to be bound by the terms and provisions
of any applicable Enhancement agreement.
(c) In connection with such appointment and assumption, the
Trustee shall be entitled to such compensation, or may make such arrangements
for the compensation of the Successor Servicer out of Collections, as it and
such Successor Servicer shall agree; provided, however, that no such
compensation shall be in excess of the Monthly Servicing Fee permitted to the
Servicer pursuant to Section 3.02.
(d) All authority and power granted to the Successor
Servicer under this Agreement shall automatically cease and terminate upon
termination of the Trust pursuant to Section 12.01 and shall pass to and be
vested in the Transferors and, without limitation, the Transferors are hereby
authorized and empowered to execute and deliver, on behalf of the Successor
Servicer, as attorney-in-fact or otherwise, all documents and other
instruments, and to do and accomplish all other acts or things necessary or
appropriate to effect the purposes of such transfer of servicing rights. The
Successor Servicer agrees to cooperate with the Transferors in effecting the
termination of the responsibilities and rights of the Successor Servicer to
conduct servicing on the Receivables. The Successor Servicer shall transfer
its electronic records relating to the Receivables to the Transferors in such
electronic form as the Transferors may reasonably request and shall transfer
all other records, correspondence and documents to the Transferors in the
manner and at such times as the Transferors shall reasonably request. To the
extent that compliance with this Section 10,02 shall require the Successor
Servicer to disclose to the Transferors information of any kind which the
Successor Servicer deems to be confidential, the Transferors shall be required
to enter into such customary licensing and confidentiality agreements as the
Successor Servicer shall deem necessary to protect its interests,
Section 10.03 Notification to Certificateholders. Upon the occurrence
of any Servicer Default, the Servicer shall give prompt written notice thereof
to the Trustee, the Rating Agencies and any Enhancement Provider, and the
Trustee shall give notice to the Investor Certificateholders at their
respective addresses appearing in the Certificate Register. Upon any
termination or appointment of a Successor Servicer pursuant to this Article X,
the Trustee shall give prompt written notice thereof to Investor
Certificateholders at their respective addresses appearing in the Certificate
Register, the Rating Agencies and to any Enhancement Provider. Notice to
Holders of Bearer Certificates shall be given by publication in the manner
described in Section 13.05 of the Agreement.
Section 10.04 Waiver of Past Defaults. The Holders of Investor
Certificates evidencing Undivided Interests aggregating more than 66-2/3% of
the Invested Amount of any Series then outstanding affected by any default by
the Servicer or either Transferor may, on behalf of all Holders of
Certificates of such affected Series, waive any default by the Servicer or
such Transferor in the performance of their respective obligations hereunder
and its consequences, except a default in the failure to make any required
deposits or payments of interest or principal with respect to any Series of
Certificates. Upon any such waiver of a past default, such default shall cease
to exist, and any default arising therefrom shall be deemed to have been
remedied for
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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.
[END OF ARTICLE X]
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ARTICLE XI
THE TRUSTEE
Section 11.01 Duties of Trustee.
(a) The Trustee, prior to the occurrence of a Servicer
Default or Pay Out Event and after the curing or waiving of all Servicer
Defaults or Pay Out Events 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 or Pay Out Event has occurred (which has not been cured
or waived), the Trustee (as trustee and not Successor Servicer) shall exercise
such of the rights and powers vested in it by this Agreement or any
Supplement, and use the same degree of care and skill in their 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 or any Supplement, shall
examine them to determine whether they conform as to form to the requirements
of this Agreement or any Supplement, but shall not be required to verify the
accuracy of any information, calculations or conclusions stated therein. The
Trustee shall give prompt written notice to the Certificateholders (or, in the
case of Holders of Bearer Certificates, notice by publication in the manner
described in Section 13.05 of the Agreement) of any material lack of
conformity of any such instrument to the applicable requirements of this
Agreement or any Supplement discovered by the Trustee which would entitle a
specified percentage of the Investor Certificateholders to take any action
pursuant to this Agreement or any Supplement.
(c) Subject to Section 11.01(a) of this Agreement, no
provision of this Agreement or any Supplement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
(i) the Trustee shall not be 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 Undivided Interests aggregating more than 50%
of the Invested Amount of any Series adversely affected thereby
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 or any
Supplement;
(iii) the Trustee shall not be charged with knowledge of any
failure by the Servicer (other than the Trustee, in its capacity as
Successor Servicer) to comply with the obligations of the Servicer
referred to in clauses (a), (b) and (c) of Section 10.01 unless a
Responsible Officer of the Trustee obtains actual knowledge of such
failure (it being
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understood that knowledge of the Servicer, in its capacity as agent
for the Trustee, is not attributable to the Trustee) or the Trustee
receives written notice of such failure from the Servicer or any
Holders of Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Invested Amount of any Series
adversely affected thereby;
(iv) in making a determination of any material and adverse
effect upon Certificateholders, the Investor Certificates, the
Trustee may, as to matters of law, rely exclusively upon an Opinion
of Counsel.
(d) The Trustee (in its capacity as such) shall not be
required to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it, and none of the provisions
contained in this Agreement or any Supplement 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 or the Successor Servicer under this Agreement
or any Supplement except during such time, if any, as the Trustee shall be the
Successor Servicer in accordance with the terms of this Agreement or any
Supplement.
(e) Except for actions expressly authorized by this
Agreement or any Supplement, the Trustee shall take no action reasonably
likely to impair the interests of the Trust in any Receivable now existing or
hereafter created or to impair the value of any Receivable now existing or
hereafter created.
(f) Except as specifically provided in this Agreement, the
Trustee shall have no power to vary the corpus of the Trust.
(g) In the event that the Paying Agent or the Transfer Agent
and Registrar shall not be the Trustee and fail to perform any obligation,
duty or agreement in the manner or on the day required to be performed by the
Paying Agent or the Transfer Agent and Registrar, as the case may be, under
this Agreement, the Trustee shall be obligated promptly upon its knowledge
thereof to perform such obligation, duty or agreement in the manner so
required but shall not be required to make a payment out of its own funds.
(h) Any action, suit or proceeding brought in respect of one
or more particular Series shall have no effect on the Trustee's rights, duties
and obligations hereunder with respect to any one or more Series not the
subject of such action, suit or proceeding.
Section 11.02 Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 11.01:
(a) the Trustee may request, rely on and shall be protected
in acting on, or in refraining from acting in accord with, any resolution,
Officer's Certificate, Opinion of Counsel, certificate of independent public
accountants or any other certificate statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document,
including, without limitation, any request or instruction by the Servicer or
the Transferor to make any deposit or payment or any draw on any Enhancement
or to transfer any Receivables or
76
Accounts, believed by it to be genuine and to have been signed or presented to
it pursuant to this Agreement or any Supplement by the proper party or
parties;
(b) the Trustee may consult with counsel as to matters of
law and any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel as to
any actions required to be taken or withheld hereunder;
(c) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement or any Supplement, or
to institute, conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of any of the Certificateholders or
Certificate Owners, pursuant to the provisions of this Agreement or any
Supplement, unless such Certificateholders or Certificate Owners, 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 (as Trustee but not as
Successor Servicer) of the obligations, upon the occurrence of any Servicer
Default (which has not been cured or waived), to exercise such of the rights
and powers vested in it by this Agreement or any Supplement, and to use the
same degree of care and skill in their 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 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
or any Supplement;
(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, except to the extent specifically requested in
writing so to do by Holders of Investor Certificates evidencing Undivided
Interests aggregating more than 50% of the Invested Amount of any Series which
could be adversely affected if the Trustee does not perform such acts and the
Trustee is reasonably indemnified therefor;
(f) the Trustee (in its capacity as such) 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 (in its
capacity as such) 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;
(g) except as may be required by subsection 11.01(a) or
11.01(b) 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 the Transferor or Servicer with their
representations, warranties or covenants or for any other purpose;
(h) whether or not therein expressly so provided, every
provision of this Agreement or any Supplement relating to the conduct or
affecting the eligibility of or affording
77
protection to the Trustee (in its capacity as such) shall be subject to the
provisions of Sections 11.01, 11.02 and 11.03;
(i) the permissive right of the Trustee to take actions
enumerated in this Agreement or any Supplement shall not be construed as a
duty;
(j) whenever in the administration of this Agreement or any
Supplement, the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officer's Certificate;
(k) no implied covenants or obligations shall be read into
this Agreement against the Trustee;
(l) without limiting the generality of this Section or
Section 11.01, the Trustee shall have no duty (i) to see to any recording,
filing, or depositing of the Agreement or any agreement referred to therein or
any financing statement or continuation statement evidencing a security
interest in the Receivables or the Accounts, or to see to the maintenance of
any such recording, filing or depositing or any rerecording, refiling or
redepositing of any thereof, or (ii) to confirm or verify the contents of any
reports or certificates of the Servicer delivered to the Trustee pursuant to
the Agreement believed by the Trustee to be genuine and to have been signed or
presented by the proper party or parties; and
(m) the Trustee shall not be deemed to be a fiduciary for
the Enhancement Provider, if any, in its capacity as such, and the Trustee's
sole responsibility with respect to the Enhancement Provider in its capacity
as such, shall be to perform those duties with respect to the Enhancement
Provider as are specifically set forth in the Agreement and no implied
covenants shall be read into the Agreement against the Trustee with respect to
the Enhancement Provider.
Section 11.30 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 certificates of
authentication on the Certificates). Except as set forth in Section 11.15, the
Trustee makes no representations as to (i) the validity or sufficiency of this
Agreement or any Supplement or of the Certificates (other than the
certificates of authentication on the Certificates), (ii) the existence or
validity of any Receivable, (iii) the validity of any transfer or assignment
of any Receivable to the Trust, (iv) the validity of any grant of a security
interest to the Trust in any Receivable, (v) the perfection of any security
interest (whether as of the date hereof or at any future time) in any
Receivable, (vi) the maintenance of or the taking of any action to maintain
such perfection, (vii) the receipt by the Trustee or the Servicer of any
Receivable, (viii) the performance or enforcement of any Receivable, (ix) the
compliance by the Transferor or the Servicer with any covenant or
representation, (x) the breach by the Transferor or the Servicer of any
warranty or representation made hereunder or in any related document or the
accuracy of any such warranty or representation or (xi) any action taken by
the Servicer in the name of the Trustee. 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 Transferors in respect of the Receivables or deposited in or
withdrawn from the Collection Account or other Accounts now or hereafter
established to effectuate the transactions contemplated herein and in
accordance with the terms hereof.
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Section 11.04 Trustee May Own Certificates. 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.
Section 11.05 The Servicer to Pay Trustee's Fees and Expenses. The
Servicer covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to receive, reasonable compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee
of an express trust) for all services rendered by it in the execution of the
trust hereby created and in the exercise and performance of any of the powers
and duties hereunder of the Trustee, and, subject to Section 8.04, the
Servicer will pay or reimburse the Trustee (without reimbursement from 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 Supplement (including the
reasonable fees and expenses of its agents and counsel) except any such
expense, disbursement or advance as may arise from its 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; provided that the
Transferors will indemnify, defend and save harmless the Trustee for any loss,
liability or expense incurred by it as Successor Servicer which is not
otherwise reimbursed hereunder, except to the extent such loss, liability or
expense is due to its negligence or bad faith as Successor Servicer.
The obligations of the Servicer and the Transferor under
this Section 11.05, Section 7.04, Section 8.04 and Section 11.17 shall survive
the termination of the Trust and the resignation or removal of the Trustee or
the Servicer.
Section 11.06 Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a corporation or national banking association
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, a
rating as to its long-term unsecured debt obligations of at least Baa3 by
Moody's (if Moody's shall then be a Rating Agency) and a rating as to its
short-term deposits or long-term unsecured debt obligations that satisfies the
rating requirement of any other applicable Rating Agency and subject to
supervision or examination by Federal or state authority. If such corporation
or national banking association publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purpose of this Section 11.06, the
combined capital and surplus of such corporation or national banking
association 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 as Trustee and be
discharged from the trust hereby created by giving written notice thereof to
the Transferors and the Servicer. Upon receiving such notice of resignation,
the Transferors shall promptly appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the
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resigning Trustee and one copy to the successor trustee. If no successor
trustee shall have been so appointed and have accepted within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor
trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.06 hereof and shall fail to
resign after written request therefor by the Transferors, or if at any time
the Trustee shall be legally unable to act, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Transferor may, but shall not be required to, remove the
Trustee and promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee and shall promptly pay all fees
owed to the outgoing Trustee.
(c) Any resignation or removal of the Trustee and
appointment of a successor trustee pursuant to any of the provisions of this
Section 11.07 shall not become effective until acceptance of appointment by
the successor trustee as provided in Section 11.08 hereof and payment of all
fees and expenses owed to the outgoing Trustee. Any such liability of the
Trustee arising hereunder shall survive such appointment of a successor
trustee.
Section 11.08 Successor Trustee.
(a) Any successor trustee appointed as provided in Section
11.07 hereof shall execute, acknowledge and deliver to the Transferors 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 and under any Supplement, with like
effect as if originally named as Trustee herein. The predecessor Trustee shall
upon payment of its fees and expenses deliver to the successor trustee all
documents held by it hereunder, and the Transferors and the predecessor
Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for fully and certainly vesting and confirming in
the successor trustee all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as
provided in this Section 11.08 unless at the time of such acceptance such
successor trustee shall be eligible under the provisions of Section 11.06
hereof.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section 11.08 hereof, such successor trustee shall mail
notice of such succession hereunder to all Certificateholders (other than
Holders of Bearer Certificates) at their addresses as shown in the Certificate
Register. Notice to Holders of Bearer Certificates shall be given by
publication in the manner described in Section 13.05 of the Agreement.
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
80
succeeding to the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder provided such Person shall be eligible
under the provisions of Section 11.06 hereof, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
Section 11.10 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provision of this Agreement or
any Supplement, 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 separate trustee, of
all or any part of the Trust, and to vest in such Person, in such capacity and
for the benefit of the Certificateholders, such title to the trust, or any
part thereof, and, subject to the other provisions of this Section 11.10, such
powers, duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
11.06 and no notice to Certificateholders of the appointment of any co-trustee
or separate trustee shall be required under Section 11.08 hereof.
(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any laws of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely
at the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder
appointed with due care; 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 or any Supplement, specifically including
every provision of this Agreement or any Supplement relating to the conduct
of, affecting the
81
liability of, or affording protection to, the Trustee. Every such instrument
shall be filed with the Trustee and a copy thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time
appoint 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 or any Supplement 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 shall prepare or cause to be prepared and is
authorized hereunder to sign any tax returns required to be filed by the Trust
and, to the extent possible, shall file such returns at least five days before
such returns are due to be filed. The Servicer shall prepare or shall cause to
be prepared all tax information required by law to be distributed to
Certificateholders and Certificate Owners and shall deliver such information
to the Paying Agent at least five days prior to the date it is required by law
to be distributed to Certificateholders and Certificate Owners. The Servicer
will furnish to the Trustee an opinion of Counsel as to the preparation of all
tax returns of the Trust. In no event shall the Trustee, the Paying Agent, the
Transferors or the Servicer be liable for any liabilities, costs or expenses
of the Trust, the Investor Certificateholders or the Certificate Owners
arising under any tax law, including without limitation, Federal, state or
local 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), except to the extent that such tax is imposed as a result
of a violation by such Person of the provisions of this Agreement or any
Supplement.
Section 11.12 Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or any
Supplement 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. If a Servicer Default shall
occur and be continuing, the Trustee, in its discretion may, subject to the
provisions of Section 10.01, proceed to protect and enforce its rights and the
rights of the Certificateholders under this Agreement or any Supplement, by
such 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 any Supplement or in aid of the execution of any power granted in
this Agreement or any Supplement or for the enforcement of any other legal,
equitable or other remedy as the Trustee, being advised by counsel, shall deem
effectual to protect and enforce any of the rights of the Trustee or the
Certificateholders.
Section 11.14 Rights of Certificateholders to Direct Trustee. Holders
of Investor Certificates evidencing Undivided Interests aggregating more than
50% of the Invested Amount
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of any Series affected by the conduct of any proceeding or the exercise of any
right conferred on the Trustee shall have the right to direct the times,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee; provided,
however, that, subject to Section 11.01, the Trustee shall have the right to
decline to follow any such direction if the Trustee being advised by counsel
determines that the action so directed may not lawfully be taken, or if the
Trustee in good faith shall, by a Responsible Officer or Responsible Officers
of the Trustee, determine that the proceedings so directed would be illegal or
involve it in personal liability or be unduly prejudicial to the rights of
Certificateholders not parties to such direction; and provided further that
nothing in this Agreement or any Supplement 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 Trustees. The Trustee
represents and warrants that:
(i) The Trustee is a banking corporation, organized,
existing and in good standing under the laws of the State of New
York;
(ii) The Trustee has full power, authority and right to
execute, deliver and perform this Agreement and any Supplement, and
has taken all necessary action to authorize the execution, delivery
and performance by it of this Agreement and any Supplement; and
(iii) This Agreement and any Supplement has been duly
executed and delivered by the Trustee, and assuming due execution and
delivery by the other parties thereto constitutes a legal, valid and
binding obligation of the Trustee enforceable against the Trustee in
accordance with its terms.
Section 11.16 Maintenance of Office or Agency. The Trustee will
maintain at its expense in the Borough of Manhattan, The City of New York, an
office or offices or agency or agencies where notices and demands to or upon
the Trustee in respect of the Certificates and this Agreement may be served.
The Trustee initially appoints its Corporate Trust Office as its office for
such purposes in New York. The Trustee will give prompt written notice (or in
the case of Holders of Bearer Certificates, notice by publication in the
manner described in Section 13.05 of the Agreement) to the Servicer and to
Certificateholders of any change in the location of the Certificate Register
or any such office or agency.
Section 11.17 Indemnification of the Trustee. The Transferors shall
jointly and severally indemnify the Trustee for, and hold it harmless against,
any loss, liability or expense incurred without negligence or willful
misconduct on the part of the Trustee arising out of any third-party claim or
alleged third-party claim in connection with the exercise or performance of
any of its powers or duties under this Agreement, The Trustee shall have a
lien on any and all amounts which are payable to the Transferors with respect
to amounts due and owing to the Trustee pursuant to this Section 11.17. The
amount of the Transferors' liability under this Section 11.17 shall be
subordinate to the security interest of the Trust in the Receivables and shall
be payable from the assets of the Transferors at the time such liability is
asserted and at any time thereafter. The provisions of this Section 11.17
shall survive the termination of this Agreement and the resignation or removal
of the Trustee.
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[END OF ARTICLE XI]
84
ARTICLE XII
TERMINATION
Section 12.01 Termination of Trust.
(a) The respective obligations and responsibilities of each
Transferor, the Servicer, the Paying Agent and the Trustee and their agents
hereunder created hereby (other than the obligation of the Trustee to make
payments to Certificateholders as hereafter set forth) shall terminate, except
with respect to the duties described in Sections and subsections 2.04(c),
7.04, 8.04, 11.05, 11.17 and 12.03(b), upon the earlier of (i) the day
following the date on which funds shall have been deposited in the Collection
Account sufficient to pay the Aggregate Invested Amount plus applicable
Certificate Interest accrued through the last day of the interest accrual
period preceding such Distribution Date in full on all Series of Investor
Certificates and (ii) July 15, 2092 (the "Final Termination Date") provided,
however, that in no event shall the trust created by this Agreement continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, formerly United States representative at the
Court of St. ▇▇▇▇▇, of the Commonwealth of Massachusetts, living on the date
of this Agreement.
(b) If on the Distribution Date in the month immediately
preceding the month in which the Final Termination Date occurs (after giving
effect to all transfers, withdrawals, deposits and drawings to occur on such
date and the payment of principal on any Series of Certificates to be made on
such Distribution Date pursuant to Article IV) the Invested Amount of any
Series would be greater than zero, the Servicer shall sell on or prior to the
succeeding Distribution Date all of the Receivables in a commercially
reasonable manner and on commercially reasonable terms which shall include the
solicitation of competitive bids and shall consummate the sale with the
highest bidder for the Receivables. Each of the Transferors or any of their
respective Affiliates shall be permitted to bid for the Receivables. In
addition, each of the Transferors or their respective Affiliates shall have
the right to match any bid by a third Person and be granted the right to
purchase the Receivables at such matched bid price. The proceeds of any such
sale shall be treated as Collections on the Receivables and shall be allocated
in accordance with Article IV; provided, however, that the Trustee shall
determine conclusively the amount of such proceeds which are allocable to
Yield Collections and the amount of such proceeds which are allocable to
Principal Collections. Prior to such sale of Receivables, the Servicer shall
continue to collect Collections on the Receivables and allocate such payments
in accordance with the provisions of Article IV.
Section 12.02 Optional Purchase; Final Termination Date of Investor
Certificates of any Series.
(a) If provided in any Supplement with respect to a Series
on any Distribution Date either or both of the Transferors may, but shall not
be obligated to, purchase any such Series of Investor Certificates by
depositing into the Collection Account, on the Distribution Date, an amount
equal to the Invested Amount thereof plus interest accrued and unpaid thereon
at the applicable Certificate Rate through the interest accrual period related
to such Distribution
85
Date on which the purchase will be made; provided, however, that no such
purchase of any Series of Investor Certificates shall occur unless the
Transferors shall deliver to the Trustee and the Rating Agencies an Opinion of
Counsel reasonably acceptable to the Trustee that such purchase of any Series
of Investor Certificates would not constitute a fraudulent conveyance of any
Transferor. Nothing herein limits the right of TRS or any Affiliate to
purchase Investor Certificates on the open market and submit them to the
Trustee for cancellation.
(b) The amount deposited pursuant to subsection 12.02(a) of
the Agreement shall be paid to the Investor Certificateholders of the related
Series pursuant to Article IV on the Distribution Date following the date of
such deposit. All Certificates of a Series which are purchased by either or
both of the Transferors pursuant to subsection 12.02(a) of the Agreement shall
be delivered by the Transferors upon such purchase to, and be cancelled by,
the Transfer Agent and Registrar and be disposed of in a manner satisfactory
to the Trustee and the Transferors.
(c) All principal or interest with respect to any Series of
Investor Certificates shall be due and payable no later than the Stated Series
Termination Date with respect to such Series. Unless otherwise provided in a
Supplement, in the event that the Invested Amount of any Series of
Certificates is greater than zero on its Stated Series Termination Date (after
giving effect to all transfers, withdrawals, deposits and drawings to occur on
such date and the payment of principal to be made on such Series on such
date), the Trustee will sell or cause to be sold, and pay the proceeds to all
Certificateholders of such Series pro rata in final payment of all principal
of and accrued interest on such Series of Certificates, an amount of
Receivables or interests in Receivables up to 110% of the Invested Amount of
such Series at the close of business on such date (but not more than an amount
of Receivables equal to the sum of (1) the product of (A) the Transferor
Percentage, (B) the Trust Principal Component and (C) a fraction the numerator
of which is the related Invested Percentage of Yield Collections and the
denominator of which is the sum of all Invested Percentages with respect to
Yield Collections of all Series outstanding and (2) the Invested Amount of
such Series). The Trustee shall conduct the sale of Receivables in a
commercially reasonable manner and on commercially reasonable terms which
shall include the solicitation of competitive bids and shall consummate the
sale with the highest bidder for the Receivables. The Transferors or any of
their respective Affiliates shall be permitted to bid for the Receivables. In
addition, the Transferors or any of their respective Affiliates shall have the
right to match any bid by a third Person and be granted the right to purchase
the Receivables at such matched bid price, Any proceeds of such sale in excess
of such principal and interest paid shall be paid to the Holder of the
Exchangeable Transferor Certificate. Upon such Stated Series Termination Date
with respect to the applicable Series of Certificates, final payment of all
amounts allocable to any Investor Certificates of such Series shall be made in
the manner provided in Section 12.03 of the Agreement.
Section 12.03 Final Payment with Respect to any Series.
(a) Written notice of any termination, specifying the
Distribution Date upon which the Investor Certificateholders of any Series may
surrender their Certificates for payment of the final distribution with
respect to such Series and cancellation, shall be given (subject to at least
two Business Days' prior notice from the Servicer to the Trustee) by the
Trustee to Investor Certificateholders of such Series mailed not later than
the fifth day of the month of such final distribution (or in the case of the
Holders of Bearer Certificates by the publication by the Trustee
86
of a notice at least once in a newspaper of general circulation in Luxembourg
(which newspaper shall be printed in the English language and customarily
published on each business day in Luxembourg) and, so long as the Investor
Certificates are listed on the Luxembourg Stock Exchange or other stock
exchange and such exchange so requires, in Luxembourg or the location required
by such other stock exchange) specifying (a) the Distribution Date (which
shall be the Distribution Date in the month in which the deposit is made
pursuant to Section 2.07 or subsection 12.02(a) of the Agreement) upon which
final payment of such Investor Certificates will be made upon presentation and
surrender of such Investor Certificates at the office or offices therein
designated, (which, in the case of Bearer Certificates, shall be outside the
United States), (b) the amount of any such final payment and (c) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Investor
Certificates at the office or offices therein specified. The Servicer's notice
to the Trustee in accordance with the preceding sentence shall be accompanied
by an Officers' Certificate setting forth the information specified in the
applicable Supplement covering the period during the then current calendar
year through the date of such notice and setting forth the date of such final
distribution. The Trustee shall give such notice to the Transfer Agent and
Registrar and the Paying Agent at the time such notice is given to such
Investor Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to
subsection 12.01(a) of the Agreement or the occurrence of the Stated Series
Termination Date with respect to any Series pursuant to Section 12.02 of the
Agreement, all funds then on deposit in the Collection Account shall continue
to be held in trust for the benefit of the Certificateholders and the Paying
Agent or the Trustee shall pay such funds to the Certificateholders upon
surrender of their Certificates (which surrenders and payments, in the case of
Bearer Certificates, shall be made only outside the United States). In the
event that all of the Investor Certificateholders of such Series shall not
surrender their Certificates for cancellation within six months after the date
specified in the above-mentioned notice, the Trustee shall give a second
written notice (or in the case of Bearer Certificates, publication notice) to
the remaining Investor Certificateholders of such Series upon receipt of the
appropriate records from the Transfer Agent and Registrar to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one and one-half years after the second notice all the
Investor Certificates of such Series shall not have been surrendered for
cancellation, the Trustee may take appropriate steps, or may appoint an agent
to take appropriate steps, to contact the remaining Investor
Certificateholders of such Series concerning surrender of their Certificates,
and the cost thereof shall be paid out of the funds in the Collection Account
held for the benefit of such Investor Certificateholders.
(c) All Certificates surrendered for payment of the final
distribution with respect to such Certificates and cancellation shall be
cancelled by the Transfer Agent and Registrar and be disposed of in a manner
satisfactory to the Trustee and the Transferors.
Section 12.04 Transferor's Termination Rights. Upon the termination
of the Trust pursuant to Section 12.01 and the surrender of the Exchangeable
Transferor Certificate, the Trustee shall return to the Transferors (without
recourse, representation or warranty) all right, title and interest of the
Trust in the Receivables, whether then existing or hereafter created, and all
monies due or to become due with respect thereto, all proceeds thereof except
for amounts held by the Paying Agent pursuant to subsection 12.03(b). The
Trustee shall execute and deliver
87
such instruments of transfer and assignment, in each case without recourse, as
shall be reasonably requested by the Transferors to vest in itself all right,
title and interest which the Trust had in the applicable Receivables and the
Trustee shall be entitled to receive and rely conclusively upon an Opinion of
Counsel as to its execution and delivery of such instruments being in
compliance herewith.
[END OF ARTICLE XII]
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Amendment.
(a) This Agreement and any Supplement may be amended from
time to time by the Servicer, the Transferors and the Trustee, without the
consent of any of the investor Certificateholders, to cure any ambiguity, to
correct or supplement any provisions herein which may be inconsistent with any
other provisions herein or to add any other provisions with respect to matters
or questions raised under this Agreement which shall not be inconsistent with
the provisions of this Agreement, including (i) any matters arising under
subsection 2.05(d) of the Agreement necessary to effect the conveyance
contemplated thereunder, (ii) to add, modify or eliminate such provisions as
the Transferors may deem necessary or advisable in order to enable all or a
portion of the Trust (A) to qualify as, and to permit an election to be made
to cause the Trust to be treated as, a "financial asset securitization
investment trust" as described in the provisions of Section 860L of the
Internal Revenue Code and (B) to avoid the imposition of state or local income
or franchise taxes imposed on the Trust's property or its income and (iii) the
addition or deletion of a sale of Receivables and termination of the Trust
upon the occurrence of an insolvency of either of the Transferors; provided,
however, that such action shall not adversely affect in any material respect
the interests of any of the Investor Certificateholders. Additionally, this
Agreement and any Supplement may be amended from time to time by the Servicer,
the Transferors and the Trustee, without the consent of any of the
Certificateholders, to add to or change any of the provisions of this
Agreement to provide that Bearer Certificates may be registrable as to
principal, to change or eliminate any restrictions on the payment of principal
of (or premium, if any) or any interest on Bearer Certificates to comply with
the Bearer Rules, to permit Bearer Certificates to be issued in exchange for
Registered Certificates (if then permitted by the Bearer Rules), to permit
Bearer Certificates to be issued in exchange for Bearer Certificates of other
authorized denominations or to permit the issuance of Certificates in
uncertificated form, provided any such action shall not adversely affect the
interests of the Holders of Bearer Certificates of any Series or any related
Coupons in any material respect unless such amendment is necessary to comply
with the Bearer Rules. Prior to executing any amendment in accordance with
this subsection 13.01(a), the Trustee shall receive and shall be permitted to
rely upon an Opinion of Counsel to the effect that the conditions and
requirements of this subsection 13.01(a) have been satisfied.
(b) This Agreement and any Supplement may also be amended
from time to time by the Servicer, the Transferors and the Trustee, without
the consent of any of the Certificateholders, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement, or of modifying in any manner the rights of the Holders of
Investor Certificates; provided that (i) the Servicer shall have provided an
Opinion of Counsel to the Trustee to the effect that such amendment will not
materially and adversely affect the interests of the Investor Certificateholders
of any outstanding Series (or 100% of the class of Certificateholders so
affected shall have consented), (ii) such amendment shall not, as evidenced by
an Opinion of Counsel, cause the Trust to be characterized for Federal income
tax purposes as an association taxable as a corporation or otherwise have any
material adverse impact on the Federal income taxation of any outstanding
Series of Investor Certificates or any Certificate Owner and (iii) the Rating
Agencies shall confirm that such amendment shall not
89
cause a reduction or withdrawal of the rating of any outstanding Series of
Certificates; provided, further, that such amendment shall not reduce in any
manner the amount of, or delay the timing of, distributions which are required
to be made on any Investor Certificate of such Series without the consent of
the related Investor Certificateholder, change the definition of or the manner
of calculating the interest of any Investor Certificateholder of such Series
without the consent of the related Investor Certificateholder or reduce the
percentage pursuant to clause (b)required to consent to any such amendment, in
each case without the consent of all such Investor Certificateholders.
(c) This Agreement and any Supplement may also be amended
from time to time by the Servicer, the Transferors and the Trustee with the
consent of the Holders of Investor Certificates evidencing Undivided Interests
aggregating not less than 66-2/3% of the Invested Amount of all Series
adversely affected, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or modifying
in any manner the rights of the Investor Certificateholders of any Series then
issued and outstanding; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, distributions
which are required to be made on any Investor Certificate of such Series
without the consent of the related Investor Certificateholders, (ii) change
the definition of or the manner of calculating the Invested Amount, the
Invested Percentage, the applicable available amount under any Enhancement or
the Investor Default Amount of such Series without the consent of each related
Investor Certificateholders or (iii) reduce the aforesaid percentage required
to consent to any such amendment, without the consent of each related Investor
Certificateholder.
(d) Promptly after the execution of any such amendment or
consent the Trustee shall furnish written notification (or in the case of
Bearer Certificates, publication notice in the manner described in Section
13.05 of the Agreement) of the substance of such amendment to each Investor
Certificateholder, and the Servicer shall furnish written notification of the
substance of such amendment to any related Enhancement Provider and each
Rating Agency.
(e) It shall not be necessary for the consent of Investor
Certificateholders under this Section 13.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such Certificateholders
shall approve the substance thereof. The manner of obtaining such consents and
of evidencing the authorization of the execution thereof by Investor
Certificateholders shall be subject to such reasonable requirements as the
Trustee may prescribe.
(f) Any Assignment or Reassignments regarding the addition
to or removal of Receivables from the Trust respectively, as provided in
Sections 2.06 and 2.07, respectively, of the Agreement executed in accordance
with the provisions hereof shall not be considered amendments to this
Agreement, including, without limitation, for the purpose of subsections
13.01(a), (b), (c) and (g) of the Agreement,
(g) Prior to the execution of any amendment to the
Agreement, the Trustee shall be entitled to receive and rely upon an Opinion
of Counsel substantially in the form of Part Two of Exhibit G, The Trustee
may, but shall not be obligated to enter into any such amendment which affects
the Trustee's own rights, duties or immunities under the Agreement or
otherwise.
Section 13.02 Protection of Right, Title and Interest to Trust.
90
(a) The Servicer shall cause this Agreement, any Supplement,
all amendments hereto and/or all financing statements, amendments and
continuation statements and any other necessary documents covering the right,
title and interest of the Trust in the property conveyed hereunder 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
Trustee hereunder to all property comprising the Trust. The Servicer shall
deliver to the Trustee file-stamped copies of, or filing receipts for, any
document recorded, registered or filed as provided above, as soon as available
following such recording, registration or filing. Each 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 subsection 13.02(a).
(b) Within 30 days after either Transferor makes any change
in its name, identity or corporate structure which would make any financing
statement, amendment or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of Section
9-402(7) of the UCC as in effect in the Relevant UCC State, such Transferor
shall give the Trustee notice of any such change and shall file such financing
statements or amendments as may be necessary to continue the perfection of the
Trust's interest in the property conveyed hereunder.
(c) The Transferors and the Servicer will give the Trustee
prompt written notice of any relocation of any office from which the Servicer
services Receivables or keeps records concerning the Receivables or of its
principal executive office and whether, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any amendment of
any previously filed financing or continuation statement or of any new
financing statement and shall file such financing statements, continuation
statements or amendments as may be necessary to continue the perfection of the
Trust's security interest in the Receivables and the proceeds thereof
notwithstanding any relocation of any office from which the Servicer services
Receivables or keeps records concerning the Receivables or of its principal
executive office. The Servicer will at all times maintain each office from
which it services Receivables, and the Transferors and the Servicer will at
all times maintain their respective principal executive offices within the
United States of America.
(d) The Servicer will deliver to the Trustee: (i) upon each
date that any Additional Accounts are to be included in the Accounts pursuant
to Section 2.06 hereof, an Opinion of Counsel substantially in the form of
Part One of Exhibit G; and (ii) on or before March 1 of each year, beginning
with 1993 an Opinion of Counsel, dated as of a date within 90 days of such
day, substantially in the form of Exhibit H.
Section 13.03 Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Investor Certificateholder
shall not operate to terminate this Agreement or the Trust, nor shall such
death or incapacity entitle such Certificateholder's legal representatives or
heirs to claim at 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.
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(b) No Investor Certificateholder shall have any right to
vote (except as provided herein) or in any manner otherwise control the
operation and management of the Trust, or the obligations of the parties
hereto, 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 Certificateholder previously shall have given notice to
the Trustee, and unless the Holders of Certificates evidencing Undivided
Interests aggregating more than 66-2/3% of the Invested Amount of any Series
which may be adversely affected but for the institution of such suit, action
or proceeding shall have made written request upon the Trustee to institute
such action, suit or proceeding in its own name as Trustee hereunder and shall
have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or thereby,
and the Trustee, for 60 days after its receipt of such notice, request and
offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Certificateholders
shall have the right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Certificateholders of any other of the Certificates, or to
obtain or seek to obtain priority over or preference to any other such
Certificateholder, or to enforce any right under this Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of
this Section 13.03, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity. Each
Certificate Owner by its acquisition of a Book Entry Certificate shall be
deemed to have consented to the provisions of this Section 13.03.
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. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
sent by facsimile transmission and confirmed by personal delivery or overnight
delivery, to (a) in the case of the RFC, to American Express Receivables
Financing Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Secretary, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇, with
copies to American Express Travel Related Services Company, Inc., American
Express Tower, World Financial Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: General Counsel, (b) in the case of Centurion Bank, to
American Express Centurion Bank, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
Attention: President, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇, (c) in the case of the
Servicer, to American Express Travel Related Services Company, Inc., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇
▇▇▇▇▇▇▇▇▇, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇, with copies to American Express
Travel Related Services Company, Inc., American Express Tower, World Financial
Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General
Counsel, (d) in the case of the Trustee, to The Bank of New York, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate
92
Trust Department - Asset Backed Finance Unit, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇;
or, as to each party, at such other address as shall be designated by such
party in a written notice to each other party. Any notice required or
permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Certificateholder as shown in
the Certificate Register. Any notice so mailed within the time prescribed in
this Agreement shall be conclusively presumed to have been duly given, whether
or not the Certificateholder receives such notice.
Any notice required or permitted to be made to Holders of
Bearer Certificates by publication shall be published in an Authorized
Newspaper and, if the Certificates of such Series are then listed on the
Luxembourg Stock Exchange and such stock exchange shall so require, in a
newspaper of general circulation in Luxembourg (which newspaper shall be
printed in the English language and customarily published on each business day
in Luxembourg) and, if the Certificates of such Series are listed on any other
stock exchange and such stock exchange shall so require, in any other city
required by such stock exchange outside the United States, or, if not
practicable, elsewhere in Europe.
In case by reason of the suspension of publication of any
Authorized Newspaper or permitted newspaper with respect to Luxembourg or by
reason of any other cause it shall be impracticable to publish any notice to
Holders of Bearer Certificates as provided above, then such notification to
Holders of Bearer Certificates as shall be given with approval of the Trustee
shall constitute sufficient notice to such Holders for every purpose
hereunder. Neither the failure to give notice by publication to Holders of
Bearer Certificates as provided above, nor any defect in any notice so
published, shall affect the sufficiency of any notice mailed to Holders of
Registered Certificates as provided above.
Copies of all notices, reports, certificates and amendments
delivered hereunder shall be mailed to the Rating Agency as follows: ▇▇▇▇▇'▇
Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ABS
Monitoring Department - 4th Floor and Standard & Poor's Ratings Group, ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Asset Backed Surveillance Department.
Section 13.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or rights of the Certificateholders thereof.
Section 13.07 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 7.02, 7.05, 8.02 and 8.05,
this Agreement, including any Supplement, may not be assigned by either
Transferor or the Servicer, as the case may be, without the prior consent of
Holders of Investor Certificate, evidencing Undivided Interests aggregating
more than 51% of the Aggregate Invested Amount,
Section 13.08 Certificates Nonassessable and Fully Paid. It is the
intention of the parties to this Agreement that the Certificateholders (and
the Certificate owners) shall not be personally liable for obligations of the
Trust, that the Undivided Interests represented by the Certificates
93
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 13.09 Further Assurances. The Transferor and the Servicer
agree to do and perform, from time to time, any and all acts and to execute
any and all further instruments required or reasonably requested by the
Trustee more fully to effect the purposes of this Agreement including, without
limitation, the execution of any financing statements or continuation
statements relating to the property of the Trust for filing under the
provisions of the UCC of the Relevant UCC State.
Section 13.10 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Trustee or the Investor
Certificateholders, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
Section 13.11 Counterparts. This Agreement and any Supplement may be
executed in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which together
shall constitute one and the same instrument.
Section 13.12 Third-Party Beneficiaries. This Agreement and any
Supplement will inure to the benefit of and be binding upon the parties
hereto, the Certificateholders and the Certificate Owners and their respective
successors and permitted assigns. Except as otherwise provided in this
Agreement, no other person will have any right or obligation hereunder
provided, however, that if so specified in the applicable Supplement, an
Enhancement Provider may be deemed to be a third party beneficiary of this
Agreement.
Section 13.13 Actions by Certificateholders.
(a) Wherever in this Agreement or any Supplement a provision
is made that an action may be taken or a notice, demand or instruction given
by Investor Certificateholders, such action, notice or instruction may be
taken or given by any Investor Certificateholder of any Series, unless such
provision requires a specific percentage of Investor Certificateholders of a
certain Series or all Series.
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other act by a Certificateholder shall bind such
Certificateholder and every subsequent holder of such Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done or omitted to be done by the Trustee or
the Servicer in reliance thereon, whether or not notation of such action is
made upon such Certificate.
Section 13.14 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 hot be
modified, amended, waived or supplemented except as provided herein.
94
Section 13.15 Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
Section 13.16 Certificates and Opinions of Counsel.
(a) Any certificate delivered may be based, insofar as it
relates to legal matters, upon an Opinion of Counsel, unless the Person
delivering such certificate knows, or in the exercise of reasonable care
should know, that such opinion with respect to the matters upon which such
certificate may be based as aforesaid is erroneous. Any Opinion of Counsel or
certificate delivered hereunder may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer
or officers of the Servicer or a Transferor, stating that the information with
respect to such factual matters is in the possession of such Person, unless
the Person delivering such certificate or such counsel knows, or in the
exercise of reasonable care should know, that such certificate opinion or
representations with respect to such matters are erroneous. Any Opinion of
Counsel delivered hereunder may contain necessary exceptions and
qualifications.
(b) Any Opinion of Counsel or certificate delivered
hereunder may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an independent public
accountant or firm of accountants, unless such counsel or the Person
delivering such certificate as the case may be, knows that the certificate or
opinions or representations with respect to the accounting matters upon which
the certificate or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous. Any
certificate, opinion or representations of any firm of independent public
accountants filed with the Trustee shall contain a statement that such firm is
independent.
(c) Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates, statements,
opinions or other instruments, hereunder, they may, but need not, be
consolidated and form one instrument.
Section 13.17 Effect of Amendment No. 3. Reference is made to
Amendment No. 3 to the Original Pooling Agreement, dated as of September 12,
1994. This Agreement contains the amendments to the Original Pooling Agreement
in effect pursuant to such Amendment No. 3. Such Amendment No. 3 provides that
Amendment No. 3 shall be null and void and of no further force and effect on
the date specified by the Servicer in an Officer's Certificate delivered to
the Trustee stating that the Servicer has modified its computer programs such
that from and after such date no amounts billed to Cardmembers under the
Privileged Assets Program will be included in any calculation of Receivables
balances. This Agreement shall be deemed amended to delete all provisions
hereof contained in such Amendment No. 3 as of the date so specified by the
Servicer.
[END OF ARTICLE ▇▇▇▇]
▇▇
IN WITNESS WHEREOF, the Transferors, the Servicer and the
Trustee have caused this Pooling and Servicing Agreement to be duly executed
by their respective officers as of the day and year first above written.
AMERICAN EXPRESS RECEIVABLES
FINANCING CORPORATION,
as Transferor
By:
----------------------------------
Name:
Title:
AMERICAN EXPRESS CENTURION BANK,
as Transferor
By:
----------------------------------
Name:
Title:
AMERICAN EXPRESS TRAVEL RELATED
SERVICES COMPANY, INC.,
as Servicer
By:
-----------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee and Paying Agent
By:
-----------------------------------
Name:
Title: