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FIRST NATIONAL BANK OF COMMERCE
Transferor and Servicer
and
THE FIRST NATIONAL BANK OF CHICAGO
Trustee
on behalf of the Holders
of the First NBC Credit Card Master Trust
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POOLING AND SERVICING AGREEMENT
Dated as of August 1, 1997
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.....................................................1
SECTION 1.1 Definitions..............................................1
SECTION 1.2 Other Interpretive Provisions...........................21
ARTICLE II CONVEYANCE OF RECEIVABLES.....................................22
SECTION 2.1 Conveyance of Receivables...............................22
SECTION 2.2 Acceptance by Trustee...................................23
SECTION 2.3 Representations and Warranties of Transferor............24
SECTION 2.4 Representations and Warranties of Transferor Relating
to this Agreement and the Receivables...................27
SECTION 2.5 Covenants of Transferor.................................32
SECTION 2.6 Addition of Accounts....................................35
SECTION 2.7 Removal of Accounts.....................................38
SECTION 2.8 Discount Option.........................................40
SECTION 2.9 Additional Transferors..................................40
ARTICLE III ADMINISTRATION AND SERVICING.................................41
SECTION 3.1 Acceptance of Appointment and Other Matters Relating to
Servicer..............................................41
SECTION 3.2 Servicing Compensation..................................43
SECTION 3.3 Representations, Warranties and Covenants of
Servicer..............................................44
SECTION 3.4 Reports and Records for Trustee.........................45
SECTION 3.5 Annual Servicer's Certificate...........................45
SECTION 3.6 Annual Independent Accountants' Servicing
Report................................................46
SECTION 3.7 Tax Treatment...........................................47
SECTION 3.8 Notices to Transferor...................................47
SECTION 3.9 Reports to the Commission...............................47
ARTICLE IV RIGHTS OF HOLDERS AND ALLOCATION AND APPLICATION OF
COLLECTIONS...................................................47
SECTION 4.1 Rights of Holders.......................................47
SECTION 4.2 Establishment of Accounts...............................48
SECTION 4.3 Collections and Allocations.............................50
SECTION 4.4 Shared Principal Collections............................53
SECTION 4.5 Excess Finance Charge Collections.......................54
SECTION 4.6 Allocation of Trust Assets to Series or Groups..........54
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ARTICLE V [ARTICLE V IS RESERVED AND SHALL BE SPECIFIED
IN THE SUPPLEMENT WITH RESPECT TO ANY
SERIES.]................ ....................................55
ARTICLE VI THE CERTIFICATES.............................................55
SECTION 6.1 The Certificates......................................55
SECTION 6.2 Authentication of Certificates........................56
SECTION 6.3 Registration of Transfer and Exchange of
Certificates........................................56
SECTION 6.4 Mutilated, Destroyed, Lost or Stolen Certificates.....60
SECTION 6.5 Persons Deemed Owners.................................60
SECTION 6.6 Appointment of Paying Agent...........................61
SECTION 6.7 Access to List of Holders' Names and Addresses........62
SECTION 6.8 Authenticating Agent..................................62
SECTION 6.9 New Issuances.........................................64
SECTION 6.10 Book-Entry Certificates..............................66
SECTION 6.11 Notices to Clearing Agency...........................67
SECTION 6.12 Definitive Certificates..............................67
SECTION 6.13 Global Certificate; Euro-Certificate Exchange
Date...............................................68
SECTION 6.14 Meetings of Holders..................................68
SECTION 6.15 Transfers of Certain Certificates....................68
SECTION 6.16 Trust Tax Election...................................69
ARTICLE VII OTHER MATTERS RELATING TO TRANSFEROR........................69
SECTION 7.1 Liability of Transferor...............................69
SECTION 7.2 Merger or Consolidation of, or Assumption of the
Obligations of, Transferor..........................69
SECTION 7.3 Limitation on Liability...............................70
ARTICLE VIII OTHER MATTERS RELATING TO SERVICER.........................71
SECTION 8.1 Liability of Servicer.................................71
SECTION 8.2 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer............................71
SECTION 8.3 Limitation on Liability of Servicer and Others........72
SECTION 8.4 Servicer Indemnification of the Trust and Trustee.....72
SECTION 8.5 Servicer Not to Resign................................73
SECTION 8.6 Access to Certain Documentation and Information
Regarding the Receivables...........................73
SECTION 8.7 Delegation of Duties..................................73
SECTION 8.8 Examination of Records................................74
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ARTICLE IX TRUST PAY OUT EVENTS.........................................74
SECTION 9.1 Trust Pay Out Events..................................74
SECTION 9.2 Additional Rights Upon the Occurrence of Certain
Events..............................................74
ARTICLE X SERVICER DEFAULTS.............................................75
SECTION 10.1 Servicer Defaults....................................75
SECTION 10.2 Trustee to Act; Appointment of Successor.............77
SECTION 10.3 Notification to Holders..............................79
SECTION 10.4 Waiver of Past Defaults..............................79
ARTICLE XI TRUSTEE......................................................79
SECTION 11.1 Duties of Trustee....................................79
SECTION 11.2 Certain Matters Affecting Trustee....................82
SECTION 11.3 Trustee Not Liable for Recitals in Certificates......83
SECTION 11.4 Trustee May Not Own Certificates.....................83
SECTION 11.5 Servicer to Pay Trustee's Fees and Expenses..........83
SECTION 11.6 Eligibility Requirements for Trustee.................84
SECTION 11.7 Resignation or Removal of Trustee....................84
SECTION 11.8 Successor Trustee....................................85
SECTION 11.9 Merger or Consolidation of Trustee...................85
SECTION 11.10 Appointment of Co-Trustee or Separate Trustee.......86
SECTION 11.11 Tax Returns.........................................87
SECTION 11.12 Trustee May Enforce Claims Without Possession
of Certificates...................................87
SECTION 11.13 Suits for Enforcement...............................88
SECTION 11.14 Rights of Holders to Direct Trustee.................88
SECTION 11.15 Representations and Warranties of Trustee...........88
SECTION 11.16 Maintenance of Office or Agency.....................89
ARTICLE XII TERMINATION.................................................90
SECTION 12.1 Termination of Trust.................................90
SECTION 12.2 Optional Purchase....................................91
SECTION 12.3 Final Payment with Respect to any Series.............91
SECTION 12.4 Termination Rights of Transferor. ...................93
SECTION 12.5 Defeasance...........................................93
ARTICLE XIII MISCELLANEOUS PROVISIONS...................................94
SECTION 13.1 Amendment............................................94
SECTION 13.2 Protection of Right, Title and Interest to Trust.....96
SECTION 13.3 Limitation on Rights of Holders......................97
SECTION 13.4 GOVERNING LAW........................................98
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SECTION 13.5 Notices................................................98
SECTION 13.6 Severability of Provisions.............................99
SECTION 13.7 Assignment.............................................99
SECTION 13.8 Certificates Non-Assessable and Fully Paid.............99
SECTION 13.9 Further Assurances.....................................99
SECTION 13.10 No Waiver; Cumulative Remedies........................99
SECTION 13.11 Counterparts.........................................100
SECTION 13.12 Third-Party Beneficiaries............................100
SECTION 13.13 Actions by Holders...................................100
SECTION 13.14 Rule 144A Information................................100
SECTION 13.15 Merger and Integration...............................100
SECTION 13.16 Headings.............................................101
SECTION 9.2 Additional Rights Upon the Occurrence of Certain
Events...............................................I-1
EXHIBITS
EXHIBIT A Form of Assignment of Receivables in
Additional Accounts
EXHIBIT B Form of Monthly Servicer's Certificate
EXHIBIT C Form of Annual Servicer's Certificate
EXHIBIT D Form of Opinion of Counsel Regarding
Additional Accounts
EXHIBIT E Form of Annual Opinion of Counsel
EXHIBIT F Form of Reassignment of Receivables
EXHIBIT G Form of Reconveyance of Receivables
EXHIBIT H Form of Amended Section 9.2
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POOLING AND SERVICING AGREEMENT, dated as of August 1, 1997, by and
between FIRST NATIONAL BANK OF COMMERCE, a national banking association, as
Transferor and Servicer, and THE FIRST NATIONAL BANK OF CHICAGO, a national
banking association, as Trustee.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties and the Holders:
ARTICLE I DEFINITIONS
SECTION 1.1 Definitions. Whenever used in this Agreement, the
following words and phrases have the meanings identified below:
"Account" means each VISA(R), MasterCard(R)* and Private Label credit
card account serviced at the New Orleans area servicing centers of
Transferor, or at such other servicing center of Transferor as shall be
designated by Transferor or Servicer pursuant to subsection 13.2(c),
established pursuant to an Account Agreement and which is identified in an
Account Schedule delivered to Trustee by Transferor pursuant to Section 2.1
or 2.6. The term "Account" also (i) includes each Transferred Account, (ii)
includes an Additional Account only from and after its Addition Date and
(iii) includes a Removed Account only prior to its Removal Date.
"Account Agreement" means the agreement between any Obligor and
Transferor governing the operation of the Obligor's Account, as each such
agreement may be amended, modified or otherwise changed from time to time
in accordance with Section 2.5(c).
"Account Guidelines" means Transferor's policies and procedures
relating to the operation of its credit card business and the Accounts,
including policies and procedures for determining the creditworthiness of
Obligors, the extension of credit to Obligors and the maintenance of credit
card accounts and any other Accounts and collection of credit card
receivables and any other Receivables, as such policies and procedures may
be amended from time to time in accordance with Section 2.5(c).
"Account Schedule" means a computer file or microfiche list
containing an accurate list of Accounts, identified by account number and
setting forth the Receivable balance as of (a) the Cut-Off Date (for the
Account Schedule delivered on the Initial Closing Date), (b) the related
Addition Cut-Off Date (for any
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* VISA(R) and MasterCard(R) are registered servicemarks of VISA
U.S.A., Inc. and of MasterCard International Inc., respectively.
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Account Schedule delivered in connection with any designation of
Additional Accounts) or (c) the end of the prior Monthly Period (for any
Account Schedule relating to Transferred Accounts).
"Addition Cut-Off Date" means the date as of which any Additional
Accounts or Participations are designated for inclusion in the Trust, as
specified in the related Assignment.
"Addition Date" means (a) as to Additional Accounts, the date on
which the Receivables in such Additional Accounts are conveyed to the Trust
pursuant to subsection 2.6(a) or (b), and (b) as to Participations, the
date from and after which such Participations are to be included as Trust
Assets pursuant to subsection 2.6(a) or (b).
"Additional Account" is defined in subsection 2.6(a).
"Adjusted Aggregate Investor Interest" means as of any date of
determination, the sum of the "Adjusted Investor Interest" (as defined in
the related Supplement) of each Series then issued and outstanding for
which an Adjusted Investor Interest is specified in the related Supplement
plus the sum of the Investor Interests of all other Series then issued and
outstanding.
"Adjusted Investor Interest" with respect to any Series, has the
meaning specified in the related Supplement, or if not so specified, the
Investor Interest of such Series.
"Affiliate" of any Person means any other Person controlling,
controlled by or under common control with such Person.
"Aggregate Finance Charge Receivables" means, as of any date of
determination, the aggregate amount of the Finance Charge Receivables,
measured for each Account as of the end of the applicable Billing Cycle
ending in the Monthly Period immediately preceding such date of
determination.
"Aggregate Investor Interest" means, as of any date of determination,
the sum of the Investor Interests of all Series then issued and
outstanding.
"Aggregate Investor Percentage" means, as to Principal Receivables,
Finance Charge Receivables and Receivables in Defaulted Accounts, as the
case may be, as of any date of determination, the sum (not to exceed 100%)
of the relevant Investor Percentages for all Series then issued and
outstanding.
"Aggregate Principal Receivables" means the aggregate amount of the
Principal Receivables, measured (a) for any date of determination prior to the
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Conversion Date, for each Account as of the end of the applicable
Billing Cycle ending in the Monthly Period immediately preceding such date
of determination and (b) for any other date of determination, as of the end
of the day on such date of determination.
"Aggregate Receivables" means, as of any date of determination, the
aggregate amount of the Receivables, measured for each Account as of the
end of the applicable Billing Cycle ending in the Monthly Period
immediately preceding such date of determination.
"Agreement" means this Pooling and Servicing Agreement, as amended,
supplemented or otherwise modified from time to time, including by any
Supplement.
"Amortization Period" means, as to any Series or Class, any period
specified in the related Supplement during which principal collections are
set aside to repay the principal investment in that Series or Class
(excluding repayments of a Variable Interest during its revolving period).
"Annual Account Fee" means amounts referred to as "annual account
fees," "annual fees," "annual membership fees" or "inactivity charges" (or
similar terms) in the Account Agreement applicable to any Account.
"Applicants" is defined in Section 6.7.
"Assignment" is defined in subsection 2.6(d)(ii).
"Authorized Newspaper" means a newspaper 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.
"Automatic Additional Account" means Additional Accounts that are
treated as Automatic Additional Accounts pursuant to subsection 2.6(c).
"Bank Portfolio" means all VISA, MasterCard, Private Label and other
revolving credit accounts owned by Transferor.
"Bearer Certificates" is defined in Section 6.1.
"Bearer Rules" means 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
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including, to the extent applicable to any Series, proposed or temporary
regulations.
"Benefit Plan" is defined in subsection 6.3(e).
"BIF" means the Bank Insurance Fund administered by the FDIC.
"Billed Finance Charge Receivables" is defined in subsection 4.3(d).
"Billed Principal Receivables" is defined in subsection 4.3(d).
"Billing Cycle" means, with respect to any Account, the monthly
billing cycle for such Account, determined in accordance with the Account
Guidelines.
"Book-Entry Certificates" means certificates evidencing a beneficial
interest in the Investor Certificates, ownership and transfers of which
shall be made through book entries by a Clearing Agency as described in
Section 6.10.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions in New York, New York, the city in which the
Corporate Trust Office is located, or New Orleans, Louisiana (or, for any
Series, any additional city specified in the related Supplement) are
authorized or obligated by law or executive order to be closed.
"Cash Advance Fees" means amounts referred to as "cash advance fees,"
"cash access / cash advance fees," "cash access fees," "transaction fees
for cash advances," or "cash advance charges" (or similar terms) in the
Account Agreement applicable to any Account.
"CEDEL" means Cedel Bank, societe anonyme.
"Certificate" means an Investor Certificate or any Supplemental
Certificate.
"Certificate Owner" means the beneficial owner of a Book-Entry
Certificate, as reflected on the books of the Clearing Agency or of a
Person maintaining an account with the Clearing Agency (directly or as an
indirect participant).
"Certificate Register" is defined in Section 6.3.
"Class" means any class of Investor Certificates of any Series.
4
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency or Foreign Clearing Agency effects book-entry transfers and pledges
of securities deposited with the Clearing Agency or Foreign Clearing
Agency.
"Closing Date" means, for any Series, the date of issuance of such
Series of Certificates, as specified in the related Supplement.
"Collected Finance Charge Receivables" is defined in subsection
4.3(d).
"Collected Principal Receivables" is defined in subsection 4.3(d).
"Collection Account" is defined in subsection 4.2(a).
"Collection Recomputation Date" is defined in subsection 4.3(d).
"Collections" means all payments (including Insurance Proceeds and
Recoveries) received by Servicer in respect of the Receivables, in the form
of cash, checks, wire transfers, ATM transfers or any other form of payment
in accordance with the Account Agreement in effect from time to time on any
Receivables.
"Conversion Date" means the date specified in a notice from
Servicer to Trustee and each Rating Agency as the date upon which Servicer
elects to begin administering this Agreement on the basis of daily
computations of the aggregate amounts of Principal Receivables and Finance
Charge Receivables, rather than by reference to balances at the end of each
Billing Cycle which ends during each Monthly Period. Any such notice shall
be delivered (or not delivered) at Servicer's sole option.
"Corporate Trust Office" means the principal corporate trust
office of Trustee at which, at any particular time, its corporate trust
business is administered, which office at the date hereof is located at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
Corporate Trust Services Division, except for purposes of Section 11.16,
where such term shall mean the office or agency of the Trustee in the
Borough of Manhattan, the City of New York, which office at the date hereof
is located at First Chicago Trust Company of New York, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Coupons" is defined in Section 6.1.
5
"Credit Adjustment" is defined in subsection 4.3(c).
"Credit Enhancement" means, as to any Series, the subordination,
cash collateral guaranty or account, collateral interest, letter of credit,
surety bond, insurance policy, spread account, reserve account,
cross-support feature or any other contract or agreement for the benefit of
the Holders of such Series (or Holders of a Class within such Series) as
designated in the applicable Supplement.
"Credit Enhancement Provider" means, as to any Series, any Person
designated as such in the related Supplement.
"Cut-Off Date" means April 30, 1997.
"Date of Processing" means, as to any transaction, the date on
which such transaction is first recorded on Servicer's computer master file
of VISA, Mastercard and Private Label accounts (without regard to the
effective date of such recordation).
"Default Amount" means, as to any Defaulted Account, the amount of
Principal Receivables (other than Ineligible Receivables) in such Defaulted
Account on the day it became a Defaulted Account.
"Defaulted Account" means each Account as to which, in accordance
with the Account Guidelines or Servicer's customary and usual servicing
procedures for servicing credit card or other receivables comparable to the
Receivables, Servicer has charged off the Receivables in such Account as
uncollectible. An Account shall become a Defaulted Account on the day on
which such Receivables are recorded as charged off as uncollectible on
Servicer's computer master file of VISA, MasterCard and Private Label
accounts. Notwithstanding any other provision hereof, any Receivables in a
Defaulted Account that are Ineligible Receivables shall be treated as
Ineligible Receivables rather than Receivables in Defaulted Accounts.
"Defeasance" is defined in Section 12.4.
"Defeased Series" is defined in Section 12.4.
"Definitive Certificates" is defined in Section 6.10.
"Depository" is defined in Section 6.10.
"Depository Agreement" means, as to each Series (subject to the
related Supplement), the agreement among Transferor, Trustee and the
applicable Clearing Agency or Foreign Clearing Agency.
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"Determination Date" means, unless otherwise specified in the
related Supplement, the third Business Day prior to each Transfer Date.
"Discount Option Receivables" is defined in Section 2.8.
"Discount Option Receivables Amount" means, on any date of
determination on and after the date on which Transferor's exercise of its
discount option pursuant to Section 2.8 takes effect, the excess of (a) the
aggregate Discount Option Receivables created on or prior to such date
(which amount, prior to the date on which Transferor's exercise of its
discount option takes effect and with respect to Receivables generated
prior to such date, shall be zero), over (b) any Discount Option
Receivables Collections received on or prior to such date.
"Discount Option Receivables Collections" means on any Date of
Processing on and after the date on which Transferor's exercise of its
discount option pursuant to Section 2.8 takes effect, the product of (a) a
fraction the numerator of which is the Discount Option Receivables Amount
and the denominator of which is the sum of the Principal Receivables plus
the Discount Option Receivables Amount, in each case (for both numerator
and denominator) at the end of the prior Monthly Period, and (b)
Collections of Principal Receivables, prior to any reduction for Discount
Option Receivables, received on such Date of Processing.
"Discount Percentage" is defined in Section 2.8.
"Distribution Account" is defined in subsection 4.2(c).
"Distribution Date" is defined, for each Series, in the related
Supplement.
"Dollars", "$" or "U.S. $" means United States dollars.
"Eligible Account" means, as of the Cut-Off Date (or, as to
Additional Accounts, as of the relevant Addition Date), a VISA, Mastercard,
Private Label or other revolving credit account in the Bank Portfolio that:
(a) is in existence and maintained with Transferor;
(b) is payable in Dollars;
(c) has as its most recent billing address an address
located in the United States or its territories or possessions or
a Military Address; provided that an Account having as its most
recent billing address an address which is not located in the
United States or its territories or possessions or at a Military
Address shall not be deemed to be ineligible pursuant to this
clause (c) at any time of determination to the extent that the
aggregate amount of all
7
such Accounts shall be less than 3% of the aggregate amount of all
Accounts at such time;
(d) except as provided below, Transferor has not
classified on its electronic records as counterfeit, fraudulent,
stolen or lost; and
(e) Transferor has not charged off in its customary
and usual manner for charging off such Accounts.
Notwithstanding the foregoing, Eligible Accounts may include accounts which
have been identified by the Obligor as having been incurred as a result of
fraudulent use of credit cards or with respect to any credit cards which
have been reported to Transferor as lost or stolen, so long as (1) the
balance of all receivables included in such accounts is reflected as zero
on the books and records of Transferor and (2) charging privileges with
respect to all such accounts have been canceled and are not reinstated.
"Eligible Receivable" means a Receivable:
(a) that has arisen under an Eligible Account;
(b) that was created in compliance, in all material
respects, with (and pursuant to an Account Agreement that
complies, in all material respects, with) all Requirements of Law
applicable to Transferor;
(c) as to which all consents, licenses, approvals or
authorizations of, or registrations or declarations with, any
Governmental Authority required to be obtained, effected or given
by Transferor in connection with the creation of such Receivable
or the execution, delivery and performance by Transferor of the
Account Agreement pursuant to which such Receivable was created,
have been duly obtained, effected or given and are in full force
and effect as of such date of creation;
(d) as to which, at the time of and at all times
after the creation of such Receivable, Transferor or the Trust had
good and marketable title, free and clear of all Liens arising
under or through Transferor or any of its Affiliates (other than
Liens permitted by subsection 2.5(b));
(e) that is the legal, valid and binding payment
obligation of the Obligor thereon, enforceable against such
Obligor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws, now
or hereafter in effect, affecting the enforcement of creditors'
rights in
8
general and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in
equity);
(f) that, at the time of its transfer to the Trust,
is not subject to any right of rescission, setoff, counterclaim or
any other defense of the Obligor (including the defense of usury),
other than defenses arising out of any bankruptcy or other
insolvency laws and except as enforceability may be limited by
general principles of equity (whether considered in a suit at law
or equity) or as to which Servicer makes a Credit Adjustment
pursuant to subsection 4.3(c); and
(g) that constitutes an "account," a "general
intangible" or "chattel paper."
"ERISA" means the Employee Retirement Income Security Act of 1974.
"Euroclear Operator" means ▇▇▇▇▇▇ Guaranty Trust Company of New
York, Brussels, Belgium office, as operator of the Euroclear System.
"Excess Allocation Series" means any series that is designated as
an Excess Allocation Series in the related Supplement.
"Excess Finance Charge Collections" means, with respect to any
Transfer Date, the aggregate amount for all outstanding Excess Allocation
Series that the related Supplements specify are to be treated as "Excess
Finance Charge Collections" for such Transfer Date.
"Excess Funding Account" is defined in subsection 4.2(b).
"Extended Trust Termination Date" is defined in subsection 12.1(a).
"FDIC" means the Federal Deposit Insurance Corporation.
"Finance Charge Account" is defined in subsection 4.2(b).
"Finance Charge Receivables" means Receivables created in respect
of the Periodic Finance Charges, Cash Advance Fees, Annual Account Fees,
Late Fees, Overlimit Fees, NSF Fees, closed account maintenance charges and
similar fees and charges, including charges for Special Fees to the extent
such Special Fees are categorized as Finance Charge Receivables, and
Discount Option Receivables. Except as otherwise specified in any
Supplement, Net Recoveries shall be treated as Collections of Finance
Charge Receivables. Collections of Finance Charge Receivables with respect
to any Monthly Period shall also include (a) Discount Option Receivables
Collections (if any) with respect to such Monthly Period, (b) the
9
amount of Interchange (if any), Other Account Revenues (if any) and other
amounts allocable to any Series of Certificates pursuant to any Supplement
with respect to such Monthly Period (to the extent received by the Trust
and deposited into the Finance Charge Account or any Series Account, as the
case may be, on the Transfer Date following such Monthly Period), and (c)
all interest and other investment earnings (net of losses and investment
expenses) accrued on or prior to the related Transfer Date in connection
with the investment of funds on deposit in the Collection Account, the
Distribution Account, the Excess Funding Account and the Finance Charge
Account.
"Finance Charge Shortfalls" is defined, for any Series, in the related
Supplement.
"First NBC" means First National Bank of Commerce, a national
banking association.
"Fitch" means Fitch Investors Service, L.P.
"Foreign Clearing Agency" means CEDEL and the Euroclear Operator.
"Global Certificate" is defined in Section 6.13.
"Governmental Authority" means the United States of America, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Group" means, as to any Series, the group of Series in which the
related Supplement specifies that such Series shall be included.
"Holder" means the Person in whose name a Certificate is
registered in the Certificate Register and, if applicable, the holder of
any Bearer Certificate or Coupon, as the case may be, and, as to any
Series, such other Person deemed to be an "Investor Holder" or "Holder" in
any related Supplement except as otherwise provided in such Supplement.
"Ineligible Receivable" is defined in subsection 2.4(d)(iii).
"Initial Closing Date" means August 7, 1997.
"Initial Investor Interest" means, as to any Series, the amount stated
in the related Supplement.
"Insolvency Event" is defined in Section 9.2.
10
"Insurance Proceeds" means any amounts recovered by Servicer
pursuant to any credit insurance policies covering any Obligor with respect
to Receivables under such Obligor's Account.
"Interchange" means interchange fees payable to Transferor, in its
capacity as credit card issuer, through VISA U.S.A., Inc. and Mastercard
International Inc.
"Internal Revenue Code" means the Internal Revenue Code of 1986.
"Investment Company Act" means the Investment Company Act of 1940.
"Investor Account" means each of the Finance Charge Account, the
Excess Funding Account and the Distribution Account.
"Investor Certificate" means any one of the certificates
(including Bearer Certificates, Registered Certificates and Global
Certificates) executed by Transferor and authenticated by Trustee
substantially in the form (or forms in the case of a Series with multiple
Classes) attached to the related Supplement and such other interest in the
Trust deemed to be an "Investor Certificate" in any related Supplement
except as otherwise provided in such Supplement.
"Investor Holder" means the holder of record of an Investor
Certificate.
"Investor Interest" is defined, as to any Series, in the related
Supplement.
"Investor Issuance" is defined in subsection 6.9(b).
"Investor Percentage" is defined, as to any Series, in the related
Supplement.
"Investor Servicing Fee" is defined in Section 3.2.
"Issuance" means either of the procedures described under subsection
6.9(b).
"Issuance Date" is defined in subsection 6.9(b).
"Issuance Notice" is defined in subsection 6.9(b).
"Late Fees" means amounts referred to as "late fees," "late
charges" or "late payment fees" (or similar terms) in the Account Agreement
applicable to any Account.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, participation or equity interest, deposit arrangement,
encumbrance, lien (statutory or other), preference, priority or other
security agreement or preferential
11
arrangement of any kind or nature whatsoever, including any conditional
sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing and the
filing of any financing statement under the UCC (other than any such
financing statement filed for informational purposes only) or comparable
law of any jurisdiction to evidence any of the foregoing; provided that any
assignment pursuant to Section 7.2 shall not be deemed to constitute a
Lien.
"Military Address" means any mailing address on any United States
armed forces military base of operations, including APO and FPO addresses.
"Minimum Aggregate Principal Receivables" means, unless otherwise
provided in a Supplement relating to a Paired Series (with respect to the
Paired Series), as of any date of determination, an amount equal to the sum
of the numerators used to calculate the Investor Percentages with respect
to the allocation of Collections of Principal Receivables for each Series
outstanding on such date.
"Minimum Transferor Interest" means the Minimum Transferor Percentage
of the Aggregate Principal Receivables.
"Minimum Transferor Percentage" means 7%; provided that Transferor
may increase or reduce the Minimum Transferor Percentage upon (a) 30 days'
prior notice to Trustee, each Rating Agency and any Credit Enhancement
Provider entitled to receive such notice pursuant to the relevant
Supplement, (b) satisfaction of the Rating Agency Condition, and (c)
delivery to Trustee and each such Credit Enhancement Provider of an
Officer's Certificate stating that Transferor reasonably believes that such
increase or reduction will not, based on the facts known to such officer at
the time of such certification, then or thereafter cause a Pay Out Event to
occur with respect to any Series.
"Monthly Period" means, unless otherwise defined in any
Supplement, each period from and including the first day of a calendar
month to and including the last day of that calendar month.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Default Amount" means, for any Monthly Period, the excess (if
any) of (a) the amount of Receivables in Accounts that became Defaulted
Accounts during such Monthly Period over (b) all Recoveries received during
such Monthly Period.
"Net Recoveries" means, for any Monthly Period, the excess (if
any) of (a) all Recoveries received during such Monthly Period over (b) the
amount of Receivables in Accounts that became Defaulted Accounts during
such Monthly Period.
12
"Notice Date" is defined in subsection 2.6(d)(i).
"NSF Fees" means charges assessed against any Obligor pursuant to
the related Account Agreement on account of the return of checks for
non-sufficient funds.
"Obligor" means, as to any Account, the Person or Persons
obligated to make payments on that Account, including any guarantor.
"Officer's Certificate" means a certificate signed by any Vice
President or more senior officer of Transferor or Servicer and delivered to
Trustee.
"Other Account Revenues" means amounts received by Transferor (a)
from any third party in consideration of the inclusion of advertising
inserts with monthly statements relating to accounts in the Bank Portfolio,
(b) from issuers of credit insurance policies on account of experience
rebates or similar amounts related to obligors on accounts included in the
Bank Portfolio and (c) from any other Person on account of revenues related
to the Accounts, to the extent (in the case of this clause (c)) that
Transferor designates such amounts to be treated as "Other Account
Revenues" in an Officer's Certificate.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for or an employee of the Person providing the opinion (except
that no tax opinion or opinion delivered pursuant to Section 8.5 may be
delivered by such an employee), and who shall be reasonably acceptable to
Trustee.
"Overlimit Fees" means amounts referred to as "overlimit fees,"
"overlimit charges," or "exceeding the credit limit fees" (or similar
terms) in the Account Agreement applicable to any Account.
"Paired Series" means each Series that has been paired with
another Series (one of which Series may be prefunded or partially
prefunded) such that a reduction of the Adjusted Investor Interest of one
Series results in an increase of the Investor Interest of the other Series.
"Participations" is defined in subsection 2.6(a).
"Paying Agent" means any paying agent appointed pursuant to
Section 6.6 and shall initially be Trustee.
"Pay Out Event" means each Trust Pay Out Event and, as to any
Series, each other "Pay Out Event," if any, described in the Supplement for
such Series.
13
"Periodic Finance Charges" means amounts referred to as "finance
charges" (or similar terms) in the Account Agreement applicable to any
Account.
"Permitted Investments" means, unless otherwise provided in the
Supplement with respect to any Series: (a) book-entry securities or
negotiable instruments or securities represented by instruments in bearer
or registered form which evidence (i) obligations of or fully guaranteed as
to timely payment by the United States of America, (ii) demand deposits,
time deposits or certificates of deposit of any depository institution or
trust company incorporated under the laws of the United States of America
or any state thereof or domestic branches of foreign banks and subject to
supervision and examination by Federal or state banking or depository
institution authorities, provided that at the time of the Trust's
investment or contractual commitment to invest therein, the certificates of
deposit or short-term deposits of such depository institution or trust
company shall have a credit rating from Moody's and Standard & Poor's of
P-1 and A-1+, respectively, (iii) commercial paper having, at the time of
the Trust's investment or contractual commitment to invest therein, a
rating from Moody's and Standard & Poor's of P-1 and A-1+, respectively,
and, if rated by Fitch, F-1+ by Fitch, (iv) bankers' acceptances issued by
any depository institution or trust company described in clause (a)(ii),
(v) investments in money market or common trust funds rated AAA-m or AAA-mg
by Standard & Poor's and P-1 by Moody's and, if rated by Fitch, AAA by
Fitch, if such investment will not require the Trust to register as an
"investment company" under the Investment Company Act, and (vi) repurchase
obligations with respect to (A) any security described in clause (a)(i) or
(B) any other security issued or guaranteed by an agency or instrumentality
of the United States of America, in either case entered into with a
depository institution or trust company (acting as principal) described in
clause (a)(ii); (b) demand deposits in the name of the Trust or Trustee in
any depository institution or trust company described in clause (a)(ii);
and (c) any other investment if (i) the Rating Agency Condition has been
satisfied and (ii) purchase of such investment will not require the Trust
to be registered as an investment company under the Investment Company Act.
"Person" means any legal person, including any individual,
corporation, limited liability company, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
governmental entity or other entity of similar nature.
"Principal Receivable" means each Receivable other than (without
duplication) (a) Finance Charge Receivables and (b) Receivables in
Defaulted Accounts. A Receivable shall be deemed to have been created at
the end of the day on the Date of Processing of such Receivable. In
calculating the aggregate amount of Principal Receivables on any day, the
amount of Principal Receivables shall be reduced by the aggregate amount of
credit balances in the Accounts on such day. Any Receivables which
Transferor is unable to transfer as provided in subsection
14
2.5(d)(i) shall not be included in calculating the aggregate amount of
Principal Receivables.
"Principal Sharing Series" means a Series designated pursuant to
the related Supplement as a Principal Sharing Series which is entitled to
receive Shared Principal Collections.
"Principal Terms" is defined in subsection 6.9(c).
"Private Label" is the generic term used in this Agreement to
refer to revolving credit card accounts opened by Transferor in connection
with any of its military affinity programs which are not MasterCard or VISA
accounts.
"Qualified Institution" is defined in subsection 4.2(a).
"Rating Agency" means, as to each Series, the rating agency or
agencies, if any, specified in the related Supplement.
"Rating Agency Condition" means, as to any event or condition,
receipt by Transferor from each Rating Agency that such event or condition
will not result in a downgrade, qualification or withdrawal of its then
current rating of any outstanding Series.
"Reassignment" is defined in subsection 2.7(b)(ii).
"Reassignment Date" is defined in subsection 2.4(e).
"Receivable" means any amount owing by the Obligors under the
Account Agreements, including amounts owing for the purchase of goods and
services, cash advances, access checks, Annual Account Fees, Cash Advance
Fees, Periodic Finance Charges, Late Fees, Overlimit Fees, NSF Fees and
credit insurance premiums and Special Fees, if any.
"Record Date" means, with respect to any Distribution Date, the
last Business Day of the preceding Monthly Period.
"Recoveries" means all amounts, including Insurance Proceeds,
received by Servicer with respect to Receivables in Defaulted Accounts,
less related expenses of outside collection agencies.
"Registered Certificates" is defined in Section 6.1.
"Removal Date" is defined in subsection 2.7(a).
15
"Removal Notice Date" is defined in subsection 2.7(a).
"Removed Accounts" is defined in subsection 2.7(a).
"Requirements of Law" for any Person means 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
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" means any officer within the Corporate Trust
Office (or any successor group of Trustee), including any Vice President,
any Assistant Secretary or any other officer of Trustee customarily
performing functions similar to those performed by any person who at the
time shall be an above-designated officer and any particular officer to
whom any corporate trust matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Retention Condition" means:
(a) on any day on and after the Conversion Date,
either (i) the Transferor Interest is less than the Minimum
Transferor Interest or (ii) the sum of Aggregate Principal
Receivables and the principal amount on deposit in the Excess
Funding Account is less than the Minimum Aggregate Principal
Receivables (in each case determined after giving effect to any
transfer of Principal Receivables to the Trust on such day); or
(b) on any day prior to the Conversion Date, either
(i)(A) the sum of the aggregate amount of Receivables and the
principal amount on deposit in the Excess Funding Account at the
end of the day immediately prior to such date of determination,
minus the Adjusted Aggregate Investor Interest at the end of such
preceding day, minus the outstanding principal amount of all
Supplemental Certificates (and any purchased interest sold
pursuant to subsection 6.9(d)) at the end of such preceding day is
less than (B) 3% of the aggregate amount of Receivables at the end
of the day immediately prior to such date of determination, or
(ii)(A) the sum of (1) the product of 0.97 times the aggregate
amount of Receivables plus (2) the principal amount on deposit in
the Excess Funding Account, in each case at the end of the day
immediately prior to such date of determination is less than (B)
the Minimum Aggregate Principal Receivables (in the case of both
clauses (i) and (ii) determined after giving effect to any
transfer of Receivables to the Trust on such day).
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"SAIF" means the Savings Association Insurance Fund administered by
the FDIC.
"Securities Act" means the Securities Act of 1933.
"Series" means any series of Investor Certificates issued pursuant to
a Supplement.
"Series Account" means any account established pursuant to a
Supplement for the benefit of the related Series.
"Series Principal Shortfall" is defined, as to any Series, in the
related Supplement.
"Series Servicing Fee Percentage" is defined, as to any Series, in the
related Supplement.
"Series Termination Date" is defined, as to any Series, in the related
Supplement.
"Servicer" means (a) initially First NBC and (b) after any Person
is appointed as Successor Servicer, such Person as herein provided to
service the Receivables.
"Servicer Default" is defined in Section 10.1.
"Servicer Letter of Credit" is defined in subsection 4.3(a).
"Servicing Fee" is defined in Section 3.2.
"Servicing Officer" means any officer of Servicer involved in, or
responsible for, the administration and servicing of the Receivables whose
name appears on a list of servicing officers furnished to Trustee by
Servicer, as such list may be amended from time to time.
"Shared Principal Collections" means, with respect to any Transfer
Date, the aggregate amount for all outstanding Principal Sharing Series
that the related Supplements specify are to be treated as "Shared Principal
Collections" for such Transfer Date.
"Special Fees" means fees which are not now but from time to time
may be assessed on the Accounts. On or after the date on which any of such
Special Fees begin to be assessed on the Accounts, Transferor may designate
in an Officer's Certificate whether such Special Fees shall be treated as
Principal Receivables or Finance Charge Receivables.
17
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The McGraw Hill Companies, Inc.
"Subject Certificate" is defined in subsection 6.15(a).
"Successor Servicer" is defined in subsection 10.2(a).
"Supplement" means, as to any Series or Supplemental Certificate,
a supplement to this Agreement executed in conjunction with any issuance of
that Series or Supplemental Certificate.
"Supplemental Certificate" is defined in subsection 6.3(b).
"Tax Opinion" means, as to any action, an Opinion of Counsel to
the effect that, for Federal income tax purposes, (a) such action will not
adversely affect the tax characterization as debt of Investor Certificates
of any outstanding Series or Class with respect to which an Opinion of
Counsel was delivered at the time of their issuance that such Investor
Certificates would be characterized as debt, (b) such action will not cause
the Trust to be classified, for Federal income tax purposes, as an
association (or publicly traded partnership) taxable as a corporation and
(c) such action will not cause or constitute an event in which gain or loss
would be recognized by any Investor Holder.
"Termination Notice" is defined in Section 10.1.
"Transfer Agent and Registrar" is defined in Section 6.3 and shall
initially be Trustee's Corporate Trust Office.
"Transfer Date" means, unless otherwise specified in the related
Supplement, with respect to any Series, the Business Day immediately prior
to each Distribution Date.
"Transferor" means First NBC.
"Transferor Interest" means, on any date of determination, the
result (but not less than zero) of (a) the sum of the aggregate amount of
Principal Receivables and the principal amount on deposit in the Excess
Funding Account at the end of the day immediately prior to such date of
determination, minus (b) the Adjusted Aggregate Investor Interest at the
end of such preceding day, minus (c) the outstanding principal amount of
any purchased interest sold pursuant to subsection 6.9(d) at the end of
such preceding day.
"Transferor Issuance" is defined in subsection 6.9(b).
18
"Transferor Percentage" means, on any date of determination, when
used with respect to Principal Receivables, Finance Charge Receivables and
Receivables in Defaulted Accounts, a percentage equal to 100% minus the
Aggregate Investor Percentage with respect to such categories of
Receivables.
"Transferor Servicing Fee" is defined in Section 3.2.
"Transferred Account" means (a) an Account with respect to which a new
credit account number has been issued by Servicer or Transferor under
circumstances resulting from a lost or stolen credit card or from the
transfer from one affinity group to another affinity group and not
requiring standard application and credit evaluation procedures under the
Account Guidelines or (b) an Eligible Account resulting from the conversion
of an Account that was a standard account to a premium account or from a
premium account to a standard account, and which in either case can be
traced or identified by accessing Transferor's computer files by reference
to or by way of an Account Schedule delivered to Trustee pursuant to
Section 2.1 or 2.6 or pursuant to this definition as an account into which
an Account has been transferred. A Transferred Account shall not be treated
as an Automatic Additional Account for purposes of this Agreement or any
Supplement.
"Trust" means the trust created by this Agreement, which shall be
known as the First NBC Credit Card Master Trust, and the corpus of which is
the Trust Assets.
"Trust Assets" means the Receivables now existing or hereafter
created and arising in connection with the Accounts, all monies due or to
become due with respect to such Receivables (including all Finance Charge
Receivables and Recoveries), all proceeds (as defined in Section 9-306 of
the UCC as in effect in the State of Louisiana) of such Receivables and
Insurance Proceeds relating to the Receivables, and all proceeds (as
defined in Section 9-306 of the UCC as in effect in the State of Louisiana)
thereof, the right to receive certain amounts paid or payable as
Interchange (if provided for in any Supplement), such funds as from time to
time are deposited in the Collection Account, the Finance Charge Account,
the Excess Funding Account, the Distribution Account and any Series Account
and the rights to any Credit Enhancement with respect to any Series.
"Trust Extension" is defined in subsection 12.1(a).
"Trust Pay Out Event" is defined in Section 9.1.
"Trust Termination Date" means the earliest to occur of (a) unless
a Trust Extension shall have occurred, the first Business Day after the
Distribution Date with respect to any Series following the date on which
funds shall have been deposited in the Distribution Account or the
applicable Series Account for the payment of Investor Holders of each
Series then issued and outstanding sufficient to pay in full
19
such Certificates, (b) if a Trust Extension shall have occurred, the
Extended Trust Termination Date and (c) a day which is 21 years less one
day after the death of the officers and the last survivor of all the lineal
descendants of every officer of Trustee who are living on the date hereof;
provided, however, that if at any time any rights, privileges or options
under the Trust shall be or become valid under applicable law for a period
subsequent to the 21st anniversary of the death of such last survivor or
without limiting the generality of the foregoing, if legislation shall
become effective providing for the validity or permitting the effective
grant of such rights, privileges and options for a period in gross,
exceeding the period for which such rights, privileges and options are
stated to extend and be valid pursuant to this clause (c)), then such
rights, privileges or options shall not terminate as otherwise provided in
this clause (c) but, subject to the occurrence of the Trust Termination
Date pursuant to clause (a) or clause (b) above, shall extend to and
continue in effect, but only if such nontermination and extension shall
then be valid under applicable law, until one day prior to such time as the
same shall, under applicable law, cease to be valid.
"Trustee" means The First National Bank of Chicago a national
banking association, and its successors and any corporation resulting from
or surviving any consolidation or merger to which it or its successors may
be a party and any successor trustee appointed as herein provided.
"UCC" means the Uniform Commercial Code as in effect in any specified
jurisdiction.
"Undivided Interest" means the undivided interest in the Trust
evidenced by an Investor Certificate.
"Variable Interest" means either of (a) any Investor Certificate
that is designated as a variable funding certificate in the related
Supplement and (b) any purchased interest sold as permitted by subsection
6.9(d).
"Zero Balance Account" means, as of any date of determination, an
Account with a Receivable balance of zero and in which there has been no
activity for the twelve calendar months preceding such date of
determination.
SECTION 1.2 Other Interpretive Provisions. With respect to any
Series, all terms used and not defined herein are used as defined in the
related Supplement. All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document delivered
pursuant hereto unless otherwise defined therein. For purposes of this
Agreement and all such certificates and other documents, unless the context
otherwise requires: (a) accounting terms not otherwise defined in this
Agreement, and accounting terms partly defined in this Agreement to the
extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles; (b) terms defined in Article 9 of
the UCC
20
as in effect in the State of Louisiana and not otherwise defined in this
Agreement are used as defined in that Article; (c) any reference to each
Rating Agency shall only apply to any specific rating agency if such rating
agency is then rating any outstanding Series; (d) references to any amount
as on deposit or outstanding on any particular date means such amount at
the close of business on such day; (e) the words "hereof," "herein" and
"hereunder" and words of similar import refer to this Agreement (or the
certificate or other document in which they are used) as a whole and not to
any particular provision of this Agreement (or such certificate or
document); (f) references to any Section, Schedule or Exhibit are
references to Sections, Schedules and Exhibits in or to this Agreement (or
the certificate or other document in which the reference is made), and
references to any paragraph, subsection, clause or other subdivision within
any Section or definition refer to such paragraph, subsection, clause or
other subdivision of such Section or definition; (g) the term "including"
means "including without limitation"; (h) references to any law or
regulation refer to that law or regulation as amended from time to time and
include any successor law or regulation; (i) references to any Person
include that Person's successors and assigns; and (j) headings are for
purposes of reference only and shall not otherwise affect the meaning or
interpretation of any provision hereof. The agreements, representations and
warranties of First NBC in this Agreement, in its capacities as Transferor
and Servicer, shall be deemed to be its agreements, representations and
warranties only so long as it remains a party to this Agreement in such
capacity. The monthly Servicer certificate shall be in substantially the
form of Exhibit B, with such changes as Servicer may determine to be
necessary or desirable; provided that no such change shall serve to exclude
information required by this Agreement or any Supplement. Servicer shall,
upon making such determination, deliver to Trustee and each Rating Agency
an Officer's Certificate to which shall be annexed the form of the related
Exhibit, as so changed. Upon the delivery of such Officer's Certificate to
Trustee, the related Exhibit, as so changed, shall for all purposes of this
Agreement constitute such Exhibit. Trustee may conclusively rely upon such
Officer's Certificate in determining whether the related Exhibit, as
changed, conforms to the requirements of this Agreement.
ARTICLE II CONVEYANCE OF RECEIVABLES
SECTION 2.1 Conveyance of Receivables. (a) Transferor hereby
transfers, assigns, sets-over and otherwise conveys to Trustee, on behalf
of the Trust, for the benefit of the Holders, without recourse, all of its
right, title and interest in, to and under the Receivables now existing and
hereafter created and arising in connection with the Accounts (other than
Receivables in Additional Accounts), all monies due or to become due with
respect to such Receivables (including all Finance Charge Receivables and
Recoveries), any collateral securing any such Receivables and Insurance
Proceeds relating to such Receivables, and all proceeds of all of the
foregoing.
21
(b) In connection with such transfer, assignment, set-over and
conveyance, Transferor agrees to record and file, at its own expense, a
financing statement (including any continuation statements with respect to
such financing statement when applicable) with respect to the Receivables
now existing and hereafter created meeting the requirements of applicable
state law in such manner and in such jurisdictions as are necessary to
perfect the assignment of the Receivables to the Trust, and to deliver a
file-stamped copy of such financing statement or continuation statement or
other evidence of such filing (which may, for purposes of this Section 2.1,
consist of telephone confirmation of such filing) to Trustee on or prior to
the date of issuance of the Certificates (and in the case of any
continuation statements filed pursuant to this Section 2.1, as soon as
practicable after receipt thereof by Transferor). The foregoing transfer,
assignment, set-over and conveyance to the Trust shall be made to Trustee,
on behalf of the Trust, and each reference in this Agreement to such
transfer, assignment, set-over and conveyance shall be construed
accordingly.
(c) In connection with such transfer, Transferor agrees, at its
own expense, on or prior to the Initial Closing Date (i) to indicate in its
computer files that the Receivables created in connection with the Accounts
(other than any Additional Accounts) have been transferred to Trustee, on
behalf of the Trust, pursuant to this Agreement for the benefit of the
Holders by identifying such Accounts as those that may be accessed on
Transferor's computer files through use of the database code "T" and (ii)
to deliver to Trustee an Account Schedule relating to the initial Accounts,
which is hereby incorporated into and made a part of this Agreement.
Transferor further agrees, at its own expense, with respect to Automatic
Additional Accounts to indicate in its computer files on or prior to the
applicable Addition Date that Receivables created in connection with each
Automatic Additional Account have been transferred to Trustee, on behalf of
the Trust, pursuant to this Agreement for the benefit of the Holders by
identifying such Accounts as those that may be accessed on Transferor's
computer files through use of the database code "T". Transferor shall not
alter the file designations referenced in this subsection 2.1(c) with
respect to any Account during the term of this Agreement unless and until
such Account becomes a Removed Account or a Zero Balance Account.
Transferor shall hold the information to be provided with respect to the
Transferred Accounts, prior to delivery to Trustee, in trust for the
benefit of Trustee, on behalf of the Trust.
(d) The parties intend that if, and to the extent that, such
transfer is not deemed to be a sale, Transferor shall be deemed hereunder
to have granted to Trustee, for the benefit of the Investor Holders, a
first priority perfected security interest in all of Transferor's right,
title and interest in, to and under the Receivables now existing and
hereafter created and arising in connection with the Accounts (other than
Receivables in Additional Accounts), all monies due or to become due with
respect to such Receivables, any collateral securing any such Receivables
and all Insurance Proceeds relating to such Receivables (including all
Finance Charge
22
Receivables and Recoveries) and all proceeds of all of the foregoing, that
this Agreement shall constitute such a security agreement under applicable
law, and that the Transferor Interest shall be deemed to represent
Transferor's equity in the collateral granted.
Pursuant to the request of Transferor, Trustee shall cause
Certificates in authorized denominations evidencing the entire interest in
the Trust to be duly authenticated and delivered to or upon the order of
Transferor pursuant to Section 6.2.
SECTION 2.2 Acceptance by Trustee. (a) Trustee hereby acknowledges
its acceptance, on behalf of the Trust, of all right, title and interest
previously held by Transferor in and to the Receivables now existing and
hereafter created and arising in connection with the Accounts (other than
Receivables in Additional Accounts), all monies due or to become due with
respect to such Receivables (including all Finance Charge Receivables and
Recoveries), any collateral securing any such Receivables, Insurance
Proceeds relating to such Receivables and all proceeds of all of the
foregoing, and declares that it shall maintain such right, title and
interest, upon the Trust herein set forth, for the benefit of all Holders.
Trustee further acknowledges that, prior to or simultaneously with the
execution and delivery of this Agreement, Transferor delivered to Trustee
the initial Account Schedule referred to in subsection 2.1(c).
(b) Trustee agrees not to disclose to any Person any of the names,
addresses, account numbers or other information contained in the computer
files or microfiche lists delivered to Trustee by Transferor pursuant to
Sections 2.1, 2.6 and 2.7 or any other information provided by Transferor
to Trustee in any format whatsoever except as is required in connection
with the performance of its duties hereunder or in enforcing the rights of
the Holders or to a Successor Servicer appointed pursuant to Section 10.2,
as mandated pursuant to any Requirement of Law applicable to Trustee or as
required to ensure that any security interest in the Receivables is
perfected. Trustee agrees to take such measures as shall be reasonably
requested by Transferor to protect and maintain the security and
confidentiality of such information, and, in connection therewith, (i)
Trustee shall not open the sealed container in which any Account Schedule
is delivered to Trustee by Transferor except (A) after the appointment of
Trustee or any other Person as Successor Servicer after a Servicer Default,
(B) as necessary to answer any query made to it in its capacity as a
secured party with respect to the Receivables or any other Trust Assets
(and, in the case of this clause (B), only after Trustee has informed
Transferor of such query and Transferor has consented to such disclosure)
or (C) in connection with any disclosure permitted by the next sentence,
and (ii) Trustee shall allow Transferor to inspect Trustee's security and
confidentiality arrangements, policies and procedures from time to time
during normal business hours. In the event that Trustee is required by law
to disclose any such information, Trustee shall provide
23
Transferor with prompt written notice, unless such notice is prohibited by
law, of any such request or requirement so that Transferor may request a
protective order or other appropriate remedy. Trustee shall make best
efforts to provide Transferor with written notice no later than five days
prior to any disclosure pursuant to this subsection 2.2(b).
(c) 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. No liability to any Obligor under any
Account Agreement, any Requirement of Law, or any of the Receivables
arising out of any act or omission to act of Transferor in originating the
Receivables or Servicer in servicing the Receivables is intended to be
assumed by the Trust, Trustee, or the Certificateholders under or as a
result of this Agreement and the transactions contemplated hereby, and to
the maximum extent permitted and valid under mandatory provisions of law,
each expressly disclaims such assumption.
SECTION 2.3 Representations and Warranties of Transferor.
Transferor hereby represents and warrants to the Trust as of the Initial
Closing Date:
(a) Organization and Good Standing. Transferor is a national
banking association duly organized and validly existing in good standing
under the laws of the United States and has full corporate power, authority
and legal right to own its properties and conduct its business as such
properties are presently owned and such business is presently conducted,
and to execute, deliver and perform its obligations under this Agreement
and to execute and deliver to Trustee the Certificates pursuant hereto.
(b) Due Qualification. Transferor is duly qualified to do business
and is in good standing (or is exempt from such requirement) in any state
required in order to conduct its business, and has obtained all necessary
licenses and approvals with respect to Transferor required under Federal
and Louisiana law; provided that no representation or warranty is made with
respect to any qualifications, licenses or approvals which Trustee would
have to obtain to do business in any state in which Trustee seeks to
enforce any Receivable.
(c) Due Authorization. The execution and delivery of this
Agreement and the execution and delivery to Trustee of the Certificates by
Transferor and the consummation of the transactions provided for in this
Agreement have been duly authorized by Transferor by all necessary
corporate action on its part, and this Agreement will remain, from the time
of its execution, an official record of Transferor.
(d) No Conflict. The execution and delivery of this Agreement and
the Certificates, the performance of the transactions contemplated by this
Agreement and
24
the fulfillment of the terms hereof by Transferor will not conflict with,
result in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a material
default under, any material indenture, contract, agreement, mortgage, deed
of trust or other instrument to which Transferor is a party or by which it
or any of its properties are bound.
(e) No Violation. The execution and delivery of this Agreement and
the Certificates, the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof by Transferor will not
conflict with or violate any Requirements of Law applicable to Transferor.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of Transferor, threatened against
Transferor before any court, regulatory body, administrative agency, or
other tribunal or governmental instrumentality (i) asserting the invalidity
of this 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 or the Certificates, (iii) seeking any
determination or ruling that, in the reasonable judgment of Transferor,
would materially and adversely affect the performance by Transferor of its
obligations under this Agreement, (iv) seeking any determination or ruling
that would materially and adversely affect the validity or enforceability
of this Agreement or the Certificates or (v) seeking to affect adversely
the income tax attributes of the Trust.
(g) Eligibility of Accounts. As of the Cut-Off Date, each Account
was an Eligible Account and no selection procedures adverse to the Investor
Holders have been employed by Transferor in selecting the Accounts from
among the Eligible Accounts in the Bank Portfolio.
(h) Transferor's Deposit Accounts. As of the Initial Closing Date,
deposits in Transferor's deposit accounts were insured to the limits
provided by law by BIF or SAIF.
(i) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental body
or official required in connection with the execution and delivery of this
Agreement and the Certificates, the performance of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof by
Transferor, have been obtained.
(j) Insolvency. No Insolvency Event has occurred. Transferor did
not (i) execute this Agreement or the Certificates, (ii) grant to Trustee
the security interests described in Section 2.1(d), (iii) cause, permit, or
suffer the perfection or attachment of such a security interest, (iv)
otherwise effectuate or consummate any transfer to Trustee pursuant to this
Agreement or (v) acquire its interest in the Trust, in each case: (A) in
contemplation of insolvency; (B) with a view to preferring one
25
creditor over another or to preventing the application of its assets in the
manner required by applicable law or regulations; (C) after committing an
act of insolvency; or (D) with any intent to hinder, delay, or defraud
itself or its creditors.
(k) Trustee. Trustee is not an insider or Affiliate of Transferor.
For the purposes of the representations and warranties contained
in this Section 2.3 and made by Transferor on the Initial Closing Date,
"Certificates" means the Certificates issued on the Initial Closing Date.
The representations and warranties set forth in this Section 2.3 shall
survive the transfer and assignment of the respective Receivables to the
Trust and any termination of the rights and obligations of Servicer
pursuant to Section 10.1. Transferor hereby represents and warrants to the
Trust, with respect to any Series of Certificates, as of its Closing Date,
unless otherwise stated in the related Supplement, that the representations
and warranties of Transferor set forth in this Section 2.3 are true and
correct as of such date (and for purposes of such representations and
warranties, (x) "Certificates" means the Certificates issued on the related
Closing Date, (y) references to the Initial Closing Date shall be deemed to
refer to that Closing Date and (z) subsection 2.3(g) shall be deemed to
refer to the applicable Addition Cut-Off Date with respect to any
Additional Account). Upon discovery by Transferor, Servicer or 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 2.4 Representations and Warranties of Transferor Relating
to this Agreement and the Receivables.
(a) Binding Obligation; Valid Transfer and Assignment. Transferor
hereby represents and warrants to the Trust that, as of the Initial Closing
Date:
(i) This Agreement constitutes a legal, valid and
binding obligation of Transferor, enforceable against Transferor
in accordance with its terms, except (A) as such enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect affecting the enforcement of creditors' rights in
general and the rights of creditors of national banking
associations, and (B) as such enforceability may be limited by
general principles of equity (whether considered in a suit at law
or in equity).
(ii) This Agreement constitutes either (A) a valid
transfer, assignment, set-over and conveyance to Trustee, on
behalf of the Trust, for the benefit of the Holders, of all right,
title and interest of Transferor in and to the Receivables now
existing and hereafter created and arising in connection with the
Accounts (other than Receivables in Additional Accounts), all
monies due or to become due with respect to such Receivables
26
(including all Finance Charge Receivables and Recoveries), and
Insurance Proceeds relating to such Receivables, all of which
property will be held by the Trust free and clear of any Lien of
any Person claiming through or under Transferor or any of its
Affiliates except for (x) Liens permitted under subsection 2.5(b),
and (y) the Transferor Interest, or (B) a grant of a security
interest in such property to Trustee, for the benefit of the
Investor Holders, which is enforceable with respect to the
existing Receivables (other than Receivables in Additional
Accounts), the proceeds thereof, and Recoveries and Insurance
Proceeds relating thereto upon execution and delivery of this
Agreement, and which will be enforceable with respect to such
Receivables hereafter created, the proceeds thereof and Insurance
Proceeds relating thereto, upon such creation. If this Agreement
constitutes the grant of a security interest to Trustee in such
property, upon the filing of the financing statement described in
Section 2.1 and in the case of the Receivables hereafter created
and proceeds thereof and Recoveries and Insurance Proceeds
relating thereto, upon such creation, Trustee shall have a first
priority perfected security interest in such property (subject to
Section 9-306 of the UCC as in effect in the State of Louisiana),
except for Liens permitted under subsection 2.5(b). Neither
Transferor nor any Person claiming through or under Transferor
shall have any claim to or interest in the Excess Funding Account,
the Finance Charge Account, the Distribution Account or any Series
Account, and if this Agreement constitutes the grant of a security
interest in such property, except for the interest of Transferor
in such property as a debtor for purposes of the UCC as in effect
in the State of Louisiana.
(b) Eligibility of Receivables. Transferor hereby represents and
warrants to the Trust as of the Initial Closing Date and as of each
Addition Date, as the case may be, that:
(i) As of the Initial Closing Date, Transferor
represents and warrants that each Receivable was an Eligible
Receivable as of the end of the Cut-Off Date. As of any Addition
Date, Transferor represents and warrants that each Receivable was
an Eligible Receivable as of the end of the Addition Cut-Off Date.
(ii) Each Receivable then existing has been conveyed
to the Trust free and clear of any Lien of any Person claiming
through or under Transferor or any of its Affiliates (other than
Liens permitted under subsection 2.5(b)) and in compliance, in all
material respects, with all Requirements of Law applicable to
Transferor.
(iii) With respect to each Receivable then existing,
all consents, licenses, approvals or authorizations of or
registrations or declarations with
27
any Governmental Authority required to be obtained, effected or
given by 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.
(iv) As of the Initial Closing Date or the applicable
Addition Date, the related Account Schedule is an accurate and
complete listing in all material respects of (A) on the Closing
Date, all of the Accounts as of the Cut-Off Date and (B) on an
Addition Date, the related Additional Accounts. In either case,
the information contained therein with respect to the identity of
such Accounts and the Receivables existing thereunder is accurate
in all material respects as of the Cut-Off Date or the applicable
Addition Date. As of the Cut-Off Date, the Aggregate Receivables
equaled $814,353,580, of which $802,881,646 consisted of the
Aggregate Principal Receivables and $11,471,934 consisted of the
Aggregate Finance Charge Receivables.
On each day on which any new Receivable is created, 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 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 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 2.4(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 2.4 shall survive the transfer and assignment of the
respective Receivables to the Trust. Upon discovery by Transferor, Servicer
or Trustee of a breach of any of the representations and warranties set
forth in this Section 2.4, the party discovering such breach shall give
prompt written notice to the other parties mentioned above. Transferor
agrees to cooperate with Servicer and Trustee in attempting to cure any
such breach.
(d) Transfer of Ineligible Receivables.
(i) Automatic Removal. In the event of a breach with
respect to a Receivable of any representations and warranties set
forth in subsection 2.4(b)(ii), or in the event that a Receivable
is not an Eligible Receivable as a result of the failure to
satisfy the conditions set forth in clause (d) of the definition
of Eligible Receivable, and any of the following three conditions
is met: (A) as a result of such breach or event such Receivable is
charged off as uncollectible or the Trust's rights in, to or under
such Receivable or its
28
proceeds are impaired or the proceeds of such Receivable are not
available for any reason to the Trust free and clear of any Lien;
(B) the Lien upon the subject Receivable (1) arises in favor of
the United States of America or any State or any agency or
instrumentality thereof and involves taxes or liens arising under
Title IV of ERISA or (2) has been consented to by Transferor; or
(C) the certificate of deposit or unsecured short term debt rating
of Transferor is not P-1 by Moody's and the Lien upon the subject
Receivable ranks prior to the Lien created pursuant to this
Agreement; then, upon the earlier to occur of the discovery of
such breach or event by Transferor or Servicer or receipt by
Transferor of written notice of such breach or event given by
Trustee, each such Receivable shall be automatically removed from
the Trust on the terms and conditions set forth in subsection
2.4(d)(iii).
(ii) Removal After Cure Period. In the event of a
breach of any of the representations and warranties set forth in
subsection 2.4(b) other than a breach or event subject to
subsection 2.4 (d)(i), and as a result of such breach the related
Account becomes a Defaulted Account or the Trust's rights in, to
or under the Receivable or its proceeds are impaired or the
proceeds of such Receivable are not available for any reason to
the Trust free and clear of any Lien, then, upon the expiration of
60 days (or such longer period as may be agreed to by Trustee in
its sole discretion, but in no event later than 120 days) from the
earlier to occur of the discovery of any such event by either
Transferor or Servicer, or receipt by Transferor of written notice
of any such event given by Trustee, each such Receivable shall be
removed from the Trust on the terms and conditions set forth in
subsection 2.4(d)(iii); provided that no such removal shall be
required to be made if, on any day within such applicable period,
such representations and warranties with respect to such
Receivable shall then be true and correct in all material respects
as if such Receivable had been created on such day.
(iii) Procedures for Removal. When the provisions of
subsection 2.4(d)(i) or (ii) require removal of a Receivable,
Transferor shall accept reassignment of such Receivable (an
"Ineligible Receivable") by directing Servicer to deduct the
principal balance of each such Ineligible Receivable (other than
any portion of such principal balance constituting Discount Option
Receivables) from the Principal Receivables in the Trust (to the
extent previously included therein) and to decrease the Transferor
Interest by such amount. On and after the date of such removal,
each Ineligible Receivable shall be deducted from the aggregate
amount of Principal Receivables used in the calculation of any
Investor Percentage, the Transferor Percentage or the Transferor
Interest. If the exclusion of an Ineligible Receivable from the
calculation of the Transferor Interest would cause the Transferor
Interest to be reduced below the Minimum Transferor Interest,
Transferor shall promptly, and in no event later than 10 Business
29
Days after such event, make a deposit in the Excess Funding
Account in immediately available funds prior to the next
succeeding Transfer Date in an amount equal to the amount by which
the Transferor Interest would be reduced below zero. Upon the
removal of any Ineligible Receivable (and the making of any
deposit required above), the Trust shall automatically and without
further action be deemed to transfer, assign, set-over and
otherwise convey to Transferor, without recourse, representation
or warranty, all the right, title and interest of the Trust in and
to such Ineligible Receivable, all monies due or to become due
with respect to such Ineligible Receivable and all proceeds of
such Ineligible Receivable and Recoveries and Insurance Proceeds
relating to such Ineligible Receivable and Interchange (if any)
allocated to such Ineligible Receivable pursuant to any
Supplement. Such reassigned Ineligible Receivable shall be treated
by the Trust as collected in full as of the date on which it was
transferred. Trustee shall execute such documents and instruments
of transfer or assignment and take other actions as shall
reasonably be requested by Transferor to evidence the conveyance
of such Ineligible Receivable pursuant to this subsection
2.4(d)(iii). The obligation of Transferor set forth in this
subsection 2.4(d)(iii), or the automatic removal of such
Receivable from the Trust, as the case may be, shall constitute
the sole remedy respecting any breach of the representations and
warranties set forth in the above-referenced subsections with
respect to such Receivable available to Holders or Trustee on
behalf of Holders.
(iv) Proceeds Held by Servicer. For the purposes of
subsections 2.4(d)(i) and (ii) above, proceeds of a Receivable
shall not be deemed to be impaired hereunder solely because such
proceeds are held by Servicer (if Servicer is Transferor) for more
than the applicable period under Section 9- 306(3) of the UCC as
in effect in the State of Louisiana.
(e) Reassignment of Trust Portfolio. If any of the representations
and warranties set forth in subsection 2.4(a) is not true and correct in
any material respect when made and such breach has a material adverse
effect upon the interest of the Holders in the Receivables, then either
Trustee or the Holders of Investor Certificates evidencing Undivided
Interests aggregating more than 50% of the Aggregate Investor Interest, by
notice then given in writing to Transferor (and to Trustee and Servicer, if
given by the Investor Holders), may direct Transferor to accept
reassignment of all Principal Receivables and Discount Option Receivables
within 60 days of such notice (or within such longer period as may be
specified in such notice), and Transferor shall accept reassignment of such
Principal Receivables and Discount Option Receivables on a Distribution
Date specified by Transferor (such Distribution Date, the "Reassignment
Date") occurring within such applicable period on the terms and conditions
set forth below; provided that no such reassignment shall be required to be
made if, at any time during such applicable period, the representations and
warranties contained in subsection 2.4(a) shall then be true and
30
correct in all material respects. Transferor shall deposit on the Transfer
Date (in New York Clearing House, next day funds) preceding the
Reassignment Date an amount equal to the reassignment deposit amount for
such Receivables in the Distribution Account or, if provided in the related
Supplement for any Series, a Series Account for such Series, for
distribution to the Investor Holders pursuant to Article XII. The
reassignment deposit amount with respect to each Series for such
reassignment, unless otherwise stated in the related Supplement, shall be
equal to (i) the Investor Interest of such Series at the end of the day on
the last day of the Monthly Period preceding the Reassignment Date, less
the amount, if any, previously allocated for payment of principal to such
Holders on the related Distribution Date in the Monthly Period in which the
Reassignment Date occurs, plus (ii) an amount equal to all interest accrued
but unpaid on the Investor Certificates of such Series at the applicable
interest rate through such last day, less the amount, if any, previously
allocated for payment of interest to the Holders of such Series on the
related Distribution Date in the Monthly Period in which the Reassignment
Date occurs. Payment of the reassignment deposit amount with respect to
each Series, and all other amounts in the Distribution Account or the
applicable Series Account in respect of the preceding Monthly Period, shall
be considered a prepayment in full of the Receivables represented by the
Investor Certificates. On the Distribution Date following the Transfer Date
on which such amount has been deposited in full into the Distribution
Account or the applicable Series Account, the Receivables and all monies
due or to become due with respect to such Receivables and any collateral
securing any such Receivables and Recoveries and Insurance Proceeds
relating to such Receivables and Interchange (if any) allocated to the
Receivables pursuant to any Supplement and proceeds of all of the foregoing
shall be released to Transferor after payment of all amounts otherwise due
hereunder on or prior to such dates and Trustee shall execute and deliver
such instruments of transfer or assignment, in each case without recourse,
representation or warranty, as shall be prepared by and as are reasonably
requested by Transferor to vest in Transferor, or its designee or assignee,
all right, title and interest of the Trust in and to the Receivables, all
monies due or to become due with respect to such Receivables and any
collateral securing any such Receivables and Recoveries and Insurance
Proceeds relating to such Receivables and Interchange (if any) allocated to
the Receivables pursuant to any Supplement, and proceeds of all of the
foregoing. If Trustee or the Investor Holders give notice directing
Transferor to accept reassignment as provided above, the obligation of
Transferor to accept reassignment of the Receivables and pay the
reassignment deposit amount pursuant to this subsection 2.4(e) shall
constitute the sole remedy respecting a breach of the representations and
warranties contained in subsection 2.4(a) available to the Investor Holders
or Trustee on behalf of the Investor Holders.
SECTION 2.5 Covenants of Transferor. Transferor hereby covenants
that:
31
(a) Receivables Not to Be Instruments. Except as the Servicer may
deem appropriate in connection with enforcement activities, Transferor
shall take no action to cause any Receivable to be evidenced by an
instrument.
(b) Security Interests. Except for the conveyances hereunder,
Transferor shall 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; Transferor shall immediately notify Trustee of the existence of
any Lien on any Receivable; and Transferor shall defend the right, title
and interest of the Trust in, to and under the Receivables, whether now
existing or hereafter created, against all claims of third parties claiming
through or under Transferor; provided that nothing in this subsection
2.5(b) shall prevent or be deemed to prohibit Transferor from suffering to
exist upon any of the Receivables any Liens for municipal or other local
taxes if such taxes shall not at the time be due and payable or if
Transferor shall currently be contesting the validity thereof in good faith
by appropriate proceedings and shall have set aside on its books adequate
reserves with respect thereto.
(c) Account Agreements and Account Guidelines. Transferor shall
comply with and perform its obligations under the Account Agreements
relating to the Accounts and the Account Guidelines and all applicable
rules and regulations of VISA U.S.A., Inc., MasterCard International Inc.,
and the Air Force Logistics Command's Club Card Program, as applicable,
except insofar as any failure to comply or perform would not materially and
adversely affect the rights of the Trust or the Holders hereunder or under
the Certificates. Transferor may change the terms and provisions of the
Account Agreements or the Account Guidelines in any respect (including the
reduction of the required minimum monthly payment, the calculation of the
amount, or the timing, of charge-offs and the Periodic Finance Charges and
other fees to be assessed thereon) only if such change (i) would not, in
the reasonable belief of Transferor, cause a Pay Out Event for any related
Series to occur, and (ii) is made applicable to any comparable segment of
the revolving credit accounts owned and serviced by Transferor which have
characteristics the same as, or substantially similar to, the Accounts that
are the subject of such change, except as otherwise restricted by an
endorsement, sponsorship, or other agreement between Transferor and an
unrelated third party or by the terms of the Account Agreements. Transferor
shall provide the Rating Agencies written notice if Transferor's management
contract for the Air Force Logistics Command's Club Card Program is not
renewed.
(d) Account Allocations.
(i) If Transferor is unable for any reason to
transfer Receivables to the Trust in accordance with the
provisions of this Agreement (including by reason of the
application of the provisions of Section 9.2 or an order by
32
any Federal governmental agency having regulatory authority over
Transferor or any court of competent jurisdiction that Transferor
not transfer any additional Principal Receivables to the Trust)
then, in any such event: (A) Transferor agrees to allocate and pay
to the Trust, after the date of such inability, all Collections
with respect to Principal Receivables, all Discount Option
Receivables Collections, and all amounts which would have
constituted Collections with respect to Principal Receivables and
all Discount Option Receivables Collections but for Transferor's
inability to transfer such Receivables (up to an aggregate amount
equal to the amount of Principal Receivables and the Discount
Option Receivables Amount in the Trust on such date); (B)
Transferor agrees to have such amounts applied as Collections in
accordance with Article IV; and (C) for only so long as all
Collections and all amounts which would have constituted
Collections are allocated and applied in accordance with clauses
(A) and (B), Principal Receivables and Discount Option Receivables
(and all amounts which would have constituted Principal
Receivables or Discount Option Receivables, as the case may be,
but for Transferor's inability to transfer Receivables to the
Trust) that are charged off as uncollectible in accordance with
this Agreement shall continue to be allocated in accordance with
Article IV, and all amounts that would have constituted Principal
Receivables or Discount Option Receivables, as the case may be,
but for Transferor's inability to transfer Receivables to the
Trust shall be deemed to be Principal Receivables or Discount
Option Receivables, as the case may be, for the purpose of
calculating (i) the applicable Investor Percentage with respect to
any Series and (ii) the Aggregate Investor Percentage thereunder.
If Transferor is unable pursuant to any Requirement of Law to
allocate Collections as described above, Transferor agrees that it
shall in any such event allocate, after the occurrence of such
event, payments on each Account with respect to the principal
balance of such Account first to the oldest principal balance of
such Account and to have such payments applied as Collections in
accordance with Article IV. The parties hereto agree that Finance
Charge Receivables, whenever created, accrued in respect of
Principal Receivables that have been conveyed to the Trust, or
that would have been conveyed to the Trust but for the above
described inability to transfer such Receivables, shall continue
to be a part of the Trust notwithstanding any cessation of the
transfer of additional Principal Receivables and Discount Option
Receivables to the Trust, and Collections with respect thereto
shall continue to be allocated and paid in accordance with Article
IV.
(ii) If Transferor accepts reassignment of an
Ineligible Receivable pursuant to subsection 2.4(d), then, in any
such event, Transferor agrees to account for payments received
with respect to such Ineligible Receivable separately from its
accounting for Collections on Principal Receivables retained by
the Trust. If payments received from or on behalf of an Obligor
33
are not specifically applicable either to an Ineligible Receivable
of such Obligor reassigned to Transferor or to the Receivables of
such Obligor retained in the Trust, then Transferor agrees to
allocate payments proportionately based on the total amount of
Principal Receivables of such Obligor retained in the Trust and
the total amount owing by such Obligor on any Ineligible
Receivables reassigned to Transferor, and the portion allocable to
any Principal Receivables retained in the Trust shall be treated
as Collections and deposited in accordance with the provisions of
Article IV.
(e) Delivery of Collections. If at any time Transferor ceases to
act as Servicer, Transferor shall pay to the Successor Servicer all
payments received by Transferor in respect of the Receivables as soon as
practicable after receipt thereof by Transferor.
(f) Conveyance of Accounts. Transferor shall not convey, assign,
exchange or otherwise transfer the Accounts to any Person prior to the
termination of this Agreement pursuant to Article XII; provided that
Transferor shall not be prohibited hereby from conveying, assigning,
exchanging or otherwise transferring the Accounts in connection with a
transaction complying with the provisions of Section 7.2.
SECTION 2.6 Addition of Accounts. (a) If during any period of
thirty consecutive days, the Transferor Interest averaged over that period
is less than the Minimum Transferor Interest for that period, Transferor
shall designate additional Eligible Accounts ("Additional Accounts") from
the Bank Portfolio to be included as Accounts in a sufficient amount such
that the average Transferor Interest for such thirty-day period, computed
by assuming that the amount of the Principal Receivables of such Additional
Accounts shall be deemed to be outstanding in the Trust during each day of
such thirty-day period, is at least equal to the Minimum Transferor
Interest. In addition, if on any Record Date the sum of the Aggregate
Principal Receivables plus the principal amount on deposit in the Excess
Funding Account is less than the Minimum Aggregate Principal Receivables,
Transferor shall designate Additional Accounts from the Bank Portfolio to
be included as Accounts in a sufficient amount such that the Aggregate
Principal Receivables plus the principal amount on deposit in the Excess
Funding Account will be equal to or greater than the Minimum Aggregate
Principal Receivables. Receivables from all such Additional Accounts shall
be transferred to the Trust on or before the tenth Business Day following
such thirty-day period or Record Date, as the case may be. In lieu of, or
in addition to, designating Additional Accounts as required above,
Transferor may (subject to compliance with applicable securities laws), on
or before such tenth business day, convey to the Trust participations or
trust certificates representing undivided legal or beneficial interests in
a pool of assets primarily consisting of receivables arising under
revolving credit card accounts or other revolving credit accounts owned by
Transferor or any of its Affiliates and collections
34
thereon ("Participations"). Any addition of Participations to the Trust
(whether pursuant to this subsection (a) or subsection (b) below) shall be
effected by an amendment hereto, dated the applicable Addition Date,
pursuant to subsection 13.1(a).
(b) In addition to its obligation under subsection 2.6(a),
Transferor may, but shall not be obligated to, from time to time designate
Additional Accounts or Participations to be included as Trust Assets, in
either case as of the applicable Addition Date.
(c) Additional Accounts that Transferor is required to designate
pursuant to subsection 2.6(a), or elects to designate pursuant to
subsection 2.6(b), shall be treated as Automatic Additional Accounts (with
the result that the Rating Agency Condition will not have to be satisfied
with respect to such designation), so long as (x) such Additional Accounts
are MasterCard, VISA or Private Label accounts originated by Transferor in
the ordinary course of business and (y) the number of such new Additional
Accounts would not exceed an amount equal to the lesser of:
(i) the excess (if any) of (A) 15% of the aggregate
number of Accounts determined as of the first day of the third
Monthly Period prior to the applicable Addition Date (or, if
later, as of the Initial Closing Date) over (B) the aggregate
number of Automatic Additional Accounts the Addition Date for
which has occurred since the first day of such third prior Monthly
Period (or, if later, since the Initial Closing Date); and
(ii) the excess (if any) of (A) 20% of the aggregate
number of Accounts determined as of the first day of the calendar
year in which the Addition Date occurs (or, if later, as of the
Initial Closing Date) over (B) the aggregate number of Automatic
Additional Accounts the Addition Date for which has occurred since
the first day of such calendar year (or, if later, since the
Initial Closing Date).
(d) Transferor agrees that any transfer of Receivables from
Additional Accounts or Participations under subsection 2.6(a) or (b) shall
occur only upon satisfaction of the following conditions (to the extent
applicable):
(i) on or before the fifth Business Day prior to the
Addition Date with respect to additions pursuant to subsection
2.6(a) and on or before the tenth Business Day prior to the
Addition Date with respect to additions pursuant to subsection
2.6(b) (the "Notice Date"), Transferor shall give Trustee, each
Rating Agency and Servicer written notice that such Additional
Accounts or Participations will be included, which notice shall
specify the approximate aggregate amount of the Receivables or
Participations to be transferred;
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(ii) on or before the Addition Date, Transferor shall
have delivered to Trustee a written assignment (including an
acceptance by Trustee on behalf of the Trust for the benefit of
the Investor Holders) in substantially the form of Exhibit A (the
"Assignment") and Transferor shall have indicated in its computer
files that the Receivables created in connection with the
Additional Accounts have been transferred to the Trust and, within
ten Business Days thereafter, Transferor shall have delivered to
Trustee an Account Schedule relating to the Additional Accounts,
which Account Schedule list shall be deemed automatically, as of
the date of such Assignment, incorporated into and made a part of
such Assignment and this Agreement;
(iii) Transferor shall represent and warrant that (A)
each Additional Account is an Eligible Account, and each
Receivable in such Additional Account is an Eligible Receivable,
in each case as of the Addition Cut-Off Date, (B) no selection
procedures believed by Transferor to be materially adverse to the
interests of the Investor Holders were utilized in selecting the
Additional Accounts from the available Eligible Accounts from the
Bank Portfolio, (C) as of the Addition Date, Transferor is not
insolvent and (D) in the reasonable belief of Transferor, the
transfer of the Receivables from such Additional Accounts shall
not cause a Pay Out Event to occur;
(iv) Transferor shall represent and warrant that (A)
as of the Addition Date, the Assignment constitutes either (x) a
valid transfer and assignment to Trustee, on behalf of the Trust,
of all right, title and interest of Transferor in and to the
Receivables then existing and thereafter created in the Additional
Accounts, and all monies due or to become due with respect to such
Receivables (including all Finance Charge Receivables and
Recoveries), and Insurance Proceeds relating to such Receivables
and all proceeds of all of the foregoing, all of which will be
held by Trustee on behalf of the Trust, free and clear of any Lien
of any Person claiming through or under Transferor or any of its
Affiliates, except for (i) Liens permitted under subsection
2.5(b), and (ii) the Transferor Interest or (y) a grant of a
security interest in such property to Trustee, for the benefit of
the Investor Holders, which is enforceable with respect to then
existing Receivables in the Additional Accounts, the proceeds
thereof and any Insurance Proceeds and Recoveries relating thereto
upon the conveyance of such Receivables to the Trust, and which
will be enforceable with respect to the Receivables thereafter
created in respect of Additional Accounts conveyed on such
Addition Date, the proceeds thereof and any Insurance Proceeds and
Recoveries relating thereto upon such creation; and (B) if the
Assignment constitutes the grant of a security interest to Trustee
in such property, upon the filing of financing statements as
described in Section 2.1 with respect to
36
such Additional Accounts and in the case of the Receivables
thereafter created in such Additional Accounts and the proceeds
thereof, and any Insurance Proceeds and Recoveries relating
thereto, upon such creation, Trustee shall have a first priority
perfected security interest in such property (subject to Section
9-306 of the UCC as in effect in the State of Louisiana), except
for Liens permitted under subsection 2.5(b);
(v) Transferor shall deliver to Trustee an Officer's
Certificate confirming the items set forth in clauses (ii) through
(iv);
(vi) Transferor shall deliver an Opinion of Counsel
with respect to the Receivables in the Additional Accounts to
Trustee (with a copy to each Rating Agency for any outstanding
Series) substantially in the form of Exhibit D; and
(vii) the Rating Agency Condition shall have been
satisfied as to the initial transfer of Receivables from such
Additional Accounts (other than Automatic Additional Accounts) or
Participations.
SECTION 2.7 Removal of Accounts. (a) Subject to the conditions set
forth below, Transferor may, but shall not be obligated to, designate
Receivables from Accounts for deletion and removal ("Removed Accounts")
from the Trust; provided that Transferor shall not make more than one such
designation in any Monthly Period. On or before the fifth Business Day (the
"Removal Notice Date") prior to the date on which the designated Removed
Accounts will be reassigned by Trustee to Transferor (the "Removal Date"),
Transferor shall give Trustee and Servicer written notice that the
Receivables from such Removed Accounts are to be reassigned to Transferor.
(b) Transferor shall be permitted to designate and require
reassignment to it of the Receivables from Removed Accounts only upon
satisfaction of the following conditions:
(i) the removal of any Receivables of any Removed
Accounts on any Removal Date shall not, in the reasonable belief
of Transferor, (a) cause a Pay Out Event to occur, provided that
for the purposes of this subsection 2.7(b)(i)(a), the Receivables
of each Removed Account shall be considered to have been removed
as of the Removal Date, (b) cause the Transferor Interest as a
percentage of the aggregate amount of Principal Receivables to be
less than the Minimum Transferor Percentage on such Removal Date,
(c) cause the aggregate amount of Principal Receivables to be less
than the Minimum Aggregate Principal Receivables, or (d) result in
the failure to make any payment specified in the related
Supplement with respect to any Series;
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(ii) on or prior to the Removal Date, Transferor
shall have delivered to Trustee for execution a written assignment
substantially in the form of Exhibit F (the "Reassignment") and,
within five Business Days thereafter, Transferor shall have
delivered to Trustee a computer file or microfiche list containing
an accurate list of all Removed Accounts identified by account
number and the aggregate amount of the Receivables in such Removed
Accounts as of the Removal Date, which computer file or microfiche
list shall as of the Removal Date modify and amend and be made a
part of this Agreement;
(iii) Transferor shall represent and warrant that no
selection procedures believed by Transferor to be materially
adverse to the interests of the Holders were utilized in selecting
the Removed Accounts to be removed from the Trust;
(iv) on or before the tenth Business Day prior to the
Removal Date, each Rating Agency shall have received notice of
such proposed removal of the Receivables of such Accounts, and the
Rating Agency Condition shall have been satisfied with respect to
the removal; and
(v) Transferor shall have delivered to Trustee an
Officer's Certificate confirming the items set forth in clauses
(i) through (iv).
Upon satisfaction of the above conditions, Trustee shall execute
and deliver the Reassignment to Transferor, and the Receivables from the
Removed Accounts shall no longer constitute a part of the Trust; provided,
that, if Transferor so elects, Receivables existing in Removed Accounts
prior to the Removal Date may remain in the Trust, in which case (x)
Servicer shall allocate, after the Removal Date and until the balance of
such retained Receivables has been reduced to zero (in accordance with the
following allocation method), payments on each such Removed Account with
respect to the principal balance of such Account first to the oldest
principal balance of such Account and apply such payments as Collections in
accordance with Article IV, and (y) Finance Charge Receivables, whenever
created, accrued in respect of retained Principal Receivables in Removed
Accounts (the balance of which shall be determined in accordance with the
allocation rule specified in clause (x)) shall continue to be a part of the
Trust notwithstanding any cessation of the transfer of additional Principal
Receivables from the related Removed Accounts to the Trust, and Collections
with respect thereto shall continue to be allocated and paid in accordance
with Article IV. Transferor may impose additional conditions upon the
designation of Removed Accounts that it determines are necessary for
Transferor to derecognize the Receivables under applicable accounting
principles.
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(c) Transferor may, but shall not be obligated to, designate at
any time Zero Balance Accounts, any future receivables of which will no
longer be part of the Trust, and to remove from its computer records the
designation of Receivables arising in such Accounts as having been
transferred to the Trust.
SECTION 2.8 Discount Option. Transferor may at any time, upon at
least 30 days' prior written notice to Servicer, Trustee, each Credit
Enhancement Provider and each Rating Agency, designate a percentage, which
may be a fixed percentage or a variable percentage based on a formula (the
"Discount Percentage"), of the amount of Principal Receivables (determined
before subtracting Discount Option Receivables) arising in all of the
Accounts on and after such designation (and, if so elected by Transferor,
Principal Receivables then existing), or for the period specified, to be
treated as Discount Option Receivables (collectively, "Discount Option
Receivables"), and Transferor may from time to time increase, reduce or
eliminate the Discount Percentage for Discount Option Receivables arising
in the Accounts on and after the date of such change; provided that no such
designation or changes to the Discount Percentage shall become effective
unless the following conditions have been satisfied:
(i) the designation of Discount Option Receivables
(or increase, reduction or elimination of the Discount Percentage)
shall not, in the reasonable belief of Transferor, cause a Pay Out
Event to occur or cause an event which with notice or the lapse of
time or both would constitute a Pay Out Event;
(ii) on or before the date specified in the written
notice, Transferor shall have notified each Rating Agency of the
exercise of Transferor's rights under this Section 2.8 and the
Rating Agency Condition shall have been satisfied; and
(iii) Transferor shall have delivered to Trustee an
Officer's Certificate confirming the items set forth in clauses
(i) and (ii). 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.
SECTION 2.9 Additional Transferors. Transferor may designate
additional or substitute Persons to be included as Transferors under this
Agreement by an amendment to this Agreement (which amendment shall be
subject to Section 13.1 and to any applicable restrictions in the
Supplement for any outstanding Series); provided that prior to any such
designation and issuance the conditions set forth in Section 6.3(b) and the
Rating Agency Condition shall have been satisfied.
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ARTICLE III ADMINISTRATION AND SERVICING
SECTION 3.1 Acceptance of Appointment and Other Matters Relating
to Servicer. (a) Transferor agrees to act as Servicer under this Agreement.
The Investor Holders of each Series by their acceptance of the related
Certificates consent to Transferor acting as Servicer.
(b) Servicer shall service and administer the Receivables and
shall collect payments due under the Receivables in accordance with its
customary and usual servicing procedures for servicing credit card or other
receivables comparable to the Receivables and in accordance with the
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 10.1, Servicer is hereby authorized and
empowered (i) to make withdrawals from the Collection Account as set forth
in this Agreement, (ii) unless such power and authority is revoked by
Trustee on account of the occurrence of a Servicer Default pursuant to
Section 10.1, to instruct Trustee to make withdrawals and payments from the
Finance Charge Account, the Excess Funding Account and any Series Account,
in accordance with such instructions as set forth in this Agreement, (iii)
unless such power and authority is revoked by Trustee on account of the
occurrence of a Servicer Default pursuant to Section 10.1, to instruct
Trustee in writing, as set forth in this Agreement, (iv) to execute and
deliver, on behalf of the Trust for the benefit of the Holders, any and all
instruments of satisfaction or cancellation, or of partial or full release
or discharge, and all other comparable instruments, with respect to the
Receivables and, after the delinquency of any Receivable and to the extent
permitted under and in compliance with applicable law and regulations, to
commence enforcement proceedings with respect to such Receivables and (v)
to make any filing, reports, notices, applications, registrations with, and
to seek any consents or authorizations from, the Securities and Exchange
Commission and any state securities authority on behalf of the Trust as may
be necessary or advisable to comply with any Federal or state securities or
reporting requirements. Trustee agrees that it shall promptly follow the
written instructions of Servicer to withdraw funds from the Excess Funding
Account, the Finance Charge Account or any Series Account and to take any
action required under any Credit Enhancement, in each case at such time or
times as required under this Agreement. Trustee shall execute at Servicer's
written request such documents prepared by Transferor and acceptable to
Trustee as may be necessary or appropriate to enable Servicer to carry out
its servicing and administrative duties hereunder.
(c) If Transferor is unable for any reason to transfer Receivables
to the Trust in accordance with the provisions of this Agreement (including
by reason of the application of the provisions of Section 9.2 or the order
of any Federal governmental agency having regulatory authority over
Transferor or any court of competent
40
jurisdiction that Transferor not transfer any additional Principal
Receivables to the Trust) then, in any such event, (A) Servicer agrees to
allocate, after such date, all Collections with respect to Principal
Receivables, all Discount Option Receivables Collections and all amounts
which would have constituted Collections with respect to Principal
Receivables and all Discount Option Receivables Collections but for
Transferor's inability to transfer such Receivables (up to an aggregate
amount equal to the aggregate amount of Principal Receivables and the
Discount Option Receivables Amount in the Trust as of such date) in
accordance with subsection 2.5(d); (B) Servicer agrees to apply such
amounts as Collections in accordance with Article IV, and (C) for only so
long as all Collections and all amounts which would have constituted
Collections are allocated and applied in accordance with clauses (A) and
(B) above, Principal Receivables and Discount Option Receivables (and all
amounts which would have constituted Principal Receivables or Discount
Option Receivables, as the case may be, but for Transferor's inability to
transfer Receivables to the Trust) that are charged off as uncollectible in
accordance with this Agreement shall continue to be allocated in accordance
with Article IV, and all amounts which would have constituted Principal
Receivables or Discount Option Receivables, as the case may be, but for
Transferor's inability to transfer Receivables to the Trust shall be deemed
to be Principal Receivables for the purpose of calculating (i) the
applicable Investor Percentage with respect to any Series and (ii) the
Aggregate Investor Percentage thereunder. If Servicer is unable pursuant to
any Requirement of Law to allocate payments on the Accounts as described
above, Servicer agrees that it shall in any such event allocate, after the
occurrence of such event, payments on each Account with respect to the
principal balance of such Account first to the oldest principal balance of
such Account and to have such payments applied as Collections in accordance
with Article IV. The parties hereto agree that Finance Charge Receivables,
whenever created, accrued in respect of Principal Receivables which have
been conveyed to the Trust, or which would have been conveyed to the Trust
but for the above described inability to transfer such Receivables, shall
be deemed to be a part of the Trust notwithstanding any cessation of the
transfer of additional Principal Receivables and Discount Option
Receivables to the Trust, and Collections with resect thereto shall
continue to be allocated and paid in accordance with Article IV.
(d) If Transferor accepts reassignment of an Ineligible Receivable
pursuant to subsection 2.4(d) then, in any such event, Servicer agrees to
account for payments received with respect to such Ineligible Receivable
separately from its accounting for Collections on Principal Receivables
retained by the Trust. If payments received from or on behalf of an Obligor
are not specifically applicable either to an Ineligible Receivable of such
Obligor reassigned to Transferor or to Receivables of such Obligor retained
in the Trust, then Servicer agrees to allocate payments proportionately
based on the total amount of Principal Receivables of such Obligor retained
in the Trust and the total amount owing by such Obligor on any Ineligible
Receivables purchased by Transferor, and the portion allocable to any
Principal
41
Receivables retained in the Trust shall be treated as Collections and
deposited in accordance with the provisions of Article IV.
(e) Servicer shall not be obligated to use separate servicing
procedures, offices, employees or accounts for servicing the Receivables
from the procedures, offices, employees and accounts used by Servicer in
connection with servicing other credit card receivables.
(f) Servicer shall maintain fidelity bond coverage insuring
against losses through wrongdoing of its officers and employees who are
involved in the servicing of credit card receivables covering such actions
and in such amounts as Servicer believes to be reasonable from time to
time. The relationship of Servicer (and any Successor Servicer other than
Trustee) to Trustee under this Agreement is intended by the parties to be
that of independent contractor and not that of a joint venturer, partner,
or agent of Trustee, including any act of Servicer performed in the name of
Trustee.
SECTION 3.2 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 servicing fee (the "Servicing Fee") prior to the
termination of the Trust pursuant to Section 12.1. The Servicing Fee shall
be payable, with respect to each Series, at the times and in the amounts
set forth in the related Supplement. The Servicing Fee shall be allocated
between the Investor Certificates (the "Investor Servicing Fee") and
Transferor (the "Transferor Servicing Fee").
Servicer's expenses include the amounts due to Trustee pursuant to
Section 11.5 and the reasonable fees and disbursements of independent
public accountants and all other expenses incurred by Servicer in
connection with its activities hereunder; provided that Servicer shall not
be liable for any liabilities, costs or expenses of the Trust, the Investor
Holders or the Certificate Owners arising under any tax law, including any
Federal, state 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). Servicer shall be required
to pay such expenses for its own account and shall not be entitled to any
payment therefor other than the Servicing Fee.
SECTION 3.3 Representations, Warranties and Covenants of Servicer.
First NBC, as initial Servicer, hereby makes, and any Successor Servicer by
acceptance of its appointment hereunder shall make, the following
representations and warranties on which Trustee has relied in accepting the
Receivables in trust and in authenticating the Certificates issued on the
Initial Closing Date:
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(a) Organization and Good Standing. Servicer is a national banking
association duly organized, validly existing and in good standing under the
laws of the United States and has full corporate power, authority and legal
right to own its properties and conduct its credit card business as such
properties are presently owned and as such business is presently conducted,
and to execute, deliver and perform its obligations under this Agreement.
(b) Due Qualification. Servicer is not required to qualify nor
register as a foreign corporation in any state in order to service the
Receivables as required by this Agreement and has obtained all licenses and
approvals necessary in order to so service the Receivables as required
under Federal and Louisiana law. If 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.
(c) Due Authorization. The execution, delivery, and performance of
this Agreement have been duly authorized by Servicer by all necessary
corporate action on the part of Servicer and this Agreement will remain,
from the time of its execution, an official record of Servicer.
(d) Binding Obligation. This Agreement constitutes a legal, valid
and binding obligation of Servicer, enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereinafter in effect, affecting the enforcement of creditors' rights in
general and the rights of creditors of national banking associations and
except as such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity).
(e) No Violation. The execution and delivery of this Agreement by
Servicer and the performance of the transactions contemplated by this
Agreement by Servicer, and the fulfillment of the terms hereof applicable
to Servicer, will not conflict with, violate, result in any breach of any
of the material terms and provisions of, or constitute (with or without
notice or lapse of time or both) a default under, any Requirement of Law
applicable to Servicer or any material indenture, contract, agreement,
mortgage, deed of trust or other instrument to which 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 Servicer, threatened against Servicer
before any court, regulatory body, administrative agency or other tribunal
or governmental instrumentality seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions contemplated by
this Agreement, seeking any determination or ruling that, in the reasonable
judgment of Servicer, would materially and adversely affect the performance
by Servicer of its obligations under
43
this Agreement, or seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this
Agreement.
(g) Compliance with Requirements of Law. Servicer shall duly
satisfy all obligations on its part to be fulfilled under or in connection
with each Receivable and the related Account, will maintain in effect all
qualifications required under Requirements of Law in order to service
properly each Receivable and the related Account and will comply in all
material respects with all other Requirements of Law in connection with
servicing each Receivable and the related Account the failure to comply
with which would have a material adverse effect on the Holders or any
Credit Enhancement Provider.
SECTION 3.4 Reports and Records for Trustee. (a) Daily Reports. On
each Business Day, Servicer, with prior notice, shall prepare and make
available at the office of Servicer for inspection by Trustee a record
setting forth (i) the aggregate amount of Collections processed by Servicer
on the preceding Business Day and (ii) the aggregate amount of Receivables
as of the close of business on the preceding Business Day; provided that
(x) Servicer shall be required to so report the information provided in
clause (i) only at such times as Servicer is required to make deposits,
payments and withdrawals on a daily basis, rather than on each Transfer
Date, as permitted in Section 4.3(a), and (y) Servicer shall be required to
so report the information provided in clause (ii) on any day in any Monthly
Period only if the Aggregate Principal Receivables as of the end of the
prior Monthly Period, minus the sum of the Adjusted Aggregate Investor
Interest and the outstanding principal amount of any purchased interest
sold pursuant to subsection 6.9(d) is less than 20% of the Aggregate
Principal Receivables as of the end of such prior Monthly Period.
(b) Monthly Servicer's Certificate. Unless otherwise stated in the
related Supplement with respect to any Series, on each Determination Date
Servicer shall forward, as provided in Section 13.5, to Trustee, the Paying
Agent, any Credit Enhancement Provider and each Rating Agency, a
certificate of a Servicing Officer in the form of Exhibit B (which includes
the Schedule thereto specified as such in each Supplement) as to such
matters as are set forth in Exhibit B.
SECTION 3.5 Annual Servicer's Certificate. On or before March 31
of each calendar year, beginning with March 31, 1998, Servicer will
deliver, as provided in Section 13.5, to Trustee, any Credit Enhancement
Provider and each Rating Agency, an Officer's Certificate substantially in
the form of Exhibit C stating that (a) a review of the activities of
Servicer during the twelve-month period ending on December 31 of the
immediately prior calendar year, or for the initial period, from the
Closing Date until December 31, 1997, and of its performance under this
Agreement was made under the supervision of the officer signing such
certificate and (b) to the best of such officer's knowledge, based on such
review, Servicer has fully performed all
44
its obligations under this Agreement throughout such period, or, if there
has been a default in the performance of any such obligation, specifying
each such default known to such officer and the nature and status thereof.
A copy of such certificate may be obtained by any Investor Holder by a
request in writing to Trustee addressed to the Corporate Trust Office.
SECTION 3.6 Annual Independent Accountants' Servicing Report. (a)
On or before March 31 of each calendar year, beginning with March 31, 1998,
Servicer shall cause a firm of nationally recognized independent certified
public accountants (who may also render other services to Servicer or
Transferor) to furnish, as provided in Section 13.5, a report to Trustee,
any Credit Enhancement Provider and each Rating Agency, to the effect that
such firm has applied certain agreed upon procedures with Servicer and such
firm has examined certain documents and records relating to the servicing
of Accounts under this Agreement and each Supplement, compared the
information contained in Servicer's certificates delivered pursuant to this
Agreement during the period covered by such report with such documents and
records, and that, on the basis of such agreed upon procedures, such firm
is of the opinion (assuming the accuracy of any reports generated by
Servicer's third party agents) that such servicing was conducted in
compliance with this Agreement during the period covered by such report
(which shall be the prior calendar year, or the portion thereof falling
after the Initial Closing Date), except for such exceptions, errors or
irregularities as such firm shall believe to be immaterial to the financial
statements of Servicer and such other exceptions, errors or irregularities
as shall be set forth in such report. Unless otherwise provided with
respect to any Series in the related Supplement, a copy of such report may
be obtained by any Investor Holder by a request in writing to Trustee
addressed to the Corporate Trust Office.
(b) On or before March 31 of each calendar year, beginning with
March 31, 1998, Servicer shall cause a firm of nationally recognized
independent certified public accountants (who may also render other
services to Servicer or Transferor) to furnish, as provided in Section
13.5, a report, prepared using generally accepted auditing standards, to
Trustee and each Rating Agency to the effect that they have compared the
mathematical calculations of each amount set forth in the monthly
certificates forwarded by Servicer pursuant to subsection 3.4(b) during the
period covered by such report (which shall be the prior calendar year, or
the portion thereof falling after the Initial Closing Date), with
Servicer's computer reports which were the source of such amounts and that
on the basis of such comparison, such firm is of the opinion that such
amounts are in agreement, except for such exceptions as it believes to be
immaterial to the financial statements of Servicer and such other
exceptions as shall be set forth in such report. A copy of such report may
be obtained by any Investor Holder by a request in writing to Trustee
addressed to the Corporate Trust Office.
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SECTION 3.7 Tax Treatment. Transferor has structured this
Agreement and the Investor Certificates with the intention that the
Investor Certificates will qualify under applicable Federal, state, local
and foreign tax law as indebtedness. Transferor, Servicer, each Investor
Holder, and each Certificate Owner, agree to treat and to take no action
inconsistent with the treatment of the Investor Certificates (or beneficial
interest therein) as indebtedness for purposes of Federal, state, local and
foreign income or franchise taxes and any other tax imposed on or measured
by income. Each Investor Holder, by acceptance of its Certificate and each
Certificate Owner, by acquisition of a beneficial interest in a
Certificate, agree to be bound by the provisions of this Section 3.7.
Notwithstanding the foregoing or any other provision of this Agreement
Transferor may, at its option, make any election to have the Trust or any
Series treated as a "financial asset securitization investment trust" under
the Internal Revenue Code, so long as prior to that election taking effect
Transferor delivers to Trustee an Opinion of Counsel to the effect that the
election (a) will not cause the Trust to be classified, for Federal income
tax purposes, as an association (or publicly traded partnership) taxable as
a corporation and (b) will not cause or constitute an event in which gain
or loss would be recognized by any Investor Holder.
SECTION 3.8 Notices to Transferor. If Transferor is no longer
acting as Servicer, any Successor Servicer pursuant to Section 10.2 shall
deliver or make available to Transferor each certificate and report
required to be prepared, forwarded or delivered thereafter pursuant to
Sections 3.4, 3.5 and 3.6.
SECTION 3.9 Reports to the Commission. Servicer shall, on behalf
of the Trust, cause to be filed with the Securities and Exchange Commission
any periodic reports required to be filed under the provisions of the
Securities Exchange Act of 1934 and the rules and regulations of the
Securities and Exchange Commission thereunder. Transferor, if Transferor is
not Servicer, shall, at the expense of Servicer, cooperate in any
reasonable request of Servicer in connection with such filings.
ARTICLE IV RIGHTS OF HOLDERS AND ALLOCATION AND
APPLICATION OF COLLECTIONS
SECTION 4.1 Rights of Holders. Each Series of Investor
Certificates shall represent Undivided Interests in the Trust, including
the benefits of any Credit Enhancement issued with respect to such Series
and the right to receive the Collections and other amounts at the times and
in the amounts specified in this Article IV to be deposited in the Investor
Accounts and any other Series Account (if so specified in the related
Supplement) or to be paid to the Investor Holders of such Series. The
aggregate interest represented by such Certificates in the Principal
Receivables at any time shall not exceed an amount equal to the Aggregate
Investor Interest at such time. Transferor shall own the remaining
undivided interest in the
46
Trust, including the right to receive the Collections and other amounts at
the times and in the amounts specified in this Article IV to be paid on
account of the Transferor Interest. Transferor's aggregate interest in the
Principal Receivables at any time shall not exceed the Transferor Interest
at such time and Transferor shall not have any interest in the Investor
Accounts, except as provided in this Agreement, or the benefits of any
Credit Enhancement issued with respect to any Series. If this Agreement is
deemed to constitute a grant to Trustee, for the benefit of the Investor
Holders, of a security interest in the Receivables and other Trust Assets,
then the Transferor Interest shall be deemed to represent Transferor's
equity in the collateral granted.
SECTION 4.2 Establishment of Accounts. (a) The Collection Account.
Servicer, for the benefit of the Holders, shall establish and maintain in
the name of Trustee, on behalf of the Trust, a non-interest bearing
segregated account (the "Collection Account") bearing a designation clearly
indicating that the funds deposited therein are held in trust for the
benefit of the Holders, or shall cause such Collection Account to be
established and maintained, with an office or branch of (i) a depository
institution or trust company (which may include Trustee, Servicer or an
Affiliate of Servicer) organized under the laws of the United States of
America or any one of the states thereof or the District of Columbia and
with deposit insurance provided by BIF or SAIF; provided that at all times
the certificates of deposit, short-term deposits or commercial paper or the
long-term unsecured debt obligations (other than such obligation whose
rating is based on collateral or on the credit of a Person other than such
institution or trust company) of the depository institution or trust
company at which the Collection Account is maintained (including, if
applicable, Servicer) shall have a credit rating from ▇▇▇▇▇'▇ and Standard
& Poor's of at least P-1 and A-1+, respectively, and, if rated by Fitch, a
credit rating from Fitch of at least F-1, in the case of the certificates
of deposit, short-term deposits or commercial paper, or a rating from
▇▇▇▇▇'▇ of at least Aa3 and from Standard & Poor's of at least AA-, and, if
rated by Fitch, from Fitch of at least AA-, in the case of the long-term
unsecured debt obligations, or (ii) a depository institution, which may
include Trustee, which is acceptable to each Rating Agency (any of the
foregoing being a "Qualified Institution"); provided further, that upon the
insolvency of Servicer, the Collection Account shall not be permitted to be
maintained with Servicer. Pursuant to authority granted to it pursuant to
subsection 3.1(b), Servicer shall have the revocable power to withdraw
funds from the Collection Account for the purposes of carrying out its
duties hereunder.
(b) The Finance Charge and Excess Funding Accounts. Trustee, for
the benefit of the Investor Holders, shall establish and maintain with
Trustee in the name of the Trust two segregated trust accounts (the
"Finance Charge Account" and the "Excess Funding Account," respectively)
bearing a designation clearly indicating that the funds therein are held
for the benefit of the Investor Holders, or shall cause such Finance Charge
Account or Excess Funding Account to be established and
47
maintained with an office or branch of a Qualified Institution. Trustee
shall possess all right, title and interest in all funds and Permitted
Investments on deposit from time to time in the Finance Charge Account and
the Excess Funding Account and in all proceeds thereof. The Finance Charge
Account and the Excess Funding Account shall be under the sole dominion and
control of Trustee for the benefit of the Investor Holders. Pursuant to
authority granted to it hereunder, Servicer shall have the revocable power
to instruct Trustee to withdraw funds from the Finance Charge Account and
the Excess Funding Account for the purpose of carrying out Servicer's
duties hereunder. Trustee at all times shall maintain accurate records
reflecting each transaction in the Finance Charge Account and the Excess
Funding Account, and that funds held therein shall at all times be held in
trust for the benefit of the Investor Holders.
(c) The Distribution Account. Trustee, for the benefit of the
Investor Holders, shall cause to be established and maintained in the name
of the Trust, a segregated trust account (the "Distribution Account")
bearing a designation clearly indicating that the funds deposited therein
are held in trust for the benefit of the Investor Holders, or shall cause
such Distribution Account to be established and maintained, with an office
or branch of a Qualified Institution (other than Transferor). Trustee shall
possess all right, title and interest in all funds on deposit from time to
time in the Distribution Account and in all proceeds thereof. The
Distribution Account shall be under the sole dominion and control of
Trustee for the benefit of the Investor Holders.
(d) Series Accounts. If so provided in the related Supplement,
Trustee, for the benefit of the Investor Holders, shall cause to be
established and maintained in the name of the Trust, one or more Series
Accounts. Each such Series Account shall bear a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Investor Holders of such Series. Each such Series Account will be a trust
account, if so provided in the related Supplement, and will have the other
features and be applied as set forth in the related Supplement.
(e) Administration of the Finance Charge Account, Excess Funding
Account and Distribution Account. Funds on deposit in the Excess Funding
Account, the Finance Charge Account and the Distribution Account shall at
all times be invested by Trustee at the written direction of Servicer in
Permitted Investments. Any such investment in the Finance Charge Account or
the Excess Funding Account shall mature and such funds shall be available
for withdrawal on or prior to the Transfer Date related to the Monthly
Period in which such funds are processed for collection, or if so specified
in the related Supplement, immediately preceding a Distribution Date. Funds
on deposit in the Distribution Account on any Transfer Date shall be
invested in such Permitted Investments that will mature or be payable on
demand so that all such funds will be available for withdrawal on the
related Distribution Date. Trustee shall maintain for the benefit of the
Investor Holders possession of the
48
negotiable instruments or securities evidencing the Permitted Investments
described in clause (a) and, as applicable, (c) of the definition thereof
from the time of purchase thereof until the time of sale or maturity;
provided that no such investment shall be disposed of prior to its maturity
date. On each Transfer Date, all interest and other investment earnings
(net of losses and investment expenses) accrued on or prior to that
Transfer Date in connection with the investment of funds on deposit in the
Collection Account, the Excess Funding Account, the Finance Charge Account,
and the Distribution Account since the prior Transfer Date shall be deemed
to constitute, and for all purposes hereof shall be treated as, Collections
of Finance Charge Receivables with respect to the prior Monthly Period,
except as otherwise specified in the related Supplement. For purposes of
determining the availability of funds or the balances in the Finance Charge
Account, the Excess Funding Account and the Distribution Account for any
reason under this Agreement, all investment earnings on such funds shall be
deemed not to be available or on deposit.
(f) Withdrawals from Excess Funding Account. Servicer shall
instruct Trustee that funds on deposit in the Excess Funding Account shall
be withdrawn and paid to Transferor on any date to the extent that no
Retention Condition would exist after such withdrawal (after giving effect
to any addition of Principal Receivables to the Trust on such date). In
addition, on any Distribution Date on which one or more Series that is a
Principal Sharing Series is in an Amortization Period, Servicer shall
determine the aggregate amounts of Series Principal Shortfalls, if any,
with respect to each such Series (after giving effect to all allocation and
payment provisions in the Supplement with respect to each such Series), and
Servicer shall instruct Trustee to withdraw such amount from the Excess
Funding Account (up to an amount equal to the lesser of (x) the amount on
deposit in the Excess Funding Account after application of all transfers to
the Excess Funding Account on that day and (y) the amount, if any, by which
the Transferor Interest would be less than zero if there were no funds on
deposit in the Excess Funding Account on that day) on such Distribution
Date and allocate such amount among each such Series as specified in each
related Supplement.
SECTION 4.3 Collections and Allocations. (a) Collections. Except
as provided below, Servicer shall deposit all Collections in the Collection
Account as promptly as possible after the Date of Processing of such
Collections, but in no event later than the second Business Day following
such Date of Processing. In the event of the insolvency of Servicer, then,
immediately upon the occurrence of such event and thereafter, Servicer
shall deposit all Collections into the Collection Account which may no
longer be established and maintained with Servicer in accordance with
subsection 4.2(a), and in no such event shall Servicer deposit any
Collections thereafter into any account established, held or maintained
with Servicer. For purposes of this Agreement, Servicer may allocate
Recoveries, fee reversals and miscellaneous fees between the Accounts and
other accounts in the Bank Portfolio on any reasonable basis.
49
Servicer shall allocate such amounts to each Series of Investor
Certificates and to Transferor in accordance with this Article IV and shall
withdraw the required amounts from the Collection Account or pay such
amounts to Transferor in accordance with this Article IV, in both cases as
modified by any Supplement. Servicer shall make such deposits or payments
on the date indicated therein by wire transfer or as otherwise provided in
the Supplement for any Series of Certificates with respect to such Series.
Notwithstanding anything in this Agreement to the contrary, for so
long as, and only so long as, Transferor shall remain Servicer hereunder,
and (a)(i) Servicer provides to Trustee a letter of credit covering
collection risk of Servicer (the "Servicer Letter of Credit") or makes
other arrangements to cover Servicer's collection risk, and (ii) the Rating
Agency Condition shall have been satisfied with respect to the Servicer
Letter of Credit or such other arrangements, or (b) Transferor shall have
and maintain a certificate of deposit or unsecured short-term debt rating
of P-1 by ▇▇▇▇▇'▇ and of at least A-1 by Standard & Poor's and, if rated by
Fitch, at least F-1 by Fitch, and deposit insurance provided by BIF or
SAIF, Servicer need not deposit Collections into the Collection Account or
from the Collection Account into the Excess Funding Account, the Finance
Charge Account or any Series Account, as provided in any Supplement, prior
to each Transfer Date, but may make such deposits, payments and withdrawals
on each Transfer Date, in an amount equal to the net amount of such
deposits, payments and withdrawals which would have been made but for the
provisions of this paragraph.
Notwithstanding anything else in this Agreement to the contrary,
with respect to any Monthly Period, whether Servicer is required to make
monthly or daily deposits from the Collection Account into the Finance
Charge Account, the Excess Funding Account or any Series Account, as
provided in any Supplement, (i) Servicer will only be required to deposit
Collections from the Collection Account into the Finance Charge Account,
the Excess Funding Account or any Series Account up to the required amount
to be deposited into any such deposit account or, without duplication,
distributed on or prior to the related Distribution Date to Investor
Holders or to any Credit Enhancement Provider pursuant to the terms of any
Supplement or agreement relating to such Credit Enhancement and (ii) if at
any time prior to such Distribution Date the amount of Collections
deposited in the Collection Account exceeds the amount required to be
deposited pursuant to clause (i), Servicer may withdraw the excess from the
Collection Account.
(b) Allocations for Transferor. Throughout the existence of the
Trust, unless otherwise stated in any Supplement, Servicer shall allocate
to Transferor an amount equal to the product of (A) the applicable
Transferor Percentage and (B) the aggregate amount of Collections allocated
to Principal Receivables and Finance Charge Receivables in respect of each
Monthly Period. Notwithstanding anything in this Agreement to the contrary,
unless otherwise stated in any Supplement,
50
Servicer need not deposit this amount or any other amounts so allocated to
Transferor pursuant to any Supplement into the Collection Account and shall
pay, or be deemed to pay, such amounts as collected to Transferor.
(c) Adjustments for Miscellaneous Credits and Fraudulent Charges.
Servicer shall reduce (a "Credit Adjustment") on a net basis not later than
the Determination Date following each Monthly Period the aggregate amount
of Principal Receivables used to calculate the Transferor Interest with
respect to any Principal Receivable (i) which was created in respect of
merchandise refused or returned by the Obligor thereunder or as to which
the Obligor thereunder has successfully asserted a counterclaim or defense,
(ii) which is reduced by Servicer by the amount of any rebate, refund,
charge-back or adjustment (including Servicer errors) or (iii) which was
created as a result of a fraudulent or counterfeit charge.
If a Credit Adjustment would cause the Transferor Interest to be
an amount less than the Minimum Transferor Interest, Transferor shall make
a deposit, no later than the Business Day following the Date of Processing
of such Credit Adjustment, in the Excess Funding Account in immediately
available funds in an amount equal to the amount by which the Transferor
Interest would be less than zero after giving effect to such Credit
Adjustment on such Date of Processing.
(d) Estimation of Allocations. Until the Conversion Date:
(i) For the purposes of making the allocations described
in Article IV, all Collections received by Servicer with respect
to Receivables in each Billing Cycle shall be deemed, on each Date
of Processing, to be Collections of Finance Charge Receivables up
to the amount of Finance Charge Receivables billed as of the
opening of such Billing Cycle with respect to Accounts in such
Billing Cycle (with respect to each such Billing Cycle, the
"Billed Finance Charge Receivables"). Collections received by
Servicer with respect to Receivables in each Billing Cycle in
excess of the related Billed Finance Charge Receivables shall be
deemed, on each Date of Processing, to be Collections of Principal
Receivables ("Billed Principal Receivables").
(ii) On a Business Day not later than the Determination
Date in the Monthly Period following the Monthly Period in which a
Billing Cycle ends (the "Collection Recomputation Date"), Servicer
shall determine the amount of Collections of Finance Charge
Receivables and the Collections of Principal Receivables received
by Servicer on each Date of Processing during such Billing Cycle
(the "Collected Finance Charge Receivables" and the "Collected
Principal Receivables," respectively). Servicer shall recompute
the allocations made on each Date of Processing during each such
Billing Cycle pursuant to subsection 4.6(e)(i) based on the amount
of Collected Finance Charge Receivables and Collected Principal
Receivables
51
and, based upon such recomputation, (x) Servicer shall pay to
Transferor from monies in the Collection Account or, any Series
Account as provided in each Supplement any underpayment to such
Holder which such recomputation discloses, or (y) Transferor shall
pay to the Servicer any overpayment of such Holder which such
recomputation discloses, for deposit in the Collection Account or
any Series Account as provided in each Supplement for the Monthly
Period preceding such Determination Date for allocation pursuant
to Article IV. Deposits and withdrawals with respect to the
Collection Account and any Series Account shall be allocated to
each Series based on the applicable Investor Percentage with
respect to such Series as provided in the related Supplement.
(iii) All references in this Agreement (including any
Supplement) to Default Amounts, Net Default Amounts, Recoveries
and Net Recoveries with reference to any Monthly Period shall be
deemed to refer to such amounts calculated with respect to
Accounts in each Billing Cycle for the Billing Cycles ending in
such Monthly Period and then aggregated.
Notwithstanding the foregoing, on or after the Conversion Date the
provisions of this Section 4.3(d) shall not be applicable, and Collections
shall be allocated as otherwise provided in this Agreement.
SECTION 4.4 Shared Principal Collections. On each Business Day,
Shared Principal Collections may, at the option of Transferor, be applied
(or held in the Collection Account for later application) as principal with
respect to any Variable Interest or, so long as either no Principal Sharing
Series is in an Amortization Period or no Principal Sharing Series that is
in an Amortization Period will have a Series Principal Shortfall on the
related Transfer Date (assuming no Pay Out Event occurs), be withdrawn from
the Collection Account and paid to Transferor; and on each Distribution
Date, (a) Servicer shall allocate Shared Principal Collections not
previously so applied or paid to each applicable Principal Sharing Series,
pro rata, in proportion to the Series Principal Shortfalls, if any, with
respect to each such Series, and any remainder may, at the option of
Transferor, be applied as principal with respect to any Variable Interest
and (b) Servicer shall withdraw from the Collection Account or applicable
Series Account and pay to Transferor any amounts representing Shared
Principal Collections remaining after the allocations and applications
referred to in clause (a); provided that, if, on any day a Retention
Condition exists, Servicer shall not distribute to Transferor any Shared
Principal Collections that otherwise would be distributed to Transferor,
but shall deposit such funds in the Excess Funding Account to the extent
required so that the Retention Condition no longer exists.
SECTION 4.5 Excess Finance Charge Collections. On each Distribution
Date, (a) Servicer shall apply the aggregate amount for all outstanding Excess
52
Allocation Series of the amounts which the related Supplements specify are
to be treated as "Excess Finance Charge Collections" for the related
Transfer Date to other Excess Allocation Series, pro rata, in proportion to
the Finance Charge Shortfalls, if any, with respect to each such Series,
and (b) Servicer shall withdraw (or shall instruct Trustee to withdraw)
from the Collection Account and pay to Transferor an amount equal to the
excess, if any, of (x) the aggregate amount for all outstanding Excess
Allocation Series of the amounts which the related Supplements specify are
to be treated as "Excess Finance Charge Collections" for such Distribution
Date over (y) the aggregate amount for all outstanding Excess Allocation
Series which the related Supplements specify are "Finance Charge
Shortfalls", for such Distribution Date; provided that the sharing of
Excess Finance Charge Collections among Excess Allocation Series will
continue only until such time, if any, as Transferor shall deliver to
Trustee an Officer's Certificate to the effect that, in the reasonable
belief of Transferor, the continued sharing of Excess Finance Charge
Collections among Excess Allocation Series would have adverse regulatory
implications with respect to Transferor. Following the delivery by
Transferor of such an Officer's Certificate to Trustee, there will not be
any further sharing of Excess Finance Charge Collections among Excess
Allocation Series.
SECTION 4.6 Allocation of Trust Assets to Series or Groups. To the
extent so provided in the Supplement for any Series or in an amendment to
this Agreement executed pursuant to Section 13.1(a), Receivables and
Participations conveyed to the Trust and all Collections received with
respect thereto may be allocated or applied in whole or in part to one or
more Series or Groups as may be provided in such Supplement or amendment;
provided that any such allocation and application shall be effective only
upon satisfaction of the following conditions:
(i) on or before the fifth Business Day immediately
preceding such allocation, the Servicer shall have given Trustee
and each Rating Agency written notice of such allocation;
(ii) the Rating Agency Condition shall have been
satisfied with respect to such allocation; and
(iii) the Servicer shall have delivered to Trustee an
Officer's Certificate, dated the date of such allocation, to the
effect that the Servicer reasonably believes that such allocation
will not materially adversely affect the interests of the Holders
of any Series issued and outstanding.
Any such Supplement or amendment may provide that (i) such
allocation to one or more particular Series or Groups may terminate upon
the occurrence of certain events specified therein and (ii) upon the
occurrence of any such event, such assets and any Collections with respect
thereto shall be reallocated to other Series or Groups or to all Series,
all as shall be provided in such Supplement or amendment.
53
[THE REMAINDER OF ARTICLE IV IS RESERVED AND
SHALL BE SPECIFIED IN ANY SUPPLEMENT WITH
RESPECT TO ANY SERIES.]
ARTICLE V [ARTICLE V IS RESERVED AND SHALL BE SPECIFIED
IN THE SUPPLEMENT WITH RESPECT TO ANY SERIES.]
ARTICLE VI THE CERTIFICATES
SECTION 6.1 The Certificates. Subject to Sections 6.10 and 6.13,
the Investor Certificates of each Series and any Class thereof may be
issued in bearer form (the "Bearer Certificates") 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 related
Supplement. The Investor Certificates shall, upon issue pursuant hereto or
to Section 6.9 or Section 6.10, be executed and delivered by Transferor to
Trustee for authentication and redelivery as provided in Sections 6.1 and
6.2. Any Investor Certificate shall be issuable in a minimum denomination
of $1,000 Undivided Interest and integral multiples thereof, unless
otherwise specified in any Supplement. Each Certificate shall be executed
by manual or facsimile signature on behalf of Transferor by its President
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 Transferor or 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 be valid for any
purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein, executed by
or on behalf of Trustee by the manual signature of a duly authorized
signatory, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the
date of their authentication except Bearer Certificates which shall be
dated the applicable Issuance Date as provided in the related Supplement.
SECTION 6.2 Authentication of Certificates. On the Initial Closing
Date, Trustee shall authenticate and deliver the initial Series of Investor
Certificates, to or upon the written order of Transferor against payment to
Transferor or its designee of the Initial Investor Interest (net of any
purchase or underwriting discount) to the extent such delivery is required
pursuant to the applicable supplement. Upon the receipt of such payment and
the issuance of the Investor Certificates, such Investor Certificates shall
be fully paid and non-assessable. Upon an Issuance as provided in Section
6.9 and the satisfaction of certain other conditions specified therein,
Trustee shall authenticate and deliver the Investor Certificates of
additional Series (with the
54
designation provided in the related Supplement), upon the order of
Transferor, to the Persons designated in such Supplement. Upon the order of
Transferor, the Certificates of any Series shall be duly authenticated by
or on behalf of Trustee, in authorized denominations. If specified in the
related Supplement for any Series, Trustee shall authenticate and deliver
outside the United States the Global Certificate that is issued upon
original issuance thereof, upon the written order of Transferor, to the
Depository against payment of the purchase price therefor. If specified in
the related Supplement for any Series, Trustee shall authenticate
Book-Entry Certificates that are issued upon original issuance thereof,
upon the written order of Transferor, to a Clearing Agency or its nominee
as provided in Section 6.10 against payment of the purchase price thereof.
SECTION 6.3 Registration of Transfer and Exchange of Certificates.
(a) Trustee shall cause to be kept at the office or agency to be maintained
by a transfer agent and registrar (the "Transfer Agent and Registrar"), in
accordance with the provisions of Section 11.16, a register (the
"Certificate Register") in which, subject to such reasonable regulations as
it may prescribe, the Transfer Agent and Registrar shall provide for the
registration of the Investor Certificates of each Series (unless otherwise
provided in the related Supplement) and of transfers and exchanges of the
Investor Certificates as herein provided. Trustee is the initial Transfer
Agent and Registrar. If any Investor Certificate is issued as a Global
Certificate, Trustee may, or if and so long as any Series of Investor
Certificates are listed on the Luxembourg Stock Exchange and such exchange
shall so require, Trustee shall appoint a co- transfer agent and
co-registrar in Luxembourg or another European city. Any reference in this
Agreement to the Transfer Agent and Registrar shall include any co-
transfer agent and co-registrar unless the context otherwise requires.
Trustee shall be permitted to resign as Transfer Agent and Registrar upon
30 days' written notice to Servicer. In the event that Trustee shall no
longer be the Transfer Agent and Registrar, Trustee shall appoint a
successor Transfer Agent and Registrar.
Upon surrender for registration of transfer of any Certificate at
any office or agency of the Transfer Agent and Registrar, subject to the
provisions of subsection 6.3(c), Transferor shall execute, and Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates in authorized denominations of
like aggregate Undivided Interests; provided that the provisions of this
paragraph shall not apply to Bearer Certificates.
At the option of an Investor Holder, Investor Certificates may be
exchanged for other Investor Certificates of the same Series in authorized
denominations of like aggregate Undivided Interests, upon surrender of the
Investor Certificates to be exchanged at any such office or agency. At the
option of any Holder of Registered Certificates, Registered Certificates
may be exchanged for other Registered Certificates of the same Series in
authorized denominations of like aggregate Undivided Interests in the
Trust, upon surrender of the Registered Certificates to be
55
exchanged at any office or agency of the Transfer Agent and Registrar
maintained for such purpose. At the option of a Holder of a Bearer
Certificate, subject to applicable laws and regulations (including the
Bearer Rules), Bearer Certificates may be exchanged for other Bearer
Certificates or Registered Certificates of the same Series in authorized
denominations of like aggregate Undivided Interests in the Trust, in the
manner specified in the Supplement for such Series, upon surrender of the
Bearer Certificates to be exchanged at an office or agency of the Transfer
Agent and Registrar located outside the United States. Each Bearer
Certificate surrendered pursuant to this Section 6.3 shall have attached
thereto (or be accompanied by) all unmatured Coupons, provided that any
Bearer Certificate so surrendered after the close of business on the Record
Date preceding the relevant Distribution Date after the related Series
Termination Date need not have attached the Coupons relating to such
Distribution Date.
Whenever any Investor Certificates of any Series are so
surrendered for exchange, Transferor shall execute, and Trustee shall
authenticate and (unless the Transfer Agent and Registrar is different than
Trustee, in which case the Transfer Agent and Registrar shall) deliver, the
Investor Certificates of such Series which the Holder making the exchange
is entitled to receive. Every Investor Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in a form satisfactory to Trustee and the Transfer
Agent and Registrar duly executed by the Holder thereof or his
attorney-in-fact duly authorized in writing.
The preceding provisions of this Section 6.3 notwithstanding,
Trustee or the Transfer Agent and Registrar, as the case may be, shall not
be required to register the transfer of or exchange any Investor
Certificate of any Series for a period of 15 days preceding the due date
for any payment with respect to the Investor Certificates of such Series.
Unless otherwise provided in the related Supplement, no service
charge shall be made for any registration of transfer or exchange of
Certificates, but the Transfer Agent and Registrar may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
All Investor Certificates (together with any Coupons attached to
Bearer Certificates) surrendered for registration of transfer and exchange
shall be canceled by the Transfer Agent and Registrar and disposed of in a
manner satisfactory to Trustee. Trustee shall cancel and destroy the Global
Certificates upon its exchange in full for Definitive Certificates and
shall deliver a certificate of destruction to Transferor. Such certificate
shall also state that a certificate or certificates of each Foreign
Clearing Agency to the effect referred to in Section 6.13 was received with
56
respect to each portion of the Global Certificate exchanged for Definitive
Certificates.
Transferor shall execute and deliver to 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
Trustee to fulfill its responsibilities under this Agreement and the
Certificates.
(b) Except as provided in Section 2.9, 6.9 or 7.2 or this
subsection 6.3(b), Transferor shall not transfer the Transferor Interest or
any interest therein. Transferor may from time to time transfer a portion
of the Transferor Interest by causing the issuance of one or more
additional certificates (each a "Supplemental Certificate"), the terms of
which shall be defined in a Supplement (which Supplement shall be subject
to Section 13.1(a) to the extent that it amends any of the terms of this
Agreement), to be delivered to or upon the order of Transferor (or the
Holder of a Supplemental Certificate, in the case of the transfer or
exchange thereof, as provided below), upon satisfaction of the following
conditions:
(i) Trustee shall have received an Officer's Certificate
of Transferor certifying that the Transferor Interest shall not be
less than the Minimum Transferor Interest, in each case as of the
date of, and after giving effect to, such exchange;
(ii) the Rating Agency Condition shall have been
satisfied with respect to such exchange (or transfer or exchange
as provided below); and
(iii) Transferor shall have delivered to Trustee and each
Rating Agency a Tax Opinion, dated the date of such exchange (or
transfer or exchange as provided below), with respect thereto.
Any Supplemental Certificate may be transferred or exchanged only upon
satisfaction of the conditions set forth in clauses (ii) and (iii).
(c) Unless otherwise provided in the related Supplement,
registration of transfer of Registered Certificates containing a legend
relating to the restrictions on transfer of such Registered Certificates
(which legend shall be set forth in the Supplement relating to such
Investor Certificates) shall be effected only if the conditions set forth
in such related Supplement are satisfied.
Whenever a Registered Certificate containing the legend set forth
in the related Supplement is presented to the Transfer Agent and Registrar
for registration of transfer, the Transfer Agent and Registrar shall
promptly seek instructions from Servicer regarding such transfer. The
Transfer Agent and Registrar and Trustee shall be entitled to receive
written instructions signed by a Servicing Officer prior to
57
registering any such transfer or authenticating new Registered
Certificates, as the case may be. Servicer shall indemnify the Transfer
Agent and Registrar and Trustee and hold each of them harmless against any
loss, liability or expense incurred without negligence or bad faith on
their part arising out of or in connection with actions taken or omitted by
them in reliance on any such written instructions furnished pursuant to
this subsection 6.3(c).
(d) The Transfer Agent and Registrar will maintain at its expense
in New York, New York (and subject to this Section 6.3, if specified in the
related Supplement for any Series, any other city designated in such
Supplement) an office or offices or any agency or agencies where Investor
Certificates of such Series may be surrendered for registration of transfer
or exchange.
(e) The Certificates of any Series (or if there is more than one
Class in a Series, each Class) may not be acquired with the plan assets of
(i) any "employee benefit plan" as defined in Section 3(3) of ERISA, which
is subject to Title I of ERISA, or (ii) any "plan" as defined in Section
4975 of the Internal Revenue Code (each a "Benefit Plan"), unless such
Series (or Class) has been registered under Section 12(b) or Section 12(g)
of the Securities Exchange Act of 1934, and the underwriter or underwriters
for such Series (or Class) notifies Transferor and Trustee that as of the
date immediately following the conclusion of the offering, the Certificates
of such Series (or Class) have been sold to at least 100 separately named
persons. If the Certificates of any Series (or Class) may not be acquired
with plan assets because the foregoing requirements are not satisfied, then
each purchaser and each transferee of such Certificates will be deemed to
represent and warrant that it is not purchasing such Certificates with plan
assets of a Benefit Plan.
SECTION 6.4 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, Transferor and Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of
notice to Trustee that such Certificate has been acquired by a bona fide
purchaser, Transferor shall execute and Trustee shall authenticate and
(unless the Transfer Agent and Registrar is different from Trustee, in
which case the Transfer Agent and Registrar shall) deliver (in compliance
with applicable law), in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
aggregate Undivided Interest. In connection with the issuance of any new
Certificate under this Section 6.4, Trustee or the Transfer Agent and
Registrar may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of Trustee and the Transfer
Agent and Registrar) connected
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therewith. Any duplicate Certificate issued pursuant to this Section 6.4
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 6.5 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, Trustee, the Paying Agent, the
Transfer Agent and Registrar and any agent of any of them may treat the
Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Article
V (as described in any Supplement) and for all other purposes whatsoever,
and neither 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;
provided that in determining whether the holders of Investor Certificates
evidencing the requisite Undivided Interests have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Investor Certificates owned by Transferor, Servicer or any Affiliate
thereof shall be disregarded and deemed not to be outstanding, except that,
in determining whether Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Investor Certificates which a Responsible Officer knows to be so owned
shall be so disregarded. Investor Certificates so owned that have been
pledged in good faith shall not be disregarded as outstanding, if the
pledgee establishes to the satisfaction of Trustee the pledgee's right so
to act with respect to such Investor Certificates and that the pledgee is
not Transferor, Servicer or an Affiliate thereof.
In the case of a Bearer Certificate, 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 Article XII and for all other purposes whatsoever, and
neither 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.
SECTION 6.6 Appointment of Paying Agent. (a) The Paying Agent
shall make distributions to Investor Holders from the appropriate account
or accounts maintained for the benefit of Holders as specified in this
Agreement or the related Supplement for any Series pursuant to Articles IV
and V. Any Paying Agent shall have the revocable power to withdraw funds
from such appropriate account or accounts for the purpose of making
distributions referred to above. Trustee (or Servicer if Trustee is the
Paying Agent) may revoke such power and remove the Paying Agent, if Trustee
(or Servicer if Trustee is the Paying Agent) determines in its sole
discretion that the Paying Agent shall have failed to perform its
obligations under this Agreement in any material respect or for other good
cause. Trustee (or Servicer if Trustee is the Paying Agent) shall notify
the Rating Agencies of the
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removal of any Paying Agent. The Paying Agent, unless the Supplement with
respect to any Series states otherwise, shall initially be Trustee. If any
form of Investor Certificate is issued as a Global Certificate, or if and
so long as any Series of Investor Certificates are listed on the Luxembourg
Stock Exchange and such exchange shall so require, Trustee shall appoint a
co-paying agent in Luxembourg or another European city. Trustee shall be
permitted to resign as Paying Agent upon 30 days' written notice to
Servicer. In the event that Trustee shall no longer be the Paying Agent,
Trustee shall appoint a successor to act as Paying Agent (which shall be a
bank or trust company). The provisions of Sections 11.1, 11.2 and 11.3
shall apply to Trustee also in its role as Paying Agent, for so long as
Trustee shall act as Paying Agent. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
If specified in the related Supplement for any Series, so long as
the Investor Certificates of such Series are outstanding, Transferor shall
maintain a co-paying agent in New York City (for Registered Certificates
only) 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.
(b) Trustee shall cause the Paying Agent (other than itself) to
execute and deliver to Trustee an instrument in which such Paying Agent
shall agree with Trustee that such Paying Agent will hold all sums, if any,
held by it for payment to the Holders in trust for the benefit of the
Holders entitled thereto until such sums shall be paid to such Holders and
shall agree, and if Trustee is the Paying Agent it hereby agrees, that it
shall comply with all requirements of the Internal Revenue Code regarding
the withholding by Trustee of payments in respect of Federal income taxes
due from Certificate Owners.
SECTION 6.7 Access to List of Holders' Names and Addresses.
Trustee shall furnish or cause to be furnished by the Transfer Agent and
Registrar to Servicer or the Paying Agent, within five Business Days after
receipt by Trustee of a request therefor from Servicer or the Paying Agent,
respectively, in writing, a list in such form as Servicer or the Paying
Agent may reasonably require, of the names and addresses of the Investor
Holders as of the most recent Record Date for payment of distributions to
Investor Holders. Unless otherwise provided in the related Supplement,
Holders of the Investor Certificates evidencing Undivided Interests
aggregating not less than 10% of the Investor Interest of the Investor
Certificates of any Series (the "Applicants") may apply in writing to
Trustee, and if such application states that the Applicants desire to
communicate with other Investor Holders of any Series with respect to their
rights under this Agreement or under the Investor Certificates and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then Trustee, after having been adequately
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indemnified by such Applicants for its costs and expenses, shall afford or
shall cause the Transfer Agent and Registrar to afford such Applicants
access during normal business hours to the most recent list of Holders held
by Trustee and shall give Servicer notice that such request has been made,
within five Business Days after the receipt of such application. Such list
shall be as of a date no more than 45 days prior to the date of receipt of
such Applicants' request. Every Holder, by receiving and holding a
Certificate, agrees with Trustee that neither Trustee, the Transfer Agent
and Registrar, nor any of their respective agents shall be held accountable
by reason of the disclosure of any such information as to the names and
addresses of the Holders hereunder, regardless of the source from which
such information was obtained.
SECTION 6.8 Authenticating Agent. (a) Trustee may appoint one or
more authenticating agents with respect to the Certificates which shall be
authorized to act on behalf of Trustee in authenticating the Certificates
in connection with the issuance, delivery, registration of transfer,
exchange or repayment of the Certificates. Whenever reference is made in
this Agreement to the authentication of Certificates by Trustee or
Trustee's certificate of authentication, such reference shall be deemed to
include authentication on behalf of Trustee by an authenticating agent and
a certificate of authentication executed on behalf of Trustee by an
authenticating agent. Each authenticating agent must be acceptable to
Transferor.
(b) Any institution succeeding to the corporate agency business of
an authenticating agent shall continue to be an authenticating agent
without the execution or filing of any paper or any further act on the part
of Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by giving
written notice of resignation to Trustee and to Transferor. Trustee may at
any time terminate the agency of an authenticating agent by giving notice
of termination to such authenticating agent and to Transferor. Upon
receiving such a notice of resignation or upon such a termination, or in
case at any time an authenticating agent shall cease to be acceptable to
Trustee or Transferor, Trustee promptly may appoint a successor
authenticating agent. Any successor authenticating agent upon acceptance of
its appointment hereunder shall become vested with all the rights, powers
and duties of its predecessor hereunder, with like effect as if originally
named as an authenticating agent. No successor authenticating agent shall
be appointed unless acceptable to Trustee and Transferor.
(d) Trustee agrees to pay each authenticating agent from time to
time reasonable compensation for its services under this Section 6.8, and
Trustee shall be entitled to be reimbursed and Servicer shall reimburse
Trustee for such reasonable payments actually made, subject to the
provisions of Section 11.5.
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(e) The provisions of Sections 11.1, 11.2 and 11.3 shall be
applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section 6.8, the
Certificates may have endorsed thereon, in lieu of Trustee's certificate of
authentication, an alternate certificate of authentication in substantially
the following form:
"This is one of the certificates described in the Pooling and
Servicing Agreement.
---------------------------------------
as Authenticating Agent for Trustee,
By:____________________________________
Authorized Officer"
SECTION 6.9 New Issuances. (a) Upon request by Transferor from
time to time, Trustee shall issue to Transferor under Section 6.1, for
execution and redelivery to Trustee for authentication under Section 6.2,
one or more new Series of Investor Certificates. Any such Series shall be
substantially in the form specified in the related Supplement and shall
bear, upon its face, the designation for such Series to which it belongs,
as selected by Transferor. Except as specified in any Supplement for a
related Series, all Investor Certificates of any Series shall rank pari
passu and be equally and ratably entitled as provided herein to the
benefits hereof (except that the Credit Enhancement provided for any Series
shall not be available for any other Series) without preference, priority
or distinction on account of the actual time or times of authentication and
delivery, all in accordance with the terms and provisions of this Agreement
and the related Supplement.
(b) Transferor may require Trustee to issue to Transferor under
Section 6.1, for execution and redelivery to Trustee for authentication
under Section 6.2, one or more newly issued Series of Investor Certificates
or in connection with a Paired Series, interests in such Series, in
exchange for a reduction in the Transferor Interest (any such transaction,
a "Transferor Issuance"). In addition, to the extent permitted for any
Series of Investor Certificates as specified in the related Supplement (and
subject to any applicable requirements under the Securities Exchange Act of
1934 and the rules and regulations thereunder, including Rule 13e-4), the
Investor Holders of such Series may tender their Investor Certificates to
Trustee pursuant to the terms and conditions set forth in such Supplement
in exchange for one or more newly issued Series of Investor Certificates
(an "Investor Issuance"). Transferor may initiate an Issuance by notifying
Trustee, in writing at least three days in advance (an "Issuance Notice")
of the date upon which the Issuance is to occur (an "Issuance Date"). Any
Issuance Notice shall state the designation of any Series (and Class
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thereof, if applicable) to be issued on the Issuance Date and, with respect
to each such Series, its Initial Investor Interest (or the method for
calculating such Initial Investor Interest), the applicable interest rate
(or the method for allocating interest payments or other cash flows to such
Series), if any, and the Credit Enhancement Provider, if any, with respect
to such Series. On the Issuance Date, Trustee shall authenticate and
deliver any such Series of Investor Certificates only upon delivery to it
of the following: (1) a Supplement satisfying the criteria set forth in
subsection 6.9(c) executed by Transferor and specifying the Principal Terms
of such Series, (2) the applicable Credit Enhancement, if any, (3) the
agreement, if any, pursuant to which the Credit Enhancement Provider agrees
to provide the Credit Enhancement, if any, (4) a Tax Opinion, (5) evidence
that the Rating Agency Condition has been satisfied with respect to the
Issuance, (6) an Officer's Certificate signed by a Vice President (or any
more senior officer) of Transferor, that on the Issuance Date (i)
Transferor, after giving effect to the Issuance, would not be required to
add Additional Accounts pursuant to subsection 2.6(a) and (ii) after giving
effect to such Issuance, the Transferor Interest would be at least equal to
the Minimum Transferor Interest, and (7) the existing Investor
Certificates, in the case of an Investor Issuance. Upon satisfaction of
such conditions, Trustee shall issue as provided above, such Series of
Investor Certificates, dated the Issuance Date and, in the case of an
Investor Issuance, cancel the Investor Certificates tendered in exchange
for the new Series. There is no limit to the number of Issuances that may
be performed under this Agreement.
(c) In conjunction with an Issuance, the parties hereto shall
execute a Supplement, which shall specify the relevant terms with respect
to any newly issued Series of Investor Certificates, which may include: (i)
its name or designation, (ii) an Initial Investor Interest or the method of
calculating the Initial Investor Interest, (iii) the method of determining
any adjusted Investor Interest, if applicable, (iv) the applicable interest
rate (or formula for its determination), (v) the Closing Date, (vi) each
rating agency rating such Series, (vii) the name of the Clearing Agency, if
any, (viii) the rights of Transferor that have been transferred to the
Holders of such Series pursuant to such Issuance (including any rights to
allocations of Collections of Finance Charge Receivables and Principal
Receivables), (ix) the interest payment date or dates and the date or dates
from which interest shall accrue, (x) the periods during which or dates on
which principal will be paid or accrued, (xi) the method of allocating
Collections with respect to Principal Receivables for such Series and, if
applicable, with respect to other Series and the method by which the
principal amount of Investor Certificates of such Series shall amortize or
accrete and the method for allocating Collections with respect to Finance
Charge Receivables and Receivables in Defaulted Accounts, (xii) any other
Collections with respect to Receivables or other amounts available to be
paid with respect to such Series, (xiii) the names of any accounts to be
used by such Series and the terms governing the operation of any such
account and use of monies therein, (xiv) the Investor Servicing Fee and the
Series Servicing Fee Percentage, (xv) the Minimum Transferor Interest
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and the Series Termination Date, (xvi) the terms of any Credit Enhancement
with respect to such Series, and the Credit Enhancement Provider, if
applicable, (xvii) the base rate applicable to such Series, (xviii) the
terms on which the Certificates of such Series may be repurchased or
remarketed to other investors, (xix) any deposit into any account provided
for such Series, (xx) the number of Classes of such Series, and if more
than one Class, the rights and priorities of each such Class, (xxi) whether
Interchange or other fees will be included in the funds available to be
paid for such Series, (xxii) the priority of any Series with respect to any
other Series, (xxiii) the rights, if any, of Transferor that have been
transferred to the holders of such Series, (xxiv) the Minimum Aggregate
Principal Receivables, (xxv) whether such Series will be part of a Group,
(xxvi) whether such Series will be a Principal Sharing Series, (xxvii)
whether such Series will or may be a Paired Series and the Series with
which it will be paired, if applicable and (xxviii) any other relevant
terms of such Series (including whether or not such Series will be pledged
as collateral for an issuance of any other securities, including commercial
paper) (all such terms, the "Principal Terms" of such Series). The terms of
such Supplement may modify or amend the terms of this Agreement solely as
applied to such new Series.
(d) Upon satisfaction of the above conditions (mutatis mutandis),
Transferor may also cause Trustee to enter into one or more agreements
pursuant to which Trustee shall sell purchased interests in the Receivables
and other Trust Assets to one or more purchasers. Such agreement(s) shall
specify terms similar to Principal Terms for any such purchased interests
and may grant the purchaser(s) of such interests, or an agent or other
representative of such purchaser(s), notice and consultation rights with
respect to any rights or actions of Trustee.
SECTION 6.10 Book-Entry Certificates. Unless otherwise provided in
any related Supplement, the Investor Certificates, upon original issuance,
shall be issued in the form of typewritten Certificates representing the
Book-Entry Certificates, to be delivered to the depository specified in
such Supplement (the "Depository") for the Clearing Agency or Foreign
Clearing Agency for such Series. The Investor Certificates of each Series
shall, unless otherwise provided in the related Supplement, initially be
registered on the Certificate Register in the name of the nominee of the
Clearing Agency or Foreign Clearing Agency. No Certificate Owner will
receive a definitive certificate representing such Certificate Owner's
interest in the related Series of Investor Certificates, except as provided
in Section 6.12. Unless and until definitive, fully registered Investor
Certificates of any Series ("Definitive Certificates") have been issued to
Certificate Owners pursuant to Section 6.12:
(i) the provisions of this Section 6.10 shall be in full
force and effect with respect to each such Series;
(ii) Transferor, Servicer, the Paying Agent, the Transfer
Agent and Registrar and Trustee may deal with the Clearing Agency
and the Clearing
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Agency Participants for all purposes (including the making of
distributions on the Investor Certificates of each such Series) as
the authorized representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section
6.10 conflict with any other provisions of this Agreement, the
provisions of this Section 6.10 shall control with respect to each
such Series; and
(iv) the rights of Certificate Owners of each such Series
shall be exercised only through the Clearing Agency or Foreign
Clearing Agency and the applicable Clearing Agency Participants
and shall be limited to those established by law and agreements
between such Certificate Owners and the Clearing Agency or Foreign
Clearing Agency and/or the Clearing Agency Participants. Pursuant
to the Depository Agreement applicable to a Series, unless and
until Definitive Certificates of such Series are issued pursuant
to Section 6.12, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit distributions of principal and interest on the Investor
Certificates to such Clearing Agency Participants.
SECTION 6.11 Notices to Clearing Agency. Whenever notice or other
communication to the Holders is required under this Agreement, unless and
until Definitive Certificates shall have been issued to Certificate Owners
pursuant to Section 6.12, Trustee shall give all such notices and
communications specified herein to be given to Holders of the Investor
Certificates to the Clearing Agency or Foreign Clearing Agency for
distribution to Holders of Investor Certificates.
SECTION 6.12 Definitive Certificates. If (i) (A) Transferor
advises Trustee in writing that the Clearing Agency or Foreign Clearing
Agency is no longer willing or able to discharge properly its
responsibilities under the applicable Depository Agreement, and (B) Trustee
or Transferor is unable to locate a qualified successor, (ii) Transferor,
at its option, advises Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or Foreign Clearing Agency
with respect to any Series of Certificates or (iii) after the occurrence of
a Servicer Default, Certificate Owners of a Series representing beneficial
interests aggregating not less than 50% of the Investor Interest of such
Series advise Trustee and the applicable Clearing Agency or Foreign
Clearing Agency through the applicable Clearing Agency Participants in
writing that the continuation of a book-entry system through the applicable
Clearing Agency or Foreign Clearing Agency is no longer in the best
interests of the Certificate Owners, Trustee shall notify all Certificate
Owners or, with respect to clauses (ii) and (iii), Certificate Owners of
the applicable Series, through the applicable Clearing Agency Participants,
of the occurrence of any such event and of the availability of Definitive
Certificates to all Certificate Owners or, as the case may be, Certificate
Owners of such series, in each case requesting the
65
same. Upon surrender to Trustee of all Investor Certificates or the
Investor Certificates of such Series by the applicable Clearing Agency or
Foreign Clearing Agency, accompanied by registration instructions from the
applicable Clearing Agency or Foreign Clearing Agency for registration,
Trustee shall issue the applicable Definitive Certificates. Neither
Transferor nor Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Certificates
of any Series, all references herein to obligations imposed upon or to be
performed by the applicable Clearing Agency or Foreign Clearing Agency
shall be deemed to be imposed upon and performed by Trustee, to the extent
applicable with respect to such Definitive Certificates, and Trustee shall
recognize the Holders of the Definitive Certificates of such Series as
Holders of such Series hereunder.
SECTION 6.13 Global Certificate; Euro-Certificate Exchange Date.
If specified in the related Supplement for any Series, the Investor
Certificates may be initially issued in the form of a single temporary
global certificate (the "Global Certificate") in bearer form, without
interest coupons, in the denomination of the Initial Investor Interest and
substantially in the form attached to the related Supplement. Unless
otherwise specified in the related Supplement, the provisions of this
Section 6.13 shall apply to such Global Certificate. The Global Certificate
will be authenticated by Trustee upon the same conditions, in substantially
the same manner and with the same effect as the Definitive Certificates.
The Global Certificate may be exchanged in the manner described in the
related Supplement for Registered or Bearer Certificates in definitive
form.
SECTION 6.14 Meetings of Holders. To the extent provided by the
Supplement for any Series issued in whole or in part in Bearer
Certificates, Servicer or Trustee may at any time call a meeting of the
Holders of such Series, to be held at such time and at such place as
Servicer or 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 13.1.
SECTION 6.15 Transfers of Certain Certificates. (a)
Notwithstanding any other provision of this Agreement, any Certificate for
which an Opinion of Counsel has not been issued opining that such
Certificates would be treated as debt for Federal income tax purposes
(each, a "Subject Certificate") shall be subject to the next succeeding
paragraph.
(b) No transfer (or purported transfer) of all or any part of a
Subject Certificate (or any economic interest therein), whether to another
Certificate Owner or to a person who is not a Certificate Owner shall be
effective, and any such transfer (or purported transfer) shall be void ab
initio, and no Person shall otherwise become a Holder of a Subject
Certificate if: (i) at the time of such transfer (or purported
66
transfer) any Subject Certificates are traded on an established securities
market; (ii) after such transfer (or purported transfer) the Trust would
have more than 100 Holders of Subject Certificates; or (iii) the Subject
Certificates have been issued in a transaction or transactions that were
required to be registered under the Securities Act, and to the extent such
offerings or sales were not required to be registered under the Securities
Act by reason of Regulation S (17 CFR 230.901 through 230.904 or any
successor thereto) such offerings or sales would not have been required to
be registered under the Securities Act if the interests so offered or sold
had been offered and sold within the United States. For purposes of clause
(i) of the preceding sentence, an established securities market is a
national securities exchange described in Treasury Regulation 1.7704-1(b).
For purposes of determining whether the Trust will have more than 100
Holders of Subject Certificates, each Person indirectly owning an interest
in the Trust through a partnership (including any entity treated as a
partnership for federal income tax purposes), a grantor trust or an S
corporation (each such entity a "flow-through entity") shall be treated as
a Holder of a Subject Certificate unless the Servicer determines in its
sole discretion, after consulting with qualified tax counsel, that less
than substantially all of the value of the beneficial owner's interest in
the flow-through entity is attributable to the flow through entity's
interest (direct or indirect) in the Trust.
SECTION 6.16 Trust Tax Election. No Person, including the Trustee,
shall have the authority to make an election under Treasury Regulation
301.7701-3(c) to cause the Trust to be classified as an association taxable
as a corporation.
ARTICLE VII OTHER MATTERS RELATING TO TRANSFEROR
SECTION 7.1 Liability of Transferor. Transferor shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by Transferor.
SECTION 7.2 Merger or Consolidation of, or Assumption of the
Obligations of, Transferor. (a) Transferor shall not consolidate with or
merge into any other Person or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) the Person formed by such consolidation or into which
Transferor is merged or the Person which acquires by conveyance or
transfer the properties and assets of Transferor substantially as
an entirety shall be, if Transferor is not the surviving entity,
organized and existing under the laws of the United States of
America or any State or the District of Columbia, and shall be a
national banking association, state banking corporation or other
entity which is not subject to the bankruptcy laws of the United
States of America and shall expressly assume, by an agreement
supplemental hereto, executed and delivered to Trustee, in form
satisfactory to Trustee, the
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performance of every covenant and obligation of Transferor, as
applicable hereunder, and shall benefit from all the rights
granted to Transferor, as applicable hereunder. To the extent that
any right, covenant or obligation of Transferor, as applicable
hereunder, is inapplicable to the successor entity, such successor
entity shall be subject to such covenant or obligation, or benefit
from such right, as would apply, to the extent practicable, to
such successor entity. In furtherance hereof, in applying this
Section 7.2 to a successor entity, Section 9.2 shall be applied by
reference to events of involuntary liquidation, receivership or
conservatorship applicable to such successor entity as shall be
set forth in the officer's certificate described in subsection
7.2(a)(ii);
(ii) Transferor shall have delivered to Trustee an
Officer's Certificate signed by a Vice President (or any more
senior officer) of Transferor stating that such consolidation,
merger, conveyance or transfer and such supplemental agreement
comply with this Section 7.2 and that all conditions precedent
herein provided for relating to such transaction have been
complied with and an Opinion of Counsel that such supplemental
agreement is legal, valid and binding; and
(iii) Transferor shall have delivered notice to each
Rating Agency of such consolidation, merger, conveyance or
transfer.
(b) Upon satisfaction of the following conditions, Transferor may
sell or otherwise dispose of the Transferor Interest, and any other right,
title or interest of Transferor in and to the Trust Assets to any other
Person, which Person shall thereafter be Transferor and, if so agreed,
Servicer for all purposes of this Agreement:
(i) Transferor delivers an Opinion of Counsel to Trustee
stating that (A) the new Transferor has effectively assumed all
obligations of the Transferor and, if so agreed, the Servicer
under this Agreement and (B) all actions necessary to perfect the
interest of the Trustee in the Trust Assets as against the new
Transferor have been taken; and
(ii) the Rating Agency Condition is satisfied.
(c) The obligations of Transferor hereunder shall not be
assignable nor shall any Person succeed to the obligations of Transferor
hereunder except as described in subsection (a) and (b) above and in
Section 2.9.
SECTION 7.3 Limitation on Liability. Transferor and its directors,
officers, employees and agents shall not be under any liability to the
Trust, Trustee, the Holders, any Credit Enhancement Provider or any other
Person hereunder or
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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 that this
provision shall not protect Transferor or its officers, directors,
employees, or agents against any liability which would otherwise be imposed
by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder, or under any Supplement.
ARTICLE VIII OTHER MATTERS RELATING TO SERVICER
SECTION 8.1 Liability of Servicer. Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by Servicer in such capacity herein.
SECTION 8.2 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Servicer shall not consolidate with or merge into
any other Person or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) the Person formed by such consolidation or into which
Servicer is merged or the Person which acquires by conveyance or
transfer the properties and assets of Servicer substantially as an
entirety shall be a Person organized and existing under the laws
of the United States of America or any State or the District of
Columbia, and shall be a national banking association, state
banking corporation or other entity which is not subject to the
bankruptcy laws of the United States of America and, if Servicer
is not the surviving entity, shall expressly assume, by an
agreement supplemental hereto, executed and delivered to Trustee
in form satisfactory to Trustee, the performance of every covenant
and obligation of Servicer hereunder (and to the extent that any
right, covenant or obligation of Servicer, as applicable
hereunder, is inapplicable to the successor entity, such successor
entity shall be subject to such covenant or obligation, or benefit
from such right, as would apply, to the extent practicable, to
such successor entity);
(ii) Servicer shall have delivered to Trustee an
Officer's Certificate that such consolidation, merger, conveyance
or transfer and such supplemental agreement comply with this
Section 8.2 and that all conditions precedent herein provided for
relating to such transaction have been complied with and an
Opinion of Counsel that such supplemental agreement is legal,
valid and binding with respect to Servicer; and
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(iii) Servicer shall have delivered notice to the Rating
Agency of such consolidation, merger, conveyance or transfer.
SECTION 8.3 Limitation on Liability of Servicer and Others. The
directors, officers, employees or agents of Servicer shall not be under any
liability to the Trust, Trustee, the Holders, any Credit Enhancement
Provider or any other Person hereunder or pursuant to any document
delivered hereunder, it being expressly understood that all such liability
is expressly waived and released as a condition of, and as consideration
for, the execution of this Agreement and any Supplement and the issuance of
the Certificates; provided that this provision shall not protect the
directors, officers, employees and agents of Servicer against any liability
which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder. Except as provided
in Section 8.4 with respect to the Trust and Trustee, its officers,
directors, employees and agents, Servicer shall not be under any liability
to the Trust, Trustee, its officers, directors, employees and agents, the
Holders 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; provided that this provision shall not protect Servicer
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or
by reason of its reckless disregard of its obligations and duties hereunder
or under any Supplement. 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. Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Receivables in accordance with this
Agreement which in its reasonable opinion may involve it in any expense or
liability.
SECTION 8.4 Servicer Indemnification of the Trust and Trustee.
Servicer shall indemnify and hold harmless the Trust and Trustee, its
officers, directors, employees and agents, from and against any reasonable
loss, liability, expense, damage or injury suffered or sustained by reason
of any acts or omissions or alleged acts or omissions of Servicer with
respect to activities of the Trust or Trustee pursuant to this Agreement or
any Supplement or any Credit Enhancement, including 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 that (a) Servicer shall not indemnify Trustee
if such acts, omissions or alleged acts or omissions constitute or are
caused by fraud, negligence, or willful misconduct by Trustee, (b) Servicer
shall not indemnify the Trust, the Investor Holders or the Certificate
Owners for any liabilities, costs or expenses of the Trust with respect to
any action taken by Trustee at the request of the Investor Holders, (c)
Servicer shall not indemnify the Trust, the Investor Holders or the
Certificate Owners as to any losses, claims or damages incurred by any of
them in their capacities as investors, including losses incurred as a
result of Defaulted
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Accounts or Receivables which are charged off as uncollectible and (d)
Servicer shall not indemnify the Trust, the Investor Holders or the
Certificate Owners for any liabilities, costs or expenses of the Trust, the
Investor Holders or the Certificate Owners arising under any tax law,
including any Federal, state, local or foreign income or franchise taxes or
any other tax imposed on or measured by income (or any interest or
penalties with respect thereto or arising from a failure to comply
therewith) required to be paid by the Trust, the Investor Holders or the
Certificate Owners in connection herewith to any taxing authority. Any such
indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof and shall survive
termination of this Agreement and the resignation or removal of Trustee.
SECTION 8.5 Servicer Not to Resign. Except as provided in
subsection 7.2(b), Servicer shall not resign from the obligations and
duties hereby imposed on it except upon determination that (i) the
performance of its duties hereunder is no longer permissible under
applicable law and (ii) there is no reasonable action which Servicer could
take to make the performance of its duties hereunder permissible under
applicable law. Any such determination permitting the resignation of
Servicer shall be evidenced as to clause (i) by an Opinion of Counsel to
such effect delivered to Trustee. No such resignation shall become
effective until Trustee or a Successor Servicer shall have assumed the
responsibilities and obligations of Servicer in accordance with Section
10.2. If Trustee is unable within 120 days of the date of such
determination to appoint a Successor Servicer, Trustee shall serve as
Successor Servicer hereunder until such time as Trustee shall appoint a
Successor Servicer and such Successor Servicer shall have assumed the
responsibilities and obligations of Servicer in accordance with Section
10.2.
SECTION 8.6 Access to Certain Documentation and Information
Regarding the Receivables. Servicer shall provide Trustee access to the
documentation regarding the Accounts and the Receivables when Trustee is
required in connection with the enforcement of the rights of the Investor
Holders, or by applicable law, to review such documentation, such access
being afforded without charge but only upon reasonable request, during
normal business hours, subject to Servicer's normal security and
confidentiality procedures and at offices designated by Servicer. Nothing
in this Section 8.6 shall derogate from the obligation of Transferor,
Trustee or Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors, and the failure of Servicer to provide
access as provided in this Section 8.6 as a result of such obligations
shall not constitute a breach of this Section 8.6.
SECTION 8.7 Delegation of Duties. In the ordinary course of
business, Servicer may at any time delegate any duties hereunder to any
Person who agrees to conduct such duties in accordance with the Account
Guidelines. Any such
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delegations shall not relieve Servicer of its liability and responsibility
with respect to such duties, and shall not constitute a resignation within
the meaning of Section 8.5 hereof. If any such delegation is to a party
other than an Affiliate of Transferor, notification thereof shall be given
to each Rating Agency.
SECTION 8.8 Examination of Records. Servicer shall clearly and
unambiguously identify each Account (including any Additional Account
designated pursuant to Section 2.6) 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. Servicer shall, prior to the sale or
transfer to a third party of any receivable held in its custody, examine
its computer and other records to determine that such receivable is not a
Receivable.
ARTICLE IX TRUST PAY OUT EVENTS
SECTION 9.1 Trust Pay Out Events. Each of the following events
(each, a "Trust Pay Out Event") shall constitute a Pay Out Event with
respect to all Series of Certificates, immediately upon the occurrence of
such event, and without any notice or other action on the part of Trustee
or the Investor Holders:
(a) Transferor 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 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 Transferor; or Transferor shall
admit in writing its inability to pay its debts generally as they become
due, file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its creditors
or voluntarily suspend payment of its obligations; or Transferor shall
become unable for any reason to transfer Receivables to the Trust in
accordance with the provisions of this Agreement; or
(b) the Trust shall become an "investment company" within the
meaning of the Investment Company Act.
SECTION 9.2 Additional Rights Upon the Occurrence of Certain
Events. If Transferor shall consent to the appointment of a conservator or
receiver or liquidator for the winding-up or liquidation of its affairs, 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 for the winding-up or liquidation of its affairs
shall have been entered against Transferor (an "Insolvency Event"),
Transferor shall on the day of such Insolvency Event immediately cease to
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transfer Principal Receivables and Discount Option Receivables to the Trust
and shall promptly give notice to Trustee of such Insolvency Event.
Notwithstanding any cessation of the transfer to the Trust of additional
Principal Receivables and Discount Option Receivables, Finance Charge
Receivables, whenever created, accrued in respect of Principal Receivables
or Discount Option Receivables which have been transferred to the Trust
shall continue to be a part of the Trust, and Collections with respect
thereto shall continue to be allocated and paid in accordance with Article
IV.
ARTICLE X SERVICER DEFAULTS
SECTION 10.1 Servicer Defaults. If any one of the following events
(a "Servicer Default") shall occur and be continuing:
(a) any failure by Servicer to make any payment, transfer or
deposit or to give instructions or notice to Trustee pursuant to Article IV
or to instruct Trustee to make any required drawing, withdrawal, or payment
under any Credit Enhancement on or before the date occurring five Business
Days after the date such payment, transfer, deposit withdrawal or drawing
or such instruction or notice is required to be made or given, as the case
may be, under the terms of this Agreement;
(b) failure on the part of Servicer duly to observe or perform in
any respect any other covenants or agreements of Servicer set forth in this
Agreement, which has a material adverse effect on the Investor Holders of
any Series and which continues unremedied for a period of 60 days after the
date on which written notice of such failure, specifying such notice to be
a notice of Servicer Default hereunder, requiring the same to be remedied,
shall have been given to Servicer by Trustee, or to Servicer and Trustee by
the Holders of Investor Certificates evidencing Undivided Interests
aggregating not less than 25% of the Investor Interest of any Series
adversely affected thereby and continue to materially adversely affect such
Investor Holders for such period; or Servicer shall delegate its duties
under this Agreement, except as permitted by Section 8.7;
(c) any representation, warranty or certification made by Servicer
in this Agreement or in any certificate delivered pursuant to this
Agreement shall prove to have been incorrect when made, which has a
material adverse effect on the Investor Holders of any Series and which
continues to be incorrect in any material respect for a period of 60 days
after the date on which written notice of such failure, specifying such
notice to be a notice of Servicer Default hereunder, requiring the same to
be remedied, shall have been given to Servicer by Trustee, or to Servicer
and Trustee by the Holders of Investor Certificates evidencing Undivided
Interests aggregating not less than 25% of the Investor Interest of any
Series adversely affected thereby and continues to materially adversely
affect such Investor Holders for such period; or
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(d) 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 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
liquidating of its affairs, shall have been entered against Servicer, and
such decree or order shall have remained in force undischarged or unstayed
for a period of 60 days; or Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make any
assignment for the benefit of its creditors or voluntarily suspend payment
of its obligations; then, so long as such Servicer Default shall not have
been remedied or waived, either Trustee, or the Holders of Investor
Certificates evidencing Undivided Interests aggregating more than 50% of
the Aggregate Investor Interest, by notice then given in writing to
Servicer (and to Trustee if given by the Investor Holders) (a "Termination
Notice"), may terminate all of the rights and obligations of Servicer as
Servicer under this Agreement.
After receipt by Servicer of such Termination Notice, and on the
date that a Successor Servicer shall have been appointed by Trustee
pursuant to Section 10.2, all authority and power of Servicer under this
Agreement shall pass to and be vested in a Successor Servicer; and Trustee
is hereby authorized and empowered (upon the failure of Servicer to
cooperate) to execute and deliver, on behalf of Servicer, as
attorney-in-fact or otherwise, all documents and other instruments upon the
failure of Servicer to execute or deliver such documents or instruments,
and to do and accomplish all other acts or things necessary or appropriate
to effect the purpose of such transfer of servicing rights and obligations.
Servicer agrees to cooperate with Trustee and such Successor Servicer in
effecting the termination of the responsibilities and rights of Servicer to
conduct servicing hereunder including the transfer to such Successor
Servicer of all authority of Servicer to service the Receivables provided
for under this Agreement, including all authority over all Collections
which shall on the date of transfer be held by Servicer for deposit, or
which have been deposited by Servicer, in the Collection Account, the
Finance Charge Account, the Excess Funding Account, the Distribution
Account, and any Series Account, or which shall thereafter be received with
respect to the Receivables, and in assisting the Successor Servicer and in
enforcing all rights to Insurance Proceeds and Interchange (if any)
applicable to the Trust. Servicer shall promptly transfer its electronic
records or electronic copies thereof relating to the Receivables to the
Successor Servicer in such electronic form as the Successor Servicer may
reasonably request and shall promptly transfer to the Successor Servicer
all other records, correspondence and documents necessary for the continued
servicing of the Receivables in the manner and at such times as the
Successor Servicer shall reasonably request. To the extent that compliance
with this Section 10.1 shall require
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Servicer to disclose to the Successor Servicer information of any kind
which Servicer reasonably deems to be confidential, the Successor Servicer
shall be required to enter into such customary licensing and
confidentiality agreements as Servicer shall deem necessary to protect its
interests. Servicer shall, on the date of any servicing transfer, transfer
all of its rights and obligations under the Credit Enhancement with respect
to any Series to the Successor Servicer.
Notwithstanding the foregoing, a delay in or failure of
performance referred to in subsection 10.1(a) for a period of 10 Business
Days or under subsection 10.1(b) or (c) for a period of 30 Business Days,
shall not constitute a Servicer Default if such delay or failure could not
be prevented by the exercise of reasonable diligence by Servicer and such
delay or failure was caused by an act of God or the public enemy, acts of
declared or undeclared war, public disorder, rebellion, 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 Servicer from using its best
efforts to perform its obligations in a timely manner in accordance with
the terms of this Agreement and Servicer shall provide Trustee, any Credit
Enhancement Provider, Transferor, each Rating Agency 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 to so perform its obligations.
SECTION 10.2 Trustee to Act; Appointment of Successor. (a) On and
after the receipt by Servicer of a Termination Notice pursuant to Section
10.1, Servicer shall continue to perform all servicing functions under this
Agreement until the date specified in the Termination Notice or otherwise
specified by Trustee in writing or, if no such date is specified in such
Termination Notice or otherwise specified by Trustee, until a date mutually
agreed upon by Servicer and Trustee. Trustee shall notify each Rating
Agency of such removal of Servicer. Trustee shall, as promptly as possible
after the giving of a Termination Notice, appoint a successor servicer (the
"Successor Servicer"), and such Successor Servicer shall accept its
appointment by a written assumption in a form acceptable to Trustee.
Trustee may obtain bids from any potential successor servicer. If a
Successor Servicer has not been appointed and has not accepted its
appointment at the time when Servicer ceases to act as Servicer, Trustee
without further action shall automatically be appointed the Successor
Servicer. The Trustee, when acting as Successor Servicer, is authorized to
perform any servicing function through agents or affiliates.
Notwithstanding the above, Trustee shall, if it is legally unable so to
act, petition a court of competent jurisdiction to appoint any established
financial institution having, in the case of an entity that is subject to
risk-based capital adequacy requirements, risk-based capital of at least
$50,000,000 or, in the case of an entity that is not subject to risk-based
capital requirements, having a net worth of not less than $50,000,000 and
in each case whose regular business includes the servicing of VISA or
MasterCard credit card receivables as the Successor Servicer hereunder.
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(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to Servicer with respect to servicing functions
under this Agreement and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on Servicer by the terms and
provisions hereof, and all references in this Agreement to Servicer shall
be deemed to refer to the Successor Servicer. Notwithstanding the above, or
anything in this Section to the contrary, Trustee, if it becomes Servicer
pursuant to this Section, shall have no responsibility or obligation for
any act or omission of either a predecessor or Successor Servicer other
than Trustee. Any Successor Servicer, by its acceptance of its appointment,
will automatically agree to be bound by the terms and provisions of each
Credit Enhancement, but only to the extent applicable to Servicer. No
Successor Servicer shall have any responsibility for the duties of
Transferor under any circumstance.
(c) In connection with such appointment and assumption, 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 that no such compensation
shall be in excess of the Servicing Fee permitted to Servicer pursuant to
Section 3.2. Transferor agrees that if Servicer is terminated hereunder, it
will agree to deposit a portion of the Collections in respect of Finance
Charge Receivables that it is entitled to receive pursuant to Article IV to
pay its share of the compensation of the Successor Servicer. The Servicer
being terminated shall bear all costs of the appointment of a Successor
hereunder, including those of Trustee reasonably allocable to specific
employees and overhead, legal fees and expenses, accounting and financial
consulting fees and expenses, and costs of amending this Agreement, if
necessary.
(d) All authority and power granted to the Successor Servicer
under this Agreement shall automatically cease and terminate upon
termination of the Trust pursuant to Section 12.1 and shall pass to and be
vested in Transferor and Transferor is hereby authorized and empowered to
execute and deliver, on behalf of the Successor Servicer, as
attorney-in-fact or otherwise, all documents and other instruments, and to
do and accomplish all other acts or things necessary or appropriate to
effect the purposes of such transfer of servicing rights. The Successor
Servicer agrees to cooperate with Transferor in effecting the termination
of the responsibilities and rights of the Successor Servicer to conduct
servicing on the Receivables. The Successor Servicer shall transfer its
electronic records relating to the Receivables to Transferor in such
electronic form as Transferor may reasonably request and shall transfer all
other records, correspondence and documents to Transferor in the manner and
at such times as Transferor shall reasonably request. To the extent that
compliance with this Section 10.2 shall require the Successor Servicer to
disclose to Transferor information of any kind which the Successor Servicer
deems to be confidential, Transferor shall be required to enter into such
customary licensing and confidentiality agreements as the Successor
Servicer shall deem necessary to protect its interests.
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SECTION 10.3 Notification to Holders. Within two Business Days
after Servicer becomes aware of any Servicer Default, Servicer shall give
prompt written notice thereof to the Rating Agencies, Trustee and any
Credit Enhancement Provider, and Trustee shall give notice to the Investor
Holders at their respective addresses appearing in the Certificate
Register. Upon any termination or appointment of a Successor Servicer
pursuant to this Article X, Trustee shall give prompt written notice
thereof to the Rating Agencies and the Investor Holders at their respective
addresses appearing in the Certificate Register.
SECTION 10.4 Waiver of Past Defaults. The Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than
66-2/3% of the Investor Interest of each Series adversely affected by any
default by Servicer or Transferor may, on behalf of all Holders of such
Series, waive any default by Servicer or Transferor in the performance of
its obligations hereunder (including any Servicer Default) and its
consequences, except a default in the failure to make any required deposits
or payments of interest or principal relating to such Series pursuant to
Article IV which default does not result from the failure of the Paying
Agent to perform its obligations to make any required deposits or payments
of interest and principal in accordance with Article IV. Upon any such
waiver of a past default, such default shall cease to exist, and any
default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
ARTICLE XI TRUSTEE
SECTION 11.1 Duties of Trustee. (a) Trustee, prior to the
occurrence of any Servicer Default and after the curing or waiver of all
Servicer Defaults which may have occurred, undertakes to perform such
duties and only such duties as are specifically set forth in this
Agreement. If a Responsible Officer has received written notice that a
Servicer Default has occurred (which has not been cured or waived and for
which a Successor Servicer has not been appointed), Trustee shall exercise
such of the rights and powers vested in it by this Agreement, and use the
same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs, provided, however that if Trustee is acting as Successor Servicer
it shall exercise such of the rights and powers, and use the same degree of
care and skill in its exercise, as the Servicer under this Agreement.
(b) Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to
determine whether they substantially conform on their face to
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the requirements of this Agreement. Trustee shall be under no duty to verify
the contents or computations contained therein.
(c) Subject to subsection 11.1(a), no provision of this Agreement
shall be construed to relieve Trustee from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided that:
(i) Trustee shall not be personally liable for an error
of judgment made in good faith by a Responsible Officer or
Responsible Officers of Trustee, unless it shall be proved that
Trustee was negligent in ascertaining the pertinent facts;
(ii) Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of the Holders of Investor
Certificates evidencing Undivided Interests aggregating more than
50% of the Investor Interest of any Series relating to the time,
method and place of conducting any proceeding for any remedy
available to Trustee, or exercising any trust or power conferred
upon Trustee in relation to such Series, under this Agreement, so
long as Trustee was not negligent in carrying out such directions;
and
(iii) Trustee shall not be charged with knowledge of any
failure by Servicer referred to in clauses (a), (b) or (c) of
Section 10.1 unless a Responsible Officer of Trustee obtains
actual knowledge of such failure or Trustee receives written
notice of such failure from Servicer or any Holders of Investor
Certificates evidencing Undivided Interests aggregating not less
than 10% of the Investor Interest of any Series adversely affected
thereby.
(d) Trustee shall not be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if
there is reasonable ground for believing that the repayment of such funds
or adequate indemnity against such risk or liability is not reasonably
assured to it, and none of the provisions contained in this Agreement shall
in any event require Trustee to perform, or be responsible for the manner
of performance of, any of the obligations of Servicer under this Agreement
except during such time, if any, as Trustee shall be the Successor
Servicer.
(e) Except for actions expressly authorized by this Agreement,
Trustee shall take no action reasonably likely to impair the interests of
the Trust in any Receivable now existing or hereafter created or to impair
the value of any Receivable now existing or hereafter created.
(f) Except as provided in this subsection 11.1(f), Trustee shall
have no power to vary the corpus of the Trust including the power to (i)
accept any substitute
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obligation for a Receivable assigned to the Trust under Section 2.1 or 2.6,
(ii) add any other investment, obligation or security to the Trust, except
for an addition permitted under Section 2.6, or (iii) withdraw from the
Trust any Receivables, except for a withdrawal permitted under Sections
2.7, 9.2, 10.2, 12.1 or 12.2 or subsections 2.4(d), 2.4(e) or Article IV.
(g) If the Paying Agent or the Transfer Agent and Registrar shall
fail to perform any obligation, duty or agreement in the manner or on the
day required to be performed by the Paying Agent or the Transfer Agent and
Registrar, as the case may be, under this Agreement, then, subject to
subsection 11.1(d), Trustee shall be obligated promptly to perform such
obligation, duty or agreement in the manner so required.
(h) If Transferor has agreed to transfer any of its credit card
receivables (other than the Receivables) to another Person, upon the
written request of Transferor, Trustee shall enter into such intercreditor
agreements with the transferee of such receivables as are customary and
necessary to identify separately the rights, if any, of the Trust and such
other Person in Transferor's credit card receivables; provided that Trustee
shall not be required to enter into any intercreditor agreement which could
adversely affect either its own interests or the interests of the Holders
and, upon the request of Trustee, Transferor will deliver an Opinion of
Counsel on any matters relating to such intercreditor agreement, reasonably
requested by Trustee.
(i) Subject to Section 11.4, Trustee may transact banking and
trust business generally with Transferor, Servicer, and any Credit
Enhancement Provider as freely as if it were not Trustee hereunder.
SECTION 11.2 Certain Matters Affecting Trustee. Except as otherwise
provided in Section 11.1:
(a) Trustee may rely on and shall be protected in acting on, or in
refraining from acting in accord with, any assignment of Receivables in
Additional Accounts, the initial report, the monthly Servicer's
certificate, the annual Servicer's certificate, the monthly payment
instructions and notification to Trustee, the monthly Holder's statement,
any resolution, Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by it
to be genuine and to have been signed or presented to it pursuant to this
Agreement by the proper party or parties;
(b) Trustee may consult with counsel selected by it in good faith,
and any Opinion of Counsel, any Tax Opinion or any written opinion of its
own counsel shall be full and complete authorization and protection in
respect of any action taken or
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suffered or omitted by it hereunder in good faith and in accordance with
such Opinion of Counsel, Tax Opinion or written opinion, so long as Trustee
is not negligent in carrying out the actions so authorized;
(c) Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement or any Credit Enhancement,
or to institute, conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of any of the Holders or any
Credit Enhancement Provider, pursuant to the provisions of this Agreement,
unless such Holders or Credit Enhancement Provider shall have offered to
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; nothing contained
herein shall, however, relieve Trustee of the obligations, upon the
occurrence of any Servicer Default (which has not been cured or waived, and
for which a Successor Servicer has not been appointed), to exercise such of
the rights and powers vested in it by this Agreement and to use the same
degree of care and skill in its exercise as a prudent person would exercise
or use under the circumstances in the conduct of such person's own affairs;
(d) Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Agreement, so long as Trustee is not negligent in taking, suffering or
omitting such action;
(e) Trustee shall not be bound to make any investigation into the
facts of matters stated in any assignment of Receivables in Accounts as of
the Cut-Off Date or any Additional Accounts, any Reassignment of Removed
Accounts, the initial report, any daily Servicer's report, the monthly
Servicer's certificate, the annual Servicer's certificate, the monthly
payment instructions and notification to Trustee, the monthly Holder's
statement, any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing so to do by Holders of Investor
Certificates evidencing Undivided Interests aggregating more than 50% of
the Investor Interest of any Series which could be adversely affected if
Trustee does not perform such acts;
(f) Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian, and Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent, attorney or
custodian (including any Transfer Agent and Registrar or Paying Agent)
appointed with due care by it hereunder; and
(g) Subject to subsection 11.1(a), Trustee shall not be required
to make any initial or periodic examination of any documents or records
related to the Receivables or the Accounts for the purpose of establishing
the presence or absence
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of defects, the compliance by Transferor with its representations and
warranties or for any other purpose.
SECTION 11.3 Trustee Not Liable for Recitals in Certificates.
Trustee assumes no responsibility for the correctness of the recitals
contained herein and in the Certificates (other than the certificate of
authentication on the Certificates). Except as set forth in Section 11.15,
Trustee makes no representations as to the validity or sufficiency of this
Agreement or of the Certificates (other than the certificate of
authentication on the Certificates) or of any Receivable or related
document. Trustee shall not be accountable for the use or application by
Transferor of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to Transferor
in respect of the Receivables or deposited in or withdrawn from the
Collection Account, the Excess Funding Account, or the Finance Charge
Account, or any Series Account by Servicer.
SECTION 11.4 Trustee May Not Own Certificates. Trustee in its
individual capacity shall not, but in a fiduciary or any other capacity
may, become the owner of Investor Certificates. In connection with such
ownership in other than its individual capacity, Trustee shall have the
same rights as it would have if it were not Trustee.
SECTION 11.5 Servicer to Pay Trustee's Fees and Expenses. Servicer
shall pay to Trustee from time to time, and Trustee shall be entitled to
receive, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust) for all services rendered by it in the execution of the Trust hereby
created and in the exercise and performance of any of the powers and duties
hereunder of Trustee, and, subject to Section 8.4, Servicer will pay or
reimburse Trustee (without reimbursement from any Investor Account, any
Series Account or otherwise) upon its request for all reasonable expenses,
disbursements and advances incurred or made by Trustee in accordance with
any of the provisions of this Agreement or any Credit Enhancement except
any such expense, disbursement or advance as may arise from its own
negligence or bad faith and except as provided in the following sentence.
If Trustee is appointed Successor Servicer pursuant to Section 10.2, and
subject to the provisions of Section 10.2 the provisions of this Section
11.5 shall not apply to expenses, disbursements and advances made or
incurred by Trustee in its capacity as Successor Servicer.
The obligations of Servicer under this Section 11.5 shall survive
the termination of the Trust and the resignation or removal of Trustee.
SECTION 11.6 Eligibility Requirements for Trustee. Trustee
hereunder shall at all times be a corporation or 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 long-term unsecured debt rating of at
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least Baa3 by ▇▇▇▇▇'▇ and BBB- by Standard & Poor's and, if rated by Fitch,
at least BBB- by Fitch, having, in the case of an entity that is subject to
risk-based capital adequacy requirements, risk-based capital of at least
$50,000,000 or, in the case of an entity that is not subject to risk-based
capital adequacy requirements, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by Federal or
state authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section
11.6, the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time Trustee shall cease
to be eligible in accordance with the provisions of this Section 11.6,
Trustee shall resign immediately in the manner and with the effect
specified in Section 11.7.
SECTION 11.7 Resignation or Removal of Trustee. (a) Trustee may at
any time resign and be discharged from the Trust hereby created by giving
written notice thereof to Servicer. Upon receiving such notice of
resignation, Servicer shall promptly appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered
to the resigning Trustee and one copy to the successor trustee. If no
successor trustee shall have been so appointed and have accepted within 30
days after the giving of such notice of resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee.
(b) If at any time Trustee shall cease to be eligible in
accordance with the provisions of Section 11.6 hereof and shall fail to
resign after written request therefor by Transferor, or if at any time
Trustee shall be legally unable to act, or shall be adjudged a bankrupt or
insolvent, or a receiver of Trustee or of its property shall be appointed,
or any public officer shall take charge or control of Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then Transferor may, but shall not be required to, remove
Trustee and promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to Trustee so
removed and one copy to the successor trustee.
(c) Any resignation or removal of Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 11.7
shall not become effective until acceptance of appointment by the successor
trustee as provided in Section 11.8 hereof and any liability of Trustee
arising hereunder shall survive such appointment of a successor trustee.
SECTION 11.8 Successor Trustee. (a) Any successor trustee
appointed as provided in Section 11.7 hereof shall execute, acknowledge and
deliver to Transferor and to its predecessor Trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or
removal of the predecessor Trustee shall become
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effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties
and obligations of its predecessor hereunder, with the like effect as if
originally named as Trustee herein. The predecessor Trustee shall deliver
to the successor trustee all documents and statements held by it hereunder,
and Transferor and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for
fully and certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in
this Section 11.8 unless at the time of such acceptance such successor
trustee shall be eligible under the provisions of Section 11.6.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section 11.8, such successor trustee shall mail notice of
such succession hereunder to all Holders at their addresses as shown in the
Certificate Register.
SECTION 11.9 Merger or Consolidation of Trustee. Any Person into
which Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which Trustee shall be a party, or any Person succeeding
to the corporate trust business of Trustee, shall be the successor of
Trustee hereunder, provided such Person shall be eligible under Section
11.6, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 11.10 Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust may at the time be located, Trustee shall have the
power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in such
Person or Persons, in such capacity and for the benefit of the Holders,
such title to the trust, or any part thereof, and, subject to the other
provisions of this Section 11.10, such powers, duties, obligations, rights
and trusts as Trustee may consider necessary or desirable. No co-trustee or
separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 11.6 and no notice to
Holders of the appointment of any co-trustee or separate trustee shall be
required under Section 11.8 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 Trustee shall be conferred or imposed upon and
exercised or performed
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by Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not
authorized to act separately without Trustee joining in such act),
except to the extent that under any laws of any jurisdiction in
which any particular act or acts are to be performed (whether as
Trustee hereunder or as successor to Servicer hereunder), Trustee
shall be incompetent or unqualified to perform such act or acts,
in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article XI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested
with the estates or property specified in its instrument of appointment,
either jointly with Trustee or separately, as may be provided therein,
subject to all the provisions of this Agreement, specifically including
every provision of this Agreement relating to the conduct of, affecting the
liability of, or affording protection to, Trustee. Every such instrument
shall be filed with Trustee and a copy thereof given to Servicer.
(d) Any separate trustee or co-trustee may at any time constitute
Trustee as its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect
to this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and
be exercised by Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 11.11 Tax Returns. If the Trust shall be required to file
tax returns, Servicer shall prepare or cause to be prepared any tax returns
required to be filed by the Trust and shall remit such returns to Trustee
for signature and, to the extent possible, file such returns at least five
days before such returns are due to be filed. Trustee is hereby authorized
to sign any such return on behalf of the Trust. Servicer shall prepare or
shall cause to be prepared all tax information required by law to be
distributed to Holders and shall deliver such information to Trustee at
least
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five days prior to the date it is required by law to be distributed to
Holders. Trustee, upon request, shall furnish Servicer with all such
information known to Trustee as may be reasonably required in connection
with the preparation of all tax returns of the Trust, and shall cause such
tax returns to be signed in the manner required by law. In no event shall
Trustee or Servicer be liable for any liabilities, costs or expenses of the
Trust, the Investor Holders or the Certificate Owners arising under any tax
law, including Federal, state, local or foreign income or excise taxes or
any other tax imposed on or measured by income (or any interest or penalty
with respect thereto or arising from a failure to comply therewith).
SECTION 11.12 Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or any
Series of Certificates may be prosecuted and enforced by Trustee without
the possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by Trustee
shall be brought in its own name as trustee. Any recovery of judgment
shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of Trustee, its agents and counsel, be
for the ratable benefit of any Series of Holders in respect of which such
judgment has been obtained.
SECTION 11.13 Suits for Enforcement. If a Servicer Default shall
occur and be continuing, Trustee, in its discretion may, subject to the
provisions of Section 10.1, proceed to protect and enforce its rights and
the rights of any Series of Holders under this Agreement by a suit, action
or proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in
aid of the execution of any power granted in this Agreement or for the
enforcement of any other legal, equitable or other remedy as Trustee, being
advised by counsel, shall deem most effectual to protect and enforce any of
the rights of Trustee or any Series of Holders.
SECTION 11.14 Rights of Holders to Direct Trustee. Holders of
Investor Certificates evidencing Undivided Interests aggregating more than
50% of the Aggregate Investor Interest (or, with respect to any remedy,
trust, or power that does not relate to all Series, 50% of the Aggregate
Investor Interest of the Investor Certificates of all Series to which such
remedy, trust, or power relates) shall have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to
Trustee, or exercising any trust or power conferred on Trustee; provided
that (a) subject to Section 11.1, Trustee shall have the right to decline
to follow any such direction if Trustee being advised by counsel determines
that the action so directed may not lawfully be taken, or if Trustee in
good faith shall, by a Responsible Officer or Responsible Officers of
Trustee, determine that the proceedings so directed would be illegal or
involve it in personal liability or be unduly prejudicial to the rights of
Holders not parties to such direction and (b) nothing in this Agreement
shall impair the right of Trustee to take any action deemed
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proper by Trustee and which is not inconsistent with such direction of such
Holders of Investor Certificates.
SECTION 11.15 Representations and Warranties of Trustee. Trustee
represents and warrants that:
(a) Organization and Good Standing. Trustee is a national banking
association duly organized and validly existing in good standing under the
laws of the United States and has full corporate power, authority and legal
right to own its properties and conduct its business as such properties are
presently owned and such business is presently conducted, and to execute,
deliver and perform its obligations under this Agreement.
(b) Due Qualification. Trustee is duly qualified to do business
and is in good standing (or is exempt from such requirement) in any state
required in order to conduct its business, and has obtained all necessary
licenses and approvals required under federal or state law.
(c) Due Authorization. The execution and delivery of this
Agreement have been duly authorized by Trustee by all necessary corporate
action on its part, and this Agreement will remain, from the time of its
execution, an official record of Trustee.
(d) No Conflict. The execution and delivery of this Agreement and
the performance of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof by Trustee will not conflict with, result
in any breach of any of the material terms and provisions of, or constitute
(with or without notice or lapse of time or both) a material default under,
any material indenture, contract, agreement, mortgage, deed of trust or
other instrument to which Trustee is a party or by which it or any of its
properties are bound.
(e) No Violation. The execution and delivery of this Agreement and
the Certificates, the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof by Trustee will not
conflict with or violate any Requirements of Law applicable to Trustee.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of Trustee, threatened against Trustee
before any court, regulatory body, administrative agency, or other tribunal
or governmental instrumentality (i) asserting the invalidity of this
Agreement, (ii) seeking any determination or ruling that, in the reasonable
judgment of Trustee, would materially and adversely affect the performance
by Trustee of its obligations under this Agreement, (iii) seeking any
determination or ruling that would materially and adversely affect the
validity or enforceability of this Agreement.
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(g) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental body
or official required in connection with the execution and delivery of this
Agreement and the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof by Trustee, have been
obtained.
(h) Trustee. Trustee is not an insider or Affiliate of Transferor.
(i) Binding Obligation; Valid Transfer and Assignment. This
Agreement constitutes a legal, valid and binding obligation of Trustee,
enforceable against Trustee in accordance with its terms, except (A) as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general and the rights of
creditors of national banking associations, and (B) as such enforceability
may be limited by general principles of equity (whether considered in a
suit at law or in equity).
SECTION 11.16 Maintenance of Office or Agency. 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 Trustee in respect of the Certificates and this Agreement may be
served. Trustee initially appoints the Corporate Trust Office as its office
for such purposes in New York. Trustee will give prompt written notice to
Servicer and to Holders in accordance with Section 13.5 (or in the case of
Holders of Bearer Certificates, in the manner provided for in the related
Supplement) of any change in the location of the Certificate Register or
any such office or agency.
ARTICLE XII TERMINATION
SECTION 12.1 Termination of Trust. (a) The respective obligations
and responsibilities of Transferor, Servicer and Trustee created hereby
(other than the obligation of Trustee to make payments to Holders as
hereafter set forth) shall terminate, except with respect to the duties
described in Section 11.5 and subsections 2.4(c) and 12.3(b), on the Trust
Termination Date; provided that the Trust shall not terminate on the date
specified in clause (a) of the definition of "Trust Termination Date" if
each of Servicer and Transferor notify Trustee in writing, not later than
five Business Days preceding such date, that they desire that the Trust not
terminate on such date, which notice (such notice, a "Trust Extension")
shall specify the date on which the Trust shall terminate (such date, the
"Extended Trust Termination Date"); provided that the Extended Trust
Termination Date shall in any event not be later than the day specified in
clause (c) of the definition of "Trust Termination Date." Servicer and
Transferor may, on any date following the Trust Extension, so long as no
Series of Certificates is outstanding, deliver a notice in writing to
Trustee changing the Extended Trust Termination Date.
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(b) All principal or interest with respect to any Series of
Investor Certificates shall be due and payable no later than the Series
Termination Date with respect to such Series. Unless otherwise provided in
a Supplement, in the event that the Investor Interest of any Series of
Certificates is greater than zero on its Series Termination Date (after
giving effect to all transfers, withdrawals, deposits and drawings to occur
on such date and the payment of principal to be made on such Series on such
date), Trustee will sell or cause to be sold, and pay the proceeds first,
to all Holders of such Series pro rata in final payment of all principal of
and accrued interest on such Series of Certificates, and second, as
provided in the related Supplement, an amount of Principal Receivables and
the related Finance Charge Receivables (or interests therein) up to 110% of
the Investor Interest of such Series at the close of business on such date
(but in no event in excess of the applicable Investor Percentages of
Principal Receivables and Finance Charge Receivables on such date). Trustee
shall notify each Credit Enhancement Provider of the proposed sale of such
Receivables and shall provide each Credit Enhancement Provider an
opportunity to bid on such Receivables. Transferor shall be permitted to
purchase such Receivables in such case and shall have a right of first
refusal with respect thereto. Any proceeds of such sale in excess of such
principal and interest paid shall be paid to Transferor. Upon such 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 12.3.
SECTION 12.2 Optional Purchase. (a) If so provided in any
Supplement, Transferor may, but shall not be obligated to, cause a final
distribution to be made in respect of the related Series of Certificates on
a Distribution Date specified in such Supplement by depositing into the
Distribution Account or the applicable Series Account, not later than the
Transfer Date preceding such Distribution Date, for application in
accordance with Section 12.3, the amount specified in such Supplement;
provided that if the short term deposits or long-term unsecured debt
obligations of Transferor are not rated at the time of such purchase of
Certificates at least P-3 or Baa-3, respectively, by ▇▇▇▇▇'▇, no such event
shall occur unless Transferor shall deliver an Opinion of Counsel
reasonably acceptable to Trustee that such deposit into the Distribution
Account as provided in the related Supplement would not constitute a
fraudulent conveyance of Transferor.
(b) The amount deposited pursuant to subsection 12.2(a) shall be
paid to the Investor Holders of the related Series pursuant to Section 12.3
on the related Distribution Date following the date of such deposit. All
Certificates of a Series which are purchased by Transferor pursuant to
subsection 12.2(a) shall be delivered by Transferor upon such purchase to,
and be canceled by, the Transfer Agent and Registrar and be disposed of in
a manner satisfactory to Trustee and Transferor. The Investor Interest of
each Series which is purchased by Transferor pursuant to subsection 12.2(a)
shall, for the purposes of the definition of "Transferor Interest,"
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be deemed to be equal to zero on the Distribution Date following the making
of the deposit, and the Transferor Interest shall thereupon be deemed to
have been increased by the Investor Interest of such Series.
SECTION 12.3 Final Payment with Respect to any Series. (a) Written
notice of any termination, specifying the Distribution Date upon which the
Investor Holders 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
Servicer to Trustee) by Trustee to Investor Holders of such Series mailed
not later than the fifth day of the month of such final distribution (or in
the manner provided by the Supplement relating to such Series) specifying
(i) the Distribution Date (which shall be the Distribution Date in the
month (x) in which the deposit is made pursuant to subsection 2.4(e),
9.2(b), or 12.2(a) of this Agreement or such other section as may be
specified in the related Supplement, or (y) in which the related Series
Termination Date occurs) 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), (ii) the
amount of any such final payment, and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made
only upon presentation and surrender of the Investor Certificates at the
office or offices therein specified. Servicer's notice to Trustee in
accordance with the preceding sentence shall be accompanied by an Officers'
Certificate setting forth the information specified in Article V of this
Agreement covering the period during the then current calendar year through
the date of such notice and setting forth the date of such final
distribution. 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 Holders.
(b) Notwithstanding the termination of the Trust pursuant to
subsection 12.1(a) or the occurrence of the Series Termination Date with
respect to any Series, all funds then on deposit in the Finance Charge
Account, the Excess Funding Account, the Distribution Account or any Series
Account applicable to the related Series shall continue to be held in trust
for the benefit of the Holders of the related Series and the Paying Agent
or Trustee shall pay such funds to the Holders of the related Series upon
surrender of their Certificates (which surrenders and payments, in the case
of Bearer Certificates, shall be made only outside the United States). In
the event that all of the Investor Holders of any Series shall not
surrender their Certificates for cancellation within six months after the
date specified in the above-mentioned written notice to Investor Holders,
Trustee shall give a second written notice (or, in the case of Bearer
Certificates, publication notice) to the remaining Investor Holders 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
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after the second notice with respect to a Series, all the Investor
Certificates of such Series shall not have been surrendered for
cancellation, Trustee may take appropriate steps or may appoint an agent to
take appropriate steps, to contact the remaining Investor Holders of such
Series concerning surrender of their Certificates, and the cost thereof
shall be paid out of the funds in the Distribution Account or any Series
Account held for the benefit of such Investor Holders. Trustee and the
Paying Agent shall pay to Transferor upon request any monies held by them
for the payment of principal or interest which remains unclaimed for two
years. After payment to Transferor, Investor Holders entitled to the money
must look to Transferor for payment as general creditors unless an
applicable abandoned property law designates another Person.
(c) All Certificates surrendered for payment of the final
distribution with respect to such Certificates and cancellation shall be
canceled by the Transfer Agent and Registrar and be disposed of in a manner
satisfactory to Trustee and Transferor.
SECTION 12.4 Termination Rights of Transferor. Upon the
termination of the Trust pursuant to Section 12.1, and after payment of all
amounts due hereunder on or prior to such termination, Trustee shall
execute a written reconveyance substantially in the form of Exhibit G
pursuant to which it shall reconvey to Transferor (without recourse,
representation or warranty) all right, title and interest of the Trust in
the Receivables, whether then existing or thereafter created, all moneys
due or to become due with respect to such Receivables (including all
accrued interest theretofore posted as Finance Charge Receivables and
Recoveries) and all proceeds of such Receivables and Insurance Proceeds
relating to such Receivables and Interchange (if any) allocable to the
Trust pursuant to any Supplement, and all proceeds thereof, except for
amounts held by Trustee pursuant to subsection 12.3(b). Trustee shall
execute and deliver such instruments of transfer and assignment, in each
case without recourse, as shall be reasonably requested by Transferor to
vest in Transferor all right, title and interest which the Trust had in the
Receivables.
SECTION 12.5 Defeasance. Notwithstanding anything to the contrary
in this Agreement:
(a) Transferor may at its option be discharged from its
obligations hereunder with respect to any Series or all outstanding Series
(in any such case, the "Defeased Series") on the date the applicable
conditions set forth in subsection 12.5(c) are satisfied (a "Defeasance");
provided, however, that the following rights, obligations, powers, duties
and immunities shall survive with respect to the Defeased Series until
otherwise terminated or discharged hereunder: (i) the rights of Holders of
Investor Certificates of the Defeased Series to receive, solely from the
trust fund provided for in subsection 12.5(c), payments in respect of
principal of and interest on such Investor Certificates when such payments
are due; (ii) the right of any Credit Enhancement Provider to the repayment
of any amount due to it under the applicable
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Credit Enhancement and Supplement, including interest thereon; (iii)
Transferor's obligations with respect to such Certificates under Sections
6.3 and 6.4; (iv) the rights, powers, trusts, duties and immunities of
Trustee, the Paying Agent and the Transfer Agent and Registrar hereunder;
and (v) this Section 12.5.
(b) Subject to subsection 12.5(c),Transferor at its option may
cause Collections allocated to the Defeased Series and available to
purchase Principal Receivables to be applied to purchase Permitted
Investments rather than Principal Receivables.
(c) The following shall be the conditions to Defeasance under
subsection 12.5(a): (i) Transferor irrevocably shall have deposited or
caused to be deposited with Trustee (such deposit to be made other than
from Transferor's funds), under the terms of an irrevocable trust agreement
in form and substance satisfactory to Trustee, as trust funds in trust for
making the payments described below, (A) Dollars in an amount, or (B)
Permitted Investments which through the scheduled payment of principal and
interest in respect thereof will provide, not later than the due date of
payment thereon, money in an amount, or (C) a combination thereof, in each
case sufficient to pay and discharge, and which shall be applied by Trustee
to pay and discharge, all remaining scheduled interest and principal
payments on all outstanding Investor Certificates of the Defeased Series on
the dates scheduled for such payments in this Agreement and the applicable
Supplements and all amounts owing to the Credit Enhancement Providers, if
any, with respect to the Defeased Series; and (ii) prior to any exercise of
its right pursuant to this Section 12.5 with respect to a Defeased Series
to substitute money or Permitted Investments for Receivables, (x)
Transferor shall have delivered to Trustee a Tax Opinion with respect to
such deposit and termination of obligations and an Opinion of Counsel to
the effect that such deposit and termination of obligations will not result
in the Trust being required to register as an "investment company" within
the meaning of the Investment Company Act and (y) Transferor shall have
delivered to Trustee and each Credit Enhancement Provider an Officer's
Certificate stating that Transferor reasonably believes that such deposit
and termination of obligations will not, based on the facts known to such
officer at the time of such certification, then or thereafter cause a Pay
Out Event with respect to any Series.
ARTICLE XIII MISCELLANEOUS PROVISIONS
SECTION 13.1 Amendment. (a) This Agreement or any Supplement may
be amended in writing from time to time by Servicer, Transferor and
Trustee, without the consent of any of Holders; provided that such action
shall not, in the reasonable belief of Transferor, as evidenced by an
Officer's Certificate from Transferor addressed and delivered to Trustee,
adversely affect in any material respect the interests of any Investor
Holders; provided, further, that each Rating Agency shall have notified
Transferor, Servicer and Trustee in writing that the Rating Agency
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Condition has been satisfied with respect to any outstanding Series or
Class to which it is a Rating Agency. This Agreement or any Supplement may
be amended in writing by Servicer, Transferor and Trustee, without the
consent of any of the Holders to (i) provide for additional Credit
Enhancement or substitute Credit Enhancement with respect to a Series (so
long as the amount of such substitute Credit Enhancement, unless otherwise
provided in any related Supplement, is equal to the original Credit
Enhancement for such Series), (ii) add one or more Participations to the
Trust, (iii) to effect the designation of any additional Transferor or to
provide for the addition to the Trust of Participations, (iv) cure any
ambiguity or correct or supplement any provision contained Agreement or
Series Supplement which may be defective or inconsistent with any other
provisions thereof, (v) enable all or a portion of the Trust 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" under the Internal
Revenue Code (and, in connection with any such election, to modify or
eliminate existing provisions relating to the intended Federal income tax
treatment of the Certificates and the Trust), (vi) enable the Trust to
qualify as a partnership for purposes of any state tax laws (including by
amending Section 9.2 to read in its entirety substantially as set forth on
Exhibit H), and (vii) enable Receivables transferred to the Trust to be
derecognized by Transferor (or applicable additional Transferor) under
applicable accounting principles and the Trust to not be treated as a
member of Transferor's (or such related additional Transferor's)
consolidated group under applicable accounting principles.
(b) This Agreement or any Supplement may also be amended in
writing from time to time by Servicer, Transferor and Trustee with the
consent of the Holders of Investor Certificates evidencing Undivided
Interests aggregating not less than 66- 2/3% of the Investor Interest of
each outstanding Series or Class adversely affected by such amendment for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or any Supplement or
modifying in any manner the rights of Investor Holders of any Series or
Class then issued and outstanding; provided 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 Certificates of
such Series without the consent of each Investor Holder of such Series,
(ii) change the definition of or the manner of calculating the Investor
Interest or the Investor Percentage of such Series without the consent of
each Investor Holder of such Series, or (iii) reduce the aforesaid
percentage required to consent to any such amendment, without the consent
of each Investor Holder of all Series adversely affected. Trustee may, but
shall not be obligated to, enter into any such amendment which affects
Trustee's rights, duties or immunities under this Agreement or otherwise.
(c) Notwithstanding anything in this Section 13.1 to the contrary,
the Supplement with respect to any Series may be amended on the items and
in accordance with the procedures provided in such Supplement.
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(d) Promptly after the execution of any such amendment (other than
an amendment pursuant to subsection (a)), Trustee shall furnish
notification of the substance of such amendment to each Investor Holder of
each Series adversely affected and to each Rating Agency providing a rating
for such Series.
(e) It shall not be necessary for the consent of Investor Holders
under this Section 13.1 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Investor Holders shall be
subject to such reasonable requirements as Trustee may prescribe.
(f) Any Supplement executed and delivered pursuant to Section 6.9
and any amendments regarding the addition to or removal of Receivables from
the Trust as provided in Section 2.6 or 2.7, executed in accordance with
the provisions hereof, shall not be considered amendments to this Agreement
for the purpose of subsections 13.1(a) and (b).
(g) In connection with any amendment, Trustee may request an
Opinion of Counsel from Transferor or Servicer to the effect that the
amendment complies with all requirements of this Agreement.
SECTION 13.2 Protection of Right, Title and Interest to Trust. (a)
Servicer shall cause this Agreement, all amendments hereto and/or all
financing statements and continuation statements and any other necessary
documents covering the Holders' and Trustee's right, title and interest to
the Trust to be promptly recorded, registered, and filed, and at all times
to be kept recorded, registered, and filed, all in such manner and in such
places as may be required by law fully to preserve and protect the right,
title and, interest of the Holders or Trustee, as the case may be,
hereunder to all property comprising the Trust. Servicer shall deliver to
Trustee file- stamped copies of, or filing receipts for, any document
recorded, registered or filed as provided above, as soon as available
following such recording, registration or filing. Transferor shall
cooperate fully with 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 13.2(a).
(b) Within 30 days after Transferor makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with subsection (a) seriously
misleading within the meaning of Section 9-402(7) of the UCC as in effect
in the State of Louisiana, Transferor shall give Trustee notice of any such
change and shall file such financing statements or amendments as may be
necessary to continue the perfection of the Trust's security interest in
the Receivables and the proceeds thereof.
93
(c) Each of Transferor and Servicer will give Trustee prompt
written notice of any relocation of any office from which it services
Receivables or keeps records concerning the Receivables or of its principal
executive office and whether, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any amendment
of any previously filed financing or continuation statement or of any new
financing statement and shall file such financing statements or amendments
as may be necessary to continue the perfection of the Trust's security
interest in the Receivables and the proceeds thereof. Each of Transferor
and Servicer will at all times maintain each office from which it services
Receivables and its principal executive office within the United States of
America.
(d) The Servicer will deliver to Trustee: (i) upon each date that
any Additional Accounts are to be included in the Accounts pursuant to
subsection 2.6(a) or (b), an Opinion of Counsel substantially in the form
of Exhibit D; and (ii) on or before March 31 of each year, beginning with
March 31, 1998, an Opinion of Counsel, substantially in the form of Exhibit
E.
(e) Upon not less than 5 Business Days' written notice from
Transferor to Trustee and Servicer that Transferor wishes to dispose of any
receivables arising from any of its VISA, MasterCard, Private Label or
other revolving credit accounts which are not Accounts but which are
included in the Bank Portfolio, Trustee shall execute and deliver such
instruments of release, in each case without recourse, representation or
warranty, as shall be prepared by and as are reasonably requested by
Transferor to release of record any purported right, title or interest of
the Trust in and to such receivables, all monies due or to become due with
respect to such receivables and all proceeds of such receivables; provided
that Transferor shall deliver to Trustee and Servicer an Officer's
Certificate dated the date of such release, certifying that no property
described in such release constitutes Trust Assets.
SECTION 13.3 Limitation on Rights of Holders. (a) The death or
incapacity of any Holder shall not operate to terminate this Agreement or
the Trust, nor shall such death or incapacity entitle such Holder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(b) No Holder shall have any right to vote (except with respect to
the Investor Holders as provided in Section 13.1 hereof) or in any manner
otherwise control the operation and management of the Trust, or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Certificates, be construed so as to
constitute the Holders from time to time as partners or members of an
association; nor shall any Holder be under any liability to any third
person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
94
(c) No Holder shall have any right by virtue of any provisions of
this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such Holder
previously shall have given written notice to Trustee, and unless the
Holders of Certificates evidencing Undivided Interests aggregating more
than 50% of the Investor Interest of any Series which may be adversely
affected but for the institution of such suit, action or proceeding, shall
have made written request upon Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to
Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and Trustee,
for 60 days after its receipt of such 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 Holder with every other Holder and Trustee, that no one
or more Holders 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 Holders of any other of the
Certificates, or to obtain or seek to obtain priority over or preference to
any other such Holder, or to enforce any right under this Agreement, except
in the manner herein provided and for the equal, ratable and common benefit
of all Holders. For the protection and enforcement of the provisions of
this Section 13.3, each and every Holder and Trustee shall be entitled to
such relief as can be given either at law or in equity.
SECTION 13.4 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 13.5 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given
if personally delivered at, sent by facsimile or courier or mailed by
registered mail, return receipt requested, to (a) in the case of Transferor
and Servicer, First National Bank of Commerce, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Secretary, (b) in the case of Trustee, the Corporate Trust Office, (c) in
the case of the Credit Enhancement Provider for a particular Series, the
address or facsimile number, if any, specified in the Supplement relating
to such Series, and (d) in the case of the Rating Agency for a particular
Series, the address or facsimile number, if any, specified in the
Supplement relating to such Series; or, as to each party, such other
address or facsimile number as shall be designated by such party in a
written notice to each other party. Unless otherwise provided with respect
to any Series in the related Supplement any notice required or permitted to
be mailed to a Holder shall be given by first class mail, postage prepaid,
at the address of such Holder as shown in the Certificate Register, or with
respect to any notice required or permitted to be made to the Holders of
Bearer Certificates, by
95
publication in the manner provided in the related Supplement. If and so
long as any Series or Class is listed on the Luxembourg Stock Exchange and
such Exchange shall so require, any notice to Investor Holders shall be
published in an authorized newspaper of general circulation in Luxembourg
within the time period prescribed in this Agreement. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed
to have been duly given, whether or not the Holder receives such notice.
SECTION 13.6 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 Holders thereof.
SECTION 13.7 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 8.2 and 8.5, this
Agreement may not be assigned by Servicer without the prior consent of
Holders of Investor Certificates evidencing Undivided Interests aggregating
not less than 66-2/3% of the Investor Interest of each Series on a
Series-by-Series basis, and satisfaction of the Rating Agency Condition.
SECTION 13.8 Certificates Non-Assessable and Fully Paid. It is the
intention of the parties to this Agreement that the Holders shall not be
personally liable for obligations of the Trust, that the Undivided
Interests represented by the Certificates shall be non-assessable for any
losses or expenses of the Trust or for any reason whatsoever, and that
Certificates upon authentication thereof by Trustee pursuant to Sections
2.1 and 6.2 are and shall be deemed fully paid.
SECTION 13.9 Further Assurances. Transferor and Servicer agree to
do and perform, from time to time, any and all acts and to execute any and
all further instruments required or reasonably requested by Trustee more
fully to effect the purposes of this Agreement, including the execution of
any financing statements or continuation statements relating to the
Receivables for filing under the provisions of the UCC of any applicable
jurisdiction.
SECTION 13.10 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of Trustee, any Credit
Enhancement Provider or the Investor Holders, 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,
96
powers and privileges herein provided are cumulative and not exhaustive of
any rights, remedies, powers and privileges provided by law.
SECTION 13.11 Counterparts. This Agreement may be executed in two
or more counterparts (and by different parties on separate counterparts),
each of which shall be an original, but all of which together shall
constitute one and the same instrument.
SECTION 13.12 Third-Party Beneficiaries. This Agreement will inure
to the benefit of and be binding upon the parties hereto, the Holders and,
to the extent provided in the related Supplement, to the Credit Enhancement
Provider named therein, and their respective successors and permitted
assigns. Except as otherwise provided in this Article XIII, no other Person
will have any right or obligation hereunder.
SECTION 13.13 Actions by Holders. (a) Wherever in this Agreement a
provision is made that an action may be taken or a notice, demand or
instruction given by Investor Holders, such action, notice or instruction
may be taken or given by any Investor Holder, unless such provision
requires a specific percentage of Investor Holders.
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other act by a Holder shall bind such Holder 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 Trustee or Servicer in reliance
thereon, whether or not notation of such action is made upon such
Certificate.
SECTION 13.14 Rule 144A Information. For so long as any of the
Investor Certificates of any Series or any Class are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act,
each of Transferor, Servicer, Trustee and the Credit Enhancement Provider
for such Series agree to cooperate with each other to provide to any
Investor Holders of such Series or Class and to any prospective purchaser
of Certificates designated by such an Investor Holder upon the request of
such Investor Holder or prospective purchaser, any information required to
be provided to such holder or prospective purchaser to satisfy the
condition set forth in Rule 144A(d)(4) under the Securities Act.
SECTION 13.15 Merger and Integration. Except as specifically
stated otherwise herein, this Agreement sets forth the entire understanding
of the parties relating to the subject matter hereof, and all prior
understandings, written or oral, are superseded by this Agreement. This
Agreement may not be modified, amended, waived or supplemented except as
provided herein.
97
SECTION 13.16 Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation
of any provision hereof.
98
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused
this Agreement to be duly executed by their respective officers as of the
day and year first above written.
FIRST NATIONAL BANK OF COMMERCE,
Transferor and Servicer
By:_________________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief ALCO Officer
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
By:_________________________________________
Name: ▇. ▇▇▇▇▇▇▇▇
Title: Trust Officer
99
EXHIBIT A
FORM OF ASSIGNMENT OF RECEIVABLES
IN ADDITIONAL ACCOUNTS
-----------------------
(As required by Section 2.6 of
the Pooling and Servicing Agreement)
ASSIGNMENT No. _______ OF RECEIVABLES IN ADDITIONAL
ACCOUNTS dated as of _____________, ___** by and between FIRST NATIONAL
BANK OF COMMERCE, a national banking association, as Transferor
("Transferor") and Servicer ("Servicer"), and THE FIRST NATIONAL BANK OF
CHICAGO, a national banking association, as Trustee ("Trustee"), pursuant
to the Pooling and Servicing Agreement referred to below.
WITNESSETH:
WHEREAS, Transferor, Servicer and Trustee are parties to
the Pooling and Servicing Agreement dated as of August 1, 1997 (as may be
amended and supplemented from time to time, the "Agreement");
WHEREAS, pursuant to the Agreement, Transferor wishes to
designate Additional Accounts to be included as Accounts and to convey the
Receivables of such Additional Accounts, whether now existing or hereafter
created, to the Trust as part of the corpus of the Trust (as each such
terms are defined in the Agreement); and
WHEREAS, Trustee is willing to accept such designation and
conveyance subject to the terms and conditions hereof;
NOW, THEREFORE, Transferor, Servicer and Trustee hereby
agree as follows:
1. Defined Terms. All capitalized terms used herein shall
have the meanings ascribed to them in the Agreement unless otherwise
defined herein.
"Addition Date" means, with respect to the Additional
Accounts designated hereby, ________, ____.
-------------------------
** To be dated as of the applicable Addition Date.
A-1
"Addition Cut Off Date" means, with respect to the
Additional Accounts designated hereby, ________, ____.
2. Designation of Additional Accounts. Within ten
Business Days after the Addition Date, Transferor will deliver to Trustee
an Account Schedule identifying all such Additional Accounts and specifying
for each such Account, as of the Addition Cut Off Date, its account number,
the aggregate amount outstanding in such Account and the aggregate amount
of Principal Receivables outstanding in such Account, which Account
Schedule shall be immediately incorporated into and made a part of this
Assignment and the Agreement.
3. Conveyance of Receivables. Transferor does hereby
transfer, assign, set over and otherwise convey to Trustee, on behalf of
the Trust, for the benefit of the Holders, without recourse, all its right,
title and interest in, to and under the Receivables of such Additional
Accounts existing at the close of business on the Addition Date and
thereafter created and arising in connection with the Additional Accounts,
all monies due or to become due with respect to such Receivables (including
all Finance Charge Receivables and Recoveries), all proceeds of such
Receivables and Insurance Proceeds relating to such Receivables, and all
proceeds thereof. The foregoing does not constitute and is not intended to
result in the creation or assumption by the Trust, Trustee, any Investor
Holder or any Credit Enhancement Provider of any obligation of Servicer,
Transferor or any other Person in connection with the Accounts, the
Receivables or under any agreement or instrument relating thereto,
including any obligation to Obligors, merchant banks, merchants clearance
systems or insurers.
Transferor agrees to record and file, at its own expense,
financing statements (and continuation statements when applicable) with
respect to the Receivables in the Additional Accounts, meeting the
requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect, and maintain perfection of, the
assignment of such Receivables to the Trust, and to deliver a file- stamped
copy of each such financing statement or other evidence of such filing to
Trustee on or prior to the Addition Date. The foregoing transfer,
assignment, set- over and conveyance to the Trust shall be made to Trustee,
on behalf of the Trust, and each reference in this Assignment to such
transfer, assignment, set-over and conveyance shall be construed
accordingly. Trustee shall be under no obligation whatsoever to file such
financing or continuation statements or to make any other filing under the
UCC in connection with such assignment.
In connection with such assignment, Transferor has
indicated in its computer files that Receivables created in connection with
the Additional Accounts and designated hereby have been transferred to
Trustee, on behalf of the Trust, for the benefit of the Holders.
A-2
The parties intend that if, and to the extent that, such
assignment is not deemed to be a sale, Transferor shall be deemed hereunder
to have granted to Trustee, on behalf of the Trust, for the benefit of the
Investor Holders, a first priority perfected security interest in all of
Transferor's right, title and interest in, to and under the Receivables now
existing and hereafter created and arising in connection with the
Additional Accounts, all monies due or to become due with respect to such
Receivables (including all Finance Charge Receivables and Recoveries) and
all proceeds thereof, that this Assignment shall constitute such a security
agreement under applicable law, and that the Transferor Interest shall be
deemed to represent Transferor's equity in the collateral granted.
4. Acceptance by Trustee. Trustee hereby acknowledges its
acceptance on behalf of the Trust for the benefit of the Holders of all
right, title and interest to the property, now existing and hereafter
created, conveyed to the Trust pursuant to Section 3 of this Assignment,
and declares that it shall maintain such right, title and interest, upon
the trust set forth in the Agreement for the benefit of all Holders.
Trustee further acknowledges that, within five Business Days after the
execution and delivery of this Assignment, Transferor will deliver to
Trustee the Account Schedule or printed list described in Section 2 of this
Assignment.
5. Representations and Warranties of Transferor.
Transferor hereby represents and warrants to Trustee, on behalf of the
Trust, as of the date of this Assignment and as of the Addition Date that:
(a) Legal, Valid and Binding Obligation. This
Assignment constitutes a legal, valid and binding
obligation of Transferor enforceable against Transferor
in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect affecting the enforcement
of creditors' rights in general and except as such
enforceability may be limited by general principles of
equity (whether considered in a suit at law or in
equity);
(b) Eligibility of Accounts and Receivables.
Each Additional Account designated hereby is an Eligible
Account, and each Receivable in such Additional Account
is an Eligible Receivable;
(c) Selection Procedures. No selection
procedures believed by Transferor to be materially
adverse to the interests of the Investor Holders were
utilized in selecting the Additional Accounts from the
Bank Portfolio;
(d) Insolvency. As of the Addition Date,
Transferor is not insolvent.
A-3
(e) Pay Out Event. Transferor reasonably
believes that the transfer of the Receivables arising in
the Additional Accounts will not cause a Pay Out Event to
occur with respect to any Series;
(f) Security Interest. This Assignment
constitutes either (x) a valid transfer and assignment to
Trustee, on behalf of the Trust, of all right, title and
interest of Transferor in and to the Receivables existing
at the close of business on the Addition Date and
thereafter created in the Additional Accounts, and all
monies due or to become due with respect to such
Receivables (including all Finance Charge Receivables and
Recoveries), all proceeds of such Receivables and
Insurance Proceeds relating to such Receivables and all
proceeds thereof, all of which will be held by Trustee on
behalf of the Trust, free and clear of any Lien of any
Person claiming through or under Transferor or any of its
Affiliates, except for (i) Liens permitted under
subsection 2.5(b), (ii) the interest of Transferor and
(iii) Transferor's right to receive interest accruing on,
and investment earnings in respect of, the Finance Charge
Account and the Excess Funding Account and any Series
Account as provided in the Agreement and any related
Supplement or (y) a grant of a security interest in such
property to Trustee, for the benefit of the Investor
Holders, which is enforceable with respect to then
existing Receivables in the Additional Accounts, the
proceeds thereof and Insurance Proceeds and Recoveries
relating thereto upon the conveyance of such Receivables
to the Trust, and which will be enforceable with respect
to the Receivables thereafter created in respect of
Additional Accounts conveyed on the Addition Date, the
proceeds thereof and Insurance Proceeds and Recoveries
relating thereto upon such creation; and (z) if the
Assignment constitutes the grant of a security interest
to Trustee in such property, upon the filing of a
financing statement as described in Section 2.1 of the
Agreement with respect to the Additional Accounts and in
the case of the Receivables thereafter created in the
Additional Accounts and the proceeds thereof, and
Insurance Proceeds and Recoveries relating thereto, upon
such creation, Trustee shall have a first priority
perfected security interest in such property (subject to
Section 9-306 of the UCC as in effect in the State of
Louisiana), except for Liens permitted under subsection
2.5(b) of the Agreement;
(g) No Conflict. The execution and delivery by
Transferor of this Assignment, the performance of the
transactions contemplated by this Assignment and the
fulfillment of the terms hereof applicable to Transferor,
will not conflict with or violate any Requirements of Law
applicable to Transferor or conflict with, result in any
breach of any
A-4
of the material terms and provisions of, or constitute
(with or without notice or lapse of time or both) a
material default under, any indenture, contract,
agreement, mortgage, deed of trust or other instrument to
which Transferor is a party or by which it or its
properties are bound;
(h) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of
Transferor, threatened against Transferor before any
court, regulatory body, administrative agency or other
tribunal or governmental instrumentality (i) asserting
the invalidity of this Assignment, (ii) seeking to
prevent the consummation of any of the transactions
contemplated by this Assignment, (iii) seeking any
determination or ruling that, in the reasonable judgment
of Transferor, would materi ally and adversely affect the
performance by Transferor of its obligations under this
Assignment, (iv) seeking any determination or ruling that
would materially and adversely affect the validity or
enforceability of this Assignment or (v) seeking to
affect adversely the income tax attributes of the Trust
under the Federal, or applicable state income or
franchise tax systems; and
(i) All Consents. All authorizations, consents,
orders or approvals or other actions of any Person or of
any court or other governmental authority required to be
obtained by Transferor in connection with the execution
and delivery of this Assignment by Transferor and the
performance of the transactions contemplated by this
Assignment by Transferor, have been obtained.
6. Ratification of Agreement. As supplemented by this
Assignment, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Assignment shall be read, taken and
construed as one and the same instrument.
7. Counterparts. This Assignment may be executed in two
or more counterparts, and by different parties on separate counterparts,
each of which shall be an original, but all of which shall constitute one
and the same instrument.
8. GOVERNING LAW. THIS ASSIGNMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
A-5
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have
caused this Assignment to be duly executed by their respective officers as
of the day and year first above written.
FIRST NATIONAL BANK OF COMMERCE,
Transferor and Servicer
By:____________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
By:_____________________________________
Name:
Title:
A-6
EXHIBIT B
FORM OF MONTHLY SERVICER'S CERTIFICATE
FIRST NATIONAL BANK OF COMMERCE
--------------------------
First NBC Credit Card Master Trust, Series ______
--------------------------
For the _____________ Determination Date
For the ___________ Monthly Period
The undersigned, a duly authorized representative of
First National Bank of Commerce, as Servicer pursuant to the Pooling and
Servicing Agreement dated as of August 1, 1997 (the "Pooling and Servicing
Agreement") by and between First National Bank of Commerce and The First
National Bank of Chicago, as Trustee, does hereby certify as follows:
1. Capitalized terms used in this Certificate have their
respective meanings set forth in the Pooling and Servicing Agreement;
provided, that the "preceding Monthly Period" shall mean the Monthly Period
immediately preceding the calendar month in which this Certificate is
delivered. This Certificate is delivered pursuant to subsection 3.4(b) of
the Pooling and Servicing Agreement. References herein to certain sections
and subsections are references to the respective sections and subsections
of the Pooling and Servicing Agreement, as amended by the applicable Series
Supplement.
2. First National Bank of Commerce is Servicer under the
Pooling and Servicing Agreement.
3. The undersigned is a Servicing Officer.
4. The date of this Certificate is _____________, 199__
which is a Determination Date under the Pooling and Servicing Agreement.
5. The aggregate amount of Collections processed during
the preceding Monthly Period (equal to 5(a) plus 5(b)) was equal to
$__________.
(a) The aggregate amount of Collections of
Finance Charge Receivables collected during the preceding
Monthly Period (the "Collections of Finance Charge
Receivables") was equal to
$___________.
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(b) The aggregate amount of Collections of
Principal Receivables collected during the preceding
Monthly Period (the "Collections of Principal
Receivables") was equal to $________.
6. The aggregate amount of Receivables as of the end of
the last day of the preceding Monthly Period was equal to $__________.
7. Attached hereto is an authentic copy of the statements
required to be delivered by the Servicer on the date of this Certificate to
the Paying Agent pursuant to Article V.
8. To the knowledge of the undersigned, there are no
Liens on any Receivables in the Trust except as described below:
[If applicable, insert "None".]
9. The amount, if any, by which the sum of the balance of
the Excess Funding Account and the aggregate Principal Receivables exceeds
the Minimum Aggregate Principal Receivables required to be maintained
pursuant to the Pooling and Servicing Agreement, is equal to $_________.
10. The amount, if any, of the drawing request required
to be made by Trustee on the Servicer Letter of Credit pursuant to
subsection 4.3(a) of the Pooling and Servicing Agreement on the related
Transfer Date is equal to
$____________.
IN WITNESS WHEREOF, the undersigned has duly executed and
delivered this certificate this _____ day of ____________, _____.
FIRST NATIONAL BANK OF
COMMERCE, Servicer
By:________________________________
Name:
Title:
B-2
Schedule __ to Monthly
Servicer's Certificate
FIRST NATIONAL BANK OF COMMERCE
--------------------------
First NBC Credit Card Master Trust, Series ______
--------------------------
For the _____________ Determination Date
For the ___________ Monthly Period
[TO COME]
1
EXHIBIT C
FORM OF ANNUAL SERVICER'S CERTIFICATE
-------------------------------------
(To be delivered on or before each
March 31 beginning with March 31, 1998,
pursuant to Section 3.5 of the Pooling and
Servicing Agreement referred to below)
FIRST NATIONAL BANK OF COMMERCE
FIRST NBC CREDIT CARD MASTER TRUST
The undersigned, a duly authorized representative of First
National Bank of Commerce, as Servicer ("First NBC"), pursuant to the
Pooling and Servicing Agreement dated as of August 1, 1997 (as may be
amended and supplemented from time to time, the "Agreement"), among First
NBC, as Transferor and Servicer, and The First National Bank of Chicago, as
Trustee, does hereby certify that:
1. First NBC is, as of the date hereof, Servicer under the
Agreement. Capitalized terms used in this Certificate have their respective
meanings as set forth in the Agreement.
2. The undersigned is a Servicing Officer who is duly authorized
pursuant to the Agreement to execute and deliver this Certificate to
Trustee.
3. A review of the activities of Servicer during the fiscal year
ended __________, ____, and of its performance under the Agreement was
conducted under my supervision.
4. Based on such review, Servicer has, to the best of my
knowledge, performed in all material respects its obligations under the
Agreement throughout such year and no default in the performance of such
obligations has occurred or is continuing except as set forth in paragraph
5.
5. The following is a description of each default in the
performance of Servicer's obligations under the provisions of the Agreement
known to me to have been made by Servicer during the fiscal year ended
___________, _____, which sets forth in detail (i) the nature of each such
default, (ii) the action taken by Servicer, if
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any, to remedy each such default and (iii) the current status of each such
default: [if applicable, insert "None."]
IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate this ______ day of ____________, 19___.
FIRST NATIONAL BANK OF
COMMERCE, Servicer
By ________________________
Name:
Title:
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EXHIBIT D
FORM OF OPINION OF COUNSEL WITH RESPECT
TO ADDITION OF ADDITIONAL ACCOUNTS
----------------------------------
(Provisions to be included in
Opinion of Counsel to be
delivered pursuant to
Section 2.6(d)(vi) of the
Pooling and Servicing Agreement)
The opinions set forth below may be subject to appropriate
qualifications, assumptions, limitations and exceptions.
1. The Receivables arising in such Additional Accounts constitute
accounts, general intangibles or chattel paper.
2. The Pooling and Servicing Agreement creates either a valid sale
of the Receivables in such Additional Accounts and the proceeds thereof, or
creates, in favor of Trustee, on behalf of the Trust, for the benefit of
the Investor Holders, a security interest in Transferor's rights in the
Receivables in such Additional Accounts and the proceeds thereof.
3. The security interest described in paragraph 2 is perfected and
of first priority under the UCC.
4. No further filings or actions are required under the UCC prior
to ______________, _______ in order to maintain the perfection and priority
of the security interest created by the Pooling and Servicing Agreement in
favor of Trustee, on behalf of the Trust, in Transferor's rights in the
Receivables in such Additional Accounts and the proceeds thereof.
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EXHIBIT E
FORM OF ANNUAL OPINION OF COUNSEL
---------------------------------
The opinion set forth below, which is to be delivered pursuant to
subsection 13.2(d)(ii) of the Pooling and Servicing Agreement, may be
subject to certain qualifications, assumptions, limitations and exceptions
taken or made in the opinion of counsel delivered on the Initial Closing
Date with respect to similar matters.
No filing or other action, other than such filing or action
described in such opinion, is necessary from the date of such opinion
through March 31 of the following year to continue the perfected status of
the interest of Trustee, on behalf of the Trust, in the collateral
described in the financing statements referred to in such opinion.
E-1
EXHIBIT F
FORM OF REASSIGNMENT OF RECEIVABLES
(As required by Section 2.7 of
the Pooling and Servicing Agreement)
REASSIGNMENT No. _______ OF RECEIVABLES dated as of _________,
____* by and among FIRST NATIONAL BANK OF COMMERCE, a national banking
association, as Transferor ("Transferor") and Servicer ("Servicer"), and
THE FIRST NATIONAL BANK OF CHICAGO, a national banking association
("Trustee"), pursuant to the Pooling and Servicing Agreement referred to
below.
WITNESSETH:
WHEREAS, Transferor, Servicer and Trustee are parties to the
Pooling and Servicing Agreement dated as of August 1, 1997 (as may be
amended and supplemented from time to time, the "Agreement");
WHEREAS, pursuant to the Agreement, Transferor wishes to remove
from the Trust all Receivables in certain designated Accounts (the "Removed
Accounts") and to cause Trustee to reconvey the Receivables of such Removed
Accounts, whether now existing or hereafter created, from the Trust to
Transferor; and
WHEREAS, Trustee is willing to accept such designation and to
reconvey the Receivables in the Removed Accounts subject to the terms and
conditions hereof;
NOW, THEREFORE, Transferor, Servicer and Trustee hereby agree as
follows:
1. Defined Terms. All terms defined in the Agreement and used
herein shall have such defined meanings when used herein, unless otherwise
defined herein.
"Removal Date" means, with respect to the Removed Accounts
designated hereby, ____________, _____.
"Removal Notice Date" means, with respect to the Removed Accounts,
-----------, ---.
2. Designation of Removed Accounts. On or before the date that is ten
Business Days after the Removal Date, Transferor will deliver to Trustee a
computer
----------------------
* To be dated as of the Removal Date.
F-1
file or microfiche list containing an accurate list of all Removed Accounts
identified by account number and the aggregate amount of the Receivables in
such Removed Accounts as of the Removal Date, which computer file or
microfiche list shall as of the Removal Date modify and amend and be made
part of the Agreement.
3. Conveyance of Receivables. (a) Trustee does hereby transfer,
assign, set over and otherwise convey, without recourse, to Transferor, on
and after the Removal Date, all right, title and interest of Trustee, on
behalf of the Trust, in, to and under the Receivables existing at the close
of business on the Removal Date and thereafter created from time to time in
the Removed Accounts designated hereby, all monies due or to become due
with respect to such Receivables (including all Finance Charge Receivables
and Recoveries), all proceeds of such Receivables and Insurance Proceeds
relating to such Receivables, and all proceeds thereof.
(b) In connection with such transfer, Trustee agrees to execute
and deliver to Transferor on or prior to the date this Reassignment is
delivered, applicable termination statements with respect to the
Receivables existing at the close of business on the Removal Date and
thereafter created from time to time in the Removed Accounts reassigned
hereby and the proceeds thereof evidencing the release by the Trust of its
interest in the Receivables in the Removed Accounts, and meeting the
requirements of applicable state law, in such manner and such jurisdictions
as are necessary to terminate such interest.
4. Representations and Warranties of Transferor. Transferor hereby
represents and warrants to Trustee, on behalf of the Trust, as of the
Removal Date:
(a) Legal, Valid and Binding Obligation. This
Reassignment constitutes a legal, valid and binding obligation of
Transferor enforceable against Transferor, in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement
of creditors' rights in general and except as such enforceability
may be limited by general principles of equity (whether considered
in a suit at law or in equity);
(b) Pay Out Event, Minimum Transferor Interest, Minimum
Aggregate Principal Receivables, Series Payments. Transferor
reasonably believes that the removal of the Receivables in the
Removed Accounts will not (A) cause a Pay Out Event to occur with
respect to any Series (provided that for purposes of this
subsection 4(b)(A), the Receivables in the Removed Accounts shall
be considered to have been removed as of the Removal Date), (B)
cause the Transferor Interest as a percentage of the aggregate
amount of Principal Receivables to be less than the Minimum
Transferor Interest, (C) cause the aggregate amount of Principal
Receivables to be less than the
F-2
Minimum Aggregate Principal Receivables, or (D) result in the
failure to make any payment specified in the related Supplement
with respect to any Series;
(c) Selection Procedure. No selection procedures believed
by Transferor to be materially adverse to the interests of the
Holders of any Series as of the Removal Date were utilized in
selecting the Removed Accounts to be removed from the Trust; and
(d) Rating Agency Notice; Approval. Each Rating Agency
has received notice, on or before the tenth Business Day prior to
the Removal Date, of the proposed removal of the Receivables from
the Removed Accounts, and the Rating Agency Condition has been
satisfied with respect to the removal
5. Ratification of Agreement. As supplemented by this
Reassignment, the Agreement is in all respects ratified and confirmed and
the Agreement as so supplemented by this Reassignment shall be read, taken
and construed as one and the same instrument.
6. Counterparts. This Reassignment may be executed in two or more
counterparts, and by different parties on separate counterparts, each of
which shall be an original, but all of which shall constitute one and the
same instrument.
7. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
F-3
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused
this Reassignment to be duly executed by their respective officers as of
the day and year first above written.
FIRST NATIONAL BANK OF COMMERCE,
Transferor and Servicer
By:_________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
By:_________________________________
Name:
Title:
F-4
EXHIBIT G
FORM OF RECONVEYANCE OF RECEIVABLES
-----------------------------------
RECONVEYANCE of RECEIVABLES, dated as of __________ __, 19__, by
and between FIRST NATIONAL BANK OF COMMERCE, a national banking association
(the "Transferor") and THE FIRST NATIONAL BANK OF CHICAGO, a national
banking association (the "Trustee") pursuant to the Pooling and Servicing
Agreement referred to below.
W I T N E S S E T H:
WHEREAS, Transferor and Trustee are parties to the Pooling and
Servicing Agreement dated as of August 1, 1997 (hereinafter as such
agreement may have been, or may from time to time be, amended, supplemented
or otherwise modified, the "Pooling and Servicing Agreement") by and among
First National Bank of Commerce, as Transferor and Servicer, and Trustee;
WHEREAS, pursuant to the Pooling and Servicing Agreement,
Transferor wishes to cause Trustee to reconvey all of the Receivables and
proceeds thereof, whether now existing or hereafter created, from the Trust
to Transferor pursuant to the terms of Section 12.4 of the Pooling and
Servicing Agreement upon termination of the Trust pursuant to Section 12.1
of the Pooling and Servicing Agreement (as each such term is defined in the
Pooling and Servicing Agreement);
WHEREAS, Trustee is willing to reconvey the Receivables subject to the
terms and conditions hereof;
NOW THEREFORE, Transferor and Trustee hereby agree as follows:
1. Defined Terms. All terms defined in the Pooling and Servicing
Agreement and used herein shall have such defined meanings when used
herein, unless otherwise defined herein.
"Reconveyance Date" shall mean __________ __, 19__.
2. Return of Lists of Accounts. Trustee shall deliver to
Transferor not later than three Business Days after the Reconveyance Date,
each and every computer file or microfiche list of Accounts delivered to
Trustee pursuant to the terms of the Pooling and Servicing Agreement.
G-1
3. Conveyance of Receivables. (a) Trustee does hereby reconvey to
Transferor, without recourse, representation or warranty, on and after the
Reconveyance Date, all right, title and interest of the Trust in and to
each and every Receivable now existing and hereafter created in the
Accounts, all monies due or to become due with respect thereto (including
all accrued interest heretofore posted as Finance Charge Receivables and
Recoveries), and all proceeds of such Receivables and Insurance Proceeds
relating to such Receivables and Interchange (if any) allocable to the
Trust pursuant to any Supplement, except for amounts, if any, held by
Trustee pursuant to subsection 12.3(b) of the Pooling and Servicing
Agreement.
(b) In connection with such transfer, Trustee agrees to
execute and deliver on or prior to the date of this Reconveyance, such UCC
termination statements or other instruments of transfer and assignment, in
each case without recourse, as Transferor may reasonably request to vest in
such Holder all right, title and interest which the Trust had in the
Receivables.
4. Counterparts. This Reconveyance may be executed in two or more
counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one
and the same instrument.
5. GOVERNING LAW. THIS RECONVEYANCE SHALL BE CON STRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
G-2
IN WITNESS WHEREOF, the undersigned have caused this Reconveyance
of Receivables to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
FIRST NATIONAL BANK OF COMMERCE,
Transferor and Servicer
By____________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
By_____________________________________
Name:
Title:
G-3
EXHIBIT H
FORM OF AMENDED SECTION 9.2
---------------------------
SECTION 9.2 Additional Rights Upon the Occurrence of Certain
Events. (a) If Transferor shall consent to the appointment of a conservator
or receiver or liquidator for the winding-up or liquidation of its affairs,
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 for the winding-up or liquidation of its affairs
shall have been entered against Transferor (an "Insolvency Event"),
Transferor shall on the day of such Insolvency Event (the "Appointment
Day") immediately cease to transfer Principal Receivables and Discount
Option Receivables to the Trust and shall promptly give notice to Trustee
of such Insolvency Event. Notwithstanding any cessation of the transfer to
the Trust of additional Principal Receivables and Discount Option
Receivables, Finance Charge Receivables, whenever created, accrued in
respect of Principal Receivables or Discount Option Receivables which have
been transferred to the Trust shall continue to be a part of the Trust, and
Collections with respect thereto shall continue to be allocated and paid in
accordance with Article IV. Within 15 days of the Appointment Day, Trustee
shall (i) publish a notice in an Authorized Newspaper that an Insolvency
Event has occurred and that Trustee intends to sell, dispose of or
otherwise liquidate the Receivables in a commercially reasonable manner and
(ii) send written notice to the Investor Holders describing the provisions
of this Section 9.2 and requesting instructions from such Holders. Unless
within 90 days from the day notice pursuant to clause (i) is first
published, Trustee shall have received written instructions of Holders of
Investor Certificates evidencing more than 50% of the Investor Interest of
each Series issued and outstanding (or, if any such Series has two or more
Classes, each Class) to the effect that such Holders disapprove of the
liquidation of the Receivables and wish to continue having Principal
Receivables and Discount Option Receivables transferred to the Trust as
before such Insolvency Event, Trustee shall sell, dispose of or otherwise
liquidate the Receivables in a commercially reasonable manner and on
commercially reasonable terms, which shall include the solicitation of
competitive bids. Trustee may obtain a prior determination for any such
conservator, receiver or liquidator that the terms and manner of any
proposed sale, disposition or liquidation are commercially reasonable. The
provisions of Sections 9.1 and 9.2 shall not be deemed to be mutually
exclusive.
(b) The proceeds from the sale, disposition or liquidation of the
Receivables pursuant to subsection (a) shall be treated as Collections on
the Receivables and shall be allocated and deposited in accordance with the
provisions of Article IV; provided, that Trustee shall determine
conclusively in its sole discretion the amount of such proceeds which are
allocable to Finance Charge Receivables and the amount of such
H-1
proceeds which are allocable to Principal Receivables. Unless Trustee
receives written instructions from Investor Holders as provided in
subsection (a), on the day following the last Distribution Date in the
Monthly Period during which such proceeds are distributed to the Investor
Holders of each Series, the Trust shall terminate.
(c) Trustee may appoint an agent or agents to assist with its
responsibilities pursuant to this Article IX with respect to competitive
bids.
H-2