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TARGET RECEIVABLES CORPORATION,
Transferor
RETAILERS NATIONAL BANK,
Servicer
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
Trustee
TARGET CREDIT CARD MASTER TRUST
AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT
Dated as of April 28, 2000
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions...........................................................2
Section 1.1. Definitions.............................................2
Section 1.2. Other Definitional Provisions..........................27
ARTICLE II
Conveyance of Receivables............................................29
Section 2.1. Conveyance of Receivables..............................29
Section 2.2. Acceptance by Trustee..................................31
Section 2.3. Representations and Warranties of the Transferor
Relating to the Transferor.............................32
Section 2.4. Representations and Warranties of the Transferor
Relating to this Agreement and any Supplement and the
Receivables............................................34
Section 2.5. Reassignment of Ineligible Receivables.................37
Section 2.6. Reassignment of Receivables in Trust Portfolio
..............................................................39
Section 2.7. Covenants of the Transferor............................40
Section 2.8. Covenants of the Transferor with Respect to the
Bank Purchase Agreement................................46
Section 2.9. Addition of Accounts...................................47
Section 2.10. Removal of Accounts....................................55
Section 2.11. Discount Option........................................58
Section 2.12. Additional Transferors.................................58
Section 2.13. Account Allocations....................................59
ARTICLE III
Administration and Servicing of Receivables...........................61
Section 3.1. Acceptance of Appointment and Other Matters
Relating to the Servicer................................61
Section 3.2. Servicing Compensation..................................62
Section 3.3. Representations, Warranties and Covenants of the
Servicer................................................63
Section 3.4. Report to the Trustee...................................68
Section 3.5. Annual Certificate of Servicer..........................70
Section 3.6. Annual Servicing Report of Independent Public
Accountants; Copies of Reports Available................70
Section 3.7. Tax Treatment...........................................72
Section 3.8. Notices to Retailers National Bank......................72
Section 3.9. Adjustments.............................................72
ARTICLE IV
Rights of Certificateholders and
Allocation and Application of Collections.............................74
Section 4.1. Rights of Certificateholders............................74
Section 4.2. Establishment of Collection Account and Special
Funding Account.........................................74
Section 4.3. Collections and Allocations.............................78
Section 4.4. Shared Principal Collections............................80
Section 4.5. Excess Finance Charge Collections.......................80
Section 4.6. Allocations During Funding Period.......................81
ARTICLE V
Distributions and Reports to Certificateholders.......................82
ARTICLE VI
The Certificates......................................................83
Section 6.1. The Certificates........................................83
Section 6.2. Authentication of Certificates..........................84
Section 6.3. New Issuances...........................................84
Section 6.4. Registration of Transfer and Exchange of
Certificates............................................87
Section 6.5. Mutilated, Destroyed, Lost or Stolen Certificates.......91
Section 6.6. Persons Deemed Owners...................................92
Section 6.7. Appointment of Paying Agent.............................93
Section 6.8. Access to List of Registered Certificateholders'
Names and Addresses.....................................93
Section 6.9. Authenticating Agent....................................94
Section 6.10. Book-Entry Certificates.................................95
Section 6.11. Notices to Clearing Agency..............................96
Section 6.12. Definitive Certificates.................................97
Section 6.13. Global Certificate......................................97
Section 6.14. Uncertificated Classes..................................98
ARTICLE VII
Other Matters Relating to the Transferor..............................99
Section 7.1. Liability of the Transferor.............................99
Section 7.2. Merger or Consolidation of, or Assumption of the
Obligations of, the Transferor..........................99
Section 7.3. Limitations on Liability of the Transferor.............101
Section 7.4. Liabilities............................................101
ARTICLE VIII
Other Matters Relating to the Servicer...............................103
Section 8.1. Liability of the Servicer..............................103
Section 8.2. Merger or Consolidation of, or Assumption of the
Section 8.3. Limitation on Liability of the Servicer and
Others.................................................104
Section 8.4. Servicer Indemnification of the Trust and the
Trustee................................................105
Section 8.5. The Servicer Not To Resign.............................105
Section 8.6. Access to Certain Documentation and Information
Regarding the Receivables..............................106
Section 8.7. Delegation of Duties...................................107
Section 8.8. Examination of Records.................................107
ARTICLE IX
Early Amortization Events............................................108
Section 9.1. Early Amortization Events..............................108
Section 9.2. Additional Rights upon the Occurrence of Certain
Events.................................................109
ARTICLE X..................................................................110
Section 10.1. Servicer Defaults.....................................110
Section 10.2. Trustee to Act; Appointment of Successor..............114
Section 10.3. Notification to Certificateholders....................116
ARTICLE XI
The Trustee..........................................................117
Section 11.1. Duties of Trustee.....................................117
Section 11.2. Certain Matters Affecting the Trustee.................119
Section 11.3. Trustee Not Liable for Recitals in Certificates
..............................................................120
Section 11.4. Trustee May Own Certificates..........................121
Section 11.5. The Servicer To Pay Trustee's Fees and Expenses.......121
Section 11.6. Eligibility Requirements for Trustee..................122
Section 11.7. Resignation or Removal of Trustee.....................122
Section 11.8. Successor Trustee.....................................123
Section 11.9. Merger or Consolidation of Trustee....................123
Section 11.10. Appointment of Co-Trustee or Separate Trustee........124
Section 11.11. Tax Return...........................................125
Section 11.12. Trustee May Enforce Claims Without Possession
of Certificates.......................................126
Section 11.13. Suits for Enforcement................................126
Section 11.14. Rights of Certificateholders to Direct Trustee.......126
Section 11.15. Representations and Warranties of Trustee............127
Section 11.16. Maintenance of Office or Agency......................128
Section 11.17. Confidentiality......................................128
ARTICLE XII
Termination..........................................................129
Section 12.1. Termination of Trust..................................129
Section 12.2. Final Distribution....................................129
Section 12.3. Transferor's Termination Rights.......................131
Section 12.4. Defeasance............................................131
ARTICLE XIII
Miscellaneous Provisions.............................................133
Section 13.1. Amendment; Waiver of Past Defaults....................133
Section 13.2. Protection of Right, Title and Interest to Trust
Assets................................................135
Section 13.3. Limitation on Rights of Certificateholders............137
Section 13.4. Governing Law; Jurisdiction...........................138
Section 13.5. Notices, Payments.....................................138
Section 13.6. Rule 144A Information.................................140
Section 13.7. Severability of Provisions............................140
Section 13.8. Assignment............................................140
Section 13.9. Certificates Nonassessable and Fully Paid.............140
Section 13.10. Further Assurances....................................140
Section 13.11. Nonpetition Covenant..................................141
Section 13.12. No Waiver; Cumulative Remedies........................141
Section 13.13. Counterparts..........................................141
Section 13.14. Third-Party Beneficiaries.............................141
Section 13.15. Actions by Certificateholders.........................141
Section 13.16. Merger and Integration................................142
Section 13.17. Headings..............................................142
Section 13.18. No Proceedings........................................142
EXHIBITS
Exhibit A Form of Transferor Certificate
Exhibit B Form of Assignment of Receivables in Supplemental
Accounts
Exhibit C Form of Reassignment of Receivables in Removed
Accounts
Exhibit D Form of Annual Servicer's Certificate
Exhibit E-1 Private Placement Legend
Exhibit E-2 Form of Undertaking Letter
Exhibit E-3 ERISA Legend
Exhibit F Example of a Credit Card Agreement
Exhibit G Reserved
Exhibit H-1 Form of Opinion of Counsel with respect to Amendments
Exhibit H-2 Form of Opinion of Counsel with respect to Addition
of Supplemental Accounts
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT, dated as
of April 28, 2000 among TARGET RECEIVABLES CORPORATION, a Minnesota
corporation, as Transferor, RETAILERS NATIONAL BANK, a national banking
association, as Servicer, and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
a national banking association, as Trustee.
WHEREAS, the Transferor, the Servicer and the Trustee have
heretofore executed and delivered a Pooling and Servicing Agreement, dated
as of September 13, 1995 (as amended, supplemented or otherwise modified,
the "Original Pooling and Servicing Agreement"), by and between Target
Receivables Corporation (formerly known as ▇▇▇▇▇▇ ▇▇▇▇▇▇ Receivables
Corporation), as the Transferor, Retailers National Bank, as the Servicer,
and the Trustee for the issuance by the ▇▇▇▇▇▇ ▇▇▇▇▇▇ Credit Card Master
Trust of the Investor Certificates and the Exchangeable Transferor
Certificate;
WHEREAS, the Transferor, formerly known as ▇▇▇▇▇▇ ▇▇▇▇▇▇
Receivables Corporation, has been renamed Target Receivables Corporation
and desires to amend and restate the Original Pooling and Servicing
Agreement to read in its entirety as set forth below and to, among other
things, rename the Trust the Target Credit Card Master Trust;
WHEREAS, Section 13.1(a) of the Original Pooling and Servicing
Agreement provides that the Servicer, the Transferor and the Trustee,
without the consent of any of the Certificateholders, may amend the
Original Pooling and Servicing Agreement from time to time so long as (x)
the Transferor shall have delivered to the Trustee an Officer's Certificate
to the effect that the Transferor reasonably believes that such action
shall not adversely affect in any material respect the interests of any
Investor Certificateholder, (y) the Rating Agency Condition shall have been
satisfied with respect to such amendment and (z) a Tax Opinion is delivered
in connection with such amendment;
WHEREAS, all conditions precedent to the execution
of this Agreement have been complied with;
NOW, THEREFORE, pursuant to Section 13.1(a) of the Original
Pooling and Servicing Agreement, the Servicer, the Transferor and the
Trustee hereby agree that effective on and as of the date hereof, the
Original Pooling and Servicing Agreement is hereby amended and restated in
its entirety as follows:
In consideration of the mutual agreements herein contained, each
party agrees as follows for the benefit of the other parties, the
Certificateholders and any Enhancement Provider to the extent provided
herein and in any Supplement:
ARTICLE I
Definitions
Section 1.1. Definitions. Whenever used in this Agreement, the
following words and phrases shall have the following meanings, and the
definitions of such terms are applicable to the singular as well as the
plural forms of such terms and to the masculine as well as to the feminine
and neuter genders of such terms.
"Account" shall mean each Initial Account, each Automatic
Additional Account and each Supplemental Account, but shall exclude any
Account all the Receivables in which are either reassigned or assigned to
the Transferor or its designee or the Servicer in accordance with the terms
of this Agreement and any inactive Accounts which in accordance with the
Credit Card Guidelines have been removed from the active computer records
of the Credit Card Originator. The definition of Account shall include each
account into which an Account is transferred (a "Transferred Account");
provided that (i) such transfer is made in accordance with the Credit Card
Guidelines and (ii) such Transferred Account can be traced or identified,
by reference to or by way of the computer files, microfiche lists or
printed lists delivered to the Trustee pursuant to Section 2.1 or 2.9(f),
as an account into which an Account has been transferred. The term
"Account" shall be deemed to refer to an Automatic Additional Account or a
Supplemental Account only from and after the Addition Date with respect
thereto, and the term "Account" shall be deemed to refer to any Removed
Account only prior to the Removal Date with respect thereto.
"Accumulation Period" shall mean, with respect to any Series,
the period, if any, specified as such in the related Supplement.
"Act" shall mean the Securities Act of 1933, as amended.
"Addition" shall mean the designation of additional Eligible
Accounts to be included as Accounts pursuant to subsection 2.9(a), (b) or
(d) or of Participation Interests to be included as Trust Assets pursuant
to subsection 2.9(a) or (b), as applicable.
"Addition Cut-Off Date" shall mean the date as of which any
Supplemental Accounts or Participation Interests are designated for
inclusion in the Trust, as specified in the related Assignment.
"Addition Date" shall mean (i) with respect to Supplemental
Accounts, the date on which the Receivables in such Supplemental Accounts
are conveyed to the Trust pursuant to subsection 2.9(a) or (b), as
applicable, (ii) with respect to Automatic Additional Accounts, the date on
which such accounts are created, and (iii) with respect to Participation
Interests, the date from and after which such Participation Interests are
to be included as Trust Assets pursuant to subsection 2.9(a) or (b).
"Additional Account" shall mean an Automatic Additional Account
or a Supplemental Account.
"Affiliate" shall mean, with respect to any specified Person,
any other Person controlling or controlled by or under common control with
such specified Person. For the purposes of this definition, "control" shall
mean the power to direct the management and policies of a Person, directly
or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Aggregate Addition Limit" shall mean, with respect to any
Series, the number of accounts which may be included as Automatic
Additional Accounts without confirmation from each Rating Agency that such
action will satisfy the Rating Agency Condition and which may be designated
as Supplemental Accounts pursuant to subsection 2.9(a), without the prior
Rating Agency notice described under subsection 2.9(c)(iv), which would
either (x) with respect to any of the three consecutive Monthly Periods
commencing in January, April, July and October of each calendar year
commencing October, 1995, may not exceed 15% of the number of Accounts as
of the first day of the calendar year during which such Monthly Periods
commence (or the Trust Cut-Off Date, in the case of 1995) or (y) with
respect to any twelve-month period, equal 20% of the number of Accounts as
of the first day of such twelve-month period.
"Agreement" shall mean this Amended and Restated Pooling and
Servicing Agreement and all amendments hereof and supplements hereto,
including, with respect to any Series or Class, the related Supplement.
"Amortization Period" shall mean, with respect to any Series or
any Class within a Series, a period following the Revolving Period, which
shall be the controlled amortization period, the principal amortization
period, the rapid accumulation period, the early amortization period, or
other amortization period or accumulation period, in each case as defined
with respect to such Series in the related Supplement.
"Applicants" shall have the meaning specified in Section 6.8.
"Assignment" shall have the meaning specified in subsection
2.9(f).
"Authorized Newspaper" shall mean any newspaper or newspapers
of general circulation in the Borough of Manhattan, The City of New York
printed in the English language (and, with respect to any Series or Class,
if and so long as the Investor Certificates of such Series or Class are
listed on the Luxembourg Stock Exchange and such exchange shall so require,
in Luxembourg, printed in any language satisfying the requirements of such
exchange) and customarily published on each business day at such place,
whether or not published on Saturdays, Sundays or holidays.
"Automatic Addition Suspension Date" shall mean the Business
Day specified in subsection 2.9(d)(i) or the Determination Date specified
in subsection 2.9(d)(ii), as applicable.
"Automatic Addition Termination Date" shall mean the Business
Day specified by the Transferor pursuant to subsection 2.9(d)(i) hereof as
of which new open end credit card accounts owned by the Credit Card
Originator shall cease to become Automatic Additional Accounts.
"Automatic Additional Account" shall mean each open end credit
card account established pursuant to a Credit Card Agreement coming into
existence (i) after the Trust Cut-Off Date and prior to the earlier of the
Automatic Addition Termination Date or an Automatic Addition Suspension
Date and (ii) following an Automatic Addition Suspension Date and after a
Restart Date and prior to a subsequent Automatic Addition Suspension Date
or any Automatic Addition Termination Date; provided however with respect
to any accounts initially originated by parties other than Retailers
National Bank and its successors or assigns and/or any transferees of
Accounts from Retailers National Bank, such accounts shall be deemed to be
Automatic Additional Accounts only upon satisfaction of the Rating Agency
Condition.
"Bank Purchase Agreement" shall mean (i) the amended and
restated receivables purchase agreement, dated as of April 28, 2000,
between Retailers National Bank, as seller, and Target Capital Corporation
(formerly known as ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation), as purchaser, and
(ii) in the event of a transfer of Accounts by Retailers National Bank to
any other entity in accordance with this Agreement, the receivables
purchase agreement between Retailers National Bank and such other entity,
substantially in the form of the receivables purchase agreement referred to
in clause (i) above.
"Base Rate" shall have the meaning, with respect to any Series,
specified in the related Supplement.
"Bearer Certificate" shall have the meaning specified in
Section 6.1.
"Benefit Plan" shall have the meaning specified in subsection
6.4(c).
"Book-Entry Certificates" shall mean beneficial interests in
the Investor Certificates, ownership and transfers of which shall be made
through book entries by a Clearing Agency as described in Section 6.10.
"Business Day" shall mean any day other than (a) a Saturday or
Sunday, (b) any other day on which national banking associations or state
banking institutions in New York, New York, Minneapolis, Minnesota or Sioux
Falls, South Dakota are authorized or obligated by law, executive order or
governmental decree to be closed or (c) for purposes of any particular
Series, any other day specified in the related Supplement.
"Certificate" shall mean any one of the Investor Certificates
or the Transferor Certificate.
"Certificateholder" or "Holder" shall mean an Investor
Certificateholder or a Person in whose name the Transferor Certificate is
registered.
"Certificateholders' Interest" shall have the meaning specified
in Section 4.1.
"Certificate Owner" shall mean, with respect to a Book-Entry
Certificate, the Person who is the owner of such Book-Entry Certificate, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly or as an
indirect participant, in accordance with the rules of such Clearing
Agency).
"Certificate Rate" shall mean, with respect to any Series or
Class, the certificate rate specified therefor in the related Supplement.
"Certificate Register" shall mean the register maintained
pursuant to Section 6.4, providing for the registration of the Registered
Certificates and the Transferor Certificate and transfers and exchanges
thereof.
"Class" shall mean, with respect to any Series, any one of the
classes of Investor Certificates of that Series.
"Clearing Agency" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended.
"Clearing Agency Participant" shall mean a broker, dealer,
bank, other financial institution or other Person for whom from time to
time a Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency.
"Closing Date" shall mean, with respect to any Series, the
closing date specified in the related Supplement.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
"Collection Account" shall have the meaning specified in
Section 4.2.
"Collections" shall mean all payments (including Recoveries of
Principal Receivables or Finance Charge Receivables) received by the
Servicer with respect to the Receivables, in the form of cash, checks (to
the extent collected), wire transfers or other form of payment in
accordance with the Credit Card Agreements in effect from time to time on
any Receivables and all payments received by the Servicer with respect to
Merchant Fees and Deferred Billing Fees. If so specified in any Supplement,
Collections shall also include any payments received by the Servicer with
respect to Participation Interests.
"Commission" shall mean the Securities and Exchange Commission.
"Confidential Information" shall have the meaning specified in
Section 11.17.
"Corporate Trust Office" shall have the meaning specified in
Section 11.16.
"Coupon" shall have the meaning specified in Section 6.1.
"Credit Card Agreement" shall mean, with respect to an Account,
the agreements between the Credit Card Originator which owns such Account
and the related Obligor, governing the terms and conditions of such
Account, as such agreements may be amended, modified or otherwise changed
from time to time and as distributed (including any amendments and
revisions thereto) to such Obligors. An example of a Credit Card Agreement
is attached as Exhibit F.
"Credit Card Guidelines" shall mean written policies and
procedures of the Credit Card Originator relating to the operation of its
consumer revolving lending business, including, without limitation, the
written policies and procedures for determining the creditworthiness of
credit card customers, the extension of credit to credit card customers and
relating to the maintenance of credit card accounts and collection of
receivables with respect thereto, as such policies and procedures may be
amended, modified, or otherwise changed from time to time in conformance
with all Requirements of Law, the failure to comply with which would have a
material adverse effect on interests hereunder of Investor
Certificateholders.
"Credit Card Originator" shall mean Retailers National Bank,
and its successors or assigns and/or any transferee of the Accounts from
Retailers National Bank or any other originator of Accounts.
"Daily Report" shall have the meaning specified in subsection
3.4(a).
"Date of Processing" shall mean, with respect to any
transaction, the Business Day on which such transaction is first recorded
pursuant to the Servicer's customary and usual servicing practices on the
Servicer's computer file of consumer open-end credit card accounts (without
regard to the effective date of such recordation).
"Debtor Relief Laws" shall mean the Bankruptcy Code of the
United States of America and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, suspension of payments, readjustment of debt,
marshalling of assets or similar debtor relief laws of the United States,
any state or any foreign country from time to time in effect, affecting the
rights of creditors generally.
"Defaulted Amount" shall mean, with respect to any Monthly
Period, an amount (which shall not be less than zero) equal to (a) the
amount of Defaulted Receivables for each day in such Monthly Period, minus
(b) the sum of (i) the amount of any Defaulted Receivables for which the
Transferor Amount is reduced as a result of the assignment of a principal
balance of zero thereto for purposes of determining the aggregate amount of
Principal Receivables or the Servicer became obligated to accept
reassignment or assignment in accordance with the terms of this Agreement
during such Monthly Period, (ii) the aggregate amount of Recoveries
received in such Monthly Period with respect to Finance Charge Receivables
and Principal Receivables previously charged off as uncollectible and (iii)
the excess, if any, for the immediately preceding Monthly Period, of the
sum computed pursuant to this clause (b) over the amount of Principal
Receivables that became Defaulted Receivables during such Monthly Period;
provided, however, that, if an Insolvency Event occurs with respect to the
Transferor, the amount of such Defaulted Receivables which are subject to
reassignment to the Transferor in accordance with the terms of this
Agreement shall not be added to the sum so subtracted and, if any of the
events described in subsection 10.1(d) occur with respect to the Servicer,
the amount of such Defaulted Receivables which are subject to reassignment
or assignment to the Servicer in accordance with the terms of this
Agreement shall not be added to the sum so subtracted.
"Defaulted Receivable" shall mean, with respect to any date of
determination, all Principal Receivables in any Account which are charged
off as uncollectible on such day in accordance with the Credit Card
Guidelines and the Servicer's customary and usual servicing procedures for
servicing open end credit card account receivables comparable to the
Receivables. A Principal Receivable in any Account shall become a Defaulted
Receivable on the day on which such Principal Receivable is recorded as
charged off on the Servicer's computer master file of consumer credit card
accounts in accordance with the Credit Card Guidelines.
"Defeasance" shall have the meaning specified in Section 12.4.
"Defeased Series" shall have the meaning specified in Section
12.4.
"Deferred Billing Fees" shall mean the fees paid with respect
to the Accounts by the Dayton's, Hudson's, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇'▇, Mervyn's and
Target Stores to Retailers National Bank as compensation for Accounts which
make charges on a deferred billing basis.
"Definitive Certificates" shall have the meaning specified in
Section 6.10.
"Definitive Euro-Certificates" shall have the meaning specified
in Section 6.13.
"Demand Note" shall have the meaning specified in subsection
2.7(i).
"Depositary" shall mean the Person specified in the applicable
Supplement, in its capacity as depositary for the respective accounts of
any Clearing Agency or, with respect to Global Certificates, any foreign
clearing agencies set forth in the related Supplement.
"Depository Agreement" shall mean, with respect to any Series
or Class, the agreement among the Transferor, the Trustee and the
applicable Clearing Agency.
"Determination Date" shall mean the third Business Day
preceding each Distribution Date.
"Discount Option Receivables" shall mean, on any Date of
Processing on and after the date on which the Transferor's exercise of its
discount option pursuant to Section 2.11 takes effect, the sum of (a) the
aggregate Discount Option Receivables at the end of the prior day (which
amount, prior to the date on which the Transferor's exercise of its
discount option takes effect and with respect to Receivables generated
prior to such date, shall be zero) plus (b) any New Discount Option
Receivables created on such day minus (c) any Discount Option Receivables
Collections received on such Date of Processing.
"Discount Option Receivables Collections" shall mean on any
Date of Processing on and after the date on which the Transferor's exercise
of its discount option pursuant to Section 2.11 takes effect, the product
of (a) a fraction the numerator of which is the amount of the Discount
Option Receivables and the denominator of which is the sum of the Principal
Receivables plus the amount of Discount Option Receivables, in each case
(for both numerator and denominator) at the end of the prior Monthly Period
and (b) Collections of Principal Receivables, prior to any reduction for
Finance Charge Receivables which are Discount Option Receivables, received
on such Date of Processing.
"Discount Percentage shall have the meaning specified in
subsection 2.11(a).
"Distribution Date" shall mean, with respect to any Series, the
date specified in the related Supplement.
"Document Delivery Date" shall mean the first Closing Date in
the case of Initial Accounts, the Addition Date in the case of Supplemental
Accounts and the Removal Date in the case of Removed Accounts.
"Early Amortization Event" shall mean, with respect to any
Series, each event specified in Section 9.1 and each additional event, if
any, specified in the relevant Supplement as an Early Amortization Event
with respect to such Series.
"Eligible Account" shall mean an open end credit card account,
which is not a commercial account, owned by the Credit Card Originator
which as of the Trust Cut-Off Date with respect to an Initial Account, on
the date of creation thereof, with respect to an Automatic Additional
Account, or as of the related Addition Cut-Off Date with respect to a
Supplemental Account, meets the requirement of either clause (i) or (ii)
below: (i) (a) is in existence and serviced at certain facilities of the
Credit Card Originator or an Affiliate thereof; (b) is payable in United
States dollars; (c) except as provided below, has not been identified as an
account the credit cards with respect to which have been reported to the
Credit Card Originator as having been lost or stolen; (d) has not been, and
does not have any Receivables that have been, sold, pledged, assigned or
otherwise conveyed to any person (except pursuant to this Agreement or the
Bank Purchase Agreement), unless any such pledge or assignment is released
on or before the initial Closing Date or the Addition Date, as applicable;
(e) except as provided below, does not have any Receivables that are
Defaulted Receivables; (f) except as provided below, does not have any
Receivables which have been identified by the Credit Card Originator or the
relevant Obligor as having been incurred as a result of fraudulent use of
any related credit card; and (g) has an Obligor who has provided as his or
her most recent billing address, an address located in the United States or
its territories or possessions or a United States military address;
provided, however, that as of any date of determination, up to 4% (or such
greater percentage if prior written notice thereof has been given by the
Transferor to each Rating Agency and the Rating Agency Condition has been
satisfied) of the number of Accounts may have Obligors who have provided
addresses outside of such jurisdictions or (ii) with respect to
Supplemental Accounts, the addition of such Accounts (other than an
addition required pursuant to subsection 2.9(a)(i)) shall have satisfied
the Rating Agency Condition.
"Eligible Deposit Account" shall mean either (a) a segregated
account with an Eligible Institution or (b) a segregated trust account with
the corporate trust department of a depository institution organized under
the laws of the United States or any one of the states thereof, including
the District of Columbia (or any domestic branch of a foreign bank), and
acting as a trustee for funds deposited in such account, so long as any of
the securities of such depository institution shall have a credit rating
from each Rating Agency in one of its generic credit rating categories
which signifies investment grade.
"Eligible Institution" shall mean (a) a depository institution
(which may be the Trustee or an Affiliate) organized under the laws of the
United States or any one of the states thereof which at all times (i) has
either (x) a long-term unsecured debt rating of "A2" or better by Moody's
or (y) a certificate of deposit rating of "P-1" by Moody's, (ii) has either
(x) a long-term unsecured debt rating of "AAA" by Standard & Poor's or (y)
a certificate of deposit rating of "A-l+" by Standard & Poor's and (iii) is
a member of the FDIC or (b) any other institution that is acceptable to
Moody's and Standard & Poor's.
"Eligible Investments" shall mean book-entry securities,
negotiable instruments or securities represented by instruments in bearer
or registered form which evidence:
(a) direct obligations of, and obligations fully
guaranteed as to timely payment of principal and interest
by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit
(having original maturities of no more than 365 days) of depository
institutions or trust companies incorporated under the laws of the
United States of America or any state thereof (or domestic branches
of foreign banks) and subject to supervision and examination by
Federal or state banking or depository institution authorities;
provided that at the time of the Trust's investment or contractual
commitment to invest therein, the short-term debt rating of such
depository institution or trust company shall be in the highest
investment category of each Rating Agency;
(c) commercial paper or other short-term obligations having, at
the time of the Trust's investment or contractual commitment to
invest therein, a rating from each Rating Agency in its highest
investment category;
(d) demand deposits, time deposits and certificates of deposit
which are fully insured by the FDIC, with a Person the commercial
paper of which has a credit rating from each Rating Agency in its
highest investment category;
(e) notes or bankers' acceptances (having original maturities
of no more than 365 days) issued by any depository institution or
trust company referred to in clause (b) above;
(f) time deposits, other than as referred to in clause (d)
above, with a Person the commercial paper of which has a credit
rating from each Rating Agency in its highest investment category; or
(g) any other investments approved in writing by each Rating
Agency which would not cause the Trust to become an "investment
company" within the meaning of the Investment Company Act.
"Eligible Receivable" shall mean each Receivable:
(a) which has arisen under an Eligible Account;
(b) which was created in compliance with the Credit Card
Guidelines and all Requirements of Law applicable to the Credit Card
Originator, the failure to comply with which would have a material
adverse effect on Investor Certificateholders, and pursuant to a
Credit Card Agreement which complies with all Requirements of Law
applicable to the Credit Card Originator, the failure to comply with
which would have a material adverse effect on Investor
Certificateholders;
(c) with respect to which all consents, licenses, approvals or
authorizations of, or registrations with, any Governmental Authority
required to be obtained or given by the Credit Card Originator in
connection with the creation of such Receivable or the execution,
delivery and performance by the Credit Card Originator under the
related Credit Card Agreement, have been duly obtained or given and
are in full force and effect as of the date of creation of such
Receivable, if, and to the extent that the failure to so obtain or
give any such consent, license, approval, authorization or
registration would have a material adverse effect on the Investor
Certificateholders;
(d) as to which, at the time of its transfer to the Trust, the
Transferor or the Trust will have good title free and clear of all
Liens (other than any Lien for municipal or other local taxes if such
taxes are not then due and payable or if the Transferor is then
contesting the validity thereof in good faith by appropriate
proceedings and has set aside on its books adequate reserves with
respect thereto);
(e) which has been the subject of a valid transfer and
assignment from the Transferor to the Trust of all the Transferor's
right, title and interest therein or the grant of a "security
interest" (as defined in the UCC) therein;
(f) which at and after the time of transfer to the Trust is the
legal, valid and binding payment obligation of the Obligor thereof,
legally enforceable against such Obligor in accordance with its
terms, except as 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);
(g) which constitutes an "account," a "general intangible" or
"chattel paper" under and as defined in Article 9 of the UCC;
(h) which, at the time of its transfer to the Trust, has not
been waived or modified except as permitted in accordance with
subsection 3.3(h);
(i) which, at the time of its transfer to the Trust, is not
subject to any right of rescission, setoff, counterclaim or any other
defense of the Obligor (including the defense of usury), other than
defenses arising out of Debtor Relief Laws or other similar laws
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) or as to which the
Servicer is required by Section 3.9 to make an adjustment;
(j) as to which, at the time of its transfer to the Trust, the
Transferor has satisfied all obligations to be fulfilled at the time
it is transferred to the Trust; and
(k) as to which, at the time of its transfer to the Trust, the
Transferor has not taken any action which, or failed to take any
action the omission of which, would, at the time of its transfer to
the Trust, impair the rights of the Trust or the Certificateholders
therein.
"Eligible Servicer" shall mean the Trustee, a wholly owned
subsidiary of the Trustee or an entity which, at the time of its
appointment as Servicer, (a) is servicing a portfolio of consumer open end
credit card accounts or other consumer open end credit accounts, (b) is
legally qualified and has the capacity to service the Accounts, (c) is
qualified (or licensed) to use the software that is then being used to
service the Accounts or obtains the right to use, or has its own, software
which is adequate to perform its duties under this Agreement, (d) has, in
the reasonable judgment of the Trustee, the ability to professionally and
competently service a portfolio of similar accounts and (e) has a net worth
of at least $50,000,000 as of the end of its most recent fiscal quarter.
"Enhancement" shall mean the rights and benefits provided to
the Investor Certificateholder of any Series or Class pursuant to any
letter of credit, surety bond, insurance policy, cash collateral account,
cash collateral guaranty, collateral invested amount, spread account,
reserve account, guaranty, guaranteed rate agreement, maturity guaranty
facility, tax protection agreement, interest rate swap agreement, interest
rate cap agreement or other similar arrangement. The subordination of any
Class to another Class, or a cross support feature which requires
collections on Receivables allocated to one Series to be paid as principal
and/or interest with respect to another Series shall be deemed to be an
Enhancement.
"Enhancement Agreement" shall mean any agreement, instrument or
document governing the terms of any Enhancement or pursuant to which any
Enhancement is issued or outstanding.
"Enhancement Invested Amount" with respect to any Series, shall
have the meaning specified in the related Supplement.
"Enhancement Provider" shall mean the Person or Persons
providing any Enhancement, other than the Investor Certificateholders of
any Class which is subordinated to another Class.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Excess Finance Charge Collections" shall have the meaning
specified in Section 4.5.
"FASIT" means a financial asset securitization investment
trust.
"FDIC" shall mean the Federal Deposit Insurance Corporation or
any successor.
"Finance Charge Receivables" shall mean, with respect to any
Monthly Period, the sum of (i) all amounts billed to the Obligors on any
Account at the beginning of such Monthly Period in respect of Periodic
Finance Charges, (ii) certain fees and charges, including Late Fees,
overlimit fees, return check fees, Deferred Billing Fees and Merchant Fees,
(iii) Discount Option Receivables and (iv) all amounts (other than amounts
already included in clause (i) of this definition) billed in respect of
Receivables that are not Eligible Receivables.
"Finance Charge Shortfalls" shall have the meaning specified in
Section 4.5.
"Floating Allocation Percentage" shall mean, with respect to
any Series, the floating allocation percentage specified in the related
Supplement.
"Funding Period" shall have the meaning specified in Section
4.6.
"Global Certificate" shall have the meaning specified in
Section 6.13.
"Governmental Authority" shall mean the United States of
America, any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Group" shall mean, with respect to any Series, the group of
Series, if any, in which the related Supplement specifies such Series is to
be included.
"Ineligible Receivables" shall have the meaning specified in
subsection 2.5(a).
"Initial Account" shall mean each open end credit card account
established pursuant to a Credit Card Agreement between the Credit Card
Originator and any Person existing on the Trust Cut-Off Date.
"Insolvency Event" shall have the meaning specified in
subsection 9.1(a).
"Insurance Proceeds" shall mean any amounts recovered by the
Servicer pursuant to any credit insurance policies covering any Obligor
with respect to Receivables under such Obligor's Account.
"Interest Funding Account" shall mean, with respect to any
Series, the account, if any, specified as such in the related Supplement.
"Invested Amount" shall have, with respect to any Series, the
meaning specified in the related Supplement.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended.
"Investor Certificateholder" shall mean the Person in whose
name a Registered Certificate is registered in the Certificate Register or
the holder of any Bearer Certificate (or the Global Certificate, as the
case may be) or Coupon.
"Investor Certificates" shall mean any one of the certificates
(including the Bearer Certificates, the Registered Certificates or any
Global Certificate) executed by the Transferor and authenticated by or on
behalf of the Trustee, substantially in the form attached to the related
Supplement, other than the Transferor Certificate, the Supplemental
Certificates, if any, and any Participation.
"Investor Percentage" shall have, for any Series, with respect
to Principal Receivables, Finance Charge Receivables and Receivables in
Defaulted Accounts, the meaning specified in the related Supplement.
"Late Fees" shall mean the fees specified in the Credit Card
Agreement applicable to each Account for late fees with respect to such
Account.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, participation or equity interest, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority
or other security agreement or preferential arrangement of any kind or
nature whatsoever, including 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, excluding any lien or filing pursuant to
this Agreement; provided, however, that any assignment or transfer pursuant
to subsection 6.3(c) or (d) or Section 7.2 shall not be deemed to
constitute a Lien.
"Loss" shall have the meaning specified in subsection 7.4(b).
"Merchant Fees" shall mean the fees paid with respect to the
Accounts by the Dayton's, Hudson's, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇'▇, Mervyn's and Target
Stores to Retailers National Bank, in its capacity as Credit Card
Originator, in connection with Obligor charges for goods and services.
"Monthly Period" shall mean, with respect to each Distribution
Date, the immediately preceding fiscal month of the Transferor, unless
otherwise defined in any Supplement.
"Monthly Report" shall have the meaning specified in subsection
3.4(b).
"Monthly Servicing Fee" shall have the meaning specified in the
related Supplement.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc., or its
successor.
"New Discount Option Receivables" shall mean, as of any date of
determination, the product of the Discount Percentage and the amount of
Principal Receivables (before subtracting out Finance Charge Receivables
which are Discount Option Receivables) arising on such date of
determination.
"Notices" shall have the meaning specified in subsection
13.5(a).
"Obligor" shall mean, with respect to any Account, the Person
or Persons obligated to make payments with respect to such Account,
including any guarantor thereof.
"Officer's Certificate" shall mean, unless otherwise specified
in this Agreement, a certificate delivered to the Trustee signed by the
Chief Executive Officer, Chairman of the Board, President, any Vice
President or the Treasurer of the Transferor or the Servicer, as the case
may be.
"Opinion of Counsel" shall mean a written opinion of counsel,
who may be counsel for, or an employee of, the Person providing the opinion
and which opinion shall be reasonably acceptable to the Trustee.
"Participation" shall have the meaning specified in subsection
6.3(e).
"Participation Interests" shall have the meaning specified in
subsection 2.9(a).
"Participation Percentage," with respect to any Participation,
shall have the meaning specified in the related Participation Supplement.
"Participation Supplement" shall mean a supplement to this
Agreement under which the Trustee issues Participations at the Transferor's
direction.
"Paying Agent" shall mean any paying agent and co- paying agent
appointed pursuant to Section 6.7.
"Periodic Finance Charges" shall have the meaning specified in
the Credit Card Agreement applicable to each Account for finance charges
(due to periodic rate) or any similar term.
"Person" shall mean 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.
"Portfolio Yield" shall have the meaning, with respect to any
Series, specified in the related Supplement.
"Pre-Funding Account" shall have the meaning specified in
Section 4.6.
"Principal Allocation Percentage" shall mean, with respect to
any Series, the principal allocation percentage specified in the related
Supplement.
"Principal Receivable" shall mean all Eligible Receivables
which are not Finance Charge Receivables (and which are not Deferred
Billing Fees or Merchant Fees). In calculating the aggregate amount of
Principal Receivables on any day, the amount of Principal Receivables shall
not include Defaulted Receivables and shall be reduced by the aggregate
amount of credit balances in the Accounts on such day.
"Principal Sharing Series" shall mean a Series that, pursuant
to the Supplement therefor, is entitled to receive Shared Principal
Collections.
"Principal Shortfalls" shall have the meaning specified in
Section 4.4.
"Principal Terms" shall mean, with respect to any Series, (i)
its name or designation; (ii) its initial principal amount (or method for
calculating such amount) and its invested amount in the Trust; (iii) its
Certificate Rate (or method for the determination thereof); (iv) the
payment date or dates and the date or dates from which interest shall
accrue; (v) the method for allocating Collections to Certificateholders of
such Series; (vi) the designation of any Series Accounts and the terms
governing the operation of any such Series Accounts; (vii) the percentage
used to calculate the servicing fee with respect thereto; (viii) the
provider, if any, and the terms of any form of Enhancement with respect
thereto; (ix) the terms on which the Investor Certificates of such Series
may be repurchased by the Transferor or any Affiliate of the Transferor or
remarketed to other investors; (x) the Series Termination Date; (xi) the
number of Classes of Investor Certificates of such Series and, if such
Series consists of more than one Class, the rights and priorities of
each such Class; (xii) the extent to which the Investor Certificates of
such Series will be issuable in temporary or permanent global form (and, in
such case, the depositary for such Global Certificate or Certificates, the
terms and conditions, if any, upon which such Global Certificates may be
exchanged, in whole or in part, for Definitive Certificates, and the manner
in which any interest payable on a Global Certificate will be paid); (xiii)
whether the Investor Certificates of such Series may be issued as Bearer
Certificates and any limitation imposed thereon; (xiv) the priority of such
Series with respect to any other Series; (xv) the Group, if any, to which
such Series belongs; and (xvi) any other relevant terms of, or with respect
to, such Series.
"Rating Agency" shall mean, with respect to any outstanding
Series or Class, each statistical rating agency selected by the Transferor
to rate the Investor Certificates of such Series or Class.
"Rating Agency Condition" shall mean, with respect to any
action requiring rating agency approval or consent, that each Rating Agency
shall have notified the Transferor, the Servicer and the Trustee in writing
that such action will not result in a reduction or withdrawal of the rating
of any outstanding Series or Class with respect to which it is a Rating
Agency.
"Reassignment" shall have the meaning specified in Section
2.10.
"Receivable" shall mean any amount owing from time to time by
an Obligor under an Account, including amounts owing for purchases of goods
and services, and amounts payable for Finance Charge Receivables (exclusive
of Deferred Billing Fees and Merchant Fees). A Receivable shall be deemed
to have been created at the end of the day on the Date of Processing of
such Receivable. Receivables which become Defaulted Receivables shall not
be shown on the Servicer's records as amounts payable (and shall cease to
be included as Receivables) on the day on which they become Defaulted
Receivables.
"Receivables Purchase Agreement" shall mean (i) the amended and
restated receivables purchase agreement, dated as of April 28, 2000,
between Target Capital Corporation (formerly known as ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital
Corporation) and the Transferor and (ii) any receivables purchase agreement
between a transferor of the Accounts other than TCC and the Transferor,
substantially in the form of the receivables purchase agreement referred to
in clause (i) above.
"Record Date" shall mean, with respect to any Series Date, the
date specified in the related Supplement.
"Recoveries" shall mean all amounts, including Insurance
Proceeds, received by the Servicer with respect to Principal Receivables
which have previously become Defaulted Receivables and, with respect to
Finance Charge Receivables, which have been charged off as uncollectible in
accordance with the Credit Card Guidelines and the Servicer's customary and
usual servicing procedures for servicing open end credit card account
receivables comparable to the Receivables, including the net proceeds of
any sale of such Defaulted Receivables and Finance Charge Receivables which
have been charged off as uncollectible by the Transferor or the Servicer
regardless of whether such Defaulted Receivables and Finance Charge
Receivables have been transferred, set over or otherwise conveyed to the
Transferor pursuant to Section 2.10.
"Registered Certificateholder" shall mean the Holder of a
Registered Certificate.
"Registered Certificates" shall have the meaning specified in
Section 6.1.
"Removal Date" shall have the meaning specified in subsection
2.10(a).
"Removal Notice Date" shall have the meaning specified in
subsection 2.10(a).
"Removed Accounts" shall have the meaning specified in Section
2.10.
"Required Designation Date" shall have the meaning specified in
subsection 2.9(a).
"Required Principal Balance" shall mean, as of any date of
determination, the sum of the numerators used at such date to calculate (i)
the Investor Percentage with respect to Principal Receivables for all
Series outstanding on such date and (ii) the Participation Percentages for
all Participations outstanding on such date, less the amount on deposit in
the Special Funding Account as of the date of determination.
"Required Retained Transferor's Percentage" shall mean, as of
any date of determination, the highest of the Required Retained
Transferor's Percentages specified in the Supplements for all outstanding
Series.
"Required Retained Transferor Amount" shall mean, as of any
date of determination, the product of (i) the sum of (a) the aggregate
Principal Receivables and (b) the amounts on deposit in the Special Funding
Account and any other accounts specified in a Supplement and (ii) the
Required Retained Transferor's Percentage.
"Requirements of Law" with respect to any Person shall mean the
certificate of incorporation, articles 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.
"Responsible Officer" shall mean any officer within the
Corporate Trust Department (or any successor group of the Trustee),
including any vice president, assistant vice president, assistant secretary
or any other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by the persons who at the
time shall be such officers, respectively, or to whom any corporate trust
matter is referred at the Trustee's Corporate Trust Office because of such
officer's knowledge of and familiarity with the particular subject.
"Restart Date" shall mean the date specified in the notice
delivered by the Transferor to the Trustee pursuant to subsection 2.9(d)(i)
or 2.9(d)(iii).
"Revolving Period" shall mean, with respect to any Series, the
period specified as such in the related Supplement.
"Rule 144A" shall mean Rule 144A under the Act, as such Rule
may be amended from time to time.
"Series" shall mean any series of Investor Certificates
established pursuant to a Supplement.
"Series Account" shall mean any deposit, trust, escrow or
similar account maintained for the benefit of the Investor
Certificateholders of any Series or Class, as specified in any Supplement.
"Series Allocation Percentage" shall mean with respect to any
Series, on any date of determination, the percentage equivalent of a
fraction the numerator of which is the Series Invested Amount of such
Series and the denominator of which is the sum of the Series Invested
Amounts of all Series then outstanding.
"Series Invested Amount" shall have, with respect to any
Series, the meaning specified in the related Supplement.
"Series Issuance Date" shall mean, with respect to any Series,
the date on which the Investor Certificates of such Series are to be
originally issued in accordance with Section 6.3 and the related
Supplement.
"Series Termination Date" shall mean, with respect to any
Series, the termination date specified in the related Supplement.
"Service Transfer" shall have the meaning specified in Section
10.1.
"Servicer" shall mean Retailers National Bank, in its capacity
as Servicer pursuant to this Agreement, and, after any Service Transfer,
the Successor Servicer.
"Servicer Default" shall have the meaning specified in Section
10.1.
"Servicing Fee" shall mean, with respect to any Series, the
servicing fee specified in Section 3.2.
"Servicing Fee Rate" shall mean, with respect to any Series,
the servicing fee rate specified in the related Supplement.
"Servicing Officer" shall mean any officer of the Servicer
involved in, or responsible for, the administration and servicing of the
Receivables whose name appears on a list of servicing officers furnished to
the Trustee by the Servicer on the initial Closing Date, as such list may
from time to time be amended.
"Shared Principal Collections" shall have the meaning specified
in Section 4.4.
"Special Funding Account" shall have the meaning specified in
Section 4.2.
"Standard & Poor's" shall mean Standard & Poor's Ratings Group,
a division of The McGraw Hill Companies or its successor.
"Successor Servicer" shall have the meaning specified in
subsection 10.2(a).
"Supplement" shall mean, with respect to any Series, a
Supplement to this Agreement, executed and delivered in connection with the
original issuance of the Investor Certificates of such Series pursuant to
Section 6.3, and all amendments thereof and supplements thereto.
"Supplemental Account" shall mean each open end credit card
account established pursuant to a Credit Card Agreement, which account is
designated pursuant to subsection 2.9(a) or 2.9(b) to be included as an
Account, and is identified in a computer file, microfiche list or printed
list delivered to the Trustee by the Transferor pursuant to Section 2.1.
"Supplemental Certificate" shall have the meaning specified in
subsection 6.3(c).
"Tax Opinion" shall mean, with respect to any action, an
Opinion of Counsel to the effect that, for Federal income tax purposes, (a)
such action will not adversely affect the tax characterization as debt of
Investor Certificates of any outstanding Series or Class with respect to
which an Opinion of Counsel was delivered at the time of their issuance
that such Investor Certificates would be characterized as debt, (b) such
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 Certificateholder.
"TCC" shall mean Target Capital Corporation (formerly known as
▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation), a Minnesota corporation.
"Termination Notice" shall have the meaning specified in
Section 10.1.
"Transfer Agent and Registrar" shall have the meaning specified
in subsection 6.4(a).
"Transfer Date" shall mean the Business Day immediately
preceding each Distribution Date.
"Transferor" shall mean Target Receivables Corporation
(formerly known as ▇▇▇▇▇▇ ▇▇▇▇▇▇ Receivables Corporation), a Minnesota
corporation, or its permitted successors or assigns under this Agreement
and additional transferors, if any, designated in accordance with Sections
2.12 or 6.3(d).
"Transferor Amount" shall mean, on any date of determination,
the aggregate amount of Principal Receivables on such day, minus the sum of
the Series Invested Amounts with respect to all Series then outstanding,
minus the amount of any Participation, plus the principal amount on deposit
in the Special Funding Account or other account specified in a Supplement.
"Transferor Certificate" shall mean the certificate executed by
the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A.
"Transferor Retained Certificates" shall mean Investor
Certificates of any Series which the Transferor retained pursuant to the
terms of any Supplement.
"Transferor's Interest" shall have the meaning specified in
Section 4.1.
"Transferor's Percentage" shall mean, with respect to Finance
Charge Receivables and Defaulted Receivables, 100% less the sum of the
Floating Allocation Percentages with respect to all outstanding Series,
less the sum of the Participation Percentages with respect to all
Participations and with respect to Principal Receivables, 100% less the sum
of the Principal Allocation Percentages with respect to all outstanding
Series, less the sum of the Participation Percentages with respect to all
Participations.
"Transferred Account" shall have the meaning set forth in the
definition of "Account."
"Transfer Restriction Event" shall have the meaning specified
in Section 2.13.
"Trust" shall mean the Target Credit Card Master Trust
(formerly known as ▇▇▇▇▇▇ ▇▇▇▇▇▇ Credit Card Master Trust) created by this
Agreement.
"Trust Assets" shall have the meaning specified in Section 2.1.
"Trust Cut-Off Date" shall mean June 30, 1995.
"Trust Portfolio Yield" shall mean, with respect to any Monthly
Period, the annualized percentage equivalent of a fraction, the numerator
of which is an amount equal to the aggregate amount of Collections of
Finance Charge Receivables for such Monthly Period, and the denominator of
which is the aggregate amount of Principal Receivables in the Trust as of
the first day of such Monthly Period.
"Trustee" shall mean Norwest Bank Minnesota, National
Association, a national banking association, in its capacity as trustee on
behalf of the Trust, or its successor in interest, or any successor trustee
appointed as herein provided.
"UCC" shall mean the Uniform Commercial Code, as amended from
time to time, as in effect in the State of Delaware and in any other state
where the filing of a financing statement is required to perfect the
Transferor's or the Trust's interest in the Receivables and the proceeds
thereof or in any other specified jurisdiction.
"United States" shall mean the United States of America
(including the states and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.
"Variable Funding Certificates" shall have the meaning
specified in any Variable Funding Supplement.
"Variable Funding Supplement" shall mean a Supplement executed
in connection with the issuance of, and otherwise specifying the terms
governing the issuance of, Variable Funding Certificates provided for
therein.
Section 1.2. Other Definitional Provisions. (a) With respect to
any Series, all terms used herein and not otherwise defined herein shall
have meanings ascribed to them in the related Supplement.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such
certificate or other document to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent
with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Agreement or in any such
certificate or other document shall control.
(d) The agreements, representations and warranties of Target
Receivables Corporation and Retailers National Bank in this Agreement in
each of their respective capacities as Transferor and as Servicer, shall be
deemed to be the separate agreements, representations and warranties of
Target Receivables Corporation and Retailers National Bank solely in each
such respective capacity for so long as Target Receivables Corporation and
Retailers National Bank act in each such capacity under this Agreement.
(e) Any reference to each Rating Agency shall only apply to any
specific rating agency if such rating agency is then rating any outstanding
Series.
(f) Unless otherwise specified, references to any amount as on
deposit or outstanding on any particular date shall mean such amount at the
close of business on such day.
(g) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement; references
to any Section, Schedule or Exhibit are references to Sections, Schedules
and Exhibits in or to this Agreement unless otherwise specified; and the
term "including" means "including without limitation."
ARTICLE II
Conveyance of Receivables
Section 2.1. Conveyance of Receivables. By execution of this
Agreement, the Transferor does hereby transfer, assign, set over and
otherwise convey to the Trust, for the benefit of the Certificateholders,
all its right, title and interest in, to and under (i) the Receivables
existing at the close of business on the Trust Cut-Off Date and thereafter
created from time to time and arising in the Initial Accounts and the
Receivables existing on each applicable Addition Date and thereafter
created from time to time and arising in any Automatic Additional Accounts
owned by the Credit Card Originator, and in each case, thereafter created
from time to time until the termination of the Trust, all Recoveries
allocable to the Trust as provided herein, all monies due or to become due
and all amounts received with respect to any of the foregoing and all
proceeds (including "proceeds" as defined in the UCC) of any of the
foregoing, (ii) any Merchant Fees and Deferred Billing Fees, (iii) the
Receivables Purchase Agreement and (iv) the Bank Purchase Agreement. Such
property, together with all monies on deposit in the Collection Account,
the Special Funding Account, the Series Accounts and any Enhancement shall
constitute the assets of the Trust (the "Trust Assets"). The foregoing does
not constitute and is not intended to result in the creation or assumption
by the Trust, the Trustee, any Investor Certificateholders or any
Enhancement Provider of any obligation of the Credit Card Originator, the
Servicer, the Transferor or any other Person in connection with the
Accounts or the Receivables or under any agreement or instrument relating
thereto, including any obligation to obligors, merchant banks, merchants
clearance systems or insurers.
The Transferor agrees to record and file, at its own expense,
financing statements (and continuation statements when applicable) with
respect to the Receivables now existing and hereafter created in Accounts
and other Trust Assets meeting the requirements of applicable state law in
such manner and in such jurisdictions as are necessary to perfect, and
maintain the perfection of, the assignment of such Receivables to the
Trust, and to deliver a file-stamped copy of each such financing statement
or other evidence of such filing (which may, for purposes of this Section
2.1 consist of telephone confirmation of such filing promptly followed by
delivery to the Trustee of a file-stamped copy) to the Trustee on or prior
to the initial Closing Date, in the case of such Receivables arising in the
Initial Accounts and Automatic Additional Accounts, and (if any additional
filing is so necessary) the applicable Addition Date, in the case of such
Receivables arising in Supplemental Accounts. The 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.
The Transferor further agrees, at its own expense, (a) on (x)
the Automatic Addition Termination Date or any Automatic Addition
Suspension Date, in the case of the Initial Accounts and any Additional
Accounts designated pursuant hereto prior to such date, (y) the applicable
Addition Date, in the case of Supplemental Accounts, and (z) the applicable
Removal Date, in the case of Removed Accounts, to indicate in the
appropriate computer files that Receivables created in connection with the
Accounts owned by the Credit Card Originator (other than Removed Accounts)
have been conveyed to the Trust pursuant to this Agreement for the benefit
of the Certificateholders (or conveyed to the Transferor or its designee in
accordance with Section 2.10, in the case of Removed Accounts) by including
in such computer files the code identifying each such Account (or, in the
case of Removed Accounts, either including such a code identifying the
Removed Accounts only if the removal occurs prior to the Automatic Addition
Termination Date or any Automatic Addition Suspension Date, or subsequent
to a Restart Date, or deleting such code thereafter) and (b) on the date
referred to in clause (x), (y) or (z) above, as applicable, to deliver to
the Trustee a computer file, microfiche list or printed list containing a
true and complete list of all such Accounts, specifying for each such
Account, as of the Automatic Addition Termination Date or any Automatic
Addition Suspension Date, in the case of clause (x) above, the applicable
Addition Cut-Off Date, in the case of Supplemental Accounts, and the
Removal Date, in the case of Removed Accounts, its account number, the
aggregate amount outstanding in such Account and the aggregate amount of
Principal Receivables outstanding in such Account. Such file or list shall
be supplemented from time to time to reflect Supplemental Accounts and
Removed Accounts. Once the code referenced in this paragraph has been
included with respect to any Account, the Transferor further agrees not to
alter such code during the remaining term of this Agreement unless and
until (a) such Account becomes a Removed Account, (b) a Restart Date has
occurred on which the Transferor starts including Automatic Additional
Accounts as Accounts or (c) the Transferor shall have delivered to the
Trustee at least 30 days' prior written notice of its intention to do so
and has taken such action as is necessary or advisable to cause the
interest of the Trustee in the Receivables and other Trust Assets to
continue to be perfected with the priority required by this Agreement.
The Transferor hereby grants and transfers to the Trustee, for
the benefit of the Certificateholders, a security interest in all of the
Transferor's right, title and interest in, to and under the Receivables and
all other Trust Assets, to secure a loan in an amount equal to the unpaid
principal amount of the Investor Certificates issued hereunder or to be
issued pursuant to this Agreement and the interest accrued at the related
Certificate Rate, and agrees that this Agreement shall constitute a
security agreement under applicable law.
Section 2.2. Acceptance by Trustee. (a) The Trustee hereby
acknowledges its acceptance on behalf of the Trust of all right, title and
interest to the property, now existing and hereafter created, conveyed to
the Trust pursuant to Section 2.1 and declares that it shall maintain such
right, title and interest, upon the trust herein set forth, for the benefit
of all Certificateholders.
(b) The Trustee hereby agrees not to disclose to any Person any
of the account numbers or other information contained in any computer
files, microfiche lists or printed lists delivered to the Trustee from time
to time, except (i) to a Successor Servicer or as required by a Requirement
of Law applicable to the Trustee, (ii) in connection with the performance
of the Trustee's duties hereunder or (iii) in enforcing the rights of
Certificateholders. The Trustee (i) agrees to take such measures as shall
be reasonably requested by the Transferor to protect and maintain the
security and confidentiality of such information and (ii) in any event will
maintain and preserve such files or lists and the confidentiality of the
information contained in such files or lists in the same manner and with
the same degree of care that it would exercise with respect to similar
files, lists or information maintained by it for its own account. The
Trustee will also, upon two Business Days' prior notice, allow the
Transferor to inspect the Trustee's security and confidentiality
arrangements from time to time during normal business hours. The Trustee
shall provide the Transferor with notice no later than five Business Days
prior to any disclosure pursuant to this Section or any shorter period of
time as required by any Requirements of Law.
(c) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement or any Supplement.
(d) The Trustee hereby agrees not to use any information it
obtains pursuant to this Agreement, including any of the account numbers or
other information contained in the computer files, microfiche lists or
printed lists delivered by the Transferor to the Trustee pursuant to this
Agreement, including Sections 2.1, 2.9, 2.10 or 3.4(c), other than to
perform its duties hereunder.
Section 2.3. Representations and Warranties of the Transferor
Relating to the Transferor. The Transferor hereby represents and warrants
to the Trust (and agrees that the Trustee may rely on each such
representation and warranty in accepting the Receivables in trust and in
authenticating the Certificates) as of each Closing Date that:
(a) Organization and Good Standing. The Transferor is a
corporation validly existing in good standing under the laws of the
State of Minnesota, 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, to execute, deliver and perform its obligations under this
Agreement and each Supplement and to execute and deliver to the
Trustee the Certificates pursuant hereto.
(b) Due Qualification. The Transferor is duly qualified to do
business and is in good standing as a foreign corporation (or is
exempt from such requirements), and has obtained all necessary
licenses and approvals in each jurisdiction in which failure to so
qualify or to obtain such licenses and approvals would render any
Credit Card Agreement relating to an Account owned by the Credit Card
Originator or any Receivable transferred to the Trust by the
Transferor unenforceable by the Credit Card Originator, the
Transferor, the Servicer or the Trustee and would have a material
adverse effect on the interests of the Certificateholders hereunder
or under any Supplement.
(c) Due Authorization. The execution, delivery and performance
of this Agreement and each Supplement by the Transferor, the
execution and delivery to the Trustee of the Certificates by the
Transferor and the consummation by the Transferor of the transactions
provided for in this Agreement and each Supplement have been duly
authorized by the Transferor by all necessary corporate action on the
part of the Transferor and this Agreement and each Supplement will
remain, from the time of its execution, an official record of the
Transferor.
(d) No Conflict. The execution and delivery by the Transferor
of this Agreement, each Supplement and the Certificates, the
performance by the Transferor of the transactions contemplated by
this Agreement and each Supplement and the fulfillment by the
Transferor of the terms hereof and thereof will not conflict with,
result in any breach of any of the material terms and provisions of,
or constitute (with or without notice or lapse of time or both) a
material default under, any indenture, contract, agreement, mortgage,
deed of trust, or other instrument to which the Transferor is a party
or by which it or any of its properties are bound.
(e) No Violation. The execution and delivery by the Transferor
of this Agreement, each Supplement and the Certificates, the
performance by the Transferor of the transactions contemplated by
this Agreement and each Supplement and the fulfillment by the
Transferor of the terms hereof and thereof will not conflict with or
violate any Requirements of Law applicable to the Transferor.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Transferor, threatened
against the Transferor, before any court, regulatory body,
administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement, any
Supplement or the Certificates, (ii) seeking to prevent the issuance
of the Certificates or the consummation of any of the transactions
contemplated by this Agreement, any Supplement or the Certificates,
(iii) seeking any determination or ruling that, in the reasonable
judgment of the Transferor, would materially and adversely affect the
performance by the Transferor of its obligations under this Agreement
or any Supplement, (iv) seeking any determination or ruling that
would materially and adversely affect the validity or enforceability
of this Agreement, any Supplement or the Certificates or (v) seeking
to affect adversely the income tax attributes of the Trust under the
Federal or applicable state income or franchise tax systems.
(g) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any
governmental body or official required in connection with the
execution and delivery by the Transferor of this Agreement, each
Supplement and the Certificates, the performance by the Transferor of
the transactions contemplated by this Agreement and each Supplement
and the fulfillment by the Transferor of the terms hereof and
thereof, have been obtained.
(h) Insolvency. No Insolvency Event with respect to the Credit
Card Originator, TCC or the Transferor has occurred and the transfer
of the Receivables by the Transferor to the Trust has not been made
in contemplation of the occurrence thereof.
The representations and warranties of the Transferor set forth
in this Section 2.3 shall survive the transfer and assignment by the
Transferor of the respective Receivables to the Trust. Upon discovery by
the Transferor, the Servicer or the Trustee of a breach of any of the
representations and warranties by the Transferor set forth in this Section
2.3, the party discovering such breach shall give prompt written notice to
the others and to each Enhancement Provider, if any, entitled thereto
pursuant to the relevant Supplement. The Transferor agrees to cooperate
with the Servicer and the Trustee in attempting to cure any such breach.
For purposes of the representations and warranties set forth in this
Section 2.3, each reference to a Supplement shall be deemed to refer only
to those Supplements in effect as of the relevant Closing Date.
Section 2.4. Representations and Warranties of the Transferor
Relating to this Agreement and any Supplement and the Receivables. (a)
Representations and Warranties. The Transferor hereby represents and
warrants to the Trust (and agrees that the Trustee may rely on each such
representation and warranty in accepting the Receivables in trust and in
authenticating the Certificates) as of the date of this Agreement and the
date of each Supplement, as of each Closing Date and, with respect to
Additional Accounts, as of the related Addition Date that:
(i) this Agreement, each Supplement and, in the case of
Supplemental Accounts, the related Assignment, each constitutes
a legal, valid and binding obligation of the Transferor,
enforceable against the Transferor in accordance with its
terms, except as such enforceability may be limited by
applicable 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);
(ii) as of the Automatic Addition Termination Date or any
Automatic Addition Suspension Date and as of each subsequent
Addition Date with respect to Supplemental Accounts, and as of
the applicable Removal Date with respect to the Removed
Accounts, the related computer file, microfiche list or printed
list delivered pursuant to this Agreement, as supplemented to
such date, is an accurate and complete listing in all material
respects of all the Accounts owned by the Credit Card
Originator as of such date, such Addition Cut-Off Date or such
Removal Date, as the case may be, and the information contained
therein with respect to the identity of such Accounts and the
Receivables existing in such Accounts is true and correct in
all material respects as of such date, such Addition Cut-Off
Date or such Removal Date, as the case may be;
(iii) the Transferor is the legal and beneficial owner of
all right, title and interest in each Receivable and the
Transferor has the full right to transfer such Receivables to
the Trust, and each Receivable conveyed to the Trust by the
Transferor has been conveyed to the Trust free and clear of any
Lien of any Person claiming through or under the Transferor or
any of its Affiliates (other than Liens permitted under
subsection 2.7(b)) and in compliance, in all material respects,
with all Requirements of Law applicable to the Transferor;
(iv) all authorizations, consents, orders or approvals of
or registrations or declarations with any Governmental
Authority required to be obtained, effected or given by the
Transferor in connection with the conveyance by the Transferor
of Receivables to the Trust have been duly obtained, effected
or given and are in full force and effect;
(v) this Agreement or, in the case of Supplemental
Accounts, the related Assignment constitutes either a valid
transfer and assignment to the Trust of all right, title and
interest of the Transferor in the Receivables and other Trust
Assets conveyed to the Trust by the Transferor and all monies
due or to become due with respect thereto and the proceeds
thereof or this Agreement or a grant of a "security interest"
(as defined in the UCC) in such property to the Trust, which,
in the case of existing Receivables and the proceeds thereof,
is enforceable upon execution and delivery of this Agreement,
or, with respect to then existing Receivables in Additional
Accounts, as of the applicable Addition Date, and which will be
enforceable with respect to such Receivables hereafter and
thereafter created and the proceeds thereof upon such creation,
in each case except as such enforceability may be limited by
applicable 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). Upon the
filing of the financing statements pursuant to Section 2.1 and,
in the case of Receivables hereafter created and the proceeds
thereof, upon the creation thereof, the Trust shall have a
first priority security interest in such property and
"proceeds" (as defined in the UCC) except for Liens permitted
under subsection 2.7(b);
(vi) except as otherwise expressly provided in this
Agreement or any Supplement, neither the Transferor nor any
Person claiming through or under the Transferor has any claim
to or interest in the Collection Account, the Special Funding
Account, any Series Account or any Enhancement;
(vii) on the Trust Cut-Off Date, with respect to each
Initial Account, on the date of its creation, with respect to
each Automatic Additional Account and, on the applicable
Addition Cut-Off Date, with respect to each related
Supplemental Account each Account classified as an "Eligible
Account" by the Transferor in any document or report delivered
hereunder will satisfy the requirements contained in the
definition of Eligible Account and each Receivable classified
as an "Eligible Receivable" by the Transferor in any document
or report delivered hereunder will satisfy the requirements
contained in the definition of Eligible Receivable;
(viii) on the Trust Cut-Off Date, each Receivable then
existing is an Eligible Receivable, on the date of creation of
each Automatic Additional Account, each Receivable contained in
such Automatic Additional Account is an Eligible Receivable
and, on the applicable Addition Cut-Off Date, each Receivable
contained in any related Supplemental Account is an Eligible
Receivable; and
(ix) as of the date of the creation of any new
Receivable, such Receivable is an Eligible Receivable.
(b) Notice of Breach. The representations and warranties of the
Transferor set forth in this Section 2.4 shall survive the transfer and
assignment by the Transferor of Receivables to the Trust. Upon discovery by
the Transferor, the Servicer or the Trustee of a breach of any of the
representations and warranties by the Transferor set forth in this Section
2.4, the party discovering such breach shall give prompt written notice to
the others and to each Enhancement Provider, if any, entitled thereto
pursuant to the relevant Supplement. The Transferor agrees to cooperate
with the Servicer and the Trustee in attempting to cure any such breach.
For purposes of the representations and warranties set forth in this
Section 2.4, each reference to a Supplement shall be deemed to refer only
to those Supplements in effect as of the date of the relevant
representations or warranties.
Section 2.5. Reassignment of Ineligible Receivables. (a)
Reassignment of Receivables. In the event that (i) any representation or
warranty of the Transferor contained in subsection 2.4(a)(ii), (iii), (iv),
(vii), (viii) or (ix) is not true and correct in any material respect as of
the date specified therein with respect to any Receivable transferred to
the Trust by the Transferor or any Account owned by the Credit Card
Originator and as a result of such breach any Receivables in the related
Account become Defaulted Receivables or the Trust's rights in, to or under
such Receivables or the proceeds of such Receivables are impaired or such
proceeds are not available for any reason to the Trust free and clear of
any Lien, unless cured within 60 days (or such longer period, not in excess
of 150 days, as may be agreed to by the Trustee) after the earlier to occur
of the discovery thereof by the Transferor or receipt by the Transferor or
a designee of the Transferor of notice thereof given by the Trustee, or
(ii) it is so provided in subsection 2.7(a) with respect to any Receivables
transferred to the Trust by the Transferor, then such Receivable shall be
designated an "Ineligible Receivable" and shall be assigned a principal
balance of zero for the purpose of determining the aggregate amount of
Principal Receivables on any day; provided, however, that such Receivables
will not be deemed to be Ineligible Receivables but will be deemed an
Eligible Receivable and such Principal Receivables shall be included in
determining the aggregate Principal Receivables in the Trust if, on any day
prior to the end of such 60-day or longer period, (x) either (A) in the
case of an event described in clause (i) above the relevant representation
and warranty shall be true and correct in all material respects as if made
on such day or (B) in the case of an event described in clause (ii) above
the circumstances causing such Receivable to become an Ineligible
Receivable shall no longer exist and (y) the Transferor shall have
delivered an Officer's Certificate describing the nature of such breach and
the manner in which the relevant representation and warranty became true
and correct.
(b) Price of Reassignment. On and after the date of its
designation as an Ineligible Receivable, each Ineligible Receivable shall
not be given credit in determining the aggregate amount of Principal
Receivables used to calculate the Transferor Amount, and the Floating
Allocation Percentage and the Principal Allocation Percentage applicable to
any Series. If, following the exclusion of such Principal Receivables from
the calculation of the Transferor Amount, the Transferor Amount (excluding
the interest represented by any Supplemental Certificate) would otherwise
be less than the Required Retained Transferor Amount, the Transferor shall
make a deposit into the Special Funding Account in immediately available
funds prior to the next succeeding Business Day in an amount equal to the
amount by which the Transferor Amount (excluding the interest represented
by any Supplemental Certificate) would otherwise be less than the Required
Retained Transferor Amount (up to the amount of such Principal
Receivables). The payment of such deposit amount in immediately available
funds shall otherwise be considered payment in full of all of the
Ineligible Receivables.
The obligation of the Transferor to make the deposits, if any,
required to be made to the Special Funding Account as provided in this
Section 2.5, shall constitute the sole remedy respecting the event giving
rise to such obligation available to Certificateholders (or the Trustee on
behalf of the Certificateholders) or any Enhancement Provider.
Section 2.6. Reassignment of Receivables in Trust Portfolio. If
any representation or warranty of the Transferor set forth in subsection
2.3(a), (b) or (c) or subsection 2.4(a)(i), (v) or (vi) is not true and
correct in any material respect and such breach has a material adverse
effect on the Certificateholders' Interest in the Receivables transferred
to the Trust by the Transferor, then either the Trustee or the Holders of
Investor Certificates evidencing not less than 50% of the aggregate unpaid
principal amount of all outstanding Investor Certificates, by notice then
given to the Transferor and the Servicer (and to the Trustee if given by
the Investor Certificateholders), may direct the Transferor to accept a
reassignment of the Receivables transferred to the Trust by the Transferor
if such breach and any material adverse effect caused by such breach is not
cured within 60 days of such notice (or within such longer period, not in
excess of 150 days, as may be specified in such notice), and upon those
conditions the Transferor shall be obligated to accept such reassignment on
the terms set forth below; provided, however, that such Receivables will
not be reassigned to the Transferor if, on any day prior to the end of such
60-day or longer period (i) the relevant representation and warranty shall
be true and correct in all material respects as if made on such day and
(ii) the Transferor shall have delivered an Officer's Certificate
describing the nature of such breach and the manner in which the relevant
representation and warranty became true and correct.
The Transferor shall deposit in the Collection Account in
immediately available funds not later than 12:00 noon, New York City time,
on the first Distribution Date following the Monthly Period in which such
reassignment obligation arises, in payment for such reassignment, an amount
equal to the sum of the amounts specified therefor with respect to each
outstanding Series in the related Supplement. Notwithstanding anything to
the contrary in this Agreement, such amounts shall be distributed on such
Distribution Date in accordance with Article IV and the terms of each
Supplement. The payment of such deposit amount in immediately available
funds shall otherwise be considered payment in full of all of the
Receivables.
Upon the deposit, if any, required to be made to the Collection
Account as provided in this Section 2.6 and the reassignment of the
applicable Receivables, the Trustee, on behalf of the Trust, shall
automatically and without further action be deemed to transfer, assign, set
over and otherwise convey to the Transferor or its designee, without
recourse, representation or warranty (except for the warranty that since
the date of transfer by the Transferor, the Trustee has not sold,
transferred or encumbered any such Receivables or interest therein), all
the right, title and interest of the Trust in and to such Receivables, all
monies due or to become due and all amounts received with respect thereto
and all proceeds thereof. The Trustee shall execute such documents and
instruments of transfer or assignment and take such other actions as shall
reasonably be requested by the Transferor to effect the conveyance of such
Receivables pursuant to this Section 2.6. The obligation of the Transferor
to accept reassignment of any Receivables, and to make the deposits, if
any, required to be made to the Collection Account as provided in this
Section 2.6, shall constitute the sole remedy respecting the event giving
rise to such obligation available to Certificateholders (or the Trustee on
behalf of the Certificateholders).
Section 2.7. Covenants of the Transferor. The Transferor hereby
covenants as follows:
(a) Receivables to be Accounts, General Intangibles or Chattel
Paper. Except in connection with the enforcement or collection of an
Account, the Transferor will take no action to cause any Receivable
transferred by it to the Trust to be evidenced by any instrument (as
defined in the UCC) and, if any such Receivable is so evidenced
(whether or not in connection with the enforcement or collection of
an Account), it shall be deemed to be an Ineligible Receivable in
accordance with subsection 2.5(a) and shall be reassigned to the
Transferor in accordance with subsection 2.5(b).
(b) Security Interests. Except for the conveyances hereunder,
the Transferor will not sell, pledge, assign or transfer or otherwise
convey to any other Person, or grant, create, incur, assume or suffer
to exist any Lien on any Receivable, whether now existing or
hereafter created, or any interest therein; the Transferor will
immediately notify the Trustee of the existence of any Lien on any
Receivable of which the Transferor has knowledge; and the Transferor
shall defend the right, title and interest of the Trust in, to and
under the Receivables, whether now existing or hereafter created,
against all claims of third parties claiming through or under the
Transferor; provided, however, that nothing in this subsection 2.7(b)
shall prevent or be deemed to prohibit the Transferor from suffering
to exist upon any of the Receivables any Liens for taxes if such
taxes shall not at the time be due and payable or if the Transferor
shall currently be contesting the validity thereof in good faith by
appropriate proceedings and shall have set aside on its books
adequate reserves with respect thereto. Notwithstanding the
foregoing, nothing in this subsection 2.7(b) shall be construed to
prevent or be deemed to prohibit (i) the transfer of the Transferor
Certificate and certain other rights of the Transferor in accordance
with the terms of this Agreement and any related Supplement or (ii)
the sale of any Defaulted Receivables and Finance Charge Receivables
in Accounts that have been reconveyed to the Transferor pursuant to
Section 2.10 provided that Recoveries on such Accounts shall be
applied as provided herein and that with respect to any Monthly
Period, the aggregate amount of sales proceeds received from such
sold receivables shall not exceed the greater of (x) 0.20% of the
aggregate outstanding balance of all Receivables on the first day of
such Monthly Period or (y) $5,000,000.
(c) Transferor's Interest. Except as otherwise permitted
herein, including in Sections 2.12, 6.3 and 7.2, the Transferor
agrees not to transfer, assign, exchange or otherwise convey or
pledge, hypothecate or otherwise grant a security interest in the
Transferor's Interest represented by the Transferor Certificate or
any Supplemental Certificate and any such attempted transfer,
assignment, exchange, conveyance, pledge, hypothecation or grant
shall be void.
(d) Delivery of Collections or Recoveries. If the Transferor
receives Collections or Recoveries, the Transferor agrees to pay the
Servicer all such Collections and Recoveries as soon as practicable
after receipt thereof but in no event later than two Business Days
after the Date of Processing by the Transferor.
(e) Notice of Liens. The Transferor shall notify the Trustee
and each Enhancement Provider, if any, entitled to such notice
pursuant to the relevant Supplement promptly after becoming aware of
any Lien on any Receivable other than the conveyances hereunder or
Liens permitted under subsection 2.7(b).
(f) Separate Corporate Existence. The Transferor
shall:
(i) Maintain in full effect its existence, rights and
franchises as a corporation under the laws of the state of its
incorporation and obtain and preserve its qualification to do
business in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability
of this Agreement and the Receivables Purchase Agreement and
each other instrument or agreement necessary or appropriate to
proper administration hereof and permit and effectuate the
transactions contemplated hereby.
(ii) Maintain its own deposit account or accounts,
separate from those of any Affiliate of the Transferor, with
commercial banking institutions. The funds of the Transferor
will not be diverted to any other Person or for other than the
corporate use of the Transferor, and, except as may be
expressly permitted by this Agreement or the Receivables
Purchase Agreement, the funds of the Transferor shall not be
commingled with those of any Affiliate of the Transferor.
(iii) Ensure that, to the extent that it shares the same
officers or other employees as any of its stockholders or
Affiliates, the salaries of and the expenses related to
providing benefits to such officers and other employees shall
be fairly allocated among such entities, and each such entity
shall bear its fair share of the salary and benefit costs
associated with all such common officers and employees.
(iv) Ensure that, to the extent that it jointly contracts
with any of its stockholders or Affiliates to do business with
vendors or service providers or to share overhead expenses, the
costs incurred in so doing shall be allocated fairly among such
entities, and each such entity shall bear its fair share of
such costs. To the extent that the Transferor contracts or does
business with vendors or service providers where the goods and
services provided are partially for the benefit of any other
Person, the costs incurred in so doing shall be fairly
allocated to or among such entities for whose benefit the goods
and services are provided, and each such entity shall bear its
fair share of such costs. All material transactions between the
Transferor and any of its Affiliates shall be only on an
arm's-length basis.
(v) Maintain a principal executive and administrative
office through which its business is conducted separate from
those of its stockholders and Affiliates. To the extent that
the Transferor and any of its stockholders or Affiliates have
offices in contiguous space, there shall be fair and
appropriate allocation of overhead costs among them, and each
such entity shall bear its fair share of such expenses.
(vi) Conduct its affairs strictly in accordance with its
Articles of Incorporation and observe all necessary,
appropriate and customary corporate formalities, including, but
not limited to, holding all regular and special stockholders'
and directors' meetings appropriate to authorize all corporate
action, keeping separate and accurate minutes of such meetings,
passing all resolutions or consents necessary to authorize
actions taken or to be taken, and maintaining accurate and
separate books, records and accounts, including, but not
limited to, payroll and intercompany transaction accounts.
Regular stockholders' and directors' meetings shall be held at
least annually.
(vii) Ensure that its Board of Directors shall be elected
independently from the Boards of Directors of its Affiliates
and shall at all times include at least one Independent
Director (for purposes hereof, "Independent Director" shall
mean any member of the Board of Directors of the Transferor who
is not and has not at any time been (x) a director, officer,
employee or shareholder of any Affiliate of the Transferor
within a period of three years prior to such Person's election
to the Board of Directors or (y) a member of the immediate
family of any of the foregoing).
(viii) Ensure that decisions with respect to its business
and daily operations shall be independently made by the
Transferor (although the officer making any particular decision
may also be an officer or director of an Affiliate of the
Transferor) and shall not be dictated by an Affiliate of the
Transferor.
(ix) Act solely in its own corporate name and through its
own authorized officers and agents, and no Affiliate of the
Transferor shall be appointed to act as agent of the
Transferor, except as expressly contemplated by this Agreement
or the Receivables Purchase Agreement.
(x) Ensure that no Affiliate of the Transferor shall
advance funds to the Transferor, other than capital
contributions from TCC made to enable the Transferor to pay the
purchase price of Receivables or as is otherwise provided in
the Receivables Purchase Agreement, and no Affiliate of the
Transferor will otherwise supply funds to, or guaranty debts
of, the Transferor; provided, however, that an Affiliate of the
Transferor may provide funds to the Transferor in connection
with capitalization of the Transferor provided to assure that
the Transferor has "substantial assets" as described in
Treasury Regulation Section 301.7701- 2(d)(2).
(xi) Not enter into any guaranty, or otherwise become
liable, with respect to any obligation of any Affiliate of the
Transferor other than with respect to Section 7.4.
(xii) Ensure that any financial reports required of the
Transferor shall comply with generally accepted accounting
principles and shall be issued separately from, but may be
consolidated with, any reports prepared for any of its
Affiliates.
(g) Continuous Perfection. The Transferor shall not change its
name, identity or structure in any manner that could cause any
financing or continuation statement filed pursuant to this Agreement
to be misleading within the meaning of Section 9-402(7) of the UCC
(or any other then applicable provision of the UCC) unless the
Transferor shall have delivered to the Trustee at least 30 days'
prior written notice thereof and, no later than 30 days after making
such change, shall have taken all action necessary or advisable to
amend such financing statement or continuation statement so that it
is not misleading. The Transferor shall not change its chief
executive office or change the location of its principal records
concerning the Receivables, the Trust Assets or the Collections
unless it has delivered to the Trustee at least 30 days' prior
written notice of its intention to do so and has taken such action as
is necessary or advisable to cause the interest of the Trustee in the
Receivables and other Trust Assets to continue to be perfected with
the priority required by this Agreement.
(h) Reports to the Commission. The Transferor shall, on behalf
of the Trust, cause to be filed with the Commission any periodic
reports required to be filed under the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder.
(i) Net Worth. The Transferor shall retain in force and shall
enforce according to its terms that certain demand note (the "Demand
Note") dated as of September 13, 1995, between ▇▇▇▇▇▇ ▇▇▇▇▇▇
Corporation (now known as Target Corporation), as the maker, and
▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation (now known as Target Capital
Corporation), as the payee and any other demand note provided by
Target Corporation to TCC pursuant to the Demand Note.
Notwithstanding the foregoing, at such time as the Demand Note shall
become due according to its terms, the Transferor may enter into a
new demand note or alternative arrangement (in lieu of retaining the
cash paid under the Demand Note) if it obtains an opinion of counsel
that use of such replacement demand note or alternative arrangement
will not cause the Trust to be classified for federal income tax
purposes as an association taxable as a corporation.
Section 2.8. Covenants of the Transferor with Respect to the
Bank Purchase Agreement. The Transferor, in its capacity as purchaser of
the Receivables from TCC pursuant to the Receivables Purchase Agreement,
hereby covenants that the Transferor will at all times enforce the
covenants and agreements of the Credit Card Originator in the Bank Purchase
Agreement assigned by TCC to the Transferor in the Receivables Purchase
Agreement, including, without limitation, covenants to the effect set forth
below.
(a) Periodic Finance Charges and Other Fees. Except as
otherwise required by any Requirement of Law, or as is deemed by the
Credit Card Originator in its sole discretion to be appropriate, it
shall not at any time reduce the annual percentage rates of the
Periodic Finance Charges assessed on the Receivables or reduce other
fees on the Accounts, if, either (a) as a result of such reduction it
is reasonably expected that such reduction will cause an Early
Amortization Event to occur with respect to a Series or (b) such
reduction (x) if the Credit Card Originator owns a comparable segment
of receivables, is not applied to any such comparable segment of
consumer open end credit accounts owned by the Credit Card Originator
that have characteristics the same as or substantially similar to the
Receivables that are the subject of such change and (y) if the Credit
Card Originator does not own such a comparable segment of
receivables, will not be made with the intent to materially benefit
the Transferor over the Investor Certificateholders or to materially
adversely affect the Investor Certificateholders, except as otherwise
restricted by an endorsement, sponsorship, or other agreement between
the Transferor and an unrelated third party or by the terms of the
Accounts.
(b) Credit Card Agreements and Credit Card Guidelines. The
Credit Card Originator shall comply with and perform its obligations
under the Credit Card Agreements relating to the Accounts and the
Credit Card Guidelines except insofar as any failure so to comply or
perform would not materially and adversely affect the rights of the
Trust or the Certificateholders hereunder or under the Certificates.
Unless required by law or unless, in its sole discretion, the Credit
Card Originator deems it appropriate, it will not change the terms
and provisions of the Credit Card Agreements or the Credit Card
Guidelines with respect to any of the Accounts in any respect
(including the calculation of the amount, or the timing, of
charge-offs and the Periodic Finance Charges and other fees to be
assessed thereon), if, either (i) as a result of such change it is
reasonably expected that such change will cause an Early Amortization
Event to occur with respect to a Series or (ii) such change (x) if
the Credit Card Originator owns a comparable segment of receivables,
is not applied to any such comparable segment of consumer open end
credit accounts owned by the Credit Card Originator that have
characteristics the same as or substantially similar to the
Receivables that are the subject of such change and (y) if the Credit
Card Originator does not own such a comparable segment of
receivables, will not be made with the intent to materially benefit
the Transferor over the Investor Certificateholders or to materially
adversely affect the Investor Certificateholders, except as otherwise
restricted by an endorsement, sponsorship, or other agreement between
the Transferor and an unrelated third party or by the terms of the
Accounts.
The Transferor further covenants that the Transferor will not
enter into any amendments to the Receivables Purchase Agreement unless the
Rating Agency Condition has been satisfied.
Section 2.9. Addition of Accounts. (a) Required Additions. (i)
If, as of the close of business on the last Business Day of any Monthly
Period, either (x) the Transferor Amount (excluding the interest
represented by any Supplemental Certificate) is less than the Required
Retained Transferor Amount on such date or (y) the aggregate amount of
Principal Receivables is less than the Required Principal Balance on such
date, the Transferor shall on or prior to the close of business on the 10th
Business Day following the last Business Day of such Monthly Period (the
"Required Designation Date"), unless the Transferor Amount (excluding the
interest represented by any Supplemental Certificate) equals or exceeds the
Required Retained Transferor Amount or the aggregate amount of Principal
Receivables equals or exceeds the Required Principal Balance, as the case
may be, in either case as of the close of business on any day after the
last Business Day of such Monthly Period and prior to the Required
Designation Date, designate additional Eligible Accounts to be included as
Accounts as of the Required Designation Date or any earlier date in a
sufficient amount such that, after giving effect to such addition, the
Transferor Amount (excluding the interest represented by any Supplemental
Certificate) as of the close of business on the Addition Date is at least
equal to the Required Retained Transferor Amount on such date and the
aggregate amount of Principal Receivables equals or exceeds the Required
Principal Balance on such date. The failure of any condition set forth in
paragraph (c) or (d) below, as the case may be, shall not relieve the
Transferor of its obligation pursuant to this paragraph; provided, however,
that the failure of the Transferor to transfer Receivables to the Trust as
provided in this paragraph solely as a result of the unavailability of a
sufficient amount of Eligible Receivables shall not constitute a breach of
this Agreement; provided, further, that any such failure which has not been
timely cured will nevertheless result in the occurrence of an Early
Amortization Event with respect to each Series for which, pursuant to the
Supplement therefor, a failure by the Transferor to convey Receivables in
Supplemental Accounts or Participation Interests to the Trust by the day on
which it is required to convey such Receivables or Participation Interests
constitutes an "Early Amortization Event" (as defined in such Supplement).
(ii) In lieu of, or in addition to, designating Supplemental
Accounts pursuant to clause (i) above, the Transferor may, subject to the
conditions specified in paragraph (c) below, convey to the Trust
participations representing undivided interests in a pool of assets
primarily consisting of open end credit card receivables generated in
credit card accounts owned by a Credit Card Originator, and any interests
in the foregoing, including securities representing or backed by such
receivables, and other self- liquidating financial assets including,
without limitation, any "Eligible Assets" as such term is defined in Rule
3a-7 under the Investment Company Act (or any successor to such Rule) and
collections thereon ("Participation Interests"); provided that an Opinion
of Counsel is delivered that such Participation Interest will not be
classified or cause the Trust to be classified as an equity interest in an
association taxable as a corporation; provided, further, that to the extent
required pursuant to the Act, any Participation Interests transferred to
the Trust (a) shall have been (i) registered under the Act or (ii) held for
at least the Rule 144(k) holding period, and (b) shall be acquired in
secondary market transactions not from the issuer or an affiliate. The
addition of Participation Interests in the Trust pursuant to this paragraph
(a) or paragraph (b) below shall be effected by a Supplement, dated the
applicable Addition Date, pursuant to subsection 13.1(a).
(b) Permitted Additions. The Transferor may from time to time
after an Automatic Addition Termination Date or an Automatic Addition
Suspension Date (and in the latter case, prior to a Restart Date), at its
sole discretion, subject to the conditions specified in paragraph (c)
below, designate additional Eligible Accounts to be included as Accounts or
Participation Interests to be included as Trust Assets, in either case as
of the applicable Addition Date.
(c) Conditions to Addition. On the Addition Date with respect
to any Supplemental Accounts or Participation Interests added pursuant to
subsection 2.9(a) or 2.9(b), the Credit Card Originator will sell to TCC,
TCC will thereafter sell to the Transferor and the Transferor will
thereafter transfer to the Trust the Receivables arising in Supplemental
Accounts (and such Supplemental Accounts shall be deemed to be Accounts for
purposes of this Agreement) and Participation Interests, subject to the
satisfaction of the following conditions:
(i) on or before the tenth Business Day immediately
preceding the Addition Date, the Transferor shall have given
the Trustee, the Servicer, each Rating Agency and any
Enhancement Provider entitled thereto pursuant to the relevant
Supplement written notice that the Supplemental Accounts or
Participation Interests will be included and specifying the
applicable Addition Date, the Addition Cut-Off Date, the
approximate number of accounts expected to be added and the
approximate aggregate balances expected to be outstanding in
the accounts to be added;
(ii) in the case of Supplemental Accounts, the Transferor
shall have delivered to the Trustee copies of UCC-1 financing
statements covering such Supplemental Accounts, if necessary to
perfect the Trust's interest in the Receivables arising
therein;
(iii) as of each of the Addition Cut-Off Date and the
Addition Date, (x) no Insolvency Event with respect to the
Credit Card Originator, TCC or the Transferor shall have
occurred, (y) the Credit Card Originator, TCC and the
Transferor shall not be insolvent and (z) the transfer of the
Receivables arising in the Supplemental Accounts or the
Participation Interests to the Trust shall not have been made
in contemplation of the occurrence of an Insolvency Event or
the insolvency thereof;
(iv) except in the case of an Addition pursuant to
subsection 2.9(a), the Rating Agency Condition shall have been
satisfied and in the case of an Addition pursuant to subsection
2.9(a) which would exceed the Aggregate Addition Limit, the
Transferor shall have provided to Standard & Poor's at least 10
Business Days' prior written notice of such Addition and at or
prior to the end of such 10 Business Day period, the Transferor
shall receive a notice in writing from Standard & Poor's that
such Addition will not result in the lowering or withdrawal of
its then existing rating of the Investor Certificates of any
Series;
(v) the Transferor shall have delivered to the Trustee
and any Enhancement Provider entitled thereto pursuant to the
relevant Supplement an Officer's Certificate, dated the
Addition Date, stating that (x) in the case of Supplemental
Accounts, as of the applicable Addition Date the Supplemental
Accounts are all Eligible Accounts, (y) to the extent
applicable, the conditions set forth in clauses (ii) through
(iv) above have been satisfied and (z) the Transferor
reasonably believes that (A) the addition by the Transferor of
the Receivables arising in the Supplemental Accounts or of the
Participation Interests to the Trust will not, based on the
facts known to such officer at the time of such certification,
then or thereafter cause an Early Amortization Event to occur
with respect to any Series and (B) in the case of Supplemental
Accounts, no selection procedure was utilized by the Transferor
which would result in a selection of Supplemental Accounts
(from among the available Eligible Accounts owned by the Credit
Card Originator) that would have a result that would be
materially less favorable to the interests of the Investor
Certificateholders of any Series as of the Addition Date than a
random selection; and
(vi) the Transferor shall have delivered to the Trustee,
each Rating Agency and any Enhancement Provider entitled
thereto pursuant to the relevant Supplement an outside Opinion
of Counsel, dated the Addition Date, in accordance with
subsection 13.2(d).
(d) Automatic Additional Accounts.
(i) All accounts which meet the definition of Automatic
Additional Accounts shall be included as Accounts from and
after the date upon which such Automatic Additional Accounts
are created and all Receivables in such Automatic Additional
Accounts, whether such Receivables are then existing or
thereafter created, shall be transferred automatically to the
Trust upon purchase by the Transferor. For all purposes of this
Agreement, all receivables of such Automatic Additional
Accounts shall be treated as Receivables upon their creation.
The Transferor may elect at any time to terminate the inclusion
in Accounts of new accounts which would otherwise be Automatic
Additional Accounts as of any Business Day (the "Automatic
Addition Termination Date"), or suspend any such inclusion as
of any Business Day (an "Automatic Addition Suspension Date")
until a date (the "Restart Date") to be notified in writing by
the Transferor to the Trustee by delivering to the Trustee, the
Servicer and each Rating Agency prior written notice of such
election at least 10 days prior to such Automatic Addition
Termination Date or Automatic Addition Suspension date.
Promptly after an Automatic Addition Termination Date or any
Automatic Addition Suspension Date, or a Restart Date, the
Transferor and the Trustee agree to execute and the Transferor
agrees to record and file at its own expense an amendment to
the financing statements referred to in Section 2.1 to specify
the accounts then subject to this Agreement (which
specification may incorporate a list of accounts by reference)
and, except in connection with any such filing made after a
Restart Date, to release any security interest in any accounts
created after the Automatic Addition Termination Date or any
Automatic Addition Suspension Date.
(ii) The Transferor shall not be permitted to continue to
designate Automatic Additional Accounts to be included as
Accounts pursuant to this subsection 2.9(d) (and the
Determination Date on which such determination is made shall be
also referred to as an "Automatic Addition Suspension Date")
unless:
(I) the arithmetic average for the three
Monthly Periods preceding the then current
Monthly Period, of the annualized
percentage equivalent of a fraction for
each respective Monthly Period, the
numerator of which is equal to the
Defaulted Amount for the respective Monthly
Period and the denominator of which is
equal to the aggregate Principal
Receivables as of the first day of the
respective Monthly Period, is less than
10.50%;
(II) the arithmetic average for the three
Monthly Periods preceding the then current
Monthly Period, of the percentage
equivalent of a fraction for each
respective Monthly Period, the numerator of
which is equal to the amount of Collections
received during the respective Monthly
Period and the denominator of which is
equal to the aggregate Principal
Receivables as of the first day of the
respective Monthly Period, is greater than
or equal to 10.0%;
(III) the arithmetic average for the three
Monthly Periods preceding the then current
Monthly Period of the Trust Portfolio Yield
minus the weighted arithmetic average of
the Base Rates for each Series then
outstanding for such three Monthly Periods
is greater than or equal to 1.5%;
(IV) the number of accounts to be included as
Automatic Additional Accounts with respect
to the related six-month period is less
than or equal to 30% of the number of
Accounts as of the first day of such
six-month period;
provided, however, that the designation of Automatic Additional Accounts
shall be permitted to continue in the event that as of any date of
determination on which (x) any of the conditions in clauses (I) through
(III) listed above is not met, and if the Aggregate Addition Limit would be
exceeded as a result of the inclusion of such Automatic Additional Accounts
as Accounts or (y) the condition in clause (IV) above would not be
satisfied because the threshold specified therein would be exceeded as a
result of the inclusion of such Automatic Additional Accounts as Accounts,
the Rating Agency Condition shall have been satisfied with respect to such
inclusion;
(V) on each Determination Date, the Transferor
shall have delivered to the Rating Agencies
and the Trustee an Officer's Certificate,
certifying (i) that each Automatic
Additional Account designated as an
Eligible Account is an Eligible Account and
(ii) that either (x) the conditions under
clauses (I), (II) or (III) above shall be
satisfied or the Aggregate Addition Limit
would not be exceeded as a result of the
inclusion of such Automatic Additional
Accounts as Accounts and the limitation
under clause (IV) above will not be
exceeded or (y) if the conditions under
clauses (I), (II) or (III) shall not be
satisfied and the Aggregate Addition Limit
would be exceeded as a result of the
inclusion of such Automatic Additional
Accounts as Accounts, or the condition
under clause (IV) above would not be
satisfied because the threshold specified
therein would be exceeded as a result of
the inclusion of Automatic Additional
Accounts as Accounts, the Rating Agency
Condition has been satisfied with respect
to such inclusion; and
(VI) as of the Addition Date, (x) no Insolvency
Event with respect to the Credit Card
Originator, TCC or the Transferor shall
have occurred, (y) the Credit Card
Originator, TCC and the Transferor shall
not be insolvent and (z) the transfer of
the Receivables arising in the Automatic
Additional Accounts to the Trust shall not
have been made in contemplation of the
occurrence of an Insolvency Event or the
insolvency thereof.
(iii) If the conditions of clauses (I) through (III) of clause
(ii) above are not satisfied and clause (IV) of clause (ii) above is
satisfied, the Transferor intends to continue to automatically add
accounts so long as the Aggregate Addition Limit is not exceeded.
Upon either (x) any one of the conditions set forth in clauses (I)
through (III) of clause (ii) above not being satisfied and the
Aggregate Addition Limit being exceeded or (y) the condition set
forth in clause (IV) above not being satisfied because the threshold
specified therein has been exceeded as specified in an Officer's
Certificate of the Transferor delivered pursuant to clause (ii)(V)
above, the Transferor shall cease to designate Automatic Additional
Accounts to be included as Accounts pursuant to this subsection
2.9(d) until a date (the "Restart Date") specified in a written
notice given by the Transferor to the Trustee; provided, however,
that the Transferor shall specify in such notice that on such Restart
Date (x) the conditions under clauses (I) through (III) of clause
(ii) above will be satisfied or the Aggregate Addition Limit would
not be exceeded as a result of the inclusion of Automatic Additional
Accounts as Accounts and the condition under clause (ii)(IV) above
will be satisfied on the Restart Date and (y) all accounts of the
Credit Card Originators shall have been designated Accounts either as
Automatic Additional Accounts prior to the Automatic Addition
Suspension Date or as Supplemental Accounts.
(e) Representations and Warranties. The Transferor hereby
represents and warrants to the Trust as of the related Addition Date as to
the matters relating to it set forth in paragraph (d)(iii) above and that
the file or list delivered pursuant to paragraph (f) below is, as of the
applicable Addition Cut-Off Date, true and complete in all material
respects.
(f) Delivery of Documents. In the case of the designation of
Supplemental Accounts, the Transferor shall deliver to the Trustee (i) the
computer file, microfiche list or printed list required to be delivered
pursuant to Section 2.1 with respect to such Supplemental Accounts on the
applicable Document Delivery Date and (ii) a duly executed, written
Assignment (including an acceptance by the Trustee for the benefit of the
Certificateholders), substantially in the form of Exhibit B (the
"Assignment"), on the Document Delivery Date.
(g) Adjustment to Calculations. The Transferor may direct that
the Principal Receivables in the Additional Accounts be treated as
Principal Receivables outstanding on the last day of the Monthly Period
preceding the Monthly Period in which the Addition is made for purposes of
calculating Floating Allocation Percentages and Principal Allocation
Percentages for the Monthly Period of such Addition. Such direction may be
made on the Addition Date only if all collections with respect to the
Additional Accounts for the period from the last day of the preceding
Monthly Period through the Addition Date are deposited in the Collection
Account on the Addition Date. Following any such Addition, the Servicer
shall allocate collections for the balance of such Monthly Period,
including the collections deposited on the Addition Date, to the
Certificateholders' Interest of each Series and the Transferor Amount so
that each interest receives the same allocations of Finance Charge
Receivables, Principal Receivables and Defaulted Amounts that it would have
received if such Additional Accounts had been included in the Trust for the
entire Monthly Period in which the Addition occurred.
Section 2.10. Removal of Accounts. On any day of any Monthly
Period the Transferor shall have the right to require the reassignment to
it or its designee of all the Trust's right, title and interest in, to and
under the Receivables then existing and thereafter created, all monies due
or to become due and all amounts received with respect thereto and all
proceeds thereof in or with respect to the Accounts then owned by the
Credit Card Originator and designated by the Transferor (the "Removed
Accounts") or Participation Interests (unless otherwise set forth in the
applicable Supplement), upon satisfaction of the following conditions:
(a) on or before the tenth Business Day immediately
preceding the Removal Date (the "Removal Notice Date") the
Transferor shall have given the Trustee, the Servicer, each
Rating Agency and any Enhancement Provider entitled thereto
pursuant to the relevant Supplement written notice of such
removal and specifying the date for removal of the Removed
Accounts and Participation Interests (the "Removal Date");
(b) with respect to Removed Accounts, on or prior to the
date that is 10 Business Days after the Removal Date, the
Transferor shall have delivered to the Trustee a computer file,
microfiche list or printed list containing a true and complete
list of the Removed Accounts specifying for each such Account,
as of the Removal Notice Date, its account number, the
aggregate amount outstanding, and the aggregate amount of
Principal Receivables outstanding in such Account;
(c) with respect to Removed Accounts, the Transferor
shall have represented and warranted as of the Removal Date
that the list of Removed Accounts delivered pursuant to
paragraph (b) above, as of the Removal Date, is true and
complete in all material respects;
(d) the Rating Agency Condition shall have
been satisfied with respect to such removal;
(e) the Transferor shall have delivered to the Trustee
and any Enhancement Provider entitled thereto pursuant to the
relevant Supplement an Officer's Certificate, dated as of the
Removal Date, to the effect that the Transferor reasonably
believes that (i) such removal will not, based on the facts
known to such officer at the time of such certification, then
or thereafter cause an Early Amortization Event or an event
which with notice or lapse of time would constitute an Early
Amortization Event to occur with respect to any Series and (ii)
no selection procedure believed by the Transferor to be
materially adverse to the interests of the Investor
Certificateholders has been used in removing Removed Accounts
from among any pool of Accounts or Participation Interests of a
similar type;
(f) the Transferor shall not utilize a selection
procedure intended to include a disproportionately higher level
of Defaulted Receivables in the Removed Accounts than exist in
the Accounts and shall not remove such Accounts for the
intended purpose of mitigating losses to the Trust; and
(g) the Transferor shall pay to the Trust the greater of
(i) the fair market value (as of the Removal Date) of the
Receivables to be removed and (ii) the amount of the Principal
Receivables to be removed; to the extent the fair market value
of the Receivables exceeds the amount of the Principal
Receivables to be removed, the amount of such excess shall be
treated as Collections of Finance Charge Receivables.
Upon satisfaction of the above conditions, the Trustee shall
execute and deliver to the Transferor or its designee a written
reassignment in substantially the form of Exhibit C (the "Reassignment")
and shall, without further action, be deemed to transfer, assign, set over
and otherwise convey to the Transferor or its designee, effective as of the
Removal Date, without recourse, representation or warranty, all the right,
title and interest of the Trust in and to the Receivables arising in the
Removed Accounts or the Participation Interests, all monies due and to
become due and all amounts received with respect thereto and all proceeds
thereof. In addition, the Trustee shall execute such other documents and
instruments of transfer or assignment and take such other actions as shall
reasonably be requested by the Transferor to effect the conveyance of
Receivables pursuant to this Section 2.10.
In addition to the foregoing, on the date when any Receivable
in an Account becomes a Defaulted Receivable, the Trust shall automatically
and without further action or consideration be deemed to transfer, set over
and otherwise convey to the Transferor, without recourse, representation or
warranty, all right, title and interest of the Trust in and to the
Defaulted Receivables and Finance Charge Receivables which have been
charged off as uncollectible, in such Account, all monies due or to become
due with respect thereto and all proceeds thereof; provided that Recoveries
of such Account shall be applied as provided herein. Each such Account
shall constitute a Removed Account for which the applicable Removal Date
shall be the first date on which any Receivable in such Account became a
Defaulted Receivable.
Section 2.11. Discount Option. (a) The Transferor shall have
the option to designate at any time a fixed or floating percentage (the
"Discount Percentage"), of the amount of Receivables arising in the
Accounts on or after the date such designation becomes effective that would
otherwise constitute Principal Receivables (prior to subtracting from
Principal Receivables, Finance Charge Receivables that are Discount Option
Receivables) to be treated as Finance Charge Receivables. The Transferor
may from time to time increase (subject to the limitations described
below), reduce or eliminate the Discount Percentage for Discount Option
Receivables arising in the Accounts on and after the date of such change.
The Transferor must provide 30 days' prior written notice to the Servicer,
the Trustee and each Rating Agency of any such increase, reduction or
elimination, and such increase, reduction or elimination shall become
effective on the date specified therein only if (i) the Transferor has
delivered to the Trustee an Officer's Certificate to the effect that, based
on the facts known to such officer at the time, the Transferor reasonably
believes that such increase, reduction or elimination shall not at the time
of its occurrence cause an Early Amortization Event, or an event which with
notice or the lapse of time would constitute an Early Amortization Event,
to occur with respect to any Series and (ii) the Discount Percentage shall
not be greater than 3% at any time, unless the Transferor, the Servicer and
the Trustee shall have received written confirmation from each Rating
Agency that the Rating Agency Condition is satisfied.
(b) On each Date of Processing after the date on which the
Transferor's exercise of its discount option takes effect, the Transferor
shall treat Discount Option Receivables Collections as Collections of
Finance Charge Receivables.
Section 2.12. Additional Transferors. The Transferor may
designate additional 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, in connection with such designation, the
Transferor shall surrender the Transferor Certificate to the Trustee in
exchange for a newly issued Transferor Certificate reflecting such
additional Transferor's interest in the Transferor's Interest; provided,
however, that prior to any such designation and issuance the conditions set
forth in subsection 6.3(c) shall have been satisfied with respect thereto.
Section 2.13 Account Allocations. In the event that the
Transferor is unable for any reason to transfer Receivables to the Trust in
accordance with the provisions of this Agreement, including by reason of
the application of the provisions of Section 9.1 or any order of any
Governmental Authority (a "Transfer Restriction Event"), then, in any such
event, (a) the Transferor and the Servicer agree (except as prohibited by
any such order) to allocate and pay to the Trust, after the date of such
inability, all Collections, including Collections of Receivables
transferred to the Trust prior to the occurrence of such event, and all
amounts which would have constituted Collections but for the Transferor's
inability to transfer Receivables (up to an aggregate amount equal to the
amount of Receivables transferred to the Trust by the Transferor in the
Trust on such date), (b) the Transferor and the Servicer agree that such
amounts will be applied as Collections in accordance with Article IV and
the terms of each Supplement and (c) for so long as the allocation and
application of all Collections and all amounts that would have constituted
Collections are made in accordance with clauses (a) and (b) above,
Principal Receivables and all amounts which would have constituted
Principal Receivables but for the Transferor's inability to transfer
Receivables to the Trust which are written off as uncollectible in
accordance with this Agreement shall continue to be allocated in accordance
with Article IV and the terms of each Supplement. For the purpose of the
immediately preceding sentence, the Transferor and the Servicer shall treat
the first received Collections with respect to the Accounts as allocable to
the Trust until the Trust shall have been allocated and paid Collections in
an amount equal to the aggregate amount of Principal Receivables in the
Trust as of the date of the occurrence of such event. If the Transferor and
the Servicer are unable pursuant to any Requirements of Law to allocate
Collections as described above, the Transferor and the Servicer agree that,
after the occurrence of such event, payments on each Account with respect
to the principal balance of such Account shall be allocated first to the
oldest principal balance of such Account and shall have such payments
applied as Collections in accordance with Article IV and the terms of each
Supplement. The parties hereto agree that Finance Charge Receivables,
whenever created, accrued in respect of Principal Receivables which have
been conveyed to the Trust shall continue to be a part of the Trust
notwithstanding any cessation of the transfer of additional Principal
Receivables to the Trust and Collections with respect thereto shall
continue to be allocated and paid in accordance with Article IV and the
terms of each Supplement.
ARTICLE III
Administration and Servicing
of Receivables
Section 3.1. Acceptance of Appointment and Other Matters
Relating to the Servicer. (a) Retailers National Bank agrees to act as
Servicer under this Agreement and the Certificateholders by their
acceptance of Certificates consent to Retailers National Bank acting as
Servicer.
(b) The Servicer shall service and administer the Receivables,
shall collect payments due under the Receivables and shall charge off as
uncollectible Receivables, all in accordance with its customary and usual
servicing procedures for servicing credit card and other consumer open end
credit receivables comparable to the Receivables and in accordance with the
Credit Card Guidelines. The Servicer shall have full power and authority,
acting alone or through any party properly designated by it hereunder, to
do any and all things in connection with such servicing and administration
which it may deem necessary or desirable. Without limiting the generality
of the foregoing, subject to Section 10.1 and provided Retailers National
Bank is the Servicer, the Servicer or its designee (rather than the
Trustee) is hereby authorized and empowered (i) to make withdrawals and
payments or to instruct the Trustee to make withdrawals and payments from
the Collection Account and any Series Account, as set forth in this
Agreement or any Supplement, and (ii) to take any action required or
permitted under any Enhancement, as set forth in this Agreement or any
Supplement. Without limiting the generality of the foregoing and subject to
Section 10.1, the Servicer or its designee is hereby authorized and
empowered to make any filings, reports, notices, applications and
registrations with, and to seek any consents or authorizations from, the
Commission and any state securities authority on behalf of the Trust as may
be necessary or advisable to comply with any Federal or state securities
laws or reporting requirements; provided, however, that initially, the
Transferor shall make any filings with the Commission and under state
securities laws on behalf of the Trust. The Trustee shall furnish the
Servicer with any powers of attorney or other documents necessary or
appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
(c) The Servicer shall not be obligated to use separate
servicing procedures, offices, employees or accounts for servicing the
Receivables from the procedures, offices, employees and accounts used by
the Servicer in connection with servicing other credit card receivables.
(d) The Servicer shall comply with and perform its servicing
obligations with respect to the Accounts and Receivables in accordance with
the Credit Card Agreements relating to the Accounts and the Credit Card
Guidelines except insofar as any failure to so comply or perform would not
materially and adversely affect the Trust or the Investor
Certificateholders.
(e) The Servicer shall be liable for the payment, without
reimbursement, of all expenses incurred in connection with the Trust and
the servicing activities hereunder including expenses related to
enforcement of the Receivables, fees and disbursements of the Trustee, any
Paying Agent and any Transfer Agent and Registrar (including the reasonable
fees and expenses of its counsel) in accordance with Section 11.5, fees and
disbursements of independent accountants and all other fees and expenses,
including the costs of filing UCC continuation statements and the costs and
expenses relating to obtaining and maintaining the listing of any Investor
Certificates on any stock exchange, that are not expressly stated in this
Agreement to be payable by the Trust, the Investor Certificateholders of a
Series or the Transferor (other than Federal, state, local and foreign
income, franchise and other taxes, if any, or any interest or penalties
with respect thereto, assessed on the Trust).
(f) The Servicer agrees that upon a request by the Transferor
it will use its best efforts to obtain and maintain the listing of the
Investor Certificates of any Series or Class on any specified securities
exchange. If any such request is made, the Servicer shall give notice to
the Transferor and the Trustee on the date on which such Investor
Certificates are approved for such listing. Within three Business Days
following receipt of notice by the Servicer of any actual, proposed or
contemplated delisting of such Investor Certificates by any such securities
exchange the Servicer, in its sole discretion, may terminate any listing on
any such securities exchange.
Section 3.2. Servicing Compensation. As full compensation for
its servicing activities hereunder and as reimbursement for any expense
incurred by it in connection therewith, the Servicer shall be entitled to
receive a servicing fee (the "Servicing Fee") with respect to each Monthly
Period, payable monthly on the related Distribution Date, in an amount
equal to one-twelfth of the product of (a) the weighted average of the
Servicing Fee Rates with respect to each outstanding Series (based upon the
Servicing Fee Rate for each Series and the Series Invested Amount (or such
other amount as specified in the related Supplement) of such Series, in
each case as of the last day of the prior Monthly Period) and (b) the
amount of Principal Receivables on the last day of the prior Monthly
Period. The share of the Servicing Fee allocable to (i) the
Certificateholders' Interest of a particular Series with respect to any
Monthly Period (the "Monthly Servicing Fee") and (ii) the Enhancement
Invested Amount, if any, of a particular Series with respect to any Monthly
Period will each be determined in accordance with the relevant Supplement.
The share of the Servicing Fee allocable to any Participation with respect
to any Monthly Period will be determined in accordance with the applicable
Participation Supplement. The portion of the Servicing Fee with respect to
any Monthly Period not so allocated to the Certificateholders' Interest or
the Enhancement Invested Amount, if any, of a particular Series or any
Participation shall be paid from amounts allocable to the Holder of the
Transferor Certificate on the related Distribution Date. In no event shall
the Trust, the Trustee, the Investor Certificateholders of any Series, the
holder of any Participation or any Enhancement Provider be directly liable
for the share of the Servicing Fee with respect to any Monthly Period to be
paid from amounts allocable to the Holder of the Transferor Certificate.
Section 3.3. Representations, Warranties and Covenants of the
Servicer. Retailers National Bank, in its capacity as initial Servicer,
hereby makes, and any Successor Servicer by its appointment hereunder shall
make, on each Closing Date (and on the date of any such appointment), the
following representations, warranties and covenants to the Trust (and
agrees that the Trustee may rely on each such representation, warranty and
covenant in accepting the Receivables in trust and in authenticating the
Certificates):
(a) Organization and Good Standing. The Servicer is a
national banking association (or with respect to such Successor
Servicer, such other corporate entity as may be applicable)
duly organized, validly existing and in good standing under the
laws of the United States, and has full corporate power,
authority and legal right to execute, deliver and perform its
obligations under this Agreement and each Supplement and, in
all material respects, to own its properties and conduct its
business as such properties are presently owned and as such
business is presently conducted.
(b) Due Qualification. The Servicer is duly qualified to
do business and is in good standing as a foreign corporation
(or is exempt from such requirements), and has obtained all
necessary licenses and approvals in each jurisdiction in which
failure to so qualify or to obtain such licenses and approvals
would have a material adverse effect on the interests of the
Investor Certificateholders hereunder or under any Supplement.
(c) Due Authorization. The execution,
delivery, and performance of this Agreement and each
Supplement have been duly authorized by the Servicer
by all necessary corporate action on the part of the
Servicer.
(d) Binding Obligation. This Agreement and each
Supplement constitutes a legal, valid and binding obligation of
the Servicer, enforceable in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect, affecting the enforcement of
creditors' rights in general (or with respect to such Successor
Servicer, such other corporate entity as may be applicable) and
except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in
equity).
(e) No Violation. The execution and delivery of this
Agreement and each Supplement by the Servicer, the performance
of the transactions contemplated by this Agreement and each
Supplement and the fulfillment of the terms hereof and thereof
applicable to the Servicer, will not conflict with, violate,
result in any breach of any of the material terms and
provisions of, or constitute (with or without notice or lapse
of time or both) a material default under, any Requirement of
Law applicable to the Servicer or any indenture, contract,
agreement, mortgage, deed of trust or other instrument to which
the Servicer is a party or by which it or any of its properties
are bound.
(f) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of the
Servicer, threatened against the Servicer before any court,
regulatory body, administrative agency or other tribunal or
governmental instrumentality seeking to prevent the issuance of
the Certificates or the consummation of any of the transactions
contemplated by this Agreement or any Supplement, seeking any
determination or ruling that, in the reasonable judgment of the
Servicer, would materially and adversely affect the performance
by the Servicer of its obligations under this Agreement or any
Supplement, or seeking any determination or ruling that would
materially and adversely affect the validity or enforceability
of this Agreement or any Supplement.
(g) Compliance with Requirements of Law. The Servicer
shall duly satisfy all obligations on its part to be fulfilled
under or in connection with the Receivables and the related
Accounts, will maintain in effect all qualifications required
under Requirements of Law in order to properly service the
Receivables and the related Accounts and will comply in all
material respects with all other Requirements of Law in
connection with servicing the Receivables and the related
Accounts, the failure to comply with which would have a
material adverse effect on the interests of the Investor
Certificateholders.
(h) No Rescission or Cancellation. Subject to Section
3.9, the Servicer shall not permit any rescission or
cancellation of a Receivable except as ordered by a court of
competent jurisdiction or other Governmental Authority or in
the ordinary course of its business and in accordance with the
Credit Card Guidelines.
(i) Protection of Certificateholders' Rights. Except as
provided in subsections 2.8(a) and (b) hereof with respect to
the Bank Purchase Agreement, the Servicer shall take no action
which, nor omit to take any action the omission of which, would
substantially impair the rights of Certificateholders in any
Receivable or Account, nor shall it, except in the ordinary
course of its business and in accordance with the Credit Card
Guidelines, reschedule, revise or defer Collections due on the
Receivables.
(j) Receivables Not To Be Evidenced by Promissory Notes.
Except in connection with its enforcement or collection of an
Account, the Servicer will take no action to cause any
Receivable to be evidenced by any instrument, other than an
instrument that, taken together with one or more other
writings, constitutes chattel paper (as such terms are defined
in the UCC) and, if any Receivable is so evidenced (whether or
not in connection with the enforcement or collection of an
Account), it shall be reassigned or assigned to the Servicer as
provided in this Section 3.3.
(k) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any
governmental body or official required in connection with the
execution and delivery by the Servicer of this Agreement and
each Supplement, the performance by the Servicer of the
transactions contemplated by this Agreement and each Supplement
and the fulfillment by the Servicer of the terms hereof and
thereof, have been obtained; provided, however, that the
Servicer makes no representation or warranty regarding state
securities or "blue sky" laws in connection with the
distribution of the Certificates.
(l) Maintenance of Records and Books of Account. The
Servicer shall maintain and implement administrative and
operating procedures (including the ability to recreate records
evidencing the Receivables in the event of the destruction of
the originals thereof), and keep and maintain all documents,
books, computer records and other information, reasonably
necessary or advisable for the collection of all the
Receivables. Such documents, books and computer records shall
reflect all facts giving rise to the Receivables, all payments
and credits with respect thereto, and, to the extent required
pursuant to Section 2.1, such documents, books and computer
records shall indicate the interests of the Trust in the
Receivables.
For purposes of the representations, warranties and covenants
set forth in this Section 3.3, each reference to a Supplement shall be
deemed to refer only to those Supplements in effect as of the relevant
Closing Date or the date of appointment of a Successor Servicer, as
applicable.
If any of the representations, warranties or covenants of the
Servicer contained in paragraph (g), (h), (i) or (j) with respect to any
Receivable or the related Account is breached, and as a result of such
breach the Trust's rights in, to or under any Receivables in the related
Account or the proceeds of such Receivables are materially impaired or such
proceeds are not available for any reason to the Trust free and clear of
any Lien, then no later than the expiration of 60 days (or such longer
period, not in excess of 150 days, as may be agreed to by the Trustee) from
the earlier to occur of the discovery of such event by the Servicer, or
receipt by the Servicer of notice of such event given by the Trustee, all
Receivables in the Account or Accounts to which such event relates shall be
reassigned or assigned to the Servicer on the terms and conditions set
forth below; provided, however, that such Receivables will not be
reassigned or assigned to the Servicer if, on any day prior to the end of
such 60-day or longer period, (i) the relevant representation and warranty
shall be true and correct, or the relevant covenant shall have been
complied with, in all material respects and (ii) the Servicer shall have
delivered an Officer's Certificate describing the nature of such breach and
the manner in which such breach was cured.
The Servicer shall effect such assignment by making a deposit
into the Collection Account in immediately available funds prior to the
next succeeding Business Day in an amount equal to the amount of such
Receivables, which deposit shall be considered a Collection with respect to
such Receivables and shall be applied in accordance with Article IV and the
terms of each Supplement.
Upon each such assignment to the Servicer, the Trustee, on
behalf of the Trust, shall automatically and without further action be
deemed to transfer, assign, set over and otherwise convey to the Servicer,
without recourse, representation or warranty (except for the warranty that
since the date of transfer by the Transferor, the Trustee has not sold,
transferred or encumbered any such Receivables or interest therein), all
right, title and interest of the Trust in and to such Receivables, all
monies due or to become due and all amounts received with respect thereto
and all proceeds thereof. The Trustee shall execute such documents and
instruments of transfer or assignment and take such other actions as shall
be reasonably requested by the Servicer to effect the conveyance of any
such Receivables pursuant to this Section 3.3. The obligation of the
Servicer to accept assignment of such Receivables, and to make the
deposits, if any, required to be made to the Special Funding Account or the
Collection Account as provided in the preceding paragraph, shall constitute
the sole remedy respecting the event giving rise to such obligation
available to Certificateholders (or the Trustee on behalf of
Certificateholders) or any Enhancement Provider, except as provided in
Section 8.4.
Section 3.4. Report to the Trustee.
(a) Daily Reports. On the second Business Day immediately
following each Date of Processing, the Servicer shall prepare and make
available at the office of the Servicer for inspection by the Trustee a
report (the "Daily Report") that shall set forth (i) the aggregate amount
of Collections processed by the Servicer on such Date of Processing, (ii)
estimates of the aggregate amount of Collections processed by the Servicer
with respect to Principal Receivables on such Date of Processing, (iii)
estimates of the aggregate amount of Collections processed by the Servicer
with respect to Finance Charge Receivables, on such Date of Processing,
(iv) the aggregate amount of Defaulted Receivables for such Date of
Processing, and (v) the estimates of the aggregate amount of Principal
Receivables in the Trust as of such Date of Processing. The estimate of the
aggregate amount of Collections processed by the Servicer with respect to
Principal Receivables required by clause (ii) above shall equal (x) the
product of (a) the Collections, other than Merchant Fees and Deferred
Billing Fees, and (b) a fraction, the numerator of which shall be the
aggregate amount of Collections of Principal Receivables as of the last day
of the preceding Monthly Period and the denominator of which shall be the
aggregate amount of Collections, excluding Merchant Fees and Deferred
Billing Fees, as of such last day. The estimate of the aggregate amount of
Collections processed by the Servicer with respect to Finance Charge
Receivables required by clause (iii) above shall equal the sum of (x) the
product of (a) the Collections, excluding Merchant Fees and Deferred
Billing Fees, and (b) a fraction, the numerator of which shall be the
aggregate amount of Collections of Finance Charge Receivables other than
Merchant Fees and Deferred Billing Fees (including Discount Option
Receivables) as of the last day of the preceding Monthly Period and the
denominator of which shall be the aggregate amount of Collections, other
than Merchant Fees and Deferred Billing Fees, as of such last day and (y)
the Merchant Fees and Deferred Billing Fees.
(b) Monthly Reports; Adjustments. On or before each
Determination Date, the Servicer shall prepare and make available at the
office of the Servicer for inspection by the Trustee a report (the "Monthly
Report") that shall set forth (x) during the Monthly Period the amount on
deposit in the Special Funding Account as of the last day of the preceding
Monthly Period and (y) a calculation of the Transferor Amount and the
Required Retained Transferor Amount as of the last day of the preceding
Monthly Period and a determination of whether the Transferor Amount
(excluding the interest represented by any Supplemental Certificate) on
such day was greater than the Required Retained Transferor Amount on such
day and such other information as may be specified in any applicable
Supplement. In addition, on the Determination Date following each Monthly
Period during which the methods of estimating shall have been used pursuant
to subsection 3.4(a) above by the Servicer, the Servicer shall make in the
Monthly Report an appropriate "true-up" adjustment of the aggregate amounts
allocated as Collections of Principal Receivables and Finance Charge
Receivables in the Collection Account for such Monthly Period pursuant to
subsection 3.4(a) above to the actual amount of Collections of Principal
Receivables included in the Trust Assets, the amount of Discount Option
Receivables for such Monthly Period, and the actual amount of Collections
of Finance Charge Receivables included in the Trust Assets, in each case,
to reflect the difference between (x) the amounts that should have been
recorded as Collections in respect of Principal Receivables and Finance
Charge Receivables if actual Collections of Principal Receivables and
Finance Charge Receivables had been known and (y) the amount allocated
thereto pursuant to the last two sentences of subsection 3.4(a).
(c) Monthly Servicer's Certificate. Unless otherwise stated in
the Supplement related to any Series, on each Determination Date, the
Servicer shall forward to the Trustee, the Paying Agent, each Rating Agency
and each Enhancement Provider, if any, a certificate of a Servicing Officer
setting forth (i) the aggregate amounts for the preceding Monthly Period
with respect to each of the items specified in clauses (i), (ii) and (iii)
of subsection 3.4(a), together with the amount and nature of any "true-up"
adjustment required by subsection 3.4(b), (ii) the Defaulted Amount for the
preceding Monthly Period, (iii) Recoveries for the preceding Monthly
Period, (iv) a calculation of the Portfolio Yield and Base Rate for each
Series then outstanding, (v) the aggregate amount of Receivables and the
balance on deposit in the Collection Account (or any subaccount thereof) or
any Series Account applicable to any Series then outstanding with respect
to Collections processed as of the end of the last day of the preceding
Monthly Period, (vi) the aggregate amount of adjustments from the preceding
Monthly Period, (vii) the aggregate amount, if any, of withdrawals,
drawings or payments under any Enhancement with respect to each Series
required to be made with respect to the preceding Monthly Period, (viii)
the sum of all amounts payable to the Investor Certificateholders on the
succeeding Distribution Date in respect of interest and principal payable
with respect to the Investor Certificates and (ix) such other amounts,
calculations, and/or information as may be required by any relevant
Supplement.
(d) Transferred Accounts. The Servicer covenants and agrees
hereby to deliver to the Trustee, after the Automatic Addition Termination
Date or any Automatic Addition Suspension Date (but in the latter case,
prior to a Restart Date) within a reasonable time period after any
Transferred Account is created, but in any event not later than 15 days
after the end of the Monthly Period within which the Transferred Account is
created, a notice specifying the new account number for any Transferred
Account and the replaced account number.
Section 3.5. Annual Certificate of Servicer. The Servicer shall
deliver to the Trustee, each Rating Agency and each Enhancement Provider,
if any, entitled thereto pursuant to the relevant Supplement, on or before
the 90th day following the Transferor's fiscal year an Officer's
Certificate (with appropriate insertions) substantially in the form of
Exhibit D.
Section 3.6. Annual Servicing Report of Independent Public
Accountants; Copies of Reports Available. (a) On or before the 90th day
following the end of the Transferor's fiscal year the Servicer shall cause
a firm of nationally recognized independent public accountants (who may
also render other services to the Servicer or the Transferor) to furnish a
report (addressed to the Trustee) to the Trustee, the Servicer and each
Rating Agency to the effect that they have applied certain procedures
agreed upon with the Servicer to certain documents relating to the
administration and servicing of Accounts under this Agreement and each
Supplement, and that based on such agreed upon procedures, such firm will
provide a report stating that the administration and servicing was
conducted in compliance with Article III and Article IV and Section 8.8 of
this Agreement and the applicable provisions of any Supplement, except for
such exceptions or errors as they believe to be immaterial and such other
exceptions as shall be set forth in such report. A copy of such report
shall be delivered to each Enhancement Provider, if any, entitled thereto
pursuant to the relevant Supplement.
(b) On or before the 90th day following the end of the
Transferor's fiscal year, beginning with May 3, 1996, the Servicer shall
cause a firm of nationally recognized independent public accountants (who
may also render other services to the Servicer or the Transferor) to
furnish a report to the Trustee, the Servicer and each Rating Agency to the
effect that they have randomly selected at least one (1) of the Servicer's
Certificates delivered pursuant to subsection 3.4(c) during each of the
three month periods ended March 31, June 30, September 30 and December 31
during the period covered by such report and applied certain procedures
agreed upon with the Servicer to compare the mathematical calculations of
certain amounts set forth in such report with the Servicer's computer
reports which were the source of such amounts and that on the basis of such
agreed upon procedures and comparison, such accountants are of the opinion
that such amounts are in agreement, except for such exceptions as they
believe to be immaterial and such other exceptions as shall be set forth in
such statement. A copy of such report shall be delivered to each
Enhancement Provider, if any, entitled thereto pursuant to the relevant
Supplement. Notwithstanding the foregoing, the report furnished by the
independent public accountants shall cover each of the twelve (12)
Servicer's Certificates delivered pursuant to Section 3.4(c) if any
material exceptions were set forth in that report by the independent public
accountants pursuant to this Section 3.6(b).
(c) A copy of each certificate and report provided pursuant to
Section 3.4(c), 3.5 or 3.6 may be obtained by any Investor
Certificateholder or Certificate Owner by a request to the Trustee
addressed to the Corporate Trust Office.
Section 3.7. Tax Treatment. The Transferor has entered into
this Agreement, and the Certificates will be issued with the intention
that, unless otherwise specified in any Supplement, for Federal, state and
local income and franchise tax purposes, the Investor Certificates (except
any Certificates held by the Transferor) of each Series will qualify as
debt secured by the Receivables. The Transferor, by entering into this
Agreement, each Certificateholder, by the acceptance of its Certificate
(and each Certificate Owner, by its acceptance of an interest in the
applicable Certificate), agree to treat the Investor Certificates for
Federal, state and local income and franchise tax purposes as debt. Each
Holder of an Investor Certificate agrees that it will cause any Certificate
Owner acquiring an interest in an Investor Certificate through it to comply
with this Agreement as to treatment as debt under applicable tax law, as
described in this Section 3.7. Furthermore, subject to Section 11.11 or
unless the Transferor shall determine that the filing of returns is
appropriate, the Trustee shall treat the Trust as a security device only
and shall not file tax returns or obtain an employer identification number
on behalf of the Trust.
Section 3.8. Notices to Retailers National Bank. If Retailers
National Bank is no longer acting as Servicer, any Successor Servicer shall
deliver to Retailers National Bank each certificate and report required to
be provided thereafter pursuant to Section 3.4(c), 3.5 or 3.6.
Section 3.9. Adjustments. (a) If the Servicer adjusts downward
the amount of any Receivable because of a rebate, refund, unauthorized
charge or billing error to an accountholder, or because such Receivable was
created in respect of merchandise which was refused or returned by an
accountholder, or if the Servicer otherwise adjusts downward the amount of
any Receivable without receiving Collections therefor or charging off such
amount as uncollectible, then, in any such case, the amount of Principal
Receivables will be reduced by the amount of the adjustment. Similarly, the
amount of Principal Receivables will be reduced by the amount of any
Principal Receivable which was discovered as having been created through a
fraudulent or counterfeit charge or with respect to which the covenant of
the Transferor contained in subsection 2.7(b) has been breached.
Notwithstanding the foregoing, any Collection with respect to such
Receivables, the balances of which have been adjusted downward, which would
otherwise have been treated as Collections of Principal Receivables shall
be treated as Collections of Principal Receivables. Any adjustment required
as provided above shall be made on or prior to the end of the Monthly
Period in which such adjustment obligation arises. If, following the
exclusion of such Principal Receivables from the calculation of the
Transferor Amount, the Transferor Amount (excluding the interest
represented by any Supplemental Certificate) would otherwise be less than
the Required Retained Transferor Amount, not later than 12:00 noon, New
York City time, on the Distribution Date following the Monthly Period in
which such adjustment obligation arises, the Transferor shall make a
deposit into the Special Funding Account in immediately available funds in
an amount equal to the amount by which the Transferor Amount (excluding the
interest represented by any Supplemental Certificate) would otherwise be
less than the Required Retained Transferor Amount (up to the amount of such
Principal Receivables). Any amount deposited into the Special Funding
Account pursuant to the preceding sentence shall be considered Collections
of Principal Receivables and shall be applied in accordance with Article IV
and the terms of each Supplement.
(b) If (i) the Servicer makes a deposit into the Collection
Account in respect of a Collection of a Receivable and such Collection was
received by the Servicer in the form of a check which is not honored for
any reason or (ii) the Servicer makes a mistake with respect to the amount
of any Collection and deposits an amount that is less than or more than the
actual amount of such Collection, the Servicer shall appropriately adjust
the amount subsequently deposited into the Collection Account to reflect
such dishonored check or mistake. Any Receivable in respect of which a
dishonored check is received shall be deemed not to have been paid.
Notwithstanding the first two sentences of this paragraph, any adjustments
made pursuant to this paragraph will be reflected in a current report but
will not change any amount of Collections previously reported pursuant to
subsection 3.4(c).
ARTICLE IV
Rights of Certificateholders and
Allocation and Application of Collections
Section 4.1. Rights of Certificateholders. The Investor
Certificates shall represent fractional undivided interests in the Trust,
which, with respect to each Series, shall consist of the right to receive,
to the extent necessary to make the required payments with respect to the
Investor Certificates of such Series at the times and in the amounts
specified in the related Supplement, the portion of Collections allocable
to Investor Certificateholders of such Series pursuant to this Agreement
and such Supplement, funds on deposit in the Collection Account allocable
to Certificateholders of such Series pursuant to this Agreement and such
Supplement, funds on deposit in any related Series Account and funds
available pursuant to any related Enhancement (collectively, with respect
to all Series, the "Certificateholders' Interest"), it being understood
that, unless otherwise specified in the Supplement with respect to such
Series, the Investor Certificates of any Series or Class shall not
represent any interest in any Series Account or Enhancement for the benefit
of any other Series or Class. The Transferor Certificate shall represent
the ownership interest in the remainder of the Trust Assets not allocated,
pursuant to this Agreement, any Supplement or any Participation Supplement,
to the Certificateholders' Interest or any Participation, respectively,
including the right to receive Collections with respect to the Receivables
and other amounts at the times and in the amounts specified in this
Agreement or any Supplement to be paid to the Transferor on behalf of the
Holder of the Transferor Certificate (the "Transferor's Interest");
provided, however, that the Transferor Certificate shall not represent any
interest in the Collection Account, any Series Account or any Enhancement,
except as specifically provided in this Agreement or any Supplement.
Section 4.2. Establishment of Collection Account and Special
Funding Account. The Servicer, for the benefit of the Certificateholders,
shall establish and maintain in the name of the Trustee, on behalf of the
Trust, an Eligible Deposit Account bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Certificateholders (the "Collection Account"). The Collection Account shall
initially be established with the Trustee. The Trustee shall possess all
right, title and interest in and to all funds on deposit from time to time
in the Collection Account and in all proceeds thereof for the benefit of
the Certificateholders. The Collection Account shall be under the sole
dominion and control of the Trustee for the benefit of the
Certificateholders. Except as expressly provided in this Agreement, the
Servicer agrees that it shall have no right of set-off or banker's lien
against, and no right to otherwise deduct from, any funds held in the
Collection Account for any amount owed to it by the Trustee, the Trust, any
Certificateholder or any Enhancement Provider. If at any time the
Collection Account ceases to be an Eligible Deposit Account, the Trustee
(or the Servicer on its behalf) shall within 10 Business Days (or such
longer period, not to exceed 30 calendar days, as to which each Rating
Agency may consent) establish a new Collection Account meeting the
conditions specified above, transfer any cash or any investments to such
new Collection Account and from the date such new Collection Account is
established, it shall be the "Collection Account."
Funds on deposit in the Collection Account (other than amounts
deposited pursuant to Section 2.6, 10.1 or 12.2) shall at the direction of
the Servicer or the Transferor be invested by the Trustee in Eligible
Investments selected by the Servicer or the Transferor. All such Eligible
Investments shall be held by the Trustee for the benefit of the
Certificateholders. The Trustee shall maintain for the benefit of the
Certificateholders possession of the negotiable instruments or certificated
securities, if any, evidencing such Eligible Investments. Investments of
funds representing Collections collected during any Monthly Period shall be
invested in Eligible Investments that will convert or be convertible into
cash so that all funds will be available at the close of business on the
Transfer Date following such Monthly Period. No Eligible Investment shall
be disposed of prior to its maturity; provided, however, that the Trustee
may sell, liquidate or dispose of an Eligible Investment before its
maturity, at the written direction of the Servicer, if such sale,
liquidation or disposal would not result in a loss of all or part of the
principal portion of such Eligible Investment or if, prior to the maturity
of such Eligible Investment, a default occurs in the payment of principal,
interest or any other amount with respect to such Eligible Investment. On
each Distribution Date, all interest and other investment earnings (net of
losses and investment expenses) on funds on deposit in the Collection
Account shall be treated as Collections of Finance Charge Receivables with
respect to the last day of the related Monthly Period, except as otherwise
specified in any Supplement. For purposes of determining the availability
of funds or the balances in the Collection Account for any reason under
this Agreement, all investment earnings net of investment expenses and
losses on such funds shall be deemed not to be available or on deposit.
The Servicer, for the benefit of the Certificateholders, shall
establish and maintain in the name of the Trustee, on behalf of the Trust,
an Eligible Deposit Account bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the
Certificateholders (the "Special Funding Account"). The Special Funding
Account shall initially be established with the Trustee. The Trustee shall
possess all right, title and interest in and to all funds on deposit from
time to time in the Special Funding Account and in all proceeds thereof.
The Special Funding Account shall be under the sole dominion and control of
the Trustee for the benefit of the Certificateholders. Except as expressly
provided in this Agreement, the Servicer agrees that it shall have no right
of set-off or banker's lien against, and no right to otherwise deduct from,
any funds held in the Special Funding Account for any amount owed to it by
the Trustee, the Trust, any Certificateholder or any Enhancement Provider.
If, at any time, the Special Funding Account ceases to be an Eligible
Deposit Account, the Trustee (or the Servicer on its behalf) shall within
10 Business Days (or such longer period, not to exceed 30 calendar days, as
to which each Rating Agency may consent) establish a new Special Funding
Account meeting the conditions specified above, transfer any cash or any
investments to such new Special Funding Account and from the date such new
Special Funding Account is established, it shall be the "Special Funding
Account."
Funds on deposit in the Special Funding Account shall at the
direction of the Servicer or the Transferor be invested by the Trustee in
Eligible Investments selected by the Servicer or the Transferor. All such
Eligible Investments shall be held by the Trustee for the benefit of the
Certificateholders. The Trustee shall maintain for the benefit of the
Certificateholders possession of the negotiable instruments or certificated
securities, if any, evidencing such Eligible Investments. Funds on deposit
in the Special Funding Account on any day will be invested in Eligible
Investments that will convert or be convertible into cash so that all funds
will be available at the close of business on the next Business Day. No
Eligible Investment shall be disposed of prior to its maturity; provided,
however, that the Trustee may sell, liquidate or dispose of an Eligible
Investment before its maturity, at the written direction of the Servicer,
if such sale, liquidation or disposal would not result in a loss of all or
part of the principal portion of such Eligible Investment or if, prior to
the maturity of such Eligible Investment, a default occurs, in the payment
of principal, interest or any other amount with respect to such Eligible
Investment. Unless directed by the Servicer, funds deposited in the Special
Funding Account on a Transfer Date with respect to the next following
Distribution Date are not required to be invested overnight. On each
Distribution Date, all interest and other investment earnings (net of
losses and investment expenses) on funds on deposit in the Special Funding
Account shall be treated as Collections of Finance Charge Receivables with
respect to the last day of the related Monthly Period except as otherwise
specified in the related Supplement. Unless otherwise directed by the
Servicer, funds on deposit in the Special Funding Account will be withdrawn
and paid to the Holder of the Transferor Certificate or such other Person
as may be specified in a Supplement on any Business Day to the extent that
the Transferor Amount (excluding the interest represented by any
Supplemental Certificate) would otherwise exceed the Required Retained
Transferor Amount on such date. On any Transfer Date on which one or more
Series is in an Accumulation Period or Amortization Period, the Servicer
shall determine the aggregate amounts of Principal Shortfalls, if any, with
respect to each such Series that is a Principal Sharing Series (after
giving effect to the allocation and payment provisions in the Supplement
with respect to each such Series), and the Servicer shall instruct the
Trustee to withdraw such amount (up to the amount on deposit in the Special
Funding Account) on the succeeding Distribution Date and allocate such
amount among each such Series as specified in each related Supplement;
provided, however, that funds shall only be withdrawn from the Special
Funding Account for allocation to cover such Principal Shortfalls if, and
to the extent, that such allocation will not result in the reduction of the
Transferor Amount (excluding the interest represented by any Supplemental
Certificate) to an amount below the Required Retained Transferor Amount.
For purposes of determining the availability of funds or the balances in
the Special Funding Account for any reason under this Agreement, all
investment earnings net of investment expenses and losses on such funds
shall be deemed not to be available or on deposit.
Section 4.3. Collections and Allocations. (a) The Servicer will
apply or will instruct the Trustee to apply all funds on deposit in the
Collection Account as described in this Article IV and in each Supplement.
Except as otherwise provided below and in each Supplement, the Servicer
shall deposit Collections into the Collection Account no later than the
second Business Day following the Date of Processing of such Collections.
Subject to the express terms of any Supplement, but notwithstanding
anything else in this Agreement to the contrary, if Retailers National Bank
remains the Servicer and (x) for so long as Target Corporation maintains a
short-term debt rating of "A-1" or better by Standard & Poor's and "P-1" or
better by Moody's (or such other rating below "A-1" or "P-1", as the case
may be, which is satisfactory to each Rating Agency), or (y) Retailers
National Bank has provided to the Trustee a letter of credit covering
collection risk of the Servicer acceptable to each Rating Agency (as
evidenced by a letter from each Rating Agency to the effect that the Rating
Agency Condition has been satisfied), the Servicer need not make the daily
deposits of Collections into the Collection Account as provided in the
preceding sentence, but may make a single deposit in the Collection Account
in immediately available funds not later than 12:00 noon, New York City
time, on the related Transfer Date.
(b) With respect to each day during each Monthly Period, (i)
Collections of Finance Charge Receivables will be allocated to the
Certificateholders' Interest of each Series, and (ii) Collections of
Principal Receivables will be allocated to the Certificateholders' Interest
of each Series, each as set forth in the Supplement related to such Series.
On each Determination Date, (i) Collections of Recoveries will
be treated as Collections of Principal Receivables and allocated to the
Certificateholders' Interest of each Series and (ii) Defaulted Receivables
will be allocated to the Certificate-holders' Interest of each Series, each
as set forth in the related Supplement.
(c) Throughout the existence of the Trust, unless otherwise
stated in any Supplement, the Servicer shall allocate to the Holder of the
Transferor Certificate an amount equal to the product of (A) the
Transferor's Percentage and (B) the aggregate amount of such Collections
allocated to Principal Receivables and Finance Charge Receivables,
respectively, in respect of each Monthly Period; provided, however, that,
if the Transferor Amount (determined after giving effect to any payment of
such amount and any Principal Receivables transferred to the Trust on such
date and excluding the interest represented by any Supplemental
Certificate), would otherwise be less than or equal to the Required
Retained Transferor Amount, the Servicer will not distribute to the Holder
of the Transferor Certificate any such amounts that otherwise would be
distributed to the Holder of the Transferor Certificate, but shall deposit
such funds in the Special Funding Account. Notwithstanding anything in this
Agreement to the contrary, unless otherwise stated in any Supplement, the
Servicer need not deposit this amount or any other amounts so allocated to
the Transferor Certificate pursuant to any Supplement into the Collection
Account and shall pay, or be deemed to pay, such amounts as collected to
the Holder of the Transferor Certificate.
The payments to be made to the Holder of the Transferor
Certificate pursuant to this subsection 4.3(c) do not apply to deposits to
the Collection Account or other amounts that do not represent Collections,
including payment of the purchase price for Receivables pursuant to Section
2.6 or 10.1, proceeds from the sale, disposition or liquidation of
Receivables pursuant to Section 12.2 or payment of the purchase price for
the Certificateholders' Interest of a specific Series pursuant to the
related Supplement.
(d) Throughout the existence of the Trust, unless otherwise
stated in any Participation Supplement, the Servicer shall allocate to the
holders of any Participations an amount equal to the product of (A) the
related Participation Percentage and (B) the aggregate amount of such
Collections allocated to Principal Receivables, Finance Charge Receivables
and Recoveries, respectively, and the aggregate amount of Defaulted
Receivables, in each case, in respect of each Monthly Period.
Notwithstanding anything in this Agreement to the contrary, unless
otherwise stated in any Participation Supplement, the Servicer need not
deposit these amounts or any other amounts so allocated to any
Participation pursuant to any Participation Supplement into the Collection
Account and shall pay such amounts as collected to the holder of the
related Participation.
The payments to be made to the holder of any Participation
pursuant to this subsection 4.3(d) do not apply to deposits to the
Collection Account or other amounts that do not represent Collections,
including payment of the purchase price for Receivables pursuant to Section
2.6 or 10.1, proceeds from the sale, disposition or liquidation of
Receivables pursuant to Section 12.2 or payment of the purchase price for
the Certificateholders' Interest of a specific Series pursuant to the
related Supplement.
Section 4.4. Shared Principal Collections. On each Distribution
Date, (a) the Servicer shall allocate Shared Principal Collections to each
Principal Sharing Series, pro rata, in proportion to the Principal
Shortfalls, if any, with respect to each such Series, and any remainder
may, at the option of the Transferor, be applied as principal with respect
to any Variable Funding Certificate and (b) the Servicer shall withdraw
from the Collection Account or the Special Funding Account and pay to the
Holder of the Transferor Certificate an amount equal to the excess, if any,
of (x) the sum of the aggregate amount for all outstanding Series of
Collections of Principal Receivables which the related Supplements or this
Agreement specify are to be treated as "Shared Principal Collections" for
such Distribution Date plus the amount of any payment received by the
Trustee from the holder of any Participation with respect to the purchase
of a Participation or any increases in the principal amount of such
Participation (such sum to be treated for purposes of this Agreement as
"Shared Principal Collections") over (y) the aggregate amount for all
outstanding Principal Sharing Series which the related Supplements specify
are "Principal Shortfalls," for such Distribution Date; provided, however,
that, if, on any Distribution Date the Transferor Amount (determined after
giving effect to any Principal Receivables transferred to the Trust on such
date and excluding the interest represented by any Supplemental
Certificate), would otherwise be less than or equal to the Required
Retained Transferor Amount, the Servicer will not distribute to the Holder
of the Transferor Certificate any Shared Principal Collections that
otherwise would be distributed to the Holder of the Transferor Certificate,
but shall deposit such funds in the Special Funding Account.
Section 4.5. Excess Finance Charge Collections. On each
Distribution Date, (a) for each Group the Servicer shall apply the
aggregate amount for all outstanding Series in such Group of the amounts
which the related Supplements specify are to be treated as "Excess Finance
Charge Collections" for such Distribution Date to each Series in such
Group, pro rata, in proportion to the Finance Charge Shortfalls, if any,
with respect to each such Series, and (b) the Servicer shall withdraw (or
shall instruct the Trustee to withdraw) from the Collection Account and pay
to the Holder of the Transferor Certificate an amount equal to the excess,
if any, of (x) the aggregate amount for all outstanding Series in a Group
of the amounts which the related Supplements specify are to be treated as
"Excess Finance Charge Collections" for such Distribution Date over (y) the
aggregate amount for all outstanding Series in such Group which the related
Supplements specify are "Finance Charge Shortfalls" for such Distribution
Date; provided, however, that the sharing of Excess Finance Charge
Collections among Series in a Group will continue only until such time, if
any, at which the Transferor shall deliver to the Trustee an Officer's
Certificate to the effect that, in the reasonable belief of the Transferor,
the continued sharing of Excess Finance Charge Collections among Series in
any Group would have adverse regulatory implications with respect to the
Transferor. Following the delivery by the Transferor of such an Officer's
Certificate to the Trustee, there will not be any further sharing of Excess
Finance Charge Collections among Series in any Group.
Section 4.6. Allocations During Funding Period. To the extent
that the Servicer establishes an Eligible Deposit Account as a pre-funding
account (the "Pre-Funding Account") with respect to any Series, bearing a
designation indicating that the funds deposited therein are for the benefit
of such Series, during the period (the "Funding Period"), as set forth in
the related Supplement, that the Pre-Funding Account maintains a balance,
the date upon which an increase in the Invested Amount of such Series in
accordance with the terms of such related Supplement occurs shall be
treated as an Addition Date solely for the purpose of calculating the
Floating Allocation Percentage and the Principal Allocation Percentage.
Such Addition Date shall be deemed to occur on the date of each such
increase and the Floating Allocation Percentage and Principal Allocation
Percentage shall be calculated accordingly.
ARTICLE V
Distributions and Reports to
Certificateholders
Distributions shall be made to, and reports shall be provided
to, Certificateholders as set forth in the applicable Supplement.
ARTICLE VI
The Certificates
Section 6.1. The Certificates. The Investor Certificates of any
Series or Class may be issued in bearer form ("Bearer Certificates") with
attached interest coupons and any other applicable coupon (collectively,
the "Coupons") or in fully registered form ("Registered Certificates") and
shall be substantially in the form of the exhibits with respect thereto
attached to the applicable Supplement. The Transferor Certificate will be
issued in registered form, substantially in the form of Exhibit A, and
shall upon issue, be executed and delivered by the Transferor to the
Trustee for authentication and redelivery as provided in Section 6.2.
Unless otherwise specified in the applicable Participation Supplement, each
Participation shall be uncertificated. Each Supplemental Certificate shall
be either issued in registered form or shall be uncertificated, in either
case as specified in the applicable Supplement. Except as otherwise
provided in Section 6.3 or in any Supplement, Bearer Certificates shall be
issued in minimum denominations of $5,000 and Registered Certificates shall
be issued in minimum denominations of $1,000 and in integral multiples of
$1,000 in excess thereof and shall be subject to the terms specified in the
applicable Supplement. If specified in any Supplement, the Investor
Certificates of any Series or Class shall be issued upon initial issuance
as a single certificate evidencing the aggregate original principal amount
of such Series or Class as described in Section 6.13. The Transferor
Certificate shall initially be a single certificate and shall initially
represent the entire Transferor's Interest. Each Certificate shall be
executed by manual or facsimile signature on behalf of the Transferor by
its President or any Vice President. Certificates bearing the manual or
facsimile signature of an individual who was, at the time when such
signature was affixed, authorized to sign on behalf of the Transferor shall
not be rendered invalid, notwithstanding that such individual ceased to be
so authorized prior to the authentication and delivery of such Certificates
or does not hold such office at the date of such Certificates. No
Certificates shall be entitled to any benefit under this Agreement, or be
valid for any purpose, unless there appears on such Certificate a
certificate of authentication substantially in the form provided for herein
executed by or on behalf of the Trustee by the manual signature of a duly
authorized signatory, and such certificate of authentication upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. Bearer
Certificates shall be dated the Closing Date. All Registered Certificates
and the Transferor Certificate shall be dated the date of their
authentication.
Section 6.2. Authentication of Certificates. The Trustee shall
authenticate and deliver the Investor Certificates of each Series and Class
that are issued upon original issuance to or upon the order of the
Transferor against payment to the Transferor of the purchase price
therefor. The Trustee shall authenticate and deliver the Transferor
Certificate to the Transferor simultaneously with its delivery of the
Investor Certificates of the first Series to be issued hereunder. If
specified in the related Supplement for any Series or Class, the Trustee
shall authenticate and deliver outside the United States the Global
Certificate that is issued upon original issuance thereof.
Section 6.3. New Issuances. (a) The Transferor may from time to
time direct the Trustee, on behalf of the Trust, to authenticate one or
more new Series of Investor Certificates. The Investor Certificates of all
outstanding Series shall be equally and ratably entitled as provided herein
to the benefits of this Agreement without preference, priority or
distinction, all in accordance with the terms and provisions of this
Agreement and the applicable Supplement except, with respect to any Series
or Class, as provided in the related Supplement.
(b) On or before the Closing Date relating to any new Series,
the parties hereto will execute and deliver a Supplement which will specify
the Principal Terms of such new Series. The terms of such Supplement may
modify or amend the terms of this Agreement solely as applied to such new
Series. The obligation of the Trustee to authenticate the Investor
Certificates of such new Series and to execute and deliver the related
Supplement is subject to the satisfaction of the following conditions;
provided, however, that the conditions set forth in clauses (i), (iii),
(iv) and (v) below shall not be applicable to the issuance of the first
Series of Investor Certificates:
(i) on or before the fifth Business Day immediately
preceding the Closing Date, the Transferor shall have given the
Trustee, the Servicer, each Rating Agency and any Enhancement
Provider entitled thereto pursuant to the relevant Supplement notice
of such issuance and the Closing Date;
(ii) the Transferor shall have delivered to the Trustee
the related Supplement, executed by each party hereto other than the
Trustee;
(iii) the Transferor shall have delivered to the Trustee
any related Enhancement Agreement executed by each of the parties
thereto, other than the Trustee;
(iv) the Rating Agency Condition shall have been satisfied
with respect to such issuance;
(v) the Transferor shall have delivered to the Trustee
and any Enhancement Provider entitled thereto pursuant to the
relevant Supplement an Officer's Certificate, dated the Series
Issuance Date, to the effect that the Transferor reasonably believes
that such issuance will not, based on the facts known to such officer
at the time of such certification, then or thereafter cause an Early
Amortization Event to occur with respect to any Series;
(vi) the Transferor shall have delivered to the Trustee
and each Rating Agency a Tax Opinion, dated the Closing Date, with
respect to such issuance; and
(vii) the Transferor Amount (excluding the interest
represented by any Supplemental Certificate) shall not be less than
the Required Retained Transferor Amount, as of the Closing Date and
after giving effect to such issuance.
Upon satisfaction of the above conditions, the Trustee shall execute the
Supplement and authenticate the Investor Certificates of such Series upon
execution thereof by the Transferor.
(c) The Transferor may surrender the Transferor Certificate to
the Trustee in exchange for a newly issued Transferor Certificate and one
or more additional certificates (each, a "Supplemental Certificate"), the
terms of which shall be defined in a Supplement (which Supplement shall be
subject to subsection 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 the Transferor
(or the Holder of a Supplemental Certificate, in the case of the transfer
or exchange thereof, as provided below), upon satisfaction of the following
conditions:
(i) the Transferor Amount (excluding the interest
represented by any Supplemental Certificate) shall not be less than
the Required Retained Transferor Amount, 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) the Transferor shall have delivered to the 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) above.
(d) The Transferor Certificate (or any interest therein) may be
transferred to a Person which is a member of the "affiliated group" as
defined in Code Section 1504(a) of which Retailers National Bank is a
member without the consent or approval of the Holders of the Investor
Certificates, provided that (i) the Rating Agency Condition shall have been
satisfied with respect to such transfer, (ii) the Transferor shall have
delivered to the Trustee and each Rating Agency a Tax Opinion, dated the
date of such transfer, with respect thereto, and (iii) the Transferor
Amount (excluding the interest represented by any Supplemental Certificate)
shall not be less than the Required Retained Transferor Amount. In
connection with any such transfer, the Person to whom the Transferor
Certificate is transferred will, by its acquisition and holding of an
interest in the Transferor Certificate, assume all of the rights and
obligations of the Transferor as described in this Agreement and in any
Supplement or amendment thereto (including the right under this paragraph
(d) with respect to subsequent transfers of an interest in the Transferor
Certificate).
(e) The Transferor may direct the Trustee to issue on behalf of
the Trust one or more participations (each, a "Participation"), the terms
of which shall be defined in a Participation Supplement (which
Participation Supplement shall be subject to subsection 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 the Transferor upon satisfaction of the following
conditions:
(i) the Transferor Amount (excluding the interest
represented by any Supplemental Certificate) shall not be less than
the Required Retained Transferor Amount, 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 issuance (or transfer as provided
below); and
(iii) the Transferor shall have delivered to the Trustee
and each Rating Agency a Tax Opinion, dated the date of such issuance
(or transfer as provided below), with respect thereto.
Any Participation may be transferred or exchanged only upon satisfaction of
the conditions set forth in clauses (ii) and (iii) above. Notwithstanding
the foregoing, on the Closing Date, the Transferor shall issue to Retailers
National Bank a Participation with respect to which the conditions above
need not be specifically satisfied. The Trustee, at the direction of the
Transferor, may agree to extend the term of any Participation. Any payments
made by the holder of any Participation and received by the Trustee with
respect to the purchase of any Participation or the increase in the
principal amount of the Participation shall be treated as Collections of
Principal Receivables pursuant to Section 4.4.
Section 6.4. Registration of Transfer and Exchange of
Certificates. (a) The Trustee shall cause to be kept at the office or
agency to be maintained in accordance with the provisions of Section 11.16
a register (the "Certificate Register") in which, subject to such
reasonable regulations as it may prescribe, a transfer agent and registrar
(which may be the Trustee) (the "Transfer Agent and Registrar") shall
provide for the registration of the Registered Certificates and of
transfers and exchanges of the Registered Certificates as herein provided.
The Transfer Agent and Registrar shall initially be Norwest Bank Minnesota,
National Association, and any co-transfer agent and co-registrar chosen by
the Transferor and acceptable to the Trustee, including, if and so long as
any Series or Class is listed on the Luxembourg Stock Exchange and such
exchange shall so require, a co-transfer agent and co-registrar in
Luxembourg. So long as any Investor Certificates are outstanding, the
Transferor shall maintain a co-transfer agent and co-registrar in New York
City. Any reference in this Agreement to the Transfer Agent and Registrar
shall include any co-transfer agent and co-registrar unless the context
requires otherwise.
The Trustee may revoke such appointment and remove any Transfer
Agent and Registrar if the Trustee determines in its sole discretion that
such Transfer Agent and Registrar failed to perform its obligations under
this Agreement in any material respect. Any Transfer Agent and Registrar
shall be permitted to resign as Transfer Agent and Registrar upon 30 days'
notice to the Transferor, the Trustee and the Servicer; provided, however,
that such resignation shall not be effective and such Transfer Agent and
Registrar shall continue to perform its duties as Transfer Agent and
Registrar until the Trustee has appointed a successor Transfer Agent and
Registrar reasonably acceptable to the Transferor.
Subject to paragraph (c) below, upon surrender for registration
of transfer of any Registered Certificate at any office or agency of the
Transfer Agent and Registrar maintained for such purpose, one or more new
Registered Certificates (of the same Series and Class) in authorized
denominations of like aggregate fractional undivided interests in the
Certificateholders' Interest shall be executed, authenticated and
delivered, in the name of the designated transferee or transferees.
At the option of a Registered Certificateholder, Registered
Certificates (of the same Series and Class) may be exchanged for other
Registered Certificates of authorized denominations of like aggregate
fractional undivided interests in the Certificateholders' Interest, upon
surrender of the Registered Certificates to be exchanged at any such office
or agency; Registered Certificates, including Registered Certificates
received in exchange for Bearer Certificates, may not be exchanged for
Bearer Certificates. At the option of the Holder of a Bearer Certificate,
subject to applicable laws and regulations, Bearer Certificates may be
exchanged for other Bearer Certificates or Registered Certificates (of the
same Series and Class) of authorized denominations of like aggregate
fractional undivided interests in the Certificateholders' Interest, upon
surrender of the Bearer Certificates to be exchanged at an office or agency
of the Transfer Agent and Registrar located outside the United States. Each
Bearer Certificate surrendered pursuant to this Section 6.4 shall have
attached thereto all unmatured Coupons; provided that any Bearer
Certificate, so surrendered after the close of business on the Record Date
preceding the relevant payment date or distribution date after the expected
final payment date need not have attached the Coupon relating to such
payment date or distribution date (in each case, as specified in the
applicable Supplement).
Whenever any Investor Certificates are so surrendered for
exchange, the Transferor shall execute, the Trustee shall authenticate and
the Transfer Agent and Registrar shall deliver (in the case of Bearer
Certificates, outside the United States) the Investor Certificates which
the Investor Certificateholder making the exchange is entitled to receive.
Every Investor Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of
transfer in a form satisfactory to the Trustee or the Transfer Agent and
Registrar duly executed by the Investor Certificateholder or the
attorney-in-fact thereof duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Investor Certificates, but the Transfer Agent and
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such
transfer or exchange.
All Investor Certificates (together with any Coupons)
surrendered for registration of transfer and exchange or for payment shall
be canceled and disposed of in a manner satisfactory to the Trustee. The
Trustee shall cancel and destroy any Global Certificate upon its exchange
in full for Definitive Euro-Certificates and shall deliver a certificate of
destruction to the Transferor. Such certificate shall also state that a
certificate or certificates of a foreign Clearing Agency to the effect
referred to in Section 6.13 was received with respect to each portion of
the Global Certificate exchanged for Definitive Euro-Certificates.
The Transferor shall execute and deliver to the Trustee Bearer
Certificates and Registered Certificates in such amounts and at such times
as are necessary to enable the Trustee to fulfill its responsibilities
under this Agreement, each Supplement and the Certificates.
(b) The Transfer Agent and Registrar will maintain at its
expense in the City of New York and, if and so long as any Series or Class
is listed on the Luxembourg Stock Exchange, Luxembourg, an office or agency
where Investor Certificates may be surrendered for registration of transfer
or exchange (except that Bearer Certificates may not be surrendered for
exchange at any such office or agency in the United States).
(c) (i) Registration of transfer of Investor Certificates
containing (x) a legend substantially to the effect set forth on
Exhibit E-1-A shall be effected only if such transfer is made
pursuant to an effective registration statement under the Act or is
exempt from the registration requirements under the Act and (y) a
legend substantially to the effect set forth on Exhibit E-1-B shall
be effected only if such transfer is made to a Person that is not (1)
an employee benefit plan or other plan, trust or account (including
an individual retirement account) that is subject to ERISA or Section
4975 of the Code or (2) any collective investment fund, insurance
company separate or general account or other entity (except an entity
registered under the Investment Company Act) whose underlying assets
include "plan assets" under ERISA by reason of a plan's investment in
such entity (a "Benefit Plan"). In the event that registration of a
transfer is to be made in reliance upon an exemption from the
registration requirements under the Act, the transferor or the
transferee shall deliver, at its expense, to the Transferor, the
Servicer and the Trustee, an investment letter from the transferee,
substantially in the form of the investment representation letter
attached hereto as Exhibit E-2, and no registration of transfer shall
be made until such letter is so delivered.
Investor Certificates issued upon registration or transfer
of, or Investor Certificates issued in exchange for, Investor
Certificates bearing the legend referred to above shall also bear
such legend unless the Transferor, the Servicer, the Trustee and the
Transfer Agent and Registrar receive an Opinion of Counsel,
satisfactory to each of them, to the effect that such legend may be
removed.
Whenever an Investor Certificate containing the legend
referred to above is presented to the Transfer Agent and Registrar for
registration of transfer, the Transfer Agent and Registrar shall
promptly seek instructions from the Servicer regarding such transfer
and shall be entitled to receive instructions signed by a Servicing
Officer prior to registering any such transfer. The Transferor hereby
agrees to indemnify the Transfer Agent and Registrar and the Trustee
and to hold each of them harmless against any loss, liability or
expense incurred without negligence or bad faith on their part
arising out of or in connection with actions taken or omitted by them
in relation to any such instructions furnished pursuant to this
clause (i).
(ii) Registration of transfer of Investor Certificates
containing a legend to the effect set forth on Exhibit E-3 shall be
effected only if such transfer is made to a Person which is not a
Benefit Plan. By accepting and holding any such Investor Certificate,
an Investor Certificateholder shall be deemed to have represented and
warranted that it is not a Benefit Plan. By acquiring any interest in
a Book-Entry Certificate which contains such legend, a Certificate
Owner shall be deemed to have represented and warranted that it is
not a Benefit Plan.
(iii) If so requested by the Transferor, the Trustee will
make available to any prospective purchaser of Investor Certificates
who so requests, a copy of a letter provided to the Trustee by or on
behalf of the Transferor relating to the transferability of any
Series or Class to a Benefit Plan.
Section 6.5. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate (together, in the case of Bearer
Certificates, with all unmatured Coupons (if any) appertaining thereto) is
surrendered to the Transfer Agent and Registrar, or the Transfer Agent and
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Transfer Agent
and Registrar and the Trustee such security or indemnity as may be required
by them to save each of them harmless, then, in the absence of notice to
the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Transferor shall execute, the Trustee shall authenticate and
the Transfer Agent and Registrar shall deliver (in the case of Bearer
Certificates, outside the United States), in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like tenor and aggregate fractional undivided interest. In connection with
the issuance of any new Certificate under this Section 6.5, the Trustee or
the Transfer Agent and Registrar may require the payment by the
Certificateholder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee and Transfer Agent
and Registrar) connected therewith. Any duplicate Certificate issued
pursuant to this Section 6.5 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 6.6. Persons Deemed Owners. The Trustee, the Paying
Agent, the Transfer Agent and Registrar and any agent of any of these may
(a) prior to due presentation of a Registered Certificate for registration
of transfer, treat the Person in whose name any Registered Certificate is
registered as the owner of such Registered Certificate for the purpose of
receiving distributions pursuant to the terms of the applicable Supplement
and for all other purposes whatsoever, and (b) treat the bearer of a Bearer
Certificate or Coupon as the owner of such Bearer Certificate or Coupon for
the purpose of receiving distributions pursuant to the terms of the
applicable Supplement and for all other purposes whatsoever; and, in any
such case, neither the Trustee, the Paying Agent, the Transfer Agent and
Registrar nor any agent of any of them shall be affected by any notice to
the contrary. Notwithstanding the foregoing, in determining whether the
Holders of the requisite Investor Certificates have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Transferor, the Servicer, any other Holder of the
Transferor Certificate, the Trustee or any Affiliate thereof, shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only
Certificates which the Trustee actually knows to be so owned shall be so
disregarded. Certificates so owned which have been pledged in good faith
shall not be disregarded and may be regarded as outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Certificates and that the pledgee is not the
Transferor, the Servicer, any other Holder of the Transferor Certificate or
any Affiliate thereof.
Section 6.7. Appointment of Paying Agent. The Paying Agent
shall make distributions to Investor Certificateholders from the Collection
Account or any applicable Series Account pursuant to the provisions of the
applicable Supplement and shall report the amounts of such distributions to
the Trustee. Any Paying Agent shall have the revocable power to withdraw
funds from the Collection Account or any applicable Series Account for the
purpose of making the distributions referred to above. The Trustee may
revoke such power and remove the Paying Agent if the Trustee determines in
its sole discretion that the Paying Agent shall have failed to perform its
obligations under this Agreement or any Supplement in any material respect.
The Paying Agent shall initially be Norwest Bank Minnesota, National
Association, and any co- paying agent chosen by the Transferor and
acceptable to the Trustee, including, if and so long as any Series or Class
is listed on the Luxembourg Stock Exchange and such exchange so requires, a
co-paying agent in Luxembourg or another western European city. Any Paying
Agent shall be permitted to resign as Paying Agent upon 30 days' notice to
the Trustee. In the event that any Paying Agent shall resign, the Trustee
shall appoint a successor to act as Paying Agent. The Trustee shall cause
each successor or additional Paying Agent to execute and deliver to the
Trustee an instrument in which such successor or additional Paying Agent
shall agree with the Trustee that it will hold all sums, if any, held by it
for payment to the Investor Certificateholders in trust for the benefit of
the Investor Certificateholders entitled thereto until such sums shall be
paid to such Investor Certificateholders. The Paying Agent shall return all
unclaimed funds to the Trustee and upon removal shall also return all funds
in its possession to the Trustee. The provisions of Sections 11.1, 11.2,
11.3 and 11.5 shall apply to the Trustee also in its role as Paying Agent,
for so long as the Trustee shall act as Paying Agent. Any reference in this
Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.
Section 6.8. Access to List of Registered Certificateholders'
Names and Addresses. The Trustee will furnish or cause to be furnished by
the Transfer Agent and Registrar to the Servicer or the Paying Agent,
within five Business Days after receipt by the Trustee of a request
therefor, a list in such form as the Servicer or the Paying Agent may
reasonably require, of the names and addresses of the Registered
Certificateholders. If any Holder or group of Holders of Investor
Certificates of any Series or all outstanding Series, as the case may be,
evidencing not less than 10% of the aggregate unpaid principal amount of
such Series or all outstanding Series, as applicable (the "Applicants"),
apply to the Trustee, and such application states that the Applicants
desire to communicate with other Investor Certificateholders with respect
to their rights under this Agreement or any Supplement or under the
Investor Certificates and is accompanied by a copy of the communication
which such Applicants propose to transmit, then the Trustee, after having
been adequately indemnified by such Applicants for its costs and expenses
shall afford or shall cause the Transfer Agent and Registrar to afford such
Applicants access during normal business hours to the most recent list of
Registered Certificateholders of such Series or all outstanding Series, as
applicable, held by the Trustee, within five Business Days after the
receipt of such application. Such list shall be as of a date no more than
45 days prior to the date of receipt of such Applicants' request.
Every Registered Certificateholder, by receiving and holding a
Registered Certificate, agrees with the Trustee that neither the Trustee,
the Transfer Agent and Registrar, nor any of their respective agents, shall
be held accountable by reason of the disclosure of any such information as
to the names and addresses of the Registered Certificateholders hereunder,
regardless of the sources from which such information was derived.
Section 6.9. Authenticating Agent. (a) The Trustee may appoint
one or more authenticating agents with respect to the Certificates which
shall be authorized to act on behalf of the Trustee in authenticating the
Certificates in connection with the issuance, delivery, registration of
transfer, exchange or repayment of the Certificates. Whenever reference is
made in this Agreement to the authentication of Certificates by the Trustee
or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication on behalf of the Trustee by an
authenticating agent and certificate of authentication executed on behalf
of the Trustee by an authenticating agent. Each authenticating agent must
be acceptable to the Transferor and the Servicer.
(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 power or any further act on the part
of the Trustee or such authenticating agent. An authenticating agent may at
any time resign by giving notice of resignation to the Trustee and to the
Transferor. The Trustee may at any time terminate the agency of an
authenticating agent by giving notice of termination to such authenticating
agent and to the Transferor. Upon receiving such a notice of resignation or
upon such a termination, or in case at any time an authenticating agent
shall cease to be acceptable to the Trustee or the Transferor, the Trustee
promptly may appoint a successor authenticating agent. Any successor
authenticating agent upon acceptance of its appointment hereunder shall
become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an authenticating
agent. No successor authenticating agent shall be appointed unless
acceptable to the Trustee and the Transferor. The Transferor agrees to pay
to each authenticating agent from time to time reasonable compensation for
its services under this Section 6.9. The provisions of Sections 11.1, 11.2
and 11.3 shall be applicable to any authenticating agent.
(c) Pursuant to an appointment made under this Section 6.9, the
Certificates may have endorsed thereon, in lieu of the Trustee's
certificate of authentication, an alternate certificate of authentication
in substantially the following form:
This is one of the Certificates described in the Amended and
Restated Pooling and Servicing Agreement.
------------------------------------
------------------------------------
as Authenticating Agent
for the Trustee,
By:---------------------------------
Authorized Officer
Section 6.10. Book-Entry Certificates. Unless otherwise
specified in the related Supplement for any Series or Class, the Investor
Certificates, upon original issuance, shall be issued in the form of one or
more typewritten Investor Certificates representing the Book-Entry
Certificates, to be delivered to the Clearing Agency, by, or on behalf of,
the Transferor. The Investor Certificates shall initially be registered on
the Certificate Register in the name of the Clearing Agency or its nominee,
and no Certificate Owner will receive a definitive certificate representing
such Certificate Owner's interest in the Investor Certificates, except as
provided in Section 6.12. Unless and until definitive, fully registered
Investor Certificates ("Definitive Certificates") have been issued to the
applicable Certificate Owners pursuant to Section 6.12 or as otherwise
specified in any such Supplement:
(a) the provisions of this Section 6.10 shall be in
full force and effect;
(b) the Transferor, the Servicer and the Trustee may deal with
the Clearing Agency and the Clearing Agency Participants for all purposes
(including the making of distributions) as the authorized representatives
of the respective Certificate Owners;
(c) to the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this Section
6.10 shall control; and
(d) the rights of the respective Certificate Owners shall be
exercised only through the Clearing Agency and the Clearing Agency
Participants and shall be limited to those established by law and
agreements between such Certificate Owners and the Clearing Agency or the
Clearing Agency Participants. Pursuant to the Depository Agreement, unless
and until Definitive Certificates are issued pursuant to Section 6.12, the
Clearing Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit distributions of principal and
interest on the related Investor Certificates to such Clearing Agency
Participants.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Investor
Certificateholders evidencing a specified percentage of the aggregate
unpaid principal amount of Investor Certificates, such direction or consent
may be given by Certificate Owners (acting through the Clearing Agency and
the Clearing Agency Participants) owning Investor Certificates evidencing
the requisite percentage of principal amount of Investor Certificates.
Section 6.11. Notices to Clearing Agency. Whenever any notice
or other communication is required to be given to Investor
Certificateholders of any Series or Class with respect to which Book-Entry
Certificates have been issued, unless and until Definitive Certificates
shall have been issued to the related Certificate Owners, the Trustee shall
give all such notices and communications to the applicable Clearing Agency.
Section 6.12. Definitive Certificates. If Book- Entry
Certificates have been issued with respect to any Series or Class and (a)
the Transferor advises the Trustee that the Clearing Agency is no longer
willing or able to discharge properly its responsibilities under the
Depository Agreement with respect to such Series or Class and the Trustee
or the Transferor is unable to engage a qualified successor, (b) the
Transferor, at its option, advises the Trustee that it elects to terminate
the book-entry system with respect to such Series or Class through the
Clearing Agency or (c) after the occurrence of a Servicer Default,
Certificate Owners of such Series or Class evidencing not less than 50% of
the aggregate unpaid principal amount of such Series or Class advise the
Trustee and the Clearing Agency through the Clearing Agency Participants
that the continuation of a book-entry system with respect to the Investor
Certificates of such Series or Class through the Clearing Agency is no
longer in the best interests of the Certificate Owners with respect to such
Certificates, then the Trustee shall notify all Certificate Owners of such
Certificates, through the Clearing Agency, of the occurrence of any such
event and of the availability of Definitive Certificates to Certificate
Owners requesting the same. Upon surrender to the Trustee of any such
Certificates by the Clearing Agency, accompanied by registration
instructions from the Clearing Agency for registration, the Transferor
shall execute and the Trustee shall authenticate and deliver such
Definitive Certificates. Neither the Transferor nor the Trustee shall be
liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of such Definitive Certificates all references herein to
obligations imposed upon or to be performed by the Clearing Agency shall be
deemed to be imposed upon and performed by the Trustee, to the extent
applicable with respect to such Definitive Certificates and the Trustee
shall recognize the Holders of such Definitive Certificates as Investor
Certificateholders hereunder.
Section 6.13. Global Certificate. If specified in the related
Supplement for any Series, or Class, the Investor Certificates for such
Series or Class will initially be issued in the form of a single temporary
global Certificate (the "Global Certificate") in bearer form, without
interest coupons, in the denomination of the aggregate principal amount of
such Series or Class and substantially in the form set forth in the exhibit
with respect thereto attached to the related Supplement. The Global
Certificate will be executed by the Transferor and authenticated by the
Trustee upon the same conditions, in substantially the same manner and with
the same effect as the Definitive Certificates. The Global Certificate may
be exchanged for Bearer or Registered Certificates in definitive form (the
"Definitive EuroCertificates") pursuant to the terms of any applicable
Supplement.
Section 6.14. Uncertificated Classes. Notwithstanding anything
to the contrary contained in this Article VI or in Article XII, unless
otherwise specified in any Supplement, any provisions contained in this
Article VI and in Article XII relating to the registration, form,
execution, authentication, delivery, presentation, cancellation and
surrender of Certificates shall not be applicable to any uncertificated
Certificates.
ARTICLE VII
Other Matters Relating to the Transferor
Section 7.1. Liability of the Transferor. The Transferor shall
be liable in all respects for the obligations, covenants, representations
and warranties of the Transferor arising under or related to this Agreement
or any Supplement. The Transferor shall be liable only to the extent of the
obligations specifically undertaken by it in its capacity as Transferor.
Section 7.2. Merger or Consolidation of, or Assumption of the
Obligations of, the Transferor. (a) The Transferor shall not consolidate
with or merge into any other corporation or convey or transfer its
properties and assets substantially as an entirety to any Person unless:
(i)(x) the business entity formed by such consolidation
or into which the Transferor is merged or the Person which acquires
by conveyance or transfer the properties and assets of the Transferor
substantially as an entirety shall be, if the Transferor is not the
surviving entity, organized and existing under the laws of the United
States of America or any state or the District of Columbia, and, if
the Transferor is not the surviving entity, such business entity
shall expressly assume, by an agreement supplemental hereto, executed
and delivered to the Trustee, in form reasonably satisfactory to the
Trustee, the performance of every covenant and obligation of the
Transferor hereunder, including its obligations under Section 7.4;
(y) the Transferor has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance or transfer and such supplemental
agreement comply with this Section 7.2, that such supplemental
agreement is a valid and binding obligation of such surviving entity
enforceable against such surviving entity in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally from time to time in
effect and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in
equity), and that all conditions precedent herein provided for
relating to such transaction have been complied with;
(ii) the Rating Agency Condition shall have been
satisfied with respect to such consolidation, merger, conveyance or
transfer;
(iii) the Transferor shall have delivered to the Trustee
and each Rating Agency a Tax Opinion, dated the date of such
consolidation, merger, conveyance or transfer, with respect thereto;
(iv) in connection with any merger or consolidation, the
business entity into which the Transferor shall merge or consolidate
shall be (x) a business entity that is not subject to Title 11 of the
United States Code or (y) a special-purpose corporation, the powers
and activities of which shall be limited to the performance of the
Transferor's obligations under this Agreement, any Supplement and the
Receivables Purchase Agreement; and
(v) if the Transferor is not the surviving entity, the
surviving entity shall file new UCC-1 financing statements with
respect to the interest of the Trust in the Receivables.
(b) The obligations of the Transferor hereunder shall not be
assignable nor shall any Person succeed to the obligations of the
Transferor hereunder except in each case in accordance with (i) the
provisions of the foregoing paragraph, (ii) Sections 2.12 or 6.3(d), or
(iii) conveyances, mergers, consolidations, assumptions, sales or transfers
to other entities (1) for which the Transferor delivers an Officer's
Certificate to the Trustee indicating that the Transferor reasonably
believes that such action will not adversely affect in any material respect
the interests of any Investor Certificateholder, (2) which meet the
requirements of clause (ii) of the preceding paragraph and (3) for which
such purchaser, transferee, pledgee or entity shall expressly assume, in an
agreement supplemental hereto, executed and delivered to the Trustee in
writing in form satisfactory to the Trustee, the performance of every
covenant and obligation of the Transferor thereby conveyed.
(c) This Section 7.2 shall not be construed to prohibit or in
any way limit the Transferor's ability to effectuate any consolidation or
merger pursuant to which the Transferor would be the surviving entity.
Section 7.3. Limitations on Liability of the Transferor.
Subject to Sections 7.1 and 7.4, neither the Transferor, any Holder of the
Transferor Certificate nor any of the directors, officers, employees or
agents of the Transferor acting in such capacities shall be under any
liability to the Trust, the Trustee, the Certificateholders, any
Enhancement Provider or any other Person for any action taken or for
refraining from the taking of any action in good faith in their capacities
as Transferor pursuant to this Agreement; provided, however, that this
provision shall not protect the Transferor, any Holder of the Transferor
Certificate or any such Person against any liability which would otherwise
be imposed by reason of willful misfeasance, bad faith or gross negligence
in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Transferor and any director, officer,
employee or agent of the Transferor may rely in good faith on any document
of any kind prima facie properly executed and submitted by any Person
(other than the Transferor) respecting any matters arising hereunder.
Section 7.4. Liabilities. (a) Notwithstanding Section 7.3 (and
notwithstanding Sections 8.3 and 8.4), the Transferor by entering into this
Agreement, and any Holder of any interest in the Transferor Certificate
(excluding, unless otherwise provided in any Supplement, any Supplemental
Certificate and not including, unless otherwise provided in any
Participation Supplement, any Participation) by its acceptance thereof,
agree to be liable, directly to the injured party, for the entire amount of
any losses, claims, damages or liabilities (other than those that would be
incurred by an Investor Certificateholder if the Investor Certificates were
notes secured by the Receivables, for example, as a result of the
performance of the Receivables, market fluctuations, a shortfall or failure
to make payment under any Enhancement or other similar market or investment
risks associated with ownership of the Investor Certificates) arising out
of or based on the arrangement created by this Agreement or the actions of
the Servicer taken pursuant hereto (to the extent that, if the Trust Assets
at the time the claim is made were used to pay in full all outstanding
Certificates of all Series, the Trust Assets that would remain after the
Investor Certificateholders and Enhancement Providers, if any, were paid in
full would be insufficient to pay any such losses, claims, damages or
liabilities) as though this Agreement created a partnership under the
Delaware Revised Uniform Partnership Act in which the Transferor and such
Holder of the Transferor Certificate were general partners. To the extent
provided in Section 8.4, the Servicer will (from its own assets and not
from the assets of the Trust) indemnify and hold harmless the Transferor
and each Holder of the Transferor Certificate against and from certain
losses, claims, damages and liabilities of the Transferor or such Holder as
described in this Section 7.4 arising from the actions or omissions of the
Servicer.
(b) The Transferor shall indemnify and hold harmless the
Trustee and its officers, directors, employees and agents, from and against
any loss, liability, expense, damage or injury (collectively, a "Loss")
suffered or sustained by reason of the acceptance by the Trustee of the
Trust pursuant to this Agreement, other than as specified in Section 8.4,
including any judgment, award, settlement, reasonable attorneys' fees and
other costs or expenses incurred in connection with the defense of any
action, proceeding or claim; provided, however, that the Transferor's duty
to indemnify under this subsection 7.4(b) shall not extend to any Losses
(i) for which the Trustee has a right to indemnification under any other
provision of this Agreement, or (ii) that are caused by or result from the
breach of contract by, or the fraud, negligence, or willful misconduct of,
the Trustee, its employees or its agents.
ARTICLE VIII
Other Matters Relating to the Servicer
Section 8.1. Liability of the Servicer. The Servicer shall be
liable under this Agreement only to the extent of the obligations
specifically undertaken by the Servicer in its capacity as Servicer.
Section 8.2. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer. The Servicer shall not consolidate with or
merge into any other corporation or convey or transfer its properties and
assets substantially as an entirety to any Person, unless:
(a) (i) the corporation formed by such consolidation or into
which the Servicer is merged or the Person which acquires by
conveyance or transfer the properties and assets of the Servicer
substantially as an entirety shall be, if the Servicer is not the
surviving entity, a corporation organized and existing under the laws
of the United States of America or any state or the District of
Columbia, and, if the Servicer is not the surviving entity, such
corporation shall expressly assume, by an agreement supplemental
hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, the performance of every covenant and
obligation of the Servicer hereunder;
(ii) the Servicer has delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel each stating that
such consolidation, merger, conveyance or transfer and such
supplemental agreement comply with this Section 8.2, that such
supplemental agreement is a valid and binding obligation of such
surviving entity enforceable against such surviving entity in
accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally from time to time in effect and except as such
enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity), and that all
conditions precedent herein provided for relating to such transaction
have been complied with; and
(iii) either (x) the corporation formed by such
consolidation or into which the Servicer is merged or the Person
which acquired by conveyance or transfer the properties and assets of
the Servicer substantially as an entirety shall be an Eligible
Servicer (taking into account, in making such determination, the
experience and operations of the predecessor Servicer) or (y) upon
the effectiveness of such consolidation, merger, conveyance or
transfer, a Successor Servicer shall have assumed the obligations of
the Servicer in accordance with this Agreement.
(b) This Section 8.2 shall not be construed to prohibit or in
any way limit the Servicer's ability to effectuate any consolidation or
merger pursuant to which the Servicer would be the surviving entity.
(c) The Servicer shall notify each Rating Agency promptly after
any consolidation, merger, conveyance or transfer effected pursuant to this
Section 8.2.
Section 8.3. Limitation on Liability of the Servicer and
Others. Except as provided in Sections 8.4 and 11.5, neither the Servicer
nor any of the directors, officers, employees or agents of the Servicer in
its capacity as Servicer shall be under any liability to the Trust, the
Trustee, the Certificateholders, any Enhancement Providers or any other
person for any action taken or for refraining from the taking of any action
in good faith in its capacity as Servicer pursuant to this Agreement;
provided, however, that this provision shall not protect the Servicer or
any such Person against any liability which would otherwise be imposed by
reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Servicer and any director, officer, employee or agent
of the Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person (other than the
Servicer) respecting any matters arising hereunder. The Servicer shall not
be under any obligation to appear in, prosecute or defend any legal action
which is not incidental to its duties as Servicer in accordance with this
Agreement and which in its reasonable judgment may involve it in any
expense or liability. The Servicer may, in its sole discretion, undertake
any such legal action which it may deem necessary or desirable for the
benefit of the Certificateholders with respect to this Agreement and the
rights and duties of the parties hereto and the interests of the
Certificateholders hereunder.
Section 8.4. Servicer Indemnification of the Trust and the
Trustee. The Servicer shall indemnify and hold harmless the Trust and the
Trustee and its officers, directors, employees and agents, from and against
any loss, liability, expense, damage or injury suffered or sustained by
reason of any acts or omissions of the Servicer with respect to the Trust
pursuant to this Agreement, including any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in
connection with the defense of any action, proceeding or claim; provided,
however, that the Servicer shall not indemnify the Trustee if such acts,
omissions or alleged acts or omissions constitute or are caused by fraud,
negligence, or willful misconduct by the Trustee; provided, further, that
the Servicer shall not indemnify the Trust, the Investor Certificateholders
or the Certificate Owners for any liabilities, costs or expenses of the
Trust with respect to any action taken by the Trustee at the request of the
Investor Certificateholders; provided, further, that the Servicer shall not
indemnify the Trust, the Investor Certificateholders or the Certificate
Owners as to any losses, claims or damages incurred by any of them in their
capacities as investors, including, without limitation, losses with respect
to market or investment risks associated with ownership of the Investor
Certificates or losses incurred as a result of Defaulted Receivables; and
provided, further, that the Servicer shall not indemnify the Trust, the
Investor Certificateholders or the Certificate Owners for any liabilities,
costs or expenses of the Trust, the Investor Certificateholders or the
Certificate Owners arising under any tax law, including, any Federal,
state, local or foreign income or franchise taxes or any other tax imposed
on or measured by income (or any interest or penalties with respect thereto
or arising from a failure to comply therewith) required to be paid by the
Trust, the Investor Certificateholders or the Certificate Owners in
connection herewith to any taxing authority. Indemnification pursuant to
this Section 8.4 shall not be payable from the Trust Assets. The provisions
of this indemnity shall run directly to and be enforceable by an indemnitee
subject to the limitations hereof.
Section 8.5. The Servicer Not To Resign. The Servicer shall not
resign from the obligations and duties hereby imposed on it except (x) upon
the determination that (i) the performance of its duties hereunder is no
longer permissible under Requirements of Law (other than the charter and
by-laws of the Servicer) and (ii) there is no reasonable action which the
Servicer could take to make the performance of its duties hereunder
permissible under such Requirements of Law or (y) as may be required, in
connection with the Servicer's consolidation with, or merger into any other
corporation or the Servicer's conveyance or transfer of its properties and
assets substantially as an entirety to any Person in each case, in
accordance with Section 8.2. Any determination permitting the resignation
of the Servicer pursuant to clause (x) above shall be evidenced by an
Opinion of Counsel to such effect delivered to the Trustee. No resignation
shall become effective until the Trustee or a Successor Servicer shall have
assumed the responsibilities and obligations of the Servicer in accordance
with Section 10.2. If within 120 days of the date of the determination that
the Servicer may no longer act as Servicer, and if the Trustee is unable to
appoint a Successor Servicer, the Trustee shall serve as Successor
Servicer. Notwithstanding the foregoing, the Trustee shall, if it is
legally unable so to act, petition a court of competent jurisdiction to
appoint any established institution having a net worth of not less than
$50,000,000 and whose regular business includes the servicing of credit
card accounts as the Successor Servicer hereunder. The Trustee shall give
prompt notice to each Rating Agency and each Enhancement Provider, if any,
entitled thereto under the terms of the applicable Supplement upon the
appointment of a Successor Servicer.
Section 8.6. Access to Certain Documentation and Information
Regarding the Receivables. The Servicer shall provide to the Trustee access
to the documentation regarding the Accounts and the Receivables in such
cases where the Trustee is required in connection with the enforcement of
the rights of Certificateholders or by applicable statutes or regulations
to review such documentation, such access being afforded without charge but
only (a) upon reasonable request, (b) during normal business hours, (c)
subject to the Servicer's normal security and confidentiality procedures
and (d) at reasonably accessible offices in the continental United States
designated by the Servicer. Nothing in this Section 8.6 shall derogate from
the obligation of the Credit Card Originator, TCC, the Transferor, the
Trustee and the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors and the failure of the
Servicer to provide access as provided in this Section 8.6 as a result of
such obligation shall not constitute a breach of this Section 8.6.
Section 8.7. Delegation of Duties. In the ordinary course of
business, the Servicer may at any time delegate any duties hereunder to any
Person who agrees to conduct such duties in accordance with the Credit Card
Guidelines and this Agreement. Any such delegations shall not relieve the
Servicer of its liability and responsibility with respect to
such duties, and shall not constitute a resignation within the meaning of
Section 8.5 and the Servicer will remain jointly and severally liable with
such Person for any amounts which would otherwise be payable pursuant to
this Article VIII as if the Servicer had performed such duty; provided,
however, that in the case of any significant delegation to a Person other
than an Affiliate of Retailers National Bank, at least 30 days' prior
written notice shall be given to the Trustee, each Rating Agency and each
Enhancement Provider, if any, entitled thereto pursuant to the relevant
Supplement, of such delegation to any entity that is not an Affiliate of
the Servicer.
Section 8.8. Examination of Records. To the extent required
pursuant to Section 2.1, the Transferor and the Servicer shall clearly and
unambiguously indicate in their computer files or other records that the
Receivables arising in the Accounts have been conveyed to the Trustee, on
behalf of the Trust, pursuant to this Agreement for the benefit of the
Certificateholders. From and after the date the actions referred to in the
preceding sentence are required to be taken, the Transferor and the
Servicer shall, prior to the sale or transfer to a third party of any
receivable held in its custody, examine its computer and other records to
determine that such receivable is not a Receivable.
ARTICLE IX
Early Amortization Events
Section 9.1. Early Amortization Events. If any one of the
following events (each, an "Early Amortization Event") shall occur with
respect to any Series:
(a) Retailers National Bank, TCC, the Transferor or any Holder
of the Transferor Certificate shall fail generally to, or admit in writing
its inability to, pay its debts as they become due or makes an assignment
for the benefit of its creditors; or a proceeding shall have been
instituted in a court having jurisdiction in the premises seeking a decree
or order for relief in respect of Retailers National Bank, TCC, the
Transferor or any Holder of the Transferor Certificate in an involuntary
case under any Debtor Relief Law, or for the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator, conservator or
other similar official of such Person or for any substantial part of its
property, or for the winding-up or liquidation, dissolution, reorganization
or readjustment of its affairs or similar relief and, if instituted against
the Transferor or any Holder of the Transferor Certificate, any such
proceeding shall continue undismissed or unstayed and in effect, for a
period of 60 consecutive days, or any of the actions sought in such
proceeding shall occur; or the commencement by Retailers National Bank,
TCC, the Transferor or any Holder of the Transferor Certificate, of a
voluntary case under any Debtor Relief Law, or such Person's seeking,
consenting or acquiescing to the entry of an order for relief in an
involuntary case under any Debtor Relief Law, or seeking, consenting or
acquiescing to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator, conservator or
other similar official of such Person or for any substantial part of its
property, or any general assignment for the benefit of creditors; or such
Person or any subsidiary of such Person shall have taken any corporate
action in furtherance of any of the foregoing actions (any such event, an
"Insolvency Event");
(b) the Trust shall become an "investment company"
within the meaning of the Investment Company Act;
(c) the Transferor Amount (excluding the interest represented
by any Supplemental Certificate) shall be less than the Required Retained
Transferor Amount; or
(d) the Transferor shall become unable for any
reason to transfer Receivables to the Trust pursuant to this
Agreement;
then in the case of any such event, an Early Amortization Event shall occur
with respect to such Series without any notice or other action on the part
of the Trustee or the Investor Certificateholders, immediately upon the
occurrence of such event.
Section 9.2. Additional Rights upon the Occurrence of Certain
Events. If an Insolvency Event occurs with respect to the Transferor
(excluding any Supplemental Certificate), or the event set forth in
subsection 9.1(c) shall occur, the Transferor shall on the day any such
event occurs, immediately cease to transfer Principal Receivables, or
interests in Principal Receivables represented by any Participation
Interests to the Trust and shall promptly give notice to the Trustee
thereof. Notwithstanding any cessation of the transfer to the Trust of
additional Principal Receivables or any Participation Interests, Principal
Receivables or any Participation Interests transferred to the Trust prior
to the occurrence of such Insolvency Event and Collections in respect of
such Principal Receivables and Participation Interests, and Finance Charge
Receivables whenever created accrued in respect of such Principal
Receivables, shall continue to be a part of the Trust.
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 the Servicer to make any payment,
transfer or deposit or to give instructions or notice to the Trustee
pursuant to the terms of this Agreement or any Supplement on or
before the date occurring five Business Days after the date such
payment, transfer or deposit or such instruction or notice is
required to be made or given, as the case may be, under the terms of
this Agreement or any Supplement;
(b) failure on the part of the Servicer to duly observe
or perform in any material respect any other covenants or agreements
of the Servicer set forth in this Agreement or any Supplement which
has a material adverse effect on the interests hereunder of the
Investor Certificateholders of any Series or Class (which
determination shall be made without regard to whether funds are then
available pursuant to any Enhancement) and which continues unremedied
for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been
given to the Servicer by the Trustee, or to the Servicer and the
Trustee by Holders of Investor Certificates evidencing not less than
25% of the aggregate unpaid principal amount of all Investor
Certificates (or, with respect to any such failure that does not
relate to all Series, 25% of the aggregate unpaid principal amount of
all Series to which such failure relates); the Servicer shall
delegate its duties under this Agreement, except as permitted by
Sections 8.2 and 8.7, a Responsible Officer of the Trustee has actual
knowledge of such delegation and such delegation continues unremedied
for 15 days after the date on which written notice thereof, requiring
the same to be remedied, shall have been given to the Servicer by the
Trustee, or to the Servicer and the Trustee by Holders of Investor
Certificates evidencing not less than 25% of the aggregate unpaid
principal amount of all Investor Certificates;
(c) any representation, warranty or certification made by
the Servicer in this Agreement or any Supplement or in any
certificate delivered pursuant to this Agreement or any Supplement
shall prove to have been incorrect when made, which has a material
adverse effect on the rights of the Investor Certificateholders of
any Series or Class (which determination shall be made without regard
to whether funds are then available pursuant to any Enhancement) and
which continues to be incorrect in any material respect for a period
of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the
Servicer by the Trustee, or to the Servicer and the Trustee by the
Holders of Investor Certificates evidencing not less than 25% of the
aggregate unpaid principal amount of all Investor Certificates (or,
with respect to any such representation, warranty or certification
that does not relate to all Series, 25% of the aggregate unpaid
principal amount of all Series to which such representation, warranty
or certification relates); or
(d) the Servicer shall fail generally to, or admit in
writing its inability to, pay its debts as they become due; or a
proceeding shall have been instituted in a court having jurisdiction
in the premises seeking a decree or order for relief in respect of
the Servicer in an involuntary case under any Debtor Relief Law, or
for the appointment of a receiver, liquidator, assignee, trustee,
custodian, sequestrator, conservator or other similar official of
such Person or for any substantial part of its property, or for the
winding-up or liquidation of its affairs and, if instituted against
the Servicer, any such proceeding shall continue undismissed or
unstayed and in effect, for a period of 60 consecutive days, or any
of the actions sought in such proceeding shall occur; or the
commencement by the Servicer, of a voluntary case under any Debtor
Relief Law, or such Person's consent to the entry of an order for
relief in an involuntary case under any Debtor Relief Law, or consent
to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator, conservator or other
similar official of such Person or for any substantial part of its
property, or any general assignment for the benefit of creditors; or
such Person or any subsidiary of such Person shall have taken any
corporate action in furtherance of any of the foregoing actions;
then, in the event of any Servicer Default, so long as the Servicer Default
shall not have been remedied, either the Trustee or the Holders of Investor
Certificates evidencing more than 50% of the aggregate unpaid principal
amount of all Investor Certificates, by notice given to the Servicer (and
to the Trustee and any Enhancement Provider entitled thereto pursuant to
the relevant Supplement if given by the Investor Certificateholders) (a
"Termination Notice"), may terminate all but not less than all the rights
and obligations of the Servicer, as Servicer, under this Agreement and in
and to the Receivables and the proceeds thereof; provided, however, if
within 60 days of receipt of a Termination Notice the Trustee is unable to
obtain any bids from Eligible Servicers in accordance with subsection
10.2(c) to act as a Successor Servicer and receives an Officer's
Certificate of the Servicer to the effect that the Servicer cannot in good
faith cure the Servicer Default which gave rise to the Termination Notice,
the Trustee shall offer the Transferor the right at its option to purchase
the Certificateholders' Interest and the interest in the Trust Assets
represented by any Participation on the Distribution Date occurring in the
next calendar month. The purchase price for the Certificateholders'
Interest shall be equal to the sum of the amounts specified therefor with
respect to each outstanding Series in the related Supplement. The
Transferor shall notify the Trustee prior to the Record Date for the
related Distribution Date of the purchase if it is exercising such option.
If it exercises such option, the Transferor shall (x) deliver to the
Trustee an Opinion of Counsel (which must be an independent outside
counsel) to the effect that, in reliance on certain certificates to the
effect that the Receivables constitute fair value for consideration paid
therefor and as to the solvency of the Transferor, the purchase would not
be considered a fraudulent conveyance and (y) deposit the purchase price
into the Collection Account not later than 12:00 noon, New York City time,
on such Distribution Date in immediately available funds. The purchase
price shall be allocated and distributed to Investor Certificateholders in
accordance with Article IV and the terms of each Supplement.
After receipt by the Servicer of such Termination Notice, and
on the date that a Successor Servicer shall have been appointed by the
Trustee pursuant to Section 10.2, all authority and power of the Servicer
under this Agreement shall pass to and be vested in the Successor Servicer
(a "Service Transfer"); and, without limitation, the Trustee is hereby
authorized and empowered (upon the failure of the Servicer to cooperate) to
execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, all documents and other instruments upon the failure of the
Servicer to execute or deliver such documents or instruments, and to do and
accomplish all other acts or things necessary or appropriate to effect the
purposes of such transfer of servicing rights. The Servicer agrees to
cooperate with the Trustee and the Successor Servicer in effecting the
termination of the responsibilities and rights of the Servicer to conduct
servicing hereunder including, without limitation, the transfer to the
Successor Servicer of all authority of the Servicer to service the
Receivables provided for under this Agreement, including, without
limitation, all authority over all Collections which shall on the date of
transfer be held by the Servicer for deposit, or which have been deposited
by the Servicer, in the Collection Account, or which shall thereafter be
received with respect to the Receivables, and in assisting the Successor
Servicer and in enforcing all rights to Insurance Proceeds. The Servicer
shall promptly transfer its electronic records relating to the Receivables
to the Successor Servicer in such electronic form as the Successor Servicer
may reasonably request and shall promptly transfer to the Successor
Servicer all other records, correspondence and documents necessary for the
continued servicing of the Receivables in the manner and at such times as
the Successor Servicer shall reasonably request. To the extent that
compliance with this Section 10.1 shall require the Servicer to disclose to
the Successor Servicer information of any kind which the Servicer
reasonably deems to be confidential, the Successor Servicer shall be
required to enter into such customary licensing and confidentiality
agreements as the Servicer shall deem appropriate to protect its interests.
Notwithstanding the foregoing, any delay in or failure of
performance under subsection 10.1(a) for a period of five Business Days or
under subsection 10.1(b) or (c) for a period of 60 days (in addition to any
period provided in subsection 10.1(a), (b) or (c)) shall not constitute a
Servicer Default until the expiration of such additional five Business Days
or 60 days, respectively, if such delay or failure could not be prevented
by the exercise of reasonable diligence by the Servicer and such delay or
failure was caused by an act of God or the public enemy, acts of declared
or undeclared war, public disorder, rebellion or sabotage, epidemics,
landslides, lightning, fire, hurricanes, earthquakes, floods or similar
causes. The preceding sentence shall not relieve the Servicer from the
obligation to use its best efforts to perform its obligations in a timely
manner in accordance with the terms of this Agreement and any Supplement
and the Servicer shall provide the Trustee, each Rating Agency, any
Enhancement Provider entitled thereto pursuant to the relevant Supplement,
the Holder of the Transferor Certificate and the Investor
Certificateholders with an Officer's Certificate giving immediate notice of
such failure or delay by it, together with a description of its efforts to
so perform its obligations.
Section 10.2. Trustee to Act; Appointment of Successor. (a) On
and after the receipt by the Servicer of a Termination Notice pursuant to
Section 10.1, the Servicer shall continue to perform all servicing
functions under this Agreement until the date specified in the Termination
Notice or otherwise specified by the Trustee or until a date mutually
agreed upon by the Servicer and the Trustee. The Trustee shall, as promptly
as possible after the giving of a Termination Notice, appoint an Eligible
Servicer as a successor servicer (the "Successor Servicer"), and such
Successor Servicer shall accept its appointment by a written assumption in
a form acceptable to the Trustee. In the event that a Successor Servicer
has not been appointed or has not accepted its appointment at the time when
the Servicer ceases to act as Servicer, the Trustee without further action
shall automatically be appointed the Successor Servicer. The Trustee may
delegate any of its servicing obligations to an Affiliate of the Trustee or
agent in accordance with Section 3.1(b) and 8.7. Notwithstanding the
foregoing, the Trustee shall, if it is legally unable so to act, petition a
court of competent jurisdiction to appoint any established institution
having a net worth of not less than $50,000,000 and whose regular business
includes the servicing of credit card receivables as the Successor Servicer
hereunder. The Trustee shall give prompt notice to each Rating Agency and
each Enhancement Provider, if any, entitled thereto pursuant to the
applicable Supplement upon the appointment of a Successor Servicer.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to servicing
functions under this Agreement and shall be subject to all the
responsibilities, duties and liabilities (except for liabilities arising
during the period of time when the prior Servicer was performing and acting
as Servicer) relating thereto placed on the Servicer by the terms and
provisions hereof, and all references in this Agreement to the Servicer
shall be deemed to refer to the Successor Servicer.
(c) In connection with any Termination Notice, the Trustee will
review any bids which it obtains from Eligible Servicers and shall be
permitted to appoint any Eligible Servicer submitting such a bid as a
Successor Servicer for servicing compensation not in excess of the
aggregate Servicing Fees for all Series; provided, however, that the Holder
of the Transferor Certificate shall be responsible for payment of the
portion of such aggregate Servicing Fees allocable to the Holder of the
Transferor Certificate and that no such monthly compensation paid out of
Collections shall be in excess of such aggregate Servicing Fees. Each
Holder of the Transferor Certificate agrees that, if Retailers National
Bank (or any Successor Servicer) is terminated as Servicer hereunder, the
portion of the Collections in respect of Finance Charge Receivables that
the Holder of the Transferor Certificate is entitled to receive pursuant to
this Agreement or any Supplement shall be reduced by an amount sufficient
to pay the Holder of the Transferor Certificate share (determined by
reference to the Supplements with respect to any outstanding Series) of the
compensation of the Successor Servicer.
(d) All authority and power granted to the Successor Servicer
under this Agreement shall automatically cease and terminate upon
termination of the Trust pursuant to Section 12.1 and shall pass to and be
vested in the Transferor and, without limitation, the Transferor is hereby
authorized and empowered to execute and deliver, on behalf of the Successor
Servicer, as attorney-in-fact or otherwise, all documents and other
instruments, and to do and accomplish all other acts or things necessary or
appropriate to effect the purposes of such transfer of servicing rights.
The Successor Servicer agrees to cooperate with the Transferor in effecting
the termination of the responsibilities and rights of the Successor
Servicer to conduct servicing on the Receivables. The Successor Servicer
shall transfer its electronic records relating to the Receivables to the
Transferor in such electronic form as the Transferor may reasonably request
and shall transfer all other records, correspondence and documents to the
Transferor in the manner and at such times as the Transferor shall
reasonably request. To the extent that compliance with this Section 10.2
shall require the Successor Servicer to disclose to the Transferor
information of any kind which the Successor Servicer deems to be
confidential, the Transferor shall be required to enter into such customary
licensing and confidentiality agreements as the Successor Servicer shall
deem appropriate to protect its interests.
Section 10.3. Notification to Certificateholders. Within two
Business Days after the Servicer becomes aware of any Servicer Default, the
Servicer shall give notice thereof to the Trustee, each Rating Agency and
any Enhancement Provider entitled thereto pursuant to the relevant
Supplement and the Trustee shall give notice to the Investor
Certificateholders. Upon any termination or appointment of a Successor
Servicer pursuant to this Article X, the Trustee shall give prompt notice
thereof to the Investor Certificateholders.
ARTICLE XI
The Trustee
Section 11.1. Duties of Trustee. (a) The Trustee, prior to the
occurrence of a Servicer Default and after the curing of all Servicer
Defaults which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement. If a
Servicer Default has occurred (which has not been cured or waived) the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to
determine whether they conform on their face to the requirements of this
Agreement. The Trustee shall give prompt written notice to the
Certificateholders of any material lack of conformity of any such
instrument to the applicable requirements of this Agreement discovered by
the Trustee which would entitle a specified percentage of the
Certificateholders to take any action pursuant to this Agreement.
(c) Subject to subsection 11.1(a), no provision of this
Agreement shall be construed to relieve the Trustee from liability for its
own negligent action, its own negligent failure to act or its own
misconduct; provided, however, that:
(i) the Trustee shall not be personally liable for an
error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of the Holders of
Investor Certificates relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement; provided that such direction is delivered by the Holders
of Investor Certificates evidencing the percentage of the aggregate
unpaid principal amount of Investor Certificates of all Series to
which such action relates required for such action by the terms of
this Agreement; and
(iii) the Trustee shall not be charged with knowledge of
any failure by the Servicer referred to in clauses (a) and (b) of
Section 10.1 unless a Responsible Officer of the Trustee obtains
actual knowledge of such failure or the Trustee receives written
notice of such failure from the Servicer, any Holders of Investor
Certificates evidencing not less than 25% of the aggregate unpaid
principal amount of all Investor Certificates (or, with respect to
any such failure that does not relate to all Series, 25% of the
aggregate unpaid principal amount of all Investor Certificates of all
Series to which such failure relates, or the Enhancement Providers,
if any, for all Series to which such failure relates).
(d) The Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of
its duties hereunder or in the exercise of any of its rights or powers
hereunder, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this
Agreement shall in any event require the Trustee to perform, or be
responsible for the manner of performance of, any of the obligations of the
Servicer under this Agreement except during such time, if any, as the
Trustee shall be the successor to, and be vested with the rights, duties,
powers and privileges of, the Servicer in accordance with the terms of this
Agreement.
(e) The Trustee shall have no power to vary the corpus of the
Trust, except as expressly provided in this Agreement.
(f) In the event that the Paying Agent or the Transfer Agent
and Registrar shall fail to perform any obligation, duty or agreement in
the manner or on the day required to be performed by the Paying Agent or
the Transfer Agent and Registrar, as the case may be, under this Agreement,
the Trustee shall be obligated as soon as possible upon knowledge of a
Responsible Officer thereof and receipt of appropriate records, if any, to
perform such obligation, duty or agreement in the manner so required.
(g) If the Transferor has agreed to transfer any of its
receivables (other than the Receivables) to another Person, upon the
written request of the Transferor, the Trustee will enter into such
intercreditor agreements with the transferee of such receivables as are
customary and necessary to separately identify the rights of the Trust and
such other Person in the Transferor's receivables; provided that the
Trustee shall not be required to enter into any intercreditor agreement
which could adversely affect the interests of the Certificateholders and,
upon the request of the Trustee, the Transferor will deliver an Opinion of
Counsel on any matters relating to such intercreditor agreement, reasonably
requested by the Trustee.
Section 11.2. Certain Matters Affecting the
Trustee.
(a) the Trustee may rely on and shall be protected in
acting on, or in refraining from acting in accord with, any
resolution, Officer's Certificate, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond or other paper or
document reasonably believed by it to be genuine and to have been
signed or presented to it pursuant to this Agreement by the proper
party or parties;
(b) the Trustee may consult with counsel, and any advice
of such counsel, or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(c) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement or any
Enhancement Agreement, or to institute, conduct or defend any
litigation hereunder or thereunder or in relation to this Agreement
or any Enhancement Agreement, at the request, order or direction of
any of the Certificateholders, pursuant to the provisions of this
Agreement or any Enhancement Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; nothing contained herein
shall, however, relieve the Trustee of the obligations, upon the
occurrence of any Servicer Default (which has not been cured) to
exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in its
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs;
(d) the Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and believed by
it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(e) the Trustee shall not be bound to make any
investigation into the facts of matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, appraisal, bond or other paper or document,
unless requested in writing to do so by Holders of Investor
Certificates evidencing more than 25% of the aggregate unpaid
principal amount of all Investor Certificates (or, with respect to
any such matters that do not relate to all Series, 25% of the
aggregate unpaid principal amount of the Investor Certificates of all
Series to which such matters relate);
(f) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian, and the Trustee shall not
be responsible for any misconduct or negligence on the part of any
such agent, attorney or custodian appointed with due care by it
hereunder; and
(g) except as may be required by subsection 11.1(a), the
Trustee shall not be required to make any initial or periodic
examination of any documents or records related to the Receivables or
the Accounts for the purpose of establishing the presence or absence
of defects, the compliance by the Transferor with its representations
and warranties or for any other purpose.
Section 11.3. Trustee Not Liable for Recitals in Certificates.
The Trustee assumes no responsibility for the correctness of the recitals
contained herein and in the Certificates (other than the certificate of
authentication on the Certificates). Except as set forth in Section 11.15,
the Trustee makes no representations as to the validity or sufficiency of
this Agreement or any Supplement or of the Certificates (other than the
certificate of authentication on the Certificates) or of any Receivable or
related document. The Trustee shall not be accountable for the use or
application by the Transferor of any of the Certificates or of the proceeds
of such Certificates, or for the use or application of any funds paid to
the Transferor or the Holder of the Transferor Certificate in respect of
the Receivables or deposited in or withdrawn from the Collection Account,
any Series Accounts or any other accounts hereafter established to
effectuate the transactions contemplated by this Agreement and in
accordance with the terms of this Agreement.
Section 11.4. Trustee May Own Certificates. Subject to Section
6.6, the Trustee in its individual or any other capacity may become the
owner or pledgee of Investor Certificates with the same rights as it would
have if it were not the Trustee.
Section 11.5. The Servicer To Pay Trustee's Fees and Expenses.
The Servicer covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to receive, reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by
it in the execution of the trust hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee, and
the Servicer will pay or reimburse the Trustee (without reimbursement from
the Collection Account or otherwise) upon its request for all reasonable
expenses or disbursements incurred or made by the Trustee in accordance
with any of the provisions of this Agreement or any Enhancement Agreement
(including the reasonable fees and expenses of its agents, any co-trustee
and counsel) except any such expense, disbursement or advance as may arise
from its own negligence, willful misconduct or bad faith and except as
provided in the following sentence. If the Trustee is appointed Successor
Servicer pursuant to Section 10.2, the provisions of this Section 11.5
shall not apply to expenses, disbursements and advances made or incurred by
the Trustee in its capacity as Successor Servicer.
The obligations of the Servicer under Section 8.4 and this
Section 11.5 shall survive the termination of the Trust and the resignation
or removal of the Trustee.
Section 11.6. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a bank, trust company or a corporation
organized and doing business under the laws of the United States of America
or any state thereof authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000
and subject to supervision or examination by Federal or state authority and
maintain any credit or deposit rating required by any Rating Agency (as of
the date hereof "Baa3" for ▇▇▇▇▇'▇). If such bank or corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for
the purpose of this Section 11.6, the combined capital and surplus of such
bank or corporation shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published. In case
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 11.6, the 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) The
Trustee may at any time resign and be discharged from the trust hereby
created by giving written notice thereof to the Servicer. Upon receiving
such notice of resignation, the Transferor shall promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and
have accepted within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.6 and shall fail to resign
after written request therefor by the Servicer or the Transferor, or if at
any time the Trustee shall be legally unable to act, or shall be adjudged a
bankrupt or insolvent, or a receiver of the Trustee or of its property
shall be appointed, or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, in which event the Servicer
shall remove the Trustee and promptly appoint a successor trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee.
(c) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section
11.7 shall not become effective until acceptance of appointment by the
successor trustee as provided in Section 11.8 and any liability of the
Trustee arising hereunder shall survive such appointment of a successor
trustee.
Section 11.8. Successor Trustee. (a) Any successor trustee
appointed as provided in Section 11.7 shall execute, acknowledge and
deliver to the Transferor, to the Servicer and to its predecessor Trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee shall become effective
and such successor trustee, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if
originally named as Trustee herein. The predecessor Trustee shall deliver
to the successor trustee all documents and statements held by it hereunder,
and the Transferor 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 provide notice
of such succession hereunder to all Investor Certificateholders and the
Servicer shall provide such notice to each Rating Agency and any
Enhancement Provider entitled thereto pursuant to the relevant Supplement.
Section 11.9. Merger or Consolidation of Trustee. Any Person
into which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person
succeeding to the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation shall be
eligible under the provisions of Section 11.6, 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, the Trustee shall
have the power and may execute and deliver all instruments to appoint one
or more Persons to act as a co-trustee or co- trustees, or separate trustee
or separate trustees, of all or any part of the Trust, and to vest in such
Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust, or any part thereof, and,
subject to the other provisions of this Section 11.10, such powers, duties,
obligations, rights and trusts as the Trustee may consider necessary or
desirable; provided, however, that the Trustee shall exercise due care in
the appointment of any co-trustee. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 11.6 and no notice to Certificateholders of the
appointment of any co- trustee or separate trustee shall be required under
Section 11.8.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act) except to the extent that under any laws of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder) the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely
at the direction of the Trustee;
(ii) no trustee hereunder shall be personally
liable by reason of any act or omission of any other trustee hereunder;
and
(iii) the Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to
this Agreement and the conditions of this Article XI. Each separate trustee
and co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of
appointment, either jointly with the Trustee or separately, as may be
provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the
conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under
or in respect to this Agreement on its behalf and in its name. If any
separate trustee or co- trustee shall die, become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.
Section 11.11. Tax Return. In the event the Trust shall be
required to file tax returns, the Servicer shall prepare or shall cause to
be prepared any tax returns required to be filed by the Trust and shall
remit such returns to the Trustee for signature (if it is determined that
the Trustee is required to sign such returns) at least five days before
such returns are due to be filed; the Trustee shall promptly sign such
returns and deliver such returns after signature to the Servicer and such
returns shall be filed by the Servicer. The Servicer in accordance with the
terms of each Supplement shall also prepare or shall cause to be prepared
all tax information required by law to be distributed to Investor
Certificateholders. The Trustee upon request, will furnish the Servicer
with all such information known to the Trustee as may be reasonably
required in connection with the preparation of all tax returns of the
Trust. In no event shall the Trustee or the Servicer (except as provided in
Section 7.4 or 8.4) be liable for any liabilities, costs or expenses of the
Trust or the Investor Certificateholders arising under any tax law,
including Federal, state, local or foreign income or excise taxes or any
other tax imposed or measured by income (or any interest or penalty with
respect thereto or arising from a failure to comply therewith).
Section 11.12. Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, be for the ratable benefit of the Certificateholders in
respect of which such judgment has been obtained.
Section 11.13. Suits for Enforcement. If a Servicer Default
shall occur and be continuing, the Trustee, in its discretion may, subject
to the provisions of Sections 10.1 and 11.14, proceed to protect and
enforce its rights and the rights of the Certificateholders under this
Agreement by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained
in this Agreement or in aid of the execution of any power granted in this
Agreement or for the enforcement of any other legal, equitable or other
remedy as the Trustee, being advised by counsel, shall deem most effectual
to protect and enforce any of the rights of the Trustee or the
Certificateholders.
Section 11.14. Rights of Certificateholders to Direct Trustee.
Holders of Investor Certificates evidencing more than 50% of the aggregate
unpaid principal amount of all Investor Certificates (or, with respect to
any remedy, trust or power that does not relate to all Series, 50% of the
aggregate unpaid principal amount of the Investor Certificates of all
Series to which such remedy, trust or power relates) shall have the right
to direct the time, method, and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee relating to such proceeding; provided, however, that,
subject to Section 11.1, the Trustee shall have the right to decline to
follow any such direction if the Trustee being advised by counsel
determines that the action so directed may not lawfully be taken, or if the
Trustee in good faith shall, by a Responsible Officer or Responsible
Officers of the Trustee, determine that the proceedings so directed would
be illegal or involve it in personal liability or be unduly prejudicial to
the rights of Certificateholders not parties to such direction; and
provided further that nothing in this Agreement shall impair the right of
the Trustee to take any action deemed proper by the Trustee and which is
not inconsistent with such direction.
Section 11.15. Representations and Warranties of Trustee. The
Trustee represents and warrants as of each Closing Date that:
(a) the Trustee is a national banking association organized,
existing and in good standing under the laws of the United States;
(b) the Trustee has full power, authority and right to execute,
deliver and perform this Agreement and each Supplement, and has taken all
necessary action to authorize the execution, delivery and performance by it
of this Agreement and each Supplement; and
(c) this Agreement and each Supplement has been duly executed
and delivered by the Trustee and is a binding obligation of the Trustee
enforceable against the Trustee in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general and except as
such enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
Section 11.16. Maintenance of Office or Agency. The Trustee
will maintain at its expense an office or agency (the "Corporate Trust
Office") where notices and demands to or upon the Trustee in respect of the
Certificates and this Agreement may be served (a) in the City of New York,
in the case of Registered Certificates and Holders thereof, and (b) in
London or Luxembourg, in the case of Bearer Certificates and Holders
thereof, if and for so long as any Bearer Certificates are outstanding. The
corporate trust office of the Trustee (the "Corporate Trust Office") shall
initially be located at Norwest Bank Minnesota, National Association, MAC
N9311-161, Sixth and Marquette, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The Trustee
will give prompt notice to the Servicer and to Investor Certificateholders
of any change in the location of the Certificate Register or any such
office or agency.
Section 11.17. Confidentiality. Information provided by the
Credit Card Originator or the Transferor to the Trustee related to the
transaction effected hereunder, including all information related to the
Obligors with respect to the Receivables, and any computer software
provided to the Trustee in connection with the transaction effected
hereunder or under any Supplement, in each case whether in the form of
documents, reports, lists, tapes, discs or any other form, shall be
"Confidential Information." The Trustee and its agents, representatives or
employees shall at all times maintain the confidentiality of all
Confidential Information and shall not, without the prior written consent
of the Credit Card Originator or the Transferor, as applicable, disclose to
third parties (including Certificateholders) or use such information, in
any manner whatsoever, in whole or in part, except as expressly permitted
under this Agreement or under any Supplement or as required to fulfill an
obligation of the Trustee under this Agreement or under any Supplement, in
which case such Confidential Information shall be revealed only to the
extent expressly permitted or only to the Trustee's agents, representatives
and employees who need to know such Confidential Information to the extent
required for the purpose of fulfilling an obligation of the Trustee under
this Agreement or under any Supplement. Notwithstanding the above,
Confidential Information may be disclosed to the extent required by law or
legal process, provided that the Trustee gives prompt written notice to the
Credit Card Originator or the Transferor, as applicable, of the nature and
scope of such disclosure.
ARTICLE XII
Termination
Section 12.1. Termination of Trust. The Trust and the
respective obligations and responsibilities of the Transferor, the Servicer
and the Trustee created hereby (other than the obligation of the Trustee to
make payments to Investor Certificateholders as hereinafter set forth)
shall terminate, except with respect to the duties described in Sections
7.4, 8.4, 9.2 and 12.2(b), upon the earlier of (i) September 30, 2095 and
(ii) the day following the Distribution Date on which the Invested Amount
and Enhancement Invested Amount for each Series is zero (provided that the
Transferor has delivered a written notice to the Trustee electing to
terminate the Trust).
Section 12.2. Final Distribution. (a) The Servicer shall give
the Trustee at least 30 days' prior notice of the Distribution Date on
which the Investor Certificateholders of any Series or Class may surrender
their Investor Certificates for payment of the final distribution on and
cancellation of such Investor Certificates (or, in the event of a final
distribution resulting from the application of Section 2.6 or 10.1, notice
of such Distribution Date promptly after the Servicer has determined that a
final distribution will occur, if such determination is made less than 30
days prior to such Distribution Date). Such notice shall be accompanied by
an Officer's Certificate setting forth the information specified in Section
3.5 covering the period during the then current calendar year through the
date of such notice. Not later than the fifth day of the month in which the
final distribution in respect of such Series or Class is payable to
Investor Certificateholders, the Trustee shall provide notice to Investor
Certificateholders of such Series or Class specifying (i) the date upon
which final payment of such Series or Class will be made upon presentation
and surrender of Investor Certificates of such Series or Class at the
office or offices therein designated, (ii) the amount of any such final
payment and (iii) that the Record Date otherwise applicable to such payment
date is not applicable, payments being made only upon presentation and
surrender of such Investor Certificates at the office or offices therein
specified (which, in the case of Bearer Certificates, shall be outside the
United States). The Trustee shall give such notice to the Transfer Agent
and Registrar and the Paying Agent at the time such notice is given to
Investor Certificateholders.
(b) Notwithstanding a final distribution to the Investor
Certificateholders of any Series or Class (or the termination of the
Trust), except as otherwise provided in this paragraph, all funds then on
deposit in the Collection Account, the Special Funding Account and any
Series Account allocated to such Investor Certificateholders shall continue
to be held in trust for the benefit of such Investor Certificateholders and
the Paying Agent or the Trustee shall pay such funds to such Investor
Certificateholders upon surrender of their Investor Certificates (and any
excess shall be paid in accordance with the terms of any relevant
Enhancement Agreement). In the event that all such Investor
Certificateholders shall not surrender their Investor Certificates for
cancellation within six months after the date specified in the notice from
the Trustee described in paragraph (a), the Trustee shall give a second
notice to the remaining such Investor Certificateholders to surrender their
Investor Certificates for cancellation and receive the final distribution
with respect thereto (which surrender and payment, in the case of Bearer
Certificates, shall be outside the United States). If within one year after
the second notice all such Investor Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps, or
may appoint an agent to take appropriate steps, to contact the remaining
such Investor Certificateholders concerning surrender of their Investor
Certificates, and the cost thereof shall be paid out of the funds in the
Collection Account or any Series Account held for the benefit of such
Investor Certificateholders. The Trustee and the Paying Agent shall pay to
the Transferor any monies held by them for the payment of principal or
interest that remains unclaimed for two years. After payment to the
Transferor, Investor Certificate- holders entitled to the money must look
to the Transferor for payment as general creditors unless an applicable
abandoned property law designates another Person.
(c) In the event that the Invested Amount with respect to any
Series is greater than zero on its Series Termination Date or such earlier
date as is specified in the related Supplement (after giving effect to
deposits and distributions otherwise to be made on such date), the Trustee
will sell or cause to be sold on such Series Termination Date, in
accordance with the procedures and subject to the conditions described in
such Supplement, Principal Receivables and the related Finance Charge
Receivables (or, if a Tax Opinion is obtained, interests therein) in an
amount up to 110% of the Invested Amount with respect to such Series on
such date (after giving effect to such deposits and distributions;
provided, however, that in no event shall such amount exceed an amount of
Principal Receivables (and all associated Finance Charge Receivables) equal
to the sum of (i) the product of (A) the Transferor's Percentage, (B) the
aggregate outstanding Principal Receivables, and (C) a fraction the
numerator of which is the related Investor Percentage of Collections of
Finance Charge Receivables and the denominator of which is the sum of all
Investor Percentages with respect to Collections of Finance Charge
Receivables of all Series outstanding and (ii) the Invested Amount of such
Series). The proceeds from any such sale shall be allocated and distributed
in accordance with the terms of the applicable Supplement.
Section 12.3. Transferor's Termination Rights. Upon the
termination of the Trust pursuant to Section 12.1 and the surrender of the
Transferor Certificate and any Supplemental Certificate, the Trustee shall
assign and convey to the Transferor or its designee, without recourse,
representation or warranty, all right, title and interest of the Trust in
and to the Receivables, whether then existing or thereafter created, all
monies due or to become due and all amounts received with respect thereto
and all proceeds thereof, except for amounts held by the Trustee pursuant
to subsection 12.2(b). The Trustee shall execute and deliver such
instruments of transfer and assignment, in each case without recourse, as
shall be reasonably requested by the Transferor to vest in the Transferor
or its designee all right, title and interest which the Trust had in and to
the Receivables and such other related assets.
Section 12.4. Defeasance. Notwithstanding anything to the
contrary in this Agreement or any Supplement:
(a) The Transferor may at its option be discharged from its
obligations hereunder with respect to any Series or all outstanding Series
(the "Defeased Series") on the date the applicable conditions set forth in
subsection 12.4(c) are satisfied ("Defeasance"); provided, however, that
the following rights, obligations, powers, duties and immunities shall
survive with respect to the Defeased Series until otherwise terminated or
discharged hereunder: (i) the rights of Holders of Investor Certificates of
the Defeased Series to receive, solely from the trust fund provided for in
subsection 12.4(c), payments in respect of principal of and interest on
such Investor Certificates when such payments are due; (ii) the
Transferor's obligations with respect to such Certificates under Sections
6.4 and 6.5; (iii) the rights, powers, trusts, duties and immunities of the
Trustee, the Paying Agent and the Transfer Agent and Registrar hereunder;
and (iv) this Section 12.4
(b) Subject to subsection 12.4(c), the Transferor at its option
may cause Collections allocated to the Defeased Series and available to
purchase additional Receivables to be applied to purchase Eligible
Investments rather than additional Receivables.
(c) The following shall be the conditions to Defeasance under
subsection 12.4(a): (i) the Transferor irrevocably shall have deposited or
caused to be deposited with the Trustee, under the terms of an irrevocable
trust agreement in form and substance satisfactory to the Trustee, as trust
funds in trust for making the payments described below, (A) dollars in an
amount, or (B) Eligible Investments which through the scheduled payment of
principal and interest in respect thereof will provide, not later than the
due date of payment thereon, money in an amount, or (C) a combination
thereof, in each case sufficient to pay and discharge, and, which shall be
applied by the Trustee to pay and discharge, all remaining scheduled
interest and principal payments on all outstanding Investor Certificates of
the Defeased Series on the dates scheduled for such payments in this
Agreement and the applicable Supplements and all amounts owing to the
Enhancement Providers, if any, with respect to the Defeased Series; (ii)
prior to any exercise of its right pursuant to this Section 12.4 with
respect to a Defeased Series to substitute money or Eligible Investments
for Receivables, the Transferor shall have delivered to the Trustee a Tax
Opinion with respect to such deposit and termination of obligations and an
Opinion of Counsel to the effect that such deposit and termination of
obligations will not result in the Trust being required to register as an
"investment company" within the meaning of the Investment Company Act;
(iii) the Transferor shall have delivered to the Trustee and each
Enhancement Provider, if any, entitled thereto pursuant to the relevant
Supplement an Officer's Certificate of the Transferor stating that the
Transferor reasonably believes that such deposit and termination of
obligations will not, based on the facts known to such officer at the time
of such certification, then cause an Early Amortization Event or any event
that, with the giving of notice or the lapse of time, would constitute an
Early Amortization Event to occur with respect to any Series; and (iv) the
Rating Agency Condition has been satisfied.
ARTICLE XIII
Miscellaneous Provisions
Section 13.1. Amendment; Waiver of Past Defaults. (a) This
Agreement or any Supplement may be amended from time to time (including,
without limitation, in connection with (i) adding covenants, restrictions
or conditions of the Transferor, such further covenants, restrictions or
conditions as its Board of Directors and the Trustee shall consider to be
for the benefit or protection of the Investor Certificateholders, and to
make the occurrence, or the occurrence and continuance, of a default in any
of such additional covenants, restrictions or conditions a default or Early
Amortization Event permitting the enforcement of all or any of the several
remedies provided in this Agreement as herein set forth; provided, however,
that in respect of any such additional covenant, restriction or condition
such amendment may provide for a particular period of grace after default
or may provide for an immediate enforcement upon such default or may limit
the remedies available to the Trustee upon such default, (ii) curing any
ambiguity or correcting or supplementing any provision contained herein or
in any Supplement which may be defective or inconsistent with any other
provision contained herein or in any Supplement or to surrender any right
or power conferred upon the Transferor, (iii) the issuance of a
Supplemental Certificate or Participation, (iv) the addition of a
Participation Interest to the Trust, (v) the assumption by another entity,
in accordance with the provisions of this Agreement, of the Transferor's
obligations hereunder, (vi) the provision of additional Enhancement for the
benefit of Certificateholders of any Series by the Servicer, the Transferor
and the Trustee without the consent of any of the Certificateholders, (vii)
enabling the Trust or a portion thereof to elect to qualify as a FASIT (or
comparable tax entity for the securitization of financial assets) in
accordance with the Code or (viii) adding any provision to, changing in any
manner or eliminating any of the provisions of this Agreement or any
Supplement or modifying in any manner the rights of Certificateholders of
any Series then issued and outstanding, provided, in each case, that (x)
the Transferor shall have delivered to the Trustee an Officer's Certificate
to the effect that the Transferor reasonably believes that such action
shall not adversely affect in any material respect the interests of any
Investor Certificateholder, (y) except with respect to clauses (i) and
(ii), the Rating Agency Condition shall have been satisfied with respect to
any such amendment and (z) a Tax Opinion is delivered in connection with
any such amendment. The designation of additional Transferors pursuant to
Section 2.12 shall be subject to this Section 13.1 only to the extent that
the supplement to this Agreement providing for such designation amends any
of the terms of this Agreement.
(b) This Agreement or any Supplement may also be amended from
time to time by the Servicer, the Transferor and the Trustee, with the
consent of the Holders of Investor Certificates evidencing not less than
66-2/3% of the aggregate unpaid principal amount of the Investor
Certificates of all adversely affected Series, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or any Supplement or of modifying in any
manner the rights of the Investor Certificateholders; provided, however,
that no such amendment shall (i) reduce in any manner the amount of or
delay the timing of any distributions to be made to Investor
Certificateholders or deposits of amounts to be so distributed or the
amount available under any Enhancement without the consent of each affected
Investor Certificateholder (provided that any amendment of the terms of an
Early Amortization Event shall not be deemed to be within the scope of this
clause (i)), (ii) change the definition of or the manner of calculating the
interest of any Investor Certificateholder without the consent of each
affected Investor Certificateholder or (iii) reduce the aforesaid
percentage required to consent to any such amendment without the consent of
each Investor Certificateholder. Any amendment to be effected pursuant to
this paragraph shall be deemed to adversely affect all outstanding Series,
other than any Series with respect to which such action shall not, as
evidenced by an Opinion of Counsel for the Transferor, addressed and
delivered to the Trustee, adversely affect in any material respect the
interests of any Investor Certificateholder of such Series. The Trustee
may, but shall not be obligated to, enter into any such amendment which
affects the Trustee's rights, duties or immunities under this Agreement or
otherwise.
(c) Promptly after the execution of any such amendment or
consent (other than an amendment pursuant to paragraph (a)), the Trustee
shall furnish notification of the substance of such amendment to each
Investor Certificateholder, and the Servicer shall furnish notification of
the substance of such amendment to each Rating Agency and each Enhancement
Provider, if any, entitled thereto pursuant to the relevant Supplement.
(d) It shall not be necessary for the consent of Investor
Certificateholders 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
Certificateholders shall be subject to such reasonable requirements as the
Trustee may prescribe.
(e) Any Supplement executed in accordance with the provisions
of Section 6.3 shall not be considered an amendment to this Agreement for
the purposes of this Section 13.1.
(f) The Holders of Investor Certificates evidencing more than
66-2/3% of the aggregate unpaid principal amount of the Investor
Certificates of each Series, or, with respect to any Series with two or
more Classes, of each Class (or, with respect to any default that does not
relate to all Series, 66- 2/3% of the aggregate unpaid principal amount of
the Investor Certificates of each Series to which such default relates or,
with respect to any such Series with two or more Classes, of each Class)
may, on behalf of all Certificateholders, waive any default by the
Transferor or the Servicer in the performance of their obligations
hereunder (other than any event which would result in an Early Amortization
Event as described in Section 9.1 of this Agreement or the failure to add
Receivables in Additional Accounts when required to do so pursuant to
subsection 2.9(a)(i)) and its consequences, except the failure to make any
distributions required to be made to Investor Certificateholders or to make
any required deposits of any amounts to be so distributed. Upon any such
waiver of a past default, such default shall cease to exist, and any
default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
Section 13.2. Protection of Right, Title and Interest to Trust
Assets. (a) The Transferor shall cause this Agreement, all amendments and
supplements hereto and all financing statements and continuation statements
and any other necessary documents covering the Certificateholders, and the
Trustee's right, title and interest to the Trust to be promptly recorded,
registered and filed, and at all times to be kept recorded, registered and
filed, all in such manner and in such places as may be required by law
fully to preserve and protect the right, title and interest of the
Certificateholders and the Trustee hereunder to all property comprising the
Trust Assets. The Transferor shall deliver to the Trustee file-stamped
copies of, or filing receipts for, any document recorded, registered or
filed as provided above, as soon as available following such recording,
registration or filing.
(b) Within 30 days after the Transferor makes any change in its
name, identity or corporate structure which would make any financing
statement or continuation statement filed in accordance with paragraph (a)
seriously misleading within the meaning of Section 9-402(7) (or any
comparable provision) of the UCC, the Transferor shall give the Trustee
notice of any such change and shall file such financing statements or
amendments as may be necessary to continue the perfection of the Trust's
security interest in the Receivables and the proceeds thereof.
(c) The Transferor and the Servicer will give the Trustee
prompt notice of any relocation of any office from which it services
Receivables or keeps records concerning the Receivables or of its principal
executive office and whether, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any amendment
of any previously filed financing or continuation statement or of any new
financing statement and shall file such financing statements or amendments
as may be necessary to perfect or to continue the perfection of the Trust's
security interest in the Receivables and the proceeds thereof. The
Transferor and the Servicer will at all times maintain each office from
which it services Receivables and its principal executive offices within
the United States.
(d) The Transferor will deliver to the Trustee and any
Enhancement Provider entitled thereto pursuant to the relevant Supplement:
(i) upon the execution and delivery of each amendment of this Agreement or
any Supplement, an Opinion of Counsel to the effect specified in Exhibit
H-1; (ii) on each Addition Date on which any Supplemental Accounts are to
be designated as Accounts pursuant to subsection 2.9(a) or (b), an Opinion
of Counsel substantially in the form of Exhibit H-2, and on each Addition
Date on which any Participation Interests are to be included in the Trust
pursuant to subsection 2.9(a) or (b), an Opinion of Counsel covering the
same substantive legal issues addressed by Exhibit H-2 but conformed to the
extent appropriate to relate to Participation Interests; and (iii) on or
before March 31 of each year, beginning with March 31, 1996, an Opinion of
Counsel substantially in the form of Exhibit H-2.
Section 13.3. Limitation on Rights of Certificateholders. (a)
The death or incapacity of any Certificateholder (other than the
Transferor) shall not operate to terminate this Agreement or the Trust, nor
shall such death or incapacity entitle such Certificateholders' legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(b) No Investor Certificateholder shall have any right to vote
(except as expressly provided in this Agreement) or in any manner otherwise
control the operation and management of the Trust, or the obligations of
the parties hereto, nor shall any Investor Certificateholder be under any
liability to any third person by reason of any action by the parties to
this Agreement pursuant to any provision hereof.
(c) No Investor Certificateholder shall have any right by
virtue of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Investor Certificateholder previously shall have
made, and unless the Holders of Investor Certificates evidencing more than
50% of the aggregate unpaid principal amount of all Investor Certificates
(or, with respect to any such action, suit or proceeding that does not
relate to all Series, 50% of the aggregate unpaid principal amount of the
Investor Certificates of all Series to which such action, suit or
proceeding relates) shall have made, written request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity
as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt
of such request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and
intended, and being expressly covenanted by each Investor Certificateholder
with every other Investor Certificateholder and the Trustee, that no one or
more Investor Certificateholders shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of
this Agreement to affect, disturb or prejudice the rights of Holders of any
other of the Investor Certificates, or to obtain or seek to obtain priority
over or preference to any other Investor Certificateholder, or to enforce
any right under this Agreement, except in the manner herein provided and
for the equal, ratable and common benefit of all Investor
Certificateholders except as otherwise expressly provided in this
Agreement. For the protection and enforcement of the provisions of this
Section 13.3, each and every Investor Certificateholder and the Trustee
shall be entitled to such relief as can be given either at law or in
equity.
SECTION 13.4. GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS. Each of the parties hereto hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the
courts of the State of Delaware and of the federal courts sitting in the
State of Delaware for any litigation arising out of or relating to this
Agreement and the transactions contemplated hereby (and agrees not to
commence any litigation relating thereto except in such courts) and further
agrees that service of any process, summons, notice or document by prepaid
certified mail with proof of mailing receipt validated by the United States
Postal Service to its respective address set forth in Section 13.5 (or to
the agent of such party appointed and maintained in the State of Delaware
as such party's agent for acceptance of legal process) shall be effective
service of process for any litigation brought against it in any such court.
Each of the parties hereto hereby irrevocably and unconditionally waives
any objection to the laying of venue of any litigation arising out of this
Agreement or the transactions contemplated hereby in the courts of the
State of Delaware or of the federal courts sitting in the State of Delaware
and hereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such litigation brought in any
such court has been brought in an inconvenient forum.
Section 13.5. Notices, Payments. (a) All demands notices,
instructions, directions and communications (collectively, "Notices") under
this Agreement shall be in writing and shall be deemed to have been duly
given if personally delivered at, mailed by registered mail, return receipt
requested, or sent by facsimile transmission (i) in the case of the
Transferor, to Target Receivables Corporation, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention Treasurer
(facsimile no. (612) 370- 5508), (ii) in the case of the Servicer to
Retailers National Bank, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, Attention: Vice President and Manager (facsimile no. (605)
362-2028), (iii) in the case of the Trustee, to Norwest Bank Minnesota,
National Association, MAC N9311-161, Sixth and Marquette, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services/Asset-Backed
Administration (facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇), (iv) in the case of ▇▇▇▇▇'▇,
to ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ABS Monitoring
Department 4th Floor (facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇), (v) in the case of
Standard & Poor's, to ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention
of Asset Backed Group (facsimile no. (212) ________), (vi) in the case of
the Paying Agent or the Transfer Agent and Registrar, to Norwest Bank
Minnesota, National Association, MAC N9311-161, Sixth and Marquette,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Services/Asset-Backed Administration (facsimile no. (612) 667- 3464) and
(vii) to any other Person as specified in any Supplement; or, as to each
party, at such other address or facsimile number as shall be designated by
such party in a written notice to each other party.
(b) Any Notice required or permitted to be given to a Holder of
Registered Certificates shall be given by first- class mail, postage
prepaid, at the address of such Holder as shown in the Certificate
Register. No Notice shall be required to be mailed to a Holder of Bearer
Certificates or Coupons but shall be given as provided below. Any Notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Investor
Certificateholder receives such Notice. In addition, (a) if and so long as
any Series or Class is listed on the Luxembourg Stock Exchange and such
exchange shall so require, any Notice to Investor Certificateholders shall
be published in an Authorized Newspaper of general circulation in
Luxembourg within the time period prescribed in this Agreement and (b) in
the case of any Series or Class with respect to which any Bearer
Certificates are outstanding, any Notice required or permitted to be given
to Investor Certificateholders of such Series or Class shall be published
in an Authorized Newspaper within the time period prescribed in this
Agreement.
Section 13.6. Rule 144A Information. For so long as any of the
Investor Certificates of any Series or Class are "restricted securities"
within the meaning of Rule 144(a)(3) under the Act, each of the Transferor,
the Trustee, the Servicer and any Enhancement Provider agree to cooperate
with each other to provide to any Investor Certificateholders of such
Series or Class and to any prospective purchaser of Certificates designated
by such Investor Certificateholder, upon the request of such Investor
Certificateholder or prospective purchaser, any information required to be
provided to such holder or prospective purchaser to satisfy the condition
set forth in Rule 144A(d)(4) under the Act.
Section 13.7. Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall for
any reason whatsoever be held invalid, then such provisions shall be deemed
severable from the remaining provisions of this Agreement and shall in no
way affect the validity or enforceability of the remaining provisions or of
the Certificates or the rights of the Certificateholders.
Section 13.8. Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Article VIII, this
Agreement may not be assigned by the Servicer without the prior consent of
Holders of Investor Certificates evidencing not less than 66-2/3% of the
aggregate unpaid principal amount of all outstanding Investor Certificates.
Section 13.9. Certificates Nonassessable and Fully Paid. It is
the intention of the parties to this Agreement that the Certificateholders
shall not be personally liable for obligations of the Trust, that the
interests in the Trust represented by the Certificates shall be
nonassessable for any losses or expenses of the Trust or for any reason
whatsoever and that Certificates upon authentication thereof by the Trustee
pursuant to Section 6.2 are and shall be deemed fully paid.
Section 13.10. Further Assurances. The Transferor and the
Servicer agree to do and perform, from time to time, any and all acts and
to execute any and all further instruments required or reasonably requested
by the Trustee more fully to effect the purposes of this Agreement,
including the execution of any financing statements or continuation
statements relating to the Receivables for filing under the provisions of
the UCC of any applicable jurisdiction.
Section 13.11. Nonpetition Covenant. Notwithstanding any prior
termination of this Agreement, the Servicer, the Trustee, the Transferor,
each Enhancement Provider, if any, each Holder of a Supplemental
Certificate and each Holder of a Participation shall not, prior to the date
which is one year and one day after the termination of this Agreement with
respect to the Trust or the Transferor, acquiesce, petition or otherwise
invoke or cause the Trust or the Transferor to invoke the process of any
Governmental Authority for the purpose of commencing or sustaining a case
against the Trust or the Transferor under any Federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Trust or
the Transferor or any substantial part of their respective property or
ordering the winding-up or liquidation of the affairs of the Trust or the
Transferor.
Section 13.12. No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Trustee or the
Certificateholders, any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege under this
Agreement preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights, remedies, powers
and privileges provided under this Agreement are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law.
Section 13.13. Counterparts. This Agreement may be executed in
two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
Section 13.14. Third-Party Beneficiaries. This Agreement will
inure to the benefit of and be binding upon the parties hereto, the
Certificateholders, any Enhancement Provider (to the extent provided in
this Agreement and the related Supplement) and their respective successors
and permitted assigns. Except as otherwise expressly provided in this
Agreement (including, without limitation, Section 7.4), no other Person
will have any right or obligation hereunder.
Section 13.15. Actions by Certificateholders. (a) Wherever in
this Agreement a provision is made that an action may be taken or a Notice
given by Certificateholders, such action or Notice may be taken or given by
any Certificateholder, unless such provision requires a specific percentage
of Certificateholders.
(b) Any Notice, request, authorization, direction, consent,
waiver or other act by the Holder of a Certificate shall bind such Holder
and every subsequent Holder of such Certificate and of any Certificate
issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof in respect of anything done or omitted to be done by the
Trustee or the Servicer in reliance thereon, whether or not notation of
such action is made upon such Certificate.
Section 13.16. Merger and Integration. Except as specifically
stated otherwise herein, this Agreement sets forth the entire understanding
of the parties relating to the subject matter hereof, and all prior
understandings, written or oral, are superseded by this Agreement. This
Agreement may not be modified, amended, waived or supplemented except as
provided herein.
Section 13.17. Headings. The headings herein are for purposes
of reference only and shall not otherwise affect the meaning or
interpretation of any provision hereof.
Section 13.18. No Proceedings. Each of the Trustee, the
Transferor, the Servicer, and each Certificateholder by acceptance of its
Certificate, hereby agrees that it will not institute against the Holder of
the Transferor Certificate, or join any other Person in instituting against
the Holder of the Transferor Certificate, on account of its ownership of
the Transferor Certificate or its obligations hereunder, any bankruptcy,
insolvency, liquidation, readjustment of debt, marshalling of assets or any
similar proceeding so long as there shall not have elapsed one year plus
one day since the last day on which any Investor Certificates shall have
been outstanding.
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee
have caused this Agreement to be duly executed by their respective officers
as of the day and year first above written.
TARGET RECEIVABLES
CORPORATION,
as Transferor,
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Treasurer
RETAILERS NATIONAL BANK,
as Servicer,
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Treasurer
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee,
By /s/ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇. ▇▇▇▇▇▇
Title: Corporate Trust Officer
EXHIBIT A
FORM OF TRANSFEROR CERTIFICATE
THIS TRANSFEROR CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS TRANSFEROR CERTIFICATE NOR
ANY PORTION HEREOF MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE
REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM SUCH REGISTRATION PROVISIONS.
THIS TRANSFEROR CERTIFICATE IS NOT PERMITTED TO BE TRANSFERRED,
ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN COMPLIANCE
WITH THE TERMS OF THE AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
No. R-1 One Unit
TARGET CREDIT CARD MASTER TRUST
TRANSFEROR CERTIFICATE
THIS CERTIFICATE REPRESENTS AN INTEREST
IN CERTAIN ASSETS OF THE
TARGET CREDIT CARD MASTER TRUST
Evidencing an interest in a trust, the corpus of which consists primarily
of receivables generated from time to time in the ordinary course of
business in a portfolio of open end credit card accounts owned by Retailers
National Bank.
(Not an interest in or obligation of the Transferor
or any affiliate thereof)
This certifies that TARGET RECEIVABLES CORPORATION is the
registered owner of a fractional interest in the assets of a trust (the
"Trust") not allocated to the Certificateholders' Interest, the interest of
any Holder of a Supplemental Certificate or the interest of any holder of a
Participation pursuant to the Amended and Restated Pooling and Servicing
Agreement dated as of April 28, 2000 (as amended and supplemented, the
"Agreement"), among Target Receivables Corporation, a Minnesota
corporation, as transferor (the "Transferor"), Retailers National Bank, a
national banking association, as Servicer, and Norwest Bank Minnesota,
National Association, a national banking association, as trustee (the
"Trustee"). The corpus of the Trust consists of (i) a portfolio of all
receivables (the "Receivables") existing in the open end credit card
accounts identified under the Agreement from time to time (the "Accounts"),
(ii) all Receivables generated under the Accounts from time to time
thereafter, (iii) funds collected or to be collected from accountholders in
respect of the Receivables, (iv) all funds which are from time to time on
deposit in the Collection Account, the Special Funding Account and in the
Series Accounts, (v) the benefits of any Enhancements issued and to be
issued by Enhancement Providers, if any, with respect to one or more Series
of Investor Certificates and (vi) all other assets and interests
constituting the Trust. Although a summary of certain provisions of the
Agreement is set forth below, this Certificate does not purport to
summarize the Agreement and reference is made to the Agreement for
information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and obligations
of the Trustee. A copy of the Agreement may be requested from the Trustee
by writing to the Trustee at Norwest Center, Sixth and Marquette,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇. To the extent not
defined herein, the capitalized terms used herein have the meanings
ascribed to them in the Agreement.
This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement, as amended
and supplemented from time to time, the Holder of this Certificate by
virtue of the acceptance hereof assents and is bound.
The Receivables consist of Principal Receivables which arise
generally from the purchase of merchandise and services and Finance Charge
Receivables which arise generally from Periodic Finance Charges, Late Fees
and other fees and charges with respect to the Accounts.
This Certificate is the Transferor Certificate, which
represents the Transferor's interest in certain assets of the Trust,
including the right to receive a portion of the Collections and other
amounts at the times and in the amounts specified in the Agreement. The
aggregate interest represented by the Transferor Certificate at any time in
the Receivables in the Trust shall not exceed the Transferor's Interest at
such time. In addition to the Transferor Certificate, (i) Investor
Certificates will be issued to investors pursuant to the Agreement, which
will represent the Certificateholders' Interest, (ii) Supplemental
Certificates may be issued pursuant to the Agreement, which will represent
that portion of the Transferor's Interest not allocated to the Holder of
the Transferor Certificate and (iii) Participations may be issued pursuant
to the Agreement, which will represent an undivided ownership interest in
the Receivables. This Transferor Certificate shall not represent any
interest in the Collection Account, the Special Funding Account or the
Series Accounts, except as expressly provided in the Agreement, or any
Enhancements.
The Transferor has entered into the Agreement, and this
Certificate is issued, with the intention that, for Federal, state and
local income and franchise tax purposes only, the Investor Certificates
(except, Transferor Retained Certificates which are held by the Transferor)
will qualify as debt secured by the Receivables. The Transferor, by
entering into the Agreement and the Holder of the Transferor Certificate by
acceptance of this Transferor Certificate, agree to treat such Investor
Certificates for Federal, state and local income and franchise tax purposes
as debt under applicable tax law.
Subject to certain conditions and exceptions specified in the
Agreement, the obligations created by the Agreement and the Trust created
thereby shall terminate upon the earliest of (i) September 30, 2095 and
(ii) the day following the Distribution Date on which the Invested Amount
and Enhancement Invested Amount for each Series is zero (provided the
Transferor has delivered a written notice to the Trustee electing to
terminate the Trust).
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.
IN WITNESS WHEREOF, the Holder of the Transferor Certificate
has caused this Certificate to be duly executed.
TARGET RECEIVABLES CORPORATION,
as Transferor,
By ______________________________
Name:
Title:
Dated: ______________, ____
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Transferor Certificate described in the
within-mentioned Agreement.
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee,
By ________________________
Authorized Signatory
or
By [________________________],
as Authenticating Agent
for the Trustee,
By _________________________
Authorized Signatory
EXHIBIT B
FORM OF ASSIGNMENT OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS
(As required by Section 2.9 of the Amended and
Restated Pooling and Servicing Agreement)
ASSIGNMENT No. ____ OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS
dated as of __________, ____1/ by and among TARGET RECEIVABLES CORPORATION,
a Minnesota corporation, as Transferor (the "Transferor"), RETAILERS
NATIONAL BANK, as Servicer (the "Servicer"), and NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, a national banking association (the "Trustee"),
pursuant to the Amended and Restated Pooling and Servicing Agreement
referred to below.
WITNESSETH
WHEREAS the Transferor, the Servicer and the Trustee are
parties to the Amended and Restated Pooling and Servicing Agreement dated
as of April 28, 2000 (as may be amended and supplemented from time to time,
the "Agreement");
WHEREAS, pursuant to the Agreement, the Transferor wishes to
designate Supplemental Accounts owned by the Credit Card Originator to be
included as Accounts and to convey the Receivables of such Supplemental
Accounts, whether now existing or hereafter created, to the Trust as part
of the corpus of the Trust (as each such term is defined in the Agreement);
and
WHEREAS the Trustee is willing to accept such designation and
conveyance subject to the terms and conditions hereof;
NOW, THEREFORE, the Transferor, the Servicer and the Trustee
hereby agree as follows:
1. Defined Terms. All capitalized terms used herein shall have
the meanings ascribed to them in the Agreement unless otherwise defined
herein.
"Addition Date" shall mean, with respect to the Supplemental
Accounts designated hereby, ___________, ____.
"Addition Cut-Off Date" shall mean, with respect to the
Supplemental Accounts designated hereby, ___________, ----.
--------
1/ To be dated as of the applicable Addition Date.
-
2. Designation of Supplemental Accounts. On or before the
Document Delivery Date, the Transferor will deliver to the Trustee a
computer file, microfiche list or printed list containing a true and
complete schedule identifying all such Supplemental Accounts specifying for
each such Account, as of the Addition Cut-Off Date, its account number, the
aggregate amount outstanding in such Account and the aggregate amount of
Principal Receivables outstanding in such Account, which computer file,
microfiche list or printed list shall supplement any computer file,
microfiche list or printed list previously delivered to the Trustee.
3. Conveyance of Receivables. The Transferor does hereby
transfer, assign, set over and otherwise convey to the Trust, for the
benefit of the Certificateholders, all its right, title and interest in, to
and under the Receivables of such Supplemental Accounts existing at the
close of business on the Addition Date and thereafter created from time to
time until the termination of the Trust, all monies due or to become due
and all amounts received with respect thereto and all proceeds (including
"proceeds" as defined in the UCC) thereof. The foregoing does not
constitute and is not intended to result in the creation or assumption by
the Trust, the Trustee, any Investor Certificateholder or any Enhancement
Provider of any obligation of the Servicer, the Transferor, the Credit Card
Originator or any other Person in connection with the Accounts, the
Receivables or under any agreement or instrument relating thereto,
including any obligation to Obligors, merchant banks, merchants clearance
systems or insurers.
The Transferor agrees to record and file, at its own expense,
financing statements (and continuation statements when applicable) with
respect to the Receivables now in Supplemental Accounts, meeting the
requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect, and maintain perfection of, the
assignment of such Receivables to the Trust, and to deliver a file-stamped
copy of each such financing statement or other evidence of such filing to
the Trustee on or prior to the Addition Date. The 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, the Transferor further
agrees, at its own expense, on or prior to the date of this Assignment, to
cause the Credit Card Originator to indicate in the appropriate computer
files that Receivables created in connection with the Supplemental Accounts
and designated hereby have been conveyed to the Trust pursuant to the
Agreement and this Assignment for the benefit of the Certificateholders.
The Transferor does hereby grant to the Trustee a security
interest in all of its right, title and interest in and to the Receivables
now existing and hereafter created in the Supplemental Accounts, all monies
due or to become due and all amounts received with respect thereto and all
proceeds (including "proceeds" as defined in the UCC) thereof. This
Assignment constitutes a security agreement under the UCC.
4. Acceptance by Trustee. The Trustee hereby acknowledges its
acceptance on behalf of the Trust of all right, title and interest to the
property, now existing and hereafter created, conveyed to the Trust
pursuant to Section 3 of this Assignment, and declares that it shall
maintain such right, title and interest, upon the trust set forth in the
Agreement, for the benefit of all Certificateholders. The Trustee further
acknowledges that, prior to or simultaneously with the execution and
delivery of this Assignment, the Transferor delivered to the Trustee the
computer file, microfiche list or printed list described in Section 2 of
this Assignment.
5. Representations and Warranties of the Transferor. The
Transferor hereby represents and warrants to the Trustee, on behalf of the
Trust, as of the date of this Assignment and as of the Addition Date that:
(a) Legal, Valid and Binding Obligation. This Assignment
constitutes a legal, valid and binding obligation of the Transferor
enforceable against the Transferor in accordance with its terms,
except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a suit
at law or in equity);
(b) Eligibility of Accounts. Each Supplemental Account
designated hereby is an Eligible Account;
(c) Insolvency. As of each of the Addition Cut-Off Date
and the Addition Date, no Insolvency Event with respect to the Credit
Card Originator or the Transferor has occurred and the transfer by
the Transferor of Receivables arising in the Supplemental Accounts to
the Trust has not been made in contemplation of the occurrence
thereof;
(d) Early Amortization Event. The Transferor reasonably
believes that (A) the addition of the Receivables arising in the
Supplemental Accounts will not, based on the facts known to the
Transferor, then or thereafter cause an Early Amortization Event to
occur with respect to any Series and (B) no selection procedure
was utilized by the Transferor which would result in the selection of
Supplemental Accounts (from among the available Eligible Accounts
owned by the Credit Card Originator) that would be materially less
favorable to the interests of the Investor Certificateholders of any
Series as of the Addition Date than a random selection;
(e) Security Interest. This Assignment constitutes a
valid transfer and assignment to the Trust of all right, title and
interest of the Transferor in and to the Receivables and other Trust
Assets conveyed to the Trust by the Transferor and all monies due or
to become due and all amounts received with respect thereto and the
proceeds as defined in the UCC, and this Assignment constitutes a
grant of a "security interest" (as defined in the UCC) in such
property to the Trust, which, in the case of existing Receivables and
the proceeds thereof, is enforceable upon execution and delivery of
this Assignment, and which will be enforceable with respect to such
Receivables hereafter created and the proceeds thereof upon such
creation. Upon the filing of the financing statements described in
Section 3 of this Assignment and, in the case of the Receivables
hereafter created and the proceeds thereof, upon the creation
thereof, the Trust shall have a first priority security interest in
such property except for Liens permitted under Section 2.7(b) of the
Agreement;
(f) No Conflict. The execution and delivery by the
Transferor of this Assignment, the performance of the transactions
contemplated by this Assignment and the fulfillment of the terms
hereof applicable to the Transferor, will not conflict with or
violate any Requirements of Law applicable to the Transferor or
conflict with, result in any breach of any of the material terms and
provisions of, or constitute (with or without notice or lapse of time
or both) a material default under, any indenture, contract,
agreement, mortgage, deed of trust or other instrument to which the
Transferor is a party or by which it or its properties are bound;
(g) No Proceedings. There are no proceedings or
investigations, pending or, to the best knowledge of the Transferor,
threatened against the Transferor before any court, regulatory body,
administrative agency or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Assignment, (ii)
seeking to prevent the consummation of any of the transactions
contemplated by this Assignment, (iii) seeking any determination or
ruling that, in the reasonable judgment of the Transferor, would
materially and adversely affect the performance by the Transferor of
its obligations under this Assignment, (iv) seeking any determination
or ruling that would materially and adversely affect the validity or
enforceability of this Assignment or (v) seeking to affect adversely
the income tax attributes of the Trust under the Federal or
applicable state income or franchise tax systems; and
(h) All Consents. All authorizations, consents, orders or
approvals or other actions of any Person or of any court or other
governmental authority required to be obtained by the Transferor in
connection with the execution and delivery of this Assignment by the
Transferor and the performance of the transactions contemplated by
this Assignment by the Transferor, have been obtained.
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 DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Transferor, the Servicer and the
Trustee have caused this Assignment to be duly executed by their respective
officers as of the day and year first above written.
TARGET RECEIVABLES CORPORATION,
as Transferor,
By ______________________________
Name:
Title:
RETAILERS NATIONAL BANK,
as Servicer,
By ______________________________
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee,
By ______________________________
Name:
Title:
EXHIBIT C
FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
(As required by Section 2.10 of the Amended
and Restated Pooling and Servicing Agreement)
REASSIGNMENT No. _____ OF RECEIVABLES dated as of __________,
___,1/ by and among TARGET RECEIVABLES CORPORATION, a Minnesota
corporation, as Transferor (the "Transferor"), RETAILERS NATIONAL BANK, a
national banking association, as Servicer (the "Servicer") and NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, a national banking association, as trustee
(the "Trustee"), pursuant to the Amended and Restated Pooling and Servicing
Agreement referred to below.
WITNESSETH:
WHEREAS the Transferor, the Servicer and the Trustee are
parties to the Amended and Restated Pooling and Servicing Agreement dated
as of April 28, 2000 (as may be amended and supplemented from time to time,
the "Agreement");
WHEREAS pursuant to the Agreement, the Transferor wishes to
remove from the Trust all Receivables in certain designated Accounts owned
by the Credit Card Originator (the "Removed Accounts") and to cause the
Trustee to reconvey the Receivables of such Removed Accounts, whether now
existing or hereafter created, from the Trust to the Transferor; and
WHEREAS the Trustee is willing to accept such designation and
to reconvey the Receivables in the Removed Accounts subject to the terms
and conditions hereof;
NOW, THEREFORE, the Transferor, the Servicer and the Trustee
hereby agree as follows:
1. Defined Terms. All terms defined in the Agreement and used
herein shall have such defined meanings when used herein, unless otherwise
defined herein.
"Removal Date" shall mean, with respect to the Removed Accounts
designated hereby, ______________, ____.
"Removal Notice Date" shall mean, with respect to the Removed
Accounts, ______________, ____.
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1/ To be dated as of the Removal Date.
-
2. Designation of Removed Accounts. On or before the date that
is 10 Business Days after the Removal Date, the Transferor will deliver to
the Trustee a computer file, microfiche list or printed list containing a
true and complete schedule identifying all Accounts the Receivables of
which are being removed from the Trust, specifying for each such Account,
as of the Removal Notice Date, its account number, the aggregate amount
outstanding in such Account and the aggregate amount of Principal
Receivables in such Account, which computer file, microfiche list or
printed list shall supplement any computer file, microfiche list or printed
list previously delivered to the Trustee pursuant to the Agreement.
3. Conveyance of Receivables. (a) The Trustee does hereby
transfer, assign, set over and otherwise convey to the Transferor, without
recourse, on and after the Removal Date, all right, title and interest of
the Trust in, to and under the Receivables existing at the close of
business on the Removal Date and thereafter created from time to time in
the Removed Accounts designated hereby, all monies due or to become due and
all amounts received with respect thereto and all proceeds thereof.
(b) In connection with such transfer, the Trustee agrees
to execute and deliver to the Transferor on or prior to the date this
Reassignment is delivered, applicable termination statements with respect
to the Receivables existing at the close of business on the Removal Date
and thereafter created from time to time in the Removed Accounts 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 the Transferor. The
Transferor hereby represents and warrants to the Trustee, on behalf of the
Trust, as of the Removal Date:
(a) Legal, Valid and Binding Obligation. This
Reassignment constitutes a legal, valid and binding obligation of the
Transferor enforceable against the Transferor, in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium 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) Early Amortization Event. The Transferor reasonably
believes that (A) the removal of the Receivables existing in the Removed
Accounts will not, based on the facts known to the Transferor, then or
thereafter cause an Early Amortization Event to occur with respect to any
Series and (B) no selection procedure believed by the Transferor to be
materially adverse to the interests of the Investor Certificateholders has
been used in removing Removed Accounts from among any pool of Accounts or
Participations of a similar type as of the Removal Date;
(c) List of Removed Accounts. The list of Removed Accounts
delivered pursuant to Section 2.10(c) of the Agreement, as of the Removal
Date, is true and complete in all material respects; and
(d) Defaulted Receivables. No selection procedure was
utilized by the Transferor with the intent to include a disproportionately
higher level of Defaulted Receivables in the Removed Accounts than exist in
the Accounts or to remove Accounts for the intended purpose of mitigating
losses to the Trust.
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 DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Transferor, the Servicer and the
Trustee have caused this Reassignment to be duly executed by their
respective officers as of the day and year first above written.
TARGET RECEIVABLES CORPORATION,
as Transferor,
By ______________________________
Name:
Title:
RETAILERS NATIONAL BANK
as Servicer,
By ______________________________
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee,
By ______________________________
Name:
Title:
EXHIBIT D
FORM OF ANNUAL SERVICER'S CERTIFICATE
(To be delivered on or before the 90th day following
the end of the fiscal year of the Transferor, pursuant to
Section 3.5 of the Amended and Restated Pooling and
Servicing
Agreement referred to below)
RETAILERS NATIONAL BANK
TARGET CREDIT CARD MASTER TRUST
The undersigned, a duly authorized representative of Retailers
National Bank, as Servicer ("RNB"), pursuant to the Amended and Restated
Pooling and Servicing Agreement dated as of April 28, 2000 (as may be
amended and supplemented from time to time, the "Agreement"), among Target
Receivables Corporation, as Transferor, RNB as Servicer, and Norwest Bank
Minnesota, National Association, as Trustee, does hereby certify that:
1. RNB is, as of the date hereof, the Servicer under the
Agreement. Capitalized terms used in this Certificate have their respective
meanings as set forth in the Agreement.
2. The undersigned is a Servicing Officer who is duly
authorized pursuant to the Agreement to execute and deliver this
Certificate to the Trustee.
3. A review of the activities of the Servicer during the fiscal
year ended __________, ____, and of its performance under the Agreement was
conducted under my supervision.
4. Based on such review, the Servicer has, to the best of my
knowledge, performed in all material respects its obligations under the
Agreement throughout such year and no default in the performance of such
obligations has occurred or is continuing except as set forth in paragraph
5 below.
5. The following is a description of each default in the
performance of the Servicer's obligations under the provisions of the
Agreement known to me to have been made by the Servicer during the fiscal
year ended __________, ____, which sets forth in detail (i) the nature of
each such default, (ii) the action taken by the Servicer, if any, to remedy
each such default and (iii) the current status of each such default: [If
applicable, insert "None."]
IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate this _____ day of _______, ____.
RETAILERS NATIONAL BANK,
as Servicer,
By ______________________________
Name:
Title:
EXHIBIT E-1-A
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "1933 ACT"). NEITHER THIS CERTIFICATE NOR ANY
PORTION HEREOF MAY BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE 1933 ACT AND
ANY APPLICABLE PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE
TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN
THE AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
EXHIBIT E-1-B
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE
ACCOUNT OF A BENEFIT PLAN (AS DEFINED BELOW).1/
-
--------
1/ The following text should be included in any Certificate in which the
above legend appears:
The [Certificates] may not be acquired by or for the
account of (a) any employee benefit plan or other plan, trust
or account (including an individual retire ment account) that
is subject to the Employee Retire ment Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended, or (b) any collective
investment fund, insurance company separate or general account
or other entity (except an entity registered under the Invest
ment Company Act of 1940, as amended) whose underlying assets
include "plan assets" under ERISA by reason of any such plan's
investment in such entity (a "Benefit Plan"). By accepting and
holding this Certificate, the Holder hereof shall be deemed to
have represented and warranted that it is not, and is not
acting on behalf of, a Benefit Plan. By acquiring any interest
in this Certificate, each applicable Certificate Owner shall be
deemed to have represented and warranted that it is not, and is
not acting on behalf of, a Benefit Plan.
EXHIBIT E-2
[FORM OF UNDERTAKING LETTER]
[Date]
Norwest Bank Minnesota, National Association
Norwest Center
Sixth and Marquette
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Target Receivables Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Re: Purchase of $____________1/ principal
amount of Target Credit Card Master
Trust, [Class __], [__%] [Floating Rate]
Asset Backed Certificates, Series [ ]
Dear Sirs:
In connection with our purchase of the above- referenced Asset
Backed Certificates (the "Certificates") we confirm that:
(i) we understand that the Certificates are not being
registered under the Securities Act of 1933, as amended (the "1933
Act"), and are being sold to us in a transaction that is exempt from
the registration requirements of the 1933 Act;
(ii) any information we desire concerning the Certificates or
any other matter relevant to our decision to purchase the
certificates is or has been made available to us;
(iii) we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks
of an investment in the Certificates, and we (and any account for
which we are purchasing under paragraph (iv) below) are able to bear
the economic risk of an investment in the Certificates; we (and any
account for which we are purchasing under paragraph (iv) below) are
an "accredited investor" (as such term is defined in Rule 501(a)(1),
(2) or (3) of Regulation D under the ▇▇▇▇ ▇▇▇); and we are not, and
none of such accounts is, a Benefit Plan;
--------
1/ Not less than $250,000 minimum principal amount.
-
(iv) we are acquiring the Certificates for our own account or
for accounts as to which we exercise sole investment discretion and
not with a view to any distribution of the Certificates, subject,
nevertheless, to the understanding that the disposition of our
property shall at all times be and remain within our control;
(v) we agree that the Certificates must be held indefinitely by
us unless subsequently registered under the 1933 Act or an exemption
from any registration requirements of that Act and any applicable
state securities laws available;
(vi) we agree that in the event that at some future time we
wish to dispose of or exchange any of the Certificates (such
disposition or exchange not being currently foreseen or
contemplated), we will not transfer or exchange any of the
Certificates unless:
(A)(1) the sale is of at least U.S. $250,000 principal
amount of Certificates to an Eligible Purchaser (as defined
below), (2) a letter to substantially the same effect as
paragraphs (i), (ii), (iii), (iv), (v) and (vi) of this letter
is executed promptly by the purchaser and (3) all offers or
solicitations in connection with the sale, whether directly or
through any agent acting on our behalf, are limited only to
Eligible Purchasers and are not made by means of any form of
general solicitation or general advertising whatsoever; or
(B) the Certificates are transferred pursuant to Rule 144
under the 1933 Act by us after we have held them for more than
three years; or
(C) the Certificates are sold in any other transaction
that does not require registration under the 1933 Act and, if
the Transferor, the Servicer, the Trustee or the Transfer Agent
and Registrar so requests, we theretofore have furnished to
such party an opinion of counsel satisfactory to such party, in
form and substance satisfactory to such party, to such effect;
or
(D) the Certificates are transferred pursuant to an
exception from the registration requirements of the 1933 Act
under Rule 144A under the 1933 Act; and
(vii) we understand that the Certificates will bear a legend to
substantially the following effect:
"THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "1933 ACT"). NEITHER THIS CERTIFICATE NOR ANY
PORTION HEREOF MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE 1933 ACT AND
ANY APPLICABLE PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE
TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN
THE AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN."
["THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF
A BENEFIT PLAN (AS DEFINED BELOW)."]*/
The first paragraph of this legend may be removed if the Transferor, the
Servicer, the Trustee and the Transfer Agent and Registrar have received an
opinion of counsel satisfactory to them, in form and substance satisfactory
to them, to the effect that such paragraph may be removed.
"Eligible Purchaser" means either an Eligible Dealer or a
corporation, partnership or other entity which we have reasonable grounds
to believe and do believe can make representations with respect to itself
to substantially the same effect as the representations set forth herein.
"Eligible Dealer" means any corporation or other entity the principal
business of which is acting as a broker and/or dealer in securities.
["Benefit Plan" means (a) any employee benefit plan or other plan, trust or
account (including an individual retirement account) that is subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Internal Revenue Code of 1986, as amended, or (b) any
collective investment fund, insurance company separate or general account
or other entity (except an entity registered under the Investment Company
Act of 1940, as amended) whose underlying assets include "plan assets"
under ERISA by reason of a plan's investment in such entity.]**/ Capitalized
terms used but not defined herein shall have the meanings given to such
terms in the Amended and Restated Pooling and Servicing Agreement, dated as
of April 28, 2000, by and among Target Receivables Corporation, Retailers
National Bank and Norwest Bank Minnesota, National Association
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* This bracketed text should be included only if the Certificate(s) to
be purchased include the legend specified on Exhibit E-1-B.
** This bracketed text should be included only if the Certificate(s) to
be purchased include the legend specified on Exhibit E-1-B.
Very truly yours,
------------------------
(Name of Purchaser)
By:_____________________
(Authorized Officer)
EXHIBIT E-3
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF
A BENEFIT PLAN (AS DEFINED BELOW).1/
-
--------
1/ The following text should be included in any Certificate in which the
above legend appears:
The [Certificates] may not be acquired by or for the
account of (a) any employee benefit plan or other plan, trust
or account (including an individual retire ment account) that
is subject to the Employee Retire ment Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended, or (b) any collective
investment fund, insurance company separate or general account
or other entity (except an entity registered under the Invest
ment Company Act of 1940, as amended) whose underlying assets
include "plan assets" under ERISA by reason of any such plan's
investment in such entity (a "Benefit Plan"). By accepting and
holding this Certificate, the Holder hereof shall be deemed to
have represented and warranted that it is not, and is not
acting on behalf of, a Benefit Plan. By acquiring any interest
in this Certificate, each applicable Certificate Owner shall be
deemed to have represented and warranted that it is not, and is
not acting on behalf of, a Benefit Plan.
EXHIBIT F
Example of a Credit Card Agreement
EXHIBIT G
RESERVED.
EXHIBIT H-1
FORM OF OPINION OF COUNSEL WITH RESPECT
TO AMENDMENTS
Provisions to be included in
Opinion of Counsel to be delivered pursuant
to Section 13.2(d)(i)
The opinions set forth below may be subject to all the
qualifications, assumptions, limitations and exceptions taken or made in
the Opinions of Counsel delivered on any applicable Closing Date.
(i) The amendment to the [Amended and Restated Pooling and
Servicing Agreement], [Supplement], attached hereto as Schedule 1
(the "Amendment" ), has been duly authorized, executed and delivered
by the Transferor and the Servicer and constitutes the legal, valid
and binding agreement of the Transferor and the Servicer,
respectively, enforceable in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws from time to
time in effect affecting creditors' rights generally or the rights of
creditors of national banking associations. The enforceability of the
respective obligations of the Transferor and the Servicer is also
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law)
(ii) The Amendment has been entered into in accordance with the
terms and provisions of Section 13.1 of the Amended and Restated
Pooling and Servicing Agreement.
EXHIBIT H-2
FORM OF OPINION OF COUNSEL WITH RESPECT
TO ADDITION OF SUPPLEMENTAL ACCOUNTS
Provisions to be included in
Opinion of Counsel to be
delivered pursuant to
Section 13.2(d)(ii) or (iii)
The opinions set forth below may be subject to appropriate
qualifications, assumptions, limitations and exceptions. Paragraphs 1-3 are
not required if the opinion is being delivered solely under Section
13.2(d)(iii).
1. The Receivables arising in such Supplemental Accounts
constitute either "general intangibles," "accounts" or "chattel paper," in
each case as defined under Section 9- 106 of the UCC.
2. The Amended and Restated Pooling and Servicing Agreement
creates in favor of the Trust a security interest in the Transferor's
rights in the Receivables in such Supplemental 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 March 31, ____, in order to maintain the perfection and priority
of the security interest created by the Amended and Restated Pooling and
Servicing Agreement in favor of the Trust in the Transferor's rights in the
Receivables and the proceeds thereof.