Exhibit 4.2 - Amended and Restated Master Pooling and Servicing Agreement
[EXECUTION COPY]
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_________________________________________
AMENDED AND RESTATED
MASTER POOLING AND SERVICING AGREEMENT
Dated as of December 31, 2001
_________________________________________
TYLER INTERNATIONAL FUNDING, INC.
Transferor
FIRST NORTH AMERICAN NATIONAL BANK
Transferor under the Prior Agreement and Servicer
and
BANKERS TRUST COMPANY
Trustee
on behalf of the Certificateholders
_________________________________________
CIRCUIT CITY CREDIT CARD MASTER TRUST
_________________________________________
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TABLE OF CONTENTS
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PAGE
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ARTICLE I
DEFINITIONS
Section 1.1 Definitions ................................................ 1
Section 1.2 Other Definitional Provisions .............................. 19
Section 1.3 Amendment and Restatement .................................. 19
Section 1.4 Assumption Agreement; Continuing Liability ................. 19
ARTICLE II
APPOINTMENT OF TRUSTEE; CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.1 Appointment of Trustee; Conveyance of Receivables .......... 21
Section 2.2 Acceptance by Trustee ...................................... 23
Section 2.3 Representations and Warranties of the Transferor Relating
to the Transferor .......................................... 24
Section 2.4 Representations and Warranties of the Transferor Relating
to this Agreement and any Supplement and the Receivables ... 26
Section 2.5 Covenants of the Transferor ................................ 33
Section 2.6 Addition of Accounts; Repurchase of Investor Certificates .. 35
Section 2.7 Removal of Accounts ........................................ 39
Section 2.8 Discount Option Receivables ................................ 41
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 3.1 Appointment and Other Matters Relating to the Servicer ..... 43
Section 3.2 Servicing Compensation ..................................... 44
Section 3.3 Representations, Warranties and Covenants of the Servicer .. 45
Section 3.4 Reports and Records for the Trustee ........................ 48
Section 3.5 Annual Servicer's Certificate .............................. 49
Section 3.6 Annual Independent Public Accountants' Servicing Report .... 49
Section 3.7 Tax Treatment .............................................. 50
Section 3.8 Adjustments ................................................ 50
Section 3.9 Reports to the Commission .................................. 51
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION AND
APPLICATION OF COLLECTIONS
Section 4.1 Establishment of Collection Account and Allocations with
Respect to the Exchangeable Transferor Certificate ......... 53
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ARTICLE V
[ARTICLE V IS RESERVED AND MAY BE SPECIFIED IN ANY
SUPPLEMENT WITH RESPECT TO ANY SERIES]
ARTICLE VI
THE CERTIFICATES
Section 6.1 The Certificates ............................................ 59
Section 6.2 Authentication of Certificates ............................. 59
Section 6.3 Registration of Transfer and Exchange of Certificates ...... 60
Section 6.4 Mutilated, Destroyed, Lost or Stolen Certificates .......... 63
Section 6.5 Persons Deemed Owners ...................................... 63
Section 6.6 Appointment of Paying Agent ................................ 64
Section 6.7 Access to List of Certificateholders' Names and Addresses .. 65
Section 6.8 Authenticating Agent ....................................... 65
Section 6.9 Tender of Exchangeable Transferor Certificate .............. 66
Section 6.10 Global Certificate; Euro-Certificate Exchange Date ......... 68
Section 6.11 Book-Entry Certificates .................................... 69
Section 6.12 Notices to Clearing Agency ................................. 70
Section 6.13 Definitive Certificates .................................... 70
Section 6.14 Meetings of Certificateholders ............................. 71
Section 6.15 Uncertificated Classes ..................................... 73
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
Section 7.1 Liability of the Transferor ................................ 74
Section 7.2 Merger or Consolidation of, or Assumption of the
Obligations of, the Transferor ............................. 74
Section 7.3 Limitation on Liability of the Transferor .................. 75
Section 7.4 Liabilities ................................................ 75
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
Section 8.1 Liability of the Servicer .................................. 77
Section 8.2 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer ............................... 77
Section 8.3 Limitation on Liability of the Servicer and Others ......... 77
Section 8.4 Indemnification of the Trust and the Trustee ............... 78
Section 8.5 The Servicer Not to Resign ................................. 79
Section 8.6 Access to Certain Documentation and Information Regarding
the Receivables ............................................ 79
Section 8.7 Delegation of Duties ....................................... 79
Section 8.8 Examination of Records ..................................... 79
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ARTICLE IX
EARLY AMORTIZATION EVENTS
Section 9.1 Early Amortization Events .................................... 80
Section 9.2 Additional Rights Upon the Occurrence of Certain Events ...... 81
ARTICLE X
SERVICER DEFAULTS
Section 10.1 Servicer Defaults ............................................ 83
Section 10.2 Trustee to Act; Appointment of Successor ..................... 85
Section 10.3 Notification to Certificateholders ........................... 86
Section 10.4 Waiver of Past Defaults ...................................... 87
ARTICLE XI
THE TRUSTEE
Section 11.1 Duties of Trustee ............................................ 88
Section 11.2 Certain Matters Affecting the Trustee ........................ 89
Section 11.3 Trustee Not Liable for Recitals in Certificates .............. 91
Section 11.4 Trustee May Own Certificates ................................. 91
Section 11.5 The Servicer to Pay Trustee's Fees and Expenses .............. 92
Section 11.6 Eligibility Requirements for Trustee ......................... 92
Section 11.7 Resignation or Removal of Trustee ............................ 92
Section 11.8 Successor Trustee ............................................ 93
Section 11.9 Merger or Consolidation of Trustee ........................... 93
Section 11.10 Appointment of Co-Trustee or Separate Trustee ................ 94
Section 11.11 Tax Returns and Compliance ................................... 95
Section 11.12 Trustee May Enforce Claims Without Possession of
Certificates ................................................. 95
Section 11.13 Suits for Enforcement ........................................ 96
Section 11.14 Rights of Certificateholders to Direct Trustee ............... 96
Section 11.15 Representations and Warranties of Trustee .................... 96
Section 11.16 Maintenance of Office or Agency .............................. 96
Section 11.17 Force Majeure ................................................ 97
ARTICLE XII
TERMINATION
Section 12.1 Termination of Trust ......................................... 98
Section 12.2 Optional Purchase; Final Termination Date of Investor
Certificates of any Series ................................... 98
Section 12.3 Final Payment with Respect to any Series ..................... 99
Section 12.4 Transferor's Termination Rights .............................. 100
Section 12.5 Defeasance ................................................... 101
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 Amendment ................................................. 103
Section 13.2 Protection of Right, Title and Interest to Trust .......... 105
Section 13.3 Limitation on Rights of Certificateholders ................ 106
Section 13.4 GOVERNING LAW ............................................. 106
Section 13.5 Notices ................................................... 107
Section 13.6 Severability of Provisions ................................ 107
Section 13.7 Assignment ................................................ 108
Section 13.8 Certificates Nonassessable and Fully Paid ................. 108
Section 13.9 Further Assurances ........................................ 108
Section 13.10 No Waiver; Cumulative Remedies ............................ 108
Section 13.11 Counterparts .............................................. 108
Section 13.12 Third-Party Beneficiaries ................................. 108
Section 13.13 Actions by Certificateholders ............................. 108
Section 13.14 Merger and Integration .................................... 109
Section 13.15 Headings .................................................. 109
Section 13.16 Certificates and Opinions of Counsel ...................... 109
Section 13.17 Nonpetition Covenant ...................................... 109
EXHIBITS
Exhibit A: Form of Exchangeable Transferor Certificate
Exhibit B: Form of Assignment of Receivables in Additional Accounts
Exhibit C: Form of Reassignment of Receivables
Exhibit D: Form of Series Closing Date Report
Exhibit E: Form of Monthly Servicer's Certificate
Exhibit F: Form of Annual Servicer's Certificate
Exhibit G: Form of Opinion of Counsel with Respect to the Agreement and
Additional Accounts
Exhibit H: Form of Annual Opinion of Counsel
Exhibit I: Form of Depository Agreement (Letter of Representations)
Exhibit J: Tyler Funding Charter Provisions (Separate Corporate Existence)
Exhibit K: Rating Agency Procedure (Automatic Additional Accounts)
Exhibit L: Rating Agency Procedure (Removal of Accounts)
SCHEDULES
Schedule 1 List of Accounts
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AMENDED AND RESTATED MASTER POOLING AND SERVICING AGREEMENT, dated as
of December 31, 2001, among TYLER INTERNATIONAL FUNDING, INC., a Delaware
corporation, as Transferor, FIRST NORTH AMERICAN NATIONAL BANK, a national
banking association, as Transferor under the Prior Agreement (as defined below)
and as Servicer, and BANKERS TRUST COMPANY, a New York banking corporation, as
Trustee.
PRELIMINARY STATEMENTS
WHEREAS, First North American National Bank, as Transferor and
Servicer, and Bankers Trust Company, as Trustee, are parties to a Master Pooling
and Servicing Agreement dated as of October 4, 1994, as amended (the "Prior
Agreement"); and
WHEREAS, First North American National Bank desires to amend and
restate the Prior Agreement to provide for, among other changes, the
substitution of Tyler International Funding, Inc., a qualifying special purpose
entity, for First North American National Bank as Transferor;
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, each party hereto agrees, for the benefit of the other parties and, to
the extent provided herein or in any Supplement, for the benefit of the
Certificateholders and any Enhancement Provider, to amend and restate the Prior
Agreement as of December 31, 2001 to read in its entirety as set forth herein.
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used in this Agreement, the
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following words and phrases shall have the following meanings:
"Account" shall mean each consumer revolving credit card account
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originated by the Bank, which account (i) is identified in the Bank's master
computer files by the four digit identifying code number 1006, 1007, 1906, 1907,
2006, 2007, 3206, 3207, 3306, 3307, 3506, 3507, 3706, 3707, 3806, 3807, 3906,
3907, 4306, 4307, 4406, 4407, 4506, 4507, 4606, 4607, 4706, 4707, 4806 or 4807
(and, in each case, is identified as being correlated to Big Agent 2000) or (ii)
is identified in a computer file or microfiche list delivered to the Trustee by
the Transferor pursuant to Section 2.1 or 2.6. The term "Account" shall include
(A) each Transferred Account, (B) each Additional Account, but only from and
after the Additional Account Closing Date with respect thereto, (C) each
Automatic Additional Account, but only from and after the Creation Date with
respect thereto, and (D) each Removed Account, but only prior to the Removal
Date with respect thereto.
"Account Agreements" shall have the meaning specified in Section 1.1
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of the Receivables Purchase Agreement.
"Account Guidelines" shall mean the written policies and procedures of
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the Bank relating to the operation of its consumer revolving credit card
business, including, without
limitation, the policies and procedures for determining the creditworthiness of
customers and the extension of credit to customers and relating to the
maintenance of consumer revolving credit card accounts and the collection of
receivables, as such policies and procedures may be amended from time to time in
accordance with Section 5.1(c) of the Receivables Purchase Agreement.
"Accumulation Period" shall have, with respect to any Series or Class,
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the meaning, if any, specified for such Series or Class in the related
Supplement.
"Additional Account Closing Date" shall mean, with respect to any
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Additional Account, the date on which such Additional Account will be included
as an Account pursuant to Section 2.6.
"Additional Account Cut-Off Date" shall mean, with respect to any
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Additional Account, the last day of the Collection Period preceding the related
Additional Account Closing Date.
"Additional Accounts" shall have the meaning specified in Section
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2.6(a).
"Adjustment Amount" shall have the meaning specified in Section
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3.8(a).
"Adjustment Payment" shall have the meaning specified in Section
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3.8(a).
"Affiliate" shall mean, with respect to any Person, any other Person
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directly or indirectly controlling, controlled by or under common control with
such Person.
"Aggregate Automatic Addition Limit" shall mean (i) the number of
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Eligible Accounts designated as Automatic Additional Accounts pursuant to
Section 2.6(d) which would either (x) with respect to any calendar quarter,
equal 15% of the sum of the number of Accounts as of the first day of such
calendar quarter and the number of Additional Accounts included as Accounts
pursuant to Section 2.6(a) or Section 2.6(b) since such first day and (y) with
respect to any period of twelve consecutive Collection Periods, equal 20% of the
sum of the number of Accounts as of the first day of such period and the number
of Additional Accounts included as Accounts pursuant to Section 2.6(a) or
Section 2.6(b) since such first day or (ii) such higher number of Automatic
Additional Accounts as may be calculated pursuant to the procedure attached as
Exhibit K or as may otherwise be approved in writing by the Rating Agencies.
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"Aggregate Invested Amount" shall mean, on any date of determination,
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the sum of the Invested Amounts with respect to all Series then outstanding.
"Aggregate Invested Percentage" shall mean, on any date of
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determination, the sum of the applicable Invested Percentages with respect to
all Series then outstanding.
"Aggregate Principal Receivables" shall mean, on any date of
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determination, the aggregate amount of Principal Receivables at the end of such
date.
"Agreement" shall mean this Master Pooling and Servicing Agreement and
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all amendments hereof and supplements hereto, including any Supplement.
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"Amortization Period" shall mean, with respect to any Series, the
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Accumulation Period, Controlled Amortization Period, Principal Amortization
Period, Early Amortization Period or other type of amortization period specified
in the related Supplement.
"Applicants" shall have the meaning specified in Section 6.7.
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"Appointment Day" shall have the meaning specified in Section 9.2(a).
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"Assignment" shall have the meaning specified in Section 2.6.
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"Authorized Newspaper" shall mean one or more newspapers of general
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circulation in the Borough of Manhattan, The City of New York printed in the
English language and customarily published on each Business Day, whether or not
published on Saturdays, Sundays and holidays.
"Automatic Additional Accounts" shall have the meaning specified in
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Section 2.6(d).
"Bank" shall mean First North American National Bank, a national
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banking association, and any successor thereto.
"Bearer Certificates" shall have the meaning specified in Section 6.1.
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"Bearer Rules" shall mean the provisions of the Internal Revenue Code,
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in effect from time to time, governing the treatment of bearer obligations,
including sections 163(f), 871, 881, 1441, 1442 and 4701, and any regulations
thereunder including, to the extent applicable to any Series, proposed or
temporary regulations.
"Book-Entry Certificates" shall mean certificates evidencing
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beneficial interests in the Investor Certificates, ownership and transfers of
which shall be evidenced or made through book entries by a Clearing Agency as
described in Section 6.11; provided, however, that after the occurrence of a
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condition whereupon book-entry registration and transfer are no longer permitted
and Definitive Certificates are issued to the Certificate Owners, such
Definitive Certificates shall replace Book-Entry Certificates.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
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day on which banking institutions in Richmond, Virginia, Atlanta, Georgia or New
York, New York (or, with respect to any Series, any additional city specified in
the related Supplement) are authorized or obligated by law or executive order to
be closed.
"Certificate" shall mean one of any Series of the Investor
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Certificates or the Exchangeable Transferor Certificate.
"Certificateholder" or "Holder" shall mean the Person in whose name a
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Certificate is registered in the Certificate Register and, if applicable, the
holder of any Bearer Certificate or coupon, as the case may be, or such other
Person deemed to be a "Certificateholder" or "Holder" in any related Supplement.
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"Certificate Interest" shall mean interest payable with respect to the
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Investor Certificates of any Series pursuant to the related Supplement.
"Certificate Owner" shall mean, with respect to any Book-Entry
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Certificate, the Person who is the beneficial owner of such Book-Entry
Certificate, as reflected on the books of the Clearing Agency or on the books of
a Person maintaining an account with such Clearing Agency (directly or as an
indirect participant in accordance with the rules of such Clearing Agency).
"Certificate Principal" shall mean principal payable with respect to
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the Investor Certificates of any Series pursuant to the related Supplement.
"Certificate Rate" shall mean, with respect to any Series or Class,
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the rate per annum (or the formula on the basis of which such rate shall be
determined) specified for such Series or Class in the related Supplement.
"Certificate Register" shall mean the register maintained pursuant to
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Section 6.3 providing for the registration of the applicable Certificates and
transfers and exchanges thereof.
"Circuit City" shall mean Circuit City Stores, Inc., a Virginia
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corporation, and any successor thereto.
"Class" shall mean any class of Investor Certificates within a Series,
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each as designated in the related Supplement.
"Clearing Agency" shall mean an organization registered as a "clearing
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agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended, or any successor provision thereto.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
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financial institution or other Person for whom from time to time a Clearing
Agency or Foreign Clearing Agency effects book-entry transfers and pledges of
securities deposited with such Clearing Agency or Foreign Clearing Agency.
"Clearstream" shall mean Clearstream Banking, societe anonyme, a
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professional depository incorporated under the laws of Luxembourg, and any
successor thereto.
"Closing Date" shall mean, with respect to any Series, the date of
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issuance of such Series, as specified in the related Supplement.
"Collection Account" shall have the meaning specified in Section 4.1.
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"Collection Period" shall mean, unless otherwise provided in any
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Supplement, the period from and including the first day of a calendar month to
and including the last day of such calendar month.
"Collections" shall mean all payments and other amounts (including
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Insurance Proceeds) received by the Servicer with respect to the Receivables, in
the form of cash, checks,
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wire transfers, ATM transfers or other form of payment in accordance with the
related Account Agreements in effect from time to time. Collections with respect
to any Collection Period shall be deemed to include (i) all Recoveries, if any,
received during such Collection Period, (ii) the Interchange Amount, if any,
with respect to such Collection Period and (iii) all interest and other
investment earnings (net of losses and investment expenses), if any, received
during such Collection Period on funds on deposit in the Excess Funding Account.
"Common Depositary" shall mean the Person appointed as such as
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specified in the related Supplement, in its capacity as common depositary for
the respective accounts of a Foreign Clearing Agency.
"Controlled Amortization Period" shall have, with respect to any
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Series, the meaning, if any, specified in the related Supplement.
"Corporate Trust Office" shall mean the principal office of the
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Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Agreement is
located at Four ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate
Trust and Agency Group/Structured Finance.
"Coupons" shall have the meaning specified in Section 6.1.
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"Creation Date" shall mean, with respect to any Account or
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Receivable, the Business Day on which such Account is first identified in the
Servicer's master computer files by the four digit identifying code number 1006,
1007, 1906, 1907, 2006, 2007, 3206, 3207, 3306, 3307, 3506, 3507, 3706, 3707,
3806, 3807, 3906, 3907, 4306, 4307, 4406, 4407, 4506, 4507, 4606, 4607, 4706,
4707, 4806 or 4807 (and, in each case, is identified as being correlated to Big
Agent 2000) or the date on which such Receivable is created, as applicable.
"Date of Processing" shall mean, with respect to any transaction,
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the Business Day on which such transaction is first recorded on the Servicer's
computer master file of consumer revolving credit card accounts (without regard
to the effective date of such recordation).
"Default Amount" shall mean, for any Collection Period, the
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aggregate amount of Principal Receivables (other than Ineligible Receivables) in
all Accounts which became Defaulted Accounts during such Collection Period
(determined in each case as of the date on which the related Account became a
Defaulted Account) minus Recoveries, if any, received during such Collection
Period.
"Defaulted Account" shall mean each Account with respect to
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which, in accordance with the Account Guidelines pursuant to which such Account
is governed or the customary and usual servicing procedures of the Servicer for
servicing consumer revolving credit card receivables comparable to the
Receivables, the Servicer has charged off the Receivables in such Account as
uncollectible. An Account shall be deemed a Defaulted Account no later than the
earlier of (i) the last day of the calendar month in which such Account becomes
180 days delinquent on a contractual basis and (ii) 30 days after receipt of
notice by the Servicer that the related Obligor has died or has filed a
bankruptcy petition or has had a bankruptcy petition filed against him.
Notwithstanding any other provision hereof, any Receivables in a Defaulted
5
Account which are Ineligible Receivables shall be treated as Ineligible
Receivables rather than Receivables in Defaulted Accounts.
"Defeasance" shall have the meaning specified in Section 12.5.
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"Defeased Series" shall have the meaning specified in Section
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12.5.
"Definitive Certificates" shall have the meaning specified in
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Section 6.11.
"Definitive Euro-Certificates" shall have the meaning specified
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in Section 6.10.
"Depository Agreement" shall mean the agreement among the
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Transferor, the Trustee and the initial Clearing Agency, substantially in the
form of Exhibit I, or such other agreement as may be specified in the related
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Supplement.
"Determination Date" shall mean, with respect to any Series, the
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eighth day of each calendar month or, if such day is not a Business Day, the
next succeeding Business Day, or such other date as may be specified in the
related Supplement.
"Discount Collections" shall mean, on any Date of Processing on
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and after the date on which the Transferor's exercise of its discount option
pursuant to Section 2.8 takes effect, the product of (a) a fraction the
numerator of which is the amount of Discount Option Receivables and the
denominator of which is the sum of the Principal Receivables and the Discount
Option Receivables, in each case at the end of the prior Collection Period, and
(b) Collections of Principal Receivables (without giving effect to Discount
Option Receivables) on such Date of Processing.
"Discount Option Receivables" shall mean, on any Date of
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Processing on and after the date on which the Transferor's exercise of its
discount option pursuant to Section 2.8 takes effect, the sum of (a) the
aggregate Discount Option Receivables at the end of the prior Date of Processing
(which amount, prior to the date on which the Transferor's exercise of its
discount option takes effect, shall be zero) plus (b) any new Discount Option
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Receivables created on such Date of Processing minus (c) any Discount
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Collections received on such Date of Processing. Discount Option Receivables
created on any Date of Processing shall mean the product of the amount of any
Principal Receivables created on such Date of Processing (without giving effect
to Discount Option Receivables) and the Discount Percentage.
"Discount Percentage" shall have the meaning specified in Section
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2.8(a).
"Distribution Date" shall mean, with respect to any Series, the
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fifteenth day of each calendar month, or, if such fifteenth day is not a
Business Day, the next succeeding Business Day, or such other date as may be
specified in the related Supplement.
"Early Amortization Event" shall mean, with respect to any
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Series, each event specified in Section 9.1 and each additional event, if any,
specified in the related Supplement as an Early Amortization Event with respect
to such Series.
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"Early Amortization Period" shall have, with respect to any
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Series, the meaning, if any, specified in the related Supplement.
"Eligible Account" shall mean, with respect to Accounts existing
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on the Substitution Date, as of the Initial Cut-Off Date, with respect to
Additional Accounts, as of the related Additional Account Cut-Off Date, and with
respect to Automatic Additional Accounts (including Automatic Additional
Accounts included as Accounts prior to the Substitution Date), as of the related
Creation Date, each Account (i) which is in existence and owned by the Bank,
(ii) which is payable in United States dollars, (iii) the credit card or cards
related to which have not been reported lost or stolen or designated fraudulent,
(iv) which was created in accordance with, or under standards no less stringent
than, the Account Guidelines, (v) which is not identified by the Bank in its
computer files as having been canceled due to the bankruptcy, insolvency or
death of the related Obligor, (vi) the receivables in which have not been
charged off as uncollectible prior to the Initial Cut-Off Date, the Additional
Account Cut-Off Date or the Creation Date, as applicable, in accordance with the
Account Guidelines, (vii) the receivables in which have not been assigned,
pledged or sold (other than pursuant to the Receivables Purchase Agreement or
this Agreement), (viii) the Obligor of which has provided, as its most recent
billing address, an address in the United States or its territories or
possessions or a United States military address (provided, however, that up to
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1% of the Accounts (based on the aggregate outstanding balance of the
receivables in such Accounts as a percentage of the aggregate outstanding
balance of all Receivables) may have an Obligor which has provided, as its most
recent billing address, an address outside the United States and its territories
and possessions which is not a United States military address) and (ix) with
respect to which neither the Transferor nor any Affiliate of the Transferor is
the Obligor.
"Eligible Institution" shall mean (i) a depository institution,
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which may include the Trustee, organized under the laws of the United States or
any state thereof or the District of Columbia (or any domestic branch or agency
of a foreign bank), which at all times has either a long-term unsecured debt
rating of at least Baa3 from Moody's or a long-term unsecured debt rating, a
short-term unsecured debt rating or a certificate of deposit rating acceptable
to Moody's and the deposits in which are insured by the FDIC or (ii) any other
depository institution, which may include the Trustee, approved in writing by
each Rating Agency; provided, however, that (A) the commercial paper, short-term
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debt obligations or other short-term deposits of the depository institution
described in clause (i) above must be rated at least P-1 by Moody's and at least
A-1+ by Standard & Poor's (and at least F-1 by Fitch if Fitch is a Rating Agency
for any then outstanding Series and the commercial paper, short-term debt
obligations or other short-term deposits of such depository institution are
rated by Fitch) if deposits are to be held in an account maintained with such
depository institution pursuant to this Agreement for 30 or fewer days and (B)
the long-term unsecured debt obligations of the depository institution described
in clause (i) above must be rated at least AA- by Standard & Poor's if deposits
are to be held in an account maintained with such depository institution
pursuant to this Agreement for more than 30 days.
"Eligible Investments" shall mean instruments, investment
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property or other property, other than securities issued by or obligations of
the Bank or any Affiliate of the Bank, which evidence:
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(i) direct obligations of, or obligations fully guaranteed as
to timely payment by, the United States or any agency or instrumentality
thereof the obligations of which are backed by the full faith and credit of
the United States;
(ii) demand deposits, time deposits, bankers' acceptances or
certificates of deposit of any depository institution or trust company
organized under the laws of the United States or any state thereof or the
District of Columbia (or any domestic branch or agency of a foreign bank)
and subject to supervision and examination by federal or state banking or
depository institution authorities; provided, however, that, at the time of
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investment, the commercial paper or other unsecured short-term debt
obligations of such depository institution or trust company must be rated
at least P-1 by Moody's and at least A-1+ by Standard & Poor's (and a
rating of at least F-1+ by Fitch if Fitch is a Rating Agency for any then
outstanding Series and the commercial paper, short-term debt obligations or
other short-term deposits of such depository institution or trust company
are rated by Fitch);
(iii) commercial paper having, at the time of investment, a
rating of at least P-1 by Moody's and at least A-1+ by Standard & Poor's
(and a rating of at least F-1+ by Fitch if Fitch is a Rating Agency for any
then outstanding Series and such commercial paper is rated by Fitch);
(iv) demand deposits, time deposits and certificates of deposit
fully insured by the FDIC having, at the time of investment, a rating of at
least P-1 by Moody's and at least A-1+ by Standard & Poor's (and a rating
of at least F-1+ by Fitch if Fitch is a Rating Agency for any then
outstanding Series and such demand deposits, time deposits or certificates
of deposit are rated by Fitch); or
(v) money market funds having, at the time of investment, a
rating in the highest rating category assigned by Moody's and Standard &
Poor's (and a rating in the highest rating category assigned by Fitch if
Fitch is a Rating Agency for any then outstanding Series and such money
market funds are rated by Fitch), including, without limitation, money
market funds for which the Trustee or any Affiliate of the Trustee is
investment manager or advisor;
and any other investment as to which the Rating Agency Condition shall have been
satisfied.
"Eligible Receivable" shall mean each Receivable:
-------------------
(i) which has arisen under an Eligible Account;
(ii) which was created in compliance with all applicable
Requirements of Law and pursuant to an Account Agreement which complies
with all applicable Requirements of Law in either case the failure to
comply with which would have a material adverse effect upon the Investor
Certificateholders;
(iii) with respect to which all material consents, licenses,
approvals or authorizations of, or registrations with, any Governmental
Authority required to be obtained or given by the Bank in connection with
the creation of such Receivable or the
8
execution, delivery and performance by the Bank of the related Account
Agreement have been duly obtained or given and are in full force and effect
as of such date of creation;
(iv) which has been the subject of a valid sale by the Bank to
the Transferor of all of the Bank's right, title and interest in such
Receivable pursuant to the Receivables Purchase Agreement and as to which
at the time of the transfer of such Receivable to the Trust, the Trust will
have good and marketable title, free and clear of all Liens (other than
Liens permitted under Section 2.5(b));
(v) which has been the subject of either a valid transfer and
assignment from the Transferor to the Trust of all of the Transferor's
right, title and interest therein or the grant of a first priority
perfected security interest therein (and in the proceeds thereof to the
extent set forth in Section 9-315 of the UCC as in effect in the Relevant
UCC State), effective until the termination of the Trust;
(vi) which will at all times be the legal, valid and binding
payment obligation of the Obligor thereof enforceable against such Obligor
in accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws, now or hereafter in effect, affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a suit at
law or in equity);
(vii) which constitutes an "account" under and as defined in
Article 9 of the UCC as in effect in the State of New York and the Relevant
UCC State;
(viii) which, at the time of its transfer to the Trust, has not
been waived or modified except as permitted hereunder;
(ix) which is not subject to any setoff, right of rescission,
counterclaim or other defense (including the defense of usury), other than
defenses arising out of applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors'
rights in general;
(x) as to which the Transferor has satisfied all obligations to
be fulfilled at the time of its transfer to the Trust;
(xi) as to which the Transferor has done nothing, at the time of
its transfer to the Trust, to impair the rights of the Trust or
Certificateholders therein; and
(xii) which was originated by the Bank in the ordinary course of
business.
"Eligible Servicer" shall mean the Bank, the Trustee, or any entity
-----------------
which, at the time of its appointment as Servicer, (i) has a net worth of not
less than $50,000,000 as of the end of its most recent fiscal quarter, (ii) is
servicing a portfolio of consumer revolving credit card accounts, (iii) is
legally qualified and has the capacity to service the Accounts, (iv) has
demonstrated the ability to professionally service a portfolio of similar
accounts in accordance with standards of skill and care customary in the
industry and (v) is qualified to use the software
9
that is then currently 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.
"Enhancement" shall mean, with respect to any Series or Class, any
-----------
letter of credit, guaranteed rate agreement, maturity guaranty facility,
liquidity facility, cash collateral account, collateral indebtedness amount,
collateral interest, collateralized trust obligation, cash collateral guaranty,
surety bond, insurance policy, tax protection agreement, interest rate swap,
interest rate cap, spread account, reserve account, subordination arrangement,
cross-support feature or other contract, agreement or arrangement (including any
combination of any such contracts, agreements or arrangements) established or
entered into for the benefit of the Certificateholders of such Series or Class,
in each case as set forth in the related Supplement.
"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" shall have, with respect to any
---------------------------
Series, the meaning specified in the related Supplement.
"Enhancement Provider" shall mean, with respect to any Series, that
--------------------
Person designated as such in the related Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended from time to time, and the regulations promulgated thereunder.
"Euro-Certificate Exchange Date" shall mean, with respect to any
------------------------------
Series, the date specified in the related Supplement.
"Euroclear Operator" shall mean Euroclear Bank S.A./N.V., as
------------------
operator of the Euroclear System, or any successor thereto.
"Excess Automatic Additional Accounts" shall mean, with respect to
------------------------------------
any calendar quarter or any period of twelve consecutive months, all Automatic
Additional Accounts designated by the Transferor during such calendar quarter or
such twelve month period after the designation of the Automatic Additional
Account that caused the number of Automatic Additional Accounts designated
during such calendar quarter or such twelve month period to equal the applicable
Aggregate Automatic Addition Limit.
"Excess Funding Account" shall have the meaning specified in Section
----------------------
4.1(f).
"Excess Funding Amount" shall mean, on any date of determination,
---------------------
the amount on deposit in the Excess Funding Account on such date.
"Excess Recoveries" shall mean, with respect to any Collection
-----------------
Period, all Recoveries received during such Collection Period in excess of the
Default Amount for such Collection Period (calculated without deducting such
Recoveries in calculating the Default Amount for such Collection Period).
10
"Exchange" shall mean the procedure described under Section 6.9.
--------
"Exchange Date" shall have, with respect to any Series issued
-------------
pursuant to an Exchange, the meaning specified in Section 6.9.
"Exchangeable Transferor Certificate" shall mean the certificate
-----------------------------------
executed by the Transferor and authenticated by the Trustee, substantially in
the form of Exhibit A, and any Exchangeable Transferor Certificate reissued
---------
pursuant to Section 6.9.
"Exchange Notice" shall have, with respect to any Series issued
---------------
pursuant to an Exchange, the meaning specified in Section 6.9.
"FDIC" shall mean the Federal Deposit Insurance Corporation, or any
----
successor thereto.
"Final Termination Date" shall have the meaning specified in Section
----------------------
12.1(a).
"Finance Charge Receivables" shall mean (i) Receivables created in
--------------------------
respect of Finance Charges, cash advance fees, annual fees, late charges,
overlimit charges and all other fees and charges on the Accounts (other than
returned check charges, Insurance Charges and service contract charges) and (ii)
Discount Option Receivables. Collections of Finance Charge Receivables with
respect to any Collection Period shall be deemed to include (i) all Excess
Recoveries with respect to such Collection Period, (ii) the Interchange Amount,
if any, with respect to such Collection Period and (iii) all interest and other
investment earnings (net of losses and investment expenses), if any, received
during such Collection Period on funds on deposit in the Excess Funding Account.
"Finance Charge Shortfalls" shall have, with respect to any Series,
-------------------------
the meaning specified in the related Supplement.
"Finance Charges" shall have the meaning specified in the Account
---------------
Agreement applicable to each Account.
"Fiscal Year" shall mean the period commencing on March 1 of any
-----------
year and ending on February 28 (or February 29, if applicable) of the following
year.
"Fitch" shall mean Fitch, Inc.
-----
"Fixed Allocation Percentage" shall have, with respect to any
---------------------------
Series, the meaning specified in the related Supplement.
"Floating Allocation Percentage" shall have, with respect to any
------------------------------
Series, the meaning specified in the related Supplement.
"Foreign Clearing Agency" shall mean, with respect to any Series,
-----------------------
Clearstream or the Euroclear Operator or any other established clearing agency
for securities outside the United States designated in the related Supplement.
11
"Global Certificate" shall have the meaning specified in Section
------------------
6.10(a).
"Governmental Authority" shall mean the United States, any state
----------------------
or other political subdivision thereof and any United States entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"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 Receivable" shall have the meaning specified in
---------------------
Section 2.4(d)(iii).
"Initial Closing Date" shall mean October 4, 1994.
--------------------
"Initial Cut-Off Date" shall mean the opening of business on
--------------------
September 30, 1994.
"Initial Invested Amount" shall mean, with respect to any Series,
-----------------------
the amount specified in the related Supplement.
"Insolvency Event" shall have the meaning specified in Section
----------------
9.1(b).
"Insurance Charges" shall mean, with respect to any Account, the
-----------------
monthly premiums charged to the related Obligor with respect to any Insurance
Policies.
"Insurance Policies" shall mean any credit insurance policies
------------------
offered through the Bank with respect to the Accounts.
"Insurance Proceeds" shall mean amounts received or recovered
------------------
pursuant to any Insurance Policies.
"Interchange" shall mean interchange fees payable to the Bank, in
-----------
its capacity as credit card issuer, through MasterCard International
Incorporated or VISA USA Incorporated, with respect to the MasterCard or VISA
credit card accounts, if any, included in the Accounts.
"Interchange Amount" shall mean, with respect to any Collection
------------------
Period, the amount of Interchange paid to the Bank with respect to such
Collection Period.
"Internal Revenue Code" shall mean the Internal Revenue Code of
---------------------
1986, as amended from time to time.
"Invested Amount" shall have, with respect to any Series, the
---------------
meaning specified in the related Supplement.
"Invested Percentage" shall have, with respect to any Series, the
-------------------
meaning specified in the related Supplement.
"Investor Certificate" shall mean a certificate executed by the
--------------------
Transferor and authenticated by or on behalf of the Trustee substantially in a
form attached to any Supplement or such other interest in the Trust as may be
deemed to be an "Investor Certificate" in any Supplement.
12
"Investor Certificateholder" shall mean the holder of record of
--------------------------
an Investor Certificate.
"Investor Charge Offs" shall have, with respect to any Series,
--------------------
the meaning specified in the related Supplement.
"Investor Default Amount" shall have, with respect to any Series,
-----------------------
the meaning specified in the related Supplement.
"Investor Monthly Servicing Fee" shall have the meaning specified
------------------------------
in Section 3.2.
"Lien" shall mean any security interest, mortgage, deed of trust,
----
pledge, hypothecation, assignment, participation, deposit arrangement,
encumbrance, lien (statutory or other), preference, priority right or interest
or other security agreement or preferential arrangement of any kind or nature
whatsoever, including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, other than any lien or filing made pursuant to
this Agreement or the Receivables Purchase Agreement and any assignment or
transfer made pursuant to Section 6.9 or 7.2.
"Manager" shall mean the managing underwriter of any Series.
-------
"Minimum Aggregate Principal Receivables" shall mean, on any date
---------------------------------------
of determination, the aggregate of the amounts set forth in each Supplement for
each then outstanding Series as the "Minimum Aggregate Principal Receivables"
for such Series, which amount for any such Series shall be the Initial Invested
Amount of such Series unless otherwise specified in the related Supplement.
"Minimum Transferor Amount" shall mean, on any date of
-------------------------
determination, the product of the Aggregate Principal Receivables on such date
and the Minimum Transferor Interest Percentage on such date.
"Minimum Transferor Interest Percentage" shall mean, on any date
--------------------------------------
of determination, the highest percentage set forth in any Supplement for any
then outstanding Series as the "Minimum Transferor Interest Percentage" for such
Series.
"Monthly Servicing Fee" shall have the meaning specified in
---------------------
Section 3.2.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
-------
"1940 Act" shall have the meaning specified in Section 9.1.
--------
"Obligor" shall mean, with respect to any Account, each Person
-------
obligated to make payments with respect to such Account, including any guarantor
thereof.
"Officer's Certificate" shall mean a certificate signed by any
---------------------
Vice President or more senior officer of either of the Transferor or the
Servicer and delivered to the Trustee.
13
"Opinion of Counsel" shall mean a written opinion of counsel, who
------------------
may be counsel for or an employee of the Person providing the opinion, and who
shall be reasonably acceptable to the Trustee; provided, however, that any Tax
-------- -------
Opinion or other opinion relating to federal income tax matters shall be an
opinion of nationally recognized tax counsel; and, provided further, that no
-------- -------
such written opinion (including, without limitation, any Tax Opinion) shall be
an expense of the Trustee.
"Paying Agent" shall mean any paying agent appointed pursuant to
------------
Section 6.6 and shall initially be the Trustee.
"Permitted Activities" shall mean the primary activities of the
--------------------
Trust, which are:
(i) holding Receivables and the other Trust Property,
which assets cannot be contrary to the status of the Trust as a qualified
special purpose entity under existing accounting literature, including
passive derivative financial instruments that pertain to beneficial
interests issued or sold to parties other than the Transferor or Affiliates
or agents of the Transferor;
(ii) issuing Certificates and other interests in the Trust;
(iii) receiving Collections and making payments on
Certificates and interests in accordance with the terms of this Agreement
and any Supplement; and
(iv) engaging in other activities that are necessary to
accomplish or incidental to the foregoing activities, which other
activities cannot be contrary to the status of the Trust as a qualified
special purpose entity under existing accounting literature.
"Person" shall mean any legal person, including any individual,
------
corporation, partnership, limited liability company, limited liability
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Authority or other entity of similar
nature.
"Principal Amortization Period" shall have, with respect to any
-----------------------------
Series, the meaning, if any, specified in the related Supplement.
"Principal Receivables" shall mean Receivables other than Finance
---------------------
Charge Receivables, Receivables in Defaulted Accounts and Discount Option
Receivables. Collections of Principal Receivables with respect to any Collection
Period shall be deemed to include all Recoveries received during such Collection
Period (other than Excess Recoveries with respect to such Collection Period).
"Principal Sharing Series" shall mean a Series that, pursuant to
------------------------
the related Supplement, is entitled to receive Shared Principal Collections.
"Principal Shortfalls" shall have, with respect to any Series,
--------------------
the meaning specified in the related Supplement.
14
"Principal Terms" shall have, with respect to any Series issued
---------------
pursuant to an Exchange, the meaning specified in Section 6.9.
"Prior Agreement" shall have the meaning specified in the
---------------
Preliminary Statements.
"Prior Trust Property" shall have the meaning specified in
--------------------
Section 2.1(c).
"Publication Date" shall have the meaning specified in Section
----------------
9.2(a).
"Rating Agency" shall mean, with respect to any Series, each
-------------
rating agency selected by the Transferor to rate the Investor Certificates of
such Series.
"Rating Agency Condition" shall mean, with respect to any action,
-----------------------
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 its rating of any outstanding Series or Class with respect to which it is a
Rating Agency.
"Reassignment" shall have the meaning specified in Section 2.7.
------------
"Receivable" shall mean any amount owing by an Obligor under an
----------
Account from time to time, including, without limitation, amounts owing for the
payment of goods and services, cash advances, Insurance Charges, service
contract charges, Finance Charges, cash advance fees, annual fees, late charges,
overlimit charges, returned check charges and all other fees and charges. In
calculating the aggregate amount of Receivables on any day, the amount of
Receivables shall be reduced by the aggregate amount of credit balances, and
other adjustments stated in Section 3.8 hereof, in the Accounts on such day. Any
Receivables which the Transferor is unable to transfer as provided in Section
2.5(d) shall not be included in calculating the aggregate amount of Receivables.
"Receivables Purchase Agreement" shall mean the Receivables
------------------------------
Purchase Agreement dated as of December 31, 2001 between the Bank and Tyler
Funding, and acknowledged and accepted by the Trustee, as amended, supplemented
or otherwise modified from time to time.
"Record Date" shall mean, with respect to any Series and any
-----------
Distribution Date, the last Business Day of the immediately preceding Collection
Period or such other date as may be specified in the related Supplement.
"Recoveries" shall mean all amounts (including Insurance
----------
Proceeds, if any) received by the Servicer with respect to Receivables in
Defaulted Accounts (net of any out-of-pocket costs and expenses of collection
and certain other post-charge off adjustments).
"Registered Certificates" shall have the meaning specified in
-----------------------
Section 6.1.
"Relevant UCC State" shall mean all jurisdictions where a UCC
------------------
filing is required to perfect and maintain the security interest of the Trustee
in the Receivables and the proceeds thereof.
15
"Removal Date" shall mean the date on which the Receivables in
------------
certain designated Removed Accounts will be reassigned by the Trustee to the
Transferor.
"Removal Notice Date" shall mean the fifth Business Day prior to
-------------------
a Removal Date.
"Removed Accounts" shall have the meaning specified in Section
----------------
2.7.
"Repurchase Terms" shall mean, with respect to any Series issued
----------------
pursuant to an Exchange, the terms and conditions under which the Transferor may
repurchase such Series pursuant to Section 12.2.
"Requirements of Law" shall mean, with respect to any Person, the
-------------------
certificate of incorporation or articles of association and by-laws or other
organizational or governing documents of such Person, and any law, treaty, rule
or regulation, or determination of an arbitrator or Governmental Authority, in
each case applicable to or binding upon such Person or to which such Person is
subject, whether Federal, state or local (including, without limitation, usury
laws, the Federal Truth in Lending Act and Regulation Z and Regulation B of the
Board of Governors of the Federal Reserve System).
"Responsible Officer" shall mean, with respect to the Trustee,
-------------------
for purposes of this Agreement, any Vice President, Assistant Vice President,
Assistant Secretary or Assistant Treasurer of the Trustee or any trust officer,
or any officer of the Trustee customarily performing functions similar to those
performed by the person who at the time shall be such officers, or to whom any
corporate trust matter is referred because of his knowledge of and familiarity
with a particular subject, who shall, in any case, be working in the Structured
Finance Group, or any successor thereto responsible for the administration of
this Agreement.
"Revolving Credit Agreement" shall mean the Revolving Credit
--------------------------
Agreement dated as of December 31, 2001 between Circuit City and Tyler Funding,
as such agreement may be amended, supplemented or otherwise modified from time
to time.
"Revolving Period" shall mean, with respect to any Series, the
----------------
period from and including the date of initial issuance of the Investor
Certificates of such Series to but not including the day on which an
Amortization Period for such Series commences.
"Series" shall mean any Series of Investor Certificates, each as
------
designated in the related Supplement (including any Enhancement Invested Amount
related thereto).
"Series Adjustment Amount" shall mean, with respect to any
------------------------
Collection Period for any Series, the product of (i) the percentage equivalent
of a fraction, the numerator of which is the Invested Amount with respect to
such Series as of the last day of such Collection Period and the denominator of
which is the Aggregate Invested Amount on such last day and (ii) the Adjustment
Amount as of such last day.
"Servicer" shall mean the Bank or, after any Service Transfer,
--------
the Successor Servicer.
16
"Servicer Default" shall have the meaning specified in Section
----------------
10.1.
"Service Transfer" shall have the meaning specified in Section
----------------
10.1.
"Servicing Fee Percentage" shall have, with respect to any
------------------------
Series, the meaning 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, as such list may from time to time be amended.
"Shared Excess Finance Charge Collections" shall have, with
----------------------------------------
respect to any Series, the meaning specified in the related Supplement.
"Shared Principal Collections" shall have, with respect to any
----------------------------
Series, the meaning specified in the related Supplement.
"Standard & Poor's" shall mean Standard & Poor's, a division of
-----------------
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Stated Series Termination Date" shall have, with respect to any
------------------------------
Series, the meaning specified in the related Supplement.
"Substitution Date" shall mean December 31, 2001.
-----------------
"Successor Servicer" shall have the meaning specified in Section
------------------
10.2.
"Supplement" shall mean, with respect to any Series, a supplement
----------
to this Agreement complying with the terms of Section 6.9 and executed in
connection with the issuance of such Series.
"Tax Opinion" shall have the meaning specified in Section 6.9(b).
-----------
"Termination Notice" shall have, with respect to any Series, the
------------------
meaning specified in Section 10.1.
"Transfer Agent and Registrar" shall have the meaning specified
----------------------------
in Section 6.3 and shall initially be the Trustee.
"Transfer Date" shall mean the Business Day preceding each
-------------
Distribution Date.
"Transferor" shall mean Tyler Funding, as transferor of the
----------
Receivables created on or after the Substitution Date.
"Transferor Amount" shall mean, on any date of determination, the
-----------------
Aggregate Principal Receivables at the end of the day immediately prior to such
date of determination, plus the Excess Funding Amount at the end of such day,
----
minus the Aggregate Invested Amount at the
-----
17
end of such day, minus any Enhancement Invested Amount at the end of such day
-----
(to the extent not included in the Aggregate Invested Amount).
"Transferor Interest" shall have the meaning specified in Section
-------------------
4.1(a).
"Transferor Interest Percentage" shall mean, on any date of
------------------------------
determination, the Transferor Amount divided by the Aggregate Principal
Receivables.
"Transferor Percentage" shall mean, on any date of determination,
---------------------
when used with respect to Collections of Principal Receivables, Finance Charge
Receivables and Receivables in Defaulted Accounts, one hundred percent minus the
-----
Aggregate Invested Percentage calculated on such date with respect to such
categories of Receivables as calculated by the Servicer.
"Transferred Account" shall mean a consumer revolving credit card
-------------------
account with respect to which a new credit card account number has been issued
by the Servicer or the Bank in accordance with its usual and customary servicing
practices and in accordance with the Account Guidelines, and which can be traced
or identified by reference to or by way of the computer files or microfiche
lists delivered to the Trustee pursuant to Sections 2.1 and 2.6 as an account
into which an Account has been transferred (including such transfers occurring
between the Initial Cut-Off Date and the Initial Closing Date and between any
Additional Account Cut-Off Date and the related Additional Account Closing
Date).
"Trust" shall mean the trust created by this Agreement, the
-----
corpus of which shall consist of the Trust Property.
"Trust Property" shall have the meaning specified in Section
--------------
2.1(b).
"Trustee" shall mean the institution executing this Agreement as
-------
trustee, the successor to its corporate trust business, or its successor in
interest, or any successor trustee appointed as herein provided.
"Tyler Funding" shall mean Tyler International Funding, Inc., a
-------------
Delaware corporation, and any successor thereto.
"UCC" shall mean the Uniform Commercial Code, as amended from
---
time to time, as in effect in any specified jurisdiction.
"Undivided Interest" shall mean the undivided interest of any
------------------
Certificateholder in the Trust.
"United States" shall mean the United States of America.
-------------
"Zero Balance Account" shall mean an Account with a Receivable
--------------------
balance of zero.
18
Section 1.2 Other Definitional Provisions.
-----------------------------
(a) All terms defined in any Supplement or this Agreement shall
have the defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein. The definitions of
all terms defined herein shall include the singular as well as the plural form
of such terms and the masculine of such terms as well as the feminine and neuter
genders of such terms.
(b) As used herein and in any certificate or other document made
or delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1, and accounting terms partly defined in Section 1.1 to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles on the date of determination. To the extent that
the definitions of accounting terms herein are inconsistent with the meanings of
such terms under generally accepted accounting principles, the definitions
contained herein shall control.
(c) The representations, warranties and covenants of Tyler
Funding in this Agreement in its capacity as Transferor shall be deemed to be
the representations, warranties and covenants of Tyler Funding solely in such
capacity for so long as it acts in such capacity under this Agreement. The
representations, warranties and covenants of the Bank in this Agreement in its
capacity as Servicer shall be deemed to be the representations, warranties and
covenants of the Bank solely in such capacity for so long as it acts in such
capacity under this Agreement.
(d) All references to the Prior Agreement in any other instrument
or document shall be deemed to constitute references to this Agreement. All
references in any such instrument or document to the Bank, as Transferor under
the Prior Agreement, shall also be deemed to constitute references to Tyler
Funding as Transferor under this Agreement.
(e) All series of investor certificates issued and outstanding
under the Prior Agreement shall constitute Series issued and outstanding under
this Agreement, and all supplements executed in connection with such series
shall constitute Supplements executed under this Agreement.
(f) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to any Supplement or this
Agreement as a whole and not to any particular provision of such Supplement or
this Agreement, as the case may be; Section, subsection, Schedule and Exhibit
references contained in this Agreement or any Supplement are references to
Sections, subsections, Schedules and Exhibits in or to this Agreement or any
Supplement unless otherwise specified; and the word "including" means including
without limitation.
Section 1.3 Amendment and Restatement. On the Substitution Date,
-------------------------
the Prior Agreement shall automatically be amended and restated as set forth
herein. On and after the Substitution Date, the rights and obligations of the
Transferor, the Servicer, the Bank, the Trustee and the Certificateholders shall
be governed by this Agreement.
Section 1.4 Assumption Agreement; Continuing Liability. All
------------------------------------------
representations, warranties and covenants made by the Bank, as Transferor under
the Prior Agreement, shall
19
survive the execution and delivery of this Agreement. Tyler Funding hereby
assumes and agrees to perform every covenant and obligation of the Bank as
Transferor under the Prior Agreement. The Bank hereby agrees that it shall
continue to be liable for all representations, warranties and covenants made by
it as Transferor under the Prior Agreement and that it shall continue to be
obligated to perform its covenants and obligations as Transferor under the Prior
Agreement. Pursuant to the provisions of this Agreement (including the
provisions of Section 11.1(d)), the Trustee shall be entitled to enforce each
such representation, warranty or covenant against either the Bank, as Transferor
under the Prior Agreement, or the Transferor to the same extent as though such
representations, warranties and covenants had been set forth or incorporated by
reference in this Agreement.
[END OF ARTICLE I]
20
ARTICLE II
APPOINTMENT OF TRUSTEE; CONVEYANCE OF
RECEIVABLES; ISSUANCE OF CERTIFICATES
Section 2.1 Appointment of Trustee; Conveyance of Receivables.
-------------------------------------------------
(a) The Bank, as Transferor under the Prior Agreement, confirms that
it has appointed and authorized, and the Transferor does hereby appoint and
authorize, Bankers Trust Company to act as Trustee as provided herein and to
exercise such powers under this Agreement as are delegated to the Trustee by the
terms hereof together with all such powers as are reasonably incidental thereto.
The Trustee confirms such appointment and agrees to exercise such powers and
perform such functions on behalf of the Certificateholders from time to time as
are specifically delegated to the Trustee by the terms hereof. The Trust created
by and maintained by the Prior Agreement shall continue to exist and be
maintained under this Agreement.
(b) The Transferor does hereby transfer, assign, set-over, and
otherwise convey to the Trust, for the benefit of the Certificateholders,
without recourse except as provided herein, all right, title and interest of the
Transferor in and to the Receivables created on or after the Substitution Date,
all monies due or to become due and all amounts received with respect to such
Receivables (including Finance Charge Receivables and Recoveries), all proceeds
of such Receivables (including Insurance Proceeds) and the Interchange Amount
with respect to each Collection Period commencing on or after the Substitution
Date. The Transferor does hereby further transfer, assign, set-over, and
otherwise convey to the Trust, for the benefit of the Certificateholders, all of
its rights, remedies, powers, privileges and claims under or with respect to the
Receivables Purchase Agreement (whether arising pursuant to the terms of the
Receivables Purchase Agreement or otherwise available to the Transferor at law
or in equity), including, without limitation, the rights of the Transferor to
enforce the Receivables Purchase Agreement and to give or withhold any and all
consents, requests, notices, directions, approvals, extensions or waivers under
or with respect to the Receivables Purchase Agreement. The property described in
the prior two sentences, together with the Prior Trust Property and all monies
as are from time to time deposited in the Collection Account, the Excess Funding
Account and any other account or accounts maintained for the benefit of the
Certificateholders (including, to the extent specified in the related
Supplement, investment earnings on such amounts), all proceeds of the foregoing
and all monies as are from time to time available under any Enhancement for any
Series for payment to Certificateholders, shall constitute the property of the
Trust (the "Trust Property"). The foregoing transfer, assignment, set-over and
--------------
conveyance does not constitute and is not intended to result in a creation or an
assumption by the Trust, the Trustee or any Certificateholder of any obligation
of the Servicer, the Transferor or any other Person in connection with the
Accounts, the Receivables or under any agreement or instrument relating thereto
including, without limitation, any obligation to any Obligors, merchant service
establishments or insurers.
In connection with such transfer, the Transferor agrees to record and
file (and does hereby authorize the Trustee to record and file), at the expense
of the Transferor, financing statements (and continuation statements with
respect to such financing statements when
21
applicable) with respect to the Receivables created on or after the Substitution
Date for the transfer of accounts (as defined in the UCC as in effect in the
Relevant UCC State) meeting the requirements of applicable state law in such
manner and in such jurisdictions as are necessary to perfect the transfers and
assignments of such Receivables by the Transferor to the Trust, and to deliver a
file-stamped copy of such financing statements or other evidence of such filings
to the Trustee on or prior to the Substitution Date (which may, for the purposes
of this Section 2.1, consist of telephone confirmation of such filing) and, in
the case of continuation statements, as soon as reasonably practical after
receipt thereof.
In connection with such transfer, the Transferor agrees, at its own
expense, on or prior to the Substitution Date, to indicate clearly and
unambiguously in its computer files that the Receivables created on or after the
Substitution Date in connection with the Accounts (other than any Additional
Account or Automatic Additional Account) have been transferred to the Trust
pursuant to this Agreement for the benefit of the Certificateholders. The
Transferor further agrees to deliver to the Trustee (a) on or before the third
Business Day following the Substitution Date, a computer file or microfiche list
containing a true and complete list of all such Accounts, identified by account
number as of the Substitution Date and (b) so long as Automatic Additional
Accounts are being included automatically pursuant to Section 2.6(d), on or
prior to each Distribution Date, a new computer file or microfiche list
containing a true and complete list of all Accounts identified as described in
the preceding clause (a) as of the last day of the most recent Collection Period
or an Officer's Certificate stating that the file or list of Accounts most
recently delivered pursuant to this subsection remains a true and complete list
of all Accounts. Such file or list shall be marked as Schedule 1 to this
Agreement, shall be delivered to the Trustee as confidential and proprietary,
and is hereby incorporated into and made a part of this Agreement. Any such
additional file or list shall be marked as Schedule 1 to this Agreement, shall
be delivered to the Trustee as confidential and proprietary, shall replace the
then existing Schedule 1 to this Agreement, and shall be incorporated into and
made a part of this Agreement. The Transferor agrees, at its own expense, by the
end of the Collection Period in which any Transferred Accounts have been
originated to indicate clearly and unambiguously in its computer files that the
Receivables created in connection with the Transferred Accounts have been
transferred to the Trust pursuant to this Agreement for the benefit of the
Certificateholders.
The parties hereto intend that each transfer of Receivables and other
Trust Property (other than the Prior Trust Property) pursuant to this Section
2.1(b) or any Assignment constitute a sale, and not a secured borrowing, for all
purposes, including for accounting purposes. If and to the extent that,
notwithstanding such intent, the transfer pursuant to this Section 2.1(b) is not
deemed to constitute a sale, the Transferor shall be deemed hereunder to have
granted and does hereby grant to the Trustee, on behalf of the Trust and for the
benefit of the Certificateholders, a security interest in all of its right,
title and interest, whether now owned or hereafter acquired, in and to the
Receivables and all other Trust Property (other than the Prior Trust Property)
to secure the payment of each Series and this Agreement shall constitute a
security agreement under the UCC.
(c) The Bank, as Transferor under the Prior Agreement, confirms that
it has transferred, assigned, set-over, and otherwise conveyed to the Trust, for
the benefit of the Certificateholders, without recourse except as provided in
the Prior Agreement, all right, title and interest of the Bank in and to the
Receivables existing on the Initial Cut-Off Date or created
22
between the Initial Cut-Off Date and the Substitution Date, all monies due
or to become due and all amounts received with respect to such Receivables
(including Finance Charge Receivables and Recoveries) on and after the Initial
Cut-Off Date, all proceeds of such Receivables (including Insurance Proceeds)
and the Interchange Amount with respect to each Collection Period commencing
between the Initial Cut-Off Date and the Substitution Date (the "Prior Trust
-----------
Property"). The Bank, as Transferor under the Prior Agreement, the Servicer and
--------
the Trustee confirm that they intended that each transfer of Receivables and
other property pursuant to the Prior Agreement constitute a sale, and not a
secured borrowing, for all purposes, including for accounting purposes. If and
to the extent that, notwithstanding such intent, the transfer pursuant to
Section 2.1 of the Prior Agreement is not deemed to constitute a sale, (i) the
Bank, as Transferor under the Prior Agreement, confirms that it shall be deemed
thereunder to have granted, and did thereby (and, to the extent necessary, does
hereby) grant to the Trustee, on behalf of the Trust and for the benefit of the
Certificateholders, a security interest in all of its right, title and interest,
whether owned on or acquired after the Initial Closing Date, in and to all of
the Prior Trust Property to secure the payment of each Series and that the Prior
Agreement constituted a security agreement under the UCC and (ii) the Transferor
does hereby transfer, assign, set-over, and otherwise convey to the Trust, for
the benefit of the Certificateholders, without recourse except as provided
herein, all right, title and interest of the Transferor in and to the Prior
Trust Property acquired pursuant to the Receivables Purchase Agreement.
The parties hereto intend that the transfer of the Prior Trust
Property pursuant to this Section 2.1(c) constitute a sale, and not a secured
borrowing, for all purposes, including for accounting purposes. If and to the
extent that, notwithstanding such intent, the transfer pursuant to this Section
2.1(c) is not deemed to constitute a sale, the Transferor shall be deemed
hereunder to have granted and does hereby grant to the Trustee, on behalf of the
Trust and for the benefit of the Certificateholders, a security interest in all
of its right, title and interest in and to the Prior Trust Property acquired
pursuant to the Receivables Purchase Agreement to secure the payment of each
Series and this Agreement shall constitute a security agreement under the UCC.
(d) The Bank confirms that the Prior Trust Property in existence on
the Substitution Date is included as Trust Property.
Section 2.2 Acceptance by Trustee.
---------------------
(a) The Trustee hereby acknowledges its acceptance, to the extent
validly transferred, assigned, set over or otherwise conveyed to the Trust as
provided in Section 2.1(b), on behalf of the Trust, of all right, title and
interest previously held by the Transferor in and to the Receivables created on
or after the Substitution Date and all other Trust Property and declares that it
shall hold such right, title and interest, in trust as herein set forth and
subject to the terms hereof, for the benefit of all Certificateholders. The
Trustee further acknowledges that, prior to or simultaneously with the execution
and delivery of this Agreement, the Transferor delivered to the Trustee the
computer file or microfiche list represented by the Transferor to be the
computer file or microfiche list described in the third paragraph of Section
2.1(b).
(b) The Trustee hereby confirms that it accepted, to the extent
validly transferred, assigned, set over or otherwise conveyed to the Trust as
provided in Section 2.1(b) of the Prior Agreement, on behalf of the Trust, all
right, title and interest previously held by the
23
Bank, as Transferor under the Prior Agreement, in and to the Receivables
existing on the Initial Cut-Off Date or created between the Initial Cut-Off Date
and the Substitution Date, all monies due or to become due and all amounts
received with respect to such Receivables (including Finance Charge Receivables
and Recoveries) on and after the Initial Cut-Off Date, all proceeds of such
Receivables (including Insurance Proceeds), the Interchange Amount with respect
to each Collection Period commencing between the Initial Cut-Off Date and the
Substitution Date, such funds as were from time to time before the Substitution
Date deposited in the Collection Account, the Excess Funding Account and any
other account or accounts maintained for the benefit of Certificateholders, and
the benefits of any Enhancement for any Series issued before the Substitution
Date, and declares that it shall hold such right, title and interest, upon the
trust herein set forth, and subject to the terms hereof for the benefit of all
Certificateholders.
(c) The Trustee hereby agrees not to disclose to any Person
(including any Certificateholder or Certificate Owner) any of the account
numbers or other information contained in the computer files or microfiche lists
delivered to the Trustee by the Transferor pursuant to Sections 2.1 and 2.6,
except as is required in connection with the performance of its duties hereunder
or as may be provided in any Supplement, or in connection with audits,
examinations, investigations and other inquiries which are required in
connection with the Trustee's regulatory supervision or in response to a court
order, subpoena, or other judicial or governmental demand or in enforcing the
rights of the Certificateholders or to a Successor Servicer appointed pursuant
to Section 10.2 or a successor Trustee appointed pursuant to Section 11.8. The
Trustee agrees to take such measures as shall be necessary or reasonably
requested by the Transferor or the Bank to protect and maintain the security and
confidentiality of such information.
(d) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement.
Section 2.3 Representations and Warranties of the Transferor Relating
---------------------------------------------------------
to the Transferor. The Transferor hereby represents and warrants to the Trustee,
-----------------
on behalf of the Trust, as of the Substitution Date and, with respect to any
Series, as of the date of the related Supplement and the related Closing Date,
unless otherwise stated in such Supplement that:
(i) Organization and Good Standing. The Transferor is a corporation
------------------------------
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has full 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 any Supplement and to execute and deliver
to the Trustee the Certificates pursuant hereto.
(ii) Due Qualification. The Transferor is duly qualified to do
-----------------
business and is in good standing (or is exempt from such requirements) and has
obtained all necessary licenses and approvals with respect to the Transferor, in
each jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would render any Account Agreement relating to an Account or any
Receivable unenforceable by it or the Trust or would have a material adverse
effect on the Investor Certificateholders or on the Transferor's or the
Servicer's ability to perform its obligations under this Agreement or
24
any Supplement; provided, however, that no representation or warranty is made
-------- -------
with respect to any qualifications, licenses or approvals which the Trustee
would have to obtain to do business in any state in which the Trustee seeks to
enforce any Receivable.
(iii) Due Authorization. The execution, delivery and performance of this
-----------------
Agreement and any Supplement by the Transferor and the execution and delivery to
the Trustee of the Certificates and the consummation by the Transferor of the
transactions provided for in this Agreement and any Supplement have been duly
authorized by the Transferor by all necessary action on the part of the
Transferor.
(iv) No Violation. The execution and delivery of this Agreement, any
------------
Supplement and the Certificates by the Transferor, the performance by the
Transferor of the transactions contemplated by this Agreement and any Supplement
and the fulfillment by the Transferor of the terms hereof and thereof will not
conflict with, violate or result in any breach of any of the material terms and
provisions of, or constitute (with or without notice or lapse of time or both) a
default under, any Requirement of Law applicable to the Transferor or any
material 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.
(v) 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, arbitrator or other
tribunal or governmental instrumentality (i) asserting the invalidity of this
Agreement, any Supplement or the Certificates, (ii) seeking to prevent the
issuance of the Certificates or the consummation of any of the transactions
contemplated by this Agreement, any Supplement or the Certificates, (iii)
seeking any determination or ruling that, in the reasonable judgment of 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 Federal income tax
attributes of the Trust.
(vi) All Consents Required. All approvals, authorizations, consents,
---------------------
orders or other actions of any Person or of any Governmental Authority required
to be obtained on or prior to the date as of which this representation is being
made in connection with the execution and delivery by the Transferor of this
Agreement, any Supplement and the Certificates, the performance by the
Transferor of the transactions contemplated by this Agreement and any Supplement
and the fulfillment by the Transferor of the terms hereof and thereof, have been
obtained; provided, however, that no representation or warranty is made
-------- -------
regarding state securities or "Blue Sky" laws in connection with any
distribution of the Certificates.
(vii) Amount of Receivables; Computer File. As of the close of business on
------------------------------------
the third Business Day preceding the Substitution Date, the amount of
Receivables was $1,298,884,969.78. The computer file or microfiche list
delivered pursuant to Section 2.1
25
is complete and accurately reflects the information regarding the
Receivables under the Accounts in all material respects as of the
applicable time referred to in Section 2.1.
The representations and warranties set forth in this Section 2.3 shall
survive the transfer and assignment of the Receivables to the Trust and
termination of the rights and obligations of the Servicer pursuant to Section
10.1. Upon discovery by the Transferor, the Servicer or the Trustee of a breach
of any of the representations and warranties set forth in this Section 2.3, the
party discovering such breach shall give prompt written notice thereof to the
others.
Section 2.4 Representations and Warranties of the Transferor Relating
----------------------------------------------------------
to this Agreement and any Supplement and the Receivables.
--------------------------------------------------------
(a) Binding Obligation; Valid Transfer and Assignment. The Transferor
-------------------------------------------------
hereby represents and warrants to the Trustee, on behalf of the Trust, as of the
Substitution Date and, with respect to any Series, as of the related Closing
Date, unless otherwise stated in the related Supplement, that:
(i) Each of this Agreement and any Supplement constitutes a
legal, valid and binding obligation of the Transferor, enforceable against
the Transferor in accordance with its terms, subject to applicable
bankruptcy, insolvency, receivership, conservatorship, 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 proceeding at law or in equity).
(ii) This Agreement constitutes either (A) a valid transfer and
assignment to the Trust of all right, title and interest of the Transferor
in and to the Receivables created on or after the Substitution Date (other
than Receivables in Additional Accounts), all monies due or to become due
and all amounts received with respect thereto on or after the Substitution
Date and all proceeds thereof (to the extent set forth in Section 9-315 of
the UCC as in effect in the Relevant UCC State), and such Receivables and
all proceeds thereof will be transferred to the Trust free and clear of any
Lien of any Person claiming through or under the Transferor or any of its
Affiliates, except for (x) Liens permitted under Section 2.5(b), (y) the
interest of the Transferor as holder of the Exchangeable Transferor
Certificate or any other Class held by the Transferor from time to time and
(z) any right of the holder of the Exchangeable Transferor Certificate to
receive interest accruing on, and investment earnings with respect to, the
Collection Account or any other account or accounts maintained for the
benefit of the Certificateholders or any Enhancement Provider as provided
in this Agreement and any Supplement or (B) a grant of a security interest
(as defined in the UCC as in effect in the Relevant UCC State) in such
property to the Trustee on behalf of the Trust.
(iii) If this Agreement constitutes the grant of a security
interest in the Trust Property (other than the Prior Trust Property) to the
Trustee:
26
(A) this Agreement creates a valid and continuing security
interest (as defined in the UCC of the Relevant UCC State) in the Trust
Property (other than the Prior Trust Property) in favor of the Trustee,
which security interest is prior to all other Liens, and is enforceable as
such against creditors of and purchasers from the Transferor;
(B) the Receivables transferred by the Transferor constitute
"accounts" within the meaning of the UCC of the Relevant UCC State;
(C) at the time of its transfer of any Trust Property to the
Trust pursuant to this Agreement, the Transferor owned and had good and
marketable title to such Trust Property free and clear of any Lien, claim
or encumbrance of any Person (other than any Lien described in clause (x),
(y) or (z) of paragraph (ii) above);
(D) the Transferor has caused or will have caused, within ten
(10) days of the execution of this Agreement, the filing of all appropriate
financing statements in the proper filing office in the appropriate
jurisdictions under applicable law in order to perfect the security
interest in the Receivables and the proceeds thereof granted to the Trustee
pursuant to this Agreement;
(E) other than the security interest granted to the Trustee
pursuant to this Agreement or an Assignment, the Transferor has not
pledged, assigned, sold, granted a security interest in, or otherwise
conveyed any of the Receivables created on or after the Substitution Date
or the proceeds thereof;
(F) the Transferor has not authorized the filing of and is not
aware of any financing statements filed against the Transferor that include
a description of the Receivables other than any financing statement
relating to the transfer of the Receivables to the Transferor pursuant to
the Receivables Purchase Agreement or the security interest granted to the
Trustee pursuant to this Agreement or an Assignment or any financing
statement that has been terminated; and
(G) the Transferor is not aware of any judgment or tax lien
filings against the Transferor.
(iv) If the transfer pursuant to Section 2.1 of the Prior Agreement is
not deemed to constitute a sale, this Agreement constitutes either (A) a valid
transfer and assignment to the Trust of all right, title and interest of the
Transferor in and to the Receivables included in the Prior Trust Property, all
monies due or to become due and all amounts received with respect thereto and
all proceeds thereof (to the extent set forth in Section 9-315 of the UCC as in
effect in the Relevant UCC State), and such Receivables and all proceeds thereof
will be transferred to the Trust free and clear of any Lien of any Person
claiming through or under the Transferor or any of its Affiliates, except for
(x) Liens in favor of the Trustee on behalf of the Trust and Liens permitted
under Section 2.5(b), (y) the interest of the Transferor as holder of the
Exchangeable Transferor
27
Certificate or any other Class held by the Transferor from time to time and
(z) any right of the holder of the Exchangeable Transferor Certificate to
receive interest accruing on, and investment earnings with respect to, the
Collection Account or any other account or accounts maintained for the
benefit of the Certificateholders or any Enhancement Provider as provided
in this Agreement and any Supplement or (B) a grant of a security interest
(as defined in the UCC as in effect in the Relevant UCC State) in such
property to the Trustee on behalf of the Trust.
(v) If the transfer pursuant to Section 2.1 of the Prior Agreement is
not deemed to constitute a sale and this Agreement constitutes the grant of
a security interest in the Prior Trust Property to the Trustee:
(A) this Agreement creates a valid and continuing security
interest (as defined in the UCC of the Relevant UCC State) in the Prior
Trust Property in favor of the Trustee, which security interest is prior to
all other Liens (other than Liens created under the Prior Agreement in
favor of the Trustee on behalf of the Trust), and is enforceable as such
against creditors of and purchasers from the Transferor;
(B) the Receivables included in the Prior Trust Property
constitute "accounts" within the meaning of the UCC of the Relevant UCC
State;
(C) at the time of its transfer of any Prior Trust Property to
the Trust pursuant to this Agreement, the Transferor owned and had good and
marketable title to such Prior Trust Property free and clear of any Lien,
claim or encumbrance of any Person (other than any Lien described in clause
(x), (y) or (z) of paragraph (iv) above);
(D) the Transferor has caused or will have caused, within ten
(10) days of the execution of this Agreement, the filing of all appropriate
financing statements in the proper filing office in the appropriate
jurisdictions under applicable law in order to perfect the security
interest in the Receivables included in the Prior Trust Property and the
proceeds thereof granted to the Trustee pursuant to this Agreement;
(E) other than the security interest granted to the Trustee
pursuant to this Agreement, the Transferor has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the
Receivables included in the Prior Trust Property or the proceeds thereof;
(F) the Transferor has not authorized the filing of and is not
aware of any financing statements filed against the Transferor that include
a description of the Receivables included in the Prior Trust Property other
than any financing statement relating to the transfer of the Receivables to
the Transferor pursuant to the Receivables Purchase Agreement or the
security interest granted to the Trustee pursuant to this Agreement or any
financing statement that has been terminated; and
28
(G) the Transferor is not aware of any judgment or tax
lien filings against the Transferor.
Except as otherwise specifically provided in this Agreement or any
Supplement, neither the Transferor nor any Person claiming through or under the
Transferor shall have any claim to or interest in the Collection Account or any
other account or accounts maintained for the benefit of Certificateholders or
any Enhancement Provider, except for any right of the Transferor to receive
interest accruing on, and investment earnings with respect to, any such account
as provided in this Agreement and any Supplement and, if this Agreement
constitutes the grant of a security interest in such property, except for the
interest of the Transferor in such property as a debtor for purposes of the UCC
as in effect in the Relevant UCC State.
(b) Eligibility of Receivables. The Transferor shall be deemed to
--------------------------
represent and warrant to the Trust (i) on each day on or after the Substitution
Date on which the Transferor designates an Automatic Additional Account pursuant
to Section 2.6(d), that each Automatic Additional Account designated on such day
is an Eligible Account and that no selection procedures believed by the
Transferor to be materially adverse to the interests of the Investor
Certificateholders or any Enhancement Provider were used in selecting such
Automatic Additional Account from the available Eligible Accounts in the
Transferor's portfolio of consumer revolving credit card accounts, (ii) on each
day on or after the Substitution Date on which any new Receivable is created
(including, without limitation, any Receivable created in any Automatic
Additional Account), that each Receivable created on such day is an Eligible
Receivable and (iii) on each day on or after the Substitution Date on which a
computer file or microfiche list is delivered pursuant to Section 2.1(b)
(including, without limitation, any computer file or microfiche list delivered
with respect to Automatic Additional Accounts), that such computer file or
microfiche list is an accurate and complete listing of all the Accounts in all
material respects as of the last day of the preceding Collection Period and that
the information contained therein with respect to the identity of such Accounts
and the Receivables existing thereunder was true and correct in all material
respects as of the last day of such preceding Collection Period.
(c) Notice of Breach. The representations and warranties set forth in
----------------
this Section 2.4 shall survive the transfer and assignment of the Receivables to
the Trust and the termination of the rights and obligations of the Servicer
pursuant to Section 10.1. The representations and warranties set forth in
Section 2.4(a)(iii) shall not be waived by any of the parties to this Agreement
unless the Rating Agency Condition shall have been satisfied. Upon discovery by
the Transferor, the Servicer or the Trustee of a breach of any of the
representations and warranties set forth in this Section 2.4, the party
discovering such breach shall give prompt written notice thereof to the others.
(d) Transfer of Ineligible Receivables.
----------------------------------
(i) Automatic Removal. In the event that a Receivable is not an
-----------------
Eligible Receivable as a result of the failure to satisfy the conditions
set forth in clause (iv) of the definition of Eligible Receivable, and
either of the following two conditions is met:
29
(A) the Lien on such Receivable (1) ranks prior to the
Lien created pursuant to this Agreement, (2) arises in favor of the
United States or any state or any agency or instrumentality thereof or
involves taxes or liens arising under Title IV of ERISA, or (3) has
been consented to by the Transferor; or
(B) the Lien on such Receivable is not of the types
described in clause (A) above, but, as a result of such breach or
event, such Receivable becomes a Receivable in a Defaulted Account or
the Trust's rights in, to or under such Receivable or its proceeds are
materially impaired or the proceeds of such Receivable are not
available for any reason to the Trust free and clear of any Lien (other
than Liens permitted under Section 2.5(b));
then, upon the earlier to occur of the discovery of such breach or event by
the Transferor or the Servicer or receipt by the Transferor or the Servicer
of written notice of such breach or event given by the Trustee, each such
Receivable or, at the option of the Transferor, all such Receivables with
respect to the related Account, shall be automatically removed from the
Trust on the terms and conditions set forth in Section 2.4(d)(iii).
(ii) Removal after Cure Period. In the event that any of the
-------------------------
representations and warranties set forth in Section 2.4(b) or in Section
5(c), 5(d), 5(e) or 5(f) of any Assignment is breached with respect to a
Receivable (other than as a result of the failure to satisfy the conditions
set forth in clause (iv) of the definition of Eligible Receivable) and, as
a result of such breach, such Receivable becomes a Receivable in a
Defaulted Account or the Trust's rights in, to or under such Receivable or
its proceeds are materially impaired or the proceeds of such Receivable are
not available for any reason to the Trust free and clear of any Lien (other
than Liens permitted under Section 2.5(b)), then, upon the expiration of 60
days or any longer period agreed upon by the Trustee (not to exceed an
additional 90 days) from the earlier to occur of the discovery of any such
breach by the Transferor or the Servicer or receipt by the Transferor or
the Servicer of written notice of such breach given by the Trustee, each
such Receivable or, at the option of the Transferor, all such Receivables
with respect to the related Account, shall be removed from the Trust on the
terms and conditions set forth in Section 2.4(d)(iii); provided, however,
-------- -------
that no such removal shall be required to be made if, on any day within
such applicable period, (A) such representation and warranty with respect
to such Receivable shall then be true and correct in all material respects
as if such Receivable had been created on such day, and (B) the related
Account is no longer a Defaulted Account as the result of the breach of
such representation and warranty, and the Trust's rights in, to or under
such Receivable or its proceeds are no longer materially impaired as a
result of a breach of such representation and warranty, and the proceeds of
such Receivable are available to the Trust free and clear of all Liens
resulting in the breach of such representation and warranty, as applicable.
(iii) Reassignment Terms and Conditions. When required or
---------------------------------
permitted with respect to a Receivable by the provisions of Section
2.4(d)(i) or Section 2.4(d)(ii) (an "Ineligible Receivable"), the
---------------------
Transferor shall accept reassignment of such Ineligible Receivable by
directing the Servicer to deduct the principal balance of such Ineligible
30
Receivable from the Aggregate Principal Receivables and to decrease the
Transferor Amount by such amount. On and after the date of such
reassignment, each Ineligible Receivable shall be deducted from the
Aggregate Principal Receivables used in the calculation of any Invested
Percentage, any Fixed Allocation Percentage, any Floating Allocation
Percentage, the Transferor Percentage and the Transferor Amount. In the
event that the exclusion of an Ineligible Receivable from the calculation
of the Transferor Amount would cause the Transferor Amount to be reduced
below zero or would otherwise not be permitted by law, the Transferor shall
deposit into the Excess Funding Account not later than 3:00 P.M. (New York
City time) on the date of such reassignment, in immediately available
funds, an amount equal to the amount by which the Transferor Amount would
be reduced below zero. The Transferor shall make such deposit out of funds
received by it from the Bank pursuant to Section 6.1 of the Receivables
Purchase Agreement. Any such deposit into the Excess Funding Account in
connection with the reassignment of an Ineligible Receivable shall be
considered a payment in full of the Ineligible Receivable and such deposit
shall be applied in accordance with the provisions of Article IV. Upon the
reassignment to the Transferor of an Ineligible Receivable, the Trust
shall, without further action, be deemed to transfer, assign, set-over and
otherwise convey to the Transferor, without recourse, representation or
warranty, all right, title and interest of the Trust in and to such
Ineligible Receivable, 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 as are
prepared by the Transferor and take such other actions as shall reasonably
be requested by the Transferor to effect the conveyance of such Ineligible
Receivable pursuant to this subsection. In the event that on any day within
60 days, or any longer period agreed upon by the Trustee (not to exceed an
additional 90 days), of the date on which the removal of Receivables which
are not Eligible Receivables from the Trust pursuant to this Section
2.4(d)(iii) is effected, (A) the applicable representations and warranties
with respect to such Receivable shall be true and correct in all material
respects on such date and (B) the Receivable is an Eligible Receivable, the
related Account is no longer a Defaulted Account and the Trust's rights in,
to or under such Receivable or its proceeds are no longer materially
impaired as a result of the breach of such representation and warranty and
the proceeds of such Receivable are available to the Trust free and clear
of all Liens resulting in the breach of such representation and warranty,
the Transferor may, but shall not be required to, direct the Servicer to
include such Receivable in the Trust. Upon reinclusion of a Receivable in
the Trust pursuant to this subsection, the Transferor shall be deemed to
make the applicable representations and warranties in Section 2.4(b) as of
the date of such addition, as if the Receivable had been created on such
date, and shall execute all such necessary documents and instruments of
transfer or assignment and take such other actions as shall be necessary to
effect and perfect the reconveyance of such Receivable to the Trust. The
obligation of the Transferor set forth in this subsection shall constitute
the sole remedy respecting any breach by the Transferor of the
representations and warranties set forth in the above-referenced
subsections with respect to such Receivable available to the
Certificateholders or the Trustee on behalf of Certificateholders.
Notwithstanding any other provision of this Section 2.4(d), a reassignment
of an Ineligible Receivable shall not occur if the Transferor fails to make
a
31
deposit or designation of Additional Accounts required by this Section
2.4(d) with respect to such Ineligible Receivable.
(iv) No Impairment. For the purposes of Sections 2.4(d)(i) and
-------------
2.4(d)(ii), proceeds of a Receivable shall not be deemed to be impaired
hereunder solely because such proceeds are held by the Servicer for more
than the applicable period under Section 9-315 of the UCC as in effect in
the Relevant UCC State.
(e) Reassignment of Trust Portfolio. In the event that (i) any of the
-------------------------------
representations and warranties set forth in Section 2.3(i), 2.3(iii) or 2.4(a)
or in Section 5(a) or 5(b) of any Assignment is breached or (ii) a material
amount of Receivables are not Eligible Receivables and, in either case, such
event has a materially adverse effect on the Investor Certificateholders
(without regard to the amount of any Enhancement), either the Trustee or the
Holders of Investor Certificates evidencing Undivided Interests aggregating more
than 50% of the Aggregate Invested Amount, by notice then given in writing to
the Transferor (and to the Trustee and the Servicer, if given by the Investor
Certificateholders), may direct the Transferor to accept reassignment of all
Receivables within 60 days of such notice, or within such longer period as may
be specified in such notice (not to exceed an additional 90 days), and the
Transferor shall be obligated to accept such reassignment on a Distribution Date
specified by the Transferor occurring within such applicable period on the terms
and conditions set forth below; provided, however, that no such reassignment
-------- -------
shall be required to be made, and the Transferor shall not be obligated to
accept such reassignment, if, on the Business Day prior to such Distribution
Date, the representations and warranties set forth in Sections 2.3(i), 2.3(iii)
and 2.4(a) or in Sections 5(a) and 5(b) of such Assignment shall then be true
and correct in all material respects or there shall no longer be a material
amount of Receivables which are not Eligible Receivables, as the case may be.
The Transferor shall deposit in the Collection Account on the Business Day prior
to such Distribution Date (in immediately available funds) an amount equal to
the reassignment deposit amount for such Receivables for distribution pursuant
to the provisions of Section 12.3. The deposit amount for such reassignment
shall be equal to the Aggregate Invested Amount at the close of business on the
Record Date related to the Distribution Date with respect to which such deposit
is made (less the aggregate principal amount then on deposit in the Excess
Funding Account and any principal funding account relating to any Series), plus
(i) an amount equal to all accrued but unpaid interest on the Certificates of
all Series at the applicable Certificate Rates through the end of the respective
interest accrual period(s) of such Series and (ii) any other unpaid amounts
required to be paid pursuant to this Section 2.4(e) or under any Supplement or
Enhancement Agreement. The Transferor shall make such deposit out of funds
received by it from the Bank pursuant to Section 6.2 of the Receivables Purchase
Agreement. Payment of the reassignment deposit amount and all other amounts in
the Collection Account in respect of the preceding Collection Period shall be
considered a prepayment in full of all such Receivables. On the Distribution
Date with respect to which such amount has been deposited in full into the
Collection Account, the Receivables and all monies due or to become due and all
amounts received with respect thereto and all proceeds thereof (after payment of
all amounts otherwise due on or before such date pursuant to the terms of any
Supplement or Enhancement Agreement) shall be released to the Transferor and the
Trustee shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, representation or warranty, as shall be reasonably
requested by the Transferor to vest in the Transferor, or its designee or
assignee, all right, title and interest of the Trust in and
32
to the Receivables, all monies due or to become due and all amounts received
with respect thereto and all proceeds thereof. If the Trustee or the Investor
Certificateholders give a notice directing the Transferor to accept reassignment
as provided herein and the Transferor is obligated to accept such reassignment
as provided herein, then such obligation of the Transferor shall constitute the
sole remedy respecting a breach of the representations and warranties contained
in Section 2.3(i), 2.3(iii) or 2.4(a) or Section 5(a) or 5(b) of any Assignment
or there being a material amount of Receivables which are not Eligible
Receivables available to the Investor Certificateholders or the Trustee on
behalf of the Investor Certificateholders.
(f) Nothing contained in this Section 2.4 shall create an obligation on
the part of the Trustee to verify the accuracy or continued accuracy of the
representations or warranties contained in this Section 2.4. The Trustee shall
have no obligation to give any notice pursuant to this Section 2.4 unless it has
actual knowledge of facts which would permit the giving of such notice.
Section 2.5 Covenants of the Transferor. The Transferor hereby
---------------------------
covenants that:
(a) Receivables Not to be Evidenced by Instruments or Chattel Paper.
---------------------------------------------------------------
The Transferor will take no action to cause any Receivable to be evidenced by an
instrument or chattel paper (each as defined in the UCC as in effect in the
Relevant UCC State) and will not cause or permit the Bank to take any such
action (other than in its capacity as Servicer in connection with its
enforcement or collection of an Account).
(b) Security Interests. Except for the conveyances hereunder, the
------------------
Transferor will not sell, pledge, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any Lien arising through or
under the Transferor on, any Receivable, whether now existing or hereafter
created, or any interest therein, the Transferor will notify the Trustee of the
existence of any Lien on any Receivable transferred by the Transferor
immediately upon discovery thereof, and the Transferor will defend the right,
title and interest of the Trust in, to and under the Receivables, whether now
existing or hereafter created, against all claims of third parties claiming
through or under the Transferor; provided, however, that nothing in this Section
-------- -------
2.5(b) shall prevent or be deemed to prohibit the Transferor from suffering to
exist upon any of the Receivables any Liens for municipal or other local taxes
and other governmental charges if such taxes or governmental charges shall not
at the time be due and payable or if the Transferor or the Bank shall currently
be contesting the validity thereof in good faith by appropriate proceedings and
the Transferor shall have set aside on its books adequate reserves under
generally accepted accounting principles with respect thereto; and, provided
--------
further, that nothing in this subsection shall prohibit the Transferor from
-------
conveying an interest in the Exchangeable Transferor Certificate in accordance
with Section 6.3(b) hereof.
(c) Account Agreements and Account Guidelines. The Transferor shall
-----------------------------------------
include in the Receivables Purchase Agreement a covenant by the Bank that the
Bank will comply with and perform its obligations under the applicable Account
Agreements relating to the Accounts and the Account Guidelines except insofar as
any failure so to comply or perform would not materially and adversely affect
the rights of the Trust or the Investor Certificateholders hereunder (without
regard to the amount of any Enhancement) or under the
33
Certificates. Subject to compliance with all Requirements of Law the failure to
comply with which would have a material adverse effect on the Investor
Certificateholders (without regard to the amount of any Enhancement), the
Receivables Purchase Agreement may permit the Bank to change the terms and
provisions of the Account Agreements or the Account Guidelines in any respect
(including, without limitation, the required minimum monthly payment, the
calculation of the amount, or the timing, of charge-offs and the Finance Charges
and other fees to be assessed thereon) only if such change (i) would not, in the
reasonable belief of the Bank, cause an Early Amortization Event to occur and
(ii) is made applicable to the comparable segment of the revolving credit card
accounts owned and serviced by the Bank that have characteristics the same as,
or substantially similar to, the Accounts that are the subject of such change,
except as otherwise restricted by an endorsement, sponsorship or other agreement
between the Bank and an unrelated third party or by the terms of the Account
Agreements.
(d) Account Allocations. In the event that the Transferor is unable for
-------------------
any reason to transfer Receivables to the Trust in accordance with the
provisions of this Agreement (including, without limitation, by reason of the
application of the provisions of Section 9.2 or a binding order of any
Governmental Authority), then, in any such event, (A) the Transferor agrees
(except as prohibited by any such order) to allocate and pay to the Trust, after
the date of such inability, all Collections of Principal Receivables and
Discount Option Receivables transferred to the Trust prior to the occurrence of
such event and all amounts which would have constituted Collections of Principal
Receivables and Discount Option Receivables but for the Transferor's inability
to transfer such Receivables to the Trust (up to an aggregate amount equal to
the Aggregate Principal Receivables and the Discount Option Receivables in the
Trust as of such date), (B) the Transferor agrees to have such amounts applied
as Collections in accordance with Article IV and (C) for only so long as all
Collections and all amounts which would have constituted Collections are
allocated and applied in accordance with clauses (A) and (B) above, all
Collections of Principal Receivables and Discount Option Receivables and all
amounts which would have constituted Collections of Principal Receivables and
Discount Option Receivables but for the Transferor's inability to transfer
Receivables to the Trust which are charged off as uncollectible in accordance
with this Agreement and the Account Guidelines shall continue to be allocated in
accordance with Article IV and all amounts which would have constituted
Collections of Principal Receivables and Discount Option Receivables but for the
Transferor's inability to transfer Receivables to the Trust shall be deemed to
be Collections of Principal Receivables for the purpose of calculating the
Invested Percentage with respect to any Series and the Aggregate Invested
Percentage. If the Transferor is unable pursuant to any Requirement of Law to
allocate amounts as described above, the Transferor agrees (except as prohibited
by law) to allocate payments on each Account with respect to the balance of such
Account first to the oldest Receivable in such Account and to have such payments
applied as Collections in accordance with Article IV. Finance Charge
Receivables, whenever created, accrued in respect of Principal Receivables or
Discount Option Receivables which have been conveyed to the Trust, or which
would have been conveyed to the Trust but for the Transferor's inability to
transfer Receivables to the Trust, shall continue to be a part of the Trust
notwithstanding any cessation of the transfer of additional Principal
Receivables and Discount Option Receivables to the Trust and Collections with
respect thereto shall continue to be allocated and paid in accordance with
Article IV.
34
(e) Delivery of Collections. In the event that the Transferor receives
-----------------------
Collections, the Transferor agrees to pay to the Servicer all payments received
by the Transferor with respect to such Collections promptly, and in no event
later than two Business Days, after receipt thereof by the Transferor.
(f) Separate Corporate Existence. The Transferor shall operate as an
----------------------------
entity with assets and liabilities distinct from those of Circuit City, the Bank
and each other Affiliate of Circuit City and shall comply with the provisions of
its certificate of incorporation attached as Exhibit J.
---------
(g) Amendments to Certificate of Incorporation. The Transferor shall
------------------------------------------
deliver to each Rating Agency prior written notice of any amendment to its
amended and restated certificate of incorporation and shall not amend, alter,
change or repeal Article III, VI, VII, VIII, IX, X or XI of its amended and
restated certificate of incorporation or the defined term "Independent Director"
or "Material Action" set forth in Article XII of its amended and restated
certificate of incorporation unless the Rating Agency Condition shall have been
satisfied.
(h) Amendments to Receivables Purchase Agreement. The Transferor shall
--------------------------------------------
not amend, supplement or otherwise modify the Receivables Purchase Agreement to
add any Person as a seller thereunder or enter into a new receivables purchase
agreement with any Person other than the Bank unless, in each case, the Rating
Agency Condition shall have been satisfied.
Section 2.6 Addition of Accounts; Repurchase of Investor Certificates.
---------------------------------------------------------
(a) If, as of the end of any Collection Period, (i) the Transferor
Amount (after giving effect to any amounts deposited in the Excess Funding
Account) is less than the Minimum Transferor Amount or (ii) the Aggregate
Principal Receivables is less than the Minimum Aggregate Principal Receivables,
then the Transferor shall, before the close of business on the following
Transfer Date, designate additional Eligible Accounts (the "Additional
----------
Accounts") to be included as Accounts in a sufficient amount such that, after
--------
giving effect to such designation, the Transferor Amount at least equals the
Minimum Transferor Amount and the Aggregate Principal Receivables at least
equals the Minimum Aggregate Principal Receivables; provided, however, that the
-------- -------
Transferor need not make any such designation to the extent that the
deficiencies described in clauses (i) and (ii) above have been eliminated on or
before such Transfer Date through reductions in the Aggregate Invested Amount or
through increases in the amount on deposit in the Excess Funding Account.
(b) In addition to its obligation under Section 2.6(a), the Transferor
may, but shall not be obligated to, designate from time to time Additional
Accounts to be included as Accounts as of the related Additional Account Closing
Date.
(c) The Transferor agrees that any designation of Additional Accounts
under Section 2.6(a) or (b) shall satisfy the following conditions:
(i) On or before the fifth Business Day prior to the Additional
Account Closing Date, the Transferor shall have given the Trustee, the
Servicer, each Rating Agency and each other Person entitled thereto
pursuant to the related Supplement written
35
notice that the Additional Accounts will be included as Accounts and
specifying the approximate aggregate amount of the Receivables to be
transferred;
(ii) On or before the Additional Account Closing Date, the
Transferor shall have delivered to the Trustee (and the Trustee shall
have accepted on behalf of the Trust for the benefit of the Investor
Certificateholders and any Enhancement Provider) a written assignment
substantially in the form of Exhibit B (the "Assignment") and shall
--------- ----------
have clearly indicated in its computer files that the Receivables
created in connection with the Additional Accounts have been
transferred to the Trust and the Transferor shall have delivered to the
Trustee a computer file or microfiche list represented by the
Transferor to contain a true and complete list of the Additional
Accounts identified by account number and by Receivable balance in the
Additional Accounts as of the Additional Account Cut-Off Date, which
computer file or microfiche list shall be as of the date of such
Assignment incorporated into and made a part of such Assignment and
this Agreement;
(iii) The Transferor shall represent and warrant that (x)
each Additional Account was, as of the Additional Account Cut-Off Date,
an Eligible Account, (y) no selection procedures believed by the
Transferor to be materially adverse to the interests of any outstanding
Series of Investor Certificates or any Enhancement Provider were used
in selecting the Additional Accounts from the available Eligible
Accounts in the Transferor's portfolio of consumer revolving credit
card accounts; and (z) as of the Additional Account Closing Date, the
Transferor is not insolvent and will not be made insolvent by the
transfer of the Receivables in the Additional Accounts;
(iv) The Transferor shall represent and warrant that, as of
the Additional Account Closing Date, the Assignment constitutes either
(A) a valid transfer and assignment to the Trust of all right, title
and interest of the Transferor in and to the Receivables then existing
and thereafter created in the Additional Accounts, all monies due or to
become due and all amounts received with respect thereto on or after
the Additional Account Cut-Off Date and all proceeds thereof (to the
extent set forth in Section 9-315 of the UCC as in effect in the
Relevant UCC State), and such Receivables and all proceeds thereof will
be transferred to the Trust free and clear of any Lien of any Person
claiming through or under the Transferor or any of its Affiliates,
except for (x) Liens permitted under Section 2.5(b),(y) the interest of
the Transferor as holder of the Exchangeable Transferor Certificate or
any other Class held by the Transferor from time to time and (z) any
right of the holder of the Exchangeable Transferor Certificate to
receive interest accruing on, and investment earnings with respect to,
the Collection Account or any other account or accounts maintained for
the benefit of the Certificateholders or any Enhancement Provider as
provided in this Agreement and any Supplement or (B) a grant of a
security interest (as defined in the UCC as in effect in the Relevant
UCC State) in such property to the Trustee on behalf of the Trust.
(v) If the Assignment constitutes the grant of a security
interest in such property to the Trustee, the Transferor shall
represent and warrant, as of the Additional Account Closing Date, that:
36
(A) the Assignment creates a valid and continuing security
interest (as defined in the UCC of the Relevant UCC State) in such
property in favor of the Trustee, which security interest is prior to
all other Liens, and is enforceable as such against creditors of and
purchasers from the Transferor;
(B) the Receivables transferred by the Transferor pursuant
to the Assignment constitute "accounts" within the meaning of the UCC
of the Relevant UCC State;
(C) the Transferor owns and has good and marketable title
to the property transferred under the Assignment free and clear of any
Lien, claim or encumbrance of any Person (other than any Lien
described in clause (x), (y) or (z) of paragraph (iv) above);
(D) the Transferor has caused or will have caused, within
ten (10) days of the execution of the Assignment, the filing of all
appropriate financing statements in the proper filing office in the
appropriate jurisdictions under applicable law in order to perfect the
security interest in the Receivables and the proceeds thereof granted
to the Trustee pursuant to the Assignment;
(E) other than the security interest granted to the Trustee
pursuant to this Agreement or an Assignment, the Transferor has not
pledged, assigned, sold, granted a security interest in, or otherwise
conveyed any of the Receivables in the Additional Accounts or the
proceeds thereof;
(F) the Transferor has not authorized the filing of and is
not aware of any financing statements filed against the Transferor
that include a description of the Receivables in the Additional
Accounts other than any financing statement relating to the transfer
of the Receivables to the Transferor pursuant to the Receivables
Purchase Agreement or the security interest granted to the Trustee
pursuant to this Agreement or an Assignment or any financing statement
that has been terminated; and
(G) the Transferor is not aware of any judgment or tax lien
filings against the Transferor.
(vi) The Transferor shall deliver to the Trustee (with a copy to
the Rating Agencies) an Officer's Certificate confirming the items set
forth in paragraphs (ii) through (v) above and paragraph (viii) below (and
the Trustee may conclusively rely on such Officer's Certificate, shall have
no duty to make inquiries with regard to the matters set forth therein and
shall incur no liability in so relying);
(vii) The Transferor shall deliver to the Trustee, with a copy to
each Rating Agency, an Opinion of Counsel with respect to the Receivables
in the Additional Accounts substantially in the form of Part One of Exhibit
G;
(viii) The Transferor shall record and file (and does hereby
authorize the Trustee to record and file) financing statements with respect
to the Receivables then
37
existing and thereafter created in the Additional Accounts for the
transfer of accounts (as defined in the UCC as in effect in the
Relevant UCC State) meeting the requirements of applicable state law
in such manner and in such jurisdictions as are necessary to perfect
the transfer and assignment of the Receivables in the Additional
Accounts by the Transferor to the Trust; and
(ix) The Rating Agencies shall have received from the
Transferor five Business Days' notice, in the case of Additional
Accounts being added pursuant to Section 2.6(a), and ten Business
Days' notice, in the case of Additional Accounts being added pursuant
to Section 2.6(b), of such proposed addition of Additional Accounts
and, in the event that Additional Accounts are being added pursuant to
Section 2.6(b), the Rating Agency Condition shall have been satisfied.
(d) The Transferor may, but shall not be obligated to,
designate from time to time additional consumer revolving credit card accounts
(the "Automatic Additional Accounts") to be included as Accounts by causing such
-----------------------------
Accounts to be identified pursuant to Section 2.2(d) of the Receivables Purchase
Agreement in the Bank's master computer files by the four digit identifying code
number 1006, 1007, 1906, 1907, 2006, 2007, 3206, 3207, 3306, 3307, 3506, 3507,
3706, 3707, 3806, 3807, 3906, 3907, 4306, 4307, 4406, 4407, 4506, 4507, 4606,
4607, 4706, 4707, 4806 or 4807 (and, in each case, is identified as being
correlated to Big Agent 2000) and in the computer file or microfiche list
delivered to the Trustee by the Transferor with respect to such Accounts
pursuant to Section 2.1(b). For purposes of this Section 2.6(d), Automatic
Additional Accounts shall be deemed to include only Eligible Accounts (x) of a
type included as Accounts on the Substitution Date or any Additional Account
Closing Date (but only if such Additional Account Closing Date related to
Additional Accounts added pursuant to Section 2.6(b)) or consented to in
writing by each Rating Agency and (y) not prohibited from being included as
Accounts pursuant to the terms of any Supplement.
If the number of Automatic Additional Accounts designated during
any calendar quarter or any period of twelve consecutive months exceeds the
applicable Aggregate Automatic Addition Limit, then, upon discovery of such
excess designation, (x) the Excess Automatic Additional Accounts shall be deemed
to be Removed Accounts and (y) the Trustee shall, without further action, be
deemed to transfer, assign, 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 Receivables in the Excess Automatic Additional Accounts,
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 as are prepared by the Transferor and take
such other actions as shall be reasonably requested by the Transferor to effect
the conveyance of such Receivables pursuant to this Section 2.6(d). If the
removal of Excess Automatic Additional Accounts causes the Transferor Amount to
be less than the Minimum Transferor Amount or the Aggregate Principal
Receivables to be less than the Minimum Aggregate Principal Receivables, then
the Transferor shall, no later than 10 Business Days after such removal,
designate Additional Accounts to be included as Accounts in accordance with
Section 2.6(a) in an amount such that, after giving effect to such designation,
the Transferor Amount at least equals the Minimum Transferor Amount and the
Aggregate Principal Receivables at least equals the Minimum Aggregate Principal
Receivables; provided, however, that the Transferor need not make any such
-------- -------
designation to the extent that such deficiencies have
38
been eliminated on or before such tenth Business Day through reductions in the
Aggregate Invested Amount or through increases in the amount on deposit in the
Excess Funding Account. The removal of Excess Automatic Additional Accounts in
accordance with this Section 2.6(d) shall be deemed to cure any violation of the
Aggregate Automatic Addition Limit, and such removal shall constitute the sole
remedy respecting any such violation available to Certificateholders or the
Trustee on behalf of Certificateholders.
The Transferor shall record and file (and does hereby authorize the
Trustee to record and file), at the expense of the Transferor, financing
statements (and continuation statements with respect to such financing
statements when applicable) with respect to the Receivables then existing and
thereafter created in the Automatic Additional Accounts for the transfer of
accounts (as defined in the UCC as in effect in the Relevant UCC State) meeting
the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect the transfer and assignment of such
Receivables by the Transferor to the Trust, and to deliver a file-stamped copy
of such financing statements or other evidence of such filings to the Trustee.
Section 2.7 Removal of Accounts.
-------------------
(a) Subject to the conditions set forth below, the Transferor may, but
shall not be obligated to, designate from time to time Accounts for deletion and
removal ("Removed Accounts") from the Accounts; provided, however, that the
------- -------- -------- -------
Transferor shall not make more than one such designation in any Collection
Period; and, provided further, that the Transferor shall select the Removed
-------- -------
Accounts on a random basis. On or before the tenth Business Day (the "Removal
-------
Notice Date") prior to the date on which the designated Removed Accounts will be
-----------
reassigned by the Trustee to the Transferor (the "Removal Date"), the Transferor
------------
shall give the Trustee and the Servicer written notice that the Receivables in
such Removed Accounts are to be reassigned to the Transferor.
(b) The Transferor shall be permitted to designate and require
reassignment to it of Receivables in Removed Accounts only upon satisfaction of
the following conditions:
(i) On or prior to the Removal Date, the Transferor shall have
delivered to the Trustee for execution a written instrument of
reassignment substantially in the form of Exhibit C (the
---------
"Reassignment") and a computer file or microfiche list containing a
------------
true and complete list of all Removed Accounts identified by account
number and by the aggregate balance of the Receivables in such Removed
Accounts as of the Removal Notice Date, which computer file or
microfiche list shall as of the Removal Date modify and amend and be
made a part of this Agreement;
(ii) The Transferor shall represent and warrant that no selection
procedures believed by the Transferor to be materially adverse to the
interests of any outstanding Series of Investor Certificates or any
Enhancement Provider were used in selecting the Removed Accounts to be
removed from the Trust;
(iii) The removal of any Receivables in any Removed Accounts on
any Removal Date shall not, in the reasonable belief of the
Transferor, (A) cause an Early
39
Amortization Event, or an event which, with notice or lapse of time or
both, would constitute an Early Amortization Event, to occur;
provided, however, for the purpose of this subsection 2.7(b)(iii), the
-------- -------
Receivables of each Removed Account shall be deemed to have been
removed as of the Removal Date, (B) cause the Transferor Interest
Percentage to be less than the Minimum Transferor Interest Percentage
on such Removal Date, (C) cause the aggregate amount of Principal
Receivables to be less than the Minimum Aggregate Principal
Receivables, or (D) result in the failure to make any payments
specified in the related Supplement with respect to any Series;
(iv) The Rating Agencies shall have received five Business
Days' notice from the Transferor of such proposed removal of Accounts
and the Rating Agency Condition shall have been satisfied; and
(v) The Transferor shall deliver to the Trustee (with a
copy to the Rating Agencies) an Officer's Certificate confirming the
items set forth in paragraphs (i) through (iv) above (and the Trustee
may conclusively rely on such Officer's Certificate, shall have no
duty to make inquiries with regard to the matters set forth therein
and shall incur no liability in so relying).
Upon satisfaction of the above conditions, the Trustee shall
execute and deliver the Reassignment to the Transferor, and the Receivables in
the Removed Accounts shall no longer constitute a part of the Trust.
(c) The Transferor may, but shall not be obligated to,
designate from time to time Zero Balance Accounts for deletion and removal from
the Accounts; provided, however, that, prior to such designation and removal,
-------- -------
the Transferor shall have delivered to each Rating Agency and the Trustee an
Officer's Certificate to the effect that the removal of the Receivables in the
Zero Balance Accounts shall not, in the reasonable belief of the Transferor,
cause an Early Amortization Event to occur. The Trustee may conclusively rely on
such Officer's Certificate, shall have no duty to make inquiries with regard to
the matters set forth therein and shall incur no liability in so relying. On or
before the date on which the designated Zero Balance Accounts are removed, the
Transferor shall deliver to the Trustee a computer file or microfiche list
containing a true and complete list of such Zero Balance Accounts identified by
account number, which computer file or microfiche list shall as of the removal
date modify and amend and be made a part of this Agreement. On the date on which
the designated Zero Balance Accounts are removed, the Trustee shall, without
further action, be deemed to transfer, assign, 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 Receivables in such Zero Balance
Accounts, all monies due or to become due and all amounts received thereafter
with respect thereto and all proceeds thereof. The Trustee shall execute such
documents and instruments of transfer or assignment as are prepared by the
Transferor and take such other actions as shall be reasonably requested by the
Transferor to effect the conveyance of such Receivables pursuant to this Section
2.7(c).
(d) The Transferor may, but shall not be obligated to,
designate from time to time Defaulted Accounts for deletion and removal from the
Accounts; provided, however, that each such designation must be approved in
-------- -------
writing by each Rating Agency or be made in accordance with the procedure
attached as Exhibit L. On or before the date on which the
---------
40
designated Defaulted Accounts are removed, the Transferor shall deliver to the
Trustee a computer file or microfiche list containing a true and complete list
of such Defaulted Accounts identified by account number, which computer file or
microfiche list shall as of the removal date modify and amend and be made a part
of this Agreement. On the date on which the designated Defaulted Accounts are
removed, the Trustee shall, without further action, be deemed to transfer,
assign, 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 Receivables (including, without limitation, all Finance Charge Receivables)
in such Defaulted Accounts, all monies due or to become due and all amounts
received thereafter with respect thereto and all proceeds thereof; provided,
--------
however, that all Recoveries with respect to such Receivables shall be applied
-------
as provided herein. The Trustee shall execute such documents and instruments of
transfer or assignment as are prepared by the Transferor and take such other
actions as shall be reasonably requested by the Transferor to effect the
conveyance of such Receivables pursuant to this Section 2.7(d).
Section 2.8 Discount Option Receivables.
---------------------------
(a) The Transferor may, without notice to or consent of the
Certificateholders, designate a percentage (the "Discount Percentage") of the
-------------------
Receivables in all or certain of the Accounts created on and after such date of
designation to be treated as Discount Option Receivables in accordance with the
provisions of this Section 2.8. The Discount Percentage shall not apply to
Finance Charges, cash advance fees, annual fees, late charges, overlimit charges
or any other fees and charges on the Accounts (other than returned check
charges, Insurance Charges and service contract charges) or to Receivables in
Defaulted Accounts. The Discount Percentage may be fixed or variable and shall
not exceed 4%.
(b) Discount Option Receivables shall be considered Finance Charge
Receivables for all purposes hereunder, including for the purposes of allocating
Collections pursuant to Article IV.
(c) The Transferor may, without notice to or consent of the
Certificateholders, from time to time after its designation of a Discount
Percentage, increase (up to 4%), reduce or eliminate (in each case subject to
the limitations described below) the Discount Percentage for Discount Option
Receivables arising in all or certain of the Accounts on and after the date of
such change; provided, however, that the Transferor shall not change any
-------- -------
existing Discount Option Receivables into Principal Receivables and the
Transferor shall not increase the Discount Percentage during any Early
Amortization Period or if such increase would cause the Aggregate Principal
Receivables to be less than the Minimum Aggregate Principal Receivables.
(d) The Transferor shall provide to the Servicer, the Trustee and each
Rating Agency 30 days' prior written notice of any designation, increase,
reduction or elimination of the Discount Percentage, and such designation,
increase, reduction or elimination shall become effective on the date specified
in such notice only if (i) the Transferor has delivered to the Trustee an
Officer's Certificate to the effect that the Transferor reasonably believes that
such designation, increase, reduction or elimination will not at the time of its
occurrence cause an Early Amortization Event or an event which with notice or
the lapse of time or both would constitute an Early Amortization Event to occur
with respect to any Series and (ii) the Rating
41
Agency Condition has been satisfied with respect to such designation, increase,
reduction or elimination. The Trustee may conclusively rely on such Officer's
Certificate, shall have no duty to make inquiries with regard to the matters set
forth therein and shall incur no liability in so relying.
(e) On each Date of Processing of any Collections during the time the
discount option is in effect, Collections in an amount equal to the product of
(i) a fraction the numerator of which is the amount of Discount Option
Receivables and the denominator of which is the amount of all of the Principal
Receivables (including Discount Option Receivables) at the end of the prior
Collection Period and (ii) Collections of Receivables that arise in the Accounts
during such time that would otherwise be Principal Collections will be deemed
Finance Charge Collections and will be applied accordingly.
[END OF ARTICLE II]
42
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 3.1 Appointment and Other Matters Relating to the Servicer.
------------------------------------------------------
(a) The Bank confirms that it has agreed to act as the Servicer under
this Agreement. The Investor Certificateholders, by their acceptance of the
Investor Certificates, consent to the Bank acting as Servicer.
(b) The Servicer shall service and administer the Receivables and
shall collect payments due under the Receivables in accordance with its
customary and usual servicing procedures for servicing credit card receivables
comparable to the Receivables and in accordance with the applicable Account
Guidelines and shall have full power and authority, acting alone or through any
party properly designated by it hereunder, to do any and all things in
connection with such servicing and administration which it may deem necessary or
desirable. Without limiting the generality of the foregoing and subject to
Section 10.1, the Servicer is hereby authorized and empowered (i) to make
withdrawals and payments and to instruct the Trustee to make withdrawals and
payments from the Collection Account, the Excess Funding Account or any other
account or accounts maintained for the benefit of the Certificateholders or with
regard to any Enhancement as set forth in this Agreement and any Supplement,
(ii) unless such power and authority is revoked by the Trustee on account of the
occurrence of a Servicer Default pursuant to Section 10.1, to instruct the
Trustee to take any action permitted or required under any Enhancement at such
time as is set forth in this Agreement or any Supplement, (iii) to execute and
deliver, on behalf of the Trust for the benefit of the Certificateholders, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Receivables and, after the delinquency of any Receivable and to the extent
permitted under and in compliance with applicable law and regulations, to
commence enforcement proceedings with respect to such Receivables and (iv) to
make any filings, reports, notices, applications, or registrations with, and to
seek any consents or authorizations from, the Securities and Exchange Commission
and any state securities laws authority on behalf of the Trust as may be
necessary or advisable to comply with any Federal or state securities laws or
reporting requirements. Prior to receipt by a Responsible Officer of the Trustee
of written notice of a Servicer Default the Trustee shall promptly follow the
written instructions of the Servicer to withdraw funds from the Collection
Account and any other account or accounts maintained for the benefit of the
Certificateholders or with regard to any Enhancement. The Trustee shall furnish
the Servicer with limited powers of attorney and other documents necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder, and the Trustee shall not be held responsible for any act or
omission by the Servicer in its use of such powers of attorney.
(c) In the event that the Transferor is unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of this
Agreement (including, without limitation, by reason of the application of the
provisions of Section 9.2 or a binding order of any Governmental Authority),
then, in any such event, (A) the Servicer agrees (except as prohibited by any
such order) to allocate, after the date of such inability, all Collections of
Principal Receivables and Discount Option Receivables and all amounts which
would have constituted Collections of Principal Receivables and Discount Option
Receivables but for the Transferor's
43
inability to transfer such Receivables to the Trust (up to an aggregate amount
equal to the Aggregate Principal Receivables and the Discount Option Receivables
in the Trust as of such date) in accordance with Section 2.5(d) and to apply
such amounts as Collections in accordance with Article IV and (B) for only so
long as all Collections and all amounts which would have constituted Collections
are allocated and applied in accordance with clause (A) above, all Collections
of Principal Receivables and Discount Option Receivables and all amounts which
would have constituted Collections of Principal Receivables and Discount Option
Receivables but for the Transferor's inability to transfer Receivables to the
Trust which are charged off as uncollectible in accordance with this Agreement
and the Account Guidelines shall continue to be allocated in accordance with
Article IV and all amounts which would have constituted Collections of Principal
Receivables and Discount Option Receivables but for the Transferor's inability
to transfer Receivables to the Trust shall be deemed to be Collections of
Principal Receivables for the purpose of calculating the Invested Percentage
with respect to any Series and the Aggregate Invested Percentage. If the
Servicer is unable pursuant to any Requirement of Law to allocate amounts as
described above, the Servicer agrees (except as prohibited by law) to allocate,
after the date on which the Transferor becomes unable to do so, payments on each
Account with respect to the balance of such Account first to the oldest
Receivable in such Account and to have such payments applied as Collections in
accordance with Article IV. Finance Charge Receivables, whenever created,
accrued in respect of Principal Receivables or Discount Option Receivables which
have been conveyed to the Trust, or which would have been conveyed to the Trust
but for the Transferor's inability to transfer Receivables to the Trust, shall
continue to be a part of the Trust notwithstanding any cessation of the transfer
of additional Principal Receivables and Discount Option Receivables to the Trust
and Collections with respect thereto shall continue to be allocated and paid in
accordance with Article IV.
(d) The Servicer shall not be obligated to use separate servicing
procedures, offices, employees or accounts for servicing the Receivables from
the procedures, offices, employees and accounts used by the Servicer in
connection with servicing other revolving consumer credit card receivables.
(e) The Servicer shall maintain fidelity bond coverage insuring
against losses through wrongdoing of its officers and employees who are involved
in the servicing of Receivables covering such actions with such insurers and in
such amounts as the Servicer believes to be commercially reasonable from time to
time.
(f) The Servicer shall comply with and perform its obligations
under the Account Agreements and the Account Guidelines except insofar as any
failure to so comply would not materially and adversely affect the rights of the
Trust or the Certificateholders hereunder or under the Certificates.
Section 3.2 Servicing Compensation. As full compensation for its
----------------------
servicing activities hereunder and reimbursement for its expenses as set forth
in the immediately following paragraph, the Servicer shall be entitled to
receive a monthly servicing fee with respect to any Collection Period (or
portion thereof) prior to the termination of the Trust pursuant to Section 12.1
(the "Monthly Servicing Fee") payable in arrears on each Distribution Date in an
---------------------
amount equal to, with respect to each Series then outstanding, one-twelfth of
the product of the Servicing Fee Percentage for such Series and the sum of an
allocable portion of the Transferor Amount and
44
the Invested Amount of such Series, each as of the last day of the Collection
Period preceding the Collection Period with respect to which the Monthly
Servicing Fee is being paid. The share of the Monthly Servicing Fee allocable to
each Series of Investor Certificateholders with respect to any Distribution Date
(with respect to any such Series, the "Investor Monthly Servicing Fee") shall be
------------------------------
determined and paid to the Servicer in accordance with the related Supplement.
The remainder of the Monthly Servicing Fee shall be paid by the Transferor, and
in no event shall the Trust, the Trustee, any Enhancement Provider or the
Investor Certificateholders be liable for the share of the Monthly Servicing Fee
to be paid by the Transferor. The share of the Monthly Servicing Fee to be paid
by the Transferor shall not be paid from the Trust Property and shall be paid
only to the extent that the Transferor has funds available for that purpose. If
the Transferor does not have funds available to make such payment, the Servicer
shall not be entitled to assert a claim against the Transferor for the unpaid
amount. In the case of the first Collection Period, the Monthly Servicing Fee
and the Investor Monthly Servicing Fee shall accrue from the Initial Cut-Off
Date.
The Servicer's expenses include the amounts due to the Trustee
pursuant to Section 11.5 and the reasonable fees and disbursements of
independent accountants and all other expenses incurred by the Servicer in
connection with its activities hereunder; provided, however, that the Servicer
-------- -------
shall not be liable for any liabilities, costs or expenses of the Trust, the
Investor Certificateholders or the Certificate Owners arising under any tax law,
including, without limitation, any Federal, state or local income or franchise
taxes or any other tax imposed on or measured by income (or any interest or
penalties with respect thereto or arising from a failure to comply therewith),
except to the extent incurred as a result of the Servicer's violation of the
provisions of this Agreement. The Servicer shall be required to pay such
expenses for its own account and shall not be entitled to any payment therefor
other than the Monthly Servicing Fee.
Section 3.3 Representations, Warranties and Covenants of the
------------------------------------------------
Servicer. The Bank, as initial Servicer, hereby makes, and any Successor
--------
Servicer by its appointment hereunder shall make, the following representations,
warranties and covenants with respect to any Series (with appropriate
modifications to Section 3.3(a) to reflect such Successor Servicer's
organizational structure), as of the date of the related Supplement and the
related Closing Date, or, if such Successor Servicer is appointed thereafter, as
of the date of such appointment, unless otherwise stated in such Supplement, on
which the Trustee has relied in accepting the Receivables and the other property
conveyed pursuant to Section 2.1 in trust and in authenticating the
Certificates:
(a) Organization and Good Standing. The Servicer is a national
------------------------------
banking association duly organized, validly existing and in good standing under
the laws of the United States, and has full power, authority and legal right to
own its properties and conduct its business as such properties are presently
owned and such business is presently conducted, and to execute, deliver and
perform its obligations under this Agreement and any Supplement.
(b) Due Qualification. The Servicer is duly qualified to do
-----------------
business and is in good standing (or is exempt from such requirements) in any
state where such qualification is necessary in order to service the Receivables
as required by this Agreement and any Supplement and has obtained all necessary
licenses and approvals as required under Federal and state law, and if the
Servicer shall be required by any Requirement of Law to so qualify or register
or
45
obtain such license or approval, then it shall do so except where the
failure to obtain such license or approval does not materially affect the
Servicer's ability to perform its obligations hereunder or the enforceability of
any Receivable.
(c) Due Authorization. The execution, delivery and performance of
-----------------
this Agreement and any Supplement by the Servicer and the consummation by the
Servicer of the transactions provided for in this Agreement and any Supplement
have been duly authorized by the Servicer by all necessary action on the part of
the Servicer.
(d) Binding Obligation. Each of this Agreement and any Supplement
------------------
constitutes a legal, valid and binding obligation of the Servicer, enforceable
against the Servicer in accordance with its terms, subject to applicable
bankruptcy, insolvency, receivership, conservatorship, reorganization,
moratorium or other similar laws now or hereafter in effect affecting the
enforcement of creditors' rights in general and the rights of creditors of
national banking associations and except as such enforceability may be limited
by general principles of equity (whether considered in a proceeding at law or in
equity).
(e) No Violation. The execution and delivery of this Agreement and
------------
any Supplement by the Servicer, the performance by the Servicer of the
transactions contemplated by this Agreement and any Supplement and the
fulfillment by the Servicer of the terms hereof and thereof, will not conflict
with, violate or result in any breach of any of the material terms and
provisions of, or constitute (with or without notice or lapse of time or both) a
default under, any Requirement of Law applicable to the Servicer or any material
indenture, contract, agreement, mortgage, deed of trust or other instrument to
which the Servicer is a party or by which it is bound.
(f) No Proceedings. There are no proceedings or investigations
--------------
pending or, to the best knowledge of the Servicer, threatened against the
Servicer before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions contemplated by this
Agreement or any Supplement, seeking any determination or ruling that, in the
reasonable judgment of the Servicer, would materially and adversely affect the
performance by the Servicer of its obligations under this Agreement or any
Supplement, or seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Agreement or any
Supplement.
(g) Compliance with Requirements of Law. The Servicer shall duly
-----------------------------------
satisfy in all material respects its obligations under or in connection with
each Receivable and the corresponding Account, will maintain in effect all
material qualifications required under all Requirements of Law in order to
service properly each Receivable and the corresponding Account and will comply
in all material respects with all other Requirements of Law in connection with
servicing each Receivable and the related Account the failure to comply with
which would have a material adverse effect on the Certificateholders (without
regard to the amount of any Enhancement).
(h) No Rescission or Cancellation. Except in connection with an
-----------------------------
Adjustment Payment pursuant to Section 3.8, the Servicer shall not permit any
rescission or cancellation of
46
any 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 applicable Account Guidelines.
(i) Protection of Certificateholders' Rights. The Servicer shall
----------------------------------------
take no action which, nor omit to take any action the omission of which, would
impair the rights of Certificateholders in any Receivable or the rights of any
Enhancement Provider, nor shall it reschedule, revise, waive or defer payments
due on any Receivable except in accordance with the applicable Account
Guidelines.
(j) All Consents Required. All approvals, authorizations,
---------------------
consents, orders or other actions of any Person or of any Governmental Authority
required to be obtained on or prior to each date as of which this representation
is being made in connection with the execution and delivery by the Servicer of
this Agreement and any Supplement, the performance by the Servicer of the
transactions contemplated by this Agreement and any Supplement and the
fulfillment by the Servicer of the terms hereof and thereof, have been obtained;
provided, however, that no representation or warranty is made regarding state
-------- -------
securities or "Blue Sky" laws in connection with any distribution of the
Certificates.
(k) Receivables Not to be Evidenced by Instruments or Chattel
----------------------------------------------------------
Paper. 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 an
instrument or chattel paper (each as defined in the UCC as in effect in the
Relevant UCC State).
In the event of a breach of any of the covenants set forth in
Section 3.3(g), (h), (i) or (k) with respect to a Receivable, and such breach
has a material adverse effect on the Certificateholders' interest in such
Receivable (without regard to the amount of any Enhancement) then, upon the
expiration of 60 days or any longer period agreed upon by the Trustee (not to
exceed an additional 90 days) from the earlier to occur of the discovery of any
such event by the Servicer or receipt by the Servicer of written notice of any
such event given by the Trustee, unless such breach has been cured, each such
Receivable or, at the option of the Transferor, all such Receivables with
respect to the related Account, shall be assigned and transferred to the
Servicer upon the deposit by the Servicer into the Collection Account in
immediately available funds prior to the next succeeding Distribution Date of an
amount equal to the amount of each such Receivable at the end of the Collection
Period preceding such Distribution Date, plus the amount of finance charges at
the monthly periodic rate applicable to such Receivable from the last date
billed through the end of such Collection Period to the extent not included in
the amount of such Receivable. Any such deposit into the Collection Account in
connection with any such assignment of a Receivable shall be considered a
payment in full of such Receivable and such deposit shall be applied in
accordance with the provisions of Article IV. Upon the assignment to the
Servicer of such a Receivable, the Trust shall, without further action, be
deemed to transfer, assign, set-over and otherwise convey to the Servicer,
without recourse, representation or warranty, all the right, title and interest
of the Trust in and to such Receivable, all monies due or to become due and all
amounts received thereafter with respect thereto and all proceeds thereof. The
Trustee shall execute such documents and instruments of transfer or assignment,
in each case without recourse, representation or warranty, and take such other
actions as shall reasonably be requested by the Servicer to effect the
conveyance of such
47
Receivable pursuant to this subsection. The obligation of the Servicer set forth
in this Section 3.3 shall constitute the sole remedy respecting any breach by
the Servicer of the representations and warranties set forth in the
above-referenced subsections with respect to such Receivable available to
Certificateholders or the Trustee on behalf of Certificateholders.
Notwithstanding any other provision of this Section 3.3, no assignment of a
Receivable to the Servicer pursuant to this Section 3.3 shall occur if the
Servicer fails to make the deposit required by this Section 3.3 with respect to
such Receivable.
Section 3.4 Reports and Records for the Trustee.
-----------------------------------
(a) Initial Report. On the Closing Date with respect to each Series,
--------------
the Servicer shall prepare and deliver, as provided in Section 13.5, to the
Trustee and the Rating Agencies, an Officer's Certificate substantially in the
form of Exhibit D setting forth the Aggregate Principal Receivables, the
---------
Transferor Amount and the Transferor Interest Percentage as of the end of the
day two Business Days preceding the Closing Date and the expected Transferor
Interest Percentage after giving effect to the issuance of such Series.
(b) Daily Reports. For so long as deposits of Collections are
-------------
required to be made daily by the Servicer pursuant to Section 4.1(e), on each
Business Day commencing on the Initial Closing Date, the Servicer shall prepare,
and make available for inspection by the Trustee, and maintain at the office of
the Servicer a record setting forth the aggregate amount of Collections
processed by the Servicer on the second preceding Business Day. The Servicer
shall prepare such other reports on a daily (or less frequent) basis as may be
required by any Supplement.
(c) Monthly Servicer's Certificate. On each Determination Date, the
------------------------------
Servicer shall deliver, as provided in Section 13.5, to the Trustee, the Paying
Agent and the Rating Agencies, an Officer's Certificate signed by a Servicing
Officer substantially in the form of Exhibit E (which certificate shall attach
---------
for each Series the monthly statement to be delivered to Certificateholders on
the following Distribution Date pursuant to the related Supplement) setting
forth the following information (which, in the case of clauses (iii), (iv) and
(v) below, will be stated on the basis of an original principal amount of $1,000
per Certificate): (i) the aggregate amount of Collections processed for the
immediately preceding Collection Period and the aggregate amount of Collections
of Finance Charge Receivables and the aggregate amount of Collections of
Principal Receivables processed during such Collection Period; (ii) the Invested
Percentage with respect to the immediately preceding Collection Period of each
Series of Certificates with respect to Collections of Principal Receivables and
the Invested Percentage with respect to such Collection Period of each Series of
Certificates with respect to Collections of Finance Charge Receivables and
Defaulted Receivables; (iii) for each Series and for each Class within any such
Series, the total amount to be distributed to Investor Certificateholders on the
next succeeding Distribution Date, if applicable; (iv) for each Series and for
each Class within any such Series, the amount of such distribution allocable to
principal, if applicable; (v) for each Series and for each Class within any such
Series, the amount of such distribution allocable to interest, if applicable;
(vi) the aggregate outstanding balance of the Accounts which were delinquent by
31 to 60, 61 to 90 and 91 or more days as of the close of business on the last
day of the immediately preceding Collection Period; (vii) for each Series and
for each Class within any such Series, the Investor Default Amount for the
related Distribution Date; (viii) for
48
each Series and for each Class within any such Series, the amount of the
Investor Charge Offs and the amount of the reimbursements of Investor Charge
Offs for the next succeeding Distribution Date; (ix) for each Series, the
Investor Monthly Servicing Fee for the next succeeding Distribution Date; (x)
for each Series, the existing deficit controlled amortization amount or deficit
controlled accumulation amount, if applicable; (xi) the aggregate amount of
Receivables in the Trust at the close of business on the last day of the
immediately preceding Collection Period; (xii) for each Series, the Invested
Amount at the close of business on the last day of the immediately preceding
Collection Period; (xiii) the available amount of any Enhancement for each
Series; and (xiv) whether an Early Amortization Event with respect to any Series
shall have occurred during or with respect to the immediately preceding
Collection Period. The Trustee shall be under no duty to recalculate, verify or
recompute the information supplied to it under this Section 3.4.
Section 3.5 Annual Servicer's Certificate. The Servicer shall deliver,
-----------------------------
as provided in Section 13.5, to the Trustee and the Rating Agencies, on or
before June 30 of each year, beginning with June 30, 2002, an Officer's
Certificate signed by a Servicing Officer and substantially in the form of
Exhibit F (a) stating that a review of the activities of the Servicer during the
---------
preceding Fiscal Year and of its performance under this Agreement was made under
the supervision of the officer signing such certificate and (b) stating that to
the best of such officer's knowledge, based on such review, either there has
occurred no event which, with the giving of notice or passage of time or both,
would constitute a Servicer Default and the Servicer has fully performed all its
obligations under this Agreement throughout such year or, if there has occurred
such an event, specifying each such event known to such officer and the nature
and status thereof. A copy of such Officer's Certificate may be obtained by any
Investor Certificateholder or Certificate Owner by a request in writing to the
Trustee addressed to the Corporate Trust Office.
Section 3.6 Annual Independent Public Accountants' Servicing Report.
-------------------------------------------------------
(a) On or before June 30 of each year, beginning with June 30, 2002,
the Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Servicer or the
Transferor) to furnish, as provided in Section 13.5, a report prepared in
accordance with standards established by the American Institute of Certified
Public Accountants and, accordingly, including such procedures as they
considered necessary in the circumstances, to the Trustee, the Rating Agencies
and, as required, any Enhancement Provider to the effect that, in their opinion,
the monthly Servicer's Certificates issued during the period covered by the
report (which shall be the preceding Fiscal Year) are, in all material respects,
in conformity with the terms and conditions set forth in Section 3.4(c). Such
procedures will include comparisons of the mathematical calculations of each
amount set forth in the monthly Servicer's Certificates forwarded by the
Servicer pursuant to Section 3.4(c) during the period covered by such report
with the Servicer's computer reports that were the source of such amounts, and
such report shall state that, on the basis of such comparison, such accountants
are of the opinion that such amounts are in agreement, except for such
exceptions as they believe to be immaterial and such other exceptions as shall
be set forth in such report. A copy of such report may be obtained by any
Investor Certificateholder or Certificate Owner by a request in writing to the
Trustee addressed to the Corporate Trust Office.
49
(b) On or before June 30 of each year, beginning with June 30, 2002, the
Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Servicer or the
Transferor) to furnish, as provided in Section 13.5, a report to the Trustee,
the Rating Agencies and, as required, any Enhancement Provider to the effect
that in connection with their examination of the monthly Servicer's
Certificates, nothing came to their attention that caused them to believe that
the Servicer failed to comply with the terms and conditions set forth in
Sections 3.2, 3.4(c), 4.1 and 8.8 of this Agreement.
(c) On or before June 30 of each year, beginning with June 30, 2002, the
Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Servicer or the
Transferor) to furnish, as provided in Section 13.5, a report to the Trustee to
the effect that such firm has applied certain procedures agreed upon with the
Servicer to certain documents and records relating to the administration and
servicing of Accounts under this Agreement and any Supplement during the
preceding fiscal year, and has reported on the findings.
Section 3.7 Tax Treatment. The Transferor has structured this
-------------
Agreement and the Investor Certificates (other than any Investor Certificates
held by the Transferor) with the intention that such Investor Certificates will
qualify under applicable tax law as indebtedness of the Transferor or, if
specified in the applicable Supplement, an interest in a partnership (and not as
an association or publicly traded partnership taxable as a corporation for
purposes of federal income tax law), and the Transferor, any entity acquiring
any direct or indirect interest in the Exchangeable Transferor Certificate, each
Investor Certificateholder (or Certificate Owner) by acceptance of its
Certificate (or, in the case of a Certificate Owner, by virtue of such
Certificate Owner's acquisition of a beneficial interest therein) and each
holder of an interest in any Enhancement Invested Amount by its acceptance
thereof agree, and shall be deemed to agree, to treat such Investor Certificates
(or beneficial interest therein) or Enhancement Invested Amount for purposes of
Federal, state and local income or franchise taxes and any other tax imposed on
or measured by income, as indebtedness or, if specified in the applicable
Supplement, an interest in a partnership. Each Certificateholder agrees that it
will cause any Certificate Owner acquiring an interest in a Certificate through
it to comply with this Agreement as to treatment as indebtedness or, if
specified in the applicable Supplement, an interest in a partnership, for
certain tax purposes. Consistent with the foregoing, the Trustee shall not file
a Federal income tax return on behalf of the Trust or apply for a taxpayer
identification number on behalf of the Trust unless required to do so as a
result of a determination by the Internal Revenue Service or pursuant to the
terms of any Supplement.
Section 3.8 Adjustments.
-----------
(a) If the Transferor or the Servicer adjusts downward the amount of
any Principal Receivable because of a rebate, refund, unauthorized charge or
billing error to an Obligor, or because such Receivable was created in respect
of goods or services which were refused, returned or not received by an Obligor,
or if the Transferor or the Servicer otherwise adjusts downward the amount of
any Principal Receivable without receiving Collections therefor or without
charging off such amount as uncollectible, then, in any such case, the Servicer
shall deduct from the Aggregate Principal Receivables and decrease the
Transferor Amount by the amount of such adjustment. Similarly, the amount of the
Aggregate Principal Receivables and
50
the Transferor Amount 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 contained in Section 2.5(b) was
breached. Any adjustment required pursuant to either of the two preceding
sentences shall be made on or prior to the end of the Collection Period in which
such adjustment obligation arises. In the event that, following any such
exclusion, the Transferor Amount would be less than the Minimum Transferor
Amount, within two Business Days of the date on which such adjustment obligation
arises, the Transferor shall pay to the Servicer for deposit into the Excess
Funding Account, in immediately available funds, an amount equal to the amount
by which the Transferor Amount would be reduced below the Minimum Transferor
Amount. Any amount deposited into the Excess Funding Account pursuant to the
immediately preceding sentence (an "Adjustment Payment") shall be applied in
------------------
accordance with Article IV and the terms of each Supplement. If the Transferor
fails to make any required Adjustment Payment and, as a result of such failure,
the Transferor Amount is less than zero as of the last day of any Collection
Period, the amount of such deficiency (the "Adjustment Amount") shall, to the
-----------------
extent such Adjustment Amount is not otherwise reduced, be allocated among all
then outstanding Series. An Adjustment Amount shall be reduced to the extent
that amounts are deposited in the Excess Funding Account, the Aggregate
Principal Receivables increase, the Aggregate Invested Amount is reduced (other
than as a result of the allocation of an Adjustment Amount) or the Transferor
subsequently makes a required Adjustment Payment. In the event that the Servicer
adjusts upwards the principal amount of any Receivable, the Aggregate Principal
Receivables shall be increased by the amount of such upward adjustment.
(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, no adjustments shall be made pursuant to this paragraph that will
change any amount of Collections previously reported pursuant to Section 3.4(c).
(c) In the event that the Transferor shall fail to pay to the
Servicer for deposit into the Excess Funding Account any amount required to be
so paid pursuant to Section 3.8(a), and shall not have subsequently paid such
amount, no Collections of Principal Receivables allocable to the Investor
Certificates shall be distributed or otherwise released to the Transferor
hereunder, but shall instead be deposited in the Excess Funding Account for so
long as any Series Adjustment Amount shall exist. In addition, in the event that
the Transferor shall repurchase the Receivables or the Certificates of any
Series, including pursuant to Section 10.2 or Article XII, the purchase price
with respect to any Series shall include the Series Adjustment Amount of such
Series, if any.
Section 3.9 Reports to the Commission. The Servicer shall, on behalf
-------------------------
of the Trust, cause to be filed with the Securities and Exchange Commission any
periodic reports required to be filed under the provisions of the Securities
Exchange Act of 1934, as amended, and the rules
51
and regulations of the Securities and Exchange Commission thereunder. The
Transferor shall, at the expense of the Servicer, cooperate in any reasonable
request of the Servicer in connection with such filings.
[END OF ARTICLE III]
52
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
Section 4.1 Establishment of Collection Account and
---------------------------------------
Allocations with Respect to the Exchangeable Transferor Certificate.
-------------------------------------------------------------------
(a) The Collection Account. The Trustee, for the benefit of
----------------------
the Certificateholders, shall establish and maintain or cause to be established
and maintained in the name of the Trustee, on behalf of the Trust, with an
Eligible Institution a segregated trust account (the "Collection Account"),
------------------
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Investor Certificateholders. The Trustee shall
possess all right, title and interest in all funds on deposit from time to time
in the Collection Account and in all proceeds thereof. The Collection Account
shall be under the sole dominion and control of the Trustee for the benefit of
the Investor Certificateholders. If, at any time, the institution holding the
Collection Account ceases to be an Eligible Institution, the Trustee (or the
Servicer on its behalf) shall within five Business Days establish a new
Collection Account meeting the conditions specified above with an Eligible
Institution and shall transfer any cash and/or any investments to such new
Collection Account, and from the date such new Collection Account is
established, it shall be the "Collection Account." Pursuant to the authority
granted to the Servicer in Section 3.1(b), the Servicer shall have the power,
revocable by the Trustee, to make withdrawals and payments from the Collection
Account and to instruct the Trustee to make withdrawals and payments from the
Collection Account for the purposes of carrying out the Servicer's or the
Trustee's duties hereunder.
Each Series shall represent undivided interests in the Trust,
including the benefits of any Enhancement to be provided with respect to such
Series as indicated in the Supplement relating to such Series and the right to
receive Collections and other amounts at the times and in the amounts specified
in this Article IV to be deposited in the Collection Account and any other
accounts maintained for the benefit of the Certificateholders or to be paid to
the Investor Certificateholders of such Series. The Exchangeable Transferor
Certificate shall represent the interest in the Trust not represented by any
Series then outstanding, including the right to receive Collections and other
amounts at the times and in the amounts specified in this Article IV to be paid
to the Transferor (the "Transferor Interest"); provided, however, that the
------------------- -------- -------
Exchangeable Transferor Certificate shall not represent any interest in the
Collection Account or any other accounts maintained for the benefit of the
Certificateholders or the benefits of any Enhancement to be provided by an
Enhancement Provider issued with respect to any Series, except as specifically
provided in this Article IV. The Certificates do not represent obligations of,
or any interest in, the Transferor, the Servicer or any Affiliate thereof, and
neither the Certificates nor the Accounts or the Receivables are insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency. The Certificates are limited in right of payment to certain
Collections respecting the Receivables and the other assets of the Trust
allocable to such Certificates as provided herein and in the applicable
Supplement.
(b) Administration of the Collection Account. At the
----------------------------------------
written direction of the Servicer, funds on deposit in the Collection Account to
be invested shall be invested by the Trustee in Eligible Investments selected by
the Servicer. In the absence of written direction of
53
the Servicer, funds on deposit in the Collection Account shall be invested in
money market funds as specified in clause (v) of the definition of Eligible
Investments. All such Eligible Investments shall be held by the Trustee for the
benefit of the Investor Certificateholders. Investments of funds representing
Collections collected during any Collection Period shall be invested in Eligible
Investments that will mature so that such funds will be available by the close
of business on the Transfer Date next succeeding such Collection Period. Any
funds on deposit in the Collection Account to be so invested shall be invested
solely in Eligible Investments. All Eligible Investments shall be held to
maturity. The Trustee shall maintain possession of the negotiable instruments or
securities, if any, evidencing such Eligible Investments. On each Distribution
Date, all interest and other investment earnings (net of losses and investment
expenses) on funds on deposit in the Collection Account shall be paid to the
Holder of the Exchangeable Transferor Certificate. The Transferor, at its
option, may direct the Servicer's investment of funds pursuant to this Section
4.1(b).
(c) Allocations For the Exchangeable Transferor Certificate.
-------------------------------------------------------
Throughout the existence of the Trust, the Servicer shall allocate to the Holder
of the Exchangeable Transferor Certificate an amount equal to the product of (i)
the Transferor Percentage and (ii) the aggregate amount of Collections allocated
to Principal Receivables and Finance Charge Receivables, respectively, in
respect of each Collection Period. Notwithstanding anything to the contrary in
Section 4.1, unless specified in any Supplement, the Servicer need not deposit
this amount, or any other amounts so allocated to the Exchangeable Transferor
Certificate pursuant to any Supplement, into the Collection Account and shall
pay such amounts as collected to the Holder of the Exchangeable Transferor
Certificate.
(d) Allocation of Collections Between Collections of
------------------------------------------------
Principal Receivables and Collections of Finance Charge Receivables. The
-------------------------------------------------------------------
Servicer shall allocate Collections processed with respect to any Account to
Finance Charge Receivables to the extent of outstanding Finance Charge
Receivables with respect to such Account. The balance of Collections processed
with respect to such Account shall be allocated to Principal Receivables.
(e) Collections. The Servicer will apply all Collections
-----------
with respect to the Receivables for each Collection Period as described in this
Article IV and each Supplement. Except as otherwise provided below, the Servicer
shall deposit all 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, for so long as, and only so long as, the
Bank or an Affiliate of the Bank shall be the Servicer hereunder and (i) the
Bank or such Affiliate shall maintain a short-term debt rating (which may be an
implied rating) of at least P-1 by Moody's and A-1 by Standard & Poor's, or (ii)
the Bank or such Affiliate shall obtain and maintain in force a letter of credit
or other surety covering collection risk of the Servicer approved in writing by
each Rating Agency and the holders of 66-2/3% of the Invested Amount of each
Class of Investor Certificates of any then outstanding Series which is not
assigned a rating by any Rating Agency (it being understood that any such letter
of credit must include, without limitation, provisions acceptable to each Rating
Agency and such holders addressing the downgrade or withdrawal of any required
debt rating maintained by the issuer of such letter of credit), or (iii)(A) the
Bank shall obtain the consent of the holders of 66-2/3% of the Invested Amount
of each Class of Investor Certificates of any then outstanding Series which is
not assigned a rating by any Rating
54
Agency and such consent shall not have been withdrawn in accordance with the
terms of the related Supplement and (B) the Rating Agency Condition has been
satisfied with respect to the Servicer's inability to satisfy the rating
requirement specified in clause (i), and for two Business Days following any
reduction of either such rating or failure to satisfy the conditions of clause
(ii), the Servicer need not deposit Collections into the Collection Account or
make payments to the holder of the Exchangeable Transferor Certificate prior to
the close of business on the second Business Day following the Date of
Processing, but rather may make a single deposit in the Collection Account in
immediately available funds on the Business Day prior to each Distribution Date
in an amount equal to the Collections with respect to the Collection Period
preceding such Distribution Date to the extent such amounts and Collections are
allocated to one or more Series in accordance with Article IV. Collections shall
not be required to be invested in Eligible Investments until such time as they
are deposited into the Collection Account. The Servicer shall promptly notify
the Trustee of any downgrade or withdrawal of its short-term credit or
certificate of deposit rating or, if an Affiliate of the Bank is acting as
Servicer hereunder, of any such downgrade or withdrawal with respect to such
Affiliate.
If the Servicer is required to make daily deposits of
Collections into the Collection Account pursuant to this subsection, the
Servicer may, during any Amortization Period and subject to the provisions of
the applicable Supplement, cease depositing Collections of Principal Receivables
received during any Collection Period and allocable to a Series at such time as
the amount of Collections of Principal Receivables allocable to such Series and
deposited into the Collection Account equals the amount of principal scheduled
or permitted to be paid on the next succeeding Distribution Date with respect to
such Series. Collections of Principal Receivables allocable to such Series in
excess of such amount shall be distributed on a daily basis as they are
collected to the Transferor.
(f) Excess Funding Account. The Trustee, for the benefit of
----------------------
the Certificateholders, shall establish and maintain or cause to be established
and maintained in the name of the Trustee, on behalf of the Trust, with an
Eligible Institution a segregated trust account (the "Excess Funding Account"),
----------------------
which may be a subaccount of the Collection Account, bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Investor Certificateholders. The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Excess Funding Account
and in all proceeds thereof. The Excess Funding Account shall be under the sole
dominion and control of the Trustee for the benefit of the Investor
Certificateholders. If, at any time, the institution holding the Excess Funding
Account ceases to be an Eligible Institution, the Trustee (or the Servicer on
its behalf) shall within five Business Days establish a new Excess Funding
Account meeting the conditions specified above with an Eligible Institution and
shall transfer any cash and/or any investments to such new Excess Funding
Account, and from the date such new Excess Funding Account is established, it
shall be the "Excess Funding Account." Pursuant to the authority granted to the
Servicer in Section 3.1(b), the Servicer shall have the power, revocable by the
Trustee, to make withdrawals and payments from the Excess Funding Account and to
instruct the Trustee to make withdrawals and payments from the Excess Funding
Account for the purposes of carrying out the Servicer's or the Trustee's duties
hereunder.
At the written direction of the Servicer, funds on deposit in
the Excess Funding Account to be invested shall be invested by the Trustee in
Eligible Investments selected by the
55
Servicer. In the absence of written direction of the Servicer, funds on deposit
in the Excess Funding Account shall be invested in money market funds as
specified in clause (v) of the definition of Eligible Investments. All such
Eligible Investments shall be held by the Trustee for the benefit of the
Investor Certificateholders. The Trustee shall maintain for the benefit of the
Investor Certificateholders possession of the negotiable instruments or
securities, if any, evidencing such Eligible Investments. Funds on deposit in
the Excess Funding Account on any date (after giving effect to any withdrawals
from the Excess Funding Account on such date) will be invested in Eligible
Investments that will mature so that funds will be available at the close of
business on the next Business Day following such date. On each Determination
Date, the Servicer shall instruct the Trustee to withdraw on the next succeeding
Distribution Date from the Excess Funding Account and deposit in the Collection
Account all interest and other investment earnings (net of losses and investment
expenses) on funds on deposit in the Excess Funding Account, for application as
Collections of Finance Charge Receivables with respect to the prior Collection
Period. Interest (including reinvested interest) and other investment income and
earnings on funds on deposit in the Excess Funding Account shall not be
considered part of the Excess Funding Amount for purposes of this Agreement. On
each Business Day, the Servicer shall determine the Transferor Amount. If the
Transferor Amount exceeds the Minimum Transferor Amount on any Business Day, the
Servicer shall instruct the Trustee in writing to withdraw an amount equal to
such excess (but not to exceed the Excess Funding Amount) from the Excess
Funding Account on such day and pay such amount to the Holder of the
Exchangeable Transferor Certificate. If the Minimum Transferor Amount exceeds
the Transferor Amount on any Business Day, the Servicer shall deposit
Collections of Principal Receivables that would otherwise be distributed to the
Transferor on such day into the Excess Funding Account on such day in an amount
equal to such excess. On each Determination Date on which one or more Series is
in an Amortization Period, the Servicer shall determine the aggregate amount 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 on the next
succeeding Distribution Date), and the Servicer shall instruct the Trustee to
withdraw such amount (up to the Excess Funding Amount) from the Excess Funding
Account on the next succeeding Distribution Date and allocate such amount among
each such Series as Shared Principal Collections as specified in each related
Supplement.
(g) Shared Principal Collections. On each Distribution Date,
----------------------------
(i) the Servicer shall allocate Shared Principal Collections to each Principal
Sharing Series in a Group, pro rata, in proportion to the Principal Shortfalls,
if any, with respect to each such Series and (ii) the Servicer shall withdraw
(or shall instruct the Trustee to withdraw) from the Collection Account or the
Excess Funding Account and pay to the Holder of the Exchangeable Transferor
Certificate (A) an amount equal to the excess, if any, of (x) the aggregate
amount of Shared Principal Collections for all such Series for such Distribution
Date over (y) the aggregate amount of Principal Shortfalls for all such Series
for such Distribution Date and (B) the aggregate amount for all outstanding
Series of that portion of Collections which the related Supplements specify are
to be allocated and paid to the Transferor with respect to such Distribution
Date; provided, however, that such amounts shall be paid to the Holder of the
-------- -------
Exchangeable Transferor Certificate only to the extent that the Transferor
Amount for such Distribution Date (determined after giving effect to any
Principal Receivables transferred to the Trust on such date) exceeds the Minimum
Transferor Amount; and, provided further, that, if on any Distribution Date the
-------- -------
56
Transferor Amount is less than or equal to the Minimum Transferor Amount, the
Servicer will not distribute to the Holder of the Exchangeable Transferor
Certificate any Shared Principal Collections then on deposit in the Collection
Account that otherwise would be distributed to such Holder, but shall deposit
such funds in the Excess Funding Account.
(h) Shared Excess Finance Charge Collection. On each Distribution
---------------------------------------
Date, (i) the Servicer shall allocate Shared Excess Finance Charge Collections
with respect to the Series in a Group to each Series in such Group, pro rata, in
proportion to the Finance Charge Shortfalls, if any, with respect to each such
Series and (ii) the Servicer shall withdraw (or shall instruct the Trustee to
withdraw) from the Collection Account and pay to the Holder of the Exchangeable
Transferor Certificate an amount equal to the excess, if any, of (x) the
aggregate amount of Shared Excess Finance Charge Collections for all such Series
for such Distribution Date over (y) the aggregate amount of Finance Charge
Shortfalls for all such Series for such Distribution Date to the extent any
Shared Excess Finance Charge Collections are held on deposit in the Collection
Account.
(i) Net Deposits. For so long as the Bank or an Affiliate of the
------------
Bank shall be the Servicer hereunder and a Servicer Default shall not have
occurred and be continuing, the Servicer may make deposits into the Collection
Account or the Excess Funding Account on any date net of amounts payable as of
such date to the Transferor or the Servicer from amounts on deposit in the
Collection Account or the Excess Funding Account and may make deposits into the
Collection Account on each Transfer Date net of amounts payable on the following
Distribution Date to the Transferor or the Servicer from amounts on deposit in
the Collection Account, it being understood that the Investor Monthly Servicing
Fee with respect to any Series shall be payable to the Servicer only in
accordance with the provisions specified in the related Supplement and that the
foregoing shall in no event increase the amount payable to the Transferor or the
Servicer hereunder or pursuant to any Supplement.
[THE REMAINDER OF ARTICLE IV IS RESERVED
AND MAY BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
57
ARTICLE V
[ARTICLE V IS RESERVED AND MAY BE SPECIFIED IN
ANY SUPPLEMENT WITH RESPECT TO ANY SERIES]
58
ARTICLE VI
THE CERTIFICATES
Section 6.1 The Certificates. Subject to Sections 6.10 and 6.11,
----------------
the Investor Certificates of any Series or Class may be issued in bearer form
(the "Bearer Certificates") with attached interest coupons and a special coupon
-------------------
(collectively, the "Coupons") or in fully registered form (the "Registered
------- ----------
Certificates"), and shall be substantially in the form of the exhibits with
------------
respect thereto attached to the applicable Supplement. The Exchangeable
Transferor Certificate shall be substantially in the form of Exhibit A. The
---------
Investor Certificates and the Exchangeable Transferor Certificate shall, upon
issue pursuant hereto or to Section 6.9 or Section 6.11, be executed and
delivered by the Transferor (or the Trustee on behalf of the Trust, if specified
in the applicable Supplement) to the Trustee for authentication and redelivery
as provided in Section 6.2. Any Investor Certificates shall be issued in minimum
denominations of $1,000 and in integral multiples of $1,000 in excess thereof,
unless otherwise specified in any Supplement. If specified in the related
Supplement for any Series, the Investor Certificates shall be issued upon
initial issuance as a single certificate in an original principal amount equal
to the Initial Invested Amount as described in Section 6.10. The Exchangeable
Transferor Certificate may also be issued in two or more certificates. Each
Certificate executed by the Transferor shall be executed by manual or facsimile
signature on behalf of the Transferor by its President, any Senior Vice
President or any Vice President. Certificates bearing the manual or facsimile
signature of the individual who was, at the time when such signature was
affixed, authorized to sign on behalf of the Transferor or the Trustee shall not
be rendered invalid, notwithstanding that such individual has ceased to be so
authorized prior to the authentication and delivery of such Certificates or does
not hold such office at the date of such Certificates. Unless otherwise provided
in the related Supplement, no Certificate shall be entitled to any benefit under
this Agreement or any applicable Supplement, or be valid for any purpose, unless
there appears on such Certificate a certificate of authentication substantially
in the form provided for herein executed by or on behalf of the Trustee by the
manual signature of a duly authorized signatory, and such certificate upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication, except that Bearer
Certificates shall be dated the date of their issuance.
Section 6.2 Authentication of Certificates. Upon an Exchange as
------------------------------
provided in Section 6.9 and the satisfaction of the conditions specified
therein, the Trustee shall authenticate and deliver the Investor Certificates of
each additional Series (with the designation provided in the applicable
Supplement), upon the order of the Transferor, to the Persons designated in such
Supplement and shall authenticate and deliver to the Transferor a new
Exchangeable Transferor Certificate. Upon the order of the Transferor, the
Certificates of any Series shall be duly authenticated by or on behalf of the
Trustee, in authorized denominations equal to (in the aggregate) the Initial
Invested Amount of such Series of Investor Certificates. If specified in the
related Supplement for any Series, the Trustee shall authenticate and deliver
outside the United States the Global Certificate that is issued upon original
issuance thereof, upon the written order of the Transferor, to the Common
Depositary as provided in Section 6.10 against payment of the purchase price
therefor. If specified in the related Supplement for any Series, the Trustee
shall authenticate Book-Entry Certificates that are issued upon original
issuance thereof, upon the
59
written order of the Transferor, to a Clearing Agency or its nominee as provided
in Section 6.11 against payment of the purchase price therefor.
Section 6.3 Registration of Transfer and Exchange of
----------------------------------------
Certificates.
------------
(a) The Trustee shall cause to be kept at the office or agency to
be maintained by a transfer agent and registrar (which may be the Trustee) (the
"Transfer Agent and Registrar") in accordance with the provisions of Section
----------------------------
6.3(c) a register (the "Certificate Register") in which, subject to such
--------------------
reasonable regulations as it may prescribe, the Transfer Agent and Registrar
shall provide for the registration of the Registered Certificates and of
transfers and exchanges of the Registered Certificates as herein provided. The
Trustee is hereby initially appointed Transfer Agent and Registrar for the
purpose of registering the Registered Certificates and transfers and exchanges
of the Registered Certificates as herein provided. The Trustee shall be
permitted to resign as Transfer Agent and Registrar upon 30 days' prior written
notice to the Transferor and the Servicer; provided, however, that such
-------- -------
resignation shall not be effective and the Trustee shall continue to perform the
duties of Transfer Agent and Registrar until the Transferor has appointed a
successor Transfer Agent and Registrar acceptable to the Transferor and the
Trustee. If specified in the related Supplement for any Series, the Transferor
shall appoint any co-transfer agent and co-registrar chosen by the Transferor,
and acceptable to the Trustee, including, if and so long as the Registered
Certificates are listed on the Luxembourg Stock Exchange or other stock exchange
and such exchange shall so require, a co-transfer agent and co-registrar in
Luxembourg or the location required by such other stock exchange. If specified
in such related Supplement, so long as the Registered Certificates relating to
such Supplement are outstanding, the Transferor shall maintain a co-transfer
agent and co-registrar in New York City or any other city designated in such
Supplement and any reference in this Agreement to the Transfer Agent and
Registrar shall include any co-transfer agent and co-registrar unless the
context requires otherwise.
Upon surrender for registration of transfer of any Registered
Certificate at any office or agency of the Transfer Agent and Registrar
maintained for such purpose, the Transferor (or the Trustee on behalf of the
Trust, if specified in the applicable Supplement) shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee, one or
more new Registered Certificates in authorized denominations of the same Series
representing like aggregate Undivided Interests in the Trust; provided, however,
-------- -------
that the provisions of this paragraph shall not apply to Bearer Certificates.
At the option of any Holder thereof, Registered Certificates may
be exchanged for other Registered Certificates of the same Series in authorized
denominations of like aggregate Undivided Interests in the Trust, upon surrender
of the Registered Certificates to be exchanged at any office or agency of the
Transfer Agent and Registrar maintained for such purpose. At the option of any
Holder thereof, subject to applicable laws and regulations, Bearer Certificates
may be exchanged for other Bearer Certificates or Registered Certificates of the
same Series in authorized denominations of like aggregate Undivided Interests in
the Trust, upon surrender of the Bearer Certificates to be exchanged at an
office or agency of the Transfer Agent and Registrar located outside the United
States. Each Bearer Certificate surrendered pursuant to this Section 6.3 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
60
Distribution Date after the related Series Termination Date need not have
attached the Coupon relating to such Distribution Date. No Registered
Certificates may be exchanged for a Bearer Certificate.
The preceding provisions of this Section 6.3 notwithstanding,
the Trustee or the Transfer Agent and Registrar, as the case may be, shall not
be required to register the transfer of or exchange any Certificate of any
Series for a period of 15 days preceding the due date for any payment with
respect to the Certificates of such Series.
Whenever any Investor Certificates of any Series are
surrendered for exchange, the Transferor (or the Trustee on behalf of the Trust,
if specified in the applicable Supplement) shall execute, and the Trustee shall
authenticate and the Transfer Agent and Registrar shall deliver (in the case of
Bearer Certificates, outside the United States), the Investor Certificates of
such Series which the Certificateholder making the exchange is entitled to
receive. Every Investor Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
a form satisfactory to the Trustee and the Transfer Agent and Registrar duly
executed by the Certificateholder thereof or his attorney-in-fact duly
authorized in writing.
Except as provided in any Supplement, no service charge shall
be made for any registration of transfer or exchange of Investor Certificates,
but the Transfer Agent and Registrar and the Trustee or any co-transfer agent
and co-registrar or co-trustee may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Investor Certificates.
All Investor Certificates (together with any Coupons attached
to Bearer Certificates) surrendered for registration of transfer or exchange
shall be canceled by the Transfer Agent and Registrar and disposed of in a
manner satisfactory to the Trustee and the Transferor. The Trustee shall cancel
and mutilate the Global Certificate upon its exchange in full for Definitive
Certificates and shall deliver to the Transferor either a certificate of
destruction or such canceled and mutilated Global Certificate. The Trustee shall
also forward to the Transferor a copy of each certificate of each Foreign
Clearing Agency to the effect referred to in Section 6.10 which was received by
the Trustee with respect to each portion of the Global Certificate exchanged for
Definitive Certificates.
The Transferor shall execute and deliver to the Trustee or the
Transfer Agent and Registrar, as applicable, Bearer Certificates and Registered
Certificates in such amounts and at such times as are necessary to enable the
Trustee to fulfill its responsibilities under this Agreement and the
Certificates.
(b) Except as provided in Sections 6.9 and 7.2 or in any
Supplement, the Transferor's interest in the Exchangeable Transferor Certificate
and other amounts payable to the Transferor pursuant to this Agreement shall not
be sold, transferred, assigned, exchanged, pledged, participated or otherwise
conveyed, unless (i) the Servicer has delivered to the Trustee an Officer's
Certificate stating that such sale, transfer, assignment, exchange, pledge,
participation or conveyance will not, while any Series of Certificates remains
outstanding, reduce the Transferor Interest Percentage below the Minimum
Transferor Interest Percentage and (ii)
61
prior to such sale, transfer, assignment, exchange, pledge, participation or
conveyance, the Rating Agency Condition is satisfied and (iii) the Trustee
receives prior thereto an Opinion of Counsel to the effect that (x) the conveyed
interest in the Exchangeable Transferor Certificate will be treated as either
debt or an interest in a partnership for Federal income tax purposes and that
the conveyance of such interest will not cause the Trust to be characterized for
Federal income tax purposes as an association taxable as a corporation or
otherwise have any material adverse impact on the Federal or applicable state
income taxation of any outstanding Series of Investor Certificates or any
Certificate Owner and (y) such transfer will not cause a taxable event for
Federal income tax purposes to any Investor Certificateholder.
(c) The Transfer Agent and Registrar will maintain at its
expense in the Borough of Manhattan, the City of New York (and, if specified in
the related Supplement for any Series, Luxembourg (or subject to Section 6.3(a)
any other city designated in such Supplement)), an office or offices or agency
or agencies where Investor Certificates may be surrendered for registration of
transfer or exchange (except that Bearer Certificates may not be surrendered for
exchange at any such office or agency in the United States).
(d) Unless otherwise provided in the related Supplement,
registration of transfer of Registered Certificates containing a legend relating
to the restrictions on transfer of such Registered Certificates (which legend
shall be set forth in the Supplement relating to such Investor Certificates)
shall be effected only if:
(i) the sale is of at least U.S. $500,000 principal
amount of such Certificates and (b) a letter from the purchaser
satisfactory to counsel to the Servicer is executed and received; or
(ii) (a) the Registered Certificates are transferred in
compliance with Rule 144 (or any amendment thereto) or Rule 144A (or
any amendment thereto) under the Securities Act of 1933, as amended,
and (b) a letter from the purchaser satisfactory to counsel to the
Servicer is executed and received; or
(iii) the Registered Certificates are sold or otherwise
transferred in any other transaction that does not require registration
under the Securities Act of 1933, as amended, and, if the Transferor,
the Servicer, the Trustee or the Transfer Agent and Registrar so
request, an Opinion of Counsel satisfactory to it or them, in form and
substance satisfactory to it or them, is furnished to such effect.
Registered Certificates issued upon registration of transfer
of, or Registered Certificates issued in exchange for, Registered Certificates
bearing the legend referred to above shall also bear such legend unless the
Transferor, the Servicer, the Trustee and the Transfer Agent and Registrar
receive an Opinion of Counsel satisfactory to each of them, to the effect that
such legend may be removed.
Whenever a Registered Certificate containing the legend set
forth in the related Supplement is presented to the Transfer Agent and Registrar
for registration of transfer, the Transfer Agent and Registrar shall promptly
seek written instructions from the Servicer regarding such transfer. The
Transfer Agent and Registrar and the Trustee shall be entitled to
62
receive written instructions signed by a Servicing Officer prior to registering
any such transfer or authenticating new Registered Certificates, as the case may
be. The Servicer hereby agrees to indemnify the Transfer Agent and Registrar and
the Trustee and to hold each of them harmless against any loss, liability or
expense incurred without bad faith on their part arising out of or in connection
with actions taken or omitted by them in reliance on and in accordance with any
such written instructions furnished pursuant to this Section 6.3(d).
Section 6.4 Mutilated, Destroyed, Lost or Stolen
------------------------------------
Certificates. If (a) any mutilated Certificate (together, in the case of Bearer
------------
Certificates, with all unmatured Coupons (if any) appertaining thereto) is
surrendered to the Transfer Agent and Registrar, or the Transfer Agent and
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Transfer Agent and
Registrar, the Trustee and the Transferor 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 (or the Trustee on behalf of the Trust, if specified in the
applicable Supplement) shall execute and the Trustee shall authenticate and the
Transfer Agent and Registrar shall deliver (in the case of Bearer Certificates,
outside the United States), in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
aggregate Undivided Interest, if applicable. In connection with the issuance of
any new Certificate under this Section 6.4, the Trustee or the Transfer Agent
and Registrar may require the payment by the Certificateholder of a sum
sufficient to cover any tax or other governmental expenses (including those
incurred by the Trustee or the Transfer Agent and Registrar) connected
therewith. Any duplicate Certificate issued pursuant to this Section 6.4 shall
constitute complete and indefeasible evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 6.5 Persons Deemed Owners. Prior to due presentation
---------------------
of a Certificate (other than a Bearer Certificate) for registration of transfer,
the Trustee, the Paying Agent, the Transfer Agent and Registrar and any agent of
any of them may treat the person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving distributions
pursuant to Article IV and for all other purposes whatsoever, and neither the
Trustee, the Paying Agent, the Transfer Agent and Registrar nor any agent of any
of them shall be affected by any notice to the contrary. In the case of a Bearer
Certificate, the Trustee, the Paying Agent, the Transfer Agent and Registrar and
any agent of any of them may treat the bearer of a Bearer Certificate or Coupon
as the owner of such Bearer Certificate or Coupon for the purpose of receiving
distributions pursuant to Article IV and for all other purposes whatsoever, and
neither the Trustee, the Paying Agent, the Transfer Agent and Registrar nor any
agent of any of them shall be affected by any notice to the contrary.
Notwithstanding the foregoing provisions of this Section 6.5, in determining
whether the holders of the requisite Undivided Interests have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Transferor, the Servicer or any affiliate thereof (as
defined in Rule 405 under the Securities Act of 1933, as amended) shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Certificates which a
Responsible Officer of the Trustee knows to be so owned shall be so disregarded.
Certificates so owned which have been pledged in good faith shall not be
disregarded and may be regarded as outstanding if the pledgee establishes to the
satisfaction of
63
the Trustee the pledgee's right so to act with respect to such Certificates and
that the pledgee is not the United States, the Transferor, the Servicer or an
affiliate thereof (as defined above).
Section 6.6 Appointment of Paying Agent. The Paying Agent
---------------------------
shall make distributions to Investor Certificateholders from the Collection
Account (or any other account or accounts maintained for the benefit of
Certificateholders as specified in the related Supplement for any Series)
pursuant to Articles IV and V. Any Paying Agent shall have the revocable power
to withdraw funds from the Collection Account (or any other account or accounts
maintained for the benefit of Certificateholders as specified in the related
Supplement for any Series) for the purpose of making distributions referred to
above. The Trustee (or the Transferor if the Trustee is the Paying Agent) may
revoke such power and remove the Paying Agent if the Trustee (or the Transferor
if the Trustee is the Paying Agent) determines in its sole discretion that the
Paying Agent shall have failed to perform its obligations under this Agreement
in any material respect or for other good cause. The Paying Agent shall (unless
otherwise specified in the related Supplement for any Series) initially be the
Trustee and any co-paying agent chosen by the Transferor and acceptable to the
Trustee, including, if and so long as any Series of Investor Certificates is
listed on the Luxembourg Stock Exchange or other stock exchange and such
exchange so requires, a co-paying agent in Luxembourg or the location of such
other stock exchange. The Trustee shall be permitted to resign as Paying Agent
upon 30 days' prior written notice to the Servicer and the Transferor; provided,
--------
however, that such resignation shall not be effective and the Trustee shall
-------
continue to perform the duties of Paying Agent until the appointment of a
successor Paying Agent, pursuant to this Section 6.6. The Transferor shall
notify the Rating Agencies of any resignation or replacement of the Paying
Agent. In the event that the Trustee shall no longer be the Paying Agent, the
Transferor shall appoint a successor to act as Paying Agent and such successor
shall be acceptable to the Trustee. The Trustee shall cause the initial Paying
Agent (unless the initial Paying Agent is the Trustee) and each successor Paying
Agent or any additional Paying Agent appointed by the Transferor to execute and
deliver to the Trustee an instrument in which such initial or successor Paying
Agent or additional Paying Agent shall agree with the Trustee that, as Paying
Agent, such initial or successor Paying Agent or additional Paying Agent will
hold all sums, if any, held by it for payment to the Investor Certificateholders
in trust for the benefit of the Investor Certificateholders entitled thereto
until such sums shall be paid to such Certificateholders and shall comply with
all requirements of the Internal Revenue Code regarding the withholding by the
Trustee of payments in respect of federal income taxes due from
Certificateholders. The Paying Agent shall return all unclaimed funds to the
Trustee and upon removal of a Paying Agent shall also return all funds in its
possession to the Trustee. The provisions of Sections 11.1, 11.2 and 11.3 shall
apply to the Trustee also in its role as Paying Agent, for so long as the
Trustee shall act as Paying Agent. Any reference in this Agreement to the Paying
Agent shall include any co-paying agent unless the context requires otherwise.
If specified in the related Supplement for any Series, so long
as the Investor Certificates of such Series are outstanding, the Transferor
shall, if the Paying Agent is not located in New York City, appoint a co-paying
agent in New York City (for Registered Certificates only) acceptable to the
Trustee or any other city designated in such Supplement which, if and so long as
any Series of Investor Certificates is listed on the Luxembourg Stock Exchange
or other stock exchange and such exchange so requires, shall be in Luxembourg or
the location required by such other stock exchange.
64
Section 6.7 Access to List of Certificateholders' Names and
-----------------------------------------------
Addresses. The Trustee will furnish or cause to be furnished by the Transfer
---------
Agent and Registrar to the Servicer or the Paying Agent (or any agent thereof),
within five Business Days after receipt by the Trustee of a request therefor
from the Servicer or the Paying Agent, respectively, in writing, a list in the
form maintained by the Transfer Agent and Registrar of the names and addresses
of the Investor Certificateholders (other than Bearer Certificateholders). If
Holders representing Undivided Interests in the Trust aggregating not less than
10% of the Invested Amount of the Investor Certificates of such Series (the
"Applicants") apply in writing to the Trustee, and such application states that
----------
the Applicants desire to communicate with other Investor Certificateholders of
such Series with respect to their rights under this Agreement or under the
Investor Certificates and is accompanied by a copy of the communication which
such Applicants propose to transmit, then the Trustee, after having been
adequately indemnified by such Applicants for its costs and expenses, shall
afford or shall cause the Transfer Agent and Registrar to afford such Applicants
access during normal business hours to the most recent list of
Certificateholders (other than Bearer Certificateholders) maintained by the
Transfer Agent and Registrar, or shall mail or cause to be mailed such list
within five Business Days after the receipt of such application. Such list shall
be as of a date no more than 45 days prior to the date of receipt of such
Applicants' request.
Every Certificateholder, by receiving and holding a Certificate
agrees with the Trustee that neither the Trustee, the Transfer Agent and
Registrar, nor any of their respective agents shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the Certificateholders (other than Bearer Certificateholders) hereunder,
regardless of the sources from which such information was derived.
Section 6.8 Authenticating Agent.
--------------------
(a) The Trustee may appoint one or more authenticating agents
with respect to the Certificates which shall be authorized to act on behalf of
the Trustee in authenticating the Certificates in connection with the issuance,
delivery, registration of transfer, exchange or repayment of the Certificates.
Whenever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication on behalf of the Trustee by
an authenticating agent and a certificate of authentication executed on behalf
of the Trustee by an authenticating agent. Each authenticating agent must be
reasonably acceptable to the Transferor.
(b) Any institution succeeding to the corporate agency business
of an authenticating agent shall continue to be an authenticating agent without
the execution or filing of any paper or any further act on the part of the
Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by giving
written notice of resignation to the Trustee and to the Transferor. The Trustee
may at any time 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
65
the rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an authenticating agent. No successor authenticating
agent shall be appointed unless acceptable to the Trustee and the Transferor.
(d) The Trustee agrees to pay, on behalf of the Trust, to each
authenticating agent from time to time reasonable compensation for its services
under this Section 6.8.
(e) The provisions of Sections 11.1, 11.2 and 11.3 shall be
applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section 6.8, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
This is one of the Certificates described in the Master Pooling
and Servicing Agreement.
_______________________________
as Authenticating Agent
for the Trustee,
By: ___________________________
Authorized Officer
Section 6.9 Tender of Exchangeable Transferor Certificate.
---------------------------------------------
(a) Upon any Exchange, the Trustee shall issue to the Transferor
under Section 6.1 for execution (unless the Trustee is to execute such Series on
behalf of the Trust, as specified in the applicable Supplement) and redelivery
to the Trustee for authentication under Section 6.2 one or more new Series of
Investor Certificates. Any such Series of Investor Certificates shall be
substantially in the form specified in the related Supplement and shall bear,
upon its face, the designation for such Series selected by the Transferor.
Except as specified in the Supplement for any Series as to differing treatment
of the Investor Certificates within such Series, all Investor Certificates of
any Series shall be equally and ratably entitled as provided herein to the
benefits hereof without preference, priority or distinction on account of the
actual time or times of authentication and delivery (except that any Enhancement
provided for any Series shall not be available for any other Series), all in
accordance with the terms and provisions of this Agreement and the applicable
Supplement.
(b) The Holder of the Exchangeable Transferor Certificate may
tender the Exchangeable Transferor Certificate, or the Exchangeable Transferor
Certificate and the Investor Certificates of any Series, to the Trustee in
exchange for (i) one or more newly issued Series of Investor Certificates and
(ii) a reissued Exchangeable Transferor Certificate (any such tender an
"Exchange"). The Transferor may perform an Exchange, without the consent of any
--------
Certificateholder, by notifying the Trustee, in writing at least three Business
Days in advance (an "Exchange Notice") of the date upon which the Exchange is to
---------------
occur (an "Exchange Date"). Any Exchange Notice shall state the designation of
-------------
any Series to be issued on the Exchange Date and,
66
with respect to each such Series: (x) its Initial Invested Amount (or the method
for calculating such Initial Invested Amount), if any, which amount may not be
greater than the current principal amount of the Exchangeable Transferor
Certificate minus the Minimum Transferor Amount at such time, and (y) its
-----
Certificate Rate (or the method for allocating interest payments or other cash
flow to such Series), if any. On the Exchange Date, the Trustee shall
authenticate and deliver any such Series only upon delivery to it of the
following: (A) a Supplement in form satisfactory to the Trustee executed by the
Transferor and specifying the Principal Terms of such Series, (B) an Opinion of
Counsel to the effect that, unless otherwise specified in the related
Supplement, the newly issued Series of Investor Certificates (other than any
Class of Investor Certificates required to be retained by the Transferor) will
be characterized as either indebtedness or an interest in a partnership (that is
not taxable as a corporation) under existing law for Federal income tax purposes
and that the issuance of the newly issued Series of Investor Certificates will
not have any material adverse impact on the Federal income tax characterization
of any outstanding Series of Investor Certificates that have been the subject of
a previous opinion of tax counsel or result in the Trust being taxable as an
association or as a publicly traded partnership taxable as a corporation for
Federal or applicable state tax purposes (such opinion, a "Tax Opinion"), (C) an
-----------
agreement, if any, pursuant to which the Enhancement Provider agrees to provide
Enhancement, (D) written confirmation from each Rating Agency that the Exchange
will not result in the Rating Agency's reducing or withdrawing its rating on any
then outstanding Series rated by it and (E) the existing Exchangeable Transferor
Certificate and the Investor Certificate of the Series, if any, to be exchanged.
Upon satisfaction of such conditions, the Trustee shall cancel the existing
Exchangeable Transferor Certificate and issue, as provided above, such Series of
Investor Certificates and a new Exchangeable Transferor Certificate, dated the
Exchange Date. There is no limit to the number of Exchanges that may be
performed under this Agreement.
(c) In conjunction with an Exchange, the parties hereto shall
execute a Supplement, which shall specify the relevant terms with respect to any
Series of Investor Certificates, which may include, without limitation: (i) its
name or designation, (ii) an Initial Invested Amount or the method of
calculating the Initial Invested Amount, (iii) a Certificate Rate (or formula
for the determination thereof), (iv) the rights of the Holder of the
Exchangeable Transferor Certificate that have been transferred to the Holders of
such Series pursuant to such Exchange, (v) the interest payment date or dates
and the date or dates from which interest shall accrue, (vi) the method of
allocating Collections of Principal Receivables for such Series and, if
applicable, with respect to other Series and the method by which the principal
amount of Investor Certificates of such Series shall amortize or accrete and the
method for allocating Collections of Finance Charge Receivables and Receivables
in Defaulted Accounts, (vii) the names of any accounts to be used by such Series
and the terms governing the operation of any such account, (viii) the Servicing
Fee Percentage, (ix) the Minimum Transferor Interest Percentage, (x) the Minimum
Aggregate Principal Receivables, (xi) the Series Termination Date, (xii) the
terms of any Enhancement, (xiii) the Enhancement Provider, if any, (xiv) the
base rate, if any, (xv) the Repurchase Terms or the terms on which the
Certificates of such Series may be remarketed to other investors, (xvi) any
deposit into any account provided for such Series, (xvii) the number of Classes
within such Series, and if more than one Class, the rights and priorities of
each such Class, (xviii) the extent to which the Investor Certificates will be
issuable in temporary or permanent global form and, in such case, the depository
for such global certificate or certificates, the terms and conditions, if any,
upon which such global certificate may be exchanged in whole
67
or in part for Definitive Certificates, and the manner in which any interest
payable on a temporary or global certificate will be paid, (xix) whether the
Certificates may be issued in bearer form and any limitations imposed thereon
and provisions relating to compliance with applicable laws and rules for bearer
instruments, (xx) the priority of such Series with respect to any other Series,
(xxi) whether Interchange or other fees will be included in the funds available
to be paid with respect to such Series, (xxii) whether such Series will or may
be paired with any other Series and the Series with which it will be paired, if
applicable, (xxiii) the Group, if any, to which such Series belongs, and (xxiv)
any other relevant terms of such Series (all such terms, the "Principal Terms"
---------------
of such Series). The terms of such Supplement may modify or amend the terms of
this Agreement solely as applied to such new Series. If on the date of the
issuance of such Series there is issued and outstanding no Series of Investor
Certificates which is currently rated by a Rating Agency, then as a condition to
such Exchange a nationally recognized investment banking firm or commercial bank
shall also deliver to the Trustee an officer's certificate stating, in
substance, that the Exchange will not have an adverse effect on the timing or
distribution of payments to such other Series of Investor Certificates then
issued and outstanding.
(d) In connection with the creation or sale of any additional
interest in the Trust or the Receivables, whether or not designated as an
Exchange (including, without limitation, the receipt by the Trust or the
Transferor of the proceeds of any loan or additional loan provided by any
Enhancement Provider), the Transferor shall deliver to the Trustee and to each
Rating Agency assigning a rating to any Class of Investor Certificates of any
then outstanding Series (if so requested by such Rating Agency) a Tax Opinion
with respect to such interest.
Section 6.10 Global Certificate; Euro-Certificate Exchange Date.
--------------------------------------------------
(a) If specified in the Supplement for any Series, the Investor
Certificates of such Series may be initially issued in the form of a single
temporary Global Certificate (the "Global Certificate") in bearer form, without
------------------
interest coupons, in the denomination of the Initial Invested Amount and
substantially in the form attached to such Supplement. Unless otherwise
specified in the applicable Supplement, the provisions of this Section 6.10
shall apply to such Global Certificate. The Global Certificate will be
authenticated by the Trustee upon the same conditions, in substantially the same
manner and with the same effect as the Definitive Certificates. The Global
Certificate may be exchanged as described in this Section 6.10 or in the
applicable Supplement for Bearer Certificates and/or Registered Certificates in
definitive form (the "Definitive Euro-Certificates"). Notwithstanding the
----------------------------
foregoing, no Certificates shall be issued in bearer form unless the Transferor
has determined, and delivers an Opinion of Counsel to the Trustee substantially
to the effect that, the terms and procedures governing issuance and transfer of
such Certificates result in favorable treatment to Investor Certificateholders
under the Bearer Rules.
(b) The Manager shall, upon its determination of the date of
completion of the distribution of the Certificates, so advise the Trustee, the
Transferor, the Common Depositary, and each Foreign Clearing Agency in writing
forthwith. Without unnecessary delay, but prior to the Euro-Certificate Exchange
Date, the Transferor will execute and deliver to the Trustee at its office or to
the Trustee's designated agent outside the United States definitive Bearer
Certificates
68
in an aggregate principal amount equal to the Initial Invested Amount of the
Global Certificate. All Bearer Certificates so issued and delivered will have
Coupons attached. The Global Certificate may be exchanged for an equal aggregate
principal amount of Definitive Euro-Certificates only on or after the
Euro-Certificate Exchange Date. A United States institutional investor will be
required to deliver to the Transferor, the Trustee and the Manager at the time
of its purchase of Registered Certificates a signed certificate substantially in
the form attached to the Supplement for the related Series. Upon any demand for
exchange for Definitive Certificates in accordance with this paragraph, the
Transferor shall cause the Trustee to authenticate and deliver the Definitive
Certificates to the Holder (x) outside the United States, in the case of Bearer
Certificates, and (y) according to the instructions of the Holder, in the case
of Registered Certificates, but only upon presentation to the Trustee of a
written statement substantially in the form attached to the Supplement for the
related Series with respect to the Global Certificate or portion thereof being
exchanged signed by a Foreign Clearing Agency, to the effect that it has
received in writing or by tested telex a certification substantially in the form
of the certificate attached to the Supplement for the related Series, such
certificate being dated no earlier than 15 days prior to the Euro-Certificate
Exchange Date and signed by or on behalf of the person appearing in the records
of a Foreign Clearing Agency as the beneficial owner of the Global Certificate
or portion thereof being exchanged. Upon receipt of such certification, the
Trustee shall cause the Global Certificate to be endorsed in accordance with
paragraph (d) below. Unless otherwise provided in the related Supplement, any
exchange as provided in this Section 6.10(b) shall be made free of charge to the
holders and the beneficial owners of the Global Certificate and to the
beneficial owners of the Definitive Euro-Certificates issued in exchange, except
that a person receiving Definitive Euro-Certificates must bear the cost of
insurance, postage, transportation and the like in the event that such person
does not receive such Definitive Euro-Certificates in person at the offices of a
Foreign Clearing Agency.
(c) The delivery to the Trustee by a Foreign Clearing Agency of
any written statement referred to above may be relied upon by the Transferor and
the Trustee as conclusive evidence that a corresponding certification or
certifications has or have been delivered to such Foreign Clearing Agency,
pursuant to the terms of this Agreement.
(d) Upon any such exchange of all or a portion of the Global
Certificate for a Definitive Euro-Certificate or Certificates, such Global
Certificate shall be endorsed by or on behalf of the Trustee to reflect the
reduction of its principal amount by an amount equal to the aggregate principal
amount of such Definitive Euro-Certificate or Certificates. Until so exchanged
in full, such Global Certificate shall in all respects be entitled to the same
benefits under this Agreement as Definitive Euro-Certificates authenticated and
delivered hereunder except that the beneficial owners of such Global Certificate
shall not be entitled to receive payments of interest on the Certificates until
they have exchanged their beneficial interests in such Global Certificate for
Definitive Euro-Certificates.
Section 6.11 Book-Entry Certificates. Unless otherwise provided
-----------------------
in any related Supplement, the Investor Certificates, upon original issuance,
will be issued in the form of the requisite number of typewritten Certificates
representing the Book-Entry Certificates, to be delivered to The Depository
Trust Company, which shall be the initial Clearing Agency, by, or on behalf of,
the Transferor. The Investor Certificates shall initially be registered on the
Certificate Register in the name of CEDE & Co., the nominee of the initial
Clearing Agency, and
69
no Certificate Owner will receive a definitive certificate representing such
Certificate Owner's interest in the Investor Certificates, except as provided in
Section 6.13. Unless and until definitive, fully registered Investor
Certificates (the "Definitive Certificates") have been issued to Certificate
Owners pursuant to Section 6.13:
(i) the provision of this Section 6.11 shall be in full
force and effect;
(ii) the Transferor, the Servicer, the Paying Agent, the
Transfer Agent and Registrar and the Trustee may deal with the Clearing
Agency for all purposes (including the making of distributions on the
Investor Certificates) as the authorized representatives of the Certificate
Owners, and, absent gross negligence or willful misconduct on its part, the
Transferor, the Servicer, the Paying Agent, the Transfer Agent and
Registrar and the Trustee shall have no responsibility or liability for any
aspect of the records pertaining to, or the making of any distribution to,
the Clearing Agency Participants or the Certificate Owners;
(iii) to the extent that the provisions of this Section 6.11
conflict with any other provisions of this Agreement, the provisions of
this Section 6.11 shall control;
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and the Clearing Agency Participants and shall
be limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Depository Agreement, unless and until
Definitive Certificates are issued pursuant to Section 6.13, the initial
Clearing Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit distributions of principal and
interest on the Investor Certificates to such Clearing Agency Participants;
and
(v) whenever this Agreement requires or permits actions to
be taken based upon instructions or directions of a specified percentage of
the Invested Amount of any or all Series of Certificates outstanding, the
Clearing Agency shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from Certificate
Owners and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in
Investor Certificates.
Section 6.12 Notices to Clearing Agency. Whenever notice or other
--------------------------
communication to the Investor Certificateholders is required under this
Agreement, unless and until Definitive Certificates shall have been issued to
Certificate Owners pursuant to Section 6.13, the Trustee, the Servicer and the
Paying Agent shall give all such notices and communications specified herein to
be given to Holders of the Investor Certificates to the applicable Clearing
Agency.
Section 6.13 Definitive Certificates. If Book-Entry Certificates
-----------------------
have been issued pursuant to Section 6.11 and if (i)(A) the Transferor advises
the Trustee in writing that the Clearing Agency is no longer willing or able to
discharge properly its responsibilities under the Depository Agreement, and (B)
the Trustee or the Transferor is unable to locate a qualified successor (which
successor must be treated as maintaining a book-entry system within the
70
meaning of Section 163(f)(3) of the Internal Revenue Code), (ii) the Transferor
at its option, advises the Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency with respect to the Certificates
or (iii) after the occurrence of a Servicer Default, Certificate Owners
representing beneficial interests aggregating more than 50% of the Invested
Amount of any Series advise the Trustee and the Clearing Agency through the
Clearing Agency Participants in writing that the continuation of a book-entry
system through the Clearing Agency is no longer in the best interests of the
Certificate Owners, the Trustee shall notify all Certificate Owners, through
each applicable Clearing Agency, of the occurrence of any such event and of the
availability of Definitive Certificates to Certificate Owners requesting the
same. Upon surrender to the Trustee of the Investor Certificates by the Clearing
Agency, accompanied by registration instructions from the Clearing Agency for
registration, the Trustee shall issue the Definitive Certificates. Neither the
Transferor, the Transfer Agent and Registrar nor the Trustee shall be liable for
any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Certificates all references herein to obligations imposed upon or to
be performed by the Clearing Agency shall be deemed to be imposed upon and
performed by the Trustee to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder.
Section 6.14 Meetings of Certificateholders.
------------------------------
(a) Unless not permitted by the Supplement for any Series issued
in whole or in part in Bearer Certificates, the Transferor, the Servicer or the
Trustee may at any time call a meeting of the Certificateholders of such Series
or of all Series, to be held at such time and at such place as the Transferor,
the Servicer or the Trustee, as the case may be, shall determine, for the
purpose of approving a modification of or amendment to, or obtaining a waiver
of, any covenant or condition set forth in this Agreement with respect to such
Series or in the Certificates of such Series, subject to Section 13.1.
References in this Section 6.14 to Certificateholders shall be deemed to refer
to the Exchangeable Transferor Certificates and only those Series of Investor
Certificates for which this Section 6.14 is applicable. Notice of any meeting of
Certificateholders, setting forth the time and place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be given in
accordance with Section 13.5 and at least once in an Authorized Newspaper and,
if and for so long as the Certificates are listed on the Luxembourg Stock
Exchange or other stock exchange and such exchange so requires, in a newspaper
of general circulation in Luxembourg (which newspaper shall be printed in the
English or French language and customarily published on each business day in
Luxembourg) or the location required by such other stock exchange, the first
publication to be not less that 20 nor more than 180 days prior to the date
fixed for the meeting. To be entitled to vote at any meeting of
Certificateholders, a person shall be (i) a Holder of one or more Certificates
of the applicable Series or (ii) a person appointed by an instrument in writing
as proxy by the Holder of one or more Certificates. The only Persons who shall
be entitled to be present or to speak to any meeting of Certificateholders shall
be the Persons entitled to vote at such meeting and their counsel and any
representatives of the Transferor, the Servicer and the Trustee and their
respective counsels.
(b) At a meeting of Investor Certificateholders, persons entitled
to vote Investor Certificates evidencing Undivided Interests aggregating a
majority of the Invested
71
Amount of the applicable Series or all outstanding Series, as the case may
be, shall constitute a quorum. No business shall be transacted in the absence of
a quorum, unless a quorum is present when the meeting is called to order. In the
absence of a quorum at any such meeting, the meeting may be adjourned for a
period of not less than 10 days; in the absence of a quorum at any such
adjourned meeting, such adjourned meeting may be further adjourned for a period
of not less than 10 days; at the reconvening of any meeting further adjourned
for lack of a quorum, the Persons entitled to vote at least 25% in Undivided
Interest of the applicable Series or all outstanding Series, as the case may be,
shall constitute a quorum for the taking of any action set forth in the notice
of the original meeting. Notice of the reconvening of any adjourned meeting
shall be given as provided above except that such notice must be given not less
than five days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage of the aggregate principal amount of the outstanding
Investor Certificates which shall constitute a quorum.
(c) Any Certificateholder who has executed an instrument in
writing appointing a person as proxy shall be deemed to be present for the
purposes of determining a quorum and be deemed to have voted; provided, however,
-------- -------
that such Certificateholder shall be considered as present or voting only with
respect to the matters covered by such instrument in writing. Subject to the
provisions of Section 13.1, any resolution passed or decision taken at any
meeting of Investor Certificateholders duly held in accordance with this Section
6.14 shall be binding on all the Investor Certificateholders whether or not
present or represented at the meeting.
(d) The holding of Bearer Certificates shall be proved by the
production of such Bearer Certificates or by a certificate, satisfactory to the
Servicer and the Trustee, executed by any bank, trust company or recognized
securities dealer, wherever situated, satisfactory to the Servicer and the
Trustee. Each such certificate shall be dated and shall state that on the date
thereof a Bearer Certificate bearing a specified serial number was deposited
with or exhibited to such bank, trust company or recognized securities dealer by
the person named in such certificate. Any such certificate may be issued in
respect of one or more Bearer Certificates specified therein. The holding by the
person named in any such certificate of any Bearer Certificate specified therein
shall be presumed to continue for a period of one year from the date of such
certificate unless at the time of any determination of such holding (i) another
certificate bearing a later date issued in respect of the same Bearer
Certificate shall be produced, (ii) the Bearer Certificate specified in such
certificate shall be produced by some other person or (iii) the Bearer
Certificate specified in such certificate shall have ceased to be outstanding.
The appointment of any proxy shall be proved by having the signature of the
person executing the proxy guaranteed by any bank, trust company or recognized
securities dealer satisfactory to the Trustee. The holding of Registered
Certificates shall be proved by the Certificate Register or by a certificate or
certificates of the Transfer Agent and Registrar.
(e) The Trustee shall appoint a temporary chairman of the
meeting. A permanent chairman and a permanent secretary of the meeting shall be
elected by vote of the holders of a majority in Undivided Interest of the
Certificates of such Series represented at the meeting. No vote shall be cast or
counted at any meeting in respect of any Certificate challenged as not
outstanding and ruled by the chairman of the meeting to be not outstanding. The
chairman of the meeting shall have no right to vote except as a
Certificateholder or proxy. Any meeting of
72
Certificateholders duly called at which a quorum is present may be adjourned
from time to time, and the meeting may be held as so adjourned without further
notice.
(f) The vote upon any resolution submitted to any meeting of
Certificateholders shall be by written ballot on which shall be subscribed the
signatures of the Certificateholders or proxies and on which shall be inscribed
the serial number or numbers of the Certificates held or represented by them.
The permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Certificateholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was published as
provided above. The record shall be signed and verified by the permanent
chairman and secretary of the meeting and one of the duplicates shall be
delivered to the Servicer and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the matters
therein stated.
Section 6.15 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 Certificate.
[END OF ARTICLE VI]
73
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
Section 7.1 Liability of the Transferor. The Transferor shall be liable
---------------------------
in accordance herewith only to the extent of the obligations specifically
undertaken by the Transferor in such capacity herein.
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
business entity or convey or transfer its properties and assets substantially as
an entirety to any Person, unless:
(i) 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 organized and existing under the laws of the United
States or any State or the District of Columbia, and if the Transferor is
not the surviving entity, shall expressly assume, by an agreement
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the performance of every covenant and
obligation of the Transferor, as applicable, hereunder and shall benefit
from all the rights granted to the Transferor, as applicable, hereunder. To
the extent that any right, covenant or obligation of the Transferor is
inapplicable to the successor entity, such successor entity shall be
subject to such covenant or obligation, or benefit from such right, as
would apply, to the extent practicable, to such successor entity;
(ii) the Transferor has delivered to the Trustee an Officer's
Certificate signed by a Vice President or more senior officer of the
Transferor stating that such consolidation, merger, conveyance or transfer
and such supplemental agreement comply with this Section 7.2 and that all
conditions precedent herein provided for relating to such transaction have
been complied with and an Opinion of Counsel stating that such supplemental
agreement constitutes a legal, valid and binding obligation of the
Transferor, enforceable against the Transferor in accordance with its
terms, subject to applicable bankruptcy, insolvency, receivership,
conservatorship, 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 proceeding at law or in
equity); and
(iii) if the surviving entity is subject to the bankruptcy laws of
the United States, the Transferor shall have received written notice from
each Rating Agency that such consolidation, merger, conveyance or transfer
will not result in a downgrading or withdrawal of its then current rating
of any outstanding Series of Investor Certificates and shall have delivered
copies of each such notice to the Servicer and the Trustee; and
74
(iv) if the surviving entity is not subject to the bankruptcy laws
of the United States, the Transferor shall have delivered to each Rating
Agency notice of such consolidation, merger, conveyance or transfer.
(b) The obligations of the Transferor hereunder shall not be assignable
nor shall any Person succeed to the obligations of the Transferor hereunder
except in each case in accordance with the provisions of the foregoing
paragraph.
Section 7.3 Limitation on Liability of the Transferor. The directors,
-----------------------------------------
officers, employees or agents of the Transferor shall not be under any liability
to the Trust, the Servicer, the Trustee, the Certificateholders, any Enhancement
Provider or any other Person hereunder or pursuant to any document delivered
hereunder, it being expressly understood that all such liability is expressly
waived and released as a condition of, and as consideration for, the execution
of this Agreement and any Supplement and the issuance of the Certificates;
provided, however, that this provision shall not protect the directors,
-------- -------
officers, employees or agents of the Transferor against any liability which
would otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations or duties hereunder or pursuant to any document delivered hereunder.
Except as provided in Section 7.4, the Transferor shall not be under any
liability to the Trust, the Servicer, the Trustee, the Certificateholders, any
Enhancement Provider or any other Person for any action taken or for refraining
from the taking of any action in its capacity as Transferor pursuant to this
Agreement or any Supplement whether arising from express or implied duties under
this Agreement or any Supplement; provided, however, that this provision shall
-------- -------
not protect the Transferor against any liability which would otherwise be
imposed by reason of its willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of its reckless disregard of its
obligations or duties hereunder or under any Supplement. 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 respecting any matters arising hereunder.
Section 7.4 Liabilities. Notwithstanding Section 7.3, by entering into
-----------
this Agreement, the Transferor agrees to be liable, directly to the injured
party, for the entire amount of any losses, claims, damages, expenses, or
liabilities (other than those incurred by a Certificateholder in the capacity of
an investor in the Investor Certificates as a result of the performance of the
Receivables, market fluctuations, a shortfall in any Enhancement or other
similar market or investment risks) arising out of or based on the arrangement
created by this Agreement and the actions of the Servicer taken pursuant hereto
as though this Agreement created a partnership under the Uniform Partnership
Act. The Transferor agrees to pay, indemnify and hold harmless each Investor
Certificateholder against and from any and all such losses, claims, expenses,
damages and liabilities (other than those incurred by a Certificateholder in the
capacity of an investor in the Investor Certificates as a result of the
performance of the Receivables, market fluctuations, a shortfall in any
Enhancement or other similar market or investment risks) except to the extent
that they arise from any action by such Investor Certificateholder. Subject to
Sections 8.3 and 8.4, in the event of a Service Transfer, the Successor Servicer
will indemnify and hold harmless the Transferor for any losses, claims, damages
and liabilities of the Transferor as described in this Section 7.4 arising from
the actions or omissions of such Successor Servicer. Amounts payable by the
Transferor pursuant to this
75
Section 7.4 shall not be paid from the Trust Property and shall be paid only to
the extent that the Transferor has funds available for that purpose. If the
Transferor does not have funds available to make any such payment, no Person
shall be entitled to assert a claim against the Transferor for such unpaid
amount.
[END OF ARTICLE VII]
76
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
Section 8.1 Liability of the Servicer. The Servicer shall be liable in
-------------------------
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer in such capacity herein.
Section 8.2 Merger or Consolidation of, or Assumption of the
------------------------------------------------
Obligations of, the Servicer. The Servicer shall not consolidate with or merge
----------------------------
into any other business entity or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) the business entity formed by such consolidation or
into which the Servicer is merged or the Person which acquires by
conveyance or transfer the properties and assets of the Servicer
substantially as an entirety shall be organized and existing under the
laws of the United States or any State or the District of Columbia, and
if the Servicer is not the surviving entity, shall be an Eligible
Servicer and shall expressly assume, by an agreement supplemental
hereto, executed and delivered to the Trustee, the performance of every
covenant and obligation of the Servicer, as applicable, hereunder and
shall benefit from all the rights granted to the Servicer, as
applicable, hereunder. To the extent that any right, covenant or
obligation of the Servicer is inapplicable to the successor entity,
such successor entity shall be subject to such covenant or obligation,
or benefit from such right, as would apply, to the extent practicable,
to such successor entity;
(ii) the Servicer has delivered to the Trustee an Officer's
Certificate stating that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section 8.2
and that all conditions precedent herein provided for relating to such
transaction have been complied with and an Opinion of Counsel that such
supplemental agreement constitutes a legal, valid and binding
obligation of the Servicer, enforceable against the Servicer in
accordance with its terms, subject to applicable bankruptcy,
insolvency, receivership, conservatorship, 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 proceeding at law or in equity);
(iii) if the surviving entity is subject to the bankruptcy
laws of the United States, the Servicer shall have received written
notice from each Rating Agency that such consolidation, merger,
conveyance or transfer will not result in a downgrading or withdrawal
of its then current rating of any outstanding Series of Investor
Certificates and shall have delivered copies of each such notice to the
Transferor and the Trustee; and
(iv) if the surviving entity is not subject to the
bankruptcy laws of the United States, the Servicer shall have delivered
to each Rating Agency notice of such consolidation, merger, conveyance
or transfer.
Section 8.3 Limitation on Liability of the Servicer and Others. The
--------------------------------------------------
directors, officers, employees or agents of the Servicer shall not be under any
liability to the Trust, the
77
Transferor, the Trustee, the Certificateholders, any Enhancement Provider or any
other Person hereunder or pursuant to any document delivered hereunder, it being
expressly understood that all such liability is expressly waived and released as
a condition of, and as consideration for, the execution of this Agreement and
any Supplement and the issuance of the Certificates; provided, however, that
-------- -------
this provision shall not protect the directors, officers, employees or agents of
the Servicer against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations or duties hereunder or
pursuant to any document delivered hereunder. Except as provided in Section 8.4,
the Servicer shall not be under any liability to the Trust, the Transferor, the
Trustee, the Certificateholders, any Enhancement Provider or any other Person
for any action taken or for refraining from the taking of any action in its
capacity as Servicer pursuant to this Agreement or any Supplement whether
arising from express or implied duties under this Agreement or any Supplement;
provided, however, that this provision shall not protect the Servicer against
-------- -------
any liability which would otherwise be imposed by reason of its willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of its reckless disregard of obligations or duties hereunder or under any
Supplement. 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 respecting any matters arising hereunder.
The Servicer shall not be under any obligation to appear in, prosecute or defend
any legal action which is not incidental to its duties to service the
Receivables in accordance with this Agreement or any Supplement which in its
reasonable opinion may involve it in any expense or liability.
Section 8.4 Indemnification of the Trust and the Trustee. The Servicer
---------------------------------------------
shall indemnify and hold harmless the Trust, for the benefit of the
Certificateholders, and the Trustee, including its directors, officers, agents
and employees, from and against any loss, liability, expense, damage or injury
arising out of or relating to any claims, actions or proceedings brought or
asserted by third parties which are suffered or sustained by reason of any acts
or omissions of the Servicer pursuant to this Agreement or any Supplement,
including but not limited to any judgment, award, settlement, reasonable
attorneys' fees and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim; provided,
--------
however, that the Servicer shall not indemnify the Trust for the benefit of the
-------
Certificateholders or the Trustee or its directors, officers, agents or
employees for any liability, cost or expense of the Trust or the Trustee or its
officers, directors, agents or employees if any such claims, actions or
proceedings relate to (i) any action taken by the Trustee at the request of the
Investor Certificateholders, (ii) any Federal, state or local taxes (or any
interest or penalties with respect thereto) required to be paid by the Trust,
the Trustee or the Investor Certificateholders in connection herewith to any
taxing authority, (iii) with respect to the Trustee and its officers, directors
and employees, any wrongful actions taken by or omissions of the Trustee or any
fraud, negligence or willful misconduct by the Trustee or (iv) a
Certificateholder in the capacity of an investor in the Investor Certificates as
a result of the performance of the Receivables, market fluctuations, a shortfall
in any Enhancement or other similar market or investment risks. Subject to
Sections 7.1 and 7.4 and Section 10.2(b) of the Agreement, any indemnification
pursuant to this Section 8.4 shall only be from the assets of the Servicer. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof and shall survive the
termination of this Agreement, the resignation and removal of the Trustee and
payment in full of the Certificates.
78
Section 8.5 The Servicer Not to Resign. The Servicer shall not resign
---------------------------
from the obligations and duties hereby imposed on it as such except upon
determination that (i) the performance of its duties hereunder is or will become
impermissible under applicable law, regulation or order and (ii) there is no
reasonable action which the Servicer could take to make the performance of its
duties hereunder permissible under applicable law. Any such determination
permitting the resignation of the Servicer shall be evidenced as to clause (i)
of this Section 8.5 by an Opinion of Counsel to such effect delivered to the
Trustee. No such resignation shall be effective until the Trustee or a successor
to the Servicer has assumed the Servicer's responsibilities and obligations
under this Agreement. If the Trustee is unable within 120 days of the date of
such determination to appoint a Successor Servicer pursuant to Section 10.2(a),
the Trustee or its duly appointed agent (which may not be the outgoing Servicer)
shall serve as Successor Servicer hereunder but the Trustee shall have continued
authority to appoint another Person as Successor Servicer.
Section 8.6 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 the
Investor Certificateholders, or by applicable statutes or regulations, to review
such documentation, such access being afforded without charge but only (i) upon
reasonable request, (ii) during normal business hours, (iii) subject to such
security and confidentiality procedures as the Servicer may deem reasonably
necessary and (iv) at offices designated by the Servicer. Nothing in this
Section 8.6 shall derogate from the obligation of the Transferor, the Trustee or
the Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors and the failure of the Servicer to provide access as
provided in this Section 8.6 as a result of such obligation shall not constitute
a breach of this Section 8.6.
Section 8.7 Delegation of Duties. It is understood and agreed by the
--------------------
parties hereto that the Servicer may delegate certain of its duties hereunder to
any Person who agrees to conduct such duties in accordance with the applicable
Account Guidelines and the usual and customary servicing policies and procedures
of the Servicer. The fees of any Person to whom such duties are delegated shall
be for the account of the Servicer. 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 hereof. If
any such delegation is not in the ordinary course of business, notification
thereof shall be given by the Servicer to each Rating Agency.
Section 8.8 Examination of Records. Each of the Transferor and the
-----------------------
Servicer shall clearly and unambiguously identify each Account (including any
Account designated pursuant to Section 2.6) in its computer or other records to
reflect that the Receivables arising in such Account have been conveyed to the
Trust pursuant to this Agreement. Each of 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.
[END OF ARTICLE VIII]
79
ARTICLE IX
EARLY AMORTIZATION EVENTS
Section 9.1 Early Amortization Events. Unless modified with respect to
-------------------------
any Series of Investor Certificates by the Supplement for such Series, if any
one of the following events shall occur:
(a) the Bank shall consent or fail to object to the appointment of a
conservator, receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceeding of or relating to the
Bank or of or relating to all or substantially all of its property, or a decree
or order of a court, agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceeding, or for the winding-up or liquidation of its affairs, shall
have been entered against the Bank; or the Bank shall admit in writing its
inability to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend payment of
its obligations;
(b) the Transferor shall consent or fail to object to the appointment
of a bankruptcy trustee, conservator, receiver or liquidator in any bankruptcy
proceeding, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceeding of or relating to the Transferor or of or
relating to all or substantially all of its property, or a decree or order of a
court, agency or supervisory authority having jurisdiction in the premises for
the appointment of a bankruptcy trustee, conservator, receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceeding, or for the winding-up or liquidation of its affairs, shall
have been entered against the Transferor or an action seeking any such decree or
order shall have been commenced and, notwithstanding an objection by the
Transferor, shall have remained undischarged or unstayed for a period of sixty
(60) days; or the Transferor shall admit in writing its inability to pay its
debts generally as they become due, file or consent or fail to object (or object
without dismissal of any such filing within sixty (60) days of such filing or
the earlier entry of any order providing for such relief) to the filing of a
petition to take advantage of any applicable bankruptcy, insolvency or
reorganization statute, make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations (any such event described in this
clause (b) or in clause (a) above, an "Insolvency Event");
----------------
(c) the Bank shall become unable for any reason to sell Receivables
to the Transferor in accordance with the provisions of the Receivables Purchase
Agreement;
(d) the Transferor shall become unable for any reason to transfer
Receivables to the Trust in accordance with the provisions of this Agreement; or
(e) the Trust shall become an "investment company" within the meaning
of the Investment Company Act of 1940, as amended (the "1940 Act");
--------
then, an Early Amortization Event with respect to all Series then outstanding
shall occur without any notice or other action on the part of the Trustee or the
Investor Certificateholders immediately upon the occurrence of such event. Upon
a Responsible Officer of the Trustee
80
receiving actual notice thereof, the Trustee shall advise the Rating Agencies in
writing of the occurrence of any Early Amortization Event.
Section 9.2 Additional Rights Upon the Occurrence of Certain Events.
-------------------------------------------------------
(a) Upon the occurrence of an Insolvency Event, the Transferor shall
promptly give notice of such event to the Trustee, and the Transferor shall on
the day of such Insolvency Event (the "Appointment Day"), immediately cease to
---------------
transfer Principal Receivables to the Trust hereunder. Notwithstanding any
cessation of the transfer to the Trust of additional Principal Receivables,
Principal Receivables transferred to the Trust prior to the occurrence of such
Insolvency Event and Collections in respect of such Principal Receivables and
Finance Charge Receivables whenever created shall continue to be part of the
Trust, and such Collections shall continue to be allocated and deposited in
accordance with the provisions of Article IV. Within 15 days of the receipt by
the Trustee of the notice of an Insolvency Event, the Trustee shall (i) publish
a notice in an Authorized Newspaper that an Insolvency Event has occurred and
that the Trustee intends to sell, dispose of or otherwise liquidate the
Receivables in a commercially reasonable manner and (ii) send written notice to
the Investor Certificateholders and any Enhancement Provider entitled thereto
describing the provisions of this Section 9.2 and requesting instructions from
such Holders, which notice shall request each Investor Certificateholder to
advise the Trustee in writing that it elects one of the following options: (A)
the Investor Certificateholder wishes the Trustee to instruct the Servicer not
to sell, dispose of or otherwise liquidate the Receivables and to instruct the
Servicer to reconstitute the Trust upon the same terms and conditions set forth
herein, or (B) the Investor Certificateholder wishes the Trustee to instruct the
Servicer to sell, dispose of or otherwise liquidate the Receivables, or (C) the
Investor Certificateholder refuses to advise the Trustee as to the specific
action the Trustee shall instruct the Servicer to take. If after 90 days from
the day notice pursuant to clause (i) above is first published (the "Publication
-----------
Date"), the Trustee shall not have received written instructions of Holders of
----
Investor Certificates aggregating in excess of 50% of the related Invested
Amount of each Series (or in the case of a Series having more than one Class of
Investor Certificates, each Class of such Series), each Holder of any interest
in the Exchangeable Transferor Certificate other than the Transferor and any
other Person specified in any Supplement to the effect that the Trustee shall
instruct the Servicer not to sell, dispose of, or otherwise liquidate the
Receivables and to instruct the Servicer to reconstitute the Trust upon the same
terms and conditions as set forth herein, the Trustee shall instruct the
Servicer to proceed to sell, dispose of, or otherwise liquidate the Receivables
in a commercially reasonable manner and on commercially reasonable terms, which
shall include the solicitation of competitive bids and the Servicer shall
proceed to consummate the sale, liquidation or disposition of the Receivables as
provided above with the highest bidder for the Receivables. If, however, with
respect to the portion of the Receivables allocable to any outstanding Series,
the Holders of more than 50% of the principal amount of each Class of such
Series and each Holder of any interest in the Exchangeable Transferor
Certificate other than the Transferor instruct the Trustee not to sell the
portion of the Receivables allocable to such Series, the Trust shall continue
with respect to such Series pursuant to the terms of this Agreement and the
related Supplement. If specified in the applicable Supplement, the holder of an
Enhancement Invested Amount with respect to a Series shall be entitled to give
instructions pursuant to this Section 9.2 as if such Enhancement Invested Amount
were a Class of such Series. The portion of the Receivables allocable to any
Series shall be equal to the sum of (1) the product of (A) the Transferor
Percentage, (B) the Aggregate
81
Principal Receivables and (C) a fraction the numerator of which is the related
Invested Percentage with respect to Finance Charge Receivables and the
denominator of which is the sum of all Invested Percentages with respect to
Finance Charge Receivables of all Series outstanding and (2) the Invested Amount
of such Series. The Transferor or any of its Affiliates shall be permitted to
bid for the Receivables. In addition the Transferor or any of its Affiliates
shall have the right to match any bid by a third person and be granted the right
to purchase the Receivables at such matched bid price. The Trustee may obtain a
prior determination from the conservator or receiver that the terms and manner
of any proposed sale, disposition or liquidation are commercially reasonable.
The provisions of Sections 9.1 and 9.2 shall not be deemed to be mutually
exclusive.
(b) The proceeds from the sale, disposition or liquidation of the
Receivables pursuant to Section (a) above shall be treated as Collections on the
Receivables allocable to the Investor Certificateholders and shall be allocated
and deposited as Collections allocable to the Investor Certificateholders of the
applicable Series in accordance with the provisions of Article IV; provided,
--------
however, that the Trustee shall determine conclusively without liability for
------
such determination the amount of such proceeds which are allocable to Finance
Charge Receivables and the amount of such proceeds which are allocable to
Principal Receivables. On the day following the Distribution Date on which such
proceeds are distributed to the Investor Certificateholders (assuming that no
Series elects to reconstitute the Trust), the Trust shall terminate.
[END OF ARTICLE IX]
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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 to make such payment, transfer
or deposit or to give notice to the Trustee as to any required drawing or
payment under any Enhancement on or before the date occurring five Business Days
after the date such payment, transfer, deposit or drawing or such instruction or
notice is required to be made or given, as the case may be, under the terms of
this Agreement or any Supplement;
(b) failure on the part of the Servicer duly to observe or perform any
other covenants or agreements of the Servicer set forth in this Agreement or any
Supplement, which has a material adverse effect on the Certificateholders of any
Series then outstanding (without regard to the amount of 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 the Transferor, or to the Servicer,
the Transferor and the Trustee by the Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the Invested Amount
of any Series adversely affected thereby, and which continues to materially
adversely affect the rights of the Certificateholders of any Series then
outstanding (without regard to the amount of any Enhancement) or the Servicer
shall delegate its duties under this Agreement, except as permitted by Section
8.7; provided, however, that any such failure that relates to any particular
Receivable or group of Receivables shall not constitute a Servicer Default if
the Servicer has made a deposit in the Collection Account with respect to such
failure in accordance with Section 3.3;
(c) any representation, warranty or certification made by the Servicer in
this Agreement or any Supplement or in any certificate delivered pursuant to
this Agreement or any Supplement shall prove to have been incorrect when made,
which has a material adverse effect on the rights of the Certificateholders of
any Series then outstanding (without regard to the amount of any Enhancement)
and which continues to be incorrect in any material respect and which continues
to affect materially and adversely the rights of the Certificateholders of any
Series (without regard to the amount of any Enhancement) 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 the
Transferor, or to the Servicer, the Transferor and the Trustee by the Holders of
Investor Certificates evidencing Undivided Interests aggregating more than 50%
of the Invested Amount of any Series adversely affected thereby; or
(d) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to the Servicer or
of or relating to all or substantially all of its property, or a decree or order
of a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicer and such
83
decree or order shall have remained in force undischarged or unstayed for a
period of 60 days; or the Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations;
then, so long as such Servicer Default shall not have been remedied, the
Trustee, the Transferor or the Holders of Investor Certificates evidencing
Undivided Interests aggregating more than 50% of the Aggregate Invested Amount,
by notice then given in writing to the Servicer (and to the Trustee and the
Transferor if given by the Investor Certificateholders) (a "Termination
-----------
Notice"), may terminate all of the rights and obligations of the Servicer as
------
Servicer under this Agreement and in and to the Receivables and the proceeds
thereof and appoint a new Servicer (a "Service Transfer"). The rights and
----------------
interests of the Transferor Interest will not be affected by any Service
Transfer. The Trustee, upon giving or receiving a Termination Notice shall
immediately notify the Rating Agencies and any Enhancement Provider of such
notice. After receipt by the Servicer of such Termination Notice, and on the
date that a Successor Servicer shall have been appointed by the Trustee pursuant
to Section 10.2, all authority and power of the Servicer under this Agreement
shall pass to and be vested in a Successor Servicer, and, without limitation,
the Trustee is hereby authorized and empowered (upon the failure of the Servicer
to cooperate) to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments upon the
failure of the Servicer to execute or deliver such documents or instruments, and
to do and accomplish all other acts or things necessary or appropriate to effect
the purposes of such Service Transfer. The Servicer agrees to take all
reasonable actions to cooperate with the Trustee and such Successor Servicer in
effecting the termination of the responsibilities and rights of the Servicer to
conduct servicing hereunder, including, without limitation, the transfer to such
Successor Servicer of all authority of the Servicer to service the Receivables
provided for under this Agreement, including, without limitation, all authority
over all Collections which shall on the date of transfer be held by the Servicer
for deposit, or which have been deposited by the Servicer, in the Collection
Account, or which shall thereafter be received with respect to the Receivables,
and in assisting the Successor Servicer and in enforcing all rights to
Recoveries. The Servicer shall promptly transfer its electronic records relating
to the Receivables to the Successor Servicer in such electronic form as the
Successor Servicer may reasonably request and shall promptly transfer to the
Successor Servicer all other records, correspondence and documents necessary for
the continued servicing of the Receivables in the manner and at such times as
the Successor Servicer shall reasonably request. To the extent that compliance
with this Section 10.1 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
necessary to protect its interest.
Notwithstanding the foregoing, a delay in or failure of performance
referred to in Section 10.1(a) for a period of 10 Business Days after the
applicable grace period or a delay in or failure of performance referred to in
Section 10.1(b) or (c) for a period of 60 Business Days after the applicable
grace period shall not constitute a Servicer Default if such delay or failure
could not be prevented by the exercise of reasonable diligence by the Servicer
and such delay or failure was caused by an act of God or the public enemy, acts
of declared or undeclared war, public disorder, rebellion, riot or sabotage,
epidemics, landslides, lightning, fire, hurricanes, tornadoes, earthquakes,
nuclear disasters or meltdowns, floods, power outages or similar causes. The
84
preceding sentence shall not relieve the Servicer from using its best efforts to
perform its obligations in a timely manner in accordance with the terms of this
Agreement and the Servicer shall provide the Trustee, any Enhancement Provider,
the Transferor and the Holders of Investor Certificates with an Officer's
Certificate giving prompt notice of such failure or delay by it, together with a
description of the cause of such failure or delay and its efforts so to perform
its obligations. The Servicer shall immediately notify a Responsible Officer of
the Trustee in writing of any Servicer Default.
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 in writing or, if no such date is
specified in such Termination Notice, or otherwise specified by the Trustee,
until a date mutually agreed upon by the Servicer and Trustee. The Trustee shall
as promptly as possible after the giving of a Termination Notice appoint a
successor servicer (the "Successor Servicer"), and such Successor Servicer shall
--------- --------
accept its appointment by a written assumption in a form acceptable to the
Trustee and the Transferor. The Transferor shall have the right to nominate to
the Trustee the name of a potential successor servicer which nominee shall be
selected by the Trustee as the Successor Servicer. The Trustee may obtain bids
from any potential successor servicer. If the Trustee is unable to obtain any
bids from any potential successor servicer, the Trustee has not appointed the
Transferor's nominee and the Servicer delivers to the Trustee an Officer's
Certificate to the effect that it cannot in good faith cure the Servicer Default
which gave rise to a transfer of servicing, then the Trustee shall notify each
Enhancement Provider that a sale of the Receivables is proposed and shall
provide each Enhancement Provider an opportunity to bid on the Receivables and
shall offer the Transferor the right of first refusal to purchase the
Receivables on terms equivalent to the best purchase offer as determined by the
Trustee, but in no event less than an amount equal to the Aggregate Invested
Amount (less the aggregate principal amount on deposit in the Excess Funding
Account and any principal funding account with respect to any Series) on the
date of such purchase plus all accrued but unpaid interest on the Certificates
----
of all Series at the applicable Certificate Rates through the end of the
applicable interest accrual periods of such Series plus any other unpaid amounts
----
required to be paid pursuant to this Section 10.2 under any Supplement;
provided, however, that, if the Transferor shall not have a rating of P-3 or
-------- -------
Baa3 or higher by ▇▇▇▇▇'▇ and BBB- or higher by Standard & Poor's, no such
reassignment shall occur unless the Transferor shall deliver to the Trustee and
the Rating Agencies an Opinion of Counsel reasonably acceptable to the Trustee
that such reassignment would not constitute a fraudulent conveyance. In the
event that a Successor Servicer has not been appointed and has not accepted its
appointment at the time when the Servicer ceases to act as Servicer, the Trustee
(as trustee hereunder) without further action shall automatically be appointed
the Successor Servicer. Notwithstanding the above, the Trustee shall, if it is
legally unable so to act, petition a court of competent jurisdiction to appoint
any established financial institution having a net worth of not less than
$50,000,000 and whose regular business includes the servicing of charge card or
revolving credit receivables as the Successor Servicer hereunder.
Notwithstanding anything to the contrary in this Agreement, the entire amount of
the reassignment deposit amount shall be distributed to the Investor
Certificateholders of the related Series on the subsequent Distribution Date for
such Series pursuant to Section 12.3 (except for amounts payable to any
Enhancement
85
Provider under the applicable Enhancement Agreement, which amounts shall be
distributed to such Enhancement Provider.)
(b) Upon its appointment, the Successor Servicer shall be the successor in
all respects to the Servicer with respect to servicing functions under this
Agreement and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof, and all references in this Agreement to the Servicer shall be deemed to
refer to the Successor Servicer; provided, however, that the outgoing Servicer
-------- -------
shall not be relieved of any liability hereunder for its actions prior to the
transfer of servicing hereunder; and, provided further, that (i) the outgoing
-------- -------
Servicer shall not indemnify the Trust or the Trustee under Section 8.4 for
acts, omissions or alleged acts or omissions by a Successor Servicer and (ii)
the outgoing Servicer shall not pay or reimburse the Trustee pursuant to Section
11.5 for any expense, disbursement or advance of the Trustee related to or
arising as a result of the negligence or bad faith of the Successor Servicer.
Any Successor Servicer, by its acceptance of its appointment, will automatically
agree to be bound by the terms and provisions of any applicable Enhancement
agreement.
(c) In connection with such appointment and assumption, the Trustee shall
be entitled to such compensation, or may make such arrangements for the
compensation of the Successor Servicer out of Collections, as it and such
Successor Servicer shall agree; provided, however, that no such compensation
-------- -------
shall be in excess of the Monthly Servicing Fee permitted to the Servicer
pursuant to Section 3.2.
(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 necessary to protect its interests.
Section 10.3 Notification to Certificateholders. Upon the occurrence of
----------------------------------
any Servicer Default, the Servicer shall give prompt written notice thereof to
the Trustee, the Rating Agencies and any Enhancement Provider, and the Trustee
shall give notice to the Investor Certificateholders at their respective
addresses appearing in the Certificate Register. Upon any termination or
appointment of a Successor Servicer pursuant to this Article X, the Trustee
shall give prompt written notice thereof to the Investor Certificateholders at
their respective addresses appearing in the Certificate Register, the Rating
Agencies and to any Enhancement Provider.
86
Notice to Holders of Bearer Certificates shall be given by publication in the
manner described in Section 13.5.
Section 10.4 Waiver of Past Defaults. The Holders of Investor Certificates
-----------------------
evidencing Undivided Interests aggregating more than 66-2/3% of the Invested
Amount of any Series then outstanding affected by any default by the Servicer or
the Transferor may, on behalf of all Holders of Certificates of such affected
Series, waive any default by the Servicer or the Transferor in the performance
of their respective obligations hereunder and its consequences, except a default
resulting from the failure to make any required deposits or payments of interest
or principal with respect to any Series. 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.
[END OF ARTICLE X]
87
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 or waiving of all Servicer Defaults which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. If a Servicer Default has occurred (which has not been
cured or waived), the Trustee (as Trustee and not Successor Servicer) shall
exercise such of the rights and powers vested in it by this Agreement or any
Supplement, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement or any Supplement, shall examine them to determine
whether they conform as to form to the requirements of this Agreement or any
Supplement, but shall not be required to verify the accuracy of any information,
calculations or conclusions stated therein.
(c) Subject to Section 11.1(a), no provision of this Agreement or any
Supplement shall be construed to relieve the Trustee from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct; provided, however, that:
-------- -------
(i) the Trustee shall not be liable for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the Invested
Amount of any Series adversely affected thereby relating to the time, method
and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under
this Agreement or any Supplement;
(iii) the Trustee shall not be charged with knowledge of any
failure by the Servicer (other than the Trustee, in its capacity as Successor
Servicer) to comply with the obligations of the Servicer referred to in
clauses (a), (b) and (c) of Section 10.1 unless a Responsible Officer of the
Trustee obtains actual knowledge of such failure (it being understood that
knowledge of the Servicer, in its capacity as agent for the Trustee, is not
attributable to the Trustee) or the Trustee receives written notice of such
failure from the Servicer, the Transferor, any Holders of Investor
Certificates evidencing Undivided Interests aggregating more than 50% of the
Invested Amount of any Series adversely affected thereby or any Enhancement
Provider;
88
(iv) in making a determination of any material and adverse
effect upon Certificateholders or the Investor Certificates, the
Trustee may, as to matters of law, rely exclusively upon an Opinion of
Counsel.
(d) The Trustee (in its capacity as such) shall not be required
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in exercise of any of its rights
or powers, if there is reasonable ground for believing that the repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this Agreement
or any Supplement shall in any event require the Trustee to perform, or be
responsible for the manner of performance of, any of the obligations of the
Transferor, the Servicer or the Successor Servicer under this Agreement or any
Supplement except during such time, if any, as the Trustee shall be the
Successor Servicer in accordance with the terms of this Agreement or any
Supplement.
(e) Except for actions expressly authorized by this Agreement or
any Supplement, the Trustee shall take no action reasonably likely to impair the
interests of the Trust in any Receivable now existing or hereafter created or to
impair the value of any Receivable now existing or hereafter created.
(f) Except as specifically provided in this Agreement, the
Trustee shall have no power to vary the corpus of the Trust.
(g) In the event that the Paying Agent or the Transfer Agent and
Registrar shall not be the Trustee and shall fail to perform any obligation,
duty or agreement in the manner or on the day required to be performed by the
Paying Agent or the Transfer Agent and Registrar, as the case may be, under this
Agreement, the Trustee shall be obligated promptly upon its knowledge thereof to
perform such obligation, duty or agreement in the manner so required.
(h) Any action, suit or proceeding brought in respect of one or
more particular Series shall have no effect on the Trustee's rights, duties and
obligations hereunder with respect to any one or more Series not the subject of
such action, suit or proceeding.
(i) The Trustee shall, upon the reasonable request of the
Transferor, enter into any intercreditor agreement relating to the assets of the
Transferor.
Section 11.2 Certain Matters Affecting the Trustee. Except as
-------------------------------------
otherwise provided in Section 11.1:
(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, Opinion of Counsel, certificate of independent public accountants
or any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document, including,
without limitation, any request or instruction by the Servicer or the Transferor
to make any deposit or payment or any draw on any Enhancement or to transfer any
Receivables or Accounts, prima facie properly executed and submitted to it
----- -----
pursuant to this Agreement or any Supplement by the proper party or parties;
89
(b) the Trustee may consult with counsel as to matters of law and
any advice 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 Opinion of Counsel as to any actions
required to be taken or withheld hereunder;
(c) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement or any Supplement, or to
institute, conduct or defend any litigation hereunder or in relation hereto, at
the request, order or direction of any of the Certificateholders or Certificate
Owners or any Enhancement Provider, pursuant to the provisions of this Agreement
or any Supplement or any Enhancement, unless such Certificateholders or
Certificate Owners or such Enhancement Provider shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; nothing contained herein
shall, however, relieve the Trustee (as Trustee but not as Successor Servicer)
of the obligations, upon the occurrence of any Servicer Default (which has not
been cured or waived), to exercise such of the rights and powers vested in it by
this Agreement or any Supplement, and to use the same degree of care and skill
in their exercise, as a prudent Person would exercise or use under the
circumstances in the conduct of such Person's own affairs;
(d) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement or
any Supplement;
(e) except as may be required by Section 11.1(a) or 11.1(b), the
Trustee shall not be bound to make any investigation into the facts of matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or document,
except to the extent specifically requested in writing so to do by Holders of
Investor Certificates evidencing Undivided Interests aggregating more than 50%
of the Invested Amount of any Series which could be adversely affected if the
Trustee does not perform such acts and the Trustee is reasonably indemnified
therefor;
(f) the Trustee (in its capacity as such) may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys or a custodian, and the Trustee (in its capacity
as such) shall not be responsible for any misconduct or negligence on the part
of any such agent, attorney or custodian appointed with due care by it
hereunder;
(g) except as may be required by Section 11.1(a) or 11.1(b)
hereof, the Trustee shall not be required to make any initial or periodic
examination of any documents or records related to the Receivables or the
Accounts for the purpose of establishing the presence or absence of defects, the
compliance by the Transferor or the Servicer with their representations,
warranties or covenants or for any other purpose;
(h) the permissive right of the Trustee to take actions
enumerated in this Agreement or any Supplement shall in no event be construed as
a duty;
90
(i) whenever in the administration of this Agreement or any
Supplement, the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officer's Certificate;
(j) except with respect to any Enhancement Invested Amount, the
Trustee shall not be deemed to be a fiduciary for the Enhancement Provider, if
any, in its capacity as such, and the Trustee's sole responsibility with respect
to the Enhancement Provider in its capacity as such shall be to perform those
duties with respect to the Enhancement Provider as are specifically set forth in
the related Enhancement Agreement and no implied covenants or obligations shall
be read into this Agreement against the Trustee with respect to the Enhancement
Provider; and
(k) the Trustee shall have no duty (i) to see to any recording,
filing or depositing of this Agreement or any agreement referred to herein or
any financing statement or continuation statement evidencing a security interest
in the Receivables or the Accounts, or to see to the maintenance of any such
recording, filing or depositing or any rerecording, refiling or redepositing of
any thereof or (ii) to confirm or verify the contents of any reports or
certificates of the Servicer delivered to the Trustee pursuant to this Agreement
believed by the Trustee to be genuine and to have been signed or presented by
the proper party or parties.
Section 11.3 Trustee Not Liable for Recitals in Certificates. The
-----------------------------------------------
Trustee assumes no responsibility for the correctness of the recitals contained
herein, in any Supplement or in the Certificates (other than the certificates of
authentication on the Certificates). Except as set forth in Section 2.2(a) or
Section 11.15, the Trustee makes no representations as to (i) the validity or
sufficiency of this Agreement or any Supplement or of the Certificates (other
than the certificates of authentication on the Certificates), (ii) the existence
or validity of any Receivable, (iii) the validity of any transfer or assignment
of any Receivable to the Trust, (iv) the validity of any grant of a security
interest to the Trust in any Receivable, (v) the perfection of any security
interest (whether as of the date hereof or at any future time) in any
Receivable, (vi) the maintenance of or the taking of any action to maintain such
perfection, (vii) the receipt by the Trustee or the Servicer of any Receivable,
(viii) the performance or enforcement of any Receivable, (ix) the compliance by
the Transferor or the Servicer with any covenant or representation, (x) the
breach by the Transferor or the Servicer of any warranty or representation made
hereunder or in any related document or the accuracy of any such warranty or
representation or (xi) any action taken by the Servicer in the name of the
Trustee. The Trustee shall not be accountable for the use or application by the
Transferor of any of the Certificates or of the proceeds of such Certificates,
or for the use or application of any funds paid to the Transferor in respect of
the Receivables or deposited in or withdrawn from the Collection Account, the
Excess Funding Account or any other accounts now or hereafter established to
effectuate the transactions contemplated herein and in accordance with the terms
hereof.
Section 11.4 Trustee May Own Certificates. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of Investor
Certificates with the same rights as it would have if it were not the Trustee
and may transact any banking or trust business with the Transferor, the Servicer
or any of their respective Affiliates.
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Section 11.5 The Servicer to Pay Trustee's Fees and Expenses. The
-----------------------------------------------
Servicer covenants and agrees to pay to the Trustee and any co-trustee(s)
appointed pursuant to Section 11.10 from time to time out of its own funds, and
the Trustee and any such co-trustee(s), 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 or pursuant to any
Supplement of the Trustee, and, subject to Section 8.4, the Servicer will pay or
reimburse the Trustee and any such co-trustee(s) (without reimbursement from the
Collection Account or otherwise) upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee or any such
co-trustee(s) in accordance with any of the provisions of this Agreement or any
Supplement (including the reasonable fees and expenses of its agents and
counsel) except any such expense, disbursement or advance as may arise from its
negligence or bad faith and except as provided in the following sentence. If the
Trustee is appointed Successor Servicer pursuant to Section 10.2, the provisions
of this Section 11.5 shall not apply to expenses, disbursements and advances
incurred or made by the Trustee in its capacity as Successor Servicer.
The obligations of the Servicer and the Transferor under this
Section 11.5, Section 7.4, Section 8.4 and Section 11.17 shall survive the
termination of the Trust and the resignation or removal of the Trustee or the
Servicer.
Section 11.6 Eligibility Requirements for Trustee. The Trustee
------------------------------------
hereunder shall at all times be a corporation (including a banking corporation)
or national banking association organized and doing business under the laws of
the United States or any state thereof authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000, a rating as to its long-term unsecured debt obligations of at least
Baa3 by Moody's (if Moody's shall then be a Rating Agency) and BBB- by Standard
& Poor's (if Standard & Poor's shall then be a Rating Agency) and a rating as to
its short-term deposits or long-term unsecured debt obligations that satisfies
the rating requirement of any other Rating Agency assigning a rating for any
Class of Investor Certificates of any then outstanding Series and subject to
supervision or examination by Federal or state authority. If such corporation or
national banking association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section 11.6, the combined capital and
surplus of such corporation or national banking association shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 11.6, 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 as Trustee and be
discharged from the trust hereby created by giving written notice thereof to the
Transferor and 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 such appointment within 30 days after
the giving of such notice of
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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 Transferor, or if at any time the Trustee shall
be legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Transferor may, but shall not be required to, remove the Trustee and promptly
appoint a successor trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so removed and one copy to
the successor trustee. The Transferor shall promptly pay all fees and expenses
owed to any removed 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 payment of all fees and expenses owed to the
resigning or removed Trustee. 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, the Servicer and its
predecessor Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder and under any Supplement, with like
effect as if originally named as Trustee herein. The predecessor Trustee shall
upon payment of its fees and expenses deliver to the successor trustee all
documents held by it hereunder, and the Transferor, the Servicer and the
predecessor Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and
obligations.
(b) No successor trustee shall accept appointment as provided in this
Section 11.8 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 11.6 hereof and shall be an Eligible
Servicer, and, if Standard & Poor's is then a Rating Agency, unless Standard &
Poor's shall have consented to such appointment.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section 11.8, such successor trustee shall mail notice of such
succession hereunder to each Rating Agency and all Certificateholders (other
than Holders of Bearer Certificates) at their addresses as shown in the
Certificate Register. Notice to Holders of Bearer Certificates shall be given by
publication in the manner described in Section 13.5.
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
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resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any Person succeeding to all or substantially all the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such Person shall be eligible under the provisions of
Section 11.6, 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 provision of this Agreement or any
Supplement, at any time, for the purpose of meeting any legal requirements of
any jurisdiction in which any part of the Trust may at the time be located, the
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee, or separate trustee, of all
or any part of the Trust, and to vest in such Person, in such capacity and for
the benefit of the Certificateholders, such title to the Trust, or any part
thereof, and, subject to the other provisions of this Section 11.10, such
powers, duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
11.6 and no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 11.8. The Servicer shall be
responsible for the fees and expenses of any co-trustee or separate trustee
appointed hereunder.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is
not authorized to act separately without the Trustee joining in such act),
except to the extent that under any laws of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder
or as successor to the Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder appointed with due
care; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article XI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its
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instrument of appointment, either jointly with the Trustee or separately, as may
be provided therein, subject to all the provisions of this Agreement or any
Supplement, specifically including every provision of this Agreement or any
Supplement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time appoint the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect to this
Agreement or any Supplement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 11.11 Tax Returns and Compliance.
--------------------------
(a) In the event the Trust shall be required to file tax returns, the
Servicer shall prepare or cause to be prepared and is authorized hereunder to
sign any tax returns required to be filed by the Trust and, to the extent
possible, shall file such returns at least five days before such returns are due
to be filed. The Servicer shall prepare or shall cause to be prepared all tax
information required by law to be distributed to Certificateholders and
Certificate Owners and shall deliver such information to the Paying Agent at
least five days prior to the date it is required by law to be distributed to
Certificateholders and Certificate Owners. The Trustee shall, upon request,
furnish the Servicer with all such information known to the Trustee as may be
reasonably required in connection with the preparation of such tax returns and
shall, upon request, execute such tax returns. In no event shall the Trustee,
the Paying Agent, the Servicer or the Transferor be liable for any liabilities,
costs or expenses of the Trust, the Investor Certificateholders or the
Certificate Owners arising under any tax law, including, without limitation,
Federal, state or local income or excise taxes or any other tax imposed on or
measured by income (or any interest or penalty with respect thereto or arising
from a failure to comply therewith), except to the extent that such tax is
imposed as a result of a violation by such Person of the provisions of this
Agreement or any Supplement.
(b) The Trustee and each Paying Agent shall comply with all Federal
withholding requirements respecting payments to Investor Certificateholders or
persons receiving funds from the Trust. In the event the Trustee or Paying Agent
does withhold any amount from interest, principal, or other payments pursuant to
Federal withholding requirements, the Trustee or Paying Agent shall indicate the
amount withheld in writing with any payment to the person otherwise entitled to
such amount.
Section 11.12 Trustee May Enforce Claims Without Possession of
------------------------------------------------
Certificates. All rights of action and claims under this Agreement or any
------------
Supplement or the Certificates may be prosecuted and enforced by the Trustee
without the possession of any of the Certificates or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee. Any recovery of judgment
shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and
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advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Certificateholders in respect of which such judgment has been obtained.
Section 11.13 Suits for Enforcement. If a Servicer Default shall
---------------------
occur and be continuing, the Trustee, in its discretion, may, subject to the
provisions of Section 10.1, proceed to protect and enforce its rights and the
rights of the Certificateholders under this Agreement or any Supplement by such
suit, action or proceeding in equity or at law or otherwise, whether for the
specific performance of any covenant or agreement contained in this Agreement or
any Supplement or in aid of the execution of any power granted in this Agreement
or any Supplement or for the enforcement of any other legal, equitable or other
remedy as the Trustee, being advised by counsel, shall deem effectual to protect
and enforce any of the rights of the Trustee or the Certificateholders.
Section 11.14 Rights of Certificateholders to Direct Trustee. Unless
----------------------------------------------
otherwise specified for any Series in the related Supplement, Holders of
Investor Certificates evidencing Undivided Interests aggregating more than 50%
of the Aggregate Invested Amount of all Series affected by the conduct of any
proceeding or the exercise of any right conferred on the Trustee shall have the
right to direct the time, method, and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee; provided, however, that, subject to Section 11.1, 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 for which it has not been
adequately indemnified hereunder or be unduly prejudicial to the rights of
Certificateholders of such Series not parties to such direction or to the rights
of Certificateholders of other Series; and, provided further, that nothing in
-------- -------
this Agreement or any Supplement shall impair the right of the Trustee to take
any action deemed proper by the Trustee and which is not inconsistent with such
direction.
Section 11.15 Representations and Warranties of Trustee. The Trustee
-----------------------------------------
represents and warrants that:
(i) The Trustee is a banking corporation, organized, existing and
in good standing under the laws of the State of New York;
(ii) The Trustee has full power, authority and right to execute,
deliver and perform this Agreement and any Supplement, and has taken all
necessary action to authorize the execution, delivery and performance by
it of this Agreement and any Supplement; and
(iii) This Agreement and any Supplement have been duly executed and
delivered by the Trustee and, assuming due execution and delivery by the
other parties hereto and thereto, constitute legal, valid and binding
obligations of the Trustee enforceable against the Trustee in accordance
with their respective terms.
Section 11.16 Maintenance of Office or Agency. The Trustee will
-------------------------------
maintain at its expense in the Borough of Manhattan, The City of New York, an
office or offices or agency or
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agencies where notices and demands to or upon the Trustee in respect of the
Certificates and this Agreement may be served. The Trustee initially appoints
its Corporate Trust Office as its office for such purposes in New York. The
Trustee will give prompt written notice (or in the case of Holders of Bearer
Certificates, notice by publication in the manner described in Section 13.5 of
the Agreement) to the Servicer and to Certificateholders of any change in the
location of the Certificate Register or any such office or agency.
Section 11.17 Force Majeure. In no event shall the Trustee be liable for
-------------
any failure or delay in the performance of its obligations hereunder because of
circumstances beyond its control, including, without limitation, acts of God or
the public enemy, acts of declared or undeclared war, terrorism, public
disorder, rebellion, riot or sabotage, epidemics, landslides, lightning, fire,
hurricanes, tornadoes, earthquakes, nuclear disasters or meltdowns, floods,
power outages, embargoes or government actions, including any laws, ordinances,
regulations or the like which delay, restrict or prohibit the providing of the
services contemplated by this Agreement.
[END OF ARTICLE XI]
97
ARTICLE XII
TERMINATION
Section 12.1 Termination of Trust.
--------------------
(a) The respective obligations and responsibilities of the Transferor,
the Servicer, the Paying Agent and the Trustee and their agents hereunder
created hereby (other than the obligation of the Trustee to make payments to
Certificateholders as hereafter set forth) shall terminate, except with respect
to the duties described in Sections 2.4(c), 7.4, 8.4, 11.5, 11.17 and 12.3(b),
upon the earliest of (i) the day following the date on which funds shall have
been deposited in the Collection Account sufficient to pay the Aggregate
Invested Amount and any Enhancement Invested Amount plus applicable Certificate
Interest accrued through the last day of the interest accrual period preceding
such Distribution Date in full on all Series of Investor Certificates, (ii)
September 1, 2094 and (iii) the expiration of 21 years from the death of the
last survivor of the descendants of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, former President
of the United States, living on the date hereof (the "Final Termination Date").
----------------------
(b) If on the last Distribution Date in the month immediately
preceding the month in which the Final Termination Date occurs (after giving
effect to all transfers, withdrawals, deposits and drawings to occur on such
date and the payment of principal on any Series of Certificates to be made on
such Distribution Date pursuant to Article IV), the Invested Amount or any
Enhancement Invested Amount of any Series would be greater than zero, the
Servicer shall sell within 30 days after such Distribution Date all of the
Receivables in a commercially reasonable manner and on commercially reasonable
terms which shall include the solicitation of competitive bids and shall
consummate the sale with the highest bidder for the Receivables. The Transferor
or any of its Affiliates shall be permitted to bid for the Receivables. In
addition, the Transferor or any Affiliate shall have the right to match any bid
by a third Person and be granted the right to purchase the Receivables at such
matched bid price. The proceeds of any such sale shall be treated as Collections
on the Receivables and shall be allocated in accordance with Article IV;
provided, however, that the Trustee shall determine conclusively the amount of
-------- -------
such proceeds which are allocable to Finance Charge Receivables and the amount
of such proceeds which are allocable to Principal Receivables. Prior to such
sale of Receivables, the Servicer shall continue to collect Collections on the
Receivables and allocate such payments in accordance with the provisions of
Article IV.
Section 12.2 Optional Purchase; Final Termination Date of Investor
-----------------------------------------------------
Certificates of any Series.
--------------------------
(a) If provided in any Supplement with respect to a Series of Investor
Certificates (which provision must refer specifically to this Section 12.2), on
any Distribution Date, the Transferor may, but shall not be obligated to,
purchase such Series by depositing into the Collection Account, prior to such
Distribution Date, an amount equal to the Invested Amount thereof plus interest
accrued and unpaid thereon at the applicable Certificate Rate through the
interest accrual period preceding such Distribution Date plus any other unpaid
----
amounts required to be paid pursuant to this Section 12.2 under any Supplement;
provided, however, that, if the Transferor shall not have a rating of P-3 or
-------- -------
Baa3 or higher by Moody's and BBB- or higher by Standard & Poor's, no such
purchase of any Series of Investor Certificates shall occur unless the
98
Transferor shall deliver to the Trustee and the Rating Agencies an Opinion
of Counsel reasonably acceptable to the Trustee that such purchase of any Series
of Investor Certificates would not constitute a fraudulent conveyance. Nothing
herein limits the right of the Transferor or any Affiliate to purchase Investor
Certificates on the open market and submit them to the Trustee for cancellation.
(b) The amount deposited pursuant to Section 12.2(a) shall be paid to
the Investor Certificateholders of the related Series pursuant to Article IV on
the Distribution Date following the date of such deposit. All Certificates of a
Series which are purchased by the Transferor pursuant to Section 12.2(a) shall
be delivered by the Transferor upon such purchase to, and be canceled by, the
Transfer Agent and Registrar and be disposed of in a manner satisfactory to the
Trustee and the Transferor.
(c) All principal or interest with respect to any Series of Investor
Certificates shall be due and payable no later than the Stated Series
Termination Date with respect to such Series. Unless otherwise provided in the
related Supplement, in the event that the Invested Amount or any Enhancement
Invested Amount of any Series of Certificates is greater than zero on its Stated
Series Termination Date (after giving effect to all transfers, withdrawals,
deposits and drawings to occur on such date and the payment of principal to be
made on such Series on such date), the Trustee will sell or cause the Servicer
to sell, and pay the proceeds to all Certificateholders of such Series pro rata
in final payment of all principal of and accrued interest on such Series of
Certificates, an amount of Receivables or interests in Receivables up to 110% of
the Invested Amount and any Enhancement Invested Amount of such Series at the
close of business on such date (but not more than an amount of Receivables equal
to the sum of (1) the product of (A) the Transferor Percentage, (B) the
Aggregate Principal Receivables and (C) a fraction the numerator of which is the
related Invested Percentage with respect to Finance Charge Receivables and the
denominator of which is the sum of all Invested Percentages with respect to
Finance Charge Receivables of all Series outstanding and (2) the Invested Amount
and any Enhancement Invested Amount of such Series). The Trustee shall conduct
the sale of Receivables in a commercially reasonable manner and on commercially
reasonable terms which shall include the solicitation of competitive bids and
shall consummate the sale with the highest bidder for the Receivables. The
Transferor or any of its Affiliates shall be permitted to bid for the
Receivables. In addition, the Transferor or any Affiliate shall have the right
to match any bid by a third Person and be granted the right to purchase the
Receivables at such matched bid price. Any proceeds of such sale in excess of
the outstanding principal and interest due to Certificateholders of the
applicable Series (which shall be paid to such Holders) shall be paid to the
Holder of the Exchangeable Transferor Certificate, unless the applicable
Supplement shall provide otherwise. Upon such Stated Series Termination Date
with respect to the applicable Series of Certificates, final payment of all
amounts allocable to any Investor Certificates of such Series shall be made in
the manner provided in Section 12.3.
Section 12.3 Final Payment with Respect to any Series.
----------------------------------------
(a) Written notice of any termination, specifying the Distribution
Date upon which the Investor Certificateholders of any Series may surrender
their Certificates for payment of the final distribution with respect to such
Series and cancellation, shall be given (subject to at least two Business Days'
prior notice from the Servicer to the Trustee) by the Trustee to the
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Investor Certificateholders of such Series mailed not later than the fifth day
of the month of such final distribution (or, in the case of the Holders of
Bearer Certificates, by the publication by the Trustee of a notice at least once
in a newspaper of general circulation in Luxembourg (which newspaper shall be
printed in the English language and customarily published on each business day
in Luxembourg) and, so long as the Investor Certificates are listed on the
Luxembourg Stock Exchange or other stock exchange and such exchange so requires,
in Luxembourg or the location required by such other stock exchange) specifying
(a) the Distribution Date (which shall be the Distribution Date in the month in
which the deposit is made pursuant to Section 2.4, 9.2, 10.2 or 12.2(a) or such
other section as may be specified in the related Supplement) upon which final
payment of such Investor Certificates will be made upon presentation and
surrender of such Investor Certificates at the office or offices therein
designated (which, in the case of Bearer Certificates, shall be outside the
United States), (b) the amount of any such final payment and (c) that the Record
Date otherwise applicable to such Distribution Date is not applicable, payments
being made only upon presentation and surrender of the Investor Certificates at
the office or offices therein specified. The Servicer's notice to the Trustee in
accordance with the preceding sentence shall be accompanied by an Officer's
Certificate setting forth the information specified in the applicable Supplement
covering the period during the then current calendar year through the date of
such notice and setting forth the date of such final distribution. The Trustee
shall give such notice to the Transferor, the Transfer Agent and Registrar and
the Paying Agent at the time such notice is given to such Investor
Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to Section
12.1(a) or the occurrence of the Stated Series Termination Date with respect to
any Series, all funds then on deposit in the Collection Account shall continue
to be held in trust for the benefit of the Certificateholders and the Paying
Agent or the Trustee shall pay such funds to the Certificateholders upon
surrender of their Certificates (which surrenders and payments, in the case of
Bearer Certificates, shall be made only outside the United States). In the event
that all of the Investor Certificateholders of such Series shall not surrender
their Certificates for cancellation within six months after the date specified
in the above-mentioned notice, the Trustee shall give a second written notice
(or, in the case of Bearer Certificates, publication notice) to the remaining
Investor Certificateholders of such Series upon receipt of the appropriate
records from the Transfer Agent and Registrar to surrender their Certificates
for cancellation and receive the final distribution with respect thereto. If
within one and one-half years after the second notice all the Investor
Certificates of such Series shall not have been surrendered for cancellation,
the Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Investor Certificateholders of such
Series concerning surrender of their Certificates, and the cost thereof shall be
paid out of the funds in the Collection Account held for the benefit of such
Investor Certificateholders. The Trustee shall pay or cause to be paid to the
Transferor upon request all monies held for the payment of principal or interest
which remain unclaimed after two years.
(c) All Certificates surrendered for payment of the final distribution
with respect to such Certificates and cancellation shall be canceled by the
Transfer Agent and Registrar and be disposed of in a manner satisfactory to the
Trustee and the Transferor.
Section 12.4 Transferor's Termination Rights. Upon the termination of
-------------------------------
the Trust pursuant to Section 12.1 and the surrender of the Exchangeable
Transferor Certificate, the
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Trustee shall transfer and assign to the Transferor (without recourse,
representation or warranty) all right, title and interest of the Trust in and to
the Receivables, whether then existing or thereafter created, and all monies due
or to become due and all amounts received with respect thereto and all proceeds
thereof, except for amounts held by the Paying Agent pursuant to Section
12.3(b), and all other Trust Property. The Trustee shall execute and deliver
such instruments of transfer and assignment, in each case without recourse,
representation or warranty, as shall be reasonably requested by the Transferor
to vest in the Transferor all right, title and interest which the Trust had in
the applicable Receivables.
Section 12.5 Defeasance. Notwithstanding anything to the contrary in this
----------
Agreement, except as otherwise specifically provided with respect to any Series
in the related Supplement:
(a) The Transferor may at the Transferor's 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
---------------
12.5(c) are satisfied (a "Defeasance"); provided, however, that the following
---------- -------- -------
rights, obligations, powers, duties and immunities shall survive with respect to
the Defeased Series until otherwise terminated or discharged hereunder: (i) the
rights of the Holders of Investor Certificates of the Defeased Series to
receive, solely from the trust fund provided for in Section 12.5(c), payments in
respect of principal of and interest on such Investor Certificates when such
payments are due; (ii) the right of any Enhancement Provider to the repayment of
any amount due to it under the related Enhancement Agreement and Supplement,
including interest thereon; (iii) the Transferor's obligations with respect to
such Certificates under Sections 6.3 and 6.4; (iv) the rights (including the
right to payment of its fees and expenses), powers, trusts, duties, and
immunities of the Trustee, the Paying Agent and the Transfer Agent and Registrar
hereunder; and (v) this Section 12.5.
(b) Subject to Section 12.5(c), the Transferor at its option may cause
Collections allocated to the Defeased Series and available to acquire Principal
Receivables to be applied to acquire Eligible Investments rather than Principal
Receivables.
(c) The following shall be the conditions to Defeasance under Section
12.5(a):
(i) The Transferor irrevocably shall have deposited or caused to be
deposited with the Trustee (such deposit to be made from other than the
Transferor's funds), 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) U.S. 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 with respect to the Defeased Series;
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(ii) prior to its exercise of its right pursuant to this Section 12.5
with respect to a Defeased Series to substitute money or Eligible
Investments for Receivables, the Transferor shall have delivered to the
Trustee an Opinion of Counsel to the effect that such deposit and
termination of obligations will not have any material adverse impact on the
Federal income tax characterization of any outstanding Series of Investor
Certificates that have been the subject of a previous opinion of tax
counsel or result in the Trust being taxable as an association for Federal
or applicable state tax purposes 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 1940 Act;
(iii) the Transferor shall have delivered to the Trustee and any
Enhancement Provider an Officer's Certificate of the Transferor stating 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 with respect
to any Series or any event that, with the giving of notice or the lapse of
time, would result in the occurrence of an Early Amortization Event with
respect to any Series; and
(iv) the Rating Agency Condition shall have been satisfied.
[END OF ARTICLE XII]
102
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 Amendment.
---------
(a) This Agreement and any Supplement may be amended from time to time by
the Servicer, the Transferor and the Trustee, without the consent of any of the
Investor Certificateholders, to cure any ambiguity, to correct or supplement any
provisions herein or therein which may be inconsistent with any other provisions
herein or therein, to add one or more new identifying code numbers to the
definition of Creation Date or the first paragraph of Section 2.6(d) or to add
any other provisions with respect to matters or questions raised under this
Agreement which shall not be inconsistent with the provisions of this Agreement,
including any matters arising under Section 2.5(d) necessary to effect the
conveyance contemplated thereunder; provided, however, that such action shall
-------- -------
not adversely affect in any material respect the interests of any of the
Investor Certificateholders; and, provided further, that an amendment pursuant
-------- -------
to this Section 13.1(a) shall not effect a significant change in the Permitted
Activities of the Trust. In addition, this Agreement and any Supplement may be
amended from time to time by the Servicer, the Transferor and the Trustee,
without the consent of any of the Certificateholders, to add to or change any of
the provisions of this Agreement to enable Bearer Certificates to be issued in
conformity with the Bearer Rules, to provide that Bearer Certificates may be
registrable as to principal, to change or eliminate any restrictions on the
payment of principal of (or premium, if any) or any interest on Bearer
Certificates to comply with the Bearer Rules, to permit Bearer Certificates to
be issued in exchange for Registered Certificates (if then permitted by the
Bearer Rules), to permit Bearer Certificates to be issued in exchange for Bearer
Certificates of other authorized denominations or to permit the issuance of
Certificates in uncertificated form, provided any such action shall not
adversely affect the interests of the Holders of Bearer Certificates of any
Series or any related Coupons in any material respect unless such amendment is
necessary to comply with the Bearer Rules. Prior to executing any amendment in
accordance with this Section 13.1(a), the Trustee shall receive and shall be
permitted to rely upon an Opinion of Counsel to the effect that the conditions
and requirements of this Section 13.1(a) have been satisfied (without implying
that such a rating confirmation is required to be obtained, such Opinion of
Counsel may rely as to any rated Series solely on a rating confirmation from the
Rating Agencies that such amendment shall not cause a reduction or withdrawal of
the rating of any outstanding Series of Certificates). The Transferor shall
deliver prior written notice of any amendment pursuant to this Section 13.1(a)
to each Rating Agency.
(b) This Agreement and any Supplement may also be amended from time to time
by the Servicer, the Transferor and the Trustee, without the consent of any of
the Certificateholders, for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or any
Supplement or modifying in any manner the rights of the Investor
Certificateholders of any Series then issued and outstanding; provided, however,
-------- -------
that (i) the Servicer shall have provided an Opinion of Counsel to the Trustee
to the effect that such amendment will not materially and adversely affect the
interests of the Investor Certificateholders of any outstanding Series, which
Opinion of Counsel may rely as to any rated Series solely on the rating
confirmation referred to in clause (iii) below (or 100% of the Class of
Certificateholders so affected shall have consented), (ii) such amendment shall
not, as evidenced by an Opinion of Counsel, cause any outstanding Series as to
which an opinion that it
103
was debt was given on its Closing Date to fail to qualify as debt for Federal
income tax purposes, cause the Trust to be characterized for Federal income tax
purposes as an association taxable as a corporation or otherwise have any
material adverse impact on the Federal income tax characterization of any
outstanding Series of Investor Certificates or the Federal income taxation of
any Investor Certificateholder or any Certificate Owner and (iii) the Rating
Agency Condition shall have been satisfied; and, provided further, that such
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amendment shall not effect a significant change in the Permitted Activities of
the Trust or reduce in any manner the amount of, or delay the timing of, or
change the priority of, distributions which are required to be made on any
Investor Certificate of such Series without the consent of the related Investor
Certificateholder or change the definition of or the manner of calculating the
interest of any Investor Certificate of such Series without the consent of the
related Investor Certificateholder or reduce the required percentage for
consents to amendments pursuant to Section 13.1(c) without the consent of each
affected Investor Certificateholder.
(c) This Agreement and 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 Undivided Interests aggregating not less
than 66-2/3% of the Invested Amount of all Series adversely affected, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or any Supplement or modifying in any manner
the rights of the Investor Certificateholders of any Series then issued and
outstanding; provided, however, that no such amendment shall (i) reduce in any
-------- -------
manner the amount of, or delay the timing of, distributions which are required
to be made on any Investor Certificate of such Series without the consent of the
related Investor Certificateholders, (ii) change the definition of or the manner
of calculating the Invested Amount, the Invested Percentage, the applicable
available amount under any Enhancement or the Investor Default Amount of such
Series without the consent of the related Investor Certificateholders or (iii)
reduce the aforesaid percentage required to consent to any such amendment,
without the consent of the related Investor Certificateholders. Any amendment
pursuant to this Section 13.1(c) shall require that each Rating Agency rating
the affected Series confirm that such amendment will not cause a reduction or
withdrawal of the rating of any outstanding Series of Certificates.
(d) Promptly after the execution of any such amendment other than an
amendment pursuant to Section 13.1(a), the Trustee shall furnish written
notification (or in the case of Bearer Certificates, publication notice in the
manner described in Section 13.5) of the substance of such amendment to each
Investor Certificateholder, and the Servicer shall furnish written notification
of the substance of such amendment to any related Enhancement Provider and each
Rating Agency.
(e) It shall not be necessary for the consent of Investor
Certificateholders under this Section 13.1 to approve the particular form of any
proposed amendment, but it shall be sufficient if such Certificateholders shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Investor
Certificateholders shall be subject to such reasonable requirements as the
Trustee may prescribe.
(f) Any Assignment or Reassignment regarding the addition to or removal of
Receivables from the Trust respectively, as provided in Sections 2.6 and 2.7,
respectively,
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executed in accordance with the provisions hereof shall not be considered
amendments to this Agreement, including, without limitation, for the purpose of
Sections 13.1(a), (b), (c) and (g).
(g) Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel
substantially in the form of Part Two of Exhibit G. The Trustee may, but shall
---------
not be obligated to, enter into any such amendment which affects the Trustee's
own rights, duties or immunities under this Agreement or otherwise.
(h) Notwithstanding anything in this Section 13.1 to the contrary,
(i) this Agreement shall not be amended to replace Tyler Funding as Transferor
or to add any Person as Transferor unless the Rating Agency Condition shall have
been satisfied and (ii) any Supplement may be amended on the terms and in
accordance with the procedures specified therein.
Section 13.2 Protection of Right, Title and Interest to Trust.
------------------------------------------------
(a) The Servicer shall cause this Agreement, any Supplement, all
amendments hereto and/or all financing statements, amendments and continuation
statements and any other necessary documents covering the right, title and
interest of the Trust in the property conveyed hereunder to be promptly
recorded, registered and filed, and at all times to be kept recorded, registered
and filed, all in such manner and in such places as may be required by law fully
to preserve and protect the right, title and interest of the Trustee hereunder
to the Trust Property and to maintain the perfection and priority of the
security interest of the Trustee in the Receivables and the proceeds thereof.
The Servicer shall deliver to the Trustee file-stamped copies of, or filing
receipts for, any document recorded, registered or filed as provided above, as
soon as available following such recording, registration or filing. The
Transferor shall cooperate fully with the Servicer in connection with the
obligations set forth above and will execute any and all documents reasonably
required to fulfill the intent of this Section 13.2.
(b) The Transferor shall not change its name, identity,
organizational structure or jurisdiction of organization unless it has first (i)
made all filings in all relevant jurisdictions under the UCC and other
applicable law as are necessary to continue and maintain the first-priority
perfected ownership or security interest of the Trustee in the Receivables and
the other property conveyed to the Trustee hereunder and (ii) delivered to the
Servicer, the Trustee and each Rating Agency an Opinion of Counsel to the effect
that all necessary filings have been made under the UCC in all relevant
jurisdictions as are necessary to continue and maintain the first-priority
perfected ownership or security interest of the Trustee in the Receivables
conveyed to the Trustee hereunder and the proceeds thereof.
(c) The Servicer will at all times maintain each office from which
it services Receivables within the United States.
(d) The Transferor will deliver to the Trustee and each Rating
Agency: (i) upon each date that any Additional Accounts are to be included in
the Accounts pursuant to Section 2.6 (other than Section 2.6(d)), an Opinion of
Counsel substantially in the form of Part One of Exhibit G; and (ii) on or
before June 30 of each year, beginning with June 30, 2002, an
105
Opinion of Counsel, dated as of a date within 90 days of such day, substantially
in the form of Exhibit H.
---------
Section 13.3 Limitation on Rights of Certificateholders.
------------------------------------------
(a) The death or incapacity of any Investor Certificateholder shall
not operate to terminate this Agreement or the Trust, nor shall such death or
incapacity entitle such Certificateholder's legal representatives or heirs to
claim 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 provided herein) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall any
Investor Certificateholder be under any liability to any third person by reason
of any action taken by the parties to this Agreement pursuant to any provision
hereof.
(c) No Investor Certificateholder shall have any right by virtue of
any provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Certificateholder previously shall have given notice to the Trustee, and unless
the Holders of Certificates evidencing Undivided Interests aggregating more than
66-2/3% of the Invested Amount of any Series which may be adversely affected but
for the institution of such suit, action or proceeding shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Certificateholders shall
have the right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Certificateholders of any other of the Certificates, or to
obtain or seek to obtain priority over or preference to any other such
Certificateholder, or to enforce any right under this Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of this
Section 13.3, each and every Certificateholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity. Each Certificate
Owner by its acquisition of a Book Entry Certificate shall be deemed to have
consented to the provisions of this Section 13.3.
Section 13.4 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
106
Section 13.5 Notices. All demands, notices and communications
-------
hereunder shall be in writing and shall be deemed to have been duly given if
sent by facsimile transmission to, sent by courier to or mailed by registered
mail, return receipt requested, to (a) in the case of the Transferor, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ 11, Bermuda, telecopy number (441)
▇▇▇-▇▇▇▇, telephone number (▇▇▇) ▇▇▇-▇▇▇▇, (b) in the case of the Servicer, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer,
telecopy number (▇▇▇) ▇▇▇-▇▇▇▇, telephone number (▇▇▇) ▇▇▇-▇▇▇▇, (c) in the case
of the Trustee, Four ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Trust and Agency Group/Structured Finance, telecopy number (212)
▇▇▇-▇▇▇▇, telephone number (▇▇▇) ▇▇▇-▇▇▇▇, and (d) as to such other parties to
which notices hereunder or under any Supplement are required to be given
pursuant to the terms of any Supplement, the addresses specified in any
Supplement or, as to each party, such other address as shall be designated by
such party in a written notice to each other party. Any notice required or
permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Certificateholder as shown in the
Certificate Register. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Certificateholder receives such notice.
Any notice required or permitted to be made to Holders of
Bearer Certificates by publication shall be published in an Authorized Newspaper
and, if the Certificates of such Series are then listed on the Luxembourg Stock
Exchange and such stock exchange shall so require, in a newspaper of general
circulation in Luxembourg (which newspaper shall be printed in the English
language and customarily published on each business day in Luxembourg) and, if
the Certificates of such Series are listed on any other stock exchange and such
stock exchange shall so require, in any other city required by such stock
exchange outside the United States, or, if not practicable, elsewhere in Europe.
In case by reason of the suspension of publication of any
Authorized Newspaper or permitted newspaper with respect to Luxembourg or by
reason of any other cause it shall be impracticable to publish any notice to
Holders of Bearer Certificates as provided above, then such notification to
Holders of Bearer Certificates as shall be given with approval of the Trustee
shall constitute sufficient notice to such Holders for every purpose hereunder.
Neither the failure to give notice by publication to Holders of Bearer
Certificates as provided above, nor any defect in any notice so published, shall
affect the sufficiency of any notice mailed to Holders of Registered
Certificates as provided above.
Copies of all notices, reports, certificates and amendments
required to be delivered to the Rating Agencies hereunder shall be mailed as
follows: ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ABS Monitoring Department; Standard & Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset Backed Surveillance Department; and
Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset
Backed Surveillance.
Section 13.6 Severability of Provisions. If any one or more of
--------------------------
the covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way
107
affect the validity or enforceability of the other provisions of this Agreement
or of the Certificates or rights of the Certificateholders thereof.
Section 13.7 Assignment. Notwithstanding anything to the contrary
----------
contained herein, except as provided in Sections 7.2, 8.2 and 8.5, this
Agreement, including any Supplement, may not be assigned by the Transferor or
the Servicer, as the case may be, without the prior consent of Holders of
Investor Certificates evidencing Undivided Interests aggregating more than
66-2/3% of the Aggregate Invested Amount. The Transferor or the Servicer, as
applicable, shall deliver to each Rating Agency prior written notice of any such
assignment.
Section 13.8 Certificates Nonassessable and Fully Paid. It is the
-----------------------------------------
intention of the parties to this Agreement that the Investor Certificateholders
(and the Certificate Owners) shall not be personally liable for obligations of
the Trust, that the Undivided Interests represented by the Investor Certificates
shall be nonassessable for any losses or expenses of the Trust or for any reason
whatsoever, and that Investor Certificates upon authentication thereof by the
Trustee pursuant to Section 6.2 are and shall be deemed fully paid.
Section 13.9 Further Assurances. The Transferor and the Servicer
------------------
agree to do and perform, from time to time, any and all acts and to execute any
and all further instruments required or reasonably requested by the Trustee more
fully to effect the purposes of this Agreement including, without limitation,
the authorization of any financing statements or continuation statements
relating to the property of the Trust for filing under the provisions of the UCC
as in effect in the Relevant UCC State.
Section 13.10 No Waiver; Cumulative Remedies. No failure to
------------------------------
exercise and no delay in exercising, on the part of the Transferor, the
Servicer, the Trustee or the Investor Certificateholders, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exhaustive of any rights, remedies,
powers and privileges provided by law.
Section 13.11 Counterparts. This Agreement and any Supplement may
------------
be executed in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which together
shall constitute one and the same instrument.
Section 13.12 Third-Party Beneficiaries. This Agreement and any
-------------------------
Supplement will inure to the benefit of and be binding upon the parties hereto,
the Certificateholders and the Certificate Owners and their respective
successors and permitted assigns. Except as otherwise provided in this Agreement
or any Supplement, no other person will have any right or obligation hereunder.
Section 13.13 Actions by Certificateholders.
-----------------------------
(a) Wherever in this Agreement or any Supplement a provision is
made that an action may be taken or a notice, demand or instruction given by
Investor Certificateholders, such action, notice or instruction may be taken or
given by any Investor Certificateholder of any
108
Series, unless such provision requires a specific percentage of Investor
Certificateholders of a certain Series or all Series.
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other act by a Certificateholder shall bind such
Certificateholder and every subsequent holder of such Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done or omitted to be done by the Trustee or the Servicer
in reliance thereon, whether or not notation of such action is made upon such
Certificate.
Section 13.14 Merger and Integration. Except as specifically
----------------------
stated otherwise herein, this Agreement sets forth the entire understanding of
the parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
Section 13.15 Headings. The headings herein are for purposes of
--------
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
Section 13.16 Certificates and Opinions of Counsel.
------------------------------------
(a) Any certificate delivered hereunder may be based, insofar as
it relates to legal matters, upon an Opinion of Counsel, unless the Person
delivering such certificate knows, or in the exercise of reasonable care should
know, that such opinion with respect to the matters upon which such certificate
may be based as aforesaid is erroneous. Any Opinion of Counsel or certificate
delivered hereunder may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer or the Transferor, stating that the information with respect to
such factual matters is in the possession of such Person, unless the Person
delivering such certificate or such counsel knows, or in the exercise of
reasonable care should know, that such certificate, opinion or representations
with respect to such matters are erroneous. Any Opinion of Counsel delivered
hereunder may contain necessary exceptions and qualifications.
(b) Any Opinion of Counsel or certificate delivered hereunder
may be based, insofar as it relates to accounting matters, upon a certificate or
opinion of or representations by an independent public accountant or firm of
accountants, unless such counsel or the Person delivering such certificate, as
the case may be, knows that the certificate or opinions or representations with
respect to the accounting matters upon which the certificate or opinion may be
based as aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous. Any certificate, opinion or representations of
any firm of independent public accountants filed with the Trustee shall contain
a statement that such firm is independent.
(c) Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments hereunder, they may, but need not, be consolidated and form
one instrument.
Section 13.17 Nonpetition Covenant.
--------------------
109
(a) To the fullest extent permitted by applicable law, notwithstanding
any prior termination of this Agreement, the Transferor, the Servicer, the
Trustee, the Transfer Agent and Registrar and each Paying Agent shall not, prior
to the date which is one year and one day after the termination of this
Agreement with respect to the Trust, acquiesce, petition or otherwise invoke or
cause the Trust to invoke the process of any Governmental Authority for the
purpose of commencing or sustaining a case against the Trust under any Federal
or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Trust or any substantial part of its property or ordering the winding-up
or liquidation of the affairs of the Trust.
(b) To the fullest extent permitted by applicable law, notwithstanding
any prior termination of this Agreement, the Trust, the Servicer, the Trustee,
the Transfer Agent and Registrar and each Paying Agent shall not, prior to the
date which is one year and one day after the termination of this Agreement with
respect to the Transferor, acquiesce, petition or otherwise invoke or cause the
Transferor to invoke the process of any Governmental Authority for the purpose
of commencing or sustaining a case against 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 Transferor or any substantial part of its property or ordering the
winding-up or liquidation of the affairs of the Transferor.
110
IN WITNESS WHEREOF, the Transferor, the Bank, as Transferor under the
Prior Agreement, the Servicer and the Trustee have caused this Amended and
Restated Master Pooling and Servicing Agreement to be duly executed by their
respective officers as of the day and year first above written.
TYLER INTERNATIONAL FUNDING, INC.,
as Transferor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
FIRST NORTH AMERICAN NATIONAL BANK,
as Transferor under the Prior Agreement
and as Servicer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
BANKERS TRUST COMPANY,
as Trustee
By: /s/ ▇▇▇▇▇ Barstock
Name: ▇▇▇▇▇ Barstock
Title: Vice President