NORDSTROM NATIONAL CREDIT BANK
Transferor and Servicer
and
NORWEST BANK COLORADO, NATIONAL ASSOCIATION
Trustee
on behalf of the Certificateholders
of Nordstrom Credit Card Master Trust
MASTER POOLING AND SERVICING AGREEMENT
Dated as of August 14, 1996
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS
Section 1.1 Definitions 1
Section 1.2 Other Definitional Provisions 23
ARTICLE II APPOINTMENT OF TRUSTEE;
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.1 Appointment of Trustee; Conveyance
of Receivables 24
Section 2.2 Acceptance by Trustee 27
Section 2.3 Representations and Warranties 28
Section 2.4 Representations and Warranties of the
Transferor Relating to the Agreement and
any Supplement and the Receivables 31
Section 2.5 Covenants of the Transferor 40
Section 2.6 Addition of Accounts 43
Section 2.7 Removal of Accounts 48
ARTICLE III ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.1 Acceptance of Appointment and
Other Matters Relating to the
Servicer 50
Section 3.2 Servicing Compensation 52
Section 3.3 Representations, Warranties and Covenants
of the Servicer 53
Section 3.4 Reports and Records for the Trustee 57
Section 3.5 Annual Servicer's Certificate 59
Section 3.6 Annual Independent Public Accountants'
Servicing Report 60
Section 3.7 Tax Treatment 60
Section 3.8 Adjustments 61
Section 3.9 Notices to the Transferor 62
i
ARTICLE IV RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
PAGE
Section 4.1 Establishment of Collection Account
and Excess Funding Account and Allocation
of Collections 64
ARTICLE V (Reserved) 71
ARTICLE VI THE CERTIFICATES
Section 6.1 The Certificates 72
Section 6.2 Authentication of Certificates 73
Section 6.3 Registration of Transfer and Ex-
change of Certificates 73
Section 6.4 Mutilated, Destroyed, Lost or
Stolen Certificates 78
Section 6.5 Persons Deemed Owners 79
Section 6.6 Appointment of Paying Agent 80
Section 6.7 Access to List of Certificate-
holders' Names and Addresses 81
Section 6.8 Authenticating Agent 82
Section 6.9 Tender of Exchangeable Transfer-
or Certificate 84
Section 6.10 Global Certificate; Euro-Certif-
icate Exchange Date 87
Section 6.11 Book-Entry Certificates 89
Section 6.12 Notices to Clearing Agency 90
Section 6.13 Definitive Certificates 91
Section 6.14 Meetings of Certificateholders 91
ARTICLE VII OTHER MATTERS RELATING TO THE
TRANSFEROR
Section 7.1 Liability of the Transferor 96
Section 7.2 Merger or Consolidation of, or
Assumption of the Obligations
of, the Transferor 96
Section 7.3 Limitation on Liability of the
Transferor 97
Section 7.4 Liabilities 98
ii
ARTICLE VIII OTHER MATTERS RELATING TO THE
SERVICER
PAGE
Section 8.1 Liability of the Servicer 99
Section 8.2 Merger or Consolidation of, or
Assumption of the Obligations
of, the Servicer 99
Section 8.3 Limitation on Liability of the
Servicer and Others 100
Section 8.4 Indemnification of the Trust and
the Trustee 101
Section 8.5 The Servicer Not to Resign 101
Section 8.6 Access to Certain Documentation
and Information Regarding the
Receivables 102
Section 8.7 Delegation of Duties 102
Section 8.8 Examination of Records 103
ARTICLE IX EARLY AMORTIZATION EVENTS
Section 9.1 Early Amortization Events 104
Section 9.2 Additional Rights Upon the Oc-
▇▇▇▇▇▇▇▇ of Certain Events 105
ARTICLE X SERVICER DEFAULTS
Section 10.1 Servicer Defaults 109
Section 10.2 Trustee to Act; Appointment of
Successor 112
Section 10.3 Notification to Certificateholders 115
Section 10.4 Waiver of Past Defaults 115
ARTICLE XI THE TRUSTEE
Section 11.1 Duties of Trustee 117
Section 11.2 Certain Matters Affecting the
Trustee 119
Section 11.3 Trustee Not Liable for Recitals
in Certificates 122
Section 11.4 Trustee May Own Certificates 123
Section 11.5 The Servicer to Pay Trustee's
Fees and Expenses 123
Section 11.6 Eligibility Requirements for
Trustee 124
iii
PAGE
Section 11.7 Resignation or Removal of Trustee 124
Section 11.8 Successor Trustee 125
Section 11.9 Merger or Consolidation of
Trustee 126
Section 11.10 Appointment of Co-Trustee or
Separate Trustee 126
Section 11.11 Tax Returns and Compliance 128
Section 11.12 Trustee May Enforce Claims With-
out Possession of Certificates. 129
Section 11.13 Suits for Enforcement 129
Section 11.14 Rights of Certificateholders to
Direct Trustee 129
Section 11.15 Representations and Warranties
of Trustee 130
Section 11.16 Maintenance of Office or Agency 130
ARTICLE XII TERMINATION
Section 12.1 Termination of Trust 132
Section 12.2 Optional Purchase; Final Termi-
nation Date of Investor Certifi-
▇▇▇▇▇ of any Series 133
Section 12.3 Final Payment with Respect to
any Series 134
Section 12.4 Transferor's Termination Rights 136
ARTICLE XIII MISCELLANEOUS PROVISIONS
Section 13.1 Amendment 137
Section 13.2 Protection of Right, Title and
Interest to Trust 140
Section 13.3 Limitation on Rights of Certifi-
cateholders 141
Section 13.4 Governing Law 142
Section 13.5 Notices 142
Section 13.6 Severability of Provisions 144
Section 13.7 Assignment 144
Section 13.8 Certificates Nonassessable and
Fully Paid 144
Section 13.9 Further Assurances 144
Section 13.10 No Waiver; Cumulative Remedies 144
Section 13.11 Counterparts 145
Section 13.12 Third-Party Beneficiaries 145
Section 13.13 Actions by Certificateholders 145
Section 13.14 Merger and Integration 145
Section 13.15 Headings 146
iv
PAGE
Section 13.16 Certificates and Opinions of
Counsel 146
Section 13.17 Nonpetition Covenant 147
EXHIBITS
Exhibit A: Form of Exchangeable Transferor Cer-
tificate
Exhibit B: Form of Assignment of Receivables in
Supplemental Accounts
Exhibit C: Form of Reassignment of Receivables
Exhibit D: Form of Series Closing Date Report
Exhibit E: Form of Monthly Servicer's Certifi-
cate
Exhibit F: Form of Annual Servicer's Certificate
Exhibit G: Form of Opinion of Counsel with Re-
spect to the Pooling and Servicing
Agreement and Supplemental Accounts
Exhibit H: Form of Annual Opinion of Counsel
Exhibit I: Account Agreements
Exhibit J: Form of Depository Agreement (Letter
of Representations)
SCHEDULES
Schedule 1 List of Accounts
v
MASTER POOLING AND SERVICING AGREEMENT, dated
as of August 14, 1996, between NORDSTROM NATIONAL CREDIT
BANK, a national banking association, as Transferor and
Servicer, and NORWEST BANK COLORADO, NATIONAL ASSOCIA-
TION, a national banking association, as Trustee.
In consideration of the mutual agreements
herein contained, each party agrees as follows for the
benefit of the other party and for the benefit of the
Certificateholders and any Enhancement Provider:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used in this
Agreement, the following words and phrases shall have the
following meanings:
Account shall mean each Initial Account, each
Automatic Additional Account and each Supplemental Ac-
count, but shall exclude any Account all the Receivables
in which are either reassigned or assigned to the Trans-
feror or its designee or the Servicer in accordance with
the terms of this Agreement. The term "Account" shall
include each Transferred Account. The term "Account"
shall be deemed to refer to an Automatic Additional
Account or a Supplemental Account only from and after the
Addition Date with respect thereto, and the term "Ac-
count" shall be deemed to refer to any Removed Account
only prior to the Removal Date with respect thereto.
Account Agreements shall mean the agreements
substantially in the forms attached as Exhibit I, as such
agreements may be amended from time to time.
Account Guidelines shall mean the policies
and procedures of the Transferor relating to the opera-
tion of its consumer revolving credit card business, in-
cluding, without limitation, the policies and procedures
for determining the creditworthiness of customers, 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.
Accumulation Period with respect to any
Series, shall have the meaning specified in the related
Supplement.
Addition Cut Off Date shall mean with respect
to any Supplemental Account the last day of the Due
Period preceding the Addition Date.
Addition Date shall mean (i) with respect to
Supplemental Accounts, the date on which Supplemental Ac-
counts will be included as Accounts pursuant to Section
2.6 and (ii) with respect to Automatic Additional Ac-
counts, the date on which such accounts are created.
Additional Account shall mean an Automatic
Additional Account or a Supplemental Account.
Adjustment Payment shall have the meaning
specified in Section 3.8(a).
Affiliate of any Person shall mean any other
Person directly or indirectly controlling, controlled by
or under common control with such Person.
Aggregate Invested Amount shall mean with
respect to any date of determination the sum of the
Invested Amounts with respect to all Series of Investor
Certificates then outstanding.
Aggregate Invested Percentage shall mean with
respect to any date of determination the sum of the
applicable Invested Percentages with respect to all
Series of Investor Certificates then outstanding.
Aggregate Principal Receivables shall mean,
for any date of determination, the aggregate amount of
Principal Receivables at the end of such day.
Agreement shall mean this Master Pooling and
Servicing Agreement and all amendments hereof and supple-
ments hereto including any Supplement.
Amortization Period shall mean, with respect
to any Series, the period following the Revolving Period
which shall be the Accumulation Period, Controlled Amor-
tization Period, Early Amortization Period or Rapid
Amortization Period (each as defined in any related
Supplement).
2
Applicants shall have the meaning specified
in Section 6.7.
Appointment Day shall have the meaning speci-
fied in Section 9.2(a).
Assignment shall have the meaning specified
in Section 2.6(c)(ii).
Authorized Newspaper shall mean one or more
newspapers of general circulation in the Borough of
Manhattan, The City of New York printed in the English
language and customarily published on each Business Day,
whether or not published on Saturdays, Sundays and holi-
days.
Automatic Addition Suspension Date shall mean
the Business Day specified as such in Section 2.6(d).
Automatic Addition Termination Date shall
mean the Business Day specified as such by the Transferor
pursuant to Section 2.6(d) as of which new VISA and
MasterCard accounts originated or acquired by the Trans-
feror shall cease to become Automatic Additional Ac-
counts.
Automatic Additional Account shall mean each
VISA or MasterCard account originated or acquired by the
Transferor (i) after the Cut Off Date and prior to the
earlier of the Automatic Addition Termination Date or an
Automatic Addition Suspension Date and (ii) following an
Automatic Addition Suspension Date and after a Restart
Date and prior to a subsequent Automatic Addition Suspen-
sion Date or any Automatic Addition Termination Date.
Bearer Certificates shall mean any certifi-
▇▇▇▇▇ issued in bearer form.
Bearer Rules shall mean the provisions of the
Internal Revenue Code, in effect from time to time,
governing the treatment of bearer obligations, including
sections 163(f), 871, 881, 1441, 1442 and 4701, and any
regulations thereunder including, to the extent applica-
ble to any Series, proposed or temporary regulations.
3
Book-Entry Certificates shall mean beneficial
interests in the Investor Certificates, ownership and
transfers of which shall be evidenced or made through
book entries by a Clearing Agency as described in Section
6.11; provided, that after the occurrence of a condition
whereupon book-entry registration and transfer are no
longer permitted and Definitive Certificates are issued
to the Certificate Owners, such Definitive Certificates
shall replace Book-Entry Certificates.
Business Day shall mean any day other than a
Saturday, a Sunday or a day on which banking institutions
in Denver, Colorado, 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.
CEDEL shall mean Cedel Bank soci_t_ anonyme
or any successor thereto.
Certificate shall mean one of any Series of
the Investor Certificates or the Exchangeable Transferor
Certificate.
Certificateholder or "Holder" shall mean in
respect of any Certificate, in the case of a Registered
Certificate, the Person in whose name the Registered Cer-
tificate is registered in the Certificate Register and,
in the case of a Bearer Certificate or any Coupon, the
bearer thereof.
Certificate Interest shall mean interest
payable with respect to the Investor Certificates of a
Series, as specified in the related Supplement.
Certificate Owner shall mean, with respect to
a Book-Entry Certificate, the Person who is the benefi-
cial owner of such Book-Entry Certificate, as reflected
on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency
(directly or as an indirect participant, in accordance
with the rules of such Clearing Agency).
Certificate Principal shall mean principal
payable with respect to the Investor Certificates of a
Series, as specified in the related Supplement.
4
Certificate Rate shall mean, with respect to
any Series of Investor Certificates (or, for any Series
with more than one class, for each class of such Series),
the percentage (or formula on the basis of which such
rate shall be determined) stated in the related Supple-
ment; provided that, unless otherwise provided in the
applicable Supplement, in each case such rate shall be
calculated on the basis of a 360-day year consisting of
twelve 30-day months.
Certificate Register shall mean the register
maintained pursuant to Section 6.3, providing for the
registration of the applicable Certificates and transfers
and exchanges thereof.
Clearing Agency shall mean an organization
registered as a "clearing agency" pursuant to Section 17A
of the Securities Exchange Act of 1934, as amended, or
any successor provision thereto.
Clearing Agency Participant shall mean a
broker, dealer, bank, other financial institution or
other Person for whom from time to time a Clearing Agency
effects book-entry transfers and pledges of securities
deposited with the Clearing Agency.
Closing Date shall mean, with respect to any
Series, the date of issuance of the Certificates of such
Series, as specified in the related Supplement.
Collection Account shall have the meaning
specified in Section 4.1(a).
Collections shall mean all payments (includ-
ing Recoveries) received by the Servicer with respect to
the Receivables, in the form of cash, checks, wire trans-
fers, ATM transfers or other form of payment in accor-
dance with the related Account Agreement in effect from
time to time on any Receivable. Collections with respect
to any Due Period shall include (i) the amount (if any)
deposited by the Transferor into the Collection Account
pursuant to Section 2.8 and (ii) the amount of Inter-
change (if any) allocable to any Series pursuant to any
Supplement with respect to such Due Period (to the extent
received by the Trust).
5
Common Depositary shall mean the Person ap-
pointed as such as specified in the related Supplement,
in its capacity as common depositary for the respective
accounts of a Foreign Clearing Agency.
Controlled Amortization Period with respect
to any Series, shall have the meaning specified in the
related Supplement.
Corporate Trust Office shall mean the princi-
pal office of the Trustee at which at any particular time
its corporate business shall be administered, which
office at the date of the execution of this Agreement is
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Corporate Trust and Escrow Services.
Coupons shall have the meaning specified in
Section 6.1.
Cut Off Date shall mean, for each Account,
the close of business on July 31, 1996.
Date of Processing shall mean, with respect
to any transaction, the second Business Day after 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 recorda-
tion).
Default Amount shall mean, for any Due Peri-
od, the amount of the Principal Receivables in all Ac-
counts which became Defaulted Accounts during such Due
Period at the time such Accounts became Defaulted Ac-
counts, plus any Receivables created in such Due Period
on Defaulted Accounts, minus Recoveries, if any, received
in such Due Period.
Defaulted Account shall mean each Account
with respect to which, in accordance with the Account
Guidelines pursuant to which such Account is governed or
the customary and usual servicing procedures of the
Servicer for servicing consumer revolving credit card re-
ceivables comparable to the Receivables, the Servicer has
charged off the Receivables in such Account as uncollect-
ible; in any event, an Account shall be deemed a Default-
ed Account no later than when such Account becomes 150
days delinquent on a contractual basis. Notwithstanding
6
any other provision hereof, any Receivables in a Default-
ed Account which are Ineligible Receivables shall be
treated as Ineligible Receivables rather than Receivables
in Defaulted Accounts.
Definitive Certificates shall have the mean-
ing specified in Section 6.11.
Definitive Euro-Certificates shall have the
meaning specified in Section 6.10(a).
Depository Agreement shall mean the agreement
among the Transferor, the Trustee and the initial Clear-
ing Agency, in the form attached hereto as Exhibit J, or
as otherwise provided in the related Supplement.
Determination Date shall mean the fifth
Business Day prior to each Distribution Date.
Dissolution Event shall have the meaning
specified in Section 9.2(a).
Distribution Date shall mean, unless other-
wise specified in the applicable Supplement, the twenti-
eth day of each calendar month, or, if such twentieth day
is not a Business Day, the next succeeding Business Day.
Due Period shall mean, unless otherwise
provided in a Supplement, with respect to a Distribution
Date for each Account, the period from and including the
first day of a calendar month and ending at the close of
business on the last day of such calendar month.
Early Amortization Event shall have, with
respect to each Series, the meaning specified in Section
9.1.
Early Amortization Period with respect to any
Series, shall have the meaning specified in the related
Supplement.
Eligible Account shall mean each Account
which, as of the Selection Date (or, with respect to
Additional Accounts, as of the relevant Addition Date)
(i) is an Account and was in existence and owned by the
Transferor at the close of business on the Selection Date
or the Addition Date, as applicable, (ii) is payable in
7
United States dollars, (iii) the credit card or cards
related to which have not been reported lost or stolen or
designated fraudulent, (iv) has not been identified by
the Transferor in its computer files as having been
cancelled due to the Obligor's bankruptcy or insolvency,
(v) the receivables in which have not been written off as
uncollectible prior to the Selection Date or the Addition
Date, as applicable, in accordance with the Account
Guidelines, (vi) the receivables in which have not been
assigned, pledged or sold (other than pursuant to this
Agreement or any Receivables Purchase Agreement), (vii)
the Obligor of which has provided, as its most recent
billing address, an address in the United States or its
territories or possessions or Canada and (viii) is not an
account with respect to which the Transferor or any
Affiliate of the Transferor is the Obligor.
Eligible Institution shall mean a (i) deposi-
tary institution, which may include the Trustee, orga-
nized under the laws of the United States or any one of
the States thereof including the District of Columbia,
the deposits in which are insured by the FDIC and which
at all times has a short-term unsecured debt rating of at
least P-1 and A-1+ from Moody's and Standard & Poor's,
respectively, or (ii) a depository institution, which may
include the Trustee, which is acceptable to each Rating
Agency assigning a rating for any class of Investor
Certificates of any then outstanding Series.
Eligible Investments shall mean, unless
otherwise specified in the Supplement with respect to any
Series, (a) negotiable instruments or securities repre-
sented by instruments in bearer or registered or in book-
entry form which evidence (i) obligations fully ▇▇▇▇▇▇-
▇▇▇▇ by the United States of America; (ii) time deposits
in, or bankers acceptances issued by, any depositary
institution or trust company incorporated under the laws
of the United States of America or any state thereof (or
any domestic branch or agency of any foreign bank) and
subject to supervision and examination by Federal or
state banking or depositary institution authorities;
provided, however, that at the time of the Trust's in-
vestment or contractual commitment to invest therein, the
certificates of deposit or short-term deposits, if any,
or long-term unsecured debt obligations (other than such
obligation whose rating is based on collateral or on the
credit of a Person other than such institution or trust
8
company) of such depositary institution or trust company
shall have a credit rating from Moody's and Standard &
Poor's of P-1 and A-1+, respectively, in the case of the
certificates of deposit or short-term deposits, or a
rating not lower than one of the two highest investment
categories granted by Moody's and AAA by Standard &
Poor's in the case of long-term unsecured debt obliga-
tions; (iii) certificates of deposit having, at the time
of the Trust's investment or contractual commitment to
invest therein, a rating from Moody's and Standard &
Poor's of P-1 and A-1+, respectively; (iv) investments in
money market funds rated in the highest investment cate-
gory (in case of Standard & Poor's, such rating category
being AAAm or AAAm-G) or otherwise approved in writing by
the applicable Rating Agencies, (b) demand deposits in
the name of the Trust or the Trustee on behalf of the
Trust in any depositary institution or trust company
referred to in (a)(ii) above, (c) commercial paper (hav-
ing original or remaining maturities of no more than 270
days) having, at the time of the Trust's investment or
contractual commitment to invest therein, a credit rating
from Moody's and Standard & Poor's of P-1 and A-1+,
respectively, (d) Eurodollar time deposits having a
credit rating from Moody's and Standard & Poor's of P-1
and A-1+, respectively, (e) repurchase agreements involv-
ing any of the Eligible Investments described in clauses
(a)(i), (a)(iii) and (d) hereof so long as the other
party to the repurchase agreement has at the time of the
Trust's investment therein, a rating from Moody's and
Standard & Poor's of P-1 and A-1+, respectively, and (f)
any other investment if the applicable Rating Agency con-
firms in writing that such investment will not adversely
affect its then current rating of the Investor Certifi-
▇▇▇▇▇.
Eligible Receivable shall mean each Receiv-
able:
(i) which has arisen under an
Eligible Account;
(ii) which was created in com-
pliance with all applicable requirements of law
and pursuant to an 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 Cer-
tificateholders;
9
(iii) with respect to which all
material consents, licenses, approvals or au-
thorizations of, or registrations with, any
Governmental Authority required to be obtained
or given by the Transferor in connection with
the creation of such Receivable or the execu-
tion, delivery and performance by the Transfer-
or of the related agreement have been duly ob-
tained or given and are in full force and ef-
fect as of such date of creation;
(iv) as to which at the time of
the transfer of such Receivable to the Trust,
the Trust will have good and marketable title,
free and clear of all liens, encumbrances,
charges and security interests (except those
permitted by subsection 2.5(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-
306 of the UCC as in effect in the Relevant UCC
State), effective until the termination of the
Trust;
(vi) which will at all times be
the legal, valid and binding payment obligation
of the Obligor thereof enforceable against such
Obligor in accordance with its terms, except as
such enforceability may be limited by applica-
ble bankruptcy, insolvency, reorganization,
moratorium or other similar laws, now or here-
after in effect, affecting the enforcement of
creditors' rights in general and except as such
enforceability may be limited by general prin-
ciples of equity (whether considered in a suit
at law or in equity);
(vii) which constitutes either
an "account" or a "general intangible" under
and as defined in Article 9 of the UCC as then
in effect in the Relevant UCC State;
10
(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, reorganiza-
tion, moratorium or other similar laws affect-
ing the enforcement of creditors' rights in
general;
(x) as to which the Transferor
has satisfied all obligations to be fulfilled
at the time it is transferred to the Trust; and
(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.
Eligible Servicer shall mean Nordstrom Na-
tional Credit Bank, Nordstrom Credit, Inc., the Trustee
or any entity which, at the time of its appointment as
Servicer, (i) is an established financial institution
having capital or net worth of not less than $50,000,000,
(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 demon-
strated 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 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 of Certificates within a Series, any
letter of credit, guaranteed rate agreement, maturity
guaranty facility, liquidity facility, cash collateral
account, cash collateral guaranty, surety bond, insurance
policy, tax protection agreement, interest rate swap,
interest rate cap, spread account, reserve account or
other contract, agreement or arrangement (including the
subordination of a Series or class to another Series or
11
class) for the benefit of Certificateholders of such
Series or class, as specified in the related Supplement.
Enhancement Invested Amount shall have, with
respect to each 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.
Euro-Certificate Exchange Date shall mean,
with respect to any Series, the date specified in the
related Supplement.
Euroclear Operator shall mean ▇▇▇▇▇▇ Guaranty
Trust Company of New York, Brussels office as operator of
the Euroclear System or any successor thereto.
Excess Funding Account shall have the meaning
specified in Section 4.1(c).
Excess Principal Collections shall mean, with
respect to a Distribution Date, the aggregate amount for
all outstanding Series of Collections of Principal Re-
ceivables which the related Supplements specify are to be
treated as "Excess Principal Collections" for such Dis-
tribution Date.
Exchange shall mean the procedure described
under 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 exchangeable as provided in Section 6.9
for one or more Series of Investor Certificates and a
reissued Exchangeable Transferor Certificate; provided,
that at any time there shall be only one Exchangeable
Transferor Certificate.
Exchange Date shall have the meaning, with
respect to any Series issued pursuant to an Exchange,
specified in Section 6.9.
12
Exchange Notice shall have the meaning, with
respect to any Series issued pursuant to an Exchange,
specified in Section 6.9.
Excluded Receivables Balance shall mean, with
respect to any date of determination, the amount, if any,
by which the aggregate amount of Eligible Receivables
which are Principal Receivables on which the Obligor has
provided, as its most recent address, an address located
in Canada exceeds 0.5% of the aggregate outstanding
balance of all Eligible Receivables which are Principal
Receivables.
FDIC shall mean the Federal Deposit Insurance
Corporation, or any successor thereto.
Final Termination Date shall have the meaning
specified in subsection 12.1(a).
Finance Charge Receivables shall mean Receiv-
▇▇▇▇▇ created in respect of Periodic Finance Charges,
cash advance fees, annual cardholder fees, credit insur-
ance premiums, late fees, overlimit fees, return check
fees and all other fees and charges on the Accounts. Fi-
▇▇▇▇▇ Charge Receivables with respect to any Due Period
shall include the amount of Interchange (if any) alloca-
ble to any Series pursuant to any Supplement with respect
to such Due Period (to the extent received by the Trust).
Fixed/Floating Allocation Percentage shall
have, with respect to each Series, the meaning specified
in the related Supplement.
Floating Allocation Percentage shall have,
with respect to each Series, the meaning specified in the
related Supplement.
Foreign Clearing Agency shall mean with
respect to any Series, CEDEL or the Euroclear Operator or
any other established clearing agency for securities
outside the United States designated in the related
Supplement.
Funding Period shall have the meaning speci-
fied in Section 4.1(f).
13
Global Certificate shall have the meaning
specified in subsection 6.10(a).
Governmental Authority shall mean the United
States of America, any state or other political subdivi-
sion thereof and any United States entity exercising
executive, legislative, judicial, regulatory or adminis-
trative functions of or pertaining to government.
Ineligible Receivable shall have the meaning
specified in subsection 2.4(d)(iii).
Initial Account shall mean each VISA or
MasterCard account or other revolving consumer credit
card account of the Transferor or which was acquired by
the Transferor and chosen from all Eligible Accounts of
the Transferor, which Account is identified as of the Cut
Off Date in the computer file or microfiche list deliv-
ered to the Trustee by the Transferor pursuant to Section
2.1.
Initial Closing Date shall mean August 14,
1996.
Initial Invested Amount shall mean, with
respect to any Series, the amount stated in the related
Supplement.
Interchange shall mean interchange fees
payable to the Transferor, in its capacity as credit card
issuer, through VISA USA, Inc. and MasterCard Interna-
tional Incorporated, including any interchange fees pay-
able directly by an Affiliate of the Transferor to the
Transferor, in its capacity as credit card issuer.
Internal Revenue Code shall mean the Internal
Revenue Code of 1986, as amended from time to time.
Invested Amount shall mean, with respect to
each Series, the meaning specified in the related Supple-
ment.
Invested Percentage shall have, with respect
to each Series, the meaning specified in the related
Supplement.
14
Investor Certificate shall mean any one of
the certificates executed by the Transferor and authenti-
cated by the Trustee substantially in the form attached
to the applicable Supplement.
Investor Certificateholder shall mean the
holder of record of an Investor Certificate.
Investor Charge Offs shall have, with respect
to each Series, the meaning specified in the related
Supplement.
Investor Default Amount shall mean, with
respect to each Series for any Due Period, an amount
equal to the product of (a) the Default Amount and (b)
the related Floating Allocation Percentage for such Due
Period.
Investor Monthly Servicing Fee shall have,
with respect to each Series, the meaning specified in
Section 3.2.
Lien shall mean any mortgage, deed of trust,
pledge, hypothecation, assignment, participation, deposit
arrangement, encumbrance, lien (statutory or other),
preference, priority right or interest or other security
agreement or preferential arrangement of any kind or
nature whatsoever, including, without limitation, any
conditional sale or other title retention agreement, any
financing lease having substantially the same economic
effect as any of the foregoing and the filing of any
financing statement under the Uniform Commercial Code
(other than any such financing statement filed for infor-
mational purposes only) or comparable law of any juris-
diction to evidence any of the foregoing; provided,
however, that any assignment pursuant to Section 7.2
shall not be deemed to constitute a Lien.
Manager shall mean the managing underwriter
of any Series.
Minimum Aggregate Principal Receivables shall
mean, as of any date of determination, the sum of the
numerators used at such date to calculate the Invested
Percentages with respect to Collections of Principal
Receivables for all Series outstanding on such date, less
the amount on deposit in the Excess Funding Account.
15
Minimum Transferor Amount shall mean, as of
any date of determination, the product of (i) the sum of
(a) the Aggregate Principal Receivables and (b) the
amounts on deposit in the Excess Funding Account or any
principal funding account and (ii) the Minimum Transferor
Interest Percentage.
Minimum Transferor Interest Percentage shall
mean, as of any date of determination, the highest per-
centage specified as the "Minimum Transferor Interest
Percentage" in any Supplement for any outstanding 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, the Person or Persons obligated to make payments
with respect to such Account, including any guarantor
thereof.
Officer's Certificate shall mean a certifi-
cate signed by any Vice President or more senior officer
of either of the Transferor or the Servicer and delivered
to the Trustee.
Opinion of Counsel shall mean a written
opinion of independent counsel, who may be counsel for
the Transferor, and which shall be acceptable to the
Trustee.
Paying Agent shall mean any paying agent
appointed pursuant to Section 6.6 and shall initially be
the Trustee.
Periodic Finance Charges shall have the
meaning specified in the Account Agreement applicable to
each Account for finance charges (due to periodic rate)
or any similar term.
16
Person shall mean any legal person, including
any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated
organization, Governmental Authority or other entity of
similar nature.
Pre-Funding Account shall have the meaning
specified in Section 4.1(f).
Principal Receivables shall mean Receivables
other than Finance Charge Receivables and Receivables in
Defaulted Accounts.
Principal Shortfalls shall mean, with respect
to a Distribution Date, the aggregate amount for all
outstanding Series which the related Supplements specify
are "Principal Shortfalls" for such Distribution Date.
Principal Terms shall have the meaning, with
respect to any Series issued pursuant to an Exchange,
specified in Section 6.9.
Publication Date shall have the meaning
specified in Section 9.2(a).
Rapid Amortization Period shall have, with
respect to any Series, the meaning specified in the
related Supplement.
Rating Agency shall mean, with respect to any
Series, each statistical rating agency, if any, selected
by the Transferor to rate the Investor Certificates of
such Series and specified in the related Supplement.
Reassignment shall have the meaning specified
in Section 2.7(b)(i).
Receivable shall mean any amount owing, from
time to time, by an Obligor under an Account including,
without limitation, amounts owing for the purchase of
merchandise and services, Periodic Finance Charges, cash
advances and cash advance fees, access checks, annual
cardholder fees, credit insurance premiums, late fees,
overlimit fees, return check fees and all other fees and
charges. In calculating the aggregate amount of Receiv-
▇▇▇▇▇ on any day, the amount of Receivables shall be
reduced by the aggregate amount of credit balances, and
17
other adjustments stated in Section 3.8 hereof, in the
Accounts on such day. Any Receivables which the Trans-
feror is unable to transfer as provided in subsection
2.5(d) shall not be included in calculating the aggregate
amount of Receivables.
Receivables Purchase Agreement shall mean any
receivables purchase agreement as may be entered into
from time to time by the Transferor providing for the
purchase by the Transferor of receivables arising under
VISA or MasterCard accounts or other revolving consumer
credit card accounts, which agreement relates to receiv-
▇▇▇▇▇ which have been transferred to the Trust pursuant
to this Agreement.
Record Date shall mean, unless otherwise
specified with respect to a Series in the related Supple-
ment, with respect to any Distribution Date, the last
Business Day of the immediately preceding calendar month.
Recoveries shall mean all amounts received
with respect to Receivables in Defaulted Accounts, net of
expenses allocable thereto.
Registered Certificateholder shall mean the
Holder of a Registered Certificate.
Registered Certificates shall have the mean-
ing specified in Section 6.1.
Relevant UCC State shall mean all jurisdic-
tions where UCC filing is required to perfect and main-
tain the security interest of the Trustee.
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
18
conditions under which the Transferor may repurchase such
Series of Certificates pursuant to Section 12.2.
Requirements of Law for any Person shall mean
the certificate of incorporation or articles of associa-
tion 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 Govern-
mental Authority, in each case applicable to or binding
upon such Person or to which such Person is subject,
whether Federal, state or local (including, but not
limited to, usury laws, the Federal Truth in Lending Act
and Regulation Z and Regulation B of the Board of ▇▇▇▇▇-
▇▇▇▇ of the Federal Reserve System).
Responsible Officer shall mean any officer of
the Trustee assigned by it to administer its corporate
trust matters.
Restart Date shall mean the date specified as
such in the notice delivered by the Transferor to the
Trustee pursuant to Section 2.6(d).
Revolving Period shall mean, with respect to
each Series, the period from and including the date of
initial issuance of the Investor Certificates of such
Series to, but not including, the day on which an Amorti-
zation Period for such Series commences.
Securities Act shall mean the Securities Act
of 1933, as amended.
Selection Date shall mean July 31, 1996.
Series shall mean any Series of Investor
Certificates, each as designated in the related Supple-
ment (including any Enhancement Invested Amount related
thereto).
Series Factor shall mean a number carried out
to eight decimals (and rounded to seven decimals) repre-
senting the ratio of the applicable Invested Amount as of
the end of the last day of the preceding Due Period to
the applicable Initial Invested Amount.
Servicer shall mean initially Nordstrom
National Credit Bank and thereafter any Person appointed
19
as successor as herein provided to service the Receiv-
▇▇▇▇▇.
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 mean, with
respect to any Series, the percentage specified in the
related Supplement.
Servicing Officer shall mean any officer of
the Servicer involved in, or responsible for, the admin-
istration 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.
Standard & Poor's shall mean Standard &
Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc.
Stated Series Termination Date shall mean,
with respect to any Series, the date stated in the relat-
ed Supplement as the termination date for such Series.
Subsidiary of a Person shall mean any Person
more than 50% of the outstanding voting interests of
which shall at any time be owned or controlled, directly
or indirectly, by such Person or by one or more Subsid-
iaries of such Person or any similar business organiza-
tion which is so owned or controlled.
Successor Servicer shall have the meaning
specified in Section 10.2(a).
Supplement shall mean, with respect to any
Series, a supplement to this Agreement complying with the
terms of Section 6.9, executed in conjunction with any
issuance of any Series.
Supplemental Account shall mean each VISA or
MasterCard account or other revolving consumer credit
card account of the Transferor or which was acquired by
the Transferor and chosen from all Eligible Accounts of
20
the Transferor, which Account is designated pursuant to
Section 2.6(a) or 2.6(b) to be included as an Account,
and is identified as of the related Addition Date in the
computer file or microfiche list delivered to the Trustee
by the Transferor pursuant to Section 2.1.
Supplemental Account Selection Date shall
have the meaning specified in Section 2.6.
Tax Opinion shall have the meaning specified
in subsection 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(a) and shall initially
be the Trustee.
Transferor shall mean Nordstrom National
Credit Bank, as transferor of the Receivables.
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 determi-
nation, minus the Aggregate Invested Amount at the end of
such day, minus any Enhancement Invested Amount at the
end of such day and plus the principal amount on deposit
in the Excess Funding Account or any principal funding
account at the end of such day.
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 or otherwise, one
hundred percent minus the Aggregate Invested Percentages
calculated on such date with respect to such categories
of Receivables as calculated by the Servicer.
21
Transferred Account shall mean a consumer
revolving credit card account (including an upgraded
account) with respect to which a new credit card account
number has been issued by the Servicer in accordance with
the Servicer's usual 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 Cut Off Date and the
Initial 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 speci-
fied in Section 2.1(b).
Trustee shall mean the institution executing
this Agreement as trustee, or its successor in interest,
or any successor trustee appointed as herein provided.
UCC shall mean the Uniform Commercial Code,
as amended from time to time, as in effect in any speci-
fied jurisdiction.
Undistributed Principal Collections shall
have the meaning specified in subsection 4.1(g).
Undivided Interest shall mean the undivided
interest of any Certificateholder in the Trust.
22
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 princi-
ples on the date of determination. To the extent that
the definitions of accounting terms herein are inconsis-
tent with the meanings of such terms under generally
accepted accounting principles, the definitions contained
herein shall control.
(c) The agreements and representations and
warranties of Nordstrom National Credit Bank in this
Agreement in its capacity as Servicer, shall be deemed to
be the agreements, representations and warranties of
Nordstrom National Credit Bank solely in such capacity
for so long as it acts in such capacity under this Agree-
ment.
(d) The words "hereof," "herein" and "hereun-
der" and words of similar import when used in this Agree-
ment shall refer to any Supplement or this Agreement as a
whole and not to any particular provision of such Supple-
ment or this Agreement, as the case may be; Section,
subsection, Schedule and Exhibit references contained in
this Agreement or any Supplement are references to Sec-
tions, subsections, Schedules and Exhibits in or to this
Agreement or any Supplement unless otherwise specified;
and the word "including" means including without limita-
tion.
(END OF ARTICLE I)
23
ARTICLE II
APPOINTMENT OF TRUSTEE;
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.1 Appointment of Trustee; Conveyance of Receiv-
▇▇▇▇▇. (a) The Transferor appoints and authorizes
Norwest Bank Colorado, National Association to act as
Trustee as provided herein and to exercise such powers
under this Agreement as are delegated to the Trustee by
the terms hereof together with all such powers as are
reasonably incidental thereto. The Trustee hereby ac-
cepts such appointment and agrees to exercise such powers
and perform such functions on behalf of the Certificate-
holders from time to time as are specifically delegated
to the Trustee by the terms hereof.
(b) The Transferor does hereby transfer,
assign, set-over, and otherwise convey to the Trust for
the benefit of the Certificateholders, without recourse,
all right, title and interest of the Transferor in, to
and under (i) the Receivables existing at the close of
business on the Cut Off Date and thereafter created from
time to time and arising in the Initial Accounts and the
Receivables existing on each applicable Addition Date and
thereafter created from time to time and arising in any
Automatic Additional Account, and in each case, thereaf-
ter created from time to time until the termination of
the Trust, all monies due or to become due with respect
to any of the foregoing (including Recoveries) on and
after the Cut Off Date, and all proceeds (including
"proceeds" as defined in the UCC) of such Receivables,
and (ii) any Receivables Purchase Agreement. Such prop-
erty, together with 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 and all monies as
are from time to time available under any Enhancement for
any Series for payment to Certificateholders shall con-
stitute the property of the Trust (the "Trust Property").
The foregoing transfer, assignment, set-over and convey-
ance 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
24
instrument relating thereto including, without limita-
tion, any obligation to any Obligors, merchant service
establishments, VISA USA, Inc. or MasterCard Internation-
al Incorporated or any insurers.
In connection with such transfer, the Transfer-
or agrees to record and file, at its own expense, financ-
ing statements (and continuation statements with respect
to such financing statements when applicable) with re-
spect to the Receivables now existing and hereafter
created in Accounts and other Trust Property meeting the
requirements of applicable state law in such manner and
in such jurisdictions as are necessary to perfect, and
maintain the perfection of, the transfers and assignments
of the 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 Closing Date, in the case of Receivables
arising in the Initial Accounts and Automatic Additional
Accounts, and (if any additional filing is necessary) the
applicable Addition Date or Restart Date, in the case of
Receivables arising in Supplemental Accounts or Automatic
Additional Accounts, respectively.
In connection with such transfer, the Trans-
feror agrees, at its own expense, on or prior to the Ini-
tial Closing Date to indicate clearly and unambiguously
in its computer files that the Receivables created in
connection with the Accounts (other than any Additional
Account) have been transferred to the Trust pursuant to
this Agreement for the benefit of the Certificateholders.
The Transferor further agrees to deliver to the Trustee
(a) on the Initial Closing Date, a computer file or
microfiche list containing a true and complete list of
all such Accounts, identified by account number and by
Receivable balance as of the Cut Off Date and (b) within
twenty Business Days of any request by the Trustee, a new
computer file or microfiche list containing a true and
complete list of all Accounts identified as described in
the preceding clause (a) as of the last day of the most
recent Due Period. Such file or list shall be marked as
Schedule 1 to this Agreement, delivered to the Trustee as
confidential and proprietary, and is hereby incorporated
into and made a part of this Agreement. The Transferor
agrees, at its own expense, by the end of the Due Period
in which any Transferred Accounts have been originated to
indicate clearly and unambiguously in its computer files
25
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 Certif-
icateholders.
The Transferor further agrees, at its own
expense, (a) on (x) the Automatic Addition Termination
Date or any Automatic Addition Suspension Date, in the
case of the Initial Accounts and any Additional Accounts
designated pursuant hereto prior to such date, (y) the
applicable Addition Date, in the case of Supplemental Ac-
counts, and (z) the applicable Removal Date, in the case
of Removed Accounts, to indicate in the appropriate
computer files that Receivables created in connection
with the Accounts owned by the Transferor (other than Re-
moved Accounts) have been conveyed to the Trust pursuant
to this Agreement for the benefit of the Certificate-
holders (or conveyed to the Transferor or its designee in
accordance with Section 2.7, in the case of Removed
Accounts) by including in such computer files the code
identifying each such Account (or, in the case of Removed
Accounts, either including such a code identifying the
Removed Accounts only if the removal occurs prior to the
Automatic Addition Termination Date or any Automatic
Addition Suspension Date, or subsequent to a Restart
Date, or deleting such code thereafter) and (b) on the
date referred to in clauses (x), (y) or (z) above, as
applicable, to deliver to the Trustee a computer file,
microfiche list or printed list containing a true and
complete list of all such Accounts, specifying for each
such Account, as of the Automatic Addition Termination
Date or any Automatic Addition Suspension Date, in the
case of clause (x) above, the applicable Addition Cut Off
Date, in the case of Supplemental Accounts, and the
Removal Date, in the case of Removed Accounts, its ac-
count number, the aggregate amount outstanding in such
Account and the aggregate amount of Principal Receivables
outstanding in such Account. Such file or list shall be
supplemented from time to time to reflect Supplemental
Accounts and Removed Accounts. Once the code referenced
in this paragraph has been included with respect to any
Account, the Transferor further agrees not to alter such
code during the remaining term of this Agreement unless
and until (a) such Account becomes a Removed Account, (b)
a Restart Date has occurred on which the Transferor
starts including Automatic Additional Accounts as Ac-
counts or (c) the Transferor shall have delivered to the
26
Trustee at least 30 days prior written notice of its
intention to do so and has taken such action as is neces-
sary or advisable to cause the interest of the Trustee in
the Receivables and other Trust Property to continue to
be perfected with the priority required by this Agree-
ment.
The Transferor hereby grants to the Trustee a
first priority perfected security interest in all of the
Transferor's right, title and interest in and to the
Receivables and all other Trust Property, now existing
and hereafter created, all monies due or to become due
with respect thereto on and after the Cut Off Date (in-
cluding Recoveries), all proceeds of such Receivables,
such funds 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
Certificateholders, and the benefits of any Enhancement
for any Series for payment to Certificateholders in order
to secure the payment of the unpaid principal amount of
the Investor Certificates issued hereunder or to be
issued pursuant to this Agreement and the interest ac-
crued at the related Certificate Rate, and agrees that
this Agreement shall constitute a security agreement
under applicable law.
Section 2.2 Acceptance by Trustee.
(a) The Trustee hereby acknowledges its accep-
tance, to the extent validly transferred, assigned, set
over or otherwise conveyed to the Trust as provided in
subsection 2.1(b) hereof, on behalf of the Trust, of all
right, title and interest previously held by the Trans-
feror in and to the Receivables, now existing and hereaf-
ter created, all monies due or to become due with respect
thereto on and after the Cut Off Date (including Recover-
ies), all proceeds of such Receivables, such funds as are
from time to time deposited in the Collection Account,
the Excess Funding Account and any other account or ac-
counts maintained for the benefit of Certificateholders,
and benefits of any Enhancement for any Series, and
declares that it shall hold such right, title and inter-
est, upon the trust herein set forth, and subject to the
terms hereof for the benefit of all Certificateholders.
The Trustee further acknowledges that, prior to or simul-
taneously with the execution and delivery of this Agree-
ment, the Transferor delivered to the Trustee, the com-
27
puter file or microfiche list represented by the Trans-
feror to be the computer file or microfiche list de-
scribed in the third paragraph of Section 2.1(b).
(b) The Trustee hereby agrees not to disclose
to any Person (including any Certificateholder or Certif-
icate Owner) any of the account numbers or other informa-
tion 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 in en-
forcing 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 to
protect and maintain the security and confidentiality of
such information, and, in connection therewith, shall
allow the Transferor or the Servicer on behalf of the
Transferor to inspect the Trustee's security and confi-
dentiality arrangements from time to time during normal
business hours. The Trustee shall provide the Transferor
with written notice five Business Days prior to any
disclosure pursuant to this subsection 2.2(b).
(c) The Trustee shall have no power to create,
assume or incur indebtedness or other liabilities in the
name of the Trust other than as contemplated in this
Agreement.
Section 2.3 Representations and Warranties. The
Transferor hereby represents and warrants to the Trustee,
on behalf of the Trust, with respect to any Series of
Certificates, as of the date of any Supplement and the
related Closing Date, unless otherwise stated in such
Supplement that:
(i) Organization and Good
Standing. The Transferor is a national banking
association duly organized and validly existing
in good standing under the laws of the United
States of America, and has full power, authori-
ty 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 Sup-
28
plement 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
requirement) in any state where such qualifica-
tion is required in order to conduct business,
and has obtained all necessary licenses and
approvals with respect to the Transferor re-
quired under Federal and Colorado law; provid-
ed, however, that no representation or warranty
is made with respect to any qualifications, li-
censes or approvals which the Trustee would
have to obtain to do business in any state in
which the Trustee seeks to enforce any Receiv-
able.
(iii) Due Authorization. The
execution and delivery of this Agreement and
any Supplement and the execution and delivery
to the Trustee of the Certificates and the
consummation of the transactions provided for
in this Agreement and any Supplement have been
duly authorized by the Transferor by all neces-
sary action on the part of the Transferor.
(iv) No Violation. The execu-
tion and delivery of this Agreement, any Sup-
plement and the Certificates, the performance
of the transactions contemplated by this Agree-
ment and any Supplement and the fulfillment of
the terms hereof will not conflict with, vio-
late or result in any breach of any of the
material terms and provisions of, or constitute
(with or without notice or lapse of time or
both) a material default under, any Requirement
of Law applicable to the Transferor or any
material indenture, contract, agreement, ▇▇▇▇-
▇▇▇▇, 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, threat-
ened against the Transferor, before any court,
29
regulatory body, administrative agency, arbi-
trator or other tribunal or governmental in-
strumentality (i) asserting the invalidity of
this Agreement, any Supplement or the Certifi-
▇▇▇▇▇, (ii) seeking to prevent the issuance of
the Certificates or the consummation of any of
the transactions contemplated by this Agree-
ment, 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 per-
formance 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 Supple-
ment or the Certificates or (v) seeking to
affect adversely the Federal income tax attrib-
utes of the Trust.
(vi) Eligibility of Accounts.
As of the applicable Selection Date or Addi-
tion Date, each Account was an Eligible Ac-
count.
(vii) All Consents Required.
All approvals, authorizations, consents, orders
or other actions of any Person or of any Gov-
ernmental Authority required to be obtained on
or prior to the date as of which this represen-
tation is being made in connection with the
execution and delivery of this Agreement, any
Supplement and the Certificates, the perfor-
▇▇▇▇▇ of the transactions contemplated by this
Agreement and the fulfillment of the terms
hereof, have been obtained.
(viii) Amount of Receivables;
Computer File. As of the Cut Off Date, the
amount of Receivables was $208,462,983.38. The
computer file or microfiche list delivered
pursuant to Section 2.1 hereof is complete and
accurately reflects the information regarding
the Receivables under the Accounts in all mate-
rial respects as of the applicable time re-
ferred to in Section 2.1.
30
The representations and warranties set forth in
this Section 2.3 shall survive the transfer and assign-
ment of the Receivables to the Trust, and termination of
the rights and obligations of the Servicer pursuant to
Section 10.1. Upon discovery by either of the Trans-
feror, the Servicer or the Trustee of a breach of any of
the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice
to the others.
Section 2.4 Representations and Warranties of the Trans-
feror Relating to the Agreement and any Supplement and
the Receivables.
(a) Binding Obligation; Valid Transfer and
Assignment. The Transferor hereby represents and war-
rants to the Trustee, on behalf of the Trust, with re-
spect to any Series of Certificates, as of the date of
any Supplement and the related Closing Date, unless
otherwise stated in such Supplement that:
(i) Each of this Agreement and
any Supplement constitutes a legal, valid and
binding obligation of the Transferor, enforce-
able against the Transferor, in accordance with
its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affect-
ing the enforcement of creditors' rights in
general and the rights of creditors of national
banking associations and except as such en-
forceability may be limited by general princi-
ples of equity (whether considered in a suit at
law or in equity).
(ii) This Agreement constitutes
either (A) a valid transfer and assignment to
the Trust of all right, title and interest of
the Transferor in and to the Receivables now
existing and hereafter created, all monies due
or to become due with respect thereto on and
after the Cut Off Date, Recoveries, and all
proceeds (as defined in the UCC as in effect in
the Relevant UCC State) of such Receivables,
such funds as are from time to time deposited
in the Collection Account, the Excess Funding
Account and any other account or accounts main-
31
tained for the benefit of Certificateholders
and the benefits of any Enhancement, and such
Receivables and all proceeds thereof will be
held by the Trust free and clear of any Lien of
any Person except for (x) Liens permitted under
subsection 2.5(b), (y) the interest of the
Transferor as holder of the Exchangeable Trans-
feror Certificate and (z) any right of the
holder of the Exchangeable Transferor Certifi-
cate to receive interest accruing on, and in-
vestment earnings with respect to, the Collec-
tion Account, the Excess Funding Account or any
other account or accounts maintained for the
benefit of Certificateholders as provided in
this Agreement and any Supplement or (B) a
grant of a security interest (as defined in the
UCC as in effect in the Relevant UCC State) in
such property to the Trustee on behalf of the
Trust, which is enforceable with respect to
existing Receivables (other than Receivables in
Additional Accounts) and the proceeds thereof
(to the extent set forth in Section 9-306 of
the UCC in effect in the Relevant UCC State)
upon execution and delivery of this Agreement,
and which will be enforceable with respect to
such Receivables thereafter created and the
proceeds thereof to such extent, upon such cre-
ation. If this Agreement constitutes the grant
of a security interest to the Trust in such
property, upon the filing of the applicable
financing statements and in the case of the
Receivables hereafter created and proceeds
thereof upon such creation, the Trust shall
have a first priority perfected security inter-
est in such property and the proceeds thereof
(to the extent set forth in Section 9-306 of
the UCC in effect in the Relevant UCC State),
except for Liens permitted under subsection
2.5(b) hereunder. Neither the Transferor nor
any Person claiming through or under the Trans-
feror shall have any claim to or interest in
the Collection Account, the Excess Funding
Account or any other account or accounts main-
tained for the benefit of Certificateholders,
except for any right of the Transferor to re-
ceive interest accruing on, and investment
earnings with respect to, any such account as
32
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 Transfer-
or hereby represents and warrants to the Trustee, on
behalf of the Trust as of the Cut Off Date with respect
to each Initial Account, on the date of its creation with
respect to each Automatic Additional Account and on each
Addition Cut Off Date with respect to each related Sup-
plemental Account that (i) each Receivable then existing
is an Eligible Receivable, (ii) all material information
with respect to the Accounts and Receivables provided to
the Trustee by the Transferor was true and correct in all
material respects as of the Selection Date or the related
Addition Date, (iii) each Receivable then existing has
been conveyed to the Trust free and clear of any Lien of
any Person (other than Liens permitted under subsection
2.5(b)) and in compliance, in all material respects, with
all Requirements of Law applicable to the Transferor,
(iv) with respect to each Receivable then existing, all
consents, licenses, approvals or authorizations of or
registrations or declarations with any Governmental
Authority required to be obtained, effected or given by
the Transferor, in connection with the conveyance of such
Receivable to the Trust have been duly obtained, effected
or given and are in full force and effect, (v) as of the
Initial Closing Date, as of the Automatic Addition Termi-
nation Date or any Automatic Addition Suspension Date
with respect to the Initial Accounts and any Additional
Accounts designated pursuant hereto prior to such date,
as of the applicable Addition Date with respect to Sup-
plemental Accounts and as of the applicable Removal Date
with respect to Removed Accounts, Schedule 1 to this
Agreement is and will be an accurate and complete listing
of all the Accounts in all material respects as of each
such date, and the information contained therein with re-
spect to the identity of such Accounts and the Receiv-
▇▇▇▇▇ existing thereunder is and will be true and correct
in all material respects as of each such date and (vi) no
selection procedure believed by the Transferor to be
adverse to the interests of the Investor Certificate-
holders has been used in selecting the Accounts. On each
day on which any new Receivable is created, the Transfer-
33
or shall be deemed to represent and warrant to the Trust
that (A) each Receivable created on such day is an Eligi-
ble Receivable, (B) each Receivable created on such day
has been conveyed to the Trust free and clear of any Lien
of any Person claiming through or under the Transferor or
any of its Affiliates (other than Liens permitted under
subsection 2.5(b)) and in compliance, in all material re-
spects, with all Requirements of Law applicable to the
Transferor, (C) with respect to each such Receivable, all
consents, licenses, approvals or authorizations of or
registrations or declarations with, any Governmental
Authority required to be obtained, effected or given by
the Transferor, in connection with the conveyance of such
Receivable to the Trust have been duly obtained, effected
or given and are in full force and effect and (D) the
representations and warranties set forth in subsection
2.4(a) are true and correct with respect to each Receiv-
able created on such day as if made on such day.
(c) Notice of Breach. The representations and
warranties set forth in this Section 2.4 shall survive
the transfer and assignment of the Receivables to the
Trust and the 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 2.4, the party discovering such
breach shall give prompt written notice to the others.
(d) Transfer of Ineligible Receivables.
(i) Automatic Removal. In the
event of a breach with respect to a Receivable
of any of the representations and warranties
set forth in subsection 2.4(b)(iii) or in the
event that a Receivable is not an Eligible
Receivable as a result of the failure to satis-
fy the conditions set forth in clause (iv) of
the definition of an Eligible Receivable, and
either of the following two conditions is met:
(A) the Lien upon the subject
Receivable (1) ranks prior to the
Lien created pursuant to this Agree-
ment, (2) arises in favor of the
United States of America or any state
or any agency or instrumentality
34
thereof or involves taxes or liens
arising under Title IV of the Employ-
ee Retirement Income Security Act of
1974, or (3) has been consented to by
the Transferor; or
(B) the Lien on the subject
Receivable is not of the types de-
scribed 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 Receiv-
able or its proceeds are materially
impaired or the proceeds of such
Receivable are not available for any
reason to the Trust free and clear of
any Lien except Liens permitted pur-
suant to subsection 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 auto-
matically removed from the Trust on the terms and
conditions set forth below in subsection
2.4(d)(iii).
(ii) Removal after Cure Period.
In the event of a breach of any of the repre-
sentations and warranties set forth in subsec-
tion 2.4(b)(i), (ii), (iv), (v) or (vi) with
respect to a Receivable (other than in the
event that a Receivable is not an Eligible
Receivable as a result of the failure to satis-
fy the conditions set forth in clause (iv) of
the definition of Eligible Receivable), and as
a result of such breach or event such Receiv-
able becomes a Receivable which is not an ▇▇▇-
gible Receivable, the Account related to such
Receivable becomes a Defaulted Account or the
Trust's rights in, to or under such Receivable
or its proceeds are materially impaired or the
proceeds of such Receivable are not available
35
for any reason to the Trust free and clear of
any Lien except Liens permitted pursuant to
subsection 2.5(b), then, upon the expiration of
60 days or any longer period agreed upon by the
Trustee (not to exceed an additional 60 days)
from the earlier to occur of the discovery of
any such event by the Transferor or the
Servicer, or receipt by the Transferor or the
Servicer of written notice of any such event
given by the Trustee, each such Receivable or,
at the option of the Transferor, all such Re-
ceivables with respect to the related Account,
shall be removed from the Trust on the terms
and conditions set forth in subsection
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
representations and warranties with respect to
such Receivable shall then be true and correct
in all material respects as if such Receivable
had been created on such day, and (B) such
Receivable is an Eligible Receivable, the re-
lated Account is no longer a Defaulted Account
as the result of the breach of such representa-
tion and warranty, and the Trust's rights in,
to or under such Receivable or its proceeds are
no longer impaired as the result of the breach
of such representation and warranty, and the
proceeds of such Receivable have become avail-
able to the Trust free and clear of all Liens
resulting in the breach of such representation
or warranty, as applicable.
(iii) Removal Terms and Condi-
tions. When required or permitted with respect
to a Receivable by the provisions of subsection
2.4(d)(i) or subsection 2.4(d)(ii) above (an
"Ineligible Receivable"), the Transferor shall
accept reassignment of such Ineligible Receiv-
able by directing the Servicer to deduct the
principal balance of such Ineligible Receivable
from the Aggregate Principal Receivables and to
decrease the Transferor Amount by such amount.
On and after the date of such removal, each
Ineligible Receivable shall be deducted from
the Aggregate Principal Receivables used in the
calculation of any Invested Percentage, the
36
Transferor Percentage, the Transferor Amount or
the Excluded Receivables Balance. In the event
that the exclusion of an Ineligible Receivable
from the calculation of the Transferor Amount
and the Excluded Receivables Balance would
cause the Transferor Amount minus the Excluded
Receivables Balance to be reduced below zero or
would otherwise not be permitted by law, the
Transferor shall immediately, but in no event
later than 10 Business Days after such event,
make a deposit in the Excess Funding Account in
immediately available funds prior to the next
succeeding Distribution Date in an amount equal
to the amount by which the Transferor Amount
minus the Excluded Receivables Balance would be
reduced below zero. 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 Ineligi-
ble Receivable. 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 the right,
title and interest of the Trust in and to such
Ineligible Receivable, all monies due or to
become due with respect thereto and all pro-
ceeds thereof. The Trustee shall execute such
documents and instruments of transfer or as-
signment and take such other actions as shall
reasonably be requested by the Transferor to
effect the conveyance of such Ineligible Re-
ceivable 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 60 days), of the date
on which the removal of Receivables which are
not Eligible Receivables from the Trust pursu-
ant to this Section is effected, (A) the appli-
cable representations and warranties with re-
spect to such Receivable shall be true and
correct in all material respects on such date
and (B) the Receivable is an Eligible Receiv-
able, the Account corresponding to the Receiv-
able is no longer a Defaulted Account and the
Trust's rights in, to or under such Receivable
37
or its proceeds are no longer impaired as a
result of the breach of such representation or
warranty and the proceeds of such Receivable
are available to the Trust free and clear of
all Liens resulting in the breach of such rep-
resentation 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 Trans-
feror shall have been deemed to have made the
applicable representations and warranties in
subsection 2.4(b) as of the date of such addi-
tion, as if the Receivable had been created on
such date, and shall execute all such necessary
documents and instruments of transfer or as-
signment and take such other actions as shall
be necessary to effect and perfect the recon-
veyance of such Receivable to the Trust. The
obligation of the Transferor set forth in this
subsection shall constitute the sole remedy
respecting any breach of the representations
and warranties set forth in the above-refer-
enced subsections with respect to such Receiv-
able available to Certificateholders or the
Trustee on behalf of Certificateholders.
Notwithstanding any other provi-
sion of this subsection 2.4(d), a reassignment
of an Ineligible Receivable shall not occur if
the Transferor fails to make a deposit required
by this subsection 2.4(d) with respect to such
Ineligible Receivable.
(iv) No Impairment. For the
purposes of subsections 2.4(d)(i) and
2.4(d)(ii) above, proceeds of a Receivable
shall not be deemed to be impaired hereunder
solely because such proceeds are held by the
Servicer for more than the applicable period
under Section 9-306(3) of the UCC as in effect
in the Relevant UCC State.
(e) Reassignment of Trust Portfolio. In the
event of (1) a breach of any of the representations or
warranties set forth in subsection 2.3(i), 2.3(iii) or
2.4(a) or (2) a material amount of Receivables are not
38
Eligible Receivables, and in either case such event has a
materially adverse effect on 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 60 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, at any time
during such applicable period, the representations and
warranties contained in subsection 2.3(i), 2.3(iii) and
2.4(a) 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 on the Busi-
ness Day prior to the Distribution Date (in immediately
available funds) an amount equal to the reassignment
deposit amount for such Receivables in the Collection
Account for distribution pursuant to the provisions of
Section 12.3. The deposit amount for such reassignment
shall be equal to the Aggregate Invested Amount on the
Record Date related to the applicable Distribution Date
on which such deposit is made (less the aggregate princi-
pal amount on deposit in any principal funding account),
plus (i) an amount equal to all accrued but unpaid inter-
est 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
unpaid amounts payable to any Enhancement Provider under
the applicable Enhancement agreement. Payment of the
reassignment deposit amount and all other amounts in the
Collection Account in respect of the preceding Due Period
shall be considered a prepayment in full of all such
Receivables. On the Distribution Date with respect to
which such amount has been deposited in full into the
Collection Account, the Receivables and all monies due or
to become due with respect thereto and all proceeds
relating thereto shall be released to the Transferor and
39
the Trustee shall execute and deliver such instruments of
transfer or assignment, in each case without recourse,
representation or warranty, as shall be reasonably re-
quested by the Transferor to vest in the Transferor or
its designee or assignee, all right, title and interest
of the Trust in and to the Receivables, all monies due or
to become due with respect thereto and all proceeds
thereof. If the Trustee or the Investor Certificatehold-
ers 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 representa-
tions and warranties contained in subsection 2.3(i),
2.3(iii) or 2.4(a) or there being a material amount of
Receivables which are not Eligible Receivables available
to the Investor Certificateholders or the Trustee on
behalf of the Investor Certificateholders.
(f) Nothing contained in this Section 2.4
shall create an obligation on the part of the Trustee to
verify the accuracy or continued accuracy of the repre-
sentations 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 knowl-
edge 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 Promis-
sory Notes or Chattel Paper. The Transferor will take no
action to cause any Receivable to be evidenced by any
instrument (as defined in the UCC as in effect in the
Relevant UCC State). Each Receivable shall be payable
pursuant to a contract which does not create a Lien on
any goods purchased thereunder.
(b) Security Interests. Except for the con-
veyances hereunder, the Transferor will not sell, pledge,
assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien on any Receiv-
able, 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 trans-
ferred by the Transferor immediately upon discovery
40
thereof; and the Transferor will defend the right, title
and interest of the Trust in, to and under the Receiv-
▇▇▇▇▇, whether now existing or hereafter created, against
all claims of third parties claiming through or under the
Transferor; provided, however, that nothing in this
subsection 2.5(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 govern-
mental charges shall not at the time be due and payable
or if the Transferor shall currently be contesting the
validity thereof in good faith by appropriate proceedings
and shall have set aside on its books adequate reserves
with respect thereto; provided, further, that nothing in
this subsection shall prohibit the Transferor from con-
veying an interest in the Exchangeable Transferor Cer-
tificate in accordance with subsection 6.3(b) hereof.
(c) Account Agreements and Guidelines. The
Transferor shall 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 Certificates.
Subject to compliance with all Requirements of Law the
failure to comply with which would have a material ad-
verse effect on the Investor Certificateholders (without
regard to the amount of any Enhancement), the Transferor
may change the terms and provisions of the Account Agree-
ments or the Account Guidelines in any respect (includ-
ing, without limitation, the reduction of the minimum
monthly payment, the calculation of the amount, or the
timing, of charge-offs and the amount of Periodic Finance
Charges or other fees and charges) as follows: (a) if
the Transferor owns a comparable segment of accounts,
then such change shall be made applicable to such compa-
rable segment of the accounts owned and serviced by the
Transferor that have characteristics the same as, or sub-
stantially similar to, the Accounts that are the subject
of such change, and (b) if the Transferor does not own
such a comparable segment, then the Transferor will not
make any such change with the intent to materially bene-
fit the Transferor over the Investor Certificateholders.
41
(d) Account Allocations. In the event that
the Transferor is unable for any reason to transfer
Receivables to the Trust in accordance with the provi-
sions of this Agreement (including, without limitation,
by reason of the application of the provisions of Section
9.2 or an order by any Federal governmental agency having
regulatory authority over the Transferor or an order of
any court of competent jurisdiction that the Transferor
not transfer any additional Receivables to the Trust)
then, in any such event, (A) the Transferor agrees (ex-
cept as prohibited by any such order) to allocate and pay
to the Trust, after the date of such inability, all
Collections (including Collections with respect to Fi-
▇▇▇▇▇ Charge Receivables) with respect to Principal Re-
ceivables transferred to the Trust prior to the occur-
rence of such event, and all amounts which would have
constituted Collections (including Collections with re-
spect to Finance Charge Receivables) with respect to such
Receivables which would have been Principal Receivables
but for the Transferor's inability to transfer such
Receivables (up to an aggregate amount equal to the
Receivables in the Trust on such date); (B) the Transfer-
or agrees to have such amounts applied as Collections in
accordance with Article IV, and (C) for only so long as
the allocation and application of such Collections are
made in accordance with clauses (A) and (B) above, Col-
lections of Principal Receivables and all amounts which
would have constituted Collections of Principal Receiv-
▇▇▇▇▇ but for the Transferor's inability to transfer Re-
ceivables to the Trust which are charged off as ▇▇▇▇▇-
lectible in accordance with this Agreement shall continue
to be allocated in accordance with the related Supple-
ment, and all amounts which would have constituted Col-
lections of Principal 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 applicable
Invested Percentage thereunder. If the Transferor is
unable pursuant to any Requirement of Law to allocate
Collections as described above, the Transferor agrees
that it shall, in any such event, and to the extent not
prohibited by law, allocate, after the date that the
Transferor becomes unable to allocate Collections as
described above, payments on each Account with respect to
the balance of such Account first to the oldest receiv-
able in such Account and to have such payments applied as
Collections in accordance with Article IV.
42
(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 Collections on the Receiv-
▇▇▇▇▇ as soon as practicable after receipt thereof by the
Transferor, but in no event later than two Business Days
after the receipt thereof by the Transferor.
Section 2.6. Addition of Accounts.
(a) Required Additions. If, (1) as of the end
of any Due Period the Transferor Amount minus the Exclud-
ed Receivables Balance is less than the Minimum Trans-
feror Amount, the Transferor shall designate additional
Eligible Accounts (the "Supplemental Accounts") to be
included as Accounts in a sufficient amount such that the
Transferor Amount minus the Excluded Receivables Balance,
each after giving effect to such addition, at least
equals the Minimum Transferor Amount or (2) as of the end
of any Due Period the Aggregate Principal Receivables are
less than the Minimum Aggregate Principal Receivables,
then the Transferor shall designate Supplemental Accounts
to be included as Accounts in a sufficient amount such
that the Aggregate Principal Receivables will be equal to
or greater than the Minimum Aggregate Principal Receiv-
▇▇▇▇▇. Receivables from such Supplemental Accounts shall
be transferred to the Trust, on or before 10 days fol-
lowing the Determination Date related to such Due Period
(the "Addition Date"). Failure to add Supplemental Ac-
counts as required by this subsection 2.6(a) shall be an
Early Amortization Event with respect to the affected
Series.
(b) Permitted Additions. In addition to its
obligation under subsection 2.6(a), the Transferor may,
but shall not be obligated to, designate from time to
time, at its sole discretion, subject to the conditions
specified in paragraph (c) below, additional Eligible Ac-
counts as Supplemental Accounts to be included as Ac-
counts as of the applicable Addition Date.
(c) Conditions to Addition. The Transferor
agrees that any such transfers of Receivables from Sup-
plemental Accounts under subsection 2.6(a) or (b) shall
satisfy the following conditions:
43
(i) On or before the fifth
Business Day prior to the Addition Date, the
Transferor shall give the Trustee and the
Servicer written notice that such Supplemental
Accounts will be included and specifying the
approximate aggregate amount of the Receivables
to be transferred;
(ii) On or prior to the Addi-
tion Date, the Transferor shall have delivered
to the Trustee a written assignment (and the
Trustee shall have accepted such assignment on
behalf of the Trust for the benefit of the
Investor Certificateholders and any Enhancement
Provider) in substantially the form of Exhibit
B (the "Assignment") and shall have clearly
indicated in its computer files that the Re-
ceivables created in connection with the Supp-
lemental 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 all Supplemental
Accounts identified by account number and by
Receivable balance in such Supplemental Ac-
counts as of the Addition 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 Supplemen-
tal Account was, as of the date of its selec-
tion (the "Supplemental Account Selection
Date"), an Eligible Account, (y) no selection
procedures believed by the Transferor to be
materially adverse to the interests of any
Series of Investor Certificates or any Enhance-
ment Provider were utilized in selecting the
Supplemental Accounts from the available Eligi-
ble Accounts in the Transferor's portfolio; and
(z) as of the Addition Date, the Transferor is
not insolvent and will not be made insolvent by
the transfer of the Receivables of such Supp-
lemental Accounts;
44
(iv) The Transferor shall rep-
resent and warrant, that, as of the Addition
Date, the Assignment constitutes either (x) 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 Supplemental Ac-
counts, all monies due or to become due with
respect thereto on and after the Addition Cut
Off Date, Recoveries and all proceeds of such
Receivables (to the extent set forth in Section
9-306 of the UCC as in effect in the Relevant
UCC State), and such Receivables and all pro-
ceeds thereof will be conveyed to the Trust
free and clear of any Lien of any Person claim-
ing through or under the Transferor or any of
its Affiliates, except for (i) Liens permitted
under subsection 2.5(b) hereunder, (ii) the
interest of the holder of the Exchangeable
Transferor Certificate and (iii) any right of
the holder of the Exchangeable Transferor Cer-
tificate to receive interest accruing on, and
investment earnings with respect to, the Col-
lection Account, the Excess Funding Account and
any other account or accounts maintained for
the benefit of Certificateholders as provided
in this Agreement and any Supplement or (y) a
grant of a security interest (as defined in the
UCC as in effect in the Relevant UCC State) in
such property to the Trustee on behalf of the
Trust, which is enforceable with respect to
then existing Receivables of the Supplemental
Accounts, and the proceeds thereof (to the ex-
tent set forth in Section 9-306 of the UCC as
in effect in the Relevant UCC State) upon the
conveyance of such Receivables to the Trust,
and which will be enforceable with respect to
the Receivables thereafter created in respect
of Supplemental Accounts, and the proceeds
thereof to such extent, upon such creation; and
(z) if the Assignment constitutes the grant of
a security interest to the Trust in such prop-
erty, upon the filing of financing statements
as described in Section 2.1 with respect to
such Supplemental Accounts and in the case of
such Receivables of Supplemental Accounts
thereafter created and the proceeds thereof (to
45
the extent set forth in Section 9-306 of the
UCC in effect in the Relevant UCC State) upon
such creation, the Trust shall have a first
priority perfected security interest in such
property, except for Liens permitted under
subsection 2.5(b) hereunder;
(v) The Transferor shall deliv-
er to the Trustee (with a copy to each Rating
Agency assigning a rating for any class of Inv-
estor Certificates of any then outstanding
Series) an Officer's Certificate confirming the
items set forth in paragraphs (ii) and (iii)
above and (vi) and (vii) below and the Trustee
may rely on such Officer's Certificate;
(vi) The Transferor shall de-
liver to the Trustee and each Rating Agency as-
signing a rating for any class of Investor
Certificates of any then outstanding Series, an
Opinion of Counsel with respect to the Receiv-
▇▇▇▇▇ in the Supplemental Accounts substantial-
ly in the form of Part One of Exhibit G;
(vii) The Transferor shall
record and file financing statements with re-
spect to the Receivables then existing and
thereafter created in the Supplemental Accounts
for the transfer of accounts and general intan-
gibles (both as defined in the UCC in effect in
the Relevant UCC State) meeting the require-
ments of applicable state law in such manner
and in such jurisdictions as are necessary to
perfect the transfer and assignment of the
Receivables in Supplemental Accounts by the
Transferor to the Trust; and
(viii) Each Rating Agency as-
signing a rating for any class of Investor
Certificates of any then outstanding Series
shall have received ten Business Days' notice
of such proposed addition of Supplemental Ac-
counts; in the event that Supplemental Accounts
are being added pursuant to subsection 2.6(b),
the Transferor shall have received written
confirmation from each such Rating Agency that
such addition would not result in a downgrading
46
or withdrawal of its then current rating of any
outstanding Series of Investor Certificates.
(d) Automatic Additional Accounts. All ac-
counts which meet the definition of Automatic Additional
Accounts shall be included as Accounts from and after the
date upon which such Automatic Additional Accounts are
created and all Receivables in such Automatic Additional
Accounts, whether such Receivables are then existing or
thereafter created, shall be transferred automatically to
the Trust upon creation by the Transferor. For all pur-
poses of this Agreement, all receivables of such Auto-
matic Additional Accounts shall be treated as Receivables
upon their creation. The Transferor may elect at any
time to terminate the inclusion in Accounts of new ac-
counts which would otherwise be Automatic Additional Ac-
counts as of any Business Day (the "Automatic Addition
Termination Date"), or suspend any such inclusion as of
any Business Day (an "Automatic Addition Suspension
Date") until a date (the "Restart Date") to be notified
in writing by the Transferor to the Trustee by delivering
to the Trustee, the Servicer and each Rating Agency
assigning a rating for any class of Investor Certificates
of any then outstanding Series, prior written notice of
such election at least 10 days prior to such Automatic
Addition Termination Date or Automatic Addition Suspen-
sion Date. Unless otherwise specified in such notice,
any date specified as a date as of which new accounts
will cease to be included in Accounts will be an Automat-
ic Addition Suspension Date. Promptly after an Automatic
Addition Termination Date or any Automatic Addition
Suspension Date, or a Restart Date, the Transferor and
the Trustee agree to execute and the Transferor agrees to
record and file at its own expense an amendment to the
financing statements referred to in Section 2.1 hereof to
specify the accounts then subject to this Agreement
(which specification may incorporate a list of accounts
by reference) and, except in connection with any such
filing made after a Restart Date, to release any security
interest in any accounts created after the Automatic
Addition Termination Date or any Automatic Addition
Suspension Date.
(e) Representations and Warranties. The
Transferor hereby represents and warrants to the Trust as
of the related Addition Date that the file or list deliv-
ered pursuant to paragraph (f) below is, as of the appli-
47
cable Addition Cut Off Date, true and complete in all
material respects.
(f) Delivery of Documents. In the case of the
designation of Supplemental Accounts, the Transferor
shall deliver to the Trustee (i) the computer file,
microfiche list or printed list required to be delivered
pursuant to Section 2.1 with respect to such Supplemental
Accounts on the applicable Addition Date.
Section 2.7 Removal of Accounts.
(a) Subject to the conditions set forth below,
on each Determination Date on which the Transferor Amount
minus the Excluded Receivables Balance exceeds the Mini-
mum Transferor Amount at the end of the related Due Peri-
od, 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 Due Period. On or before the
fifth Business Day (the "Removal Notice Date") prior to
the date on which the designated Removed Accounts will be
reassigned by the Trustee to the Transferor (the "Removal
Date"), the Transferor shall give the Trustee and the
Servicer written notice that the Receivables from 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
from 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 in substantially the form of
Exhibit C (the "Reassignment") and, within five
Business Days thereafter, 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;
48
(ii) The Transferor shall rep-
resent 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 Enhance-
ment Provider were utilized in selecting the
Removed Accounts to be removed from the Trust;
(iii) The removal of any Re-
ceivables of any Removed Accounts on any Remov-
al Date shall not, (a) in the reasonable belief
of the Transferor, cause an Early Amortization
Event to occur or an event which with notice or
lapse of time or both would constitute an Early
Amortization Event and (b) cause the Transferor
Amount minus the Excluded Receivables Balance
to be less than the Minimum Transferor Amount
on such Removal Date;
(iv) Each Rating Agency assign-
ing a rating for any class of Investor Certifi-
▇▇▇▇▇ of any then outstanding Series shall have
received ten Business Days' notice of such pro-
posed removal of Accounts and the Transferor
shall have received written notice from each
such Rating Agency that such removal would not
result in a downgrading or withdrawal of the
then current rating of any outstanding Series
of the Investor Certificates; and
(v) The Transferor shall have
delivered to the Trustee and each Rating Agency
assigning a rating for any class of Investor
Certificates of any then outstanding Series, an
Officer's Certificate confirming the items set
forth in (i) through (iii) above. The Trustee
may 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 from the Removed Accounts
shall no longer constitute a part of the Trust.
(END OF ARTICLE II)
49
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.1 Acceptance of Appointment and Other Matters
Relating to the Servicer.
(a) Nordstrom National Credit Bank, hereby
agrees to act as the Servicer under this Agreement. The
Investor Certificateholders by their acceptance of the
Investor Certificates consent to Nordstrom National
Credit 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 receiv-
▇▇▇▇▇ 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 adminis-
tration which it may deem necessary or desirable. With-
out 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 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
of the Agreement, to instruct the Trustee to take any
action permitted or required under any Enhancement at
such time as is set forth in this Agreement and any
Supplement, (iii) to execute and deliver, on behalf of
the Trust for the benefit of the Certificateholders, any
and all instruments of satisfaction or cancellation, or
of partial or full release or discharge, and all other
comparable instruments, with respect to the Receivables
and, after the delinquency of any Receivable and to the
extent permitted under and in compliance with applicable
law and regulations, to commence enforcement proceedings
with respect to such Receivables and (iv) to make any
filings, reports, notices, applications, or registrations
50
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. The
Trustee agrees that it shall promptly follow the written
instructions of the Servicer to withdraw funds from the
Collection Account, Excess Funding Account and any other
account or accounts maintained for the benefit of Certif-
icateholders and with regard to any Enhancement. The
Trustee shall furnish the Servicer with any powers of
attorney and other documents necessary or appropriate to
enable the Servicer to carry out its servicing and admin-
istrative duties hereunder.
(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 (includ-
ing, without limitation, by reason of the application of
the provisions of Section 9.2 or the order of any Federal
governmental agency having regulatory authority over the
Transferor or any court of competent jurisdiction that
the Transferor not transfer any additional Receivables to
the Trust) then, in any such event, (A) the Servicer
agrees to allocate, after such date, all Collections
(including Collections with respect to Finance Charge
Receivables) with respect to Principal Receivables, and
all amounts which would have constituted Collections
(including Collections with respect to Finance Charge
Receivables) with respect to such Receivable which would
have been Principal Receivables but for the Transferor's
inability to transfer such Receivables (up to an aggre-
gate amount equal to the Aggregate Principal Receivables
in the Trust as of such date) in accordance with subsec-
tion 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 consti-
tuted Collections are allocated and applied in accordance
with clause (A) above, Collections of Principal Receiv-
▇▇▇▇▇ and all amounts which would have constituted Col-
lections of Principal Receivables but for the
Transferor's inability to transfer Receivables to the
Trust which are charged off as uncollectible in accor-
dance with this Agreement shall continue to be allocated
in accordance with Article IV and all amounts which would
have constituted Collections of Principal Receivables but
for the Transferor's inability to transfer Receivables to
51
the Trust shall be deemed to be Collections of Principal
Receivables for the purpose of calculating the applicable
Invested Percentage thereunder; provided, that if the
Servicer is unable pursuant to any Requirement of Law to
allocate payments on the Accounts as described above, the
Servicer agrees that it shall, in any such event, allo-
cate, after the date that the Servicer becomes unable to
allocate payments on the Accounts as described above,
payments on each Account with respect to the balance of
such Account first to the oldest Receivable in such
Account.
(d) The Servicer shall not be obligated to use
separate servicing procedures, offices, employees or
accounts for servicing the Receivables from the proce-
dures, 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 ser-
vicing of Receivables covering such actions with such
insurers and in such amounts as the Servicer believes to
be reasonable from time to time.
Section 3.2 Servicing Compensation. As compensation for
its servicing activities hereunder and reimbursement for
its expenses as set forth in the immediately following
paragraph, the Servicer shall be entitled to receive a
monthly servicing fee in respect of any Due 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 the sum of, with respect to all Series then
outstanding, one-twelfth of the product of the applicable
Servicing Fee Percentages and the sum of an allocable
portion of the Transferor Amount and the Invested Amount
of each Series, each as of the last day of the Due Period
preceding the Due Period for which the Monthly Servicing
Fee is being paid. The share of the Monthly Servicing
Fee allocable to each Series of Investor Certificatehold-
ers with respect to any Due Period (or portion thereof)
shall be equal to one-twelfth of the product of (A) the
Servicing Fee Percentage for such Series and (B) the
Invested Amount of such Series (after subtracting from
the Invested Amount the aggregate amount of any deposits
52
previously made into any principal funding account) on
the last day of the applicable Due Period (or, in the
case of the first Distribution Date, the Initial Invested
Amount, unless otherwise specified in any Supplement)
(with respect to any such Series, the "Investor Monthly
Servicing Fee"), and shall be paid to the Servicer pursu-
ant to the applicable Supplement. The remainder of the
Monthly Servicing Fee shall be paid by the Transferor and
in no event shall the Trust, the Trustee, any Enhancement
Provider or the Investor Certificateholders be liable for
the share of the Monthly Servicing Fee to be paid by the
Transferor. In the case of the first Due Period, the
Monthly Servicing Fee and the Investor Monthly Servicing
Fee shall accrue from the Cut Off Date.
The Servicer's expenses include the amounts due
to the Trustee pursuant to Section 11.5 and any authenti-
cating agent pursuant to Section 6.8 and the reasonable
fees and disbursements of independent accountants and all
other expenses incurred by the Servicer in connection
with its activities hereunder, and include, without
limitation, all other fees and expenses of the Trust
provided for in Section 8.4 hereof; provided, that the
Servicer shall not be liable for any liabilities, costs
or expenses of the Trust, the Investor Certificateholders
or the Certificate Owners arising under any tax law,
including without limitation any Federal, state or local
income or franchise taxes or any other tax imposed on or
measured by income (or any interest or penalties with
respect thereto or arising from a failure to comply
therewith), except to the extent incurred as a result of
the Servicer's violation of the provisions of this Agree-
ment. The Servicer shall be required to pay such expens-
es 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. Nordstrom National Credit Bank, as initial
Servicer, hereby makes, and any successor Servicer by its
appointment hereunder shall make, the following represen-
tations, warranties and covenants with respect to any
Series of Certificates, as of the date of the related
Supplement and its Closing Date, unless otherwise stated
in such Supplement, on which the Trustee has relied in
accepting the Receivables and the other property conveyed
53
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 orga-
nized, validly existing and in good standing under the
laws of the United States of America, 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 Re-
ceivables as required by this Agreement and any Supple-
ment and has obtained all necessary licenses and approv-
als as required under Federal and state law, and if the
Servicer shall be required by any Requirement of Law to
so qualify or register or obtain such license or approv-
al, then it shall do so, in each case 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 Re-
ceivable.
(c) Due Authorization. The execution, deliv-
ery, and performance of this Agreement and any Supple-
ment, and the consummation 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 Agree-
ment and any Supplement constitutes a legal, valid and
binding obligation of the Servicer, enforceable in accor-
dance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar
laws now or hereinafter in effect affecting the enforce-
ment 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).
54
(e) No Violation. The execution and delivery
of this Agreement and any Supplement by the Servicer, and
the performance of the transactions contemplated by this
Agreement and any Supplement and the fulfillment of the
terms hereof and thereof applicable to the Servicer, will
not conflict with, violate, result in any breach of any
of the material terms and provisions of, or constitute
(with or without notice or lapse of time or both) a
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 consumma-
tion of any of the transactions contemplated by this
Agreement or any Supplement, seeking any determination or
ruling that, in the reasonable judgment of the Servicer,
would materially and adversely affect the performance by
the Servicer of its obligations under this Agreement or
any Supplement, or seeking any determination or ruling
that would materially and adversely affect the validity
or enforceability of this Agreement or any Supplement.
(g) Compliance with Requirements of Law. The
Servicer shall duly satisfy its obligations in all mate-
rial respects on its part to be fulfilled under or in
connection with each Receivable and the corresponding
Account, will maintain in effect all material qualifica-
tions required under Requirements of Law in order to
service properly each Receivable and the corresponding
Account and will comply in all material respects with all
other Requirements of Law in connection with servicing
each Receivable and the related Account the failure to
comply with which would have a material adverse effect on
the Certificateholders (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 any Receivable except as ordered by a
55
court of competent jurisdiction or other Governmental
Authority.
(i) Protection of Certificateholders' Rights.
The Servicer shall take no action which, nor omit to
take any action the omission of which, would impair the
rights of Certificateholders in any Receivable or the
rights of any Enhancement Provider, nor shall it
reschedule, revise, waive or defer payments due on any
Receivable except in accordance with the applicable
Account Guidelines.
(j) All Consents Required. All approvals,
authorizations, consents, orders or other actions of any
Person or of any Governmental Authority required in
connection with the execution and delivery by the
Servicer of this Agreement, the performance by the
Servicer of the transactions contemplated by this Agree-
ment and the fulfillment by the Servicer of the terms
hereof, have been obtained, except such as are required
by state securities or "Blue Sky" laws in connection with
the distribution of any Series.
(k) Receivables Not to be Evidenced by Promis-
sory Notes or Chattel Paper. The Servicer will take no
action to cause any Receivable to be evidenced by any
instrument (as defined in the UCC as in effect in the
Relevant UCC State). Each Receivable shall be payable
pursuant to a contract which does not create a Lien on
any merchandise purchased thereunder.
In the event of a breach of any of the representations
and warranties set forth in subsection 3.3(g), (h), (i)
or (j) with respect to a Receivable, and such breach has
a material adverse effect on the Certificateholders'
interest in such Receivable (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 60 days) from the earlier to occur
of the discovery of any such event by the Servicer, or
receipt by the Servicer of written notice of any such
event given by the Trustee, each such Receivable or, at
the option of the 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
56
Date an amount equal to the amount of each such Receiv-
able at the end of the Due Period for 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 Due Period to the
extent not included in the amount of such Receivable.
Any such deposit into the Collection Account in connec-
tion 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 provi-
sions of Article IV. Upon the assignment to the Servicer
of such a Receivable, the Trust shall, without further
action, be deemed to transfer, assign, set-over and
otherwise convey to the Servicer, without recourse,
representation or warranty (including those implied by
law), all the right, title and interest of the Trust in
and to such Receivable, all monies due or to become due
with respect thereto and all proceeds thereof. The
Trustee shall execute such documents and instruments of
transfer or assignment and take such other actions as
shall reasonably be requested by the Servicer to effect
the conveyance of any such Receivable pursuant to this
Section and as shall be specified in an Opinion of Coun-
sel delivered to the Trustee to the effect that such
documents and instruments comply herewith. The obliga-
tion of the Servicer set forth in this Section 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 Receiv-
able.
Section 3.4 Reports and Records for the Trustee.
(a) Initial Report. On the day on which a
Series of the Investor Certificates are issued (the
"Closing Date"), the Servicer shall prepare and deliver,
as provided in Section 13.5, to the Trustee and each
Rating Agency assigning a rating for any class of Invest-
or Certificates of any then outstanding Series, an
Officer's Certificate substantially in the form of Exhib-
57
it D setting forth the Aggregate Principal Receivables,
the Transferor Amount, the Excluded Receivables Balance
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(h), on each Business Day commenc-
ing on the Closing Date, the Servicer shall prepare, and
make available for inspection by the Trustee and maintain
at the office of the Servicer a record setting forth the
aggregate amount of Collections processed by the Servicer
on the immediately preceding Business Day.
(c) Monthly Servicer's Certificate. On each
Determination Date, the Servicer shall forward, as pro-
vided in Section 13.5, to the Trustee, the Paying Agent
and each Rating Agency assigning a rating for any class
of Investor Certificates of any then outstanding Series,
an Officer's Certificate signed by a Servicing Officer
substantially in the form of Exhibit E (with the Monthly
Certificateholder's Statement required pursuant to the
applicable Supplement attached) setting forth the follow-
ing information (which, in the case of clauses (iii),
(iv) and (v) below, will be stated on the basis of an
original principal amount of $1,000 per Certificate):
(i) the aggregate amount of Collections processed for the
Due Period for such Determination Date and the aggregate
amount of Collections of Finance Charge Receivables and
the aggregate amount of Collections of Principal Receiv-
▇▇▇▇▇ processed during such Due Period; (ii) the Invested
Percentage on the last day of the preceding Due Period of
each Series of Certificates with respect to Collections
of Principal Receivables and the Invested Percentage on
the last day of the preceding Due 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 Certifi-
cateholders on the next succeeding Distribution Date;
(iv) for each Series and for each class within any such
Series, the amount of such distribution allocable to
principal; (v) for each Series and for each class within
any such Series, the amount of such distribution alloca-
ble to interest; (vi) the aggregate outstanding balance
58
of the Accounts which were delinquent by 30 to 59, 60 to
89, 90 to 119 and by 120 days or more as of the close of
business on the last day of the Due Period immediately
preceding such Distribution Date; (vii) for each Series
and each class within a Series, the Investor Default
Amount for the immediately preceding Due Period; (viii)
for each Series and each class within a Series, the
amount of the Investor Charge Offs and the amount of the
reimbursements of Investor Charge Offs for such Distribu-
tion Date; (ix) for each Series, the Investor Monthly
Servicing Fee for such 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 and
the Excluded Receivables Balance in the Trust at the
close of business on the last day of the Due Period
preceding such Distribution Date; (xii) for each Series,
the Invested Amount at the close of business on the last
day of the Due Period immediately preceding such Distri-
bution Date; (xiii) the available amount of any Enhance-
ment for each Series; (xiv) for each Series and each
class within a Series, the Series Factor as of the end of
the related Due Period; and (xv) whether an Early Amorti-
zation Event with respect to any Series shall have oc-
curred during or with respect to the related Due 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
will deliver, as provided in Section 13.5, to the Trustee
and each Rating Agency assigning a rating for any class
of Investor Certificates of any then outstanding Series,
on or before April 30 of each calendar year, beginning
with 1997, an Officer's Certificate substantially in the
form of Exhibit F (a) stating that a review of the activ-
ities of the Servicer during the preceding calendar year
(or, in the case of the initial such Officer's Certifi-
cate, during the period from the Initial Closing Date
until December 31, 1996) 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
59
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. On or before April 30 of each calendar
year, beginning with 1997, the Servicer shall cause a
firm of nationally recognized independent public accoun-
tants (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, each Rating Agency assign-
ing a rating for any class of Investor Certificates of
any then outstanding Series and, as required, any En-
hancement Provider to the effect that such firm has
applied certain procedures agreed upon with the Servicer
to certain documents and records relating to the adminis-
tration and servicing of Accounts under this Agreement
and any Supplement, and that, based upon such agreed upon
procedures, such firm will provide a report stating that
the servicing was conducted in compliance with Article
III and IV and Section 8.8 of this Agreement and any
Supplement, except for such exceptions or errors as they
believe to be immaterial and such other exceptions as
shall be set forth in such statement. Such procedures
will include the comparison of the mathematical calcula-
tions of amounts set forth in the monthly certificates
forwarded by the Servicer pursuant to subsection 3.4(c)
during the period covered by such report (which shall be
the period from January 1 (except for the calendar year
ending December 31, 1996, which shall be from the Initial
Closing Date to December 31, 1996) of the preceding
calendar year to and including December 31 of such calen-
dar year) with the Servicer's computer reports which were
the source of such amounts. A copy of such report may be
obtained by any Investor Certificateholder or Certificate
Owner by a request in writing to the Trustee addressed to
the Corporate Trust Office.
Section 3.7 Tax Treatment. The Transferor has structured
this Agreement and the Investor Certificates (other than
any Investor Certificates held by the Transferor) and any
Enhancement Invested Amount have been (or will be) issued
with the intention that such Investor Certificates will
60
qualify under applicable tax law as indebtedness of the
Transferor, and the Transferor, any entity acquiring any
direct or indirect interest in the Exchangeable Transfer-
or 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 Inves-
tor 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.
Each Certificateholder agrees that it will cause any
Certificate Owner acquiring an interest in a Certificate
through it to comply with this Agreement as to treatment
as indebtedness for certain tax purposes. 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.
Section 3.8 Adjustments. (a) If the Servicer adjusts
downward the amount of any Receivable because of a re-
bate, refund, dividend credit under the Transferor's
Purchase Dividend Program, unauthorized charge or billing
error to an Obligor, because such Receivable was created
in respect of merchandise or services which were refused,
returned or not received by an Obligor, or if the
Servicer otherwise adjusts downward the amount of any
Receivable without receiving Collections therefor or
without charging off such amount as uncollectible, then,
in any such case, the amount of the Aggregate Principal
Receivables used to calculate the Transferor Amount, the
Transferor Interest Percentage, the Excluded Receivables
Balance and the Floating Allocation Percentage and the
Fixed/Floating Allocation Percentage applicable to any
Series will be reduced by the amount of such adjustment.
Similarly, the amount of the Aggregate Principal Receiv-
▇▇▇▇▇ used to calculate the Transferor Amount, the Trans-
feror Interest Percentage, the Excluded Receivables
Balance and the Floating Allocation Percentage and the
Fixed/Floating Allocation Percentage applicable to any
Series will be reduced by the amount of any Receivable
which was discovered as having been created through a
61
fraudulent or counterfeit charge or with respect to which
the covenant contained in subsection 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 Due Period in which such adjustment obligation
arises. In the event that, following any such exclusion,
the Transferor Amount minus the Excluded Receivables
Balance would be less than zero, 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 Trans-
feror Amount minus the Excluded Receivables Balance would
be reduced below zero. Any amount deposited into the
Excess Funding Account in connection with the adjustment
of a Receivable (an "Adjustment Payment") shall be con-
sidered Collections of Principal Receivables and shall be
applied in accordance with Article IV and the terms of
each Supplement. In the event that the Servicer adjusts
upwards the amount of any Receivable, the Aggregate
Principal Receivables shall be increased by the product
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 Collec-
tion 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. Notwith-
standing 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).
Section 3.9 Notices to the Transferor. In the event that
the Transferor is no longer acting as Servicer, any
Successor Servicer appointed pursuant to Section 10.2
shall deliver or make available to the Transferor each
certificate and report required to be prepared, forwarded
or delivered thereafter pursuant to Sections 3.4, 3.5 and
3.6.
62
(END OF ARTICLE III)
63
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
Section 4.1 Establishment of Collection Account and
Excess Funding Account and Allocation of Collections.
(a) The Collection Account. The Trustee, for
the benefit of the Certificateholders, shall establish
and maintain or cause to be established and maintained in
the name of the Trustee, on behalf of the Trust, with an
Eligible Institution a segregated account (the "Collec-
tion Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit
of the Certificateholders. The Trustee shall possess all
right, title and interest in all funds on deposit from
time to time in the Collection Account and in all pro-
ceeds thereof. The Collection Account shall be under the
sole dominion and control of the Trustee for the benefit
of the Certificateholders. If, at any time, the institu-
tion holding the Collection Account ceases to be an
Eligible Institution, the Trustee (or the Servicer on its
behalf) shall within five Business Days establish a new
Collection Account meeting the conditions specified above
with an Eligible Institution, transfer any cash and/or
any investments to such new Collection Account and from
the date such new Collection Account is established, it
shall be the "Collection Account." Pursuant to the
authority granted to the Servicer in 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 Trustee's duties here-
under.
Each Series shall represent interests in the
Trust, including the benefits of any Enhancement to be
provided by an Enhancement Provider issued with respect
to such Series as indicated in the Supplement relating to
such Series and the right to receive Collections and
other amounts at the times and in the amounts specified
in this Article IV to be deposited in the Collection
Account, the Excess Funding Account and any other ac-
counts maintained for the benefit of the Certificatehold-
64
ers or paid to the Investor Certificateholders. The
Exchangeable Transferor Certificate shall represent the
interest in the Trust not represented by any Series of
Investor Certificates then outstanding, including the
right to receive Collections and other amounts at the
times and in the amounts specified in this Article IV to
be paid to the Transferor (the "Transferor Interest");
provided, however, that such Exchangeable Transferor
Certificate shall not represent any interest in the
Collection Account and any other accounts maintained for
the benefit of the Certificateholders or the benefits of
any Enhancement to be provided by an Enhancement Provider
issued with respect to any Series, except as specifically
provided in this Article IV.
(b) Administration of the Collection Account.
At the written direction of the Servicer, funds on
deposit in the Collection Account to be so invested shall
be invested by the Trustee in Eligible Investments. All
such Eligible Investments shall be held by the Trustee
for the benefit of the Certificateholders. Investments
of funds representing Collections collected during any
Due Period shall be invested in Eligible Investments that
will mature so that such funds will be available by the
close of business on the Business Day preceding the Dis-
tribution Date related to such Due Period. Any funds on
deposit in the Collection Account to be so invested shall
be invested solely in Eligible Investments. No Eligible
Investment shall be disposed of prior to its maturity;
provided, however, that the Trustee may sell, liquidate
or dispose of an Eligible Investment before its maturity,
if so directed by the Servicer, the Servicer having
reasonably determined that the interest of the Certifi-
cateholders may be adversely affected if such Eligible
Investment is held to its maturity. The Trustee shall
maintain possession of the negotiable instruments or
securities, if any, evidencing the Eligible Investments
described in clause (a) of the definition thereof from
the time of purchase thereof until the time of maturity.
On each Distribution Date, all interest and other
investment earnings (net of losses and investment
expenses) on funds on deposit in the Collection Account
shall be paid to the Holder of the Exchangeable Transfer-
or Certificate. The Transferor at its option may direct
the Servicer's investment of funds pursuant to this
subsection 4.1(b).
65
(c) The Excess Funding Account. The Trustee,
for the benefit of the Certificateholders, shall estab-
lish and maintain or cause to be established and main-
tained in the name of the Trustee, on behalf of the
Trust, with an Eligible Institution a segregated account
(the "Excess Funding Account"), bearing a designation
clearly indicating that the funds deposited therein are
held for the benefit of the Certificateholders. The
Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Excess
Funding Account and in all proceeds thereof. The Excess
Funding Account shall be under the sole dominion and con-
trol of the Trustee for the benefit of the Certificate-
holders. If, at any time, the institution holding the
Excess Funding Account ceases to be an Eligible Institu-
tion, 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, transfer any cash and/or any in-
vestments 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 Trustee's
duties hereunder.
(d) Administration of the Excess Funding Ac-
count. Funds on deposit in the Excess Funding Account
shall be invested at the written direction of the
Servicer by the Trustee in Eligible Investments. Funds
on deposit in the Excess Funding Account on any Distribu-
tion Date shall be invested in such investments that will
mature so that such funds will be available for withdraw-
al on or prior to the following Distribution Date. The
Trustee shall maintain for the benefit of the Certifi-
cateholders possession of the negotiable instruments or
securities, if any, evidencing such Eligible Investments.
No Eligible Investment shall be disposed of prior to its
maturity; provided, however, that the Trustee may sell,
liquidate or dispose of an Eligible Investment before its
maturity, if so directed by the Servicer, the Servicer
having reasonably determined that the interest of the
Certificateholders may be adversely affected if such
66
Eligible Investment is held to its maturity. On each
Distribution Date, all interest and earnings (net of
losses and investment expenses) received during the pre-
ceding Due Period on funds on deposit in the Excess
Funding Account shall be retained in the Excess Funding
Account (to the extent that the amount required to be on
deposit in the Excess Funding Account is less than the
amount on deposit in the Excess Funding Account) and the
balance, if any, shall be deposited in the Collection Ac-
count and treated as a portion of Collections of Finance
Charge Receivables allocable to the Investor Certificates
for such Distribution Date. For purposes of determining
the availability of funds or the balance in the Excess
Funding Account for any reason under this Agreement,
except as otherwise provided in the preceding sentence,
such net interest and earnings shall be deemed not to be
available or on deposit.
(e) Allocations For the Exchangeable Transfer-
or Certificate. Throughout the existence of the Trust,
the Servicer shall allocate to the Holder of the Ex-
changeable Transferor Certificate an amount equal to the
product of (A) the Transferor Percentage and (B) the
aggregate amount of Collections allocated to Principal
Receivables and Finance Charge Receivables, respectively,
in respect of such Due Period. Notwithstanding anything
to the contrary in Section 4.1(h), unless otherwise
specified in any Supplement, the Servicer need not depos-
it this amount, and any other amounts so allocated to the
Exchangeable Transferor Certificate pursuant to any
Supplement, into the Collection Account and shall pay
such amounts as collected to the Holder of the Exchange-
able Transferor Certificate, except as provided in Sec-
tion 4.1(g).
(f) Allocations During Funding Period. To the
extent that the Servicer establishes an account with an
Eligible Institution as a pre-funding account (the "Pre-
Funding Account") with respect to any Series, bearing a
designation indicating that the funds deposited therein
are for the benefit of such Series, during the period
(the "Funding Period"), as set forth in the related
Supplement, that the Pre-Funding Account maintains a
balance, the date upon which an increase in the Invested
Amount of such Series in accordance with the terms of
such related Supplement occurs shall be treated as an
Addition Date solely for the purpose of calculating the
67
Floating Allocation Percentage and the Fixed/Floating
Allocation Percentage. Such Addition Date shall be
deemed to occur on the date of each such increase and the
Floating Allocation Percentage and Fixed/Floating Alloca-
tion Percentage shall be calculated accordingly.
(g) Undistributed Principal Collections. On
each Distribution Date, (a) the Servicer shall allocate
Excess Principal Collections to each Series as set forth
in the related Supplement and (b) the Servicer shall
withdraw from the Collection Account or otherwise allo-
cate and pay to the Transferor (i) an amount equal to the
excess, if any, of (x) the aggregate amount for all
outstanding Series of Collections which the related Sup-
plements specify are to be treated as "Excess Principal
Collections" for such Distribution Date over (y) the
aggregate amount for all outstanding Series which the
related Supplements specify are "Principal Shortfalls"
for such Distribution Date and, without duplication, (ii)
the aggregate amount for all outstanding Series of that
portion of Collections which the related Supplements
specify are to be allocated and paid to the Transferor
with respect to such Distribution Date; provided, howev-
er, that such amounts shall be paid to the Transferor
only if the Transferor Amount minus the Excluded Receiv-
▇▇▇▇▇ Balance (each determined after giving effect to any
Receivables transferred to the Trust on such date) ex-
ceeds zero. The amount held in the Excess Funding Ac-
count as a result of the proviso in the preceding sen-
tence ("Undistributed Principal Collections") shall be
paid to the Transferor at the time the Transferor Amount
minus the Excluded Receivables Balance exceeds zero;
provided, however, that any Undistributed Principal
Collections on deposit in the Excess Funding Account at
any time during which any Series is in its Accumulation
Period, Rapid Amortization Period, Controlled Amortiza-
tion Period, or Early Amortization Period shall be allo-
cated and distributed in accordance with the terms of the
related Supplement.
(h) Collections. The Servicer will apply all
Collections with respect to the Receivables for each Due
Period as described in this Article IV and each Supple-
ment. Except as otherwise provided below, the Servicer
shall deposit Collections into the Collection Account on
the Date of Processing of such Collections, and shall
deposit all amounts received from the Transferor pursuant
68
to subsection 2.4(d)(iii) and all Adjustment Payments
received from the Transferor pursuant to subsection
3.8(a) in the Excess Funding Account on the Date of Pro-
cessing of such payments. 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, Nordstrom National Credit Bank or an Affili-
ate of Nordstrom National Credit Bank shall be the
Servicer hereunder and (i) Nordstrom National Credit Bank
or such Affiliate shall maintain a short-term certificate
of deposit rating or commercial paper rating (which in
each case may be an implied rating), as applicable, of P-
1 by Moody's and of A-1 by Standard & Poor's, or (ii)
Nordstrom National Credit Bank shall obtain a written
notification from each Rating Agency assigning a rating
for any class of Investor Certificates of any then out-
standing Series to the effect that such Rating Agency
does not intend to downgrade or withdraw its then current
rating of any outstanding Series of Investor Certificates
despite the Servicer's inability to satisfy the rating
requirement specified in clause (i), and for two Business
Days following any reduction of either such rating or
failure to satisfy the conditions of clause (ii), the
Servicer may, but 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 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 Distri-
bution Date in an amount equal to the Collections with
respect to the Due Period for each such Distribution Date
to the extent such Collections are allocated to the
Investor Certificateholders in accordance with Article
IV. Collections shall not be required to be invested in
Eligible Investments until such time as they are deposit-
ed into the Collection Account. The Servicer shall
notify the Trustee of any downgrade or withdrawal of its
short-term credit rating or the short-term certificate of
deposit rating of its Affiliate maintaining the Collec-
tion Account.
Should the Servicer be required to make daily
deposits of Collections into the Collection Account
pursuant to this subsection, during any Amortization
Period, the Servicer may, subject to the provisions of
the applicable supplement, cease depositing Collections
of Principal Receivables received in any Due Period and
69
allocable to a Series in any Amortization Period at such
time as an amount of Collection of Principal Receivables
allocable to such Series and deposited into the Collec-
tion 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 Princi-
pal Receivables allocable to such Series in excess of
such amount shall, subject to the provisos in subsection
4.1(g) and the next succeeding paragraph, be distributed
on a daily basis as they are collected to the Transferor.
Should the Servicer be required to make daily
deposits of Collections into the Collection Account
pursuant to this subsection, during any Amortization
Period, the Servicer may, subject to the provisions of
the applicable Supplement, cease depositing Excess Prin-
cipal Collections received with respect to a Due Period
at such time as such Excess Principal Collections depos-
ited into the Collection Account with respect to each
Series in an Amortization Period together with Collec-
tions of Principal Receivables allocable to such Series
and deposited into the Collection Account with respect to
such Due Period equals the amount of principal scheduled
or permitted to be paid with respect to such Series on
the next succeeding Distribution Date.
Should the Servicer be required to make daily
deposits of Collections in the Collection Account pursu-
ant to this subsection, Excess Principal Collections in
excess of amounts allocable to Series which are in their
Amortization Period and deposited in the Collection
Account pursuant to the preceding sentence shall, subject
to the provisos in subsection 4.1(g), be distributed to
the Transferor on a daily basis.
(THE REMAINDER OF ARTICLE IV IS RESERVED
AND MAY BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES)
70
ARTICLE V
(ARTICLE V IS RESERVED AND MAY
BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES)
71
ARTICLE VI
THE CERTIFICATES
Section 6.1 The Certificates. Subject to Sections 6.10
and 6.11, the Investor Certificates of each Series and
any class thereof may be issued in bearer form (the
"Bearer Certificates") with attached interest coupons and
a special coupon (collectively, the "Coupons") or in
fully registered form (the "Registered Certificates"),
and shall be substantially in the form of the exhibits
with respect thereto attached to the applicable
Supplement. The Exchangeable Transferor Certificate
shall be substantially in the form of Exhibit A. The
Investor Certificates and the Exchangeable Transferor
Certificate shall, upon issue pursuant hereto or to
Section 6.9 or Section 6.11, be executed and delivered by
the Transferor 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 shall be executed by manual or facsimile
signature on behalf of the Transferor by its President,
its Treasurer or any Vice President. Certificates bear-
ing 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 Certifi-
▇▇▇▇▇. 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 autho-
rized signatory, and such certificate upon any Certifi-
cate shall be conclusive evidence, and the only evidence,
that such Certificate has been duly authenticated and
72
delivered hereunder. All Certificates shall be dated the
date of their authentication, except Bearer Certificates
which shall be dated the Closing Date.
Section 6.2 Authentication of Certificates.
Contemporaneously with the assignment and transfer of the
Receivables, whether now existing or hereafter created,
and the other Trust Property to the Trust, the Trustee
shall authenticate and deliver the initial Series of
Investor Certificates that is issued upon original issu-
ance to or upon the order of the Transferor against
payment to the Transferor of the purchase price therefor.
The Trustee shall authenticate and deliver the Exchange-
able Transferor Certificate to the Transferor simulta-
neously with its delivery of the initial Series of Inves-
tor Certificates. Upon an Exchange as provided in Sec-
tion 6.9 of the Agreement and the satisfaction of the
conditions specified therein, the Trustee shall authenti-
cate and deliver the Investor Certificates of additional
Series (with the designation provided in the applicable
Supplement), upon the order of the Transferor, to the
Persons designated in such Supplement. 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 Cer-
tificates. 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 written order of the Transferor, to a
Clearing Agency or its nominee as provided in Section
6.11 against payment of the purchase price thereof.
Section 6.3 Registration of Transfer and Exchange of Cer-
tificates.
(a) The Trustee shall cause to be kept at the
office or agency to be maintained by a transfer agent and
registrar (which may be the Trustee) (the "Transfer Agent
and Registrar") in accordance with the provisions of
subsection 6.3(c) of the Agreement a register (the "Cer-
73
tificate 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 Regis-
tered 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 Trust-
ee. If specified in the related Supplement for any
Series of Certificates, the Transferor shall appoint any
co-transfer agent and co-registrar chosen by the Trans-
feror, 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 relat-
ing 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 Sup-
plement and any reference in this Agreement to the Trans-
fer Agent and Registrar shall include any co-transfer
agent and co-registrar unless the context requires other-
wise.
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 shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Registered
Certificates in authorized denominations of the same
Series representing like aggregate Undivided Interests.
At the option of any Registered Certificate-
holder, Registered Certificates may be exchanged for
other Registered Certificates of the same Series in
authorized denominations of like aggregate Undivided
74
Interests, upon surrender of the Registered Certificates
to be exchanged at any office or agency of the Transfer
Agent and Registrar maintained for such purpose. At the
option of a Bearer Certificateholder, subject to applica-
ble laws and regulations (including, without limitation,
the Bearer Rules), Bearer Certificates may be exchanged
for other Bearer Certificates or Registered Certificates
of the same Series in authorized denominations of like
aggregate Undivided Interests, upon surrender of the
Bearer Certificates to be exchanged at an office or
agency of the Transfer Agent and Registrar located out-
side the United States. Each Bearer Certificate surren-
dered 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 Distribution Date
after the related Stated 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 so surrendered for exchange, the Transferor
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 Certifi-
cateholder 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 satisfacto-
ry 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 ser-
vice charge shall be made for any registration of trans-
fer or exchange of Investor Certificates, but the Trans-
fer Agent and Registrar and the Trustee or any co-trans-
75
fer agent and co-registrar or co-trustee may require
payment of a sum sufficient to cover any tax or govern-
mental charge that may be imposed in connection with any
transfer or exchange of Investor Certificates.
All Investor Certificates (together with any
Coupons attached to Bearer Certificates) surrendered for
registration of transfer or exchange shall be cancelled
by the Transfer Agent and Registrar and disposed of in a
manner satisfactory to the Trustee and the Transferor.
The Trustee shall cancel and mutilate the Global Certifi-
cate upon its exchange in full for Definitive Certifi-
▇▇▇▇▇ and shall deliver such cancelled and mutilated
Global Certificate to the Transferor. The Trustee shall
state that a certificate or certificates of each Foreign
Clearing Agency to the effect referred to in Section 6.10
of this Agreement were received by the Trustee with re-
spect to each portion of the Global Certificate exchanged
for Definitive Certificates and shall also forward to the
Transferor a copy of each such certificate or certifi-
▇▇▇▇▇.
The Transferor shall execute and deliver to the
Trustee or the Transfer Agent and Registrar, as applica-
ble, 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, the Transferor's interest in the Exchangeable Trans-
feror Certificate and other amounts payable to the Trans-
feror pursuant to this Agreement shall not be sold,
transferred, assigned, exchanged, pledged, participated
or otherwise conveyed, unless (i) the Servicer has deliv-
ered to the Trustee an Officer's Certificate stating that
such sale, transfer, assignment, exchange, pledge or
conveyance will not, while any Series of Certificates
remains outstanding, reduce the Transferor's retained
interest in the Exchangeable Transferor Certificate below
the Minimum Transferor Interest Percentage (or such
greater percentage as may be specified in any Supplement)
and (ii) the Trustee receives prior to such sale, trans-
fer, assignment, exchange, pledge, participation or
conveyance written confirmation from each Rating Agency
assigning a rating for any class of Investor Certificates
of any then outstanding Series that such transfer, as-
76
signment, exchange, pledge, participation or conveyance
will not result in such Rating Agency's reducing or with-
drawing its rating on any then outstanding Series rated
by it 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 charac-
terized for Federal income tax purposes as an association
or a publicly traded partnership taxable as a corporation
or otherwise have any material adverse impact on the
Federal or applicable state income taxation of any out-
standing Series of Investor Certificates or any Certifi-
cate 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 Sup-
plement for any Series, Luxembourg (or subject to Section
6.3(a) of the Agreement any other city designated in such
Supplement)), an office or offices or agency or agencies
where Investor Certificates may be surrendered for regis-
tration of transfer or exchange (except that Bearer
Certificates may not be surrendered for exchange at any
such office or agency in the United States).
(d) Unless otherwise provided in any related
Supplement, registration of transfer of Registered Cer-
tificates containing a legend relating to the restric-
tions 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 Certifi-
▇▇▇▇▇ and (b) a letter from the purchaser sat-
isfactory to counsel to the Servicer is execut-
ed and received; or
(ii) (a) the Registered Certif-
icates are transferred in compliance with Rule
144 (or any amendment thereto) or Rule 144A (or
any amendment thereto) under the Securities
Act, and (b) a letter from the purchaser satis-
77
factory to counsel to the Servicer is executed
and received; or
(iii) the Registered Certifi-
▇▇▇▇▇ are sold or otherwise transferred in any
other transaction that does not require regis-
tration under the Securities Act, and, if the
Transferor, the Servicer, the Trustee or the
Transfer Agent and Registrar so request, an
Opinion of Counsel satisfactory to it, in form
and substance satisfactory to it, is furnished
to such effect.
Registered Certificates issued upon registra-
tion 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 satis-
factory 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 pre-
sented to the Transfer Agent and Registrar for registra-
tion of transfer, the Transfer Agent and Registrar shall
promptly seek written instructions from the Servicer
regarding such transfer. The Transfer Agent and Regis-
trar and the Trustee shall be entitled to 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 negligence or bad faith on their part arising out
of or in connection with actions taken or omitted by them
in reliance on and in accordance with any such written
instructions furnished pursuant to this subsection
6.3(d).
Section 6.4 Mutilated, Destroyed, Lost or Stolen Certifi-
▇▇▇▇▇. 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
78
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 shall execute and the Trustee shall au-
thenticate 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 Inter-
est, 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 charge that may be
imposed in relation thereto and any other expenses (in-
cluding 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 owner-
ship 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 Article XII hereof and for all
other purposes whatsoever, and neither the Trustee, the
Paying Agent, the Transfer Agent and Registrar nor any
agent of any of them shall be affected by any notice to
the contrary. In the case of a Bearer Certificate, the
Trustee, the Paying Agent, the Transfer Agent and Regis-
trar and any agent of any of them may treat the bearer of
a Bearer Certificate or Coupon as the owner of such
Bearer Certificate or Coupon for the purpose of receiving
distributions pursuant to Article IV and Article XII
hereof and for all other purposes whatsoever, and neither
the Trustee, the Paying Agent, the Transfer Agent and
Registrar nor any agent of any of them shall be affected
by any notice to the contrary. Notwithstanding the
79
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) shall
be disregarded and deemed not to be outstanding, except
that, in determining whether the Trustee shall be pro-
tected in relying upon any such request, demand, authori-
zation, direction, notice, consent or waiver, only Cer-
tificates which the Trustee knows to be so owned shall be
so disregarded. Certificates so owned which have been
pledged in good faith shall not be disregarded and may be
regarded as outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act
with respect to such Certificates and that the pledgee is
not the United States, the Servicer or an affiliate
thereof (as defined above).
Section 6.6 Appointment of Paying Agent. The Paying
Agent shall make distributions to Investor Certif-
icateholders from the Collection Account (or any other
account or accounts maintained for the benefit of Certif-
icateholders as specified in the related Supplement for
any Series) pursuant to Articles IV and V hereof. Any
Paying Agent shall have the revocable power to withdraw
funds from the Collection Account (or any other account
or accounts maintained for the benefit of Certificate-
holders 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 dis-
cretion that the Paying Agent shall have failed to per-
form its obligations under this Agreement in any material
respect. The Paying Agent shall initially be the Trustee
and any co-paying agent chosen by the 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 ▇▇▇▇▇-
▇▇▇▇▇ or the location of such other stock exchange. The
Trustee shall be permitted to resign as Paying Agent upon
30 days' written notice to the Servicer and the Transfer-
or. Such resignation of the Trustee shall become effec-
tive only upon the appointment of a successor Paying
80
Agent, pursuant to this Section 6.6. The Transferor
shall notify each Rating Agency assigning a rating for
any class of Investor Certificates of any then outstand-
ing Series 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. The Trustee shall
cause the initial Paying Agent 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 Inves-
tor Certificateholders entitled thereto until such sums
shall be paid to such Certificateholders. The Paying
Agent shall return all unclaimed funds to the Trustee and
upon removal of a Paying Agent shall also return all
funds in its possession to the Trustee. The provisions
of Sections 11.1, 11.2 and 11.3 of the Agreement shall
apply to the Trustee also in its role as Paying Agent,
for so long as the Trustee shall act as Paying Agent.
Any reference in this Agreement to the Paying Agent shall
include any co-paying agent unless the context requires
otherwise.
If specified in the related Supplement for any
Series, so long as the Investor Certificates of such
Series are outstanding, the Transferor shall, if the
Paying Agent is not located in New York City, appoint a
co-paying agent in New York City (for Registered Certifi-
▇▇▇▇▇ only) or any other city designated in such Supple-
ment which, if and so long as any Series of Investor
Certificates is listed on the Luxembourg Stock Exchange
or other stock exchange and such exchange so requires,
shall be in Luxembourg or the location required by such
other stock exchange.
Section 6.7 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 such form as the
81
Servicer or the Paying Agent may reasonably require, of
the names and addresses of the Investor Certificatehold-
ers (other than Bearer Certificateholders). Unless
otherwise provided in the related Supplement, if Holders
representing Undivided Interests aggregating not less
than 10% of the Invested Amount of the Investor Certifi-
▇▇▇▇▇ 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 Certif-
icates 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) held by the Trustee, and shall
give the Servicer notice that such request has been made
within five Business Days after the receipt of such
application. Such list shall be as of a date no more
than 45 days prior to the date of receipt of such
Applicants' request.
Every Certificateholder, by receiving and
holding a Certificate agrees with the Trustee that nei-
ther 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 au-
thenticating 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 Certifi-
▇▇▇▇▇ 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 authenti-
cating agent and a certificate of authentication executed
82
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 corpo-
rate agency business of an authenticating agent shall
continue to be an authenticating agent without the execu-
tion 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 suc-
cessor authenticating agent upon acceptance of its ap-
pointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder,
with like effect as if originally named as an authenti-
cating agent. No successor authenticating agent shall be
appointed unless acceptable to the Trustee and the Trans-
feror.
(d) The Servicer agrees to pay, on behalf of
the Trust, to each authenticating agent from time to time
reasonable compensation for its services under this
Section 6.8.
(e) The provisions of Sections 11.1, 11.2 and
11.3 of the Agreement shall be applicable to any authen-
ticating 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 substan-
tially the following form:
This is one of the Certificates described in
the Master Pooling and Servicing Agreement.
83
_______________________
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 of the Agreement for
execution and redelivery to the Trustee for authentica-
tion under Section 6.2 of the Agreement one or more new
Series of Investor Certificates. Any such Series of
Investor Certificates shall be substantially in the form
specified in the applicable Supplement and shall bear,
upon its face, the designation for such Series to which
it belongs so selected by the Transferor. Except as
specified in any Supplement for a related Series, all
Investor Certificates of any Series shall be equally and
ratably entitled as provided herein to the benefits
hereof without preference, priority or distinction on
account of the actual time or times of authentication and
delivery, all in accordance with the terms and provisions
of this Agreement and the applicable Supplement.
(b) The Transferor may tender the Exchangeable
Transferor Certificate to the Trustee in exchange for (i)
one or more newly issued Series of Investor Certificates
and (ii) a reissued Exchangeable Transferor Certificate
(any such tender an "Exchange"). The Transferor may
perform an Exchange by notifying the Trustee, in writing
at least three days in advance (an "Exchange Notice") of
the date upon which the Exchange is to occur (an "Ex-
change Date"). Any Exchange Notice shall state the
designation of any Series to be issued on the Exchange
Date and, with respect to each such Series: (x) its
Initial Invested Amount (or the method for calculating
such Initial Invested Amount), if any, which, in the
aggregate, at any time, may not be greater than the
current principal amount of the Exchangeable Transferor
Certificate less the product of the Minimum Transferor
Percentage and the Aggregate Principal Receivables at
such time, and (y) its Certificate Rate (or the method
84
for allocating interest payments or other cash flow to
such Series), if any. On the Exchange Date, the Trustee
shall only authenticate and deliver any such Series upon
delivery to it of the following: (A) a Supplement in
form satisfactory to the Trustee executed by the Trans-
feror and specifying the Principal Terms of such Series,
(B) the applicable Enhancement, if any, (C) an Opinion of
Counsel to the effect that the newly issued Series of
Investor Certificates will be characterized as either
indebtedness or an interest in a partnership under exist-
ing law for Federal income tax purposes and that the
issuance of the newly issued Series of Investor Certifi-
▇▇▇▇▇ will not have any material adverse impact on the
Federal income tax characterization of any outstanding
Series of Investor Certificates that have been the sub-
ject of a previous opinion of tax counsel or result in
the Trust being taxable as an association or as a public-
ly traded partnership taxable as a corporation for ▇▇▇▇▇-
al or applicable state tax purposes (such opinion, a "Tax
Opinion"), (D) an agreement, if any, pursuant to which
the Enhancement Provider agrees to provide Enhancement,
(E) written confirmation from each Rating Agency assign-
ing a rating for any class of Investor Certificates of
any then outstanding Series that the Exchange will not
result in such Rating Agency's reducing or withdrawing
its rating on any then outstanding Series rated by it and
(F) the existing Exchangeable Transferor Certificate.
Upon satisfaction of such conditions, the Trustee shall
cancel the existing Exchangeable Transferor Certificate
and issue, as provided above, such Series of Investor
Certificates and new Exchangeable Transferor Certificate,
dated the Exchange Date. 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 limita-
tion: (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 (including any rights to allocations of
Principal Collections), (v) the interest payment date or
dates and the date or dates from which interest shall
85
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 opera-
tion of any such account, (viii) the Servicing Fee Per-
centage, (ix) the Minimum Transferor Interest Percentage,
(x) the Minimum Aggregate Principal Receivables, (xi) the
Stated Series Termination Date, (xii) the terms of any
Enhancement, (xiii) the Enhancement Provider, (xiv) the
base rate, if any, (xv) the Repurchase Terms or the terms
on which the Certificates of such Series may be
remarketed to other investors, (xvi) any deposit into any
account provided for such Series, (xvii) the number of
classes of such Series, and if more than one class, the
rights and priorities of each such class, (xviii) the
extent to which the Investor Certificates will be issu-
able in temporary or permanent global form, and in such
case, the depository for such global certificate or
certificates, the terms and conditions, if any, upon
which such global certificate may be exchanged in whole
or in part for Definitive Certificates, and the manner in
which any interest payable on a temporary or global
certificate will be paid, (xix) whether the Certificates
may be issued in bearer form and any limitations imposed
thereon and provisions relating to compliance with appli-
cable laws and rules for bearer instruments, (xx) the
priority of any Series with respect to any other Series,
and (xxi) any other relevant terms of such Series (all
such terms, the "Principal Terms" of such Series). If on
the date of the issuance of such Series there is issued
and outstanding no Series of Investor Certificates which
is currently rated by a Rating Agency, then as a condi-
tion 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, but
not limited to, the receipt by the Trust or the Transfer-
86
or of the proceeds of any loan or additional loan provid-
ed by an Enhancement Provider), the Transferor shall
deliver to the Trustee and each Rating Agency assigning a
rating for any class of Investor Certificates of any then
outstanding Series a Tax Opinion with respect to such
interest if so requested by any such Rating Agency.
Section 6.10 Global Certificate; Euro-Certificate Exchange
Date.
(a) If specified in the related Supplement for
any Series, the Investor Certificates may be initially
issued in the form of a single temporary Global Certifi-
cate (the "Global Certificate") in bearer form, without
interest coupons, in the denomination of the Initial
Invested Amount and substantially in the form attached to
the applicable Supplement. Unless otherwise specified in
the applicable Supplement, the provisions of this Section
6.10 shall apply to such Global Certificate. The Global
Certificate will be authenticated by the Trustee upon the
same conditions, in substantially the same manner and
with the same effect as the Definitive Certificates. The
Global Certificate may be exchanged as described in this
Section 6.10 or in the applicable Supplement for Bearer
and/or Registered Certificates in definitive form (the
"Definitive Euro-Certificates"). Notwithstanding the
foregoing, no Certificates shall be issued in bearer form
unless the 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 in an aggregate
principal amount equal to the Initial Invested Amount.
All Bearer Certificates so issued and delivered will have
Coupons attached. The Global Certificate may be ex-
changed for an equal aggregate principal amount of Defin-
87
itive Euro-Certificates only on or after the Euro-Certif-
icate 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 substan-
tially in the form attached to the Supplement for the
related Series. Upon any demand for exchange for Defini-
tive 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 Certifi-
▇▇▇▇▇, 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 Ex-
change 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 certifica-
tion, the Trustee shall cause the Global Certificate to
be endorsed in accordance with paragraph (d) below.
Unless otherwise provided in the applicable Supplement,
any exchange as provided in this subsection 6.10(b) shall
be made free of charge to the holders and the beneficial
owners of the Global Certificate and to the beneficial
owners of the Definitive Euro-Certificates issued in
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 Trust-
ee as conclusive evidence that a corresponding certifica-
tion or certifications has or have been delivered to such
Foreign Clearing Agency, pursuant to the terms of this
Agreement.
88
(d) Upon any such exchange of all or a portion
of the Global Certificate for a Definitive Euro-Certifi-
cate 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 Certifi-
cate shall not be entitled to receive payments of inter-
est 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 Certifi-
▇▇▇▇▇, upon original issuance, will be issued in the form
of the requisite number of typewritten Certificates
representing the Book-Entry Certificates, to be delivered
to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Transferor. The Inves-
tor Certificates shall initially be registered on the
Certificate Register in the name of CEDE & Co., the
nominee of the Clearing Agency, and no Certificate Owner
will receive a definitive certificate representing such
Certificate Owner's interest in the Investor Certifi-
▇▇▇▇▇, except as provided in Section 6.13 of the Agree-
ment. Unless and until definitive, fully registered
Investor Certificates (the "Definitive Certificates")
have been issued to Certificate Owners pursuant to Sec-
tion 6.13 of the Agreement:
(i) the provision of this Section 6.11
shall be in full force and effect;
(ii) the Transferor, the Servicer, the
Paying Agent, the Transfer Agent and Registrar
and the Trustee may deal with the Clearing
Agency and the Clearing Agency Participants for
all purposes (including the making of distribu-
tions on the Investor Certificates) as the
authorized representatives of the Certificate
Owners;
89
(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 Deposito-
ry Agreement, unless and until Definitive Cer-
tificates are issued pursuant to Section 6.13
of the Agreement, the initial Clearing Agency
will make book-entry transfers among the Clear-
ing Agency Participants and receive and trans-
mit 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 instruc-
tions 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 in-
structions 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 or any Supplement,
unless and until Definitive Certificates shall have been
issued to Certificate Owners pursuant to Section 6.13 of
the Agreement, the Trustee, the Servicer and the Paying
Agent, to the extent any of them is obligated hereunder
or under any Supplement to give notices and communica-
tions to Investor Certificateholders, shall give or cause
to be given all such notices and communications specified
herein or therein to be given to Holders of the Investor
Certificates to the Clearing Agencies.
90
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 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 applicable
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 applicable
Clearing Agency Participants in writing that the continu-
ation 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 Participant, of
the occurrence of any such event and of the availability
of Definitive Certificates to Certificate Owners request-
ing 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 conclu-
sively 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 Certifi-
▇▇▇▇▇, the Transferor, the Servicer or the Trustee may at
any time call a meeting of the Certificateholders of such
91
Series or of all Series, to be held at such time and at
such place as the Transferor, the Servicer or the Trust-
ee, as the case may be, shall determine, for the purpose
of approving a modification of or amendment to, or ob-
taining 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 of
the Agreement. References in this Section to Certifi-
cateholders 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 of the
Agreement and at least once in an Authorized Newspaper
and, if and for so long as the Certificates are listed on
the Luxembourg Stock Exchange or other stock exchange and
such exchange so requires, in a newspaper of general
circulation in Luxembourg (which newspaper shall be
printed in the English or French language and customarily
published on each business day in Luxembourg) or the
location required by such other stock exchange, the first
publication to be not less than 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 in-
strument 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 Certificatehold-
ers shall be the Persons entitled to vote at such meeting
and their counsel and any representatives of the Trans-
feror, the Servicer and the Trustee and their respective
counsels.
(b) At a meeting of Investor Certificatehold-
ers, persons entitled to vote Investor Certificates
evidencing Undivided Interests aggregating a majority of
the Invested Amount of the applicable Series or all
outstanding Series, as the case may be, shall constitute
a quorum. No business shall be transacted in the absence
of a quorum, unless a quorum is present when the meeting
is called to order. In the absence of a quorum at any
such meeting, the meeting may be adjourned for a period
of not less than 10 days; in the absence of a quorum at
any such adjourned meeting, such adjourned meeting may be
92
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 reconven-
ing of any adjourned meeting shall be given as provided
above except that such notice must be given not less than
five days prior to the date on which the meeting is
scheduled to be reconvened. Notice of the reconvening of
an adjourned meeting shall state expressly the percentage
of the aggregate principal amount of the outstanding
Investor Certificates which shall constitute a quorum.
(c) Any Certificateholder who has executed an
instrument in writing appointing a person as proxy shall
be deemed to be present for the purposes of determining a
quorum and be deemed to have voted; provided that such
Certificateholder shall be considered as present or
voting only with respect to the matters covered by such
instrument in writing. Subject to the provisions of
Section 13.1 of the Agreement, any resolution passed or
decision taken at any meeting of Investor Certificate-
holders 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 recog-
nized 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 Certifi-
93
cate specified in such certificate shall be produced by
some other person or (iii) the Bearer Certificate speci-
fied in such certificate shall have ceased to be out-
standing. 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 outstand-
ing and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no
right to vote except as a Certificateholder or proxy.
Any meeting of Certificateholders duly called at which a
quorum is present may be adjourned from time to time, and
the meeting may be held as so adjourned without further
notice.
(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 Certifi-
▇▇▇▇▇ held or represented by them. The permanent chair-
man 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
94
be delivered to the Servicer and the other to the Trustee
to be preserved by the Trustee, the latter to have at-
tached thereto the ballots voted at the meeting. Any
record so signed and verified shall be conclusive evi-
dence of the matters therein stated.
(END OF ARTICLE VI)
95
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 such Trans-
feror.
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 convey-
ance 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 of America or any State or
the District of Columbia, and shall be a na-
tional banking association, state banking cor-
poration or other entity which is not subject
to the bankruptcy laws of the United States of
America, and if the Transferor is not the sur-
viving 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 cove-
nant and obligation of the Transferor, as ap-
plicable hereunder and shall benefit from all
the rights granted to the Transferor, as appli-
cable 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 cove-
nant 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
96
Transferor stating that such consolidation,
merger, conveyance or transfer and such supple-
mental agreement comply with this Section 7.2
and that all conditions precedent herein pro-
vided for relating to such transaction have
been complied with and an Opinion of Counsel
stating that such supplemental agreement is
legal, valid and binding with respect to the
Transferor; and
(iii) the Transferor shall have delivered
written notice to each Rating Agency assigning
a rating for any class of Investor Certificates
of any then outstanding Series of such ▇▇▇▇▇▇▇-
dation, merger, conveyance or transfer.
(b) The obligations of the Transferor hereun-
der 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 fore-
going 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 Trustee, the Certificateholders, any Enhancement
Provider or any other Person hereunder or pursuant to any
document delivered hereunder, it being expressly under-
stood that all such liability is expressly waived and
released as a condition of, and as consideration for, the
execution of this Agreement and any Supplement and the
issuance of the Certificates; provided, however, that
this provision shall not protect the officers, directors,
employees or agents of the Transferor against any liabil-
ity which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the perfor-
▇▇▇▇▇ of duties hereunder. Except as provided in Section
7.4, the Transferor shall not be under any liability to
the Trust, the Trustee, the Certificateholders, any
Enhancement Provider or any other Person for any action
taken or for refraining from the taking of any action in
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 Trans-
feror against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or
97
gross negligence in the performance of duties hereunder.
The Transferor and any director, officer, employee or
agent of the Transferor may rely in good faith on any
document of any kind prima facie properly executed and
submitted by any Person 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, penalties or
liabilities (other than those incurred by a Certificate-
holder 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 En-
hancement 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 part-
nership under the Uniform Partnership Act. The Transfer-
or agrees to pay, indemnify and hold harmless each Inves-
tor Certificateholder against and from any and all such
losses, claims, 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 Ser-
vice 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.
(END OF ARTICLE VII)
98
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. (a) 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, un-
less:
(i) the business entity formed by such
consolidation or into which the Servicer is
merged or the Person which acquires by convey-
ance 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 of America or any State or the
District of Columbia, and shall be a national
banking association, state banking corporation
or other entity which is not subject to the
bankruptcy laws of the United States of Ameri-
ca, 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 obliga-
tion of the Servicer hereunder. (To the extent
that any right, covenant or obligation of the
Servicer is inapplicable to the successor enti-
ty, such successor entity shall be subject to
such covenant or obligation, or benefit from
such right, as would apply, to the extent prac-
ticable, 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
99
transaction have been complied with and an
Opinion of Counsel stating that such supplemen-
tal agreement is legal, valid and binding with
respect to the Servicer; and
(iii) the Servicer shall have delivered
written notice to each Rating Agency assigning
a rating for any class of Investor Certificates
of any then outstanding Series of such ▇▇▇▇▇▇▇-
dation, 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 Transferor, the Trustee, the Certificatehold-
ers, any Enhancement Provider or any other Person hereun-
der or pursuant to any document delivered hereunder, it
being expressly understood that all such liability is
expressly waived and released as a condition of, and as
consideration for, the execution of this Agreement and
any Supplement and the issuance of the Certificates;
provided, however, that this provision shall not protect
the directors, officers, employees and agents of the
Servicer against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder.
Except as provided in Section 8.4, the Servicer shall
not be under any liability to the Trust, the Trustee, the
Certificateholders or any other Person for any action
taken or for refraining from the taking of any action in
its capacity as Servicer pursuant to this Agreement or
any Supplement whether arising from express or implied
duties under this Agreement or any Supplement; provided,
however, that this provision shall not protect the
Servicer against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder.
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 inci-
dental to its duties to service the Receivables in accor-
dance with this Agreement or any Supplement which in its
reasonable opinion may involve it in any expense or
liability.
100
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 officers, directors and employees,
from and against any reasonable 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 officers, direc-
tors or employees for any liability, cost or expense of
the Trust or the Trustee or its officers, directors or
employees if any such claims, actions or proceedings
relate to (i) any action taken by the Trustee at the
request of the Investor Certificateholders, (ii) any
Federal, state, local or foreign income or franchise
taxes or any other tax imposed or measured by income (or
any interest or penalties with respect thereto) required
to be paid by the Trust, the Trustee or the Investor Cer-
tificateholders in connection herewith to any taxing
authority or (iii) with respect to the Trustee and its
officers, directors and employees, any fraud, negligence,
willful misconduct or wrongful actions taken by or omis-
sions of the Trustee. Subject to Sections 7.1 and 7.4
and subsection 10.2(b) of the Agreement, any indemnifi-
cation pursuant to this Section shall only be from the
assets of the Servicer. The provisions of this indemnity
shall run directly to and be enforceable by an injured
party subject to the limitations hereof and shall survive
the termination of the Agreement and payment in full of
the certificates.
Seciton 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 hereun-
der permissible under applicable law, regulation or
order. Any such determination permitting the resignation
101
of the Servicer shall be evidenced as to clause (i) of
this Section by an Opinion of Counsel to such effect
delivered to the Trustee. If the Trustee is unable
within 120 days of the date of such determination to
appoint a Successor Servicer pursuant to subsection
10.2(a), the Trustee or its duly appointed agent (which
may not be the outgoing Servicer) shall serve as Succes-
sor Servicer hereunder but the Trustee shall have contin-
ued authority to appoint another Person as Successor
Servicer.
Seciton 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 Certificate-
holders, 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 desig-
nated 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 dele-
gate certain of its duties hereunder to any Person who
agrees to conduct such duties in accordance with the
applicable Account Guidelines. The fees of any Person to
whom such duties are delegated 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 resig-
nation 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 to each
Rating Agency assigning a rating for any class of
Investor Certificates of any then outstanding Series.
102
Section 8.8 Examination of Records. The Transferor and
the Servicer shall clearly and unambiguously identify
each Account (including any Supplemental 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. 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)
103
ARTICLE IX
EARLY AMORTIZATION EVENTS
Section 9.1 Early Amortization Events. Unless modified
with respect to any Series of Investor Certificates by
any related Supplement, if any one of the following
events shall occur:
(a) the Transferor or Nordstrom Credit, Inc.
shall consent to the appointment of a trustee, conserva-
tor, receiver, liquidator, custodian or other similar
official in any bankruptcy, insolvency, readjustment of
debt, marshalling of assets and liabilities, receiver-
ship, conservatorship or similar proceedings of or relat-
ing to either the Transferor or Nordstrom Credit, Inc. or
of or relating to all or substantially all of its proper-
ty; or a decree or order of a court or agency or supervi-
sory authority having jurisdiction in the premises for
the appointment of a trustee, conservator, receiver,
liquidator, custodian or other similar official in any
bankruptcy, insolvency, readjustment of debt, marshalling
of assets and liabilities, receivership, conservatorship
or similar proceedings, or for the winding-up or liquida-
tion of its affairs, shall have been entered against
either the Transferor or Nordstrom Credit, Inc. and, only
in the case of Nordstrom Credit, Inc., such decree or
order shall have remained in force undischarged or
unstayed for a period of sixty (60) days; either the
Transferor or Nordstrom Credit, Inc. shall admit in writ-
ing its inability to pay its debts generally as they
become due, file a petition to take advantage of any
applicable bankruptcy, insolvency, receivership, ▇▇▇▇▇▇-
vatorship or reorganization statute, make an assignment
for the benefit of its creditors or voluntarily suspend
payment of its obligations; an involuntary petition shall
be filed with respect to the Transferor or Nordstrom
Credit, Inc. in a court of competent jurisdiction seeking
to take advantage of any applicable bankruptcy, insolven-
cy, receivership, conservatorship or reorganization stat-
ute and, only in the case of Nordstrom Credit, Inc., such
proceeding or petition shall continue undismissed for
sixty (60) days; or the Transferor shall become unable
for any reason to transfer Receivables in accordance with
the provisions of this Agreement; and
104
(b) 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 of Certificates then outstanding shall occur
without any notice or other action on the part of the
Trustee or all Investor Certificateholders immediately
upon the occurrence of such event. The Trustee shall
advise each Rating Agency assigning a rating for any
class of Investor Certificates of any then outstanding
Series in writing of the occurrence of any Early Amorti-
zation Event.
Section 9.2 Additional Rights Upon the Occurrence of
Certain Events.
(a) If the Transferor voluntarily goes into
liquidation or consents to the appointment of a conserva-
tor or receiver or liquidator in any insolvency, read-
justment of debt, marshaling of assets and liabilities or
similar proceedings of or relating to the Transferor or
of or relating to all or substantially all their respec-
tive 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 proceed-
ings, or for the winding-up or liquidation of its af-
fairs, shall have been entered against the Transferor; or
the Transferor shall admit in writing its inability to
pay its debts generally as they become due, file a peti-
tion to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the bene-
fit of its creditors or voluntarily suspend payment of
its obligations; or the Transferor shall become unable
for any reason to transfer Receivables to the Trust in
accordance with the provisions of this Agreement (such
voluntary liquidation, appointment, entering of such
decree, admission, filing, making, suspension or inabili-
ty, a "Dissolution Event"), the Transferor shall promptly
give notice of such event to the Trustee, and the Trans-
feror shall on the day of such appointment, voluntary
liquidation, entering of such decree, admission, filing,
making, suspension or inability, as the case may be (the
"Appointment Day"), immediately cease to transfer Princi-
pal Receivables to the Trust hereunder. Notwithstanding
105
any cessation of the transfer to the Trust of additional
Principal Receivables, Principal Receivables transferred
to the Trust prior to the occurrence of such Dissolution
Event and Collections in respect of such Principal Re-
ceivables and Finance Charge Receivables whenever created
shall continue to be part of the Trust, and such Collec-
tions 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 a
Dissolution Event, the Trustee shall (i) publish a notice
in an Authorized Newspaper that a Dissolution Event has
occurred and that the Trustee intends to sell, dispose of
or otherwise liquidate the Receivables in a commercially
reasonable manner and (ii) send written notice to the
Investor Certificateholders and any Enhancement Provider
entitled thereto describing the provisions of this Sec-
tion 9.2 and requesting instructions from such Holders,
which notice shall request each Investor Certificatehold-
er to advise the Trustee in writing that it elects one of
the following options: (A) the Investor Certificatehold-
er 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 Certifi-
cateholder refuses to advise the Trustee as to the spe-
cific 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 (other than the Transferor or any
of its Affiliates) of Investor Certificates representing
Undivided Interests aggregating in excess of 50% of the
related Invested Amount of each Series (or in the case of
a Series having more than one class of Investor Certifi-
▇▇▇▇▇, each class of such Series) to the effect that the
Trustee shall instruct the Servicer not to sell, dispose
of, or otherwise liquidate the Receivables and to in-
struct the Servicer to reconstitute the Trust upon the
same terms and conditions as set forth herein, the Trust-
ee shall instruct the Servicer to proceed to sell, dis-
pose of, or otherwise liquidate the Receivables in a
commercially reasonable manner and on commercially rea-
sonable terms, which shall include the solicitation of
competitive bids and the Servicer shall proceed to con-
106
summate the sale, liquidation or disposition of the
Receivables as provided above with the highest bidder for
the Receivables. If, however, with respect to the por-
tion of the Receivables allocable to any outstanding
Series, the holders (other than the Transferor or any of
its Affiliates) of more than 50% of the principal amount
of each class of such Series instruct the Trustee not to
sell the portion of the Receivables allocable to such
Series, the Trust shall continue with respect to such
Series pursuant to the terms of the Agreement and the
Supplement. If specified in the applicable Supplement,
the holder (other than the Transferor or any of its
Affiliates) of an Enhancement Invested Amount with re-
spect to a Series shall be entitled to give instructions
pursuant to this Section 9.2 as if such Enhancement In-
vested 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 Principal Receivables and
(C) a fraction the numerator of which is the related
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 addi-
tion 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 deter-
mination from the conservator or receiver that the terms
and manner of any proposed sale, disposition or liquida-
tion are commercially reasonable. The provisions of
Sections 9.1 and 9.2 shall not be deemed to be mutually
exclusive.
(b) The proceeds from the sale, disposition or
liquidation of the Receivables pursuant to subsection (a)
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
that the Trustee shall determine conclusively without
liability for such determination the amount of such
proceeds which are allocable to Finance Charge Receiv-
▇▇▇▇▇ and the amount of such proceeds which are allocable
107
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)
108
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 re-
quired drawing or payment under any Enhancement on or
before the date occurring five Business Days after the
date such payment, transfer, deposit or drawing or such
instruction or notice is required to be made or given, as
the case may be, under the terms of this Agreement or any
Supplement; provided, however, that any such failure
caused by a non willful act of the Servicer shall not
constitute a Servicer Default if the Servicer promptly
remedies such failure within five Business Days after
receiving notice of such failure or otherwise becoming
aware of such failure;
(b) failure on the part of the Servicer duly
to observe or perform any other covenants or agreements
of the Servicer set forth in this Agreement or any Sup-
plement, which has a material adverse effect on the
Certificateholders of any Series then outstanding (with-
out regard to the amount of any Enhancement) and which
continues unremedied for a period of 60 days after the
date on which the written notice of such failure requir-
ing the same to be remedied shall have been given to the
Servicer by the Trustee, or to the Servicer and the
Trustee by the Holders of Investor Certificates evidenc-
ing Undivided Interests aggregating not less than 50% of
the Invested Amount of any Series materially adversely
affected thereby, and which continues to materially ad-
versely affect the rights of the Holders of Investor
Certificates of such Series (without regard to the amount
of any Enhancement) for such period; or the Servicer
shall delegate its duties under this Agreement, except as
permitted by Section 8.7;
(c) any representation, warranty or certifica-
tion made by the Servicer in this Agreement or any Sup-
plement or in any certificate delivered pursuant to this
109
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 reme-
died, shall have been given to the Servicer by the Trust-
ee, or to the Servicer and the Trustee by the Holders of
Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Invested Amount of any
Series adversely affected thereby; or
(d) the Servicer shall consent to the appoint-
ment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets
and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially
all of its property, or a decree or order of a court or
agency or supervisory authority having jurisdiction in
the premises for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of
debt, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undis-
charged 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 reorgani-
zation statute, make any assignment for the benefit of
its creditors or voluntarily suspend payment of its
obligations;
then, so long as such Servicer Default shall not have
been remedied, either the Trustee or the Holders of
Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Aggregate Invested
Amount, by notice then given in writing to the Servicer
(and to the Trustee if given by the Investor Certificate-
holders) (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 "Ser-
110
vice Transfer"). The rights and interests of the Trans-
feror Interest will not be affected by any Service Trans-
fer. The Trustee, upon giving or receiving a Termination
Notice shall immediately notify each Rating Agency as-
signing a rating for any class of Investor Certificates
of any then outstanding Series and any Enhancement Pro-
vider 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 pursu-
ant 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 Receiv-
▇▇▇▇▇ 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 reason-
ably 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 Succes-
sor Servicer shall be required to enter into such custom-
111
ary licensing and confidentiality agreements as the
Servicer shall deem necessary to protect its interest.
Notwithstanding the foregoing, a delay in or
failure of performance referred to in subsection 10.1(a)
for a period of 10 Business Days after the applicable
grace period or under subsection 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,
swarms of locusts or similar causes. The preceding sen-
tence shall not relieve the Servicer from using its best
reasonable 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 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 func-
tions under this Agreement until the date specified in
the Termination Notice or otherwise specified by the
Trustee in writing or, if no such date is specified in
such Termination Notice, or otherwise specified by the
Trustee, until a date mutually agreed upon by the
Servicer and Trustee (not to exceed 120 days from the
date of delivery of such notice). The Trustee shall as
promptly as possible after the giving of a Termination
Notice appoint a successor servicer (the "Successor
Servicer"), with the consent of any Enhancement Provider,
and such Successor Servicer shall accept its appointment
by a written assumption in a form acceptable to the
112
Trustee, the Transferor and any Enhancement Provider.
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, subject to the consent of any Enhancement
Provider. The Trustee may obtain bids from any potential
successor servicer. If the Trustee is unable to obtain
any bids from any potential successor servicer and the
Servicer delivers an Officer's Certificate to the effect
that it cannot in good faith cure the Servicer Default
which gave rise to a transfer of servicing, then the
Trustee shall offer the Transferor the right to accept
reassignment of all the Receivables; provided, however,
that no such reassignment shall occur unless the Trans-
feror shall deliver to the Trustee and each Rating Agency
assigning a rating for any class of Investor Certificates
of any then outstanding Series an Opinion of Counsel
reasonably acceptable to the Trustee that such reassign-
ment would not constitute a fraudulent conveyance by the
Transferor. The reassignment deposit amount for such a
reassignment shall be equal to the Aggregate Invested
Amount (less the aggregate principal amount on deposit in
any principal funding account), plus (i) 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 applicable interest accrual periods of
such Series and (ii) any unpaid amounts payable to any
Enhancement Provider under the applicable Enhancement
agreement. In the event that a Successor Servicer has
not been appointed and has not accepted its appointment
at the time when the Servicer ceases to act as Servicer,
the Trustee (as trustee hereunder) without further action
shall automatically be appointed the Successor Servicer.
Notwithstanding the above, the Trustee shall, if it is
legally unable so to act, petition a court of competent
jurisdiction to appoint any established financial insti-
tution 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 Suc-
cessor 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 Enhance-
ment Provider under the applicable Enhancement Agreement,
which amounts shall be distributed to such Enhancement
Provider.)
113
(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 responsibili-
ties, 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 re-
lieved of any liability hereunder for its actions prior
to the transfer of servicing hereunder; and provided
further, that, (i) the outgoing Servicer shall not indem-
nify 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 compen-
sation, or may make such arrangements for the compensa-
tion of the Successor Servicer out of Collections, as it
and such Successor Servicer shall agree; provided, howev-
er, 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 automati-
cally 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 deliv-
er, 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 neces-
sary or appropriate to effect the purposes of such trans-
fer of servicing rights. The Successor Servicer agrees
to cooperate with the Transferor in effecting the termi-
nation of the responsibilities and rights of the Succes-
sor Servicer to conduct servicing on the Receivables.
The Successor Servicer shall transfer its electronic
114
records relating to the Receivables to the Transferor in
such electronic form as the Transferor may reasonably
request and shall transfer all other records, correspon-
dence 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, each
Rating Agency assigning a rating for any class of
Investor Certificates of any then outstanding Series and
any Enhancement Provider, and the Trustee shall give
notice to the Investor Certificateholders at their re-
spective addresses appearing in the Certificate Register.
Upon any termination or appointment of a Successor
Servicer pursuant to this Article X, the Trustee shall
give prompt written notice thereof to Investor Certifi-
cateholders at their respective addresses appearing in
the Certificate Register, each Rating Agency assigning a
rating for any class of Investor Certificates of any then
outstanding Series and to any Enhancement Provider.
Notice to Holders of Bearer Certificates shall be given
by publication in the manner described in Section 13.5 of
the Agreement.
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 a Transferor may, on behalf of all
Holders of Certificates of such affected Series, waive
any default by the Servicer or such Transferor in the
performance of their respective obligations hereunder and
its consequences, except a default in the failure to make
any required deposits or payments of interest or
principal with respect to any Series of Certificates.
Upon any such waiver of a past default, such default
shall cease to exist, and any default arising therefrom
shall be deemed to have been remedied for every purpose
of this Agreement. No such waiver shall extend to any
115
subsequent or other default or impair any right conse-
quent thereon except to the extent expressly so waived.
(END OF ARTICLE X)
116
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 specifi-
cally 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 resolu-
tions, 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 Sup-
plement, 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 conclu-
sions stated therein. The Trustee shall give prompt
written notice to the Certificateholders (or, in the case
of Holders of Bearer Certificates, notice by publication
in the manner described in Section 13.5 of the Agreement)
of any material lack of conformity of any such instrument
to the applicable requirements of this Agreement or any
Supplement discovered by the Trustee which would entitle
a specified percentage of the Investor Certificateholders
to take any action pursuant to this Agreement or any
Supplement.
(c) Subject to Section 11.1(a) of this Agree-
ment, 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:
117
(i) the Trustee shall not be personally
liable for an error of judgment made in good
faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascer-
taining the pertinent facts;
(ii) the Trustee shall not be personally
liable with respect to any action taken, suf-
fered 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 obli-
gations of the Servicer referred to in clauses
(a), (b) and (c) of Section 10.1 unless a Re-
sponsible 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, any
Holders of Investor Certificates evidencing
Undivided Interests aggregating more than 10%
of the Invested Amount of any Series adversely
affected thereby or any Enhancement Provider;
(iv) in making a determination of any
material and adverse effect upon Certificate-
holders, 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
118
believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reason-
ably assured to it, and none of the provisions contained
in this Agreement or any Supplement shall in any event
require the Trustee to perform, or be responsible for the
manner of performance of, any of the obligations of the
Servicer or the Successor Servicer under this Agreement
or any Supplement except during such time, if any, as the
Trustee shall be the Successor Servicer in accordance
with the terms of this Agreement or any Supplement.
(e) Except for actions expressly authorized by
this Agreement or any Supplement, the Trustee shall take
no action reasonably likely to impair the interests of
the Trust in any Receivable now existing or hereafter
created or to impair the value of any Receivable now
existing or hereafter created.
(f) Except as specifically provided in this
Agreement, the Trustee shall have no power to vary the
corpus of the Trust.
(g) In the event that the Paying Agent or the
Transfer Agent and Registrar shall not be the Trustee and
fail to perform any obligation, duty or agreement in the
manner or on the day required to be performed by the
Paying Agent or the Transfer Agent and Registrar, as the
case may be, under this Agreement, the Trustee shall be
obligated promptly upon its knowledge thereof to perform
such obligation, duty or agreement in the manner so
required but shall not be required to make a payment out
of its own funds.
(h) Any action, suit or proceeding brought in
respect of one or more particular Series shall have no
effect on the Trustee's rights, duties and obligations
hereunder with respect to any one or more Series not the
subject of such action, suit or proceeding.
Section 11.2 Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 11.1:
(a) the Trustee may request, rely on and shall
be protected in acting on, or in refraining from acting
in accord with, any resolution, Officer's Certificate,
Opinion of Counsel, certificate of independent public
accountants or any other certificate, statement, instru-
119
ment, 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 Receiv-
▇▇▇▇▇ or Accounts, prima facie properly executed and
submitted to it pursuant to this Agreement or any Supple-
ment by the proper party or parties;
(b) the Trustee may consult with counsel as to
matters of law and any Opinion of Counsel shall be full
and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such Opinion of
Counsel as to any actions required to be taken or with-
held 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, con-
duct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of any of the
Certificateholders pursuant to the provisions of this
Agreement or any Supplement, unless such Certificatehold-
ers shall have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; nothing con-
tained herein shall, however, relieve the Trustee (as
Trustee but not as Successor Servicer) of the obliga-
tions, 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,
120
opinion, report, notice, request, consent, order, approv-
al, 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 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 Supple-
ment shall in no event be construed as a duty;
(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) no implied covenants or obligations shall
be read into this Agreement against the Trustee;
(k) 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
121
as such shall be to perform those duties with respect to
the Enhancement Provider as are specifically set forth in
the Agreement and no implied covenants shall be read into
the Agreement against the Trustee with respect to the En-
hancement Provider; and
(l) the Trustee shall have no duty (i) to see
to any recording, filing or depositing of the Agreement
or any agreement referred to therein or any financing
statement or continuation statement evidencing a security
interest in the Receivables or the Accounts, or to see to
the maintenance of any such recording, filing or deposit-
ing or any rerecording, refiling or redepositing of any
thereof or (ii) to confirm or verify the contents of any
reports or certificates of the Servicer delivered to the
Trustee pursuant to the Agreement believed by the Trustee
to be genuine and to have been signed or presented by the
proper party or parties.
Section 11.3 Trustee Not Liable for Recitals in
Certificates. The Trustee assumes no responsibility for
the correctness of the recitals contained herein and in
the Certificates (other than the certificates of
authentication on the Certificates). Except as set forth
in Section 11.15, the Trustee makes no representations as
to (i) the validity or sufficiency of this Agreement or
any Supplement or of the Certificates (other than the
certificates of authentication on the Certificates), (ii)
the existence or validity of any Receivable, (iii) the
validity of any transfer or assignment of any Receivable
to the Trust, (iv) the validity of any grant of a securi-
ty 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 Trust-
ee or the Servicer of any Receivable, (viii) the perfor-
▇▇▇▇▇ or enforcement of any Receivable, (ix) the compli-
ance 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 applica-
tion by the Transferor of any of the Certificates or of
the proceeds of such Certificates, or for the use or
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application of any funds paid to the Transferor in re-
spect of the Receivables or deposited in or withdrawn
from the Collection Account, the Excess Funding Account
or other accounts now or hereafter established to effec-
tuate the transactions contemplated herein and in accor-
dance 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.
Section 11.5 The Servicer to Pay Trustee's Fees and
Expenses. The Servicer covenants and agrees to pay to
the Trustee from time to time out of its own funds, and
the Trustee shall be entitled to receive, reasonable
compensation (which shall not be limited by any provision
of law in regard to the compensation of a trustee of an
express trust) for all services rendered by it in the
execution of the trust hereby created and in the exercise
and performance of any of the powers and duties hereunder
of the Trustee, and, subject to Section 8.4, the Servicer
will pay or reimburse the Trustee (without reimbursement
from the Collection Account or otherwise) upon its re-
quest for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance
with any of the provisions of this Agreement or any
Supplement (including the reasonable fees and expenses of
its agents and counsel) except any such expense, dis-
bursement or advance as may arise from its negligence or
bad faith and except as provided in the following sen-
tence. If the Trustee is appointed Successor Servicer
pursuant to Section 10.2, the provisions of this Section
11.5 shall not apply to expenses, disbursements and
advances made or incurred by the Trustee in its capacity
as Successor Servicer; provided that the Transferor will
indemnify, defend and save harmless the Trustee for any
loss, liability or expense incurred by it as Successor
Servicer which is not otherwise reimbursed hereunder,
except to the extent such loss, liability or expense is
due to its negligence or bad faith as Successor Servicer.
The obligations of the Servicer and the Trans-
feror under this Section 11.5, Section 7.4 and Section
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8.4 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 or
national banking association organized and doing business
under the laws of the United States of America or any
state thereof authorized under such laws to exercise
corporate trust powers, having a combined capital and
surplus of at least $50,000,000, a rating as to its long-
term unsecured debt obligations of at least Baa3 by
Moody's and BBB- by Standard & Poor's 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 provi-
sions 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
within 30 days after the giving of such notice of resig-
nation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor
trustee.
124
(b) If at any time the Trustee shall cease to
be eligible in accordance with the provisions of Section
11.6 hereof and shall fail to resign after written re-
quest 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 Trust-
ee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the
Transferor may, but shall not be required to, remove the
Trustee and promptly appoint a successor trustee by
written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed
and one copy to the successor trustee and shall promptly
pay all fees owed to the outgoing Trustee.
(c) Any resignation or removal of the Trustee
and appointment of a successor trustee pursuant to any of
the provisions of this Section 11.7 shall not become
effective until acceptance of appointment by the succes-
sor trustee as provided in Section 11.8 hereof and pay-
ment of all fees and expenses owed to the outgoing Trust-
ee. Any such 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 provid-
ed in Section 11.7 hereof shall execute, acknowledge and
deliver to the Transferor and to its predecessor Trustee
an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor
Trustee shall become effective and such successor trust-
ee, 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 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.
125
(b) No successor trustee shall accept appoint-
ment as provided in this Section 11.8 unless at the time
of such acceptance such successor trustee shall be eligi-
ble under the provisions of Section 11.6 hereof and shall
be an Eligible Servicer.
(c) Upon acceptance of appointment by a suc-
cessor trustee as provided in this Section 11.8 hereof,
such successor trustee shall mail notice of such succes-
sion hereunder to each Rating Agency assigning a rating
for any class of Investor Certificates of any then out-
standing Series 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 of the Agreement.
Section 11.9 Merger or Consolidation of Trustee.
Any Person into which the Trustee may be merged or
converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or ▇▇▇▇▇▇▇-
dation to which the Trustee shall be a party, or any
Person succeeding to all or substantially all the corpo-
rate trust business of the Trustee, shall be the succes-
sor of the Trustee hereunder, provided such Person shall
be eligible under the provisions of Section 11.6 hereof,
without the execution or filing of any paper or any
further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
Section 11.10 Appointment of Co-Trustee or
Separate Trustee.
(a) Notwithstanding any other provision of
this Agreement or any Supplement, at any time, for the
purpose of meeting any legal requirements of any juris-
diction 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 Per-
sons 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 Certificatehold-
ers, 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
126
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 hereof.
(b) Every separate trustee and co-trustee
shall, to the extent permitted by law, be appointed and
act subject to the following provisions and conditions:
(i) all rights, powers, duties
and obligations conferred or imposed upon the
Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such
separate trustee or co-trustee jointly (it
being understood that such separate trustee or
co-trustee is not authorized to act separately
without the Trustee joining in such act), ex-
cept 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 here-
under), 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 ap-
pointed 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 effec-
tively 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
127
the estates or property specified in its instrument of
appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all
the provisions of this Agreement or any Supplement,
specifically including every provision of this Agreement
or any Supplement relating to the conduct of, affecting
the 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.
In no event shall the Trustee, the Paying Agent or the
Servicer be liable for any liabilities, costs or expenses
of the Trust, the Investor Certificateholders or the
Certificate Owners arising under any tax law, including
without limitation, Federal, state, local or foreign
income or excise taxes or any other tax imposed on or
measured by income (or any interest or penalty with
respect thereto or arising from a failure to comply
therewith), except to the extent that such tax is imposed
as a result of a violation by such Person of the provi-
sions of this Agreement or any Supplement.
128
(b) The Trustee and each Paying Agent shall
comply with all Federal withholding requirements respect-
ing payments to Investor Certificateholders or persons
receiving funds from the Trust that the Trustee reason-
ably believes are applicable under the Code. In the
event the Trustee or Paying Agent does withhold any
amount from interest, principal, or other payments pursu-
ant to Federal withholding requirements, the Trustee or
Paying Agent shall indicate the amount withheld in writ-
ing 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 compen-
sation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable
benefit of the Certificateholders in respect of which
such judgment has been obtained.
Section 11.13 Suits for Enforcement. If a Servicer Default
shall occur and be continuing, the Trustee, in its dis-
cretion 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 perfor-
▇▇▇▇▇ 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.
Seciton 11.14 Rights of Certificateholders to Direct
Trustee. Holders of Investor Certificates evidencing
Undivided Interests aggregating more than 50% of the
Invested Amount of any Series affected by the conduct of
any proceeding or the exercise of any right conferred on
129
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 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 Agree-
ment 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 corpora-
tion, organized, existing and in good standing
under the laws of the United States;
(ii) The Trustee has full pow-
er, authority and right to execute, deliver and
perform this Agreement and any Supplement, and
has taken all necessary action to authorize the
execution, delivery and performance by it of
this Agreement and any Supplement; and
(iii) This Agreement and any
Supplement has been duly executed and delivered
by the Trustee, and assuming due execution and
delivery by the other parties thereto consti-
tutes a legal, valid and binding obligation of
the Trustee enforceable against the Trustee in
accordance with its terms.
Section 11.16 Maintenance of Office or Agency. If so
specified in any Supplement, the Trustee will maintain at
its expense in the Borough of Manhattan, The City of New
York, an office or offices or agency or agencies where
notices and demands to or upon the Trustee in respect of
the Certificates and this Agreement may be served. The
130
address of such office or agency will be specified in the
related Supplement. 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 Certifi-
cateholders of any change in the location of the Certifi-
cate Register or any such office or agency, as
applicable.
(END OF ARTICLE XI)
131
ARTICLE XII
TERMINATION
Section 12.1 Termination of Trust.
(a) The respective obligations and responsi-
bilities 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 de-
scribed in Sections and subsections 2.4(c), 7.4, 8.4,
11.5 and 12.3(b), upon the earlier of (i) the latest
Stated Series Termination Date for all Series outstanding
or (ii) August 14, 2096 (the "Final Termination Date").
(b) If on the Distribution Date in the month
immediately preceding the month in which the Final Termi-
nation 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 Certifi-
▇▇▇▇▇ 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 on or prior to the succeeding
Distribution Date all of the Receivables in a commer-
cially 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, howev-
er, 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.
132
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 on any Distribution Date the Transferor may,
but shall not be obligated to, purchase any such Series
of Investor Certificates by depositing into the Collec-
tion Account, on the Distribution Date, an amount equal
to the Invested Amount thereof plus interest accrued and
unpaid thereon at the applicable Certificate Rate through
the interest accrual period related to such Distribution
Date on which the purchase will be made; provided, howev-
er that no such purchase of any Series of Investor Cer-
tificates shall occur unless the Transferor shall deliver
to the Trustee and each Rating Agency assigning a rating
for any class of Investor Certificates of any then out-
standing Series an Opinion of Counsel reasonably accept-
able to the Trustee that such purchase of any Series of
Investor Certificates would not constitute a fraudulent
conveyance of the Transferor. 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 subsec-
tion 12.2(a) of the Agreement shall be paid to the Inves-
tor 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 subsection
12.2(a) of the Agreement shall be delivered by the Trans-
feror upon such purchase to, and be cancelled by, the
Transfer Agent and Registrar and be disposed of in a
manner satisfactory to the Trustee and the 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 a Supplement, in the event that the Invested Amount or
any Enhancement Invested Amount of any Series of Certifi-
▇▇▇▇▇ is greater than zero on its Stated Series Termina-
tion Date (after giving effect to all transfers, with-
drawals, deposits and drawings to occur on such date and
the payment of principal to be made on such Series on
such date), the Trustee will sell or cause to be sold,
and pay the proceeds to all Certificateholders of such
133
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 Percent-
age, (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 com-
mercially reasonable manner and on commercially reason-
able terms which shall include the solicitation of com-
petitive 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 Affili-
ate shall have the right to match any bid by a third
Person and be granted the right to purchase the Receiv-
▇▇▇▇▇ 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 of the Agreement.
Section 12.3 Final Payment with Respect to any Series.
(a) Written notice of any termination, speci-
fying the Distribution Date upon which the Investor
Certificateholders of any Series may surrender their
Certificates for payment of the final distribution with
respect to such Series and cancellation, shall be given
(subject to at least two Business Days' prior notice from
the Servicer to the Trustee) by the Trustee to Investor
Certificateholders of such Series mailed not later than
the fifth day of the month of such final distribution (or
134
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 or subsection 12.2(a) of the Agreement) upon
which final payment of such Investor Certificates will be
made upon presentation and surrender of such Investor
Certificates at the office or offices therein designated,
(which, in the case of Bearer Certificates, shall be
outside the United States), (b) the amount of any such
final payment and (c) that the Record Date otherwise
applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender
of the Investor Certificates at the office or offices
therein specified. The Servicer's notice to the Trustee
in accordance with the preceding sentence shall be accom-
panied by an Officer's Certificate setting forth the
information specified in the applicable Supplement cover-
ing the period during the then current calendar year
through the date of such notice and setting forth the
date of such final distribution. The Trustee shall give
such notice to the Transfer Agent and Registrar and the
Paying Agent at the time such notice is given to such
Investor Certificateholders.
(b) Notwithstanding the termination of the
Trust pursuant to subsection 12.1(a) of the Agreement or
the occurrence of the Stated Series Termination Date with
respect to any Series pursuant to Section 12.2 of the
Agreement, all funds then on deposit in the Collection
Account shall continue to be held in trust for the bene-
fit 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 cancel-
lation within six months after the date specified in the
above-mentioned notice, the Trustee shall give a second
135
written notice (or in the case of Bearer Certificates,
publication notice) to the remaining Investor Certifi-
cateholders of such Series upon receipt of the appropri-
ate 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 appro-
priate steps, or may appoint an agent to take appropriate
steps, to contact the remaining Investor Certificatehold-
ers of such Series concerning surrender of their Certifi-
▇▇▇▇▇, and the cost thereof shall be paid out of the
funds in the Collection Account held for the benefit of
such Investor Certificateholders.
(c) All Certificates surrendered for payment
of the final distribution with respect to such Certifi-
▇▇▇▇▇ and cancellation shall be cancelled by the Transfer
Agent and Registrar and be disposed of in a manner satis-
factory 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
Trustee shall return to the Transferor (without recourse,
representation or warranty) all right, title and interest
of the Trust in the Receivables, whether then existing or
thereafter created, and all monies due or to become due
with respect thereto, all proceeds thereof except for
amounts held by the Paying Agent pursuant to subsection
12.3(b). The Trustee shall execute and deliver such
instruments of transfer and assignment, in each case
without recourse, as shall be reasonably requested by the
Transferor to vest in itself all right, title and inter-
est which the Trust had in the applicable Receivables and
the Trustee shall be entitled to receive and rely conclu-
sively upon an Opinion of Counsel as to its execution and
delivery of such instruments being in compliance here-
with.
(END OF ARTICLE XII)
136
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 Inves-
tor Certificateholders, to cure any ambiguity, to correct
or supplement any provisions herein which may be incon-
sistent with any other provisions herein or to add any
other provisions with respect to matters or questions
raised under this Agreement which shall not be inconsis-
tent with the provisions of this Agreement, including any
matters arising under subsection 2.5(d) of the Agreement
necessary to effect the conveyance contemplated thereun-
der; provided, however, that such action shall not ad-
versely affect in any material respect the interests of
any of the Investor Certificateholders. Additionally,
this Agreement and any Supplement may be amended from
time to time by the Servicer, the Transferor and the
Trustee, without the consent of any of the Certificate-
holders, 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 neces-
sary to comply with the Bearer Rules. Prior to executing
any amendment in accordance with this subsection 13.1(a),
the Trustee shall receive and shall be permitted to rely
upon an Opinion of Counsel to the effect that the condi-
tions and requirements of this subsection 13.1(a) have
been satisfied. The Transferor shall deliver prior writ-
ten notice of any amendment pursuant to this subsection
13.1(a) to each Rating Agency assigning a rating for any
137
class of Investor Certificates of any then outstanding
Series.
(b) This Agreement and any Supplement may also
be amended from time to time by the Servicer, the Trans-
feror and the Trustee, without the consent of any of the
Certificateholders, for the purpose of adding any provi-
sions to or changing in any manner or eliminating any of
the provisions of this Agreement, or of modifying, in any
manner the rights of the Holders of Investor Certifi-
▇▇▇▇▇; provided that (i) the Servicer shall have provided
an Opinion of Counsel to the Trustee to the effect that
such amendment will not materially and adversely affect
the interests of the Investor Certificateholders of any
outstanding Series, 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 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 or a publicly traded partner-
ship taxable as a corporation or otherwise have any
material adverse impact on the Federal income tax charac-
terization of any outstanding Series of Investor Certifi-
▇▇▇▇▇ or the Federal income taxation of any Investor
Certificateholder or any Certificate Owner and (iii) each
Rating Agency assigning a rating for any class of Invest-
or Certificates of any then outstanding Series shall con-
firm that such amendment shall not cause a reduction or
withdrawal of the rating of any outstanding Series of
Certificates; provided, further, that such amendment
shall not reduce in any manner the amount of, or delay
the timing of, distributions which are required to be
made on any Investor Certificate of such Series without
the consent of the related Investor Certificateholder,
change the definition of or the manner of calculating the
interest of any Investor Certificateholder of such Series
without the consent of the related Investor Certificate-
holder or reduce the aforesaid percentage required to
consent to any such amendment, in each case without the
consent of all such Investor Certificateholders.
(c) This Agreement and any Supplement may also
be amended from time to time by the Servicer, the Trans-
feror and the Trustee with the consent of the Holders of
138
Investor Certificates evidencing Undivided Interests
aggregating not less than 66-2/3% of the Invested Amount
of all Series adversely affected, for the purpose of
adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or
modifying in any manner the rights of the Investor Cer-
tificateholders of any Series then issued and outstand-
ing; 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 In-
vested Amount, the Invested Percentage, the applicable
available amount under any Enhancement or the Investor
Default Amount of such Series without the consent of each
related Investor Certificateholders or (iii) reduce the
aforesaid percentage required to consent to any such
amendment, without the consent of each related Investor
Certificateholder. Any amendment pursuant to this sub-
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 or consent 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 Agreement) of the substance of such amendment
to each Investor Certificateholder, and the Servicer
shall furnish written notification of the substance of
such amendment to any related Enhancement Provider and
each Rating Agency assigning a rating for any class of
Investor Certificates of any then outstanding Series.
(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 authoriza-
tion of the execution thereof by Investor Certificate-
holders shall be subject to such reasonable requirements
as the Trustee may prescribe.
(f) Any Assignment or Reassignments regarding
the addition to or removal of Receivables from the Trust
respectively, as provided in Sections 2.6 and 2.7, re-
139
spectively, of the Agreement executed in accordance with
the provisions hereof shall not be considered amendments
to this Agreement, including, without limitation, for the
purpose of subsections 13.1(a), (b), (c) and (g) of the
Agreement.
(g) Prior to the execution of any amendment to
the Agreement, the Trustee shall be entitled to receive
and rely upon an Opinion of Counsel substantially in the
form of Part Two of Exhibit G. The Trustee may, but
shall not be obligated to enter into any such amendment
which affects the Trustee's own rights, duties or immuni-
ties under the Agreement or otherwise.
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 financ-
ing statements, amendments and continuation statements
and any other necessary documents covering the right,
title and interest of the Trust in the property conveyed
hereunder to be promptly recorded, registered and filed,
and at all times to be kept recorded, registered and
filed, all in such manner and in such places as may be
required by law fully to preserve and protect the right,
title and interest of the Trustee hereunder to all prop-
erty comprising the Trust. The Servicer shall deliver to
the Trustee file-stamped copies of, or filing receipts
for, any document recorded, registered or filed as pro-
vided above, as soon as available following such record-
ing, registration or filing. The Transferor shall coop-
erate fully with the Servicer in connection with the
obligations set forth above and will execute any and all
documents reasonably required to fulfill the intent of
this subsection 13.2(a).
(b) Within 30 days after the Transferor makes
any change in its name, identity or corporate structure
which would make any financing statement, amendment or
continuation statement filed in accordance with paragraph
(a) above seriously misleading within the meaning of
Section 9-402(7) of the UCC as in effect in the Relevant
UCC State, the Transferor shall give the Trustee notice
of any such change and shall file such financing state-
ments, amendments or continuation statements as may be
necessary to continue the perfection of the Trust's
interest in the property conveyed hereunder.
140
(c) The Transferor and the Servicer will give
the Trustee prompt written notice of any relocation of
any office from which the Servicer services Receivables
or keeps records concerning the Receivables or of its
principal executive office and whether, as a result of
such relocation, the applicable provisions of the UCC
would require the filing of any amendment of any previ-
ously filed financing or continuation statement or of any
new financing statement and shall file such financing
statements, continuation statements or amendments as may
be necessary to continue the perfection of the Trust's
security interest in the Receivables and the proceeds
thereof notwithstanding any relocation of any office from
which the Servicer services Receivables or keeps records
concerning the Receivables or of its principal executive
office. The Servicer will at all times maintain each
office from which it services Receivables, and the Trans-
feror and the Servicer will at all times maintain their
respective principal executive offices within the United
States of America.
(d) The Servicer will deliver to the Trustee
and each Rating Agency assigning a rating for any class
of Investor Certificates of any then outstanding Series,
on or before April 30 of each year, beginning with 1997
an 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 incapaci-
ty 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 liabil-
ity to any third person by reason of any action taken by
the parties to this Agreement pursuant to any provision
hereof.
141
(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 Certifi-
▇▇▇▇▇ 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 re-
quest 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 liabili-
ties 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 Certificate-
holder and the Trustee, that no one or more Certificate-
holders shall have the right in any manner whatever by
virtue or by availing itself or themselves of any provi-
sions 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 pro-
tection 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
Colorado, including the UCC as in effect in the State of
Colorado, without reference to its conflict of law provi-
sions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with
such laws.
Section 13.5 Notices. All demands, notices and
communications hereunder shall be in writing and shall be
deemed to have been duly given if sent by facsimile
transmission to the telephone number designated by the
142
receiving party and confirmed by personal delivery or
overnight delivery, to (a) in the case of the Transferor
and the Servicer, to Nordstrom National Credit Bank,
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, telecopy number (303) 397-
4775, (b) in the case of the Trustee, to Norwest Bank
Colorado, National Association, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust and Escrow
Services, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇, (c) in the case
of any Enhancement Provider for a particular Series, the
address, if any, specified in the Supplement relating to
such Series, and (d) in the case of the Rating Agency for
a particular Series, the address, if any, specified in
the Supplement relating to such Series; or, as to each
party, at such other address as shall be designated by
such party in a written notice to each other party. Any
notice required or permitted to be mailed to a Certifi-
cateholder 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 Certifi-
▇▇▇▇▇ 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 ▇▇▇▇▇-
▇▇▇▇▇) 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 practica-
ble, elsewhere in Europe.
In case by reason of the suspension of publica-
tion 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 consti-
tute sufficient notice to such Holders for every purpose
hereunder. Neither the failure to give notice by publi-
cation to Holders of Bearer Certificates as provided
above, nor any defect in any notice so published, shall
143
affect the sufficiency of any notice mailed to Holders of
Registered Certificates as provided above.
Section 13.6 Severability of Provisions. If any one or
more of the covenants, agreements, provisions or terms of
this Agreement shall for any reason whatsoever be held
invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this
Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement
or of the Certificates or rights of the Certificatehold-
ers thereof.
Section 13.7 Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Section
7.2, 7.5, 8.2 and 8.5, this Agreement, including any Sup-
plement, 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.
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 whatso-
ever, 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 instru-
ments required or reasonably requested by the Trustee
more fully to effect the purposes of this Agreement
including, without limitation, the execution of any
financing statements or continuation statements relating
to the property of the Trust for filing under the provi-
sions of the UCC of the Relevant UCC State.
Section 13.10 No Waiver; Cumulative Remedies. No failure
to exercise and no delay in exercising, on the part of
the Trustee or the Investor Certificateholders, any
right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or
144
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.
Seciton 13.11 Counterparts. This Agreement and any
Supplement may be executed in two or more counterparts
(and by different parties on separate counterparts), each
of which shall be an original, but all of which together
shall constitute one and the same instrument.
Section 13.12 Third-Party Beneficiaries. This Agreement
and any Supplement will inure to the benefit of and be
binding upon the parties hereto, the Certificateholders
and the Certificate Owners and their respective
successors and permitted assigns. Except as otherwise
provided in this Agreement, no other person will have any
right or obligation hereunder; provided, however, that if
so specified in the applicable Supplement, an Enhancement
Provider may be deemed to be a third party beneficiary of
this Agreement.
Seciton 13.13 Actions by Certificateholders.
(a) Wherever in this Agreement or any Supple-
ment a provision is made that an action may be taken or a
notice, demand or instruction given by Investor Certifi-
cateholders, such action, notice or instruction may be
taken or given by any Investor Certificateholder of any
Series, unless such provision requires a specific per-
centage of Investor Certificateholders of a certain
Series or all Series.
(b) Any request, demand, authorization, direc-
tion, notice, consent, waiver or other act by a Certifi-
cateholder 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
145
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 supple-
mented 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 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 certifi-
cate 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 accoun-
tants 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,
146
certificates, statements, opinions or other instruments
hereunder, they may, but need not, be consolidated and
form one instrument.
Section 13.17 Nonpetition Covenant. 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.
147
IN WITNESS WHEREOF, the Transferor, the
Servicer and the Trustee have caused this Pooling and
Servicing Agreement to be duly executed by their respec-
tive officers as of the day and year first above written.
NORDSTROM NATIONAL CREDIT BANK,
as Transferor and Servicer
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President, CEO
NORWEST BANK COLORADO,
NATIONAL ASSOCIATION
as Trustee and Paying Agent
By: /s/ A. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Name: A. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
SCHEDULE 1
LIST OF ACCOUNTS
Delivered to Trustee only
EXHIBIT A
TO THE MASTER POOLING
AND SERVICING AGREEMENT
EXCHANGEABLE TRANSFEROR
CERTIFICATE
THIS CERTIFICATE OR ANY INTEREST HEREIN MAY NOT BE TRANSFERRED, ASSIGNED,
EXCHANGED OR CONVEYED, EXCEPT IN ACCORDANCE WITH SECTIONS 6.3, 6.9 AND 7.2 OF
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
▇▇. ▇-▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ CREDIT CARD MASTER TRUST
EXCHANGEABLE TRANSFEROR CERTIFICATE
This Certificate represents an interest in
the Nordstrom Credit Card Master Trust
Evidencing an undivided interest in a trust, the corpus of which consists of
receivables generated or to be generated in a portfolio of designated VISA
Card and MasterCard credit card accounts.
(Not an interest in or recourse obligation of Nordstrom National Credit Bank
or any of its affiliates)
This certifies that Nordstrom National Credit Bank is the registered owner of
an undivided interest in the Nordstrom Credit Card Master Trust (the "Trust")
issued pursuant to the Master Pooling and Servicing Agreement, dated as of
August 14, 1996 (the "Pooling and Servicing Agreement"; such term to include
any Supplement thereto) by and among Nordstrom National Credit Bank, as
Transferor (in such capacity, the "Transferor"), Nordstrom National Credit
Bank, as Servicer (in such capacity, the "Servicer"), and Norwest Bank
Colorado, National Association, as Trustee (the "Trustee"). The corpus of the
Trust consists of all of the Transferor's right, title and interest in and to
a portfolio of receivables now existing and hereafter created (the
"Receivables") arising under certain credit card accounts from time to time
A-1
owned by the Transferor and identified in the Pooling and Servicing Agreement
(collectively, the "Accounts"), all monies due or to become due with respect
thereto (including Recoveries) on and after the Cut Off Date, all proceeds of
such Receivables, all monies as are from time to time deposited in the
Collection Account and any other account or accounts maintained for the
benefit of the Certificateholders and all monies as are from time to time
available under any Enhancement for any Series for payment to
Certificateholders. The Receivables consist of Receivables which arise
generally from the purchase of merchandise and services, periodic finance
charges, cash advances and cash advance fees, access checks, annual cardholder
fees, credit insurance premiums, late fees, overlimit fees, return check fees
and all other fees and charges, as more fully specified in the Pooling and
Servicing Agreement, including Recoveries on Receivables in Defaulted
Accounts.
Although a summary of certain provisions of the Pooling and Servicing
Agreement is set forth below, this Certificate does not purport to summarize
the Pooling and Servicing Agreement and reference is made to the Pooling and
Servicing Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds, and duties evidenced hereby and the rights,
duties and obligations of the Trustee. A copy of the Pooling and Servicing
Agreement may be requested from the Trustee by writing to the Trustee at ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust and Escrow
Services. To the extent not defined herein capitalized terms used herein have
the meanings ascribed to them in the Pooling and Servicing Agreement.
This Certificate is the Exchangeable Transferor Certificate, which represents
a fractional undivided interest in the Trust including the right to receive
the Collections and other amounts at the times and in the amounts specified in
the Pooling and Servicing Agreement to be paid to the holder of the
Exchangeable Transferor Certificate. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Pooling and Servicing
Agreement, to which Pooling and Servicing Agreement, as amended from time to
time, the holder hereof by virtue of the acceptance hereof assents and by
which the holder hereof is bound.
A-2
This Exchangeable Transferor Certificate represents the Transferor Interest in
the Receivables in the Trust at any time. In addition to the Exchangeable
Transferor Certificate, Investor Certificates will be issued to investors
pursuant to the Pooling and Servicing Agreement, which will represent the
interests of Investor Certificateholders in the Trust. This Certificate shall
not represent any interest in the Collection Account, the Excess Funding
Account or any other account or any Enhancement except as specifically
provided in the Pooling and Servicing Agreement.
The Transferor has entered into the Pooling and Servicing Agreement, and this
Certificate is issued, with the intention that, for Federal, state and local
income and franchise tax purposes, the Investor Certificates (other than those
held by the Transferor) will qualify as indebtedness secured by the
Receivables. The Transferor, by entering into the Pooling and Servicing
Agreement and by the acceptance of the Exchangeable Transferor Certificate,
agrees to treat the Investor Certificates (other than those held by the
Transferor) for Federal, state and local income and franchise tax purposes as
indebtedness.
Subject to certain conditions in the Pooling and Servicing Agreement, the
obligations created by the Pooling and Servicing Agreement and the Trust
created thereby shall terminate upon the earlier of (i) the day following the
date on which funds shall have been deposited in the Collection Account
sufficient to pay the Aggregate Invested Amount 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 and (ii) August 14, 2096.
Upon the termination of the Trust pursuant to Article XII of the Pooling and
Servicing Agreement and the surrender of the Exchangeable Transferor
Certificate, the Trustee shall return to the Transferor (without recourse,
representation or warranty) all right, title and interest of the Trust in the
Receivables, whether then existing or thereafter created, and all proceeds
thereof except for amounts held by the Paying Agent and all other Trust
Property. The Trustee shall execute and deliver such instruments of transfer
and assignment, in each case without recourse, as shall be reasonably
A-3
requested by the Transferor to vest in the Transferor all right, title and
interest which the Trustee had in the applicable Receivables.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement, or be valid
for any purpose.
A-4
IN WITNESS WHEREOF, Nordstrom National Credit Bank has caused this
Exchangeable Transferor Certificate to be duly executed under its official
seal.
NORDSTROM NATIONAL CREDIT BANK
By____________________________
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Exchangeable Transferor Certificate referred to in the within-
mentioned Pooling and Servicing Agreement.
Dated: , NORWEST BANK COLORADO,
NATIONAL ASSOCIATION
as Trustee
By_____________________
Authorized Signatory
A-5
EXHIBIT B
TO THE MASTER POOLING
AND SERVICING AGREEMENT
FORM OF ASSIGNMENT OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS
(As required by Subsection 2.6(c)(ii) of the Master
Pooling and Servicing Agreement)
ASSIGNMENT No. __ OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS, dated as of
_________, ____, from NORDSTROM NATIONAL CREDIT BANK, a national banking
association (the "Transferor"), to NORWEST BANK COLORADO, NATIONAL
ASSOCIATION, a national banking association (the "Trustee") pursuant to the
Master Pooling and Servicing Agreement referred to below.
W I T N E S S E T H:
WHEREAS, Nordstrom National Credit Bank, as Transferor and as Servicer, and
the Trustee are parties to the Master Pooling and Servicing Agreement, dated
as of August 14, 1996, including any Supplement thereto (hereinafter as such
agreement may have been, or may from time to time be, amended, supplemented or
otherwise modified, the "Pooling and Servicing Agreement"); and
WHEREAS, pursuant to the Pooling and Servicing Agreement, the Transferor
wishes to designate Supplemental Accounts to be included as Accounts and to
convey the Receivables of such Supplemental Accounts, whether now existing or
hereafter created, to the Trust as part of the corpus of the Trust (as each
such term is defined in the Pooling and Servicing Agreement); and
WHEREAS, the Trustee is willing to accept such designation and conveyance
subject to the terms and conditions hereof;
NOW THEREFORE, the Transferor and the Trustee hereby agree as follows:
B-1
1. Defined Terms. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to them in the Pooling and Servicing
Agreement.
"Addition Date" shall mean, with respect to the Supplemental Accounts
designated hereby, ____________, ____.
"Addition Cut Off Date" shall mean, with respect to the Supplemental Accounts
designated hereby, __________, ____.
"Supplemental Account Selection Date" shall mean, with respect to the
Supplemental Accounts designated hereby, __________, ____.
2. Designation of Supplemental Accounts. The Transferor shall deliver to
the Trustee on or prior to the Addition Date, a computer file or microfiche
list containing a true and complete list of all Accounts which as of the
Addition Date shall be deemed to be Supplemental Accounts, identified by
account number and by Receivable balance in such Supplemental Accounts as of
the close of business on the Addition Cut Off Date. Such list shall be marked
as Schedule 1 to this Assignment and, as of the Addition Date, shall be
incorporated into and made a part of this Assignment and the Pooling and
Servicing Agreement.
3. Conveyance of Receivables. (a) The Transferor does hereby transfer,
assign, set-over and otherwise convey to the Trust for the benefit of the
Certificateholders, without recourse, on and after the Addition Date, all
right, title and interest of the Transferor in and to the Receivables now
existing and hereafter created in the Supplemental Accounts designated on
Schedule 1, all monies due or to become due with respect thereto on and after
the Addition Cut Off Date and all amounts received with respect thereto,
including all Recoveries related thereto, and all proceeds thereof.
(b) In connection with such transfer, the Transferor agrees to record and
file, at its own expense, financing statements (and continuation statements
with respect to such financing statements when applicable) with respect to the
Receivables now existing and hereafter created in the Supplemental Accounts
B-2
designated on Schedule 1 (which may be a single financing statement with
respect to all such Receivables) for the transfer of accounts and general
intangibles (if necessary) as defined in Section 9-106 of the UCC as in effect
in the Relevant UCC State meeting the requirements of Relevant UCC State law
in such manner and such jurisdictions as are necessary to perfect the
assignment of such Receivables to the Trust, and to deliver a file-stamped
copy of such financing statement or other evidence of such filing (which may,
for purposes of this Section 3, consist of telephone confirmation of such
filing, confirmed within 24 hours in writing) to the Trustee on or prior to
the Addition Date.
(c) In connection with such transfer, the Transferor further agrees, at
its own expense, on or prior to the Addition Date, to indicate clearly and
unambiguously in its computer files that Receivables created in connection
with the Supplemental Accounts designated hereby have been transferred to the
Trust pursuant to this Assignment for the benefit of Certificateholders.
4. Acceptance by Trustee. Subject to the satisfaction of the conditions
set forth in Section 6 of this Assignment, the Trustee hereby acknowledges its
acceptance on behalf of the Trust of all right, title and interest previously
held by the Transferor in and to the Receivables now existing and hereafter
created, and declares that it shall maintain such right, title and interest,
upon the trust herein set forth, for the benefit of all Certificateholders and
any Enhancement Provider. The Trustee further acknowledges that, prior to or
simultaneously with the execution and delivery of this Assignment, the
Transferor delivered to the Trustee the computer file or microfiche list
described in Section 2 of this Assignment.
5. Representations and Warranties of the Transferor. The Transferor hereby
represents and warrants to the Trust as of the Addition Date that:
(a) Legal, Valid and Binding Obligation. This Assignment constitutes a
legal, valid and binding obligation of the Transferor, enforceable against the
Transferor in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
B-3
in effect affecting the enforcement of creditors' rights in general and the
rights of creditors of national banking associations and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(b) Eligibility of Accounts. Each Supplemental Account designated hereby
was, as of the Supplemental Account Selection Date, an Eligible Account.
(c) Selection Procedures. No selection procedures believed by the
Transferor to be materially adverse to the interests of any Series of Investor
Certificates or any Enhancement Provider were utilized in selecting the
Supplemental Accounts designated hereby from the available Eligible Accounts
in the Transferor's portfolio of credit card accounts.
(d) Insolvency. The Transferor is not insolvent and, after giving effect
to the conveyance set forth in Section 3 of this Assignment, will not be
insolvent.
(e) Security Interest. This Assignment constitutes either (i) a valid
transfer and assignment to the Trust of all right, title and interest of the
Transferor in and to the Receivables now existing and hereafter created in
Supplemental Accounts designated on Schedule 1 hereto, all monies due or to
become due with respect thereto on and after the Addition Cut Off Date,
Recoveries and all proceeds (as defined in the UCC as in effect in the
Relevant UCC State) of such Receivables, and such Receivables and all proceeds
thereof will be held by the Trust free and clear of any Lien of any Person
except for (x) Liens permitted under subsection 2.5(b) of the Pooling and
Servicing Agreement, (y) the interest of the holder of the Exchangeable
Transferor Certificate and (z) any right of the holder of the Exchangeable
Transferor Certificate to receive interest accruing on, and investment
earnings with respect to, the Collection Account, the Excess Funding Account
and any other account or accounts maintained for the benefit of
Certificateholders as provided in the Pooling and Servicing Agreement and any
Supplement; or (ii) a grant of a security interest (as defined in the UCC as
in effect in the Relevant UCC State) in such property to the Trustee on behalf
of the Trust, which is enforceable with respect to the existing Receivables of
B-4
the Supplemental Accounts designated on Schedule 1 hereto, and the proceeds
thereof (to the extent set forth in Section 9-306 of the UCC as in effect in
the Relevant UCC State) upon the conveyance of such Receivables to the Trust,
and which will be enforceable with respect to the Receivables thereafter
created in respect of Supplemental Accounts designated on Schedule 1 hereto
and the proceeds thereof to such extent, upon such creation; and (iii) if this
Assignment constitutes the grant of a security interest to the Trust in such
property, upon the filing of financing statements described in Section 3 of
this Assignment with respect to the Supplemental Accounts designated hereby
and in the case of the Receivables of such Supplemental Accounts thereafter
created and the proceeds thereof upon such creation, the Trust shall have a
first priority perfected security interest in such property and the proceeds
thereof (to the extent set forth in Section 9-306 of the UCC as in effect in
the Relevant UCC State), except for Liens permitted under subsection 2.5(b) of
the Pooling and Servicing Agreement.
6. Conditions Precedent. The acceptance of the Trustee set forth in
Section 4 and the amendment of the Pooling and Servicing Agreement set forth
in Section 7 are subject to the satisfaction, on or prior to the Addition
Date, of the following conditions precedent:
(a) Officer's Certificate. The Transferor shall have delivered to the
Trustee an Officer's Certificate dated as of the Addition Date, certifying
that (i) all requirements set forth in Section 2.6 of the Pooling and
Servicing Agreement for designating Supplemental Accounts and conveying the
Receivables of such Accounts, whether now existing or hereafter created, have
been satisfied and (ii) each of the representations and warranties made by the
Transferor in Section 5 is true and correct as of the Addition Date. 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.
(b) Opinion of Counsel. The Transferor shall have delivered to the
Trustee and each Rating Agency assigning a rating for any class of Investor
Certificates of any then outstanding Series an Opinion of Counsel with respect
to the Receivables in the Supplemental Accounts designated hereby
B-5
substantially in the form of Part One of Exhibit G to the Pooling and
Servicing Agreement.
7. Amendment of the Pooling and Servicing Agreement. The Pooling and
Servicing Agreement is hereby amended to provide that all references therein
to the "Pooling and Servicing Agreement," to "this Agreement" and "herein"
shall be deemed from and after the Addition Date to be a dual reference to the
Pooling and Servicing Agreement as supplemented by this Assignment. Except as
expressly amended hereby, all of the representations, warranties, terms,
covenants and conditions of the Pooling and Servicing Agreement shall remain
unamended and shall continue to be, and shall remain, in full force and effect
in accordance with its terms and except as expressly provided herein shall not
constitute or be deemed to constitute a waiver of compliance with or a consent
to non-compliance with any term or provision of the Pooling and Servicing
Agreement.
8. Counterparts. This Assignment may be executed in two or more
counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
B-6
IN WITNESS WHEREOF, the undersigned have caused this Assignment of Receivables
in Supplemental Accounts to be duly executed and delivered by their respective
duly authorized officers on the day and year first above written.
NORDSTROM NATIONAL CREDIT BANK
as Transferor of the
Supplemental Accounts
By____________________________
Name:
Title:
NORWEST BANK COLORADO,
NATIONAL ASSOCIATION
as Trustee and Paying Agent
By___________________________
Name:
Title:
B-7
Schedule 1
to Assignment of
Receivables in
Supplemental Accounts
SUPPLEMENTAL ACCOUNTS
B-8
EXHIBIT C
TO THE MASTER POOLING
AND SERVICING AGREEMENT
FORM OF REASSIGNMENT OF RECEIVABLES
(As required by Section 2.7(b)(i) of the
Master Pooling and Servicing Agreement)
REASSIGNMENT No. __ OF RECEIVABLES, dated as of _________, ____, between
NORDSTROM NATIONAL CREDIT BANK, a national banking association, and NORWEST
BANK COLORADO, NATIONAL ASSOCIATION, a national banking association (the
"Trustee"), pursuant to the Master Pooling and Servicing Agreement referred to
below.
W I T N E S S E T H:
WHEREAS, Nordstrom National Credit Bank, as transferor (the "Transferor") and
as servicer, and the Trustee are parties to the Master Pooling and Servicing
Agreement, dated as of August 14, 1996, including any Supplement (hereinafter
as such agreement may have been, or may from time to time be, amended,
supplemented or otherwise modified, the "Pooling and Servicing Agreement");
and
WHEREAS, pursuant to the Pooling and Servicing Agreement, the Transferor
wishes to remove all Receivables from certain designated Accounts (the
"Removed Accounts") and to cause the Trustee to quitclaim the Receivables of
such Removed Accounts, whether now existing or hereafter created, from the
Trust to the Transferor (as each such term is defined in the Pooling and
Servicing Agreement); and
WHEREAS, the Trustee is willing to accept such designation and to quitclaim
the Receivables in the Removed Accounts subject to the terms and conditions
hereof;
NOW THEREFORE, the Transferor and the Trustee hereby agree as follows:
C-1
1. Defined Terms. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to them in the Pooling and Servicing
Agreement.
"Removal Date" shall mean, with respect to the Removed Accounts designated
hereby, ____________, ____.
"Removal Notice Date" shall mean, with respect to the Removed Accounts
designated hereby, _________, _____ (which shall be a date on or prior to the
fifth Business Day prior to the Removal Date).
2. Designation of Removed Accounts. The Transferor shall deliver to the
Trustee herewith, a computer file or microfiche list containing a true and
complete list of each Account which as of the Removal Date shall be deemed to
be a Removed Account, such Accounts being identified by account number and by
the aggregate balance of the Receivables in such Removed Accounts as of the
Removal Notice Date. Such list shall be marked as Schedule 1 to this
Reassignment and shall be incorporated into and made a part of this
Reassignment and the Pooling and Servicing Agreement as of the Removal Date.
3. Conveyance of Receivables. The Trustee does hereby quitclaim to the
Transferor, without recourse or representation on and after the Removal Date,
all right, title and interest of the Trust in and to the Receivables now
existing and hereafter created in the Removed Accounts designated on Schedule
1, all monies due or to become due and all amounts received with respect
thereto, including all Recoveries related thereto, and all proceeds thereof.
(a) In connection with such transfer, the Trustee agrees to execute and
deliver to the Transferor on or prior to the date of this Reassignment, a
termination statement with respect to the Receivables now existing and
hereafter created in the Removed Accounts designated hereby (which may be a
single termination statement with respect to all such Receivables) evidencing
the release by the Trust of its lien on the Receivables in the Removed
Accounts, and meeting the requirements of applicable state law, in such manner
and such jurisdictions as are necessary to remove such lien. The Transferor
shall be responsible for filing any such termination statement and the Trustee
C-2
shall have no responsibility to see to any recording or filing of any such
termination statement.
4. Acceptance by Trustee. The Trustee hereby acknowledges that, prior to
or simultaneously with the execution and delivery of this Reassignment, the
Transferor delivered to the Trustee the computer file or microfiche list
represented by the Transferor to be as described in Section 2 of this
Reassignment.
5. Representations and Warranties of the Transferor. The Transferor hereby
represents and warrants to the Trust as of the Removal Date:
(a) Legal, Valid and Binding Obligation. This Reassignment constitutes a
legal, valid and binding obligation of the Transferor, enforceable against the
Transferor in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect affecting the enforcement of creditors' rights in general and the
rights of creditors of national banking associations and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity); and
(b) Selection Procedures. No selection procedures believed by such
Transferor to be materially adverse to the interests of any outstanding Series
of Investor Certificates or any Enhancement Provider were utilized in
selecting the Removed Accounts designated hereby.
6. Conditions Precedent. The amendment of the Pooling and Servicing
Agreement set forth in Section 7 hereof is subject to the satisfaction, on or
prior to the Removal Date, of the following condition precedent:
(a) Officer's Certificate. The Transferor shall have delivered to the
Trustee and the Rating Agencies an Officer's Certificate certifying that (i)
on the Removal Date, all requirements set forth in Section 2.7 of the Pooling
and Servicing Agreement for designating Removed Accounts and reconveying the
Receivables of such Removed Accounts, whether now existing or hereafter
created, have been satisfied, and (ii) each of the representations and
warranties made by the Transferor in Section 5 hereof is true and correct as
C-3
of the Removal Date. 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.
7. Amendment of the Pooling and Servicing Agreement. The Pooling and
Servicing Agreement is hereby amended to provide that all references therein
to the "Pooling and Servicing Agreement," to "this Agreement" and "herein"
shall be deemed from and after the Removal Date to be a dual reference to the
Pooling and Servicing Agreement as supplemented by this Reassignment. Except
as expressly amended hereby, all of the representations, warranties, terms,
covenants and conditions of the Pooling and Servicing Agreement shall remain
unamended and shall continue to be, and shall remain, in full force and effect
in accordance with its terms and except as expressly provided herein shall not
constitute or be deemed to constitute a waiver of compliance with or a consent
to non-compliance with any term or provision of the Pooling and Servicing
Agreement.
8. Counterparts. This Reassignment may be executed in two or more
counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
C-4
IN WITNESS WHEREOF, the undersigned have caused this Reassignment of
Receivables to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
NORDSTROM NATIONAL CREDIT BANK
as Transferor
By____________________________
Name:
Title:
NORWEST BANK COLORADO,
NATIONAL ASSOCIATION
as Trustee and Paying Agent
By___________________________
Name:
Title:
C-5
Schedule 1
to Reassignment
of Receivables
REMOVED ACCOUNTS
C-6
EXHIBIT D
TO THE MASTER POOLING
AND SERVICING AGREEMENT
FORM OF SERIES CLOSING DATE REPORT
NORDSTROM NATIONAL CREDIT BANK
_______________________________________
NORDSTROM CREDIT CARD MASTER TRUST
_______________________________________
The undersigned, duly authorized representative of Nordstrom National Credit
Bank, as Servicer (the "Servicer") pursuant to the Master Pooling and
Servicing Agreement dated as of August 14, 1996, by and among Nordstrom
National Credit Bank, as Transferor and as Servicer, and Norwest Bank
Colorado, National Association, as trustee (the "Trustee"), does hereby
certify to the best of his or her knowledge after reasonable investigation
that:
1. The Servicer is as of the date hereof the Servicer under the Pooling and
Servicing Agreement. Capitalized terms used in this Certificate have their
respective meanings set forth in the Pooling and Servicing Agreement.
2. The undersigned is duly authorized pursuant to the Pooling and Servicing
Agreement to execute and deliver this certificate to the Trustee.
3. This certificate is delivered pursuant to Section 3.4(a) of the Pooling
and Servicing Agreement.
4. The Aggregate Principal Receivables as of the end of the day two
Business Days preceding the Closing Date for Series ____ was $ .
D-1
5. The Transferor Amount and the Excluded Receivables Balance as of the end
of the day two Business Days preceding the Closing Date for Series ____ were
$________ and $________, respectively, and the Transferor Percentage as of
such date was ____%.
6. The Transferor Percentage after giving effect to the issuance of the
Investor Certificates of Series ____ is expected to be not less than __%.
IN WITNESS WHEREOF, the undersigned, a duly authorized officer of the
Servicer, has duly executed this Certificate this day of , .
NORDSTROM NATIONAL CREDIT BANK
as Servicer
By:_____________________
Name:
Title:
D-2
EXHIBIT E
TO THE MASTER POOLING
AND SERVICING AGREEMENT
FORM OF MONTHLY SERVICER'S CERTIFICATE
NORDSTROM NATIONAL CREDIT BANK
_______________________________________
NORDSTROM CREDIT CARD MASTER TRUST ________________________________________
The undersigned, a duly authorized representative of Nordstrom National Credit
Bank ("Nordstrom"), as Servicer pursuant to the Master Pooling and Servicing
Agreement dated as of August 14, 1996 (the "Pooling and Servicing Agreement"),
between Nordstrom, as Transferor and Servicer, and Norwest Bank Colorado,
National Association, as Trustee, does hereby certify as follows:
1. Capitalized terms used in this Officer's Certificate have their
respective meanings set forth in the Pooling and Servicing Agreement.
2. Nordstrom is as of the date hereof the Servicer under the Pooling and
Servicing Agreement.
3. The undersigned is a Servicing Officer.
4. The aggregate amount of Collections processed for preceding Due Period
was equal to $ _____
5. The aggregate amount of Collections of Finance Charge Receivables for
the Due Period was equal to $
6. The aggregate amount of Collections of Principal Receivables for
preceding Due Period was equal to $ _____
E-1
7. The Invested Percentage with respect to Collections of Principal
Receivables on the last day of the preceding Due Period was equal to:
Series %
Series %
etc.
8. The Invested Percentage with respect to Collections of Finance Charge
Receivables on the last day of the preceding Due Period was equal to:
Series %
Series %
etc.
9. The Invested Percentage with respect to Defaulted Receivables on the
last day of the preceding Due Period was equal to:
Series %
Series %
etc.
10. The total amount to be distributed to Investor Certificateholders on
the next succeeding Distribution Date is equal to:
Series $
Series $
etc.
11. The amount to be distributed to Investor Certificateholders on the next
succeeding Distribution Date per $1,000 original principal amount is equal to:
Series $
Series $
etc.
12. The amount of such distribution allocable to principal is equal to:
Series $
Series $
etc.
E-2
13. The amount of such distribution allocable to principal per $1,000
original principal amount is equal to:
Series $
Series $
etc.
14. The amount of such distribution allocable to interest is equal to:
Series $
Series $
etc.
15. The amount of such distribution allocable to interest per $1,000
original principal amount is equal to:
Series $
Series $
etc.
16. The aggregate outstanding balance of Accounts which were as of the last
day of the immediately preceding Due Period delinquent:
30-59 days $ _____
60-89 days $ _____
90-119 days $ _____
120 or more days $ _____
17. The Investor Default Amount for the preceding Due Period is equal to:
Series $
Series $
etc.
18. (a) The amount of Investor Charge-Offs with respect to next succeeding
Distribution Date is equal to:
Series $
Series $
etc.
E-3
(b) The amount of reimbursement of Investor Charge-Offs with respect
to the next succeeding Distribution Date is equal to :
Series $
Series $
etc.
19. The amount of the Investor Monthly Servicing Fee required to be paid on
the next succeeding Distribution Date is equal to:
Series $
Series $
etc.
20. The existing Deficit Controlled [Amortization] [Accumulation] Amount,
if applicable, is equal to:
Series $
Series $
etc.
21. The aggregate amount of Receivables in the Trust at the close of
business on the last day of the preceding Due Period is equal to:
Series $
Series $
etc.
22. The Invested Amount at the close of business on the last day of the
preceding Due Period is equal to:
Series $
Series $
etc.
23. The available amount of any applicable Enhancement is equal to:
Series $
Series $
etc.
E-4
24. The Series Factor as of the end of the related Due Period is equal to:
Series $
Series $
etc.
25. Attached hereto is a true and correct copy of the Monthly
Certificateholder's Statement required to be delivered by the Servicer on the
date of this Officer's Certificate to the Trustee in respect of each Series
outstanding pursuant to the Pooling and Servicing Agreement and the
Supplements thereto.
26. As of the date hereof (no Early Amortization Event with respect to any
Series has occurred during or with respect to the preceding Due Period) (an
Early Amortization Event has occurred with respect to Series).
27. As of the date hereof (i) Nordstrom's short-term certificate of deposit
rating (if any) is ___ by Moody's and ___ by Standard & Poor's( , which in the
case of (Moody's) (Standard & Poor's) is an implied rating) and (ii) Nordstrom
Credit, Inc.'s commercial paper rating (if any) is ___ by Moody's and ___ by
Standard & Poor's( , which in the case of (Moody's) (Standard & Poor's) is an
implied rating).
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this
certificate this day of , .
NORDSTROM NATIONAL CREDIT BANK
as Servicer
By ______________________
Servicing Officer
E-5
EXHIBIT F
TO THE MASTER POOLING
AND SERVICING AGREEMENT
FORM OF ANNUAL SERVICER'S CERTIFICATE
NORDSTROM NATIONAL CREDIT BANK
____________________________________
NORDSTROM CREDIT CARD MASTER TRUST
____________________________________
The undersigned, a duly authorized representative of Nordstrom National Credit
Bank ("Nordstrom"), as Servicer pursuant to the Master Pooling and Servicing
Agreement dated as of August 14, 1996 (the "Pooling and Servicing Agreement"),
between Nordstrom, as Transferor and Servicer, and Norwest Bank Colorado,
National Association, as Trustee, does hereby certify that:
1. Capitalized terms used in this Officer's Certificate have their
respective meanings set forth in the Pooling and Servicing Agreement.
2. Nordstrom is as of the date hereof the Servicer under the Pooling and
Servicing Agreement.
3. The undersigned is duly authorized pursuant to the Pooling and Servicing
Agreement to execute and deliver this Officer's Certificate to the Trustee.
4. This certificate is delivered pursuant to Section 3.5 of the Pooling and
Servicing Agreement.
5. A review of the activities of the Servicer during the calendar year
ended December 31, and of its performance under the Pooling and Servicing
Agreement was made under my supervision.
6. Based on such review, to the best of the undersigned's knowledge, the
Servicer has fully performed all its obligations under the Pooling and
F-1
Servicing Agreement throughout such calendar year and no event which, with the
giving of notice or passage of time or both, would constitute a Servicer
Default has occurred or is continuing except as set forth in paragraph 7
below.
7. The following is a description of each Servicer Default under the
provisions of the Pooling and Servicing Agreement known to me to have been
made during the calendar year ended December 31, ____, which sets forth in
detail the (i) nature of each such Servicer Default, (ii) the action taken by
the Servicer, if any, to remedy each such Servicer Default and (iii) the
current status of each such Servicer Default:
IN WITNESS WHEREOF, the undersigned, a duly authorized officer of the
Servicer, has duly executed this Certificate this ___ day of __________, ____.
By:________________________
Name:
Title:
F-2
EXHIBIT G
TO THE MASTER POOLING
AND SERVICING AGREEMENT
PART ONE
PROVISIONS TO BE INCLUDED IN
OPINION OF COUNSEL TO BE
DELIVERED PURSUANT TO
SUBSECTION 2.6(c)(vi) OF THE
POOLING AND SERVICING AGREEMENT
The opinions set forth below may be subject to certain qualifications,
assumptions, limitations and exceptions taken or made in the opinion of the
Transferor's counsel with respect to similar matters delivered on the Initial
Closing Date. Such counsel may rely as to factual matters on certificates of
officers of the Transferor and the Servicer.
(i) The Assignment has been duly authorized, executed and delivered by the
Transferor and constitutes the valid and legally binding agreement of the
Transferor, enforceable against the Transferor in accordance with its terms
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditor's rights and the rights of creditors of national banking associations
and to general equity principles.
(ii) The provisions of the Pooling and Servicing Agreement are effective to
create, in favor of the Trustee for the benefit of the Holders of the
Certificates, a valid security interest in the Receivables and the proceeds
thereof. Such security interest constitutes a first priority perfected
security interest in such Receivables and the proceeds thereof. No other
security interest of any creditor of the Transferor is equal or prior to the
security interest of the Trustee in such Receivables.
(iii) No filing or other action, other than the filing of a Uniform
Commercial Code financing statement in the recording offices in the Relevant
UCC State is necessary to perfect or maintain the security interest in the
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Receivables and the proceeds thereof, except that (a) appropriate Uniform
Commercial Code continuation statements must be filed within the period of six
months prior to the expiration of five years from the date of the original
filing, (b) if the Transferor changes its name, identity or corporate
structure, appropriate Uniform Commercial Code financing statements must be
filed prior to the expiration of four months after the Transferor changes its
name, identity or corporate structure and (c) if the Transferor changes its
chief executive office or principal place of business to a jurisdiction other
than the State of Delaware, such security interest must be perfected in such
jurisdiction within four months of the date on which the change occurs (or
earlier, if perfection under the laws of such jurisdiction would have
otherwise ceased as set forth in clause (a) above).
PART TWO
PROVISIONS TO BE INCLUDED IN
OPINION OF COUNSEL PURSUANT
TO SUBSECTION 13.1(g)
The counsel rendering this opinion may rely on certificates of officers of the
Servicer as regards factual matters.
(i) The Amendment to the Pooling and Servicing Agreement, attached hereto as
Exhibit A (the "Amendment"), has been duly authorized, executed and delivered
by the Transferor and constitutes the valid and legally binding agreement of
the Transferor, enforceable in accordance with its terms subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditor's
rights and the rights of creditors of national banking associations and to
general equity principles.
(ii) The Amendment has been entered into in accordance with the terms and
provisions of Section 13.1 of the Pooling and Servicing Agreement.
((iii) The Amendment will not materially and adversely affect the interests
of the Investor Certificateholders.)
G-2
EXHIBIT H
TO THE MASTER POOLING
AND SERVICING AGREEMENT
PROVISIONS TO BE INCLUDED
IN ANNUAL OPINION OF COUNSEL
The opinion set forth below, which is to be delivered pursuant to subsection
13.2(d)(iii) of the Pooling and Servicing Agreement, may be subject to certain
qualifications, assumptions, limitations and exceptions taken or made in the
opinion of counsel delivered on the Initial Closing Date with respect to
similar matters .
No filing or other action, other than such filing or action described in such
opinion, is necessary from the date of such opinion through 1 of the
following year to continue the perfected status of the interest of the Trust
in the collateral described in the financing statements referred to in such
opinion.
H-1
EXHIBIT I
TO THE MASTER POOLING
AND SERVICING AGREEMENT
ACCOUNT AGREEMENTS
I-1
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We invite you to apply for Nordstrom Visa card in any of our stores. Within
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NNCB VISA CREDIT APPLICATION
Tell us about yourself
you must be 18 or older and have a bankcard reference to apply
Name: First Middle
Last
Street Address: City
State Zip
If less than one year at current address previous address
Home Phone ( ) Business Phone ( ) Employer
Employer Address City State Zip
Position
How long at current employer_________Annual Income________
Name of nearest Relative Relative's Home Phone ( )
Driver's License or State ID Number/State of Issue
Date of Birth Social Security Number Mother's Maiden Name
Would you like a Personal Identification Number issued with you card?
Yes No
Do you want to add an authorized purchaser to you account?
Name Relationship
Do you have a Nordstrom Account? Yes No Nordstrom Account Number, if known
Tell us about your co-applicant
If you are married, you may apply for a individual account,
please complete the following and have the co-applicant sign below.
Name: First Middle Last
Relation to Applicant
Employer Employer Address City
State Zip Business Phon
Position/Length of Employment Annual Income
Social Security Date of Birth
Mother's Maiden Name
Please sign below
Applicant's Signature Date
Co-Applicant's Signature Date
Schedule B
SAMPLE OFFICIAL STATEMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
(Prepared by DTC - bracketed material may be applicable only to certain issues)
1. The Depository Trust Company ("DTC"), New York, NY, will act as securities
depository for the securities (the "Securities"). The Securities will be
issued as fully registered Security certificate will be issued for
(each issue of) the Securities, (each) in the aggregate principal
amount of such issue, and will be deposited with DTC. (If, however,
the aggregate principal amount of (any) issue exceeds $200 million,
one certificate will be issued with respect to each $200 million of
principal amount and an additional certificate will be issued with
respect to any remaining principal amount of such issue.)
2. DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act to 1934. DTC holds securities that its participants ("Participants")
deposit with DTC. DTC also facilitates the settlement among Participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement
of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations, and
certain other organizations. DTC is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the American
Stock Exchange, Inc., and the National Association of Securities Dealers,
Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks, and trust companies that clear through
or maintain a custodial relationship with a Direct Participant, either directly
or indirectly ("Indirect Participants"). The Rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Securities on DTC's
records. The ownership interest of each actual purchaser of each Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
form DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of
ownership interest in the Securities are to be accomplished by entries made on
the books of Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership interests in
Securities, except in the event that use of the book-entry system for the
Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by
Participants with DTC are registered in the name of DTC's partnership
nominee, Cede & Co. The deposit of Securities with DTC and their
registration in the name of Cede & Co. effect no change in beneficial
ownership. DTC had no knowledge of the actual Beneficial Owners of
the Securities; DTC's records reflect only the identity of the
Direct Participants to whose accounts such Securities are credited,
which may or may not be the Beneficial Owners. The Participants
will remain responsible for keeping account of their holdings on behalf of
their customers.
5. Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
(6. Redemption notices shall be sent to Cede & Co. If less than all of the
Securities within an issue are being redeemed, DTC's practice is to determine
by lot the amount of the interest of each Direct Participant in such issue to
be redeemed.)
-i-
7. Neither DTC nor Cede & Co. will consent or vote with respect to
Securities. Under its usual procedures, DTC mails an Ominbus Proxy to
Issuer as soon as possible after the record date. The Ominbus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Securities are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
8. Principal an interest payments on the Securities will be make to DTC.
DTC's practice is to credit Direct Participants' accounts on payable date in
accordance with their respective holdings shown on DTC's records unless
DTC has reason to believe that it will not receive payment on payable date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held
for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of
DTC, Trustee, or Issuer, subject to any statutory or regulatory
responsibility of Issuer or Trustee, disbursement of such payment
to Direct Participants shall be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners shall be the
responsibility of Direct and Indirect Participants.
(9. A Beneficial Owner shall give notice to elect to have its Securities
purchased or tendered, through its Participant, to Trustee (or Tender/
Remarketing Agent), and shall effect delivery of such Securities by
causing the Direct Participant to transfer the Participant's interest in the
Securities, on DTC's records, to Trustee (or Tender/Remarketing Agent).
The requirement for physical delivery of Securities in connection with an
optional tender or a mandatory purchase will be deemed satisfied when the
ownership rights in the Securities are transferred by Direct Participants on
DTC's records and followed by a book-entry credit of tendered Securities to
trustee (or Tender/Remarketing Agent's) DTC account.
10. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to
Issuer or Agent. Under such circumstances, in the event that a successor
securities depository is not obtained, Security certificates are required
to be printed and
delivered.
11. Issuer may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that Issuer believes to be reliable, but
Issuer takes no responsibility for the accuracy thereof.
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EXHIBIT J
TO THE MASTER POOLING
AND SERVICING AGREEMENT
FORM OF DEPOSITORY AGREEMENT (LETTER OF REPRESENTATIONS)
J-1