1
Exhibit 10(a)(i)
EXECUTION COPY
================================================================================
▇▇▇▇▇-▇▇▇▇▇▇▇ MASTER TRUST
POOLING AND SERVICING AGREEMENT
Dated as of December 30, 1997
Among
THE EL-BEE RECEIVABLES CORPORATION,
AS TRANSFEROR
THE EL-BEE CHARGIT CORP.,
AS SERVICER
and
BANKERS TRUST COMPANY,
AS TRUSTEE
================================================================================
POOLING AND SERVICING AGREEMENT
2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Definitions..................................................................................... 1
Section 1.02 Other Definitional Provisions................................................................... 24
ARTICLE II
TRANSFER OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.01 Transfer of Receivables......................................................................... 25
Section 2.02 Acceptance by Trustee........................................................................... 26
Section 2.03 Representations and Warranties of the Transferor................................................ 27
Section 2.04 Representations and Warranties of the Transferor Relating to the Receivables.................... 31
Section 2.05 Covenants of the Transferor..................................................................... 36
Section 2.06 Required Deposits............................................................................... 47
Section 2.07 Trustee May Perform............................................................................. 48
Section 2.08 No Assumption of Liability...................................................................... 48
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.01 Acceptance of Appointment and Other Matters Relating to the Servicer............................ 48
Section 3.02 Servicing Compensation.......................................................................... 49
Section 3.03 Representations, Warranties and Covenants of the Servicer....................................... 50
Section 3.04 Reports and Records for the Trustee............................................................. 58
Section 3.05 Annual Servicer's Certificate................................................................... 59
Section 3.06 Annual Independent Accountants' Servicing Report................................................ 59
Section 3.07 Tax Treatment................................................................................... 60
Section 3.08 Notices to the Transferor....................................................................... 60
POOLING AND SERVICING AGREEMENT
3
ii
Page
----
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS
AND ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.01 Rights of Certificateholders.................................................................... 61
Section 4.02 Establishment of Accounts....................................................................... 61
Section 4.03 Collections and Allocations..................................................................... 63
ARTICLE V
DISTRIBUTIONS AND REPORTS TO CERTIFICATEHOLDERS
ARTICLE VI
THE CERTIFICATES
Section 6.01 Certificates.................................................................................... 67
Section 6.02 Authentication of Certificates.................................................................. 68
Section 6.03 Registration of Transfer and Exchange of Certificates........................................... 68
Section 6.04 Mutilated, Destroyed, or Stolen Certificates.................................................... 71
Section 6.05 Persons Deemed Owners........................................................................... 71
Section 6.06 Appointment of Paying Agent..................................................................... 72
Section 6.07 Access to List of Certificateholders' Names and Addresses....................................... 73
Section 6.08 Authenticating Agent............................................................................ 73
Section 6.09 Tender of Exchangeable Transferor Certificate................................................... 75
Section 6.10 Uncertificated Classes.......................................................................... 77
ARTICLE VII
OTHER MATTERS RELATING
TO THE TRANSFEROR
Section 7.01 Liability of the Transferor..................................................................... 77
Section 7.02 Obligations Not Assignable...................................................................... 77
Section 7.03 Limitation on Liability......................................................................... 77
Section 7.04 Indemnification of the Trustee, the Certificateholders, any Program Agent
and any Enhancement Provider.................................................................... 78
POOLING AND SERVICING AGREEMENT
4
iii
Page
----
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
Section 8.01 Liability of the Servicer....................................................................... 80
Section 8.02 Merger or Consolidation of, or Assumption of the Obligations of, the
Servicer............................................................................. 80
Section 8.03 Limitation on Liability......................................................................... 81
Section 8.04 Servicer Indemnification........................................................................ 81
Section 8.05 The Servicer Not to Resign...................................................................... 82
Section 8.06 Access to Certain Documentation and Information Regarding the Receivables....................... 82
Section 8.07 Delegation of Duties............................................................................ 83
Section 8.08 Examination of Records.......................................................................... 83
ARTICLE IX
EARLY AMORTIZATION EVENTS
Section 9.01 Trust Early Amortization Events................................................................. 83
Section 9.02 Additional Rights upon the Occurrence of Any Trust Early Amortization
Event................................................................................ 85
ARTICLE X
SERVICER DEFAULTS
Section 10.01 Servicer Defaults.............................................................................. 86
Section 10.02 Trustee to Act; Appointment of Successor....................................................... 88
Section 10.03 Notification of Servicer Default and Successor Servicer........................................ 90
Section 10.04 Waiver of Past Defaults........................................................................ 91
ARTICLE XI
THE TRUSTEE
Section 11.01 Duties of Trustee.............................................................................. 91
Section 11.02 Certain Matters Affecting the Trustee.......................................................... 93
Section 11.03 Trustee Not Liable for Recitals in Certificates................................................ 95
Section 11.04 Trustee May Own Certificates................................................................... 95
POOLING AND SERVICING AGREEMENT
5
iv
Page
----
Section 11.05 The Servicer to Pay Trustee's Fees and Expenses................................................ 95
Section 11.06 Eligibility Requirements for Trustee........................................................... 96
Section 11.07 Resignation or Removal of Trustee.............................................................. 96
Section 11.08 Successor Trustee.............................................................................. 97
Section 11.09 Merger or Consolidation of Trustee............................................................. 97
Section 11.10 Appointment of Co-Trustee or Separate Trustee.................................................. 98
Section 11.11 Tax Returns.................................................................................... 99
Section 11.12 Trustee May Enforce Claims Without Possession of Certificates.................................. 99
Section 11.13 Suits for Enforcement.......................................................................... 99
Section 11.14 Rights of Investor Certificateholders to Direct Trustee........................................100
Section 11.15 Representations and Warranties of the Trustee..................................................100
Section 11.16 Maintenance of Office or Agency................................................................101
ARTICLE XII
TERMINATION
Section 12.01 Termination of Trust...........................................................................101
Section 12.02 Optional Purchase..............................................................................102
Section 12.03 Final Payment with Respect to Any Series.......................................................103
Section 12.04 Termination of Rights of Holder of Exchangeable Transferor Certificate.........................104
Section 12.05 Defeasance.....................................................................................104
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Amendment......................................................................................105
Section 13.02 Limitation on Rights of Certificateholders.....................................................107
Section 13.03 Governing Law, Etc.............................................................................108
Section 13.04 Notices........................................................................................109
Section 13.05 Severability of Provisions.....................................................................109
Section 13.06 Assignment.....................................................................................110
Section 13.07 Certificates Non-Assessable and Fully Paid.....................................................110
Section 13.08 Further Assurances.............................................................................110
Section 13.09 Non-petition Covenant..........................................................................110
Section 13.10 No Waiver; Cumulative Remedies.................................................................110
Section 13.11 Counterparts...................................................................................110
Section 13.12 Third-Party Beneficiaries......................................................................111
Section 13.13 Actions by Certificateholders..................................................................111
POOLING AND SERVICING AGREEMENT
6
v
Page
----
Section 13.14 Rule 144A Information..........................................................................111
Section 13.15 Merger and Integration.........................................................................111
Section 13.16 Headings.......................................................................................111
Section 13.17 Inconsistent Provisions........................................................................112
SCHEDULES
Schedule 3.03(a)(vi) Concentration Account and Collection Accounts
EXHIBITS
Exhibit A Form of Monthly Servicer's Report
Exhibit B Form of Exchangeable Transferor Certificate
Exhibit C Form of Annual Servicer's Certificate
Exhibit D Form of Annual Independent Accountant's Servicing Report
Exhibit E-1 Form of Collection Account Letter
Exhibit E-2 Form of Store Account Letter
Exhibit E-3 Form of Local Bank Blocked Account Letter
Exhibit F Form of Representation Letters
Exhibit G Form of Reconveyance of Receivables
POOLING AND SERVICING AGREEMENT
7
POOLING AND SERVICING AGREEMENT, dated as of December 30, 1997,
by and among THE EL-BEE RECEIVABLES CORPORATION, a Delaware corporation, as
Transferor, THE EL-BEE CHARGIT CORP., an Ohio corporation ("CHARGIT"), as
Servicer, and BANKERS TRUST COMPANY, a New York banking corporation, as Trustee.
In consideration of the mutual agreements contained herein,
each party agrees as follows for the benefit of the other parties, the
Certificateholders and any Enhancement Provider to the extent provided herein
and in any Supplement:
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. Whenever used in this Agreement, the
following words and phrases shall have the following meanings, and the
definitions of such terms are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as the feminine and neuter
genders of such terms. With respect to any Series of Certificates, capitalized
terms not otherwise defined in this Agreement have the same meanings as
specified in the related Supplement.
"ACCOUNT" means each of the Parent's revolving credit card
accounts, including accounts which have been written off as uncollectible,
issued to an Obligor pursuant to a Cardholder Agreement between any Originator
and any Person for the sole purpose of providing credit for the purchase of
merchandise, services or insurance from any Originator or Affiliate of any
Originator. The term "Account" shall include any such revolving credit card
account with respect to which a new credit account number has been issued by the
Servicer or an Originator under circumstances resulting from (i) a lost or
stolen credit card, (ii) the transfer from one Obligor to another Obligor or
(iii) the addition of any Obligor, in each case not requiring standard
application and credit evaluation procedures under the Cardholder Guidelines.
"ACCOUNT FILE" means the file on an Originator's computer
system that identifies revolving credit card accounts of such Originator, which
file is designated by such Originator as its "Account File."
"ACCOUNT INFORMATION" shall have the meaning specified in
Section 2.02(b).
"AFFILIATE" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a
POOLING AND SERVICING AGREEMENT
8
2
Person means the possession, direct or indirect, of the power to vote 10% or
more of the Voting Stock of such Person or to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
Voting Stock, by contract or otherwise.
"AGGREGATE INVESTED AMOUNT" means, as of any date of
determination, the aggregate sum of the Series Invested Amounts of all Series
issued and outstanding on such date of determination PLUS the sum of the
Enhancement Invested Amounts, if any, for all outstanding Series on such date of
determination.
"AGGREGATE MINIMUM TRANSFEROR INVESTED AMOUNT" means, as of
any date of determination, the product of 5.0% and the Aggregate Invested Amount
on such date of determination.
"AGREEMENT" means this Pooling and Servicing Agreement and all
amendments, supplements and other modifications hereof.
"AMORTIZATION PERIOD," with respect to any Series, shall have
the meaning specified in the related Supplement.
"APPLICANTS" shall have the meaning specified in Section 6.07.
"APPROVED RATING" means a rating of P-1 by Moody's and a
rating of A-1+ by Standard & Poor's.
"BENEFICIARY" means, as of any date of determination, any of
the Trustee, the Investor Certificateholders, the Program Agent and any
Enhancement Provider.
"BENEFIT PLAN" shall have the meaning specified in Section
6.03(c).
"BIF" means the Bank Insurance Fund administered by the FDIC.
"BUSINESS DAY" means (a) a day of the year on which banks are
not required or authorized by law to close in New York City or the city in which
the Corporate Trust Office is located, (b) with respect to non-financial
reporting requirements of the Servicer or the Transferor, any day on which the
Servicer or the Transferor is not closed, (c) if during any applicable interest
period an interest rate or certificate rate is calculated by reference to a
eurodollar rate, a day on which dealings are carried on in the London interbank
market and (d) any other day specified in a Supplement as a "Business Day".
POOLING AND SERVICING AGREEMENT
9
3
"CARDHOLDER AGREEMENT" means the agreement (and the related
application) for any Account, as such agreement may be amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.
"CARDHOLDER GUIDELINES" means the Parent's policies and
procedures relating to the operation of its credit card business in effect on
the date hereof, including the policies and procedures for determining the
creditworthiness of potential and existing credit card customers, and relating
to the maintenance of credit card accounts and collection of credit card
receivables, as such policies and procedures may be amended, supplemented or
otherwise modified from time to time.
"CERTIFICATE" means any one of the Investor Certificates of
any Series or the Exchangeable Transferor Certificate.
"CERTIFICATEHOLDER" means any Person in whose name a
Certificate is registered in the Certificate Register.
"CERTIFICATE INTEREST" means interest payable in respect of
the Investor Certificates of any Series pursuant to the Supplement for such
Series.
"CERTIFICATE PRINCIPAL" means principal payable in respect of
the Investor Certificates of any Series pursuant to the Supplement for such
Series.
"CERTIFICATE PURCHASE AGREEMENT" means, with respect to any
Series, a certificate purchase agreement, executed and delivered in connection
with the original issuance of the Investor Certificates of such Series pursuant
to Article VI, and all amendments, supplements and other modifications from time
to time thereto.
"CERTIFICATE RATE" shall have, with respect to any Series of
Certificates, the meaning specified in the related Supplement.
"CERTIFICATE REGISTER" means the register maintained pursuant
to Section 6.03, providing for the registration of the Certificates and
transfers and exchanges thereof.
"CLOSING DATE" means, with respect to any Series, the date of
issuance of such Series of Certificates, as specified in the related Supplement.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLECTION" means (a) any payment by or on behalf of Obligors
received by any Originator, Transferor or Servicer, or deposited in any
Collection Account or the
POOLING AND SERVICING AGREEMENT
10
4
Concentration Account, in respect of the Receivables, in the form of cash,
checks, wire transfers, electronic transfers, ATM transfers or other form of
payment in accordance with the Cardholder Agreement in effect from time to time
on any Receivables, including all Recoveries, and (b) all interest and other
investment earnings (net of losses and investment expenses) on Collections as a
result of the investment thereof pursuant to Section 4.02. The term "Collection"
shall include Insurance Proceeds and other amounts constituting Recoveries
generally. A Collection processed on an Account in excess of the aggregate
amount of Receivables in such Account as of the date of receipt by any
Originator, the Transferor or Servicer of such Collection shall be deemed to be
a payment in respect of Principal Receivables to the extent of such excess.
"COLLECTION ACCOUNT" shall have the meaning specified in
Section 4.02(c).
"COLLECTION ACCOUNT BANK" shall have the meaning specified in
Section 4.02(c).
"COLLECTION ACCOUNT LETTER" shall have the meaning specified
in Section 4.02(c).
"CONCENTRATION ACCOUNT" shall have the meaning specified in
Section 4.02(a).
"CONCENTRATION ACCOUNT BANK" shall have the meaning specified
in Section 4.02(a).
"CONSOLIDATED TANGIBLE NET WORTH" means, with respect to any
Person, at any time, (i) total consolidated tangible assets of such Person and
its Subsidiaries, MINUS (ii) total consolidated liabilities of such Person and
its Subsidiaries.
"CORPORATE TRUST OFFICE" means the principal office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Agreement is
located at Four ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate
Trust and Agency Group/Structured Finance Team.
"CREDIT AGREEMENT" means the Credit Agreement dated as of
December 30, 1997 among the Parent, the lenders party thereto, Citibank, N.A. as
issuing bank and Citicorp USA, Inc., as agent, as amended, supplemented,
modified, restated, replaced or refinanced from time to time.
"CYCLE" means each monthly billing cycle for an Account, as
determined by the Servicer in accordance with its normal practice.
"DAILY REPORT" shall have the meaning specified in Section
3.04(a).
POOLING AND SERVICING AGREEMENT
11
5
"DEBTOR RELIEF LAWS" means the Bankruptcy Code of the United
States of America and all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization,
suspension of payments or other similar laws in any jurisdiction from time to
time in effect affecting the rights of creditors generally, and general
principles of equity (whether considered in a suit at law or in equity).
"DEFEASANCE" shall have the meaning specified in Section
12.05(a).
"DEFEASED SERIES" shall have the meaning specified in Section
12.05(a).
"DESIGNATED OBLIGOR" means, at any time, each Obligor,
PROVIDED, HOWEVER, that any Obligor shall cease to be a Designated Obligor upon
three Business Days' notice by any Program Agent to the Transferor that such
Program Agent has determined, in its reasonable credit judgment, that such
Obligor shall not be considered a Designated Obligor.
"DETERMINATION DATE" means the second Business Day preceding
each Distribution Date.
"DILUTION AMOUNT" shall have, with respect to any Due Period,
the meaning specified in Section 4.03(c).
"DISTRIBUTION DATE" means the twentieth day of each month, or
if such day is not a Business Day, the next succeeding Business Day; PROVIDED
that the initial Distribution Date for any Series shall be set forth in the
related Supplement. Notwithstanding the foregoing, in the event a Total Systems
Failure exists on any Distribution Date, the date of such Distribution Date
shall mean the fourth Business Day after the date on which the Transferor or the
Servicer delivers the Monthly Servicer's Report pursuant to Section 3.04(b);
PROVIDED that in no event shall a Distribution Date be postponed more than 10
Business Days due to a Total Systems Failure.
"DOLLARS", "$" or "U.S. $" means the lawful currency of the
United States.
"DUE PERIOD" means, initially, the period from the close of
business on December 30, 1997 until the close of business on the last day of the
last Cycle for the month of January, 1998, and thereafter, the period from the
close of business on the last day of the prior Due Period until the close of
business on the last day of the last Cycle for the following month.
"EARLY AMORTIZATION EVENT" means any Trust Early Amortization
Event or any Series Early Amortization Event for any Series.
POOLING AND SERVICING AGREEMENT
12
6
"EARLY AMORTIZATION PERIOD" shall have the meaning specified
in any Supplement hereto.
"EFFECTIVE DATE" means the date on which all the conditions
precedent to the initial issuance of the initial Series of Certificates pursuant
hereto and to the related Supplement are satisfied or waived.
"ELIGIBLE ACCOUNT" means, at any time, each Account which
satisfies each of the following conditions:
(i) such Account is denominated and payable only in Dollars to
a location within the United States of America;
(ii) such Account has been originated in connection with the
extension of credit to an Obligor whose application for the extension
of credit was processed through any Originator or an Affiliate of such
Originator or such Account has been acquired by any Originator from a
third party and determined by such Originator to be in compliance with
the Cardholder Guidelines, including those relating to the extension of
credit;
(iii) an Originator has not classified such Account on its
electronic records as counterfeit, canceled or fraudulent, and no card
issued in connection therewith has been stolen or lost;
(iv) the Obligor on such Account has provided, as its most
recent billing address, an address which is located in the United
States or in Canada, so long as the aggregate amount of Principal
Receivables owing from Obligors with addresses located in Canada does
not exceed an amount equal to 10% of the aggregate balance of all
Principal Receivables;
(v) an Originator has not charged off such Account pursuant to
the Cardholder Guidelines;
(vi) all filings, consents, licenses, approvals or
authorizations of, or registrations or declarations with, any
Governmental Authority required to be obtained, effected or given in
connection with the creation of each of the underlying Receivables in
such Account or the execution, delivery and performance by any
Originator of the Cardholder Agreement pursuant to which such
underlying Receivable was created, have been duly obtained, effected or
given and are in full force and effect as of such date of creation;
POOLING AND SERVICING AGREEMENT
13
7
(vii) such Account satisfies all applicable requirements of
the Cardholder Guidelines; and
(viii) if such Account is a "Deferred Account" (as defined in
the Cardholder Guidelines), such Account shall be payable in full
within five years after the creation thereof.
"ELIGIBLE RECEIVABLE" means each Receivable which satisfies
each of the following conditions:
(i) such Receivable has arisen under an Eligible Account;
(ii) such Receivable, together with the Cardholder Agreement
related thereto, was created in compliance with all, and does not
contravene any, applicable Requirements of Law;
(iii) such Receivable, at the time of and at all times after
the creation of such Receivable, the Transferor or the Trust has good
and marketable title thereto, free and clear of all Liens and such
Receivable has been the subject of either a valid Transfer and
assignment from the Transferor to the Trust of all the Transferor's
right, title and interest therein (and in the proceeds thereof), or the
grant of a first priority perfected "security interest" (within the
meaning of the UCC of the State of New York and of the jurisdiction the
law of which governs the perfection of the interest in such Receivable
created hereunder) therein (and in the proceeds thereof);
(iv) such Receivable arises under a Cardholder Agreement
which, together with such Receivable is in full force and effect and is
the legal, valid and binding payment obligation of the Obligor thereon,
enforceable against such Obligor in accordance with its terms, subject
only to Debtor Relief Laws;
(v) such Receivable constitutes an "account" or a "general
intangible" and is not evidenced by an "instrument" or "chattel paper",
in each case under Article 9 of the UCC as then in effect in any
applicable jurisdiction the law of which governs the perfection of the
interest in such Receivable created hereunder;
(vi) the Transfer of such Receivable constitutes a "current
transaction" within the meaning of Section 3(a)(3) of the Securities
Act;
(vii) such Receivable is not subject to any provision
prohibiting the transfer or assignment by any Originator of such
payment obligation;
POOLING AND SERVICING AGREEMENT
14
8
(viii) the Obligor of such Receivable, at the time of the
Transfer of such Receivable to the Trust, is a Designated Obligor;
(ix) the Obligor of such Receivable has been directed to remit
payments with respect thereto to the Servicer or to a Collection
Account;
(x) such Receivable arose in the ordinary course of business
of the Originator and represents all or part of the sales price of
merchandise, services or insurance within the meaning of Section
3(c)(5) of the Investment Company Act, the Obligor of which is
primarily liable with respect thereto; and
(xi) such Receivable, when acquired hereunder, does not cause
the aggregate amount of Principal Receivables arising under "Deferred
Accounts" (as defined in the Cardholder Guidelines) to exceed 15% of
the aggregate balance of all Principal Receivables.
"ENHANCEMENT" means, with respect to any Series, any cash
collateral account, letter of credit, surety bond, guaranteed rate agreement,
maturity guaranty facility, tax protection agreement, interest rate swap or any
other contract or agreement for the benefit of the Investor Certificateholders
of such Series, as designated in the applicable Supplement.
"ENHANCEMENT INVESTED AMOUNT" shall have the meaning, if
applicable with respect to any Series, specified in the related Supplement.
"ENHANCEMENT PROVIDER" means, with respect to any Series, the
Person or Persons, if any, designated as such in the related Supplement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, any successor statute, and the regulations
promulgated and rulings issued thereunder.
"ERISA AFFILIATE" means any Person that for purposes of Title
IV of ERISA is a member of the controlled group of the Transferor, or under
common control with the Transferor, within the meaning of Section 414 of the
Internal Revenue Code and the regulations promulgated thereunder.
"EXCESS FUNDING ACCOUNT" shall have the meaning specified in
Section 4.03(d).
"EXCHANGE" means the procedure described under Section 6.09.
POOLING AND SERVICING AGREEMENT
15
9
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time.
"EXCHANGE DATE" shall have the meaning, with respect to any
Series issued pursuant to an Exchange, specified in Section 6.09(b).
"EXCHANGE NOTICE" shall have the meaning, with respect to any
Series issued pursuant to an Exchange, specified in Section 6.09(b).
"EXCHANGEABLE TRANSFEROR CERTIFICATE" means the certificate or
certificates executed and authenticated by the Trustee, substantially in the
form of Exhibit B and exchangeable as provided in Section 6.09.
"EXTENDED TRUST TERMINATION DATE" shall have the meaning
specified in Section 12.01(a).
"FDIC" means the Federal Deposit Insurance Corporation or any
successor.
"FEE LETTER" means that certain fee letter dated June 25,
1997, from Citibank, N.A. to the Parent, as may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.
"FINANCE CHARGE RECEIVABLES" means the aggregate of all
amounts billed to or other indebtedness of the Obligors on any Account in the
ordinary course of any Originator's business, whether due or to become due, in
respect of (a) periodic rate finance charges, (b) late payment fees, (c) annual
fees, if any, with respect to Accounts, (d) returned check charges, (e)
Recoveries not yet received and (f) any other fees with respect to the Accounts
designated by the Transferor by notice to the Trustee at any time and from time
to time to be included as Finance Charge Receivables.
"FINANCE CHARGE SHORTFALLS" shall have the meaning specified
in Section 4.03(f).
"FISCAL YEAR" means a fiscal year of the Parent and its
Subsidiaries ending on the Saturday immediately preceding February 1 of any
calendar year.
"FIXED ALLOCATION PERCENTAGE" means, for any Series with
respect to any Due Period (including any day within such Due Period), the
percentage equivalent of a fraction the numerator of which is the Series
Invested Amount for such Series as of the end of the day on the last day of the
Due Period most recently ended before the Fixed Principal Allocation Date and
the denominator of which is the aggregate Series Invested Amounts for all
outstanding Series or, if greater, the Principal Receivables Balance, in each
case on such last day.
POOLING AND SERVICING AGREEMENT
16
10
"FIXED PRINCIPAL ALLOCATION DATE" means the earliest of the
date (i) on which the Amortization Period commences, (ii) on which an Early
Amortization Period commences and (iii) selected by the Servicer to be the
"Fixed Principal Allocation Date."
"FLOATING ALLOCATION PERCENTAGE" means, for any Series with
respect to any Due Period (including any day within such Due Period), the
percentage equivalent of a fraction the numerator of which is the Series
Invested Amount for such Series at the end of the day on the last day of the
most recently ended Due Period (or with respect to the first Due Period, the
Initial Series Invested Amount) and the denominator of which is the aggregate
Series Invested Amounts for all outstanding Series or, if greater, the Principal
Receivables Balance, in each case on such last day.
"GAAP" means generally accepted accounting principles as
applied in the United States.
"GOVERNMENTAL AUTHORITY" means any country or nation, any
political subdivision, state or municipality of such country or nation, and any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of any country or nation or political subdivision thereof.
"GROUP" means, with respect to any Series, the group of
Series, if any, in which the related Supplement specifies such Series is to be
included.
"INDEBTEDNESS" of any Person, at any time, means without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services, (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all obligations of such Person
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all obligations of
such Person as lessee under any lease of any property which, in accordance with
generally accepted accounting principles, is or should be accounted for as a
capital lease on the balance sheet of such Person, (f) all obligations,
contingent or otherwise, of such Person under acceptance, letter of credit or
similar facilities, (g) all obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any capital stock of
or other ownership or profit interest in such Person or any other Person or any
warrants, rights or options to acquire such capital stock, valued, in the case
of redeemable preferred stock, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends, (h) all obligations of
others referred to in clauses (a) through (g) above or clause (i) below
guaranteed directly or indirectly in any manner by such Person,
POOLING AND SERVICING AGREEMENT
17
11
or in effect guaranteed directly or indirectly by such Person through an
agreement (1) to pay or purchase such obligation or to advance or supply funds
for the payment or purchase of such obligation, (2) to purchase, sell or lease
(as lessee or lessor) property, or to purchase or sell services, primarily for
the purpose of enabling the debtor to make payment of such obligation or to
assure the holder of such obligation against loss, (3) to supply funds to or in
any other manner invest in the debtor (including any agreement to pay for
property or services irrespective of whether such property is received or such
services are rendered) or (4) otherwise to assure a creditor against loss, and
(i) all obligations referred to in clauses (a) through (g) above of another
Person secured by (or for which the holder of such obligation has an existing
right, contingent or otherwise, to be secured by) any Lien on property
(including accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such obligation.
"INDEMNIFIED AMOUNTS" shall have the meaning specified in
Section 7.04.
"INDEMNIFIED PARTY" shall have the meaning specified in
Section 7.04.
"INDEPENDENT PUBLIC ACCOUNTANTS" means any of (a) ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & Co., (b) Deloitte & Touche LLP, (c) Coopers & ▇▇▇▇▇▇▇, (d) Ernst &
Young, (e) KPMG Peat Marwick and (f) Price Waterhouse or any of their respective
successors so long as such successor is one of the four largest United States
accounting firms; PROVIDED that such firm is independent with respect to the
Servicer within the meaning of the Securities Act.
"INELIGIBLE RECEIVABLE" shall have the meaning specified in
Section 2.04(d)(iii).
"INITIAL CUT OFF DATE" means the close of business of the
Transferor on the day two Business Days prior to the Effective Date.
"INITIAL SERIES INVESTED AMOUNT" means with respect to any
Series, the amount specified as such in the related Supplement.
"INSOLVENCY EVENT" means, with respect to any Person, any of
the following: (i) such Person shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against such Person seeking to adjudicate
it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any Debtor Relief Laws, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such proceeding shall
remain undismissed or unstayed for a period of 60 days or any of the relief
sought in
POOLING AND SERVICING AGREEMENT
18
12
such proceeding (including the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or another similar official for,
it or for any substantial part of its property) shall be granted; or (ii) such
Person shall take any corporate, partnership, trust or similar action to
authorize any of the actions set forth in clause (i) above.
"INSURANCE PROCEEDS" means any amounts recovered by the
Servicer pursuant to any credit life, credit disability or unemployment
insurance policies covering any Obligor with respect to Receivables under such
Obligor's Account to the extent such amounts are used to make payments on such
Account.
"INTERCREDITOR AGREEMENT" means the agreement, dated as of the
date hereof, among Citicorp North America, Inc., as Program Agent, The El-Bee
Receivables Corporation, as Purchaser and Transferor, the Parent, as Borrower
(as defined in the Credit Agreement) and Originator, The El-Bee Chargit Corp.,
as Originator and as Servicer, Bankers Trust Company, as Trustee, and Citicorp,
USA, Inc., as Bank Agent (as defined therein), as the same may be amended,
supplemented or otherwise modified from time to time.
"INTEREST RATE PROTECTION AGREEMENT" with respect to any
Series, shall have the meaning specified in the related Supplement.
"INVESTMENT COMPANY ACT" means the Investment Company Act of
1940, as amended from time to time.
"INVESTOR CERTIFICATE" means any one of the certificates,
including the Registered Certificates, executed and authenticated by the Trustee
substantially in the form of the investor certificate attached to the related
Supplement, evidencing an Undivided Trust Interest, other than the Exchangeable
Transferor Certificate.
"INVESTOR CERTIFICATEHOLDER" means the holder of record of an
Investor Certificate.
"INVESTOR EXCHANGE" shall have the meaning specified in
Section 6.09(b).
"INVESTOR MONTHLY SERVICING FEE" for any Series, shall have
the meaning specified in the related Supplement.
"INVESTOR PERCENTAGE" means for any Series (A), with respect
to Collections of Principal Receivables, the Principal Allocation Percentage for
such Series, and (B) with respect to Collections of Finance Charge Receivables,
Loss Amounts or Dilution Amounts, the Floating Allocation Percentage for such
Series.
POOLING AND SERVICING AGREEMENT
19
13
"KNOWLEDGE" (and the related term "KNOW") means, with respect
to a Person's knowledge, the actual knowledge of a Responsible Officer of such
Person.
"LIEN" means any mortgage, deed of trust, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other), preference,
participation interest, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever resulting in an encumbrance against
real or personal property of a Person, including any conditional sale or other
title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing and the filing of any financing
statement under the UCC or comparable law of any jurisdiction to evidence any of
the foregoing; PROVIDED that any issuance of an Undivided Trust Interest
pursuant to any Supplement, any assignment pursuant to Section 8.02 hereof and
any lien created by or in connection with any Transaction Document shall not be
deemed to constitute a Lien.
"LOAN AGREEMENT" means, with respect to any Series, a loan
agreement, executed and delivered in connection with the original issuance of
the Investor Certificates of such Series pursuant to Article VI, and all
amendments, supplements and other modifications from time to time thereto.
"LOSS AMOUNT" for any Due Period means (a) an amount (which
shall not be less than zero) equal to (i) the aggregate principal balance of all
Principal Receivables included in the Trust Assets, or any portion thereof, that
has been written off or, consistent with the Cardholder Guidelines, should have
been written off any Originator's books as uncollectible during such Due Period,
MINUS (ii) the amount of Recoveries received in such Due Period with respect to
Receivables previously charged off as uncollectible or (b) as otherwise defined
in the applicable Series Supplement.
"MAJORITY IN INTEREST" means the holders of Certificates
evidencing 51% or more of the Aggregate Invested Amount or, if in respect of any
Series, the holders of Certificates evidencing 51% or more of the aggregate
Series Invested Amount in such Series or, in relation to any Series which has an
Enhancement Provider, as otherwise specified in the Supplement related to such
Series, excluding, in all cases, any Certificates held by the Transferor or any
of its Affiliates (to the extent such holding is Known to a Responsible Officer
of the Trustee), until the holders of all other Certificates shall have been
paid in full.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations, performance,
properties or prospects of the Transferor or the Parent and its Subsidiaries
taken as a whole, (b) the rights and remedies of any Beneficiary under any
Transaction Document, (c) the interests of any Beneficiary in the Trust Assets,
(d) the collectibility of the Receivables taken as a whole (other than as a
result of the default of one or more Obligors on the payment thereof) or (e) the
ability of the Servicer,
POOLING AND SERVICING AGREEMENT
20
14
the Transferor, the Parent or any Originator to perform its obligations under
any Transaction Document to which it is or is to be a party.
"MINIMUM AGGREGATE PRINCIPAL RECEIVABLES" means, on the last
Business Day of any Due Period, an amount equal to the sum of the Aggregate
Invested Amount for all Series, issued and outstanding on such date.
"MONTHLY SERVICER'S REPORT" shall have the meaning specified
in Section 3.04(b).
"MONTHLY SERVICING FEE" shall have the meaning specified in
Section 3.02.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc., or its
successor.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", as defined
in Section 4001(a)(3) of ERISA, to which the Transferor or any ERISA Affiliate
is making or accruing an obligation to make contributions, or has within any of
the preceding five plan years made or accrued an obligation to make
contributions.
"MULTIPLE EMPLOYER PLAN" means a "single employer plan", as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
the Transferor or any ERISA Affiliate and at least one Person other than the
Transferor and the ERISA Affiliates or (b) was so maintained and in respect of
which the Transferor or any ERISA Affiliate could have liability under Section
4064 or 4069 of ERISA in the event such plan has been or were to be terminated.
"OBLIGOR" means, with respect to any Account or Receivable,
the Person or Persons obligated to make payments with respect to such Account or
Receivable, as the case may be, including any guarantor thereof.
"OFFICER'S CERTIFICATE" means a certificate signed by a
Responsible Officer of an Originator, the Transferor or the Servicer, as
applicable.
"OPINION OF COUNSEL" means a written opinion of counsel, who
may be counsel for or an employee of the Person providing the opinion, and who
shall be reasonably acceptable to the Trustee and, in the case of an opinion to
be delivered to any Originator, the Transferor or any Enhancement Provider,
reasonably acceptable to such Originator, the Transferor or such Enhancement
Provider, as the case may be.
"ORIGINATORS" means, collectively Chargit and the Parent.
POOLING AND SERVICING AGREEMENT
21
15
"PARENT" means The ▇▇▇▇▇-▇▇▇▇▇▇▇ Stores Corp., an Ohio
corporation.
"PARENT UNDERTAKING AGREEMENT" means the agreement between the
Parent and the Trustee, dated as of the date hereof, governing the terms and
conditions upon which the Parent shall undertake the performance of certain
obligations of each Originator, the Transferor and other Affiliates of the
Parent, as Servicer or otherwise, as the same may from time to time be amended,
supplemented or otherwise modified.
"PAYING AGENT" means any paying agent appointed pursuant to
Section 6.06 and shall initially be the Trustee.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"PERMITTED INVESTMENTS" means, unless otherwise provided in
the Supplement with respect to any Series, book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence any of the following:
(i) readily marketable direct obligations of, and obligations
fully guaranteed by, the United States of America or any agency or
instrumentality of the United States of America, the obligations of
which are backed by the full faith and credit of the United States of
America;
(ii) (A) demand and time deposits in, certificates of deposit
of, bankers' acceptances issued by, or federal funds sold by, any
depository institution or trust company (including the Trustee or any
agent of the Trustee, acting in their respective commercial capacities)
incorporated under the laws of the United States of America, any State
thereof or the District of Columbia or any foreign depository
institution with a branch or agency licensed under the laws of the
United States of America or any State, subject to supervision and
examination by Federal and/or State banking authorities and having an
Approved Rating at the time of such investment or contractual
commitment providing for such investment or otherwise approved in
writing by each Rating Agency or (B) any other demand or time deposit
or certificate of deposit which is fully insured by the FDIC;
(iii) repurchase obligations with a term of not more than ten
days with respect to (A) any security described in clause (i) above or
(B) any other security issued or guaranteed by an agency or
instrumentality of the United States of America, in either case entered
into with a depository institution or trust company (acting as
principal) described in clause (ii)(A) above;
POOLING AND SERVICING AGREEMENT
22
16
(iv) short-term securities bearing interest or sold at a
discount issued by any corporation incorporated under the laws of the
United States of America or any State, the short-term unsecured
obligations of which have an Approved Rating at the time of such
investment; PROVIDED, HOWEVER, that securities issued by any particular
corporation will not be Permitted Investments with respect to any
account in which the amount on deposit is permitted to be invested in
Permitted Investments hereunder to the extent that investment therein
will cause the then outstanding principal amount of securities issued
by such corporation and held as part of the Trust Assets to exceed 10%
of the amount held in such account;
(v) commercial paper having an Approved Rating at the time of
such investment or pledge as security;
(vi) investments in money market funds rated in the highest
rating category by Moody's or Standard & Poor's (including funds for
which the Trustee or any of its Affiliates is investment manager or
advisor); or
(vii) any other investments approved in writing by each Rating
Agency.
"PERSON" means any legal person, including any individual,
corporation, partnership, joint venture, association, joint-stock company, trust
(including a business trust), unincorporated organization, limited liability
company, Governmental Authority or other entity of similar nature.
"PLAN" means a Single Employer Plan or Multiple Employer Plan.
"PLAN EVENT" means (a) (i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been waived
by the PBGC, or (ii) the requirements of subsection (1) of Section 4043(b) of
ERISA (without regard to subsection (2) of such Section) are met with respect to
a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan,
and an event described in paragraph (9), (10), (11), (12) or (13) of Section
4043(c) of ERISA is reasonably expected to occur with respect to such Plan
within the following 30 days; (b) the application for a minimum funding waiver
with respect to a Plan; (c) the provision by the administrator of any Plan of a
notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA); (d) the cessation of operations at a facility of the
Transferor or any ERISA Affiliate in the circumstances described in Section
4062(e) of ERISA; (e) the withdrawal by the Transferor or any ERISA Affiliate
from a Multiple Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for
imposition of a lien under Section
POOLING AND SERVICING AGREEMENT
23
17
302(f) of ERISA shall have been met with respect to any Plan; (g) the adoption
of an amendment to a Plan requiring the provision of security to such Plan
pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of
proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a trustee to
administer, such Plan.
"POOL FACTOR", as such term is used in any Supplement with
respect to any Series, means a number carried out to seven decimals representing
the ratio of the applicable Series Invested Amount as of the last Business Day
of the preceding Due Period (determined after taking into account any reduction
in the Series Invested Amount that will occur on the following Distribution
Date) to the applicable Initial Series Invested Amount.
"PRINCIPAL ALLOCATION PERCENTAGE" means for any Series (A)
with respect to any Due Period (including any day within such Due Period)
occurring prior to the Fixed Principal Allocation Date, the Floating Allocation
Percentage for such Series for such Due Period, and (B) with respect to any Due
Period (including any day within such Due Period) occurring on or after the
Fixed Principal Allocation Date, the Fixed Allocation Percentage for such Series
for such Due Period.
"PRINCIPAL RECEIVABLES" means (a) the aggregate of all amounts
(other than amounts which represent Finance Charge Receivables) billed to the
Obligor on any Account in respect of purchases of merchandise, services or
insurance (whether constituting an account, contract right, chattel paper,
instrument, general intangible or otherwise), (b) all other fees (other than
amounts which represent Finance Charge Receivables) billed to Obligors on the
Accounts, (c) all monies due, (d) all Collections and other amounts received or
receivable from time to time with respect to the Accounts, including all amounts
on deposit in any Collection Accounts (other than amounts which represent
Finance Charge Receivables), except, solely with respect to the Store Accounts,
to the extent described in the Intercreditor Agreement and (e) all proceeds
(including all cash collections and all "proceeds" as defined in the UCC of the
State of New York and of the jurisdiction the law of which governs the
perfection of all rights, titles, interests, remedies, powers and privileges
purported to be Transferred by or pursuant to this Agreement, other than
proceeds which represent Finance Charge Receivables) thereof. In calculating the
aggregate amount of Principal Receivables on any day, the amount of Principal
Receivables shall be reduced by the aggregate amount of any credit balances in
the Accounts owing to any Obligor thereunder on such day.
"PRINCIPAL RECEIVABLES BALANCE" means, as of any date of
determination, the sum of (x) the aggregate amount of Principal Receivables in
the Trust Assets PLUS (y) the credit balance in the Excess Funding Account, in
each case as of the close of business on such date.
POOLING AND SERVICING AGREEMENT
24
18
"PRINCIPAL SHARING SERIES" means a Series that is designated
as such pursuant to the related Supplement.
"PRINCIPAL SHORTFALLS" shall have the meaning specified in
Section 4.03(e).
"PRINCIPAL STORE ACCOUNT" means the Store Account maintained
with the bank party to an agreement substantially in the form of Exhibit E
hereto.
"PRINCIPAL TERMS", with respect to any Series issued pursuant
to an Exchange, shall have the meaning specified in Section 6.09(c).
"PROGRAM AGENT" means any Person designated as program agent
in any Supplement.
"PURCHASE AGREEMENT" means, with respect to any Originator, a
purchase agreement between the Transferor and such Originator, or between
Originators, executed and delivered in connection with the transfer to the
Transferor or an Originator, as the case may be, of any interest in the
Receivables Transferred to the Trust pursuant to Article II hereof, as amended,
supplemented or otherwise modified from time to time.
"QUALIFIED DEPOSITORY INSTITUTION" means (i) the Trustee or
(ii) a depository institution or trust company organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or the domestic branch of a foreign depository institution), with
deposit insurance provided by BIF or SAIF, the short-term deposits of which have
an Approved Rating and which has a combined capital and surplus of at least
$500,000,000.
"RATING AGENCY" means, with respect to any Series, the rating
agency or agencies, if any, specified in the related Supplement.
"RATING AGENCY CONDITION" means, with respect to any specified
action, that each Rating Agency, upon the written request of the Transferor, the
Servicer or the Trustee, shall have notified all of such parties in writing that
such action in and of itself will not result in a reduction or withdrawal of the
rating of any outstanding Series with respect to which it is a Rating Agency
and, in relation to a Series with respect to which an Enhancement is in effect,
the Enhancement Provider has given its prior written consent thereto.
"REASSIGNMENT DATE" shall have the meaning specified in
Section 2.04(e).
"RECEIVABLES" means Principal Receivables and Finance Charge
Receivables; PROVIDED that upon the reassignment or removal by the Trustee to
the Transferor of
POOLING AND SERVICING AGREEMENT
25
19
Receivables pursuant to Section 2.04(d) or (e), such reassigned or removed
Receivables, as of the date of such reassignment or removal, shall no longer be
treated as Receivables.
"RECORD DATE" means, with respect to any Distribution Date,
the last calendar day of the preceding calendar month.
"RECOVERIES" means, all amounts received (net of out-of-pocket
costs of collection), including Insurance Proceeds, with respect to Receivables
previously charged off as uncollectible.
"REGISTERED CERTIFICATES" shall have the meaning specified in
Section 6.01.
"REQUIRED DESIGNATION DATE" shall have the meaning specified
in Section 2.06.
"REQUIREMENTS OF LAW" means any law, treaty, rule or
regulation, or determination of an arbitrator or Governmental Authority and,
when used with respect to any Person, the certificate of incorporation and
by-laws or other charter or other organizational or governing documents of such
Person.
"RESERVE ACCOUNT" shall have the meaning specified in the
applicable Supplement.
"RESPONSIBLE OFFICER" means (i) with respect to the Trustee,
any officer assigned to the Corporate Trust Office, including any managing
director, vice president, assistant vice president, assistant treasurer,
assistant secretary or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above-designated officers
and having direct responsibility for the administration of the Transaction
Documents and the transactions contemplated thereby, and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject or (ii)
when used with respect to the Transferor, the Servicer or the Parent, any
President, Vice-President, Assistant Vice- President, Secretary, Assistant
Secretary, Treasurer, Assistant Treasurer or any other of its officers
customarily performing functions similar to those performed by the foregoing
officers.
"REVOLVING PERIOD" shall have, with respect to any Series, the
meaning specified in the related Supplement.
"SAIF" means the Savings Association Insurance Fund
administered by the FDIC.
POOLING AND SERVICING AGREEMENT
26
20
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time.
"SERIES" means any series of Investor Certificates.
"SERIES ACCOUNT" means, with respect to any Series, any
account or accounts established pursuant to the related Supplement for the
benefit of such Series.
"SERIES DILUTION AMOUNT" means, for any Series with respect to
any Due Period, an amount equal to the product of the Investor Percentage for
such Series for such Due Period and the Dilution Amount for such Due Period.
"SERIES EARLY AMORTIZATION EVENT" with respect to any Series,
shall have the meaning specified in the related Series.
"SERIES INVESTED AMOUNT," with respect to any Series, shall
have the meaning specified in the related Supplement.
"SERIES SERVICING FEE PERCENTAGE" means, with respect to any
Series, the amount specified in the related Supplement.
"SERIES SUPPLEMENT" means, with respect to any Series, the
Supplement entered into in connection with such Series.
"SERIES TERMINATION DATE" means, with respect to any Series,
the date specified in the related Supplement.
"SERVICER" means initially The El-Bee Chargit Corp., an Ohio
corporation, and its permitted successors and assigns and thereafter any Person
appointed Successor Servicer pursuant to Section 10.02.
"SERVICER DEFAULT" shall have the meaning specified in Section
10.01.
"SERVICER TERMINATION NOTICE" shall have the meaning specified
in Section 10.01.
"SERVICING OFFICER" means any officer of the Servicer involved
in, or responsible for, the administration and servicing of the Receivables
whose name appears on a list of servicing officers furnished to the Trustee by
the Servicer, as such list may from time to time be amended.
POOLING AND SERVICING AGREEMENT
27
21
"SHARED EXCESS FINANCE CHARGE COLLECTIONS" shall have the
meaning specified in Section 4.03(f).
"SHARED PRINCIPAL COLLECTIONS" shall have the meaning
specified in Section 4.03(e).
"SINGLE EMPLOYER PLAN" means a "single employer plan", as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
the Transferor or any ERISA Affiliate or (b) was so maintained and in respect of
which the Transferor or any ERISA Affiliate could have liability under Section
4069 of ERISA in the event such plan has been or were to be terminated.
"SOLVENT" and "SOLVENCY" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay such debts and
liabilities as they mature and (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's property would constitute an unreasonably small capital. The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services,
a division of the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or its successor.
"STORE" means any retail location of any Originator or any
Affiliate of any Originator, the corporate headquarters of any Originator or the
Parent's Distribution Center.
"STORE ACCOUNT" means any Collection Account used to collect
receipts from stores including Store Payments.
"STORE PAYMENT" means any payment by an Obligor on account of
a Receivable made by means of cash, check, money order or any other form of
payment delivered in person by such Obligor to an employee at any Store.
"SUBORDINATED NOTE" shall have the meaning specified in any
Purchase Agreement.
POOLING AND SERVICING AGREEMENT
28
22
"SUBSIDIARY" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having ordinary
voting power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such partnership,
joint venture or limited liability company or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person's other Subsidiaries.
"SUCCESSOR SERVICER" shall have the meaning specified in
Section 10.02(a).
"SUPPLEMENT" means, with respect to any Series, a supplement
to this Agreement complying with the terms of Section 6.09 of this Agreement,
executed in conjunction with any issuance of any Series of Certificates, and all
amendments, supplements and other modifications thereto.
"TAX OPINION" means, with respect to any action, an Opinion of
Counsel who is not an employee of the Servicer or any Affiliate of the Servicer
to the effect that, for Federal income tax purposes and for New York and Ohio
state income and franchise tax purposes, (a) such action will not adversely
affect the characterization of the Investor Certificates of any outstanding
Series as debt of the Transferor, (b) such action will not cause a taxable event
to any Investor Certificateholder, (c) following such action the Trust should
not be treated as an association (or publicly traded partnership) taxable as a
corporation and (d) in the case of the original issuance of Certificates and the
issuance of any new Series of Investor Certificates pursuant to Section 6.09,
the Investor Certificates should properly be characterized as either debt of the
Transferor, or if not debt, as an interest in a partnership and not in an
association (or a publicly traded partnership) taxable as a corporation.
"TERMINATION EVENT" shall have the meaning specified in any
Purchase Agreement.
"TOTAL SYSTEMS FAILURE" means, in respect of any Distribution
Date, a total failure of the computer system (including but not limited to
off-site backup systems) of the Servicer which contain records relating to the
Receivables, the effect of which would make it impossible or impracticable for
the Servicer to perform the acts required to be performed hereunder on or in
anticipation of such Distribution Date.
"TRANSACTION DOCUMENTS" means this Agreement, each Purchase
Agreement, each Supplement, each Certificate Purchase Agreement, each Loan
Agreement, the Parent Undertaking Agreement, the Intercreditor Agreement, the
Fee Letter for each Series and the
POOLING AND SERVICING AGREEMENT
29
23
other agreements and instruments executed or to be executed in connection
with any of the foregoing.
"TRANSFER" shall have the meaning specified in Section 2.01.
"TRANSFER AGENT AND REGISTRAR" shall have the meaning
specified in Section 6.03 and shall initially be the Trustee.
"TRANSFEROR" means The El-Bee Receivables Corporation, a
Delaware corporation.
"TRANSFEROR EXCHANGE" shall have the meaning specified in
Section 6.09(b).
"TRANSFEROR INVESTED AMOUNT" means at any time the aggregate
amount of Principal Receivables in the Trust PLUS the credit balance in the
Excess Funding Account MINUS the Aggregate Invested Amount.
"TRANSFEROR MONTHLY SERVICING FEE" means with respect to any
Due Period, an amount equal to one-twelfth of the product of 2% and the
Aggregate Invested Amount as of the last day of the preceding Due Period.
"TRANSFEROR PERCENTAGE" means on any date of determination,
when used with respect to Principal Receivables, Finance Charge Receivables and
Loss Amounts, a percentage equal to 100% MINUS the aggregate Investor
Percentages for all Series with respect to such categories of Receivables.
"TRUST" means the ▇▇▇▇▇-▇▇▇▇▇▇▇ Master Trust created by this
Agreement, the corpus of which shall consist of the Trust Assets.
"TRUST ASSETS" shall have the meaning specified in Section
2.01.
"TRUST EARLY AMORTIZATION EVENT" shall have the meaning
specified in Section 9.01.
"TRUST EXTENSION" shall have the meaning specified in Section
12.01(a).
"TRUST TERMINATION DATE" means the earliest of (a) the date of
the termination of the Trust pursuant to Section 9.02(b), (b) (i) unless a Trust
Extension shall have occurred, the day after the Distribution Date following the
date on which funds shall have been deposited in the applicable Series Accounts
for the payment of Investor Certificateholders of each Series then issued and
outstanding sufficient to pay in full the Series Invested Amount and, if
POOLING AND SERVICING AGREEMENT
30
24
applicable, the Enhancement Invested Amount of each such Series plus accrued
interest at the applicable Certificate Rate through the date specified in the
related Supplement with respect to each such Series plus all fees and expenses
of the Trustee, the Servicer, any Enhancement Provider and any other Person as
specified therein and (ii) if a Trust Extension shall have occurred, the
Extended Trust Termination Date, and (c) December 30, 2017.
"TRUSTEE" means Bankers Trust Company, a New York banking
corporation, in its capacity as trustee on behalf of the Trust, and its
successors and any banking corporation resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee appointed as herein provided.
"UCC" means the Uniform Commercial Code, as amended from time
to time, as in effect in the State of New York and any other state where the
filing of a financing statement is required or advisable to perfect an interest
in the Receivables and the proceeds thereof, or in any other specified
jurisdiction.
"UNDIVIDED TRUST INTEREST" means the undivided interest in the
Trust evidenced by a Certificate.
"VOTING STOCK" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even if the right so
to vote has been suspended by the happening of such a contingency.
"YIELD CHANGE" shall have the meaning specified in Section
2.05(t).
Section 1.02 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement or any Supplement
shall have the defined meanings when used in any Transaction Document,
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein.
(b) As used herein and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
Section 1.01, and accounting terms partially defined in Section 1.01 to the
extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles or regulatory accounting principles, as
applicable. To the extent that the definitions of accounting terms herein are
inconsistent with the meanings of such terms under generally accepted accounting
principles or regulatory accounting principles, the definitions contained herein
shall control.
POOLING AND SERVICING AGREEMENT
31
25
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Article, Section,
Schedule and Exhibit references contained in this Agreement are references to
Articles, Sections, Schedules and Exhibits in or to this Agreement, unless
otherwise specified; and the term "including" means "including without
limitation".
(d) Unless otherwise stated in this Agreement, in the
computation of a period of time from a specified date to a later specified date
the word "from" shall mean "from and including" and the words "to" and "until"
shall mean "to but excluding".
ARTICLE II
TRANSFER OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.01 TRANSFER OF RECEIVABLES. The Transferor does
hereby transfer, assign, set-over and otherwise convey (the making of such
transfer, assignment, set-over and conveyance being a "TRANSFER," and so to
transfer, assign, set-over and otherwise convey being to "TRANSFER") to the
Trust for the benefit of the Beneficiaries without recourse (except as expressly
provided herein), in each case whether now existing or hereafter created, (a)
all of the Transferor's right, title and interest in and to all of the
Receivables existing on the Effective Date and thereafter arising from time to
time in connection with the Accounts until the termination of the Trust, (b) all
monies due or to become due with respect thereto, (c) all Recoveries and
Insurance Proceeds relating to such Receivables, (d) all Collections and all
other amounts received or receivable from time to time with respect to such
Receivables, (e) all rights, remedies, powers and privileges with respect to
such Receivables, (f) all of the Transferor's rights, remedies, powers and
privileges under each Purchase Agreement and each Interest Rate Protection
Agreement, if any, and (g) all proceeds (including "proceeds" as defined in the
UCC of the State of New York and of the jurisdiction the law of which governs
the perfection of the interest in the Receivables Transferred hereunder) of the
foregoing. Such property described in the preceding sentence, together with all
monies from time to time on deposit in, and all Permitted Investments and other
securities, instruments and other investments purchased from funds on deposit
in, the Concentration Account, the Collection Accounts (except, solely with
respect to the Store Accounts, to the extent described in the Intercreditor
Agreement), the Excess Funding Account and any Series Account, and any
Enhancement issued with respect to any Series (the drawing on or payment of such
Enhancement not being available to Certificateholders of any other Series),
shall constitute the assets of the Trust (collectively the "TRUST ASSETS"). The
foregoing Transfer is made to the
POOLING AND SERVICING AGREEMENT
32
26
Trust for the benefit of the Beneficiaries and each reference in this Agreement
to such Transfer shall be construed accordingly.
The parties intend that if, and to the extent that, such
Transfer is not deemed to be a sale, the Transferor shall be deemed hereunder to
have granted to the Trust a first priority perfected security interest in all of
the Transferor's right, title and interest in and to all Trust Assets to secure
all the Transferor's and Servicer's obligations hereunder, including the
Transferor's obligation to sell or Transfer to the Trust all Receivables
existing on the date hereof or hereafter created and transferred to the
Transferor from time to time under the Purchase Agreements. This Agreement shall
constitute a security agreement under applicable law.
Pursuant to the request of the Transferor, the Trustee shall
cause Certificates in authorized denominations evidencing the entire interest in
the Trust to be duly authenticated and delivered to or upon the order of the
Transferor pursuant to Section 6.02.
Section 2.02 ACCEPTANCE BY TRUSTEE.
(a) 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 Trust Assets, and declares that it shall maintain such right,
title and interest, upon the Trust herein set forth, for the benefit of all
Beneficiaries to the extent set forth in the Transaction Documents. The Trustee
further acknowledges that, on or prior to the Effective Date, it has received
from the Servicer (on behalf of the Transferor) the computer file or microfiche
or written list required to be delivered to it pursuant to Section
3.03(b)(viii)(E).
(b) The Trustee hereby agrees not to disclose to any Person
any of the account numbers or other information contained in the computer files
or microfiche or written lists delivered to the Trustee pursuant to Section
3.03(b)(viii)(E) ("ACCOUNT INFORMATION") except as is required in connection
with the performance of its duties hereunder or in enforcing the rights of the
Beneficiaries or to a Successor Servicer appointed pursuant to Section 10.02 or
as mandated pursuant to any Requirement of Law applicable to the Trustee.
Notwithstanding anything herein to the contrary, the foregoing shall not be
construed to prohibit (i) disclosure of any and all information that is or
becomes publicly known, or information obtained by the Trustee from sources
other than the Transferor or the Servicer which, insofar Known to the Trustee,
are not prohibited from transmitting the information by a contractual, legal or
fiduciary obligation to the Transferor or the Servicer, (ii) disclosure of any
and all information (A) if required to do so by any applicable statute, law,
rule or regulation, (B) to any government agency or regulatory body having
authority to regulate or oversee any aspects of the Trustee's business or that
of its Affiliates, (C) pursuant to any subpoena, civil investigative demand or
similar demand or request of any court, regulatory
POOLING AND SERVICING AGREEMENT
33
27
authority, arbitrator or arbitration to which Trustee or an Affiliate, officer,
director, employer or shareholder thereof is a party, (D) in any preliminary or
final offering circular, registration statement or contract or other document
pertaining to the transactions contemplated herein approved in advance in
writing by the Transferor or the Servicer or (E) to any Affiliate, independent
or internal auditor, agent, employee or attorney of Trustee having a need to
know the same, provided that the Trustee advises such recipient of the
confidential nature of the information being disclosed and which recipient
agrees to maintain the confidentiality of any such information in accordance
with the applicable provisions of this Agreement, or (iii) any other disclosure
authorized in writing by the Transferor or the Servicer. The Trustee agrees to
take such measures as shall be reasonably requested by the Transferor to protect
and maintain the security and confidentiality of such information, and, in
connection therewith, shall allow the Transferor at the Transferor's expense to
inspect the Trustee's security and confidentiality arrangements from time to
time during normal business hours, upon reasonable prior notice. In the event
that the Trustee is required by law to disclose any Account Information, the
Trustee shall provide the Transferor with prompt written notice, unless such
notice is prohibited by law, of any such request or requirement so that the
Transferor may request a protective order or other appropriate remedy. The
Trustee shall use its best efforts to provide the Transferor with written notice
no later than five days prior to any disclosure pursuant to this Section
2.02(b).
(c) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust or place Liens on
Trust Assets other than as contemplated in this Agreement.
(d) The Trustee is hereby authorized and directed to execute
and deliver to the other parties thereto each Transaction Document to which the
Trustee is a party.
Section 2.03 REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR.
The Transferor hereby represents and warrants to the Trustee for the benefit of
the Trust (i) as of the date hereof and the Effective Date, (ii) by accepting on
the date of each Transfer the proceeds of such Transfer, as of such date and
(iii) with respect to any Series, as of the Closing Date for such Series that:
(a) DUE ORGANIZATION, QUALIFICATION AND AUTHORIZATION. The
Transferor (i) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation,
(ii) is duly qualified and in good standing as a foreign corporation in
each other jurisdiction in which it owns or leases property or in which
the conduct of its business requires it to so qualify or be licensed
and (iii) has all requisite corporate power and authority (including
all governmental licenses, permits and other approvals) to own or lease
and operate its properties and to carry on its business as now
conducted and as proposed to be conducted.
POOLING AND SERVICING AGREEMENT
34
28
(b) CORPORATE POWERS AND NO CONFLICTS. The execution, delivery
and performance by the Transferor of the Transaction Documents to which
it is or is to be a party, the consummation of the transactions
contemplated hereby and the making of each Transfer, are within the
Transferor's corporate powers, have been duly authorized by all
necessary corporate action, and do not (i) contravene or violate any
Requirement of Law, (ii) conflict with or result in the breach of, or
constitute a default under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or
affecting the Transferor or any of its properties or (iii) result in or
require the creation or imposition of any Lien upon or with respect to
any of the properties of the Transferor, and no transaction
contemplated hereby requires compliance on the Transferor's part with
any bulk sales act or similar law. The Transferor is not in violation
of any Requirement of Law or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other
instrument.
(c) GOVERNMENT AUTHORIZATION AND APPROVAL. No authorization or
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body or any other third party is
required for (i) the due execution, delivery or performance by the
Transferor of any of the Transaction Documents to which it is or is to
be a party, any Transfer or the consummation of the other transactions
contemplated hereby or thereby, (ii) the grant by the Transferor of the
liens granted by it pursuant to the Transaction Documents, (iii) the
perfection or maintenance of the liens created by the Transaction
Documents (including the first priority nature thereof) or (iv) the
exercise by the Trustee of its rights under the Transaction Documents
or the remedies granted under the Transaction Documents, except for (A)
the financing statements and other documents required to have been
filed on or prior to the Effective Date pursuant to the Certificate
Purchase Agreement and the Loan Agreement for the initial Series issued
pursuant hereto, all of which have already been duly filed and are in
full force and effect, (B) the filing from time to time of any
amendments, assignments, continuation statements or other documents
which may become required pursuant to Sections 2.05(i) or 3.03(b)(viii)
and (C) any properly completed and executed UCC-3 termination
statements which shall have been delivered to the Program Agent on or
before the Effective Date.
(d) ENFORCEABILITY. Each Transaction Document to which the
Transferor is or is to be a party constitutes a legal, valid and
binding obligation of the Transferor enforceable against the Transferor
in accordance with its terms (except as such enforceability may be
limited by Debtor Relief Laws). Each Transaction Document is in full
force and effect and is not subject, as to the Transferor, to any
specific dispute, offset, counterclaim or defense of the Transferor.
POOLING AND SERVICING AGREEMENT
35
29
(e) NO LITIGATION. There is no action, suit, investigation,
litigation or proceeding affecting the Transferor, pending or
threatened before any Governmental Authority or arbitrator that (i)
could have a Material Adverse Effect, (ii) purports to affect the
legality, validity or enforceability of any Transaction Document or the
consummation of the transactions contemplated hereby or (iii) could
adversely affect the income tax attributes of the Trust.
(f) LIENS ON PROPERTIES. Except for Liens that will be
terminated prior to the Effective Date, there are no Liens of any
nature whatsoever on any Account or Receivable. The Transferor is not a
party to any contract, agreement, lease or instrument (other than this
Agreement or as contemplated by this Agreement) the performance of
which, either unconditionally or upon the happening of an event, will
result in or require the creation of any Lien on any Account or
Receivable, or otherwise result in a violation of this Agreement.
(g) CONTRACTUAL OBLIGATIONS. (i) The Transferor is not a party
to any indenture, loan or credit agreement or any lease or other
agreement or instrument, or subject to any Requirement of Law, that
would have an adverse effect on the ability of the Transferor to carry
out its obligations under this Agreement or any other Transaction
Document to which it is a party, and (ii) neither the Transferor nor
any other party is in default in any respect under or with respect to
the Purchase Agreements or any other contract, agreement, lease or
instrument to which the Transferor is a party.
(h) INVESTMENT COMPANY ACT. The Transferor is not an
"investment company", or an "affiliated person" of, or "promoter" or
"principal underwriter" for, or a company controlled by, an "investment
company," within the meaning of and as such terms are defined in the
Investment Company Act.
(i) LOCATIONS. The chief place of business and chief executive
office of the Transferor, and the office where the Transferor keeps the
originals of its books, records and documents regarding the Receivables
and the other Trust Assets of the Transferor are located at the address
of the Transferor specified in Section 13.04.
The Transferor maintains no other business locations.
(j) TRADENAMES. The legal name of the Transferor is as set
forth on the signature page of this Agreement, and the Transferor has
no tradenames, fictitious names, assumed names or "doing business as"
names.
(k) SUBSIDIARIES. The Transferor has no Subsidiaries.
x
POOLING AND SERVICING AGREEMENT
36
30
(l) ACCURACY OF INFORMATION. Each certificate, information,
exhibit, financial statement, document, book, record or report
furnished by a Responsible Officer of the Transferor to the Trustee,
any Enhancement Provider or the Servicer in connection with this
Agreement is acurate in all material respects as of its date and no
such document contains any misstatement of material fact.
(m) SOLVENCY. The Transferor is Solvent and will be Solvent
after giving effect to the transactions contemplated by the
Transaction Documents.
(n) COMPLIANCE. The Transferor has complied, and will comply
on each initial issuance of Certificates of any Series, with each
Requirement of Law with respect to all Receivables Transferred to the
Trust hereunder and the Cardholder Agreements related thereto and
with respect to the Transferor's business or properties.
(o) TAXES. The Transferor has filed all tax returns (federal,
state and local) which it reasonably believes are required to be filed
and has paid or made adequate provision for the payment of all taxes,
assessments and other governmental charges due from the Transferor or
is contesting any such tax, assessment or other governmental charge in
good faith through appropriate proceedings as to which adequate
reserves are being maintained and no Lien with respect thereto has
attached to its property and become enforceable against its other
creditors. The Transferor knows of no reasonable basis for any
additional tax assessment for any year for which adequate reserves have
not been established.
(p) USE OF PROCEEDS. No proceeds of the issuance of any
Certificate will be used by the Transferor to acquire any security in a
transaction that is subject to Sections 13 and 14 of the Exchange Act
or to purchase or carry any margin security in violation of any
applicable law or regulation.
(q) COLLECTION ACCOUNTS. The Collection Account Banks are the
only institutions holding Collection Accounts for the receipt of
payments in respect of Receivables (subject to such changes as may be
made from time to time in accordance with Section 4.02(c) hereof), and
all Obligors, and only such Obligors, have been instructed or, upon the
creation of Receivables, will be instructed to make payments only to
the Servicer or to Collection Accounts in accordance with Section 4.03
and such instructions have not been modified or revoked by the
Transferor (except as permitted under Section 4.02(c) hereof) and such
instructions that have been given are in full force and effect.
(r) EARLY AMORTIZATION EVENT. As of the Closing Date for any
Series, no event or condition has occurred and is continuing that is,
or with the giving of notice,
POOLING AND SERVICING AGREEMENT
37
31
the passage of time or both would constitute, a Trust Early
Amortization Event or, with respect to such Series, a Series Early
Amortization Event.
(s) ERISA. No Plan has any accumulated funding deficiency, as
defined in Section 302(a) of ERISA, whether or not waived. The
Transferor and each ERISA Affiliate has timely made all contributions
required to be made by it to any Plan, except where a failure to
contribute could not reasonably be expected to give rise to a Lien
under Section 302(f) of ERISA. No Plan Event with respect to any Plan
has occurred or could reasonably be expected to occur that could
result, directly or indirectly, in any Lien being imposed on the
property of the Transferor. Neither the Transferor nor any ERISA
Affiliate has incurred, or could reasonably be expected to
incur, withdrawal liability to, or liability in connection with, the
reorganization, termination or insolvency of any Multiemployer Plan.
(t) FRAUDULENT CONVEYANCE. The Transferor is not entering into
the transactions contemplated hereby with the intent of hindering,
delaying or defrauding any creditor.
(u) LIMITED PURPOSE. The Transferor engages in no activities
other than those contemplated by the Transaction Documents.
(v) CERTIFICATES. Each Certificate, when executed and
authenticated by the Trustee in accordance with the terms of Article VI
and delivered to and paid for by an Investor Certificateholder pursuant
to the related Certificate Purchase Agreement or Loan Agreement, will
be validly issued and outstanding and entitled to the benefits of this
Agreement and the related Transaction Documents.
(w) ELIGIBILITY OF ACCOUNTS. Each Account that was classified
as an "Eligible Account" by the Transferor or the Servicer in any
document or report delivered hereunder satisfied, at the time of such
classification, the requirements for eligibility contained in the
definition of Eligible Account.
(x) OFFERING OF CERTIFICATES. Neither the Transferor nor any
agent acting on its behalf has, directly or indirectly, offered any
Certificate or any similar security of the Transferor for sale to, or
solicited any offer to buy any Certificate or any similar security of
the Transferor from, or otherwise approached or negotiated with respect
thereto, with any Person which, and neither the Transferor nor any
agent acting on its behalf has taken or will take any action which
would subject the issuance or sale of any Certificate to the provisions
of Section 5 of the Securities Act or to the qualification provisions
of any securities or blue sky law of any applicable jurisdiction.
POOLING AND SERVICING AGREEMENT
38
32
The representations and warranties set forth in this Section
2.03 shall survive the Transfer and assignment of the respective Receivables to
the Trust and the termination of the rights and obligations of the Servicer
pursuant to Section 10.01.
Section 2.04 REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR
RELATING TO THE RECEIVABLES.
(a) VALID TRANSFER AND ASSIGNMENT; ELIGIBILITY OF RECEIVABLES.
The Transferor hereby represents and warrants to the Trustee for the benefit of
the Trust (i) as of the date hereof, (ii) by accepting on the date of each
Transfer the proceeds of such Transfer, as of such date and (iii) with respect
to any Series, as of the Closing Date for such Series that:
(i) VALID TRANSFER AND ASSIGNMENT. Each of the Purchase
Agreements creates a valid sale, transfer and assignment to the
Transferor of, and, subject to the interest of the Trust hereunder, the
Transferor is the legal and beneficial owner of, in each case whether
now existing or hereafter created, (A) all of the Originators' right,
title and interest in and to the Receivables existing on the Effective
Date and thereafter arising from time to time in connection with the
Accounts until the termination of the Trust, (B) all monies due or to
become due with respect thereto, (C) all Recoveries and Insurance
Proceeds relating to such Receivables, (D) all Collections and all
other amounts received or receivable from time to time with respect to
such Receivables, (E) all rights, remedies, powers and privileges with
respect to such Receivables, (F) all of the Originators' rights,
remedies, powers and privileges under each Interest Rate Protection
Agreement and (G) all proceeds (including "proceeds" as defined in the
UCC of the State of New York and of the jurisdiction the law of which
governs the perfection of the interest in the Receivables Transferred
hereunder) of the foregoing. 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 Trust Assets, or (B) a valid
grant to the Trust of a first priority perfected security interest (as
defined in the UCC as in effect in any applicable jurisdiction) in all
right, title and interest of the Transferor in and to the Trust Assets,
which is enforceable with respect to the Receivables now existing in
connection with the Accounts and the other existing Trust Assets and
the proceeds thereof, and which will be enforceable by the Trustee, in
the case of Receivables hereafter created and arising from time to time
in connection with the Accounts and all other Trust Assets and the
proceeds thereof hereafter created, upon such creation. Upon the filing
of the appropriate financing statements, the Trust shall have a first
priority perfected ownership or security interest in those Trust Assets
and proceeds thereof in which a security interest may be perfected by
filing appropriate financing statements. Neither the Transferor nor any
Person claiming through or under the Transferor has any claim to or
interest in the Concentration Account, any Collection Account (except,
solely with respect to the Store Accounts, to the extent
POOLING AND SERVICING AGREEMENT
39
33
described in the Intercreditor Agreement), the Excess Funding Account
or any Series Account, except for (x) the Transferor's rights to
receive interest accruing on, and investment earnings in respect of,
the Concentration Account, as provided in this Agreement (and, if
applicable, any Series Account as provided in any Supplement) and (y)
to the extent that this Agreement constitutes the grant of a security
interest in such property, the interest of the Transferor in such
property as a debtor for purposes of the UCC as in effect in any
applicable jurisdiction. Except as otherwise provided in this
Agreement, the Transferor has caused the Servicer to clearly and
unambiguously ▇▇▇▇ all its computer records and all its microfiche
storage files, if any, in a manner reasonably calculated to indicate
the Trust's interest in the Trust Assets and shall cause the Servicer
to maintain such records in a manner such that the Trust's perfected
first priority interest in the Receivables shall not be adversely
affected.
(ii) ELIGIBILITY. Each Receivable (i) was purchased in
accordance with the terms of a Purchase Agreement and (ii) is an
Eligible Receivable.
(iii) FREE AND CLEAR OF LIENS. Each Receivable and the
Collections with respect thereto then existing have been or will be
Transferred to the Trust free and clear of any Lien or interest of any
Person or any other Person not holding through the Trust, and in
compliance with all Requirements of Law applicable to the Transferor.
(iv) RECORDS. The computer file or microfiche or written lists
referred to in Section 3.03(b)(viii)(E), as of the date of delivery
thereof, are accurate and complete listings in all material respects of
all the Accounts, and the information contained therein with respect to
the identity of such Accounts and the Receivables existing thereunder
is true and correct in all material respects as of such date. As of the
Initial Cut Off Date the aggregate amount of Receivables in all the
Accounts was $162,377,744.49.
(v) INVESTMENT COMPANY ACT, ETC. Each Transfer of Receivables
to the Trust hereunder constitutes a purchase or other acquisition of
notes, drafts, acceptances, open accounts receivable or other
obligations representing part or all of the sales price of merchandise,
insurance or services within the meaning of Section 3(c)(5) of the
Investment Company Act. The acquisition by the Trust of each Receivable
constitutes a "current transaction" within the meaning of Section
3(a)(3) of the Securities Act.
(vi) NO PAYMENT. The Transferor has no Knowledge of any fact
which would lead it to reasonably expect that, when billed, any
Receivable Transferred hereunder would not be paid in accordance with
its terms when due.
POOLING AND SERVICING AGREEMENT
40
34
(b) SURVIVAL. The representations and warranties set forth in
this Section 2.04 shall survive the Transfer of any of the respective
Receivables to the Trust and the termination of the rights and obligations of
the Servicer pursuant to Section 10.01.
(c) NOTICE OF BREACH. Upon discovery by the Transferor, the
Servicer or the Trustee of a breach of any of the representations and warranties
set forth in Section 2.03 or 2.04, the party discovering such breach shall give
prompt written notice to the other parties hereto and each Enhancement Provider
as soon as practicable and in any event within three Business Days following
such discovery.
(d) INELIGIBLE RECEIVABLES.
(i) AUTOMATIC REMOVAL. In the event (x) of a breach with
respect to a Receivable of any representations and warranties set forth in
Section 2.04(a)(iii), (y) a Receivable does not arise under an Eligible Account
as a result of the failure to satisfy the conditions set forth in clause (v) of
the definition of Eligible Account or (z) a Receivable is not an Eligible
Receivable as a result of the failure to satisfy the conditions set forth in
clause (iv) of the definition of Eligible Receivable, and any of the following
three conditions is met: (A) as a result of such breach or event such Receivable
is charged off as uncollectible or the Trust's rights in, to or under such
Receivable or its proceeds are impaired or the proceeds of such Receivable are
not available for any reason to the Trust free and clear of any Lien; or (B) any
Lien upon such Receivable (1) arises in favor of the United States of America or
any State or any agency or instrumentality thereof and involves taxes or liens
arising under Title IV of ERISA or (2) has been consented to by any Originator
or the Transferor, 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
of written notice of such breach or event given by the Trustee, each such
Receivable shall be automatically reduced on the terms and conditions set forth
in Section 2.04(d)(iii) and shall no longer be treated as a Receivable; PROVIDED
that if any such Lien does not have a Material Adverse Effect, the Transferor
shall have 10 days to remove any such Lien.
(ii) REMOVAL AFTER CURE PERIOD. In the event of a breach of
any of the representations and warranties set forth in Sections 2.04(a)(ii)
through 2.04(a)(vi), other than a breach or event as set forth in clause (d)(i)
above, and as a result of such breach the Receivable becomes charged off or the
Trust's rights in, to or under the Receivable or its proceeds are impaired or
the proceeds of such Receivable are not available for any reason to the Trust
free and clear of any Lien, then, upon the expiration of 60 days after the
earlier to occur of the discovery of any such event by either the Transferor or
the Servicer or receipt by the Transferor of written notice of any such event
given by the Trustee, each such Receivable shall be reduced on the terms and
conditions set forth in Section 2.04(d)(iii) and shall no longer be treated as a
Receivable; PROVIDED, HOWEVER, that no such reduction shall be required
POOLING AND SERVICING AGREEMENT
41
35
if, on any day within such applicable 60-day period, such representations and
warranties with respect to such Receivable shall then be true and correct in all
material respects as if such Receivable had been created on such day.
(iii) PROCEDURES FOR REDUCTION. When the provisions of Section
2.04(a)(i) or (ii) above require reduction of a Receivable, the Transferor
shall, with respect to each such Receivable (an "INELIGIBLE RECEIVABLE"), direct
the Servicer to deduct the principal balance of each such Ineligible Receivable
from the Principal Receivables in the Trust and to decrease the Transferor
Invested Amount by such amount (but not below zero). On and after the date of
such reduction, each Ineligible Receivable shall be deducted from the aggregate
amount of Principal Receivables used in the calculation of any Investor
Percentage, the Transferor Percentage and the Transferor Invested Amount. In the
event that the exclusion of an Ineligible Receivable from the calculation of the
Transferor Invested Amount would cause the Transferor Invested Amount to be
reduced below the Aggregate Minimum Transferor Invested Amount, the Transferor
shall immediately, but in no event later than 10 Business Days after such event,
or, if earlier, the next succeeding Distribution Date, make a deposit in the
Excess Funding Account in immediately available funds in an amount equal to the
amount by which the Transferor Invested Amount would be reduced below the
Aggregate Minimum Transferor Invested Amount were such deposit not made. The
obligation of the Transferor set forth in this Section 2.04(d)(iii), or the
automatic reduction of such Receivable from the Trust, as the case may be, shall
constitute the sole remedy respecting any breach of the representations and
warranties set forth in the above-referenced Sections with respect to such
Receivable available to Certificateholders or the Trustee on behalf of
Certificateholders, except as otherwise specified in any Supplement.
(e) REASSIGNMENT OF TRUST PORTFOLIO. In the event of a breach
of the representations and warranties set forth in Section 2.03(d) or 2.04(a)(i)
of this Agreement or Section 3.01(d) or 3.01(t) of the Purchase Agreements, the
Trustee or a Majority in Interest of all Series, by notice then given in writing
to the Transferor (and to the Trustee and the Servicer, if given by such
Majority in Interest) may direct the Transferor to accept reassignment of an
amount of Principal Receivables (as specified below) within 60 days after such
notice and the Transferor shall be obligated to accept reassignment of such
Principal Receivables on a Distribution Date specified by such Person (such
Distribution Date, the "REASSIGNMENT DATE") occurring within such applicable
period on the terms and conditions set forth below; PROVIDED, HOWEVER, that no
such reassignment shall be required to be made if, at any time during such
applicable period, the representations and warranties contained in Section
2.03(d) or 2.04(a)(i) shall then be true and correct. The Transferor shall
deposit on the Reassignment Date an amount equal to the reassignment deposit
amount (as specified below) for such Receivables in the Concentration Account
for distribution to the Investor Certificateholders pursuant to Article XII or
any Enhancement Provider pursuant to the applicable Supplement. The reassignment
deposit amount for each Series with respect to
POOLING AND SERVICING AGREEMENT
42
36
which a notice directing reassignment has been given, unless otherwise stated in
the related Supplement, shall be equal to (i) the Series Invested Amount of such
Series and, if applicable, the Enhancement Invested Amount of such Series at the
end of the day on the last day of the Due Period preceding the Reassignment
Date, LESS the amount, if any, previously allocated for payment of principal to
such Certificateholders on the related Distribution Date in the Due Period in
which the Reassignment Date occurs PLUS (ii) an amount equal to all interest
accrued but unpaid on the Investor Certificates and, if applicable, the
Enhancement Invested Amount of such Series at the applicable Certificate Rate
through such last day, LESS the amount, if any, previously allocated for payment
of interest to the Certificateholders of such Series on the related Distribution
Date in the Due Period in which the Reassignment Date occurs. Payment in full in
cash of the reassignment deposit amount with respect to each Series and all
other amounts in the applicable Series Account in respect of the preceding Due
Period shall be considered a prepayment in full of the interest in the
Receivables represented by such Series. On the Distribution Date on which such
amount has been deposited in full into the Concentration Account, Receivables
with an aggregate principal balance equal to that portion of the Aggregate
Invested Amount, with respect to which a notice directing reassignment has been
given, all monies due or to become due with respect thereto, all Recoveries and
Insurance Proceeds relating thereto and all proceeds of any of the foregoing
shall be released to the Transferor after payment of all amounts otherwise due
hereunder on or prior to such dates and the Trustee shall execute and deliver
such instruments of transfer or assignment, in each case without recourse,
representation or warranty, as shall be prepared by and as are reasonably
requested by the Transferor to vest in the Transferor, all right, title and
interest of the Trust in and to the Trust Assets. If the Trustee or a Majority
in Interest of all Series give notice directing the Transferor to accept
reassignment as provided above, the obligation of the Transferor to accept
reassignment of the Receivables and pay the reassignment deposit amount pursuant
to this Section 2.04(e) shall constitute the sole remedy respecting a breach of
the representations and warranties contained in Section 2.03(d) and 2.04(a)(i)
available to the Investor Certificateholders or the Trustee on behalf of the
Investor Certificateholders.
Section 2.05 COVENANTS OF THE TRANSFEROR. The Transferor
hereby covenants and agrees that:
(a) COMPLIANCE WITH LAW. The Transferor shall duly satisfy all
obligations on its part to be fulfilled under or in connection with the
Receivables, will maintain in effect all qualifications required under
Requirements of Law in order to properly purchase and Transfer the
Receivables and other Trust Assets to the Trust and will comply in all
respects with all Requirements of Law applicable to the Transferor, its
business and properties and the Trust Assets.
(b) PRESERVATION OF LEGAL EXISTENCE. The Transferor will
preserve and maintain its existence, legal structure, legal name, its
rights (charter and statutory),
POOLING AND SERVICING AGREEMENT
43
37
franchises, permits, licenses, approvals and privileges in the
jurisdiction of its formation, and qualify and remain qualified in each
jurisdiction where the failure to maintain such qualification could
have a Material Adverse Effect.
(c) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Transferor
will (i) keep proper books of record and account, which shall be
maintained or caused to be maintained by the Transferor and shall be
separate and apart from those of any Affiliate of the Transferor, in
which full and correct entries shall be made of all financial
transactions and the assets and business of the Transferor in
accordance with generally accepted accounting principles consistently
applied, (ii) maintain and implement administrative and operating
procedures (including the ability to recreate records evidencing the
Receivables, the Accounts and related Cardholder Agreements
in the event of the destruction of the originals thereof) and (iii)
keep and maintain all documents, books, records and other information
necessary or reasonably advisable for the collection of all Receivables
and the related Accounts (including records adequate to permit the
daily identification of each new Receivable and Account, and all
Collections of and adjustments to each existing Receivable).
The Transferor shall provide to the Trustee access to
the documentation regarding the Receivables and the Accounts in such
cases where the Trustee requires such access in connection with the
enforcement of the rights of any Beneficiary or is required by
applicable statutes or regulations to review such documentation, such
access being afforded without charge and at the sole cost of the
Transferor but only (i) upon reasonable written request, (ii) during
normal business hours, (iii) subject to the Transferor's normal
security and confidentiality procedures and (iv) at reasonably
accessible offices in the continental United States designated by the
Transferor.
(d) MAINTENANCE OF SEPARATE DIRECTORS. The Transferor will
maintain at least two independent directors who are not officers,
directors, shareholders or employees of (i) the Parent or the
Transferor or (ii) any Affiliate of the Parent or the Transferor, or a
parent, child, spouse or sibling of any such Person; PROVIDED, HOWEVER,
that if either such independent director dies or resigns, the
Transferor shall have 30 Business Days to replace that Person with
another independent director. The Transferor will not, without the
consent of the two independent directors, so long as there shall not
have elapsed one year and one day after the termination of the Trust,
institute against the Trust or the Transferor any proceeding of the
type referred to in the definition of "Insolvency Event" or cause or
permit any action prohibited by Section 2.05(r).
(e) PAYMENT OF TAXES, ETC. The Transferor will pay promptly
when due all taxes, assessments and governmental charges or levies
imposed upon it or any Trust
POOLING AND SERVICING AGREEMENT
44
38
Asset, or in respect of its income or profits therefrom, and any and
all claims of any kind, except that no such amount, so long as such
amount is not material, need be paid if the charge or levy is being
contested in good faith through appropriate proceedings as to which
adequate reserves are being maintained and no Lien with respect thereto
has attached to its property and become enforceable against its
creditors.
(f) REPORTING REQUIREMENTS. The Transferor will:
(i) within one Business Day after a Responsible
Officer of the Transferor obtains Knowledge of the occurrence
of any Early Amortization Event or Servicer Default or any
event which, with the giving of notice or lapse of time
or both, would constitute an Early Amortization Event or a
Servicer Default, notify the Trustee in writing of such
occurrence;
(ii) as soon as possible and in any event (A) within
three Business Days after a Responsible Officer of the
Transferor obtains Knowledge of the occurrence of any Early
Amortization Event or Servicer Default, or any event which,
with the giving of notice or lapse of time or both, would
constitute an Early Amortization Event or Servicer Default,
furnish to the Trustee, each Rating Agency and each
Enhancement Provider the written statement of a Responsible
Officer of the Transferor setting forth details of such Early
Amortization Event or Servicer Default or such event and the
action which the Transferor has taken and proposes to take
with respect thereto, and (B) within three Business Days after
a Responsible Officer of the Transferor makes a determination
that any other event, development or information is reasonably
likely, individually or in the aggregate, to have a Material
Adverse Effect, give written notice thereof to the Trustee,
each Rating Agency and each Enhancement Provider;
(iii) promptly, from time to time, furnish to the
Trustee such other information, documents, records or reports
regarding the Receivables, the other Trust Assets or the
condition or operations, financial or otherwise, of the
Transferor as the Trustee may from time to time reasonably
request;
(iv) within forty-five (45) (or, after the last
calendar month in each calendar year, ninety (90)) days after
the end of each calendar month in each Fiscal Year, deliver to
the Trustee, each Rating Agency and each Enhancement Provider
the balance sheet of the Transferor as at the end of such
period and the related statement of income of the Transferor
for such calendar month and for the period from the beginning
of the then current Fiscal Year to the end of such calendar
month, and for the corresponding period during the previous
Fiscal
POOLING AND SERVICING AGREEMENT
45
39
Year, and a comparison of the statement of the year to date
earnings to the corresponding statement for the corresponding
period from the previous Fiscal Year, if applicable, certified
by the President or other executive or senior officer of the
Transferor as fairly presenting the financial position of the
Transferor as at the date indicated and the results of its
operations for the period indicated in accordance with
generally accepted accounting principles, subject to normal
year end adjustments;
(v) within ninety (90) days after the end of each
Fiscal Year deliver to the Trustee and each Rating Agency
audited financial statements of the Parent, including therein
a balance sheet of the Parent as at the end of such Fiscal
Year and statements of income and cash flow of the Parent for
each Fiscal Year, reported on by Independent Public
Accountants and accompanied by their related audit letter,
which report and letter shall be unqualified as to scope and
shall state that such financial statements fairly present the
financial position of the Parent as at the dates indicated in
conformity with generally accepted accounting principles
applied on a basis consistent with prior years, if applicable,
and that the examination by such accountants in connection
with such financial statements has been made in accordance
with generally accepted auditing standards; and
(vi) as soon as possible and in any event within 30
days after a Responsible Officer of the Transferor obtains
Knowledge that one of the following events has occurred or is
reasonably expected to occur: (i) the occurrence of any Plan
Event with respect to any Plan or (ii) the withdrawal by the
Transferor or any of its ERISA Affiliates from, or the
termination, reorganization or insolvency of, any
Multiemployer Plan, notify the Trustee in writing of such
occurrence.
(g) PURCHASE AGREEMENTS. The Transferor (i) will, at its
expense, timely perform and comply with all provisions, covenants and
other promises required to be observed by it under the Purchase
Agreements, maintain the Purchase Agreements in full force and effect,
enforce its rights under the Purchase Agreements substantially in
accordance with the terms thereof and comply with its obligations under
all Cardholder Agreements giving rise to the Receivables, and (ii) will
not amend or otherwise modify any term or condition of any Purchase
Agreement or give any consent, waiver or approval thereunder. The
Transferor shall, within one Business Day after a Responsible Officer
obtains Knowledge of the occurrence of any Termination Event or any
event which, with the giving of notice or lapse of time or both, would
constitute a Termination Event, notify the Trustee in writing of such
occurrence. The Transferor
POOLING AND SERVICING AGREEMENT
46
40
shall promptly furnish to the Trustee copies of any notices, reports or
certificates given or delivered to the Transferor under the Purchase
Agreements.
(h) UCC OPINION. The Transferor shall deliver to the Trustee
within 90 days after the end of each calendar year, beginning with the
calendar year ending on or about December 31, 1998, an Opinion of
Counsel to the Transferor (who may be counsel employed by an Affiliate
of the Transferor), dated as of a date during such 90-day period,
substantially to the effect that, in the opinion of such counsel,
either (A) such action has been taken as is necessary to continue the
perfection of the interests of (1) each Purchaser (as defined in the
related Purchase Agreement) in and to the Receivables and other
Transferred Assets (as defined in such Purchase Agreement) Transferred
under such Purchase Agreement (to the same extent as such interest was
perfected on the Effective Date with respect to the Receivables and
other Transferred Assets then owned by the Seller (as defined in such
Purchase Agreement) and reciting the details of such action or
referring to prior Opinions of Counsel in which such details are given
and (2) the Trustee in and to the Receivables Transferred hereby and
the other Trust Assets Transferred hereunder (to the same extent as
such interest was perfected on the Effective Date with respect to the
Receivables and other Trust Assets then owned by the Transferor) and
reciting the details of such action or referring to prior Opinions of
Counsel in which such details are given or (B) no such action is
necessary to continue the perfection of such interests.
(i) FURTHER ASSURANCES. (A) The Transferor agrees that from
time to time, at its own expense, the Transferor will promptly execute
and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Trustee may
reasonably request, in order to perfect and protect any pledge,
assignment or security interest granted or purported to be granted
hereby or to enable the Trustee to exercise and enforce its rights and
remedies hereunder with respect to any Receivable and the Trust Assets.
Without limiting the generality of the foregoing, the Transferor will:
(i) ▇▇▇▇ its master data processing and computer records in a manner
reasonably calculated to indicate that the Trust Assets have been sold,
in the case of any Originator, to the Transferor in accordance with the
Purchase Agreements and have been Transferred, in the case of the
Transferor, to the Trust in accordance with the Transaction Documents
for the benefit of the Beneficiaries; (ii) clearly and unambiguously
identify each Account in its computer or other records and all its
microfiche storage files, if any, to reflect that an interest in the
Receivables arising in such Account has been Transferred pursuant to
this Agreement; (iii) if any Trust Assets shall be evidenced by a
promissory note, other instrument or chattel paper, deliver and pledge
to the Trustee hereunder such note, instrument or chattel paper duly
indorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Trustee; and
(iv) execute and file such
POOLING AND SERVICING AGREEMENT
47
41
financing or continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary or desirable, or as
the Trustee may reasonably request, in order to perfect and preserve
the valid and perfected first priority ownership or security interest
granted or purported to be granted under any Transaction Document.
(B) The Transferor hereby authorizes the Trustee to file one
or more financing or continuation statements, and amendments thereto,
relating to all or any part of the Trust Assets without the signature
of the Transferor where permitted by law. A photocopy or other
reproduction of any Transaction Document or any financing statement
covering the Trust Assets or any part thereof shall be sufficient as a
financing statement where permitted by law.
(C) The Transferor will furnish to the Trustee from time to
time statements and schedules further identifying and describing the
Trust Assets and such other reports in connection with the Trust Assets
as the Trustee may reasonably request, all in reasonable detail.
(D) The Transferor shall, from time to time, execute and
deliver to the Obligors any bills, statements and letters or other
writings necessary to carry out the terms and provisions of any
Transaction Document and to facilitate the collection of the
Receivables in a manner consistent with the Cardholder Guidelines.
(j) NO LIENS. Except for the Transfers hereunder, the
Transferor will not sell, pledge, assign or transfer any Receivable or
any interest therein or any other Trust Asset to any other Person, or
grant, create, incur, assume or suffer to exist any Lien on any Trust
Asset or any other property or asset of the Transferor (other than the
Exchangeable Transferor Certificate and funds deposited pursuant to the
applicable Supplement or the Exchangeable Transferor Certificate),
whether now existing or hereafter created, or any interest therein, and
the Transferor shall defend the right, title and interest of the Trust
in and to the Trust Assets, whether now existing or hereafter created,
against all claims of third parties claiming through or under the
Transferor or any Originator. The Transferor shall notify the Trustee
and each Enhancement Provider after becoming aware of any Lien on any
Receivable.
(k) ACTIVITIES OF THE TRANSFEROR. The Transferor will not
engage in, enter into or be a party to any business, activity or
transaction of any kind other than the businesses, activities and
transactions contemplated and authorized for it by the Transaction
Documents or incidental to its ability to carry out its obligations
under such agreements.
POOLING AND SERVICING AGREEMENT
48
42
(l) INDEBTEDNESS. Except for the Subordinated Notes, the
Transferor will not create, incur or assume any Indebtedness (other
than Indebtedness related to operating expenses incurred in the
performance of or incidental to its obligations under this Agreement
which shall not exceed $150,000 per annum) or sell or transfer any
Receivable to a trust or other Person which issues securities in
respect of any such Receivables, other than as contemplated by the
Transaction Documents.
(m) GUARANTEES. Except as provided herein, the Transferor will
not become or remain liable, directly or indirectly, in connection with
any Indebtedness or other liability of any other Person, whether by
guarantee, endorsement (other than endorsements of negotiable
instruments for deposit or collection in the ordinary course of
business), agreement to purchase or repurchase, agreement to supply or
advance funds, or otherwise.
(n) INVESTMENTS. The Transferor will not make or suffer to
exist any loans or advances to, or extend any credit to, or make any
investments (by way of transfer of property, contributions to capital,
purchase of stock or securities or evidences of Indebtedness,
acquisition of the business or assets, or otherwise) in, any of its
Affiliates or any other Person except for (i) purchases of Receivables
pursuant to the terms of the Purchase Agreements, (ii) investments in
Permitted Investments in accordance with the terms of this Agreement
and (iii) holding the Exchangeable Transferor Certificate.
(o) CHANGE IN LEGAL NAME. The Transferor will not (i) make any
change to its legal name, identity or business structure in any manner
or chief executive office (including the address thereof) or use any
trade name, fictitious name, assumed name or "doing business as" name
or (ii) change its jurisdiction of organization UNLESS, prior to the
effective date of any such name change, change in chief executive
office, use or change of jurisdiction, the Transferor delivers to the
Trustee (A) written notice of such change at least 30 days prior to the
effective date thereof, (B) such financing statements (Forms UCC-1 and
UCC-3) executed by the Transferor required to reflect such name change,
change in chief executive office, use or change of jurisdiction,
together with such other documents and instruments required in
connection therewith to maintain the continued perfection of the
interests of the Trustee in the Trust Assets and (C) prior to the
effective date thereof, an Opinion of Counsel, in form and substance
satisfactory to the Trustee, as to the Transferor's due organization,
valid existence and good standing and the continued perfection after
the effective date thereof of the interests of the Trustee in and to
the Receivables and other Trust Assets Transferred hereby (to the same
extent as such interest was perfected on the Effective Date with
respect to the Receivables then owned by the Transferor). Furthermore,
the Transferor shall give 30 days' prior written notice to the Trustee
of any change in the location of the office
POOLING AND SERVICING AGREEMENT
49
43
where it keeps the books, records and documents regarding the
Receivables and the other Trust Assets from the address of the
Transferor referred to in Section 13.04.
(p) CHARTER DOCUMENTS. The Transferor will not amend any
provision of its certificate of incorporation or bylaws relating to or
affecting (i) voting rights of, actions by, appointment of, criteria
for or qualifications of any independent director or (ii) the
requirement that the Transferor maintain at all times two independent
directors, including Articles Third, Fourth, Ninth and Tenth of such
certificate of incorporation.
(q) MAINTENANCE OF SEPARATE EXISTENCE. (i) The Transferor will
not:
(A) except as provided under any Transaction
Document, suffer any limitation on the authority of its own
directors and officers to conduct its business and affairs in
accordance with their independent business judgment, or
authorize or suffer any Person other than its own directors
and officers to act on its behalf with respect to matters
(other than matters customarily delegated to others under
powers of attorney) for which a corporation's own directors
and officers would customarily be responsible;
(B) commingle its money or other assets with those of
the Servicer, the Parent, any Affiliate of the Parent or any
Affiliate of the Transferor, or use its funds for other than
the Transferor's uses;
(C) assume the liabilities of the Servicer, the
Parent or any Affiliate of the Parent;
(D) guarantee the liabilities of the Servicer, the
Parent or any Affiliate of the Parent;
(E) be involved in the day-to-day management of the
Servicer or the Parent;
(F) act as agent of the Servicer, the Parent or any
Affiliate of the Parent or allow the Servicer, the Parent or
any Affiliate of the Parent to act as its agent (other than as
Servicer hereunder or pursuant to a contract on terms no less
favorable to the Transferor than it would have obtained in a
similar contract with a Person not an Affiliate of the
Transferor);
(G) make any advances to the Servicer, the Parent or
any Affiliate of the Parent;
POOLING AND SERVICING AGREEMENT
50
44
(H) have insufficient officers and personnel to
conduct its business and operations;
(I) enter into business transactions with any of its
Affiliates unless the terms are not more or less favorable to
the Transferor than terms and conditions available at the time
to the Transferor for comparable transactions with
unaffiliated persons and a majority of the board of directors
of the Transferor including each director who is an
independent director approves the transaction; and
(J) conduct its affairs in a manner at any time
inconsistent with the assumptions set forth in the opinions
delivered pursuant to any Certificate Purchase Agreement or
Loan Agreement regarding the true sale of assets to the
Transferor under the Purchase Agreements and the
non-substantive consolidation of the Transferor with the
Parent or any Affiliate of the Parent; and
(ii) the Transferor will:
(A) do all things necessary to maintain its existence
as a corporation separate and apart from the Servicer, the
Parent, any Affiliate of the Parent, and any Affiliate of the
Transferor including conducting business correspondence in its
own name and maintaining appropriate and separate books,
records and financial statements;
(B) (1) maintain or cause to be maintained by an
agent of the Transferor under the Transferor's control
physical possession of all its books and records, (2) maintain
capitalization adequate for the conduct of its business, (3)
account for and manage its liabilities separately from those
of any other Person, including payment of all payroll and
other administrative expenses and taxes from its own assets,
(4) segregate and identify separately all of its money and
assets from those of any other Person (including, but not
limited to, maintaining separate bank accounts in its own
name), and (5) maintain offices through which its business is
conducted separate from those of the Servicer, the Parent, any
Affiliate of the Parent and any Affiliate of the Transferor
(which offices may be leased or sub-leased from any such
Person, PROVIDED that, to the extent that the Transferor and
any of its Affiliates have offices in the same location, there
shall be a fair and appropriate allocation of overhead costs
and expenses among them, and each such entity shall bear its
fair share of such costs and expenses and each such office
shall be conspicuously identified as the office of such
entity);
POOLING AND SERVICING AGREEMENT
51
45
(C) (1) maintain its books, financial statements,
accounting records and other business documents and records
separate from those of the Servicer, the Parent and each other
Person, (2) act solely in its legal name and through its own
authorized officers and agents, (3) make investments directly
or by brokers engaged and paid by the Transferor or its agents
(PROVIDED that if any such agent is an Affiliate of the
Transferor it shall be compensated at a fair market rate for
its services), (4) separately manage its liabilities from
those of the Servicer, the Parent or any Affiliate of the
Parent and pay its own liabilities, including all
administrative expenses, from its own separate assets
(PROVIDED that, to the extent the employees of the Transferor
participate in pension, insurance and other benefit plans of
the Parent or any Affiliate thereof, the Transferor will
reimburse the Parent or such Affiliate, as the case may be,
for an appropriate share of the costs thereof), (5) pay from
its assets all obligations and Indebtedness of any kind
incurred by it and (6) abide by all corporate legal
formalities, including the maintenance of current corporate
records;
(D) if the Transferor is included within the
consolidated financial statements of the Parent or any
Affiliate thereof, disclose in a note in the financial reports
required to be delivered quarterly and annually the existence
of the Transferor as a separate legal entity, having separate
assets, liabilities and operations, and the participation of
the Transferor in the transactions contemplated by the
Transaction Documents;
(E) establish investment guidelines and criteria by a
majority of the board of directors including at least two
directors who are independent directors; and
(F) conduct its affairs in a manner at all times
consistently with the assumptions set forth in the opinions
delivered pursuant to any Certificate Purchase Agreement or
any Loan Agreement regarding the true sale of assets to the
Transferor under the Purchase Agreements and the
non-substantive consolidation of the Transferor with the
Parent or any of its Affiliates.
(r) OWNERSHIP; MERGER. The Transferor will not (i) sell any
shares of any class of its capital stock to any Person (other than the
Parent or any of its Affiliates that are Subsidiaries of the Parent),
or enter into any transaction of merger or consolidation, or convey or
otherwise dispose of all or substantially all of its assets (except as
contemplated herein), or (ii) terminate, liquidate or dissolve itself
(or suffer any termination, liquidation or dissolution), or (iii)
acquire or be acquired by any Person.
POOLING AND SERVICING AGREEMENT
52
46
(s) RECEIVABLES TO BE ACCOUNTS. 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 any applicable jurisdiction), except
as permitted under Section 3.03(b)(vi). The Transferor will take no
action to cause any Receivable to be anything other than an "account,"
or a "general intangible" or the "proceeds" of either for purposes of
the UCC as in effect in any applicable jurisdiction.
(t) CARDHOLDER AGREEMENTS AND CARDHOLDER GUIDELINES. The
Transferor shall enforce the covenant in each Purchase Agreement
requiring the related Originator to comply with and perform its
obligations under the Cardholder Agreements relating to the Accounts
and the Cardholder Guidelines. The Transferor may permit any Originator
to change the terms and provisions of the Cardholder Agreements or the
Cardholder Guidelines in any respect (including the reduction of the
required minimum monthly payment, the calculation of the amount, or the
timing, of charge-offs and the periodic finance charges and other fees
to be assessed thereon), unless such change would have a Material
Adverse Effect; PROVIDED, HOWEVER, that the Transferor may not permit
an Originator to change the required minimum monthly payment or
periodic finance charge (collectively, a "YIELD CHANGE") unless, after
five Business Days' prior written notice to the Rating Agency of a
Yield Change, the Rating Agency shall have provided written notice to
the Transferor that the Rating Agency Condition shall be satisfied or
unless such Yield Change is mandated by applicable law. The Transferor
will not rescind or cancel, or permit the rescission or cancellation
of, any Receivable except as ordered by a court of competent
jurisdiction or other Governmental Authority.
(u) ACCOUNT ALLOCATIONS. In the event that the Transferor is
unable for any reason to Transfer Receivables to the Trust in
accordance with the provisions of this Agreement (including by reason
of the application of the provisions of Section 9.01(c) or 9.01(e)
hereof or by an order by any federal or state governmental agency
having regulatory authority over the Transferor or any court of
competent jurisdiction that the Transferor not Transfer any additional
Principal Receivables to the Trust) then, in any such event, (A) the
Transferor agrees to allocate and pay to the Trust, after the date of
such inability, all Collections with respect to Principal Receivables,
and all amounts which would have constituted Collections with respect
to Principal Receivables but for the Transferor's inability to Transfer
such Receivables (up to an aggregate amount equal to the amount of
Principal Receivables in the Trust on such date); (B) the Transferor
agrees to have such amounts applied as Collections in accordance with
Article IV hereof; and (C) for only so long as all Collections and all
amounts which would have constituted Collections are allocated and
applied in accordance with clauses (A) and (B) above, Principal
Receivables (and all amounts which would have constituted Principal
Receivables but for the Transferor's inability to Transfer
POOLING AND SERVICING AGREEMENT
53
47
Receivables to the Trust) that are charged off as uncollectible in
accordance with this Agreement shall continue to be allocated in
accordance with Article IV hereof, and all amounts that would have
constituted Principal Receivables but for the Transferor's inability to
Transfer Receivables to the Trust shall be deemed to be Principal
Receivables for the purpose of calculating (i) the applicable Investor
Percentage with respect to any Series and (ii) the Aggregate Invested
Amount 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 allocate, after the
occurrence of such event, payments on each Account with respect to the
principal balance of such Account first to the oldest principal balance
of such Account and to have such payments applied as Collections in
accordance with Article IV hereof. The parties hereto agree that
Finance Charge Receivables, whenever created, accrued in respect of
Principal Receivables that have been Transferred to the Trust, or that
would have been Transferred to the Trust but for the above described
inability to Transfer such Receivables, shall continue to be a part of
the Trust notwithstanding any cessation of the Transfer of additional
Principal Receivables to the Trust and Collections with respect thereto
shall continue to be allocated and paid in accordance with Article IV.
(v) DELIVERY OF COLLECTIONS. The Transferor agrees to pay to
the Servicer all payments received by the Transferor in respect of the
Receivables as soon as practicable after receipt thereof by the
Transferor.
(w) TRANSFER OF ACCOUNTS. The Transferor covenants and agrees
that it will not Transfer the Accounts to any Person prior to the
termination of this Agreement pursuant to Article XII.
(x) INFORMATION PROVIDED TO RATING AGENCIES. The Transferor
will use its best efforts to cause all information provided to any
Rating Agency pursuant to this Agreement or in connection with any
action required or permitted to be taken under this Agreement to be
complete and accurate in all material respects.
(y) TAX ELECTION. None of the Transferor, the Servicer, or the
Trustee shall make or agree to the making of an election pursuant to
Treasury Regulation section 301.7701-3(c) to have the trust, or a
deemed arrangement among the parties to this Agreement or others,
treated as an association taxable as a corporation.
(z) CASH RESERVE. The Transferor will maintain at all times a
cash reserve equal to at least $50,000.
Section 2.06 REQUIRED DEPOSITS. If either (i) the Transferor
Invested Amount on the last day of the Due Period is less than the Aggregate
Minimum Transferor Invested
POOLING AND SERVICING AGREEMENT
54
48
Amount or (ii) on the last Business Day of any Due Period, the sum of the
aggregate amount of the Principal Receivables plus the amount on deposit in the
Excess Funding Account is less than the Minimum Aggregate Principal Receivables
on such date, the Transferor shall on or prior to the close of business on the
10th Business Day following the last Business Day of such Due Period (the
"REQUIRED DESIGNATION DATE"), unless the Transferor Invested Amount exceeds the
Aggregate Minimum Transferor Invested Amount or the sum of the aggregate amount
of Principal Receivables plus the amount on deposit in the Excess Funding
Account exceeds the Minimum Aggregate Principal Receivables, as the case may be,
in either case as of the close of business on any day after the last Business
Day of such Due Period and prior to the Required Designation Date, deposit in
the Excess Funding Account immediately available funds in a sufficient amount
such that after giving effect to such addition or deposit, the Transferor
Invested Amount as of the close of business on the Required Designation Date is
at least equal to the Aggregate Minimum Transferor Invested Amount on such date
and the sum of the aggregate amount of Principal Receivables plus the amount on
deposit in the Excess Funding Account equals or exceeds the Minimum Aggregate
Principal Receivables on such date.
Section 2.07 TRUSTEE MAY PERFORM. If the Transferor fails to
perform any of its agreements or obligations under this Agreement, the Trustee
may (but shall not be obligated to) itself perform, or cause performance of,
such agreement or obligation, and the expenses incurred in connection therewith
shall be payable by the Transferor as provided in Section 11.05.
Section 2.08 NO ASSUMPTION OF LIABILITY. Nothing in this
Agreement shall constitute or is intended to result in the creation or
assumption by the Trust, the Trustee, any Certificateholder or any Enhancement
Provider of any obligation of any Originator, the Transferor or the Servicer or
any other Person to any Obligor in connection with the Receivables, the
Accounts, the Cardholder Agreements or other agreement or instrument relating
thereto.
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.01 ACCEPTANCE OF APPOINTMENT AND OTHER MATTERS
RELATING TO THE SERVICER.
POOLING AND SERVICING AGREEMENT
55
49
(a) Chargit agrees to act as the Servicer under this
Agreement. The Investor Certificateholders of each Series, by their acceptance
of the related Certificates, consent to Chargit acting as Servicer hereunder.
(b) The Servicer shall (subject to Article X) enforce all
rights and interests in, to and under the Receivables and the other Trust Assets
on behalf of the Trust. The Servicer shall service and administer the
Receivables and shall collect payments due under the Receivables in accordance
with its customary and usual servicing procedures for servicing credit card
receivables comparable to the Receivables and in accordance with the Cardholder
Guidelines and applicable laws, rules and regulations and shall have full power
and authority, acting alone or through any party properly designated by it
hereunder, to do any and all things in connection with such servicing and
administration which it may deem necessary or desirable. Without limiting the
generality of the foregoing and subject to Article X, the Servicer is hereby
authorized and empowered (i) to make deposits to, and to instruct the Trustee to
make deposits to and withdrawals from, the Concentration Account, the Collection
Accounts and the Excess Funding Account as set forth in this Agreement, (ii) to
instruct the Trustee to make withdrawals and payments from, any Series Account,
in accordance with the related Supplement, (iii) to instruct the Trustee in
writing, as set forth in this Agreement, (iv) to execute and deliver, on behalf
of the Trust for the benefit of the Beneficiaries, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
all other comparable instruments, with respect to the Receivables and, after the
delinquency of any Receivable and to the extent permitted under and in
compliance with applicable law and regulations, to commence enforcement
proceedings with respect to such Receivables and (v) to make any filings,
reports, notices, applications, registrations with, and to seek any consents or
authorizations from, the Securities and Exchange Commission and any state
securities authority on behalf of the Trust as may be necessary or advisable to
comply with any federal or state securities or reporting requirements. The
Trustee agrees that it shall promptly follow the instructions of the Servicer to
withdraw funds from the Concentration Account, the Collection Accounts, the
Excess Funding Account or any Series Account and to take any action required
under this Agreement or any other Transaction Document. The Trustee shall
execute at the Servicer's written request such documents prepared by the
Transferor and acceptable to the Trustee as may be reasonably necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder. The Trustee shall, upon the written request of the Servicer,
furnish the Servicer with any documents then in the Trustee's possession which
are reasonably necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder.
(c) The Servicer shall not be obligated to use separate
servicing procedures, offices, employees or accounts for servicing the
Receivables from the procedures, offices, employees and accounts used by the
Servicer in connection with servicing other credit card receivables.
POOLING AND SERVICING AGREEMENT
56
50
(d) The Servicer shall maintain fidelity bond coverage
insuring against losses through the wrongdoing of its officers who are involved
in the servicing of credit card receivables covering such actions and in such
amounts as the Servicer believes to be reasonable from time to time.
Section 3.02 SERVICING COMPENSATION. As compensation for its
servicing activities hereunder and reimbursement for its expenses as set forth
in the immediately following paragraph, the Servicer shall be entitled to
receive a monthly servicing fee in respect of any Due Period prior to the
termination of the Trust pursuant to Section 12.01 (with respect to each Due
Period, the "MONTHLY SERVICING FEE") which shall equal the sum of (i) the
Transferor Monthly Servicing Fee (payable only out of Collections allocable to
the Transferor Invested Amount) and (ii) the aggregate amount of all Investor
Monthly Servicing Fees as specified in each Supplement (payable only to the
extent set forth in such Supplement).
The Servicer's expenses include the amounts due to the Trustee
pursuant to Section 11.05 and the reasonable fees and disbursements of
Independent Public Accountants and all other expenses incurred by the Servicer
in connection with its activities under the Transaction Documents; PROVIDED that
the Servicer shall not be liable for any liabilities, costs or expenses of the
Trust, any Enhancement Provider or the Investor Certificateholders arising under
any tax law, including any federal, state or local income or franchise taxes or
any other tax imposed on or measured by income (or any interest or penalties
with respect thereto or arising from a failure to comply therewith). The
Servicer shall be required to pay such expenses for its own account and shall
not be entitled to any payment therefor other than the Monthly Servicing Fee.
Section 3.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SERVICER. (a) Chargit, as initial Servicer, hereby represents and warrants, and
each Successor Servicer by acceptance of its appointment hereunder shall
represent and warrant, (i) in the case of the initial Servicer (x) as of the
date hereof and as of the Effective Date and (y) with respect to any Series, as
of the Closing Date for such Series or (ii) in the case of any Successor
Servicer, (x) as of the date of such acceptance and (y) with respect to any
Series issued after such date, as of the Closing Date for such Series, in each
case unless otherwise stated in such Supplement:
(i) DUE ORGANIZATION, QUALIFICATION AND AUTHORIZATION. The
Servicer (1) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation,
(2) is duly qualified and in good standing as a foreign corporation in
each other jurisdiction in which it owns or leases property or in which
the conduct of its business requires it to so qualify or be licensed
and (3) has all requisite corporate power and authority (including all
governmental licenses, permits
POOLING AND SERVICING AGREEMENT
57
51
and other approvals) to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be conducted.
(ii) CORPORATE POWERS AND NO CONFLICTS. The execution,
delivery and performance by the Servicer of the Transaction Documents
to which it is or is to be a party, the consummation of the
transactions contemplated hereby and the making of each Transfer, are
within the Servicer's corporate powers, have been duly authorized by
all necessary corporate action, and do not (1) contravene or violate
any Requirement of Law, (2) conflict with or result in the breach of,
or constitute a default under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or
affecting the Servicer or any of its properties or (3) result in or
require the creation or imposition of any Lien upon or with respect to
any of the properties of the Servicer, and no transaction contemplated
hereby requires compliance on the Servicer's part with any bulk sales
act or similar law. The Servicer is not in violation of any Requirement
of Law or in breach of any such contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument.
(iii) GOVERNMENT AUTHORIZATION AND APPROVAL. No authorization
or approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body or any other third party is
required with respect to the Servicer for (1) the due execution,
delivery or performance by the Servicer of any of the Transaction
Documents to which it is or is to be a party, any Transfer or the
consummation of the other transactions contemplated hereby, or (2) the
exercise by the Trustee of its rights under the Transaction Documents
or its remedies granted under the Transaction Documents.
(iv) ENFORCEABILITY. Each Transaction Document to which the
Servicer is or is to be a party constitutes a legal, valid and binding
obligation of the Servicer enforceable against the Servicer in
accordance with its terms, except as such enforceability may be limited
by Debtor Relief Laws.
(v) NO LITIGATION. There is no action, suit, investigation,
litigation or proceeding affecting the Servicer, pending or threatened
before any Governmental Authority or arbitrator that (1) could have a
Material Adverse Effect, (2) purports to affect the legality, validity
or enforceability of any Transaction Document or the consummation of
the transactions contemplated hereby or (3) could adversely affect the
income tax attributes of the Trust.
(vi) COLLECTION ACCOUNTS AND THE CONCENTRATION ACCOUNT.
Specified on Schedule 3.03(a)(vi) hereto are (1) the names, addresses
and ABA numbers of all the Collection Account Banks, together with the
account numbers of the Collection
POOLING AND SERVICING AGREEMENT
58
52
Accounts and the name of a contact person at each Collection Account
Bank and (2) the name, address and ABA number of the Concentration
Account Bank, together with the account number and the name of a
contact person for the Concentration Account.
(vii) PAYMENT INSTRUCTIONS. The Servicer has notified (or
caused to be notified) the Obligor on each Receivable to make payments
on such Receivable to the Servicer or to one of the Collection
Accounts.
(viii) PERIODIC REPORTS AND DETERMINATION DATE CERTIFICATES.
Each report and certificate delivered by the Servicer pursuant to
Sections 3.04, 3.05 and 3.06 shall be true and correct in all material
respects as of the date such report or certificate is delivered.
(ix) SERVICER DEFAULT. No Servicer Default has occurred and is
continuing.
(x) EARLY AMORTIZATION EVENT. No Trust Early Amortization
Event has occurred and is continuing and, as of the Closing Date for
any Series, no Series Early Amortization Event with respect to such
Series has occurred and is continuing.
The representations and warranties set forth in this Section
3.03(a) shall survive the Transfer of the Receivables to the Trust and the
termination of the rights and obligations of any Servicer pursuant to Section
10.01. Upon a discovery by the Transferor, the Servicer or a Responsible Officer
of 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 other parties and to each Enhancement Provider, if any.
(b) The Servicer hereby covenants and agrees that:
(i) COLLECTIONS. (A) In the event that the Servicer receives
any Collections, the Servicer agrees to hold all such Collections in
trust and to deposit such Collections in a Collection Account as soon
as practicable, but in no event later than three Business Days after
receipt thereof.
(B) In the event that any Affiliate of the Servicer receives
any Collections, the Servicer agrees to deposit (or cause to be
deposited) an amount equal to such Collections in a Collection Account
as soon as practicable, but in no event later than three Business Days
after receipt thereof.
(ii) COMPLIANCE WITH REQUIREMENTS OF LAW. The Servicer will
(A) duly satisfy all obligations on its part to be fulfilled under or
in connection with each Receivable and the related Account in
accordance with the Cardholder Guidelines, (B)
POOLING AND SERVICING AGREEMENT
59
53
maintain in effect all qualifications required under any Requirement of
Law in order to service properly each Receivable and the related
Account in accordance with the Cardholder Guidelines and the
Transaction Documents and (C) comply with all other Requirements of Law
in connection with servicing each Receivable and the related Account.
(iii) EXTENSION OR AMENDMENT OF RECEIVABLES. The Servicer will
not extend, amend or otherwise modify (or consent or fail to object to
any such extension, amendment or modification by the Transferor) the
terms of any Receivable and the related Account, or amend, modify or
waive (or consent or fail to object to any such amendment, modification
or waiver by the Transferor) any payment term or condition of any
invoice related thereto except as permitted under the Cardholder
Agreements, the Cardholder Guidelines or Section 2.05(t). The Servicer
will not rescind or cancel, or permit the rescission or cancellation
of, any Receivable or the related Account except as ordered by a court
of competent jurisdiction or other Governmental Authority.
(iv) PROTECTION OF CERTIFICATEHOLDERS' RIGHTS. The Servicer
will take no action which would impair the rights of any Beneficiary in
any Receivable or Trust Asset, except as provided in this Agreement.
(v) DEPOSITS TO CONCENTRATION ACCOUNT, ANY COLLECTION ACCOUNT
OR ANY SERIES ACCOUNT. The Servicer will not deposit or otherwise
credit, or cause to be so deposited or credited, or consent or fail to
object to any such deposit or credit known to it, cash or cash proceeds
other than Collections to the Concentration Account, any Collection
Account (other than the Store Accounts) or any Series Account.
(vi) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES. The
Servicer will take no action to cause any Receivable to be evidenced by
any "instrument" (as defined in the UCC of the jurisdiction the law of
which governs the perfection of the interest in such Receivable created
hereunder), except in connection with its enforcement, in which event
the Transferor shall deliver such instrument to the Trustee as soon as
reasonably practicable but in no event more than three Business Days
after execution thereof.
(vii) REPORTING REQUIREMENTS. The Servicer will:
(A) within one Business Day after a Responsible
Officer of the Servicer obtains Knowledge of the occurrence of
a Servicer Default or an Early Amortization Event, or any
event which, with the giving of notice or lapse of
POOLING AND SERVICING AGREEMENT
60
54
time or both, would constitute a Servicer Default or Early
Amortization Event, notify the Trustee;
(B) as soon as possible and in any event within three
Business Days after a Responsible Officer of the Servicer
obtains Knowledge of the occurrence of a Servicer Default or
any Early Amortization Event or any event which, with the
giving of notice or lapse of time or both, would constitute a
Servicer Default or an Early Amortization Event, furnish to
the Trustee and to each Enhancement Provider the written
statement of a Responsible Officer of the Servicer setting
forth details of such Servicer Default or Early Amortization
Event or such event and the action which the Servicer has
taken and proposes to take with respect thereto;
(C) as soon as possible and in any event within three
Business Days after a Responsible Officer of the Servicer
makes a determination that any other event, development or
information is reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect, give written
notice thereof to the Trustee, each Rating Agency and each
Enhancement Provider;
(D) promptly, from time to time, furnish to the
Trustee and each Enhancement Provider such other information,
documents, records or reports regarding the Receivables, the
other Trust Assets or the condition or operations, financial
or otherwise, of the Servicer as the Trustee and each
Enhancement Provider may from time to time reasonably request;
(E) within forty-five (45) (or, after the last
calendar month in each Fiscal Year, ninety (90)) days after
the end of each calendar month in each Fiscal Year, deliver to
the Trustee, each Rating Agency and each Enhancement Provider
the consolidated balance sheets of the Parent and its
Subsidiaries as at the end of such period and the related
consolidated statements of income and cash flow of the Parent
and its Subsidiaries for such calendar month and for the
period from the beginning of the then current Fiscal Year to
the end of such calendar month, and for the corresponding
period during the previous calendar year, and a comparison of
the statement of the year to date earnings and cash flow to
the corresponding statement for the corresponding period from
the previous Fiscal Year, and the most recently prepared
forecasted consolidated balance sheet and consolidated
statement of earnings and cash flow of the Parent and its
Subsidiaries for and as of the end of such Fiscal Year,
certified by the Treasurer or the Controller of the Parent as
fairly presenting the consolidated financial position of the
Parent and its Subsidiaries as at the dates indicated and the
results of their operations and cash flow for the periods
indicated in
POOLING AND SERVICING AGREEMENT
61
55
accordance with generally accepted accounting principles,
subject to normal year end adjustments; and
(F) within ninety (90) days after the end of each
Fiscal Year deliver to the Trustee, each Rating Agency and
each Enhancement Provider audited consolidated financial
statements of the Parent and its Subsidiaries, including
therein a consolidated balance sheet of the Parent and its
Subsidiaries as at the end of such Fiscal Year and
consolidated statements of income and cash flow of the Parent
and its Subsidiaries for such Fiscal Year, reported on by
Independent Public Accountants and accompanied by their
related audit letter, which report and letter shall be
unqualified as to scope and shall state that such financial
statements fairly present the consolidated position of the
Parent and its Subsidiaries as at the dates indicated in
conformity with generally accepted accounting principles
applied on a basis consistent with prior years and that the
examination by such accountants in connection with such
consolidated financial statements has been made in accordance
with generally accepted auditing standards.
The Servicer shall provide to the Trustee access to the
documentation regarding the Receivables and the related Accounts in
such cases where the Trustee requires such access in connection with
the enforcement of the rights of any Beneficiary or is required by
applicable statute or regulations to review such documentation, such
access being afforded without charge and at the sole cost and expense
of the Servicer but only (i) upon reasonable written request, (ii)
during normal business hours, (iii) subject to normal and reasonable
security and confidentiality procedures and (iv) at reasonably
accessible offices in the continental United States designated by the
Servicer.
(viii) FURTHER ASSURANCES. (A) The Servicer agrees that from
time to time, at its own expense, the Servicer will promptly execute
and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Trustee may
reasonably request, in order to perfect and protect any pledge,
assignment or security interest granted or purported to be granted
hereby or to enable the Trustee to exercise and enforce its rights and
remedies hereunder with respect to any Receivable and the Trust Assets.
Without limiting the generality of the foregoing, the Servicer will:
(i) ▇▇▇▇ its computer records in a manner reasonably calculated to
indicate that the Trust Assets have been Transferred, in the case of
any Originator, to the Transferor in accordance with the Purchase
Agreements and, in the case of the Transferor, to the Trust in
accordance with the Transaction Documents for the benefit of the
Beneficiaries, (ii) clearly and unambiguously identify each Account in
its computer or other records and all its microfiche storage files, if
any, to reflect that an interest in the Receivables arising in such
Account has been Transferred pursuant to this
POOLING AND SERVICING AGREEMENT
62
56
Agreement; and (iii) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments, or
notices, or deliver to the Trustee such other documents, as may be
necessary or desirable, or as the Trustee may reasonably request, in
order to perfect and preserve the valid and perfected first priority
ownership or security interest granted or purported to be granted under
any Transaction Document.
(B) The Servicer hereby authorizes the Trustee to file one or
more financing or continuation statements, and amendments thereto,
relating to all or any part of the Trust Assets without the signature
of the Servicer where permitted by law. A photocopy or other
reproduction of any Transaction Document or any financing statement
covering the Trust Assets or any part thereof shall be sufficient as a
financing statement where permitted by law.
(C) The Servicer will furnish to the Trustee from time to time
statements and schedules further identifying and describing the Trust
Assets and such other reports in connection with the Trust Assets as
the Trustee may reasonably request, all in reasonable detail.
(D) The Servicer shall, from time to time, execute and deliver
to the Obligors any bills, statements and letters or other writings
necessary to carry out the terms and provisions of any Transaction
Document and to facilitate the collection of the Receivables in a
manner consistent with the Cardholder Guidelines.
(E) In connection with each Transfer, the Servicer agrees, on
behalf of the Transferor, as an expense of the Servicer, paid out of
the Transferor Monthly Servicing Fee, on or prior to the Effective Date
and (x) with respect to the following clause (i), on or prior to the
date of each Transfer thereafter and (y) with respect to the following
clause (ii), quarterly thereafter (i) to indicate in the Account File
maintained in its computer files that Receivables created in connection
with the Accounts have been Transferred to the Trust pursuant to this
Agreement, and (ii) to deliver to the Trustee a computer file or
microfiche or written list containing a true and complete list of all
such Accounts, identified by account number, Obligor name and Obligor
address and setting forth the Receivable balance as of the date of such
Transfer. The Servicer further agrees not to alter the file designation
referenced in clause (i) of this paragraph with respect to any Account
during the term of this Agreement.
(ix) CHANGE CARDHOLDER AGREEMENTS OR CARDHOLDER GUIDELINES.
The Servicer shall comply with and perform its servicing obligations
with respect to the Receivables and the related Accounts in accordance
with the related Cardholder Agreements and Cardholder Guidelines.
POOLING AND SERVICING AGREEMENT
63
57
(x) NOTIFICATION OF OBLIGORS. The Servicer will notify the
Obligor on each Receivable purchased by the Trust on or after the
Effective Date to make payments on such Receivable either to the
Servicer or to one of the Collection Accounts.
(xi) MODIFICATION OF SYSTEMS. The Servicer agrees, promptly
after the replacement or any material modification of any computer,
automation or other operating systems (in respect of hardware or
software) used to provide the Servicer's services as Servicer or to
make any calculations or reports hereunder, to give written notice of
any such replacement or modification to the Trustee.
(xii) SERVICER BUSINESS DAYS. No later than December 1 of each
year, the Servicer shall furnish the Trustee with a list of days other
than Saturday, Sunday, and any other day on which banks are required or
authorized by law to close in New York City or the city in which the
Corporate Trust Office is located, on which the Servicer shall be
closed during the immediately succeeding calendar year, except that
with respect to the calendar years 1997 and 1998, the Servicer shall
furnish such list to the Trustee on or before the Effective Date.
(xiii) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Servicer
shall maintain and implement administrative and operating procedures
(including the ability to recreate records evidencing the Receivables
and the related Accounts in the event of the destruction of the
originals thereof), and keep and maintain all documents, books,
microfiche, computer records and other information necessary or
reasonably advisable for the collection of all the Receivables and the
related Accounts. Such documents, books, microfiche, and computer
records shall reflect all customary facts giving rise to the
Receivables, all payments and credits with respect thereto, and the
computer records shall be clearly marked to show the interests of the
Trust in the Receivables and the related Accounts. The Servicer shall
hold on behalf of the Trust (to the extent of its interest therein) any
document evidencing or securing a Receivable and the related Account
and any Cardholder Agreement related to such Receivable or such Account
and necessary to the servicing of such Receivable or such Account and
the collection thereof in accordance with the terms of this Agreement.
Such holding by the Servicer shall be in trust and shall be deemed to
be the holding thereof by the Trustee for purposes of perfecting the
Trust's rights therein as provided in the UCC.
(xiv) MAINTENANCE OF INSURANCE. The Servicer shall use its
best efforts to maintain with a responsible company, and at its own
expense, its current commercial crime insurance (including commercial
fraud insurance) as is commercially available at a cost that is not
generally regarded as excessive by industry standards, with coverage on
all officers, employees or other Persons acting in any capacity
requiring such
POOLING AND SERVICING AGREEMENT
64
58
Persons to handle funds, money, documents or papers relating to the
Receivables and the related Accounts.
(xv) TOTAL SYSTEMS FAILURE. The Servicer shall promptly notify
the Trustee and each Enhancement Provider of any Total Systems Failure
and shall advise the Trustee of the estimated time required in order to
remedy such Total Systems Failure and of the estimated date on which a
Monthly Servicer's Report can be delivered. Until a Total Systems
Failure is remedied, the Servicer will (1) furnish to the Trustee and
each Enhancement Provider such periodic status reports and other
information relating to such Total Systems Failure as the Trustee and
each Enhancement Provider may reasonably request and (2) promptly
notify the Trustee and each Enhancement Provider if the Servicer
believes that such Total Systems Failure cannot be remedied by the
estimated date, which notice shall include a description of the
circumstances which gave rise to such delay, and the action proposed to
be taken in response thereto, and a revised estimate of the date on
which a Monthly Servicer's Report can be delivered. The Servicer shall
promptly notify the Trustee and each Enhancement Provider when a Total
Systems Failure has been remedied.
(xvi) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. The Servicer
will not add (except as provided in the second sentence of Section
4.02(c)) or terminate any Collection Account Bank, or make any material
change in its instructions to Obligors regarding the method by which
payments are to be made in respect of Receivables. The names and
addresses of all the Collection Account Banks, together with the
account numbers of the Collection Accounts of the Servicer at such
Collection Account Banks, shall be specified on Schedule 3.03(a)(vi)
hereto. Upon the addition of any Collection Account, the Servicer shall
deliver to the Trustee a new Schedule 3.03(a)(vi), and Schedule
3.03(a)(vi) hereto shall be amended in full thereby.
(xvii) SERVICING AND TRUST ADMINISTRATION ACTIVITIES. The
Servicer agrees that no substantial servicing activities in respect of
Receivables or Trust administration activities will be conducted in any
State other than New York or Ohio.
Section 3.04 REPORTS AND RECORDS FOR THE TRUSTEE.
(a) DAILY REPORTS. On each Business Day, the Servicer shall
prepare and deliver to the Trustee via telecopier, a report (the "DAILY REPORT")
setting forth (i) the Collections in respect of the Receivables processed by the
Servicer on or prior to the second preceding Business Day and (ii) the amount of
Receivables as of the close of business on the second preceding Business Day.
POOLING AND SERVICING AGREEMENT
65
59
(b) MONTHLY SERVICER'S REPORT. Unless otherwise stated in the
related Supplement with respect to any Series, on each Determination Date, the
Servicer shall forward to the Trustee, the Paying Agent, any Enhancement
Provider and the Rating Agencies a certificate of a Servicing Officer in the
form of Exhibit A (which includes the Schedule thereto specified as such in any
Supplement) setting forth (i) the aggregate amount of Collections processed
during the preceding Due Period, (ii) the aggregate amount of Collections of
Principal Receivables processed by the Servicer pursuant to Article IV during
the preceding Due Period, (iii) the aggregate amount of Collections of Finance
Charge Receivables processed by the Servicer pursuant to Article IV during the
preceding Due Period, (iv) the aggregate amount of Principal Receivables and
Finance Charge Receivables processed as of the end of the last day of the
preceding Due Period, (v) the amounts on deposit in the Excess Funding Account
and other accounts established pursuant to the related Supplements; (vi) amounts
drawn on any Enhancement; (vii) amounts to be paid to an Enhancement Provider;
(viii) the sum of all amounts payable to the Investor Certificateholders of each
Series on the succeeding Distribution Date in respect of Certificate Principal
and Certificate Interest and (ix) such other matters as are set forth in Exhibit
A (such report being the "MONTHLY SERVICER'S REPORT").
The Servicer may, upon making a determination that changes to
Exhibit A shall be necessary and desirable, deliver to the Trustee an Officer's
Certificate to which shall be annexed the form of the related Exhibit, as so
changed, so long as such changes do not serve to exclude information required by
the Agreement or any Supplement. Upon the delivery of such Officer's Certificate
to the Trustee, the related Exhibit, as so changed, shall for all purposes of
this Agreement constitute such Exhibit. The Trustee may conclusively rely upon
such Officer's Certificate in determining whether the related Exhibit, as
changed, conforms to the requirements of this Agreement.
Section 3.05 ANNUAL SERVICER'S CERTIFICATE. On or prior to the
date of the delivery of each accountant's report pursuant to Section 3.06(a),
the Servicer will deliver to the Trustee and each Enhancement Provider an
Officer's Certificate substantially in the form of Exhibit C stating that (a) a
review of the activities of the Servicer during the prior calendar year and of
its performance under this Agreement was made under the supervision of the
officer signing such certificate and (b) to the best of such officer's
knowledge, based on such review, the Servicer has fully performed all its
obligations under this Agreement throughout such period, or, if there has been a
default in the performance of any such obligation, specifying each such default
known to such officer and the nature and status thereof. A copy of such
certificate may be obtained by any Investor Certificateholder by a request in
writing to the Trustee addressed to the Corporate Trust Office or as set forth
in any Supplement.
Section 3.06 ANNUAL INDEPENDENT ACCOUNTANTS' SERVICING REPORT.
(a) On or before May 1 of each Fiscal Year of the Parent, beginning with May 1,
1999, the Servicer
POOLING AND SERVICING AGREEMENT
66
60
shall cause a firm of nationally recognized independent certified public
accountants (who may also render other services to the Servicer, the Transferor
or any Originator) to furnish a report to the Trustee and each Enhancement
Provider, to the effect that such firm has made a study and evaluation, in
accordance with the procedures specified in Exhibit D, of the Servicer's
internal accounting controls relative to the servicing of Accounts under this
Agreement and any Supplement for the prior Fiscal Year and that, on the basis of
such study and evaluation, such firm is of the opinion (assuming the accuracy of
any reports generated by the Servicer's third party agents) that the system of
internal accounting controls in effect on the date set forth in such report,
relating to servicing procedures performed by the Servicer, taken as a whole,
was sufficient for the prevention and detection of errors and irregularities in
amounts that would be material to the financial statements of the Parent or the
assets of the Trust and that such servicing was conducted in compliance with
this Agreement during the period covered by such report, except for such
exceptions, errors or irregularities as such firm shall believe to be immaterial
to the financial statements of the Parent and immaterial to the Trust Assets and
such other exceptions, errors or irregularities as shall be set forth in such
report. The Servicer shall investigate and correct such material exceptions,
errors or irregularities at its own expense. A copy of such report may be
obtained by any Investor Certificateholder by a request in writing to the
Trustee addressed to the Corporate Trust Office or as set forth in any
Supplement.
(b) On or before May 1 of each calendar year, beginning with
May 1, 1999, the Servicer shall cause a firm of nationally recognized
independent certified public accountants (who may also render other services to
the Servicer, the Transferor or any Originator) to furnish a report to the
Trustee and each Enhancement Provider, prepared using generally accepted
auditing standards, to the effect that such firm has compared the mathematical
calculations of each amount set forth in the monthly certificates forwarded by
the Servicer pursuant to Section 3.04(b) during the prior Fiscal Year with the
Servicer's computer reports which were the source of such amounts and that on
the basis of such comparison, such firm is of the opinion that such amounts are
in agreement, except for such exceptions as it believes to be immaterial to the
accuracy of the information set forth in such certificates of the Servicer and
such other exceptions as shall be set forth in such report. In the event such
firm requires the Trustee to agree to the procedures performed by such firm, the
Servicer shall direct the Trustee in writing to so agree; it being understood
and agreed that the Trustee will deliver such letter of agreement in conclusive
reliance upon the direction of the Servicer, and the Trustee makes no
independent inquiry or investigation as to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures. A copy of such report may be obtained by any Investor
Certificateholder by a request in writing to the Trustee addressed to the
Corporate Trust Office or as set forth in any Supplement.
Section 3.07 TAX TREATMENT. The parties hereto have structured
this Agreement and the Investor Certificates with the intention that the
Investor Certificates will qualify under applicable federal, state and local tax
law as indebtedness. The Transferor, the
POOLING AND SERVICING AGREEMENT
67
61
Servicer, the holder of the Exchangeable Transferor Certificate and each
Investor Certificateholder agree to treat and to take no action inconsistent
with the treatment of the Investor Certificates (or beneficial interest therein)
as indebtedness for purposes of federal, state and local income or franchise
taxes and any other tax imposed on or measured by income. Each Investor
Certificateholder and the holder of the Exchangeable Transferor Certificate, by
acceptance of its Certificate or by acquisition of a beneficial interest in a
Certificate, agrees to be bound by the provisions of this Section 3.07.
Section 3.08 NOTICES TO THE TRANSFEROR. In the event that
Chargit is no longer acting as Servicer, any Successor Servicer appointed
pursuant to Section 10.02 shall deliver or make available to the Transferor each
certificate and report required to be prepared, forwarded or delivered
thereafter pursuant to Sections 3.04, 3.05 and 3.06.
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS
AND ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.01 RIGHTS OF CERTIFICATEHOLDERS. Each Series shall
represent a fractional undivided beneficial interest in the Trust, including the
benefits of any Enhancement issued with respect to the related Series and the
right to receive the Collections and other amounts at the times and in the
amounts specified in this Article IV to be deposited in the Concentration
Account, Collection Accounts or the Excess Funding Account or to be paid to the
Investor Certificateholders of such Series; PROVIDED, HOWEVER, that the
aggregate interest represented by such Series at any time in the Principal
Receivables shall not exceed an amount equal to the applicable Series Invested
Amount at such time. The Exchangeable Transferor Certificate shall represent the
remaining undivided interest in the Trust, including the right to receive the
Collections and other amounts at the times and in the amounts specified in this
Article IV and in any Supplement to be paid to the holder of the Exchangeable
Transferor Certificate; PROVIDED, HOWEVER, that the aggregate interest
represented by such Exchangeable Transferor Certificate at any time in the
Principal Receivables shall not exceed the Transferor Invested Amount at such
time and such Exchangeable Transferor Certificate shall not represent any
interest in the Concentration Account, Collection Accounts or the Excess Funding
Account, except as provided in this Agreement, or the benefits of any
Enhancement issued with respect to any Series, except as set forth in the
related Supplement.
Section 4.02 ESTABLISHMENT OF ACCOUNTS.
(a) THE CONCENTRATION ACCOUNT. The Servicer, for the benefit
of the Beneficiaries, shall establish and maintain in the United States, with an
institution which is and
POOLING AND SERVICING AGREEMENT
68
62
ontinues to be a Qualified Depository Institution which shall initially be the
Trustee (the "CONCENTRATION ACCOUNT BANK"), in the name of the Trustee and on
behalf of the Trust, a segregated account (the "CONCENTRATION ACCOUNT") bearing
a designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Beneficiaries. The Trustee, for the benefit of the
Beneficiaries, shall possess all right, title and interest in all funds on
deposit from time to time in the Concentration Account and in all proceeds
thereof. Without limiting the rights of the Servicer set forth in Section
4.02(b) below, the Concentration Account shall be under the sole dominion and
control of the Trustee for the benefit of the Beneficiaries. Except as expressly
provided in this Agreement, the Servicer agrees that it shall have no right to
deduct from any funds held in the Concentration Account for any amount owed to
it by the Trustee, the Trust, the Transferor, any Originator, any
Certificateholder or any Enhancement Provider. Pursuant to authority granted to
it hereunder, the Servicer shall have the power to instruct the Trustee or such
Qualified Depository Institution to withdraw funds from the Concentration
Account for the purpose of carrying out the Servicer's duties hereunder. If, at
any time, the institution holding the Concentration Account ceases to be a
Qualified Depository Institution, the Trustee upon written notice by the
Servicer (or the Servicer on its behalf) shall promptly establish a new
Concentration Account with a Qualified Depository Institution meeting the
conditions specified above, transfer any cash or any investments to such new
Concentration Account and, from the date such new Concentration Account is
established, it shall be the "Concentration Account."
(b) ADMINISTRATION OF THE CONCENTRATION ACCOUNT. Funds on
deposit in the Concentration Account shall at all times be invested in Permitted
Investments as directed in writing by the Servicer. All such Permitted
Investments shall be held by the Trustee or Qualified Depository Institution
maintaining such Concentration Account for the benefit of the Beneficiaries. Any
such Permitted Investment shall mature and such funds shall be available for
withdrawal on the Business Day prior to the next following Distribution Date. No
such Permitted Investments shall be liquidated prior to the maturity thereof.
Subject to the conditions set forth herein, the Servicer shall have the
authority to instruct the Trustee with respect to the investment of such funds.
At the end of each month, all interest and earnings (net of losses and
investment expenses) on funds on deposit in the Concentration Account shall be
treated as Collections of Finance Charge Receivables. In no event shall the
Trustee be liable for the selection of Permitted Investments or for investment
losses incurred thereon. The Trustee shall have no liability in respect of
losses incurred as a result of the failure of the Servicer to provide timely
written investment direction. The Trustee shall have no obligation to invest or
reinvest any amounts held hereunder in the absence of written investment
direction.
(c) COLLECTION ACCOUNTS. On or prior to the Effective Date,
the Servicer, for the benefit of the Beneficiaries, shall establish and maintain
or cause to be established and maintained in the United States in the name of
the Trustee, on behalf of the Trust, with an
POOLING AND SERVICING AGREEMENT
69
63
institution which is and continues to be a Qualified Depository Institution,
segregated accounts in the name of the Trustee and on behalf of the Trust (each
such account, together with each account referred to in the next succeeding
sentence, a "COLLECTION ACCOUNT") bearing a designation clearly indicating that
the funds deposited therein are held in Trust for the benefit of the
Beneficiaries (except, solely with respect to the Store Accounts, to the extent
described in the Intercreditor Agreement). The Servicer, for the benefit of the
Beneficiaries, may establish and maintain or cause to be established and
maintained in the United States in the name of the Trustee, on behalf of the
Trust, with institutions which are and continue to be Qualified Depository
Institutions, additional segregated accounts, for the deposit of Store Payments,
in the name of the Trustee and on behalf of the Trust bearing a designation
clearly indicating that the funds deposited therein are held in Trust for the
benefit of the Beneficiaries (except to the extent described in the
Intercreditor Agreement). Obligors will be directed to remit payments with
respect to their Receivables in the manner set forth in Section 4.03. The
Collection Accounts shall be under the sole dominion and control of the Trustee
for the benefit of the Beneficiaries (except, solely with respect to the Store
Accounts, to the extent described in the Intercreditor Agreement). The Servicer
shall cause the Trustee to transfer Collections to the Concentration Account in
the manner set forth in Section 4.03. Each Collection Account shall be
maintained with documentation and instructions in form and substance
satisfactory to the Trustee. Such documentation shall provide, among other
things, that available amounts shall be transferred on a daily basis to the
Concentration Account. The Servicer will not (i) make any change in the name,
address or ABA number of any Collection Account Bank, the account number of any
Collection Account, the name, address or ABA number of any Concentration Account
Bank, or the account number for any Concentration Account from that set forth in
Schedule 3.03(a)(vi) hereto or (ii) materially amend any instruction to any
Obligor or any instruction to or agreement with any Collection Account Bank with
respect to any Collection Account unless the Trustee (if directed to do so in
writing by a Majority in Interest of each outstanding Series or, if the related
Supplement so provides, the Enhancement Provider for such Series) shall have
given its prior consent to such change or amendment.
The Servicer hereby agrees and acknowledges that it has
executed and delivered to the Trustee a letter and executed acknowledgement
thereto substantially in the form of Exhibit E hereto (each, a "COLLECTION
ACCOUNT LETTER"), addressed to and executed by each banking institution or other
Person with which a Collection Account is maintained (each such banking
institution with which a Collection Account is maintained being a "COLLECTION
ACCOUNT BANK"). The Servicer hereby agrees, and the Trustee hereby acknowledges,
that the execution and delivery of each Collection Account Letter transfers to
the Trustee all right, title and interest in the applicable Collection Account
and in all monies, securities and instruments therein (except, solely with
respect to the Store Accounts, to the extent described in the Intercreditor
Agreement).
POOLING AND SERVICING AGREEMENT
70
64
If, at any time, the institution holding any Collection
Account ceases to be a Qualified Depository Institution, the Trustee upon
written notice by the Servicer (or the Servicer on its behalf) shall promptly
establish a new Collection Account with a Qualified Depository Institution
meeting the conditions specified above, transfer any cash or any investments to
such new Collection Account and, from the date such new Collection Account is
established, it shall be a "Collection Account."
Section 4.03 COLLECTIONS AND ALLOCATIONS.
(a) COLLECTIONS. The Transferor and the Servicer hereby agree,
and shall instruct all Obligors accordingly: (i) to cause all Obligors to remit
payments on their Receivables directly to a Collection Account or to the
Servicer; (ii) to cause all such payments to the Principal Store Account and any
Collection Account other than a Store Account to be deposited in the
Concentration Account within two Business Days of its receipt thereof; and (iii)
to cause all such payments (other than those referred to in the preceding
clause (ii)) to be deposited (A) in a Collection Account within one Business Day
(or for sixty days after the Effective Date, two Business Days) of the
Servicer's receipt thereof, (B) then, in the Principal Store Account within one
Business Day of such deposit in such Collection Account and (C) then, in the
Concentration Account, within one Business Day of such deposit in the Principal
Collection Account. Notwithstanding the foregoing, unless the certificates of
deposit, short-term deposits or commercial paper of the Servicer shall have a
credit rating from ▇▇▇▇▇'▇ and Standard & Poor's of P-1 and A-l+, respectively,
or the long-term unsecured debt obligations of the Servicer (other than, in each
case, any obligation whose rating is based on collateral or on the credit of a
Person other than the Servicer) shall have a credit rating from ▇▇▇▇▇'▇ and
Standard & Poor's of at least Aa3 and AA, respectively, all amounts deposited
into any Collection Account on any Business Day shall on the same Business Day
be withdrawn from such Collection Account and deposited into the Concentration
Account.
(b) SERIES ALLOCATIONS. (i) On each Business Day, the Servicer
shall instruct the Trustee in writing to allocate Collections of Principal
Receivables, Collections of Finance Charge Receivables and Loss Amounts to each
Series, in each case in an amount equal to the product of (A) the Investor
Percentage for each such Series for the most recently ended Due Period and (B)
(1) all Collections of Principal Receivables deposited in the Concentration
Account on such Business Day, (2) all Collections of Finance Charge Receivables
deposited in the Concentration Account on such Business Day or (3) all Loss
Amounts incurred on such Business Day, as the case may be.
(ii) On each Business Day, the Servicer shall instruct the
Trustee in writing to allocate Collections of Principal Receivables, Collections
of Finance Charge Receivables and Loss Amounts to the holder of the Exchangeable
Transferor Certificate, in each case in an amount equal to the product of (A)
the Transferor Percentage for the most recently ended Due
POOLING AND SERVICING AGREEMENT
71
65
Period and (B) (1) all Collections of Principal Receivables deposited in the
Concentration Account on such Business Day, (2) all Collections of Finance
Charge Receivables deposited in the Concentration Account on such Business Day
or (3) all Loss Amounts incurred on such Business Day, as the case may be.
(c) ADJUSTMENTS FOR MISCELLANEOUS CREDITS AND FRAUDULENT
CHARGES. With respect to each Due Period, the aggregate amount of Principal
Receivables (i) which were created in respect of merchandise refused or returned
by the Obligor thereunder or as to which the Obligor thereunder has asserted a
counterclaim or defense, (ii) which were reduced by the Servicer by any rebate,
refund, charge-back or adjustment (including Servicer errors) or (iii) which
were created as a result of a fraudulent or counterfeit charge (with respect to
such Due Period, the "DILUTION AMOUNT") will be allocated to each Series based
upon the Investor Percentage for such Series.
On the last day of each Due Period, the aggregate amount of
Principal Receivables used to calculate the Transferor Invested Amount will be
reduced by an amount equal to the sum of the Series Dilution Amounts for each
outstanding Series for such Due Period. If such reduction would cause the
Transferor Invested Amount to be less than the Aggregate Minimum Transferor
Invested Amount, the Transferor shall promptly, but in no event later than 10
Business Days after such last day, make a deposit in the Excess Funding Account
in immediately available funds in an amount equal to the amount by which the
Transferor Invested Amount would be reduced below the Aggregate Minimum
Transferor Invested Amount.
(d) EXCESS FUNDING ACCOUNT. The Servicer, for the benefit of
the Investor Certificateholders, shall establish and maintain in the United
States in the name of the Trustee, on behalf of the Trust, a segregated trust
account with an institution which is and continues to be a Qualified Depository
Institution bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Beneficiaries (the "EXCESS FUNDING
ACCOUNT"). The Trustee, for the benefit of the Beneficiaries, 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. Without limiting the rights
of the Servicer set forth in the next succeeding paragraph, the Excess Funding
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Beneficiaries. Except as expressly provided in this Agreement,
the Servicer agrees that it shall have no right of setoff or banker's lien
against, and no right to otherwise deduct from, any funds held in the Excess
Funding Account for any amount owed to it by the Trustee, the Trust, any
Certificateholder or any Enhancement Provider. If, at any time, the institution
holding the Excess Funding Account ceases to be a Qualified Depository
Institution, the Trustee upon written notice by Servicer (or the Servicer on its
behalf) shall promptly establish a new Excess Funding Account with a Qualified
Depository Institution meeting the conditions specified above, transfer any cash
or any investments to such new Excess Funding
POOLING AND SERVICING AGREEMENT
72
66
Account and, from the date such new Excess Funding Account is established, it
shall be the "Excess Funding Account."
Funds on deposit in the Excess Funding Account shall at the
direction of the Servicer be invested by the Trustee in Permitted Investments
selected by the Servicer. All such Permitted Investments shall be held by the
Trustee for the benefit of the Beneficiaries. The Trustee shall maintain for the
benefit of the Beneficiaries possession of the negotiable instruments or
securities, if any, evidencing such Permitted Investments. Funds on deposit in
the Excess Funding Account on any date (after giving effect to any withdrawals
from the Excess Funding Account on such date) will be invested in Permitted
Investments that will mature so that funds will be available at the close of
business on the Distribution Date following such date. No such Permitted
Investments shall be liquidated prior to maturity. On each Determination Date,
the Servicer shall instruct the Trustee in writing to withdraw on the related
Distribution Date from the Excess Funding Account and deposit in the
Concentration Account all interest and other investment earnings (net of losses
and investment expenses) on funds on deposit in the Excess Funding Account, for
application as Collections of Finance Charge Receivables (allocable to each
Series PRO RATA based on the Investor Percentage for each Series until paid in
full) with respect to the prior Due Period. Interest (including reinvested
interest) and other investment income and earnings on funds on deposit in the
Excess Funding Account shall not be considered part of the amount on deposit in
such Excess Funding Account for purposes of this Agreement. On any Determination
Date on which no Series is in an Amortization Period or an Early Amortization
Period, the Servicer shall determine the amount by which the Transferor Invested
Amount exceeds the Aggregate Minimum Transferor Invested Amount on such date and
shall instruct the Trustee in writing to withdraw such amount from the Excess
Funding Account, until the amount on deposit in the Excess Funding Account is
reduced to zero, on the related Distribution Date and pay such amount to the
holder of the Exchangeable Transferor Certificate; PROVIDED that such allocation
shall be subject to Section 4.03(g). On any Determination Date on which one or
more Series is in an Amortization Period or an Early Amortization Period, the
Servicer shall determine the aggregate amount of Principal Shortfalls, if any,
with respect to each such Series that is a Principal Sharing Series (after
giving effect to the allocation and payment provisions in the Supplement with
respect to each such Series), and the Servicer shall instruct the Trustee in
writing to withdraw such amount from the Excess Funding Account on the
succeeding Distribution Date and allocate such amount among each such Series as
Shared Principal Collections as specified in each related Supplement.
(e) SHARED PRINCIPAL COLLECTIONS. On each Distribution Date,
(i) the Servicer shall allocate Shared Principal Collections to each Principal
Sharing Series in a Group, PRO RATA, in proportion to the Principal Shortfalls,
if any, with respect to each such Series and (ii) the Servicer shall instruct
the Trustee in writing to withdraw from the Concentration Account or the Excess
Funding Account and the Servicer shall pay to the holder
POOLING AND SERVICING AGREEMENT
73
67
of the Exchangeable Transferor Certificate an amount equal to the excess, if
any, of (x) the aggregate amount for all such Series of Collections of Principal
Receivables that the related Supplements specify are to be treated as "SHARED
PRINCIPAL COLLECTIONS" for such Distribution Date over (y) the aggregate amount
for all such Series that the related Supplements specify are "Principal
Shortfalls" for such Distribution Date (the "PRINCIPAL SHORTFALLS"); PROVIDED,
HOWEVER, that such amounts shall be paid to the holder of the Exchangeable
Transferor Certificate only to the extent the Transferor Invested Amount for
such Determination Date (determined after giving effect to any Principal
Receivables Transferred to the Trust on such date) exceeds the Aggregate Minimum
Transferor Invested Amount; and PROVIDED FURTHER that, if on any Distribution
Date the Transferor Invested Amount is less than or equal to the Aggregate
Minimum Transferor Invested Amount, the Servicer shall deposit in the Excess
Funding Account any Shared Principal Collections then on deposit in the
Concentration Account that otherwise would be distributed to the holder of the
Exchangeable Transferor Certificate.
(f) SHARED EXCESS FINANCE CHARGE COLLECTIONS. On each
Distribution Date, (i) the Servicer shall allocate Shared Excess Finance Charge
Collections with respect to the Series in a Group to each Series in such Group,
PRO RATA, in proportion to the Finance Charge Shortfalls, if any, with respect
to each such Series and (ii) the Servicer shall instruct the Trustee in writing
to withdraw from the Concentration Account and the Servicer shall pay to the
holder of the Exchangeable Transferor Certificate an amount equal to the excess,
if any, of (x) the aggregate amount for all outstanding Series in a Group of the
amounts that the related Supplements specify are to be treated as "SHARED EXCESS
FINANCE CHARGE COLLECTIONS" for such Distribution Date over (y) the aggregate
amount for all outstanding Series in such Group that the related Supplements
specify are "Finance Charge Shortfalls" for such Distribution Date (the "FINANCE
CHARGE SHORTFALLS"); PROVIDED, HOWEVER, that such payment shall be subject to
Section 4.03(g); and PROVIDED FURTHER that the sharing of Shared Excess Finance
Charge Collections among Series in a Group will continue only until such time,
if any, at which the Transferor shall deliver to the Trustee an Officer's
Certificate to the effect that, in the reasonable belief of the Transferor or
its counsel, the continued sharing of Shared Excess Finance Charge Collections
among Series in any Group would have adverse regulatory implications with
respect to the Transferor or any Originator. Following the delivery by the
Transferor of such an Officer's Certificate to the Trustee there will not be any
further sharing of such Shared Excess Finance Charge Collections among Series in
any Group.
POOLING AND SERVICING AGREEMENT
74
68
ARTICLE V
DISTRIBUTIONS AND REPORTS TO CERTIFICATEHOLDERS
Distributions shall be made to, and reports shall be provided
to, Certificateholders of each Series as set forth in the applicable Supplement.
ARTICLE VI
THE CERTIFICATES
Section 6.01 CERTIFICATES. The Investor Certificates of each
Series may be issued in fully registered form (for purposes of Section 163(f) of
the Code) ("REGISTERED CERTIFICATES") and shall be substantially in the form
specified in the related Supplement. The Exchangeable Transferor Certificate
shall be substantially in the form of Exhibit B hereto. The Investor
Certificates and the Exchangeable Transferor Certificate shall, upon issue
pursuant hereto or to Section 6.09 or Section 6.10, be executed and delivered by
the Transferor to the Trustee for authentication and redelivery as provided in
Sections 2.01 and 6.02. Any Investor Certificate shall be issuable in a minimum
denomination of $5,000,000 and in integral multiples of $1,000 in excess
thereof, unless otherwise specified in any Supplement, and shall be issued upon
original issuance in an aggregate original principal amount equal to the Initial
Series Invested Amount for the related Series. The Exchangeable Transferor
Certificate shall be initially issued as a single certificate to the Transferor.
Each Certificate shall be executed by manual or facsimile signature on behalf of
the Trustee by a duly authorized signatory. Certificates bearing the manual or
facsimile signature of the individual who was, at the time when such signature
was affixed, authorized to sign on behalf of the Trustee shall not be rendered
invalid, notwithstanding that such individual has ceased to be so authorized
prior to the authentication and delivery of such Certificates or does not hold
such office at the date of such Certificates. No Certificate shall be entitled
to any benefit under this Agreement, or be valid for any purpose, unless there
appears on such Certificate a certificate of authentication substantially in the
form provided for herein, executed by or on behalf of the Trustee by the manual
or facsimile signature of a duly authorized signatory, and such certificate upon
any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
Section 6.02 AUTHENTICATION OF CERTIFICATES. The Trustee shall
authenticate and deliver any Series of Investor Certificates, upon the written
order of the Transferor, to such
POOLING AND SERVICING AGREEMENT
75
69
Person as shall be designated by the Transferor, against payment to the
Transferor of the applicable Initial Series Invested Amount (net of any
discount) in accordance with the Transaction Documents. Upon the receipt of
such payment and the issuance of the Investor Certificates, such Investor
Certificates shall be fully paid and non-assessable. The Trustee shall
authenticate and deliver the Exchangeable Transferor Certificate to the
Transferor simultaneously with the initial Transfer to the Trust of
Receivables. Upon an Exchange as provided in Section 6.09 and the
satisfaction of the applicable conditions specified therein, the Trustee shall
authenticate and deliver the Investor Certificates of additional Series (with
the designation provided in the related 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 Series Invested Amount of such Series.
Section 6.03 REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES.
(a) The Trustee shall cause to be kept at the office or agency
to be maintained by a transfer agent and registrar (the "TRANSFER AGENT AND
REGISTRAR"), in accordance with the provisions of Section 11.16, a register (the
"CERTIFICATE REGISTER") in which, subject to such reasonable regulations as it
may prescribe, the Transfer Agent and Registrar shall provide for the
registration of the Investor Certificates of each Series (unless otherwise
provided in the related Supplement) and of transfers and exchanges of the
Investor Certificates as herein provided. The Trustee is hereby initially
appointed Transfer Agent and Registrar for the purposes of registering the
Investor Certificates and transfers and exchanges of the Investor Certificates
as herein provided. Any reference in this Agreement to the Transfer Agent and
Registrar shall include any co-transfer agent and co-registrar. The provisions
of Sections 7.04, 11.01, 11.02, 11.03 and 11.05 shall apply to the Trustee also
in its role as Transfer Agent and Registrar, for so long as the Trustee shall
act as Transfer Agent and Registrar. The Trustee shall be permitted to resign as
Transfer Agent and Registrar upon 30 days' written notice to the Servicer. In
the event that the Trustee shall no longer be the Transfer Agent and Registrar,
the Trustee shall appoint a successor Transfer Agent and Registrar. The Trustee
may revoke such appointment, or any subsequent appointment, and remove the
Transfer Agent and Registrar if the Trustee determines in its sole discretion
that the Transfer Agent and Registrar has failed to perform its obligations
under this Agreement in any material respect. The Transfer Agent and Registrar
shall be permitted to resign as Transfer Agent and Registrar upon 30 days'
notice to the Transferor, the Servicer and the Trustee. No resignation,
revocation or removal under this Section 6.03(a) shall be effective, and the
Transfer Agent and Registrar shall continue to perform its duties as Transfer
Agent and Registrar until, the Trustee has appointed a successor Transfer Agent
and Registrar reasonably acceptable to the Transferor and such successor has
accepted such appointment.
POOLING AND SERVICING AGREEMENT
76
70
Upon surrender for registration of transfer of any Certificate
at any office or agency of the Transfer Agent and Registrar, the Transferor
shall execute and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates in authorized
denominations of like aggregate Undivided Trust Interests.
At the option of an Investor Certificateholder, Registered
Certificates may be exchanged for other Registered Certificates of the same
Series in authorized denominations of like aggregate Undivided Trust Interests
in the Trust, upon surrender of the Registered Certificates to be exchanged at
any office or agency of the Transfer Agent and Registrar maintained for such
purpose.
Whenever any Investor Certificates of any Series are so
surrendered for exchange, the Transferor shall execute, and the Trustee shall
authenticate and (unless the Transfer Agent and Registrar is different than the
Trustee, in which case the Transfer Agent and Registrar shall) deliver, the
Investor Certificates of such Series which the Certificateholder making the
exchange is entitled to receive. Every Investor Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by a
written instrument of transfer in a form satisfactory to the Trustee and the
Transfer Agent and Registrar duly executed by the Certificateholder thereof or
his attorney-in-fact duly authorized in writing.
The preceding provisions of this Section 6.03 notwithstanding,
the Trustee or the Transfer Agent and Registrar, as the case may be, shall not
be required to register the transfer of or exchange any Investor Certificate of
any Series for a period of 15 days preceding the due date for any payment with
respect to the Investor Certificates of such Series.
Unless otherwise provided in the related Supplement, no
service charge shall be made for any registration of transfer or exchange of
Certificates, but the Transfer Agent and Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
All Investor Certificates surrendered for registration of
transfer and exchange shall be canceled by the Transfer Agent and Registrar and
disposed of in a manner satisfactory to the Trustee.
The Transferor shall execute and deliver to the Trustee or the
Transfer Agent and Registrar, as applicable, 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.
POOLING AND SERVICING AGREEMENT
77
71
(b) Except as provided in Section 6.09 or in any Supplement,
in no event shall the Exchangeable Transferor Certificate or any interest
therein be transferred hereunder, in whole or in part to a person other than the
Transferor or an Affiliate of the Transfer- or, unless the Transferor shall have
consented in writing to such transfer and unless the Trustee shall have received
a Tax Opinion.
(c) (i) Registration of transfer of Investor Certificates
shall be effected only if such transfer (x) is made pursuant to an effective
registration statement under the Securities Act, or is exempt from the
registration requirements under the Securities Act, and (y) is made to a Person
which is not an employee benefit plan, trust or account, including an individual
retirement account, that is subject to ERISA or that is described in Section
4975(e)(1) of the Code or an entity whose underlying assets include plan assets
by reason of a plan's investment in such entity (a "BENEFIT PLAN"). In the event
that registration of a transfer is to be made in reliance upon an exemption from
the registration requirements under the Securities Act, the transferor or the
transferee shall deliver, at its expense, to the Transferor, the Servicer and
the Trustee, an investment letter from the transferee, substantially in the form
of the investment and ERISA representation letter attached hereto as Exhibit F,
and no registration of transfer shall be made until such letter is so delivered.
Whenever an Investor Certificate is presented to the Transfer
Agent and Registrar for registration of transfer, the Transfer Agent and
Registrar shall promptly seek instructions from the Servicer regarding such
transfer and shall be entitled to receive instructions signed by a Servicing
Officer prior to registering any such transfer. The Transferor hereby agrees to
indemnify the Transfer Agent and Registrar and the Trustee and its officers,
directors, employees and agents and to hold each of them harmless against any
loss, liability or expense incurred without gross negligence or bad faith on
their part arising out of or in connection with actions taken or omitted by them
in relation to any such instructions furnished pursuant to this clause (i). This
provision shall survive the discharge of this Agreement or the earlier
resignation or removal of the Trustee.
(ii) If so requested by the Transferor, the Trustee will make
available to any prospective purchaser of Investor Certificates who so requests,
a copy of a letter provided to the Trustee by or on behalf of the Transferor
relating to the transferability of any Series to a Benefit Plan.
(d) The Transfer Agent and Registrar shall maintain at its
expense in the Borough of Manhattan, the City of New York (and subject to this
Section 6.03, if specified in the related Supplement for any Series, any other
city designated in such Supplement) an office or offices or an agency or
agencies where Investor Certificates of such Series may be surrendered for
registration of transfer or exchange.
POOLING AND SERVICING AGREEMENT
78
72
Section 6.04 MUTILATED, DESTROYED, OR STOLEN CERTIFICATES. If
(a) any mutilated Certificate is surrendered to the Transfer Agent and
Registrar, or the Transfer Agent and Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and (b) there
is delivered to the Transfer Agent and Registrar and the Trustee such security
or indemnity as may be required by them to save each of them harmless, then, in
the absence of written notice to the Trustee that such Certificate has been
acquired by a bona fide purchaser, the Transferor shall execute and the Trustee
shall authenticate and (unless the Transfer Agent and Registrar is different
from the Trustee, in which case the Transfer Agent and Registrar shall) deliver
(in compliance with applicable law), in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and aggregate Undivided Trust Interest. In connection with the issuance of
any new Certificate under this Section 6.04, the Trustee or the Transfer Agent
and Registrar may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee and the Transfer Agent
and Registrar) connected therewith. Any duplicate Certificate issued pursuant to
this Section 6.04 shall constitute complete and indefeasible evidence of
ownership in the Trust, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
Section 6.05 PERSONS DEEMED OWNERS. Prior to due presentation
of a Registered 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 Registered Certificate is registered as the
owner of such Registered Certificate for the purpose of receiving distributions
pursuant to any Supplement and for all other purposes whatsoever; and in any
such case neither the Trustee, the Paying Agent, the Transfer Agent
and Registrar nor any agent of any of them shall be affected by any notice to
the contrary; PROVIDED, HOWEVER, for purposes of voting or the giving of any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Investor Certificates owned by any Originator, the Transferor, the Servicer or
any Affiliate thereof shall be disregarded and deemed not to be outstanding,
except that, in determining whether the Trustee shall be fully protected in
conclusively relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Investor Certificates which a Responsible
Officer in the Corporate Trust Office of the Trustee knows to be so owned shall
be so disregarded. Investor Certificates so owned that have been pledged in good
faith shall not be disregarded as outstanding, if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Investor Certificates and that the pledgee is not any Originator, the
Transferor, the Servicer or an Affiliate thereof.
Section 6.06 APPOINTMENT OF PAYING AGENT.
POOLING AND SERVICING AGREEMENT
79
73
(a) The Paying Agent shall make distributions to Investor
Certificateholders from the appropriate account or accounts maintained for the
benefit of Investor Certificateholders as specified in any Supplement. Any
Paying Agent shall have the revocable power to withdraw funds from such
appropriate account or accounts for the purpose of making distributions referred
to above and shall report such withdrawals to the Trustee. The Trustee (or the
Servicer if the Trustee is the Paying Agent) may revoke such power and remove
the Paying Agent, if the Trustee (or the Servicer if the Trustee is the Paying
Agent) determines in its sole discretion that the Paying Agent shall have failed
to perform its obligations under this Agreement in any material respect or for
other good cause. The Paying Agent shall initially be the Trustee. The Trustee
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Servicer. In the event that the Trustee shall no longer be the Paying Agent, the
Trustee shall appoint a successor to act as Paying Agent who shall be acceptable
to the Transferor and the Trustee. The provisions of Sections 11.01, 11.02 and
11.03 shall apply to the Trustee also in its role as Paying Agent, for so long
as the Trustee shall act as Paying Agent. The Paying Agent (other than the
Trustee) shall be permitted to resign as Paying Agent upon 30 days' notice to
the Transferor, the Servicer and the Trustee. No resignation, revocation or
removal under this Section 6.06(a) shall be effective, and the Paying Agent
shall continue to perform its duties as Paying Agent until, the Trustee has
appointed a successor Paying Agent reasonably acceptable to the Transferor and
such successor has accepted such appointment.
(b) The Trustee shall cause the Paying Agent (other than
itself) to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee that such Paying Agent will hold all sums, if
any, held by it for payment to the Investor Certificateholders in trust for the
benefit of the Investor Certificateholders entitled thereto until such sums
shall be paid to such Investor Certificateholders, and shall agree, and if the
Trustee is the Paying Agent it hereby agrees, that it shall comply with all
requirements of the Code regarding the withholding by the Trustee of payments in
respect of federal income taxes due from Certificateholders (consistent with the
treatment of the Investor Certificates as debt instruments for federal income
tax purposes).
Section 6.07 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES. The Trustee shall furnish or cause to be furnished by the Transfer
Agent and Registrar to the Servicer or the Paying Agent, within five Business
Days after receipt by the Trustee of a request therefor from the Servicer or the
Paying Agent, respectively, in writing, a list in such form as the Servicer or
the Paying Agent may reasonably require, of the names and addresses of the
Registered Certificateholders as of the most recent Record Date. Unless
otherwise provided in the related Supplement, holders of Investor Certificates
evidencing Undivided Trust Interests aggregating not less than 10% of the
Undivided Trust Interest of any Series (the "APPLICANTS") may apply in writing
to the Trustee, and if such application states that the Applicants desire to
communicate with other Investor Certificateholders of any Series with
POOLING AND SERVICING AGREEMENT
80
74
respect to their rights under any Transaction Document and is accompanied by a
copy of the communication which such Applicants propose to transmit, then the
Trustee, after having been adequately indemnified by such Applicants for its
costs and expenses, shall afford or shall cause the Transfer Agent and Registrar
to afford such Applicants access during normal business hours to the most recent
list of Registered Certificateholders of such Series or all outstanding Series,
as applicable, held by the Trustee and shall give the Servicer notice that such
request has been made, within five Business Days after the receipt of such
application. The Trustee shall keep in as current a form as is reasonably
practicable the most recent list available to it of Certificateholders. Every
Registered Certificateholder, by receiving and holding a Registered Certificate,
agrees with the Trustee that neither the Trustee, the Transfer Agent and
Registrar, nor any of their respective agents shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the Registered Certificateholders hereunder, regardless of the source from
which such information was obtained.
Section 6.08 AUTHENTICATING AGENT.
(a) The Trustee may appoint one or more authenticating agents
with respect to the Certificates which shall be authorized to act on behalf of
the Trustee in authenticating the Certificates in connection with the issuance,
delivery, registration of transfer, exchange or repayment of the Certificates.
Whenever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication on behalf of the Trustee by
an authenticating agent and a certificate of authentication executed on behalf
of the Trustee by an authenticating agent. Each authenticating agent must be
acceptable to the Transferor.
(b) Any institution succeeding to the corporate agency
business of an authenticating agent shall continue to be an authenticating agent
without the execution or filing of any paper or any further act on the part of
the Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by giving
written notice of resignation to the Trustee and to the Transferor. The Trustee
may at any time terminate the agency of an authenticating agent by giving notice
of termination to such authenticating agent and to the Transferor. Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time an authenticating agent shall cease to be acceptable to the Trustee or
the Transferor, the Trustee promptly may appoint a successor authenticating
agent. Any successor authenticating agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
authenticating agent. No successor authenticating agent shall be appointed
unless acceptable to the Trustee and the Transferor.
POOLING AND SERVICING AGREEMENT
81
75
(d) The Trustee agrees to pay each authenticating agent from
time to time reasonable compensation for its services under this Section 6.08,
and the Trustee shall be entitled to be reimbursed and the Servicer shall
reimburse the Trustee for such reasonable payments actually made, subject to the
provisions of Section 11.05.
(e) The provisions of Sections 7.04, 11.01, 11.02, 11.03 and
11.05 shall be applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section 6.08,
the Certificates may have endorsed thereon, in lieu of the Trustee's certificate
of authentication, an alternate certificate of authentication in substantially
the following form:
This is one of the certificates described in the
Pooling and Servicing Agreement, dated as of December 30, 1997, among
The El-Bee Chargit Corp., The El-Bee Receivables Corp. and Bankers
Trust Company.
----------------------------
as Authenticating Agent
for the Trustee,
By:
-------------------------
Authorized Officer
Section 6.09 TENDER OF EXCHANGEABLE TRANSFEROR CERTIFICATE.
(a) Upon any Exchange (as defined below) the Trustee shall
issue to the holder of the Exchangeable Transferor Certificate under Section
6.01, for execution and redelivery to the Trustee for authentication under
Section 6.02, one or more new Series of Investor Certificates. Any such Series
of Investor Certificates shall be substantially in the form specified in the
related Supplement and shall bear, upon its face, the designation for the Series
to which it belongs, as selected by the Transferor. Except as specified in any
Supplement for a related Series, all Series shall rank PARI PASSU and be equally
and ratably entitled as provided herein to the benefits hereof (except that the
Enhancement and any Series Accounts provided for any Series shall not be
available for any other Series) without preference, priority or distinction on
account of the actual time or times of authentication and delivery, all in
accordance with the terms and provisions of this Agreement and the related
Supplement.
POOLING AND SERVICING AGREEMENT
82
76
(b) The holder of the Exchangeable Transferor Certificate 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, a "TRANSFEROR EXCHANGE").
In addition, to the extent permitted for any Series of Investor Certificates as
specified in the related Supplement, the Investor Certificateholders of such
Series may tender their Investor Certificates and the holder of the Exchangeable
Transferor Certificate may tender the Exchangeable Transferor Certificate to the
Trustee pursuant to the terms and conditions set forth in such Supplement in
exchange for (i) one or more newly issued Series of Investor Certificates and
(ii) a reissued Exchangeable Transferor Certificate (an "INVESTOR EXCHANGE").
The Transferor Exchange and Investor Exchange are referred to collectively
herein as an "EXCHANGE." The holder of the Exchangeable Transferor Certificate
may perform an Exchange by notifying the Trustee in writing at least five days
in advance (an "EXCHANGE NOTICE") of the date upon which the Exchange is to
occur (an "EXCHANGE DATE"). Any Exchange Notice shall state the designation of
any Series to be issued on the Exchange Date and, with respect to each such
Series: (a) its Initial Series Invested Amount (or the method for calculating
such Initial Series Invested Amount), which at any time may not be greater than
the current principal amount of the Exchangeable Transferor Certificate at such
time, (b) its Certificate Rate (or the method for allocating interest payments
or other cash flows to such Series), if any, and (c) the Enhancement Provider,
if any, with respect to such Series. On the Exchange Date, the Trustee shall
authenticate and deliver any such Series of Investor Certificates only upon
delivery to it of the following: (a) a Supplement satisfying the criteria set
forth in Section 6.09(c) executed by the Transferor and specifying the Principal
Terms of such Series, (b) the applicable Enhancement, if any, (c) the agreement,
if any, pursuant to which the Enhancement Provider agrees to provide the
Enhancement, if any, (d) written confirmation that the Rating Agency Condition
has been satisfied with respect to the Exchange, (e) an Officer's Certificate of
the Transferor that on the Exchange Date, after giving effect to the Exchange,
the Transferor Invested Amount will be at least equal to the Aggregate Minimum
Transferor Invested Amount and the sum of the aggregate amount of Principal
Receivables plus the amount on deposit in the Excess Funding Account will be at
least equal to the Minimum Aggregate Principal Receivables and such Exchange
will not result in the occurrence of an Early Amortization Event and is not
reasonably expected to result in such an occurrence, and (f) the existing
Exchangeable Transferor Certificate or applicable Investor Certificates, as the
case may be. If any Series is outstanding, it is a condition to the issuance of
any newly created Series of Investor Certificates that (A) such issuance will
not result in the occurrence of an Early Amortization Event, (B) the Transferor
shall have delivered to the Trustee, each Rating Agency and any Enhancement
Provider an Opinion of Counsel to the effect that such Issuance (1) has been, or
need not be, registered under the Securities Act and will not result in the
requirement that any other Series not registered under the Securities Act be so
registered (unless the Transferor has elected, in its sole discretion, to
register such Certificates), (2) will not result in the Trust becoming subject
to registration as an investment company under the Investment Company Act and
(3) will not require this
POOLING AND SERVICING AGREEMENT
83
77
Agreement or the related Supplement to be qualified under the Trust Indenture
Act of 1939, as amended (unless the Transferor has elected, in its sole
discretion, to so qualify the Agreement or the related Supplement) and (C) the
Transferor shall have delivered to the Trustee, each Rating Agency and any
Enhancement Provider a Tax Opinion, dated the date of such issuance, with
respect to such issuance. Upon satisfaction of such conditions, the Trustee
shall cancel the existing Exchangeable Transferor Certificate or applicable
Investor Certificates, as the case may be, and issue, as provided above, such
Series of Investor Certificates and a new Exchangeable Transferor Certificate,
dated the Exchange Date. There is no limit to the number of Exchanges that may
be performed under this Agreement.
(c) In conjunction with an Exchange, the parties hereto shall
execute a Supplement, which shall specify the relevant terms with respect to any
newly issued Series of Investor Certificates, which may include: (i) its name or
designation, (ii) an Initial Series Invested Amount and Series Invested Amount
or the method of calculating the Initial Series Invested Amount or the Series
Invested Amount, as the case may be, (iii) the Certificate Rate (or formula for
the determination thereof), (iv) the Closing Date, (v) the rating agency or
agencies rating such Series, (vi) the interest payment date or dates and the
date or dates from which interest shall accrue, (vii) the method of allocating
Collections with respect to Principal Receivables, Finance Charge Receivables
and Loss Amounts for such Series and the method by which the principal amount of
Investor Certificates of such Series shall amortize or accrete, (viii) the names
of any accounts to be used by such Series and the terms governing the operation
of any such accounts, (ix) the Investor Monthly Servicing Fee, (x) the Aggregate
Minimum Transferor Invested Amount (if any), (xi) the Enhancement Provider, if
applicable, and the terms of any Enhancement with respect to such Series, (xii)
the base rate applicable to such Series, (xiii) the terms on which the
Certificates of such Series may be repurchased or remarketed to other investors,
(xiv) the Series Termination Date, (xv) any deposit into any account provided
for such Series, (xvi) the priority of such Series with respect to any other
Series, (xvii) the rights, if any, of the holder of the Exchangeable Transferor
Certificate that have been transferred to the holders of such Series, (xix) the
Pool Factor, (xx) the Minimum Aggregate Principal Receivables, (xxi) whether
such Series will be part of a Group, and (xxii) any other relevant terms
(including whether or not such Series will be pledged as collateral for the
issuance of any other securities, including commercial paper) (all such terms,
the "PRINCIPAL TERMS" of such Series). The terms of such Supplement may modify
or amend the terms of this Agreement solely as applied to such new Series.
Section 6.10 UNCERTIFICATED CLASSES. Notwithstanding anything
to the contrary contained in this Article VI or in Article XII, unless otherwise
specified in any Supplement, any provisions contained in this Article VI and in
Article XII relating to the registration, form, execution, authentication,
delivery, presentation, cancellation and surrender of Certificates shall not be
applicable to any uncertificated Certificates.
POOLING AND SERVICING AGREEMENT
84
78
ARTICLE VII
OTHER MATTERS RELATING
TO THE TRANSFEROR
Section 7.01 LIABILITY OF THE TRANSFEROR. The Transferor shall
be liable hereunder only to the extent of the obligations specifically
undertaken by it in its capacity as Transferor.
Section 7.02 OBLIGATIONS NOT ASSIGNABLE.
The obligations of the Transferor hereunder shall not be
assignable nor shall any Person succeed to the obligations of the Transferor
hereunder.
Section 7.03 LIMITATION ON LIABILITY. 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 for any action taken or for refraining from the taking of such
action in such capacities pursuant to this Agreement or for any obligation or
covenant under this Agreement; PROVIDED, HOWEVER, that this provision shall not
protect the officers, directors, employees, or agents of the Transferor against
any liability which would otherwise be imposed by reason of willful misconduct,
bad faith or gross negligence in the performance of their duties or by reason of
reckless disregard of obligations and duties hereunder. The Transferor and any
director, officer, employee or agent may rely in good faith on any document of
any kind PRIMA FACIE properly executed and submitted by any Person respecting
any matters arising hereunder.
Section 7.04 INDEMNIFICATION OF THE TRUSTEE, THE
CERTIFICATEHOLDERS, ANY PROGRAM AGENT AND ANY ENHANCEMENT PROVIDER. Without
limiting any other rights which the Trustee, the Certificateholders (other than
the Transferor and its Affiliates), any Program Agent or any Enhancement
Provider and their respective assignees and their respective officers,
directors, employees, agents and affiliates (each, an "INDEMNIFIED PARTY" and
collectively the "INDEMNIFIED PARTIES") may have hereunder or under applicable
law, the Transferor hereby agrees to indemnify each Indemnified Party from and
against any and all claims, damages, losses and liabilities and related costs
and expenses (including reasonable attorneys' fees and disbursements) (all of
the foregoing being collectively referred to as "INDEMNIFIED AMOUNTS") awarded
against or incurred by any of them arising out of, relating to or resulting from
any Transaction Document, the activities of the Trustee in connection herewith,
the Transferor's use of proceeds of Transfers of Receivables or reinvestments of
Collections, the interest Transferred hereunder in Trust Assets, or in respect
of any Receivable or any Account or Cardholder Agreement (excluding however (a)
Indemnified Amounts to the
POOLING AND SERVICING AGREEMENT
85
79
extent resulting from gross negligence or willful misconduct on the part of such
Indemnified Party, (b) except as otherwise specifically provided in any
Transaction Document, recourse for uncollectible Receivables or (c) except as
otherwise specifically provided in any Transaction Document, any federal, state,
foreign or local income or franchise taxes or any other tax imposed on or
measured by income (or any interest, penalty, or addition to tax with respect
thereto or arising from a failure to comply therewith) incurred by such
Indemnified Party arising out of or as a result of this Agreement or the
interest Transferred hereunder in Trust Assets). Without limiting or being
limited by the foregoing, the Transferor shall pay on demand to each
Indemnified Party any and all amounts necessary to indemnify such Indemnified
Party from and against any and all Indemnified Amounts arising out of, relating
to or resulting from:
(i) reliance on any representation, warranty or covenant made
or statement made or deemed made by the Transferor or any of its
Affiliates (or any of their respective Responsible Officers) under or
in connection with any Transaction Document which shall have been
incorrect when made or deemed made or which the Transferor shall have
failed to perform;
(ii) the failure by the Transferor to comply with any
Transaction Document or any applicable Requirement of Law with respect
to any Trust Asset or related Cardholder Agreement, or the failure of
any Receivable, or any Account or the related Cardholder Agreement to
conform to any requirement with respect thereto under any Transaction
Document or any Requirement of Law;
(iii) the failure to vest in the Trustee on behalf of the
Trust for the benefit of the Beneficiaries either a perfected first
priority undivided percentage ownership interest or a perfected first
priority security interest in all Receivables and other Trust Assets,
free and clear of any Lien;
(iv) the failure to have filed, or any delay in filing, any
financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws that
are necessary for perfection or first priority of the ownership or
security interest created by this Agreement or any Purchase Agreement;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of an Obligor) of an Obligor to the payment of
any Receivable in, or purporting to be in, the Trust Assets (including
a defense based on such Receivable, the related Account or the related
Cardholder Agreement not being a legal, valid and binding obligation of
such Obligor enforceable against it in accordance with its terms), or
any other claim resulting from the sale of the merchandise, services or
insurance related to such
POOLING AND SERVICING AGREEMENT
86
80
Receivable or the furnishing or failure to furnish such merchandise,
services or insurance;
(vi) any products liability claim or other claim allegedly
arising out of or in connection with merchandise, services or insurance
the sale of which gave rise to any Receivable or any credit,
administration or other activity in connection with any Cardholder
Agreement;
(vii) any failure by the Transferor or any Affiliate of the
Transferor to perform its duties or obligations in accordance with the
provisions of any Transaction Document, including any failure to so
perform in connection with servicing, administering or collecting any
Receivable;
(viii) any commingling of Collections at any time with other
funds;
(ix) any investigation, litigation or proceeding related to
any Transaction Document or the use of proceeds or reinvestments of
proceeds by the Transferor, the Servicer or the Parent of Transfers of
Receivables or the ownership of or security interest in Trust Assets or
in respect of any Receivable, Account or Cardholder Agreement;
(x) any taxes, including sales, excise, intangibles, value
added, personal property and similar taxes, payable with respect to the
Receivables or the Accounts;
(xi) any federal, state, foreign or local income or franchise
tax, or any other tax imposed on or measured by reference to income, or
any interest, penalty or addition to tax with respect thereto or
arising from a failure to comply therewith, imposed upon the Trust, the
assets of the Trust or the Trustee as a result of its acting in its
capacity as trustee hereunder, EXCEPT with respect to fees or other
compensation received by the Trustee;
(xii) Any Receivable classified as an "Eligible Receivable" by
the Transferor or the Servicer in any document or report delivered
hereunder failing to satisfy, at the time of such classification, the
requirements of eligibility contained in the definition of Eligible
Receivable; or
(xiii) Any Account classified as an "Eligible Account" by the
Transferor or the Servicer in any document or report delivered
hereunder failing to satisfy, at the time of such classification, the
requirements of eligibility contained in the definition of Eligible
Account.
POOLING AND SERVICING AGREEMENT
87
81
Any Indemnified Amounts due hereunder shall be payable within
fifteen Business Days of submission of a claim by the Indemnified Party which
describes in reasonable detail the basis for such claim. The rights of the
Indemnified Parties under this Section 7.04 shall survive the collection of
Receivables, the termination of the Trust, the payment of all amounts otherwise
payable hereunder, the discharge of this Agreement and the resignation or
removal of the Trustee.
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
Section 8.01 LIABILITY OF THE SERVICER. The Servicer shall be
liable hereunder only to the extent of the obligations specifically undertaken
by the Servicer in such capacity herein.
Section 8.02 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE SERVICER. The Servicer shall not consolidate with or merge
into any other Person or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) the Person formed by such consolidation or into which the
Servicer is merged or which acquires by conveyance or transfer the
properties and assets of the Servicer substantially as an entirety
shall be, if the Servicer is not the surviving entity, a corporation
organized and existing under the laws of the United States of America
or any State thereof and shall expressly assume, by an agreement
supplemental hereto, executed and delivered to the Trustee in form
satisfactory to the Trustee, the performance of every covenant and
obligation of the Servicer hereunder;
(ii) the Servicer shall have delivered to the Trustee an
Officer's Certificate of the Servicer, upon which the Trustee may
conclusively rely, that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section 8.02
and that all conditions precedent herein provided relating to
such transaction have been complied with and an Opinion of Counsel,
upon which the Trustee may conclusively rely, that such supplemental
agreement is legal, valid and binding with respect to the Servicer;
(iii) the Servicer shall have given at least 10 Business Days'
prior notice to the Rating Agencies and the Trustee of such
consolidation, merger, conveyance or transfer;
POOLING AND SERVICING AGREEMENT
88
82
(iv) the Rating Agency Condition shall have been satisfied
with respect to such assignment and succession;
(v) the corporation formed by such consolidation or into which
the Servicer is merged or which acquires by conveyance or transfer the
properties and assets of the Servicer substantially as an entirety
shall have all licenses and approvals of Governmental Authorities
required to service the Receivables; and
(vi) if the Person described in clause (i) is not an Affiliate
of the Servicer, the Trustee shall have consented in writing to such
consolidation, merger, conveyance or transfer.
Section 8.03 LIMITATION ON LIABILITY. The directors, officers,
employees or agents of the Servicer 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 such
action in such capacities pursuant to this Agreement or for any obligation or
covenant under this Agreement; PROVIDED, HOWEVER, that this provision shall not
protect the directors, officers, employees and agents of the Servicer against
any liability that would otherwise be imposed by reason of willful misconduct,
bad faith or gross negligence in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder. The Servicer may rely in
good faith on any document of any kind PRIMA FACIE properly executed and
submitted by any Person (other than the Servicer or any Affiliate thereof)
respecting any matters arising hereunder. The Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Receivables in accordance with this
Agreement which in its reasonable opinion may involve it in any expense or
liability.
Section 8.04 SERVICER INDEMNIFICATION. The Servicer hereby
agrees to indemnify each Indemnified Party from and against Indemnified Amounts
awarded against or incurred by any of them (excluding however (a) Indemnified
Amounts to the extent resulting from gross negligence or willful misconduct on
the part of such Indemnified Party and (b) recourse (except as otherwise
specifically provided in any Transaction Document) for uncollectible
Receivables) arising out of, relating to or resulting from:
(i) reliance on any representation, warranty or covenant made
or statement made or deemed made by the Servicer (or any of its
Responsible Officers) under or in connection with any Transaction
Document which shall have been incorrect when made or deemed made or
which the Transferor shall have failed to perform;
POOLING AND SERVICING AGREEMENT
89
83
(ii) the failure by the Servicer to comply with any
Transaction Document or any applicable Requirement of Law with respect
to any Receivable, Account, Trust Asset or related Cardholder
Agreement;
(iii) any failure by the Servicer to perform its duties or
obligations in accordance with the provisions of any Transaction
Document, including any failure to so perform in connection with
servicing, administering or collecting any Receivable or Account; or
(iv) any commingling of Collections at any time with other
funds.
Any Indemnified Amounts due hereunder shall be payable within
fifteen Business Days of submission of a claim by the Indemnified Party which
describes in reasonable detail the basis for such claim. The rights of the
Indemnified Parties under this Section 8.04 shall survive the collection of all
Receivables, the termination of the Trust, the payment of all amounts otherwise
due hereunder, the discharge of this Agreement and the resignation or removal of
the Trustee.
Section 8.05 THE SERVICER NOT TO RESIGN. The Servicer shall
not resign from the obligations and duties hereby imposed on it except upon a
determination by the Servicer that (i) the performance of its duties hereunder
is no longer permissible under applicable law and (ii) there is no reasonable
action which the Servicer could take to make the performance of its duties
hereunder permissible under applicable law. No such resignation shall become
effective until the Trustee or a Successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section
10.02 hereof. Any such determination permitting the resignation of the Servicer
shall be evidenced as to clause (i) above by an Opinion of Counsel to such
effect delivered to the Trustee. The Trustee shall give prompt notice to each
Rating Agency and Enhancement Provider upon the appointment of a Successor
Servicer. If the Trustee is unable within 120 days of the date of such
determination to appoint a Successor Servicer, the Trustee shall serve as
Successor Servicer hereunder.
Section 8.06 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING THE RECEIVABLES. Subject to the terms of any Supplement, the Servicer
shall provide to the Trustee and each Enhancement Provider access to the
documentation regarding the Accounts and the Receivables in such cases where the
Trustee or any Enhancement Provider is required in connection with the
enforcement of the rights of the Investor Certificateholders or any Enhancement
Provider, or by applicable statutes or regulations, to review such documen-
tation, such access being afforded without charge but only (i) upon reasonable
request, (ii) during the Servicer's normal business hours, (iii) subject to
normal and reasonable security and confidentiality procedures and (iv) at
offices designated by the Servicer. Nothing in this Section 8.06 shall derogate
from the obligation of any Originator, the Transferor, the Trustee,
POOLING AND SERVICING AGREEMENT
90
84
the Servicer or any Enhancement Provider to observe any applicable law
prohibiting disclosure of information regarding the Obligors and the failure of
the Servicer to provide access as provided in this Section 8.06 as a result of
such obligations shall not constitute a breach of this Section 8.06.
Section 8.07 DELEGATION OF DUTIES. In the ordinary course of
business, the Servicer may at any time delegate any duties hereunder to any
Person who agrees to conduct such duties in accordance with the Cardholder
Guidelines. Any such delegations shall not relieve the Servicer of its liability
and responsibility with respect to such duties, and shall not constitute a
resignation within the meaning of Section 8.05 hereof.
Section 8.08 EXAMINATION OF RECORDS. The Servicer shall
clearly and unambiguously identify each Account in its computer or other records
to reflect that the Receivables arising in such Account and other Trust Assets
have been Transferred to the Trust pursuant to this Agreement. The Servicer
shall, prior to the sale or transfer to a third party of any receivable held in
its custody, examine its computer and other records to determine that such
receivable is not a Receivable.
ARTICLE IX
EARLY AMORTIZATION EVENTS
Section 9.01 TRUST EARLY AMORTIZATION EVENTS. If any one of
the following events (each, a "TRUST EARLY AMORTIZATION EVENT") shall occur:
(a) any failure by the Transferor or the Servicer to make any
payment, transfer or deposit required to be paid, effected or made by
it hereunder within two Business Days after the same shall become due;
or
(b) any representation or warranty, certification or written
statement made or deemed made by the Transferor or the Servicer under
or in connection with this Agreement, or in any statement, record,
certificate, financial statement or other document delivered pursuant
to this Agreement, or in connection with this Agreement, shall prove to
have been incorrect in any material respect on or as of the date made
or deemed made; or
(c) the Transferor shall fail to observe or perform any
covenant or agreement applicable to it contained in any Transaction
Document, if such failure shall remain unremedied for two days; or
POOLING AND SERVICING AGREEMENT
91
85
(d) an Insolvency Event shall occur with respect to any
Originator, the Transferor, the Servicer, the Parent or the Trust; or
(e) the Securities and Exchange Commission or other regulatory
body having jurisdiction shall reach a final determination that the
Transferor or the Trust is an "investment company" within the meaning
of the Investment Company Act; or
(f) any Originator for any reason shall become unable or shall
cease to transfer Receivables to the Transferor pursuant to a Purchase
Agreement; or the Transferor shall become unable for any reason to
Transfer Receivables to the Trust in accordance with the provisions of
this Agreement; or
(g) the Trust at any time receives a final determination that
the Trust will be treated as an association (or publicly traded
partnership) taxable as a corporation for federal income tax purposes;
or
(h) any of the Parent, the Transferor, the Servicer or any
Originator shall fail to pay principal in respect of any Indebtedness
of the Parent, the Transferor, the Servicer or any Originator (as the
case may be) that is outstanding (i) in a principal amount, either
individually or in the aggregate, of at least $5,000,000, (ii) in the
case of the Transferor, in any amount (but excluding, in each case,
Indebtedness outstanding under any Transaction Document) or (iii) in
the case of any Indebtedness owing by the Parent under the Credit
Agreement, in any amount, when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise); or any other event shall occur or condition shall
exist under any agreement or instrument relating to any such
Indebtedness, if the effect of such event or condition is to accelerate
the maturity of such Indebtedness or otherwise to cause such
Indebtedness to mature; or any such Indebtedness shall be declared to
be due and payable or required to be prepaid or redeemed (other than by
a regularly scheduled required prepayment or redemption), purchased or
defeased, or an offer to prepay, redeem, purchase or defease such
Indebtedness shall be required to be made, in each case prior to the
stated maturity thereof; or
(i) the amount on deposit in the Excess Funding Account
exceeds at any time an amount equal to 30% of the aggregate amount of
Principal Receivables in the Trust Assets at such time;
then, if any of the events set forth in paragraph (d) or (f) above shall have
occurred, a "Trust Early Amortization Event" with respect to all Series shall
occur without any notice, demand, protest or other requirement of any kind
immediately upon the occurrence of such event, and, if any of the events set
forth in any other paragraph above shall have occurred, the Trustee
POOLING AND SERVICING AGREEMENT
92
86
may (and, if directed to do so by a Majority in Interest of any outstanding
Series or, if the related Supplement so provides, the Enhancement Provider for
such Series, shall), by notice to the Transferor, the Servicer, and each
Enhancement Provider, declare that a "Trust Early Amortization Event" shall
occur as of the date set forth in such notice. Upon the occurrence of a Trust
Early Amortization Event, additional Receivables will not be Transferred to the
Trust. The Trustee shall be deemed to have knowledge of a Trust Early
Amortization Event only if a Responsible Officer of the Trustee has actual
knowledge or if a Responsible Officer of the Trustee has received written notice
thereof.
A Majority in Interest of each outstanding Series (or, if so
specified in the related Supplement, each Enhancement Provider for such Series)
may, on behalf of all Certificateholders, waive any default (other than a
default described in paragraph (d) or (f) above) by the Transferor or the
Servicer in the performance of their obligations hereunder and its consequences,
except the failure to make any distributions or payments required to be made to
Certificateholders or to make any required deposits of any amounts to be so
distributed or paid. Certificateholders of Certificates evidencing 67% or more
of the Aggregate Invested Amount of each outstanding Series (or, if so specified
in the related Supplement, each Enhancement Provider for such Series) may, on
behalf of all Certificateholders, waive any default described in paragraph (d)
or (f) above and its consequences. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived.
Section 9.02 ADDITIONAL RIGHTS UPON THE OCCURRENCE OF ANY
TRUST EARLY AMORTIZATION EVENT. (a) Upon the occurrence and during the
continuance of any Trust Early Amortization Event, in addition to all other
rights and remedies under this Agreement or otherwise and all other rights and
remedies provided under the UCC of the State of New York and other applicable
laws (which rights shall be cumulative), each of the Servicer, at the direction
of the Trustee, and the Trustee may exercise any and all rights and remedies of
the Transferor under or in connection with the Purchase Agreements, including
any and all rights of the Transferor to demand or otherwise require payment of
any amount under, or performance of any provision of, the Purchase Agreements.
Further, the Trustee may exercise any and all rights and remedies under the
Parent Undertaking Agreement.
(b) If an Insolvency Event with respect to the Transferor
occurs, the Transferor shall immediately cease to Transfer Principal Receivables
to the Trust and shall promptly give written notice of such event to the
Trustee, who shall, within two Business Days, forward such notice to the
Certificateholders, each Rating Agency, each Program Agent, each Enhancement
Provider and the Servicer. Notwithstanding any cessation of the
Transfer to the Trust of additional Principal Receivables, Finance Charge
Receivables, whenever created, accrued in respect of Principal Receivables which
have been Transferred to the Trust, shall continue to be a part of the Trust
Assets, and Collections with respect thereto
POOLING AND SERVICING AGREEMENT
93
87
shall continue to be allocated and paid in accordance with Article IV and any
Supplement. Unless, within 15 Business Days after the date of the notice
provided for above, the Trustee receives written instructions from a Majority in
Interest of each outstanding Series (or, if so specified in the related
Supplement, the Enhancement Provider for the Series) instructing the Trustee not
to sell, dispose of or liquidate the Receivables, the Trustee or its agent shall
promptly proceed to sell, dispose of, or otherwise liquidate the Receivables in
a commercially reasonable manner and on commercially reasonable terms; PROVIDED,
HOWEVER, that, if the amount available to the Trust for distribution after such
sale, disposition or liquidation would be less than the aggregate unpaid
Aggregate Invested Amount of the Investor Certificates plus any amount required
to be deposited in any Reserve Account pursuant to any Supplement through the
Distribution Date next succeeding the date of such sale, the Trustee or its
agent shall not proceed with such sale, disposition or liquidation unless a
Majority in Interest of each outstanding Series (or, if so specified in the
related Supplement, the Enhancement Provider for such Series) shall have
consented in writing thereto. The proceeds from such sale, disposition or
liquidation of the Receivables shall be treated as Collections on the
Receivables and shall be allocated and distributed in accordance with the terms
of the Transaction Documents after being deposited in the Concentration Account;
PROVIDED that the amount of such proceeds shall be determined by the Servicer
based on the average allocation of Collections as Collections of Finance Charge
Receivables or as Collections of Principal Receivables with respect to each of
the three Distribution Dates immediately preceding the date of such
distribution, as evidenced by a certificate delivered by the Servicer to the
Trustee. Unless the Trustee receives written instructions from Investor
Certificateholders and Enhancement Providers as provided in Section 9.02(a)
above, on the day following the last Distribution Date in the Due Period during
which such proceeds are distributed to the Investor Certificateholders of each
Series, the Trust shall terminate.
(c) The Trustee may appoint an agent or agents to assist with
its responsibilities pursuant to this Article IX with respect to competitive
bids.
ARTICLE X
SERVICER DEFAULTS
Section 10.01 SERVICER DEFAULTS. If any one of the following
events (a "SERVICER DEFAULT") shall occur and be continuing:
(a) any failure by the Servicer to make any payment, transfer
or deposit, or, if applicable, 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 action to be taken under
POOLING AND SERVICING AGREEMENT
94
88
any Enhancement Agreement, or to provide a Monthly Servicer's Report to
the Trustee, in each case, within two Business Days after the same
shall become due; or
(b) the Servicer shall fail to observe or perform any other
covenant or agreement applicable to it contained herein, which failure
continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Trustee or an Enhancement
Provider, or to the Servicer and the Trustee by holders of Investor
Certificates evidencing not less than 25% of the Series Invested Amount
of any Series or an Enhancement Provider; or
(c) any representation, warranty or certification made or
deemed made by the Servicer under or in connection with any Transaction
Document, or in any certificate or information delivered pursuant to or
in connection with any Transaction Document shall prove to have been
incorrect on or as of the date made or deemed made, which continues to
be incorrect for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Trustee or an Enhancement Provider,
or to the Servicer and the Trustee by holders of Investor Certificates
evidencing not less than 25% of the Series Invested Amount of any
Series or an Enhancement Provider; or
(d) an Insolvency Event shall occur with respect to the
Servicer; or
(e) the Servicer assigns its duties under this Agreement,
except as specifically permitted by Section 8.02; or
(f) The Servicer shall at any time fail to have Consolidated
Tangible Net Worth of at least $250,000;
then, so long as such Servicer Default shall not have been remedied, either the
Trustee, or the holders of Investor Certificates evidencing Undivided Trust
Interests aggregating more than 66 2/3% of the Aggregate Invested Amount, by
notice then given in writing to the Servicer (and to the Trustee if given by the
Investor Certificateholders) (a "SERVICER TERMINATION NOTICE"), may terminate
all of the rights and obligations of the Servicer as Servicer under this
Agreement. The Trustee shall promptly notify any Enhancement Provider of any
such Servicer Default of which a Responsible Officer of the Trustee has actual
Knowledge.
After receipt by the Servicer of such Servicer Termination
Notice, and on the date that a Successor Servicer accepts its appointment as
such by the Trustee pursuant to Section 10.02, all authority and power of the
Servicer under this Agreement shall pass to and be vested in a Successor
Servicer; and, without limitation, the Trustee is hereby authorized and
POOLING AND SERVICING AGREEMENT
95
89
empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact
or otherwise, all documents and other instruments upon the failure of the
Servicer to execute or deliver such documents or instruments, and to do and
accomplish all other acts or things necessary or appropriate to effect the
purposes of such transfer of servicing rights and obligations. The Servicer
agrees to cooperate with the Trustee and such Successor Servicer in effecting
the termination of the responsibilities and rights of the Servicer to conduct
servicing hereunder including the transfer to such Successor Servicer of all
authority of the Servicer to service the Receivables provided for under this
Agreement, including all authority over all Collections which shall on the date
of transfer be held by the Servicer for deposit, or which have been deposited by
the Servicer, in the Concentration Account, any Collection Account, the Excess
Funding Account or any Series Account, or which shall thereafter be received
with respect to the Receivables, and in assisting the Successor Servicer in
enforcing all rights to Insurance Proceeds applicable to the Trust. The Servicer
shall promptly transfer its electronic records or electronic copies thereof
relating to the Receivables, the Accounts and the other Trust Assets 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, the Accounts and the other Trust Assets in the
manner and at such times as the Successor Servicer shall reasonably request. To
the extent that compliance with this Section 10.01 shall require the Servicer to
disclose to the Successor Servicer information of any kind which the Servicer
reasonably deems to be confidential, the Successor Servicer shall be required to
enter into such customary licensing and confidentiality agreements as the
Servicer shall deem necessary to protect its interests. The Servicer shall, on
the date of any servicing transfer, transfer all of its rights and obligations
under any Enhancement with respect to any Series to the Successor Servicer.
Notwithstanding the foregoing, a delay in or failure of
performance referred to in Section 10.01(a) or (b), for a cumulative period of
five Business Days shall not constitute a Servicer Default if such delay or
failure could not be prevented by the exercise of reasonable diligence by the
Servicer and such delay or failure was caused by an act of God or the public
enemy, acts of declared or undeclared war, public disorder, rebellion, riot or
sabotage, epidemics, landslides, lightning, fire, hurricanes, tornadoes,
earthquakes, nuclear disasters or meltdowns, floods, power outages or similar
causes. The preceding sentence shall not relieve the Servicer from using its
best efforts to perform its obligations in a timely manner in accordance with
the terms of this Agreement and the Servicer shall provide the Trustee, any
Enhancement Provider and the Transferor 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.
Section 10.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
POOLING AND SERVICING AGREEMENT
96
90
(a) On and after the occurrence of a Servicer Default pursuant
to Section 10.01 or a resignation of the Servicer pursuant to Section 8.05, the
Servicer shall continue to perform all servicing functions under this Agreement
until the date of the acceptance by a Successor Servicer of its appointment as
such hereunder. The Trustee shall notify each Rating Agency of such removal of
the Servicer. The Trustee shall, as promptly as possible after the giving of a
Servicer Termination Notice appoint a successor servicer (the "SUCCESSOR
SERVICER"), and such Successor Servicer shall accept its appointment by a
written assumption in a form acceptable to the Trustee. Each Enhancement
Provider and a Majority In Interest of all Series, if any, must consent in
writing to any Successor Servicer. The Trustee may obtain bids from any
potential successor servicer. If (i) the Trustee is unable to obtain any bids
from any potential successor servicer, and (ii) the Servicer delivers to the
Trustee an Officer's Certificate to the effect that it cannot in good faith cure
the Servicer Default which gave rise to a transfer of servicing, and if the
Trustee is legally unable to act as Successor Servicer, then the Trustee shall
notify each Investor Certificateholder and any Enhancement Provider of the
proposed sale of the Receivables and shall provide each Enhancement Provider an
opportunity to bid on the Receivables and shall offer the Transferor the right
of first refusal to purchase the Receivables on terms equivalent to the best
purchase offer as determined by the Trustee, but in no event less than an amount
equal to the Aggregate Invested Amount on the date of such purchase PLUS all
interest accrued but unpaid on all of the outstanding Investor Certificates at
the applicable Certificate Rate, and all fees and expenses under any Supplement
due but unpaid through the date of such purchase; PROVIDED, HOWEVER, that if the
short-term deposits or long-term unsecured debt obligations of the Transferor
(or, if neither such deposits nor such obligations of the Transferor are rated
by Moody's, then of the Parent so long as the Parent shall be the beneficial
owner of at least a majority of the Voting Stock of the Transferor) are not
rated at the time of such purchase at least P-3 or Baa-3, respectively, by
Moody's, no such purchase by the Transferor shall occur unless the Transferor
shall deliver an Opinion of Counsel reasonably acceptable to the Trustee that
such purchase would not constitute a fraudulent conveyance of the Transferor.
The proceeds of such sale shall be deposited in the Concentration Account for
distribution to the Investor Certificateholders of each outstanding Series,
pursuant to Section 12.03 of this Agreement. Notwithstanding the above, the
Trustee may petition a court of competent jurisdiction to appoint as the
Successor Servicer hereunder any established financial institution having a
combined capital and surplus of not less than $50,000,000, and whose regular
business includes the servicing of credit card receivables.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to servicing functions
under this Agreement and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof, and all references in this Agreement to the Servicer shall be
deemed to refer to the Successor Servicer. Any Successor Servicer, by its
acceptance of its appointment, will automatically agree to be bound by the terms
and provisions of each Supplement and Enhancement.
POOLING AND SERVICING AGREEMENT
97
91
(c) In connection with such appointment and assumption, the
Trustee shall be entitled to such compensation, or may make such arrangements
for the compensation of the Successor Servicer out of Collections, as it and
such Successor Servicer shall agree; PROVIDED, HOWEVER, that no such
compensation shall be in excess of the Monthly Servicing Fee permitted to the
Servicer pursuant to Section 3.02. The holder of the Exchangeable Transferor
Certificate agrees that if the Servicer is terminated hereunder, it will agree
to deposit a portion of the Collections in respect of Finance Charge Receivables
that it is entitled to receive pursuant to Article IV to pay its share of the
compensation of the Successor Servicer.
(d) All authority and power granted to the Successor Servicer
under this Agreement shall automatically cease and terminate upon termination of
the Trust pursuant to Section 12.01 and shall pass to and be vested in the
Transferor and, without limitation, the Transferor is hereby authorized and
empowered to execute and deliver, on behalf of the Successor Servicer, as
attorney-in-fact or otherwise, all documents and other instruments, and to do
and accomplish all other acts or things necessary or appropriate to effect the
purposes of such transfer of servicing rights. The Successor Servicer agrees to
cooperate with the Transferor in effecting the termination of the
responsibilities and rights of the Successor Servicer to conduct servicing on
the Receivables. The Successor Servicer shall transfer its electronic records
relating to the Receivables to the Transferor in such electronic form as the
Transferor may reasonably request and shall transfer all other records,
correspondence and documents to the Transferor in the manner and at such times
as the Transferor shall reasonably request. To the extent that compliance with
this Section 10.02 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.
(e) If the Servicer is removed or resigns in accordance with
the provisions hereof and is replaced by a Successor Servicer, the Servicer
shall pay to such Successor Servicer from time to time all costs and expenses
arising in connection with the transfer of all of the duties and obligations of
the Servicer under the Transaction Documents to such Successor Servicer
Section 10.03 NOTIFICATION OF SERVICER DEFAULT AND SUCCESSOR
SERVICER. Within two Business Days after the Servicer becomes aware of any
Servicer Default, the Servicer shall give prompt written notice thereof to the
Trustee, each Rating Agency and each Enhancement Provider. Upon any termination
or appointment of a Successor Servicer pursuant to this Article X, the Trustee
shall give prompt written notice thereof to each Rating Agency and each
Enhancement Provider.
POOLING AND SERVICING AGREEMENT
98
92
Section 10.04 WAIVER OF PAST DEFAULTS. Except as otherwise
provided in Section 9.01, the holders of Investor Certificates evidencing
Undivided Trust Interests aggregating not less than 66 2/3% of the Series
Invested Amount of any Series outstanding adversely affected by a default by the
Servicer or the Transferor in the performance of its obligations hereunder may
waive such default and its consequences on behalf of such Series, except a
default in the failure to make any required deposits or payment of interest or
principal relating to such Series pursuant to Article IV which default does not
result from the failure of the Paying Agent to perform its obligations to make
any required deposits or payments of interest and principal in accordance with
Article IV. Upon any such waiver of a past default, such default shall cease to
exist, and any default arising therefrom shall be deemed to have been remedied
for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to the
extent expressly so waived.
ARTICLE XI
THE TRUSTEE
Section 11.01 DUTIES OF TRUSTEE.
(a) The Trustee, prior to the occurrence of any Servicer
Default of which it has actual knowledge and after the curing of all Servicer
Defaults which may have occurred, undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement and each Supplement.
If a Responsible Officer of the Trustee has received written notice that a
Servicer Default has occurred (which has not been cured or waived), the Trustee
shall exercise such of the rights and powers vested in it by this Agreement, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Subject to Section 11.01(a), no provision of this
Agreement shall be construed to relieve the Trustee from liability for its own
grossly negligent action, its own negligent failure to act or its own willful
misconduct; PROVIDED, HOWEVER, that:
(i) the Trustee shall not be personally liable for an error of
judgment made in good faith by any Responsible Officer of the Trustee,
unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of a Majority in Interest of any
Series, relating to the time, method and place
POOLING AND SERVICING AGREEMENT
99
93
of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, in
relation to the related Series under any Transaction Document; and
(iii) the Trustee shall not be charged with knowledge of any
failure by the Servicer referred to in Section 10.01 unless a
Responsible Officer of the Trustee obtains Knowledge of such failure or
the Trustee receives written notice of such failure from the Servicer
or any holders of Investor Certificates evidencing Undivided Trust
Interests aggregating not less than 10% of the Series Invested Amount
of any Series adversely affected thereby or any Enhancement Provider.
(c) The Trustee shall not be required to expend or risk its
own funds or otherwise incur financial liability in the performance of any of
its duties under any Transaction Document, or in the exercise of any of its
rights or powers, unless indemnity satisfactory to it against such risk or
liability is reasonably assured and provided to it, and none of the provisions
contained in any Transaction Document shall in any event require the Trustee to
perform, or be responsible for the manner of performance of, any of the
obligations of the Servicer under any Transaction Document except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Servicer in accordance with the
terms of this Agreement or any Supplement.
(d) Except for actions expressly authorized by this Agreement
and not prohibited by 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.
(e) Except as expressly provided in this Agreement and each
Supplement, the Trustee shall have no power to vary the corpus of the Trust
including the power to (i) accept any substitute obligation for a Receivable
initially assigned to the Trust under Section 2.01 hereof, (ii) add any other
investment, obligation or Security to the Trust, (iii) withdraw from the Trust
any Receivables, except for a withdrawal permitted under Section 9.02, 10.02,
12.01 or 12.02 or Article IV or Sections 2.04(d) or 2.04(e), or (iii) Transfer
any interest in Receivables.
(f) In the event that the Paying Agent or the Transfer Agent
and Registrar shall fail to perform any obligation, duty or agreement in the
manner or on the day required to be performed by the Paying Agent or the
Transfer Agent and Registrar, as the case may be, under this Agreement, the
Trustee shall be obligated promptly to perform such obligation, duty or
agreement in the manner so required.
POOLING AND SERVICING AGREEMENT
100
94
(g) If the Transferor has agreed to transfer any of its credit
card receivables (other than the Receivables) to another Person, upon the
written request of the Transferor, the Trustee shall enter into such
intercreditor agreements with the transferee of such receivables as are
customary and necessary to identify separately the rights, if any, of the Trust
and such other Person in the Transferor's credit card receivables; PROVIDED,
that the Trustee shall not be required to enter into any intercreditor agreement
which could adversely affect the interests of any Beneficiary, and, upon the
request of the Trustee, any Certificateholder or any Enhancement Provider, the
Transferor shall deliver to it an Opinion of Counsel and an Officer's
Certificate on any matters relating to such intercreditor agreement, reasonably
requested by the Trustee, such Certificateholder or such Enhancement Provider
and the Trustee may conclusively rely on such Opinion of Counsel and such
Officer's Certificate.
(h) The Trustee shall notify each Enhancement Provider of any
Early Amortization Event of which a Responsible Officer has actual knowledge,
promptly upon obtaining such knowledge.
Section 11.02 CERTAIN MATTERS AFFECTING THE TRUSTEE. Except as
otherwise provided in Section 11.01 or in any Supplement:
(a) the Trustee may conclusively rely on and shall be fully
protected in acting, or in refraining from acting, in accord with any
written assignment of Receivables in connection with the initial
report, the Monthly Servicer's Report, the annual Servicer's
certificate, the monthly payment instructions, the monthly
Certificateholder's statement, any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented to it pursuant to this Agreement
by the proper party or parties; PROVIDED, that if Chargit is not the
Servicer at the time the Trustee receives any such paper or document,
the Trustee shall provide a copy of such document to the Transferor;
(b) the Trustee may consult with counsel, 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;
(c) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement, any Supplement
or any Enhancement, or to institute, conduct or defend any litigation
hereunder or in relation hereto, at the request, order or direction of
any of the Investor Certificateholders unless such Investor
Certificateholders shall have offered and provided to the Trustee
reasonable security or
POOLING AND SERVICING AGREEMENT
101
95
indemnity satisfactory to it against the costs, expenses and
liabilities which may be incurred therein or thereby; nothing contained
herein shall, however, relieve the Trustee of the obligations, upon the
occurrence of any Servicer Default (which has not been cured), to
exercise such of the rights and powers vested in it by this Agreement
or any Supplement and to use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the
circumstances in the conduct of its own affairs;
(d) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement or any Supplement;
(e) the Trustee shall not be bound to make any investigation
into the facts of matters stated in any written assignment of
Receivables in connection with the initial report, the Monthly
Servicer's Report, the annual Servicer's certificate, the monthly
payment instructions and notification to the Trustee, the monthly
Certificateholder's statement, any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do
by holders of Investor Certificates evidencing Undivided Trust
Interests aggregating more than 50% of the Series Invested Amount or by
the Enhancement Provider for any Series, in each case that such Person
could be adversely affected thereby if the Trustee does not perform
such acts;
(f) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian or a nominee to the extent
not otherwise prohibited by any Supplement, and the Trustee shall not
be responsible for any misconduct, negligence or supervision on the
part of any such agent, attorney, custodian or nominee appointed with
reasonable care by it hereunder; and
(g) except as may be required by Section 11.0l(a), the Trustee
shall not be required to make any initial or periodic examination of
any documents or records related to the Receivables or the Accounts for
the purpose of establishing the presence or absence of defects or the
compliance by the Transferor with its representations and warranties or
for any other purpose.
(h) Before the Trustee acts or refrains from acting, it may
require an Officer's Certificate and/or an Opinion of Counsel. The
Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such certificate or opinion. Whenever in the
administration of this Agreement the Trustee shall deem it necessary or
desirable that a matter be proved or established prior to taking or
suffering or omitting to take any action hereunder, the Trustee (unless
other evidence in respect
POOLING AND SERVICING AGREEMENT
102
96
thereof is specifically prescribed herein) may, in the
absence of any negligence or bad faith on the part of the Trustee,
request and conclusively rely on an Officer's Certificate.
Section 11.03 TRUSTEE NOT LIABLE FOR RECITALS IN CERTIFICATES.
The Trustee assumes no responsibility for the correctness of the recitals
contained herein and in the Certificates (other than the certificate of
authentication on the Certificates). Except as set forth in Section 11.15, the
Trustee makes no representations as to the validity or sufficiency of this
Agreement or of the Certificates (other than the certificate of authentication
on the Certificates) or of any Receivable or related document. The Trustee in
its individual capacity shall not be accountable for the use or application by
the Transferor of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to the Transferor
in respect of the Receivables or deposited in or withdrawn from the
Concentration Account, any Collection Account, the Excess Funding Account or any
Series Account (or any other account hereafter established to effectuate the
transactions contemplated by the terms of this Agreement) by the Servicer.
Section 11.04 TRUSTEE MAY OWN CERTIFICATES. The Trustee in its
individual or any other capacity may become the owner or pledgee of Investor
Certificates with the same rights as it would have if it were not the Trustee.
Section 11.05 THE SERVICER TO PAY TRUSTEE'S FEES AND EXPENSES.
The Servicer covenants and agrees to pay to the Trustee from time to time, and
the Trustee shall be entitled to receive reasonable compensation (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it, and by its agents,
attorneys, custodians and nominees, in the execution of the Trust hereby created
and in the exercise and performance of any of the powers and duties hereunder of
the Trustee, and the Servicer shall pay or reimburse the Trustee (without
reimbursement from the Concentration Account, any Collection Account the Excess
Funding Account, any Series Account or otherwise) upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the provisions of this Agreement except any such
expense, disbursement or advance as may arise from its own gross negligence or
willful misconduct and except as provided in the following sentence. If the
Trustee is appointed Successor Servicer pursuant to Section 10.02, the
provisions of this Section 11.05 shall not apply to expenses, disbursements and
advances made or incurred by the Trustee in its capacity as Successor Servicer.
The obligations of the Servicer under this Section 11.05 shall
survive the termination of the Trust, the resignation or removal of the Trustee
and the termination of this Agreement.
POOLING AND SERVICING AGREEMENT
103
97
Section 11.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The
Trustee hereunder (or, alternatively, a Person which is the direct or indirect
parent corporation of the Trustee) shall at all times be a corporation organized
and doing business under the laws of the United States of America or any State
thereof, authorized under such laws to exercise corporate trust powers, having a
long-term unsecured debt rating of at least Baa2 by Moody's and BBB- by Standard
& Poor's, having a combined capital and surplus of at least $500,000,000 and
subject to supervision or examination by federal or state authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purpose of this Section 11.06, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 11.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 11.07.
Section 11.07 RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may at any time resign and be discharged from
the Trust hereby created by giving written notice thereof to the Transferor, the
Servicer, each Program Agent, each Enhancement Provider and the Rating Agencies.
Upon receiving such notice of resignation, the Servicer shall promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and have
accepted within 30 days after the giving of such notice of resignation, the
resigning Trustee, upon notice to the Transferor and the Servicer may petition
any court of competent jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.06 hereof and shall fail to resign
after written request therefor by the Transferor or the Servicer, or if at any
time the Trustee shall be legally unable to act, or shall be adjudged as
bankrupt or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Transferor or the Servicer may, but shall not be required
to, upon 10 days' prior written notice to the others, remove the Trustee and
then the Servicer shall 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. Any such appointment
shall be subject to the prior written consent of the Servicer, each Program
Agent and each Enhancement Provider.
(c) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section 11.07
shall not become effective until acceptance of appointment by the successor
trustee as provided in Section 11.08
POOLING AND SERVICING AGREEMENT
104
98
hereof and any liability of the Trustee arising hereunder shall survive such
appointment of a successor trustee.
Section 11.08 SUCCESSOR TRUSTEE.
(a) Any successor trustee appointed as provided in Section
11.07 hereof shall execute, acknowledge and deliver to the Transferor, the
Servicer and its predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor Trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as Trustee herein. The predecessor Trustee shall deliver to the successor
trustee all documents and statements held by it hereunder, and the Transferor
and the predecessor Trustee shall execute and deliver such instruments required
or contemplated hereunder or under any Supplement 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. Thereupon the
resignation or removal of the predecessor Trustee shall become effective and
such successor trustee, without any further act, shall become fully vested with
all the rights, powers, duties and obligations of its predecessor hereunder and
under each Supplement, with like effect as if originally named as Trustee herein
and therein.
(b) No successor trustee shall accept appointment as provided
in this Section 11.08 unless at the time of such acceptance such successor
trustee shall be eligible under the provisions of Section 11.06 hereof and all
amounts owing to the predecessor trustee shall have been paid.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section 11.08, such successor trustee shall mail notice of such
succession hereunder to each Rating Agency and Enhancement Provider and to all
Investor Certificateholders at their addresses as shown in the Certificate
Register.
Section 11.09 MERGER OR CONSOLIDATION OF TRUSTEE. Any Person
into which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 11.06 hereof, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding.
POOLING AND SERVICING AGREEMENT
105
99
Section 11.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
(a) Notwithstanding any other provisions of this Agreement or
any Supplement, at any time, for the purpose of meeting any legal requirements
of any jurisdiction in which any part of the Trust may at the time be located,
the Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the Investor
Certificateholders, such title to the Trust, or any part thereof, and, subject
to the other provisions of this Section 11.10, such powers, duties, obligations,
rights and trusts as the Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 11.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 11.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any laws of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article XI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
POOLING AND SERVICING AGREEMENT
106
100
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect to this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 11.11 TAX RETURNS. In the event the Trust shall be
required to file tax returns, the Trustee, as soon as practicable after it is
made aware of such requirement, shall prepare or cause to be prepared 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 costs and expenses associated with the preparation of such tax returns shall
be payable by the Servicer pursuant to Section 11.05 hereof. The Trustee is
hereby authorized to sign any such return on behalf of the Trust. The Servicer
shall also prepare or cause to be prepared all tax information required by law
to be distributed to Certificateholders and shall deliver such information to
the Trustee at least five days prior to the date it is required by law to be
distributed to Certificateholders. The Servicer, upon request, shall furnish the
Trustee with all such information known to the Servicer as may be reasonably
required in connection with the preparation of all tax returns of the Trust. In
no event shall the Trustee be liable for any liabilities, costs or expenses of
the Trust or the Investor Certificateholders arising under any tax law,
including federal, state, local or foreign income or excise taxes or any other
tax imposed on or measured by income (or any interest or penalty with respect
thereto or arising from a failure to comply therewith).
Section 11.12 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
CERTIFICATES. All rights of action and claims under this Agreement or any Series
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 or agent. Any recovery of judgment shall, after provision for
the payment of the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel, be for the ratable benefit of any Series
in respect of which such judgment has been obtained.
POOLING AND SERVICING AGREEMENT
107
101
Section 11.13 SUITS FOR ENFORCEMENT. (a) If a Servicer Default
shall occur and be continuing, the Trustee, in its discretion may, for the equal
and ratable benefit of the Investor Certificateholders (in accordance with their
Series Invested Amounts), subject to the provisions of Sections 10.01 and 11.14,
proceed to protect and enforce its rights and the rights of the Investor
Certificateholders of any Series under this Agreement or any Supplement by a
suit, action or proceeding in equity or at law or otherwise, whether for the
specific performance of any covenant or agreement contained in this Agreement or
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
most effectual to protect and enforce any of the rights of the Trustee or the
Investor Certificateholders of any Series.
(b) Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Beneficiary any plan of reorganization, arrangement, adjustment or composition
affecting any interests in the Receivables or the rights of any owner thereof,
or to authorize the Trustee to vote in respect of the claim of any Beneficiary
in any such proceeding.
Section 11.14 RIGHTS OF INVESTOR CERTIFICATEHOLDERS TO DIRECT
TRUSTEE. A Majority in Interest of the Aggregate Invested Amount (or with
respect to any remedy, trust or power that does not relate to all Series, a
Majority in Interest of all Series to which such remedy, trust or power relates)
shall have the right to direct the Trustee (i) with respect to 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, and (ii) to exercise
any right, remedy or power provided to Investor Certificateholders of a Series
pursuant to the related Supplement, and the Trustee shall so act; PROVIDED,
HOWEVER, that, subject to Section 11.01, the Trustee shall have the right to
decline to follow any such direction if the Trustee being advised by counsel
determines that the action so directed may not lawfully be taken, or if the
Trustee in good faith shall, by a Responsible Officer or Responsible Officers of
the Trustee, determine that the proceedings so directed would be illegal or
involve it in personal liability or be unduly prejudicial to the rights of
Investor Certificateholders not parties to such direction; and PROVIDED,
FURTHER, that nothing in this Agreement shall impair the right of the Trustee to
take any action deemed proper by the Trustee and which is not inconsistent with
such direction of such holders of Investor Certificates.
Section 11.15 REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE.
The Trustee, in its individual capacity, represents and warrants that:
(a) the Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws of the State of
New York, and has the power to own its assets and to transact the
business in which it is presently engaged;
POOLING AND SERVICING AGREEMENT
108
102
(b) the Trustee has full power, authority and right to
execute, deliver and perform this Agreement, and has taken all
necessary action to authorize the execution, delivery and performance
by it of this Agreement; and
(c) this Agreement has been duly executed and delivered by the
Trustee and constitutes a legal, valid and binding obligation of the
Trustee enforceable against the Trustee in accordance with its terms
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and except as such enforceability may be
limited by general principles of equity, whether considered in a suit
at law or in equity).
Section 11.16 MAINTENANCE OF OFFICE OR AGENCY. The Trustee
shall maintain at its expense in New York, New York an office or offices, or
agency or agencies, where notices and demands to or upon the Trustee in respect
of the Certificates and this Agreement may be served. The Trustee initially
appoints the Corporate Trust Office, as its office for such purposes. The
Trustee shall give prompt written notice to the Servicer, Certificateholders and
each Enhancement Provider of any change in the location of the Certificate
Register or any such office or agency.
ARTICLE XII
TERMINATION
Section 12.01 TERMINATION OF TRUST. (a) The Trust and the
respective obligations and responsibilities of the Transferor, the Servicer and
the Trustee created hereby (other than the obligation of the Trustee to make
payments to Certificateholders as hereinafter set forth) shall terminate, except
with respect to the duties described in Sections 7.04, 8.04, 11.05 and 12.03(b),
on the Trust Termination Date; PROVIDED, HOWEVER, that the Trust shall not
terminate on the date specified in clause (b)(i) of the definition of "Trust
Termination Date" if each of the Servicer and the holder of the Exchangeable
Transferor Certificate notify the Trustee in writing, not later than 5 Business
Days preceding such date, that they desire that the Trust not terminate on such
date, which notice (such notice, a "TRUST EXTENSION") shall specify the date on
which the Trust shall terminate (such date, the "EXTENDED TRUST TERMINATION
DATE"); PROVIDED, HOWEVER, that the Extended Trust Termination Date shall be not
later than December 30, 2017. The Servicer and the holder of the Exchangeable
Transferor Certificate may, on any date following the Trust Extension, so long
as no Series is outstanding, deliver a notice in writing to the Trustee changing
the Extended Trust Termination Date.
POOLING AND SERVICING AGREEMENT
109
103
(b) In the event that (i) the Trust has not terminated by the
last Distribution Date occurring in the second month preceding the Trust
Termination Date, and (ii) (A) the Series Invested Amount and, if applicable,
the Enhancement Invested Amount of any Series (after giving effect to all
transfers, withdrawals, deposits and drawings to occur on such date and the
payment of principal on any Series of Certificates to be made on the related
Distribution Date during such month pursuant to Article IV or any Supplement)
are greater than zero or (B) Loss Amounts allocated to any Series to the extent
such amounts can be reimbursed pursuant to the related Supplement remain
unreimbursed, or (C) any party to a Supplement is owed accrued interest, fees or
expenses, then the Servicer shall sell within 30 days after such Distribution
Date all the Receivables. The proceeds of any sale shall be treated as
Collections on the Receivables and shall be allocated and distributed in
accordance with Article IV and each Supplement; PROVIDED, HOWEVER, that the
amount of such proceeds which are allocable to Finance Charge Receivables and
the amount of such proceeds which are allocable to Principal Receivables shall
be determined by the Servicer based on the average allocation of Collections as
Collections of Finance Charge Receivables or as Collections of Principal
Receivables with respect to each of the three Distribution Dates immediately
preceding the date of such distribution, as evidenced by a certificate delivered
by the Servicer to the Trustee. During such thirty day period, the Servicer
shall continue to collect payments on the Receivables and allocate and deposit
such payments in accordance with the provisions of Article IV.
(c) All principal, interest, fees and expenses with respect to
any Series shall be due and payable no later than the applicable Series
Termination Date. Unless otherwise provided in a Supplement, in the event that
the Series Invested Amount and, if applicable, the Enhancement Invested Amount
of any Series is greater than zero on its Series Termination Date (after giving
effect to all transfers, withdrawals, deposits and drawings to occur on such
date and the payment of principal, interest and fees to be made on such Series
on such date), the Trustee will sell or cause to be sold all the Receivables,
and allocate and distribute all the proceeds of such sale in accordance with
Article IV and each Supplement. Any proceeds of such sale in excess of the
amounts described in the preceding sentence shall be paid to the holder of the
Exchangeable Transferor Certificate. Upon such Series Termination Date with
respect to the applicable Series, final payment of all amounts allocable to any
Investor Certificates or, if applicable, Enhancement Invested Amounts of such
Series shall be made in the manner provided in Section 12.03.
Section 12.02 OPTIONAL PURCHASE. (a) If so provided in any
Supplement, the Transferor may, but shall not be obligated to, cause a final
distribution to be made in respect of the related Series on a Distribution Date
specified in such Supplement by depositing into the Collection Account or the
applicable Series Account, not later than the Business Day prior to such
Distribution Date, for application in accordance with Section 12.03, the amount
specified in such Supplement.
POOLING AND SERVICING AGREEMENT
110
104
(b) The amount deposited pursuant to Section 12.02(a) shall be
paid on the related Distribution Date to the Investor Certificateholders of the
related Series pursuant to Section 12.03. All Certificates of a Series which are
to be redeemed by the Trust pursuant to Section 12.02(a) shall be canceled by
the Transfer Agent and Registrar and be disposed of in a manner satisfactory to
the Trustee and the Transferor. The Series Invested Amount of each Series which
is redeemed by the Trust pursuant to Section 12.02(a) shall, for the purposes of
the definition of "Transferor Invested Amount," be deemed to be equal to zero on
the Distribution Date following the making of the deposit, and the Transferor
Invested Amount shall thereupon be deemed to have been increased by the Series
Invested Amount of such Series.
Section 12.03 FINAL PAYMENT WITH RESPECT TO ANY SERIES. (a)
Written notice of any termination, specifying the Distribution Date upon which
the Investor Certificateholders of any Series may surrender their Certificates
for payment of the final distribution with respect to such Series and
cancellation, shall be given (subject to at least two Business Days' prior
notice from the Servicer to the Trustee) by the Trustee to Investor
Certificateholders of such Series mailed not later than the fifth day of the
month of such final distribution (or in the manner provided by the Supplement
relating to such Series) specifying (i) the Distribution Date (which shall be
the Distribution Date in the month (x) in which the deposit is made pursuant to
Section 2.04(e), 9.02(b), 10.02(a), or 12.02(a) of this Agreement or such other
section as may be specified in the related Supplement, or (y) in which the
related Series Termination Date occurs) upon which final payment of such
Investor Certificates will be made upon presentation and surrender of such
Investor Certificates at the office or offices therein designated, (ii) the
amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Investor Certificates at the office or
offices therein specified. The Trustee shall give such notice to the Transfer
Agent and Registrar and the Paying Agent (if not the Trustee) at the time such
notice is given to such Investor Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to
Section 12.01(a) or the occurrence of the Series Termination Date with respect
to any Series, all funds then on deposit in any Collection Account, the
Concentration Account, the Excess Funding Account or any Series Account
applicable to the related Series shall continue to be held in trust for the
benefit of the Investor Certificateholders of the related Series, and the Paying
Agent or the Trustee shall pay such funds to the Certificateholders of the
related Series upon surrender of their Certificates. In the event that all of
the Investor Certificateholders of any Series shall not surrender their
Certificates for cancellation within six months after the date specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Investor Certificateholders of such Series upon receipt of the
appropriate records from the Transfer Agent and Registrar to surrender their
Certificates for cancellation and receive the
POOLING AND SERVICING AGREEMENT
111
105
final distribution with respect thereto. The Trustee and the Paying Agent shall
pay to the Transferor upon written request any funds held by them for the
payment of principal or interest which remains unclaimed for two years. After
payment to the Transferor, Investor Certificateholders entitled to such funds
may seek recovery only from the Transferor as general creditors unless an
applicable abandoned property law designates another Person.
(c) All Certificates surrendered for payment of the final
distribution with respect to such Certificates and cancellation shall be
canceled by the Transfer Agent and Registrar and be disposed of in a manner
satisfactory to the Trustee and the Transferor.
Section 12.04 TERMINATION OF RIGHTS OF HOLDER OF EXCHANGEABLE
TRANSFEROR CERTIFICATE. Upon the termination of the Trust pursuant to Section
12.01, and after payment of all amounts due hereunder or under any other
Transaction Document on or prior to such termination and the surrender of the
Exchangeable Transferor Certificate, the Trustee shall execute a written
reconveyance substantially in the form of Exhibit G pursuant to which it shall
reconvey to the holder of the Exchangeable Transferor Certificate (without
recourse, representation or warranty) all Trust Assets, except for amounts held
by the Trustee pursuant to Section 12.03(b). The Trustee shall execute and
deliver such instruments of transfer and assignment, in each case without
recourse, representation or warranty, as shall be reasonably requested by the
holder of the Exchangeable Transferor Certificate to vest in such holder all
right, title and interest which the Trust had in the Receivables.
Section 12.05 DEFEASANCE. Notwithstanding anything to the
contrary in this Agreement or any Supplement:
(a) The Transferor and any Affiliate of Transferor that is a
holder of the Exchangeable Transferor Certificate may at Transferor's
option be discharged from its obligations hereunder with respect to any
Series or all outstanding Series (the "DEFEASED SERIES") on the date
the applicable conditions set forth in Section 12.05(c) are satisfied
(a "DEFEASANCE"); PROVIDED, HOWEVER, that the following rights,
obligations, powers, duties and immunities shall survive with respect
to the Defeased Series until otherwise terminated or discharged
hereunder: (i) the rights of the holders of Investor Certificates of
the Defeased Series to receive, solely from the trust fund provided for
in Section 12.05(c), payments in respect of principal of and interest
on such Investor Certificates when such payments are due; (ii) the
right of any Beneficiary to the payment of indemnities and any other
amount due to it under any Transaction Document; (iii) the Transferor's
obligations with respect to such Certificates under Sections 6.03 and
6.04; (iv) the rights, powers, trusts, duties, and immunities of the
Trustee, the Paying Agent and the Registrar hereunder (including,
without limitation, Section 7.04 hereof); and (v) this Section 12.05.
POOLING AND SERVICING AGREEMENT
112
106
(b) Subject to Section 12.05(c), the Transferor at its option
may cause Collections allocated to the Defeased Series and available to
purchase Principal Receivables to be applied to purchase Permitted
Investments rather than Principal Receivables.
(c) The following shall be the conditions to Defeasance under
Section 12.05(a):
(i) The Transferor irrevocably shall have deposited
or caused to be deposited with the Trustee (such deposit to be
made from other than the funds of the Transferor or any
Affiliate of the Transferor's funds), under the terms of an
irrevocable trust agreement in form and substance satisfactory
to the Trustee, as trust funds in trust for making the
payments described below, (A) Dollars in an amount, or (B)
Permitted Investments which through the scheduled payment of
principal and interest in respect thereof will provide, not
later than the due date of payment thereon, money in an
amount, or (C) a combination thereof, in each case sufficient
to pay and discharge, and which shall be applied by the
Trustee to pay and discharge, all remaining scheduled interest
and principal payments on all outstanding Investor
Certificates of the Defeased Series on the dates scheduled for
such payments in this Agreement and the applicable Supplements
and all amounts owing to the Enhancement Providers with
respect to the Defeased Series;
(ii) prior to its first exercise of its right
pursuant to this Section 12.05 with respect to a Defeased
Series to substitute money or Permitted Investments for
Receivables, if any Series of Investor Certificates are
outstanding that were characterized as debt at the time of
their issuance, the Transferor shall have delivered to the
Trustee a Tax Opinion with respect to such deposit and
termination of obligations and (in any case) an Opinion of
Counsel to the effect that such deposit and termination of
obligations will not result in the Trust being required to
register as an "investment company" within the meaning of the
Investment Company Act;
(iii) the Transferor shall have delivered to the
Trustee and any Enhancement Provider an Officer's Certificate
of the Transferor stating the Transferor reasonably believes
that such deposit and termination of obligations will not,
based on the facts known to such officer at the time of such
certification, then cause an Early Amortization Event or any
event that with the giving of notice or the lapse of time
would constitute an Early Amortization Event; and (iv) the
Rating Agency Condition shall have been satisfied and the
Transferor
POOLING AND SERVICING AGREEMENT
113
107
shall have delivered copies of such written notice to the
Servicer and the Trustee.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 AMENDMENT. (a) This Agreement or any Supplement
may be amended in writing from time to time by the Servicer, the Transferor, the
holder of the Exchangeable Transferor Certificate and the Trustee, without the
consent of any Investor Certificateholder; PROVIDED that such action shall not,
as evidenced by an Opinion of Counsel for the Transferor addressed and delivered
to the Trustee, adversely affect in any material respect the interests of any
Beneficiary; PROVIDED, FURTHER, that the Rating Agency Condition shall have been
satisfied with respect to such amendment.
(b) This Agreement or any Supplement may also be amended in
writing from time to time by the Servicer, the Transferor, the holder of the
Exchangeable Transferor Certificate and the Trustee, with the consent of the
holders of Investor Certificates evidencing Undivided Trust Interests
aggregating not less than 66 2/3% of the Series Invested Amount, of each
outstanding Series adversely affected by such amendment for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or any Supplement or modifying in any manner the
rights of Investor Certificateholders of any outstanding Series; PROVIDED,
HOWEVER, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, distributions that are required to be made on any Investor
Certificates of any such Series without the consent of each Investor
Certificateholder of such Series affected thereby, (ii) change the definition of
or the manner of calculating the Series Invested Amount, the Loss Amount or the
Investor Percentage without the consent of each Investor Certificateholder of
all Series adversely affected thereby, or (iii) reduce the aforesaid percentage
required to consent to any such amendment, without the consent of each Investor
Certificateholder of each Series adversely affected thereby. Any amendment to be
effected pursuant to this Article XIII shall be deemed to affect adversely all
outstanding Series, other than any Series with respect to which such action
shall not, as evidenced by an Opinion of Counsel as described in Section
13.01(a), adversely affect in any material respect the interests of such Series.
The Trustee may, but shall not be obligated to, enter into any such Amendment
which affects the Trustee's rights, duties or immunities under this Agreement or
otherwise.
POOLING AND SERVICING AGREEMENT
114
108
(c) Notwithstanding anything in this Section 13.01 to the
contrary, the Supplement with respect to any Series may be amended on the terms
and in accordance with the procedures provided in such Supplement.
(d) Promptly after the execution of any such amendment, the
Servicer shall furnish notification of the substance of such amendment to each
Investor Certificateholder of each Series adversely affected thereby, each
Enhancement Provider, and each Rating Agency.
(e) It shall not be necessary for the consent of Investor
Certificateholders under this Section 13.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Investor Certificateholders shall
be subject to such reasonable requirements as the Trustee may prescribe.
(f) Any Supplement executed and delivered pursuant to Section
6.09, executed in accordance with the provisions hereof, shall not be considered
an amendment to this Agreement for the purpose of Sections 13.01(a) and (b).
(g) In connection with any amendment, the Trustee may request
an Opinion of Counsel from the Transferor or Servicer to the effect that the
amendment complies with all requirements of this Agreement.
Section 13.02 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. (a)
The death or incapacity of any Certificateholder shall not operate to terminate
this Agreement or the Trust, nor shall such death or incapacity entitle such
Certificateholders 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) Except as set forth in this Agreement or any Supplement,
no Certificateholder shall have any right to vote or in any manner otherwise
control the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to constitute the Certificateholders
from time to time as partners or members of an association, nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement or any Supplement pursuant to any
provision hereof or thereof.
(c) No Investor Certificateholder shall have any right by
virtue of any provisions of this Agreement or any Supplement to institute any
suit, action or proceeding in equity or at law upon or under or with respect to
this Agreement or any Supplement, unless
POOLING AND SERVICING AGREEMENT
115
109
such Investor Certificateholder previously shall have made, and unless the
holders of Investor Certificates evidencing more than 50% of the Aggregate
Invested Amount of all Certificates (or, with respect to any such action, suit
or proceeding that does not relate to all Series, 50% of the Aggregate Invested
Amount of all Series to which such action, suit or proceeding relates), shall
have made, a request in writing to the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 30 days
after such request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Investor Certificateholder with every
other Certificateholder and the Trustee, that no one or more Investor
Certificateholders shall have the right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement or any
Supplement to affect, disturb or prejudice the rights of any other Investor
Certificateholder, or to obtain or seek to obtain priority over or preference to
any other such Investor Certificateholder, or to enforce any right under this
Agreement or any Supplement, except in the manner herein provided and for the
equal, ratable and common benefit of all Investor Certificateholders except as
otherwise expressly provided in this Agreement or any Supplement with respect to
any Enhancement applicable to any Series. For the protection and enforcement of
the provisions of this Section 13.02, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
(d) No Certificateholder shall have the right to sell, assign
or transfer any interest in any Principal Receivables or Finance Charge
Receivables except in connection with any sale, assignment or transfer of
Investor Certificates by such Certificateholder in accordance with the
Transaction Documents.
Section 13.03 GOVERNING LAW, ETC. (a) GOVERNING LAW. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE
INTERESTS OF THE TRUSTEE ON BEHALF OF THE TRUST IN THE TRUST ASSETS IS GOVERNED
BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(b) JURISDICTION. (i) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive general jurisdiction of any New York State court or federal court
of the United States of America sitting in New York City, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement or any of the other Transaction Documents to which it is a
party, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or
POOLING AND SERVICING AGREEMENT
116
110
proceeding may be heard and determined in any such New York State court or, to
the extent permitted by law, in such federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or any of the other Transaction Documents in the
courts of any jurisdiction.
(ii) Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any of the other Transaction Documents to which it is a party in any New York
State or federal court. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) CONSENT TO SERVICE OF PROCESS. Each party to this
Agreement irrevocably consents to service of process by personal delivery,
certified mail, postage prepaid or overnight courier. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
(d) WAIVER OF JURY TRIAL. Each party to this Agreement waives
any right to a trial by jury in any action or proceeding to enforce or defend
any rights under or relating to this Agreement, any other Transaction Document
or any amendment, instrument, document or agreement delivered or which may in
the future be delivered in connection herewith or therewith or arising from any
course of conduct, course of dealing, statements (whether oral or written),
actions of any of the parties hereto and the liquidity providers or any other
relationship existing in connection with this Agreement or any other Transaction
Document, and agrees that any such action or proceeding shall be tried before a
court and not before a jury.
Section 13.04 NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at, sent by facsimile to, sent by courier or mailed by
registered mail, return receipt requested, to (a) in the case of the Transferor,
▇▇▇▇ ▇▇-▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇; Attention: President, (b) in the case of
the Servicer, ▇▇▇▇ ▇▇-▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇; Attention: President, (c) in
the case of the Trustee, the Corporate Trust Office, (d) in the case of the
Enhancement Provider for a particular Series, the address, if any, specified in
the related Supplement, (e) in the case of the Program Agent for a particular
Series, the address, if any, specified in the related Supplement, or (f) in the
case of the Rating Agency for a particular Series, the address, if any,
specified in the related Supplement.
POOLING AND SERVICING AGREEMENT
117
111
Unless otherwise provided with respect to any Series in the related Supplement,
any notice required or permitted to be mailed to a Certificateholder shall be
given by first class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Certificateholder receives such notice.
Section 13.05 SEVERABILITY OF PROVISIONS. If any one or more
of the covenants, agreements, provisions or terms of this Agreement shall for
any reason whatsoever be held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Agreement or of the
Certificates or rights of the Certificateholders thereof hereunder.
Section 13.06 ASSIGNMENT. Notwithstanding anything to the
contrary contained herein, except as provided in Section 8.02, this Agreement
may not be assigned by the Transferor or the Servicer without the prior written
consent of the holders of Investor Certificates evidencing Undivided Trust
Interests aggregating not less than 66 2/3% of the Series Invested Amount of
each Series on a Series by Series basis.
Section 13.07 CERTIFICATES NON-ASSESSABLE AND FULLY PAID. It
is the intention of the parties to this Agreement that the Certificateholders
shall not be personally liable for obligations of the Trust, that the Undivided
Trust Interests represented by the Certificates shall be non-assessable for any
losses or expenses of the Trust or for any reason whatsoever, and that
Certificates upon authentication thereof by the Trustee pursuant to Sections
2.01 and 6.02 are and shall be deemed fully paid.
Section 13.08 FURTHER ASSURANCES. The Transferor and the
Servicer agree to do and perform, from time to time, any and all acts and to
execute any and all further instruments required or reasonably requested by the
Trustee more fully to effect the purposes of this Agreement, including the
execution of any financing statements or continuation statements relating to the
Receivables for filing under the provisions of the UCC of any applicable
jurisdiction.
Section 13.09 NON-PETITION COVENANT. Notwithstanding any prior
termination of this Agreement, the Servicer, the Enhancement Provider, any
holder of the Exchangeable Transferor Certificate, the Trustee and the
Transferor, shall not, prior to the date which is one year and one day after the
last day on which any Investor Certificate shall have been outstanding,
acquiesce, petition or otherwise invoke or cause the Trust or the Transferor to
invoke the process of any Governmental Authority for the purpose of commencing
or sustaining a case against the Trust or the Transferor under any Federal or
state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian,
POOLING AND SERVICING AGREEMENT
118
112
sequestrator or other similar official of the Trust or the Transferor or any
substantial part of its property or ordering the winding up or liquidation of
the affairs of the Trust or the Transferor.
Section 13.10 NO WAIVER; CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of any Beneficiary, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exhaustive of any rights,
remedies, and privileges provided by law.
Section 13.11 COUNTERPARTS. This Agreement may be executed in
two or more counterparts (and by different parties on separate counterparts),
each of which shall be an original, but all of which together shall constitute
one and the same agreement. Delivery of an executed counterpart of a signature
page to this Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Agreement.
Section 13.12 THIRD-PARTY BENEFICIARIES. This Agreement shall
inure to the benefit of and be binding upon the parties hereto, the
Certificateholders and, to the extent provided herein, in the related Supplement
or in any other Transaction Document, any Enhancement Provider or other
Beneficiary named therein, and their respective successors and permitted
assigns. Except as otherwise provided in this Article XIII, no other Person
shall have any right or obligation hereunder.
Section 13.13 ACTIONS BY CERTIFICATEHOLDERS. (a) Whenever in
this Agreement a provision is made that an action may be taken or a notice,
demand or instructions given by Investor Certificateholders, such action, notice
or instruction may be taken or given by any Investor Certificateholder, unless
such provision requires a specific percentage of Investor Certificateholders.
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other act by a Certificateholder shall bind such
Certificateholder and every subsequent holder of such Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done or omitted to be done by the Trustee or the Servicer
in reliance thereon, whether or not notation of such action is made upon such
Certificate.
Section 13.14 RULE 144A INFORMATION. For so long as any of the
Investor Certificates of any Series are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, each of the Transferor, the
Servicer, the Trustee and the Enhancement Provider for such Series agree to
cooperate with each other to provide to any Investor
POOLING AND SERVICING AGREEMENT
119
113
Certificateholders of such Series and to any prospective purchaser of
Certificates designated by such an Investor Certificateholder upon the request
of such Investor Certificateholder or prospective purchaser, any information
required to be provided to such holder or prospective purchaser to satisfy the
condition set forth in Rule 144A(d)(4) under the Securities Act.
Section 13.15 MERGER AND INTEGRATION. Except as specifically
stated otherwise herein, this Agreement, together with the other Transaction
Documents, sets forth the entire understanding of the parties relating to the
subject matter hereof, and all prior understandings, written or oral, are
superseded by the Transaction Documents. This Agreement may not be modified,
amended, waived or supplemented except as provided herein.
Section 13.16 HEADINGS. The headings herein are for purposes
of reference only and shall not otherwise affect the meaning or interpretation
of any provision hereof.
POOLING AND SERVICING AGREEMENT
120
Section 13.17 INCONSISTENT PROVISIONS. To the extent that any
provision in any Supplement or in any certificate or document delivered in
connection with any Supplement is inconsistent with any provision under this
Agreement, or in any circumstance in which it is unclear whether such Supplement
or this Agreement shall control, the provisions contained in such Supplement (or
such certificate or other document) shall control with respect to the related
Series.
IN WITNESS WHEREOF, the Transferor, the Servicer and the
Trustee have caused this Agreement to be duly executed by their respective
officers as of the day and year first above written.
THE EL-BEE RECEIVABLES
CORPORATION
By:
---------------------------------
Name:
Title:
THE EL-BEE CHARGIT CORP.
By:
---------------------------------
Name:
Title:
BANKERS TRUST COMPANY, as
Trustee
By:
---------------------------------
Name:
Title:
POOLING AND SERVICING AGREEMENT
121
EXHIBIT A
FORM OF MONTHLY SERVICER'S REPORT
POOLING AND SERVICING AGREEMENT
122
EXHIBIT B
FORM OF EXCHANGEABLE TRANSFEROR CERTIFICATE
, 1997
--------------
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). NEITHER THIS
CERTIFICATE NOR ANY PORTION HEREOF MAY BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE SECURITIES ACT.
THE HOLDER HEREOF AGREES FOR THE BENEFIT OF THE TRUST THAT
THIS CERTIFICATE MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO
THE EXTENT PERMITTED IN THE TRANSACTION DOCUMENTS.
▇▇▇▇▇-▇▇▇▇▇▇▇ MASTER TRUST
EXCHANGEABLE TRANSFEROR CERTIFICATE
THIS CERTIFICATE REPRESENTS AN UNDIVIDED INTEREST
IN CERTAIN ASSETS OF THE ▇▇▇▇▇-▇▇▇▇▇▇▇
MASTER TRUST
the corpus of which consists primarily of certain receivables generated from
time to time by The ▇▇▇▇▇-▇▇▇▇▇▇▇ Stores Corp. (the "COMPANY") which are then
purchased by The El-Bee Chargit Corp. ("CHARGIT") (together, the "ORIGINATORS")
and then purchased by The El-Bee Receivables Corporation, a Delaware corporation
(the "TRANSFEROR") from the Originators, which in turn transfers and assigns
such receivables to the ▇▇▇▇▇-▇▇▇▇▇▇▇ Master Trust pursuant to the Pooling and
Servicing Agreement, dated as of December 30, 1997, among the Transferor,
Chargit, as Servicer, and Bankers Trust Company, as Trustee (as amended,
supplemented or otherwise modified from time to time, the "POOLING AND SERVICING
AGREEMENT"; capitalized terms used herein and not otherwise defined herein are
used herein as
POOLING AND SERVICING AGREEMENT
123
B-2
defined therein). This Certificate does not represent any recourse obligation
of, and is not guaranteed by, the Transferor, the Company, Chargit or any
Affiliate of any of them.
This certifies that THE EL-BEE RECEIVABLES CORPORATION is the
registered owner of the fractional undivided interest (the "TRANSFEROR
INTEREST") in the assets of the ▇▇▇▇▇-▇▇▇▇▇▇▇ Master Trust (the "TRUST") not
represented by the Investor Certificates pursuant to the Pooling and Servicing
Agreement. Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee by manual or facsimile signature, this Certificate
shall not be entitled to any benefit under the Pooling and Servicing Agreement
or be valid for any purpose.
The corpus of the Trust consists of (i) a portfolio of
Receivables arising in connection with Accounts identified under the Pooling and
Servicing Agreement from time to time, (ii) funds collected or to be collected
from Obligors in respect of the Receivables, (iii) all funds which are from time
to time on deposit in the Concentration Account, the Collection Accounts, and
any other account or accounts held for the benefit of Certificateholders and
(iv) all other assets and interests constituting the Trust Assets.
This Certificate is issued under and is subject to the terms,
provisions and conditions of the Transaction Documents. Although a summary of
certain provisions of the Transaction Documents is set forth below, this
Certificate does not purport to summarize the Transaction Documents and is
qualified in its entirety by the terms and provisions of the Transaction
Documents, and reference is made to the Transaction Documents for information
with respect to the interests, rights, benefits, obligations, proceeds and
duties evidenced hereby and the rights, duties and obligations of the Trustee,
the Servicer and the other parties bound by the Transaction Documents.
This Certificate is the Exchangeable Transferor Certificate,
which represents an interest in the Trust, including the right to receive
Collections and other amounts at the times and in the amounts specified in the
Transaction Documents to be paid to the holder of the Exchangeable Transferor
Certificate. In addition to this Certificate, Investor Certificates are being
issued to investors pursuant to the Transaction Documents, which will represent
the interests of Investor Certificateholders in the Trust. This Certificate
shall not represent any interest in the Concentration Account, any Collection
Account, or other account or Trust Asset except as provided in the Transaction
Documents.
Subject to certain conditions in the Transaction Documents,
the obligations created by the Transaction Documents and the Trust created
thereby shall terminate upon the earlier of (i) the Trust Termination Date or
the Extended Trust Termination Date, as applicable, and (ii) the Termination
Date of the last outstanding Series of Certificates.
POOLING AND SERVICING AGREEMENT
124
B-3
By its acceptance of this Exchangeable Transferor Certificate,
the holder hereof agrees that it will take no action with respect to such
holder's rights under the Transaction Documents that would violate the terms of
the Transaction Documents.
Upon termination of the Trust pursuant to Article XII of the
Pooling and Servicing Agreement, subject to the provisions of the Transaction
Documents, payment in full of the Investor Certificateholders and the surrender
of this Certificate, the Trustee shall assign and convey to the holder of the
Exchangeable Transferor Certificate (without recourse, representation or
warranty (except for the representation that each Receivable and all other Trust
Assets will be free and clear of all Liens)) all right, title and interest of
the Trust in the Trust Assets, whether then existing or thereafter created,
including the Receivables and all proceeds thereof, except for amounts held by
the Trustee pursuant to Section 12.03(b) of the Pooling and Servicing Agreement.
The Trustee shall execute and deliver such instruments of transfer and
assignment, in each case without recourse, as shall be reasonably requested by
the Transferor to vest in the Transferor all right, title and interest which the
Trust has in the Trust Assets.
IN WITNESS WHEREOF, the Transferor has caused this Certificate
to be duly executed.
Dated: ________ __, ___
THE EL-BEE RECEIVABLES
CORPORATION
By:
--------------------------------
Name:
Title:
POOLING AND SERVICING AGREEMENT
125
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates described in the
within-mentioned Pooling and Servicing Agreement.
Dated __________ __, 1997
BANKERS TRUST COMPANY,
not in its individual capacity
but solely as Trustee
By: ______________________ OR By: ______________________________
Authorized Signer Authenticating Agent for the Trustee
By: ______________________________
Authorized Signer
POOLING AND SERVICING AGREEMENT
126
EXHIBIT C
FORM OF ANNUAL SERVICER'S CERTIFICATE
The undersigned, a duly authorized officer of The El-Bee
Chargit Corp. (the "SERVICER"), as Servicer pursuant to the Pooling and
Servicing Agreement, dated as of December 30, 1997 (as amended, supplemented or
otherwise modified from time to time, the "POOLING AND SERVICING AGREEMENT";
capitalized terms used herein and not otherwise defined herein are used herein
as defined therein) by and among The El-Bee Receivables Corporation, as
Transferor, the Servicer, and Bankers Trust Company, as Trustee, does hereby
certify that:
1. ______________ is, as of the date hereof, the Servicer
under 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
and each Enhancement Provider.
3. This Certificate is delivered pursuant to Section 3.05 of
the Pooling and Servicing Agreement.
4. A review of the activities of the Servicer during the prior
calendar year and its performance under the Pooling and Servicing Agreement was
conducted under my supervision.
5. Based on such review, the Servicer has, to the best of my
knowledge, fully performed all its obligations under all of the Transaction
Documents throughout such period and no default in the performance of such
obligations has occurred or is continuing except as set forth in paragraph 6
below.
6. The following is a description of each default in the
performance of the Servicer's obligations under the provisions of any of the
Transaction Documents, known to us to have been made during such period, which
sets forth in detail (i) the nature of each such default, (ii) the action taken
by the Servicer, if any, to remedy each such default and (iii) the current
status of each such default:
POOLING AND SERVICING AGREEMENT
127
C-2
[If applicable, insert "None."]
IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate this ____ day of _________, ______.
By: ________________________
Name:
Title:
POOLING AND SERVICING AGREEMENT
128
EXHIBIT D
FORM OF ANNUAL INDEPENDENT
ACCOUNTANT'S SERVICING REPORT
POOLING AND SERVICING AGREEMENT
129
EXHIBIT E-1
FORM OF COLLECTION ACCOUNT LETTER
[Date]
[Bank]
[Address]
Attention: _________
Ladies and Gentlemen:
Reference is made to collection account no. _________ into
which certain monies, instruments and other properties are deposited from time
to time (the "COLLECTION ACCOUNT") maintained with [Bank] ("YOU" or the "BANK")
by The El-Bee Chargit Corp. and The ▇▇▇▇▇-▇▇▇▇▇▇▇ Stores Corp. (together being
the "CUSTOMER"). The Customer and certain of its affiliates have entered into a
transaction pursuant to which the Collection Account and the other Account
Collateral (as defined below) are to be transferred to Bankers Trust Company, as
trustee (the "TRUSTEE") for The ▇▇▇▇▇-▇▇▇▇▇▇▇ Master Trust, established pursuant
to a Pooling and Servicing Agreement (the "POOLING AND SERVICING AGREEMENT"),
dated as of December 30, 1997, among The El-Bee Receivables Corporation, as
transferor (the "TRANSFEROR"), The El-Bee Chargit Corp., as servicer (the
"SERVICER"), and the Trustee (the "RECEIVABLES TRANSACTION"). It is a condition
precedent to the Receivables Transaction that you execute and deliver this
Collection Account Letter. Terms defined in the Pooling and Servicing Agreement,
unless otherwise defined herein, are used herein as therein defined.
Pursuant to the Transaction Documents, the Customer and
certain of its affiliates have granted to the Trustee, for the benefit of the
Beneficiaries, a security interest in certain property of the Customer,
including, among other things, the following (the "ACCOUNT COLLATERAL"): the
Collection Account, all funds held therein and all certificates and instruments,
if any, from time to time representing or evidencing such Collection Account,
all interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the then existing Account Collateral and all proceeds of any and
all of the foregoing Account Collateral and, to the extent not otherwise
included, all (i) payments under insurance (whether or not the Trustee is
POOLING AND SERVICING AGREEMENT
130
E-2
the loss payee thereof), or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the foregoing
Account Collateral and (ii) cash. It is a condition to the continued maintenance
of the Collection Account with you that you agree to this Collection Account
Letter.
You hereby agree that the Trustee, for the benefit of the
Beneficiaries, possesses all right, title and interest in and to the Collection
Account and all Account Collateral now or hereinafter on deposit in the
Collection Account and further agree that all funds in the Collection Account
shall be transferred to the Trustee on behalf of the Trust in accordance with
the instructions set forth herein. You also agree that the Trustee shall have
full and irrevocable right, power and authority to demand, collect, withdraw,
receive or ▇▇▇ for all amounts now or hereafter on deposit in the Collection
Account and at its discretion to take any other action which it deems necessary
or appropriate to protect its interest, on behalf of the Beneficiaries, in the
Collection Account. Except as provided in paragraph (i) below, the Collection
Accounts shall not be subject to deductions, set-off, banker's liens or any
other right in favor of any person or entity other than the Trustee, the Trust
or the other Beneficiaries referred to in the Pooling and Servicing Agreement.
By signing this Collection Account Letter you acknowledge
that, as of the date hereof, you have received no notice of any other pledge or
assignment of the Collection Account. Further, you hereby agree with the Trustee
as follows:
(a) Notwithstanding anything to the contrary in the Collection
Account and all or any other agreement relating to the Collection
Account, the Collection Account is and will be, subject to the terms
and conditions of the Transaction Documents, maintained solely for the
benefit of the Trustee, will be entitled "Bankers Trust Company, as
Trustee, Re: The ▇▇▇▇▇-▇▇▇▇▇▇▇ Master Trust" and will be subject to
written instructions only from an authorized officer of the Trustee.
The Collection Account and all of the Account Collateral shall be in
the sole dominion and control of the Trustee, and the Customer shall
have no control thereover.
(b) You will collect mail from the Collection Account on each
Business Day at times which coincide with the delivery of mail thereto.
(c) You will follow your usual operating procedures for the
handling of any remittance received in the Collection Account that
contains restrictive endorsements, irregularities (such as a variance
between the written and numerical amounts), undated or postdated items,
missing signatures, incorrect payees, etc.
POOLING AND SERVICING AGREEMENT
131
E-3
(d) You will endorse and process all eligible checks and other
remittance items not covered by paragraph (c) and deposit such checks
and remittance items in the Collection Account.
(e) You will mail all checks returned unpaid because of
uncollected or insufficient funds under appropriate advice to the
Customer (with a copy of the notification of return to the Trustee).
The Customer shall indemnify you for the uncollected amounts of any
such items.
(f) You will maintain a record of all checks and other
remittance items received in the Collection Account and, in addition to
providing the Customer with photostats, vouchers, enclosures, etc. of
such checks and remittance items on a daily basis, furnish to the
Trustee a monthly statement of the Collection Account to: Bankers Trust
Company, as Trustee, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust and Agency Group/Structured Finance Team,
with a copy to the Customer.
(g) You will transfer, in available funds, on each Business
Day, all funds on deposit in the Collection Account to the following
account (the "CONCENTRATION ACCOUNT"):
ABA Number: ▇▇▇▇▇▇▇▇▇
Bankers Trust Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Account Name: BTCO f/a/o ▇▇▇▇▇-▇▇▇▇▇▇▇
Concentration Account
Account Number: ▇▇▇▇▇▇▇▇
Reference: ▇▇▇▇▇-▇▇▇▇▇▇▇ Concentration Account
Attention: Structured Finance Team
or to such other account as the Trustee may from time to time designate
in writing.
(h) Subject to paragraph (i) below, all transfers referred to
in paragraph (g) above shall be made by the undersigned irrespective
of, and without deduction for, any counterclaim, defense, recoupment or
set-off and shall be final, and the undersigned will not seek to
recover from the Trustee for any reason any such payment once made.
(i) All customary service charges and fees with respect to the
Collection Account shall be debited to the Collection Account, together
with any items deposited to the Collection Account which are returned
unpaid. In the event insufficient funds
POOLING AND SERVICING AGREEMENT
132
E-4
remain in such Collection Account to cover such customary service
charges and fees, the Customer shall pay and indemnify you for the
amounts of such customary service charges and fees.
(j) The Trustee shall be entitled to exercise any and all
rights of the Customer in respect of the Collection Account in
accordance with the terms of the Transaction Documents, and the
undersigned shall comply in all respects with such exercise.
The Collection Account Letter shall be binding upon and shall
inure to the benefit of you, the Customer, the Trustee, the Program Agent, the
Beneficiaries and their respective successors, transferees and assigns. You may
terminate the Collection Account Letter only upon thirty days' prior written
notice to the Customer and the Trustee. The Trustee may terminate this
Collection Account Letter upon ten days' prior written notice to you and the
Customer. Upon such termination you shall close the Collection Account and
transfer all funds in the Collection Account to the Concentration Account. After
any such termination, you shall nonetheless remain obligated promptly to
transfer to the Concentration Account or to the Trustee all funds and other
property received in respect of the Collection Account.
This Collection Account Letter may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Collection Account Letter by
telecopier shall be effective as delivery of a manually executed counterpart of
this Collection Account Letter.
This Collection Account Letter supersedes all prior
agreements, oral or written, with respect to the subject matter hereof and may
not be amended, modified or supplemented except by a writing signed and agreed
upon by the Trustee, the Customer and you.
Upon acceptance of this Collection Account Letter it will be
the valid and binding obligation of the Customer, the Trustee and you, in
accordance with its terms.
POOLING AND SERVICING AGREEMENT
133
THIS COLLECTION ACCOUNT LETTER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF OHIO.
Very truly yours,
THE ▇▇▇▇▇-▇▇▇▇▇▇▇ STORES CORP.
By: ___________________________
Name:
Title:
THE EL-BEE CHARGIT CORP.
By: ___________________________
Name:
Title:
BANKERS TRUST COMPANY, not in its
individual capacity but solely as Trustee
By: ___________________________
Name:
Title:
POOLING AND SERVICING AGREEMENT
134
Acknowledged and agreed to as of
the date first above written:
[BANK]
By:
----------------------------
Name:
Title:
POOLING AND SERVICING AGREEMENT
135
EXHIBIT E-2
FORM OF COLLECTION ACCOUNT LETTER
(PRINCIPAL STORE ACCOUNT ONLY)
POOLING AND SERVICING AGREEMENT
136
EXHIBIT E-3
FORM OF COLLECTION ACCOUNT LETTER
(OTHER STORE ACCOUNTS ONLY)
POOLING AND SERVICING AGREEMENT
137
EXHIBIT F
FORM OF REPRESENTATION LETTER (RULE 144A)
[Date]
Bankers Trust Company
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
The El-Bee Receivables Corporation
▇▇▇▇ ▇▇-▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇-▇▇▇▇▇▇▇ Master Trust,
[ ]% Floating Rate Certificates,
Series [ ]
Ladies and Gentlemen:
In connection with our acquisition of the Certificates
referred to above (the "CERTIFICATES"), we certify that (a) we understand that
the Certificates are not being registered under the Securities Act of 1933, as
amended (the "SECURITIES ACT"), or any state securities laws and are being
transferred to us in a transaction that is exempt from the registration
requirements of the Securities Act and any such laws, (b) we have such knowledge
and experience in financial and business matters that we are capable of
evaluating the merits and risks of investment in the Certificates, (c) we have
had the opportunity to ask questions of and receive answers from [___________]
concerning the purchase of the Certificates and all matters relating thereto or
any additional information deemed necessary to our decision to purchase the
Certificates, (d) we are not (i) an employee benefit plan (as defined in Section
3(3) of ERISA) subject to Title I of ERISA, (ii) a plan (as defined in Section
4975(e)(1) of the Internal Revenue Code) or (iii) an entity whose underlying
assets include "plan assets" under Department of Labor Regulation 29 C.F.R.
Section 2510.3-101, (e) we have not, nor has anyone acting on our behalf,
offered, transferred, pledged, sold or otherwise disposed of the Certificates,
any interest in the Certificates or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with,
POOLING AND SERVICING AGREEMENT
138
F-2
any person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, that would
constitute a distribution of the Certificates under the Securities Act or that
would render the disposition of the Certificates a violation of Section 5 of the
Securities Act or require registration pursuant thereto, nor will we act, nor
have we authorized or will we authorize any person to act, in such manner with
respect to the Certificates, and (f) we are a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act and are acquiring
such Certificates in compliance with all applicable requirements of Rule 144A
and the Securities Act. We are aware that the sale to us is being made in
reliance on Rule 144A. We are acquiring the Certificates for our own account or
for resale pursuant to Rule 144A, and we understand that the Certificates may be
resold, pledged or transferred only (a) upon delivery of a certificate to
substantially the same effect as this letter and (b) (i) to a person reasonably
believed to be a qualified institutional buyer that purchases for its own
account or for the account of a qualified institutional buyer to whom notice is
given that the resale, pledge or transfer is being made in reliance on Rule 144A
or (ii) pursuant to another exemption from registration under the Securities
Act.
Very truly yours,
[NAME OF INSTITUTION]
By:
-------------------------------
Name:
Title:
POOLING AND SERVICING AGREEMENT
139
FORM OF REPRESENTATION LETTER (NON-RULE 144A)
[Date]
Bankers Trust Company
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
The El-Bee Receivables Corporation
▇▇▇▇ ▇▇-▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇-▇▇▇▇▇▇▇ Master Trust,
[ ]% Floating Rate Certificates,
Series [ ]
Ladies and Gentlemen:
In connection with our acquisition of the Certificates
referred to above (the "CERTIFICATES"), we certify that (a) we understand that
the Certificates are not being registered under the Securities Act of 1933, as
amended (the "SECURITIES ACT") or any state securities laws, and are being
transferred to us in a transaction that is exempt from the registration
requirements of the Securities Act and any such laws, (b) we are an "accredited
investor," as defined in Regulation D under the Securities Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investment in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from
[_______________] concerning the purchase of the Certificates and all matters
relating thereto or any additional information deemed necessary to our decision
to purchase the Certificates, (d) we are not (i) an employee benefit plan (as
defined in Section 3(3) of ERISA) subject to Title I of ERISA, (ii) a plan (as
defined in Section 4975(e)(1) of the Internal Revenue Code) or (iii) an entity
whose underlying assets include "plan assets" under Department of Labor
Regulation 29 C.F.R. Section 2510.3-101, (e) we are acquiring the Certificates
for investment for our own account and not with a view to any distribution of
such Certificates (but without prejudice to our right at all times to sell or
otherwise dispose of the Certificates in accordance with clause (g) below), (f)
we have not, nor has anyone acting on our behalf, offered, transferred, pledged,
sold or otherwise disposed of the Certificates, any interest in the Certificates
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general
POOLING AND SERVICING AGREEMENT
140
2
advertising or in any other manner, or taken any other action, that would
constitute a distribution of the Certificates under the Securities Act or that
would render the disposition of the Certificates a violation of Section 5 of the
Securities Act or require registration pursuant thereto, nor will we act, nor
have we authorized or will we authorize any person to act, in such manner with
respect to the Certificates, and (g) we will not sell, transfer or otherwise
dispose of any Certificates unless (1) such sale, transfer or other disposition
is made pursuant to an effective registration statement under the Securities Act
or is exempt from such registration requirements, (2) the purchaser or
transferee of such Certificate has executed and delivered to you a certificate
to substantially the same effect as this letter, and (3) the purchaser or
transferee has otherwise complied with any conditions for transfer set forth in
the Pooling and Servicing Agreement.
Very truly yours,
[NAME]
By:
------------------------------
Name:
Title:
POOLING AND SERVICING AGREEMENT
141
EXHIBIT G
FORM OF RECONVEYANCE OF RECEIVABLES
RECONVEYANCE of RECEIVABLES, dated as of __________ __, ____
(the "RECONVEYANCE") by and among Bankers Trust Company, as Trustee (the
"TRUSTEE") and the holder of the Exchangeable Transferor Certificate pursuant to
the Pooling and Servicing Agreement referred to below (the "TRANSFEREE").
W I T N E S S E T H:
WHEREAS, The El-Bee Receivables Corporation, a Delaware
corporation, as Transferor, The El-Bee Chargit Corp., as Servicer, and the
Trustee, are parties to the Pooling and Servicing Agreement, dated as of
December 30, 1997, (as amended, supplemented or otherwise modified from time to
time, the "POOLING AND SERVICING AGREEMENT"; capitalized terms used herein and
not otherwise defined herein are used herein as defined therein);
WHEREAS, pursuant to the Pooling and Servicing Agreement, the
Transferee wishes to cause the Trustee to transfer all of the Receivables and
proceeds thereof, whether now existing or hereafter created, from the Trustee to
the Transferee pursuant to the terms of Section 12.04 of the Pooling and
Servicing Agreement upon termination of the Trust pursuant to Article XII of the
Pooling and Servicing Agreement;
WHEREAS, the Trustee is willing to transfer the Receivables
subject to the terms and conditions hereof;
NOW, THEREFORE, the Transferee and the Trustee hereby agree as
follows:
Section 1. DEFINED TERMS. Wherever used in this Reconveyance,
the following term shall have the following meaning:
"RECONVEYANCE DATE" means _________ __, ____.
Section 2. RETURN OF LISTS OF ACCOUNTS. The Trustee shall
deliver to the
POOLING AND SERVICING AGREEMENT
142
Transferee, not later than three Business Days after the Reconveyance Date, each
and every computer file or microfiche or written list of Accounts delivered to
the Trustee pursuant to the terms of the Pooling and Servicing Agreement.
Section 3. RECONVEYANCE OF RECEIVABLES. (a) The Trustee does
hereby convey to the Transferee (without recourse, representation or warranty)
all right, title and interest of the Trustee in the Receivables, whether now
existing or hereafter created, all moneys due or to become due with respect
thereto, all Recoveries and Insurance Proceeds relating to such Receivables, all
rights, remedies, powers and privileges of the Trustee with respect to the
Receivables and all proceeds of the foregoing, except for amounts held by the
Trustee pursuant to Section 12.03(b) of the Pooling and Servicing Agreement.
(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 Transferee to vest in such Transferee all right, title and
interest which the Trustee had in the Receivables.
Section 4. COUNTERPARTS. This Reconveyance may be executed in
two or more counterparts (and by different parties hereto in separate
counterparts), each of which shall be an original, but all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Reconveyance by telecopier shall be
effective as delivery of a manually executed counterpart of this Reconveyance.
Section 5. GOVERNING LAW. This Reconveyance shall be governed
by and construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned have caused this
Reconveyance to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
BANKERS TRUST COMPANY, as
Trustee
By: _______________________
Name:
Title:
POOLING AND SERVICING AGREEMENT
143
G-3
[HOLDER OF THE EXCHANGEABLE
TRANSFEROR CERTIFICATE]
By: ________________________
Name:
Title:
POOLING AND SERVICING AGREEMENT
