EXHIBIT 4.2
[EXECUTION COPY]
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SECOND AMENDED AND RESTATED
MASTER POOLING AND SERVICING AGREEMENT
Dated as of November 18, 2003
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FLEET BANK (RI), NATIONAL ASSOCIATION
Transferor and Servicer
and
JPMORGAN CHASE BANK
Trustee
on behalf of the Certificateholders
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FNANB CREDIT CARD MASTER TRUST
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TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS
Section 1.1 Definitions.................................................. 1
Section 1.2 Other Definitional Provisions................................ 19
Section 1.3 Amendment and Restatement.................................... 20
ARTICLE II
APPOINTMENT OF TRUSTEE; CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.1 Appointment of Trustee; Conveyance of Receivables............ 21
Section 2.2 Acceptance by Trustee........................................ 22
Section 2.3 Representations and Warranties of the Transferor Relating
to the Transferor............................................ 23
Section 2.4 Representations and Warranties of the Transferor Relating
to this Agreement and any Supplement and the Receivables..... 25
Section 2.5 Covenants of the Transferor.................................. 30
Section 2.6 Addition of Accounts; Repurchase of Investor Certificates.... 32
Section 2.7 Removal of Accounts.......................................... 36
Section 2.8 Discount Option Receivables.................................. 38
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 3.1 Appointment and Other Matters Relating to the Servicer....... 40
Section 3.2 Servicing Compensation....................................... 41
Section 3.3 Representations, Warranties and Covenants of the Servicer.... 42
Section 3.4 Reports and Records for the Trustee.......................... 45
Section 3.5 Annual Servicer's Certificate................................ 46
Section 3.6 Annual Independent Public Accountants' Servicing Report...... 46
Section 3.7 Tax Treatment................................................ 47
Section 3.8 Adjustments.................................................. 47
Section 3.9 Reports to the Commission.................................... 48
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION AND
APPLICATION OF COLLECTIONS
Section 4.1 Establishment of Collection Account and Allocations with
Respect to the Exchangeable Transferor Certificate........... 50
ARTICLE V
[ARTICLE V IS RESERVED AND MAY BE SPECIFIED IN ANY SUPPLEMENT WITH
RESPECT TO ANY SERIES]
ARTICLE VI
THE CERTIFICATES
Section 6.1 The Certificates............................................. 57
Section 6.2 Authentication of Certificates............................... 57
Section 6.3 Registration of Transfer and Exchange of Certificates........ 58
Section 6.4 Mutilated, Destroyed, Lost or Stolen Certificates............ 61
Section 6.5 Persons Deemed Owners........................................ 61
Section 6.6 Appointment of Paying Agent.................................. 62
Section 6.7 Access to List of Certificateholders' Names and Addresses.... 63
Section 6.8 Authenticating Agent......................................... 63
Section 6.9 Tender of Exchangeable Transferor Certificate................ 64
Section 6.10 Global Certificate; Euro-Certificate Exchange Date........... 66
Section 6.11 Book-Entry Certificates...................................... 67
Section 6.12 Notices to Clearing Agency................................... 68
Section 6.13 Definitive Certificates...................................... 68
Section 6.14 Meetings of Certificateholders............................... 69
Section 6.15 Uncertificated Classes....................................... 71
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
Section 7.1 Liability of the Transferor.................................. 72
Section 7.2 Merger or Consolidation of, or Assumption of the
Obligations of, the Transferor............................... 72
Section 7.3 Limitation on Liability of the Transferor.................... 73
Section 7.4 Liabilities.................................................. 73
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
Section 8.1 Liability of the Servicer.................................... 75
Section 8.2 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer................................. 75
Section 8.3 Limitation on Liability of the Servicer and Others........... 76
Section 8.4 Indemnification of the Trust and the Trustee................. 76
Section 8.5 The Servicer Not to Resign................................... 77
Section 8.6 Access to Certain Documentation and Information Regarding
the Receivables.............................................. 77
Section 8.7 Delegation of Duties......................................... 78
Section 8.8 Examination of Records....................................... 78
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ARTICLE IX
EARLY AMORTIZATION EVENTS
Section 9.1 Early Amortization Events.................................... 79
Section 9.2 Additional Rights Upon the Occurrence of Certain Events...... 79
ARTICLE X
SERVICER DEFAULTS
Section 10.1 Servicer Defaults............................................ 82
Section 10.2 Trustee to Act; Appointment of Successor..................... 84
Section 10.3 Notification to Certificateholders........................... 85
Section 10.4 Waiver of Past Defaults...................................... 86
ARTICLE XI
THE TRUSTEE
Section 11.1 Duties of Trustee............................................ 87
Section 11.2 Certain Matters Affecting the Trustee........................ 88
Section 11.3 Trustee Not Liable for Recitals in Certificates.............. 90
Section 11.4 Trustee May Own Certificates................................. 90
Section 11.5 The Servicer to Pay Trustee's Fees and Expenses.............. 91
Section 11.6 Eligibility Requirements for Trustee......................... 91
Section 11.7 Resignation or Removal of Trustee............................ 91
Section 11.8 Successor Trustee............................................ 92
Section 11.9 Merger or Consolidation of Trustee........................... 92
Section 11.10 Appointment of Co-Trustee or Separate Trustee................ 93
Section 11.11 Tax Returns and Compliance................................... 94
Section 11.12 Trustee May Enforce Claims Without Possession of
Certificates................................................. 94
Section 11.13 Suits for Enforcement........................................ 95
Section 11.14 Rights of Certificateholders to Direct Trustee............... 95
Section 11.15 Representations and Warranties of Trustee.................... 95
Section 11.16 Maintenance of Office or Agency.............................. 96
Section 11.17 Waiver of Bond Requirement................................... 96
Section 11.18 Waiver of Inventory, Accounting and Appraisal Requirements... 96
ARTICLE XII
TERMINATION
Section 12.1 Termination of Trust......................................... 97
Section 12.2 Optional Purchase; Final Termination Date of Investor
Certificates of any Series................................... 97
Section 12.3 Final Payment with Respect to any Series..................... 98
Section 12.4 Transferor's Termination Rights.............................. 100
Section 12.5 Defeasance................................................... 100
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 Amendment.................................................... 102
Section 13.2 Protection of Right, Title and Interest to Trust............. 104
Section 13.3 Limitation on Rights of Certificateholders................... 105
Section 13.4 GOVERNING LAW................................................ 105
Section 13.5 Notices...................................................... 105
Section 13.6 Severability of Provisions................................... 106
Section 13.7 Assignment................................................... 107
Section 13.8 Certificates Nonassessable and Fully Paid.................... 107
Section 13.9 Further Assurances........................................... 107
Section 13.10 No Waiver; Cumulative Remedies............................... 107
Section 13.11 Counterparts................................................. 107
Section 13.12 Third-Party Beneficiaries.................................... 107
Section 13.13 Actions by Certificateholders................................ 107
Section 13.14 Merger and Integration....................................... 108
Section 13.15 Headings..................................................... 108
Section 13.16 Certificates and Opinions of Counsel......................... 108
Section 13.17 Nonpetition Covenant......................................... 108
EXHIBITS
Exhibit A: Form of Account Agreement
Exhibit B: Form of Exchangeable Transferor Certificate
Exhibit C: Form of Assignment of Receivables in Additional Accounts
Exhibit D: Form of Reassignment of Receivables
Exhibit E: Form of Series Closing Date Report
Exhibit F: Form of Monthly Servicer's Certificate
Exhibit G: Form of Annual Servicer's Certificate
Exhibit H: Form of Opinion of Counsel with Respect to the Agreement
and Additional Accounts
Exhibit I: Form of Annual Opinion of Counsel
Exhibit J: Form of Depository Agreement (Letter of Representations)
Exhibit K: Rating Agency Procedure (Removal of Accounts)
SCHEDULES
Schedule 1 List of Accounts
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SECOND AMENDED AND RESTATED MASTER POOLING AND SERVICING
AGREEMENT, dated as of November 18, 2003, between FLEET BANK (RI), NATIONAL
ASSOCIATION, a national banking association (the "Bank"), as Transferor and as
Servicer, and JPMORGAN CHASE BANK, a New York banking corporation and successor
trustee to First Union National Bank ("JPMorgan"), as Trustee.
PRELIMINARY STATEMENTS
WHEREAS, DC Funding International, Inc., a Delaware
corporation ("DC Funding"), as Transferor, First North American National Bank, a
national banking association ("FNANB"), as Transferor under the Prior Agreement
and as Servicer, and JPMorgan, as Trustee, entered into an Amended and Restated
Master Pooling and Servicing Agreement dated as of December 31, 2001 (as
amended, the "Original Agreement");
WHEREAS, DC Funding, as Transferor, FNANB, as Servicer, the
Bank, JPMorgan, as Trustee, and the FNANB Credit Card Master Note Trust, a
Delaware statutory trust, are parties to an Assignment and Assumption Agreement
dated as of November 18, 2003 pursuant to which (i) DC Funding has assigned to
the Bank all of DC Funding's rights as Transferor under the Original Agreement
and the Bank has assumed the performance of every covenant and obligation of DC
Funding as Transferor under the Original Agreement and (ii) FNANB has assigned
to the Bank all of FNANB's rights as Servicer under the Original Agreement and
the Bank has assumed the performance of every covenant and obligation of FNANB
as Servicer under the Original Agreement; and
WHEREAS, the Bank, as Transferor and as Servicer, and
JPMorgan, as Trustee, desire to amend and restate the Original Agreement
(including the exhibits and schedules thereto) as set forth herein;
NOW, THEREFORE, in consideration of the mutual agreements
contained herein, each party hereto agrees, for the benefit of the other parties
and, to the extent provided herein or in any Supplement, for the benefit of the
Certificateholders and any Enhancement Provider, to amend and restate the
Original Agreement as of November 18, 2003 to read in its entirety as set forth
herein.
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
"Account" shall mean each MasterCard(R) or VISA(R) credit card
account originated by FNANB or the Bank which (i) is identified in the Bank's
master computer files or other appropriate books and records as an account
subject to this Agreement or (ii) is identified in a computer file or microfiche
list delivered to the Trustee by the Transferor (or its predecessors) pursuant
to Section 2.1 or 2.6. The term "Account" shall include (A) each Transferred
Account, (B) each Additional Account, but only from and after the Additional
Account Closing Date with respect thereto, (C) each Automatic Additional
Account, but only
from and after the Creation Date with respect thereto, and (D) each Removed
Account, but only prior to the Removal Date with respect thereto
"Account Agreements" shall mean the account agreements
substantially in the forms attached as Exhibit A, as such agreements may be
amended from time to time.
"Account Guidelines" shall mean the written policies and
procedures of the Bank relating to the servicing of the Accounts, including,
without limitation, the policies and procedures for determining the
creditworthiness of customers and the extension of credit to customers and
relating to the maintenance of MasterCard and VISA credit card accounts and the
collection of receivables, as such policies and procedures may be amended from
time to time in accordance with Section 2.5(c).
"Accumulation Period" shall have, with respect to any Series
or Class, the meaning, if any, specified for such Series or Class in the related
Supplement.
"Additional Account Closing Date" shall mean, with respect to
any Additional Account, the date on which such Additional Account will be
included as an Account pursuant to Section 2.6.
"Additional Account Cut-Off Date" shall mean, with respect to
any Additional Account, the last day of the Collection Period preceding the
related Additional Account Closing Date.
"Additional Accounts" shall have the meaning specified in
Section 2.6(a).
"Adjustment Amount" shall have the meaning specified in
Section 3.8(a).
"Adjustment Payment" shall have the meaning specified in
Section 3.8(a).
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by or under common control
with such Person.
"Aggregate Automatic Addition Limit" shall mean (i) the number
of Eligible Accounts designated as Automatic Additional Accounts pursuant to
Section 2.6(d) which would either (x) with respect to any calendar quarter,
equal 15% of the sum of the number of Accounts as of the first day of such
calendar quarter and the number of Additional Accounts included as Accounts
pursuant to Section 2.6(a) or Section 2.6(b) since such first day and (y) with
respect to any period of twelve consecutive Collection Periods, equal 20% of the
sum of the number of Accounts as of the first day of such period and the number
of Additional Accounts included as Accounts pursuant to Section 2.6(a) or
Section 2.6(b) since such first day or (ii) such higher number of Automatic
Additional Accounts as may be approved in writing by the Rating Agencies.
"Aggregate Invested Amount" shall mean, on any date of
determination, the sum of the Invested Amounts with respect to all Series then
outstanding.
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"Aggregate Invested Percentage" shall mean, on any date of
determination, the sum of the applicable Invested Percentages with respect to
all Series then outstanding.
"Aggregate Principal Receivables" shall mean, on any date of
determination, the aggregate amount of Principal Receivables at the end of such
date.
"Agreement" shall mean this Second Amended and Restated Master
Pooling and Servicing Agreement and all amendments hereof and supplements
hereto, including any Supplement.
"Amortization Period" shall mean, with respect to any Series,
the Accumulation Period, Controlled Amortization Period, Principal Amortization
Period, Early Amortization Period or other type of amortization period specified
in the related Supplement.
"Applicants" shall have the meaning specified in Section 6.7.
"Appointment Day" shall have the meaning specified in Section
9.2(a).
"Assignment" shall have the meaning specified in Section 2.6.
"Assignment and Assumption Agreement" shall mean the
Assignment and Assumption Agreement dated as of November 18, 2003 among DC
Funding, FNANB, the Bank, the Trustee and the FNANB Credit Card Master Note
Trust, as amended, supplemented or otherwise modified from time to time.
"Assumption Date" shall mean November 18, 2003.
"Authorized Newspaper" shall mean one or more newspapers of
general circulation in the Borough of Manhattan, The City of New York printed in
the English language and customarily published on each Business Day, whether or
not published on Saturdays, Sundays and holidays.
"Automatic Additional Accounts" shall have the meaning
specified in Section 2.6(d).
"Bank" shall mean Fleet Bank (RI), National Association, a
national banking association, and any successor thereto.
"Bearer Certificates" shall have the meaning specified in
Section 6.1.
"Bearer Rules" shall mean the provisions of the Internal
Revenue Code, in effect from time to time, governing the treatment of bearer
obligations, including sections 163(f), 871, 881, 1441, 1442 and 4701, and any
regulations thereunder including, to the extent applicable to any Series,
proposed or temporary regulations.
"Book-Entry Certificates" shall mean certificates evidencing
beneficial interests in the Investor Certificates, ownership and transfers of
which shall be evidenced or made through book entries by a Clearing Agency as
described in Section 6.11; provided, however, that after the
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occurrence of a condition whereupon book-entry registration and transfer are no
longer permitted and Definitive Certificates are issued to the Certificate
Owners, such Definitive Certificates shall replace Book-Entry Certificates.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in Philadelphia, Pennsylvania or
New York, New York (or, with respect to any Series, any additional city
specified in the related Supplement) are authorized or obligated by law or
executive order to be closed.
"Certificate" shall mean one of any Series of the Investor
Certificates or the Exchangeable Transferor Certificate.
"Certificateholder" or "Holder" shall mean the Person in whose
name a Certificate is registered in the Certificate Register and, if applicable,
the holder of any Bearer Certificate or coupon, as the case may be, or such
other Person deemed to be a "Certificateholder" or "Holder" in any related
Supplement.
"Certificate Interest" shall mean interest payable with
respect to the Investor Certificates of any Series pursuant to the related
Supplement.
"Certificate Owner" shall mean, with respect to any Book-Entry
Certificate, the Person who is the beneficial owner of such Book-Entry
Certificate, as reflected on the books of the Clearing Agency or on the books of
a Person maintaining an account with such Clearing Agency (directly or as an
indirect participant in accordance with the rules of such Clearing Agency).
"Certificate Principal" shall mean principal payable with
respect to the Investor Certificates of any Series pursuant to the related
Supplement.
"Certificate Rate" shall mean, with respect to any Series or
Class, the rate per annum (or the formula on the basis of which such rate shall
be determined) specified for such Series or Class in the related Supplement.
"Certificate Register" shall mean the register maintained
pursuant to Section 6.3 providing for the registration of the applicable
Certificates and transfers and exchanges thereof.
"Class" shall mean any class of Investor Certificates within a
Series, each as designated in the related Supplement.
"Clearing Agency" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended, or any successor provision thereto.
"Clearing Agency Participant" shall mean a broker, dealer,
bank, other financial institution or other Person for whom from time to time a
Clearing Agency or Foreign Clearing Agency effects book-entry transfers and
pledges of securities deposited with such Clearing Agency or Foreign Clearing
Agency.
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"Clearstream" shall mean Clearstream Banking, societe anonyme,
a professional depository incorporated under the laws of Luxembourg, and any
successor thereto.
"Closing Date" shall mean, with respect to any Series, the
date of issuance of such Series, as specified in the related Supplement.
"Collection Account" shall have the meaning specified in
Section 4.1.
"Collection Period" shall mean, unless otherwise provided in
any Supplement, the period from and including the first day of a calendar month
to and including the last day of such calendar month.
"Collections" shall mean all payments and other amounts
(including Insurance Proceeds) received by the Servicer with respect to the
Receivables, in the form of cash, checks, wire transfers, ATM transfers or other
form of payment in accordance with the related Account Agreements in effect from
time to time. Collections with respect to any Collection Period shall be deemed
to include (i) all Recoveries, if any, received during such Collection Period,
(ii) the Interchange Amount, if any, with respect to such Collection Period and
(iii) all interest and other investment earnings (net of losses and investment
expenses), if any, received during such Collection Period on funds on deposit in
the Excess Funding Account.
"Common Depositary" shall mean the Person appointed as such as
specified in the related Supplement, in its capacity as common depositary for
the respective accounts of a Foreign Clearing Agency.
"Controlled Amortization Period" shall have, with respect to
any Series, the meaning, if any, specified in the related Supplement.
"Corporate Trust Office" shall mean 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 ▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Coupons" shall have the meaning specified in Section 6.1.
"Creation Date" shall mean (i) with respect to any Account,
the Business Day on which such Account is first identified in accordance with
Section 2.1 or 2.6 as an account subject to this Agreement and (ii) with respect
to any Receivable, the date on which such Receivable is created.
"Date of Processing" shall mean, with respect to any
transaction, the Business Day on which such transaction is first recorded on the
Servicer's computer master file of MasterCard and VISA credit card accounts
(without regard to the effective date of such recordation).
"DC Funding" shall mean DC Funding International, Inc., a
Delaware corporation, and any successor thereto.
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"Default Amount" shall mean, for any Collection Period, the
aggregate amount of Principal Receivables (other than Ineligible Receivables) in
all Accounts which became Defaulted Accounts during such Collection Period
(determined in each case as of the date on which the related Account became a
Defaulted Account) minus Recoveries, if any, received during such Collection
Period.
"Defaulted Account" shall mean each Account with respect to
which, in accordance with the Account Guidelines pursuant to which such Account
is governed or the customary and usual servicing procedures of the Servicer for
servicing consumer revolving credit card receivables comparable to the
Receivables, the Servicer has charged off the Receivables in such Account as
uncollectible. An Account shall be deemed a Defaulted Account no later than the
earlier of (i) the last day of the calendar month in which such Account becomes
180 days delinquent on a contractual basis and (ii) 30 days after receipt of
notice by the Servicer that the related Obligor has died or has filed a
bankruptcy petition or has had a bankruptcy petition filed against him.
Notwithstanding any other provision hereof, any Receivables in a Defaulted
Account which are Ineligible Receivables shall be treated as Ineligible
Receivables rather than Receivables in Defaulted Accounts.
"Defeasance" shall have the meaning specified in Section 12.5.
"Defeased Series" shall have the meaning specified in Section
12.5.
"Definitive Certificates" shall have the meaning specified in
Section 6.11.
"Definitive Euro-Certificates" shall have the meaning
specified in Section 6.10.
"Depository Agreement" shall mean the agreement among the
Transferor, the Trustee and the initial Clearing Agency, substantially in the
form of Exhibit J, or such other agreement as may be specified in the related
Supplement.
"Determination Date" shall mean, with respect to any Series,
the eighth day of each calendar month or, if such day is not a Business Day, the
next succeeding Business Day, or such other date as may be specified in the
related Supplement.
"Discount Collections" shall mean, on any Date of Processing,
the product of (a) a fraction the numerator of which is the amount of Discount
Option Receivables and the denominator of which is the sum of the Principal
Receivables and the Discount Option Receivables, in each case at the end of the
prior Collection Period, and (b) Collections of Principal Receivables (without
giving effect to Discount Option Receivables) on such Date of Processing.
"Discount Option Receivables" shall mean, on any Date of
Processing, the sum of (a) the aggregate Discount Option Receivables at the end
of the prior Date of Processing (which amount, at the end of the Date of
Processing prior to the Initial Cut-Off Date shall be $1,610,469,630) plus (b)
any new Discount Option Receivables created on such Date of Processing minus (c)
any Discount Collections received on such Date of Processing. Discount Option
Receivables created on any Date of Processing shall mean the product of the
amount of
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any Principal Receivables created on such Date of Processing (without giving
effect to Discount Option Receivables) and the Discount Percentage.
"Discount Percentage" shall have the meaning specified in
Section 2.8(a).
"Distribution Date" shall mean, with respect to any Series,
the fifteenth day of each calendar month, or, if such fifteenth day is not a
Business Day, the next succeeding Business Day, or such other date as may be
specified in the related Supplement.
"Early Amortization Event" shall mean, with respect to any
Series, each event specified in Section 9.1 and each additional event, if any,
specified in the related Supplement as an Early Amortization Event with respect
to such Series.
"Early Amortization Period" shall have, with respect to any
Series, the meaning, if any, specified in the related Supplement.
"Eligible Account" shall mean, with respect to Accounts
existing on the Initial Closing Date, as of the Initial Cut-Off Date, with
respect to Additional Accounts, as of the related Additional Account Cut-Off
Date, and with respect to Automatic Additional Accounts, as of the related
Creation Date, each Account (i) which is in existence and owned by FNANB (before
the Assumption Date) or the Bank (on or after the Assumption Date), (ii) which
is payable in United States dollars, (iii) the credit card or cards related to
which have not been reported lost or stolen or designated fraudulent, (iv) which
was created in accordance with, or under standards no less stringent than, the
Account Guidelines, (v) which is not identified by FNANB (in the case of
Accounts for which the Creation Date is before the Assumption Date) or the Bank
(in the case of Accounts for which the Creation Date is on or after the
Assumption Date) in its computer files as having been canceled due to the
bankruptcy, insolvency or death of the related Obligor, (vi) the receivables in
which have not been charged off as uncollectible prior to the Initial Cut-Off
Date, the Additional Account Cut-Off Date or the Creation Date, as applicable,
in accordance with the Account Guidelines, (vii) the receivables in which have
not been assigned, pledged or sold (other than pursuant to the Receivables
Purchase Agreement or this Agreement), (viii) the Obligor of which has provided,
as its most recent billing address, an address in the United States or its
territories or possessions or a United States military address (provided,
however, that up to 1% of the Accounts (based on the aggregate outstanding
balance of the receivables in such Accounts as a percentage of the aggregate
outstanding balance of all Receivables) may have an Obligor which has provided,
as its most recent billing address, an address outside the United States and its
territories and possessions which is not a United States military address) and
(ix) with respect to which neither the Transferor nor any Affiliate of the
Transferor is the Obligor.
"Eligible Institution" shall mean (i) a depository
institution, which may include the Trustee, organized under the laws of the
United States or any state thereof or the District of Columbia (or any domestic
branch or agency of a foreign bank), which at all times has either a long-term
unsecured debt rating of at least Baa3 from Moody's or a long-term unsecured
debt rating, a short-term unsecured debt rating or a certificate of deposit
rating acceptable to Moody's and the deposits in which are insured by the FDIC
or (ii) any other depository institution, which may include the Trustee,
approved in writing by each Rating Agency; provided, however, that
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(A) the commercial paper, short-term debt obligations or other short-term
deposits of the depository institution described in clause (i) above must be
rated at least P-1 by Moody's and at least A-1+ by Standard & Poor's (and at
least F-1 by Fitch if Fitch is a Rating Agency for any then outstanding Series
and the commercial paper, short-term debt obligations or other short-term
deposits of such depository institution are rated by Fitch) if deposits are to
be held in an account maintained with such depository institution pursuant to
this Agreement for 30 or fewer days and (B) the long-term unsecured debt
obligations of the depository institution described in clause (i) above must be
rated at least AA- by Standard & Poor's if deposits are to be held in an account
maintained with such depository institution pursuant to this Agreement for more
than 30 days.
"Eligible Investments" shall mean instruments, investment
property or other property, other than securities issued by or obligations of
the Bank or any Affiliate of the Bank, which evidence:
(i) direct obligations of, or obligations fully
guaranteed as to timely payment by, the United States or any agency or
instrumentality thereof the obligations of which are backed by the full
faith and credit of the United States;
(ii) demand deposits, time deposits, bankers'
acceptances or certificates of deposit of any depository institution or
trust company organized under the laws of the United States or any
state thereof or the District of Columbia (or any domestic branch or
agency of a foreign bank) and subject to supervision and examination by
federal or state banking or depository institution authorities;
provided, however, that, at the time of investment, the commercial
paper or other unsecured short-term debt obligations of such depository
institution or trust company must be rated at least P-1 by Moody's and
at least A-1+ by Standard & Poor's (and a rating of at least F-1+ by
Fitch if Fitch is a Rating Agency for any then outstanding Series and
the commercial paper, short-term debt obligations or other short-term
deposits of such depository institution or trust company are rated by
Fitch);
(iii) commercial paper having, at the time of
investment, a rating of at least P-1 by Moody's and at least A-1+ by
Standard & Poor's (and a rating of at least F-1+ by Fitch if Fitch is a
Rating Agency for any then outstanding Series and such commercial paper
is rated by Fitch);
(iv) demand deposits, time deposits and
certificates of deposit fully insured by the FDIC having, at the time
of investment, a rating of at least P-1 by Moody's and at least A-1+ by
Standard & Poor's (and a rating of at least F-1+ by Fitch if Fitch is a
Rating Agency for any then outstanding Series and such demand deposits,
time deposits or certificates of deposit are rated by Fitch); or
(v) money market funds having, at the time of
investment, a rating in the highest rating category assigned by Moody's
and Standard & Poor's (and a rating in the highest rating category
assigned by Fitch if Fitch is a Rating Agency for any then outstanding
Series and such money market funds are rated by Fitch), including,
without
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limitation, money market funds for which the Trustee or any Affiliate
of the Trustee is investment manager or advisor;
and any other investment as to which the Rating Agency Condition shall have been
satisfied.
"Eligible Receivable" shall mean each Receivable:
(i) which has arisen under an Eligible Account;
(ii) which was created in compliance with all
applicable Requirements of Law and pursuant to an Account Agreement
which complies with all applicable Requirements of Law in either case
the failure to comply with which would have a material adverse effect
upon the Investor Certificateholders;
(iii) with respect to which all material consents,
licenses, approvals or authorizations of, or registrations with, any
Governmental Authority required to be obtained or given by FNANB (in
the case of a Receivable created before the Assumption Date) or the
Bank (in the case of a Receivable created on or after the Assumption
Date) in connection with the creation of such Receivable or the
execution, delivery and performance by FNANB (in the case of a
Receivable created before the Assumption Date) or the Bank (in the case
of a Receivable created on or after the Assumption Date) of the related
Account Agreement have been duly obtained or given and are in full
force and effect as of such date of creation;
(iv) which, in the case of a Receivable created
on or after the Restructure Date but before the Assumption Date, has
been the subject of a valid sale by FNANB to DC Funding of all of
FNANB's right, title and interest in such Receivable pursuant to the
Receivables Purchase Agreement;
(v) (A) which, in the case of a Receivable
created before the Restructure Date, has been the subject of either a
valid transfer and assignment from FNANB to the Trust of all of FNANB's
right, title and interest therein or the grant of a first priority
perfected security interest therein (and in the proceeds thereof to the
extent set forth in Section 9-315 of the UCC as in effect in the
Relevant UCC State), effective until the termination of the Trust, (B)
which, in the case of a Receivable created on or after the Restructure
Date but before the Assumption Date, has been the subject of either a
valid transfer and assignment from DC Funding to the Trust of all of DC
Funding's right, title and interest therein or the grant of a first
priority perfected security interest therein (and in the proceeds
thereof to the extent set forth in Section 9-315 of the UCC as in
effect in the Relevant UCC State), effective until the termination of
the Trust, (C) which, in the case of a Receivable created on or after
the Assumption Date, has been the subject of either a valid transfer
and assignment from the Transferor to the Trust of all of the
Transferor's right, title and interest therein or the grant of a first
priority perfected security interest therein (and in the proceeds
thereof to the extent set forth in Section 9-315 of the UCC as in
effect in the Relevant UCC State), effective until the termination of
the Trust, and (D) as to which, at the time of the transfer of such
Receivable to the Trust, FNANB, DC Funding or the Transferor, as
applicable, or the Trust will have good and
9
marketable title, free and clear of all Liens (other than Liens
permitted under Section 2.5(b));
(vi) which will at all times be the legal, valid
and binding payment obligation of the Obligor thereof enforceable
against such Obligor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in
effect, affecting the enforcement of creditors' rights in general and
except as such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity);
(vii) which constitutes an "account" under and as
defined in Article 9 of the UCC as in effect in the State of New York
and the Relevant UCC State;
(viii) which, at the time of its transfer to the
Trust, has not been waived or modified except as permitted hereunder;
(ix) which is not subject to any setoff, right of
rescission, counterclaim or other defense (including the defense of
usury), other than defenses arising out of applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights in general;
(x) as to which FNANB (in the case of a
Receivable created before the Restructure Date), DC Funding (in the
case of a Receivable created on or after the Restructure Date but
before the Assumption Date) or the Transferor (in the case of a
Receivable created on or after the Assumption Date) has satisfied all
obligations to be fulfilled at the time of the transfer of such
Receivable to the Trust;
(xi) as to which FNANB (in the case of a
Receivable created before the Restructure Date), DC Funding (in the
case of a Receivable created on or after the Restructure Date but
before the Assumption Date) or the Transferor (in the case of a
Receivable created on or after the Assumption Date) has done nothing,
at the time of the transfer of such Receivable to the Trust, to impair
the rights of the Trust or the Certificateholders therein; and
(xii) which was originated by FNANB (in the case
of a Receivable originated before the Assumption Date) or the Bank (in
the case of a Receivable originated on or after the Assumption Date) in
the ordinary course of business.
"Eligible Servicer" shall mean the Bank, the Trustee, or any
entity which, at the time of its appointment as Servicer, (i) has a net worth of
not less than $50,000,000 as of the end of its most recent fiscal quarter, (ii)
is servicing a portfolio of consumer revolving credit card accounts, (iii) is
legally qualified and has the capacity to service the Accounts, (iv) has
demonstrated the ability to professionally service a portfolio of similar
accounts in accordance with standards of skill and care customary in the
industry and (v) is qualified to use the software that is then currently being
used to service the Accounts or obtains the right to use or has its own software
which is adequate to perform its duties under this Agreement.
10
"Enhancement" shall mean, with respect to any Series or Class,
any letter of credit, guaranteed rate agreement, maturity guaranty facility,
liquidity facility, cash collateral account, collateral indebtedness amount,
collateral interest, collateralized trust obligation, cash collateral guaranty,
surety bond, insurance policy, tax protection agreement, interest rate swap,
interest rate cap, spread account, reserve account, subordination arrangement,
cross-support feature or other contract, agreement or arrangement (including any
combination of any such contracts, agreements or arrangements) established or
entered into for the benefit of the Certificateholders of such Series or Class,
in each case as set forth in the related Supplement.
"Enhancement Agreement" shall mean any agreement, instrument
or document governing the terms of any Enhancement or pursuant to which any
Enhancement is issued or outstanding.
"Enhancement Invested Amount" shall have, with respect to any
Series, the meaning specified in the related Supplement.
"Enhancement Provider" shall mean, with respect to any Series,
that Person designated as such in the related Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated
thereunder.
"Euro-Certificate Exchange Date" shall mean, with respect to
any Series, the date specified in the related Supplement.
"Euroclear Operator" shall mean Euroclear Bank S.A./N.V., as
operator of the Euroclear System, or any successor thereto.
"Excess Automatic Additional Accounts" shall mean, with
respect to any calendar quarter or any period of twelve consecutive months, all
Automatic Additional Accounts designated by FNANB or the Transferor during such
calendar quarter or such twelve month period after the designation of the
Automatic Additional Account that caused the number of Automatic Additional
Accounts designated during such calendar quarter or such twelve month period to
equal the applicable Aggregate Automatic Addition Limit.
"Excess Funding Account" shall have the meaning specified in
Section 4.1(f).
"Excess Funding Amount" shall mean, on any date of
determination, the amount on deposit in the Excess Funding Account on such date.
"Excess Recoveries" shall mean, with respect to any Collection
Period, all Recoveries received during such Collection Period in excess of the
Default Amount for such Collection Period (calculated without deducting such
Recoveries in calculating the Default Amount for such Collection Period).
"Exchange" shall mean the procedure described under Section
6.9.
11
"Exchange Date" shall have, with respect to any Series issued
pursuant to an Exchange, the meaning specified in Section 6.9.
"Exchangeable Transferor Certificate" shall mean the
certificate executed by the Transferor and authenticated by the Trustee,
substantially in the form of Exhibit B, and any Exchangeable Transferor
Certificate reissued pursuant to Section 6.9.
"Exchange Notice" shall have, with respect to any Series
issued pursuant to an Exchange, the meaning specified in Section 6.9.
"FDIC" shall mean the Federal Deposit Insurance Corporation,
or any successor thereto.
"Final Termination Date" shall have the meaning specified in
Section 12.1(a).
"Finance Charge Receivables" shall mean (i) Receivables
created in respect of Finance Charges, cash advance fees, annual fees, late
charges, overlimit charges, returned check charges and all other fees and
charges on the Accounts (other than Insurance Charges) and (ii) Discount Option
Receivables. Collections of Finance Charge Receivables with respect to any
Collection Period shall be deemed to include (i) all Excess Recoveries with
respect to such Collection Period, (ii) the Interchange Amount, if any, with
respect to such Collection Period and (iii) all interest and other investment
earnings (net of losses and investment expenses), if any, received during such
Collection Period on funds on deposit in the Excess Funding Account.
"Finance Charge Shortfalls" shall have, with respect to any
Series, the meaning specified in the related Supplement.
"Finance Charges" shall have the meaning specified in the
Account Agreement applicable to each Account.
"Fiscal Year" shall mean the period commencing on March 1 of
any year and ending on February 28 (or February 29, if applicable) of the
following year.
"Fitch" shall mean Fitch, Inc.
"Fixed Allocation Percentage" shall have, with respect to any
Series, the meaning specified in the related Supplement.
"Floating Allocation Percentage" shall have, with respect to
any Series, the meaning specified in the related Supplement.
"FNANB" shall mean First North American National Bank, a
national banking association, and any successor thereto.
"Foreign Clearing Agency" shall mean, with respect to any
Series, Clearstream or the Euroclear Operator or any other established clearing
agency for securities outside the United States designated in the related
Supplement.
12
"Global Certificate" shall have the meaning specified in
Section 6.10(a).
"Governmental Authority" shall mean the United States, any
state or other political subdivision thereof and any United States entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Group" shall mean, with respect to any Series, the group of
Series, if any, in which the related Supplement specifies such Series is to be
included.
"Ineligible Receivable" shall have the meaning specified in
Section 2.4(d)(iii).
"Initial Closing Date" shall mean October 30, 1997.
"Initial Cut-Off Date" shall mean the opening of business on
September 30, 1997.
"Initial Invested Amount" shall mean, with respect to any
Series, the amount specified in the related Supplement.
"Insolvency Event" shall have the meaning specified in Section
9.1(b).
"Insurance Charges" shall mean, with respect to any Account,
the monthly premiums charged to the related Obligor with respect to any
Insurance Policies.
"Insurance Policies" shall mean any credit insurance policies
offered through FNANB or the Bank with respect to the Accounts.
"Insurance Proceeds" shall mean amounts received or recovered
pursuant to any Insurance Policies.
"Interchange" shall mean interchange fees payable to the Bank,
in its capacity as credit card issuer, through MasterCard International
Incorporated or VISA USA Incorporated, with respect to the Accounts.
"Interchange Amount" shall mean, with respect to any
Collection Period, the amount of Interchange paid to the Bank with respect to
such Collection Period.
"Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended from time to time.
"Invested Amount" shall have, with respect to any Series, the
meaning specified in the related Supplement.
"Invested Percentage" shall have, with respect to any Series,
the meaning specified in the related Supplement.
"Investor Certificate" shall mean a certificate executed by DC
Funding or the Transferor and authenticated by or on behalf of the Trustee
substantially in a form attached to any Supplement or such other interest in the
Trust as may be deemed to be an "Investor Certificate" in any Supplement.
13
"Investor Certificateholder" shall mean the holder of record
of an Investor Certificate.
"Investor Charge Offs" shall have, with respect to any Series,
the meaning specified in the related Supplement.
"Investor Default Amount" shall have, with respect to any
Series, the meaning specified in the related Supplement.
"Investor Monthly Servicing Fee" shall have the meaning
specified in Section 3.2.
"Lien" shall mean any security interest, mortgage, deed of
trust, pledge, hypothecation, assignment, participation, deposit arrangement,
encumbrance, lien (statutory or other), preference, priority right or interest
or other security agreement or preferential arrangement of any kind or nature
whatsoever, including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, other than any lien or filing made pursuant to
this Agreement and any assignment or transfer made pursuant to Section 6.9 or
7.2 or pursuant to the Assignment and Assumption Agreement.
"Manager" shall mean the managing underwriter of any Series.
"Minimum Aggregate Principal Receivables" shall mean, on any
date of determination, an amount equal to the aggregate of the amounts set forth
in each Supplement for each then outstanding Series as the "Minimum Aggregate
Principal Receivables" for such Series on such date minus the Excess Funding
Amount on such date.
"Minimum Transferor Amount" shall mean, on any date of
determination, the product of the Aggregate Principal Receivables on such date
and the Minimum Transferor Interest Percentage on such date.
"Minimum Transferor Interest Percentage" shall mean, on any
date of determination, the highest percentage set forth in any Supplement for
any then outstanding Series as the "Minimum Transferor Interest Percentage" for
such Series on such date.
"Monthly Servicing Fee" shall have the meaning specified in
Section 3.2.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"1940 Act" shall have the meaning specified in Section 9.1.
"Obligor" shall mean, with respect to any Account, each Person
obligated to make payments with respect to such Account, including any guarantor
thereof.
"Officer's Certificate" shall mean a certificate signed by any
Vice President or more senior officer of either of the Transferor or the
Servicer and delivered to the Trustee.
14
"Opinion of Counsel" shall mean a written opinion of counsel,
who may be counsel for or an employee of the Person providing the opinion, and
who shall be reasonably acceptable to the Trustee; provided, however, that any
Tax Opinion or other opinion relating to federal income tax matters shall be an
opinion of nationally recognized tax counsel; and, provided further, that no
such written opinion (including, without limitation, any Tax Opinion) shall be
an expense of the Trustee.
"Original Agreement" shall have the meaning specified in the
Preliminary Statements.
"Paying Agent" shall mean any paying agent appointed pursuant
to Section 6.6 and shall initially be the Trustee.
"Permitted Activities" shall mean the primary activities of
the Trust, which are:
(i) holding Receivables and the other Trust
Property, which assets cannot be contrary to the status of the Trust as
a qualified special purpose entity under existing accounting
literature, including passive derivative financial instruments that
pertain to beneficial interests issued or sold to parties other than
the Transferor or Affiliates or agents of the Transferor;
(ii) issuing Certificates and other interests in
the Trust;
(iii) receiving Collections and making payments on
Certificates and interests in accordance with the terms of this
Agreement and any Supplement; and
(iv) engaging in other activities that are
necessary to accomplish or incidental to the foregoing activities,
which other activities cannot be contrary to the status of the Trust as
a qualified special purpose entity under existing accounting
literature.
"Person" shall mean any legal person, including any
individual, corporation, partnership, limited liability company, limited
liability partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Authority or other entity of similar
nature.
"Principal Amortization Period" shall have, with respect to
any Series, the meaning, if any, specified in the related Supplement.
"Principal Receivables" shall mean Receivables other than
Finance Charge Receivables, Receivables in Defaulted Accounts and Discount
Option Receivables. Collections of Principal Receivables with respect to any
Collection Period shall be deemed to include all Recoveries received during such
Collection Period (other than Excess Recoveries with respect to such Collection
Period).
"Principal Sharing Series" shall mean a Series that, pursuant
to the related Supplement, is entitled to receive Shared Principal Collections.
15
"Principal Shortfalls" shall have, with respect to any Series,
the meaning specified in the related Supplement.
"Principal Terms" shall have, with respect to any Series
issued pursuant to an Exchange, the meaning specified in Section 6.9.
"Pro Forma Investor Default Amount" shall mean, for any
Distribution Date with respect to any Series, the average of the Investor
Default Amounts for such Series for the three consecutive Distribution Dates
preceding such Distribution Date; provided, however, that the Investor Default
Amount for the three consecutive Distribution Dates preceding the initial
Distribution Date with respect to any Series shall be calculated based on the
Default Amount and Invested Percentages that would have applied had such Series
been outstanding at all relevant times with an Invested Amount equal to the
Initial Invested Amount of such Series.
"Publication Date" shall have the meaning specified in Section
9.2(a).
"Rating Agency" shall mean, with respect to any Series, each
rating agency selected by the Transferor to rate the Investor Certificates of
such Series.
"Rating Agency Condition" shall mean, with respect to any
action, that each Rating Agency shall have notified the Transferor, the Servicer
and the Trustee in writing that such action will not result in a reduction or
withdrawal of its rating of any outstanding Series or Class with respect to
which it is a Rating Agency.
"Reassignment" shall have the meaning specified in Section
2.7.
"Receivable" shall mean any amount owing by an Obligor under
an Account from time to time, including, without limitation, amounts owing for
the payment of goods and services, cash advances, Insurance Charges, Finance
Charges, cash advance fees, annual fees, late charges, overlimit charges,
returned check charges and all other fees and charges. In calculating the
aggregate amount of Receivables on any day, the amount of Receivables shall be
reduced by the aggregate amount of credit balances, and other adjustments stated
in Section 3.8 hereof, in the Accounts on such day. Any Receivables which the
Transferor is unable to transfer as provided in Section 2.5(d) shall not be
included in calculating the aggregate amount of Receivables.
"Receivables Purchase Agreement" shall mean the Receivables
Purchase Agreement dated as of December 31, 2001, as amended, between FNANB and
DC Funding, and acknowledged and accepted by the Trustee, which agreement was
terminated as of the Assumption Date.
"Record Date" shall mean, with respect to any Series and any
Distribution Date, the last Business Day of the immediately preceding Collection
Period or such other date as may be specified in the related Supplement.
"Recoveries" shall mean all amounts (including Insurance
Proceeds, if any) received by the Servicer with respect to Receivables in
Defaulted Accounts (net of any post-charge off adjustments).
16
"Registered Certificates" shall have the meaning specified in
Section 6.1.
"Relevant UCC State" shall mean all jurisdictions where a UCC
filing is required to perfect and maintain the security interest of the Trustee
in the Receivables and the proceeds thereof.
"Removal Date" shall mean the date on which the Receivables in
certain designated Removed Accounts will be reassigned by the Trustee to the
Transferor.
"Removal Notice Date" shall mean the fifth Business Day prior
to a Removal Date.
"Removed Accounts" shall have the meaning specified in Section
2.7.
"Repurchase Terms" shall mean, with respect to any Series
issued pursuant to an Exchange, the terms and conditions under which the
Transferor may repurchase such Series pursuant to Section 12.2.
"Requirements of Law" shall mean, with respect to any Person,
the certificate of incorporation or articles of association and by-laws or other
organizational or governing documents of such Person, and any law, treaty, rule
or regulation, or determination of an arbitrator or Governmental Authority, in
each case applicable to or binding upon such Person or to which such Person is
subject, whether Federal, state or local (including, without limitation, usury
laws, the Federal Truth in Lending Act and Regulation Z and Regulation B of the
Board of Governors of the Federal Reserve System).
"Responsible Officer" shall mean any officer of the Trustee
assigned by it to administer its corporate trust matters.
"Restructure Date" shall mean December 31, 2001.
"Revolving Period" shall mean, with respect to any Series, the
period from and including the date of initial issuance of the Investor
Certificates of such Series to but not including the day on which an
Amortization Period for such Series commences.
"Series" shall mean any Series of Investor Certificates, each
as designated in the related Supplement (including any Enhancement Invested
Amount related thereto).
"Series Adjustment Amount" shall mean, with respect to any
Collection Period for any Series, the product of (i) the percentage equivalent
of a fraction, the numerator of which is the Invested Amount with respect to
such Series as of the last day of such Collection Period and the denominator of
which is the Aggregate Invested Amount on such last day and (ii) the Adjustment
Amount as of such last day.
"Servicer" shall mean the Bank or, after any Service Transfer,
the Successor Servicer.
"Servicer Default" shall have the meaning specified in Section
10.1.
17
"Service Transfer" shall have the meaning specified in Section
10.1.
"Servicing Fee Percentage" shall have, with respect to any
Series, the meaning specified in the related Supplement.
"Servicing Officer" shall mean any officer of the Servicer
involved in, or responsible for, the administration and servicing of the
Receivables whose name appears on a list of servicing officers furnished to the
Trustee by the Servicer, as such list may from time to time be amended.
"Shared Excess Finance Charge Collections" shall have, with
respect to any Series, the meaning specified in the related Supplement.
"Shared Principal Collections" shall have, with respect to any
Series, the meaning specified in the related Supplement.
"Standard & Poor's" shall mean Standard & Poor's, a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Stated Series Termination Date" shall have, with respect to
any Series, the meaning specified in the related Supplement.
"Successor Servicer" shall have the meaning specified in
Section 10.2.
"Supplement" shall mean, with respect to any Series, a
supplement to this Agreement complying with the terms of Section 6.9 and
executed in connection with the issuance of such Series.
"Tax Opinion" shall have the meaning specified in Section
6.9(b).
"Termination Notice" shall have, with respect to any Series,
the meaning specified in Section 10.1.
"Transfer Agent and Registrar" shall have the meaning
specified in Section 6.3 and shall initially be the Trustee.
"Transfer Date" shall mean the Business Day preceding each
Distribution Date.
"Transferor" shall mean the Bank, as transferor of the
Receivables created on or after the Assumption Date.
"Transferor Amount" shall mean, on any date of determination,
the Aggregate Principal Receivables at the end of the day immediately prior to
such date of determination, plus the Excess Funding Amount at the end of such
day, minus the Aggregate Invested Amount at the end of such day, minus any
Enhancement Invested Amount at the end of such day (to the extent not included
in the Aggregate Invested Amount).
"Transferor Interest" shall have the meaning specified in
Section 4.1(a).
18
"Transferor Interest Percentage" shall mean, on any date of
determination, the Transferor Amount divided by the Aggregate Principal
Receivables.
"Transferor Percentage" shall mean, on any date of
determination, when used with respect to Collections of Principal Receivables,
Finance Charge Receivables and Receivables in Defaulted Accounts, one hundred
percent minus the Aggregate Invested Percentage calculated on such date with
respect to such categories of Receivables as calculated by the Servicer.
"Transferred Account" shall mean a MasterCard or VISA credit
card account with respect to which a new credit card account number has been
issued by FNANB or the Bank in accordance with its usual and customary servicing
practices and in accordance with the Account Guidelines, and which can be traced
or identified by reference to or by way of the computer files or microfiche
lists delivered to the Trustee pursuant to Sections 2.1 and 2.6 as an account
into which an Account has been transferred (including such transfers occurring
between the Initial Cut-Off Date and the Initial Closing Date and between any
Additional Account Cut-Off Date and the related Additional Account Closing
Date).
"Trust" shall mean the trust created by this Agreement, the
corpus of which shall consist of the Trust Property.
"Trust Property" shall have the meaning specified in Section
2.1(b).
"Trustee" shall mean the institution executing this Agreement
as trustee, the successor to its corporate trust business, or its successor in
interest, or any successor trustee appointed as herein provided.
"UCC" shall mean the Uniform Commercial Code, as amended from
time to time, as in effect in any specified jurisdiction.
"Undivided Interest" shall mean the undivided interest of any
Certificateholder in the Trust.
"United States" shall mean the United States of America.
"Zero Balance Account" shall mean an Account with a Receivable
balance of zero.
Section 1.2 Other Definitional Provisions.
(a) All terms defined in any Supplement or this Agreement
shall have the defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined therein. The
definitions of all terms defined herein shall include the singular as well as
the plural form of such terms and the masculine of such terms as well as the
feminine and neuter genders of such terms.
(b) As used herein and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in Section 1.1, and accounting terms partly defined in Section 1.1 to
the extent not defined, shall have the respective meanings given
19
to them under generally accepted accounting principles on the date of
determination. To the extent that the definitions of accounting terms herein are
inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained herein shall control.
(c) The representations, warranties and covenants of the
Bank in this Agreement in its capacity as Transferor shall be deemed to be the
representations, warranties and covenants of the Bank solely in such capacity
for so long as it acts in such capacity under this Agreement. The
representations, warranties and covenants of the Bank in this Agreement in its
capacity as Servicer shall be deemed to be the representations, warranties and
covenants of the Bank solely in such capacity for so long as it acts in such
capacity under this Agreement.
(d) All series of investor certificates issued and
outstanding under the Original Agreement shall constitute Series issued and
outstanding under this Agreement, and all supplements executed in connection
with such series shall constitute Supplements executed under this Agreement.
(e) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to any
Supplement or this Agreement as a whole and not to any particular provision of
such Supplement or this Agreement, as the case may be; Section, subsection,
Schedule and Exhibit references contained in this Agreement or any Supplement
are references to Sections, subsections, Schedules and Exhibits in or to this
Agreement or any Supplement unless otherwise specified; and the word "including"
means including without limitation.
Section 1.3 Amendment and Restatement. On the Assumption Date,
the Original Agreement shall automatically be amended and restated as set forth
herein. On and after the Assumption Date, the rights and obligations of the
Transferor, the Servicer, the Bank, the Trustee and the Certificateholders shall
be governed by this Agreement and all references to the Original Agreement in
any other instrument or document shall be deemed to constitute references to
this Agreement.
[END OF ARTICLE I]
20
ARTICLE II
APPOINTMENT OF TRUSTEE; CONVEYANCE OF
RECEIVABLES; ISSUANCE OF CERTIFICATES
Section 2.1 Appointment of Trustee; Conveyance of Receivables.
(a) The Transferor does hereby acknowledge that JPMorgan
Chase Bank has been appointed to act as Trustee as provided herein and to
exercise such powers under this Agreement as are delegated to the Trustee by the
terms hereof together with all such powers as are reasonably incidental thereto.
The Trustee confirms such appointment and agrees to exercise such powers and
perform such functions on behalf of the Certificateholders from time to time as
are specifically delegated to the Trustee by the terms hereof. The Trust created
by and maintained by the Original Agreement shall continue to exist and be
maintained under this Agreement.
(b) The Transferor does hereby transfer, assign,
set-over, and otherwise convey to the Trustee, for the benefit of the
Certificateholders, without recourse except as provided herein, all right, title
and interest of the Transferor in and to the Receivables, all monies due or to
become due and all amounts received with respect to the Receivables (including
Finance Charge Receivables and Recoveries), all proceeds of the Receivables
(including Insurance Proceeds) and the Interchange Amount with respect to each
Collection Period. The property described in the prior sentence, together with
all monies as are from time to time deposited in the Collection Account, the
Excess Funding Account and any other account or accounts maintained for the
benefit of the Certificateholders (including, to the extent specified in the
related Supplement, investment earnings on such amounts), all proceeds of the
foregoing and all monies as are from time to time available under any
Enhancement for any Series for payment to Certificateholders, shall constitute
the property of the Trustee and the Trust (the "Trust Property"). The foregoing
transfer, assignment, set-over and conveyance does not constitute and is not
intended to result in a creation or an assumption by the Trust, the Trustee or
any Certificateholder of any obligation of the Servicer, the Transferor or any
other Person in connection with the Accounts, the Receivables or under any
agreement or instrument relating thereto including, without limitation, any
obligation to any Obligors, merchant service establishments or insurers.
In connection with such transfer, the Transferor agrees to
record and file (and does hereby authorize the Trustee to record and file), at
the expense of the Transferor, financing statements (and continuation statements
with respect to such financing statements when applicable) with respect to the
Receivables for the transfer of accounts (as defined in the UCC as in effect in
the Relevant UCC State) meeting the requirements of applicable state law in such
manner and in such jurisdictions as are necessary to perfect the transfers and
assignments of the Receivables by the Transferor to the Trustee, and to deliver
a file-stamped copy of such financing statements or other evidence of such
filings to the Trustee on or prior to the Assumption Date (which may, for the
purposes of this Section 2.1, consist of telephone confirmation of such filing)
and, in the case of continuation statements, as soon as reasonably practical
after receipt thereof.
21
In connection with such transfer, the Transferor agrees, at
its own expense, on or prior to the Assumption Date, to indicate clearly and
unambiguously in its computer files or other appropriate books and records that
the Receivables created in connection with the Accounts (other than any
Additional Account or Automatic Additional Account) have been transferred to the
Trustee pursuant to this Agreement for the benefit of the Certificateholders.
The Transferor further agrees to deliver or cause to be delivered to the Trustee
(a) on or before the third Business Day following the Assumption Date, a
computer file or microfiche list containing a true and complete list of all
Accounts, identified by account number as of the Assumption Date, and (b) so
long as Automatic Additional Accounts are being included automatically pursuant
to Section 2.6(d), on or prior to each Distribution Date, a new computer file or
microfiche list containing a true and complete list of all Accounts identified
as described in the preceding clause (a) as of the last day of the most recent
Collection Period or an Officer's Certificate stating that the file or list of
Accounts most recently delivered pursuant to this subsection remains a true and
complete list of all Accounts. Such file or list shall be marked as Schedule 1
to this Agreement, shall be delivered to the Trustee as confidential and
proprietary, and is hereby incorporated into and made a part of this Agreement.
Any such additional file or list shall be marked as Schedule 1 to this
Agreement, shall be delivered to the Trustee as confidential and proprietary,
shall replace the then existing Schedule 1 to this Agreement, and shall be
incorporated into and made a part of this Agreement. The Transferor agrees, at
its own expense, by the end of the Collection Period in which any Transferred
Accounts have been originated to indicate clearly and unambiguously in its
computer files or other appropriate books and records that the Receivables
created in connection with the Transferred Accounts have been transferred to the
Trustee pursuant to this Agreement for the benefit of the Certificateholders.
The parties hereto intend that each transfer of Receivables
and other Trust Property pursuant to this Section 2.1(b) or any Assignment
constitute a sale. If and to the extent that, notwithstanding such intent, the
transfer pursuant to this Section 2.1(b) is not deemed to constitute a sale, the
Transferor shall be deemed hereunder to have granted and does hereby grant to
the Trustee, on behalf of the Trust and for the benefit of the
Certificateholders, a security interest in all of its right, title and interest,
whether now owned or hereafter acquired, in and to the Receivables and all other
Trust Property to secure the payment of each Series and this Agreement shall
constitute a security agreement under the UCC.
(c) Any reference in this Agreement to a conveyance,
assignment or other transfer to the Trust shall be construed as, and shall be
deemed to mean, a conveyance, assignment or other transfer to the Trustee.
Section 2.2 Acceptance by Trustee.
(a) The Trustee hereby acknowledges its acceptance, to
the extent validly transferred, assigned, set over or otherwise conveyed to the
Trustee as provided in Section 2.1(b), for the benefit of the
Certificateholders, of all right, title and interest previously held by the
Transferor in and to the Receivables and all other Trust Property and declares
that it shall hold such right, title and interest, in trust as herein set forth
and subject to the terms hereof, for the benefit of all Certificateholders. The
Trustee further acknowledges that, prior to or simultaneously with the execution
and delivery of this Agreement, the Transferor delivered or caused to be
delivered to the Trustee the computer file or microfiche list represented by the
22
Transferor to be the computer file or microfiche list described in the third
paragraph of Section 2.1(b).
(b) The Trustee hereby agrees not to disclose to any
Person (including any Certificateholder or Certificate Owner) any of the account
numbers or other information contained in the computer files or microfiche lists
delivered to the Trustee by or on behalf of the Transferor pursuant to Sections
2.1 and 2.6, except as is required in connection with the performance of its
duties hereunder or as may be provided in any Supplement, or in connection with
audits, examinations, investigations and other inquiries which are required in
connection with the Trustee's regulatory supervision or in response to a court
order, subpoena, or other judicial or governmental demand or in enforcing the
rights of the Certificateholders or to a Successor Servicer appointed pursuant
to Section 10.2 or a successor Trustee appointed pursuant to Section 11.8. The
Trustee agrees to take such measures as shall be necessary or reasonably
requested by the Transferor to protect and maintain the security and
confidentiality of such information.
(c) The Trustee shall have no power to create, assume or
incur indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement.
Section 2.3 Representations and Warranties of the Transferor
Relating to the Transferor. The Transferor hereby represents and warrants to the
Trustee, on behalf of the Trust, as of the Assumption Date and, with respect to
any Series issued after the Assumption Date, as of the date of the related
Supplement and the related Closing Date, unless otherwise stated in such
Supplement that:
(i) Organization and Good Standing. The
Transferor is a national banking association duly organized, validly
existing and in good standing under the laws of the United States, and
has full power, authority and legal right to own its properties and
conduct its business as such properties are presently owned and such
business is presently conducted, to execute, deliver and perform its
obligations under this Agreement and any Supplement and to execute and
deliver to the Trustee the Certificates pursuant hereto.
(ii) Due Qualification. The Transferor is duly
qualified to do business and is in good standing (or is exempt from
such requirements) and has obtained all necessary licenses and
approvals with respect to the Transferor, in each jurisdiction in which
failure to so qualify or to obtain such licenses and approvals would
render any Account Agreement relating to an Account or any Receivable
unenforceable by it or the Trust or would have a material adverse
effect on the Investor Certificateholders or on the Transferor's or the
Servicer's ability to perform its obligations under this Agreement or
any Supplement; provided, however, that no representation or warranty
is made with respect to any qualifications, licenses or approvals which
the Trustee would have to obtain to do business in any state in which
the Trustee seeks to enforce any Receivable.
(iii) Due Authorization. The execution, delivery
and performance of this Agreement and any Supplement by the Transferor
and the execution and delivery to the Trustee of the Certificates and
the consummation by the Transferor of the transactions
23
provided for in this Agreement and any Supplement have been duly
authorized by the Transferor by all necessary action on the part of the
Transferor.
(iv) No Violation. The execution and delivery of
this Agreement, any Supplement and the Certificates by the Transferor,
the performance by the Transferor of the transactions contemplated by
this Agreement and any Supplement and the fulfillment by the Transferor
of the terms hereof and thereof will not conflict with, violate or
result in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default
under, any Requirement of Law applicable to the Transferor or any
material indenture, contract, agreement, mortgage, deed of trust or
other instrument to which the Transferor is a party or by which it or
any of its properties are bound.
(v) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of the Transferor,
threatened against the Transferor before any court, regulatory body,
administrative agency, arbitrator or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement, any
Supplement or the Certificates, (ii) seeking to prevent the issuance of
the Certificates or the consummation of any of the transactions
contemplated by this Agreement, any Supplement or the Certificates,
(iii) seeking any determination or ruling that, in the reasonable
judgment of the Transferor, would materially and adversely affect the
performance by the Transferor of its obligations under this Agreement
or any Supplement, (iv) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this
Agreement, any Supplement or the Certificates or (v) seeking to affect
adversely the Federal income tax attributes of the Trust.
(vi) All Consents Required. All approvals,
authorizations, consents, orders or other actions of any Person or of
any Governmental Authority required to be obtained on or prior to the
date as of which this representation is being made in connection with
the execution and delivery by the Transferor of this Agreement, any
Supplement and the Certificates, the performance by the Transferor of
the transactions contemplated by this Agreement and any Supplement and
the fulfillment by the Transferor of the terms hereof and thereof, have
been obtained; provided, however, that no representation or warranty is
made regarding state securities or "Blue Sky" laws in connection with
any distribution of the Certificates.
(vii) Computer File. The computer file or
microfiche list delivered pursuant to Section 2.1 is complete and
accurately reflects the information regarding the Receivables under the
Accounts in all material respects as of the applicable time referred to
in Section 2.1.
The representations and warranties set forth in this Section
2.3 shall survive the transfer and assignment of the Receivables to the Trust
and termination of the rights and obligations of the Servicer pursuant to
Section 10.1. Upon discovery by the Transferor, the Servicer or the Trustee of a
breach of any of the representations and warranties set forth in this Section
2.3, the party discovering such breach shall give prompt written notice thereof
to the others.
24
Section 2.4 Representations and Warranties of the Transferor
Relating to this Agreement and any Supplement and the Receivables.
(a) Binding Obligation; Valid Transfer and Assignment.
The Transferor hereby represents and warrants to the Trustee, on behalf of the
Trust, as of the Assumption Date and, with respect to any Series issued after
the Assumption Date, as of the related Closing Date, unless otherwise stated in
the related Supplement, that:
(i) Each of this Agreement and any Supplement
constitutes a legal, valid and binding obligation of the Transferor,
enforceable against the Transferor in accordance with its terms,
subject to applicable bankruptcy, insolvency, receivership,
conservatorship, reorganization, moratorium or other similar laws now
or hereafter in effect affecting the enforcement of creditors' rights
in general and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in
equity).
(ii) This Agreement constitutes either (A) a
valid transfer and assignment to the Trust of all right, title and
interest of the Transferor in and to the Receivables (other than
Receivables in Additional Accounts), all monies due or to become due
and all amounts received with respect thereto and all proceeds thereof
(to the extent set forth in Section 9-315 of the UCC as in effect in
the Relevant UCC State), and such Receivables and all proceeds thereof
will be transferred to the Trust free and clear of any Lien of any
Person claiming through or under the Transferor or any of its
Affiliates, except for (x) Liens permitted under Section 2.5(b), (y)
the interest of the Transferor as holder of the Exchangeable Transferor
Certificate or any other Class held by the Transferor from time to time
and (z) any right of the holder of the Exchangeable Transferor
Certificate to receive interest accruing on, and investment earnings
with respect to, the Collection Account or any other account or
accounts maintained for the benefit of the Certificateholders or any
Enhancement Provider as provided in this Agreement and any Supplement
or (B) a grant of a security interest (as defined in the UCC as in
effect in the Relevant UCC State) in such property to the Trustee on
behalf of the Trust.
(iii) If this Agreement constitutes the grant of a
security interest in the Trust Property to the Trustee:
(A) this Agreement creates a valid and
continuing security interest (as defined in the UCC of the
Relevant UCC State) in the Trust Property in favor of the
Trustee, which security interest is prior to all other Liens,
and is enforceable as such against creditors of and purchasers
from the Transferor;
(B) the Receivables transferred by the
Transferor constitute "accounts" within the meaning of the UCC
of the Relevant UCC State;
(C) at the time of its transfer of any
Trust Property to the Trust pursuant to this Agreement, the
Transferor owned and had good and marketable title to such
Trust Property free and clear of any Lien, claim or
encumbrance of
25
any Person (other than any Lien described in clause (x), (y)
or (z) of paragraph (ii) above);
(D) the Transferor has caused or will
have caused, within ten (10) days of the execution of this
Agreement, the filing of all appropriate financing statements
in the proper filing office in the appropriate jurisdictions
under applicable law in order to perfect the security interest
in the Receivables and the proceeds thereof granted to the
Trustee pursuant to this Agreement;
(E) other than the security interest
granted to the Trustee pursuant to this Agreement or an
Assignment, the Transferor has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of
the Receivables or the proceeds thereof;
(F) the Transferor has not authorized
the filing of and is not aware of any financing statements
filed against the Transferor that include a description of the
Receivables other than any financing statement relating to the
security interest granted to the Trustee pursuant to this
Agreement or an Assignment or any financing statement that has
been terminated; and
(G) the Transferor is not aware of any
judgment or tax lien filings against the Transferor.
Except as otherwise specifically provided in this Agreement or
any Supplement, neither the Transferor nor any Person claiming through or under
the Transferor shall have any claim to or interest in the Collection Account or
any other account or accounts maintained for the benefit of Certificateholders
or any Enhancement Provider, except for any right of the Transferor to receive
interest accruing on, and investment earnings with respect to, any such account
as provided in this Agreement and any Supplement and, if this Agreement
constitutes the grant of a security interest in such property, except for the
interest of the Transferor in such property as a debtor for purposes of the UCC
as in effect in the Relevant UCC State.
(b) Eligibility of Receivables. The Transferor shall be
deemed to represent and warrant to the Trust (i) on each day on which the
Transferor designates an Automatic Additional Account pursuant to Section
2.6(d), that each Automatic Additional Account designated on such day is an
Eligible Account and that no selection procedures believed by the Transferor to
be materially adverse to the interests of the Investor Certificateholders or any
Enhancement Provider were used in selecting such Automatic Additional Account
from the available Eligible Accounts in the Transferor's portfolio of MasterCard
and VISA credit card accounts, (ii) on each day on which any new Receivable is
created (including, without limitation, any Receivable created in any Automatic
Additional Account), that each Receivable created on such day is an Eligible
Receivable and (iii) on each day on which a computer file or microfiche list is
delivered pursuant to Section 2.1(b) (including, without limitation, any
computer file or microfiche list delivered with respect to Automatic Additional
Accounts), that such computer file or microfiche list is an accurate and
complete listing of the Accounts in all material respects as of the last day of
the preceding Collection Period and that the information contained therein with
26
respect to the identity of the Accounts and the Receivables existing thereunder
was true and correct in all material respects as of the last day of such
preceding Collection Period.
(c) Notice of Breach. The representations and warranties
set forth in this Section 2.4 shall survive the transfer and assignment of the
Receivables to the Trust and the termination of the rights and obligations of
the Servicer pursuant to Section 10.1. The representations and warranties set
forth in Section 2.4(a)(iii) shall not be waived by any of the parties to this
Agreement unless the Rating Agency Condition shall have been satisfied. Upon
discovery by the Transferor, the Servicer or the Trustee of a breach of any of
the representations and warranties set forth in this Section 2.4, the party
discovering such breach shall give prompt written notice thereof to the others.
(d) Transfer of Ineligible Receivables.
(i) Automatic Removal. In the event that a
Receivable is not an Eligible Receivable as a result of the failure to
satisfy the conditions set forth in clause (iv) of the definition of
Eligible Receivable, and either of the following two conditions is met:
(A) the Lien on such Receivable (1)
ranks prior to the Lien created pursuant to this Agreement,
(2) arises in favor of the United States or any state or any
agency or instrumentality thereof or involves taxes or liens
arising under Title IV of ERISA, or (3) has been consented to
by the Transferor; or
(B) the Lien on such Receivable is not
of the types described in clause (A) above, but, as a result
of such breach or event, such Receivable becomes a Receivable
in a Defaulted Account or the Trust's rights in, to or under
such Receivable or its proceeds are materially impaired or the
proceeds of such Receivable are not available for any reason
to the Trust free and clear of any Lien (other than Liens
permitted under Section 2.5(b));
then, upon the earlier to occur of the discovery of such breach or
event by the Transferor or the Servicer or receipt by the Transferor or
the Servicer of written notice of such breach or event given by the
Trustee, each such Receivable or, at the option of the Transferor, all
such Receivables with respect to the related Account, shall be
automatically removed from the Trust on the terms and conditions set
forth in Section 2.4(d)(iii).
(ii) Removal after Cure Period. In the event that
any of the representations and warranties set forth in Section 2.4(b)
or in Section 5(c), 5(d), 5(e) or 5(f) of any Assignment is breached
with respect to a Receivable (other than as a result of the failure to
satisfy the conditions set forth in clause (iv) of the definition of
Eligible Receivable) and, as a result of such breach, such Receivable
becomes a Receivable in a Defaulted Account or the Trust's rights in,
to or under such Receivable or its proceeds are materially impaired or
the proceeds of such Receivable are not available for any reason to the
Trust free and clear of any Lien (other than Liens permitted under
Section 2.5(b)), then, upon the expiration of 60 days or any longer
period agreed upon by the Trustee (not to exceed an additional 90 days)
from the earlier to occur of the discovery of any such
27
breach by the Transferor or the Servicer or receipt by the Transferor
or the Servicer of written notice of such breach given by the Trustee,
each such Receivable or, at the option of the Transferor, all such
Receivables with respect to the related Account, shall be removed from
the Trust on the terms and conditions set forth in Section 2.4(d)(iii);
provided, however, that no such removal shall be required to be made
if, on any day within such applicable period, (A) such representation
and warranty with respect to such Receivable shall then be true and
correct in all material respects as if such Receivable had been created
on such day, and (B) the related Account is no longer a Defaulted
Account as the result of the breach of such representation and
warranty, and the Trust's rights in, to or under such Receivable or its
proceeds are no longer materially impaired as a result of a breach of
such representation and warranty, and the proceeds of such Receivable
are available to the Trust free and clear of all Liens resulting in the
breach of such representation and warranty, as applicable.
(iii) Reassignment Terms and Conditions. When
required or permitted with respect to a Receivable by the provisions of
Section 2.4(d)(i) or Section 2.4(d)(ii) (an "Ineligible Receivable"),
the Transferor shall accept reassignment of such Ineligible Receivable
by directing the Servicer to deduct the principal balance of such
Ineligible Receivable from the Aggregate Principal Receivables and to
decrease the Transferor Amount by such amount. On and after the date of
such reassignment, each Ineligible Receivable shall be deducted from
the Aggregate Principal Receivables used in the calculation of any
Invested Percentage, any Fixed Allocation Percentage, any Floating
Allocation Percentage, the Transferor Percentage and the Transferor
Amount. In the event that the exclusion of an Ineligible Receivable
from the calculation of the Transferor Amount would cause the
Transferor Amount to be reduced below zero or would otherwise not be
permitted by law, the Transferor shall deposit into the Excess Funding
Account not later than 3:00 P.M. (New York City time) on the date of
such reassignment, in immediately available funds, an amount equal to
the amount by which the Transferor Amount would be reduced below zero.
Any such deposit into the Excess Funding Account in connection with the
reassignment of an Ineligible Receivable shall be considered a payment
in full of the Ineligible Receivable and such deposit shall be applied
in accordance with the provisions of Article IV. Upon the reassignment
to the Transferor of an Ineligible Receivable, the Trust shall, without
further action, be deemed to transfer, assign, set over and otherwise
convey to the Transferor, without recourse, representation or warranty,
all right, title and interest of the Trust in and to such Ineligible
Receivable, all monies due or to become due and all amounts received
with respect thereto and all proceeds thereof. The Trustee shall
execute such documents and instruments of transfer or assignment as are
prepared by the Transferor and take such other actions as shall
reasonably be requested by the Transferor to effect the conveyance of
such Ineligible Receivable pursuant to this subsection. In the event
that on any day within 60 days, or any longer period agreed upon by the
Trustee (not to exceed an additional 120 days), of the date on which
the removal of Receivables which are not Eligible Receivables from the
Trust pursuant to this Section 2.4(d)(iii) is effected, (A) the
applicable representations and warranties with respect to such
Receivable shall be true and correct in all material respects on such
date and (B) the Receivable is an Eligible Receivable, the related
Account is no longer a Defaulted Account and the Trust's rights in, to
or under such Receivable or its proceeds are no longer materially
impaired as a
28
result of the breach of such representation and warranty and the
proceeds of such Receivable are available to the Trust free and clear
of all Liens resulting in the breach of such representation and
warranty, the Transferor may, but shall not be required to, direct the
Servicer to include such Receivable in the Trust. Upon reinclusion of a
Receivable in the Trust pursuant to this subsection, the Transferor
shall be deemed to make the applicable representations and warranties
in Section 2.4(b) as of the date of such addition, as if the Receivable
had been created on such date, and shall execute all such necessary
documents and instruments of transfer or assignment and take such other
actions as shall be necessary to effect and perfect the reconveyance of
such Receivable to the Trust. The obligation of the Transferor set
forth in this subsection shall constitute the sole remedy respecting
any breach by the Transferor of the representations and warranties set
forth in the above-referenced subsections with respect to such
Receivable available to the Certificateholders or the Trustee on behalf
of Certificateholders. Notwithstanding any other provision of this
Section 2.4(d), a reassignment of an Ineligible Receivable shall not
occur if the Transferor fails to make a deposit or designation of
Additional Accounts required by this Section 2.4(d) with respect to
such Ineligible Receivable.
(iv) No Impairment. For the purposes of Sections
2.4(d)(i) and 2.4(d)(ii), proceeds of a Receivable shall not be deemed
to be impaired hereunder solely because such proceeds are held by the
Servicer for more than the applicable period under Section 9-315 of the
UCC as in effect in the Relevant UCC State.
(e) Reassignment of Trust Portfolio. In the event that
(i) any of the representations and warranties set forth in Section 2.3(i),
2.3(iii) or 2.4(a) or in Section 5(a) or 5(b) of any Assignment is breached or
(ii) a material amount of Receivables are not Eligible Receivables and, in
either case, such event has a materially adverse effect on the Investor
Certificateholders (without regard to the amount of any Enhancement), either the
Trustee or the Holders of Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Aggregate Invested Amount, by notice then given
in writing to the Transferor (and to the Trustee and the Servicer, if given by
the Investor Certificateholders), may direct the Transferor to accept
reassignment of all Receivables within 60 days of such notice, or within such
longer period as may be specified in such notice (not to exceed an additional 90
days), and the Transferor shall be obligated to accept such reassignment on a
Distribution Date specified by the Transferor occurring within such applicable
period on the terms and conditions set forth below; provided, however, that no
such reassignment shall be required to be made, and the Transferor shall not be
obligated to accept such reassignment, if, on the Business Day prior to such
Distribution Date, the representations and warranties set forth in Sections
2.3(i), 2.3(iii) and 2.4(a) or in Sections 5(a) and 5(b) of such Assignment
shall then be true and correct in all material respects or there shall no longer
be a material amount of Receivables which are not Eligible Receivables, as the
case may be. The Transferor shall deposit in the Collection Account on the
Business Day prior to such Distribution Date (in immediately available funds) an
amount equal to the reassignment deposit amount for such Receivables for
distribution pursuant to the provisions of Section 12.3. The deposit amount for
such reassignment shall be equal to the Aggregate Invested Amount at the close
of business on the Record Date related to the Distribution Date with respect to
which such deposit is made (less the aggregate principal amount then on deposit
in the Excess Funding Account and any principal funding account relating to any
Series), plus (i) an amount equal to all accrued but unpaid interest on the
29
Certificates of all Series at the applicable Certificate Rates through the end
of the respective interest accrual period(s) of such Series and (ii) any other
unpaid amounts required to be paid pursuant to this Section 2.4(e) or under any
Supplement or Enhancement Agreement. Payment of the reassignment deposit amount
and all other amounts in the Collection Account in respect of the preceding
Collection Period shall be considered a prepayment in full of all such
Receivables. On the Distribution Date with respect to which such amount has been
deposited in full into the Collection Account, the Receivables and all monies
due or to become due and all amounts received with respect thereto and all
proceeds thereof (after payment of all amounts otherwise due on or before such
date pursuant to the terms of any Supplement or Enhancement Agreement) shall be
released to the Transferor and the Trustee shall execute and deliver such
instruments of transfer or assignment, in each case without recourse,
representation or warranty, as shall be reasonably requested by the Transferor
to vest in the Transferor, or its designee or assignee, all right, title and
interest of the Trust in and to the Receivables, all monies due or to become due
and all amounts received with respect thereto and all proceeds thereof. If the
Trustee or the Investor Certificateholders give a notice directing the
Transferor to accept reassignment as provided herein and the Transferor is
obligated to accept such reassignment as provided herein, then such obligation
of the Transferor shall constitute the sole remedy respecting a breach of the
representations and warranties contained in Section 2.3(i), 2.3(iii) or 2.4(a)
or Section 5(a) or 5(b) of any Assignment or there being a material amount of
Receivables which are not Eligible Receivables available to the Investor
Certificateholders or the Trustee on behalf of the Investor Certificateholders.
(f) Nothing contained in this Section 2.4 shall create an
obligation on the part of the Trustee to verify the accuracy or continued
accuracy of the representations or warranties contained in this Section 2.4. The
Trustee shall have no obligation to give any notice pursuant to this Section 2.4
unless it has actual knowledge of facts which would permit the giving of such
notice.
Section 2.5 Covenants of the Transferor. The Transferor hereby
covenants that:
(a) Receivables Not to be Evidenced by Instruments or
Chattel Paper. The Transferor will take no action to cause any Receivable to be
evidenced by an instrument or chattel paper (each as defined in the UCC as in
effect in the Relevant UCC State) (other than in its capacity as Servicer in
connection with its enforcement or collection of an Account).
(b) Security Interests. Except for the conveyances
hereunder, the Transferor will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any Lien arising
through or under the Transferor on, any Receivable, whether now existing or
hereafter created, or any interest therein, the Transferor will notify the
Trustee of the existence of any Lien on any Receivable transferred by the
Transferor immediately upon discovery thereof, and the Transferor will defend
the right, title and interest of the Trust in, to and under the Receivables,
whether now existing or hereafter created, against all claims of third parties
claiming through or under the Transferor; provided, however, that nothing in
this Section 2.5(b) shall prevent or be deemed to prohibit the Transferor from
suffering to exist upon any of the Receivables any Liens for municipal or other
local taxes and other governmental charges if such taxes or governmental charges
shall not at the time be due and payable or if the Transferor
30
shall currently be contesting the validity thereof in good faith by appropriate
proceedings and the Transferor shall have set aside on its books adequate
reserves under generally accepted accounting principles with respect thereto;
and, provided further, that nothing in this subsection shall prohibit the
Transferor from conveying an interest in the Exchangeable Transferor Certificate
in accordance with Section 6.3(b) hereof.
(c) Account Agreements and Account Guidelines. The
Transferor shall comply with and perform its obligations under the applicable
Account Agreements relating to the Accounts and the Account Guidelines except
insofar as any failure so to comply or perform would not materially and
adversely affect the rights of the Trust or the Investor Certificateholders
hereunder (without regard to the amount of any Enhancement) or under the
Certificates. Subject to compliance with all Requirements of Law the failure to
comply with which would have a material adverse effect on the Investor
Certificateholders (without regard to the amount of any Enhancement), the
Transferor may change the terms and provisions of the Account Agreements or the
Account Guidelines in any respect (including, without limitation, the required
minimum monthly payment, the calculation of the amount, or the timing, of
charge-offs and the Finance Charges and other fees to be assessed thereon) only
if such change (i) would not, in the reasonable belief of the Transferor, cause
an Early Amortization Event to occur and (ii) is made applicable to the
comparable segment of the revolving credit card accounts owned and serviced by
the Transferor that have characteristics the same as, or substantially similar
to, the Accounts that are the subject of such change, except as otherwise
restricted by an endorsement, sponsorship or other agreement between the
Transferor and an unrelated third party or by the terms of the Account
Agreements.
(d) Account Allocations. In the event that the Transferor
is unable for any reason to transfer Receivables to the Trust in accordance with
the provisions of this Agreement (including, without limitation, by reason of
the application of the provisions of Section 9.2 or a binding order of any
Governmental Authority), then, in any such event, (A) the Transferor agrees
(except as prohibited by any such order) to allocate and pay to the Trust, after
the date of such inability, all Collections of Principal Receivables and
Discount Option Receivables transferred to the Trust prior to the occurrence of
such event and all amounts which would have constituted Collections of Principal
Receivables and Discount Option Receivables but for the Transferor's inability
to transfer such Receivables to the Trust (up to an aggregate amount equal to
the Aggregate Principal Receivables and the Discount Option Receivables in the
Trust as of such date), (B) the Transferor agrees to have such amounts applied
as Collections in accordance with Article IV and (C) for only so long as all
Collections and all amounts which would have constituted Collections are
allocated and applied in accordance with clauses (A) and (B) above, all
Collections of Principal Receivables and Discount Option Receivables and all
amounts which would have constituted Collections of Principal Receivables and
Discount Option Receivables but for the Transferor's inability to transfer
Receivables to the Trust which are charged off as uncollectible in accordance
with this Agreement and the Account Guidelines shall continue to be allocated in
accordance with Article IV and all amounts which would have constituted
Collections of Principal Receivables and Discount Option Receivables but for the
Transferor's inability to transfer Receivables to the Trust shall be deemed to
be Collections of Principal Receivables for the purpose of calculating the
Invested Percentage with respect to any Series and the Aggregate Invested
Percentage. If the Transferor is unable pursuant to any Requirement of Law to
allocate amounts as described above, the Transferor agrees (except as prohibited
by law)
31
to allocate payments on each Account with respect to the balance of such Account
first to the oldest Receivable in such Account and to have such payments applied
as Collections in accordance with Article IV. Finance Charge Receivables,
whenever created, accrued in respect of Principal Receivables or Discount Option
Receivables which have been conveyed to the Trust, or which would have been
conveyed to the Trust but for the Transferor's inability to transfer Receivables
to the Trust, shall continue to be a part of the Trust notwithstanding any
cessation of the transfer of additional Principal Receivables and Discount
Option Receivables to the Trust and Collections with respect thereto shall
continue to be allocated and paid in accordance with Article IV.
(e) Delivery of Collections. In the event that the
Transferor receives Collections, the Transferor agrees to pay to the Servicer
all payments received by the Transferor with respect to such Collections
promptly, and in no event later than two Business Days, after receipt thereof by
the Transferor.
Section 2.6 Addition of Accounts; Repurchase of Investor
Certificates.
(a) If, as of the end of any Collection Period, (i) the
Transferor Amount (after giving effect to any amounts deposited in the Excess
Funding Account) is less than the Minimum Transferor Amount or (ii) the
Aggregate Principal Receivables is less than the Minimum Aggregate Principal
Receivables (after giving effect to any amounts deposited in the Excess Funding
Account), then the Transferor shall, before the close of business on the
following Transfer Date, designate additional Eligible Accounts (the "Additional
Accounts") to be included as Accounts in a sufficient amount such that, after
giving effect to such designation, the Transferor Amount at least equals the
Minimum Transferor Amount and the Aggregate Principal Receivables at least
equals the Minimum Aggregate Principal Receivables; provided, however, that the
Transferor need not make any such designation to the extent that the
deficiencies described in clauses (i) and (ii) above have been eliminated on or
before such Transfer Date through reductions in the Aggregate Invested Amount or
through increases in the amount on deposit in the Excess Funding Account.
(b) In addition to its obligation under Section 2.6(a),
the Transferor may, but shall not be obligated to, designate from time to time
Additional Accounts to be included as Accounts as of the related Additional
Account Closing Date.
(c) The Transferor agrees that any designation of
Additional Accounts under Section 2.6(a) or (b) shall satisfy the following
conditions:
(i) On or before the fifth Business Day prior to
the Additional Account Closing Date, the Transferor shall have given
the Trustee, the Servicer, each Rating Agency and each other Person
entitled thereto pursuant to the related Supplement written notice that
the Additional Accounts will be included as Accounts and specifying the
approximate aggregate amount of the Receivables to be transferred;
(ii) On or before the Additional Account Closing
Date, the Transferor shall have delivered to the Trustee (and the
Trustee shall have accepted on behalf of the Trust for the benefit of
the Investor Certificateholders and any Enhancement Provider) a
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written assignment substantially in the form of Exhibit C (the
"Assignment") and shall have clearly indicated in its computer files or
other appropriate books and records that the Receivables created in
connection with the Additional Accounts have been transferred to the
Trustee and the Transferor shall have delivered or caused to have been
delivered to the Trustee a computer file or microfiche list represented
by the Transferor to contain a true and complete list of the Additional
Accounts identified by account number and by Receivable balance in the
Additional Accounts as of the Additional Account Cut-Off Date, which
computer file or microfiche list shall be as of the date of such
Assignment incorporated into and made a part of such Assignment and
this Agreement;
(iii) The Transferor shall represent and warrant
that (x) each Additional Account was, as of the Additional Account
Cut-Off Date, an Eligible Account, (y) no selection procedures believed
by the Transferor to be materially adverse to the interests of any
outstanding Series of Investor Certificates or any Enhancement Provider
were used in selecting the Additional Accounts from the available
Eligible Accounts in the Transferor's portfolio of MasterCard and VISA
credit card accounts; and (z) as of the Additional Account Closing
Date, the Transferor is not insolvent and will not be made insolvent by
the transfer of the Receivables in the Additional Accounts;
(iv) The Transferor shall represent and warrant
that, as of the Additional Account Closing Date, the Assignment
constitutes either (A) a valid transfer and assignment to the Trustee
of all right, title and interest of the Transferor in and to the
Receivables then existing and thereafter created in the Additional
Accounts, all monies due or to become due and all amounts received with
respect thereto on or after the Additional Account Cut-Off Date and all
proceeds thereof (to the extent set forth in Section 9-315 of the UCC
as in effect in the Relevant UCC State), and such Receivables and all
proceeds thereof will be transferred to the Trustee free and clear of
any Lien of any Person claiming through or under the Transferor or any
of its Affiliates, except for (x) Liens permitted under Section 2.5(b),
(y) the interest of the Transferor as holder of the Exchangeable
Transferor Certificate or any other Class held by the Transferor from
time to time and (z) any right of the holder of the Exchangeable
Transferor Certificate to receive interest accruing on, and investment
earnings with respect to, the Collection Account or any other account
or accounts maintained for the benefit of the Certificateholders or any
Enhancement Provider as provided in this Agreement and any Supplement
or (B) a grant of a security interest (as defined in the UCC as in
effect in the Relevant UCC State) in such property to the Trustee.
(v) If the Assignment constitutes the grant of a
security interest in such property to the Trustee, the Transferor shall
represent and warrant, as of the Additional Account Closing Date, that:
(A) the Assignment creates a valid
and continuing security interest (as defined in the UCC of the
Relevant UCC State) in such property in favor of the Trustee,
which security interest is prior to all other Liens, and is
enforceable as such against creditors of and purchasers from
the Transferor;
33
(B) the Receivables transferred by
the Transferor pursuant to the Assignment constitute
"accounts" within the meaning of the UCC of the Relevant UCC
State;
(C) the Transferor owns and has good
and marketable title to the property transferred under the
Assignment free and clear of any Lien, claim or encumbrance of
any Person (other than any Lien described in clause (x), (y)
or (z) of paragraph (iv) above);
(D) the Transferor has caused or will
have caused, within ten (10) days of the execution of the
Assignment, the filing of all appropriate financing statements
in the proper filing office in the appropriate jurisdictions
under applicable law in order to perfect the security interest
in the Receivables and the proceeds thereof granted to the
Trustee pursuant to the Assignment;
(E) other than the security interest
granted to the Trustee pursuant to this Agreement or an
Assignment, the Transferor has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of
the Receivables in the Additional Accounts or the proceeds
thereof;
(F) the Transferor has not authorized
the filing of and is not aware of any financing statements
filed against the Transferor that include a description of the
Receivables in the Additional Accounts other than any
financing statement relating to the security interest granted
to the Trustee pursuant to this Agreement or an Assignment or
any financing statement that has been terminated; and
(G) the Transferor is not aware of
any judgment or tax lien filings against the Transferor.
(vi) The Transferor shall deliver to the Trustee
(with a copy to the Rating Agencies) an Officer's Certificate
confirming the items set forth in paragraphs (ii) through (v) above and
paragraph (viii) below (and the Trustee may conclusively rely on such
Officer's Certificate, shall have no duty to make inquiries with regard
to the matters set forth therein and shall incur no liability in so
relying);
(vii) The Transferor shall deliver to the Trustee,
with a copy to each Rating Agency, an Opinion of Counsel with respect
to the Receivables in the Additional Accounts substantially in the form
of Part One of Exhibit H;
(viii) The Transferor shall record and file (and
does hereby authorize the Trustee to record and file) financing
statements with respect to the Receivables then existing and thereafter
created in the Additional Accounts for the transfer of accounts (as
defined in the UCC as in effect in the Relevant UCC State) meeting the
requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect the transfer and assignment
of the Receivables in the Additional Accounts by the Transferor to the
Trustee; and
34
(ix) The Rating Agencies shall have received from
the Transferor five Business Days' notice, in the case of Additional
Accounts being added pursuant to Section 2.6(a), and ten Business Days'
notice, in the case of Additional Accounts being added pursuant to
Section 2.6(b), of such proposed addition of Additional Accounts and,
in the event that Additional Accounts are being added pursuant to
Section 2.6(b), the Rating Agency Condition shall have been satisfied.
(d) The Transferor may, but shall not be obligated to,
designate from time to time additional MasterCard or VISA credit card accounts
(the "Automatic Additional Accounts") to be included as Accounts by causing such
Accounts (i) to be identified in the Bank's master computer files or other
appropriate books and records as accounts subject to this Agreement or (ii) to
be identified in a computer file or microfiche list delivered to the Trustee by
or on behalf of the Transferor pursuant to Section 2.1(b). For purposes of this
Section 2.6(d), Automatic Additional Accounts shall be deemed to include only
Eligible Accounts (x) of a type included as Accounts on the Assumption Date or
any Additional Account Closing Date (but only if such Additional Account Closing
Date related to Additional Accounts added pursuant to Section 2.6(b)) or
consented to in writing by each Rating Agency (it being understood that
non-consumer MasterCard or VISA credit card accounts and MasterCard or VISA
credit card accounts secured by assets or deposits held by the Transferor are
not of a type included as Accounts on the Assumption Date for purposes of this
Section 2.6(d)) and (y) not prohibited from being included as Accounts pursuant
to the terms of any Supplement. The Transferor shall provide to each Rating
Agency, on or before the fifth Business Day preceding the related Additional
Account Closing Date, written notice of any designation of Automatic Additional
Accounts pursuant to this Section 2.6(d).
If the number of Automatic Additional Accounts designated
during any calendar quarter or any period of twelve consecutive months exceeds
the applicable Aggregate Automatic Addition Limit, then, upon discovery of such
excess designation, (x) the Excess Automatic Additional Accounts shall be deemed
to be Removed Accounts and (y) the Trustee shall, without further action, be
deemed to transfer, assign, set-over and otherwise convey to the Transferor,
without recourse, representation or warranty, all right, title and interest of
the Trust in and to the Receivables in the Excess Automatic Additional Accounts,
all monies due or to become due and all amounts received with respect thereto
and all proceeds thereof. The Trustee shall execute such documents and
instruments of transfer or assignment as are prepared by the Transferor and take
such other actions as shall be reasonably requested by the Transferor to effect
the conveyance of such Receivables pursuant to this Section 2.6(d). If the
removal of Excess Automatic Additional Accounts causes the Transferor Amount to
be less than the Minimum Transferor Amount or the Aggregate Principal
Receivables to be less than the Minimum Aggregate Principal Receivables, then
the Transferor shall, no later than 10 Business Days after such removal,
designate Additional Accounts to be included as Accounts in accordance with
Section 2.6(a) in an amount such that, after giving effect to such designation,
the Transferor Amount at least equals the Minimum Transferor Amount and the
Aggregate Principal Receivables at least equals the Minimum Aggregate Principal
Receivables; provided, however, that the Transferor need not make any such
designation to the extent that such deficiencies have been eliminated on or
before such tenth Business Day through reductions in the Aggregate Invested
Amount or through increases in the amount on deposit in the Excess Funding
Account. The removal of Excess Automatic Additional Accounts in accordance with
this Section 2.6(d)
35
shall be deemed to cure any violation of the Aggregate Automatic Addition Limit,
and such removal shall constitute the sole remedy respecting any such violation
available to Certificateholders or the Trustee on behalf of Certificateholders.
The Transferor shall record and file (and does hereby
authorize the Trustee to record and file), at the expense of the Transferor,
financing statements (and continuation statements with respect to such financing
statements when applicable) with respect to the Receivables then existing and
thereafter created in the Automatic Additional Accounts for the transfer of
accounts (as defined in the UCC as in effect in the Relevant UCC State) meeting
the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect the transfer and assignment of such
Receivables by the Transferor to the Trustee, and to deliver a file-stamped copy
of such financing statements or other evidence of such filings to the Trustee.
Section 2.7 Removal of Accounts.
(a) Subject to the conditions set forth below, the
Transferor may, but shall not be obligated to, designate from time to time
Accounts for deletion and removal ("Removed Accounts") from the Accounts;
provided, however, that the Transferor shall not make more than one such
designation in any Collection Period; and, provided further, that the Transferor
shall select the Removed Accounts on a random basis. On or before the fifth
Business Day (the "Removal Notice Date") prior to the date on which the
designated Removed Accounts will be reassigned by the Trustee to the Transferor
(the "Removal Date"), the Transferor shall give the Trustee and the Servicer
written notice that the Receivables in such Removed Accounts are to be
reassigned to the Transferor.
(b) The Transferor shall be permitted to designate and
require reassignment to it of Receivables in Removed Accounts only upon
satisfaction of the following conditions:
(i) On or prior to the Removal Date, the
Transferor shall have delivered to the Trustee for execution a written
instrument of reassignment substantially in the form of Exhibit D (the
"Reassignment") and a computer file or microfiche list containing a
true and complete list of all Removed Accounts identified by account
number and by the aggregate balance of the Receivables in such Removed
Accounts as of the Removal Notice Date, which computer file or
microfiche list shall as of the Removal Date modify and amend and be
made a part of this Agreement;
(ii) The Transferor shall represent and warrant
that no selection procedures believed by the Transferor to be
materially adverse to the interests of any outstanding Series of
Investor Certificates or any Enhancement Provider were used in
selecting the Removed Accounts to be removed from the Trust;
(iii) The removal of any Receivables in any
Removed Accounts on any Removal Date shall not, in the reasonable
belief of the Transferor, (A) cause an Early Amortization Event, or an
event which, with notice or lapse of time or both, would constitute an
Early Amortization Event, to occur; provided, however, for the purpose
of this subsection 2.7(b)(iii), the Receivables of each Removed Account
shall be deemed to
36
have been removed as of the Removal Date, (B) cause the Transferor
Interest Percentage to be less than the Minimum Transferor Interest
Percentage on such Removal Date, (C) cause the aggregate amount of
Principal Receivables to be less than the Minimum Aggregate Principal
Receivables, or (D) result in the failure to make any payments
specified in the related Supplement with respect to any Series;
(iv) The Rating Agencies shall have received five
Business Days' notice from the Transferor of such proposed removal of
Accounts and the Rating Agency Condition shall have been satisfied; and
(v) The Transferor shall deliver to the Trustee
(with a copy to the Rating Agencies) an Officer's Certificate
confirming the items set forth in paragraphs (i) through (iv) above
(and the Trustee may conclusively rely on such Officer's Certificate,
shall have no duty to make inquiries with regard to the matters set
forth therein and shall incur no liability in so relying).
Upon satisfaction of the above conditions, the Trustee shall
execute and deliver the Reassignment to the Transferor, and the Receivables in
the Removed Accounts shall no longer constitute a part of the Trust.
(c) The Transferor may, but shall not be obligated to,
designate from time to time Zero Balance Accounts for deletion and removal from
the Accounts; provided, however, that, prior to such designation and removal,
the Transferor shall have delivered to each Rating Agency and the Trustee an
Officer's Certificate to the effect that the removal of the Receivables in the
Zero Balance Accounts shall not, in the reasonable belief of the Transferor,
cause an Early Amortization Event to occur. The Trustee may conclusively rely on
such Officer's Certificate, shall have no duty to make inquiries with regard to
the matters set forth therein and shall incur no liability in so relying. On or
before the date on which the designated Zero Balance Accounts are removed, the
Transferor shall deliver to the Trustee a computer file or microfiche list
containing a true and complete list of such Zero Balance Accounts identified by
account number, which computer file or microfiche list shall as of the removal
date modify and amend and be made a part of this Agreement. On the date on which
the designated Zero Balance Accounts are removed, the Trustee shall, without
further action, be deemed to transfer, assign, set-over and otherwise convey to
the Transferor, without recourse, representation or warranty, all right, title
and interest of the Trust in and to the Receivables in such Zero Balance
Accounts, all monies due or to become due and all amounts received thereafter
with respect thereto and all proceeds thereof. The Trustee shall execute such
documents and instruments of transfer or assignment as are prepared by the
Transferor and take such other actions as shall be reasonably requested by the
Transferor to effect the conveyance of such Receivables pursuant to this Section
2.7(c).
(d) The Transferor may, but shall not be obligated to,
designate from time to time Defaulted Accounts for deletion and removal from the
Accounts; provided, however, that each such designation must be approved in
writing by each Rating Agency or be made in accordance with the procedure
attached as Exhibit K. On or before the date on which the designated Defaulted
Accounts are removed, the Transferor shall deliver to the Trustee a computer
file or microfiche list containing a true and complete list of such Defaulted
Accounts identified by account number, which computer file or microfiche list
shall as of the removal date
37
modify and amend and be made a part of this Agreement. On the date on which the
designated Defaulted Accounts are removed, the Trustee shall, without further
action, be deemed to transfer, assign, set-over and otherwise convey to the
Transferor, without recourse, representation or warranty, all right, title and
interest of the Trust in and to the Receivables (including, without limitation,
all Finance Charge Receivables) in such Defaulted Accounts, all monies due or to
become due and all amounts received thereafter with respect thereto and all
proceeds thereof; provided, however, that all Recoveries with respect to such
Receivables shall be applied as provided herein. The Trustee shall execute such
documents and instruments of transfer or assignment as are prepared by the
Transferor and take such other actions as shall be reasonably requested by the
Transferor to effect the conveyance of such Receivables pursuant to this Section
2.7(d).
Section 2.8 Discount Option Receivables.
(a) The Transferor agrees that a specified percentage
(the "Discount Percentage") of the Receivables in the Accounts shall be treated
as Discount Option Receivables in accordance with the provisions of this Section
2.8. The Discount Percentage shall not apply to Finance Charges, cash advance
fees, annual fees, late charges, overlimit charges, returned check charges or
any other fees and charges on the Accounts (other than Insurance Charges) or to
Receivables in Defaulted Accounts. The Discount Percentage may be fixed or
variable.
(b) Discount Option Receivables shall be considered
Finance Charge Receivables for all purposes hereunder, including for the
purposes of allocating Collections pursuant to Article IV.
(c) The Discount Percentage as of the Initial Closing
Date shall be 2.0%. The Transferor may, without notice to or consent of the
Certificateholders, from time to time, increase, reduce or eliminate (in each
case subject to the limitations described below) the Discount Percentage for
Discount Option Receivables arising in all or certain of the Accounts on and
after the date of such change; provided, however, that the Transferor shall not
change any existing Discount Option Receivables into Principal Receivables and
the Transferor shall not increase the Discount Percentage during any Early
Amortization Period or if such increase would cause the Aggregate Principal
Receivables to be less than the Minimum Aggregate Principal Receivables.
(d) The Transferor shall provide to the Servicer, the
Trustee and each Rating Agency 30 days' prior written notice of any increase,
reduction or elimination of the Discount Percentage, and such increase,
reduction or elimination shall become effective on the date specified in such
notice only if (i) the Transferor has delivered to the Trustee an Officer's
Certificate to the effect that the Transferor reasonably believes that such
increase, reduction or elimination will not at the time of its occurrence cause
an Early Amortization Event or an event which with notice or the lapse of time
or both would constitute an Early Amortization Event to occur with respect to
any Series and (ii) if such designation would cause the Discount Percentage to
be less than 1.0% or more than 3.0%, the Rating Agency Condition has been
satisfied with respect to such increase, reduction or elimination. The Trustee
may conclusively rely on such Officer's Certificate, shall have no duty to make
inquiries with regard to the matters set forth therein and shall incur no
liability in so relying.
38
(e) On each Date of Processing of any Collections during
the time the discount option is in effect, Collections in an amount equal to the
product of (i) a fraction the numerator of which is the amount of Discount
Option Receivables and the denominator of which is the amount of all of the
Principal Receivables (including Discount Option Receivables) at the end of the
prior Collection Period and (ii) Collections of Receivables that arise in the
Accounts during such time that would otherwise be Principal Collections will be
deemed Finance Charge Collections and will be applied accordingly.
[END OF ARTICLE II]
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ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 3.1 Appointment and Other Matters Relating to the
Servicer.
(a) The Bank confirms that it has agreed to act as the
Servicer under this Agreement. The Investor Certificateholders, by their
acceptance of the Investor Certificates, consent to the Bank acting as Servicer.
(b) The Servicer shall service and administer the
Receivables and shall collect payments due under the Receivables in accordance
with its customary and usual servicing procedures for servicing credit card
receivables comparable to the Receivables and in accordance with the applicable
Account Guidelines and shall have full power and authority, acting alone or
through any party properly designated by it hereunder, to do any and all things
in connection with such servicing and administration which it may deem necessary
or desirable. Without limiting the generality of the foregoing and subject to
Section 10.1, the Servicer is hereby authorized and empowered (i) to make
withdrawals and payments and to instruct the Trustee to make withdrawals and
payments from the Collection Account, the Excess Funding Account or any other
account or accounts maintained for the benefit of the Certificateholders or with
regard to any Enhancement as set forth in this Agreement and any Supplement,
(ii) unless such power and authority is revoked by the Trustee on account of the
occurrence of a Servicer Default pursuant to Section 10.1, to instruct the
Trustee to take any action permitted or required under any Enhancement at such
time as is set forth in this Agreement or any Supplement, (iii) to execute and
deliver, on behalf of the Trust for the benefit of the Certificateholders, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Receivables and, after the delinquency of any Receivable and to the extent
permitted under and in compliance with applicable law and regulations, to
commence enforcement proceedings with respect to such Receivables and (iv) to
make any filings, reports, notices, applications, or registrations with, and to
seek any consents or authorizations from, the Securities and Exchange Commission
and any state securities laws authority on behalf of the Trust as may be
necessary or advisable to comply with any Federal or state securities laws or
reporting requirements. Prior to receipt by a Responsible Officer of the Trustee
of written notice of a Servicer Default the Trustee shall promptly follow the
written instructions of the Servicer to withdraw funds from the Collection
Account and any other account or accounts maintained for the benefit of the
Certificateholders or with regard to any Enhancement. The Trustee shall furnish
the Servicer with limited powers of attorney and other documents necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder, and the Trustee shall not be held responsible for any act or
omission by the Servicer in its use of such powers of attorney.
(c) In the event that the Transferor is unable for any
reason to transfer Receivables to the Trust in accordance with the provisions of
this Agreement (including, without limitation, by reason of the application of
the provisions of Section 9.2 or a binding order of any Governmental Authority),
then, in any such event, (A) the Servicer agrees (except as prohibited by any
such order) to allocate, after the date of such inability, all Collections of
Principal Receivables and Discount Option Receivables and all amounts which
would have constituted Collections of Principal Receivables and Discount Option
Receivables but for the Transferor's
40
inability to transfer such Receivables to the Trust (up to an aggregate amount
equal to the Aggregate Principal Receivables and the Discount Option Receivables
in the Trust as of such date) in accordance with Section 2.5(d) and to apply
such amounts as Collections in accordance with Article IV and (B) for only so
long as all Collections and all amounts which would have constituted Collections
are allocated and applied in accordance with clause (A) above, all Collections
of Principal Receivables and Discount Option Receivables and all amounts which
would have constituted Collections of Principal Receivables and Discount Option
Receivables but for the Transferor's inability to transfer Receivables to the
Trust which are charged off as uncollectible in accordance with this Agreement
and the Account Guidelines shall continue to be allocated in accordance with
Article IV and all amounts which would have constituted Collections of Principal
Receivables and Discount Option Receivables but for the Transferor's inability
to transfer Receivables to the Trust shall be deemed to be Collections of
Principal Receivables for the purpose of calculating the Invested Percentage
with respect to any Series and the Aggregate Invested Percentage. If the
Servicer is unable pursuant to any Requirement of Law to allocate amounts as
described above, the Servicer agrees (except as prohibited by law) to allocate,
after the date on which the Transferor becomes unable to do so, payments on each
Account with respect to the balance of such Account first to the oldest
Receivable in such Account and to have such payments applied as Collections in
accordance with Article IV. Finance Charge Receivables, whenever created,
accrued in respect of Principal Receivables or Discount Option Receivables which
have been conveyed to the Trust, or which would have been conveyed to the Trust
but for the Transferor's inability to transfer Receivables to the Trust, shall
continue to be a part of the Trust notwithstanding any cessation of the transfer
of additional Principal Receivables and Discount Option Receivables to the Trust
and Collections with respect thereto shall continue to be allocated and paid in
accordance with Article IV.
(d) The Servicer shall not be obligated to use separate
servicing procedures, offices, employees or accounts for servicing the
Receivables from the procedures, offices, employees and accounts used by the
Servicer in connection with servicing other revolving consumer credit card
receivables.
(e) The Servicer shall maintain fidelity bond coverage
insuring against losses through wrongdoing of its officers and employees who are
involved in the servicing of Receivables covering such actions with such
insurers and in such amounts as the Servicer believes to be commercially
reasonable from time to time.
(f) The Servicer shall comply with and perform its
obligations under the Account Agreements and the Account Guidelines except
insofar as any failure to so comply would not materially and adversely affect
the rights of the Trust or the Certificateholders hereunder or under the
Certificates.
Section 3.2 Servicing Compensation. As full compensation for
its servicing activities hereunder and reimbursement for its expenses as set
forth in the immediately following paragraph, the Servicer shall be entitled to
receive a monthly servicing fee with respect to any Collection Period (or
portion thereof) prior to the termination of the Trust pursuant to Section 12.1
(the "Monthly Servicing Fee") payable in arrears on each Distribution Date in an
amount equal to, with respect to each Series then outstanding, one-twelfth of
the product of the Servicing Fee Percentage for such Series and the sum of an
allocable portion of the Transferor Amount and
41
the Invested Amount of such Series, each as of the last day of the Collection
Period preceding the Collection Period with respect to which the Monthly
Servicing Fee is being paid. The share of the Monthly Servicing Fee allocable to
each Series of Investor Certificateholders with respect to any Distribution Date
(with respect to any such Series, the "Investor Monthly Servicing Fee") shall be
determined and paid to the Servicer in accordance with the related Supplement.
The remainder of the Monthly Servicing Fee shall be paid by the Transferor, and
in no event shall the Trust, the Trustee, any Enhancement Provider or the
Investor Certificateholders be liable for the share of the Monthly Servicing Fee
to be paid by the Transferor. The share of the Monthly Servicing Fee to be paid
by the Transferor shall not be paid from the Trust Property and shall be paid
only to the extent that the Transferor has funds available for that purpose. If
the Transferor does not have funds available to make such payment, the Servicer
shall not be entitled to assert a claim against the Transferor for the unpaid
amount. In the case of the first Collection Period, the Monthly Servicing Fee
and the Investor Monthly Servicing Fee shall accrue from the Initial Cut-Off
Date.
The Servicer's expenses include the amounts due to the Trustee
pursuant to Section 11.5 and the reasonable fees and disbursements of
independent accountants and all other expenses incurred by the Servicer in
connection with its activities hereunder; provided, however, that the Servicer
shall not be liable for any liabilities, costs or expenses of the Trust, the
Investor Certificateholders or the Certificate Owners arising under any tax law,
including, without limitation, any Federal, state or local income or franchise
taxes or any other tax imposed on or measured by income (or any interest or
penalties with respect thereto or arising from a failure to comply therewith),
except to the extent incurred as a result of the Servicer's violation of the
provisions of this Agreement. The Servicer shall be required to pay such
expenses for its own account and shall not be entitled to any payment therefor
other than the Monthly Servicing Fee.
Section 3.3 Representations, Warranties and Covenants of the
Servicer. The Bank, as Servicer, hereby represents, warrants and covenants to
the Trustee, on behalf of the Trust, as of the Assumption Date and, with respect
to any Series issued after the Assumption Date, as of the related Closing Date,
unless otherwise stated in the related Supplement (and any Successor Servicer by
its appointment hereunder shall represent, warrant and covenant to the Trustee,
on behalf of the Trust, as of the date of such appointment and, with respect to
any Series issued after such date, as of the related Closing Date, unless
otherwise stated in the related Supplement (with appropriate modifications to
Section 3.3(a) to reflect such Successor Servicer's organizational structure)),
that:
(a) Organization and Good Standing. The Servicer is a
national banking association duly organized, validly existing and in good
standing under the laws of the United States, and has full power, authority and
legal right to own its properties and conduct its business as such properties
are presently owned and such business is presently conducted and to execute,
deliver and perform its obligations under this Agreement and any Supplement.
(b) Due Qualification. The Servicer is duly qualified to
do business and is in good standing (or is exempt from such requirements) in any
state where such qualification is necessary in order to service the Receivables
as required by this Agreement and any Supplement and has obtained all necessary
licenses and approvals as required under Federal and state law, and if the
Servicer shall be required by any Requirement of Law to so qualify or register
or
42
obtain such license or approval, then it shall do so except where the failure to
obtain such license or approval does not materially affect the Servicer's
ability to perform its obligations hereunder or the enforceability of any
Receivable.
(c) Due Authorization. The execution, delivery and
performance of this Agreement and any Supplement by the Servicer and the
consummation by the Servicer of the transactions provided for in this Agreement
and any Supplement have been duly authorized by the Servicer by all necessary
action on the part of the Servicer.
(d) Binding Obligation. Each of this Agreement and any
Supplement constitutes a legal, valid and binding obligation of the Servicer,
enforceable against the Servicer in accordance with its terms, subject to
applicable bankruptcy, insolvency, receivership, conservatorship,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general and the rights of
creditors of national banking associations and except as such enforceability may
be limited by general principles of equity (whether considered in a proceeding
at law or in equity).
(e) No Violation. The execution and delivery of this
Agreement and any Supplement by the Servicer, the performance by the Servicer of
the transactions contemplated by this Agreement and any Supplement and the
fulfillment by the Servicer of the terms hereof and thereof, will not conflict
with, violate or result in any breach of any of the material terms and
provisions of, or constitute (with or without notice or lapse of time or both) a
default under, any Requirement of Law applicable to the Servicer or any material
indenture, contract, agreement, mortgage, deed of trust or other instrument to
which the Servicer is a party or by which it is bound.
(f) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of the Servicer, threatened
against the Servicer before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality seeking to prevent the issuance
of the Certificates or the consummation of any of the transactions contemplated
by this Agreement or any Supplement, seeking any determination or ruling that,
in the reasonable judgment of the Servicer, would materially and adversely
affect the performance by the Servicer of its obligations under this Agreement
or any Supplement, or seeking any determination or ruling that would materially
and adversely affect the validity or enforceability of this Agreement or any
Supplement.
(g) Compliance with Requirements of Law. The Servicer
shall duly satisfy in all material respects its obligations under or in
connection with each Receivable and the corresponding Account, will maintain in
effect all material qualifications required under all Requirements of Law in
order to service properly each Receivable and the corresponding Account and will
comply in all material respects with all other Requirements of Law in connection
with servicing each Receivable and the related Account the failure to comply
with which would have a material adverse effect on the Certificateholders
(without regard to the amount of any Enhancement).
(h) No Rescission or Cancellation. Except in connection
with an Adjustment Payment pursuant to Section 3.8, the Servicer shall not
permit any rescission or cancellation of
43
any Receivable except as ordered by a court of competent jurisdiction or other
Governmental Authority or in the ordinary course of its business and in
accordance with the applicable Account Guidelines.
(i) Protection of Certificateholders' Rights. The
Servicer shall take no action which, nor omit to take any action the omission of
which, would impair the rights of Certificateholders in any Receivable or the
rights of any Enhancement Provider, nor shall it reschedule, revise, waive or
defer payments due on any Receivable except in accordance with the applicable
Account Guidelines.
(j) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any Governmental Authority
required to be obtained on or prior to each date as of which this representation
is being made in connection with the execution and delivery by the Servicer of
this Agreement and any Supplement, the performance by the Servicer of the
transactions contemplated by this Agreement and any Supplement and the
fulfillment by the Servicer of the terms hereof and thereof, have been obtained;
provided, however, that no representation or warranty is made regarding state
securities or "Blue Sky" laws in connection with any distribution of the
Certificates.
(k) Receivables Not to be Evidenced by Instruments or
Chattel Paper. Except in connection with its enforcement or collection of an
Account, the Servicer will take no action to cause any Receivable to be
evidenced by an instrument or chattel paper (each as defined in the UCC as in
effect in the Relevant UCC State).
In the event of a breach of any of the covenants set forth in
Section 3.3(g), (h), (i) or (k) with respect to a Receivable, and such breach
has a material adverse effect on the Certificateholders' interest in such
Receivable (without regard to the amount of any Enhancement) then, upon the
expiration of 60 days or any longer period agreed upon by the Trustee (not to
exceed an additional 120 days) from the earlier to occur of the discovery of any
such event by the Servicer or receipt by the Servicer of written notice of any
such event given by the Trustee, unless such breach has been cured, each such
Receivable or, at the option of the Transferor, all such Receivables with
respect to the related Account, shall be assigned and transferred to the
Servicer upon the deposit by the Servicer into the Collection Account in
immediately available funds prior to the next succeeding Distribution Date of an
amount equal to the amount of each such Receivable at the end of the Collection
Period preceding such Distribution Date, plus the amount of finance charges at
the monthly periodic rate applicable to such Receivable from the last date
billed through the end of such Collection Period to the extent not included in
the amount of such Receivable. Any such deposit into the Collection Account in
connection with any such assignment of a Receivable shall be considered a
payment in full of such Receivable and such deposit shall be applied in
accordance with the provisions of Article IV. Upon the assignment to the
Servicer of such a Receivable, the Trust shall, without further action, be
deemed to transfer, assign, set-over and otherwise convey to the Servicer,
without recourse, representation or warranty, all the right, title and interest
of the Trust in and to such Receivable, all monies due or to become due and all
amounts received thereafter with respect thereto and all proceeds thereof. The
Trustee shall execute such documents and instruments of transfer or assignment,
in each case without recourse, representation or warranty, and take such other
actions as shall reasonably be requested by the Servicer to effect the
conveyance of such
44
Receivable pursuant to this subsection. The obligation of the Servicer set forth
in this Section 3.3 shall constitute the sole remedy respecting any breach by
the Servicer of the representations and warranties set forth in the
above-referenced subsections with respect to such Receivable available to
Certificateholders or the Trustee on behalf of Certificateholders.
Notwithstanding any other provision of this Section 3.3, no assignment of a
Receivable to the Servicer pursuant to this Section 3.3 shall occur if the
Servicer fails to make the deposit required by this Section 3.3 with respect to
such Receivable.
Section 3.4 Reports and Records for the Trustee.
(a) Initial Report. On the Closing Date with respect to
each Series, the Servicer shall prepare and deliver, as provided in Section
13.5, to the Trustee and the Rating Agencies, an Officer's Certificate
substantially in the form of Exhibit E setting forth the Aggregate Principal
Receivables, the Transferor Amount and the Transferor Interest Percentage as of
the end of the day two Business Days preceding the Closing Date and the expected
Transferor Interest Percentage after giving effect to the issuance of such
Series.
(b) Daily Reports. For so long as deposits of Collections
are required to be made daily by the Servicer pursuant to Section 4.1(e), on
each Business Day commencing on the Initial Closing Date, the Servicer shall
prepare, and make available for inspection by the Trustee, and maintain at the
office of the Servicer a record setting forth the aggregate amount of
Collections processed by the Servicer on the second preceding Business Day. The
Servicer shall prepare such other reports on a daily (or less frequent) basis as
may be required by any Supplement.
(c) Monthly Servicer's Certificate. On each Determination
Date, the Servicer shall deliver, as provided in Section 13.5, to the Trustee,
the Paying Agent and the Rating Agencies, an Officer's Certificate signed by a
Servicing Officer substantially in the form of Exhibit F (which certificate
shall attach for each Series the monthly statement to be delivered to
Certificateholders on the following Distribution Date pursuant to the related
Supplement) setting forth the following information (which, in the case of
clauses (iii), (iv) and (v) below, will be stated on the basis of an original
principal amount of $1,000 per Certificate): (i) the aggregate amount of
Collections processed for the immediately preceding Collection Period and the
aggregate amount of Collections of Finance Charge Receivables and the aggregate
amount of Collections of Principal Receivables processed during such Collection
Period; (ii) the Invested Percentage with respect to the immediately preceding
Collection Period of each Series of Certificates with respect to Collections of
Principal Receivables and the Invested Percentage with respect to such
Collection Period of each Series of Certificates with respect to Collections of
Finance Charge Receivables and Defaulted Receivables; (iii) for each Series and
for each Class within any such Series, the total amount to be distributed to
Investor Certificateholders on the next succeeding Distribution Date, if
applicable; (iv) for each Series and for each Class within any such Series, the
amount of such distribution allocable to principal, if applicable; (v) for each
Series and for each Class within any such Series, the amount of such
distribution allocable to interest, if applicable; (vi) the aggregate
outstanding balance of the Accounts which were delinquent by 31 to 60, 61 to 90
and 91 or more days as of the close of business on the last day of the
immediately preceding Collection Period; (vii) for each Series and for each
Class within any such Series, the Investor Default Amount for the related
Distribution Date; (viii) for
45
each Series and for each Class within any such Series, the amount of the
Investor Charge Offs and the amount of the reimbursements of Investor Charge
Offs for the next succeeding Distribution Date; (ix) for each Series, the
Investor Monthly Servicing Fee for the next succeeding Distribution Date; (x)
for each Series, the existing deficit controlled amortization amount or deficit
controlled accumulation amount, if applicable; (xi) the aggregate amount of
Receivables in the Trust at the close of business on the last day of the
immediately preceding Collection Period; (xii) for each Series, the Invested
Amount at the close of business on the last day of the immediately preceding
Collection Period; (xiii) the available amount of any Enhancement for each
Series; and (xiv) whether an Early Amortization Event with respect to any Series
shall have occurred during or with respect to the immediately preceding
Collection Period. The Trustee shall be under no duty to recalculate, verify or
recompute the information supplied to it under this Section 3.4.
Section 3.5 Annual Servicer's Certificate. The Servicer shall
deliver, as provided in Section 13.5, to the Trustee and the Rating Agencies, on
or before June 30 of each year, beginning with June 30, 2002, an Officer's
Certificate signed by a Servicing Officer and substantially in the form of
Exhibit G (a) stating that a review of the activities of the Servicer during the
preceding Fiscal Year and of its performance under this Agreement was made under
the supervision of the officer signing such certificate and (b) stating that to
the best of such officer's knowledge, based on such review, either there has
occurred no event which, with the giving of notice or passage of time or both,
would constitute a Servicer Default and the Servicer has fully performed all its
obligations under this Agreement throughout such year or, if there has occurred
such an event, specifying each such event known to such officer and the nature
and status thereof. A copy of such Officer's Certificate may be obtained by any
Investor Certificateholder or Certificate Owner by a request in writing to the
Trustee addressed to the Corporate Trust Office.
Section 3.6 Annual Independent Public Accountants' Servicing
Report.
(a) On or before June 30 of each year, beginning with
June 30, 2002, the Servicer shall cause a firm of nationally recognized
independent public accountants (who may also render other services to the
Servicer or the Transferor) to furnish, as provided in Section 13.5, a report
prepared in accordance with standards established by the American Institute of
Certified Public Accountants and, accordingly, including such procedures as they
considered necessary in the circumstances, to the Trustee, the Rating Agencies
and, as required, any Enhancement Provider to the effect that, in their opinion,
the monthly Servicer's Certificates issued during the period covered by the
report (which shall be the preceding Fiscal Year) are, in all material respects,
in conformity with the terms and conditions set forth in Section 3.4(c). Such
procedures will include comparisons of the mathematical calculations of each
amount set forth in the monthly Servicer's Certificates forwarded by the
Servicer pursuant to Section 3.4(c) during the period covered by such report
with the Servicer's computer reports that were the source of such amounts, and
such report shall state that, on the basis of such comparison, such accountants
are of the opinion that such amounts are in agreement, except for such
exceptions as they believe to be immaterial and such other exceptions as shall
be set forth in such report. A copy of such report may be obtained by any
Investor Certificateholder or Certificate Owner by a request in writing to the
Trustee addressed to the Corporate Trust Office.
46
(b) On or before June 30 of each year, beginning with
June 30, 2002, the Servicer shall cause a firm of nationally recognized
independent public accountants (who may also render other services to the
Servicer or the Transferor) to furnish, as provided in Section 13.5, a report to
the Trustee, the Rating Agencies and, as required, any Enhancement Provider to
the effect that in connection with their examination of the monthly Servicer's
Certificates, nothing came to their attention that caused them to believe that
the Servicer failed to comply with the terms and conditions set forth in
Sections 3.2, 3.4(c), 4.1 and 8.8 of this Agreement.
(c) On or before June 30 of each year, beginning with
June 30, 2002, the Servicer shall cause a firm of nationally recognized
independent public accountants (who may also render other services to the
Servicer or the Transferor) to furnish, as provided in Section 13.5, a report to
the Trustee to the effect that such firm has applied certain procedures agreed
upon with the Servicer to certain documents and records relating to the
administration and servicing of Accounts under this Agreement and any Supplement
during the preceding fiscal year, and has reported on the findings.
Section 3.7 Tax Treatment. The Transferor has structured this
Agreement and the Investor Certificates (other than any Investor Certificates
held by the Transferor) with the intention that such Investor Certificates will
qualify under applicable tax law as indebtedness of the Transferor or, if
specified in the applicable Supplement, an interest in a partnership (and not as
an association or publicly traded partnership taxable as a corporation for
purposes of federal income tax law), and the Transferor, any entity acquiring
any direct or indirect interest in the Exchangeable Transferor Certificate, each
Investor Certificateholder (or Certificate Owner) by acceptance of its
Certificate (or, in the case of a Certificate Owner, by virtue of such
Certificate Owner's acquisition of a beneficial interest therein) and each
holder of an interest in any Enhancement Invested Amount by its acceptance
thereof agree, and shall be deemed to agree, to treat such Investor Certificates
(or beneficial interest therein) or Enhancement Invested Amount for purposes of
Federal, state and local income or franchise taxes and any other tax imposed on
or measured by income, as indebtedness or, if specified in the applicable
Supplement, an interest in a partnership. Each Certificateholder agrees that it
will cause any Certificate Owner acquiring an interest in a Certificate through
it to comply with this Agreement as to treatment as indebtedness or, if
specified in the applicable Supplement, an interest in a partnership, for
certain tax purposes. Consistent with the foregoing, the Trustee shall not file
a Federal income tax return on behalf of the Trust or apply for a taxpayer
identification number on behalf of the Trust unless required to do so as a
result of a determination by the Internal Revenue Service or pursuant to the
terms of any Supplement.
Section 3.8 Adjustments.
(a) If the Transferor or the Servicer adjusts downward
the amount of any Principal Receivable because of a rebate, refund, unauthorized
charge or billing error to an Obligor, or because such Receivable was created in
respect of goods or services which were refused, returned or not received by an
Obligor, or if the Transferor or the Servicer otherwise adjusts downward the
amount of any Principal Receivable without receiving Collections therefor or
without charging off such amount as uncollectible, then, in any such case, the
Servicer shall deduct from the Aggregate Principal Receivables and decrease the
Transferor Amount by the amount of such adjustment. Similarly, the amount of the
Aggregate Principal Receivables and
47
the Transferor Amount will be reduced by the amount of any Principal Receivable
which was discovered as having been created through a fraudulent or counterfeit
charge or with respect to which the covenant contained in Section 2.5(b) was
breached. Any adjustment required pursuant to either of the two preceding
sentences shall be made on or prior to the end of the Collection Period in which
such adjustment obligation arises. In the event that, following any such
exclusion, the Transferor Amount would be less than the Minimum Transferor
Amount, within two Business Days of the date on which such adjustment obligation
arises, the Transferor shall pay to the Servicer for deposit into the Excess
Funding Account, in immediately available funds, an amount equal to the amount
by which the Transferor Amount would be reduced below the Minimum Transferor
Amount. Any amount deposited into the Excess Funding Account pursuant to the
immediately preceding sentence (an "Adjustment Payment") shall be applied in
accordance with Article IV and the terms of each Supplement. If the Transferor
fails to make any required Adjustment Payment and, as a result of such failure,
the Transferor Amount is less than zero as of the last day of any Collection
Period, the amount of such deficiency (the "Adjustment Amount") shall, to the
extent such Adjustment Amount is not otherwise reduced, be allocated among all
then outstanding Series. An Adjustment Amount shall be reduced to the extent
that amounts are deposited in the Excess Funding Account, the Aggregate
Principal Receivables increase, the Aggregate Invested Amount is reduced (other
than as a result of the allocation of an Adjustment Amount) or the Transferor
subsequently makes a required Adjustment Payment. In the event that the Servicer
adjusts upwards the principal amount of any Receivable, the Aggregate Principal
Receivables shall be increased by the amount of such upward adjustment.
(b) If (i) the Servicer makes a deposit into the
Collection Account in respect of a Collection of a Receivable and such
Collection was received by the Servicer in the form of a check which is not
honored for any reason or (ii) the Servicer makes a mistake with respect to the
amount of any Collection and deposits an amount that is less than or more than
the actual amount of such Collection, the Servicer shall appropriately adjust
the amount subsequently deposited into the Collection Account to reflect such
dishonored check or mistake. Any Receivable in respect of which a dishonored
check is received shall be deemed not to have been paid. Notwithstanding the
first two sentences of this paragraph, no adjustments shall be made pursuant to
this paragraph that will change any amount of Collections previously reported
pursuant to Section 3.4(c).
(c) In the event that the Transferor shall fail to pay to
the Servicer for deposit into the Excess Funding Account any amount required to
be so paid pursuant to Section 3.8(a), and shall not have subsequently paid such
amount, no Collections of Principal Receivables allocable to the Investor
Certificates shall be distributed or otherwise released to the Transferor
hereunder, but shall instead be deposited in the Excess Funding Account for so
long as any Series Adjustment Amount shall exist. In addition, in the event that
the Transferor shall repurchase the Receivables or the Certificates of any
Series, including pursuant to Section 10.2 or Article XII, the purchase price
with respect to any Series shall include the Series Adjustment Amount of such
Series, if any.
Section 3.9 Reports to the Commission. The Servicer shall, on
behalf of the Trust, cause to be filed with the Securities and Exchange
Commission any periodic reports required to be filed under the provisions of the
Securities Exchange Act of 1934, as amended,
48
and the rules and regulations of the Securities and Exchange Commission
thereunder. The Transferor shall, at the expense of the Servicer, cooperate in
any reasonable request of the Servicer in connection with such filings.
[END OF ARTICLE III]
49
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
Section 4.1 Establishment of Collection Account and
Allocations with Respect to the Exchangeable Transferor Certificate.
(a) The Collection Account. The Trustee, for the benefit
of the Certificateholders, shall establish and maintain or cause to be
established and maintained in the name of the Trustee, on behalf of the Trust,
with an Eligible Institution a segregated trust account (the "Collection
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Investor Certificateholders. The Trustee
shall possess all right, title and interest in all funds on deposit from time to
time in the Collection Account and in all proceeds thereof. The Collection
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Investor Certificateholders. If, at any time, the institution
holding the Collection Account ceases to be an Eligible Institution, the Trustee
(or the Servicer on its behalf) shall within ten Business Days establish a new
Collection Account meeting the conditions specified above with an Eligible
Institution and shall transfer any cash and/or any investments to such new
Collection Account, and from the date such new Collection Account is
established, it shall be the "Collection Account." Pursuant to the authority
granted to the Servicer in Section 3.1(b), the Servicer shall have the power,
revocable by the Trustee, to make withdrawals and payments from the Collection
Account and to instruct the Trustee to make withdrawals and payments from the
Collection Account for the purposes of carrying out the Servicer's or the
Trustee's duties hereunder.
Each Series shall represent undivided interests in the Trust,
including the benefits of any Enhancement to be provided with respect to such
Series as indicated in the Supplement relating to such Series and the right to
receive Collections and other amounts at the times and in the amounts specified
in this Article IV to be deposited in the Collection Account and any other
accounts maintained for the benefit of the Certificateholders or to be paid to
the Investor Certificateholders of such Series. The Exchangeable Transferor
Certificate shall represent the interest in the Trust not represented by any
Series then outstanding, including the right to receive Collections and other
amounts at the times and in the amounts specified in this Article IV to be paid
to the Transferor (the "Transferor Interest"); provided, however, that the
Exchangeable Transferor Certificate shall not represent any interest in the
Collection Account or any other accounts maintained for the benefit of the
Certificateholders or the benefits of any Enhancement to be provided by an
Enhancement Provider issued with respect to any Series, except as specifically
provided in this Article IV. The Certificates do not represent obligations of,
or any interest in, the Transferor, the Servicer or any Affiliate thereof, and
neither the Certificates nor the Accounts or the Receivables are insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency. The Certificates are limited in right of payment to certain
Collections respecting the Receivables and the other assets of the Trust
allocable to such Certificates as provided herein and in the applicable
Supplement.
(b) Administration of the Collection Account. At the
written direction of the Servicer, funds on deposit in the Collection Account to
be invested shall be invested by the Trustee in Eligible Investments selected by
the Servicer. In the absence of written direction of
50
the Servicer, funds on deposit in the Collection Account shall be invested in
money market funds as specified in clause (v) of the definition of Eligible
Investments. All such Eligible Investments shall be held by the Trustee for the
benefit of the Investor Certificateholders. Investments of funds representing
Collections collected during any Collection Period shall be invested in Eligible
Investments that will mature so that such funds will be available by the close
of business on the Transfer Date next succeeding such Collection Period. Any
funds on deposit in the Collection Account to be so invested shall be invested
solely in Eligible Investments. All Eligible Investments shall be held to
maturity. The Trustee shall maintain possession of the negotiable instruments or
securities, if any, evidencing such Eligible Investments. On each Distribution
Date, all interest and other investment earnings (net of losses and investment
expenses) on funds on deposit in the Collection Account shall be paid to the
Holder of the Exchangeable Transferor Certificate. The Transferor, at its
option, may direct the Servicer's investment of funds pursuant to this Section
4.1(b).
(c) Allocations For the Exchangeable Transferor
Certificate. Throughout the existence of the Trust, the Servicer shall allocate
to the Holder of the Exchangeable Transferor Certificate an amount equal to the
product of (i) the Transferor Percentage and (ii) the aggregate amount of
Collections allocated to Principal Receivables and Finance Charge Receivables,
respectively, in respect of each Collection Period. Notwithstanding anything to
the contrary in Section 4.1, unless specified in any Supplement, the Servicer
need not deposit this amount, or any other amounts so allocated to the
Exchangeable Transferor Certificate pursuant to any Supplement, into the
Collection Account and shall pay such amounts as collected to the Holder of the
Exchangeable Transferor Certificate.
(d) Allocation of Collections Between Collections of
Principal Receivables and Collections of Finance Charge Receivables. The
Servicer shall allocate Collections processed with respect to any Account to
Finance Charge Receivables to the extent of outstanding Finance Charge
Receivables with respect to such Account. The balance of Collections processed
with respect to such Account shall be allocated to Principal Receivables.
(e) Collections. The Servicer will apply all Collections
with respect to the Receivables for each Collection Period as described in this
Article IV and each Supplement. Except as otherwise provided below, the Servicer
shall deposit all Collections into the Collection Account no later than the
second Business Day following the Date of Processing of such Collections.
Subject to the express terms of any Supplement, but notwithstanding anything
else in this Agreement to the contrary, for so long as, and only so long as, the
Bank or an Affiliate of the Bank shall be the Servicer hereunder and (i) the
Bank or such Affiliate shall maintain a short-term debt rating (which may be an
implied rating) of at least P-1 by Moody's and A-1 by Standard & Poor's, or (ii)
the Bank or such Affiliate shall obtain and maintain in force a letter of credit
or other surety covering collection risk of the Servicer approved in writing by
each Rating Agency and the holders of 66-2/3% of the Invested Amount of each
Class of Investor Certificates of any then outstanding Series which is not
assigned a rating by any Rating Agency (it being understood that any such letter
of credit must include, without limitation, provisions acceptable to each Rating
Agency and such holders addressing the downgrade or withdrawal of any required
debt rating maintained by the issuer of such letter of credit), or (iii)(A) the
Bank shall obtain the consent of the holders of 66-2/3% of the Invested Amount
of each Class of Investor Certificates of any then outstanding Series which is
not assigned a rating by any Rating
51
Agency and such consent shall not have been withdrawn in accordance with the
terms of the related Supplement and (B) the Rating Agency Condition has been
satisfied with respect to the Servicer's inability to satisfy the rating
requirement specified in clause (i), and for two Business Days following any
reduction of either such rating or failure to satisfy the conditions of clause
(ii), the Servicer need not deposit Collections into the Collection Account or
make payments to the holder of the Exchangeable Transferor Certificate prior to
the close of business on the second Business Day following the Date of
Processing, but rather may make a single deposit in the Collection Account in
immediately available funds on the Business Day prior to each Distribution Date
in an amount equal to the Collections with respect to the Collection Period
preceding such Distribution Date to the extent such amounts and Collections are
allocated to one or more Series in accordance with Article IV. Collections shall
not be required to be invested in Eligible Investments until such time as they
are deposited into the Collection Account. The Servicer shall promptly notify
the Trustee of any downgrade or withdrawal of its short-term credit or
certificate of deposit rating or, if an Affiliate of the Bank is acting as
Servicer hereunder, of any such downgrade or withdrawal with respect to such
Affiliate.
If the Servicer is required to make daily deposits of
Collections into the Collection Account pursuant to this subsection, the
Servicer may, prior to the occurrence of an Early Amortization Event and subject
to the provisions of the applicable Supplement, cease depositing Collections of
Finance Charge Receivables received during any Collection Period and allocable
to a Series at such time as the amount of Collections of Finance Charge
Receivables allocable to such Series and deposited into the Collection Account
equals the sum of (i) the amount of interest scheduled to be paid on the next
succeeding Distribution Date with respect to such Series, (ii) if the Bank is no
longer the Servicer, the Investor Monthly Servicing Fee scheduled to be paid on
such Distribution Date with respect to such Series and (iii) the Pro Forma
Investor Default Amount for such Distribution Date with respect to such Series.
Collections of Finance Charge Receivables allocable to such Series in excess of
such amount shall be distributed on a daily basis as they are collected to the
Transferor.
If the Servicer is required to make daily deposits of
Collections into the Collection Account pursuant to this subsection, the
Servicer may, during any Amortization Period and subject to the provisions of
the applicable Supplement, cease depositing Collections of Principal Receivables
received during any Collection Period and allocable to a Series at such time as
the amount of Collections of Principal Receivables allocable to such Series and
deposited into the Collection Account equals the amount of principal scheduled
or permitted to be paid on the next succeeding Distribution Date with respect to
such Series. Collections of Principal Receivables allocable to such Series in
excess of such amount shall be distributed on a daily basis as they are
collected to the Transferor.
(f) Excess Funding Account. The Trustee, for the benefit
of the Certificateholders, shall establish and maintain or cause to be
established and maintained in the name of the Trustee, on behalf of the Trust,
with an Eligible Institution a segregated trust account (the "Excess Funding
Account"), which may be a subaccount of the Collection Account, bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Investor Certificateholders. The Trustee shall possess all right,
title and interest in all funds on deposit from time to time in the Excess
Funding Account and in all proceeds thereof. The Excess Funding Account shall be
under the sole dominion and control of the Trustee for the
52
benefit of the Investor Certificateholders. If, at any time, the institution
holding the Excess Funding Account ceases to be an Eligible Institution, the
Trustee (or the Servicer on its behalf) shall within five Business Days
establish a new Excess Funding Account meeting the conditions specified above
with an Eligible Institution and shall transfer any cash and/or any investments
to such new Excess Funding Account, and from the date such new Excess Funding
Account is established, it shall be the "Excess Funding Account." Pursuant to
the authority granted to the Servicer in Section 3.1(b), the Servicer shall have
the power, revocable by the Trustee, to make withdrawals and payments from the
Excess Funding Account and to instruct the Trustee to make withdrawals and
payments from the Excess Funding Account for the purposes of carrying out the
Servicer's or the Trustee's duties hereunder.
At the written direction of the Servicer, funds on deposit in
the Excess Funding Account to be invested shall be invested by the Trustee in
Eligible Investments selected by the Servicer. In the absence of written
direction of the Servicer, funds on deposit in the Excess Funding Account shall
be invested in money market funds as specified in clause (v) of the definition
of Eligible Investments. All such Eligible Investments shall be held by the
Trustee for the benefit of the Investor Certificateholders. The Trustee shall
maintain for the benefit of the Investor Certificateholders possession of the
negotiable instruments or securities, if any, evidencing such Eligible
Investments. Funds on deposit in the Excess Funding Account on any date (after
giving effect to any withdrawals from the Excess Funding Account on such date)
will be invested in Eligible Investments that will mature so that funds will be
available at the close of business on the next Business Day following such date.
On each Determination Date, the Servicer shall instruct the Trustee to withdraw
on the next succeeding Distribution Date from the Excess Funding Account and
deposit in the Collection Account all interest and other investment earnings
(net of losses and investment expenses) on funds on deposit in the Excess
Funding Account, for application as Collections of Finance Charge Receivables
with respect to the prior Collection Period. Interest (including reinvested
interest) and other investment income and earnings on funds on deposit in the
Excess Funding Account shall not be considered part of the Excess Funding Amount
for purposes of this Agreement. On each Business Day, the Servicer shall
determine the Transferor Amount, the Minimum Transferor Amount, the Aggregate
Principal Receivables and the Minimum Aggregate Principal Receivables. If, on
any Business Day, the Transferor Amount exceeds the Minimum Transferor Amount
and the Aggregate Principal Receivables exceeds the Minimum Aggregate Principal
Receivables, the Servicer shall instruct the Trustee in writing to withdraw an
amount equal to the lesser of such excess amounts (but not to exceed the Excess
Funding Amount) from the Excess Funding Account on such day and pay such amount
to the Holder of the Exchangeable Transferor Certificate. If, on any Business
Day, the Minimum Transferor Amount exceeds the Transferor Amount or the Minimum
Aggregate Principal Receivables exceeds the Aggregate Principal Receivables, the
Servicer shall deposit Collections of Principal Receivables that would otherwise
be distributed to the Transferor on such day into the Excess Funding Account on
such day in an amount equal to the greater of such excess amounts. On each
Determination Date on which one or more Series is in an Amortization Period, the
Servicer shall determine the aggregate amount of Principal Shortfalls, if any,
with respect to each such Series that is a Principal Sharing Series (after
giving effect to the allocation and payment provisions in the Supplement with
respect to each such Series on the next succeeding Distribution Date), and the
Servicer shall instruct the Trustee to withdraw such amount (up to the Excess
Funding Amount) from the Excess Funding Account on
53
the next succeeding Distribution Date and allocate such amount among each such
Series as Shared Principal Collections as specified in each related Supplement.
(g) Shared Principal Collections. On each Distribution
Date, (i) the Servicer shall allocate Shared Principal Collections to each
Principal Sharing Series in a Group, pro rata, in proportion to the Principal
Shortfalls, if any, with respect to each such Series and (ii) the Servicer shall
withdraw (or shall instruct the Trustee to withdraw) from the Collection Account
or the Excess Funding Account and pay to the Holder of the Exchangeable
Transferor Certificate (A) an amount equal to the excess, if any, of (x) the
aggregate amount of Shared Principal Collections for all such Series for such
Distribution Date over (y) the aggregate amount of Principal Shortfalls for all
such Series for such Distribution Date and (B) the aggregate amount for all
outstanding Series of that portion of Collections which the related Supplements
specify are to be allocated and paid to the Transferor with respect to such
Distribution Date; provided, however, that such amounts shall be paid to the
Holder of the Exchangeable Transferor Certificate only to the extent that the
Transferor Amount for such Distribution Date (determined after giving effect to
any Principal Receivables transferred to the Trust on such date) exceeds the
Minimum Transferor Amount; and, provided further, that, if on any Distribution
Date the Transferor Amount is less than or equal to the Minimum Transferor
Amount, the Servicer will not distribute to the Holder of the Exchangeable
Transferor Certificate any Shared Principal Collections then on deposit in the
Collection Account that otherwise would be distributed to such Holder, but shall
deposit such funds in the Excess Funding Account.
(h) Shared Excess Finance Charge Collection. On each
Distribution Date, (i) the Servicer shall allocate Shared Excess Finance Charge
Collections with respect to the Series in a Group to each Series in such Group,
pro rata, in proportion to the Finance Charge Shortfalls, if any, with respect
to each such Series and (ii) the Servicer shall withdraw (or shall instruct the
Trustee to withdraw) from the Collection Account and pay to the Holder of the
Exchangeable Transferor Certificate an amount equal to the excess, if any, of
(x) the aggregate amount of Shared Excess Finance Charge Collections for all
such Series for such Distribution Date over (y) the aggregate amount of Finance
Charge Shortfalls for all such Series for such Distribution Date to the extent
any Shared Excess Finance Charge Collections are held on deposit in the
Collection Account.
(i) Net Deposits. For so long as the Bank or an Affiliate
of the Bank shall be the Servicer hereunder and a Servicer Default shall not
have occurred and be continuing, the Servicer may make deposits into the
Collection Account or the Excess Funding Account on any date net of amounts
payable as of such date to the Transferor or the Servicer from amounts on
deposit in the Collection Account or the Excess Funding Account and may make
deposits into the Collection Account on each Transfer Date net of amounts
payable on the following Distribution Date to the Transferor or the Servicer
from amounts on deposit in the Collection Account, it being understood that the
Investor Monthly Servicing Fee with respect to any Series shall be payable to
the Servicer only in accordance with the provisions specified in the related
Supplement and that the foregoing shall in no event increase the amount payable
to the Transferor or the Servicer hereunder or pursuant to any Supplement.
54
[THE REMAINDER OF ARTICLE IV IS RESERVED
AND MAY BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
55
ARTICLE V
[ARTICLE V IS RESERVED AND MAY BE SPECIFIED IN
ANY SUPPLEMENT WITH RESPECT TO ANY SERIES]
56
ARTICLE VI
THE CERTIFICATES
Section 6.1 The Certificates. Subject to Sections 6.10 and
6.11, the Investor Certificates of any Series or Class may be issued in bearer
form (the "Bearer Certificates") with attached interest coupons and a special
coupon (collectively, the "Coupons") or in fully registered form (the
"Registered Certificates"), and shall be substantially in the form of the
exhibits with respect thereto attached to the applicable Supplement. The
Exchangeable Transferor Certificate shall be substantially in the form of
Exhibit B. The Investor Certificates and the Exchangeable Transferor Certificate
shall, upon issue pursuant hereto or to Section 6.9 or Section 6.11, be executed
and delivered by the Transferor (or the Trustee on behalf of the Trust, if
specified in the applicable Supplement) to the Trustee for authentication and
redelivery as provided in Section 6.2. Any Investor Certificates shall be issued
in minimum denominations of $1,000 and in integral multiples of $1,000 in excess
thereof, unless otherwise specified in any Supplement. If specified in the
related Supplement for any Series, the Investor Certificates shall be issued
upon initial issuance as a single certificate in an original principal amount
equal to the Initial Invested Amount as described in Section 6.10. The
Exchangeable Transferor Certificate may also be issued in two or more
certificates. Each Certificate executed by the Transferor shall be executed by
manual or facsimile signature on behalf of the Transferor by its President, any
Senior Vice President or any Vice President. Certificates bearing the manual or
facsimile signature of the individual who was, at the time when such signature
was affixed, authorized to sign on behalf of the Transferor or the Trustee shall
not be rendered invalid, notwithstanding that such individual has ceased to be
so authorized prior to the authentication and delivery of such Certificates or
does not hold such office at the date of such Certificates. Unless otherwise
provided in the related Supplement, no Certificate shall be entitled to any
benefit under this Agreement or any applicable Supplement, or be valid for any
purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by or on
behalf of the Trustee by the manual signature of a duly authorized signatory,
and such certificate upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication,
except that Bearer Certificates shall be dated the date of their issuance.
Section 6.2 Authentication of Certificates. Upon an Exchange
as provided in Section 6.9 and the satisfaction of the conditions specified
therein, the Trustee shall authenticate and deliver the Investor Certificates of
each additional Series (with the designation provided in the applicable
Supplement), upon the order of the Transferor, to the Persons designated in such
Supplement and shall authenticate and deliver to the Transferor a new
Exchangeable Transferor Certificate. Upon the order of the Transferor, the
Certificates of any Series shall be duly authenticated by or on behalf of the
Trustee, in authorized denominations equal to (in the aggregate) the Initial
Invested Amount of such Series of Investor Certificates. If specified in the
related Supplement for any Series, the Trustee shall authenticate and deliver
outside the United States the Global Certificate that is issued upon original
issuance thereof, upon the written order of the Transferor, to the Common
Depositary as provided in Section 6.10 against payment of the purchase price
therefor. If specified in the related Supplement for any Series, the Trustee
shall authenticate Book-Entry Certificates that are issued upon original
issuance thereof, upon the
57
written order of the Transferor, to a Clearing Agency or its nominee as provided
in Section 6.11 against payment of the purchase price therefor.
Section 6.3 Registration of Transfer and Exchange of
Certificates.
(a) The Trustee shall cause to be kept at the office or
agency to be maintained by a transfer agent and registrar (which may be the
Trustee) (the "Transfer Agent and Registrar") in accordance with the provisions
of Section 6.3(c) a register (the "Certificate Register") in which, subject to
such reasonable regulations as it may prescribe, the Transfer Agent and
Registrar shall provide for the registration of the Registered Certificates and
of transfers and exchanges of the Registered Certificates as herein provided.
The Trustee is hereby initially appointed Transfer Agent and Registrar for the
purpose of registering the Registered Certificates and transfers and exchanges
of the Registered Certificates as herein provided. The Trustee shall be
permitted to resign as Transfer Agent and Registrar upon 30 days' prior written
notice to the Transferor and the Servicer; provided, however, that such
resignation shall not be effective and the Trustee shall continue to perform the
duties of Transfer Agent and Registrar until the Transferor has appointed a
successor Transfer Agent and Registrar acceptable to the Transferor and the
Trustee. If specified in the related Supplement for any Series, the Transferor
shall appoint any co-transfer agent and co-registrar chosen by the Transferor,
and acceptable to the Trustee, including, if and so long as the Registered
Certificates are listed on the Luxembourg Stock Exchange or other stock exchange
and such exchange shall so require, a co-transfer agent and co-registrar in
Luxembourg or the location required by such other stock exchange. If specified
in such related Supplement, so long as the Registered Certificates relating to
such Supplement are outstanding, the Transferor shall maintain a co-transfer
agent and co-registrar in New York City or any other city designated in such
Supplement and any reference in this Agreement to the Transfer Agent and
Registrar shall include any co-transfer agent and co-registrar unless the
context requires otherwise.
Upon surrender for registration of transfer of any Registered
Certificate at any office or agency of the Transfer Agent and Registrar
maintained for such purpose, the Transferor (or the Trustee on behalf of the
Trust, if specified in the applicable Supplement) shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee, one or
more new Registered Certificates in authorized denominations of the same Series
representing like aggregate Undivided Interests in the Trust; provided, however,
that the provisions of this paragraph shall not apply to Bearer Certificates.
At the option of any Holder thereof, Registered Certificates
may be exchanged for other Registered Certificates of the same Series in
authorized denominations of like aggregate Undivided Interests in the Trust,
upon surrender of the Registered Certificates to be exchanged at any office or
agency of the Transfer Agent and Registrar maintained for such purpose. At the
option of any Holder thereof, subject to applicable laws and regulations, Bearer
Certificates may be exchanged for other Bearer Certificates or Registered
Certificates of the same Series in authorized denominations of like aggregate
Undivided Interests in the Trust, upon surrender of the Bearer Certificates to
be exchanged at an office or agency of the Transfer Agent and Registrar located
outside the United States. Each Bearer Certificate surrendered pursuant to this
Section 6.3 shall have attached thereto all unmatured Coupons, provided that any
Bearer Certificate so surrendered after the close of business on the Record Date
preceding the relevant
58
Distribution Date after the related Series Termination Date need not have
attached the Coupon relating to such Distribution Date. No Registered
Certificates may be exchanged for a Bearer Certificate.
The preceding provisions of this Section 6.3 notwithstanding,
the Trustee or the Transfer Agent and Registrar, as the case may be, shall not
be required to register the transfer of or exchange any Certificate of any
Series for a period of 15 days preceding the due date for any payment with
respect to the Certificates of such Series.
Whenever any Investor Certificates of any Series are
surrendered for exchange, the Transferor (or the Trustee on behalf of the Trust,
if specified in the applicable Supplement) shall execute, and the Trustee shall
authenticate and the Transfer Agent and Registrar shall deliver (in the case of
Bearer Certificates, outside the United States), the Investor Certificates of
such Series which the Certificateholder making the exchange is entitled to
receive. Every Investor Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
a form satisfactory to the Trustee and the Transfer Agent and Registrar duly
executed by the Certificateholder thereof or his attorney-in-fact duly
authorized in writing.
Except as provided in any Supplement, no service charge shall
be made for any registration of transfer or exchange of Investor Certificates,
but the Transfer Agent and Registrar and the Trustee or any co-transfer agent
and co-registrar or co-trustee may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Investor Certificates.
All Investor Certificates (together with any Coupons attached
to Bearer Certificates) surrendered for registration of transfer or exchange
shall be canceled by the Transfer Agent and Registrar and disposed of in a
manner satisfactory to the Trustee and the Transferor. The Trustee shall cancel
and mutilate the Global Certificate upon its exchange in full for Definitive
Certificates and shall deliver to the Transferor either a certificate of
destruction or such canceled and mutilated Global Certificate. The Trustee shall
also forward to the Transferor a copy of each certificate of each Foreign
Clearing Agency to the effect referred to in Section 6.10 which was received by
the Trustee with respect to each portion of the Global Certificate exchanged for
Definitive Certificates.
The Transferor shall execute and deliver to the Trustee or the
Transfer Agent and Registrar, as applicable, Bearer Certificates and Registered
Certificates in such amounts and at such times as are necessary to enable the
Trustee to fulfill its responsibilities under this Agreement and the
Certificates.
(b) Except as provided in Sections 6.9 and 7.2 or in any
Supplement, the Transferor's interest in the Exchangeable Transferor Certificate
and other amounts payable to the Transferor pursuant to this Agreement shall not
be sold, transferred, assigned, exchanged, pledged, participated or otherwise
conveyed, unless (i) the Servicer has delivered to the Trustee an Officer's
Certificate stating that such sale, transfer, assignment, exchange, pledge,
participation or conveyance will not, while any Series of Certificates remains
outstanding, reduce the Transferor Interest Percentage below the Minimum
Transferor Interest Percentage and (ii)
59
prior to such sale, transfer, assignment, exchange, pledge, participation or
conveyance, the Rating Agency Condition is satisfied and (iii) the Trustee
receives prior thereto an Opinion of Counsel to the effect that (x) the conveyed
interest in the Exchangeable Transferor Certificate will be treated as either
debt or an interest in a partnership for Federal income tax purposes and that
the conveyance of such interest will not cause the Trust to be characterized for
Federal income tax purposes as an association taxable as a corporation or
otherwise have any material adverse impact on the Federal or applicable state
income taxation of any outstanding Series of Investor Certificates or any
Certificate Owner and (y) such transfer will not cause a taxable event for
Federal income tax purposes to any Investor Certificateholder.
(c) The Transfer Agent and Registrar will maintain at its
expense in the Borough of Manhattan, the City of New York (and, if specified in
the related Supplement for any Series, Luxembourg (or subject to Section 6.3(a)
any other city designated in such Supplement)), an office or offices or agency
or agencies where Investor Certificates may be surrendered for registration of
transfer or exchange (except that Bearer Certificates may not be surrendered for
exchange at any such office or agency in the United States).
(d) Unless otherwise provided in the related Supplement,
registration of transfer of Registered Certificates containing a legend relating
to the restrictions on transfer of such Registered Certificates (which legend
shall be set forth in the Supplement relating to such Investor Certificates)
shall be effected only if:
(i) the sale is of at least U.S. $500,000
principal amount of such Certificates and (b) a letter from the
purchaser satisfactory to counsel to the Servicer is executed and
received; or
(ii) (a) the Registered Certificates are
transferred in compliance with Rule 144 (or any amendment thereto) or
Rule 144A (or any amendment thereto) under the Securities Act of 1933,
as amended, and (b) a letter from the purchaser satisfactory to counsel
to the Servicer is executed and received; or
(iii) the Registered Certificates are sold or
otherwise transferred in any other transaction that does not require
registration under the Securities Act of 1933, as amended, and, if the
Transferor, the Servicer, the Trustee or the Transfer Agent and
Registrar so request, an Opinion of Counsel satisfactory to it or them,
in form and substance satisfactory to it or them, is furnished to such
effect.
Registered Certificates issued upon registration of transfer
of, or Registered Certificates issued in exchange for, Registered Certificates
bearing the legend referred to above shall also bear such legend unless the
Transferor, the Servicer, the Trustee and the Transfer Agent and Registrar
receive an Opinion of Counsel satisfactory to each of them, to the effect that
such legend may be removed.
Whenever a Registered Certificate containing the legend set
forth in the related Supplement is presented to the Transfer Agent and Registrar
for registration of transfer, the Transfer Agent and Registrar shall promptly
seek written instructions from the Servicer regarding such transfer. The
Transfer Agent and Registrar and the Trustee shall be entitled to
60
receive written instructions signed by a Servicing Officer prior to registering
any such transfer or authenticating new Registered Certificates, as the case may
be. The Servicer hereby agrees to indemnify the Transfer Agent and Registrar and
the Trustee and to hold each of them harmless against any loss, liability or
expense incurred without bad faith on their part arising out of or in connection
with actions taken or omitted by them in reliance on and in accordance with any
such written instructions furnished pursuant to this Section 6.3(d).
Section 6.4 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate (together, in the case of Bearer Certificates,
with all unmatured Coupons (if any) appertaining thereto) is surrendered to the
Transfer Agent and Registrar, or the Transfer Agent and Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Transfer Agent and Registrar, the
Trustee and the Transferor such security or indemnity as may be required by them
to save each of them harmless, then, in the absence of notice to the Trustee
that such Certificate has been acquired by a bona fide purchaser, the Transferor
(or the Trustee on behalf of the Trust, if specified in the applicable
Supplement) shall execute and the Trustee shall authenticate and the Transfer
Agent and Registrar shall deliver (in the case of Bearer Certificates, outside
the United States), in exchange for or in lieu of any such mutilated, destroyed,
lost or stolen Certificate, a new Certificate of like tenor and aggregate
Undivided Interest, if applicable. In connection with the issuance of any new
Certificate under this Section 6.4, the Trustee or the Transfer Agent and
Registrar may require the payment by the Certificateholder of a sum sufficient
to cover any tax or other governmental expenses (including those incurred by the
Trustee or the Transfer Agent and Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section 6.4 shall constitute complete and
indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
Section 6.5 Persons Deemed Owners. Prior to due presentation
of a Certificate (other than a Bearer Certificate) for registration of transfer,
the Trustee, the Paying Agent, the Transfer Agent and Registrar and any agent of
any of them may treat the person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving distributions
pursuant to Article IV and for all other purposes whatsoever, and neither the
Trustee, the Paying Agent, the Transfer Agent and Registrar nor any agent of any
of them shall be affected by any notice to the contrary. In the case of a Bearer
Certificate, the Trustee, the Paying Agent, the Transfer Agent and Registrar and
any agent of any of them may treat the bearer of a Bearer Certificate or Coupon
as the owner of such Bearer Certificate or Coupon for the purpose of receiving
distributions pursuant to Article IV and for all other purposes whatsoever, and
neither the Trustee, the Paying Agent, the Transfer Agent and Registrar nor any
agent of any of them shall be affected by any notice to the contrary.
Notwithstanding the foregoing provisions of this Section 6.5, in determining
whether the holders of the requisite Undivided Interests have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Transferor, the Servicer or any affiliate thereof (as
defined in Rule 405 under the Securities Act of 1933, as amended) shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Certificates which a
Responsible Officer of the Trustee knows to be so owned shall be so disregarded.
Certificates so owned which have been pledged in good faith shall not be
disregarded and may be regarded as outstanding if the pledgee establishes to the
satisfaction of
61
the Trustee the pledgee's right so to act with respect to such Certificates and
that the pledgee is not the United States, the Transferor, the Servicer or an
affiliate thereof (as defined above).
Section 6.6 Appointment of Paying Agent. The Paying Agent
shall make distributions to Investor Certificateholders from the Collection
Account (or any other account or accounts maintained for the benefit of
Certificateholders as specified in the related Supplement for any Series)
pursuant to Articles IV and V. Any Paying Agent shall have the revocable power
to withdraw funds from the Collection Account (or any other account or accounts
maintained for the benefit of Certificateholders as specified in the related
Supplement for any Series) for the purpose of making distributions referred to
above. The Trustee (or the Transferor if the Trustee is the Paying Agent) may
revoke such power and remove the Paying Agent if the Trustee (or the Transferor
if the Trustee is the Paying Agent) determines in its sole discretion that the
Paying Agent shall have failed to perform its obligations under this Agreement
in any material respect or for other good cause. The Paying Agent shall (unless
otherwise specified in the related Supplement for any Series) initially be the
Trustee and any co-paying agent chosen by the Transferor and acceptable to the
Trustee, including, if and so long as any Series of Investor Certificates is
listed on the Luxembourg Stock Exchange or other stock exchange and such
exchange so requires, a co-paying agent in Luxembourg or the location of such
other stock exchange. The Trustee shall be permitted to resign as Paying Agent
upon 30 days' prior written notice to the Servicer and the Transferor; provided,
however, that such resignation shall not be effective and the Trustee shall
continue to perform the duties of Paying Agent until the appointment of a
successor Paying Agent, pursuant to this Section 6.6. The Transferor shall
notify the Rating Agencies of any resignation or replacement of the Paying
Agent. In the event that the Trustee shall no longer be the Paying Agent, the
Transferor shall appoint a successor to act as Paying Agent and such successor
shall be acceptable to the Trustee. The Trustee shall cause the initial Paying
Agent (unless the initial Paying Agent is the Trustee) and each successor Paying
Agent or any additional Paying Agent appointed by the Transferor to execute and
deliver to the Trustee an instrument in which such initial or successor Paying
Agent or additional Paying Agent shall agree with the Trustee that, as Paying
Agent, such initial or successor Paying Agent or additional Paying Agent will
hold all sums, if any, held by it for payment to the Investor Certificateholders
in trust for the benefit of the Investor Certificateholders entitled thereto
until such sums shall be paid to such Certificateholders and shall comply with
all requirements of the Internal Revenue Code regarding the withholding by the
Trustee of payments in respect of federal income taxes due from
Certificateholders. The Paying Agent shall return all unclaimed funds to the
Trustee and upon removal of a Paying Agent shall also return all funds in its
possession to the Trustee. The provisions of Sections 11.1, 11.2 and 11.3 shall
apply to the Trustee also in its role as Paying Agent, for so long as the
Trustee shall act as Paying Agent. Any reference in this Agreement to the Paying
Agent shall include any co-paying agent unless the context requires otherwise.
If specified in the related Supplement for any Series, so long
as the Investor Certificates of such Series are outstanding, the Transferor
shall, if the Paying Agent is not located in New York City, appoint a co-paying
agent in New York City (for Registered Certificates only) acceptable to the
Trustee or any other city designated in such Supplement which, if and so long as
any Series of Investor Certificates is listed on the Luxembourg Stock Exchange
or other stock exchange and such exchange so requires, shall be in Luxembourg or
the location required by such other stock exchange.
62
Section 6.7 Access to List of Certificateholders' Names and
Addresses. The Trustee will furnish or cause to be furnished by the Transfer
Agent and Registrar to the Servicer or the Paying Agent (or any agent thereof),
within five Business Days after receipt by the Trustee of a request therefor
from the Servicer or the Paying Agent, respectively, in writing, a list in the
form maintained by the Transfer Agent and Registrar of the names and addresses
of the Investor Certificateholders (other than Bearer Certificateholders). If
Holders representing Undivided Interests in the Trust aggregating not less than
10% of the Invested Amount of the Investor Certificates of such Series (the
"Applicants") apply in writing to the Trustee, and such application states that
the Applicants desire to communicate with other Investor Certificateholders of
such Series with respect to their rights under this Agreement or under the
Investor Certificates and is accompanied by a copy of the communication which
such Applicants propose to transmit, then the Trustee, after having been
adequately indemnified by such Applicants for its costs and expenses, shall
afford or shall cause the Transfer Agent and Registrar to afford such Applicants
access during normal business hours to the most recent list of
Certificateholders (other than Bearer Certificateholders) maintained by the
Transfer Agent and Registrar, or shall mail or cause to be mailed such list
within five Business Days after the receipt of such application. Such list shall
be as of a date no more than 45 days prior to the date of receipt of such
Applicants' request.
Every Certificateholder, by receiving and holding a
Certificate agrees with the Trustee that neither the Trustee, the Transfer Agent
and Registrar, nor any of their respective agents shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the Certificateholders (other than Bearer Certificateholders) hereunder,
regardless of the sources from which such information was derived.
Section 6.8 Authenticating Agent.
(a) The Trustee may appoint one or more authenticating
agents with respect to the Certificates which shall be authorized to act on
behalf of the Trustee in authenticating the Certificates in connection with the
issuance, delivery, registration of transfer, exchange or repayment of the
Certificates. Whenever reference is made in this Agreement to the authentication
of Certificates by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication on behalf of the
Trustee by an authenticating agent and a certificate of authentication executed
on behalf of the Trustee by an authenticating agent. Each authenticating agent
must be reasonably acceptable to the Transferor.
(b) Any institution succeeding to the corporate agency
business of an authenticating agent shall continue to be an authenticating agent
without the execution or filing of any paper or any further act on the part of
the Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by
giving written notice of resignation to the Trustee and to the Transferor. The
Trustee may at any time terminate the agency of an authenticating agent by
giving notice of termination to such authenticating agent and to the Transferor.
Upon receiving such a notice of resignation or upon such a termination, or in
case at any time an authenticating agent shall cease to be acceptable to the
Trustee or the Transferor, the Trustee promptly may appoint a successor
authenticating agent. Any successor authenticating agent upon acceptance of its
appointment hereunder shall become vested with all
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the rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an authenticating agent. No successor authenticating
agent shall be appointed unless acceptable to the Trustee and the Transferor.
(d) The Trustee agrees to pay, on behalf of the Trust, to
each authenticating agent from time to time reasonable compensation for its
services under this Section 6.8.
(e) The provisions of Sections 11.1, 11.2 and 11.3 shall
be applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section
6.8, the Certificates may have endorsed thereon, in lieu of the Trustee's
certificate of authentication, an alternate certificate of authentication in
substantially the following form:
This is one of the Certificates described in the Pooling and
Servicing Agreement.
___________________________________
as Authenticating Agent
for the Trustee,
By: ___________________________
Authorized Officer
Section 6.9 Tender of Exchangeable Transferor Certificate.
(a) Upon any Exchange, the Trustee shall issue to the
Transferor under Section 6.1 for execution (unless the Trustee is to execute
such Series on behalf of the Trust, as specified in the applicable Supplement)
and redelivery to the Trustee for authentication under Section 6.2 one or more
new Series of Investor Certificates. Any such Series of Investor Certificates
shall be substantially in the form specified in the related Supplement and shall
bear, upon its face, the designation for such Series selected by the Transferor.
Except as specified in the Supplement for any Series as to differing treatment
of the Investor Certificates within such Series, all Investor Certificates of
any Series shall be equally and ratably entitled as provided herein to the
benefits hereof without preference, priority or distinction on account of the
actual time or times of authentication and delivery (except that any Enhancement
provided for any Series shall not be available for any other Series), all in
accordance with the terms and provisions of this Agreement and the applicable
Supplement.
(b) The Holder of the Exchangeable Transferor Certificate
may tender the Exchangeable Transferor Certificate, or the Exchangeable
Transferor Certificate and the Investor Certificates of any Series, to the
Trustee in exchange for (i) one or more newly issued Series of Investor
Certificates and (ii) a reissued Exchangeable Transferor Certificate (any such
tender an "Exchange"). The Transferor may perform an Exchange, without the
consent of any Certificateholder, by notifying the Trustee, in writing at least
three Business Days in advance (an
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"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: (x) its
Initial Invested Amount (or the method for calculating such Initial Invested
Amount), if any, which amount may not be greater than the current principal
amount of the Exchangeable Transferor Certificate minus the Minimum Transferor
Amount at such time, and (y) its Certificate Rate (or the method for allocating
interest payments or other cash flow to such Series), if any. On the Exchange
Date, the Trustee shall authenticate and deliver any such Series only upon
delivery to it of the following: (A) a Supplement in form satisfactory to the
Trustee executed by the Transferor and specifying the Principal Terms of such
Series, (B) an Opinion of Counsel to the effect that, unless otherwise specified
in the related Supplement, the newly issued Series of Investor Certificates
(other than any Class of Investor Certificates required to be retained by the
Transferor) will be characterized as either indebtedness or an interest in a
partnership (that is not taxable as a corporation) under existing law for
Federal income tax purposes and that the issuance of the newly issued Series of
Investor Certificates will not have any material adverse impact on the Federal
income tax characterization of any outstanding Series of Investor Certificates
that have been the subject of a previous opinion of tax counsel or result in the
Trust being taxable as an association or as a publicly traded partnership
taxable as a corporation for Federal or applicable state tax purposes (such
opinion, a "Tax Opinion"), (C) an agreement, if any, pursuant to which the
Enhancement Provider agrees to provide Enhancement, (D) written confirmation
from each Rating Agency that the Exchange will not result in the Rating Agency's
reducing or withdrawing its rating on any then outstanding Series rated by it
and (E) the existing Exchangeable Transferor Certificate and the Investor
Certificate of the Series, if any, to be exchanged. Upon satisfaction of such
conditions, the Trustee shall cancel the existing Exchangeable Transferor
Certificate and issue, as provided above, such Series of Investor Certificates
and a new Exchangeable Transferor Certificate, dated the Exchange Date. There is
no limit to the number of Exchanges that may be performed under this Agreement.
(c) In conjunction with an Exchange, the parties hereto
shall execute a Supplement, which shall specify the relevant terms with respect
to any Series of Investor Certificates, which may include, without limitation:
(i) its name or designation, (ii) an Initial Invested Amount or the method of
calculating the Initial Invested Amount, (iii) a Certificate Rate (or formula
for the determination thereof), (iv) the rights of the Holder of the
Exchangeable Transferor Certificate that have been transferred to the Holders of
such Series pursuant to such Exchange, (v) the interest payment date or dates
and the date or dates from which interest shall accrue, (vi) the method of
allocating Collections of Principal Receivables for such Series and, if
applicable, with respect to other Series and the method by which the principal
amount of Investor Certificates of such Series shall amortize or accrete and the
method for allocating Collections of Finance Charge Receivables and Receivables
in Defaulted Accounts, (vii) the names of any accounts to be used by such Series
and the terms governing the operation of any such account, (viii) the Servicing
Fee Percentage, (ix) the Minimum Transferor Interest Percentage, (x) the Minimum
Aggregate Principal Receivables, (xi) the Series Termination Date, (xii) the
terms of any Enhancement, (xiii) the Enhancement Provider, if any, (xiv) the
base rate, if any, (xv) the Repurchase Terms or the terms on which the
Certificates of such Series may be remarketed to other investors, (xvi) any
deposit into any account provided for such Series, (xvii) the number of Classes
within such Series, and if more than one Class, the rights and priorities of
each such Class, (xviii) the extent to which the Investor Certificates will be
issuable in temporary or
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permanent global form and, in such case, the depository for such global
certificate or certificates, the terms and conditions, if any, upon which such
global certificate may be exchanged in whole or in part for Definitive
Certificates, and the manner in which any interest payable on a temporary or
global certificate will be paid, (xix) whether the Certificates may be issued in
bearer form and any limitations imposed thereon and provisions relating to
compliance with applicable laws and rules for bearer instruments, (xx) the
priority of such Series with respect to any other Series, (xxi) whether
Interchange or other fees will be included in the funds available to be paid
with respect to such Series, (xxii) whether such Series will or may be paired
with any other Series and the Series with which it will be paired, if
applicable, (xxiii) the Group, if any, to which such Series belongs, and (xxiv)
any other relevant terms of such Series (all such terms, the "Principal Terms"
of such Series). The terms of such Supplement may modify or amend the terms of
this Agreement solely as applied to such new Series. If on the date of the
issuance of such Series there is issued and outstanding no Series of Investor
Certificates which is currently rated by a Rating Agency, then as a condition to
such Exchange a nationally recognized investment banking firm or commercial bank
shall also deliver to the Trustee an officer's certificate stating, in
substance, that the Exchange will not have an adverse effect on the timing or
distribution of payments to such other Series of Investor Certificates then
issued and outstanding.
(d) In connection with the creation or sale of any
additional interest in the Trust or the Receivables, whether or not designated
as an Exchange (including, without limitation, the receipt by the Trust or the
Transferor of the proceeds of any loan or additional loan provided by any
Enhancement Provider), the Transferor shall deliver to the Trustee and to each
Rating Agency assigning a rating to any Class of Investor Certificates of any
then outstanding Series (if so requested by such Rating Agency) a Tax Opinion
with respect to such interest.
Section 6.10 Global Certificate; Euro-Certificate Exchange
Date.
(a) If specified in the Supplement for any Series, the
Investor Certificates of such Series may be initially issued in the form of a
single temporary Global Certificate (the "Global Certificate") in bearer form,
without interest coupons, in the denomination of the Initial Invested Amount and
substantially in the form attached to such Supplement. Unless otherwise
specified in the applicable Supplement, the provisions of this Section 6.10
shall apply to such Global Certificate. The Global Certificate will be
authenticated by the Trustee upon the same conditions, in substantially the same
manner and with the same effect as the Definitive Certificates. The Global
Certificate may be exchanged as described in this Section 6.10 or in the
applicable Supplement for Bearer Certificates and/or Registered Certificates in
definitive form (the "Definitive Euro-Certificates"). Notwithstanding the
foregoing, no Certificates shall be issued in bearer form unless the Transferor
has determined, and delivers an Opinion of Counsel to the Trustee substantially
to the effect that, the terms and procedures governing issuance and transfer of
such Certificates result in favorable treatment to Investor Certificateholders
under the Bearer Rules.
(b) The Manager shall, upon its determination of the date
of completion of the distribution of the Certificates, so advise the Trustee,
the Transferor, the Common Depositary, and each Foreign Clearing Agency in
writing forthwith. Without unnecessary delay, but prior to
66
the Euro-Certificate Exchange Date, the Transferor will execute and deliver to
the Trustee at its office or to the Trustee's designated agent outside the
United States definitive Bearer Certificates in an aggregate principal amount
equal to the Initial Invested Amount of the Global Certificate. All Bearer
Certificates so issued and delivered will have Coupons attached. The Global
Certificate may be exchanged for an equal aggregate principal amount of
Definitive Euro-Certificates only on or after the Euro-Certificate Exchange
Date. A United States institutional investor will be required to deliver to the
Transferor, the Trustee and the Manager at the time of its purchase of
Registered Certificates a signed certificate substantially in the form attached
to the Supplement for the related Series. Upon any demand for exchange for
Definitive Certificates in accordance with this paragraph, the Transferor shall
cause the Trustee to authenticate and deliver the Definitive Certificates to the
Holder (x) outside the United States, in the case of Bearer Certificates, and
(y) according to the instructions of the Holder, in the case of Registered
Certificates, but only upon presentation to the Trustee of a written statement
substantially in the form attached to the Supplement for the related Series with
respect to the Global Certificate or portion thereof being exchanged signed by a
Foreign Clearing Agency, to the effect that it has received in writing or by
tested telex a certification substantially in the form of the certificate
attached to the Supplement for the related Series, such certificate being dated
no earlier than 15 days prior to the Euro-Certificate Exchange Date and signed
by or on behalf of the person appearing in the records of a Foreign Clearing
Agency as the beneficial owner of the Global Certificate or portion thereof
being exchanged. Upon receipt of such certification, the Trustee shall cause the
Global Certificate to be endorsed in accordance with paragraph (d) below. Unless
otherwise provided in the related Supplement, any exchange as provided in this
Section 6.10(b) shall be made free of charge to the holders and the beneficial
owners of the Global Certificate and to the beneficial owners of the Definitive
Euro-Certificates issued in exchange, except that a person receiving Definitive
Euro-Certificates must bear the cost of insurance, postage, transportation and
the like in the event that such person does not receive such Definitive
Euro-Certificates in person at the offices of a Foreign Clearing Agency.
(c) The delivery to the Trustee by a Foreign Clearing
Agency of any written statement referred to above may be relied upon by the
Transferor and the Trustee as conclusive evidence that a corresponding
certification or certifications has or have been delivered to such Foreign
Clearing Agency, pursuant to the terms of this Agreement.
(d) Upon any such exchange of all or a portion of the
Global Certificate for a Definitive Euro-Certificate or Certificates, such
Global Certificate shall be endorsed by or on behalf of the Trustee to reflect
the reduction of its principal amount by an amount equal to the aggregate
principal amount of such Definitive Euro-Certificate or Certificates. Until so
exchanged in full, such Global Certificate shall in all respects be entitled to
the same benefits under this Agreement as Definitive Euro-Certificates
authenticated and delivered hereunder except that the beneficial owners of such
Global Certificate shall not be entitled to receive payments of interest on the
Certificates until they have exchanged their beneficial interests in such Global
Certificate for Definitive Euro-Certificates.
Section 6.11 Book-Entry Certificates. Unless otherwise
provided in any related Supplement, the Investor Certificates, upon original
issuance, will be issued in the form of the requisite number of typewritten
Certificates representing the Book-Entry Certificates, to be delivered to The
Depository Trust Company, which shall be the initial Clearing Agency, by, or
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on behalf of, the Transferor. The Investor Certificates shall initially be
registered on the Certificate Register in the name of CEDE & Co., the nominee of
the initial Clearing Agency, and no Certificate Owner will receive a definitive
certificate representing such Certificate Owner's interest in the Investor
Certificates, except as provided in Section 6.13. Unless and until definitive,
fully registered Investor Certificates (the "Definitive Certificates") have been
issued to Certificate Owners pursuant to Section 6.13:
(i) the provision of this Section 6.11 shall be
in full force and effect;
(ii) the Transferor, the Servicer, the Paying
Agent, the Transfer Agent and Registrar and the Trustee may deal with
the Clearing Agency for all purposes (including the making of
distributions on the Investor Certificates) as the authorized
representatives of the Certificate Owners, and, absent gross negligence
or willful misconduct on its part, the Transferor, the Servicer, the
Paying Agent, the Transfer Agent and Registrar and the Trustee shall
have no responsibility or liability for any aspect of the records
pertaining to, or the making of any distribution to, the Clearing
Agency Participants or the Certificate Owners;
(iii) to the extent that the provisions of this
Section 6.11 conflict with any other provisions of this Agreement, the
provisions of this Section 6.11 shall control;
(iv) the rights of Certificate Owners shall be
exercised only through the Clearing Agency and the Clearing Agency
Participants and shall be limited to those established by law and
agreements between such Certificate Owners and the Clearing Agency
and/or the Clearing Agency Participants. Pursuant to the Depository
Agreement, unless and until Definitive Certificates are issued pursuant
to Section 6.13, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit distributions of principal and interest on the Investor
Certificates to such Clearing Agency Participants; and
(v) whenever this Agreement requires or permits
actions to be taken based upon instructions or directions of a
specified percentage of the Invested Amount of any or all Series of
Certificates outstanding, the Clearing Agency shall be deemed to
represent such percentage only to the extent that it has received
instructions to such effect from Certificate Owners and/or Clearing
Agency Participants owning or representing, respectively, such required
percentage of the beneficial interest in Investor Certificates.
Section 6.12 Notices to Clearing Agency. Whenever notice or
other communication to the Investor Certificateholders is required under this
Agreement, unless and until Definitive Certificates shall have been issued to
Certificate Owners pursuant to Section 6.13, the Trustee, the Servicer and the
Paying Agent shall give all such notices and communications specified herein to
be given to Holders of the Investor Certificates to the applicable Clearing
Agency.
Section 6.13 Definitive Certificates. If Book-Entry
Certificates have been issued pursuant to Section 6.11 and if (i)(A) the
Transferor advises the Trustee in writing that the Clearing Agency is no longer
willing or able to discharge properly its responsibilities under the
68
Depository Agreement, and (B) the Trustee or the Transferor is unable to locate
a qualified successor (which successor must be treated as maintaining a
book-entry system within the meaning of Section 163(f)(3) of the Internal
Revenue Code), (ii) the Transferor at its option, advises the Trustee in writing
that it elects to terminate the book-entry system through the Clearing Agency
with respect to the Certificates or (iii) after the occurrence of a Servicer
Default, Certificate Owners representing beneficial interests aggregating more
than 50% of the Invested Amount of any Series advise the Trustee and the
Clearing Agency through the Clearing Agency Participants in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of the Certificate Owners, the Trustee shall notify all
Certificate Owners, through each applicable Clearing Agency, of the occurrence
of any such event and of the availability of Definitive Certificates to
Certificate Owners requesting the same. Upon surrender to the Trustee of the
Investor Certificates by the Clearing Agency, accompanied by registration
instructions from the Clearing Agency for registration, the Trustee shall issue
the Definitive Certificates. Neither the Transferor, the Transfer Agent and
Registrar nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates, the Trustee
shall recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.
Section 6.14 Meetings of Certificateholders.
(a) Unless not permitted by the Supplement for any Series
issued in whole or in part in Bearer Certificates, the Transferor, the Servicer
or the Trustee may at any time call a meeting of the Certificateholders of such
Series or of all Series, to be held at such time and at such place as the
Transferor, the Servicer or the Trustee, as the case may be, shall determine,
for the purpose of approving a modification of or amendment to, or obtaining a
waiver of, any covenant or condition set forth in this Agreement with respect to
such Series or in the Certificates of such Series, subject to Section 13.1.
References in this Section 6.14 to Certificateholders shall be deemed to refer
to the Exchangeable Transferor Certificates and only those Series of Investor
Certificates for which this Section 6.14 is applicable. Notice of any meeting of
Certificateholders, setting forth the time and place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be given in
accordance with Section 13.5 and at least once in an Authorized Newspaper and,
if and for so long as the Certificates are listed on the Luxembourg Stock
Exchange or other stock exchange and such exchange so requires, in a newspaper
of general circulation in Luxembourg (which newspaper shall be printed in the
English or French language and customarily published on each business day in
Luxembourg) or the location required by such other stock exchange, the first
publication to be not less that 20 nor more than 180 days prior to the date
fixed for the meeting. To be entitled to vote at any meeting of
Certificateholders, a person shall be (i) a Holder of one or more Certificates
of the applicable Series or (ii) a person appointed by an instrument in writing
as proxy by the Holder of one or more Certificates. The only Persons who shall
be entitled to be present or to speak to any meeting of Certificateholders shall
be the Persons entitled to vote at such meeting and their counsel and any
representatives of the Transferor, the Servicer and the Trustee and their
respective counsels.
(b) At a meeting of Investor Certificateholders, persons
entitled to vote Investor Certificates evidencing Undivided Interests
aggregating a majority of the Invested
69
Amount of the applicable Series or all outstanding Series, as the case may be,
shall constitute a quorum. No business shall be transacted in the absence of a
quorum, unless a quorum is present when the meeting is called to order. In the
absence of a quorum at any such meeting, the meeting may be adjourned for a
period of not less than 10 days; in the absence of a quorum at any such
adjourned meeting, such adjourned meeting may be further adjourned for a period
of not less than 10 days; at the reconvening of any meeting further adjourned
for lack of a quorum, the Persons entitled to vote at least 25% in Undivided
Interest of the applicable Series or all outstanding Series, as the case may be,
shall constitute a quorum for the taking of any action set forth in the notice
of the original meeting. Notice of the reconvening of any adjourned meeting
shall be given as provided above except that such notice must be given not less
than five days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage of the aggregate principal amount of the outstanding
Investor Certificates which shall constitute a quorum.
(c) Any Certificateholder who has executed an instrument
in writing appointing a person as proxy shall be deemed to be present for the
purposes of determining a quorum and be deemed to have voted; provided, however,
that such Certificateholder shall be considered as present or voting only with
respect to the matters covered by such instrument in writing. Subject to the
provisions of Section 13.1, any resolution passed or decision taken at any
meeting of Investor Certificateholders duly held in accordance with this Section
6.14 shall be binding on all the Investor Certificateholders whether or not
present or represented at the meeting.
(d) The holding of Bearer Certificates shall be proved by
the production of such Bearer Certificates or by a certificate, satisfactory to
the Servicer and the Trustee, executed by any bank, trust company or recognized
securities dealer, wherever situated, satisfactory to the Servicer and the
Trustee. Each such certificate shall be dated and shall state that on the date
thereof a Bearer Certificate bearing a specified serial number was deposited
with or exhibited to such bank, trust company or recognized securities dealer by
the person named in such certificate. Any such certificate may be issued in
respect of one or more Bearer Certificates specified therein. The holding by the
person named in any such certificate of any Bearer Certificate specified therein
shall be presumed to continue for a period of one year from the date of such
certificate unless at the time of any determination of such holding (i) another
certificate bearing a later date issued in respect of the same Bearer
Certificate shall be produced, (ii) the Bearer Certificate specified in such
certificate shall be produced by some other person or (iii) the Bearer
Certificate specified in such certificate shall have ceased to be outstanding.
The appointment of any proxy shall be proved by having the signature of the
person executing the proxy guaranteed by any bank, trust company or recognized
securities dealer satisfactory to the Trustee. The holding of Registered
Certificates shall be proved by the Certificate Register or by a certificate or
certificates of the Transfer Agent and Registrar.
(e) The Trustee shall appoint a temporary chairman of the
meeting. A permanent chairman and a permanent secretary of the meeting shall be
elected by vote of the holders of a majority in Undivided Interest of the
Certificates of such Series represented at the meeting. No vote shall be cast or
counted at any meeting in respect of any Certificate challenged as not
outstanding and ruled by the chairman of the meeting to be not outstanding. The
chairman of the meeting shall have no right to vote except as a
Certificateholder or proxy. Any meeting of
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Certificateholders duly called at which a quorum is present may be adjourned
from time to time, and the meeting may be held as so adjourned without further
notice.
(f) The vote upon any resolution submitted to any meeting
of Certificateholders shall be by written ballot on which shall be subscribed
the signatures of the Certificateholders or proxies and on which shall be
inscribed the serial number or numbers of the Certificates held or represented
by them. The permanent chairman of the meeting shall appoint two inspectors of
votes who shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the meeting their
verified written reports in duplicate of all votes cast at the meeting. A record
in duplicate of the proceedings of each meeting of Certificateholders shall be
prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons having knowledge of the
facts setting forth a copy of the notice of the meeting and showing that said
notice was published as provided above. The record shall be signed and verified
by the permanent chairman and secretary of the meeting and one of the duplicates
shall be delivered to the Servicer and the other to the Trustee to be preserved
by the Trustee, the latter to have attached thereto the ballots voted at the
meeting. Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 6.15 Uncertificated Classes. Notwithstanding anything
to the contrary contained in this Article VI or in Article XII, unless otherwise
specified in any Supplement, any provisions contained in this Article VI and in
Article XII relating to the registration, form, execution, authentication,
delivery, presentation, cancellation and surrender of Certificates shall not be
applicable to any uncertificated Certificate.
[END OF ARTICLE VI]
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ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
Section 7.1 Liability of the Transferor. The Transferor shall
be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Transferor in such capacity herein.
Section 7.2 Merger or Consolidation of, or Assumption of the
Obligations of, the Transferor.
(a) The Transferor shall not consolidate with or merge
into any other business entity or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) the business entity formed by such
consolidation or into which the Transferor is merged or the Person
which acquires by conveyance or transfer the properties and assets of
the Transferor substantially as an entirety shall be organized and
existing under the laws of the United States or any State or the
District of Columbia, and if the Transferor is not the surviving
entity, shall expressly assume, by an agreement supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, the performance of every covenant and obligation of the
Transferor, as applicable, hereunder and shall benefit from all the
rights granted to the Transferor, as applicable, hereunder. To the
extent that any right, covenant or obligation of the Transferor is
inapplicable to the successor entity, such successor entity shall be
subject to such covenant or obligation, or benefit from such right, as
would apply, to the extent practicable, to such successor entity;
(ii) the Transferor has delivered to the Trustee
(i) an Officer's Certificate signed by a Vice President or more senior
officer of the Transferor stating that such consolidation, merger,
conveyance or transfer, and, if the Transferor is not the surviving
entity, such supplemental agreement, comply with this Section 7.2 and
that all conditions precedent herein provided for relating to such
transaction have been complied with and (ii) if the Transferor is not
the surviving entity, an Opinion of Counsel stating that such
supplemental agreement constitutes a legal, valid and binding
obligation of the surviving entity, enforceable against the surviving
entity in accordance with its terms, subject to applicable bankruptcy,
insolvency, receivership, conservatorship, reorganization, moratorium
or other similar laws now or hereafter in effect affecting the
enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity);
(iii) if the surviving entity is subject to the
bankruptcy laws of the United States, the Transferor shall have
received written notice from each Rating Agency that such
consolidation, merger, conveyance or transfer will not result in a
downgrading or withdrawal of its then current rating of any outstanding
Series of Investor Certificates and shall have delivered copies of each
such notice to the Servicer and the Trustee; and
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(iv) if the surviving entity is not subject to
the bankruptcy laws of the United States, the Transferor shall have
delivered to each Rating Agency notice of such consolidation, merger,
conveyance or transfer.
(b) The obligations of the Transferor hereunder shall not
be assignable nor shall any Person succeed to the obligations of the Transferor
hereunder except in each case in accordance with the provisions of the foregoing
paragraph.
Section 7.3 Limitation on Liability of the Transferor. The
directors, officers, employees or agents of the Transferor shall not be under
any liability to the Trust, the Servicer, the Trustee, the Certificateholders,
any Enhancement Provider or any other Person hereunder or pursuant to any
document delivered hereunder, it being expressly understood that all such
liability is expressly waived and released as a condition of, and as
consideration for, the execution of this Agreement and any Supplement and the
issuance of the Certificates; provided, however, that this provision shall not
protect the directors, officers, employees or agents of the Transferor against
any liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of
reckless disregard of obligations or duties hereunder or pursuant to any
document delivered hereunder. Except as provided in Section 7.4, the Transferor
shall not be under any liability to the Trust, the Servicer, the Trustee, the
Certificateholders, any Enhancement Provider or any other Person for any action
taken or for refraining from the taking of any action in its capacity as
Transferor pursuant to this Agreement or any Supplement whether arising from
express or implied duties under this Agreement or any Supplement; provided,
however, that this provision shall not protect the Transferor against any
liability which would otherwise be imposed by reason of its willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of its
reckless disregard of its obligations or duties hereunder or under any
Supplement. The Transferor and any director, officer, employee or agent of the
Transferor may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder.
Section 7.4 Liabilities. Notwithstanding Section 7.3, by
entering into this Agreement, the Transferor agrees to be liable, directly to
the injured party, for the entire amount of any losses, claims, damages,
expenses, or liabilities (other than those incurred by a Certificateholder in
the capacity of an investor in the Investor Certificates as a result of the
performance of the Receivables, market fluctuations, a shortfall in any
Enhancement or other similar market or investment risks) arising out of or based
on the arrangement created by this Agreement and the actions of the Servicer
taken pursuant hereto as though this Agreement created a partnership under the
Uniform Partnership Act. The Transferor agrees to pay, indemnify and hold
harmless each Investor Certificateholder against and from any and all such
losses, claims, expenses, damages and liabilities (other than those incurred by
a Certificateholder in the capacity of an investor in the Investor Certificates
as a result of the performance of the Receivables, market fluctuations, a
shortfall in any Enhancement or other similar market or investment risks) except
to the extent that they arise from any action by such Investor
Certificateholder. Subject to Sections 8.3 and 8.4, in the event of a Service
Transfer, the Successor Servicer will indemnify and hold harmless the Transferor
for any losses, claims, damages and liabilities of the Transferor as described
in this Section 7.4 arising from the actions or omissions of such Successor
Servicer. Amounts payable by the Transferor pursuant to this
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Section 7.4 shall not be paid from the Trust Property and shall be paid only to
the extent that the Transferor has funds available for that purpose. If the
Transferor does not have funds available to make any such payment, no Person
shall be entitled to assert a claim against the Transferor for such unpaid
amount.
[END OF ARTICLE VII]
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ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
Section 8.1 Liability of the Servicer. The Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer in such capacity herein.
Section 8.2 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer. The Servicer shall not consolidate with or merge
into any other business entity or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) the business entity formed by such
consolidation or into which the Servicer is merged or the Person which
acquires by conveyance or transfer the properties and assets of the
Servicer substantially as an entirety shall be organized and existing
under the laws of the United States or any State or the District of
Columbia, and if the Servicer is not the surviving entity, shall be an
Eligible Servicer and shall expressly assume, by an agreement
supplemental hereto, executed and delivered to the Trustee, the
performance of every covenant and obligation of the Servicer, as
applicable, hereunder and shall benefit from all the rights granted to
the Servicer, as applicable, hereunder. To the extent that any right,
covenant or obligation of the Servicer is inapplicable to the successor
entity, such successor entity shall be subject to such covenant or
obligation, or benefit from such right, as would apply, to the extent
practicable, to such successor entity;
(ii) the Servicer has delivered to the Trustee
(i) an Officer's Certificate stating that such consolidation, merger,
conveyance or transfer, and, if the Servicer is not the surviving
entity, such supplemental agreement, comply with this Section 8.2 and
that all conditions precedent herein provided for relating to such
transaction have been complied with and (ii) if the Servicer is not the
surviving entity, an Opinion of Counsel that such supplemental
agreement constitutes a legal, valid and binding obligation of the
surviving entity, enforceable against the surviving entity in
accordance with its terms, subject to applicable bankruptcy,
insolvency, receivership, conservatorship, reorganization, moratorium
or other similar laws now or hereafter in effect affecting the
enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity);
(iii) if the surviving entity is subject to the
bankruptcy laws of the United States, the Servicer shall have received
written notice from each Rating Agency that such consolidation, merger,
conveyance or transfer will not result in a downgrading or withdrawal
of its then current rating of any outstanding Series of Investor
Certificates and shall have delivered copies of each such notice to the
Transferor and the Trustee; and
(iv) if the surviving entity is not subject to
the bankruptcy laws of the United States, the Servicer shall have
delivered to each Rating Agency notice of such consolidation, merger,
conveyance or transfer.
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Section 8.3 Limitation on Liability of the Servicer and
Others. The directors, officers, employees or agents of the Servicer shall not
be under any liability to the Trust, the Transferor, the Trustee, the
Certificateholders, any Enhancement Provider or any other Person hereunder or
pursuant to any document delivered hereunder, it being expressly understood that
all such liability is expressly waived and released as a condition of, and as
consideration for, the execution of this Agreement and any Supplement and the
issuance of the Certificates; provided, however, that this provision shall not
protect the directors, officers, employees or agents of the Servicer against any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations or duties hereunder or pursuant to any document
delivered hereunder. Except as provided in Section 8.4, the Servicer shall not
be under any liability to the Trust, the Transferor, the Trustee, the
Certificateholders, any Enhancement Provider or any other Person for any action
taken or for refraining from the taking of any action in its capacity as
Servicer pursuant to this Agreement or any Supplement whether arising from
express or implied duties under this Agreement or any Supplement; provided,
however, that this provision shall not protect the Servicer against any
liability which would otherwise be imposed by reason of its willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of its
reckless disregard of obligations or duties hereunder or under any Supplement.
The Servicer and any director, officer, employee or agent of the Servicer may
rely in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Receivables in
accordance with this Agreement or any Supplement which in its reasonable opinion
may involve it in any expense or liability.
Section 8.4 Indemnification of the Trust and the Trustee. The
Servicer shall indemnify and hold harmless the Trust, for the benefit of the
Certificateholders, and the Trustee, including its directors, officers,
employees and agents, from and against any loss, liability, claim, damage,
injury or expense (including, without limitation, reasonable fees and expenses
of counsel) arising out of or relating to (i) the acceptance by the Trustee of
the Trust pursuant to this Agreement or (ii) any claims, actions or proceedings
brought or asserted against the Trust, the Trustee or any director, officer,
employee or agent of the Trustee pursuant to this Agreement or any Supplement,
including, without limitation, any judgment, award, settlement, costs or
expenses (including, without limitation, reasonable fees and expenses of
counsel) incurred in connection with the defense of any actual or threatened
action, proceeding or claim; provided, however, that the Servicer shall not
indemnify or hold harmless the Trust, for the benefit of the Certificateholders,
the Trustee or any director, officer, employee or agent of the Trustee for any
loss, liability, claim, damage, injury or expense arising out of or relating to
(i) the willful misfeasance, bad faith or negligence of the Trustee in the
performance of its duties hereunder or (ii) any action taken by the Trustee at
the request of the Certificateholders; and, provided further, that the Servicer
shall not indemnify the Trust, for the benefit of the Certificateholders, from
or against (i) any Federal, state or local taxes (or any interest or penalties
with respect thereto) required to be paid by the Trust or the Certificateholders
in connection herewith to any taxing authority or (ii) any loss, liability,
claim, damage, injury or expense incurred by the Certificateholders in their
capacity as investors as a result of any action taken by the Certificateholders
or as a result of the performance of the Receivables, market fluctuations, a
shortfall in any Enhancement or other similar market or investment risks (except
to the extent
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that such loss, liability, claim, damage, injury or expense was incurred by
reason of the failure by the Servicer to act in accordance with this Agreement
and the Account Guidelines). Subject to Sections 7.1 and 7.4 and Section
10.2(b), any indemnification pursuant to this Section 8.4 shall only be from the
assets of the Servicer. The provisions of this indemnity shall run directly to
and be enforceable by an injured party subject to the limitations hereof and
shall survive the termination of this Agreement, the resignation and removal of
the Trustee and payment in full of the Certificates.
Section 8.5 The Servicer Not to Resign. The Servicer shall not
resign from the obligations and duties hereby imposed on it as such except (i)
upon determination that the performance of its duties hereunder is or will
become impermissible under applicable law, regulation or order and there is no
reasonable action which the Servicer could take to make the performance of its
duties hereunder permissible under applicable law or (ii) upon satisfaction of
the following conditions: (A) an Eligible Servicer shall have assumed, by an
agreement supplemental hereto, executed and delivered to the Trustee, the
performance of every covenant and obligation of the Servicer hereunder; (B) the
Rating Agency Condition shall have been satisfied with respect to such
resignation and appointment; (C) the resigning Servicer shall have delivered to
the Trustee an Officer's Certificate stating that such resignation and the
related assumption agreement comply with this Section 8.5 and that all
conditions precedent herein provided for relating to such resignation and
assumption have been complied with; and (D) the resigning Servicer shall have
delivered or caused to be delivered to the Trustee (with a copy to each Rating
Agency) an Opinion of Counsel that such assumption agreement constitutes a
legal, binding and valid obligation of the successor Servicer, enforceable
against the successor Servicer in accordance with its terms, subject to
applicable bankruptcy, insolvency, receivership, conservatorship,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity). Any determination permitting
the resignation of the Servicer under clause (i) of this Section 8.5 shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee, and
no such resignation shall be effective until the Trustee or a successor to the
Servicer has assumed the Servicer's responsibilities and obligations under this
Agreement. If the Trustee is unable within 120 days of the date of such
determination to appoint a Successor Servicer pursuant to Section 10.2(a), the
Trustee or its duly appointed agent (which may not be the outgoing Servicer)
shall serve as Successor Servicer hereunder but the Trustee shall have continued
authority to appoint another Person as Successor Servicer.
Section 8.6 Access to Certain Documentation and Information
Regarding the Receivables. The Servicer shall provide to the Trustee access to
the documentation regarding the Accounts and the Receivables in such cases where
the Trustee is required in connection with the enforcement of the rights of the
Investor Certificateholders, or by applicable statutes or regulations, to review
such documentation, such access being afforded without charge but only (i) upon
reasonable request, (ii) during normal business hours, (iii) subject to such
security and confidentiality procedures as the Servicer may deem reasonably
necessary and (iv) at offices designated by the Servicer. Nothing in this
Section 8.6 shall derogate from the obligation of the Transferor, the Trustee or
the Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors and the failure of the Servicer to provide access as
provided in this Section 8.6 as a result of such obligation shall not constitute
a breach of this Section 8.6.
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Section 8.7 Delegation of Duties. It is understood and agreed
by the parties hereto that the Servicer may delegate certain of its duties
hereunder to any Person who agrees to conduct such duties in accordance with the
applicable Account Guidelines and the usual and customary servicing policies and
procedures of the Servicer. The fees of any Person to whom such duties are
delegated shall be for the account of the Servicer. Any such delegations shall
not relieve the Servicer of its liability and responsibility with respect to
such duties, and shall not constitute a resignation within the meaning of
Section 8.5 hereof. If any such delegation is not in the ordinary course of
business, notification thereof shall be given by the Servicer to each Rating
Agency.
Section 8.8 Examination of Records. Each of the Transferor and
the Servicer shall clearly and unambiguously identify each Account (including
any Account designated pursuant to Section 2.6) in its computer or other records
to reflect that the Receivables arising in such Account have been conveyed to
the Trust pursuant to this Agreement. Each of the Transferor and the Servicer
shall, prior to the sale or transfer to a third party of any receivable held in
its custody, examine its computer and other records to determine that such
receivable is not a Receivable.
[END OF ARTICLE VIII]
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ARTICLE IX
EARLY AMORTIZATION EVENTS
Section 9.1 Early Amortization Events. Unless modified with
respect to any Series of Investor Certificates by the Supplement for such
Series, if any one of the following events shall occur:
(a) the Transferor shall consent or fail to object to the
appointment of a conservator, receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar proceeding
of or relating to the Transferor or of or relating to all or substantially all
of its property, or a decree or order of a court, agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator, receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceeding, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Transferor, or the Transferor shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations (any
such event, an "Insolvency Event");
(b) the Transferor shall become unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of this
Agreement; or
(c) the Trust shall become an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the "1940 Act");
then, an Early Amortization Event with respect to all Series then outstanding
shall occur without any notice or other action on the part of the Trustee or the
Investor Certificateholders immediately upon the occurrence of such event. Upon
a Responsible Officer of the Trustee receiving actual notice thereof, the
Trustee shall advise the Rating Agencies in writing of the occurrence of any
Early Amortization Event.
Section 9.2 Additional Rights Upon the Occurrence of Certain
Events.
(a) Upon the occurrence of an Insolvency Event, the
Transferor shall promptly give notice of such event to the Trustee, and the
Transferor shall on the day of such Insolvency Event (the "Appointment Day")
immediately cease to transfer Principal Receivables to the Trustee hereunder.
Notwithstanding any cessation of the transfer to the Trustee of additional
Principal Receivables, Principal Receivables transferred to the Trust prior to
the occurrence of such Insolvency Event and Collections in respect of such
Principal Receivables and Finance Charge Receivables whenever created shall
continue to be part of the Trust, and such Collections shall continue to be
allocated and deposited in accordance with the provisions of Article IV. Within
15 days of the receipt by the Trustee of the notice of an Insolvency Event, the
Trustee shall (i) publish a notice in an Authorized Newspaper that an Insolvency
Event has occurred and that the Trustee intends to sell, dispose of or otherwise
liquidate the Receivables in a commercially reasonable manner and (ii) send
written notice to the Investor Certificateholders and any Enhancement Provider
entitled thereto describing the provisions of this Section 9.2 and requesting
instructions from such Holders, which notice shall request each Investor
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Certificateholder to advise the Trustee in writing that it elects one of the
following options: (A) the Investor Certificateholder wishes the Trustee to
instruct the Servicer not to sell, dispose of or otherwise liquidate the
Receivables and to instruct the Servicer to reconstitute the Trust upon the same
terms and conditions set forth herein, or (B) the Investor Certificateholder
wishes the Trustee to instruct the Servicer to sell, dispose of or otherwise
liquidate the Receivables, or (C) the Investor Certificateholder refuses to
advise the Trustee as to the specific action the Trustee shall instruct the
Servicer to take. If after 90 days from the day notice pursuant to clause (i)
above is first published (the "Publication Date"), the Trustee shall not have
received written instructions of Holders of Investor Certificates aggregating in
excess of 50% of the related Invested Amount of each Series (or in the case of a
Series having more than one Class of Investor Certificates, each Class of such
Series), each Holder of any interest in the Exchangeable Transferor Certificate
other than the Transferor and any other Person specified in any Supplement to
the effect that the Trustee shall instruct the Servicer not to sell, dispose of,
or otherwise liquidate the Receivables and to instruct the Servicer to
reconstitute the Trust upon the same terms and conditions as set forth herein,
the Trustee shall instruct the Servicer to proceed to sell, dispose of, or
otherwise liquidate the Receivables in a commercially reasonable manner and on
commercially reasonable terms, which shall include the solicitation of
competitive bids and the Servicer shall proceed to consummate the sale,
liquidation or disposition of the Receivables as provided above with the highest
bidder for the Receivables. If, however, with respect to the portion of the
Receivables allocable to any outstanding Series, the Holders of more than 50% of
the principal amount of each Class of such Series and each Holder of any
interest in the Exchangeable Transferor Certificate other than the Transferor
instruct the Trustee not to sell the portion of the Receivables allocable to
such Series, the Trust shall continue with respect to such Series pursuant to
the terms of this Agreement and the related Supplement. If specified in the
applicable Supplement, the holder of an Enhancement Invested Amount with respect
to a Series shall be entitled to give instructions pursuant to this Section 9.2
as if such Enhancement Invested Amount were a Class of such Series. The portion
of the Receivables allocable to any Series shall be equal to the sum of (1) the
product of (A) the Transferor Percentage, (B) the Aggregate Principal
Receivables and (C) a fraction the numerator of which is the related Invested
Percentage with respect to Finance Charge Receivables and the denominator of
which is the sum of all Invested Percentages with respect to Finance Charge
Receivables of all Series outstanding and (2) the Invested Amount of such
Series. The Transferor or any of its Affiliates shall be permitted to bid for
the Receivables. In addition the Transferor or any of its Affiliates shall have
the right to match any bid by a third person and be granted the right to
purchase the Receivables at such matched bid price. The Trustee may obtain a
prior determination from the conservator or receiver that the terms and manner
of any proposed sale, disposition or liquidation are commercially reasonable.
The provisions of Sections 9.1 and 9.2 shall not be deemed to be mutually
exclusive.
(b) The proceeds from the sale, disposition or
liquidation of the Receivables pursuant to Section (a) above shall be treated as
Collections on the Receivables allocable to the Investor Certificateholders and
shall be allocated and deposited as Collections allocable to the Investor
Certificateholders of the applicable Series in accordance with the provisions of
Article IV; provided, however, that the Trustee shall determine conclusively
without liability for such determination the amount of such proceeds which are
allocable to Finance Charge Receivables and the amount of such proceeds which
are allocable to Principal Receivables. On the day following the Distribution
Date on which such proceeds are distributed to the Investor
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Certificateholders (assuming that no Series elects to reconstitute the Trust),
the Trust shall terminate.
[END OF ARTICLE IX]
81
ARTICLE X
SERVICER DEFAULTS
Section 10.1 Servicer Defaults. If any one of the following
events (a "Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to make any payment,
transfer or deposit or to give instructions or notice to the Trustee to make
such payment, transfer or deposit or to give notice to the Trustee as to any
required drawing or payment under any Enhancement on or before the date
occurring five Business Days after the date such payment, transfer, deposit or
drawing or such instruction or notice is required to be made or given, as the
case may be, under the terms of this Agreement or any Supplement;
(b) failure on the part of the Servicer duly to observe
or perform any other covenants or agreements of the Servicer set forth in this
Agreement or any Supplement, which has a material adverse effect on the
Certificateholders of any Series then outstanding (without regard to the amount
of any Enhancement) and which continues unremedied for a period of 60 days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Trustee or the
Transferor, or to the Servicer, the Transferor and the Trustee by the Holders of
Investor Certificates evidencing Undivided Interests aggregating more than 50%
of the Invested Amount of any Series adversely affected thereby, and which
continues to materially adversely affect the rights of the Certificateholders of
any Series then outstanding(without regard to the amount of any Enhancement) or
the Servicer shall delegate its duties under this Agreement, except as permitted
by Section 8.7; provided, however, that any such failure that relates to any
particular Receivable or group of Receivables shall not constitute a Servicer
Default if the Servicer has made a deposit in the Collection Account with
respect to such failure in accordance with Section 3.3;
(c) any representation, warranty or certification made by
the Servicer in this Agreement or any Supplement or in any certificate delivered
pursuant to this Agreement or any Supplement shall prove to have been incorrect
when made, which has a material adverse effect on the rights of the
Certificateholders of any Series then outstanding (without regard to the amount
of any Enhancement) and which continues to be incorrect in any material respect
and which continues to affect materially and adversely the rights of the
Certificateholders of any Series (without regard to the amount of any
Enhancement) for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee or the Transferor, or to the Servicer, the Transferor
and the Trustee by the Holders of Investor Certificates evidencing Undivided
Interests aggregating more than 50% of the Invested Amount of any Series
adversely affected thereby; or
(d) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property, or a
decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Servicer and such
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decree or order shall have remained in force undischarged or unstayed for a
period of 60 days; or the Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations;
then, so long as such Servicer Default shall not have been remedied, the
Trustee, the Transferor or the Holders of Investor Certificates evidencing
Undivided Interests aggregating more than 50% of the Aggregate Invested Amount,
by notice then given in writing to the Servicer (and to the Trustee and the
Transferor if given by the Investor Certificateholders) (a "Termination
Notice"), may terminate all of the rights and obligations of the Servicer as
Servicer under this Agreement and in and to the Receivables and the proceeds
thereof and appoint a new Servicer (a "Service Transfer"). The rights and
interests of the Transferor Interest will not be affected by any Service
Transfer. The Trustee, upon giving or receiving a Termination Notice shall
immediately notify the Rating Agencies and any Enhancement Provider of such
notice. After receipt by the Servicer of such Termination Notice, and on the
date that a Successor Servicer shall have been appointed by the Trustee pursuant
to Section 10.2, all authority and power of the Servicer under this Agreement
shall pass to and be vested in a Successor Servicer, and, without limitation,
the Trustee is hereby authorized and empowered (upon the failure of the Servicer
to cooperate) to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments upon the
failure of the Servicer to execute or deliver such documents or instruments, and
to do and accomplish all other acts or things necessary or appropriate to effect
the purposes of such Service Transfer. The Servicer agrees to take all
reasonable actions to cooperate with the Trustee and such Successor Servicer in
effecting the termination of the responsibilities and rights of the Servicer to
conduct servicing hereunder, including, without limitation, the transfer to such
Successor Servicer of all authority of the Servicer to service the Receivables
provided for under this Agreement, including, without limitation, all authority
over all Collections which shall on the date of transfer be held by the Servicer
for deposit, or which have been deposited by the Servicer, in the Collection
Account, or which shall thereafter be received with respect to the Receivables,
and in assisting the Successor Servicer and in enforcing all rights to
Recoveries. The Servicer shall promptly transfer its electronic records relating
to the Receivables to the Successor Servicer in such electronic form as the
Successor Servicer may reasonably request and shall promptly transfer to the
Successor Servicer all other records, correspondence and documents necessary for
the continued servicing of the Receivables in the manner and at such times as
the Successor Servicer shall reasonably request. To the extent that compliance
with this Section 10.1 shall require the Servicer to disclose to the Successor
Servicer information of any kind which the Servicer reasonably deems to be
confidential, the Successor Servicer shall be required to enter into such
customary licensing and confidentiality agreements as the Servicer shall deem
necessary to protect its interest.
Notwithstanding the foregoing, a delay in or failure of
performance referred to in Section 10.1(a) for a period of 10 Business Days
after the applicable grace period or a delay in or failure of performance
referred to in Section 10.1(b) or (c) for a period of 60 Business Days after the
applicable grace period shall not constitute a Servicer Default if such delay or
failure could not be prevented by the exercise of reasonable diligence by the
Servicer and such delay or failure was caused by an act of God or the public
enemy, acts of declared or undeclared war, public disorder, rebellion, riot or
sabotage, epidemics, landslides, lightning, fire, hurricanes, tornadoes,
earthquakes, nuclear disasters or meltdowns, floods, power outages or similar
causes. The
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preceding sentence shall not relieve the Servicer from using its best efforts to
perform its obligations in a timely manner in accordance with the terms of this
Agreement and the Servicer shall provide the Trustee, any Enhancement Provider,
the Transferor and the Holders of Investor Certificates with an Officer's
Certificate giving prompt notice of such failure or delay by it, together with a
description of the cause of such failure or delay and its efforts so to perform
its obligations. The Servicer shall immediately notify a Responsible Officer of
the Trustee in writing of any Servicer Default.
Section 10.2 Trustee to Act; Appointment of Successor.
(a) On and after the receipt by the Servicer of a
Termination Notice pursuant to Section 10.1, the Servicer shall continue to
perform all servicing functions under this Agreement until the date specified in
the Termination Notice or otherwise specified by the Trustee in writing or, if
no such date is specified in such Termination Notice, or otherwise specified by
the Trustee, until a date mutually agreed upon by the Servicer and Trustee. The
Trustee shall as promptly as possible after the giving of a Termination Notice
appoint a successor servicer (the "Successor Servicer"), and such Successor
Servicer shall accept its appointment by a written assumption in a form
acceptable to the Trustee and the Transferor. The Transferor shall have the
right to nominate to the Trustee the name of a potential successor servicer
which nominee shall be selected by the Trustee as the Successor Servicer. The
Trustee may obtain bids from any potential successor servicer. If the Trustee is
unable to obtain any bids from any potential successor servicer, the Trustee has
not appointed the Transferor's nominee and the Servicer delivers to the Trustee
an Officer's Certificate to the effect that it cannot in good faith cure the
Servicer Default which gave rise to a transfer of servicing, then the Trustee
shall notify each Enhancement Provider that a sale of the Receivables is
proposed and shall provide each Enhancement Provider an opportunity to bid on
the Receivables and shall offer the Transferor the right of first refusal to
purchase the Receivables on terms equivalent to the best purchase offer as
determined by the Trustee, but in no event less than an amount equal to the
Aggregate Invested Amount (less the aggregate principal amount on deposit in the
Excess Funding Account and any principal funding account with respect to any
Series) on the date of such purchase plus all accrued but unpaid interest on the
Certificates of all Series at the applicable Certificate Rates through the end
of the applicable interest accrual periods of such Series plus any other unpaid
amounts required to be paid pursuant to this Section 10.2 under any Supplement;
provided, however, that, if the Transferor shall not have a rating of P-3 or
Baa3 or higher by Moody's and BBB- or higher by Standard & Poor's, no such
reassignment shall occur unless the Transferor shall deliver to the Trustee and
the Rating Agencies an Opinion of Counsel reasonably acceptable to the Trustee
that such reassignment would not constitute a fraudulent conveyance. In the
event that a Successor Servicer has not been appointed and has not accepted its
appointment at the time when the Servicer ceases to act as Servicer, the Trustee
(as trustee hereunder) without further action shall automatically be appointed
the Successor Servicer. Notwithstanding the above, the Trustee shall, if it is
legally unable so to act, petition a court of competent jurisdiction to appoint
any established financial institution having a net worth of not less than
$50,000,000 and whose regular business includes the servicing of charge card or
revolving credit receivables as the Successor Servicer hereunder.
Notwithstanding anything to the contrary in this Agreement, the entire amount of
the reassignment deposit amount shall be distributed to the Investor
Certificateholders of the related Series on the subsequent Distribution Date for
such Series pursuant to Section 12.3 (except for amounts payable to any
Enhancement
84
Provider under the applicable Enhancement Agreement, which amounts shall be
distributed to such Enhancement Provider.)
(b) Upon its appointment, the Successor Servicer shall be
the successor in all respects to the Servicer with respect to servicing
functions under this Agreement and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof, and all references in this Agreement to the Servicer shall be
deemed to refer to the Successor Servicer; provided, however, that the outgoing
Servicer shall not be relieved of any liability hereunder for its actions prior
to the transfer of servicing hereunder; and, provided further, that (i) the
outgoing Servicer shall not indemnify the Trust or the Trustee under Section 8.4
for acts, omissions or alleged acts or omissions by a Successor Servicer and
(ii) the outgoing Servicer shall not pay or reimburse the Trustee pursuant to
Section 11.5 for any expense, disbursement or advance of the Trustee related to
or arising as a result of the negligence or bad faith of the Successor Servicer.
Any Successor Servicer, by its acceptance of its appointment, will automatically
agree to be bound by the terms and provisions of any applicable Enhancement
agreement.
(c) In connection with such appointment and assumption,
the Trustee shall be entitled to such compensation, or may make such
arrangements for the compensation of the Successor Servicer out of Collections,
as it and such Successor Servicer shall agree; provided, however, that no such
compensation shall be in excess of the Monthly Servicing Fee permitted to the
Servicer pursuant to Section 3.2.
(d) All authority and power granted to the Successor
Servicer under this Agreement shall automatically cease and terminate upon
termination of the Trust pursuant to Section 12.1 and shall pass to and be
vested in the Transferor and, without limitation, the Transferor is hereby
authorized and empowered to execute and deliver, on behalf of the Successor
Servicer, as attorney-in-fact or otherwise, all documents and other instruments,
and to do and accomplish all other acts or things necessary or appropriate to
effect the purposes of such transfer of servicing rights. The Successor Servicer
agrees to cooperate with the Transferor in effecting the termination of the
responsibilities and rights of the Successor Servicer to conduct servicing on
the Receivables. The Successor Servicer shall transfer its electronic records
relating to the Receivables to the Transferor in such electronic form as the
Transferor may reasonably request and shall transfer all other records,
correspondence and documents to the Transferor in the manner and at such times
as the Transferor shall reasonably request. To the extent that compliance with
this Section 10.2 shall require the Successor Servicer to disclose to the
Transferor information of any kind which the Successor Servicer deems to be
confidential, the Transferor shall be required to enter into such customary
licensing and confidentiality agreements as the Successor Servicer shall deem
necessary to protect its interests.
Section 10.3 Notification to Certificateholders. Upon the
occurrence of any Servicer Default, the Servicer shall give prompt written
notice thereof to the Trustee, the Rating Agencies and any Enhancement Provider,
and the Trustee shall give notice to the Investor Certificateholders at their
respective addresses appearing in the Certificate Register. Upon any termination
or appointment of a Successor Servicer pursuant to this Article X, the Trustee
shall give prompt written notice thereof to the Investor Certificateholders at
their respective addresses appearing in the Certificate Register, the Rating
Agencies and to any Enhancement Provider.
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Notice to Holders of Bearer Certificates shall be given by publication in the
manner described in Section 13.5.
Section 10.4 Waiver of Past Defaults. The Holders of Investor
Certificates evidencing Undivided Interests aggregating more than 66-2/3% of the
Invested Amount of any Series then outstanding affected by any default by the
Servicer or the Transferor may, on behalf of all Holders of Certificates of such
affected Series, waive any default by the Servicer or the Transferor in the
performance of their respective obligations hereunder and its consequences,
except a default resulting from the failure to make any required deposits or
payments of interest or principal with respect to any Series. Upon any such
waiver of a past default, such default shall cease to exist, and any default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so waived.
[END OF ARTICLE X]
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ARTICLE XI
THE TRUSTEE
Section 11.1 Duties of Trustee.
(a) The Trustee, prior to the occurrence of a Servicer
Default and after the curing or waiving of all Servicer Defaults which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement, and no implied covenants or
obligations of the Trustee shall be read into this Agreement. If a Servicer
Default has occurred (which has not been cured or waived), the Trustee (as
Trustee and not Successor Servicer) shall exercise such of the rights and powers
vested in it by this Agreement or any Supplement, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee which are specifically required to be
furnished pursuant to any provision of this Agreement or any Supplement, shall
examine them to determine whether they conform as to form to the requirements of
this Agreement or any Supplement, but shall not be required to verify the
accuracy of any information, calculations or conclusions stated therein.
(c) Subject to Section 11.1(a), no provision of this
Agreement or any Supplement shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure to act or its
own willful misconduct; provided, however, that:
(i) the Trustee shall not be liable for an error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable
with respect to any action taken, suffered or omitted to be taken by it
in good faith in accordance with the direction of the Holders of
Investor Certificates evidencing Undivided Interests aggregating more
than 50% of the Invested Amount of any Series adversely affected
thereby relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Agreement or any
Supplement;
(iii) the Trustee shall not be charged with
knowledge of any failure by the Servicer (other than the Trustee, in
its capacity as Successor Servicer) to comply with the obligations of
the Servicer referred to in clauses (a), (b) and (c) of Section 10.1
unless a Responsible Officer of the Trustee obtains actual knowledge of
such failure (it being understood that knowledge of the Servicer, in
its capacity as agent for the Trustee, is not attributable to the
Trustee) or the Trustee receives written notice of such failure from
the Servicer, the Transferor, any Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the
Invested Amount of any Series adversely affected thereby or any
Enhancement Provider;
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(iv) in making a determination of any material
and adverse effect upon Certificateholders or the Investor
Certificates, the Trustee may, as to matters of law, rely exclusively
upon an Opinion of Counsel.
(d) The Trustee (in its capacity as such) shall not be
required to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder, or in exercise of any of its
rights or powers, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this Agreement
or any Supplement shall in any event require the Trustee to perform, or be
responsible for the manner of performance of, any of the obligations of the
Transferor, the Servicer or the Successor Servicer under this Agreement or any
Supplement except during such time, if any, as the Trustee shall be the
Successor Servicer in accordance with the terms of this Agreement or any
Supplement.
(e) Except for actions expressly authorized by this
Agreement or any Supplement, the Trustee shall take no action reasonably likely
to impair the interests of the Trust in any Receivable now existing or hereafter
created or to impair the value of any Receivable now existing or hereafter
created.
(f) Except as specifically provided in this Agreement,
the Trustee shall have no power to vary the corpus of the Trust.
(g) In the event that the Paying Agent or the Transfer
Agent and Registrar shall not be the Trustee and shall fail to perform any
obligation, duty or agreement in the manner or on the day required to be
performed by the Paying Agent or the Transfer Agent and Registrar, as the case
may be, under this Agreement, the Trustee shall be obligated promptly upon its
knowledge thereof to perform such obligation, duty or agreement in the manner so
required but shall not be required to make a payment out of its own funds.
(h) Any action, suit or proceeding brought in respect of
one or more particular Series shall have no effect on the Trustee's rights,
duties and obligations hereunder with respect to any one or more Series not the
subject of such action, suit or proceeding.
(i) The Trustee shall, upon the reasonable request of the
Transferor, enter into any intercreditor agreement relating to the assets of the
Transferor, provided that nothing in any such agreement shall impair the rights
of the Trustee hereunder.
Section 11.2 Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 11.1:
(a) the Trustee may rely on and shall be protected in
acting on, or in refraining from acting in accord with, any resolution,
Officer's Certificate, Opinion of Counsel, certificate of independent public
accountants or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document,
including, without limitation, any request or instruction by the Servicer or the
Transferor to make any deposit or payment or any draw on any Enhancement or to
transfer any Receivables or Accounts, prima facie properly executed and
submitted to it pursuant to this Agreement or any Supplement by the proper party
or parties;
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(b) the Trustee may consult with counsel as to matters of
law and any advice or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such Opinion of
Counsel as to any actions required to be taken or withheld hereunder;
(c) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement or any Supplement, or
to institute, conduct or defend any litigation hereunder or in relation hereto,
at the request, order or direction of any of the Certificateholders or
Certificate Owners or any Enhancement Provider, pursuant to the provisions of
this Agreement or any Supplement or any Enhancement, unless such
Certificateholders or Certificate Owners or such Enhancement Provider shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby; nothing
contained herein shall, however, relieve the Trustee (as Trustee but not as
Successor Servicer) of the obligations, upon the occurrence of any Servicer
Default (which has not been cured or waived), to exercise such of the rights and
powers vested in it by this Agreement or any Supplement, and to use the same
degree of care and skill in their exercise, as a prudent Person would exercise
or use under the circumstances in the conduct of such Person's own affairs;
(d) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement or
any Supplement;
(e) except as may be required by Section 11.1(a) or
11.1(b), the Trustee shall not be bound to make any investigation into the facts
of matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, except to the extent specifically requested in writing so to do by
Holders of Investor Certificates evidencing Undivided Interests aggregating more
than 50% of the Invested Amount of any Series which could be adversely affected
if the Trustee does not perform such acts and the Trustee is reasonably
indemnified therefor;
(f) the Trustee (in its capacity as such) may execute any
of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys or a custodian, and the Trustee
(in its capacity as such) shall not be responsible for any misconduct or
negligence on the part of any such agent, attorney or custodian appointed with
due care by it hereunder;
(g) except as may be required by Section 11.1(a) or
11.1(b) hereof, the Trustee shall not be required to make any initial or
periodic examination of any documents or records related to the Receivables or
the Accounts for the purpose of establishing the presence or absence of defects,
the compliance by the Transferor or the Servicer with their representations,
warranties or covenants or for any other purpose;
(h) the permissive right of the Trustee to take actions
enumerated in this Agreement or any Supplement shall in no event be construed as
a duty;
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(i) whenever in the administration of this Agreement or
any Supplement, the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officer's Certificate;
(j) except with respect to any Enhancement Invested
Amount, the Trustee shall not be deemed to be a fiduciary for the Enhancement
Provider, if any, in its capacity as such, and the Trustee's sole responsibility
with respect to the Enhancement Provider in its capacity as such shall be to
perform those duties with respect to the Enhancement Provider as are
specifically set forth in the related Enhancement Agreement and no implied
covenants or obligations shall be read into this Agreement against the Trustee
with respect to the Enhancement Provider; and
(k) the Trustee shall have no duty (i) to see to any
recording, filing or depositing of this Agreement or any agreement referred to
herein or any financing statement or continuation statement evidencing a
security interest in the Receivables or the Accounts, or to see to the
maintenance of any such recording, filing or depositing or any rerecording,
refiling or redepositing of any thereof or (ii) to confirm or verify the
contents of any reports or certificates of the Servicer delivered to the Trustee
pursuant to this Agreement believed by the Trustee to be genuine and to have
been signed or presented by the proper party or parties.
Section 11.3 Trustee Not Liable for Recitals in Certificates.
The Trustee assumes no responsibility for the correctness of the recitals
contained herein, in any Supplement or in the Certificates (other than the
certificates of authentication on the Certificates). Except as set forth in
Section 2.2(a) or Section 11.15, the Trustee makes no representations as to (i)
the validity or sufficiency of this Agreement or any Supplement or of the
Certificates (other than the certificates of authentication on the
Certificates), (ii) the existence or validity of any Receivable, (iii) the
validity of any transfer or assignment of any Receivable to the Trust, (iv) the
validity of any grant of a security interest to the Trust in any Receivable, (v)
the perfection of any security interest (whether as of the date hereof or at any
future time) in any Receivable, (vi) the maintenance of or the taking of any
action to maintain such perfection, (vii) the receipt by the Trustee or the
Servicer of any Receivable, (viii) the performance or enforcement of any
Receivable, (ix) the compliance by the Transferor or the Servicer with any
covenant or representation, (x) the breach by the Transferor or the Servicer of
any warranty or representation made hereunder or in any related document or the
accuracy of any such warranty or representation or (xi) any action taken by the
Servicer in the name of the Trustee. The Trustee shall not be accountable for
the use or application by the Transferor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Transferor in respect of the Receivables or deposited in or withdrawn
from the Collection Account, the Excess Funding Account or any other accounts
now or hereafter established to effectuate the transactions contemplated herein
and in accordance with the terms hereof.
Section 11.4 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Investor
Certificates with the same rights as it would have if it were not the Trustee
and may transact any banking or trust business with the Transferor, the Servicer
or any of their respective Affiliates.
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Section 11.5 The Servicer to Pay Trustee's Fees and Expenses.
The Servicer covenants and agrees to pay to the Trustee and any co-trustee(s)
appointed pursuant to Section 11.10 from time to time out of its own funds, and
the Trustee and any such co-trustee(s), shall be entitled to receive, reasonable
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) for all services rendered by
it in the execution of the trust hereby created and in the exercise and
performance of any of the powers and duties hereunder or pursuant to any
Supplement of the Trustee, and, subject to Section 8.4, the Servicer will pay or
reimburse the Trustee and any such co-trustee(s) (without reimbursement from the
Collection Account or otherwise) upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee or any such
co-trustee(s) in accordance with any of the provisions of this Agreement or any
Supplement (including the reasonable fees and expenses of its agents and
counsel) except any such expense, disbursement or advance as may arise from its
negligence or bad faith and except as provided in the following sentence. If the
Trustee is appointed Successor Servicer pursuant to Section 10.2, the provisions
of this Section 11.5 shall not apply to expenses, disbursements and advances
incurred or made by the Trustee in its capacity as Successor Servicer.
The obligations of the Servicer and the Transferor under this
Section 11.5, Section 7.4, Section 8.4 and Section 11.17 shall survive the
termination of the Trust and the resignation or removal of the Trustee or the
Servicer.
Section 11.6 Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a corporation (including a banking corporation)
or national banking association organized and doing business under the laws of
the United States or any state thereof authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000, a rating as to its long-term unsecured debt obligations of at least
Baa3 by Moody's (if Moody's shall then be a Rating Agency) and BBB- by Standard
& Poor's (if Standard & Poor's shall then be a Rating Agency) and a rating as to
its short-term deposits or long-term unsecured debt obligations that satisfies
the rating requirement of any other Rating Agency assigning a rating for any
Class of Investor Certificates of any then outstanding Series and subject to
supervision or examination by Federal or state authority. If such corporation or
national banking association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section 11.6, the combined capital and
surplus of such corporation or national banking association shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 11.6, the Trustee
shall resign immediately in the manner and with the effect specified in Section
11.7.
Section 11.7 Resignation or Removal of Trustee.
(a) The Trustee may at any time resign as Trustee and be
discharged from the trust hereby created by giving written notice thereof to the
Transferor and the Servicer. Upon receiving such notice of resignation, the
Transferor shall promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted such appointment within 30 days after
the giving of such notice of
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resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible
in accordance with the provisions of Section 11.6 and shall fail to resign after
written request therefor by the Transferor, or if at any time the Trustee shall
be legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Transferor may, but shall not be required to, remove the Trustee and promptly
appoint a successor trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so removed and one copy to
the successor trustee. The Transferor shall promptly pay all fees and expenses
owed to any removed Trustee.
(c) Any resignation or removal of the Trustee and
appointment of a successor trustee pursuant to any of the provisions of this
Section 11.7 shall not become effective until acceptance of appointment by the
successor trustee as provided in Section 11.8 and payment of all fees and
expenses owed to the resigning or removed Trustee. Any liability of the Trustee
arising hereunder shall survive such appointment of a successor trustee.
Section 11.8 Successor Trustee.
(a) Any successor trustee appointed as provided in
Section 11.7 shall execute, acknowledge and deliver to the Transferor, the
Servicer and its predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor Trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder and under any Supplement, with like
effect as if originally named as Trustee herein. The predecessor Trustee shall
upon payment of its fees and expenses deliver to the successor trustee all
documents held by it hereunder, and the Transferor, the Servicer and the
predecessor Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and
obligations.
(b) No successor trustee shall accept appointment as
provided in this Section 11.8 unless at the time of such acceptance such
successor trustee shall be eligible under the provisions of Section 11.6 hereof
and shall be an Eligible Servicer, and, if Standard & Poor's is then a Rating
Agency, unless Standard & Poor's shall have consented to such appointment.
(c) Upon acceptance of appointment by a successor trustee
as provided in this Section 11.8, such successor trustee shall mail notice of
such succession hereunder to each Rating Agency and all Certificateholders
(other than Holders of Bearer Certificates) at their addresses as shown in the
Certificate Register. Notice to Holders of Bearer Certificates shall be given by
publication in the manner described in Section 13.5.
Section 11.9 Merger or Consolidation of Trustee. Any Person
into which the Trustee may be merged or converted or with which it may be
consolidated, or any Person
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resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any Person succeeding to all or substantially all the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such Person shall be eligible under the provisions of
Section 11.6, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 11.10 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provision of this Agreement
or any Supplement, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the Trust may at the time
be located, the Trustee shall have the power and may execute and deliver all
instruments to appoint one or more Persons to act as a co-trustee, or separate
trustee, of all or any part of the Trust, and to vest in such Person, in such
capacity and for the benefit of the Certificateholders, such title to the Trust,
or any part thereof, and, subject to the other provisions of this Section 11.10,
such powers, duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
11.6 and no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 11.8. The Servicer shall be
responsible for the fees and expenses of any co-trustee or separate trustee
appointed hereunder.
(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Trustee joining in such act), except to the extent that under any laws
of any jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be personally
liable by reason of any act or omission of any other trustee hereunder
appointed with due care; and
(iii) the Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article XI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its
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instrument of appointment, either jointly with the Trustee or separately, as may
be provided therein, subject to all the provisions of this Agreement or any
Supplement, specifically including every provision of this Agreement or any
Supplement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time
appoint the Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect to this Agreement or any Supplement on its behalf and in its name. If
any separate trustee or co-trustee shall die, become incapable of acting, resign
or be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
Section 11.11 Tax Returns and Compliance.
(a) In the event the Trust shall be required to file tax
returns, the Servicer shall prepare or cause to be prepared and is authorized
hereunder to sign any tax returns required to be filed by the Trust and, to the
extent possible, shall file such returns at least five days before such returns
are due to be filed. The Servicer shall prepare or shall cause to be prepared
all tax information required by law to be distributed to Certificateholders and
Certificate Owners and shall deliver such information to the Paying Agent at
least five days prior to the date it is required by law to be distributed to
Certificateholders and Certificate Owners. The Trustee shall, upon request,
furnish the Servicer with all such information known to the Trustee as may be
reasonably required in connection with the preparation of such tax returns and
shall, upon request, execute such tax returns. In no event shall the Trustee,
the Paying Agent, the Servicer or the Transferor be liable for any liabilities,
costs or expenses of the Trust, the Investor Certificateholders or the
Certificate Owners arising under any tax law, including, without limitation,
Federal, state or local income or excise taxes or any other tax imposed on or
measured by income (or any interest or penalty with respect thereto or arising
from a failure to comply therewith), except to the extent that such tax is
imposed as a result of a violation by such Person of the provisions of this
Agreement or any Supplement.
(b) The Trustee and each Paying Agent shall comply with
all Federal withholding requirements respecting payments to Investor
Certificateholders or persons receiving funds from the Trust. In the event the
Trustee or Paying Agent does withhold any amount from interest, principal, or
other payments pursuant to Federal withholding requirements, the Trustee or
Paying Agent shall indicate the amount withheld in writing with any payment to
the person otherwise entitled to such amount.
Section 11.12 Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or any
Supplement or the Certificates may be prosecuted and enforced by the Trustee
without the possession of any of the Certificates or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee. Any recovery of judgment
shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and
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advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Certificateholders in respect of which such judgment has been obtained.
Section 11.13 Suits for Enforcement. If a Servicer Default
shall occur and be continuing, the Trustee, in its discretion, may, subject to
the provisions of Section 10.1, proceed to protect and enforce its rights and
the rights of the Certificateholders under this Agreement or any Supplement by
such suit, action or proceeding in equity or at law or otherwise, whether for
the specific performance of any covenant or agreement contained in this
Agreement or any Supplement or in aid of the execution of any power granted in
this Agreement or any Supplement or for the enforcement of any other legal,
equitable or other remedy as the Trustee, being advised by counsel, shall deem
effectual to protect and enforce any of the rights of the Trustee or the
Certificateholders.
Section 11.14 Rights of Certificateholders to Direct Trustee.
Unless otherwise specified for any Series in the related Supplement, Holders of
Investor Certificates evidencing Undivided Interests aggregating more than 50%
of the Aggregate Invested Amount of all Series affected by the conduct of any
proceeding or the exercise of any right conferred on the Trustee shall have the
right to direct the time, method, and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee; provided, however, that, subject to Section 11.1, the Trustee shall
have the right to decline to follow any such direction if the Trustee being
advised by counsel determines that the action so directed may not lawfully be
taken, or if the Trustee in good faith shall, by a Responsible Officer or
Responsible Officers of the Trustee, determine that the proceedings so directed
would be illegal or involve it in personal liability for which it has not been
adequately indemnified hereunder or be unduly prejudicial to the rights of
Certificateholders of such Series not parties to such direction or to the rights
of Certificateholders of other Series; and, provided further, that nothing in
this Agreement or any Supplement shall impair the right of the Trustee to take
any action deemed proper by the Trustee and which is not inconsistent with such
direction.
Section 11.15 Representations and Warranties of Trustee. The
Trustee represents and warrants that:
(i) The Trustee is a New York banking
corporation, organized, existing and in good standing under the laws of
the State of New York;
(ii) The Trustee has full power, authority and
right to execute, deliver and perform this Agreement and any
Supplement, and has taken all necessary action to authorize the
execution, delivery and performance by it of this Agreement and any
Supplement; and
(iii) This Agreement and any Supplement have been
duly executed and delivered by the Trustee and, assuming due execution
and delivery by the other parties hereto and thereto, constitute legal,
valid and binding obligations of the Trustee enforceable against the
Trustee in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, receivership, conservatorship,
reorganization, moratorium or other similar laws now or hereafter in
effect affecting the enforcement of
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creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a
proceeding at law or in equity).
Section 11.16 Maintenance of Office or Agency. The Trustee
will maintain at its expense in the Borough of Manhattan, The City of New York,
an office or offices or agency or agencies where notices and demands to or upon
the Trustee in respect of the Certificates and this Agreement may be served. The
address of such office or agency will be specified in the related Supplement.
The Trustee will give prompt written notice (or in the case of Holders of Bearer
Certificates, notice by publication in the manner described in Section 13.5) to
the Servicer and to Certificateholders of any change in the location of the
Certificate Register or any such office or agency.
Section 11.17 Waiver of Bond Requirement. The Trustee shall be
relieved of, and each Certificateholder hereby waives, any requirement of any
jurisdiction in which the Trust, or any part thereof, may be located that the
Trustee post a bond or other surety with any court, agency or body whatsoever.
Section 11.18 Waiver of Inventory, Accounting and Appraisal
Requirements. The Trustee shall be relieved of, and each Certificateholder
hereby waives, any requirement of any jurisdiction in which the Trust, or any
part thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust or any Trust Property with any court, agency or body at
any time or in any manner whatsoever.
[END OF ARTICLE XI]
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ARTICLE XII
TERMINATION
Section 12.1 Termination of Trust.
(a) The respective obligations and responsibilities of
the Transferor, the Servicer, the Paying Agent and the Trustee and their agents
hereunder created hereby (other than the obligation of the Trustee to make
payments to Certificateholders as hereafter set forth) shall terminate, except
with respect to the duties described in Sections 2.4(c), 7.4, 8.4, 11.5 and
12.3(b), upon the earliest of (i) the day following the date on which funds
shall have been deposited in the Collection Account sufficient to pay the
Aggregate Invested Amount and any Enhancement Invested Amount plus applicable
Certificate Interest accrued through the last day of the interest accrual period
preceding such Distribution Date in full on all Series of Investor Certificates,
(ii) October 1, 2097 and (iii) the expiration of 21 years from the death of the
last survivor of the descendants of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, former President
of the United States, living on the date hereof (the "Final Termination Date").
(b) If on the last Distribution Date in the month
immediately preceding the month in which the Final Termination Date occurs
(after giving effect to all transfers, withdrawals, deposits and drawings to
occur on such date and the payment of principal on any Series of Certificates to
be made on such Distribution Date pursuant to Article IV), the Invested Amount
or any Enhancement Invested Amount of any Series would be greater than zero, the
Servicer shall sell within 30 days after such Distribution Date all of the
Receivables in a commercially reasonable manner and on commercially reasonable
terms which shall include the solicitation of competitive bids and shall
consummate the sale with the highest bidder for the Receivables. The Transferor
or any of its Affiliates shall be permitted to bid for the Receivables. In
addition, the Transferor or any Affiliate shall have the right to match any bid
by a third Person and be granted the right to purchase the Receivables at such
matched bid price. The proceeds of any such sale shall be treated as Collections
on the Receivables and shall be allocated in accordance with Article IV;
provided, however, that the Trustee shall determine conclusively the amount of
such proceeds which are allocable to Finance Charge Receivables and the amount
of such proceeds which are allocable to Principal Receivables. Prior to such
sale of Receivables, the Servicer shall continue to collect Collections on the
Receivables and allocate such payments in accordance with the provisions of
Article IV.
Section 12.2 Optional Purchase; Final Termination Date of
Investor Certificates of any Series.
(a) If provided in any Supplement with respect to a
Series of Investor Certificates (which provision must refer specifically to this
Section 12.2), on any Distribution Date, the Transferor may, but shall not be
obligated to, purchase such Series by depositing into the Collection Account,
prior to such Distribution Date, an amount equal to the Invested Amount thereof
plus interest accrued and unpaid thereon at the applicable Certificate Rate
through the interest accrual period preceding such Distribution Date plus any
other unpaid amounts required to be paid pursuant to this Section 12.2 under any
Supplement; provided, however, that, if the Transferor shall not have a rating
of P-3 or Baa3 or higher by Moody's and BBB- or higher by Standard & Poor's, no
such purchase of any Series of Investor Certificates shall occur unless the
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Transferor shall deliver to the Trustee and the Rating Agencies an Opinion of
Counsel reasonably acceptable to the Trustee that such purchase of any Series of
Investor Certificates would not constitute a fraudulent conveyance. Nothing
herein limits the right of the Transferor or any Affiliate to purchase Investor
Certificates on the open market and submit them to the Trustee for cancellation.
(b) The amount deposited pursuant to Section 12.2(a)
shall be paid to the Investor Certificateholders of the related Series pursuant
to Article IV on the Distribution Date following the date of such deposit. All
Certificates of a Series which are purchased by the Transferor pursuant to
Section 12.2(a) shall be delivered by the Transferor upon such purchase to, and
be canceled by, the Transfer Agent and Registrar and be disposed of in a manner
satisfactory to the Trustee and the Transferor.
(c) All principal or interest with respect to any Series
of Investor Certificates shall be due and payable no later than the Stated
Series Termination Date with respect to such Series. Unless otherwise provided
in the related Supplement, in the event that the Invested Amount or any
Enhancement Invested Amount of any Series of Certificates is greater than zero
on its Stated Series Termination Date (after giving effect to all transfers,
withdrawals, deposits and drawings to occur on such date and the payment of
principal to be made on such Series on such date), the Trustee will sell or
cause the Servicer to sell, and pay the proceeds to all Certificateholders of
such Series pro rata in final payment of all principal of and accrued interest
on such Series of Certificates, an amount of Receivables or interests in
Receivables up to 110% of the Invested Amount and any Enhancement Invested
Amount of such Series at the close of business on such date (but not more than
an amount of Receivables equal to the sum of (1) the product of (A) the
Transferor Percentage, (B) the Aggregate Principal Receivables and (C) a
fraction the numerator of which is the related Invested Percentage with respect
to Finance Charge Receivables and the denominator of which is the sum of all
Invested Percentages with respect to Finance Charge Receivables of all Series
outstanding and (2) the Invested Amount and any Enhancement Invested Amount of
such Series). The Trustee shall conduct the sale of Receivables in a
commercially reasonable manner and on commercially reasonable terms which shall
include the solicitation of competitive bids and shall consummate the sale with
the highest bidder for the Receivables. The Transferor or any of its Affiliates
shall be permitted to bid for the Receivables. In addition, the Transferor or
any Affiliate shall have the right to match any bid by a third Person and be
granted the right to purchase the Receivables at such matched bid price. Any
proceeds of such sale in excess of the outstanding principal and interest due to
Certificateholders of the applicable Series (which shall be paid to such
Holders) shall be paid to the Holder of the Exchangeable Transferor Certificate,
unless the applicable Supplement shall provide otherwise. Upon such Stated
Series Termination Date with respect to the applicable Series of Certificates,
final payment of all amounts allocable to any Investor Certificates of such
Series shall be made in the manner provided in Section 12.3.
Section 12.3 Final Payment with Respect to any Series.
(a) Written notice of any termination, specifying the
Distribution Date upon which the Investor Certificateholders of any Series may
surrender their Certificates for payment of the final distribution with respect
to such Series and cancellation, shall be given (subject to at least two
Business Days' prior notice from the Servicer to the Trustee) by the Trustee to
the
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Investor Certificateholders of such Series mailed not later than the fifth day
of the month of such final distribution (or, in the case of the Holders of
Bearer Certificates, by the publication by the Trustee of a notice at least once
in a newspaper of general circulation in Luxembourg (which newspaper shall be
printed in the English language and customarily published on each business day
in Luxembourg) and, so long as the Investor Certificates are listed on the
Luxembourg Stock Exchange or other stock exchange and such exchange so requires,
in Luxembourg or the location required by such other stock exchange) specifying
(a) the Distribution Date (which shall be the Distribution Date in the month in
which the deposit is made pursuant to Section 2.4, 9.2, 10.2 or 12.2(a) or such
other section as may be specified in the related Supplement) upon which final
payment of such Investor Certificates will be made upon presentation and
surrender of such Investor Certificates at the office or offices therein
designated (which, in the case of Bearer Certificates, shall be outside the
United States), (b) the amount of any such final payment and (c) that the Record
Date otherwise applicable to such Distribution Date is not applicable, payments
being made only upon presentation and surrender of the Investor Certificates at
the office or offices therein specified. The Servicer's notice to the Trustee in
accordance with the preceding sentence shall be accompanied by an Officer's
Certificate setting forth the information specified in the applicable Supplement
covering the period during the then current calendar year through the date of
such notice and setting forth the date of such final distribution. The Trustee
shall give such notice to the Transferor, the Transfer Agent and Registrar and
the Paying Agent at the time such notice is given to such Investor
Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant
to Section 12.1(a) or the occurrence of the Stated Series Termination Date with
respect to any Series, all funds then on deposit in the Collection Account shall
continue to be held in trust for the benefit of the Certificateholders and the
Paying Agent or the Trustee shall pay such funds to the Certificateholders upon
surrender of their Certificates (which surrenders and payments, in the case of
Bearer Certificates, shall be made only outside the United States). In the event
that all of the Investor Certificateholders of such Series shall not surrender
their Certificates for cancellation within six months after the date specified
in the above-mentioned notice, the Trustee shall give a second written notice
(or, in the case of Bearer Certificates, publication notice) to the remaining
Investor Certificateholders of such Series upon receipt of the appropriate
records from the Transfer Agent and Registrar to surrender their Certificates
for cancellation and receive the final distribution with respect thereto. If
within one and one-half years after the second notice all the Investor
Certificates of such Series shall not have been surrendered for cancellation,
the Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Investor Certificateholders of such
Series concerning surrender of their Certificates, and the cost thereof shall be
paid out of the funds in the Collection Account held for the benefit of such
Investor Certificateholders. The Trustee shall pay or cause to be paid to the
Transferor upon request all monies held for the payment of principal or interest
which remain unclaimed after two years. If the applicable escheat or unclaimed
property laws of any relevant jurisdiction require the Trustee to follow any
procedures with respect to any Trust Property inconsistent with the foregoing,
then to the extent of any such inconsistency the Trustee shall not be liable for
any failure to abide by the terms of this Agreement.
(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.
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Section 12.4 Transferor's Termination Rights. Upon the
termination of the Trust pursuant to Section 12.1 and the surrender of the
Exchangeable Transferor Certificate, the Trustee shall transfer and assign to
the Transferor (without recourse, representation or warranty) all right, title
and interest of the Trust in and to the Receivables, whether then existing or
thereafter created, and all monies due or to become due and all amounts received
with respect thereto and all proceeds thereof, except for amounts held by the
Paying Agent pursuant to Section 12.3(b), and all other Trust Property. The
Trustee shall execute and deliver such instruments of transfer and assignment,
in each case without recourse, representation or warranty, as shall be
reasonably requested by the Transferor to vest in the Transferor all right,
title and interest which the Trust had in the applicable Receivables.
Section 12.5 Defeasance. Notwithstanding anything to the
contrary in this Agreement, except as otherwise specifically provided with
respect to any Series in the related Supplement:
(a) The Transferor may at the Transferor's option be
discharged from its obligations hereunder with respect to any Series or all
outstanding Series (the "Defeased Series") on the date the applicable conditions
set forth in subsection 12.5(c) are satisfied (a "Defeasance"); provided,
however, that the following rights, obligations, powers, duties and immunities
shall survive with respect to the Defeased Series until otherwise terminated or
discharged hereunder: (i) the rights of the Holders of Investor Certificates of
the Defeased Series to receive, solely from the trust fund provided for in
Section 12.5(c), payments in respect of principal of and interest on such
Investor Certificates when such payments are due; (ii) the right of any
Enhancement Provider to the repayment of any amount due to it under the related
Enhancement Agreement and Supplement, including interest thereon; (iii) the
Transferor's obligations with respect to such Certificates under Sections 6.3
and 6.4; (iv) the rights (including the right to payment of its fees and
expenses), powers, trusts, duties, and immunities of the Trustee, the Paying
Agent and the Transfer Agent and Registrar hereunder; and (v) this Section 12.5.
(b) Subject to Section 12.5(c), the Transferor at its
option may cause Collections allocated to the Defeased Series and available to
acquire Principal Receivables to be applied to acquire Eligible Investments
rather than Principal Receivables.
(c) The following shall be the conditions to Defeasance
under Section 12.5(a):
(i) The Transferor irrevocably shall have
deposited or caused to be deposited with the Trustee (such deposit to
be made from other than the Transferor's funds), under the terms of an
irrevocable trust agreement in form and substance satisfactory to the
Trustee, as trust funds in trust for making the payments described
below, (A) U.S. Dollars in an amount, or (B) Eligible Investments which
through the scheduled payment of principal and interest in respect
thereof will provide, not later than the due date of payment thereon,
money in an amount, or (C) a combination thereof, in each case
sufficient to pay and discharge, and which shall be applied by the
Trustee to pay and discharge, all remaining scheduled interest and
principal payments on all outstanding Investor Certificates of the
Defeased Series on the dates scheduled for such
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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 exercise of its right pursuant
to this Section 12.5 with respect to a Defeased Series to substitute
money or Eligible Investments for Receivables, the Transferor shall
have delivered to the Trustee an Opinion of Counsel to the effect that
such deposit and termination of obligations will not have any material
adverse impact on the Federal income tax characterization of any
outstanding Series of Investor Certificates that have been the subject
of a previous opinion of tax counsel or result in the Trust being
taxable as an association for Federal or applicable state tax purposes
and an Opinion of Counsel to the effect that such deposit and
termination of obligations will not result in the Trust being required
to register as an "investment company" within the meaning of the 1940
Act;
(iii) the Transferor shall have delivered to the
Trustee and any Enhancement Provider an Officer's Certificate of the
Transferor stating the Transferor reasonably believes that such deposit
and termination of obligations will not, based on the facts known to
such officer at the time of such certification, then cause an Early
Amortization Event with respect to any Series or any event that, with
the giving of notice or the lapse of time, would result in the
occurrence of an Early Amortization Event with respect to any Series;
and
(iv) the Rating Agency Condition shall have been
satisfied.
[END OF ARTICLE XII]
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 Amendment.
(a) This Agreement and any Supplement may be amended from
time to time by the Servicer, the Transferor and the Trustee, without the
consent of any of the Investor Certificateholders, to cure any ambiguity, to
correct or supplement any provisions herein or therein which may be inconsistent
with any other provisions herein or therein or to add any other provisions with
respect to matters or questions raised under this Agreement which shall not be
inconsistent with the provisions of this Agreement, including any matters
arising under Section 2.5(d) necessary to effect the conveyance contemplated
thereunder; provided, however, that such action shall not adversely affect in
any material respect the interests of any of the Investor Certificateholders;
and, provided further, that an amendment pursuant to this Section 13.1(a) shall
not effect a significant change in the Permitted Activities of the Trust. In
addition, this Agreement and any Supplement may be amended from time to time by
the Servicer, the Transferor and the Trustee, without the consent of any of the
Certificateholders, to add to or change any of the provisions of this Agreement
to enable Bearer Certificates to be issued in conformity with the Bearer Rules,
to provide that Bearer Certificates may be registrable as to principal, to
change or eliminate any restrictions on the payment of principal of (or premium,
if any) or any interest on Bearer Certificates to comply with the Bearer Rules,
to permit Bearer Certificates to be issued in exchange for Registered
Certificates (if then permitted by the Bearer Rules), to permit Bearer
Certificates to be issued in exchange for Bearer Certificates of other
authorized denominations or to permit the issuance of Certificates in
uncertificated form, provided any such action shall not adversely affect the
interests of the Holders of Bearer Certificates of any Series or any related
Coupons in any material respect unless such amendment is necessary to comply
with the Bearer Rules. Prior to executing any amendment in accordance with this
Section 13.1(a), the Trustee shall receive and shall be permitted to rely upon
an Opinion of Counsel to the effect that the conditions and requirements of this
Section 13.1(a) have been satisfied (without implying that such a rating
confirmation is required to be obtained, such Opinion of Counsel may rely as to
any rated Series solely on a rating confirmation from the Rating Agencies that
such amendment shall not cause a reduction or withdrawal of the rating of any
outstanding Series of Certificates). The Transferor shall deliver prior written
notice of any amendment pursuant to this Section 13.1(a) to each Rating Agency.
(b) This Agreement and any Supplement may also be amended
from time to time by the Servicer, the Transferor and the Trustee, without the
consent of any of the Certificateholders, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or any Supplement or modifying in any manner the rights of the
Investor Certificateholders of any Series then issued and outstanding; provided,
however, that (i) the Servicer shall have provided an Opinion of Counsel to the
Trustee to the effect that such amendment will not materially and adversely
affect the interests of the Investor Certificateholders of any outstanding
Series, which Opinion of Counsel may rely as to any rated Series solely on the
rating confirmation referred to in clause (iii) below (or 100% of the Class of
Certificateholders so affected shall have consented), (ii) such amendment shall
not, as evidenced by an Opinion of Counsel, cause any outstanding Series as to
which an opinion that it was debt was given on its Closing Date to fail to
qualify as debt for Federal income tax purposes,
102
cause the Trust to be characterized for Federal income tax purposes as an
association taxable as a corporation or otherwise have any material adverse
impact on the Federal income tax characterization of any outstanding Series of
Investor Certificates or the Federal income taxation of any Investor
Certificateholder or any Certificate Owner and (iii) the Rating Agency Condition
shall have been satisfied; and, provided further, that such amendment shall not
effect a significant change in the Permitted Activities of the Trust or reduce
in any manner the amount of, or delay the timing of, or change the priority of,
distributions which are required to be made on any Investor Certificate of such
Series without the consent of the related Investor Certificateholder or change
the definition of or the manner of calculating the interest of any Investor
Certificate of such Series without the consent of the related Investor
Certificateholder or reduce the required percentage for consents to amendments
pursuant to Section 13.1(c) without the consent of each affected Investor
Certificateholder.
(c) This Agreement and any Supplement may also be amended
from time to time by the Servicer, the Transferor and the Trustee, with the
consent of the Holders of Investor Certificates evidencing Undivided Interests
aggregating not less than 66-2/3% of the Invested Amount of all Series adversely
affected, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or any Supplement or
modifying in any manner the rights of the Investor Certificateholders of any
Series then issued and outstanding; provided, however, that no such amendment
shall (i) reduce in any manner the amount of, or delay the timing of,
distributions which are required to be made on any Investor Certificate of such
Series without the consent of the related Investor Certificateholders, (ii)
change the definition of or the manner of calculating the Invested Amount, the
Invested Percentage, the applicable available amount under any Enhancement or
the Investor Default Amount of such Series without the consent of the related
Investor Certificateholders or (iii) reduce the aforesaid percentage required to
consent to any such amendment, without the consent of the related Investor
Certificateholders. Any amendment pursuant to this Section 13.1(c) shall require
that each Rating Agency rating the affected Series confirm that such amendment
will not cause a reduction or withdrawal of the rating of any outstanding Series
of Certificates.
(d) Promptly after the execution of any such amendment
other than an amendment pursuant to Section 13.1(a), the Trustee shall furnish
written notification (or in the case of Bearer Certificates, publication notice
in the manner described in Section 13.5) of the substance of such amendment to
each Investor Certificateholder, and the Servicer shall furnish written
notification of the substance of such amendment to any related Enhancement
Provider and each Rating Agency.
(e) It shall not be necessary for the consent of Investor
Certificateholders under this Section 13.1 to approve the particular form of any
proposed amendment, but it shall be sufficient if such Certificateholders shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Investor
Certificateholders shall be subject to such reasonable requirements as the
Trustee may prescribe.
(f) Any Assignment or Reassignment regarding the addition
to or removal of Receivables from the Trust respectively, as provided in
Sections 2.6 and 2.7, respectively, executed in accordance with the provisions
hereof shall not be considered amendments to this Agreement, including, without
limitation, for the purpose of Sections 13.1(a), (b), (c) and (g).
103
(g) Prior to the execution of any amendment to this
Agreement, the Trustee shall be entitled to receive and rely upon an Opinion of
Counsel substantially in the form of Part Two of Exhibit H. The Trustee may, but
shall not be obligated to, enter into any such amendment which affects the
Trustee's own rights, duties or immunities under this Agreement or otherwise.
(h) Notwithstanding anything in this Section 13.1 to the
contrary, (i) this Agreement shall not be amended to add any Person as
Transferor unless the Rating Agency Condition shall have been satisfied and (ii)
any Supplement may be amended on the terms and in accordance with the procedures
specified therein.
Section 13.2 Protection of Right, Title and Interest to Trust.
(a) The Servicer shall cause this Agreement, any
Supplement, all amendments hereto and/or all financing statements, amendments
and continuation statements and any other necessary documents covering the
right, title and interest of the Trust in the property conveyed hereunder to be
promptly recorded, registered and filed, and at all times to be kept recorded,
registered and filed, all in such manner and in such places as may be required
by law fully to preserve and protect the right, title and interest of the
Trustee hereunder to the Trust Property and to maintain the perfection and
priority of the security interest of the Trustee in the Receivables and the
proceeds thereof. The Servicer shall deliver to the Trustee file-stamped copies
of, or filing receipts for, any document recorded, registered or filed as
provided above, as soon as available following such recording, registration or
filing. The Transferor shall cooperate fully with the Servicer in connection
with the obligations set forth above and will execute any and all documents
reasonably required to fulfill the intent of this Section 13.2.
(b) The Transferor shall not change its name, identity,
organizational structure or jurisdiction of organization unless it has first (i)
made all filings in all relevant jurisdictions under the UCC and other
applicable law as are necessary to continue and maintain the first-priority
perfected ownership or security interest of the Trustee in the Receivables and
the other property conveyed to the Trustee hereunder and (ii) delivered to the
Servicer, the Trustee and each Rating Agency an Opinion of Counsel to the effect
that all necessary filings have been made under the UCC in all relevant
jurisdictions as are necessary to continue and maintain the first-priority
perfected ownership or security interest of the Trustee in the Receivables
conveyed to the Trustee hereunder and the proceeds thereof.
(c) The Servicer will at all times maintain each office
from which it services Receivables within the United States.
(d) The Transferor will deliver to the Trustee and each
Rating Agency: (i) upon each date that any Additional Accounts are to be
included in the Accounts pursuant to Section 2.6 (other than Section 2.6(d)), an
Opinion of Counsel substantially in the form of Part One of Exhibit H; and (ii)
on or before June 30 of each year, beginning with June 30, 2002, an Opinion of
Counsel, dated as of a date within 90 days of such day, substantially in the
form of Exhibit I.
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Section 13.3 Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Investor
Certificateholder shall not operate to terminate this Agreement or the Trust,
nor shall such death or incapacity entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
(b) No Investor Certificateholder shall have any right to
vote (except as provided herein) or in any manner otherwise control the
operation and management of the Trust, or the obligations of the parties hereto,
nor shall any Investor Certificateholder be under any liability to any third
person by reason of any action taken by the parties to this Agreement pursuant
to any provision hereof.
(c) No Investor Certificateholder shall have any right by
virtue of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Certificateholder previously shall have given notice to the Trustee,
and unless the Holders of Certificates evidencing Undivided Interests
aggregating more than 66-2/3% of the Invested Amount of any Series which may be
adversely affected but for the institution of such suit, action or proceeding
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Certificateholders shall have the right in any manner whatever by
virtue or by availing itself or themselves of any provisions of this Agreement
to affect, disturb or prejudice the rights of the Certificateholders of any
other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Certificateholder, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 13.3, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity. Each Certificate Owner by its acquisition of a Book Entry Certificate
shall be deemed to have consented to the provisions of this Section 13.3.
Section 13.4 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 13.5 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
sent by facsimile transmission to, sent by courier to or mailed by registered
mail, return receipt requested, to (a) in the case of the Transferor or the
Servicer, Fleet Bank (RI), National Association, c/o Fleet Credit Card
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Services, L.P., Mail Stop: PA EH 066 02L, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇,
telephone number (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to General Counsel, Fleet Bank
(RI), National Association, Mail Stop: PA EH 066 03S, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇, telephone number
(▇▇▇) ▇▇▇-▇▇▇▇, (b) in the case of the Trustee, ▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ITS Structured Finance, telecopy number (212)
▇▇▇-▇▇▇▇, telephone number (▇▇▇) ▇▇▇-▇▇▇▇, and (c) as to such other parties to
which notices hereunder or under any Supplement are required to be given
pursuant to the terms of any Supplement, the addresses specified in any
Supplement or, as to each party, such other address as shall be designated by
such party in a written notice to each other party. Any notice required or
permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Certificateholder as shown in the
Certificate Register. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Certificateholder receives such notice.
Any notice required or permitted to be made to Holders of
Bearer Certificates by publication shall be published in an Authorized Newspaper
and, if the Certificates of such Series are then listed on the Luxembourg Stock
Exchange and such stock exchange shall so require, in a newspaper of general
circulation in Luxembourg (which newspaper shall be printed in the English
language and customarily published on each business day in Luxembourg) and, if
the Certificates of such Series are listed on any other stock exchange and such
stock exchange shall so require, in any other city required by such stock
exchange outside the United States, or, if not practicable, elsewhere in Europe.
In case by reason of the suspension of publication of any
Authorized Newspaper or permitted newspaper with respect to Luxembourg or by
reason of any other cause it shall be impracticable to publish any notice to
Holders of Bearer Certificates as provided above, then such notification to
Holders of Bearer Certificates as shall be given with approval of the Trustee
shall constitute sufficient notice to such Holders for every purpose hereunder.
Neither the failure to give notice by publication to Holders of Bearer
Certificates as provided above, nor any defect in any notice so published, shall
affect the sufficiency of any notice mailed to Holders of Registered
Certificates as provided above.
Copies of all notices, reports, certificates and amendments
required to be delivered to the Rating Agencies hereunder shall be mailed as
follows: ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ABS Monitoring Department; Standard & Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset Backed Surveillance Department; and
Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset
Backed Surveillance.
Section 13.6 Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or rights of the Certificateholders thereof.
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Section 13.7 Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Sections 7.2, 8.2 and 8.5, this
Agreement, including any Supplement, may not be assigned by the Transferor or
the Servicer, as the case may be, without the prior consent of Holders of
Investor Certificates evidencing Undivided Interests aggregating more than
66-2/3% of the Aggregate Invested Amount. The Transferor or the Servicer, as
applicable, shall deliver to each Rating Agency prior written notice of any such
assignment.
Section 13.8 Certificates Nonassessable and Fully Paid. It is
the intention of the parties to this Agreement that the Investor
Certificateholders (and the Certificate Owners) shall not be personally liable
for obligations of the Trust, that the Undivided Interests represented by the
Investor Certificates shall be nonassessable for any losses or expenses of the
Trust or for any reason whatsoever, and that Investor Certificates upon
authentication thereof by the Trustee pursuant to Section 6.2 are and shall be
deemed fully paid.
Section 13.9 Further Assurances. The Transferor and the
Servicer agree to do and perform, from time to time, any and all acts and to
execute any and all further instruments required or reasonably requested by the
Trustee more fully to effect the purposes of this Agreement including, without
limitation, the authorization of any financing statements or continuation
statements relating to the property of the Trust for filing under the provisions
of the UCC as in effect in the Relevant UCC State.
Section 13.10 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Transferor, the
Servicer, the Trustee or the Investor Certificateholders, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exhaustive of any rights, remedies,
powers and privileges provided by law.
Section 13.11 Counterparts. This Agreement and any Supplement
may be executed in two or more counterparts (and by different parties on
separate counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
Section 13.12 Third-Party Beneficiaries. This Agreement and
any Supplement will inure to the benefit of and be binding upon the parties
hereto, the Certificateholders and the Certificate Owners and their respective
successors and permitted assigns. Except as otherwise provided in this Agreement
or any Supplement, no other person will have any right or obligation hereunder.
Section 13.13 Actions by Certificateholders.
(a) Wherever in this Agreement or any Supplement a
provision is made that an action may be taken or a notice, demand or instruction
given by Investor Certificateholders, such action, notice or instruction may be
taken or given by any Investor Certificateholder of any Series, unless such
provision requires a specific percentage of Investor Certificateholders of a
certain Series or all Series.
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(b) Any request, demand, authorization, direction,
notice, consent, waiver or other act by a Certificateholder shall bind such
Certificateholder and every subsequent holder of such Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done or omitted to be done by the Trustee or the Servicer
in reliance thereon, whether or not notation of such action is made upon such
Certificate.
Section 13.14 Merger and Integration. Except as specifically
stated otherwise herein, this Agreement sets forth the entire understanding of
the parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
Section 13.15 Headings. The headings herein are for purposes
of reference only and shall not otherwise affect the meaning or interpretation
of any provision hereof.
Section 13.16 Certificates and Opinions of Counsel.
(a) Any certificate delivered hereunder may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, unless the
Person delivering such certificate knows, or in the exercise of reasonable care
should know, that such opinion with respect to the matters upon which such
certificate may be based as aforesaid is erroneous. Any Opinion of Counsel or
certificate delivered hereunder may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Servicer or the Transferor, stating that the information with
respect to such factual matters is in the possession of such Person, unless the
Person delivering such certificate or such counsel knows, or in the exercise of
reasonable care should know, that such certificate, opinion or representations
with respect to such matters are erroneous. Any Opinion of Counsel delivered
hereunder may contain necessary exceptions and qualifications.
(b) Any Opinion of Counsel or certificate delivered
hereunder may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an independent public accountant
or firm of accountants, unless such counsel or the Person delivering such
certificate, as the case may be, knows that the certificate or opinions or
representations with respect to the accounting matters upon which the
certificate or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous. Any
certificate, opinion or representations of any firm of independent public
accountants filed with the Trustee shall contain a statement that such firm is
independent.
(c) Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates, statements, opinions
or other instruments hereunder, they may, but need not, be consolidated and form
one instrument.
Section 13.17 Nonpetition Covenant. To the fullest extent
permitted by applicable law, notwithstanding any prior termination of this
Agreement, the Transferor, the Servicer, the Trustee (in its capacity as Trustee
hereunder and not in its individual capacity), the Transfer Agent and Registrar
and each Paying Agent shall not, prior to the date which is one year and one day
after the termination of this Agreement with respect to the Trust, acquiesce,
petition
108
or otherwise invoke or cause the Trust to invoke the process of any
Governmental Authority for the purpose of commencing or sustaining a case
against the Trust under any Federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Trust or any substantial part of
its property or ordering the winding-up or liquidation of the affairs of the
Trust.
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IN WITNESS WHEREOF, the Transferor, the Bank, as Transferor
and as Servicer, and the Trustee have caused this Second Amended and Restated
Master Pooling and Servicing Agreement to be duly executed by their respective
officers as of the day and year first above written.
FLEET BANK (RI), NATIONAL ASSOCIATION,
as Transferor and as Servicer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
JPMORGAN CHASE BANK,
as Trustee
By: /s/ WEN ▇▇▇ ▇▇▇▇
________________________________
Name: Wen ▇▇▇ ▇▇▇▇
Title: Asst. Vice President
FNANB Bankcard Portfolio Sale
Second Amended and Restated Master Pooling and Servicing Agreement
November 18, 2003