EXHIBIT 10.22
EXECUTION COPY
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NORDSTROM PRIVATE LABEL RECEIVABLES LLC,
Transferor,
NORDSTROM FSB,
Servicer,
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
and
NORDSTROM PRIVATE LABEL CREDIT CARD MASTER NOTE TRUST,
Issuer
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TRANSFER AND SERVICING AGREEMENT
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Dated as of October 1, 2001
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TABLE OF CONTENTS
Page
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ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions.................................................. 1
Section 1.02. Other Definitional Provisions................................ 14
ARTICLE TWO
CONVEYANCE OF RECEIVABLES
Section 2.01. Conveyance of Receivables.................................... 15
Section 2.02. Acceptance by Trust.......................................... 16
Section 2.03. Corporate Representations and Warranties of Each
Transferor................................................. 17
Section 2.04. Other Representations and Warranties of Each Transferor...... 19
Section 2.05. Reassignment of Ineligible Receivables....................... 21
Section 2.06. Reassignment of Trust Portfolio.............................. 22
Section 2.07. Covenants of each Transferor................................. 23
Section 2.08. Covenants of each Transferor with Respect to Receivables
Purchase Agreements........................................ 24
Section 2.09. Addition of Accounts......................................... 25
Section 2.10. Removal of Accounts and Participation Interests.............. 28
Section 2.11. Account Allocations.......................................... 29
Section 2.12. Discount Option.............................................. 30
Section 2.13. Representations and Warranties as to the Security Interest
of the Trust in the Receivables............................ 30
ARTICLE THREE
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 3.01. Acceptance of Appointment and Other Matters Relating to the
Servicer................................................... 32
Section 3.02. Servicing Compensation....................................... 33
Section 3.03. Representations, Warranties and Covenants of the
Servicer................................................... 34
Section 3.04. Reports and Records for the Owner Trustee and the Indenture
Trustee.................................................... 36
Section 3.05. Annual Certificate of Servicer............................... 37
Section 3.06. Annual Servicing Report of Independent Public Accountants;
Copies of Reports Available................................ 37
Section 3.07. Tax Treatment................................................ 38
Section 3.08. Notices to Nordstrom fsb..................................... 38
Section 3.09. Adjustments.................................................. 38
Section 3.10. Reports to the Commission.................................... 39
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TABLE OF CONTENTS
(continued)
Page
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Section 3.11. Reports to Rating Agencies................................... 39
ARTICLE FOUR
OTHER TRANSFEROR MATTERS
Section 4.01. Liability of each Transferor................................. 40
Section 4.02. Merger or Consolidation of, or Assumption of the Obligations
of, a Transferor........................................... 40
Section 4.03. Limitations on Liability of Each Transferor.................. 41
ARTICLE FIVE
OTHER MATTERS RELATING TO THE SERVICER
Section 5.01. Liability of the Servicer.................................... 42
Section 5.02. Merger or Consolidation of, or Assumption of the Obligations
of, the Servicer........................................... 42
Section 5.03. Limitation on Liability of the Servicer and Others........... 42
Section 5.04. Servicer Indemnification of the Trust and the Trustees....... 43
Section 5.05. Resignation of the Servicer.................................. 43
Section 5.06. Access to Certain Documentation and Information Regarding
the Receivables............................................ 44
Section 5.07. Delegation of Duties......................................... 44
Section 5.08. Examination of Records....................................... 44
ARTICLE SIX
INSOLVENCY EVENTS
Section 6.01. Rights upon the Occurrence of an Insolvency Event............ 45
ARTICLE SEVEN
SERVICER DEFAULTS
Section 7.01. Servicer Defaults............................................ 46
Section 7.02. Indenture Trustee To Act; Appointment of Successor........... 48
Section 7.03. Notification to Noteholders.................................. 50
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TABLE OF CONTENTS
(continued)
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ARTICLE EIGHT
TERMINATION
Section 8.01. Termination of Agreement..................................... 51
ARTICLE NINE
MISCELLANEOUS PROVISIONS
Section 9.01. Amendment; Waiver of Past Defaults........................... 52
Section 9.02. Waiver of Transferor or Servicer Defaults.................... 53
Section 9.03. Protection of Right, Title and Interest to Trust Assets...... 53
Section 9.04. GOVERNING LAW................................................ 54
Section 9.05. Notices; Payments............................................ 55
Section 9.06. Severability of Provisions................................... 55
Section 9.07. Further Assurances........................................... 55
Section 9.08. No Waiver; Cumulative Remedies............................... 55
Section 9.09. Counterparts................................................. 56
Section 9.10. Third-Party Beneficiaries.................................... 56
Section 9.11. Actions by Noteholders....................................... 56
Section 9.12. Rule 144A Information........................................ 56
Section 9.13. Merger and Integration....................................... 56
Section 9.14. Headings..................................................... 56
Section 9.15. Assignment................................................... 56
Section 9.16. Nonpetition Covenant......................................... 57
Section 9.17. Limitation of Liability...................................... 57
EXHIBITS
EXHIBIT A Form of Assignment of Receivables in Additional Accounts..... A-1
EXHIBIT B Form of Reassignment of Receivables in Removed Accounts...... B-1
EXHIBIT C Form of Annual Servicer's Certificate........................ X-0
XXXXXXX X-0 Form of Opinion of Counsel with Respect to Amendments........ X-0-0
XXXXXXX X-0 Form of Opinion of Counsel with Respect to Accounts.......... X-0-0
XXXXXXX X-0 Provisions to be Included in Annual Opinion of Counsel....... D-3-1
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TRANSFER AND SERVICING AGREEMENT, dated as of October 1, 2001 between
Nordstrom Private Label Receivables LLC, a Delaware limited liability company,
as transferor and Nordstrom fsb as Servicer, Nordstrom Private Label Credit Card
Master Note Trust, a Delaware business trust, as Issuer and Xxxxx Fargo Bank
Minnesota, National Association, a national banking association, as Indenture
Trustee.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties, the Noteholders and any
Series Enhancer (as defined below) to the extent provided herein, in the
Indenture and in any Indenture Supplement:
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions. Whenever used in this Agreement, the following
words and phrases shall have the following meanings, and the definitions of such
terms are applicable to the singular as well as the plural forms of such terms
and to the masculine as well as to the feminine and neuter genders of such
terms.
"Account" means (i) each Initial Account, (ii) each Additional Account
(but only from and after the Addition Date with respect thereto), (iii) each
Related Account, and (iv) each Transferred Account, but shall exclude any
Account all the Receivables in which are either: (a) after the Removal Date,
removed by the Transferor pursuant to Section 2.10, (b) reassigned to the
Transferor pursuant to Section 2.05 or (c) assigned and transferred to the
Servicer pursuant to Section 3.03.
"Account Originator" means Nordstrom fsb or Nordstrom Inc., or, upon
satisfaction of the Rating Agency Condition, any other entity which is the
issuer of the credit card relating to an Account pursuant to a Credit Card
Agreement.
"Account Owner" means the Account Originator relating to an Account or
any Person who has acquired such Account and has sold the related Receivables to
the Transferor pursuant to a Receivables Purchase Agreement.
"Addition" means the designation of (i) additional Eligible Accounts to
be included as Accounts or (ii) Participation Interests to be included as Trust
Assets in each case pursuant to Section 2.09(a) or (b).
"Addition Cut-Off Date" means, with respect to any Additional Accounts or
Participation Interests to be included in the Trust, the date on which such
Additional Accounts are designated for inclusion in the Trust.
"Addition Date" means, with respect to (i) Additional Accounts, the date
on which the Receivables in such Additional Accounts are conveyed to the Trust
pursuant to Section 2.09(a) or (b) and (ii) Participation Interests, the date
from and after which such Participation Interests are to be included as Trust
Assets pursuant to Section 2.09(a) or (b).
"Additional Account" means each consumer revolving credit card account or
business charge account established pursuant to a Credit Card Agreement, and
designated pursuant to Section 2.09(a) or (b) to be included as an Account.
"Additional Transferors" means Affiliates of the Transfer designated by
the Transferor to be included as Transferors pursuant to Section 2.09(d).
"Adverse Effect" means, with respect to any action, that such action will
(i) result in the occurrence of a Redemption Event or an Event of Default or
(ii) materially and adversely affect the amount or timing of distributions to be
made to the Noteholders of any Series or Class pursuant to this Agreement, the
Indenture or the related Indenture Supplement.
"Affiliate" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" means the power to direct the
management and policies of a Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agreement" means this Transfer and Servicing Agreement, as the same may
be amended, supplemented or otherwise modified from time to time.
"Appointment Date" means the day on which an Insolvency Event occurs with
respect to the Transferor.
"Assignment" means an Assignment of Receivables in Additional Accounts,
in substantially the form of Exhibit A.
"Authorized Newspaper" means any major newspaper or newspapers of general
circulation in the Borough of Manhattan, The City of New York, printed in the
English language (and, with respect to any Series or Class, if and so long as
the Notes of such Series are (i) listed on the Luxembourg Stock Exchange and
such Exchange shall so require, in Luxembourg, printed in any language
satisfying the requirements of such Exchange or (ii) Bearer Notes, in such place
as may be specified in the applicable Indenture Supplement) and customarily
published on each business day at such place, whether or not published on
Saturdays, Sundays or holidays.
"Bearer Notes" has the meaning specified in the Indenture.
"Business Day" means any day other than (i) a Saturday or Sunday or (ii)
any other day on which national banking associations or state banking
institutions in Washington, Colorado, Minnesota, New York, Delaware or any other
state in which the principal executive offices of Nordstrom fsb and Nordstrom
Credit, Inc., the Owner Trustee, the Indenture Trustee or other Account Owner,
as the case may be, are located, are authorized or obligated by law, executive
order or governmental decree to be closed or (iii) for purposes of any
particular Series, any other day specified in the related Indenture Supplement.
"Cash Advance Fees" means cash advance transaction fees and cash advance
late fees, if any, as specified in the Credit Card Agreement applicable to each
Account.
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"Class" has the meaning specified in the Indenture.
"Closing Date" means, with respect to any Series, the closing date
specified in the related Indenture Supplement.
"Collections" means all payments by or on behalf of Obligors (including
Insurance Proceeds) received in respect of the Receivables, in the form of cash,
checks, wire transfers, electronic transfers, ATM transfers or any other form of
payment in accordance with a Credit Card Agreement in effect from time to time,
Merchant Fees and all other amounts specified by this Agreement, the Indenture
or any Indenture Supplement as constituting Collections. As specified in any
Participation Interest Supplement or Indenture Supplement, Collections shall
include amounts received with respect to Participation Interests. All Recoveries
with respect to Receivables previously charged off as uncollectible will be
treated as Collections of Finance Charge Receivables.
"Commission" has the meaning specified in the Indenture.
"Continued Errors" has the meaning specified in Section 7.02(e).
"Contractually Delinquent" with respect to an Account, means an Account
as to which the required minimum payment set forth on the related billing
statement has not been received by the due date thereof.
"Corporate Trust Office" has the meaning when used in respect of (i) the
Owner Trustee, specified in the Trust Agreement and (ii) the Indenture Trustee,
specified in the Indenture.
"Coupon" has the meaning specified in the Indenture.
"Credit Card Agreement" means, with respect to a revolving credit card
account, the agreements between an Account Owner and the Obligor governing the
terms and conditions of such account, as such agreements may be amended,
modified or otherwise changed from time to time and as distributed (including
any amendments and revisions thereto) to holders of such account.
"Credit Card Guidelines" means the written policies and procedures of the
Servicer, the Transferor or any other Account Owner, as the case may be,
relating to the operation of its consumer revolving lending business, which are
consistent with prudent practice, including, the written policies and procedures
for determining the creditworthiness of credit card account customers, the
extension of credit to credit card account customers and relating to the
maintenance of credit card accounts and collection of receivables with respect
thereto, as such policies and procedures may be amended, modified or otherwise
changed from time to time.
"Date of Processing" means, with respect to any transaction or receipt of
Collections, the date on which such transaction is first recorded on the
Servicer's computer file of revolving credit card accounts (without regard to
the effective date of such recordation).
"Defaulted Receivables" means, with respect to any Monthly Period, all
Principal Receivables which are charged off as uncollectible in such Monthly
Period in accordance with
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the Credit Card Guidelines and the Servicer's customary and usual servicing
procedures for servicing consumer revolving credit card and other revolving
credit account receivables comparable to the Receivables (excluding any
servicing procedures applicable to receivables arising in Secured Accounts). A
Principal Receivable shall become a Defaulted Receivable on the day on which
such Principal Receivable is recorded as charged off on the Servicer's computer
master file of consumer revolving credit card accounts but, in any event, shall
be deemed a Defaulted Receivable no later than the month following the day the
related Account becomes 151 days Contractually Delinquent unless the Obligor
cures such default by making a partial payment which satisfies the criteria for
curing delinquencies set forth in the applicable Credit Card Guidelines.
"Determination Date" means, with respect to any Series, the date
specified in the applicable Indenture Supplement.
"Dilution Amount" means the amount by which the Servicer is required to
adjust the amount of Principal Receivables used to calculate the Transfer or
Interest pursuant to the first two sentences of Section 3.09.
"Discount Option Date" means each date on which a Discount Percentage
designated by the Transferor pursuant to Section 2.12 takes effect.
"Discount Option Receivables" means Principal Receivables (or a specified
portion thereof) existing on or after the Discount Option Date designated by the
Transferor as being treated as Finance Charge Receivables pursuant to Section
2.12(a). The aggregate amount of Discount Option Receivables outstanding on any
Date of Processing occurring on or after the Discount Option Date shall equal
the sum of (i) the aggregate amount of Discount Option Receivables at the end of
the prior Date of Processing (which amount, prior to the Discount Option Date,
shall be zero) plus (ii) the aggregate amount of any new Discount Option
Receivables created on such Date of Processing minus (iii) any Discount Option
Receivables Collections received on such Date of Processing. Discount Option
Receivables created on any Date of Processing means the product of the amount of
any Principal Receivables created on such Date of Processing (without giving
effect to the proviso in the definition of the term Principal Receivables) and
the Discount Percentage.
"Discount Option Receivable Collections" means on any Date of Processing,
the product of (i) a fraction the numerator of which is the aggregate amount of
Discount Option Receivables and the denominator of which is the sum of the
aggregate amount of Principal Receivables and the aggregate amount of Discount
Option Receivables, in each case at the end of the prior Date of Processing and
(ii) Collections of Principal Receivables on such Date of Processing (without
giving effect to the proviso in the definition of Principal Receivables).
"Discount Percentage" means the percentages, if any, designated by the
Transferor pursuant to Section 2.12(a).
"Distribution Date" means, with respect to any Series, the date specified
in the applicable Indenture Supplement.
"Dollars", "$" or "U.S. $" means United States dollars.
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"Early Accumulation Period" has the meaning, with respect to any Series,
specified in the related Indenture Supplement.
"Eligible Account" means a consumer revolving credit card account owned
by an Account Owner identified by the Transferor as of (i) the Initial Cut-Off
Date, in the case of the Initial Accounts or (ii) the applicable Addition
Cut-Off Date, in the case of the Additional Accounts, as having the following
characteristics:
has not been cancelled and is in existence and maintained by Transferor or the
applicable Account Owner;
(a) is payable in Dollars;
(b) except as provided below, has not been identified as an
account the credit card or cards with respect to which have been reported
to the applicable Account Owner as having been lost or stolen or has an
Obligor who has not been identified as deceased;
(c) the Obligor of which has provided, as his or her billing
address, an address located in Canada or the United States (or its
territories or possessions or military address);
(d) except as provided below, does not have any Receivables which
are Defaulted Receivables;
(e) has at no time been a Secured Account;
(f) except as provided below, does not have any Receivables which
have been identified by the applicable Account Owner or the relevant
Obligor as having been incurred as a result of fraudulent use of any
related credit card;
(g) the Obligor of which has not been identified by the Servicer
in its computer files as having been declared bankrupt;
(h) is a private label revolving credit card account or business
charge account that may be used to purchase goods and services in
Nordstrom Inc. and its retail subsidiaries' stores, catalogs and internet
sites and for cash advances at automatic teller machines;
(i) was created in accordance with the Credit Card Guidelines of
the applicable Account Originator at the time of creation of such
Account;
(j) does not have outstanding Receivables which have been sold or
pledged by the related Account Owner to any party other than the
Transferor pursuant to a Receivables Purchase Agreement; and
(k) does not have outstanding Receivables that give rise to any
claim of any governmental agency including, without limitation, the
government of the United States or any state thereof or any agency,
instrumentality or department thereof.
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Eligible Accounts may include Accounts, the Receivable of which have been
written off, or with respect to which the Transferor believes the related
Obligor is bankrupt, or as to which certain Receivables have been identified by
the Obligor as having been incurred as a result of fraudulent use of any credit
cards, or as to which any credit cards have been reported to the Account Owner
or the Servicer as lost or stolen, in each case as of the Initial Cut-Off Date,
with respect to the Initial Accounts, and as of the related Addition Cut-Off
Date, with respect to the Additional Accounts; provided that (i) the balance of
all Receivables included in such Accounts is reflected on the books and records
of the Account Owner (and is treated for purposes of this Agreement) as "zero",
and (ii) charging privileges with respect to all such Accounts have been
canceled in accordance with the relevant Credit Card Guidelines.
"Eligible Receivable" means each Receivable, including, where applicable,
the underlying receivable:
(a) which has arisen in an Eligible Account;
(b) which was created in compliance in all material respects with
all Requirements of Law applicable to the institution which owned such
Receivable at the time of its creation and pursuant to a Credit Card
Agreement which complies in all material respects with all Requirements
of Law applicable to the Account Originator or Account Owner, as the case
may be;
(c) with respect to which all material consents, licenses,
approvals or authorizations of, or registrations or declarations with,
any Governmental Authority required to be obtained, effected or given in
connection with the creation of such Receivable or the execution,
delivery and performance by applicable Account Originator and any
subsequent Account Owner of its obligations, if any, under the related
Credit Card Agreement pursuant to which such Receivable was created, have
been duly obtained, effected or given and are in full force and effect;
(d) as to which at the time of the transfer of such Receivable to
the Trust, the Transferor or the Trust will have good and marketable
title thereto and which itself is, and the underlying receivables are,
free and clear of all Liens (other than any Lien for municipal or other
local taxes if such taxes are not then due and payable or if the
Transferor is then contesting the validity thereof in good faith by
appropriate proceedings and has set aside on its books adequate reserves
with respect thereto);
(e) which has been the subject of either a valid transfer and
assignment from the Transferor to the Trust of all the Transferor's
right, title and interest therein (including any proceeds thereof), or
the grant of a first priority perfected security interest therein (and in
the proceeds thereof), effective until the termination of the Trust;
(f) which at all times will be the legal, valid and binding
payment obligation of the related Obligor 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
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enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity);
(g) which, at the time of transfer to the Trust, has not been
waived or modified except as permitted in accordance with the Credit Card
Guidelines and which waiver or modification is reflected in the
Servicer's computer file of revolving credit card accounts;
(h) which, at the time of transfer to the Trust, is not subject to
any right of rescission, setoff, counterclaim or any other defense
(including defenses arising out of violations of usury laws) of the
Obligor, other than defenses arising out of applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or equity) or as to which the Servicer is
required by Section 3.09 to make an adjustment;
(i) as to which, at the time of transfer to the Trust, the
relevant Account Originator and any subsequent Account Owner has
satisfied all of its obligations required to be satisfied by such time;
(j) as to which, at the time of transfer to the Trust, none of the
Transferor, the Servicer, or any other Account Owner, as the case may be,
has taken any action which would impair, or omitted to take any action
the omission of which would impair, the rights of the Trust or the
Noteholders therein;
(k) that does not cause the aggregate amount of Receivables that
arises from Accounts that (A) have Obligors with a billing address in
Canada to be more than 1% of total amount of Receivables in the Trust,
(B) are business charge accounts to be more than 1% of the total amount
of Receivables in the Trust, (C) are Starter Accounts to be more than 3%
of the total amount of the Receivables in the Trust and (D) have Obligors
that are employees of Nordstrom Inc. or any of its affiliates to be more
than 5% of the total amount Receivables in the Trust; and
(l) which constitutes an "account" under and as defined in Article
9 of the UCC in effect in the State of Delaware and any other State where
the filing of a financing statement is required to perfect the Trust's
interest in the Receivables and the proceeds thereof.
"Eligible Servicer" means the Indenture Trustee or, if the Indenture
Trustee is not acting as Servicer, an entity which, at the time of its
appointment as Servicer, (i) is servicing a portfolio of revolving credit card
accounts, (ii) is legally qualified and has the capacity to service the
Accounts, (iii) has demonstrated the ability to service professionally and
competently a portfolio of similar accounts in accordance with high standards of
skill and care, (iv) is qualified to use the software that is then being used to
service the Accounts or obtains the right to use or has its own software which
is adequate to perform its duties under this Agreement and (v) has a net worth
of at least $50,000,000 as of the end of its most recent fiscal quarter.
"Errors" has the meaning specified in Section 7.02(e).
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"Event of Default" has the meaning specified in the Indenture.
"Exchange Act" has the meaning specified in the Indenture.
"FDIC" means the Federal Deposit Insurance Corporation, and its
successors.
"Finance Charge Receivables" means all amounts (a) billed to the Obligors
on any Account in respect of (i) all Periodic Rate Finance Charges, (ii) Cash
Advance Fees, (iii) annual membership fees and annual service charges, (iv) Late
Fees, (v) Overlimit Fees and (vi) Discount Option Receivables, if any. Finance
Charge Receivables shall also include (a) the interest portion of Participation
Interests as shall be determined pursuant to, and only if so provided in, the
applicable Participation Interest Supplement or Indenture Supplement for any
Series and (b) all Recoveries with respect to Receivables previously charged off
as uncollectible.
"Fitch" means Fitch, Inc. and its successors.
"Governmental Authority" means the United States, any State or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Indenture" means the Master Indenture, dated as of October 1, 2001,
between the Issuer and the Indenture Trustee, as the same may be amended,
supplemented or otherwise modified from time to time.
"Indenture Collateral" has the meaning specified in Section 2.01.
"Indenture Supplement" has the meaning specified in the Indenture.
"Indenture Trustee" means Xxxxx Fargo Bank Minnesota, National
Association, and its successors, in its capacity as trustee under the Indenture,
its successors in interest and any successor indenture trustee under the
Indenture.
"Ineligible Receivables" has the meaning specified in Section 2.05(a).
"Initial Account" means each consumer revolving credit card account or
business charge account established pursuant to a Credit Card Agreement between
the applicable Account Owner and any Person, which account is identified in the
computer file or microfiche list delivered to the Owner Trustee by the
Transferor pursuant to Section 2.01 on the Initial Issuance Date.
"Initial Cut-Off Date" means September 30, 2001.
"Initial Issuance Date" means November 2, 2001, the date the Transferor's
Certificate is delivered by the Trust to the Transferor pursuant to the Trust
Agreement.
"Insolvency Event" has the meaning specified in Section 6.01.
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"Insurance Proceeds" means any amounts received pursuant to the payment
of benefits under any credit life insurance policies, credit disability or
unemployment insurance policies covering any Obligor with respect to Receivables
under such Obligor's Account.
"Invested Amount" means, with respect to any Series and for any date, an
amount equal to the invested amount or adjusted invested amount, as applicable,
specified in the related Indenture Supplement.
"Investor Percentage" means, with respect to any Series, the investor
percentage for such Series specified in the related Indenture Supplement.
"Issuer" means the Trust.
"Late Fees" has the meaning specified in the Credit Card Agreement
applicable to each Account for late fees or similar terms.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, equity interest, encumbrance, lien (statutory
or other), preference, participation interest, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including any conditional sale or other title retention agreement, any financing
lease having substantially the same economic effect as any of the foregoing and
the filing of any financing statement under the UCC or comparable law of any
jurisdiction to evidence any of the foregoing; provided, however, that any
assignment permitted by Section 3.06(b) of the Trust Agreement or Section 4.02
of, and the lien created by, this Agreement shall not be deemed to constitute a
Lien.
"Monthly Period" has the meaning specified in the Indenture.
"Monthly Servicing Fee" means, with respect to any Series and any Monthly
Period, the portion of the Servicing Fee for such Monthly Period allocable to
such Series.
"Moody's" means Xxxxx'x Investors Service, Inc., and its successors.
"Note Interest Rate" has the meaning specified in the Indenture.
"Note Owner" has the meaning specified in the Indenture.
"Note Register" has the meaning specified in the Indenture.
"Noteholder" or "Holder" has the meaning specified in the Indenture.
"Notices" means all demands, notices, instructions, directions and
communications under this Agreement.
"Obligor" means, with respect to any Account, the Person or Persons
obligated to make payments with respect to such Account, including any guarantor
thereof, but excluding any merchant.
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"Officer's Certificate" has the meaning specified in the Indenture.
"Opinion of Counsel" has the meaning specified in the Indenture.
"Overlimit Fees" has the meaning specified in the Credit Card Agreement
applicable to each Account for overlimit fees or similar terms if such fees are
provided for with respect to such Account.
"Owner Trustee" means Wilmington Trust Company, not in individual its
capacity, but solely as owner trustee under the Trust Agreement, its successors
in interest and any successor owner trustee under the Trust Agreement.
"Participating Transferor" means each Transferor who (i) owns any
Additional Account the Receivables in which shall be transferred to the Trust on
an Additional Date or (ii) is transferring a Participation Interest to the Trust
on an Addition Date.
"Participation Interest Supplement" means a supplement to this Agreement
entered into pursuant to Section 2.09(a)(ii) or (b) in connection with the
conveyance of Participation Interests to the Trust.
"Participation Interests" has the meaning specified in Section
2.09(a)(ii).
"Paying Agent" has the meaning specified in the Indenture.
"Periodic Rate Finance Charges" has the meaning specified in the Credit
Card Agreement applicable to each Account for finance charges (due to periodic
rate) or any similar term.
"Person" means any legal person, including any individual, corporation,
limited liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, governmental entity or other entity
of any nature.
"Portfolio Yield" has the meaning specified in the Indenture Supplement.
"Predecessor Servicer Work Product" has the meaning specified in Section
7.02(e).
"Principal Funding Account" has the meaning, with respect to any Series,
specified in the related Indenture Supplement.
"Principal Funding Account Balance" has the meaning, with respect to any
Series, specified in the related Indenture Supplement.
"Principal Receivables" means all Receivables other than Finance Charge
Receivables or Defaulted Receivables; provided, however, that after the Discount
Option Date, Principal Receivables on any Date of Processing thereafter means
Principal Receivables as otherwise determined pursuant to this definition minus
the amount of any Discount Option Receivables. Principal Receivables shall also
include the principal portion of Participation Interests as shall be determined
pursuant to, and only if so provided in, the applicable Participation Interest
Supplement or Indenture Supplement for any Series. In calculating the aggregate
amount of
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Principal Receivables on any day, the amount of Principal Receivables shall be
reduced by the aggregate amount of credit balances in the Accounts on such day.
Any Principal Receivables which the Transferor is unable to transfer as provided
in Section 2.11 shall not be included in calculating the amount of Principal
Receivables.
"Rating Agency" has the meaning specified in the Indenture.
"Rating Agency Condition" has the meaning specified in the Indenture.
"Reassignment" means a Reassignment of Receivables in Removed Accounts,
in substantially the form of Exhibit B.
"Receivables" means all amounts shown on the Servicer's records as
amounts payable by Obligors on any Account from time to time, including amounts
payable for Principal Receivables and Finance Charge Receivables. Receivables
which become Defaulted Receivables will cease to be included as Receivables as
of the day on which they become Defaulted Receivables.
"Receivables Purchase Agreement" means any receivables purchase agreement
entered into between the Servicer, the Transferor and an Account Owner;
provided, that before the Transferor shall enter into any receivables purchase
agreement, (i) the Rating Agency Condition is satisfied with respect to such
receivables purchase agreement and (ii) the Transferor shall have delivered to
the Indenture Trustee an Officer's Certificate to the effect that such officer
reasonably believes that the execution and delivery of such receivables purchase
agreement and the purchase of Receivables from the Account Owner named therein
will not have an Adverse Effect.
"Recoveries" means all amounts received (net of out-of-pocket costs of
collection) including Insurance Proceeds, which are reasonably estimated by the
Servicer to be attributable to Defaulted Receivables, including the net proceeds
of any sale of such Defaulted Receivables by the Transferor.
"Redemption Event" has the meaning specified in the Indenture.
"Registered Notes" has the meaning specified in the Indenture.
"Related Account" means an Account with respect to which a new credit
account number has been issued by the applicable Account Owner or Servicer or
the applicable Transferor under circumstances resulting from a lost or stolen
credit card and not requiring standard application and credit evaluation
procedures under the Credit Card Guidelines.
"Removal Date" means the date specified by the Transferor for removal of
Removed Accounts and Removed Participation Interest.
"Removed Accounts" has the meaning specified in Section 2.10(a).
"Removed Participation Interests" has the meaning specified in Section
2.10.
"Required Designation Date" has the meaning specified in Section
2.09(a)(i).
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"Required Minimum Principal Balance" means, unless otherwise provided in
an Indenture Supplement relating to any Series, as of any date of determination,
an amount equal to the sum of the numerators used in the calculation of the
Investor Percentages with respect to Principal Receivables for all outstanding
Series on such date; provided that with respect to any Series in its Early
Accumulation Period or such other period as designated in the related Indenture
Supplement with an Invested Amount as of such date of determination equal to the
Principal Funding Account Balance relating to such Series taking into account
the Principal Funding Account Balance relating to such Series on deposit in the
Principal Funding Account on such date of determination, the numerator used in
the calculation of the Investor Percentage with respect to Principal Receivables
relating to such Series shall, solely for the purpose of the definition of
Required Minimum Principal Balance, be deemed to equal zero.
"Required Transferor Interest" has the meaning specified in the
Indenture.
"Requirements of Law" means any law, treaty, rule or regulation, or
determination of an arbitrator or Governmental Authority, whether federal, state
or local (including usury laws, the Federal Truth in Lending Act and Regulation
B and Regulation Z of the Board of Governors of the Federal Reserve System),
and, when used with respect to any Person, the certificate of incorporation and
by-laws or other organizational or governing documents of such Person.
"Secured Account" means any Account for which the related Obligor has
pledged assets or made a cash collateral deposit as security for payment of the
Receivables arising in such Account.
"Series" has the meaning specified in the Indenture.
"Series Account" has the meaning specified in the Indenture.
"Series Enhancement" has the meaning specified in the Indenture.
"Series Enhancer" has the meaning specified in the Indenture.
"Service Transfer" has the meaning specified in Section 7.01.
"Servicer" means Nordstrom fsb, in its capacity as Servicer pursuant to
this Agreement, and, after any Service Transfer, the Successor Servicer.
"Servicer Default" has the meaning specified in Section 7.01(a).
"Servicing Fee" means the servicing fee payable to the Servicer in
respect of each Monthly Period pursuant to Section 3.02 in an amount equal to
one-twelfth of the product of (a) the weighted average of the Servicing Fee
Rates with respect to each outstanding Series (based upon the Servicing Fee Rate
for each Series and the Invested Amount (or such other amount as specified in
the related Indenture Supplement) of such Series, in each case as of the last
day of the prior Monthly Period) and (b) the amount of Principal Receivables on
the last day of the prior Monthly Period prior to the termination of the Trust
pursuant to Section 8.01 of the Trust Agreement.
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"Servicing Fee Rate" means, with respect to any Series, the servicing fee
rate specified in the related Indenture Supplement.
"Special Funding Account" has the meaning specified in the Indenture.
"Special Funding Amount" has the meaning specified in the Indenture.
"Standard & Poor's" means Standard & Poor's Ratings Services, or its
successor.
"Starter Account" means an Account for which the related Obligor had no
credit history as of the date of origination of the Account.
"State" has the meaning specified in the Indenture.
"Successor Servicer" has the meaning specified in Section 7.02(a).
"Supplemental Accounts" means Additional Accounts that the Transferor
designates as Accounts pursuant to Sections 2.09(a)(i) and 2.09(b).
"Supplemental Certificate" has the meaning specified in the Trust
Agreement.
"Tax Opinion" has the meaning specified in the Indenture.
"Termination Notice" has the meaning specified in Section 7.01.
"Transaction Documents" has the meaning specified in the Indenture.
"Transfer Agent and Registrar" has the meaning specified in the
Indenture.
"Transfer Restriction Event" means, with respect to a Transferor, that
such Transferor unable for any reason to transfer Receivables to the Trust
pursuant to this Agreement, including by reason of the application of the
provisions of Section 6.01 or any order of any Governmental Authority.
"Transferor" means (i) Nordstrom Private Label Receivables LLC, or its
successor under this Agreement and (ii) any Additional Transferor. References to
"each Transferor" shall refer to each entity mentioned in the preceding sentence
and references to "the Transferor" shall refer to all of such entities.
"Transferor Certificates" has the meaning specified in the Trust
Agreement.
"Transferor Interest" has the meaning specified in the Indenture.
"Transferred Account" means each account into which an Account shall be
transferred; provided, that (i) such transfer was made in accordance with the
Credit Card Guidelines and (ii) such account can be traced or identified as an
account into which an Account has been transferred.
"Trust" means the Nordstrom Private Label Credit Card Master Note Trust.
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"Trust Agreement" means the Trust Agreement relating to the Trust, dated
as of October 1, 2001, between Nordstrom Private Label Receivables LLC and the
Owner Trustee, as the same may be amended, supplemented or otherwise modified
from time to time.
"Trust Assets" has the meaning specified in Section 2.01.
"Trust Termination Date" has the meaning specified in the Trust
Agreement.
"Trustee" means the Owner Trustee and the Indenture Trustee.
"UCC" means the Uniform Commercial Code, as amended from time to time, as
in effect in the applicable jurisdiction.
"United States" has the meaning specified in the Indenture
Section 1.02. Other Definitional Provisions.
(a) With respect to any Series, all terms used herein and not otherwise
defined herein shall have meanings ascribed to them in the Trust Agreement, the
Indenture or the related Indenture Supplement, as applicable.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under GAAP. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under GAAP, the definitions contained in this Agreement
or in any such certificate or other document shall control.
(d) Any reference to each Rating Agency shall only apply to any specific
rating agency if such rating agency is then rating any outstanding Series.
(e) Unless otherwise specified, references to any amount as on deposit or
outstanding on any particular date means such amount at the close of business on
such day.
(f) The words "hereof", "herein", "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; references to any subsection,
Section, Schedule or Exhibit are references to subsections, Sections, Schedules
and Exhibits in or to this Agreement unless otherwise specified; and the term
"including" means "including without limitation."
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ARTICLE TWO
CONVEYANCE OF RECEIVABLES
Section 2.01. Conveyance of Receivables. By execution of this Agreement,
Nordstrom Private Label Receivables LLC or, if applicable, any Additional
Transferor, does hereby transfer, assign, set over and otherwise convey to the
Trust, without recourse except as provided herein, all its right, title and
interest in, to and under the Receivables existing at the close of business on
the Initial Cut-Off Date, in the case of Receivables arising in the Initial
Accounts, and on each Addition Cut-Off Date, in the case of Receivables arising
in the Additional Accounts, and in each case thereafter created from time to
time until the termination of the Trust, all Recoveries allocable to the Trust
as provided herein and the right to any Series Enhancement with respect to any
Series, in each case together with all monies due or to become due and all
amounts received or receivable with respect thereto and all proceeds (including
"proceeds" as defined in the UCC) thereof. The property described in the
preceding sentence, together with all monies and other property credited to the
Collection Account, the Series Accounts and the Special Funding Account
(including any subaccounts of such account), the rights of the Trust under this
Agreement and the Trust Agreement, the property conveyed to the Trust under any
Participation Interest Supplement and the right to receive Recoveries attributed
to cardholder charges for merchandise and services in the Accounts shall
constitute the assets of the Trust (the "Trust Assets"). The foregoing does not
constitute and is not intended to result in the creation or assumption by the
Trust, the Owner Trustee (as such or in its individual capacity), the Indenture
Trustee or any Noteholder of any obligation of any Account Owner, any
Transferor, the Servicer or any other Person in connection with the Accounts or
the Receivables or under any agreement or instrument relating thereto, including
any obligation to Obligors, merchant banks, merchants clearance systems or
insurers. The Obligors shall not be notified in connection with the creation of
the Trust of the transfer, assignment, set-over and conveyance of the
Receivables to the Trust.
Each Transferor agrees to record and file, at its own expense, financing
statements (and continuation statements when applicable) with respect to the
Receivables conveyed by such Transferor existing on the Initial Cut-Off Date and
thereafter created meeting the requirements of applicable state law in such
manner and in such jurisdictions as are necessary to perfect, and maintain the
perfection of, the transfer and assignment of its interest in such Receivables
to the Trust, and to deliver a file stamped copy of each such financing
statement or other evidence of such filing to the Owner Trustee as soon as
practicable after the first Closing Date, in the case of Receivables arising in
the Initial Accounts, and (if any additional filing is so necessary) as soon as
practicable after the applicable Addition Date, in the case of Receivables
arising in Additional Accounts. The Owner Trustee shall be under no obligation
whatsoever to file such financing or continuation statements or to make any
other filing under the UCC in connection with such transfer and assignment.
Each Transferor further agrees, at its own expense, on or prior to (i)
the first Closing Date, in the case of the Initial Accounts, (ii) the applicable
Addition Date, in the case of Additional Accounts with respect to such
Transferor, if any, and (iii) the applicable Removal Date, in the case of
Removed Accounts with respect to such Transferor, (a) to cause each Account
Owner to indicate in its respective computer files that Receivables created (or
reassigned, in the case of Removed Accounts) in connection with the Accounts
have been
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conveyed to the Trust pursuant to this Agreement (or conveyed to each such
Transferor or its designee in accordance with Section 2.10, in the case of
Removed Accounts) by including (or deleting in the case of Removed Accounts) in
such computer files a clearly specified code correctly indicating the Trust's
ownership of the Receivables, and (b) to deliver to the Owner Trustee a computer
file or microfiche list containing a true and complete list of all such Accounts
specifying for each such Account, as of the Initial Cut-Off Date, in the case of
the Initial Accounts, the applicable Addition Cut-Off Date in the case of
Additional Accounts, and the applicable Removal Date in the case of Removed
Accounts, its account number and the aggregate amount outstanding in such
Account. Each such file or list, as supplemented, from time to time, to reflect
Additional Accounts and Removed Accounts, shall be marked as Schedule 1 to this
Agreement and is hereby incorporated into and made a part of this Agreement.
Each Transferor further agrees not to alter the code referenced in this
paragraph with respect to any Account during the term of this Agreement unless
and until such Account becomes a Removed Account.
If the arrangements with respect to the Receivables hereunder shall
constitute a loan and not a purchase and sale of such Receivables, it is the
intention of the parties hereto that this Agreement shall constitute a security
agreement under applicable law, and each Transferor hereby grants to the Trust a
first priority perfected security interest in all of such Transferor's right,
title and interest, whether owned on the Initial Cut-Off Date or thereafter
acquired, in, to and under the Trust Assets, and all money, accounts, general
intangibles, chattel paper, instruments, documents, goods, investment property,
deposit accounts, certificates of deposit, letters of credit, and advices of
credit consisting of, arising from or related to the Trust Assets, and all
proceeds thereof, to secure its obligations hereunder.
To the extent that any Transferor retains any interest in the Trust
Assets, such Transferor grants to the Issuer a security interest in all of such
Transferor's right, title, and interest, whether owned on the Initial Cut-Off
Date or thereafter acquired, in, to and under the Trust Assets, and all money,
accounts, general intangibles, chattel paper, instruments, documents, goods,
investment property, deposit accounts, certificates of deposit, letters of
credit and advices of credit consisting of, arising from, or related to the
Trust Assets, and all proceeds thereof (collectively, the "Indenture
Collateral"), to secure its obligations hereunder. With respect to the Indenture
Collateral, the Issuer shall have all of the rights that it has under the
Indenture and the all of the rights of a secured creditor under the UCC. The
Transferor shall perform all actions necessary to maintain the perfection
priority of Trust's security interest in the Indenture Collateral.
Section 2.02. Acceptance by Trust.
(a) The Trust hereby acknowledges its acceptance of all right, title and
interest to the property, now existing and hereafter created, conveyed to the
Trust pursuant to Section 2.01. The Trust further acknowledges that, prior to or
simultaneously with the execution and delivery of this Agreement, the Transferor
delivered to the Owner Trustee the computer file or microfiche list relating to
the Initial Accounts described in the third paragraph of Section 2.01. The Trust
shall maintain all of its right, title and interest in the Indenture Collateral
until the Lien of the Indenture is released. The Owner Trustee shall maintain a
copy of Schedule 1, as delivered from time to time, at its Corporate Trust
Office.
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(b) The Trust hereby agrees not to disclose to any Person any of the
account numbers or other information contained in the computer files or
microfiche lists marked as Schedule 1 and delivered to the Owner Trustee or the
Trust, from time to time, except (i) to a Successor Servicer or as required by a
Requirement of Law applicable to the Owner Trustee, (ii) in connection with the
performance of the Owner Trustee's or the Trust's duties hereunder, (iii) to the
Indenture Trustee in connection with its duties in enforcing the rights of
Noteholders or (iv) to bona fide creditors or potential creditors of any Account
Owner, the Servicer or any Transferor for the limited purpose of enabling any
such creditor to identify applicable Receivables or Accounts subject to this
Agreement or the Receivables Purchase Agreements. The Trust agrees to take such
measures as shall be reasonably requested by any Transferor to protect and
maintain the security and confidentiality of such information and, in connection
therewith, shall allow each Transferor or its duly authorized representatives to
inspect the Owner Trustee's security and confidentiality arrangements as they
specifically relate to the administration of the Trust from time to time during
normal business hours upon prior written notice. The Trust shall provide the
applicable Transferor with notice five Business Days prior to disclosure of any
information of the type described in this subsection.
Section 2.03. Corporate Representations and Warranties of Each
Transferor. Each Transferor hereby severally represents and warrants to the
Trust (and agrees that the Owner Trustee and the Indenture Trustee may
conclusively rely on each such representation and warranty in accepting the
Receivables in trust and in authenticating the Notes, respectively) as of each
Closing Date (but only if it was a Transferor on such date) that:
(a) Organization and Good Standing. Such Transferor is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has, in all material respects, full
power and authority to own its properties and conduct its business as
presently owned or conducted, and to execute, deliver and perform its
obligations under this Agreement, each Transaction Document to which it
is a party and each applicable Participation Interest Supplement.
(b) Due Qualification. Such Transferor is duly qualified to do
business and is in good standing as a foreign limited liability company
or foreign corporation (or is exempt from such requirements) and has
obtained all necessary licenses and approvals, in each jurisdiction in
which failure to so qualify or to obtain such licenses and approvals
would (i) render any Credit Card Agreement relating to an Account
specified in a Receivables Purchase Agreement with such Transferor or any
Receivable conveyed to the Trust by such Transferor unenforceable by such
Transferor or the Trust or (ii) have a material adverse effect on the
Noteholders.
(c) Due Authorization. (i) The execution and delivery of this
Agreement, each Transaction Document to which it is a party and each
applicable Participation Interest Supplement by such Transferor and the
order to the Owner Trustee to have the Notes authenticated and delivered
and the consummation by such Transferor of the transactions provided for
in this Agreement, any Receivables Purchase Agreement to which it is a
party and each applicable Participation Interest Supplement have been
duly authorized by such Transferor by all necessary limited liability
company action on the part of such Transferor and (ii) this Agreement,
each Transaction Document to which it is
17
a party and each Participation Interest Supplement will remain, from the
time of its execution, an official record of such Transferor.
(d) No Conflict. The execution and delivery by such Transferor of
this Agreement, each Transaction Document to which it is a party and each
applicable Participation Interest Supplement, and the performance of the
transactions contemplated by this Agreement, each Transaction Document to
which it is a party and each applicable Participation Interest Supplement
and the fulfillment of the terms hereof and thereof applicable to such
Transferor, will not conflict with or violate any Requirements of Law
applicable to such Transferor or conflict with, result in any breach of
any of the material terms and provisions of, or constitute (with or
without notice or lapse of time or both) a material default under, any
indenture, contract, agreement, mortgage, deed of trust or other
instrument to which such Transferor is a party or by which it or its
properties are bound.
(e) No Proceedings. There are no proceedings or investigations,
pending or, to the best knowledge of such Transferor, threatened against
such Transferor before any Governmental Authority (i) asserting the
invalidity of this Agreement, Transaction Document to which it is a party
or any applicable Participation Interest Supplement, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement, any Transaction Document to which it is a party or each
applicable Participation Interest Supplement, (iii) seeking any
determination or ruling that, in the reasonable judgment of such
Transferor, would materially and adversely affect the performance by such
Transferor of its obligations under this Agreement, any Receivables
Purchase Agreement to which it is a party or each applicable
Participation Interest Supplement, (iv) seeking any determination or
ruling that would materially and adversely affect the validity or
enforceability of this Agreement, any Receivables Purchase Agreement to
which it is a party or any applicable Participation Interest Supplement
or (v) seeking to affect adversely the income or franchise tax attributes
of the Trust under the United States Federal or any State income or
franchise tax systems.
(f) All Consents. All authorizations, consents, orders or
approvals of or registrations or declarations with any Governmental
Authority required to be obtained, effected or given by such Transferor
in connection with the execution and delivery by such Transferor of this
Agreement, each Transaction Document to which it is a party and each
applicable Participation Interest Supplement and the performance of the
transactions contemplated by this Agreement, any each Transaction
Document to which it is a party and each applicable Participation
Interest Supplement by such Transferor have been duly obtained, effected
or given and are in full force and effect.
(g) Insolvency. No Insolvency Event with respect to such
Transferor has occurred and the transfer of the Receivables by such
Transferor to the Trust has not been made in contemplation of the
occurrence thereof or with the intent to hinder, delay or defraud such
Transferor or the creditors of such Transferor.
The representations and warranties of each Transferor set forth in this
Section shall survive the transfer and assignment by such Transferor of the
respective Receivables to the
18
Trust, the pledge of the Receivables to the Indenture Trustee pursuant to the
Indenture, and the issuance of the Notes. Upon discovery by such Transferor, the
Servicer or the Owner Trustee of a breach of any of the representations and
warranties by such Transferor set forth in this Section, the party discovering
such breach shall give prompt written notice to the other parties and the
Indenture Trustee. Such Transferor agrees to cooperate with the Servicer and the
Owner Trustee in attempting to cure any such breach.
Section 2.04. Other Representations and Warranties of Each Transferor.
(a) Representations and Warranties. Each Transferor hereby severally
represents and warrants to the Trust as of the Initial Issuance Date, each
Closing Date and, with respect to Additional Accounts, as of the related
Addition Date (but only if, in either case, it was a Transferor on such date)
that:
(i) each Transaction Document to which it is a party, each
applicable Participation Interest Supplement and, in the case of
Additional Accounts, the related Assignment, each constitutes a legal,
valid and binding obligation of such Transferor enforceable against such
Transferor in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally
from time to time in effect or general principles of equity;
(ii) as of the Initial Cut-Off Date with respect to the Initial
Accounts (and the Receivables arising therein), and as of the related
Removal Date or Addition Date with respect to Removed Accounts or
Additional Accounts, respectively (and the Receivables arising therein),
the portion of Schedule 1 to this Agreement under such Transferor's name,
as supplemented to such date, is an accurate and complete listing in all
material respects of all the Accounts the Receivables in which were
transferred by such Transferor on the Initial Issuance Date or such
Addition Cut-Off Date, as the case may be, and the information contained
therein with respect to the identity of such Accounts and the Receivables
existing thereunder is true and correct in all material respects as of
the Initial Cut-Off Date or such Addition Cut-Off Date, as the case may
be;
(iii)each Receivable conveyed to the Trust by such Transferor has
been conveyed to the Trust free and clear of any Lien of any Person
claiming through or under such Transferor or any of its Affiliates (other
than Liens permitted under Section 2.07(b)) and in compliance with all
Requirements of Law applicable to such Transferor;
(iv) all authorizations, consents, orders or approvals of or
registrations or declarations with any Governmental Authority required to
be obtained, effected or given by such Transferor in connection with the
conveyance by such Transferor of Receivables to the Trust have been duly
obtained, effected or given and are in full force and effect;
(v) either this Agreement or, in the case of Additional Accounts,
the related Assignment constitutes an absolute sale, transfer and
assignment to the Trust of all right, title and interest of such
Transferor in the Receivables conveyed to the Trust by such Transferor
and the proceeds thereof and Recoveries identified as relating to the
19
Receivables conveyed to the Trust by such Transferor or, if this
Agreement or, in the case of Additional Accounts, the related Assignment
does not constitute a sale of such property, it constitutes a grant of a
first priority perfected "security interest" (as defined in the UCC) in
such property to the Trust, which, in the case of existing Receivables
and the proceeds thereof and said Recoveries, is enforceable upon
execution and delivery of this Agreement, or, with respect to then
existing Receivables in Additional Accounts, as of the applicable
Addition Date, and which will be enforceable with respect to such
Receivables hereafter and thereafter created and the proceeds thereof
upon such creation. Upon the filing of the financing statements and, in
the case of Receivables hereafter created and the proceeds thereof, upon
the creation thereof, the Trust shall have a first priority perfected
security or ownership interest in such property and proceeds;
(vi) on the Initial Cut-Off Date, each Initial Account specified
in Schedule 1 with respect to such Transferor is an Eligible Account and,
on the applicable Addition Cut-Off Date, each related Additional Account
specified in Schedule 1 with respect to such Transferor is an Eligible
Account;
(vii) on the Initial Cut-Off Date, each Receivable then existing
and conveyed to the Trust by such Transferor is an Eligible Receivable
and, on the applicable Addition Cut-Off Date, each Receivable contained
in the related Additional Accounts and conveyed to the Trust by such
Transferor is an Eligible Receivable;
(viii) as of the date of the creation of any new Receivable
transferred to the Trust by such Transferor, such Receivable is an
Eligible Receivable;
(ix) no selection procedures believed by such Transferor to be
materially adverse to the interests of the Noteholders have been used in
selecting such Accounts;
(x) except as otherwise expressly provided in this Agreement or
any Indenture Supplement, neither such Transferor nor any Person claiming
through or under such Transferor has any claim to or interest in the
Collection Account, the Special Funding Account, any Series Account or
any Series Enhancement; and
(xi) the aggregate amount of Receivables that arises from Accounts
that (A) have Obligors with a billing address in Canada is less than 1%
of total amount of Receivables in the Trust, (B) are business charge
accounts is less than 1% of the total amount of Receivables in the Trust,
(C) are Starter Accounts is less than 3% of the total amount of the
Receivables in the Trust and (D) have Obligors that are employees of
Nordstrom Inc. or any of its affiliates is less 5% of the total amount
Receivables in the Trust; .
(b) Notice of Breach. The representations and warranties set forth in
Section 2.03 and this Section shall survive the transfers and assignments of the
Receivables to the Trust, the pledge of the Receivables to the Indenture Trustee
pursuant to the Indenture, and the issuance of the Notes. Upon discovery by any
Transferor or the Servicer of a breach of any of the representations and
warranties set forth in Section 2.03 or this Section, the party discovering such
breach shall give notice to the other parties and to the Indenture Trustee
within three
20
Business Days following such discovery; provided that the failure to give notice
within three Business Days does not preclude subsequent notice.
Section 2.05. Reassignment of Ineligible Receivables.
(a) Reassignment of Receivables. In the event (i) any representation or
warranty contained in Section 2.04(a)(ii), (iv), (vi), (vii), (viii) or (ix) is
not true and correct in any material respect as of the date specified therein
with respect to any Receivable or the related Account and such breach has a
material adverse effect on any Receivable (which determination shall be made
without regard to whether funds are then available pursuant to any Series
Enhancement) unless cured within 60 days (or such longer period, not in excess
of 150 days, as may be agreed to by the Indenture Trustee and the Servicer)
after the earlier to occur of the discovery thereof by the Transferor which
conveyed such Receivables to the Trust or receipt by such Transferor of written
notice thereof given by the Trust, the Indenture Trustee or the Servicer, (ii)
any representation or warranty contained in Section 2.04(a)(iii) is not true and
correct in any material respect as of the date specified therein with respect to
any Receivable and such breach has a material adverse effect on any Receivable
(which determination shall be made without regard to whether funds are then
available pursuant to any Series Enhancement) or (iii) it is so provided in
Section 2.07(a) with respect to any Receivables conveyed to the Trust by such
Transferor, then such Transferor shall accept reassignment of all Receivables in
the related Account ("Ineligible Receivables") on the terms and conditions set
forth in Section 2.05(b).
(b) Price of Reassignment. The Servicer shall deduct the portion of such
Ineligible Receivables reassigned to each Transferor which are Principal
Receivables from the aggregate amount of Principal Receivables used to calculate
the Transferor Interest. In the event that, following the exclusion of such
Principal Receivables from the calculation of the Transferor Interest, the
Transferor Interest would be less than the Required Transferor Interest, not
later than 1:00 p.m., New York City time, two Business Days after which such
reassignment obligation arises, the applicable Transferor shall make a deposit
into the Special Funding Account in immediately available funds in an amount
equal to the amount by which the Transferor Interest would be below the Required
Transferor Interest (up to the amount of such Principal Receivables).
Upon reassignment of any Ineligible Receivable, the Trust shall
automatically and without further action be deemed to transfer, assign, set over
and otherwise convey to the applicable Transferor or its designee, without
recourse, representation or warranty, all the right, title and interest of the
Trust in and to such Ineligible Receivable, all Recoveries related thereto, all
monies and amounts due or to become due and all proceeds thereof and such
reassigned Ineligible Receivable shall be treated by the Trust as collected in
full as of the date on which it was transferred. The obligation of each
Transferor to accept reassignment of any Ineligible Receivables conveyed to the
Trust by such Transferor, and to make the deposits, if any, required to be made
to the Special Funding Account as provided in this Section, shall constitute the
sole remedy respecting the event giving rise to such obligation available to the
Trust, the Noteholders (or the Indenture Trustee on behalf of the Noteholders)
or any Series Enhancer. Notwithstanding any other provision of this subsection,
a reassignment of an Ineligible Receivable in excess of the amount that would
cause the Transferor Interest to be less than the Required Transferor Interest
shall not occur if the applicable Transferor fails to make any deposit required
by this Section
21
with respect to such Ineligible Receivable. The Trust shall execute such
documents and instruments of transfer or assignment and take such other actions
as shall reasonably be requested and provided by the applicable Transferor to
effect the conveyance of such Ineligible Receivables pursuant to this
subsection, but only upon receipt of an Officer's Certificate from such
Transferor that states that all conditions set forth in this Section have been
satisfied.
Section 2.06. Reassignment of Trust Portfolio. In the event any
representation or warranty of a Transferor set forth in Section 2.03(a) or (c)
or Section 2.04(a)(i) or (v) is not true and correct in any material respect and
such breach has a material adverse effect on the Receivables or Participation
Interests conveyed to the Trust by such Transferor or the availability of the
proceeds thereof to the Trust (which determination shall be made without regard
to whether funds are then available pursuant to any Series Enhancement), then
either the Trust, the Indenture Trustee or the Holders of Notes evidencing not
less than 50% of the aggregate unpaid principal amount of all outstanding Notes,
by notice then given to such Transferor and the Servicer (and to the Trust and
Indenture Trustee if given by the Noteholders), may direct such Transferor to
accept a reassignment of the Receivables and any Participation Interests
conveyed to the Trust by such Transferor if such breach and any material adverse
effect caused by such breach is not cured within 60 days of such notice (or
within such longer period, not in excess of 150 days, as may be specified in
such notice), and upon those conditions such Transferor shall be obligated to
accept such reassignment on the terms set forth below; provided, however, that
such Receivables and Participation Interests will not be reassigned to such
Transferor if, on any day prior to the end of such 60-day or longer period (i)
the relevant representation and warranty shall be true and correct in all
material respects as if made on such day and (ii) such Transferor shall have
delivered to the Trust a certificate of an authorized officer describing the
nature of such breach and the manner in which the relevant representation and
warranty has become true and correct.
The applicable Transferor shall deposit in the Collection Account in
immediately available funds not later than 1:00 p.m., New York City time, two
Business Days after which such reassignment obligation arises, in payment for
such reassignment, an amount equal to the sum of the amounts specified therefor
with respect to each outstanding Series in the related Indenture Supplement.
Notwithstanding anything to the contrary in this Agreement, such amounts shall
be distributed to the Noteholders on such Distribution Date in accordance with
the terms of each Indenture Supplement. If the Trust, the Indenture Trustee or
the Noteholders give notice directing the applicable Transferor to accept a
reassignment of the Receivables and Participation Interests as provided above,
the obligation of such Transferor to accept such reassignment pursuant to this
Section and to make the deposit required to be made to the Collection Account as
provided in this paragraph shall constitute the sole remedy respecting an event
of the type specified in the first sentence of this Section available to the
Noteholders (or the Indenture Trustee on behalf of the Noteholders) or any
Series Enhancer. Upon reassignment of the Receivables and the Participation
Interests on such Distribution Date, the Trust shall automatically and without
further action be deemed to transfer, assign, set-over and otherwise convey to
the applicable Transferor, without recourse, representation or warranty, all the
right, title and interest of the Trust in and to the Receivables and the
Participation Interests, all Recoveries allocable to the Trust, and all monies
and amounts due or to become due with respect thereto and all proceeds thereof.
The Trust shall execute such documents and instruments of
22
transfer or assignment and take such other actions as shall reasonably be
requested by the applicable Transferor to effect the conveyance of such property
pursuant to this Section.
Section 2.07. Covenants of each Transferor. Each Transferor hereby
severally covenants that:
(a) Receivables Not Evidenced by Promissory Notes. Except in
connection with its enforcement or collection of any Receivable, such
Transferor will take no action to cause any Receivable conveyed by it to
the Trust to be evidenced by any instrument (as defined in the UCC) and
if any such Receivable is so evidenced (whether or not in connection with
the enforcement or Collection of a Receivable) it shall be deemed to be
an Ineligible Receivable and shall be reassigned to such Transferor in
accordance with Section 2.05(b).
(b) Security Interests. Except for the conveyances hereunder, such
Transferor will not sell, pledge, assign or transfer to any other Person,
or grant, create, incur, assume or suffer to exist any Lien on, any
Receivable or Participation Interest conveyed by it to the Trust, whether
now existing or hereafter created, or any interest therein, and such
Transferor shall defend the right, title and interest of the Trust and
the Indenture Trustee in, to and under the Receivables and any
Participation Interest, whether now existing or hereafter created,
against all claims of third parties claiming through or under such
Transferor; provided, however, that nothing in this subsection shall
prevent or be deemed to prohibit such Transferor from suffering to exist
upon any of the Receivables transferred by it to the Trust any Liens for
municipal or other local taxes if such taxes shall not at the time be due
and payable or if such Transferor shall currently be contesting the
validity thereof in good faith by appropriate proceedings and shall have
set aside on its books adequate reserves with respect thereto.
(c) Transferor Interest. Except for (i) the conveyances hereunder,
in connection with any transaction permitted by Section 4.02(a)(i) and as
provided in Section 2.09(d) of this Agreement or Section 2.12 of the
Indenture or (ii) conveyances with respect to which the Rating Agency
Condition shall have been satisfied and a Tax Opinion shall have been
delivered, such Transferor agrees not to transfer, sell, assign, exchange
or otherwise convey or pledge, hypothecate or otherwise grant a security
interest in the Transferor Interest, the Transferor Certificate or any
Supplemental Certificate and any such attempted transfer, assignment,
exchange, conveyance, pledge, hypothecation, grant or sale shall be void.
(d) Delivery of Collections or Recoveries. In the event that such
Transferor receives Collections or Recoveries, such Transferor agrees to
pay the Servicer all such Collections and Recoveries as soon as
practicable after receipt thereof but in no event later than two Business
Days after the Date of Processing.
(e) Notice of Liens. Such Transferor shall notify the Trust, the
Indenture Trustee and each Series Enhancer promptly after becoming aware
of any Lien on any Receivable (or on the underlying receivable) or
Participation Interest conveyed by it to
23
the Trust other than the conveyances hereunder and under any Receivables
Purchase Agreement to which it is a party and the Indenture.
(f) Notice of Change in Credit Card Guidelines. The Transferor
shall notify the Rating Agencies of any change in the Credit Card
Guidelines.
(g) Continuous Perfection. The Transferor shall not change its
name, identity or structure in any manner that might cause any financing
or continuation statement filed pursuant to this Agreement to be
misleading unless the Transferor shall have delivered to the Trust at
least 30 days' prior written notice thereof and, no later than 30 days
after making such change, shall have taken all action necessary or
advisable to amend such financing statement or continuation statement so
that it is not misleading. The Transferor shall not change the
jurisdiction under whose laws it is organized, its chief execution office
or change the location of its principal records concerning the
Receivables unless it has delivered to the Trust at least 30 days' prior
written notice of its intention to do so and has taken such action as is
necessary or advisable to cause the interest of the Trust in the
Receivables to continue to be perfected with the priority required by
this Agreement.
Section 2.08. Covenants of each Transferor with Respect to Receivables
Purchase Agreements.
(a) Each Transferor hereby covenants that it will at all times enforce
the covenants and agreements of the Account Owners under the terms of the
Receivables Purchase Agreements to which it is a party, including covenants to
the effect set forth below:
(i) Periodic Rate Finance Charges and Other Fees. Except (A) as
otherwise required by any Requirements of Law, or (B) as is deemed by the
Account Owner to be necessary in order for it to maintain its credit card
business on a competitive basis based on a good faith assessment by it of
the nature of its competition in the credit card business, it shall not
at any time reduce the annual percentage rate of the Periodic Rate
Finance Charges assessed on the Receivables transferred by it to the
Transferor or other fees charged on any of the Accounts owned by it if
either (1) as a result of any such reduction, such Account Owner's
reasonable expectation is that such reduction will cause a Redemption
Event or Event of Default to occur or (2) such reduction is not also
applied to all comparable segments of consumer revolving credit card
accounts owned by such Account Owner which have characteristics the same
as, or substantially similar to, such Accounts.
(ii) Credit Card Agreements and Guidelines. Such Account Owner
shall comply with and perform its obligations under the Credit Card
Agreements relating to the Accounts owned by it and the Credit Card
Guidelines except insofar as any failure so to comply or perform would
not materially and adversely affect the rights of the Trust or the
Noteholders. Subject to compliance with all Requirements of Law Section
2.08(a)(i), such Account Owner may change the terms and provisions of the
Credit Card Agreements or the Credit Card Guidelines with respect to any
of the Accounts owned by it in any respect (including the calculation of
the amount or the timing of charge-offs and the Periodic Rate Finance
Charges and other fees to be assessed thereon) only if such
24
change is made applicable to all comparable segments of the consumer
revolving credit card accounts owned by such Account Owner which have
characteristics the same as, or substantially similar to, such Accounts.
Notwithstanding the foregoing, unless required by Requirements of Law or
as permitted by Section 2.08(a), no Account Owner will take any action
with respect to the applicable Credit Card Agreements or the applicable
Credit Card Guidelines, which, at the time of such action, the Account
Owner reasonably believes will have a material adverse effect on the
Noteholders.
(iii) Receivables Purchase Agreement. Transferor, in its capacity
as Purchaser of Receivables from the Seller under the Receivables
Purchase Agreement, shall enforce the covenants and agreements of the
Seller as set forth in such Receivables Purchase Agreement, where a
failure of the Seller to comply would have an Adverse Effect.
(b) New or Amendments to Receivables Purchase Agreements.
Each Transferor further covenants that it will not enter into any
amendments to a Receivables Purchase Agreement or enter into a new Receivables
Purchase Agreement unless the Rating Agency Condition has been satisfied.
Section 2.09. Addition of Accounts.
(a) Additional Accounts
(i) Required Additions. If on any Business Day, either (A) the
Transferor Interest is less than the Required Transferor Interest or (B)
the total amount of Principal Receivables is less than the Required
Minimum Principal Balance on such Business Day, the Transferor shall on
or prior to the close of business on the second Business Day following
such Business Day (the "Required Designation Date"), unless the
Transferor Interest exceeds the Required Transferor Interest and the
total amount of Principal Receivables exceeds the Required Minimum
Principal Balance, in each case, as of the close of business on such
Required Designation Date, cause to be designated additional Eligible
Accounts to be included as Accounts as of the Required Designation Date
or any earlier date in a sufficient amount such that, after giving effect
to such addition, the Transferor Interest as of the close of business on
the applicable Addition Date, is at least equal to the Required
Transferor Interest and the aggregate principal balance of Principal
Receivables, plus the then outstanding principal amount of any
Participation Interests conveyed to the Trust as of the close of business
on the Addition Date, is at least equal to the Required Minimum Principal
Balance on such date. The Transferor shall promptly give notice to each
Rating Agency of any obligation of the Transferor to designate Accounts
pursuant to the preceding sentence. The failure of any condition set
forth in Section 2.09(c) shall not relieve the Transferor of its
obligation pursuant to this paragraph; provided, however, that the
failure of the Transferor to transfer Receivables to the Trust as
provided in this clause solely as a result of the unavailability of a
sufficient amount of Eligible Receivables shall not constitute a breach
of this Agreement; provided further, that any such failure which has not
been timely cured may nevertheless result in the occurrence of a
Redemption Event.
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(ii) Optional Participation Interests. In lieu of, or in addition
to, designating Additional Accounts pursuant to Section 2.09(a)(i), the
Transferor may, subject to the conditions specified in Section 2.09(c),
convey to the Trust participations (including 100% participations)
representing undivided interests in a pool of assets primarily consisting
of revolving credit card receivables and any interests in any of the
foregoing, including securities representing or backed by such
receivables and collections thereon ("Participation Interests"). The
addition of Participation Interests in the Trust shall be effected by a
Participation Interest Supplement, dated the applicable Addition Date and
entered into pursuant to Section 9.01(a).
(iii) Optional Additions. In addition to designating Additional
Accounts pursuant to clause (i) above, the Transferor, subject to the
conditions set forth in this subsection, may elect on any date to
designate Eligible Accounts to the Trust and/or to automatically convey
newly originated Eligible Accounts to the Trust upon their establishment.
The Transferor hereby elects to automatically convey newly originated
Eligible Accounts to the Trust upon their establishment. The Transferor
shall be permitted to transfer Eligible Accounts to the Trust pursuant to
this clause as long as (A) the number of new Accounts and the amount of
Receivables arising from such Accounts designated during any fiscal year
do not exceed 20% of the total amount of Accounts designated to the Trust
and Receivables in the Trust, respectively, as of the first day of such
year fiscal year or (B) for any fiscal quarter, the number of new
Accounts and the amount of Receivables arising from such Accounts
designated during such fiscal quarter do not exceed 15% of the total
amount of Accounts designated to the Trust and Receivables in the Trust,
respectively, as of the first day of such quarter. The Transferor shall
give prompt notice to each Rating Agency if any of the limits set forth
in the preceding sentence have been exceeded. If the Transferor elects to
suspend or terminate the Eligible Receivables, it shall do so only upon
providing the Indenture Trustee, the Rating Agencies and the Servicer
with notice thereof.
(b) Restricted Additions. Each Transferor may from time to time, at its
sole discretion, subject to the conditions specified in Section 2.09(c),
designate additional Eligible Accounts to be included as Accounts or
Participation Interests to be included as Trust Assets, in either case as of the
applicable Addition Date.
(c) Conditions to Required Additions, Optional Participation Interests
and Restricted Additions. On the Addition Date with respect to any Supplemental
Accounts or Participation Interests designated pursuant to Section 2.09(a) or
(b), the Transferor shall transfer the Receivables in such Supplemental Accounts
(and such Supplemental Accounts shall be deemed to be Accounts for purposes of
this Agreement) or shall transfer such Participation Interests, in each case as
of the close of business on the applicable Addition Date, subject to the
satisfaction of the following conditions:
(i) on or before the tenth Business Day immediately preceding the
Addition Date, each Participating Transferor shall have given the Trust,
the Indenture Trustee and each Rating Agency written notice that the
Supplemental Accounts or Participation Interests will be included and
specifying the applicable Addition Date, the Addition Cut-Off Date and
the approximate number of accounts expected to be added and the
26
approximate aggregate balances expected to be outstanding in the accounts
to be added (in the case of Supplemental Accounts);
(ii) in the case of Supplemental Accounts, the Participating
Transferor shall have delivered to the Trust and the Indenture Trustee
copies of UCC-1 financing statements covering such Supplemental Accounts,
if necessary to perfect the Trust's interest in the Receivables arising
therein;
(iii) as of each of the Addition Cut-Off Date and the Addition
Date, no Insolvency Event with respect to the Participating Transferor or
the Account Owner of the Supplemental Accounts shall have occurred nor
shall the transfer of the Receivables arising in the Supplemental
Accounts or of the Participation Interests to the Trust have been made in
contemplation of the occurrence thereof or with the intent to hinder,
delay or defraud the Transferor or the creditors of the Transferor;
(iv) the Rating Agency Condition shall have been satisfied with
respect to such Addition;
(v) each Participating Transferor shall have delivered to the
Trust and the Indenture Trustee an Officer's Certificate, dated the
Addition Date, stating that (A) in the case of Supplemental Accounts, as
of the applicable Addition Cut-Off Date, the Supplemental Accounts are
all Eligible Accounts, (B) to the extent applicable, the conditions set
forth in Sections 2.09(a)(ii) through (a)(iv) and (a)(viii) have been
satisfied and (C) such Participating Transferor reasonably believes that
the addition by such Participating Transferor of the Receivables arising
in the Supplemental Accounts or of the Participation Interests to the
Trust will not, based on the facts known to such officer at the time of
such addition, then or thereafter result in an Adverse Effect with
respect to any Series;
(vi) on or prior to each Distribution Date, the Participating
Transferors shall have delivered to the Trust, the Indenture Trustee and
each Rating Agency, an Opinion of Counsel substantially in the form of
Exhibit D-2 with respect to the Supplemental Accounts, if any, included
as Accounts during the related Monthly Periods ending prior to such
Distribution Date; the opinion delivery requirement set forth in the
immediately preceding sentence may be modified provided that the Rating
Agency Condition is satisfied;
(vii) in the case of designation of Supplemental Accounts,
Participating Transferors shall have delivered to the Owner Trustee (A)
the computer file or microfiche list required to be delivered pursuant to
Section 2.01 with respect to such Supplemental Accounts and (B) a duly
executed Assignment; and
(viii) to the extent required by Section 4.03, the Servicer shall
have deposited in the Collection Account all Collections with respect to
such Supplemental Accounts since the Addition Cut-off Date.
(d) Additional Transferors. Upon satisfaction of the Rating Agency
Condition, the Transferor may designate Additional Transferors under this
Agreement in an amendment hereto
27
pursuant to subsection 9.01(a) and, in connection with such designation, the
Transferor shall surrender the Transferor Certificate to the Owner Trustee in
exchange for a newly issued Transferor Certificate modified to reflect such
Additional Transferor's interest in the Transferor Interest; provided, however,
that prior to any such designation and exchange the conditions set forth in
clauses (iii) and (v) of subsection 3.06(b) of the Trust Agreement shall have
been satisfied with respect thereto.
Section 2.10. Removal of Accounts and Participation Interests.
(a) Once per Monthly Period, each Transferor shall have the right to
require the reassignment to it or its designee of all the Trust's right, title
and interest in, to and under the Receivables then existing and thereafter
created, all Recoveries related thereto after the Removal Date, all monies due
or to become due and all amounts received or receivable with respect thereto,
and all proceeds thereof in or with respect to certain specified Accounts (the
"Removed Accounts") or Participation Interests conveyed to the Trust by such
Transferor (the "Removed Participation Interests") (unless otherwise set forth
in the applicable Participation Interest Supplement or Indenture Supplement) and
designated for removal by the Transferor, upon satisfaction of the following
conditions:
(i) on or before the fifth Business Day preceding the Removal
Date, such Transferor shall have given written notice to the Trust, the
Indenture Trustee, the Servicer, the Rating Agency and each Series
Enhancer (unless such notice requirement is otherwise waived) of such
removal and specifying the Removal Date;
(ii) on or prior to the date that is five Business Days on or
before the Removal Date, such Transferor shall amend Schedule 1 by
delivering to the Owner Trustee a computer file or microfiche list
containing a true and complete list of the Removed Accounts specifying
for each such Account, as of the date notice of the Removal Date is
given, its account number, the aggregate amount outstanding in such
Account and the aggregate amount of Principal Receivables outstanding in
such Account;
(iii) the removal will not cause the Transferor Interest to be
less than the Required Transferor Interest;
(iv) such Transferor shall have represented and warranted as of
the Removal Date that the list of Removed Accounts delivered pursuant to
paragraph (ii) above, as of the Removal Date, is true and complete in all
material respects;
(v) the Rating Agency Condition shall have been satisfied with
respect to the removal of the Removed Accounts and removed Participation
Interests;
(vi) such Transferor shall have delivered to the Trust and the
Indenture Trustee an Officer's Certificate, dated the Removal Date, to
the effect that such Transferor reasonably believes that (A) such removal
will not have a material adverse effect on the Noteholders, (B) such
removal will not result in the occurrence of a Pay Out Event or Event of
Default, and (C) no selection procedures believed by such Transferor to
be materially adverse to the interests of the Noteholders have been used
in selecting the Removed Accounts; and
28
(vii) as of the Removal Date, no more than 10% of the Receivables
outstanding are more than 30 days Contractually Delinquent.
(b) Upon satisfaction of the above conditions, the Trust shall execute
and deliver to such Transferor a Reassignment and shall, without further action,
be deemed to transfer, assign, set over and otherwise convey to such Transferor
or its designee, effective as of the Removal Date, without recourse,
representation or warranty, all the right, title and interest of the Trust in
and to the Receivables arising in the Removed Accounts and Removed Participation
Interests, all Recoveries related thereto, all monies due and to become due and
all amounts received or receivable with respect thereto after the Removal Date
and all proceeds thereof and any Insurance Proceeds relating thereto. The Trust
and Owner Trustee may conclusively rely on the Officer's Certificate delivered
pursuant to this Section and shall have no duty to make inquiries with regard to
the matters set forth therein and shall incur no personal liability in so
relying.
In addition to the foregoing, on the date when any Receivable in an
Account becomes a Defaulted Receivable, the Trust shall, unless directed
otherwise by the Transferor, automatically and without further action or
consideration be deemed to transfer, set over and otherwise convey to the
Transferor with respect to such Account, without recourse, representation or
warranty, all right, title and interest of the Trust in and to the Defaulted
Receivables in such Account, all monies and amounts due or to become due with
respect thereto and all proceeds thereof; provided that Recoveries of such
Account shall be applied as provided herein.
Section 2.11. Account Allocations. In the event that a Transfer
Restriction Event occurs with respect to a Transferor, then, (i) such Transferor
and the Servicer agree (except as prohibited by any such order) to allocate and
pay to the Trust, after the date of such inability, all Collections, including
Collections of Receivables transferred to the Trust prior to the occurrence of
such event, and all amounts which would have constituted Collections but for
such Transferor's inability to transfer Receivables (up to an aggregate amount
equal to the amount of Receivables transferred to the Trust by such Transferor
in the Trust on such date), (ii) such Transferor and the Servicer agree that
such amounts will be applied as Collections in accordance with Article Eight of
the Indenture and the terms of each Indenture Supplement and (iii) for so long
as the allocation and application of all Collections and all amounts that would
have constituted Collections are made in accordance with clauses (i) and (ii)
above, Principal Receivables and all amounts which would have constituted
Principal Receivables but for such Transferor's inability to transfer
Receivables to the Trust which are charged off as uncollectible in accordance
with this Agreement shall continue to be allocated in accordance with Article
Eight of the Indenture and the terms of each Indenture Supplement. For the
purpose of the immediately preceding sentence, such Transferor and the Servicer
shall treat the first received Collections with respect to the Accounts as
allocable to the Trust until the Trust shall have been allocated and paid
Collections in an amount equal to the aggregate amount of Principal Receivables
in the Trust as of the date of the occurrence of such event. If such Transferor
and the Servicer are unable pursuant to any Requirements of Law to allocate
Collections as described above, such Transferor and the Servicer agree that,
after the occurrence of such event, payments on each Account with respect to the
principal balance of such Account shall be allocated first to the oldest
principal balance of such Account and shall have such payments applied as
Collections in accordance with Article Eight of the Indenture and the terms of
each Indenture Supplement. The parties hereto agree that Finance Charge
Receivables, whenever created, accrued in respect
29
of Principal Receivables which have been conveyed to the Trust shall continue to
be a part of the Trust notwithstanding any cessation of the transfer of
additional Principal Receivables to the Trust and Collections with respect
thereto shall continue to be allocated and paid in accordance with Article Eight
of the Indenture and the terms of each Indenture Supplement.
Section 2.12. Discount Option.
(a) The Transferor shall have the option to designate at any time and
from time to time a percentage or percentages, which may be a fixed percentage
or a variable percentage based on a formula (the "Discount Percentage"), of all
or any specified portion of Principal Receivables existing on or after the
Discount Option Date to be treated as Discount Option Receivables and thereafter
treated Finance Charge Receivables. As of the Closing Date, the Discount
Percentage is zero. Upon satisfaction of the Rating Agency Condition, the
Transferor shall also have the option of increasing, reducing or withdrawing the
Discount Percentage, at any time and from time to time, on and after the
applicable Discount Option Date. The Transferor shall provide to the Servicer,
the Trustees and any Rating Agency 30 days' prior written notice of the Discount
Option Date, and such designation shall become effective on the Discount Option
Date (i) unless such designation in the reasonable belief of the Transferor
would cause a Redemption Event or Event of Default with respect to any Series to
occur, or an event which, with notice or lapse of time or both, would constitute
a Redemption Event or Event of Default with respect to any Series and (ii) only
if the Rating Agency Condition shall have been satisfied with respect to such
designation.
(b) After the Discount Option Date, Discount Option Receivable
Collections shall be treated as Collections of Finance Charge Receivables.
Section 2.13. Representations and Warranties as to the Security Interest
of the Trust in the Receivables. The Transferor makes the following
representations and warranties to the Trust. The representations and warranties
speak as of the execution and delivery of this Agreement and as of each Closing
Date. Such representations and warranties shall survive the sale, transfer and
assignment of the Receivables to the Trust, the pledge thereof to the Indenture
Trustee and the termination of this Agreement and shall not be waived by any
party hereto unless the Rating Agency Condition is satisfied.
(a) This Agreement creates a valid and continuing security
interest (as defined in the applicable UCC) in the Indenture Collateral
in favor of the Trust, which security interest is prior to all other
Liens other than the Lien of the Indenture, and is enforceable as such as
against creditors of and purchasers from the Transferor.
(b) The Receivables constitute "accounts" within the meaning of
the applicable UCC.
(c) The Transferor owns and has good and marketable title to the
Indenture Collateral free and clear of any Lien, claim or encumbrance of
any Person.
(d) The Transferor has caused or will have caused, within ten
days, the filing of all appropriate financing statements in the proper
filing office in the appropriate
30
jurisdictions under applicable law in order to perfect the security
interest in the Indenture Collateral granted to the Trust hereunder.
(e) Other than the security interest granted to the Trust pursuant
to this Agreement, the Transferor has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the
Indenture Collateral. The Transferor has not authorized the filing of and
is not aware of any financing statements against the Transferor that
include a description of collateral covering the Indenture Collateral
other than any financing statement relating to the security interest
granted to the Trust hereunder or that has been terminated. The
Transferor is not aware of any judgment or tax lien filings against the
Transferor.
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ARTICLE THREE
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.01. Acceptance of Appointment and Other Matters Relating to the
Servicer.
(a) Nordstrom fsb agrees to act as the Servicer under this Agreement and
the Noteholders by their acceptance of Notes consent to Nordstrom fsb acting as
Servicer.
(b) As agent for each Transferor and the Trust, the Servicer shall
service and administer the Receivables (including the underlying receivables)
and any Participation Interests, shall collect and deposit into the Collection
Account amounts received under the Receivables (including the underlying
receivables) and any Participation Interests and shall charge off as
uncollectible Receivables, all in accordance with its customary and usual
servicing procedures for servicing credit card receivables comparable to the
Receivables and in accordance with the Credit Card Guidelines and the
Transaction Documents. As agent for each Transferor and the Trust, the Servicer
shall have full power and authority, acting alone or through any party properly
designated by it hereunder, to do any and all things in connection with such
servicing and administration which it may deem reasonably necessary or
desirable, including, but not limited to, billing, collecting and remitting
Collections, providing customer service and performing other activities
customary in servicing credit card receivables. Without limiting the generality
of the foregoing and subject to Section 7.01, the Servicer or its designee is
hereby authorized and empowered, unless such power is revoked by the Indenture
Trustee on account of the occurrence of a Servicer Default, (i) to instruct the
Owner Trustee or the Indenture Trustee to make withdrawals and payments from the
Collection Account, the Special Funding Account and any Series Account, as set
forth in this Agreement, the Indenture or any Indenture Supplement, (ii) to take
any action required or permitted under any Series Enhancement, as set forth in
this Agreement, the Indenture or any Indenture Supplement, (iii) to execute and
deliver, on behalf of the Trust, 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 Requirements of Law, to commence collection
proceedings with respect to such Receivable and (iv) to make any filings,
reports, notices, applications and registrations with, and to seek any consents
or authorizations from, the Commission and any state securities authority on
behalf of the Trust as may be necessary or advisable to comply with any federal
or state securities or reporting requirements or other laws or regulations. The
Owner Trustee and the Indenture Trustee upon written request therefor shall
furnish the Servicer with any documents necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder.
(c) The Servicer shall not, and no Successor Servicer shall, 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 or such Successor Servicer, as the case may be, in
connection with servicing other credit card receivables.
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(d) The Servicer shall comply with and perform its servicing obligations
with respect to the Accounts and Receivables in accordance with the Credit Card
Agreements relating to the Accounts and the Credit Card Guidelines, except
insofar as any failure to so comply or perform would not materially and
adversely affect the Trust or the Noteholders.
(e) The Servicer shall pay out of its own funds, without reimbursement,
all expenses incurred in connection with the Trust and the servicing activities
hereunder including expenses related to enforcement of the Receivables, fees and
disbursements of the Owner Trustee (as such and in its individual capacity
including amounts owed to the Owner Trustee under the Trust Agreement, the
Administrator and the Indenture Trustee (including the reasonable fees and
expenses of its outside counsel) and independent accountants and all other fees
and expenses, including the costs of filing UCC continuation statements, the
costs and expenses relating to obtaining and maintaining the listing of any
Notes on any stock exchange and any stamp, documentary, excise, property
(whether on real, personal or intangible property) or any similar tax levied on
the Trust or the Trust's assets that are not expressly stated in this Agreement
to be payable by the Trust or the Transferor (other than federal, state, local
and foreign income and franchise taxes, if any, or any interest or penalties
with respect thereto, assessed on the Trust).
(f) Fidelity Bond Coverage. The Servicer agrees at its own cost and
expense to maintain during the term of this Agreement adequate fidelity bond
coverage of the officers and employees of the Servicer (as well as any temporary
personnel if not covered by their agency's insurance) who handle or may have
occasion to handle or control any funds handled by the Servicer, documents
and/or papers relating to the Receivables. Such fidelity bond shall be in form
and substance reasonable and customary for companies which service credit card
receivables, shall protect against losses, including losses resulting from
forgery, theft, embezzlement and fraud, and the coverage under the fidelity bond
shall be at least $5,000,000. The Servicer shall furnish to the Administrator
certification by the carrier of such fidelity coverage attesting to the form or
type of bond evidencing such coverage, together with the amount, term, date of
commencement, anniversary or renewal date and name of insured and affirmatively
assuring the Administrator that such coverage cannot be materially changed,
other than by an increase in amount, or canceled without 30 days' prior written
notice to the Administrator.
Section 3.02. Servicing Compensation. As compensation for its servicing
activities hereunder and as reimbursement for any expense incurred by it in
connection therewith, the Servicer shall be entitled to receive the Servicing
Fee with respect to each Monthly Period, payable on the related Distribution
Date. The Monthly Servicing Fee allocable to a Series of Notes with respect to
any Monthly Period (the "Monthly Servicing Fee") shall be determined in
accordance with the relevant Indenture Supplement. The portion of the Servicing
Fee with respect to any Monthly Period not paid pursuant to the preceding
sentence shall be paid by the Holders of the Transferor Certificates on the
related Distribution Date and in no event shall the Trust, the Owner Trustee (as
such or in its individual capacity), the Indenture Trustee, the Noteholders of
any Series or any Series Enhancer be liable for the share of the Servicing Fee
with respect to any Monthly Period to be paid by the Holders of the Transferor
Certificates.
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Section 3.03. Representations, Warranties and Covenants of the Servicer.
(a) Nordstrom fsb, as initial Servicer, hereby makes, and any Successor
Servicer by its appointment hereunder shall make, with respect to itself, on
each Closing Date (and on the date of any such appointment), the following
representations, warranties and covenants on which the Trust and the Indenture
Trustee shall be deemed to have relied in accepting the Receivables in trust and
in entering into the Indenture:
(i) Organization and Good Standing. The Servicer is a federal
savings association duly organized and validly existing in good standing
under the laws of the United States and has, in all material respects,
full power and authority to own its properties and conduct its credit
card servicing business as presently owned or conducted, and to execute,
deliver and perform its obligations under this Agreement.
(ii) Due Qualification. The Servicer is duly qualified to do
business and is in good standing as a foreign corporation or other
foreign entity (or is exempt from such requirements) and has obtained all
necessary licenses and approvals in each jurisdiction in which the
servicing of the Receivables (including the underlying receivables) and
any Participation Interests as required by this Agreement requires such
qualification except where the failure to so qualify or obtain licenses
or approvals would not have a material adverse effect on its ability to
perform its obligations as Servicer under this Agreement.
(iii) Due Authorization. The execution, delivery, and performance
of this Agreement and the other agreements and instruments executed or to
be executed by the Servicer as contemplated hereby, have been duly
authorized by the Servicer by all necessary action on the part of the
Servicer.
(iv) Binding Obligation. This Agreement constitutes a legal, valid
and binding obligation of the Servicer, enforceable in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally from time to time in effect or the
rights of creditors of federally chartered savings associations the
deposit accounts of which are issued by the FDIC or which are subject to
regulation by the FDIC or by general principles of equity.
(v) No Conflict. The execution and delivery of this Agreement by
the Servicer, and the performance of the transactions contemplated by
this Agreement and the other Transaction Documents and the fulfillment of
the terms hereof and thereof applicable to the Servicer, 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 material default under, any indenture, contract,
agreement, mortgage, deed of trust or other instrument to which the
Servicer is a party or by which it or its properties are bound.
(vi) No Violation. The execution and delivery of this Agreement by
the Servicer, the performance of the transactions contemplated by this
Agreement and the other Transaction Documents and the fulfillment of the
terms hereof applicable to the
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Servicer will not conflict with or violate any Requirements of Law
applicable to the Servicer or conflict with, violate, result in any
breach of any of the material terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default under any
indenture, contract, agreement, mortgage, deed of trust or other
instrument to which the Servicer is a party or by which it or any of its
properties are bound.
(vii) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Servicer, threatened against the
Servicer before any Governmental Authority seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or
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 and the other
Transaction Documents.
(viii) Compliance with Requirements of Law. The Servicer shall
duly satisfy all obligations on its part to be fulfilled under or in
connection with each Receivable (and the underlying receivable) and the
related Account, if any, will maintain in effect all qualifications
required under Requirements of Law in order to service properly each
Receivable and the related Account, if any, 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 an Adverse Effect.
(ix) No Rescission or Cancellation. Subject to Section 3.09, the
Servicer shall not permit any rescission or cancellation of any
Receivable (or the underlying receivable) except in accordance with the
Credit Card Guidelines or as ordered by a court of competent jurisdiction
or other Governmental Authority.
(x) Protection of Rights. The Servicer shall take no action which,
nor omit to take any action the omission of which, would substantially
impair the rights of the Trust, the Indenture Trustee or the Noteholders
in any Receivable (or the underlying receivable) or the related Account,
if any, nor shall it reschedule, revise or defer payments due on any
Receivable except in accordance with the Credit Card Guidelines.
(xi) Receivables Not Evidenced by Promissory Notes. Except in
connection with its enforcement or collection of an Account, the Servicer
will take no action to cause any Receivable to be evidenced by any
instrument (as defined in the UCC) and if any Receivable is so evidenced
(whether or not in connection with the enforcement or collection of an
Account) it shall be reassigned or assigned to the Servicer as provided
in this Section.
(xii) All Consents. All authorizations, consents, orders or
approvals of or registrations or declarations with any Governmental
Authority required to be obtained, effected or given by the Servicer in
connection with the execution and delivery of this Agreement by the
Servicer and the performance of the transactions contemplated by this
Agreement by the Servicer, have been duly obtained, effected or given and
are in full force and effect.
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(b) In the event (i) any of the representations, warranties or covenants
of the Servicer contained in Section 3.03(a)(viii), (ix) or (x) with respect to
any Receivable or the related Account is breached, and such breach has a
material adverse effect on such Receivable (which determination shall be made
without regard to whether funds are then available to any Noteholders pursuant
to any Series Enhancement) and is not cured within 60 days (or such longer
period, not in excess of 150 days, as may be agreed to by the Indenture Trustee
and the Transferor) of the earlier to occur of the discovery of such event by
the Servicer, or receipt by the Servicer of notice of such event given by the
Indenture Trustee or the Transferor, or (ii) as provided in Section 3.03(a)(xi)
with respect to any Receivable, all Receivables in the Account or Accounts to
which such event relates shall be assigned and transferred to the Servicer on
the terms and conditions set forth below.
The Servicer shall effect such assignment by making a deposit into the
Collection Account in immediately available funds two Business Days after which
such assignment obligation arises in an amount equal to the amount of such
Receivables.
Upon each such reassignment or assignment to the Servicer, the Trust
shall automatically and without further action be deemed to sell, transfer,
assign, set over and otherwise convey to the Servicer, without recourse,
representation or warranty, all right, title and interest of the Trust in and to
such Receivables, all Recoveries related thereto, all monies due or to become
due and all amounts received or receivable with respect thereto and all proceeds
thereof. The Trust shall execute such documents and instruments of transfer or
assignment and take such other actions as shall be reasonably requested by the
Servicer to effect the conveyance of any such Receivables pursuant to this
Section but only upon receipt of an Officer's Certificate of the Servicer that
states that all conditions set forth in this section have been satisfied. The
obligation of the Servicer to accept reassignment or assignment of such
Receivables, and to make the deposits, if any, required to be made to the
Collection Account as provided in the preceding paragraph, shall constitute the
sole remedy respecting the event giving rise to such obligation available to
Noteholders (or the Indenture Trustee on behalf of Noteholders) or any Series
Enhancer, except as provided in Section 5.04.
Section 3.04. Reports and Records for the Owner Trustee and the Indenture
Trustee.
(a) Daily Records. On each Business Day, the Servicer shall make or cause
to be made available at the office of the Servicer for inspection by the Owner
Trustee and the Indenture Trustee upon request a record setting forth (i) the
Collections in respect of Principal Receivables and in respect of Finance Charge
Receivables processed by the Servicer on the second preceding Business Day in
respect of each Account and (ii) the amount of Receivables as of the close of
business on the second preceding Business Day in each Account. The Servicer
shall, at all times, maintain its computer files with respect to the Accounts in
such a manner so that the Accounts may be specifically identified and shall make
available to the Owner Trustee and the Indenture Trustee at the office of the
Servicer on any Business Day any computer programs necessary to make such
identification. The Owner Trustee and the Indenture Trustee shall enter into
such reasonable confidentiality agreements as the Servicer shall deem necessary
to protect its interests and as are reasonably acceptable in form and substance
to the Owner Trustee and the Indenture Trustee.
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(b) Monthly Servicer's Certificate. Not later than the Determination Date
preceding each Distribution Date, the Servicer shall, with respect to each
outstanding Series, deliver to the Owner Trustee, the Indenture Trustee and each
Rating Agency a certificate of an Authorized Officer in substantially the form
set forth in the related Indenture Supplement.
Section 3.05. Annual Certificate of Servicer. The Servicer shall deliver
to the Owner Trustee, the Indenture Trustee and each Rating Agency on or before
April 30 of each calendar year, beginning with April 30, 2003, an Officer's
Certificate substantially in the form of Exhibit C.
Section 3.06. Annual Servicing Report of Independent Public Accountants;
Copies of Reports Available.
(a) On or before April 30, of each fiscal year, beginning with April 30,
2003, the Servicer shall cause a firm of nationally recognized independent
public accountants (who may also render other services to the Servicer or the
Transferor or any Account Owner) to furnish a report (addressed to the Indenture
Trustee) to the Indenture Trustee, the Servicer and each Rating Agency to the
effect that they have applied certain procedures agreed upon with the Servicer
and examined certain documents and records relating to the servicing of the
Receivables under this Agreement, the Indenture and each Indenture Supplement
for the prior fiscal year (or since the effective date of this Agreement in the
case of the first such report) and that, on the basis of such agreed-upon
procedures, nothing has come to the attention of such accountants that caused
them to believe that the servicing (including the allocation of Collections set
forth in Article Eight of the Indenture and in each Indenture Supplement) has
not been conducted in compliance with the terms and conditions set forth in
Article Three and Section 5.08 of this Agreement, Article Eight of the Indenture
and the applicable provisions of each Indenture Supplement, except for such
exceptions as they believe to be immaterial and such other exceptions as shall
be set forth in such statement. Such report shall set forth the agreed-upon
procedures performed.
(b) On or before April 30 of each fiscal year, beginning with April 30,
2003, the Servicer shall cause a firm of nationally recognized independent
public accountants (who may also render other services to the Servicer or
Transferor) to furnish a report to the Indenture Trustee, the Servicer and each
Rating Agency to the effect that they have applied certain procedures agreed
upon with the Servicer to compare the mathematical calculations of certain
amounts set forth in the Servicer's certificates delivered pursuant to Section
3.04(b) during the period covered by such report with the Servicer's computer
reports that were the source of such amounts and that on the basis of such
agreed-upon procedures and comparison, such accountants are of the opinion that
such amounts are in agreement, except for such exceptions as they believe to be
immaterial and such other exceptions as shall be set forth in such statement.
Such report shall set forth the agreed-upon procedures performed.
(c) In the event such independent public accountants require the
Indenture Trustee to agree to the procedures to be performed by such firm in any
of the reports required to be prepared pursuant to this Section 3.06, the
Servicer shall direct the Indenture Trustee in writing to so agree; provided,
however, that the Indenture Trustee will deliver such letter of agreement in
conclusive reliance upon the direction of the Servicer, and the Indenture
Trustee will not make
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any independent inquiry or investigation as to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures.
(d) A copy of each certificate and report provided pursuant to Section
3.04(b), or Section 3.05 or 3.06, may be obtained by any Noteholder or Note
Owner by a request in writing to the Indenture Trustee addressed to the
Corporate Trust Office.
Section 3.07. Tax Treatment. Unless otherwise specified in the Indenture
or an Indenture Supplement with respect to a particular Series, the Transferor
has entered into this Agreement, and the Notes will be issued, with the
intention that, for federal, State and local income and franchise tax purposes,
(i) the Notes of each Series which are characterized as indebtedness at the time
of their issuance will qualify as indebtedness secured by the Receivables and
(ii) the Trust shall not be treated as an association or publicly traded
partnership taxable as a corporation. The Transferor, by entering into this
Agreement, and each Noteholder, by the acceptance of any such Note (and each
Note Owner, by its acceptance of an interest in the applicable Note), agree to
treat such Notes for federal, state and local income and franchise tax purposes
as indebtedness of the Transferor. Each Holder of such Note agrees that it will
cause any Note Owner acquiring an interest in a Note through it to comply with
this Agreement as to treatment as indebtedness under applicable tax law, as
described in this Section. The parties hereto agree that they shall not cause or
permit the making, as applicable, of any election under Treasury Regulation
Section 301.7701-3 whereby the Trust or any portion thereof would be treated as
a corporation for federal income tax purposes and, except as required by Section
6.13 of the Indenture, shall not file tax returns or obtain any federal employer
identification number for the Trust but shall treat the Trust as a security
device for federal income tax purposes. The provisions of this Agreement shall
be construed in furtherance of the foregoing intended tax treatment.
Section 3.08. Notices to Nordstrom fsb. In the event that Nordstrom fsb
is no longer acting as Servicer, any Successor Servicer shall deliver or make
available to Nordstrom fsb each certificate and report required to be provided
thereafter pursuant to Sections 3.04(b), 3.05 and 3.06.
Section 3.09. Adjustments.
(a) If the Servicer adjusts downward the amount of any Receivable because
of a rebate, refund, unauthorized charge or billing error to a cardholder, or
because such Receivable was created in respect of merchandise which was refused
or returned by a cardholder, then, in any such case, the amount of Principal
Receivables used to calculate the Transferor Interest, and (unless otherwise
specified) any other amount required herein or in the Indenture or any Indenture
Supplement to be calculated by reference to the amount of Principal Receivables,
will be reduced by the amount of the adjustment. Similarly, the amount of
Principal Receivables used to calculate the Transferor Interest and (unless
otherwise specified) any other amount required herein or in any Indenture
Supplement to be calculated by reference to the amount of Principal Receivables
will be reduced by the principal amount of any Receivable which was discovered
as having been created through a fraudulent or counterfeit charge or with
respect to which the covenant contained in Section 2.07(b) was breached. Any
adjustment required pursuant to either of the two preceding sentences shall be
made on the second Business Day after
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which such adjustment obligation arises. In the event that, following the
exclusion of such Principal Receivables from the calculation of the Transferor
Interest, the Transferor Interest would be less than the Required Transferor
Interest, not later than 1:00 p.m., New York City time, on the second Business
Day after which such adjustment obligation arises, the Transferor shall make a
deposit into the Special Funding Account in immediately available funds in an
amount equal to the amount by which the Transferor Interest would be less than
the Required Transferor Interest, due to adjustments with respect to Receivables
conveyed by such Transferor (up to the amount of such Principal Receivables).
(b) If the Servicer (i) 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)
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 foregoing, adjustments made pursuant to this
Section shall not require any change in any report previously delivered pursuant
to Section 3.04(a).
Section 3.10. Reports to the Commission. The Servicer shall, on behalf of
the Trust, cause to be filed with the Commission all periodic reports required
to be filed under the provisions of the Exchange Act, and the rules and
regulations of the Commission thereunder. The Transferor shall, at its own
expense, cooperate in any reasonable request of the Servicer in connection with
such filings.
Section 3.11. Reports to Rating Agencies. Not later than each
Determination Date, the Servicer shall deliver to each Rating Agency a written
report (unless one or more of such Rating Agencies agrees in writing to waive
receipt of such reports, in which case, the reports need not be delivered to the
Rating Agency or Rating Agencies which waived the requirement) setting forth, as
of the last day of the related Monthly Period, the number of Accounts which were
Starter Accounts, business charge accounts, with Obligors that are employees of
Nordstrom, Inc. or any of its Affiliates and had addresses located in Canada,
the territories or possessions of the United States, or which were military
addresses not located in the United States and the amount of Principal
Receivables in such Accounts; provided that the foregoing report shall not be
required if the number of such Accounts is less than 1% of all Accounts and the
amount of Principal Receivables in such Accounts is less than 1% of all
Principal Receivables, in each case as of the end of such Monthly Period.
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ARTICLE FOUR
OTHER TRANSFEROR MATTERS
Section 4.01. Liability of each Transferor. Each Transferor shall be
severally, and not jointly, liable for all obligations, covenants,
representations and warranties of such Transferor arising under or related to
this Agreement. Each Transferor shall be liable only to the extent of the
obligations specifically undertaken by it in its capacity as a Transferor.
Section 4.02. Merger or Consolidation of, or Assumption of the
Obligations of, a Transferor.
(a) No Transferor shall dissolve, liquidate, consolidate with or merge
into any other corporation or convey, transfer or sell its properties and assets
substantially as an entirety to any Person unless:
(i) (A) the entity formed by such consolidation or into which such
Transferor is merged or the Person which acquires by conveyance, transfer
or sale the properties and assets of the Transferor substantially as an
entirety shall be, if such Transferor is not the surviving entity,
organized and existing under the laws of the United States or any State,
and shall be a depository institution or other entity which is not
eligible to be a debtor in a case under Title 11 of the United States
Code and, if such Transferor is not the surviving entity, shall expressly
assume, by an agreement supplemental hereto, executed and delivered to
the Trust and the Indenture Trustee, in form reasonably satisfactory to
the Trust and the Indenture Trustee, the performance of every covenant
and obligation of such Transferor hereunder, and (B) such Transferor or
the surviving entity, as the case may be, has delivered to the Owner
Trustee and the Indenture Trustee (with a copy to each Rating Agency) an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance, transfer or sale and such supplemental
agreement comply with this Section, that such supplemental agreement is a
valid and binding obligation of such surviving entity enforceable against
such surviving entity in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally from time to time in effect or general principles of
equity, and that all conditions precedent herein provided for relating to
such transaction have been complied with;
(ii) the Rating Agency Condition shall have been satisfied with
respect to such consolidation, merger, conveyance or transfer; and
(iii) the relevant Transferor shall have delivered to the Trust,
the Indenture Trustee and each Rating Agency a Tax Opinion, dated the
date of such consolidation, merger, conveyance or transfer, with respect
thereto.
(b) Except as permitted by Section 2.07(c), the obligations, rights or
any part thereof of each Transferor hereunder shall not be assignable nor shall
any Person succeed to such obligations or rights of any Transferor hereunder
except (i) for conveyances, mergers,
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consolidations, assumptions, sales or transfers in accordance with the
provisions of the foregoing paragraph and (ii) for conveyances, mergers,
consolidations, assumptions, sales or transfers to other entities (A) which such
Transferor and the Servicer determine will not result in an Adverse Effect, (B)
which meet the requirements of Section 4.02(a)(ii) and (a)(iii) and (C) for
which such purchaser, transferee, pledgee or entity shall expressly assume, in
an agreement supplemental hereto, executed and delivered to the Trust and the
Indenture Trustee in writing in form satisfactory to the Trust and the Indenture
Trustee, the performance of every covenant and obligation of such Transferor
thereby conveyed.
Section 4.03. Limitations on Liability of Each Transferor. Subject to
Section 4.01, no Transferor nor any of the directors, officers, employees,
incorporators or agents of any Transferor acting in such capacities shall be
under any liability to the Trust, the Owner Trustee, the Indenture Trustee, the
Noteholders, any Series Enhancer or any other Person for any action taken, or
for refraining from the taking of any action, in good faith in such capacities
pursuant to this Agreement, it being expressly understood that such liability is
expressly waived and released as a condition of, and consideration for, the
execution of this Agreement, the Indenture and any Indenture Supplement and the
issuance of the Notes; provided, however, that this provision shall not protect
any Transferor or any such person against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. Each Transferor and any director, officer, employee or agent
of such Transferor may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person (other than such Transferor)
respecting any matters arising hereunder.
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ARTICLE FIVE
OTHER MATTERS RELATING TO THE SERVICER
Section 5.01. Liability of the Servicer. The Servicer shall be liable
under this Article only to the extent of the obligations specifically undertaken
by the Servicer in its capacity as Servicer.
Section 5.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer. The Servicer shall not consolidate with or merge
into any other corporation or convey, transfer or sell its properties and assets
substantially as an entirety to any Person, unless:
(a) (i) the entity formed by such consolidation or into which the
Servicer is merged or the Person which acquires by conveyance, transfer
or sale the properties and assets of the Servicer substantially in their
entirety shall be, if the Servicer is not the surviving entity, a
corporation or a depository institution organized and existing under the
laws of the United States or any State, and, if the Servicer is not the
surviving entity, such corporation shall expressly assume, by an
agreement supplemental hereto, executed and delivered to the Trust, Owner
Trustee and the Indenture Trustee, in form satisfactory to the Trust,
Owner Trustee and the Indenture Trustee, the performance of every
covenant and obligation of the Servicer hereunder;
(ii) the Servicer has delivered to the Trust, Owner Trustee and
the Indenture Trustee an Officer's Certificate and an Opinion of Counsel
each stating that such consolidation, merger, conveyance, transfer or
sale comply with this Section and that all conditions precedent herein
provided for relating to such transaction are in compliance; and
(iii) the Rating Agency Condition shall have been satisfied with
respect to such consolidation, merger or transfer or assets; and
(b) the corporation formed by such consolidation or into which the
Servicer is merged or the Person which acquires by conveyance or transfer
the properties and assets of the Servicer substantially in their entirety
shall be an Eligible Servicer.
Section 5.03. Limitation on Liability of the Servicer and Others. Except
as provided in Section 3.01(e) and Section 5.04, neither the Servicer nor any of
its directors, officers, employees or agents shall be under any liability to the
Trust, the Owner Trustee, the Indenture Trustee, the Noteholders, any Series
Enhancer or any other Person for any action taken, or for refraining from the
taking of any action, in good faith in its capacity as Servicer pursuant to this
Agreement; provided, however, that this provision shall not protect the Servicer
or any such Person against any liability which would otherwise be imposed by
reason of willful misfeasance, bad faith or gross negligence in the performance
of duties or by reason of reckless disregard of obligations and duties
hereunder. The Servicer and any director, officer, employee or agent of the
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person (other than the Servicer) respecting any
matters arising hereunder. The Servicer shall not be under any obligation to
appear in, prosecute or defend any legal action
42
which is not incidental to its duties as Servicer in accordance with this
Agreement and which in its reasonable judgment may involve it in any expense or
liability. The Servicer may, in its sole discretion, undertake any such legal
action which it may deem necessary or desirable for the benefit of the
Noteholders with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Noteholders hereunder.
Section 5.04. Servicer Indemnification of the Trust and the Trustees. The
Servicer shall indemnify and hold harmless each of the Trust, the Owner Trustee
(as such and in its individual capacity), the Indenture Trustee and any trustees
predecessor thereto (including the Indenture Trustee in its capacity as Transfer
Agent and Registrar or as Paying Agent) and their respective directors,
officers, employees and agents from and against any and all loss, liability,
claim, expense or damage suffered or sustained by reason of (i) any acts or
omissions of the Servicer with respect to the Trust pursuant to this Agreement
or (ii) the administration by the Owner Trustee or the Indenture Trustee of the
Trust or the performance by the Indenture Trustee of its duties under the
Indenture (other than such as may arise from the gross negligence or willful
misconduct of the Owner Trustee or the negligence or willful misconduct of the
Indenture Trustee, as applicable), including any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any action, proceeding or claim. Indemnification pursuant to
this Section shall not be payable from the Trust Assets. The Servicer's
obligations under this Section shall survive the termination of this Agreement
or the Trust or the earlier removal or resignation of the Owner Trustee or the
Indenture Trustee, as applicable. The Servicer agrees that the Indenture Trustee
is a third party beneficiary of this Section and is entitled to enforce the
provisions hereof for the benefit of the Trust and in its individual capacity.
Section 5.05. Resignation of the Servicer. The Servicer shall not resign
from the obligations and duties hereby imposed on it except (a) upon
determination that (a) the performance of its duties hereunder is no longer
permissible under applicable law and (b) there is no reasonable action which the
Servicer could take to make the performance of its duties hereunder permissible
under applicable law and (ii) upon the assumption, by a supplemental agreement
hereto, executed and delivered to the Trustees, in form satisfactory to each
Trustee, of the obligations and duties of the Servicer hereunder by any of its
Affiliates that is a direct or indirect wholly owned subsidiary of Nordstrom,
Inc. or by any entity the appointment of which shall have satisfied the Rating
Agency Condition and, in either case, qualifies as an Eligible Servicer. Any
determination permitting the resignation of the Servicer shall be evidenced as
to clause (i) above by an Opinion of Counsel to such effect delivered to the
Trust, the Owner Trustee and the Indenture Trustee. No resignation shall become
effective until the Indenture Trustee or a Successor Servicer shall have assumed
the responsibilities and obligations of the Servicer in accordance with Section
7.02 hereof. If within 120 days of the date of the determination that the
Servicer may no longer act as Servicer under clause (i) above the Indenture
Trustee is unable to appoint a Successor Servicer, the Indenture Trustee shall
serve as Successor Servicer. Notwithstanding the foregoing, the Indenture
Trustee shall, if it is legally unable so to act, petition a court of competent
jurisdiction to appoint any established institution qualifying as an Eligible
Servicer as the Successor Servicer hereunder. The Trust shall give prompt notice
to each Rating Agency and each Series Enhancer upon the appointment of a
Successor Servicer. Notwithstanding anything in this Agreement to the contrary,
Nordstrom fsb may assign part or all of its obligations and duties as Servicer
under this Agreement to an
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Affiliate of Nordstrom fsb so long as Nordstrom fsb shall have fully guaranteed
the performance of such obligations and duties under this Agreement.
Section 5.06. Access to Certain Documentation and Information Regarding
the Receivables. The Servicer shall provide to the Owner Trustee or the
Indenture Trustee, as applicable, access to the documentation regarding the
Accounts and the Receivables in such cases where the Owner Trustee or the
Indenture Trustee, as applicable, is required in connection with the enforcement
of the rights of Noteholders 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 the
Servicer's normal security and confidentiality procedures and (iv) at reasonably
accessible offices in the continental United States designated by the Servicer.
Nothing in this Section shall derogate from the obligation of the Transferor,
the Owner Trustee, the Indenture Trustee and the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors and
the failure of the Servicer to provide access as provided in this Section as a
result of such obligation shall not constitute a breach of this Section.
Section 5.07. Delegation of Duties. In the ordinary course of business,
the Servicer may at any time delegate its duties hereunder with respect to the
Accounts and the Receivables to any Person that agrees to conduct such duties in
accordance with the Credit Card Guidelines and this Agreement. The Servicer
shall promptly give notice to each Rating Agency of any delegation of duties
hereunder. Such delegation 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 5.05.
Section 5.08. Examination of Records. Each Transferor and the Servicer
shall indicate generally in their computer files or other records that the
Receivables arising in the Accounts have been conveyed to the Trust, pursuant to
this Agreement. Each 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 records and other records to determine that such receivable is not, and
does not include, a Receivable.
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ARTICLE SIX
INSOLVENCY EVENTS
Section 6.01. Rights upon the Occurrence of an Insolvency Event. If any
Transferor shall consent or fail to object to the appointment of a bankruptcy
trustee or conservator, receiver or liquidator in any bankruptcy proceeding or
other insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to any Transferor or relating to all or
substantially all of such Transferor's property, or the commencement of an
action seeking a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a bankruptcy trustee
or conservator, receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up, insolvency, bankruptcy, reorganization, conservatorship,
receivership or liquidation of such entity's affairs, or notwithstanding an
objection by such Transferor any such action shall have remained undischarged or
unstayed for a period of 60 days or upon entry of any order or decree providing
for such relief; or such Transferor shall admit in writing its inability to pay
its debts generally as they become due, file, or consent or fail to object (or
object without dismissal of any such filing within 60 days of such filing) to
the filing of, a petition to take advantage of any applicable bankruptcy,
insolvency or reorganization, receivership or conservatorship statute, make an
assignment for the benefit of its creditors or voluntarily suspend payment of
its obligations; or any order or decree providing for relief under any
applicable bankruptcy, insolvency or reorganization, receivership or
conservatorship statute shall be entered (any such act or occurrence with
respect to any Person being an "Insolvency Event"), such Transferor shall, on
the related Appointment Date, immediately cease to transfer Principal
Receivables to the Trust and shall promptly give notice to each Rating Agency,
the Indenture Trustee and the Owner Trustee thereof. Notwithstanding any
cessation of the transfer to the Trust of additional Principal Receivables,
Principal Receivables transferred to the Trust prior to the occurrence of such
Insolvency Event, Collections in respect of such Principal Receivables and
Finance Charge Receivables (whenever created) accrued in respect of such
Principal Receivables shall continue to be a part of the Trust Assets and shall
be allocated and distributed to Noteholders in accordance with the terms of the
Indenture and each Indenture Supplement.
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ARTICLE SEVEN
SERVICER DEFAULTS
Section 7.01. Servicer Defaults.
(a) If any one of the following events (a "Servicer Default") shall occur
and be continuing:
(i) any failure by the Servicer to make any payment, transfer or
deposit or to give instructions or to give notice to the Indenture
Trustee to make such payment, transfer or deposit on or before the date
occurring five Business Days after the date such payment, transfer or
deposit or such instruction or notice is required to be made or given, as
the case may be, under the terms of this Agreement, the Indenture or any
Indenture Supplement;
(ii) failure on the part of the Servicer duly to observe or
perform in any material respect any other covenants or agreements of the
Servicer set forth in this Agreement which has an Adverse Effect and
which continues unremedied for a period of 60 days after the date on
which notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Owner Trustee or the Indenture
Trustee, or to the Servicer, the Owner Trustee and the Indenture Trustee
by Holders of Notes evidencing not less than 10% of the aggregate unpaid
principal amount of all Notes (or, with respect to any such failure that
does not relate to all Series, 10% of the aggregate unpaid principal
amount of all Series to which such failure relates); or the Servicer
shall assign or delegate its duties under this Agreement, except as
permitted by Sections 5.02 and 5.07;
(iii) any representation, warranty or certification made by the
Servicer in this Agreement or in any certificate delivered pursuant to
this Agreement shall prove to have been incorrect when made, which has an
Adverse Effect on the rights of the Noteholders of any Series (which
determination shall be made without regard to whether funds are then
available pursuant to any Series Enhancement) and which Adverse Effect
continues for a period of 60 days after the date on which notice thereof,
requiring the same to be remedied, shall have been given to the Servicer
by the Owner Trustee or the Indenture Trustee, or to the Servicer, the
Owner Trustee and the Indenture Trustee by the Holders of Notes
evidencing not less than 10% of the aggregate unpaid principal amount of
all Notes (or, with respect to any such representation, warranty or
certification that does not relate to all Series, 10% of the aggregate
unpaid principal amount of all Series to which such representation,
warranty or certification relates);
(iv) the Servicer shall consent to the appointment of a bankruptcy
trustee or conservator or receiver or liquidator in any bankruptcy
proceeding or other insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the
Servicer or of or relating to all or substantially all 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 bankruptcy trustee
or a conservator or receiver or liquidator in
46
any bankruptcy, insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or the winding-up or liquidation
of its affairs, shall have been entered against the Servicer and such
decree or order shall have remained in force undischarged or unstayed for
a period of sixty (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 bankruptcy, insolvency or
reorganization statute, make any assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations; or
(v) any other Servicer Default described in the related Indenture
Supplement.
Notwithstanding the foregoing, a delay in or failure of performance
referred to in Section 7.01(a)(i) for a period of ten Business Days after the
applicable grace period or under Section 7.01(a)(ii) or (a)(iii) 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 or sabotage, epidemics, landslides, lightning, fire,
hurricanes, earthquakes, floods or similar causes. The preceding sentence shall
not relieve the Servicer from using all commercially reasonable efforts to
perform its obligations in a timely manner in accordance with the terms of this
Agreement and the Servicer shall provide the Indenture Trustee, Owner Trustee,
each Transferor and any Series Enhancer with an Officer's Certificate giving
prompt notice of such failure or delay by it, together with a description of its
efforts so to perform its obligations.
(b) Upon the occurrence of a Servicer Default, so long as the Servicer
Default shall not have been remedied, either the Indenture Trustee or the
Holders of Notes evidencing more than 50% of the aggregate unpaid principal
amount of all Notes, by notice then given to the Servicer and the Owner Trustee
(and to the Indenture Trustee if given by the Noteholders) (a "Termination
Notice"), may terminate all but not less than all the rights and obligations of
the Servicer as Servicer under this Agreement; provided, however, if within 60
days of receipt of a Termination Notice the Indenture Trustee does not receive
any bids from Eligible Servicers in accordance with Section 7.02(c) to act as a
Successor Servicer and receives an Officer's Certificate of the Servicer to the
effect that the Servicer cannot in good faith cure the Servicer Default which
gave rise to the Termination Notice, the Indenture Trustee shall grant a right
of first refusal to the Transferor which would permit the Transferor at its
option to acquire the Notes on the Distribution Date in the next calendar month.
The price for the Notes shall be equal to the sum of the amounts
specified therefor with respect to each outstanding Series in the related
Indenture Supplement. The Transferor shall notify the Indenture Trustee prior to
the Record Date for the Distribution Date of the acquisition if it is exercising
such right of first refusal. If the Transferor exercises such right of first
refusal, the Transferor shall deposit the price into the Collection Account not
later than 1:00 p.m., New York City time, on such Distribution Date in
immediately available funds. The price shall be allocated and distributed to
Noteholders in accordance with the terms of the Indenture and each Indenture
Supplement.
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After receipt by the Servicer of a Termination Notice, and on the date
that a Successor Servicer is appointed by the Indenture Trustee pursuant to
Section 7.02, all authority and power of the Servicer under this Agreement shall
pass to and be vested in the Successor Servicer (a "Service Transfer"); and,
without limitation, the Indenture 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 cooperate with the Indenture Trustee and such Successor
Servicer in effecting the termination of the responsibilities and rights of the
Servicer to conduct servicing hereunder, including the transfer to such
Successor Servicer of all authority of the Servicer to service the Receivables
provided for under this Agreement, including all authority over all Collections
which shall on the date of transfer be held by the Servicer for deposit, or
which have been deposited by the Servicer, in the Collection Account, or which
shall thereafter be received with respect to the Receivables, and in assisting
the Successor Servicer. The Servicer shall within 20 Business Days 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 shall require the Servicer to
disclose to the Successor Servicer information of any kind which the Servicer
deems to be confidential, the Successor Servicer shall be required to enter into
such customary licensing and confidentiality agreements as the Servicer shall
deem reasonably necessary to protect its interests.
Section 7.02. Indenture Trustee To Act; Appointment of Successor.
(a) On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 7.01, 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 Indenture Trustee or until a date mutually
agreed upon by the Servicer and the Indenture Trustee. The Indenture Trustee
shall as promptly as possible after the giving of a Termination Notice notify
each Rating Agency of such Termination Notice and appoint an Eligible Servicer
as a successor servicer (the "Successor Servicer"), and such Successor Servicer
shall accept its appointment by a written assumption in a form acceptable to the
Indenture Trustee. In the event that a Successor Servicer has not been appointed
or has not accepted its appointment at the time when the Servicer ceases to act
as Servicer, the Indenture Trustee without further action shall automatically be
appointed the Successor Servicer. The Indenture Trustee may delegate any of its
servicing obligations to an Affiliate or agent in accordance with Sections
3.01(b) and 5.07. Notwithstanding the foregoing, the Indenture Trustee shall, if
it is legally unable so to act, petition at the expense of the Servicer a court
of competent jurisdiction to appoint any established institution qualifying as
an Eligible Servicer as the Successor Servicer hereunder. The Indenture Trustee
shall give prompt notice to each Rating Agency and each Series Enhancer upon the
appointment of a Successor Servicer.
(b) Upon its appointment, the Successor Servicer shall be the successor
in all respects to the Servicer with respect to servicing functions under this
Agreement and shall be subject to
48
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.
Notwithstanding the foregoing obligations, the Successor Servicer, Xxxxx
Fargo Bank Minnesota, National Association, its successors or assigns, shall
have (i) no liability with respect to any obligation which was required to be
performed by the terminated Servicer prior to the date that the Successor
Servicer becomes the Servicer or any claim of a third party based on any alleged
action or inaction of the terminated Servicer, (ii) no obligation to perform any
repurchase obligations, if any, of the Servicer pursuant to Section 3.03(b)
hereof, (iii) no obligations of the Servicer in accordance with the Credit Card
guidelines, (iv) no obligations to maintain fidelity bond coverage pursuant to
Section 3.01(f) hereof and (v) no liability or obligation with respect to any
Servicer indemnification obligations of any prior Servicer including the
original Servicer.
(c) In connection with any Termination Notice, the Indenture Trustee will
review any bids which it obtains from Eligible Servicers and shall be permitted
to appoint any Eligible Servicer submitting such a bid as a Successor Servicer
for servicing compensation not in excess of the aggregate Servicing Fees for all
Series plus the sum of the amounts with respect to each Series and with respect
to each Distribution Date equal to any Collections of Finance Charge Receivables
allocable to Noteholders of such Series which are payable to the Holders of the
Transferor Certificates after payment of all amounts owing to the Noteholders of
such Series with respect to such Distribution Date or required to be deposited
in the applicable Series Accounts with respect to such Distribution Date and any
amounts required to be paid to any Series Enhancer for such Series with respect
to such Distribution Date pursuant to the terms of any Enhancement Agreement;
provided, however, that the Holders of the Transferor Certificates shall be
responsible for payment of the Transferor's portion of such aggregate Servicing
Fees and all other such amounts in excess of such aggregate Servicing Fees. Each
Holder of the Transferor Certificates agrees that, if Nordstrom fsb (or any
Successor Servicer) is terminated as Servicer hereunder, the portion of the
Collections in respect of Finance Charge Receivables that the Transferor is
entitled to receive pursuant to this Agreement, the Indenture or any Indenture
Supplement shall be reduced by an amount sufficient to pay the Transferor's
share of the compensation of the Successor Servicer.
(d) All authority and power granted to the Servicer under this Agreement
shall automatically cease and terminate upon termination of the Trust pursuant
to Section 8.01 of the Trust Agreement, 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 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 Servicer agrees to cooperate with the
Transferor in effecting the termination of the responsibilities and rights of
the Servicer to conduct servicing of the Receivables. The Servicer shall
transfer its electronic records relating to the Receivables to the Transferor or
its designee in such electronic form as it may reasonably request and shall
transfer all other records, correspondence and documents to it in the manner and
at such times as it shall reasonably request. To the extent that compliance with
this Section shall require the Servicer to disclose to the Transferor
information of any kind which the Servicer deems to be confidential,
49
the Transferor shall be required to enter into such customary licensing and
confidentiality agreements as the Servicer shall deem necessary to protect its
interests.
(e) Notwithstanding anything contained in the Transfer and Servicing
Agreement to the contrary, Xxxxx Fargo Bank Minnesota, National Association, as
Successor Servicer, is authorized to accept and rely on all of the accounting
records (including computer records) and work of the prior Servicer relating to
the Receivables (collectively, the "Predecessor Servicer Work Product") without
any audit or other examination thereof, and Xxxxx Fargo Bank Minnesota, National
Association shall have no duty, responsibility, obligation or liability for the
acts and omissions of the prior Servicer. If any error, inaccuracy, omission or
incorrect or non-standard practice or procedure (collectively, "Errors") exist
in any Predecessor Servicer Work Product and such Errors make it materially more
difficult to service or should cause or materially contribute to Xxxxx Fargo
Bank Minnesota, National Association making or continuing any Errors
(collectively, "Continued Errors"). Xxxxx Fargo Bank Minnesota, National
Association shall have no duty, responsibility, obligation or liability to
perform servicing or for such Continued Errors; provided, however, that Xxxxx
Fargo Bank Minnesota, National Association agrees to use its best efforts to
prevent further Continued Errors. In the event that Xxxxx Fargo Bank Minnesota,
National Association becomes aware of Errors or Continued Errors, Xxxxx Fargo
Bank Minnesota, National Association shall, with the prior consent of the
Noteholders representing 66 2/3% of the outstanding Notes, use its best efforts
to reconstruct and reconcile such data as is commercially reasonable to correct
such Errors and Continued Errors and to prevent future Continued Errors. Xxxxx
Fargo Bank Minnesota, National Association shall be entitled to recover its
costs thereby expended in accordance with Section 4.03(a) of the Indenture
Supplement.
Section 7.03. Notification to Noteholders. Within two Business Days after
the Servicer becomes aware of any Servicer Default, the Servicer shall give
notice thereof to the Owner Trustee, the Indenture Trustee, each Rating Agency
and each Series Enhancer and the Indenture Trustee shall give notice to the
Noteholders. Upon any termination or appointment of a Successor Servicer
pursuant to this Article, the Indenture Trustee shall give prompt notice thereof
to the Noteholders.
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ARTICLE EIGHT
TERMINATION
Section 8.01. Termination of Agreement. This Agreement and the respective
obligations and responsibilities of the parties hereto shall terminate, except
with respect to the duties described in Section 5.04, on the Trust Termination
Date.
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ARTICLE NINE
MISCELLANEOUS PROVISIONS
Section 9.01. Amendment; Waiver of Past Defaults.
(a) This Agreement may be amended by the parties hereto from time to time
prior to, or in connection with, the issuance of the first Series of Notes
hereunder without the requirement of any consents or the satisfaction of any
conditions set forth below. This Agreement may be amended from time to time by
the Servicer, the Transferor and the Trust, by a written instrument signed by
each of them, without the consent of the Indenture Trustee or any of the
Noteholders, provided that (i) the Transferor shall have delivered to the
Trustees an Officer's Certificate, dated the date of any such amendment, stating
that the Transferor reasonably believes that such amendment will not have an
Adverse Effect, such amendment does not affect the rights, duties or obligations
of either Trustee, Servicer or any Successor Servicer hereunder and (ii) the
Rating Agency Condition shall have been satisfied with respect to any such
amendment. Additionally, notwithstanding the preceding sentence, this Agreement
may be amended by the Servicer and the Trust at the direction of the Transferor
without the consent of the Indenture Trustee or any of the Noteholders or Series
Enhancers to add, modify or eliminate such provisions as may be necessary or
advisable in order to enable all or a portion of the Trust (i) to qualify as,
and to permit an election to be made to cause the Trust to be treated as, a
"financial asset securitization investment trust" as described in the provisions
of Section 860L of the Code, and (ii) to avoid the imposition of state or local
income or franchise taxes imposed on the Trust's property or its income;
provided, however, that (i) the Transferor delivers to the Trustees an Officer's
Certificate to the effect that the proposed amendments meet the requirements set
forth in this subsection and (ii) the Rating Agency Condition and such amendment
does not affect the rights, duties or obligations of either Trustee, Servicer or
any Successor Servicer hereunder shall have been satisfied with respect to any
such amendment. The amendments which the Transferor may make without the consent
of Noteholders or Series Enhancers pursuant to the preceding sentence may
include the addition of a sale of Receivables.
(b) This Agreement may also be amended from time to time by the parties
hereto, with the consent of the Noteholders evidencing not less than 66-2/3% of
the aggregate Outstanding principal amount of the Notes of all affected Series
for which the Transferor has not delivered an Officer's Certificate stating that
there is no Adverse Effect, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Noteholders; provided, however,
that such amendment shall satisfy the Rating Agency Condition and shall not (i)
reduce in any manner the amount of or delay the timing of any distributions
(changes in Redemption Events or Events of Default that decrease the likelihood
of the occurrence thereof shall not be considered delays in the timing of
distributions for purposes of this clause) to be made to Noteholders or deposits
of amounts to be so distributed or the amount available under any Series
Enhancement without the consent of each affected Noteholder, (ii) change the
definition of or the manner of calculating the interest of any Noteholder
without the consent of each affected Noteholder, or (iii) reduce the aforesaid
percentage required to consent to any such amendment without the consent of each
Noteholder.
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(c) Promptly after the execution of any such amendment or consent (other
than an amendment pursuant to Section 9.01(a)), the Servicer shall furnish
notification of the substance of such amendment to the Indenture Trustee, each
Noteholder, each Rating Agency and each Series Enhancer.
(d) It shall not be necessary for the consent of Noteholders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Noteholders shall be subject to such reasonable requirements as the
Indenture Trustee may prescribe.
(e) Notwithstanding anything in this Section to the contrary, no
amendment may be made to this Agreement or any Participation Interest Supplement
which would adversely affect in any material respect the interests of any Series
Enhancer without the consent of such Series Enhancer.
(f) Any Indenture Supplement executed in accordance with the provisions
of Article Ten of the Indenture shall not be considered an amendment of this
Agreement for the purposes of this Section.
(g) The Owner Trustee may, but shall not be obligated to, enter into any
such amendment which affects the Owner Trustee's rights, duties, benefits,
protections, privileges or immunities under this Agreement or otherwise. In
connection with the execution of any amendment hereunder, the Owner Trustee
shall be entitled to receive the Opinion of Counsel described in Section
9.03(d).
Section 9.02. Waiver of Transferor or Servicer Defaults.
The Holders of Notes evidencing more than 66-2/3% of the aggregate unpaid
principal amount of the Notes of each Series or, with respect to any Series with
two or more Classes, of each Class (or, with respect to any default that does
not relate to all Series, 66-2/3% of the aggregate unpaid principal amount of
the Notes of each Series to which such default relates or, with respect to any
such Series with two or more Classes, of each Class) may, on behalf of all
Noteholders, waive any default by the Transferor or the Servicer in the
performance of their obligations hereunder and its consequences, except the
failure to make any distributions required to be made to Noteholders or to make
any required deposits of any amounts to be so distributed. Upon any such waiver
of a past default, such default shall cease to exist, and any default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
Promptly after any such waiver of a past default, the Servicer shall furnish
notification of the substance of such waiver to each Rating Agency.
Section 9.03. Protection of Right, Title and Interest to Trust Assets.
(a) The Transferor shall cause this Agreement, all amendments and
supplements hereto and all financing statements and continuation statements and
any other necessary documents covering the Indenture Trustee's and the Trust's
right, title and interest to the Trust Assets to be promptly recorded,
registered and filed, and at all times to be kept recorded,
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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
Indenture Trustee, Noteholders and the Trust hereunder to all property
comprising the Trust Assets. The Transferor shall deliver to the Owner Trustee
and Indenture 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 paragraph.
(b) Within 30 days after any Transferor makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with Section 9.03(a) seriously
misleading within the meaning of Section 9-506 (or any comparable provision) of
the UCC, such Transferor shall give the Owner Trustee and the Indenture Trustee
notice of any such change and shall file such financing statements or amendments
as may be necessary to continue the perfection of the Trust's security interest
or ownership interest in the Receivables and the proceeds thereof.
(c) Each Transferor shall give the Owner Trustee and the Indenture
Trustee prompt notice of any relocation of its chief executive office or any
change in the jurisdiction under whose laws it is organized and whether, as a
result of such relocation or change, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall file such
financing statements or amendments as may be necessary to perfect or to continue
the perfection of the Trust's security interest in the Receivables and the
proceeds thereof. Each Transferor shall at all times maintain its chief
executive offices within the United States and shall at all times be organized
under the laws of a jurisdiction located within the United States.
(d) The Transferor shall deliver to the Owner Trustees, the Indenture
Trustees and each Rating Agency (i) upon the execution and delivery of each
amendment of this Agreement, an Opinion of Counsel to the effect specified in
Exhibit D-1; (ii) on each date specified in Section 2.09(c)(vi) with respect to
any Additional Accounts to be designated as Accounts, an Opinion of Counsel
substantially in the form of Exhibit D-2, (iii) on each Addition Date on which
any Participation Interests are to be included in the Trust pursuant to Section
2.09(a) or (b), an Opinion of Counsel covering the same substantive legal issues
addressed by Exhibits D-1 and D-2 but conformed to the extent appropriate to
relate to Participation Interests; and (iv) on or before April 30 of each year,
beginning with April 30, 2002, an Opinion of Counsel substantially in the form
of Exhibit D-3.
Section 9.04. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS 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.
54
Section 9.05. Notices; Payments.
(a) All Notices under this Agreement shall be in writing and shall be
deemed to have been duly given if personally delivered at, mailed by registered
mail, return receipt requested, or sent by facsimile transmission (i) in the
case of the Transferor, to Nordstrom Private Label Receivables LLC, at 00000
Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Legal Department
(facsimile no. (000) 000-0000), (ii) in the case of the Servicer, to Nordstrom
fsb, at 00000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Legal
Department (facsimile no. (000) 000-0000), (iii) in the case of the Trust or the
Owner Trustee, to Owner Trustee, Xxxxxx Square North, 0000 X. Xxxxxx Xx.,
Xxxxxxxxxx, XX 00000-0000, Attention: Corporate Trust Administration, (iv) in
the case of the Rating Agency for a particular Series, the address, if any,
specified in the Indenture Supplement relating to such Series and (v) to any
other Person as specified in the Indenture or any Indenture Supplement; or, as
to each party, at such other address or facsimile number as shall be designated
by such party in a written notice to each other party.
(b) Any Notice required or permitted to be given to a Holder of
Registered Notes shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Note Register. No Notice shall be
required to be mailed to a Holder of Bearer Notes or Coupons but shall be given
as provided below. Any Notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Noteholder receives such Notice. In addition, (i) if and so long as any
Series or Class is listed on the Luxembourg Stock Exchange and such Exchange
shall so require, any Notice to Noteholders shall be published in an Authorized
Newspaper of general circulation in Luxembourg within the time period prescribed
in this Agreement and (ii) in the case of any Series or Class with respect to
which any Bearer Notes are outstanding, any Notice required or permitted to be
given to Noteholders of such Series or Class shall be published in an Authorized
Newspaper within the time period prescribed in this Agreement.
Section 9.06. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such provisions shall be deemed
severable from the remaining provisions of this Agreement and shall in no way
affect the validity or enforceability of the remaining provisions or of the
Notes or the rights of the Noteholders or Note Owners.
Section 9.07. 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 Owner Trustee
and the Indenture Trustee more fully to effect the purposes of this Agreement,
including the execution of any financing statements or continuation statements
relating to the Receivables for filing under the provisions of the UCC of any
applicable jurisdiction.
Section 9.08. No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Trust, the Owner Trustee, the
Indenture Trustee or the Noteholders, any right, remedy, power or privilege
under this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or
55
privilege. The rights, remedies, powers and privileges provided under this
Agreement are cumulative and not exhaustive of any rights, remedies, powers and
privileges provided by law.
Section 9.09. Counterparts. This Agreement may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
Section 9.10. Third-Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto and inure to the benefit of
the Owner Trustee, the Noteholders and their respective successors and permitted
assigns. Except as otherwise expressly provided in this Agreement, no other
Person will have any right or obligation hereunder.
Section 9.11. Actions by Noteholders.
(a) Wherever in this Agreement a provision is made that an action may be
taken or a Notice given by Noteholders, such action or Notice may be taken or
given by any Noteholder, unless such provision requires a specific percentage of
Noteholders.
(b) Any Notice, request, authorization, direction, consent, waiver or
other act by the Holder of a Note shall bind such Holder and every subsequent
Holder of such Note and of any Note 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 Owner Trustee, the Transferor or the Servicer in
reliance thereon, whether or not notation of such action is made upon such Note.
Section 9.12. Rule 144A Information. For so long as any of the Notes of
any Series or Class are "restricted securities" within the meaning of Rule
144(a)(3) under the Securities Act, each of the Transferor, the Trust, the
Indenture Trustee, the Servicer and any Series Enhancer agree to cooperate with
each other to provide to any Noteholders of such Series or Class and to any
prospective purchaser of Notes designated by such Noteholder, upon the request
of such Noteholder or prospective purchaser, any information in its possession
required to be provided to such holder or prospective purchaser to satisfy the
condition set forth in Rule 144A(d)(4) under the Securities Act.
Section 9.13. 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 9.14. Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
Section 9.15. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 5.02, this Agreement may not be
assigned by the Servicer without the prior consent of Holders of Notes
evidencing not less than 66-2/3% of the aggregate unpaid principal amount of all
Series of Notes. The Servicer shall give the Rating Agencies prior written
notice of any such assignment.
56
Section 9.16. Nonpetition Covenant. Notwithstanding any prior termination
of this Agreement, the Servicer, the Owner Trustee, the Indenture Trustee, the
Seller and each Transferor shall not, prior to the date which is one year and
one day after the termination of this Agreement, acquiesce, petition or
otherwise invoke or cause the Trust to invoke the process of any Governmental
Authority for the purpose of commencing or sustaining a case against the Trust
under any Federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Trust or any substantial part of its property or
ordering the winding-up or liquidation of the affairs of the Trust.
Section 9.17. Limitation of Liability. Notwithstanding any other
provision herein or elsewhere, this Agreement has been executed and delivered by
the Owner Trustee, not in its individual capacity, but solely in its capacity as
Owner Trustee of the Trust, in no event shall Owner Trustee in its individual
capacity have any liability in respect of the representations, warranties, or
obligations of the Trust hereunder or under any other document, as to all of
which recourse shall be had solely to the assets of the Trust, and for all
purposes of this Agreement and each other document, the Owner Trustee (as such
or in its individual capacity) shall be subject to, and entitled to the benefits
of, the terms and provisions of the Trust Agreement.
57
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trust have
caused this Transfer and Servicing Agreement to be duly executed by their
respective officers as of the day and year first above written.
NORDSTROM PRIVATE LABEL
RECEIVABLES LLC,
as Transferor
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Treasurer
NORDSTROM FSB,
as Servicer
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Treasurer
NORDSTROM PRIVATE LABEL CREDIT
CARD MASTER NOTE TRUST,
as Issuer
By: Wilmington Trust Company,
not in its individual capacity but
solely as Owner Trustee of the
Trust,
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
not in its individual capacity but
solely as Indenture Trustee
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Assistant Vice President
58
EXHIBIT A
FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL ACCOUNTS
(As required by Section 2.09 of
the Transfer and Servicing Agreement)
ASSIGNMENT No. __ OF RECEIVABLES IN ADDITIONAL ACCOUNTS dated as of
_____________,(1) among Nordstrom Private Label Receivables LLC, as Transferor
(the "Transferor"), Nordstrom fsb, as Servicer (the "Servicer"), and Nordstrom
Private Label Credit Card Master Note Trust (the "Trust"), pursuant to the
Transfer and Servicing Agreement referred to below.
WITNESSETH
WHEREAS, the Transferor, the Servicer and the Trust are parties to the
Transfer and Servicing Agreement, dated as of October 1, 2001 (as amended and
supplemented, the "Agreement");
WHEREAS, pursuant to the Agreement, the Transferor wishes to designate
Additional Accounts to be included as Accounts and to convey the Receivables of
such Additional Accounts, whether now existing or hereafter created, to the
Trust; and
WHEREAS, the Trust is willing to accept such designation and conveyance
subject to the terms and conditions hereof.
NOW, THEREFORE, the Transferor, the Servicer and the Trust hereby agree
as follows:
1. Defined Terms. Capitalized terms used herein that are not otherwise
defined shall have the meanings ascribed thereto.
"Addition Cut-Off Date" means, with respect to the Additional Accounts
designated hereby, ____________, ____.
"Addition Date" means, with respect to the Additional Accounts designated
hereby, ____________, ____.
2. Designation of Additional Accounts. On or before the date hereof, the
Transferor will deliver to the Owner Trustee a computer file or microfiche list
containing a true and complete schedule identifying all Additional Accounts
designated hereby (the "Additional Accounts") specifying for each such
Additional Account, as of the Addition Cut-Off Date, its account number and the
aggregate amount outstanding in such Account, which computer file or microfiche
list shall supplement Schedule 1 to the Agreement.
--------
(1) To be dated as of the applicable Addition Date.
A-1
3. Conveyance of Receivables. The Transferor does hereby, transfer,
assign, set over and otherwise convey, without recourse except as set forth in
the Transfer and Servicing Agreement, to the Trust, all its right, title and
interest in, to and under the Receivables of such Additional Accounts existing
at the close of business on the Addition Cut-Off Date and thereafter created
from time to time until the termination of the Trust, all Recoveries related
thereto, all monies due or to become due and all amounts received or receivable
with respect thereto and all proceeds (including "proceeds" as defined in the
UCC) thereof. The foregoing does not constitute and is not intended to result in
the creation or assumption by the Trust, the Owner Trustee (as such or in its
individual capacity), the Indenture Trustee, any Noteholders or any Series
Enhancer 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 any obligation to Obligors, merchant
banks, merchants clearance systems or insurers. If necessary, the Transferor
agrees to record and file, at its own expense, financing statements (and
continuation statements when applicable) with respect to the Receivables in
Additional Accounts existing on the Addition Cut-Off Date and thereafter created
meeting the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect, and maintain perfection of, the sale
and assignment of its interest in such Receivables to the Trust, and to deliver
a file-stamped copy of each such financing statement or other evidence of such
filing to the Owner Trustee on or prior to the Addition Date. The Owner Trustee
shall be under no obligation whatsoever to file such financing or continuation
statements or to make any other filing under the UCC in connection with such
sale and assignment.
(b) In connection with such sale, the Transferor further agrees, at its
own expense, on or prior to the date of this Assignment, to indicate in the
appropriate computer files that Receivables created in connection with the
Additional Accounts have been conveyed to the Trust pursuant to the Agreement
and this Assignment.
(c) The Transferor does hereby grant to the Trust a security interest in
all of its right, title and interest, whether now owned or hereafter acquired,
in and to the Receivables in the Additional Accounts existing on the Addition
Cut-Off Date and thereafter created from time to time until the termination of
the Trust, all Recoveries related thereto, all monies due or to become due and
all amounts received or receivable with respect thereto, all money, accounts,
general intangibles, chattel paper, instruments, documents, goods, investment
property, deposit accounts, certificates of deposit, letters of credit, and
advices of credit consisting of, arising from or related to the foregoing, and
all "proceeds" (including "proceeds" as defined in the UCC) thereof. This
Assignment constitutes a security agreement under the UCC.
4. Acceptance by Trust. The Trust hereby acknowledges its acceptance of
all right, title and interest to the property, now existing and hereafter
created, conveyed to the Trust pursuant to Section 3 of this Assignment. The
Trust further acknowledges that, prior to or simultaneously with the execution
and delivery of this Assignment, the Transferor delivered to the Owner Trustee
the computer file or microfiche list described in Section 2 of this Assignment.
5. Representations and Warranties of the Transferor. The Transferor
hereby represents and warrants to the Trust, as the Addition Date that:
A-2
(a) Legal Valid and Binding Obligation. This Assignment
constitutes a legal, valid and binding obligation of the Transferor
enforceable against the Transferor in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity).
(b) Eligibility of Accounts. As of the Addition Cut-Off Date, each
Additional Account designated hereby is an Eligible Account.
(c) Insolvency. As of each of the Addition Cut-Off Date and the
Addition Date, no Insolvency Event with respect to the Transferor has
occurred and the transfer by the Transferor of Receivables arising in the
Additional Accounts to the Trust has not been made in contemplation of
the occurrence thereof.
(d) Redemption Event; Event of Default. The Transferor reasonably
believes that (i) the transfer of the Receivables arising in the
Additional Accounts will not, based on the facts known to the Transferor,
then or thereafter cause a Redemption Event or Event of Default to occur
with respect to any Series and (ii) no selection procedure was utilized
by the Transferor which would result in the selection of Additional
Accounts (from among the available Eligible Accounts available to the
Transferor) that would be materially adverse to the interests of the
Noteholders of any Series as of the Addition Date.
(e) Security Interest. This Assignment constitutes a valid sale,
transfer and assignment to the Trust of all right, title and interest,
whether owned on the Addition Cut-Off Date or thereafter acquired, of the
Transferor in the Receivables existing on the Addition Cut-Off Date or
thereafter created in the Additional Accounts, all Recoveries related
thereto, all monies due or to become due and all amounts received or
receivable with respect thereto and the "proceeds" (including "proceeds"
as defined in the applicable UCC) thereof, or, if this Assignment does
not constitute a sale of such property, it constitutes a grant of a
"security interest" (as defined in the applicable UCC) in such property
to the Trust, which, in the case of existing Receivables and the proceeds
thereof, is enforceable upon execution and delivery of this Assignment,
and which will be enforceable with respect to such Receivables hereafter
created and the proceeds thereof upon such creation. Upon the filing of
the financing statements described in Section 3 of this Assignment and,
in the case of the Receivables hereafter created and the proceeds
thereof, upon the creation thereof, the Trust shall have a first priority
perfected security or ownership interest in such property.
(f) No Conflict. The execution and delivery by the Transferor of
this Assignment, the performance of the transactions contemplated by this
Assignment and the fulfillment of the terms hereof applicable to the
Transferor, will not conflict with or violate any Requirements of Law
applicable to the Transferor or conflict with, result in any breach of
any of the material terms and provisions of, or constitute (with or
without notice or lapse of time or both) a material default under, any
indenture, contract,
A-3
agreement, mortgage, deed of trust or other instrument to which the
Transferor is a party or by which it or its properties are bound.
(g) No Proceedings. There are no proceedings or investigations,
pending or, to the best knowledge of the Transferor, threatened against
the Transferor before any court, regulatory body, administrative agency
or other tribunal or governmental instrumentality (i) asserting the
invalidity of this Assignment, (ii) seeking to prevent the consummation
of any of the transactions contemplated by this Assignment, (iii) seeking
any determination or ruling that, in the reasonable judgment of the
Transferor, would materially and adversely affect the performance by the
Transferor of its obligations under this Assignment or (iv) seeking any
determination or ruling that would materially and adversely affect the
validity or enforceability of this Assignment.
(h) All Consents. All authorizations, consents, orders or
approvals of any court or other governmental authority required to be
obtained by the Transferor in connection with the execution and delivery
of this Assignment by the Transferor and the performance of the
transactions contemplated by this Assignment by the Transferor, have been
obtained.
6. Ratification of Agreement. As supplemented by this Assignment, the
Agreement is in all respects ratified and confirmed and the Agreement as so
supplemented by this Assignment shall be read, taken and construed as one and
the same instrument.
7. Counterparts. This Assignment may be executed in two or more
counterparts, and by different parties on separate counterparts, each of which
shall be an original, but all of which shall constitute one and the same
instrument.
8. GOVERNING LAW. THIS ASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAWS 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.
9. Limitation of Liability. Notwithstanding any other provision herein or
elsewhere, this Assignment has been executed and delivered by Wilmington Trust
Company, not in its individual capacity, but solely in its capacity as Owner
Trustee of the Trust, in no event shall Wilmington Trust Company in its
individual capacity have any liability in respect of the representations,
warranties, or obligations of the Trust hereunder or under any other document,
as to all of which recourse shall be had solely to the assets of the Trust, and
for all purposes of this Assignment and each other document, the Owner Trustee
(as such or in its individual capacity) shall be subject to, and entitled to the
benefits of, the terms and provisions of the Trust Agreement.
A-4
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trust have
caused this Assignment to be duly executed by their respective officers as of
the day and year first above written.
NORDSTROM PRIVATE LABEL
RECEIVABLES LLC,
as Transferor
By:
------------------------------------
Name:
Title:
NORDSTROM FSB,
as Servicer
By:
------------------------------------
Name:
Title:
NORDSTROM PRIVATE LABEL CREDIT
CARD MASTER NOTE TRUST,
as Issuer
By: Wilmington Trust Company,
not in its individual capacity
but solely as Owner Trustee
of the Trust,
By:
------------------------------------
Name:
Title:
A-5
SCHEDULE 1
List of Accounts
S1-1
EXHIBIT B
FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
(As required by Section 2.10 of
the Transfer and Servicing Agreement)
REASSIGNMENT No. _______ OF RECEIVABLES dated as of _________,(2) among
Nordstrom Private Label Receivables LLC, as Transferor (the "Transferor") and
Nordstrom fsb, as Servicer (the "Servicer"), and [Nordstrom Private Label Credit
Card Master Note Trust], (the "Trust"), pursuant to the Transfer and Servicing
Agreement referred to below.
WITNESSETH:
WHEREAS the Transferor, the Servicer and the Trust are parties to the
Transfer and Servicing Agreement, dated as of October 1, 2001 (as amended and
supplemented, the "Agreement");
WHEREAS pursuant to the Agreement, the Transferor wishes to remove from
the Trust all Receivables owned by the Trust in certain designated Accounts (the
"Removed Accounts") and to cause the Trust to reconvey the Receivables of such
Removed Accounts, whether now existing or hereafter created, from the Trust to
the Transferor; and
WHEREAS the Trust is willing to accept such designation and to reconvey
the Receivables in the Removed Accounts subject to the terms and conditions
hereof.
NOW, THEREFORE, the Transferor and the Trust hereby agree as follows:
1. Defined Terms. Capitalized terms used herein that are not otherwise
defined shall have the meanings ascribed thereto.
"Removal Date" means, with respect to the Removed Accounts designated
hereby, ___________, ____
"Removal Notice Date" means, with respect to the Removed Accounts
______________, ____
2. Designation of Removed Accounts. On or before the Removal Date, the
Transferor will deliver to the Owner Trustee a computer file or microfiche list
containing a true and complete schedule identifying all Accounts the Receivables
of which are being removed from the Trust, specifying for each such Account, as
of the Removal Notice Date, its account number and the aggregate amount
outstanding in such Account, which computer file or microfiche list shall
supplement Schedule 1 to the Agreement.
--------
(2) To be dated as of the Removal Date.
B-1
3. Conveyance of Receivables. The Trust does hereby transfer, assign, set
over and otherwise convey to the Transferor, without recourse, all right, title
and interest of the Trust in, to and under the Receivables existing at the close
of business on the Removal Notice Date and thereafter created from time to time
in the Removed Accounts designated hereby, all Recoveries related thereto, all
monies due or to become due and all amounts received or receivable with respect
thereto and all proceeds thereof.
In connection with such transfer, the Trust agrees to execute and deliver
to the Transferor on or prior to the date this Reassignment is delivered,
applicable termination statements prepared by the Transferor with respect to the
Receivables existing at the close of business on the Removal Date and thereafter
created from time to time in the Removed Accounts reassigned hereby and the
proceeds thereof evidencing the release by the Trust of its interest in the
Receivables in the Removed Accounts, and meeting the requirements of applicable
state law, in such manner and such jurisdictions as are necessary to terminate
such interest.
4. Representations and Warranties of the Transferor. The Transferor
hereby represents and warrants to the Trust as of the Removal Date:
(a) Legal Valid and Binding Obligation. This Reassignment
constitutes a legal, valid and binding obligation of the Transferor
enforceable against the Transferor, in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity);
and
(b) Redemption Event; Event of Default. The Transferor reasonably
believes that (A) the removal of the Receivables existing in the Removed
Accounts will not, based on the facts known to the Transferor, then or
thereafter cause a Redemption Event or Event of Default to occur with
respect to any Series and (B) no selection procedure was utilized by the
Transferor which would result in a selection of Removed Accounts that
would be materially adverse to the interests of the Noteholders of any
Series as of the Removal Date.
(c) List of Removed Accounts. The list of Removed Accounts
delivered pursuant to subsection 2.10(a)(ii) of the Agreement, as of the
Removal Date, is true and complete in all material respects.
5. Ratification of Agreement. As supplemented by this Reassignment, the
Agreement is in all respects ratified and confirmed and the Agreement as so
supplemented by this Reassignment shall be read, taken and construed as one and
the same instrument.
6. Counterparts. This Reassignment may be executed in two or more
counterparts, and by different parties on separate counterparts, each of which
shall be an original, but all of which shall constitute one and the same
instrument.
7. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW
B-2
YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS 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.
8. Limitation of Liability. Notwithstanding any other provision herein or
elsewhere, this Reassignment has been executed and delivered by [Owner Trustee],
not in its individual capacity, but solely in its capacity as Owner Trustee of
the Trust, in no event shall [Owner Trustee] in its individual capacity have any
liability in respect of the representations, warranties, or obligations of the
Trust hereunder or under any other document, as to all of which recourse shall
be had solely to the assets of the Trust, and for all purposes of this
Reassignment and each other document, the Owner Trustee (as such or in its
individual capacity) shall be subject to, and entitled to the benefits of, the
terms and provisions of the Trust Agreement.
B-3
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trust have
caused this Reassignment to be duly executed by their respective officers as of
the day and year first above written.
NORDSTROM PRIVATE LABEL
RECEIVABLES LLC,
as Transferor
By:
------------------------------------
Name:
Title:
NORDSTROM FSB,
as Servicer
By:
------------------------------------
Name:
Title:
NORDSTROM PRIVATE LABEL CREDIT
CARD MASTER NOTE TRUST,
as Issuer
By: Wilmington Trust Company
not in its individual capacity
but solely as Owner Trustee
of the Trust,
By:
------------------------------------
Name:
Title:
B-4
EXHIBIT C
FORM OF ANNUAL SERVICER'S CERTIFICATE
(To be delivered on or before March 31 of
each calendar year beginning with March 31, 2002,
pursuant to Section 3.05 of the Transfer and
Servicing Agreement referred to below)
NORDSTROM CREDIT CARD MASTER NOTE TRUST
The undersigned, a duly authorized representative of Nordstrom fsb, as
Servicer (the "Servicer") and Nordstrom Private Label Receivables LLC, as
Transferor (the "Transferor"), pursuant to the Transfer and Servicing Agreement,
dated as of October 1, 2001 (as amended and supplemented, the "Agreement"),
among Nordstrom Private Label Receivables LLC, Nordstrom fsb and Nordstrom
Private Label Credit Card Mater Note Trust, does hereby certify that:
1. Nordstrom fsb is, as of the date hereof, the Servicer under the
Agreement. Capitalized terms used in this Certificate have their
respective meanings as set forth in the Agreement.
2. The undersigned is an Authorized Officer who is duly authorized
pursuant to the Agreement to execute and deliver this Certificate to the
Trust.
3. A review of the activities of the Servicer during the year
ended December 31, ____, and of its performance under the Agreement was
conducted under my supervision.
4. Based on such review, the Servicer has, to the best of my
knowledge, performed in all material respects its obligations under the
Agreement throughout such year and no default in the performance of such
obligations has occurred or is continuing except as set forth in
paragraph 5 below.
5. The following is a description of each default in the
performance of the Servicer's obligations under the provisions of the
Agreement known to me to have been made by the Servicer during the year
ended December 31, ____ which sets forth in detail (i) the nature of each
such default, (ii) the action taken by the Servicer, if any, to remedy
each such default and (iii) the current status of each such default: [If
applicable, insert "None."]
C-1
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
this ____ day of __________________, 20__.
NORDSTROM FSB,
as Servicer
By:
------------------------------------
Name:
Title:
X-0
XXXXXXX X-0
FORM OF OPINION OF COUNSEL
WITH RESPECT TO AMENDMENTS
Provisions to be included in
Opinion of Counsel to be delivered pursuant
to subsection 9.02(d)(i)
The opinions set forth below may be subject to all the qualifications,
assumptions, limitations and exceptions taken or made in the Opinions Of Counsel
delivered on any applicable Closing Date.
(i) The amendment to the Transfer and Servicing Agreement,
attached hereto as Schedule 1 (the "Amendment" ), has been duly
authorized, executed and delivered by the Transferor and constitutes the
legal, valid and binding agreement of the Transferor, enforceable in
accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
laws from time to time in effect affecting creditors' rights generally.
The enforceability of the Transferor's obligations is also subject to
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law)
(ii) The Amendment has been entered into in accordance with the
terms and provisions of Section 9.01 of the Transfer and Servicing
Agreement.
X-0-0
XXXXXXX X-0
FORM OF OPINION OF COUNSEL
WITH RESPECT TO ACCOUNTS
Provisions to be included in
Opinion of Counsel to be
delivered pursuant to
Section 9.02(d)(ii) or (iii)
The opinions set forth below may be subject to all the qualifications,
assumptions, limitations and exceptions taken or made in the Opinions of Counsel
delivered on any applicable Closing Date.
(i) To the extent that the transfer of Additional Receivables by
the Transferor to the Trust pursuant to the Assignment does not
constitute an absolute assignment by the Transferor to the Trust of such
Additional Receivables or the proceeds thereof, the Assignment creates in
favor of the Trust a security interest in the rights of the Transferor in
such Additional Receivables and the proceeds thereof.
(ii) The security interests described in paragraph 1 above is
perfected and of first priority.
X-0-0
XXXXXXX X-0
PROVISIONS TO BE INCLUDED IN
ANNUAL OPINION OF COUNSEL
The opinions set forth below may be subject to all the qualifications,
assumptions, limitations and exceptions taken or made in the Opinions of Counsel
delivered on any applicable Closing Date with respect to similar matters. Unless
otherwise indicated, all capitalized terms used herein has the meanings ascribed
to them in the Transfer and Servicing Agreement.
(i) No filing or other action, other than such filing or other
action described in such opinion, is necessary from the date of such
opinion through April 30 of the following year to continue the perfected
status of the security interest of the Trust in the Receivables described
in the financing statements referenced in such opinion.
D-3-1
SCHEDULE 1
List of Accounts
[Original list delivered to Owner Trustee]
S-1-1
