Exhibit 4.6
WFN CREDIT COMPANY, LLC,
Transferor
WORLD FINANCIAL NETWORK NATIONAL BANK,
Servicer
and
BNY MIDWEST TRUST COMPANY,
Trustee
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
SECOND AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of January 17, 1996
amended and restated as of September 17, 1999
and hereby amended and restated a second time as of August 1, 2001
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS..........................................................1
SECTION 1.1. Definitions..........................................1
SECTION 1.2. Other Interpretive Provisions.......................21
ARTICLE II CONVEYANCE OF RECEIVABLES..........................................21
SECTION 2.1. Conveyance of Receivables...........................21
SECTION 2.2. Acceptance by Trustee...............................24
SECTION 2.3. Representations and Warranties of Transferor
Relating to Transferor..............................24
SECTION 2.4. Representations and Warranties of Transferor
Relating to Transaction Documents and the
Receivables.........................................26
SECTION 2.5. Reassignment of Ineligible Receivables..............28
SECTION 2.6. Reassignment of Receivables in Trust Portfolio......29
SECTION 2.7. Covenants of Transferor.............................30
SECTION 2.8. Addition of Accounts................................35
SECTION 2.9. Removal of Accounts.................................40
SECTION 2.10. Discount Option.....................................42
SECTION 2.11. Additional Transferors..............................43
SECTION 2.12. Additional Credit Card Originators..................43
ARTICLE III ADMINISTRATION AND SERVICING......................................43
SECTION 3.1. Acceptance of Appointment and Other Matters
Relating to Servicer................................43
SECTION 3.2. Servicing Compensation..............................44
SECTION 3.3. Representations, Warranties and Covenants of
Servicer............................................45
SECTION 3.4. Reports to Trustee..................................48
SECTION 3.5. Annual Certificate of Servicer......................48
SECTION 3.6. Annual Servicing Report of Independent
Public Accountants; Copies of Reports
Available ..........................................48
SECTION 3.7. Tax Treatment.......................................49
SECTION 3.8. Notices to Transferor...............................50
SECTION 3.9. Adjustments.........................................50
ARTICLE IV RIGHTS OF HOLDERS; ALLOCATIONS.....................................51
SECTION 4.1. Rights of Holders...................................51
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SECTION 4.2 Establishment of Collection Account and
Excess Funding Account..............................51
SECTION 4.3. Collections and Allocations.........................52
SECTION 4.4. Shared Principal Collections........................54
SECTION 4.5. Excess Finance Charge Collections...................54
ARTICLE V DISTRIBUTIONS AND REPORTS...........................................55
ARTICLE VI THE CERTIFICATES...................................................55
SECTION 6.1. The Certificates....................................55
SECTION 6.2. Authentication of Certificates......................55
SECTION 6.3. New Issuances.......................................55
SECTION 6.4. Registration of Transfer and Exchange of
Certificates........................................57
SECTION 6.5. Mutilated, Destroyed, Lost or Stolen
Certificates........................................61
SECTION 6.6. Persons Deemed Owners...............................62
SECTION 6.7. Appointment of Paying Agent.........................62
SECTION 6.8. Access to List of Registered Holders' Names
and Addresses.......................................63
SECTION 6.9. Authenticating Agent................................63
SECTION 6.10. Book-Entry Certificates.............................64
SECTION 6.11. Notices to Clearing Agency..........................65
SECTION 6.12. Definitive Certificates.............................65
SECTION 6.13. Global Certificate..................................66
SECTION 6.14. Uncertificated Classes..............................66
SECTION 6.15. CUSIP Numbers.......................................66
ARTICLE VII OTHER MATTERS RELATING TO TRANSFEROR..............................66
SECTION 7.1. Liability of Transferor.............................66
SECTION 7.2. Merger or Consolidation of, or Assumption of
the Obligations of, Transferor......................66
SECTION 7.3. Limitations on Liability of Transferor..............68
SECTION 7.4. Liabilities.........................................68
ARTICLE VIII OTHER MATTERS RELATING TO SERVICER...............................68
SECTION 8.1. Liability of Servicer...............................68
SECTION 8.2. Merger or Consolidation of, or Assumption of
the Obligations of, Servicer........................68
SECTION 8.3. Limitation on Liability of Servicer and Others......69
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SECTION 8.4. Servicer Indemnification of the Trust and Trustee...70
SECTION 8.5. Servicer Not to Resign..............................70
SECTION 8.6. Access to Certain Documentation and
Information Regarding the Receivables...............71
SECTION 8.7. Delegation of Duties................................71
ARTICLE IX EARLY AMORTIZATION EVENTS..........................................71
SECTION 9.1. Early Amortization Events...........................71
SECTION 9.2. Additional Rights upon Certain Events...............72
ARTICLE X SERVICER DEFAULTS...................................................73
SECTION 10.1. Servicer Defaults...................................73
SECTION 10.2. Trustee to Act; Appointment of Successor............75
SECTION 10.3. Notification to Holders.............................76
SECTION 10.4. Waiver of Past Defaults.............................76
ARTICLE XI TRUSTEE............................................................77
SECTION 11.1. Duties of Trustee...................................77
SECTION 11.2. Certain Matters Affecting Trustee...................78
SECTION 11.3. Trustee Not Liable for Recitals in Certificates.....80
SECTION 11.4. Trustee Not to Own Certificates.....................80
SECTION 11.5. Servicer to Pay Trustee's Fees and Expenses.........80
SECTION 11.6. Eligibility Requirements for Trustee................81
SECTION 11.7. Resignation or Removal of Trustee...................81
SECTION 11.8. Successor Trustee...................................82
SECTION 11.9. Merger or Consolidation of Trustee..................82
SECTION 11.10. Appointment of Co-Trustee or Separate Trustee.......82
SECTION 11.11. Tax Return..........................................84
SECTION 11.12. Trustee May Enforce Claims Without Possession
of Certificates.....................................84
SECTION 11.13. Suits for Enforcement...............................84
SECTION 11.14. Rights of Holders to Direct Trustee.................84
SECTION 11.15. Representations and Warranties of Trustee...........85
SECTION 11.16. Maintenance of Office or Agency.....................85
SECTION 11.17. Confidentiality.....................................85
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ARTICLE XII TERMINATION.......................................................86
SECTION 12.1. Termination of Trust................................86
SECTION 12.2. Final Distribution..................................86
SECTION 12.3. Transferor's Termination Rights.....................88
ARTICLE XIII MISCELLANEOUS PROVISIONS.........................................88
SECTION 13.1. Amendment; Waiver of Past Defaults..................88
SECTION 13.2. Protection of Right, Title and Interest to Trust....90
SECTION 13.3. Limitation on Rights of Holders.....................91
SECTION 13.4. GOVERNING LAW.......................................91
SECTION 13.5. Notices, Payments...................................91
SECTION 13.6. Rule 144A Information...............................92
SECTION 13.7. Severability of Provisions..........................92
SECTION 13.8. Certificates Nonassessable and Fully Paid...........92
SECTION 13.9. Further Assurances..................................93
SECTION 13.10. Nonpetition Covenant................................93
SECTION 13.11. No Waiver; Cumulative Remedies......................93
SECTION 13.12. Counterparts........................................93
SECTION 13.13. Third-Party Beneficiaries...........................93
SECTION 13.14. Actions by Holders..................................94
SECTION 13.15. Merger and Integration..............................94
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EXHIBITS
Exhibit A Form of Assignment of Receivables in
Supplemental Accounts
Exhibit B Form of Reassignment of Receivables in
Removed Accounts
Exhibit C Form of Annual Servicer's Certificate
Exhibit D-1 Private Placement Legend
Exhibit D-2 Form of Undertaking Letter
Exhibit D3 ERISA Legend
Exhibit E-1 Form of Opinion of Counsel with respect
to Amendments
Exhibit E-2 Form of Opinion of Counsel with respect
to Addition of Supplemental Accounts
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SECOND AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT, dated as of
August 1, 2001 among WFN CREDIT COMPANY, LLC, a Delaware limited liability
company, as Transferor, WORLD FINANCIAL NETWORK NATIONAL BANK, a national
banking association ("WFN"), as Servicer, and BNY MIDWEST TRUST COMPANY
(successor to the corporate trust administration of Xxxxxx Trust and Savings
Bank, successor to The Bank of
New York), an Illinois trust company, as Trustee.
WHEREAS, World Financial Network National Bank, as transferor and
servicer, and the Trustee are parties to that certain
Pooling and Servicing
Agreement, dated as of January 17, 1996, as amended and restated as of September
17, 1999 (the "EXISTING PSA");
WHEREAS, the parties desire to amend and restate in its entirety the
Existing PSA in order to, among other things, provide for the substitution of
WFN Credit Company, LLC for World Financial Network National Bank, in its
capacity as Transferor under the Existing PSA;
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the Existing PSA is hereby amended and restated in its entirety as
follows and each party agrees as follows for the benefit of the other parties,
the Holders and any Enhancement Provider to the extent provided herein and in
any Supplement:
ARTICLE I DEFINITIONS
SECTION 1.1. DEFINITIONS. When used in this Agreement, the following words
and phrases have the following meanings. 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 each Initial Account, each open end credit card account in
the Restatement Date Portfolios existing on August 20, 2001 and identified in
the Account Schedule delivered on that date, each Automatic Additional Account
and each Supplemental Account, but excludes any Account all the Receivables in
which are either reassigned or assigned to Transferor or its designee or
Servicer in accordance with this Agreement and any inactive Accounts which in
accordance with the Credit Card Guidelines have been removed from the computer
records of the Credit Card Originator. The term "Account" includes each account
into which an Account is transferred (a "TRANSFERRED ACCOUNT") so long as (a)
such transfer is made in accordance with the Credit Card Guidelines and (b) such
Transferred Account can be traced or identified, by reference to or by way of
the Account Schedule delivered to Trustee pursuant to SECTION 2.1 OR 2.8(d), as
an account into which an Account has been transferred. The term "Account"
includes an Automatic Additional Account or a Supplemental Account only from and
after its Addition Date and includes any Removed Account only prior to its
Removal Date.
"ACCOUNT SCHEDULE" means a computer file or microfiche list containing a
true and complete list of Accounts, identified by account number and setting
forth the Receivable balance as of (a) the Trust Cut Off Date (for the Account
Schedule delivered on the Initial Closing Date), (b) the end of the related
Monthly Period (for any Account Schedule relating to Automatic Additional
Accounts), (c) July 31, 2001 for the Account Schedule relating to the
Restatement
Date Portfolios, or (d) the related Addition Cut Off Date (for any Account
Schedule delivered in connection with any designation of Supplemental Accounts).
"ACQUIRED PORTFOLIO RECEIVABLE" means any receivable acquired by the
Credit Card Originator from an Other Originator in connection with the Credit
Card Originator's acquisition of a portfolio of revolving credit card accounts
from such Other Originator (prior to the transfer of such receivable to the
Transferor pursuant to the Receivables Purchase Agreement).
"ADDITION" means the designation of additional Eligible Accounts to be
included as Accounts pursuant to SECTION 2.8(a), (b) or (c) or of Participation
Interests to be included as Trust Assets pursuant to SECTION 2.8(b) or (c), as
applicable.
"ADDITION CUT OFF DATE" means the date as of which any Supplemental
Accounts or Participation Interests are designated for inclusion in the Trust,
as specified in the related Assignment. The "Addition Cut Off Date" for accounts
existing in the Restatement Date Portfolios on July 31, 2001 is August 21, 2001.
"ADDITION DATE" means (a) as to Supplemental Accounts, the date on which
the Receivables in such Supplemental Accounts are conveyed to the Trust pursuant
to SECTION 2.8(b) or (c), as applicable, (b) as to Automatic Additional
Accounts, the date on which such accounts are created or otherwise become
Automatic Additional Accounts, (c) as to accounts existing in the Restatement
Date Portfolios on August 20, 2001, August 21, 2001 and (d) as to Participation
Interests, the date from and after which such Participation Interests are to be
included as Trust Assets pursuant to SECTION 2.8(b) OR (c).
"ADDITIONAL ACCOUNT" means an Automatic Additional Account or a
Supplemental Account.
"ADDITIONAL LIMITATION EVENT" means the occurrence of either of the
following events on any Determination Date:
1. the average of the default ratio for that Determination Date and the
preceding two Determination Dates is greater than 1.25%, where the "default
ratio" for any Determination Date equals the percentage equivalent of a fraction
(A) the numerator of which is the aggregate of the Default Amounts for all
Accounts that became Defaulted Accounts during the related Monthly Period and
(B) the denominator of which is the total Receivables as of the end of the sixth
preceding Monthly Period; or
2. the average of the payment rate for that Determination Date and the
preceding two Determination Dates is less than 10%, where the "payment rate" for
any Determination Date equals the percentage equivalent of a fraction (A) the
numerator of which is the aggregate Collections received during the related
Monthly Period and (B) the denominator of which is equal to the total
Receivables held by the Trust at the close of business for the Monthly Period
immediately prior to such related Monthly Period.
"ADJUSTED INVESTED AMOUNT" is defined, as to any Series, in the related
Supplement.
2
"AFFILIATE" means, as to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For this purpose, "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 "controlling" and "controlled"
have correlative meanings.
"AGREEMENT" means this Second Amended and Restated
Pooling and Servicing
Agreement and, for purposes of any Series, the related Supplement.
"AMORTIZATION PERIOD" means, as to any Series or any Class within a
Series, any period specified in the related Supplement during which a share of
principal collections is set aside to repay the principal investment in that
Series (excluding repayments of a Variable Interest during its revolving
period).
"APPLICANTS" is defined in SECTION 6.8.
"APPOINTMENT DATE" is defined in SECTION 9.2(a).
"APPROVED PORTFOLIO" means any Identified Portfolio and any additional
portfolio that is designated as an Approved Portfolio pursuant to SECTION
2.8(e).
"ASSIGNMENT" is defined in SECTION 2.8(d)(ii).
"AUTHORIZED NEWSPAPER" means any 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 Investor Certificates of such Series or Class are listed on the Luxembourg
Stock Exchange and such exchange shall so require, in Luxembourg, printed in any
language satisfying the requirements of such exchange) and customarily published
on each business day at such place, whether or not published on Saturdays,
Sundays or holidays.
"AUTOMATIC ADDITION SUSPENSION DATE" is defined in SECTION 2.8(a).
"AUTOMATIC ADDITION TERMINATION DATE" is defined in SECTION 2.8(a).
"AUTOMATIC ADDITIONAL ACCOUNT" means each open end credit card account in
any Approved Portfolio that is established pursuant to a Credit Card Agreement
coming into existence after (a) the Trust Cut Off Date (in the case of an
account in the Identified Portfolio) or (b) the Addition Cut Off Date relating
to the first Addition Date on which receivables from accounts in the applicable
portfolio are transferred to the Trust (in the case of an account in any other
Approved Portfolio) and, in either case, prior to the Automatic Addition
Termination Date or an Automatic Addition Suspension Date, or subsequent to a
Restart Date. In addition, accounts in an Approved Portfolio that were in
existence, but were not Eligible Accounts, on (x) the Trust Cut Off Date (in the
case of an account in the Identified Portfolio) or (y) the Addition Cut Off Date
relating to the first Addition Date on which receivables from accounts in the
applicable portfolio are transferred to the Trust (in the case of an account in
any other Approved Portfolio) but which, in either case, become Eligible
Accounts prior to the Automatic Addition
3
Termination Date or an Automatic Addition Suspension Date, or subsequent to a
Restart Date, shall also be "Automatic Additional Accounts" and shall be deemed,
for purposes of the definition of "Eligible Account" and SECTION 2.8(a), to have
been created on the first day after the Trust Cut Off Date or applicable
Addition Cut Off Date on which they are Eligible Accounts.
"AUTOMATIC ADDITION LIMITATION EVENT" means the occurrence of either of
the following events on any Determination Date:
1. the average of the default ratio for that Determination Date and the
preceding two Determination Dates is greater than 1%, where the "default ratio"
for any Determination Date equals the percentage equivalent of a fraction (A)
the numerator of which is the aggregate of the Default Amounts for all Accounts
that became Defaulted Accounts during the related Monthly Period and (B) the
denominator of which is the total Receivables as of the end of the sixth
preceding Monthly Period; or
2. the average of the payment rate for that Determination Date and the
preceding two Determination Dates is less than 10%, where the "payment rate" for
any Determination Date equals the percentage equivalent of a fraction (A) the
numerator of which is the aggregate Collections received during the related
Monthly Period and (B) the denominator of which is equal to the total
Receivables held by the Trust at the close of business for the Monthly Period
immediately prior to such related Monthly Period.
"BASE RATE" is defined, as to any Series, in the related Supplement.
"BEARER CERTIFICATE" is defined in SECTION 6.1.
"BENEFIT PLAN" is defined in SECTION 6.4(c).
"BOOK-ENTRY CERTIFICATES" means beneficial interests in the Investor
Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in SECTION 6.10.
"BUSINESS DAY" means any day other than (a) a Saturday or Sunday, (b) any
other day on which national banking associations or state banking institutions
in
New York,
New York, Chicago, Illinois or Columbus, Ohio are authorized or
obligated by law, executive order or governmental decree to be closed or (c) for
purposes of any particular Series, any other day specified in the related
Supplement.
"CERTIFICATE" means an Investor Certificate or a certificate representing
a Supplemental Interest.
"CERTIFICATE OWNER" means, with respect to a Book-Entry Certificate, the
Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency).
"CERTIFICATE REGISTER" is defined in SECTION 6.4.
"CLASS" means any class of Investor Certificates of any Series.
4
"CLEARING AGENCY" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"CLOSING DATE" means, as to any Series, the date on which that Series is
issued.
"COLLECTION ACCOUNT" is defined in SECTION 4.2.
"COLLECTIONS" means all payments (including Recoveries of Principal
Receivables or Finance Charge Receivables and Insurance Proceeds, whether or not
treated as Recoveries) received by Servicer with respect to the Receivables,
including In-Store Payments, in the form of cash, checks (to the extent
collected), wire transfers or other form of payment in accordance with the
Credit Card Agreement in effect from time to time on any Receivables. If so
specified in any Supplement, Collections shall also include any payments
received by Servicer with respect to Participation Interests.
"COMMISSION" means the Securities and Exchange Commission.
"CORPORATE TRUST OFFICE" is defined in SECTION 11.16.
"COUPON" is defined in SECTION 6.1.
"CREDIT CARD AGREEMENT" means, as to any Account, the agreements between
the Credit Card Originator that owns the Account (including WFN as assignee of
an Other Originator) and the related Obligor that govern the Account, as amended
or otherwise modified from time to time.
"CREDIT CARD GUIDELINES" means the written policies and procedures of the
Credit Card Originator relating to the operation of its consumer revolving
lending business, including written policies and procedures for determining the
creditworthiness of credit card customers, the extension of credit to credit
card customers and the maintenance of credit card accounts and collection of
related receivables, as amended or otherwise modified from time to time.
"CREDIT CARD ORIGINATOR" means (i) WFN and/or any transferee of the
Accounts from WFN or (ii) any other originator of Accounts which is designated
from time to time pursuant to SECTION 2.12 and, directly or indirectly, enters
into a receivables purchase agreement with Transferor.
"CREDIT CARD PROCESSING AGREEMENT" means one or more agreements between
the Credit Card Originator (including WFN as assignee of an Other Originator)
and a Merchant pursuant to which the Credit Card Originator agrees to extend
open end credit card accounts to customers of the Merchant and the Merchant
agrees to allow purchases to be made at its retail establishments, or in its
catalogue sales business, under such accounts.
"DAILY REPORT" is defined in SECTION 3.4(a).
5
"DATE OF PROCESSING" means, as to any transaction, the Business Day on
which the transaction is first recorded on Servicer's computer file of consumer
revolving accounts (without regard to the effective date of such recordation).
"DEBTOR RELIEF LAWS" means Title 11 of the United States Code and all
other applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, suspension of payments,
readjustment of debt, marshalling of assets or similar debtor relief laws of the
United States, any state or any foreign country from time to time in effect,
affecting the rights of creditors generally.
"DEFAULTED RECEIVABLE" means, as to any date of determination, all
Principal Receivables in any Account which are charged off as uncollectible on
that date in accordance with the Credit Card Guidelines and Servicer's customary
and usual servicing procedures for servicing open end credit card account
receivables comparable to the Receivables. A Principal Receivable in any Account
shall become a Defaulted Receivable on the day on which such Principal
Receivable is recorded as charged off in accordance with the Credit Card
Guidelines.
"DEFINITIVE CERTIFICATES" is defined in SECTION 6.10.
"DEFINITIVE EURO-CERTIFICATES" is defined in SECTION 6.13.
"DEPOSITORY AGREEMENT" means, as to any Series or Class, any agreement
among Transferor, Trustee and any applicable Clearing Agency.
"DETERMINATION DATE" means, unless otherwise specified in any Supplement
with respect to the related Series, the second Business Day preceding each
Distribution Date.
"DISCOUNT OPTION RECEIVABLES" means, on any Date of Processing on and
after the date on which Transferor's exercise of its discount option pursuant to
SECTION 2.10 takes effect, the sum of (a) the aggregate Discount Option
Receivables at the end of the prior day (which amount, prior to the date on
which Transferor's exercise of its discount option takes effect and with respect
to Receivables generated prior to such date, shall be zero), plus (b) any New
Discount Option Receivables created on such day, minus (c) any Discount Option
Receivables Collections received on such Date of Processing.
"DISCOUNT OPTION RECEIVABLES COLLECTIONS" means on any Date of Processing
on and after the date on which Transferor's exercise of its discount option
pursuant to SECTION 2.10 takes effect, the product of (a) a fraction the
numerator of which is the amount of the Discount Option Receivables and the
denominator of which is the sum of the Principal Receivables plus the amount of
Discount Option Receivables in each case (for both numerator and denominator) at
the end of the prior Monthly Period and (b) Collections of Principal
Receivables, prior to any reduction for Finance Charge Receivables which are
Discount Option Receivables, received on such Date of Processing.
"DISCOUNT PERCENTAGE" is defined in SECTION 2.10.
6
"DISTRIBUTION DATE" means, with respect to any Series, the date specified
in the related Supplement.
"DOCUMENT DELIVERY DATE" means the Initial Closing Date in the case of
Initial Accounts, the Addition Date in the case of Supplemental Accounts and the
Removal Date in the case of Removed Accounts.
"EARLY AMORTIZATION EVENT" means, as to any Series, each event specified
in SECTION 9.1 and each additional event, if any, specified in the relevant
Supplement as an Early Amortization Event for that Series.
"EFFECTIVE DATE" shall mean August 21, 2001.
"ELIGIBLE ACCOUNT" means an open end credit card account in an Approved
Portfolio owned by the Credit Card Originator that, as of the Trust Cut Off Date
(in the case of an Initial Account), the date of creation thereof (in the case
of an Automatic Additional Account) or the related Addition Cut Off Date (in the
case of a Supplemental Account):
(a) is in existence and is serviced by the Credit Card Originator or any
Affiliate of the Credit Card Originator;
(b) is payable in United States dollars;
(c) except as provided below, has not been identified as an account (i)
the credit cards for which have been reported to the Credit Card Originator or
the related Other Originator (if any) as lost or stolen or (ii) the Obligor of
which is the subject of a bankruptcy proceeding;
(d) none of the Receivables in which have been, sold, pledged, assigned or
otherwise conveyed to any Person (except by an Other Originator to the Credit
Card Originator or otherwise pursuant to this Agreement), unless any such pledge
or assignment is released on or before the Initial Closing Date or the Addition
Date, as applicable;
(e) except as provided below, none of the Receivables in which are
Defaulted Receivables or have been identified by the Credit Card Originator or
the related Other Originator (if any), or by the relevant Obligor to the Credit
Card Originator or the related Other Originator (if any), as having been
incurred as a result of fraudulent use of a credit card; and
(f) has an Obligor who has provided as his or her most recent billing
address, an address located in the United States or a United States military
address, PROVIDED that an account shall not fail to be an "Eligible Account"
solely due to the Obligor having provided a billing address not satisfying the
foregoing if as of the Trust Cut Off Date (in the case of an Initial Account),
the end of the most recently ended Monthly Period (in the case of an Automatic
Additional Account) or the related Addition Cut Off Date (in the case of a
Supplemental Account) the aggregate Principal Receivables in Accounts the most
recent billing address for which does not satisfy the foregoing made up less
than 2% (or any higher percentage as to which the Rating Agency Condition has
been satisfied) of the aggregate Principal Receivables.
7
Notwithstanding the foregoing, Eligible Accounts may include accounts, the
receivables in which have been written off, or as to which the Credit Card
Originator or related Other Originator (if any) believes the related Obligor is
bankrupt and certain receivables that have been identified by the Obligor as
having been incurred as a result of fraudulent use of credit cards or any credit
cards have been reported to the Credit Card Originator or the related Other
Originator (if any) as lost or stolen, so long as (1) the balance of all
receivables included in such accounts is reflected on the books and records of
the Credit Card Originator (and is treated for purposes of this Agreement) as
"zero" and (2) charging privileges with respect to all such accounts have been
canceled and are not reinstated.
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States or any one of the states thereof, including the District of Columbia (or
any domestic branch of a foreign bank), and acting as a trustee for funds
deposited in such account, so long as any of the securities of such depository
institution shall have a credit rating from each of Xxxxx'x, S&P and, if rated
by Fitch, Fitch in one of its generic credit rating categories that signifies
investment grade.
"ELIGIBLE INSTITUTION" means (a) a depository institution (which may be
Trustee or an affiliate) organized under the laws of the United States or any
one of the states thereof (i) that has either (A) a long-term unsecured debt
rating of "A2" or better by Moody's or (B) a certificate of deposit rating of
"P-1" by Moody's, (ii) that has either (A) a long-term unsecured debt rating of
"AAA" by S&P or (B) a certificate of deposit rating of at least "A-1+" by S&P,
(iii) that, if rated by Fitch, has either (A) a long-term unsecured debt rating
of "AAA" by Fitch or (B) a certificate of deposit rating of at least "F-1+" by
Fitch and (iv) the deposits of which are insured by the FDIC or (b) any other
institution that is acceptable to each Rating Agency, Servicer and Trustee.
"ELIGIBLE INVESTMENTS" means book-entry securities, negotiable instruments
or securities represented by instruments in bearer or registered form which
evidence:
(a) direct obligations of, and obligations fully guaranteed as to timely
payment of principal and interest by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit (having
original maturities of no more than 365 days) of depository institutions or
trust companies incorporated under the laws of the United States of America or
any state thereof (or domestic branches of foreign banks) and subject to
supervision and examination by federal or state banking or depository
institution authorities; PROVIDED that at the time of the Trust's investment or
contractual commitment to invest therein, the short-term debt rating of such
depository institution or trust company shall be in the highest investment
category of each of Moody's and S&P, which in the case of S&P means A-1+, and,
if rated by Fitch, Fitch in its highest investment category;
(c) commercial paper or other short-term obligations having, at the time
of the Trust's investment or contractual commitment to invest therein, a rating
from each of Moody's and S&P in its highest investment category, which in the
case of S&P means A-1+, and, if rated by Fitch, Fitch in its highest investment
category;
8
(d) demand deposits, time deposits and certificates of deposit which are
fully insured by the FDIC, with a Person the commercial paper of which has a
credit rating from each of Moody's and S&P in its highest investment category,
which in the case of S&P means A-1+, and, if rated by Fitch, Fitch in its
highest investment category;
(e) notes or bankers acceptances (having original maturities of no more
than 365 days) issued by any depository institution or trust company referred to
in CLAUSE (b);
(f) investments in money market funds (including funds of Trustee or its
affiliates as well as funds for which Trustee and its affiliates may receive
compensation) rated in the highest investment category by each of Moody's and
S&P, which in the case of S&P means A-1+, and, if rated by Fitch, Fitch in its
highest investment category, or otherwise approved in writing by each Rating
Agency;
(g) time deposits, other than as referred to in CLAUSE (d), with a Person
the commercial paper of which has a credit rating in its highest investment
category, from each of Moody's and S&P, which in the case of S&P means A-1+,
and, if rated by Fitch, Fitch in its highest investment category; or
(h) any other investments approved in writing by each Rating Agency,
PROVIDED that making such investments shall not cause the Trust to be required
to register as an investment company within the meaning of the Investment
Company Act.
"ELIGIBLE RECEIVABLE" means a Receivable:
(a) that has arisen under an Eligible Account;
(b) that was created in compliance with the Credit Card Guidelines and all
Requirements of Law applicable to the Credit Card Originator (or, in the case of
an Acquired Portfolio Receivable, the related Other Originator) the failure to
comply with which would have a material adverse effect on Investor Holders, and
pursuant to a Credit Card Agreement that complies with all Requirements of Law
applicable to the Credit Card Originator (and, in the case of an Acquired
Portfolio Receivable, the related Other Originator during the time prior to the
transfer of such Acquired Portfolio Receivable to the Credit Card Originator),
the failure to comply with which would have a material adverse effect on
Investor Holders;
(c) with respect to which all consents, licenses, approvals or
authorizations of, or registrations with, any Governmental Authority required to
be obtained or made by the Credit Card Originator (and, in the case of an
Acquired Portfolio Receivable, the related Other Originator with respect to such
actions prior to the transfer of such Acquired Portfolio Receivable to the
Credit Card Originator) in connection with the creation of such Receivable or
the execution, delivery and performance by the Credit Card Originator (and, in
the case of an Acquired Portfolio Receivable, the related Other Originator with
respect to such actions prior to the transfer of such Acquired Portfolio
Receivable to the Credit Card Originator) of the related Credit Card Agreement,
have been duly obtained or made and are in full force and effect as of the date
of creation of such Receivable, but failure to comply with this CLAUSE (c) shall
not cause a Receivable not to be an Eligible Receivable if, and to the extent
that, the failure to so obtain or
9
make any such consent, license, approval, authorization or registration would
not have a material adverse effect on the Investor Holders;
(d) as to which, at the time of its transfer to the Trust, Transferor or
the Trust will have good and marketable title free and clear of all Liens (other
than any Lien permitted by SECTION 2.7(b));
(e) that is the subject of a valid transfer and assignment (or the grant
of a security interest) from Transferor to the Trust of all Transferor's right,
title and interest therein;
(f) that at and after the time of transfer to the Trust is the legal,
valid and binding payment obligation of the Obligor thereof, legally enforceable
against such Obligor in accordance with its terms, except as enforceability may
be limited by applicable Debtor Relief Laws, and by general principles of equity
(whether considered in a suit at law or in equity);
(g) that constitutes an account;
(h) as to which, at the time of its transfer to the Trust, Transferor has
not taken any action which, or failed to take any action the omission of which,
would, at the time of transfer to the Trust, impair the rights therein of the
Trust or the Holders;
(i) that, at the time of its transfer to the Trust, has not been waived or
modified except as permitted in accordance with SECTION 3.3(h);
(j) that, at the time of its transfer to the Trust, is not subject to any
right of rescission, setoff, counterclaim or any other defense of the Obligor
(including the defense of usury), other than defenses arising out of Debtor
Relief Laws 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 Servicer makes an adjustment pursuant to SECTION 3.9; and
(k) as to which, at the time of its transfer to the Trust, the Transferor
has satisfied all obligations to be fulfilled at the time it is transferred to
the Trust.
"ELIGIBLE SERVICER" means Trustee, a wholly owned subsidiary of Trustee or
an entity that, at the time of its appointment as Servicer: (a) is servicing a
portfolio of consumer open end credit card accounts or other consumer open end
credit accounts; (b) is legally qualified and has the capacity to service the
Accounts; (c) is qualified (or licensed) 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; (d) has,
in the reasonable judgment of Trustee, the ability to professionally and
competently service a portfolio of similar accounts; and (e) has a net worth of
at least $50,000,000 as of the end of its most recent fiscal quarter.
"ENHANCEMENT" means the rights and benefits provided to the Investor
Holders of any Series or Class pursuant to any letter of credit, surety bond,
cash collateral account, guaranty collateral invested amount, spread account,
guaranteed rate agreement, maturity guaranty facility, tax protection agreement,
interest rate swap agreement, interest rate cap agreement or other similar
arrangement. The subordination of any Class to another Class, or a cross support
10
feature which requires collections on Receivables allocated to one Series to be
paid as principal and/or interest with respect to another Series shall be deemed
to be an Enhancement for the Class or Series benefiting from the subordination
or cross support feature.
"ENHANCEMENT AGREEMENT" means any agreement, instrument or document
governing any Enhancement or pursuant to which any Enhancement is issued or
outstanding.
"ENHANCEMENT PROVIDER" means the Person or Persons providing any
Enhancement, other than the Investor Holders of any Class which is subordinated
to another Class.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"EXCESS FINANCE CHARGE COLLECTIONS" means all amounts that any Supplement
designates as "Excess Finance Charge Collections."
"EXCESS FUNDING ACCOUNT" is defined in SECTION 4.2.
"EXCHANGE ACT" means the Securities Exchange Act of 1934.
"EXISTING PSA" is defined in the recitals hereto.
"FDIC" means the Federal Deposit Insurance Corporation.
"FINANCE CHARGE RECEIVABLES" means, with respect to any Monthly Period,
the sum of (a) all amounts billed to the Obligors on any Account at the
beginning of such Monthly Period in respect of Periodic Finance Charges, (b)
Late Fees, return check fees and any other fees that may after the Trust Cut Off
Date be charged with respect to any Account, to the extent that Servicer
designates such fees to be treated as Finance Charge Receivables in an Officer's
Certificate delivered to Trustee and (c) Discount Option Receivables. Except as
otherwise specified in any Supplement as to the related Series, Recoveries shall
be treated as Collections of Finance Charge Receivables .
"FINANCE CHARGE SHORTFALLS" is defined, as to any Series, in the related
Supplement.
"FITCH" means Fitch, Inc.
"GLOBAL CERTIFICATE" is defined in SECTION 6.13.
"GOVERNMENTAL AUTHORITY" means the United States of America, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GROUP" means, with respect to any Series, the group of Series, if any, in
which the related Supplement specifies such Series is to be included.
"HOLDER" means an Investor Holder or a Person in whose name the Transferor
Interest is registered.
11
"HOLDING" means Alliance Data Systems Corporation, a Delaware corporation.
"IDENTIFIED PORTFOLIO" means any Accounts owned from time to time by WFN
and included in the private label credit card programs of Lane Xxxxxx, Inc.,
Xxxxxx
New York, Inc., Express, Inc., Structure, Inc., Victoria's Secret Stores,
Inc., Victoria's Secret Catalogue, Inc., The Limited, Abercrombie & Fitch, Inc.,
Xxxxx Xxxxxx, Inc. and Brylane, L.P. (but limited, in the case of Brylane, L.P.,
to accounts related to the Lane Xxxxxx, Xxxxxx
New York and Roamans catalogues).
To avoid doubt, the foregoing programs include all cards issued under the
insignia of "Limited Fashion Group."
"INELIGIBLE RECEIVABLES" is defined in SECTION 2.5(a).
"INITIAL ACCOUNT" means each open end credit card account in the
Identified Portfolio existing on the Trust Cut Off Date and identified in the
Account Schedule delivered on the Initial Closing Date.
"INITIAL CLOSING DATE" means January 17, 1996.
"INSOLVENCY EVENT" means, (a) with respect to the Transferor, that the
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 the Transferor or relating to all or
substantially all of the 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 the Transferor any such action shall have remained undischarged or
unstayed for a period of sixty (60) days or upon entry of any order or decree
providing for such relief; or such Person shall admit in writing its inability
to pay its debts generally as they become due, file, or consent or fail to
object (or object without dismissal of any such filing within sixty (60) days of
such filing) 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 and (b) with respect to WFN, WFN shall
consent to the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to all or substantially all of its property,
or a decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against WFN; or WFN shall admit in writing its
inability to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend payment of
its obligations.
"INSOLVENCY PROCEEDS" is defined in SECTION 9.2(b).
12
"INSURANCE PROCEEDS" means any amounts recovered by Servicer pursuant to
any credit insurance policies covering any Obligor with respect to Receivables
under such Obligor's Account.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986.
"INVESTED AMOUNT" is defined, as to any Series, in the related Supplement.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940.
"INVESTOR CERTIFICATE" means any one of the certificates (including the
Bearer Certificates, the Registered Certificates or any Global Certificate)
executed by Transferor and authenticated by or on behalf of Trustee,
substantially in the form attached to the related Supplement, other than any
Certificates representing the Supplemental Interests, if any.
"INVESTOR HOLDER" means the Person in whose name a Registered Certificate
is registered in the Certificate Register or the holder of any Bearer
Certificate (or the Global Certificate, as the case may be) or Coupon.
"INVESTOR INTEREST" is defined in SECTION 4.1.
"INVESTOR PERCENTAGE" is defined, as to any Series, in the related
Supplement.
"INVESTOR SERVICING FEE" is defined, as to any Series, in the related
Supplement.
"INVOLUNTARY REMOVAL" is defined in SECTION 2.9(a).
"IN-STORE PAYMENTS" is defined in SECTION 2.1.
"LATE FEES" means the fees specified in the Credit Card Agreement
applicable to each Account for late fees with respect to such Account.
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment, participation or equity interest, deposit arrangement, encumbrance,
lien (statutory or other), preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including any
conditional sale or other title retention agreement, excluding any lien or
filing pursuant to this Agreement; PROVIDED that any assignment or transfer
pursuant to SECTION 6.3(c) or (d) or SECTION 7.2 shall not constitute a Lien.
"MAJORITY HOLDERS" means the Holders of Investor Certificates evidencing
more than 50% of the aggregate unpaid principal amount of all outstanding
Investor Certificates.
"MERCHANT" means each of (a) Bath & Body Works, Inc., Brylane, L.P.,
Cacique, Inc., Lane Xxxxxx, Inc., Xxxxxx
New York, Inc., Express, Inc.,
Structure, Inc., Victoria's Secret Stores, Inc., Victoria's Secret Catalogue,
Inc., The Limited Stores, Inc., Limited Too, Inc., Abercrombie & Fitch, Inc.,
and Xxxxx Xxxxxx, Inc. and (b) any other Person that operates retail
establishments at which, or a catalogue sales business in which, goods or
services may be purchased under an Account.
13
"MERCHANT ADJUSTMENT PAYMENTS" is defined in SECTION 3.9(a).
"MINIMUM TRANSFEROR AMOUNT" means, as of any date of determination, the
sum of (a) the product of (i) the sum of (A) the aggregate Principal Receivables
and (B) the amounts on deposit in the Excess Funding Account and (ii) the
Required Retained Transferor Percentage plus (b) any additional amounts
specified in the Supplement for any outstanding Series.
"MONTHLY PERIOD" means as to each Distribution Date, the immediately
preceding calendar month, unless otherwise defined in any Supplement.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"NEW DISCOUNT OPTION RECEIVABLES" means, as of any date of determination,
the product of the Discount Percentage and the amount of Principal Receivables
(before subtracting Finance Charge Receivables which are Discount Option
Receivables) arising on such date of determination.
"NOTICE DATE" is defined in SECTION 2.8(d)(i).
"NOTICES" is defined in SECTION 13.5(a).
"OBLIGOR" means, as to any Account, the Person or Persons obligated to
make payments on such Account, including any guarantor.
"OFFICER'S CERTIFICATE" means a certificate delivered to Trustee signed by
the Chairman of the Board, President, any Vice President or the Treasurer or any
Assistant Treasurer of Transferor or Servicer, as the case may be.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for, or an employee of, the Person providing the opinion.
"OTHER ORIGINATOR" means any Person from which the Credit Card Originator
acquires a portfolio of credit card accounts any or all of which are
subsequently designated as Additional Accounts.
"PARTICIPATION INTERESTS" is defined in SECTION 2.8(b).
"PAYING AGENT" means any paying agent and co-paying agent appointed
pursuant to SECTION 6.7.
"PERFECTION REPRESENTATIONS AND WARRANTIES" means the representations and
warranties set forth below:
1. GENERAL. This Agreement creates a valid and continuing security
interest (as defined in the applicable UCC) in the Receivables and the proceeds
thereof in favor of the Trust, which (a) in the case of existing Receivables and
the proceeds thereof, is enforceable upon execution of this Agreement against
creditors of and purchasers from Transferor, or with respect to then existing
Receivables in Additional Accounts, as of the applicable Addition Date, and
which will
14
be enforceable with respect to Receivables hereafter and thereafter created and
the proceeds thereof upon such creation, in each case as such enforceability may
be limited by applicable Debtor Relief Laws, now or hereafter in effect, and by
general principles of equity (whether considered in a suit at law or in equity)
and (b) upon filing of the financing statements described in CLAUSE 4 below and,
in the case of Receivables hereafter created, upon the creation thereof, will be
prior to all other Liens (other than Liens permitted pursuant to CLAUSE 3
below).
2. GENERAL. The Receivables constitute "accounts" within the meaning of
UCC Section 9-102.
3. CREATION. Immediately prior to the conveyance of the Receivables
pursuant to this Agreement, Transferor owns and has good and marketable title to
the Receivables free and clear of any Lien, claim or encumbrance of any Person;
PROVIDED that nothing in this CLAUSE 3 shall prevent or be deemed to prohibit
Transferor from suffering to exist upon any of the Receivables any Liens for any
taxes if such taxes shall not at the time be due and payable or if Transferor or
RPA Seller, as applicable, 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.
4. PERFECTION. Transferor has caused or will have caused, within ten days
of the Effective Date, the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under applicable law in
order to perfect the security interest granted by the Transferor to the Trust
under this Agreement in the Receivables arising in the Initial Accounts and
Automatic Additional Accounts included in the Identified Portfolio, and (if any
additional filing is so necessary) within 10 days of the applicable Addition
Date, in the case of such Receivables arising in Supplemental Accounts and
related Automatic Additional Accounts.
5. PRIORITY. Other than the security interest granted to the Trust
pursuant to this Agreement, Transferor has not pledged, assigned, sold, granted
a security interest in, or otherwise conveyed any of the Receivables. Transferor
has not authorized the filing of and is not aware of any financing statements
against Transferor that include a description of collateral covering the
Receivables other than any financing statement (i) relating to the security
interest granted to Trust hereunder or (ii) that has been terminated.
"PERIODIC FINANCE CHARGES" means any finance charges (due to periodic
rate) applicable to any Account.
"PERSON" means any legal person, including any individual, corporation,
partnership, limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization, governmental entity or other entity
of similar nature.
"PORTFOLIO YIELD" is defined, as to any Series, in the related Supplement.
"PRINCIPAL RECEIVABLE" means all Receivables other than Finance Charge
Receivables. In calculating the aggregate amount of Principal Receivables on any
day, the amount of Principal Receivables shall not include Defaulted Receivables
and shall be reduced by the aggregate amount of credit balances in the Accounts
on such day.
"PRINCIPAL SHARING SERIES" means a Series that, pursuant to the Supplement
therefor, is entitled to receive Shared Principal Collections.
15
"PRINCIPAL SHORTFALLS" is defined, as to any Series, in the related
Supplement.
"PRINCIPAL TERMS" means, with respect to any Series: (a) its name or
designation; (b) its initial principal amount (or method for calculating such
amount) and its invested amount in the Trust; (c) its interest rate (or method
for the determination thereof); (d) the payment date or dates and the date or
dates from which interest shall accrue; (e) the method for allocating
Collections to Holders of such Series; (f) the designation of any Series
Accounts and the terms governing the operation of any such Series Accounts; (g)
the percentage used to calculate the servicing fee with respect thereto; (h) the
provider, if any, and the terms of any form of Enhancement with respect thereto;
(i) the terms on which the Investor Certificates of such Series may be
repurchased by Transferor or any Affiliate of Transferor or remarketed to other
investors; (j) the Series Termination Date; (k) the number of Classes of
Investor Certificates of such Series and, if such Series consists of more than
one Class, the rights and priorities of each such Class; (l) the extent to which
the Investor Certificates of such Series will be issuable in temporary or
permanent global form (and, in such case, the depositary for such Global
Certificate or Certificates, the conditions, if any, upon which such Global
Certificates may be exchanged, in whole or in part, for Definitive Certificates,
and the manner in which any interest payable on a Global Certificate will be
paid); (m) whether the Investor Certificates of such Series may be issued as
Bearer Certificates and any limitation imposed thereon; (n) the priority of such
Series with respect to any other Series; (o) the Group, if any, to which such
Series belongs; (p) whether or not such Series is acting as a paired Series with
another existing Series; and (q) any other terms of such Series.
"RATING AGENCY" means, as to each Series, the rating agency or agencies,
if any, specified in the related Supplement.
"RATING AGENCY CONDITION" means, with respect to any action, that each
Rating Agency, if any, shall have notified Transferor, Servicer and Trustee in
writing that such action will not result in a reduction or withdrawal of the
rating, if any, of any outstanding Series or Class with respect to which it is a
Rating Agency.
"REASSIGNMENT" is defined in SECTION 2.9.
"RECEIVABLE" means any amount owing from time to time by an Obligor under
an Account, including amounts owing for purchases of goods and services, and
amounts payable as Finance Charge Receivables. A Receivable shall be deemed to
have been created at the end of the day on the Date of Processing of such
Receivable. Receivables which become Defaulted Receivables shall not be shown on
Servicer's records as amounts payable (and shall cease to be included as
Receivables) on the day on which they become Defaulted Receivables.
"RECEIVABLES PURCHASE AGREEMENT" means the Receivables Purchase Agreement,
dated as of August 1, 2001, between RPA Seller and Transferor.
"RECORD DATE" means, as to any Distribution Date, the date specified in
the related Supplement.
16
"RECOVERIES" means (a) all amounts received by Servicer with respect to
Principal Receivables that have previously become Defaulted Receivables and with
respect to Finance Charge Receivables that have been charged off as
uncollectible (including Insurance Proceeds) and (b) proceeds of any collateral
securing any Receivable, in each case less related collection expenses.
"REGISTERED CERTIFICATES" is defined in SECTION 6.1.
"REGISTERED HOLDER" means the Holder of a Registered Certificate.
"REMOVAL DATE" is defined in SECTION 2.9(a).
"REMOVAL NOTICE DATE" is defined in SECTION 2.9(a).
"REMOVED ACCOUNTS" is defined in SECTION 2.9.
"REQUIRED PRINCIPAL BALANCE" means, as of any date of determination, the
sum of the numerators used at such date to calculate the Investor Percentage
with respect to Principal Receivables for all Series outstanding on such date,
less the amount on deposit in the Excess Funding Account as of the date of
determination.
"REQUIRED RETAINED TRANSFEROR PERCENTAGE" means, as of any date of
determination, 4% or, if less, the highest of the Required Retained Transferor
Percentages specified in the Supplements for all outstanding Series.
"REQUIREMENTS OF LAW" means, as to any Person, the certificate of
incorporation or articles of association and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or to which such Person is subject,
whether Federal, state or local.
"RESPONSIBLE OFFICER" means any officer within the Corporate Trust Office,
including any vice president, assistant vice president, assistant secretary or
any other officer of Trustee customarily performing functions similar to those
performed by any of the above-designated officers and having direct
responsibility for the administration of this
Pooling and Servicing Agreement
and also, with respect to a particular matter, any other officer to whom any
corporate trust matter is referred at Trustee's Corporate Trust Office because
of such officer's knowledge of and familiarity with the particular subject.
"RESTART DATE" is defined in SECTION 2.8(a).
"RESTATEMENT DATE PORTFOLIOS" means any Accounts owned from time to time
by WFN and included in the private label credit card programs of Authority
International, Inc., The Sports Authority, Inc., The Sports Authority Florida,
Inc., The Sports Authority Michigan, Inc., GOODY'S FAMILY CLOTHING, INC., GARDEN
RIDGE, L.P., Too, Inc. (formerly known as Limited Too, Inc.), PACIFIC SUNWEAR
STORES CORP. and PACIFIC XXXXXXX.XXX CORP.
17
"RPA SELLER" means WFN, in its capacity as RPA Seller under the
Receivables Purchase Agreement.
"RULE 144A" means Rule 144A under the Securities Act, as such Rule may be
amended from time to time.
"S&P" means Standard & Poor's Ratings Service, a division of the McGraw
Hill Companies, Inc.
"SECURITIES ACT" means the Securities Act of 1933.
"SERIES" means any series of Investor Certificates established pursuant to
a Supplement.
"SERIES ACCOUNT" means any deposit, trust, escrow or similar account
maintained for the benefit of the Investor Holders of any Series or Class, as
specified in any Supplement.
"SERIES SERVICING FEE PERCENTAGE" is defined, as to any Series, in the
related Supplement.
"SERIES TERMINATION DATE" is defined, as to any Series, in the related
Supplement.
"SERVICE TRANSFER" is defined in SECTION 10.1.
"SERVICER" means WFN, in its capacity as Servicer pursuant to this
Agreement, and, after any Service Transfer, the Successor Servicer.
"SERVICER DEFAULT" is defined in SECTION 10.1.
"SERVICING FEE" means, as to any Series, the servicing fee specified in
SECTION 3.2.
"SERVICING OFFICER" means any officer of Servicer involved in, or
responsible for, the administration and servicing of the Receivables whose name
appears on a list of servicing officers furnished to Trustee by Servicer on the
Initial Closing Date, as such list may from time to time be amended in writing.
"SHARED PRINCIPAL COLLECTIONS" means all amounts that any Supplement
designates as "Shared Principal Collections."
"SPECIFIED TRANSFEROR AMOUNT" means, as of any date of determination, 0
or, if more, the highest amount identified as the "Specified Transferor Amount"
in the Supplement for any outstanding Series.
"SUBJECT CERTIFICATE" is defined in SECTION 6.4(d).
"SUCCESSOR SERVICER" is defined in SECTION 10.2(a).
"SUPPLEMENT" means, as to any Series, a supplement to this Agreement,
executed and delivered in connection with the original issuance of the Investor
Certificates of such Series pursuant to SECTION 6.3, and all amendments thereof
and supplements thereto.
18
"SUPPLEMENTAL ACCOUNT" is defined in SECTION 2.8(b).
"SUPPLEMENTAL INTEREST" is defined in SECTION 6.3(c).
"TAX OPINION" means, with respect to any action, an Opinion of Counsel to
the effect that, for Federal income tax purposes, (a) such action will not
adversely affect the tax characterization as debt of Investor Certificates of
any outstanding Series or Class with respect to which an Opinion of Counsel was
delivered at the time of their issuance that such Investor Certificates would be
characterized as debt, (b) such actions will not cause the Trust to be
classified, for federal income tax purposes, as an association (or publicly
traded partnership) taxable as a corporation and (c) such action will not cause
or constitute an event in which gain or loss would be recognized by any Investor
Holder.
"TERMINATION NOTICE" is defined in SECTION 10.1.
"THE LIMITED" means The Limited, Inc., a Delaware corporation.
"TRANSACTION DOCUMENTS" means, at any time, this Agreement, the
Receivables Purchase Agreement, the Supplement for each outstanding Series, any
document pursuant to which any outstanding purchased interest is sold as
permitted by SECTION 6.3(b) and any other document designated as a Transaction
Document in any Supplement or any document pursuant to which any outstanding
purchased interest is sold as permitted by SECTION 6.3(b).
"TRANSFER AGENT AND REGISTRAR" is defined in SECTION 6.4.
"TRANSFER DATE" means the Business Day immediately preceding each
Distribution Date.
"TRANSFEROR" means WFN Credit Company, LLC, a Delaware limited liability
company, and additional transferors, if any, designated in accordance with
SECTION 2.11 or 6.3(d).
"TRANSFEROR AMOUNT" means, on any date of determination, the result of (a)
the aggregate amount of Principal Receivables on such day, plus the principal
amount on deposit in the Excess Funding Account on such day, minus (b) the sum
of the Invested Amounts (or, as to any Series that has an Adjusted Invested
Amount, the Adjusted Invested Amount) with respect to all Series (but not of any
Supplemental Interests) then outstanding (and of any purchased interest sold
pursuant to SECTION 6.3(b)), plus (c) the principal amount on deposit in the
Principal Accounts (as defined in the various Supplements) for each Series, to
the extent not deducted in calculating an Adjusted Invested Amount for the
related Series.
"TRANSFEROR INTEREST" is defined in SECTION 4.1.
"TRANSFEROR PERCENTAGE" means as to Finance Charge Receivables, Defaulted
Receivables and Principal Receivables, 100% less the sum of the applicable
Investor Percentages for all outstanding Series.
"TRANSFEROR RETAINED CERTIFICATE" means any Certificate in any Class of
Investor Certificates that is designated as a "Transferor Retained Class" in any
Supplement.
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"TRANSFERRED ACCOUNT" is defined in the definition of "Account."
"TRUST" means the Trust created by this Agreement, which shall be known as
the
World Financial Network Credit Card Master Trust.
"TRUST ASSETS" is defined in SECTION 2.1.
"TRUST CUT OFF DATE" means January 12, 1996.
"TRUSTEE" means BNY Midwest Trust Company (successor to the corporate
trust administration of Xxxxxx Trust and Savings Bank, successor to The Bank of
New York), an Illinois banking corporation, in its capacity as trustee of the
Trust, or any successor trustee appointed as herein provided.
"UCC" means the Uniform Commercial Code, as in effect in the State of Ohio
and in any other State where the filing of a financing statement is required to
perfect Transferor's or the Trust's interest in the Receivables and the proceeds
thereof or in any other specified jurisdiction.
"UNITED STATES" means the United States of America (including the States
and the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
"VARIABLE INTEREST" means either of (a) any Investor Certificate that is
designated as a variable funding certificate in the related Supplement and (b)
any purchased interest sold as permitted by SECTION 6.3(b).
"WELSH, CARSON, XXXXXXXX & STOE PARTNERSHIPS" means each Welsh, Carson,
Xxxxxxxx & Xxxxx limited partnership, as now constituted or as the same may be
constituted in the future and any partner, partnership or affiliate of any of
them.
"WFN" is defined in the PREAMBLE.
SECTION 1.2. OTHER INTERPRETIVE PROVISIONS. With respect to any Series,
all terms used and not defined herein are used as defined in the related
Supplement. All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document delivered pursuant hereto unless
otherwise defined therein. For purposes of this Agreement and all such
certificates and other documents, unless the context otherwise requires: (a)
accounting terms not otherwise defined in this Agreement, and accounting terms
partly defined in this Agreement to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles; (b) terms defined in Article 9 of the UCC and not otherwise defined
in this Agreement are used as defined in that Article; (c) any reference to each
Rating Agency shall only apply to any specific rating agency if such rating
agency is then rating any outstanding Series; (d) references to any amount as on
deposit or outstanding on any particular date means such amount at the close of
business on such day; (e) the words "hereof," "herein" and "hereunder" and words
of similar import refer to this Agreement (or the certificate or other document
in which they are used) as a whole and not to any particular provision of this
Agreement (or such certificate or document); (f) references to any Section,
Schedule or Exhibit are references to Sections, Schedules and Exhibits in or to
this Agreement (or the certificate or
20
other document in which the reference is made), and references to any paragraph,
subsection, clause or other subdivision within any Section or definition refer
to such paragraph, subsection, clause or other subdivision of such Section or
definition; (g) the term "including" means "including without limitation"; (h)
references to any law or regulation refer to that law or regulation as amended
from time to time and include any successor law or regulation; (i) references to
any agreement refer to that agreement as amended from time to time; (j)
references to any Person include that Person's permitted successors and assigns;
and (k) headings are for purposes of reference only and shall not otherwise
affect the meaning or interpretation of any provision hereof. The agreements,
representations and warranties of WFN in this Agreement, in its respective
capacities as Transferor and Servicer, shall be deemed to be the separate
agreements, representations and warranties of WFN only so long as it remains a
party to this Agreement in such capacity (but the foregoing shall not impair
rights arising during or with respect to the time that such Person was a party
to this Agreement in such capacity).
ARTICLE II CONVEYANCE OF RECEIVABLES
SECTION 2.1. CONVEYANCE OF RECEIVABLES. (a) By execution of this
Agreement, Transferor transfers, assigns, sets over and otherwise conveys to the
Trustee, for the benefit of the Investor Holders, all of its right, title and
interest in, to and under (i) the Receivables existing at the close of business
on the Trust Cut Off Date and thereafter arising from time to time in the
Initial Accounts and the Receivables existing on each applicable Addition Date
and thereafter arising from time to time in the Accounts in the Restatement Date
Portfolios identified in the Account Schedule delivered on August 20, 2001 and
the Automatic Additional Accounts, all Recoveries allocable to the Trust as
provided herein, all moneys due or to become due and all amounts received with
respect to, and proceeds of, any of the foregoing, (ii) all of its rights,
remedies, powers and privileges under the Receivables Purchase Agreement and
(iii) without limiting the generality of the foregoing or the following, all of
Transferor's rights pursuant to the Receivables Purchase Agreement to receive
from the RPA Seller payments made by any Merchant under any Credit Card
Processing Agreement on account of amounts received by such Merchant in payment
of Receivables ("IN-STORE PAYMENTS") and all proceeds of such rights. Such
property, together with all moneys on deposit in the Collection Account, the
Excess Funding Account and the Series Accounts and any Enhancement 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, Trustee, any Investor Holders or any Enhancement Provider of any
obligation of the Credit Card Originator, Servicer, Transferor 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 parties hereto intend that
each transfer of Receivables and other property pursuant to the Agreement or any
Assignment constitute a sale, and not a secured borrowing, for accounting
purposes. If the foregoing transfer, assignment, setover and conveyance is not
deemed to be an absolute assignment of the subject property to the Trustee, for
the benefit of the Investor Holders, then it shall be deemed to constitute a
grant of a security interest in such property to the Trustee, for the benefit of
the Investor Holders, and the Transferor Interest shall be deemed to represent
Transferor's equity in the collateral granted.
(b) Transferor agrees to record and file, at its own expense, financing
statements (and continuation statements when applicable) with respect to the
Receivables now existing and
21
hereafter created in Accounts owned by the Credit Card Originator and other
Trust Assets 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 assignment of such Receivables to the Trust, and to deliver a file
stamped copy of each such financing statement or other evidence of such filing
(which may, for purposes of this SECTION 2.1 consist of telephone confirmation
of such filing promptly followed by delivery to Trustee of a file-stamped copy)
to Trustee on or prior to the Initial Closing Date, in the case of such
Receivables arising in the Initial Accounts and Automatic Additional Accounts
included in the Identified Portfolio, and (if any additional filing is so
necessary) the applicable Addition Date, in the case of such Receivables arising
in Supplemental Accounts and any related Automatic Additional Accounts. Trustee
shall be under no obligation whatsoever to file or maintain such financing or
continuation statements or to make any other filing under the UCC in connection
with such assignment.
(c) Transferor further agrees, at its own expense, (i) on or prior to (A)
the Automatic Addition Termination Date or any Automatic Addition Suspension
Date, or subsequent to a Restart Date, in the case of the Initial Accounts and
any Additional Accounts designated pursuant hereto prior to such date, (B) the
applicable Addition Date, in the case of Supplemental Accounts and (C) the
applicable Removal Date, in the case of Removed Accounts, to cause to be
indicated in the appropriate computer files that Receivables created in
connection with the Accounts owned by the Credit Card Originator (other than
Removed Accounts) have been conveyed to the Trust pursuant to this Agreement for
the benefit of the Holders (or conveyed to Transferor or its designee in
accordance with SECTION 2.9, in the case of Removed Accounts) by including in
such computer files the code identifying each such Account (or, in the case of
Removed Accounts, either including such a code identifying the Removed Accounts
only if the removal occurs prior to the Automatic Addition Termination Date or
an Automatic Addition Suspension Date, or subsequent to a Restart Date, or
deleting such code thereafter) and (ii) on or prior to the date referred to in
CLAUSES (i)(A), (B) or (C), as applicable, to deliver to Trustee an Account
Schedule (PROVIDED that such Account Schedule shall be provided in respect of
Automatic Additional Accounts on or prior to the Determination Date relating to
the Monthly Period during which their respective Addition Dates occur),
specifying for each such Account, as of the Automatic Addition Termination Date
or Automatic Addition Suspension Date, in the case of CLAUSE (i)(B), the
applicable Addition Cut Off Date, in the case of Supplemental Accounts, and the
Removal Date, in the case of Removed Accounts, its account number, the aggregate
amount outstanding in such Account and the aggregate amount of Principal
Receivables outstanding in such Account. Such Account Schedule shall be
supplemented from time to time to reflect Supplemental Accounts and Removed
Accounts. Once the code referenced in CLAUSE (i) of this paragraph has been
included with respect to any Account, Transferor further agrees not to permit
such code to be altered during the remaining term of this Agreement unless and
until (x) such Account becomes a Removed Account, (y) a Restart Date has
occurred on which the Transferor starts including Automatic Additional Accounts
as Accounts or (z) Transferor shall have delivered to Trustee 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 Trustee in the Receivables and
other Trust Assets to continue to be perfected with the priority required by
this Agreement.
(d) By executing this Agreement and the Receivables Purchase Agreement,
the parties hereto and thereto do not intend to cancel, release or in any way
impair the conveyance made by
22
WFN, in its capacity as "Transferor" under the Existing PSA. Without limiting
the foregoing, the parties hereto acknowledge and agree as follows:
(i) Any transfer, assignment or other conveyance by the RPA Seller
to the Transferor of assets under the Receivables Purchase Agreement or
under any Transaction Document shall be subject to any rights in such
assets granted by WFN, as "Transferor" under the Existing PSA, to the
Trustee pursuant to the Existing PSA.
(ii) The trust created by and maintained under the Existing PSA
shall continue to exist and be maintained under this Agreement.
(iii) All series of investor certificates issued under the Existing
PSA shall constitute Series issued and outstanding under this Agreement,
and any supplement executed in connection with such series shall
constitute a Supplement executed hereunder.
(iv) All references to the Existing PSA in any other instruments or
documents shall be deemed to constitute references to this Agreement. All
references in such instruments or documents to WFN in its capacity as the
"Transferor" of receivables and related assets under the Existing PSA
shall be deemed to include reference to the Transferor in such capacity
hereunder.
(v) The Transferor hereby assumes and agrees to perform all
obligations of WFN, in its capacity as "Transferor" (but not as
"Servicer"), under or in connection with the Existing PSA (as amended and
restated by this Agreement) and any supplements to the Existing PSA.
(vi) To the extent this Agreement requires that certain actions are
to be taken as of the Initial Closing Date or another date prior to the
Effective Date, WFN's execution of such action under the Existing PSA
shall constitute satisfaction of such requirement.
SECTION 2.2. ACCEPTANCE BY TRUSTEE. (a) Trustee accepts on behalf of the
Trust all right, title and interest to the property, now existing and hereafter
created, conveyed to the Trust pursuant to SECTION 2.1 and declares that it
shall maintain such right, title and interest, upon the trust herein set forth,
for the benefit of all Holders.
(b) Trustee shall have no power to create, assume or incur indebtedness or
other liabilities in the name of the Trust other than as contemplated in this
Agreement or any Supplement. Trustee, in the name of the Trust, shall have no
power to hold any derivative financial instrument unless such derivative
financial instrument complies with the requirements of paragraph 40 of Statement
of Financial Accounting Standards No. 140 issued by the Financial Accounting
Standards Board, including any interpretations thereof or any successor
regulations issued by the Financial Accounting Standards Board.
SECTION 2.3. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR RELATING TO
TRANSFEROR. Transferor represents and warrants to the Trust as of each Closing
Date and as of the Effective Date as follows:
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(a) ORGANIZATION AND GOOD STANDING. Transferor is a limited liability
company validly existing in good standing under the laws of the State of
Delaware, and has full power, authority and legal right to own its properties
and conduct its business as presently owned and conducted, to execute, deliver
and perform its obligations under each Transaction Document and to execute and
deliver to Trustee the Certificates.
(b) DUE QUALIFICATION. Transferor is duly qualified to do business and is
in good standing as a foreign limited liability company (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 render any Credit Card Agreement or any Receivable transferred
to the Trust by Transferor unenforceable by the Credit Card Originator,
Transferor, Servicer or Trustee and would have a material adverse effect on the
interests of the Holders hereunder or under any Supplement.
(c) DUE AUTHORIZATION. The execution, delivery and performance of this
Agreement and each other Transaction Document by Transferor, the execution and
delivery to Trustee of the Certificates by Transferor and the consummation by
Transferor of the transactions provided for in each Transaction Document have
been duly authorized by Transferor by all necessary limited liability company
action on the part of Transferor.
(d) NO CONFLICT. The execution and delivery by Transferor of each
Transaction Document and the Certificates, the performance by Transferor of the
transactions contemplated by each Transaction Document and the fulfillment by
Transferor of the terms hereof and thereof will not 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 Transferor is a party or by which it or any of its properties are bound.
(e) NO VIOLATION. The execution and delivery by Transferor of each
Transaction Document and the Certificates, the performance by Transferor of the
transactions contemplated by this Agreement and each Supplement and the
fulfillment by Transferor of the terms hereof and thereof will not conflict with
or violate any Requirements of Law applicable to Transferor.
(f) NO PROCEEDINGS. There are no proceedings or investigations pending or,
to the best knowledge of Transferor, threatened against Transferor, before any
court, regulatory body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of any Transaction Document or the
Certificates, (ii) seeking to prevent the issuance of the Certificates or the
consummation of any of the transactions contemplated by any Transaction Document
or the Certificates, (iii) seeking any determination or ruling that, in the
reasonable judgment of Transferor, would materially and adversely affect the
performance by Transferor of its obligations under any Transaction Document,
(iv) seeking any determination or ruling that would materially and adversely
affect the validity or enforceability of any Transaction Document or the
Certificates or (v) seeking to affect adversely the income tax attributes of the
Trust under the Federal or applicable state income or franchise tax systems.
(g) ALL CONSENTS REQUIRED. All approvals, authorizations, consents, orders
or other actions of any Person or of any governmental body or official required
in connection with the
24
execution and delivery by Transferor of each Transaction Document and the
Certificates, the performance by Transferor of the transactions contemplated by
each Transaction Document and the fulfillment by Transferor of the terms hereof
and thereof, have been obtained.
(h) INSOLVENCY. No Insolvency Event with respect to Transferor has
occurred. Transferor did not (i) execute the Transaction Documents, (ii) grant
to the Trustee the security interests described in SECTION 2.1, (iii) cause,
permit, or suffer the perfection or attachment of such a security interest, (iv)
otherwise effectuate or consummate any transfer to Trustee pursuant to any
Transaction Document or (v) acquire its interest in the Trust, in each case:
(A) in contemplation of insolvency;
(B) with a view to preferring one creditor over another or to
preventing the application of its assets in the manner required by
applicable law or regulations;
(C) after committing an act of insolvency; or
(D) with any intent to hinder, delay, or defraud itself or its
creditors.
(i) TRUSTEE. Trustee is not an insider or Affiliate of Transferor.
The representations and warranties of Transferor set forth in this SECTION 2.3
shall survive the transfer and assignment by Transferor of the respective
Receivables to the Trust. Upon discovery by Transferor, Servicer or Trustee of a
breach of any of the representations and warranties by Transferor set forth in
this SECTION 2.3, the party discovering such breach shall give prompt written
notice to the others and to each Enhancement Provider, if any, entitled thereto
pursuant to the relevant Supplement. Transferor agrees to cooperate with
Servicer and Trustee in attempting to cure any such breach. For purposes of the
representations and warranties set forth in this SECTION 2.3, each reference to
a Supplement shall be deemed to refer only to those Supplements in effect as of
the relevant Closing Date.
SECTION 2.4. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR RELATING TO
TRANSACTION DOCUMENTS AND THE RECEIVABLES. (a) Representations and Warranties.
Transferor represents and warrants to the Trust as of the Effective Date, each
Closing Date and, with respect to Additional Accounts, the related Addition Date
that:
(i) each Transaction Document and, in the case of Supplemental
Accounts, the related Assignment, each constitutes a legal, valid and
binding obligation of Transferor, enforceable against Transferor in
accordance with its terms, except as such enforceability may be limited by
applicable Debtor Relief Laws now or hereafter in effect and by general
principles of equity (whether considered in a suit at law or in equity);
(ii) as of the Automatic Addition Termination Date or any Automatic
Addition Suspension Date and as of each subsequent Addition Date with
respect to Supplemental Accounts, and as of the applicable Removal Date
with respect to the Removed Accounts, the Account Schedule delivered
pursuant to this Agreement, as supplemented to such date, is an accurate
and complete listing in all material respects of all the Accounts as of
such Automatic Addition Termination Date, such Automatic Addition
Suspension Date,
25
the related Addition Cut Off Date or such Removal Date, as the case may
be, and the information contained therein with respect to the identity of
such Accounts and the Receivables existing in such Accounts is true and
correct in all material respects as of such specified date;
(iii) Transferor is the legal and beneficial owner of all right,
title and interest in each Receivable and Transferor has the full right to
transfer such Receivables to the Trust, and each Receivable conveyed to
the Trust by Transferor has been conveyed to the Trust free and clear of
any Lien of any Person claiming through or under Transferor or any of its
Affiliates (other than Liens permitted under SECTION 2.7(b)) and in
compliance, in all material respects, with all Requirements of Law
applicable to 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 Transferor in connection with the
conveyance by Transferor of Receivables to the Trust have been duly
obtained, effected or given and are in full force and effect;
(v) this Agreement or, in the case of Supplemental Accounts, the
related Assignment constitutes either a valid transfer and assignment to
the Trust of all right, title and interest of Transferor in the
Receivables and other Trust Assets conveyed to the Trust by Transferor and
all monies due or to become due with respect thereto and the proceeds
thereof or a grant of a security interest in such property to the Trustee,
for the benefit of the Investor Holders, which, in the case of existing
Receivables and the proceeds thereof, 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, in each case except
as such enforceability may be limited by applicable Debtor Relief Laws,
now or hereafter in effect, and by general principles of equity (whether
considered in a suit at law or in equity). Upon the filing of the
financing statements pursuant to SECTION 2.1 and, in the case of
Receivables hereafter created and the proceeds thereof, upon the creation
thereof, the Trust shall have a first priority security interest in such
property and proceeds except for Liens permitted under SECTION 2.7(b);
(vi) except as otherwise expressly provided in this Agreement or any
Supplement, neither Transferor nor any Person claiming through or under
Transferor has any claim to or interest in the Collection Account, the
Excess Funding Account, any Series Account or any Enhancement;
(vii) on the Trust Cut Off Date, with respect to each Initial
Account, on the date of its creation or the date it otherwise becomes an
Automatic Additional Account, with respect to each Automatic Additional
Account and, on the applicable Addition Cut Off Date, with respect to each
related Supplemental Account, each such Account is an Eligible Account;
(viii) on the Trust Cut Off Date, each Receivable then existing is
an Eligible Receivable, on the date of creation of each Automatic
Additional Account or the date the
26
related account otherwise becomes an Automatic Additional Account, each
Receivable contained in such Automatic Additional Account is an Eligible
Receivable and, on the applicable Addition Cut Off Date, each Receivable
contained in any related Supplemental Account is an Eligible Receivable;
and
(ix) as of the date of the creation of any new Receivable, such
Receivable is an Eligible Receivable.
(b) PERFECTION REPRESENTATIONS AND WARRANTIES. Transferor hereby makes the
Perfection Representations and Warranties to the Trust. The rights and remedies
with respect to any breach of the Perfection Representations and Warranties made
under this SECTION 2.4(b) shall be continuing and shall survive any termination
of this Agreement. Neither the Trust nor the Trustee shall waive a breach of any
Perfection Representation and Warranty. In order to evidence the interests of
the Transferor and the Trust under this Agreement, the Transferor and Servicer
shall, from time to time take such action, and execute and deliver such
instruments (including, without limitation, such actions or filings as are
requested by the Trustee and financing statements under the UCC as enacted and
then in effect in any other jurisdiction in which the Transferor is organized,
has its principal place of business or maintains any books, records, files, or
other information concerning the Receivables) in order to maintain and perfect,
as a first priority interest, the security interest in the Receivables. The
Transferor hereby authorizes Servicer to file financing statements under the UCC
without the Transferor's signature where allowed by applicable law.
(c) NOTICE OF BREACH. The representations and warranties of Transferor set
forth in this SECTION 2.4 shall survive the transfer and assignment by
Transferor of Receivables to the Trust. Upon discovery by Transferor, Servicer
or Trustee of a breach of any of the representations and warranties by
Transferor set forth in this SECTION 2.4, the party discovering such breach
shall give prompt written notice to the others and to each Enhancement Provider,
if any, entitled thereto pursuant to the relevant Supplement. Transferor agrees
to cooperate with Servicer and Trustee in attempting to cure any such breach.
For purposes of the representations and warranties set forth in this SECTION
2.4, each reference to a Supplement shall be deemed to refer only to those
Supplements in effect as of the date of the relevant representations or
warranties.
SECTION 2.5. REASSIGNMENT OF INELIGIBLE RECEIVABLES. (a) REASSIGNMENT OF
RECEIVABLES. If (i) any representation or warranty of Transferor contained in
SECTION 2.4(a)(ii), (iii), (iv), (vii), (viii) or (ix) is not true and correct
in any material respect as of the date specified therein with respect to any
Receivable transferred to the Trust by Transferor or any Account and as a result
of such breach any Receivables in the related Account become Defaulted
Receivables or the Trust's rights in, to or under such Receivables or the
proceeds of such Receivables are impaired or such proceeds are not available for
any reason to the Trust free and clear of any Lien, unless cured within 60 days
(or such longer period, not in excess of 150 days, as may be agreed to by
Trustee) after the earlier to occur of the discovery thereof by Transferor or
receipt by Transferor or a designee of Transferor of notice thereof given by
Trustee, or (ii) it is so provided in SECTION 2.7(a) with respect to any
Receivables transferred to the Trust by Transferor, then such Receivable shall
be designated an "INELIGIBLE RECEIVABLE" and shall be assigned a principal
balance of zero for the purpose of determining the aggregate amount of Principal
Receivables on any day; PROVIDED that such Receivables will not be deemed to be
Ineligible
27
Receivables but will be deemed Eligible Receivables and such Principal
Receivables shall be included in determining the aggregate Principal Receivables
in the Trust if, on any day prior to the end of such 60-day or longer period,
(x) either (A) in the case of an event described in CLAUSE (i), the relevant
representation and warranty shall be true and correct in all material respects
as if made on such day or (B) in the case of an event described in CLAUSE (ii),
the circumstances causing such Receivable to become an Ineligible Receivable
shall no longer exist and (y) Transferor shall have delivered an Officer's
Certificate describing the nature of such breach and the manner in which the
relevant representation and warranty became true and correct.
(b) PRICE OF REASSIGNMENT. On and after the date of its designation as an
Ineligible Receivable, each Ineligible Receivable shall not be given credit in
determining the aggregate amount of Principal Receivables used to calculate the
Transferor Amount or the Investor Percentages applicable to any Series. If,
following the exclusion of such Principal Receivables from the calculation of
the Transferor Amount, the Transferor Amount would be less than the Specified
Transferor Amount, Transferor shall make a deposit into the Excess Funding
Account in immediately available funds prior to the next succeeding Business Day
in an amount equal to the amount by which the Transferor Amount would be less
than the Specified Transferor Amount (up to the amount of such Principal
Receivables). The payment of such deposit amount in immediately available funds
shall otherwise be considered payment in full of all of the Ineligible
Receivables.
The obligation of Transferor to make the deposits, if any, required to be
made to the Excess Funding Account as provided in this Section, shall constitute
the sole remedy respecting the event giving rise to such obligation available to
Holders (or Trustee on behalf of the Holders) or any Enhancement Provider.
SECTION 2.6. REASSIGNMENT OF RECEIVABLES IN TRUST PORTFOLIO. If any
representation or warranty of Transferor set forth in SECTION 2.3(a), (b) or (c)
or SECTION 2.4(a)(i), (v) or (vi) is not true and correct in any material
respect and such breach has a material adverse effect on the Investor Interest
in the Receivables transferred to the Trust by Transferor, then either Trustee
or the Majority Holders, by notice then given to Transferor and Servicer (and to
Trustee if given by the Investor Holders), may direct Transferor to accept a
reassignment of the Receivables transferred to the Trust by 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 Transferor shall
be obligated to accept such reassignment on the terms set forth below; PROVIDED
that such Receivables will not be reassigned to 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) Transferor shall have delivered an Officer's Certificate describing
the nature of such breach and the manner in which the relevant representation
and warranty became true and correct.
Transferor shall deposit in the Collection Account in immediately
available funds not later than 12:00 noon,
New York City time, on the first
Distribution Date following the Monthly Period in 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 Supplement. Notwithstanding anything to the contrary in this Agreement,
28
such amounts shall be distributed on such Distribution Date in accordance with
ARTICLE IV and each Supplement. The payment of such deposit amount in
immediately available funds shall otherwise be considered payment in full of all
of the Receivables.
Upon the deposit, if any, required to be made to the Collection Account as
provided in this Section or SECTION 2.5, Trustee, on behalf of the Trust, shall
automatically and without further action be deemed to transfer, assign, set over
and otherwise convey to Transferor or its designee, without recourse,
representation or warranty (except for the warranty that since the date of
transfer by Transferor, Trustee has not sold, transferred or encumbered any such
Receivables or interest therein), all the right, title and interest of the Trust
in and to the applicable Receivables, all moneys due or to become due and all
amounts received with respect thereto and all proceeds thereof. Trustee shall
execute such documents and instruments of transfer or assignment and take such
other actions as shall reasonably be requested by Transferor to effect the
conveyance of such Receivables pursuant to this Section. The obligation of
Transferor to accept reassignment of any Receivables, and to make the deposits,
if any, required to be made to the Collection Account as provided in this
Section, shall constitute the sole remedy respecting the event giving rise to
such obligation available to Holders (or Trustee on behalf of the Holders).
SECTION 2.7. Covenants of Transferor. Transferor covenants as follows:
(a) RECEIVABLES TO BE ACCOUNTS. Except in connection with the enforcement
or collection of an Account, Transferor will take no action to cause any
Receivable transferred by it to the Trust to be evidenced by any instrument and,
if any such Receivable is so evidenced (whether or not in connection with the
enforcement or collection of an Account), it shall be deemed to be an Ineligible
Receivable in accordance with SECTION 2.5(a) and shall be reassigned to
Transferor in accordance with SECTION 2.5(b).
(b) SECURITY INTERESTS. Except for the conveyances hereunder, Transferor
will not sell, pledge, assign or transfer or otherwise convey to any other
Person, or grant, create, incur, assume or suffer to exist any Lien on any
Receivable, whether now existing or hereafter created, or any interest therein;
Transferor will immediately notify Trustee of the existence of any Lien on any
Receivable of which Transferor has knowledge; and Transferor shall defend the
right, title and interest of the Trust in, to and under the Receivables, whether
now existing or hereafter created, against all claims of third parties claiming
through or under Transferor or RPA Seller; PROVIDED that nothing in this SECTION
2.7(b) shall prevent or be deemed to prohibit Transferor from suffering to exist
upon any of the Receivables any Liens for taxes if such taxes shall not at the
time be due and payable or if Transferor or RPA Seller, as applicable, 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. Notwithstanding the foregoing, nothing in this SECTION 2.7(b) shall be
construed to prevent or be deemed to prohibit the transfer of the Transferor
Interest and certain other rights of Transferor in accordance with this
Agreement and any related Supplement.
(c) TRANSFEROR INTEREST. Except as otherwise permitted herein, including
in SECTIONS 2.11, 6.3 and 7.2, Transferor agrees not to transfer, assign,
exchange or otherwise convey or pledge, hypothecate or otherwise grant a
security interest in the Transferor Interest (or any interest therein) or any
Supplemental Interest (or any interest
29
therein) and any such attempted transfer, assignment, exchange, conveyance,
pledge, hypothecation or grant shall be void.
(d) DELIVERY OF COLLECTIONS OR RECOVERIES. If Transferor receives
Collections or Recoveries, then Transferor agrees to pay 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 by
Transferor.
(e) NOTICE OF LIENS. Transferor shall notify Trustee and each Enhancement
Provider, if any, entitled to such notice pursuant to the relevant Supplement
promptly after becoming aware of any Lien on any Receivable other than the
conveyances hereunder or Liens permitted under SECTION 2.7(b).
(f) CONTINUOUS PERFECTION. 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 within the meaning
of Section 9-402(7) of the UCC (or any other then applicable provision of the
UCC) unless Transferor shall have delivered to Trustee 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. Transferor
shall not change its chief executive office, jurisdiction of organization or
change the location of its principal records concerning the Receivables, the
Trust Assets or the Collections unless it has delivered to Trustee 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 Trustee in the Receivables
and other Trust Assets to continue to be perfected with the priority required by
this Agreement.
(g) CREDIT CARD AGREEMENT AND GUIDELINES. Transferor shall enforce the
covenant in the Receivables Purchase Agreement requiring the Credit Card
Originator to comply with and perform its obligations under the Credit Card
Agreements relating to the Accounts and the Credit Card Guidelines except
insofar as any failure to comply or perform would not materially or adversely
affect the rights of the Trust or the Holders under any Transaction Document or
the Certificates. Transferor may permit the Credit Card Originator to change the
terms and provisions of the Credit Card Agreements or the Credit Card Guidelines
in any respect (including the reduction of the required minimum monthly payment,
the calculation of the amount, or the timing, of charge offs and Periodic
Finance Charges and other fees assessed thereon), but only if such change is
made applicable to any comparable segment of the revolving credit card accounts
owned and serviced by the Credit Card Originator which have characteristics the
same as, or substantially similar to, the Accounts that are the subject of such
change, except as otherwise restricted by an endorsement, sponsorship or other
agreement between Transferor and an unrelated third party or by the terms of the
Credit Card Agreements.
(h) RECEIVABLES PURCHASE AGREEMENT. Transferor, in its capacity as
purchaser of Receivables from RPA Seller under the Receivables Purchase
Agreement, shall enforce the covenants and agreement of RPA Seller as set forth
in the Receivables Purchase Agreement if the failure of RPA Seller to comply
with such covenants and agreements would (i) result in the occurrence of an
Early Amortization Event or (b) materially and adversely effect the amount or
30
timing of distributions to be made to the Investor Certificateholders of any
Series or Class pursuant to the Transaction Documents.
(i) OFFICIAL RECORDS. The resolutions of Transferor's Board of Directors
approving each of the Transaction Documents and all documents relating thereto
are and shall be continuously reflected in the minutes of Transferor's Board of
Directors. Each of the Transaction Documents and all documents relating thereto
are and shall, continuously from the time of their respective execution by
Transferor, be official records of Transferor.
(j) ACCOUNT ALLOCATIONS. If Transferor is unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of this
Agreement (including by reason of the application of the provisions of SECTION
9.2 or an order by any Federal governmental agency having regulatory authority
over Transferor or any court of competent jurisdiction that Transferor not
transfer any additional Principal Receivables to the Trust) then, in any such
event: (A) Transferor agrees to allocate and pay to the Trust, after the date of
such inability, all Collections with respect to Principal Receivables, all
Discount Option Receivables Collections, and all amounts which would have
constituted Collections with respect to Principal Receivables and all Discount
Option Receivables Collections but for Transferor's inability to transfer such
Receivables (up to an aggregate amount equal to the amount of Principal
Receivables and the Discount Option Receivables Amount in the Trust on such
date); (B) Transferor agrees to have such amounts applied as Collections in
accordance with ARTICLE IV; and (C) for only so long as all Collections and all
amounts which would have constituted Collections are allocated and applied in
accordance with CLAUSES (A) and (B), Principal Receivables and Discount Option
Receivables (and all amounts which would have constituted Principal Receivables
or Discount Option Receivables, as the case may be, but for Transferor's
inability to transfer Receivables to the Trust) that are charged off as
uncollectible in accordance with this Agreement shall continue to be allocated
in accordance with ARTICLE IV, and all amounts that would have constituted
Principal Receivables or Discount Option Receivables, as the case may be, but
for Transferor's inability to transfer Receivables to the Trust shall be deemed
to be Principal Receivables or Discount Option Receivables, as the case may be,
for the purpose of calculating the applicable Investor Percentage with respect
to any Series. If Transferor is unable pursuant to any Requirement of Law to
allocate Collections as described above, Transferor agrees that it shall in any
such event allocate, after the occurrence of such event, payments on each
Account with respect to the principal balance of such Account first to the
oldest principal balance of such Account and to have such payments applied as
Collections in accordance with ARTICLE IV. The parties hereto agree that Finance
Charge Receivables, whenever created, accrued in respect of Principal
Receivables that have been conveyed to the Trust, or that would have been
conveyed to the Trust but for the above described inability to transfer such
Receivables, shall continue to be a part of the Trust notwithstanding any
cessation of the transfer of additional Principal Receivables and Discount
Option Receivables to the Trust, and Collections with respect thereto shall
continue to be allocated and paid in accordance with ARTICLE IV.
(k) PERIODIC FINANCE CHARGES AND OTHER FEES. Transferor hereby agrees
that, except as otherwise required by any Requirement of Law, or as is deemed by
the Credit Card Originator to be necessary in order for it to maintain its
credit card business, based upon a good faith assessment by the Credit Card
Originator, in its sole discretion, of the nature of the competition in the
credit card business, it shall not at any time permit the Credit Card Originator
to reduce the
31
Periodic Finance Charges assessed on any Receivable or other fees on any Account
if, as a result of such reduction, Transferor's reasonable expectation of the
Portfolio Yield for any Series as of such date would be less than the then Base
Rate for that Series.
(l) NOTICES OF CERTAIN EVENTS. Transferor shall promptly notify each
Rating Agency after Transferor obtains knowledge that: (i) the Welsh, Carson,
Xxxxxxxx & Xxxxx Partnerships and The Limited and its Affiliates (in the
aggregate) fail to own a majority of the outstanding common stock of Holding
(PROVIDED that common stock owned by employees, either individually or through
employee stock ownership or other stock based benefit plans, shall not be
included in the calculation of ownership interests for this purpose); (ii) any
Merchant whose program gives rise to more than 10% of the Principal Receivables
(measured as of the end of the most recent Monthly Period) terminates its
private label credit card program with the Bank; (iii) the Trustee gives a
resignation notice pursuant to SECTION 11.7; or (iv) an Additional Limitation
Event or an Automatic Addition Limitation Event occurs.
(m) AMENDMENT OF ORGANIZATIONAL DOCUMENTS. Transferor shall not amend in
any material respect its certificate of formation or its limited liability
company agreement without providing the Rating Agencies with notice no later
than the fifth Business Day prior to such amendment (unless the right to such
notice is waived by the Rating Agency) and satisfying the Rating Agency
Condition.
(n) OTHER INDEBTEDNESS. Except as contemplated by the Receivables Purchase
Agreement, the Transferor shall not incur any additional debt, unless (i) such
debt is contemplated by the Transaction Documents or (ii) the Rating Agencies
are provided with notice no later than the fifth Business Day prior to the
incurrence of such additional debt (unless the right to such notice is waived by
the Rating Agency) and the Rating Agency Condition is satisfied with respect to
the incurrence of such debt.
(o) SEPARATE CORPORATE EXISTENCE. The Transferor shall:
(i) Maintain in full effect its existence, rights and franchises as
a limited liability company under the laws of the state of its
organization and will obtain and preserve its qualification to do business
in each jurisdiction in which such qualification is or shall be necessary
to protect the validity and enforceability of this Agreement and the
Receivables Purchase Agreement and each other instrument or agreement
necessary or appropriate to proper administration hereof and permit and
effectuate the transactions contemplated hereby.
(ii) Except as provided herein, maintain its own deposit, securities
and other account or accounts, separate from those of any Affiliate of the
Transferor, with financial institutions. The funds of the Transferor shall
not be diverted to any other Person or for other than the corporate use of
the Transferor, and, except as may be expressly permitted by this
Agreement or the Receivables Purchase Agreement, the funds of the
Transferor shall not be commingled with those of any other person or
entity.
(iii) Ensure that, to the extent that it shares the same officers or
other employees as any of its stockholders or Affiliates, the salaries of
and the expenses related to
32
providing benefits to such officers and other employees shall be fairly
allocated among such entities, and each such entity shall bear its fair
share of the salary and benefit costs associated with all such common
officers and employees.
(iv) Ensure that, to the extent that it jointly contracts with any
of its stockholders or Affiliates to do business with vendors or service
providers or to share overhead expenses, the costs incurred in so doing
shall be allocated fairly among entities, and each such entity shall bear
its fair share of such costs. To the extent that the Transferor contracts
or does business with vendors or service providers where the goods and
services provided are partially for the benefit of any other Person, the
costs incurred in so doing shall be fairly allocated to or among such
entities for whose benefit the goods and services are provided, and each
such entity shall bear its fair share of such costs. All material
transactions between the Transferor and any of its Affiliates shall be
only on an arm's-length basis and shall receive the approval of the
Transferor's Board of Directors including at least one Independent
Director (defined below).
(v) Maintain a principal executive and administrative office through
which its business is conducted and a telephone number separate from those
of its stockholders and Affiliates. To the extent that the Transferor and
any of its members or Affiliates have offices in contiguous space, there
shall be fair and appropriate allocation of overhead costs (including
rent) among them, and each such entity shall bear its fair share of such
expenses.
(vi) Conduct its affairs strictly in accordance with its certificate
of formation and observe all necessary, appropriate and customary
corporate formalities including, but not limited to, holding all regular
and special directors' meetings appropriate to authorize all limited
liability company action, keeping separate and accurate minutes of such
meetings, passing all resolutions or consents necessary to authorize
actions taken or to be taken, and maintaining accurate and separate books,
records and accounts, including, but not limited to, intercompany
transaction accounts. Regular directors' meetings shall be held at least
annually.
(vii) Ensure that decisions with respect to its business and daily
operations shall be independently made by the Transferor (although the
officer making any particular decision may also be an officer or director
of an Affiliate of the Transferor) and shall not be dictated by any
Affiliate of the Transferor.
(viii) Act solely in its own legal name and through its own
authorized officers and agents, and, except as contemplated by the
Transaction Documents, no Affiliate of the Transferor shall be appointed
to act as agent of the Transferor. The Transferor shall at all times use
its own stationery and business forms and describe itself as a separate
legal entity.
(ix) Except as contemplated by the Receivables Purchase Agreement,
ensure that none of its Affiliates shall advance funds to it, and no
Affiliate of the Transferor will otherwise guaranty its debts.
33
(x) Other than organizational expenses and as expressly provided
herein, pay all expenses, indebtedness and other obligations incurred by
it using its own funds.
(xi) Not enter into any guaranty, or otherwise become liable, with
respect to or hold its assets or creditworthiness out as being available
for the payment of any obligation of any of its Affiliates.
(xii) Ensure that any financial reports required of the Transferor
shall comply with GAAP and shall be issued separately from, but may be
consolidated with, any reports prepared for any of its Affiliates so long
as such consolidated reports contain footnotes describing the effect of
the transactions between the Transferor and such Affiliate and also state
that the assets of the Transferor are not available to pay creditors of
the Affiliate.
(xiii) Ensure that at all times it is adequately capitalized to
engage in the transactions contemplated in its certificate of formation
and limited liability company agreement.
SECTION 2.8. ADDITION OF ACCOUNTS. (a) AUTOMATIC ADDITIONAL ACCOUNTS.
Subject to the limitations specified below in this SECTION 2.8(a) and to any
further limitations specified in any Supplement, Automatic Additional Accounts
shall be included as Accounts from and after the date upon which they are
created, and all Receivables in Automatic Additional Accounts, whether such
Receivables are then existing or thereafter created, shall be transferred
automatically to the Trust upon their creation. For all purposes of this
Agreement, all receivables relating to Automatic Additional Accounts shall be
treated as Receivables upon their creation and shall be subject to the
eligibility criteria specified in the definitions of "Eligible Receivable" and
"Eligible Account." Transferor may elect at any time to terminate the inclusion
in Accounts of new accounts which would otherwise be Automatic Additional
Accounts as of any Business Day (the "AUTOMATIC ADDITION TERMINATION DATE"), or
suspend any such inclusion as of any Business Day (an "AUTOMATIC ADDITION
SUSPENSION DATE") until a date (the "RESTART DATE") to be notified in writing by
Transferor to Trustee by delivering to Trustee, Servicer and each Rating Agency
ten days prior written notice of such election at least 10 days prior to such
Automatic Addition Termination Date, Automatic Addition Suspension Date or
Restart Date, as the case may be. Promptly after each of an Automatic Addition
Termination Date, an Automatic Addition Suspension Date and a Restart Date,
Transferor and Trustee agree to execute, and Transferor agrees to record and
file at its own expense, an amendment to the financing statements referred to in
SECTION 2.1 to specify the accounts then subject to this Agreement (which
specification may incorporate a list of accounts by reference) and, except in
connection with any such filing made after a Restart Date, to release any
security interest in any accounts created after the Automatic Addition
Termination Date or Automatic Addition Suspension Date. Notwithstanding the
foregoing, during any period after an Automatic Addition Limitation Event has
occurred and before the Rating Agency Condition has been satisfied as to the
resumption of treating new accounts as Automatic Additional Accounts, no new
accounts that would otherwise be Automatic Additional Accounts shall be treated
as such on any Addition Date if the number of such Automatic Additional Accounts
would exceed an amount equal to the greater of:
34
(i) the excess (if any) of (1) 20% of the aggregate number of
Accounts determined as of the first day of the fiscal year of Transferor
in which the Addition Date occurs OVER (2) the aggregate amount of
Automatic Additional Accounts and Supplemental Accounts the Addition Date
for which has occurred since the first day of such fiscal year; and
(ii) the excess (if any) of (1) 15% of the aggregate number of
Accounts determined as of the first day of the fiscal quarter of
Transferor in which the Addition Date occurs OVER (2) the aggregate amount
of Automatic Additional Accounts and Supplemental Accounts the Addition
Date for which has occurred since the first day of such fiscal quarter.
In addition, no new account arising in a Restatement Date Portfolio will
be treated as an Automatic Additional Account if, as a result of doing so, the
aggregate amount of Principal Receivables in Accounts in the Restatement Date
Portfolios would exceed 10% of the aggregate amount of Principal Receivables in
the Trust; PROVIDED, HOWEVER, such limitation shall no longer apply after S&P
shall have confirmed in writing that additions of such Accounts in excess of the
10% limitation shall not cause a reduction or withdrawal of the rating on any
then outstanding Series or Class rated by S&P.
In addition, during any period after an Additional Limitation Event has
occurred and before the Rating Agency Condition has been satisfied as to the
resumption of treating new accounts as Automatic Additional Accounts, no new
accounts that would otherwise be Automatic Additional Accounts shall be treated
as such on any Addition Date if:
(i) the aggregate balance of Receivables in Automatic Additional
Accounts and Supplemental Accounts designated during a twelve month (or
shorter) period beginning on the Additional Limitation Event (or any
anniversary thereof) would exceed an amount equal to the excess (if any)
of 20% of the aggregate balance of Receivables determined as of the first
day after the Additional Limitation Event (or such anniversary); or
(ii) the aggregate balance of Receivables in Automatic Additional
Accounts and Supplemental Accounts designated during a three month (or
shorter) period beginning on the Additional Limitation Event (or the first
day of the third month commencing thereafter or of any ensuing third
month) would exceed 15% of the aggregate balance of Receivables determined
as of the first day after the occurrence of the Additional Limitation
Event (or the first day of such third month or ensuing third month).
(b) REQUIRED ADDITIONS OF SUPPLEMENTAL ACCOUNTS. If during any period of
thirty consecutive days, the Transferor Amount averaged over that period is less
than the Minimum Transferor Amount for that period, Transferor shall designate
additional Eligible Accounts ("SUPPLEMENTAL ACCOUNTS") to be included as
Accounts in a sufficient amount such that the average of the Transferor Amount,
computed by assuming that the amount of the Principal Receivables of such
Supplemental Accounts shall be deemed to be outstanding in the Trust during each
day of such 30-day period, is at least equal to the Minimum Transferor Amount.
In addition, if on any Business Day the aggregate amount of Principal
Receivables plus amounts on deposit in the Excess Funding Account is less than
the Required Principal Balance, Transferor
35
shall designate Supplemental Accounts from any Approved Portfolio to be included
as Accounts in a sufficient amount such that the aggregate amount of Principal
Receivables plus amounts on deposit in the Excess Funding Account will be equal
to or greater than the Required Principal Balance. Receivables from all such
Supplemental Accounts shall be transferred to the Trust on or before the fifth
Business Day following such thirty-day period or Business Day, as the case may
be. In lieu of, or in addition to, designating Supplemental Accounts as required
above, Transferor may convey to the Trust participations or trust certificates
representing undivided legal or beneficial interests in a pool of assets
primarily consisting of receivables arising under revolving credit card accounts
or other revolving credit accounts owned by Transferor or any of its Affiliates
and collections thereon ("PARTICIPATION INTERESTS"). Any addition of
Participation Interests to the Trust (whether pursuant to this PARAGRAPH (b) or
PARAGRAPH (c) below) shall be effected by an amendment hereto, dated the
applicable Addition Date, pursuant to SUBSECTION 13.1(a).
(c) PERMITTED ADDITIONS. In addition to its obligation under PARAGRAPH
(b), Transferor may, but shall not be obligated to, from time to time designate
Supplemental Accounts or Participation Interests to be included as Trust Assets,
in either case as of the applicable Addition Date, so long as after giving
effect to such addition no more than 20% of the Receivables by outstanding
balance, will be 30 or more days delinquent.
(d) CERTAIN CONDITIONS FOR ADDITIONS OF SUPPLEMENTAL ACCOUNTS AND
PARTICIPATION INTERESTS. Transferor agrees that any transfer of Receivables from
Supplemental Accounts or Participation Interests under PARAGRAPHS (b) or (c)
shall occur only upon satisfaction of the following conditions (to the extent
applicable):
(i) on or before the tenth Business Day prior to the Addition Date
(the "NOTICE DATE"), Transferor shall give Trustee, each Rating Agency and
Servicer written notice that such Supplemental Accounts or Participation
Interests will be included, which notice shall specify the approximate
aggregate amount of the Receivables or Participation Interests to be
transferred; and, in the case of any transfer pursuant to PARAGRAPH (c),
the Rating Agency Condition shall have been satisfied;
(ii) on or before the Addition Date, Transferor shall have delivered
to Trustee a written assignment (including an acceptance by Trustee on
behalf of the Trust for the benefit of the Investor Holders) in
substantially the form of EXHIBIT A (the "ASSIGNMENT") and the Credit Card
Originator shall have indicated in its computer files that the Receivables
created in connection with the Supplemental Accounts have been transferred
to the Trust and, within five Business Days thereafter, Transferor shall
have delivered to Trustee an Account Schedule listing such Supplemental
Accounts, which as of the date of such Assignment, shall be deemed
incorporated into and made a part of such Assignment and this Agreement;
(iii) Transferor shall represent and warrant that (x) each
Supplemental Account is, as of the Addition Date, an Eligible Account, and
each Receivable in such Supplemental Account is, as of the Addition Date,
an Eligible Receivable, (y) no selection procedures believed by Transferor
to be materially adverse to the interests of the Investor Holders were
utilized in selecting the Additional Accounts from the available
36
Eligible Accounts in an Approved Portfolio, and (z) as of the Addition
Date, Transferor is not insolvent;
(iv) Transferor shall represent and warrant that, as of the Addition
Date, the Assignment constitutes either (x) a valid transfer and
assignment to the Trust of all right, title and interest of Transferor in
and to the Receivables then existing and thereafter created in the
Supplemental Accounts, and all proceeds of such Receivables and Insurance
Proceeds relating thereto and such Receivables and all proceeds thereof
and Insurance Proceeds and Recoveries relating thereto will be held by the
Trust free and clear of any Lien of any Person claiming through or under
Transferor or any of its Affiliates, except for (i) Liens permitted under
SECTION 2.7(b), (ii) the interest of Transferor as Holder of the
Transferor Interest and (iii) Transferor's right to receive interest
accruing on, and investment earnings in respect of, the Excess Funding
Account, or any Series Account as provided in this Agreement and any
related Supplement or (y) a grant of a security interest in such property
to the Trustee, for the benefit of the Investor Holders, which is
enforceable with respect to then existing Receivables in the Supplemental
Accounts, the proceeds thereof and Insurance Proceeds and Recoveries
relating thereto upon the conveyance of such Receivables to the Trust, and
which will be enforceable with respect to the Receivables thereafter
created in respect of Supplemental Accounts conveyed on such Addition
Date, the proceeds thereof and Insurance Proceeds and Recoveries relating
thereto upon such creation; and (z) if the Assignment constitutes the
grant of a security interest to the Trustee in such property, upon the
filing of a financing statement as described in SECTION 2.1 with respect
to such Supplemental Accounts and in the case of the Receivables
thereafter created in such Supplemental Accounts and the proceeds thereof,
and Insurance Proceeds and Recoveries relating thereto, upon such
creation, the Trust shall have a first priority perfected security
interest in such property (subject to Section 9-306 of the UCC), except
for Liens permitted under SECTION 2.7(b);
(v) Transferor shall deliver an Officer's Certificate to Trustee
confirming the items set forth in CLAUSE (ii); and
(vi) Transferor shall deliver an Opinion of Counsel with respect to
the Receivables in the Supplemental Accounts to Trustee (with a copy to
each Rating Agency) substantially in the form of EXHIBIT E-2.
(e) ADDITIONAL APPROVED PORTFOLIOS. As of August 21, 2001, each of the
Restatement Date Portfolios is designated as an Approved Portfolio. The
Transferor may also from time to time designate additional portfolios of
accounts as "Approved Portfolios" if the Rating Agency Condition is satisfied
with respect to that designation (except as to any Series or Class that
expressly waives this requirement in the applicable Supplement). Transferor
agrees that prior to any transfer of Receivables from Automatic Additional
Accounts arising in a portfolio that is designated as an Approved Portfolio
pursuant to the immediately preceding sentence Transferor shall satisfy the
following requirements:
37
(i) on or before the tenth Business Day prior to the Addition Date,
Transferor shall give Trustee, each Rating Agency and Servicer written
notice that such Automatic Additional Accounts will be included;
(ii) on or before the Addition Date, Transferor shall have delivered
to Trustee a written Assignment (including an acceptance by Trustee on
behalf of the Trust for the benefit of the Investor Holders) substantially
in the form of EXHIBIT A (with appropriate modifications) and the Credit
Card Originator shall have indicated in its computer files that the
Receivables created in connection with the Automatic Additional Accounts
have been transferred to the Trust;
(iii) Transferor shall represent and warrant that (x) each Automatic
Additional Account is, as of the Addition Date, an Eligible Account, and
each Receivable in such Automatic Additional Account is, as of the
Addition Date, an Eligible Receivable, (y) no selection procedures
believed by Transferor to be materially adverse to the interests of the
Investor Holders were utilized in selecting the new Approved Portfolio,
and (z) as of the Addition Date, Transferor is not insolvent;
(iv) Transferor shall represent and warrant that, as of the Addition
Date, the Assignment constitutes either (x) a valid transfer and
assignment to the Trust of all right, title and interest of Transferor in
and to the Receivables then existing and thereafter created in the
Automatic Additional Accounts, and all proceeds of such Receivables and
Insurance Proceeds relating thereto and such Receivables and all proceeds
thereof and Insurance Proceeds and Recoveries relating thereto will be
held by the Trust free and clear of any Lien of any Person claiming
through or under Transferor or any of its Affiliates, except for (i) Liens
permitted under SECTION 2.7(b), (ii) the interest of the Holder of the
Transferor Interest and (iii) Transferor's right to receive interest
accruing on, and investment earnings in respect of, the Excess Funding
Account, or any Series Account as provided in this Agreement and any
related Supplement or (y) a grant of a security interest in such property
to the Trustee, for the benefit of the Investor Holders, which is
enforceable with respect to then existing Receivables in the Automatic
Additional Accounts, the proceeds thereof and Insurance Proceeds and
Recoveries relating thereto upon the conveyance of such Receivables to the
Trust, and which will be enforceable with respect to the Receivables
thereafter created in respect of Automatic Additional Accounts conveyed on
such Addition Date, the proceeds thereof and Insurance Proceeds and
Recoveries relating thereto upon such creation; and (z) if the Assignment
constitutes the grant of a security interest to the Trustee in such
property, upon the filing of a financing statement as described in SECTION
2.1 with respect to such Automatic Additional Accounts and in the case of
the Receivables thereafter created in such Automatic Additional Accounts
and the proceeds thereof, and Insurance Proceeds and Recoveries relating
thereto, upon such creation, the Trust shall have a first priority
perfected security interest in such property (subject to Section 9-306 of
the UCC), except for Liens permitted under SECTION 2.7(b);
(v) Transferor shall deliver an Officer's Certificate to Trustee
confirming the items set forth in CLAUSE (ii); and
38
(vi) Transferor shall deliver an Opinion of Counsel with respect to
the Receivables in the Automatic Additional Accounts to Trustee (with a
copy to each Rating Agency) substantially in the form of EXHIBIT E-2 (with
appropriate modifications).
SECTION 2.9. REMOVAL OF ACCOUNTS. (a) On any day of any Monthly Period
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 moneys due or to become
due and all amounts received with respect thereto and all proceeds thereof in or
with respect to the Accounts then owned by the Credit Card Originator and
designated by Transferor (the "REMOVED ACCOUNTS") or Participation Interests
(unless otherwise set forth in the applicable Supplement), upon satisfaction of
the following conditions:
(i) on or before the tenth Business Day immediately preceding the
Removal Date (the "REMOVAL NOTICE DATE") Transferor shall have given
Trustee, Servicer, each Rating Agency and any Enhancement Provider
entitled thereto pursuant to the relevant Supplement written notice of
such removal and specifying the date for removal of the Removed Accounts
and Participation Interests (the "REMOVAL DATE"); Transferor shall provide
each Rating Agency with such additional information relating to such
removal as the Rating Agency shall reasonably request;
(ii) with respect to Removed Accounts, on or prior to the date that
is 10 Business Days after the Removal Date, Transferor shall have
delivered to Trustee an Account Schedule listing the Removed Accounts and
specifying for each such Account, as of the Removal Notice Date, its
account number, the aggregate amount outstanding, and the aggregate amount
of Principal Receivables outstanding in such Account;
(iii) with respect to Removed Accounts, Transferor shall have
represented and warranted as of the Removal Date that the list of Removed
Accounts delivered pursuant to PARAGRAPH (ii), as of the Removal Date, is
true and complete in all material respects;
(iv) with respect to any removal pursuant to SECTION 2.9(b) that is
being made as a result of the applicable Merchant exercising a purchase
right as to which Transferor has no reasonable control (an "INVOLUNTARY
REMOVAL"), Transferor shall use reasonable efforts to satisfy the Rating
Agency Condition; and as to any other removal, the Rating Agency Condition
shall have been satisfied;
(v) Transferor shall have delivered to Trustee and any Enhancement
Provider entitled thereto pursuant to the relevant Supplement an Officer's
Certificate, dated as of the Removal Date, to the effect that Transferor
reasonably believes that (A) in the case of any removal other than an
Involuntary Removal, such removal will not, based on the facts known to
such officer at the time of such certification, then or thereafter cause
an Early Amortization Event to occur with respect to any Series, (B) in
the case of any Involuntary Removal, Transferor has used reasonable
efforts to avoid having such removal result in an Early Amortization
Event, (C) in either case, no selection procedure believed by Transferor
to be materially adverse to the interests of the Investor Holders has been
used in removing Removed Accounts from among any pool of Accounts or
Participation Interests of a similar type (it being understood that
Transferor will not be
39
deemed to have used such an adverse selection procedure in connection with
any Involuntary Removal) and (D) in the case of any Removal other than an
Involuntary Removal, Accounts (or administratively convenient groups of
Accounts, such as billing cycles) were chosen for removal on a random
basis or another basis that the Transferor believes is consistent with
achieving derecognition of the Receivables under generally accepted
accounting principles in the United States of America in effect from time
to time;
(vi) in the case of any removal pursuant to SECTION 2.9(a), the
aggregate Principal Receivables in the Removed Accounts shall not exceed
the lesser of (A) the excess of the Transferor Amount over the Minimum
Transferor Amount or (B) the excess of the aggregate amount of Principal
Receivables plus amounts on deposit in the Excess Funding Account over the
Required Principal Balance, all measured as of the end of the most
recently ended Monthly Period;
(vii) in the case of any removal pursuant to SECTION 2.9(b), the
removal shall not cause the Transferor Amount to be less than the Minimum
Transferor Amount or cause the sum of the aggregate Principal Receivables
plus the Excess Funding Account balance to be less than the Required
Principal Balance; and
(viii) such removal shall not cause a decrease in the sum of the
Invested Amounts for all outstanding Series.
Upon satisfaction of the above conditions, Trustee shall execute and
deliver to Transferor or its designee a written reassignment in substantially
the form of EXHIBIT B (the "REASSIGNMENT") and shall, without further action, be
deemed to transfer, assign, set over and otherwise convey to 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 or the Participation Interests, all
moneys due and to become due and all amounts received with respect thereto and
all proceeds thereof. In addition, Trustee shall execute such other documents
and instruments of transfer or assignment and take such other actions as shall
reasonably be requested by Transferor to effect the conveyance of Receivables
pursuant to this Section.
(b) Transferor may from time to time designate as Removed Accounts any
Accounts designated for purchase by a Merchant pursuant to the terms of the
related Credit Card Processing Agreement, PROVIDED THAT no Account included in
the Identified Portfolio may be designated a Removed Account until the Series
1996-A and Series 1996-B Certificates have been paid in full pursuant to this
SECTION 2.9(b). Any Trust's repurchase of the Receivables in Removed Accounts
designated pursuant to this SECTION 2.9(b) shall be effected in the manner and
at a price determined in accordance with SECTION 2.5(b), as if the Receivables
being repurchased were Ineligible Receivables. Amounts deposited in the
Collection Account in connection therewith shall be deemed to be Collections of
Principal Receivables and shall be applied in accordance with the terms of
ARTICLE IV and each Supplement.
SECTION 2.10. DISCOUNT OPTION. (a) Transferor shall have the option to
designate at any time a fixed or floating percentage (the "DISCOUNT PERCENTAGE")
of the amount of
40
Receivables arising in the Accounts on or after the date such designation
becomes effective that would otherwise constitute Principal Receivables (prior
to subtracting from Principal Receivables, Finance Charge Receivables that are
Discount Option Receivables) to be treated as Finance Charge Receivables.
Transferor may from time to time increase (subject to the limitations described
below), reduce or eliminate the Discount Percentage for Discount Option
Receivables arising in the Accounts on and after the date of such change.
Transferor must provide 30 days' prior written notice to Servicer, Trustee and
each Rating Agency of any such increase, reduction or elimination, and such
increase, reduction or elimination shall become effective on the date specified
therein only if (i) Transferor has delivered to Trustee an Officer's Certificate
to the effect that, based on the facts known to such officer at the time,
Transferor reasonably believes that such increase, reduction or elimination will
not at the time of its occurrence cause an Early Amortization Event, or an event
which with notice or the lapse of time would constitute an Early Amortization
Event, to occur with respect to any Series and (ii) in the case of any increase,
the Discount Percentage shall not exceed 3% after giving effect to that
increase, unless the Rating Agency Condition has been satisfied with respect to
the increase.
(b) On each Date of Processing after the date on which the Transferor's
exercise of its discount option takes effect, the Transferor shall treat
Discount Option Receivables Collections as Collections of Finance Charge
Receivables.
SECTION 2.11. ADDITIONAL TRANSFERORS. Transferor may designate additional
or substitute Persons to be included as Transferors under this Agreement by an
amendment to this Agreement (which amendment shall be subject to SECTION 13.1
and to any applicable restrictions in the Supplement for any outstanding Series)
and, in connection with such designation, the initial Transferor shall transfer
a portion of the Transferor Interest to such additional Transferor reflecting
such additional Transferor's interest in the Transferor Interest; PROVIDED THAT
prior to any such designation and issuance the conditions set forth in SECTION
6.3(d) shall have been satisfied.
SECTION 2.12. ADDITIONAL CREDIT CARD ORIGINATORS. Transferor may designate
additional Persons as Credit Card Originators under this Agreement by an
amendment to this Agreement (which amendment shall be subject to SECTION 13.1
and to any applicable restrictions in the Supplement for any outstanding
Series).
ARTICLE III ADMINISTRATION AND SERVICING
SECTION 3.1. ACCEPTANCE OF APPOINTMENT AND OTHER MATTERS RELATING TO
SERVICER. (a) WFN is appointed, and agrees to act, as Servicer.
(b) Servicer shall service and administer the Receivables, shall collect
payments due under the Receivables and shall charge off as uncollectible
Receivables, all in accordance with its customary and usual servicing procedures
for servicing credit card and other consumer open end credit receivables
comparable to the Receivables and in accordance with the Credit Card Guidelines.
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 necessary or desirable.
Without limiting the generality of the foregoing, subject to SECTION 10.1 and
provided WFN is Servicer, Servicer or its designee
41
(rather than Trustee) is hereby authorized and empowered (i) to make withdrawals
and payments or to instruct Trustee to make withdrawals and payments from the
Collection Account and any Series Account, as set forth in this Agreement or any
Supplement, and (ii) to take any action required or permitted under any
Enhancement, as set forth in this Agreement or any Supplement. Without limiting
the generality of the foregoing and subject to SECTION 10.1, Servicer or its
designee is authorized and empowered 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
laws or reporting requirements. Trustee shall furnish Servicer with any powers
of attorney or other documents necessary or appropriate to enable Servicer to
carry out its servicing and administrative duties hereunder.
(c) Servicer shall not be obligated to use separate servicing procedures,
offices, employees or accounts for servicing the Receivables from the
procedures, offices, employees and accounts used by Servicer in connection with
servicing other credit card receivables.
(d) 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 Investor Holders.
(e) Servicer shall be liable for the payment, without reimbursement, of
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 Trustee, any Paying Agent and any Transfer Agent and Registrar
(including the reasonable fees and expenses of its counsel) in accordance with
SECTION 11.5, fees and disbursements of independent accountants and all other
fees and expenses, including the costs of filing UCC continuation statements and
the costs and expenses relating to obtaining and maintaining the listing of any
Investor Certificates on any stock exchange, that are not expressly stated in
this Agreement to be payable by the Trust, the Investor Holders of a Series or
Transferor (other than Federal, state, local and foreign income, franchise and
other taxes, if any, or any interest or penalties with respect thereto, assessed
on the Trust).
(f) Servicer shall maintain fidelity bond or other appropriate insurance
coverage insuring against losses through wrongdoing of its officers and
employees who are involved in the servicing of credit card receivables covering
such actions and in such amounts as Servicer believes to be reasonable from time
to time.
SECTION 3.2. SERVICING COMPENSATION. As full compensation for its
servicing activities hereunder and as reimbursement for any expense incurred by
it in connection therewith, Servicer shall be entitled to receive a servicing
fee (the "SERVICING FEE") with respect to each Monthly Period, payable monthly
on the related Distribution Date, in an amount equal to one-twelfth of the
product of (a) the weighted average of the Series Servicing Fee Percentages with
respect to each outstanding Series (based upon the Series Servicing Fee
Percentage for each Series and the Invested Amount (or such other amount as
specified in the related 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. The share of the Servicing Fee
allocable
42
to the Investor Interest of each Series with respect to any Monthly Period (the
"INVESTOR SERVICING FEE") will be determined in accordance with the relevant
Supplement. The portion of the Servicing Fee with respect to any Monthly Period
not so allocated to the Investor Interest of a particular Series, or otherwise
allocated in any Supplement, shall be paid from Finance Charge Collections
allocable to Transferor on the related Distribution Date. In no event shall the
Trust, Trustee, the Investor Holders of any Series or any Enhancement Provider
be liable for the share of the Servicing Fee with respect to any Monthly Period
to be paid by Transferor.
SECTION 3.3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SERVICER. WFN,
in its capacity as initial Servicer, hereby makes, and any Successor Servicer by
its appointment hereunder shall make, on each Closing Date (and on the date of
any such appointment), the following representations, warranties and covenants
to the Trust:
(a) ORGANIZATION AND GOOD STANDING. Servicer is a national banking
association (or with respect to such Successor Servicer, such other corporate
entity as may be applicable) duly organized, validly existing and in good
standing under the laws of the United States, and has full corporate power,
authority and legal right to execute, deliver and perform its obligations under
this Agreement and each Supplement and, in all material respects, to own its
properties and conduct its business as such properties are presently owned and
as such business is presently conducted.
(b) DUE QUALIFICATION. Servicer is duly qualified to do business and is in
good standing as a 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 have
a material adverse effect on the interests of the Investor Holders hereunder or
under any Supplement.
(c) DUE AUTHORIZATION. The execution, delivery, and performance of this
Agreement and each Supplement have been duly authorized by Servicer by all
necessary corporate action on the part of Servicer.
(d) BINDING OBLIGATION. This Agreement and each Supplement constitutes a
legal, valid and binding obligation of Servicer, enforceable in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereinafter
in effect, affecting the enforcement of creditors' rights in general (or with
respect to such Successor Servicer, such other corporate entity as may be
applicable) and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity).
(e) NO VIOLATION. The execution and delivery of this Agreement and each
Supplement by Servicer, the performance of the transactions contemplated by this
Agreement and each Supplement and the fulfillment of the terms hereof and
thereof applicable to Servicer, will not conflict with, violate, result in any
breach of any of the material terms and provisions of, or constitute (with or
without notice or lapse of time or both) a material default under, any
Requirement of Law applicable to Servicer or any indenture, contract, agreement,
mortgage, deed of trust or other instrument to which Servicer is a party or by
which it or any of its properties are bound.
43
(f) NO PROCEEDINGS. There are no proceedings or investigations pending or,
to the best knowledge of Servicer, threatened against Servicer before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality seeking to prevent the issuance of the Certificates or the
consummation of any of the transactions contemplated by this Agreement or any
Supplement, seeking any determination or ruling that, in the reasonable judgment
of Servicer, would materially and adversely affect the performance by Servicer
of its obligations under this Agreement or any Supplement, or seeking any
determination or ruling that would materially and adversely affect the validity
or enforceability of this Agreement or any Supplement.
(g) COMPLIANCE WITH REQUIREMENTS OF LAW. Servicer shall duly satisfy all
obligations on its part to be fulfilled under or in connection with the
Receivables and the related Accounts, will maintain in effect all qualifications
required under Requirements of Law in order to properly service the Receivables
and the related Accounts and will comply in all material respects with all other
Requirements of Law in connection with servicing the Receivables and the related
Accounts, the failure to comply with which would have a material adverse effect
on the interests of the Investor Holders.
(h) NO RESCISSION OR CANCELLATION. Servicer shall not permit any
rescission or cancellation of a Receivable except as ordered by a court of
competent jurisdiction or other Governmental Authority or in the ordinary course
of its business and in accordance with the Credit Card Guidelines. Servicer
shall reflect any such rescission or cancellation in its computer file of
revolving credit card accounts. In addition, Servicer may waive the accrual
and/or payment of certain Finance Charge Receivables in respect of certain past
due Accounts, the Obligors of which have enrolled with a consumer credit
counseling service, and the Receivables in such Accounts shall not fail to be
Eligible Receivables solely as a result of such waiver.
(i) PROTECTION OF HOLDERS' RIGHTS. Servicer shall take no action which,
nor omit to take any action the omission of which, would materially impair the
rights of Holders in any Receivable or Account, nor shall it, except in the
ordinary course of its business and in accordance with the Credit Card
Guidelines, reschedule, revise or defer Collections due on the Receivables.
(j) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES. Except in
connection with its enforcement or collection of an Account, Servicer will take
no action to cause any Receivable to be evidenced by any instrument, other than
an instrument that, taken together with one or more other writings, constitutes
chattel paper 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 Servicer as provided in this Section.
(k) ALL CONSENTS REQUIRED. All approvals, authorizations, consents, orders
or other actions of any Person or of any governmental body or official required
in connection with the execution and delivery by Servicer of this Agreement and
each Supplement, the performance by Servicer of the transactions contemplated by
this Agreement and each Supplement and the fulfillment by Servicer of the terms
hereof and thereof, have been obtained; PROVIDED that Servicer makes no
representation or warranty as to state securities or "blue sky" laws.
44
(l) MAINTENANCE OF RECORDS AND BOOKS OF ACCOUNT. Servicer shall maintain
and implement administrative and operating procedures (including the ability to
recreate records evidencing the Receivables in the event of the destruction of
the originals thereof), and keep and maintain all documents, books, computer
records and other information, reasonably necessary or advisable for the
collection of all the Receivables. Such documents, books and computer records
shall reflect all facts giving rise to the Receivables, all payments and credits
with respect thereto, and, to the extent required pursuant to SECTION 2.1, such
documents, books and computer records shall indicate the interests of the Trust
in the Receivables.
For purposes of the representations and warranties set forth in this
SECTION 3.3, each reference to a Supplement shall be deemed to refer only to
those Supplements in effect as of the relevant Closing Date or the date of
appointment of a Successor Servicer, as applicable.
If any of the representations, warranties or covenants of Servicer
contained in PARAGRAPH (g), (h), (i) or (j) with respect to any Receivable or
the related Account is breached, and as a result of such breach the Trust's
rights in, to or under any Receivables in the related Account or the proceeds of
such Receivables are materially impaired or such proceeds are not available for
any reason to the Trust free and clear of any Lien, then no later than the
expiration of 60 days (or such longer period, not in excess of 150 days, as may
be agreed to by Trustee) from the earlier to occur of the discovery of such
event by Servicer, or receipt by Servicer of notice of such event given by
Trustee, all Receivables in the Account or Accounts to which such event relates
shall be reassigned or assigned to Servicer as set forth below; PROVIDED that
such Receivables will not be reassigned or assigned to Servicer 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, or the relevant covenant
shall have been complied with, in all material respects and (ii) Servicer shall
have delivered an Officer's Certificate describing the nature of such breach and
the manner in which such breach was cured.
Servicer shall effect such assignment by making a deposit into the
Collection Account in immediately available funds prior to the next succeeding
Business Day in an amount equal to the amount of such Receivables, which deposit
shall be considered a Collection with respect to such Receivables and shall be
applied in accordance with ARTICLE IV and each Supplement.
Upon each such assignment to Servicer, Trustee, on behalf of the Trust,
shall automatically and without further action be deemed to transfer, assign,
set over and otherwise convey to Servicer, without recourse, representation or
warranty (except for the warranty that since the date of transfer by Transferor,
Trustee has not sold, transferred or encumbered any such Receivables or interest
therein), all right, title and interest of the Trust in and to such Receivables,
all moneys due or to become due and all amounts received with respect thereto
and all proceeds thereof. Trustee shall execute such documents and instruments
of transfer or assignment and take such other actions as shall be reasonably
requested by Servicer to effect the conveyance of any such Receivables pursuant
to this Section. The obligation of Servicer to accept assignment of such
Receivables, and to make the deposits, if any, required to be made to the Excess
Funding Account or the Collection Account as provided in the preceding
paragraph, shall constitute the sole remedy respecting the event giving rise to
such obligation available to Holders (or Trustee on behalf of Holders) or any
Enhancement Provider.
45
SECTION 3.4. REPORTS TO TRUSTEE.
(a) DAILY REPORTS. On the second Business Day immediately following each
Date of Processing, Servicer shall prepare and make available at the office of
Servicer for inspection by Trustee a report (the "DAILY REPORT") that shall set
forth (i) the aggregate amounts of Collections, Collections with respect to
Principal Receivables and Collections with respect to Finance Charge Receivables
processed by Servicer on such Date of Processing, (ii) the aggregate amount of
Defaulted Receivables for such Date of Processing, and (iii) the aggregate
amount of Principal Receivables in the Trust as of such Date of Processing.
(b) MONTHLY SERVICER'S CERTIFICATE. Unless otherwise stated in any
Supplement as to the related Series, on each Determination Date, Servicer shall
forward to Trustee, the Paying Agent, each Rating Agency and each Enhancement
Provider, if any, a certificate of a Servicing Officer setting forth (i) the
aggregate amounts for the preceding Monthly Period with respect to each of the
items specified in CLAUSE (i) of SECTION 3.4(a), (ii) the aggregate Defaulted
Receivables and Recoveries for the preceding Monthly Period, (iii) a calculation
of the Portfolio Yield and Base Rate for each Series then outstanding, (iv) the
aggregate amount of Receivables and the balance on deposit in the Collection
Account (or any subaccount thereof) or any Series Account applicable to any
Series then outstanding with respect to Collections processed as of the end of
the last day of the preceding Monthly Period, (v) the aggregate amount of
adjustments from the preceding Monthly Period, (vi) the aggregate amount, if
any, of withdrawals, drawings or payments under any Enhancement with respect to
each Series required to be made with respect to the previous Monthly Period,
(vii) the sum of all amounts payable to the Investor Holders on the succeeding
Distribution Date in respect of interest and principal payable with respect to
the Investor Certificates and (viii) such other amounts, calculations, and/or
information as may be required by any relevant Supplement.
(c) TRANSFERRED ACCOUNTS. Servicer covenants and agrees hereby to deliver
to Trustee, on or prior to the Automatic Addition Termination Date or any
Automatic Addition Suspension Date (but in the latter case, prior to a Restart
Date) within a reasonable time period after any Transferred Account is created,
but in any event not later than 15 days after the end of the month within which
the Transferred Account is created, a notice specifying the new account number
for any Transferred Account and the replaced account number.
SECTION 3.5. ANNUAL CERTIFICATE OF SERVICER. Servicer shall deliver to
Trustee, each Rating Agency and each Enhancement Provider, if any, entitled
thereto pursuant to the relevant Supplement, on or before the 90th day following
the end of the Servicer's fiscal year 1996 and each subsequent fiscal year, an
Officer's Certificate (with appropriate insertions) substantially in the form of
EXHIBIT C.
SECTION 3.6. ANNUAL SERVICING REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS;
COPIES OF REPORTS AVAILABLE. (a) On or before the 90th day following the end of
the Servicer's fiscal year 1996 and each subsequent fiscal year, Servicer shall
cause a firm of nationally recognized independent public accountants (who may
also render other services to Servicer, the Credit Card Originator or
Transferor) to furnish a report (addressed to Trustee) to Trustee, Servicer and
each Rating Agency to the effect that they have applied certain procedures with
Servicer and such firm has examined certain documents and records relating to
the servicing of Accounts under this
46
Agreement and each Supplement, compared the information contained in Servicer's
certificates delivered pursuant to this Agreement during the period covered by
such report with such documents and records and that, on the basis of such
agreed upon procedures (and assuming the accuracy of any reports generated by
Servicer's third party agents), such servicing was conducted in compliance with
this Agreement during the period covered by such report (which shall be the
prior calendar year, or the portion thereof falling after the Initial Closing
Date), except for such exceptions, errors or irregularities as such firm shall
believe to be immaterial and such other exceptions, errors or irregularities as
shall be set forth in such report. Such report shall set forth the agreed upon
procedures performed. A copy of such report shall be delivered to each
Enhancement Provider, if any, entitled thereto pursuant to the relevant
Supplement.
(b) On or before the 90th day following the end of the Servicer's fiscal
year 1996 and each subsequent fiscal year, Servicer shall cause a firm of
nationally recognized independent public accountants (who may also render other
services to Servicer, the Credit Card Originator or Transferor) to furnish a
report to Trustee, Servicer and each Rating Agency to the effect that they have
applied certain procedures agreed upon with Servicer to compare the mathematical
calculations of certain amounts set forth in Servicer's Certificates delivered
pursuant to SECTION 3.4(c) during the period covered by such report with
Servicer's computer reports which were the source of such amounts and that on
the basis of such agreed upon procedures and comparison, 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. A copy of such report
shall be delivered to each Enhancement Provider, if any, entitled thereto
pursuant to the relevant Supplement.
(c) A copy of each certificate and report provided pursuant to SECTION
3.4(c), 3.5 or 3.6 may be obtained by any Investor Holder or Certificate Owner
by a request to Trustee addressed to the Corporate Trust Office.
(d) In the event such firm rendering a report under this Section 3.6
requires the Trustee to agree to the procedures performed by such firm, the
Servicer shall direct the Trustee in writing to so agree; it being understood
and agreed that the Trustee will deliver such letter of agreement in conclusive
reliance upon the direction of the Servicer, and the Trustee makes no
independent inquiry or investigation as to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures.
SECTION 3.7. TAX TREATMENT. Transferor has entered into this Agreement,
and the Certificates will be issued, with the intention that for Federal, state
and local income and franchise tax purposes, the Investor Certificates (except
Transferor Retained Certificates which are held by Transferor) of each Series
will qualify as debt secured by the Receivables. Transferor, by entering into
this Agreement, each Holder, by the acceptance of its Certificate (and each
Certificate Owner, by its acceptance of an interest in the applicable
Certificate), agree to treat such Investor Certificates for Federal, state and
local income and franchise tax purposes as debt. Each Holder of such Investor
Certificate agrees that it will cause any Certificate owner acquiring an
interest in a Certificate through it to comply with this Agreement as to
treatment as debt under applicable tax law, as described in this SECTION 3.7.
Furthermore, subject to SECTION 11.11, or unless Transferor shall determine that
the filing of returns is appropriate, Trustee shall
47
treat the Trust solely as a security device and not as an entity separate from
the Transferor and shall not file tax returns or obtain an employer
identification number on behalf of the Trust.
SECTION 3.8. NOTICES TO TRANSFEROR. If WFN is no longer acting as
Servicer, any Successor Servicer shall deliver to Transferor each certificate
and report required to be provided thereafter pursuant to SECTION 3.4(c), 3.5 or
3.6.
SECTION 3.9. ADJUSTMENTS. (a) If Servicer adjusts downward the amount of
any Receivable because of a rebate, refund, unauthorized charge or billing error
to an accountholder, or because such Receivable was created in respect of
merchandise which was refused or returned by an accountholder, or if Servicer
otherwise adjusts downward the amount of any Receivable without receiving
Collections therefor or charging off such amount as uncollectible ("MERCHANT
ADJUSTMENT PAYMENTS"), then, in any such case, the amount of Principal
Receivables used to calculate the Transferor Interest or the Investor
Percentages applicable to any Series will be reduced by the amount of the
adjustment. Similarly, the amount of Principal Receivables used to calculate the
Transferor Amount and the Investor Percentages applicable to any Series will be
reduced by the amount of any Principal Receivable which was discovered as having
been created through a fraudulent or counterfeit charge or with respect to which
the covenant of Transferor contained in SECTION 2.7(b) has been breached. Any
adjustment required pursuant to either of the two preceding sentences shall be
made on the first Business Day after the Date of Processing for the event giving
rise to such adjustment. If, following the exclusion of such Principal
Receivables from the calculation of the Transferor Amount, the Transferor Amount
would be less than the Specified Transferor Amount, not later than the close of
business on such first Business Day, Transferor shall make a deposit into the
Excess Funding Account in immediately available funds in an amount equal to the
amount by which the Transferor Amount would be less than the Specified
Transferor Amount (up to the amount of such Principal Receivables). Any amount
deposited into the Excess Funding Account pursuant to the preceding sentence
shall be considered Collections of Principal Receivables and shall be applied in
accordance with ARTICLE IV and each Supplement.
(b) If (i) Servicer makes a deposit into the Collection Account in respect
of a Collection of a Receivable and such Collection was received by Servicer in
the form of a check which is not honored for any reason or (ii) Servicer makes a
mistake with respect to the amount of any Collection and deposits an amount that
is less than or more than the actual amount of such Collection, Servicer shall
appropriately adjust the amount subsequently deposited into the Collection
Account to reflect such dishonored check or mistake. Any Receivable in respect
of which a dishonored check is received shall be deemed not to have been paid.
Notwithstanding the first two sentences of this paragraph, any adjustments made
pursuant to this paragraph will be reflected in a current report but will not
change any amount of Collections previously reported pursuant to SECTION 3.4(c).
ARTICLE IV RIGHTS OF HOLDERS; ALLOCATIONS
SECTION 4.1. RIGHTS OF HOLDERS. The Investor Certificates shall represent
fractional undivided interests in the Trust, which, with respect to each Series,
shall consist of the right to receive, to the extent necessary to make the
required payments with respect to the Investor Certificates of such Series at
the times and in the amounts specified in the related Supplement,
48
the portion of Collections allocable to Investor Holders of such Series pursuant
to this Agreement and such Supplement, funds on deposit in the Collection
Account allocable to Holders of such Series pursuant to this Agreement and such
Supplement, funds on deposit in any related Series Account and funds available
pursuant to any related Enhancement (the "INVESTOR INTEREST"), it being
understood that, unless otherwise specified in the Supplements with respect to
each affected Series, the Investor Certificates of any Series or Class shall not
represent any interest in any Series Account or Enhancement for the benefit of
any other Series or Class. The Transferor shall own the remaining interest in
the Trust Assets not allocated pursuant to this Agreement or any Supplement to
the Investor Interest (the "TRANSFEROR INTEREST"), including the right to
receive Collections with respect to the Receivables and other amounts at the
times and in the amounts specified in this Agreement or any Supplement to be
paid on account of the Transferor Interest; PROVIDED that (x) the Transferor
Interest shall not represent any interest in the Collection Account, any Series
Account or any Enhancement, except as specifically provided in this Agreement or
any Supplement and (y) if this Agreement or, in the case of Supplemental
Accounts, the related Assignment is deemed to constitute a grant to the Trustee,
for the benefit of the Investor Holders, of a security interest in the
Receivables and other Trust Assets, then the Transferor Interest shall be deemed
to represent Transferor's equity in the collateral granted.
SECTION 4.2. ESTABLISHMENT OF COLLECTION ACCOUNT AND EXCESS FUNDING
ACCOUNT. Servicer, for the benefit of the Holders, shall establish and maintain
in the name of Trustee, on behalf of the Trust, two Eligible Deposit Accounts
(the "COLLECTION ACCOUNT" and the "EXCESS FUNDING ACCOUNT"), each bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Holders. The Collection Account and the Excess Funding Account
shall initially be established with Trustee. Trustee shall possess all right,
title and interest in all funds on deposit from time to time in the Collection
Account and the Excess Funding Account and in all proceeds thereof for the
benefit of the Holders. The Collection Account and the Excess Funding Account
shall be under the sole dominion and control of Trustee for the benefit of the
Holders. Except as expressly provided in this Agreement, Trustee agrees that it
shall have no right of set-off or banker's lien against, and no right to
otherwise deduct from, any funds held in the Collection Account or the Excess
Funding Account for any amount owed to it by the Trust, any Holder or any
Enhancement Provider. If at any time the Collection Account or the Excess
Funding Account ceases to be an Eligible Deposit Account, Trustee (or Servicer
on its behalf) shall within 10 Business Days (or such longer period, not to
exceed 30 calendar days, as to which the Rating Agency Condition is satisfied)
establish a new Eligible Deposit Account meeting the conditions specified above
and transfer any cash or any investments from the affected account to such new
account, and from the date such new account is established, it shall be the
"Collection Account" or the "Excess Funding Account," as the case may be.
Funds on deposit in the Collection Account and the Excess Funding Account
shall, at the direction of Servicer, be invested by Trustee in Eligible
Investments selected by Servicer, except that funds on deposit in either such
account on any Transfer Date need not be invested through the immediately
following Distribution Date. All such Eligible Investments shall be held by
Trustee for the benefit of the Holders. Trustee shall maintain for the benefit
of the Holders possession of the negotiable instruments or securities, if any,
evidencing such Eligible Investments. Investments of funds representing
Collections collected during any Monthly Period shall be invested in Eligible
Investments that will mature so that all funds will be available at the
49
close of business on the Transfer Date following such Monthly Period. No
Eligible Investment shall be disposed of prior to its maturity unless Servicer
so directs and either (i) such disposal will not result in a loss of all or part
of the principal portion of such Eligible Investment or (ii) prior to the
maturity of such Eligible Investment, a default occurs in the payment of
principal, interest or any other amount with respect to such Eligible
Investment. On each Distribution Date, all interest and other investment
earnings (net of losses and investment expenses) on funds on deposit in the
Collection Account and the Excess Funding Account shall be treated as
Collections of Finance Charge Receivables with respect to the last day of the
related Monthly Period, except as otherwise specified in any Supplement. For
purposes of determining the availability of funds or the balances in the
Collection Account or the Excess Funding Account for any reason under this
Agreement, all investment earnings net of investment expenses and losses on such
funds shall be deemed not to be available or on deposit. In no event shall the
Trustee be liable for the selection of investments or for investment losses
incurred thereon. The Trustee shall have no liability in respect of losses
incurred as a result of the liquidation of any such investment prior to its
stated maturity or the failure of the party directing such investment to provide
timely written investment direction. The Trustee shall have no obligation to
invest or reinvest any amounts held hereunder in the absence of such written
investment direction.
Unless otherwise directed by Servicer, funds on deposit in the Excess
Funding Account will be withdrawn and paid to Transferor on any day to the
extent that the Transferor Amount exceeds the Specified Transferor Amount on
such day. On any Transfer Date on which one or more Series is in an Amortization
Period, Servicer shall determine the aggregate amounts of Principal Shortfalls,
if any, with respect to each such Series that is a Principal Sharing Series
(after giving effect to the allocation and payment provisions in the Supplement
with respect to each such Series), and Servicer shall instruct Trustee to
withdraw such amount from the Excess Funding Account (up to an amount equal to
the lesser of (x) the amount on deposit in the Excess Funding Account after
application of the preceding sentence on that day and (y) the amount, if any, by
which the Transferor Amount would be less than zero if there were no funds on
deposit in the Excess Funding Account on that day) on such Transfer Date and
allocate such amount among each such Series as specified in each related
Supplement.
SECTION 4.3. COLLECTIONS AND ALLOCATIONS. (a) Servicer shall apply, or
instruct Trustee to apply, all funds on deposit in the Collection Account as
described in this ARTICLE IV and in each Supplement. Except as otherwise
provided below and in each Supplement, Servicer shall deposit Collections into
the Collection Account no later than the second Business Day following the Date
of Processing of such Collections. Except as otherwise required by any
Supplement, Transferor may permit or require payments owed by any Merchant with
respect to In-Store Payments to be netted against amounts owed by the Credit
Card Originator to that Merchant, and Transferor shall require the Credit Card
Originator to deposit into the Collection Account on each Business Day an amount
equal to the aggregate amount of In-Store Payments netted against amounts owed
by the Credit Card Originator to the various Merchants on that Business Day.
Subject to the express terms of any Supplement, but notwithstanding
anything else in this Agreement to the contrary, if WFN remains Servicer and (x)
for so long as WFN maintains a short term debt rating of A-1 or better by S&P,
P-1 or better by Xxxxx'x, if rated by Fitch, F1 or better by Fitch, and, if
rated by any other Rating Agency, the equivalent rating by that Rating Agency
(or such other rating below A-1, P-1 or such equivalent rating, as the case may
be, which
50
is satisfactory to each Rating Agency, if any), (y) with respect to Collections
allocable to any Series, any other conditions specified in the related
Supplement are satisfied or (z) WFN has provided to Trustee a letter of credit,
surety bond or other similar arrangement covering collection risk of Servicer
and in each case acceptable to each Rating Agency (as evidenced by a letter from
each Rating Agency to the effect that the Rating Agency Condition has been
satisfied), if any, Servicer need not make the daily deposits of Collections
into the Collection Account as provided in the preceding paragraph, but may make
a single deposit in the Collection Account in immediately available funds not
later than 12:00 noon,
New York City time, on the related Transfer Date.
(b) On each Date of Processing, Collections of Finance Charge Receivables
and of Principal Receivables shall be allocated to the Investor Interest of each
Series in accordance with the related Supplement. On each Determination Date,
Defaulted Receivables will be allocated to the Investor Interest of each Series
in accordance with the related Supplement.
(c) Throughout the existence of the Trust, unless otherwise stated in any
Supplement, on each Date of Processing Servicer shall allocate to Transferor an
amount equal to the product of (A) the Transferor Percentage and (B) the
aggregate amount of Collections allocated to Principal Receivables and Finance
Charge Receivables, respectively, on that Date of Processing; PROVIDED that, if
the Transferor Amount (determined after giving effect to any transfer of
Principal Receivables to the Trust on such date), is less than or equal to the
Specified Transferor Amount, Servicer shall not allocate to Transferor any such
amounts that otherwise would be allocated to Transferor, but shall instead
deposit such funds in the Excess Funding Account. Unless otherwise stated in any
Supplement, neither Servicer nor Transferor need deposit any amounts allocated
to the Transferor pursuant to the foregoing into the Collection Account and
shall pay, or be deemed to pay, such amounts as collected to Transferor.
The payments to be made to Transferor, pursuant to this SECTION 4.3(c) do
not apply to deposits to the Collection Account or other amounts that do not
represent Collections, including payment of the purchase price for Receivables
pursuant to SECTION 2.6 or 10.1, proceeds from the sale, disposition or
liquidation of Receivables pursuant to SECTION 9.2 or 12.2 or payment of the
purchase price for the Investor Interest of a specific Series pursuant to the
related Supplement.
SECTION 4.4. SHARED PRINCIPAL COLLECTIONS. On each Business Day, Shared
Principal Collections may, at the option of Transferor, be applied (or held in
the Collection Account for later application) as principal with respect to any
Variable Interest or, so long as either no Series is in an Amortization Period
or no Series that is in an Amortization Period will have a Principal Shortfall
on the related Transfer Date (assuming no Early Amortization Event occurs),
withdrawn from the Collection Account and paid to Transferor; and on each
Transfer Date, (a) Servicer shall allocate Shared Principal Collections not
previously so applied or paid to each applicable Principal Sharing Series, pro
rata, in proportion to the Principal Shortfalls, if any, with respect to each
such Series, and any remainder may, at the option of Transferor, be applied as
principal with respect to any Variable Interest and (b) Servicer shall withdraw
from the Collection Account and pay to Transferor any amounts representing
Shared Principal Collections remaining after the allocations and applications
referred to in CLAUSE (a); PROVIDED that, if, on any day the Transferor Amount
(determined after giving effect to any transfer of Principal Receivables to the
Trust on such day), is less than or equal to the Specified Transferor Xxxxxx,
00
Servicer shall not distribute to Transferor any Shared Principal Collections
that otherwise would be distributed to Transferor, but shall deposit such funds
in the Excess Funding Account to the extent required so that the Transferor
Amount equals the Specified Transferor Amount. Notwithstanding the foregoing,
during any Amortization Period for any Series (other than a Variable Interest),
Transferor may not apply Shared Principal Collections as principal with respect
to any Variable Interest, unless such application of principal is made on any
Transfer Date or related Distribution Date after the application of Shared
Principal Collections pursuant to the various Supplements.
SECTION 4.5. EXCESS FINANCE CHARGE COLLECTIONS. On each Transfer Date, (a)
for each Group, Servicer shall allocate the aggregate amount for all outstanding
Series in such Group of the amounts which the related Supplements specify are to
be treated as "Excess Finance Charge Collections" for such Transfer Date to each
Series in such Group, pro rata, in proportion to the Finance Charge Shortfalls,
if any, with respect to each such Series, and (b) Servicer shall on the related
Distribution Date withdraw (or shall instruct Trustee in writing to withdraw)
from the Collection Account and pay to Transferor an amount equal to the excess,
if any, of (x) the aggregate amount for all outstanding Series in a Group of the
amounts which the related Supplements specify are to be treated as "Excess
Finance Charge Collections" for such Distribution Date over (y) the aggregate
amount for all outstanding Series in such Group which the related Supplements
specify are "Finance Charge Shortfalls", for such Distribution Date.
THE REMAINDER OF ARTICLE IV IS RESERVED AND SHALL BE SPECIFIED IN ANY
SUPPLEMENT WITH RESPECT TO ANY SERIES
ARTICLE V DISTRIBUTIONS AND REPORTS
DISTRIBUTIONS SHALL BE MADE TO, AND REPORTS SHALL BE PROVIDED TO, HOLDERS
AS SET FORTH IN THE APPLICABLE SUPPLEMENT.
ARTICLE VI THE CERTIFICATES
SECTION 6.1. THE CERTIFICATES. The Investor Certificates of any Series or
Class may be issued in bearer form ("BEARER CERTIFICATES") with attached
interest coupons and any other applicable coupon (collectively, the "COUPONS")
or in fully registered form ("REGISTERED CERTIFICATES") and shall be
substantially in the form of the exhibits with respect thereto attached to the
applicable Supplement. Except as otherwise provided in SECTION 6.3 or in any
Supplement, Bearer Certificates shall be issued in minimum denominations of
$5,000 and Registered Certificates shall be issued in minimum denominations of
$1,000 and in integral multiples of $1,000 in excess thereof. If specified in
any Supplement, the Investor Certificates of any Series or Class shall be issued
upon initial issuance as a single certificate evidencing the aggregate original
principal amount of such Series or Class as described in SECTION 6.13. Each
Certificate shall be executed by manual or facsimile signature on behalf of
Transferor by its President, Treasurer or any Vice President. Certificates
bearing the manual or facsimile signature of an individual who was, at the time
when such signature was affixed, authorized to sign on behalf of Transferor
shall not be rendered invalid, notwithstanding that such individual ceased to be
so authorized prior to the authentication and delivery of such Certificates or
does not hold such office at the date of such Certificates. No Certificates
shall be entitled to any benefit under this
52
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by or on behalf of Trustee by the manual or facsimile signature of a
duly authorized signatory, and such certificate of authentication upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. Bearer
Certificates shall be dated the applicable Closing Date. All Registered
Certificates shall be dated the date of their authentication.
SECTION 6.2. AUTHENTICATION OF CERTIFICATES. Trustee shall authenticate
and deliver the Investor Certificates of each Series and Class that are issued
upon original issuance to or upon the order of Transferor against payment to
Transferor of the purchase price therefor. If specified in the related
Supplement for any Series or Class, Trustee shall authenticate and deliver
outside the United States the Global Certificate that is issued upon original
issuance thereof.
SECTION 6.3. NEW ISSUANCES. (a) Transferor may from time to time direct
Trustee, on behalf of the Trust, to authenticate one or more new Series of
Investor Certificates. The Investor Certificates of all outstanding Series shall
be equally and ratably entitled as provided herein to the benefits of this
Agreement without preference, priority or distinction, all in accordance with
the terms and provisions of this Agreement and the applicable Supplement except,
with respect to any Series or Class, as provided in the related Supplement.
(b) On or before the Closing Date for any new Series, the parties hereto
will execute and deliver a Supplement specifying the Principal Terms of the new
Series. Such Supplement may modify or amend the terms of this Agreement solely
as applied to the new Series and may grant the Holders of the Investor
Certificates in that Series, or an agent or other representative of such
Holders, notice and consultation rights with respect to any rights or actions of
Trustee. Trustee's obligation to authenticate the Investor Certificates of a new
Series and to execute and deliver the related Supplement is subject to the
satisfaction of the following conditions (except that the conditions set forth
in CLAUSES (i), (iii), (iv) and (v) shall not be applicable to the issuance of
the first Series):
(i) on or before the fifth Business Day immediately preceding the
Closing Date, Transferor shall have given Trustee, Servicer, each Rating
Agency and any Enhancement Provider entitled thereto pursuant to the
relevant Supplement notice of such issuance and the Closing Date;
(ii) Transferor shall have delivered to Trustee the related
Supplement, executed by each party hereto other than Trustee;
(iii) Transferor shall have delivered to Trustee any related
Enhancement Agreement executed by each of the parties thereto, other than
Trustee;
(iv) the Rating Agency Condition shall have been satisfied with
respect to such issuance;
(v) Transferor shall have delivered to Trustee and any Enhancement
Provider entitled thereto pursuant to the relevant Supplement an Officer's
Certificate, dated the
53
applicable Closing Date, to the effect that Transferor reasonably believes
that such issuance will not, based on the facts known to such officer at
the time of such certification, then or thereafter cause an Early
Amortization Event to occur with respect to any Series;
(vi) Transferor shall have delivered to Trustee and each Rating
Agency a Tax Opinion, dated the Closing Date, with respect to such
issuance; and
(vii) Transferor shall have delivered to Trustee an Officer's
Certificate stating that (A) the Transferor Amount shall not be less than
the Minimum Transferor Amount and (B) the aggregate Principal Receivables
plus the Excess Funding Account balance shall not be less than the
Required Principal Balance, in each case as of the Closing Date and after
giving effect to such issuance.
Upon satisfaction of the above conditions, Trustee shall execute the Supplement
and authenticate the Investor Certificates of such Series upon execution thereof
by Transferor.
(c) Transferor may from time to time transfer a portion of the Transferor
Interest by causing the issuance of one or more additional interests (each a
"SUPPLEMENTAL INTEREST"), which may be in certificated or uncertificated form.
The form and terms of any Supplemental Interest shall be defined in a Supplement
(which Supplement shall be subject to SECTION 13.1(a) to the extent that it
amends any of the terms of this Agreement), to be delivered to or upon the order
of Transferor (or the Holder of a Supplemental Interest, in the case of the
transfer or exchange thereof, as provided below), upon satisfaction of the
following conditions:
(i) the Rating Agency Condition shall have been satisfied with
respect to such action; and
(ii) Transferor shall have delivered to Trustee and each Rating
Agency a Tax Opinion, dated the date of such action (or transfer, exchange
or other disposition as provided below), with respect thereto and an
Opinion of Counsel to the effect that such action, assignment,
participation, pledge or other disposition does not require registration
of the interest under the Securities Act or any state securities law
except for any such registration that has been duly completed and become
effective.
Any Supplemental Interest may be transferred or exchanged, and the Transferor
Interest may be pledged, only upon satisfaction of the conditions set forth in
CLAUSE (ii).
(d) The Transferor Interest may be transferred in its entirety to a Person
which is a member of the "affiliated group" as defined in Section 1504(a) of the
Code which WFN is a member without the consent or approval of the Holders of the
Investor Certificates, provided that (i) the Rating Agency Condition shall have
been satisfied with respect to such transfer, (ii) Transferor shall have
delivered to Trustee and each Rating Agency Opinions of Counsel of the type
described in SECTION 6.3(c)(ii), dated the date of such transfer, with respect
thereto and (iii) Transferor shall have delivered to Trustee an Officer's
Certificate stating that the Transferor Amount shall not be less than the
Minimum Transferor Amount. In connection with any such transfer, the Person to
whom the Transferor Interest is transferred will, by its acquisition and
54
holding of its interest in the Transferor Interest, assume all of the rights and
obligations of Transferor as described in this Agreement and in any Supplement
or amendment thereto (including the right under this PARAGRAPH (d) with respect
to subsequent transfers the Transferor Interest).
SECTION 6.4. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES. (a)
Trustee shall cause to be kept at the office or agency to be maintained in
accordance with the provisions of SECTION 11.16 a register (the "CERTIFICATE
REGISTER") in which, subject to such reasonable regulations as it may prescribe,
a transfer agent and registrar (which may be Trustee) (the "TRANSFER AGENT AND
REGISTRAR") shall provide for the registration of the Registered Certificates
and of transfers and exchanges of the Registered Certificates as herein
provided. The Transfer Agent and Registrar on the Effective Date shall be BNY
Midwest Trust Company and any co-transfer agent and co-registrar chosen by
Transferor and acceptable to Trustee, including, if and so long as any Series or
Class is listed on the Luxembourg Stock Exchange and such exchange shall so
require, a co-transfer agent and co-registrar in Luxembourg. So long as any
Investor Certificates are outstanding, Transferor shall maintain a Transfer
Agent and Registrar in New York City. Any reference in this Agreement to the
Transfer Agent and Registrar shall include any co-transfer agent and
co-registrar unless the context requires otherwise.
Trustee may revoke such appointment and remove any Transfer Agent and
Registrar if Trustee determines in its sole discretion that such Transfer Agent
and Registrar failed to perform its obligations under this Agreement in any
material respect. Any Transfer Agent and Registrar shall be permitted to resign
as Transfer Agent and Registrar upon 30 days' notice to Transferor, Trustee and
Servicer; PROVIDED that such resignation shall not be effective and such
Transfer Agent and Registrar shall continue to perform its duties as Transfer
Agent and Registrar until Trustee has appointed a successor Transfer Agent and
Registrar reasonably acceptable to Transferor.
Subject to PARAGRAPH (c), upon surrender for registration of transfer of
any Registered Certificate at any office or agency of the Transfer Agent and
Registrar maintained for such purpose, one or more new Registered Certificates
(of the same Series and Class) in authorized denominations of like aggregate
fractional undivided interests in the Investor Interest shall be executed,
authenticated and delivered, in the name of the designated transferee or
transferees.
At the option of a Registered Holder, Registered Certificates (of the same
Series and Class) may be exchanged for other Registered Certificates of
authorized denominations of like aggregate fractional undivided interests in the
Investor Interest, upon surrender of the Registered Certificates to be exchanged
at any such office or agency; Registered Certificates, including Registered
Certificates received in exchange for Bearer Certificates, may not be exchanged
for Bearer Certificates. At the option of the Holder of a Bearer Certificate,
subject to applicable laws and regulations, Bearer Certificates may be exchanged
for other Bearer Certificates or Registered Certificates (of the same Series and
Class) of authorized denominations of like aggregate fractional undivided
interests in the Investor Interest, upon surrender of the Bearer Certificates to
be exchanged at an office or agency of the Transfer Agent and Registrar located
outside the United States. Each Bearer Certificate surrendered pursuant to this
Section shall have attached thereto all unmatured Coupons; PROVIDED that any
Bearer Certificate, so surrendered after the close of business on the Record
Date preceding the relevant payment date or distribution date
55
after the expected final payment date need not have attached the Coupon relating
to such payment date or distribution date (in each case, as specified in the
applicable Supplement).
Whenever any Investor Certificates are so surrendered for exchange,
Transferor shall execute, Trustee shall authenticate and the Transfer Agent and
Registrar shall deliver (in the case of Bearer Certificates, outside the United
States) the Investor Certificates which the Investor Holder making the exchange
is entitled to receive. Every Investor Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in a form satisfactory to Trustee or the Transfer Agent
and Registrar duly executed by the Investor Holder or the attorney-in-fact
thereof duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Investor Certificates, but the Transfer Agent and Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any such transfer or exchange.
All Investor Certificates (together with any Coupons) surrendered for
registration of transfer and exchange or for payment shall be canceled and
disposed of in a manner satisfactory to Trustee. Trustee shall cancel and
destroy any Global Certificate upon its exchange in full for Definitive
Euro-Certificates and shall deliver a certificate of destruction to Transferor.
Such certificate shall also state that a certificate or certificates of a
foreign Clearing Agency to the effect required by the applicable Supplement was
received with respect to each portion of the Global Certificate exchanged for
Definitive Euro-Certificates.
Transferor shall execute and deliver to Trustee Bearer Certificates and
Registered Certificates in such amounts and at such times as are necessary to
enable Trustee to fulfill its responsibilities under this Agreement, each
Supplement and the Certificates.
(b) The Transfer Agent and Registrar will maintain at its expense in the
City of New York and an office or agency where Investor Certificates may be
surrendered for registration of transfer or exchange (except that Bearer
Certificates may not be surrendered for exchange at any such office or agency in
the United States). If and so long as any Series or Class is listed on the
Luxembourg Stock Exchange an agent shall be appointed, at the Servicer's
expense, in Luxembourg.
(c) (i) Registration of transfer of Investor Certificates containing (x) a
legend substantially to the effect set forth on EXHIBIT D-1 shall be effected
only if such transfer is made pursuant to an effective registration statement
under the Securities Act or is exempt from the registration requirements under
the Securities Act and (y) a legend substantially to the effect set forth on
EXHIBIT D-3 shall be effected only if such transfer is made to a Person that is
not (1) an employee benefit plan or other plan, trust or account (including an
individual retirement account) within the meaning of Section 3.3 of ERISA,
whether or not subject to ERISA (including, without limitation, Foreign and
governmental plans) or described by Section 4975(e)(1) of the Internal Revenue
Code or (2) any collective investment fund, insurance company separate or
general account or other entity whose underlying assets include "plan assets" of
the foregoing by reason of an employee benefit plan's or other plan's investment
in such entity (each, a "BENEFIT PLAN") unless it is an insurance company using
the assets of its general account and, at the time
56
of acquisition and throughout its holding of the certificate (a) it is not a
service provider to the trust or an affiliate of the foregoing, and would not
otherwise be excluded under 29 C.F.R. 2510.3-101(f)(1), and (b) each of the
accounts to which such certificate is allocated is an insurance company general
account (1) that is eligible for and meets the requirements of Department of
Labor Prohibited Transaction Class Exemption 95-60 and (2) of which less than
25% of the assets are (or represent) assets of a Benefit Plan. If registration
of a transfer is to be made in reliance upon an exemption from the registration
requirements under the Securities Act, the transferor or the transferee shall
deliver, at its expense, to Transferor, Servicer and Trustee, an investment
letter from the transferee, substantially in the form of the investment
representation letter attached hereto as EXHIBIT D-2, and no registration of
transfer shall be made until such letter is so delivered.
Investor Certificates issued upon registration or transfer of, or Investor
Certificates issued in exchange for, Investor Certificates bearing a legend
referred to above shall also bear such legend unless Transferor, Servicer,
Trustee and the Transfer Agent and Registrar receive an Opinion of Counsel,
satisfactory to each of them, to the effect that such legend may be removed.
Whenever an Investor Certificate containing a legend referred to above is
presented to the Transfer Agent and Registrar for registration of transfer, the
Transfer Agent and Registrar shall promptly seek instructions from Servicer
regarding such transfer and shall be entitled to receive instructions signed by
a Servicing Officer prior to registering any such transfer. Transferor hereby
agrees to indemnify the Transfer Agent and Registrar and Trustee and their
respective officers, directors, agents and employees and to hold each of them
harmless against any loss, liability or expense incurred without negligence or
bad faith on their part arising out of or in connection with actions taken or
omitted by them in relation to any such instructions furnished pursuant to this
paragraph. The preceding sentence shall survive the termination of this
Agreement and the earlier removal or resignation of the Trustee.
(ii) Registration of transfer of Investor Certificates containing a
legend to the effect set forth on EXHIBIT D-3 shall be effected only if
such transfer is made to a Person which is not a Benefit Plan, unless such
Person is an insurance company meeting the specific requirements set forth
in subsection (i) immediately above. By accepting and holding any such
Investor Certificate, an Investor Holder shall be deemed to have
represented and warranted that it is not a Benefit Plan, unless such
Person is an insurance company meeting the specific requirements set forth
in subsection (i) immediately above. By acquiring any interest in a
Book-Entry Certificate which contains such legend, a Certificate Owner
shall be deemed to have represented and warranted that it is not a Benefit
Plan, unless such Person is an insurance company meeting the specific
requirements set forth in subsection (i) immediately above.
(iii) If so requested by Transferor, Trustee will make available to
any prospective purchaser of Investor Certificates who so requests, a copy
of a letter provided to Trustee by or on behalf of Transferor relating to
the transferability of any Series or Class to a Benefit Plan.
(d) Notwithstanding any other provision of this Agreement, any Certificate
for which an Opinion of Counsel has not been issued opining on the treatment of
such Certificates as debt for
57
Federal income tax purposes (each, a "SUBJECT CERTIFICATE") shall be subject to
the following. No transfer (or purported transfer) of all or any part of a
Subject Certificate (or any economic interest therein), whether to another
Certificateholder or to a person who is not a Certificateholder, shall be
effective, and any such transfer (or purported transfer) shall be void AB
INITIO, and no Person shall otherwise become a Holder of a Subject Certificate
if (i) at the time of such transfer (or purported transfer) any Subject
Certificates are traded on an established securities market or readily tradable
on a secondary market or the substantial equivalent thereof or (ii) after such
transfer (or purported transfer) (A) the Trust would have more than 95 Holders
of Subject Certificates and any other interests in the Trust for which an
Opinion of Counsel is not rendered in connection with the issuance of such
interest to the effect that such interest will be characterized as debt for
federal income tax purposes and (B) the Subject Certificates have been issued in
a transaction or transactions that were not required to be registered under the
Securities Act, and to the extent such offerings or sales were not required to
be registered under the Securities Act by reason of Regulation S (17 CFR 230.901
through 230.904 or any successor thereto) such offerings or sales would not have
been required to be registered under the Securities Act if the interests so
offered or sold had been offered and sold within the United States. For purposes
of CLAUSE (i) of the preceding sentence, an established securities market is a
national securities exchange that is either registered under Section 6 of the
Exchange Act or exempt from registration because of the limited volume of
transactions, a foreign securities exchange that, under the law of the
jurisdiction where it is organized, satisfies regulatory requirements that are
analogous to the regulatory requirements of the Exchange Act, a regional or
local exchange, or an interdealer quotation system that regularly disseminates
firm buy or sell quotations by identified brokers or dealers by electronic means
or otherwise. For purposes of such CLAUSE (i), Subject Certificates are readily
tradable on a secondary market or the substantial equivalent thereof if (1)
Subject Certificates (or interests therein) are regularly quoted by any person,
such as a broker or dealer, making a market in the interests; (2) any person
regularly makes available to the public (including customers or subscribers) bid
or offer quotes with respect to Subject Certificates (or interests therein) and
stands ready to effect buy or sell transactions at the quoted prices for itself
or on behalf of others; (3) the holders of Subject Certificates have a readily
available, regular, and ongoing opportunity to sell or exchange the Subject
Certificates (or interests therein) through a public means of obtaining or
providing information of offers to buy, sell, or exchange such interests; or (4)
prospective buyers and sellers otherwise have the opportunity to buy, sell, or
exchange Subject Certificates (or interests therein) in a time frame and with
the regularity and continuity that is comparable to that described in CLAUSES
(1), (2) and (3) of this sentence. For purposes of determining whether the Trust
will have more than 95 Holders of Subject Certificates, each Person indirectly
owning an interest in the Trust through a partnership (including any entity
treated as a partnership for federal income tax purposes), a grantor trust or an
S corporation (each such entity a "FLOW-THROUGH ENTITY") shall be treated as a
Holder of a Subject Certificate unless Servicer determines in its sole
discretion, after consulting with qualified tax counsel, that less than
substantially all of the value of the beneficial owner's interest in the
flow-through entity is attributable to the flow-through entity's interest
(direct or indirect) in the Trust.
SECTION 6.5. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (a) any
mutilated Certificate (together, in the case of Bearer Certificates, with all
unmatured Coupons (if any) appertaining thereto) is surrendered to the Transfer
Agent and Registrar, or the Transfer Agent
58
and Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Transfer Agent and
Registrar and Trustee such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to Trustee that such
Certificate has been acquired by a bona fide purchaser, Transferor shall
execute, Trustee shall authenticate and the Transfer Agent and Registrar shall
deliver (in the case of Bearer Certificates, outside the United States), in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor and aggregate fractional undivided
interest. In connection with the issuance of any new Certificate under this
Section, Trustee or the Transfer Agent and Registrar may require the payment by
the Holder of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of Trustee and Transfer Agent and Registrar) connected
therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 6.6. PERSONS DEEMED OWNERS. Trustee, the Paying Agent, the
Transfer Agent and Registrar and any agent of any of these may (a) prior to due
presentation of a Registered Certificate for registration of transfer, treat the
Person in whose name any Registered Certificate is registered as the owner of
such Registered Certificate for the purpose of receiving distributions pursuant
to the applicable Supplement and for all other purposes whatsoever, and (b)
treat the bearer of a Bearer Certificate or Coupon as the owner of such Bearer
Certificate or Coupon for the purpose of receiving distributions pursuant to the
applicable Supplement and for all other purposes whatsoever; and, in any such
case, neither Trustee, the Paying Agent, the Transfer Agent and Registrar nor
any agent of any of these shall be affected by any notice to the contrary.
Notwithstanding the foregoing, in determining whether the Holders of the
requisite Investor Certificates have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Certificates owned by
Transferor, Servicer, any Holder of the Transferor Interest, Trustee or any
Affiliate thereof, shall be disregarded and deemed not to be outstanding, except
that, in determining whether Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Certificates which a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded. Certificates so owned which have been pledged in
good faith shall not be disregarded and may be regarded as outstanding if the
pledgee establishes to the satisfaction of Trustee the pledgee's right so to act
with respect to such Certificates and that the pledgee is not Transferor,
Servicer, any other Holder of the Transferor Interest or any Affiliate thereof.
SECTION 6.7. APPOINTMENT OF PAYING AGENT. The Paying Agent shall make
distributions to Investor Holders from the Collection Account or any applicable
Series Account pursuant to the provisions of the applicable Supplement and shall
report the amounts of such distributions to Trustee. Any Paying Agent shall have
the revocable power to withdraw funds from the Collection Account or any
applicable Series Account for the purpose of making the distributions referred
to above. Trustee may revoke such power and remove the Paying Agent if Trustee
determines in its sole discretion that the Paying Agent shall have failed to
perform its obligations under this Agreement or any Supplement in any material
respect. The Paying Agent shall initially be Trustee, and any co-paying agent
chosen by Transferor and acceptable to Trustee,
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including, if and so long as any Series or Class is listed on the Luxembourg
Stock Exchange and such exchange so requires, a co-paying agent in Luxembourg or
another western European city. Any Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' notice to Trustee. If any Paying Agent shall resign,
Trustee shall appoint a successor to act as Paying Agent. Trustee shall cause
each successor or additional Paying Agent to execute and deliver to Trustee an
instrument in which such successor or additional Paying Agent shall agree with
Trustee that it will hold all sums, if any, held by it for payment to the
Investor Holders in trust for the benefit of the Investor Holders entitled
thereto until such sums shall be paid to such Investor Holders. The Paying Agent
shall return all unclaimed funds to Trustee and upon removal shall also return
all funds in its possession to Trustee. The provisions of SECTIONS 11.1, 11.2,
11.3 and 11.5 shall apply to Trustee also in its role as Paying Agent, for so
long as Trustee shall act as Paying Agent. Any reference in this Agreement to
the Paying Agent shall include any co-paying agent unless the context requires
otherwise.
SECTION 6.8. ACCESS TO LIST OF REGISTERED HOLDERS' NAMES AND ADDRESSES.
Trustee will furnish or cause to be furnished by the Transfer Agent and
Registrar to Servicer or the Paying Agent, within five Business Days after
receipt by Trustee of a request therefor, a list in such form as Servicer or the
Paying Agent may reasonably require, of the names and addresses of the
Registered Holders. If any Holder or group of Holders of Investor Certificates
of any Series or all outstanding Series, as the case may be, evidencing not less
than 10% of the aggregate unpaid principal amount of such Series or all
outstanding Series, as applicable (the "APPLICANTS"), apply to Trustee, and such
application states that the Applicants desire to communicate with other Investor
Holders with respect to their rights under this Agreement or any Supplement or
under the Investor Certificates and is accompanied by a copy of the
communication which such Applicants propose to transmit, then Trustee, after
having been indemnified to its reasonable satisfaction by such Applicants for
its costs and expenses shall afford or shall cause the Transfer Agent and
Registrar to afford such Applicants access during normal business hours to the
most recent list of Registered Holders of such Series or all outstanding Series,
as applicable, held by Trustee, within five Business Days after the receipt of
such application. Such list shall be as of a date no more than 45 days prior to
the date of receipt of such Applicants' request.
Every Registered Holder, by receiving and holding a Registered
Certificate, agrees with Trustee that neither Trustee, the Transfer Agent and
Registrar, nor any of their respective agents, shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the Registered Holders hereunder, regardless of the sources from which such
information was derived.
SECTION 6.9. AUTHENTICATING AGENT. (a) Trustee may appoint one or more
authenticating agents with respect to the Certificates which shall be authorized
to act on behalf of Trustee in authenticating the Certificates in connection
with the issuance, delivery, registration of transfer, exchange or repayment of
the Certificates. Whenever reference is made in this Agreement to the
authentication of Certificates by Trustee or Trustee's certificate of
authentication, such reference shall be deemed to include authentication on
behalf of Trustee by an authenticating agent and certificate of authentication
executed on behalf of Trustee by an authenticating agent. Each authenticating
agent must be acceptable to Transferor and Servicer.
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(b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any power or any further act on the part of Trustee or
such authenticating agent. An authenticating agent may at any time resign by
giving notice of resignation to Trustee and to Transferor. Trustee may at any
time terminate the agency of an authenticating agent by giving notice of
termination to such authenticating agent and to Transferor. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time an
authenticating agent shall cease to be acceptable to Trustee or Transferor,
Trustee promptly may appoint a successor authenticating agent. Any successor
authenticating agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an authenticating agent. No successor
authenticating agent shall be appointed unless acceptable to Trustee and
Transferor. Transferor agrees to pay to each authenticating agent from time to
time reasonable compensation for its services under this Section. The provisions
of SECTIONS 11.1, 11.2 and 11.3 shall be applicable to any authenticating agent.
(c) Pursuant to an appointment made under this Section, the Certificates
may have endorsed thereon, in lieu of Trustee's certificate of authentication,
an alternate certificate of authentication in substantially the following form:
This is one of the Certificates described in the
Pooling and Servicing
Agreement.
_________________________________
_________________________________
as Authenticating Agent
for Trustee,
By: ____________________________________
Authorized Officer
SECTION 6.10. BOOK-ENTRY CERTIFICATES. Unless otherwise specified in
the related Supplement for any Series or Class, the Investor Certificates, upon
original issuance, shall be issued in the form of one or more typewritten
Investor Certificates representing the Book-Entry Certificates, to be delivered
to the Clearing Agency, by, or on behalf of, Transferor. The Investor
Certificates shall initially be registered on the Certificate Register in the
name of the Clearing Agency or its nominee, and no Certificate Owner will
receive a definitive certificate representing such Certificate Owner's interest
in the Investor Certificates, except as provided in SECTION 6.12. Unless and
until definitive, fully registered Investor Certificates ("DEFINITIVE
CERTIFICATES") have been issued to the applicable Certificate Owners pursuant to
SECTION 6.12 or as otherwise specified in any such Supplement:
(a) the provisions of this Section shall be in full force and effect;
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(b) Transferor, Servicer and Trustee may deal with the Clearing Agency and
the Clearing Agency Participants for all purposes (including the making of
distributions) as the authorized representatives of the respective Certificate
Owners;
(c) to the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control; and
(d) the rights of the respective Certificate Owners shall be exercised
only through the Clearing Agency and the Clearing Agency Participants and shall
be limited to those established by law and agreements between such Certificate
Owners and the Clearing Agency or the Clearing Agency Participants. Pursuant to
the Depository Agreement, unless and until Definitive Certificates are issued
pursuant to SECTION 6.12, the Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit distributions of
principal and interest on the related Investor Certificates to such Clearing
Agency Participants.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Investor Holders evidencing
a specified percentage of the aggregate unpaid principal amount of Investor
Certificates, such direction or consent may be given by Certificate Owners
(acting through the Clearing Agency and the Clearing Agency Participants) owning
Investor Certificates evidencing the requisite percentage of principal amount of
Investor Certificates.
SECTION 6.11. NOTICES TO CLEARING AGENCY. Whenever any notice or other
communication is required to be given to Investor Holders of any Series or Class
with respect to which Book-Entry Certificates have been issued, unless and until
Definitive Certificates shall have been issued to the related Certificate
Owners, Trustee shall give all such notices and communications to the applicable
Clearing Agency.
SECTION 6.12. DEFINITIVE CERTIFICATES. If Book-Entry Certificates have
been issued with respect to any Series or Class and (a) Transferor advises
Trustee that the Clearing Agency is no longer willing or able to discharge
properly its responsibilities under the Depository Agreement with respect to
such Series or Class and Trustee or Transferor is unable to engage a qualified
successor, (b) Transferor, at its option, advises Trustee that it elects to
terminate the book-entry system with respect to such Series or Class through the
Clearing Agency or (c) after the occurrence of a Servicer Default, Certificate
Owners of such Series or Class evidencing not less than 50% of the aggregate
unpaid principal amount of such Series or Class advise Trustee and the Clearing
Agency through the Clearing Agency Participants that the continuation of a
book-entry system with respect to the Investor Certificates of such Series or
Class through the Clearing Agency is no longer in the best interests of the
Certificate Owners with respect to such Certificates, then Trustee shall notify
all Certificate Owners of such Certificates, through the Clearing Agency, of the
occurrence of any such event and of the availability of Definitive Certificates
to Certificate Owners requesting the same. Upon surrender to Trustee of any such
Certificates by the Clearing Agency, accompanied by registration instructions
from the Clearing Agency for registration, Transferor shall execute and Trustee
shall authenticate and deliver such Definitive Certificates. Neither Transferor
nor Trustee shall be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be fully protected in relying on, such
instructions. Upon the issuance of such Definitive Certificates all references
herein to obligations
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imposed upon or to be performed by the Clearing Agency shall be deemed to be
imposed upon and performed by Trustee, to the extent applicable with respect to
such Definitive Certificates and Trustee shall recognize the Holders of such
Definitive Certificates as Investor Holders hereunder.
SECTION 6.13. GLOBAL CERTIFICATE. If specified in the related Supplement
for any Series, or Class, the Investor Certificates for such Series or Class
will initially be issued in the form of a single temporary global Certificate
(the "GLOBAL CERTIFICATE") in bearer form, without interest coupons, in the
denomination of the aggregate principal amount of such Series or Class and
substantially in the form set forth in the exhibit with respect thereto attached
to the related Supplement. The Global Certificate will be executed by Transferor
and authenticated by Trustee upon the same conditions, in substantially the same
manner and with the same effect as the Definitive Certificates. The Global
Certificate may be exchanged for Bearer or Registered Certificates in definitive
form (the "DEFINITIVE EURO-CERTIFICATES") pursuant to any applicable Supplement.
SECTION 6.14. UNCERTIFICATED CLASSES. Unless otherwise specified in any
Supplement, the provisions of this ARTICLE VI and ARTICLE XII relating to the
registration, form, execution, authentication, delivery, presentation,
cancellation and surrender of Certificates shall not apply to any uncertificated
Certificates.
SECTION 6.15. CUSIP NUMBERS. The Transferor in issuing the Certificates
may use "CUSIP" or "private placement" numbers (if then generally in use), and,
if so, the Trustee shall indicate the "CUSIP" or "private placement" numbers of
the Certificates in notices of redemption and related materials as a convenience
to Holders; PROVIDED that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Certificates
or as contained in any notice of redemption and related materials. The
Transferor shall promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE VII OTHER MATTERS RELATING TO TRANSFEROR
SECTION 7.1. LIABILITY OF TRANSFEROR. Transferor shall be liable for its
obligations, covenants, representations and warranties under this Agreement and
any Supplement, but only to the extent of the obligations specifically
undertaken by it in its capacity as Transferor.
SECTION 7.2. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, TRANSFEROR. (a) Transferor shall not consolidate with or merge into any
Person or convey or transfer its properties and assets substantially as an
entirety to any Person unless:
(i) the Person formed by such consolidation or into which Transferor
is merged or the Person which acquires by conveyance or transfer the
properties and assets of Transferor substantially as an entirety shall be,
if Transferor is not the surviving entity, an entity organized and
existing under the laws of the United States of America or any State or
the District of Columbia, and, if Transferor is not the surviving entity,
such entity shall expressly assume, by an agreement supplemental hereto,
executed and delivered to Trustee, in form reasonably satisfactory to
Trustee, the performance of every covenant and obligation of Transferor
hereunder, including its obligations under SECTION 7.4;
63
(ii) Transferor has delivered to Trustee (A) an Officer's
Certificate stating that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section and that
all conditions precedent herein provided for relating to such transaction
have been complied with, and (B) an Opinion of Counsel to the effect 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 and
except as such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity);
(iii) Transferor shall have delivered to Trustee and each Rating
Agency a Tax Opinion, dated the date of such consolidation, merger,
conveyance or transfer, with respect thereto;
(iv) in connection with any merger or consolidation, or any
conveyance or transfer referred to above, the business entity into which
Transferor shall merge or consolidate, or to which such conveyance or
transfer is made, shall be (x) a business entity that may not become a
debtor in any case, action or other proceeding under Title 11 of the
United States Code or (y) a special-purpose entity, the powers and
activities of which shall be limited to the performance of Transferor's
obligations under this Agreement and any Supplement; and
(v) if Transferor is not the surviving entity, the surviving entity
shall file new UCC-1 financing statements with respect to the interest of
the Trust in the Receivables.
(b) This SECTION 7.2 shall not be construed to prohibit or in any way
limit Transferor's ability to effectuate any consolidation or merger pursuant to
which Transferor would be the surviving entity.
(c) Transferor shall notify each Rating Agency promptly after any
consolidation, merger, conveyance or transfer effected pursuant to this SECTION
7.2;
(d) The obligations of Transferor hereunder shall not be assignable nor
shall any Person succeed to the obligations of Transferor hereunder except in
each case in accordance with (i) the provisions of the foregoing paragraphs,
(ii) SECTIONS 2.11 or 6.3(d), or (iii) conveyances, mergers, consolidations,
assumptions, sales or transfers to other entities (1) for which Transferor
delivers an Officer's Certificate to Trustee indicating that Transferor
reasonably believes that such action will not adversely affect in any material
respect the interests of any Investor Holder, (2) which meet the requirements of
CLAUSE (ii) of PARAGRAPH (a) and (3) for which such purchaser, transferee,
pledgee or entity shall expressly assume, in an agreement supplemental hereto,
executed and delivered to Trustee in writing in form satisfactory to Trustee,
the performance of every covenant and obligation of Transferor thereby conveyed.
SECTION 7.3. LIMITATIONS ON LIABILITY OF TRANSFEROR. Subject to SECTIONS
7.1 and 7.4, neither Transferor, any Holder of the Transferor Interest nor any
of their directors, officers, employees or agents of Transferor acting in such
capacities shall be under any liability to the
64
Trust, Trustee, the Holders, any Enhancement Provider or any other Person for
any action taken or for refraining from the taking of any action in good faith
in their capacities as Transferor pursuant to this Agreement; PROVIDED that this
provision shall not protect Transferor, any Holder of the Transferor Interest or
any such Person against any liability which would otherwise be imposed by reason
of willful misfeasance, bad faith or negligence in the performance of duties or
by reason of reckless disregard of obligations and duties hereunder. Transferor
and any director, officer, employee or agent of Transferor may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person (other than Transferor) respecting any matters arising hereunder.
SECTION 7.4. LIABILITIES. Notwithstanding SECTIONS 7.3, 8.3 and 8.4,
Transferor by entering into this Agreement, and any Holder of the Transferor
Interest by its acceptance of an interest therein, agree to be liable, directly
to the injured party, for the entire amount of any losses, claims, damages or
liabilities (other than those that would be incurred by an Investor Holder if
the Investor Certificates were notes secured by the Receivables, for example, as
a result of the performance of the Receivables, market fluctuations, a shortfall
or failure to make payment under any Enhancement or other similar market or
investment risks associated with ownership of the Investor Certificates) arising
out of or based on the arrangement created by this Agreement or the actions of
Servicer taken pursuant hereto (to the extent Trust Assets remaining after the
Investor Holders and Enhancement Providers, if any, have been paid in full are
insufficient to pay any such losses, claims, damages or liabilities) as though
this Agreement created a partnership under the Delaware Revised Uniform
Partnership Act in which Transferor and such Holder of the Transferor Interest
were general partners.
ARTICLE VIII OTHER MATTERS RELATING TO SERVICER
SECTION 8.1. LIABILITY OF SERVICER. Servicer shall be liable under this
Agreement only to the extent of the obligations specifically undertaken by
Servicer in its capacity as Servicer.
SECTION 8.2. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, SERVICER. (a) Servicer shall not consolidate with or merge into any other
corporation or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:
(i) the corporation formed by such consolidation or into which
Servicer is merged or the Person which acquires by conveyance or transfer
the properties and assets of Servicer substantially as an entirety shall
be, if Servicer is not the surviving entity, a corporation organized and
existing under the laws of the United States of America or any State or
the District of Columbia, and, if Servicer is not the surviving entity,
such corporation shall expressly assume, by an agreement supplemental
hereto, executed and delivered to Trustee, in form reasonably satisfactory
to Trustee, the performance of every covenant and obligation of Servicer
hereunder;
(ii) Servicer has delivered to Trustee (A) an Officer's Certificate
stating that such consolidation, merger, conveyance or transfer and such
supplemental agreement comply with this Section and that all conditions
precedent herein provided for relating to such transaction have been
complied with, and (B) an Opinion of Counsel to the effect that such
supplemental agreement is a valid and binding obligation of such surviving
entity
65
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 and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity); and
(iii) either (x) the corporation formed by such consolidation or
into which Servicer is merged or the Person which acquired by conveyance
or transfer the properties and assets of Servicer substantially as an
entirety shall be an Eligible Servicer (taking into account, in making
such determination, the experience and operations of the predecessor
Servicer) or (y) upon the effectiveness of such consolidation, merger,
conveyance or transfer, a Successor Servicer shall have assumed the
obligations of Servicer in accordance with this Agreement.
(b) This SECTION 8.2 shall not be construed to prohibit or in any way
limit Servicer's ability to effectuate any consolidation or merger pursuant to
which Servicer would be the surviving entity.
(c) Servicer shall notify each Rating Agency promptly after any
consolidation, merger, conveyance or transfer effected pursuant to this SECTION
8.2.
SECTION 8.3. LIMITATION ON LIABILITY OF SERVICER AND OTHERS. Except as
provided in SECTIONS 8.4 and 11.5, neither Servicer nor any of the directors,
officers, employees or agents of Servicer in its capacity as Servicer shall be
under any liability to the Trust, Trustee, the Holders, any Enhancement
Providers 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 that this provision shall not protect Servicer or any such
Person against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. Servicer and
any director, officer, employee or agent of Servicer may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person (other than Servicer) respecting any matters arising hereunder. Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action 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. Servicer may, in its sole discretion, undertake any such legal action
which it may deem necessary or desirable for the benefit of the Holders with
respect to this Agreement and the rights and duties of the parties hereto and
the interests of the Holders hereunder.
SECTION 8.4. SERVICER INDEMNIFICATION OF THE TRUST AND TRUSTEE. Servicer
shall indemnify and hold harmless the Trust and Trustee and its officers,
directors, employees and agents, from and against any loss, liability, expense,
damage or injury (i) suffered or sustained by reason of any acts or omissions of
Servicer with respect to the Trust pursuant to this Agreement, and (ii) arising
from or incurred in connection with the Trustee's administration of this Trust
and the performance of its duties hereunder under the Series Supplements or any
transaction or document contemplated in connection herewith or therewith
including any judgment, award, settlement, reasonable attorneys' fees and
expenses and other costs or expenses incurred in connection with the defense of
any action, proceeding or claim; PROVIDED that (a) Servicer shall
66
not indemnify Trustee if such acts, omissions or alleged acts or omissions
constitute or are caused by fraud, negligence, or willful misconduct by Trustee,
(b) Servicer shall not indemnify the Trust, the Investor Holders or the
Certificate Owners for any liabilities, costs or expenses of the Trust with
respect to any action taken by Trustee at the request of the Investor Holders,
(c) Servicer shall not indemnify the Trust, the Investor Holders or the
Certificate Owners as to any losses, claims or damages incurred by any of them
in their capacities as investors, including losses with respect to market or
investment risks associated with ownership of the Investor Certificates or
losses incurred as a result of Defaulted Receivables and (d) Servicer shall not
indemnify the Trust, the Investor Holders or the Certificate Owners for any
liabilities, costs or expenses of the Trust, the Investor Holders or the
Certificate Owners arising under any tax law, including any Federal, state,
local or foreign income or franchise taxes or any other tax imposed on or
measured by income (or any interest or penalties with respect thereto or arising
from a failure to comply therewith) required to be paid by the Trust, the
Investor Holders or the Certificate Owners in connection herewith to any taxing
authority. Indemnification pursuant to this Section shall not be payable from
the Trust Assets. The provisions of this indemnity shall run directly to and be
enforceable by an indemnitee subject to the limitations hereof. This SECTION 8.4
shall survive the termination of this Agreement and the earlier removal or
resignation of the Trustee.
SECTION 8.5. SERVICER NOT TO RESIGN. Servicer shall not resign from the
obligations and duties hereby imposed on it except (x) upon the determination
that (i) the performance of its duties hereunder is no longer permissible under
Requirements of Law (other than the charter and by-laws of Servicer) and (ii)
there is no reasonable action which Servicer could take to make the performance
of its duties hereunder permissible under such Requirements of Law or (y) as may
be required, in connection with Servicer's consolidation with, or merger into
any other corporation or Servicer's conveyance or transfer of its properties and
assets substantially as an entirety to any person in each case, in accordance
with SECTION 8.2. Any determination permitting the resignation of Servicer
pursuant to clause (x) above shall be evidenced by an Opinion of Counsel to such
effect delivered to Trustee. No resignation shall become effective until Trustee
or a Successor Servicer shall have assumed the responsibilities and obligations
of Servicer in accordance with SECTION 10.2. If within 120 days of the date of
the determination that Servicer may no longer act as Servicer, and if Trustee is
unable to appoint a Successor Servicer, Trustee shall serve as Successor
Servicer. Notwithstanding the foregoing, Trustee shall, if it is legally unable
so to act, petition a court of competent jurisdiction to appoint any established
institution having a net worth of not less than $50,000,000 and whose regular
business includes the servicing of credit card accounts as the Successor
Servicer hereunder. Trustee shall give prompt notice to each Rating Agency and
each Enhancement Provider, if any, entitled thereto under the applicable
Supplement upon the appointment of a Successor Servicer.
SECTION 8.6. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING THE
RECEIVABLES. Servicer shall provide to Trustee access to the documentation
regarding the Accounts and the Receivables in such cases where Trustee is
required in connection with the enforcement of the rights of Holders or by
applicable statutes or regulations to review such documentation, such access
being afforded without charge but only (a) upon reasonable request, (b) during
normal business hours, (c) subject to Servicer's normal security and
confidentiality procedures and (d) at reasonably accessible offices in the
continental United States designated by
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Servicer. Nothing in this Section shall derogate from the obligation of each
Credit Card Originator, Transferor, Trustee and Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors, and
the failure of Servicer to provide access as provided in this Section as a
result of such obligation shall not constitute a breach of this Section.
SECTION 8.7. DELEGATION OF DUTIES. In the ordinary course of business,
Servicer may at any time delegate any duties hereunder to any Person who agrees
to conduct such duties in accordance with the Credit Card Guidelines and this
Agreement. Any such delegations shall not relieve Servicer of its liability and
responsibility with respect to such duties, and shall not constitute a
resignation within the meaning of SECTION 8.5, and Servicer shall remain jointly
and severally liable with such Person for any amounts which would otherwise be
payable pursuant to this ARTICLE VIII as if Servicer had performed such duty;
PROVIDED that in the case of any significant delegation to a Person other than
an Affiliate of WFN, at least 30 days' prior written notice shall be given to
Trustee, each Rating Agency and each Enhancement Provider, if any, entitled
thereto pursuant to the relevant Supplement, of such delegation to any entity
that is not an Affiliate of Servicer.
ARTICLE IX EARLY AMORTIZATION EVENTS
SECTION 9.1. EARLY AMORTIZATION EVENTS. Each of the following shall
constitute an "EARLY AMORTIZATION EVENT" with respect to each Series:
(a) the occurrence of an Insolvency Event relating to WFN or the
Transferor;
(b) the Trust shall become an "investment company" within the meaning of
the Investment Company Act; or
(c) WFN shall become unable for any reason to transfer Receivables to the
Transferor pursuant to the Receivables Purchase Agreement or Transferor shall
become unable for any reason to transfer Receivables to the Trust pursuant to
this Agreement.
SECTION 9.2. ADDITIONAL RIGHTS UPON CERTAIN EVENTS. (a) If an Insolvency
Event occurs with respect to Transferor or any Holder of the Transferor Interest
(excluding any Supplemental Interest), Transferor shall on the day any such
event occurs (the "APPOINTMENT DATE"), immediately cease to transfer Principal
Receivables, or interests in Principal Receivables represented by any
Participation Interests to the Trust and shall promptly give notice to Trustee
thereof. Notwithstanding any cessation of the transfer to the Trust of
additional Principal Receivables or any Participation Interests, Principal
Receivables or any Participation Interests transferred to the Trust prior to the
occurrence of such Insolvency Event and Collections in respect of such Principal
Receivables and Participation Interests, and Finance Charge Receivables whenever
created accrued in respect of such Principal Receivables, shall continue to be a
part of the Trust. Upon the Appointment Date, this Agreement and the Trust shall
be deemed to have terminated, subject to the liquidation, winding up and
dissolution procedures described below. Within 15 days of the Appointment Date,
Trustee shall (i) publish a notice in an Authorized Newspaper that an Insolvency
Event has occurred, that the Trust has terminated, and that Trustee intends to
sell, dispose of or otherwise liquidate the Receivables and any Participation
Interests on commercially reasonable terms and in a commercially reasonable
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manner and (ii) give notice to Investor Holders and each Enhancement Provider,
if any, or other Person entitled thereto pursuant to the relevant Supplement
describing the provisions of this Section. Trustee shall then promptly sell,
dispose of or otherwise liquidate the Receivables and any Participation
Interests in a commercially reasonable manner and on commercially reasonable
terms, which shall include the solicitation of competitive bids. The Trustee
shall be entitled to hire and consult with financial advisors and agents in
connection with such sale, disposition or liquidation, at the expense of the
Servicer and/or the Trust. Trustee may obtain a prior determination from any
conservator, receiver or liquidator that the terms and manner of any proposed
sale, disposition or liquidation are commercially reasonable and may
conclusively rely on such determination. The provisions of SECTIONS 9.1 and 9.2
shall not be deemed to be mutually exclusive.
(b) The proceeds from the sale, disposition or liquidation of the
Receivables and any Participation Interests pursuant to PARAGRAPH (a)
("INSOLVENCY PROCEEDS") shall be immediately deposited in the Collection
Account. Insolvency Proceeds shall be allocated to Finance Charge Receivables
and Principal Receivables in the same proportion such Receivables bore to one
another on the prior Determination Date, although Trustee shall, in consultation
with the Servicer, determine conclusively the amount of the Insolvency Proceeds
which are deemed to be Finance Charge Receivables and Principal Receivables. The
Insolvency Proceeds shall be allocated and distributed to Investor Holders in
accordance with ARTICLE IV and each such Supplement.
ARTICLE X SERVICER DEFAULTS
SECTION 10.1. SERVICER DEFAULTS. If any one of the following events (a
"SERVICER DEFAULT") shall occur and be continuing:
(a) any failure by Servicer to make any payment, transfer or deposit or to
give instructions or notice to Trustee pursuant to this Agreement or any
Supplement 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 this Agreement or any Supplement;
(b) failure on the part of Servicer to duly observe or perform in any
material respect any other covenants or agreements of Servicer set forth in this
Agreement or any Supplement which has a material adverse effect on the interests
hereunder of the Investor Holders of any Series or Class (which determination
shall be made without regard to whether funds are then available pursuant to any
Enhancement) and which continues unremedied for a period of 60 days after the
date on which written notice of such failure, requiring the same to be remedied,
shall have been given to Servicer by Trustee, or to Servicer and Trustee by
Holders of Investor Certificates evidencing not less than 25% of the aggregate
unpaid principal amount of all Investor Certificates (or, with respect to any
such failure that does not relate to all Series, 25% of the aggregate unpaid
principal amount of all Series to which such failure relates); or Servicer shall
delegate its duties under this Agreement, except as permitted by SECTIONS 8.2
and 8.7, a Responsible Officer of Trustee has actual knowledge of such
delegation and such delegation continues unremedied for 15 days after the date
on which written notice thereof, requiring the same to be remedied, shall have
been given to Servicer by Trustee, or to Servicer and Trustee by
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Holders of Investor Certificates evidencing not less than 25% of the aggregate
unpaid principal amount of all Investor Certificates;
(c) any representation, warranty or certification made by Servicer in this
Agreement or any Supplement or in any certificate delivered pursuant to this
Agreement or any Supplement shall prove to have been incorrect when made, which
has a material adverse effect on the rights of the Investor Holders of any
Series or Class (which determination shall be made without regard to whether
funds are then available pursuant to any Enhancement) and which continues to be
incorrect in any material respect for a period of 60 days after the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given to Servicer by Trustee, or to Servicer and Trustee by the
Holders of Investor Certificates evidencing not less than 25% of the aggregate
unpaid principal amount of all Investor Certificates (or, with respect to any
such representation, warranty or certification that does not relate to all
Series, 25% of the aggregate unpaid principal amount of all Series to which such
representation, warranty or certification relates); or
(d) Servicer shall fail generally to, or admit in writing its inability
to, pay its debts as they become due; or a proceeding shall have been instituted
in a court having jurisdiction in the premises seeking a decree or order for
relief in respect of Servicer in an involuntary case under any Debtor Relief
Law, or for the appointment of a receiver, liquidator, assignee, trustee,
custodian, sequestrator, conservator or other similar official of such Person or
for any substantial part of its property, or for the winding-up or liquidation
of its affairs and, if instituted against Servicer, any such proceeding shall
continue undismissed or unstayed and in effect, for a period of 60 consecutive
days, or any of the actions sought in such proceeding shall occur; or the
commencement by Servicer, of a voluntary case under any Debtor Relief Law, or
such Person's consent to the entry of an order for relief in an involuntary case
under any Debtor Relief Law, or consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator, conservator or other similar official of such Person or for any
substantial part of its property, or any general assignment for the benefit of
creditors; or such Person or any Subsidiary of such Person shall have taken any
corporate action in furtherance of any of the foregoing actions;
then, in the event of any Servicer Default, so long as the Servicer Default
shall not have been remedied, either Trustee or the Holders of Investor
Certificates evidencing more than 50% of the aggregate unpaid principal amount
of all Investor Certificates, by notice given to Servicer (and to Trustee and
any Enhancement Provider entitled thereto pursuant to the relevant Supplement if
given by the Investor Holders) (a "TERMINATION NOTICE"), may terminate all but
not less than all the rights and obligations of Servicer, as Servicer, under
this Agreement and in and to the Receivables and the proceeds thereof.
After receipt by Servicer of such Termination Notice, and on the date that
a Successor Servicer shall have been appointed by Trustee pursuant to SECTION
10.2, all authority and power of Servicer under this Agreement shall pass to and
be vested in the Successor Servicer (a "SERVICE TRANSFER"); and, without
limitation, Trustee is hereby authorized and empowered (upon the failure of
Servicer to cooperate) to execute and deliver, on behalf of Servicer, as
attorney-in-fact or otherwise, all documents and other instruments upon the
failure of Servicer to execute or deliver such documents or instruments, and to
do and accomplish all other acts or things
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necessary or appropriate to effect the purposes of such transfer of servicing
rights. Servicer agrees to cooperate with Trustee and the Successor Servicer in
effecting the termination of the responsibilities and rights of Servicer to
conduct servicing hereunder including the transfer to the Successor Servicer of
all authority of 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 Servicer for deposit, or which have been deposited by
Servicer, in the Collection Account, or which shall thereafter be received with
respect to the Receivables, and in assisting the Successor Servicer and in
enforcing all rights to Insurance Proceeds. Servicer shall promptly transfer its
electronic records relating to the Receivables to the Successor Servicer in such
electronic form as the Successor Servicer may reasonably request and shall
promptly transfer to the Successor Servicer all other records, correspondence
and documents necessary for the continued servicing of the Receivables in the
manner and at such times as the Successor Servicer shall reasonably request. To
the extent that compliance with this SECTION 10.1 shall require Servicer to
disclose to the Successor Servicer information of any kind which Servicer
reasonably deems to be confidential, the Successor Servicer shall be required to
enter into such customary licensing and confidentiality agreements as Servicer
shall deem appropriate to protect its interests.
Notwithstanding the foregoing, any delay in or failure of performance
under SECTION 10.1(a) for a period of five Business Days or under SECTION
10.1(b) or (c) for a period of 60 days (in addition to any period provided in
SECTION 10.1(a), (b) or (c)) shall not constitute a Servicer Default until the
expiration of such additional five Business Days or 60 days, respectively, if
such delay or failure could not be prevented by the exercise of reasonable
diligence by 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 Servicer from
the obligation to use its best efforts to perform its obligations in a timely
manner in accordance with this Agreement and any Supplement and Servicer shall
provide Trustee, each Rating Agency, any Enhancement Provider entitled thereto
pursuant to the relevant Supplement, Transferor and the Investor Holders with an
Officer's Certificate giving immediate notice of such failure or delay by it,
together with a description of its efforts to so perform its obligations.
SECTION 10.2. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a) On and after
the receipt by Servicer of a Termination Notice pursuant to SECTION 10.1,
Servicer shall continue to perform all servicing functions under this Agreement
until the date specified in the Termination Notice or otherwise specified by
Trustee or until a date mutually agreed upon by Servicer and Trustee. Trustee
shall, as promptly as possible after the giving of a Termination Notice, 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 Trustee. If a Successor Servicer has not been appointed or
has not accepted its appointment at the time when Servicer ceases to act as
Servicer, Trustee without further action shall automatically be appointed the
Successor Servicer. Trustee may delegate any of its servicing obligations to an
Affiliate of Trustee or agent in accordance with SECTION 3.1(b) and 8.7.
Notwithstanding the foregoing, Trustee shall, if it is legally unable so to act,
petition a court of competent jurisdiction to appoint any established
institution having a net worth of not less than $50,000,000 and whose regular
business includes the servicing of credit card receivables as the Successor
Servicer hereunder. Trustee shall give prompt notice to each Rating Agency and
each Enhancement Provider, if any,
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entitled thereto pursuant to the applicable Supplement upon the appointment of a
Successor Servicer.
(b) Upon its appointment, the Successor Servicer shall be the successor in
all respects to Servicer with respect to servicing functions under this
Agreement and shall be subject to all the responsibilities, duties and
liabilities (except for liabilities arising during the period of time when the
prior Servicer was performing and acting as Servicer) relating thereto placed on
Servicer by the terms and provisions hereof, and all references in this
Agreement to Servicer shall be deemed to refer to the Successor Servicer.
(c) In connection with any Termination Notice, 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; PROVIDED, HOWEVER, that the Holder of the Transferor Interest shall be
responsible for payment of the portion of such aggregate Servicing Fees
allocable to the Holder of the Transferor Interest and that no such monthly
compensation paid out of Collections shall be in excess of such aggregate
Servicing Fees. Each Holder of the Transferor Interest agrees that, if WFN (or
any Successor Servicer) is terminated as Servicer hereunder, the portion of the
Collections in respect of Finance Charge Receivables that Transferor is entitled
to receive pursuant to this Agreement or any Supplement shall be reduced by an
amount sufficient to pay Transferor's share (determined by reference to the
Supplements with respect to any outstanding Series) of the compensation of the
Successor Servicer.
(d) All authority and power granted to the Successor Servicer under this
Agreement shall automatically cease and terminate upon termination of the Trust
pursuant to SECTION 12.1 and shall pass to and be vested in Transferor and,
without limitation, Transferor is hereby authorized and empowered to execute and
deliver, on behalf of the Successor Servicer, as attorney-in-fact or otherwise,
all documents and other instruments, and to do and accomplish all other acts or
things necessary or appropriate to effect the purposes of such transfer of
servicing rights. The Successor Servicer agrees to cooperate with Transferor in
effecting the termination of the responsibilities and rights of the Successor
Servicer to conduct servicing on the Receivables. The Successor Servicer shall
transfer its electronic records relating to the Receivables to Transferor in
such electronic form as Transferor may reasonably request and shall transfer all
other records, correspondence and documents to Transferor in the manner and at
such times as Transferor shall reasonably request. To the extent that compliance
with this SECTION 10.2 shall require the Successor Servicer to disclose to
Transferor information of any kind which the Successor Servicer deems to be
confidential, Transferor shall be required to enter into such customary
licensing and confidentiality agreements as the Successor Servicer shall deem
appropriate to protect its interests.
SECTION 10.3. NOTIFICATION TO HOLDERS. Within two Business Days after
Servicer becomes aware of any Servicer Default, Servicer shall give notice
thereof to Trustee, each Rating Agency and any Enhancement Provider entitled
thereto pursuant to the relevant Supplement and Trustee shall give notice to the
Investor Holders. Upon any termination or appointment of a Successor Servicer
pursuant to this Article, Trustee shall give prompt notice thereof to the
Investor Holders.
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SECTION 10.4. WAIVER OF PAST DEFAULTS. The Holders of Investor
Certificates evidencing undivided interests in the Trust aggregating more than
66-2/3% of the Invested Amount of each Series then outstanding affected by any
default by Servicer may, on behalf of all Holders of Certificates of such
affected Series, waive any default by Servicer in the performance of its
obligations hereunder and its consequences, except a default in the failure to
make any required deposits or payments of interest or principal with respect to
any Series of Certificates. Upon any such waiver of a past default, such default
shall cease to exist, and any default arising therefrom shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall extend
to any subsequent or other default or impair any right consequent thereon except
to the extent expressly so waived.
ARTICLE XI TRUSTEE
SECTION 11.1. DUTIES OF TRUSTEE. (a) Trustee, prior to the occurrence of a
Servicer Default and after the curing of all Servicer Defaults which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement and no implied covenants or obligations
shall be read into this Agreement against the Trustee. If a Servicer Default has
occurred (which has not been cured or waived) Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in its exercise, as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs.
(b) Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to Trustee
which are specifically required to be furnished pursuant to any provision of
this Agreement (but need not confirm or investigate the accuracy of any
mathematical calculations or other facts stated therein), shall examine them to
determine whether they substantially conform to the requirements of this
Agreement. Trustee shall give prompt written notice to the Holders of any
material lack of conformity of any such instrument to the applicable
requirements of this Agreement discovered by Trustee which would entitle a
specified percentage of the Holders to take any action pursuant to this
Agreement.
(c) Subject to SECTION 11.1(a), no provision of this Agreement shall be
construed to relieve Trustee from liability for its own negligent action, its
own negligent failure to act or its own misconduct; PROVIDED that:
(i) Trustee shall not be personally liable for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
Trustee, unless it shall be proved that Trustee was negligent in
ascertaining the pertinent facts;
(ii) Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Investor Certificates
relating to the time, method and place of conducting any proceeding for
any remedy available to Trustee, or exercising any trust or power
conferred upon Trustee, under this Agreement; PROVIDED that, such
direction is delivered by the Holder of Investor Certificates evidencing
the percentage of the aggregate unpaid principal amount of Investor
Certificates of all Series to which such action relates required for such
action by this Agreement; and
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(iii) Trustee shall not be charged with knowledge of (x) any failure
by Servicer referred to in SECTION 10.1 or (y) any Early Amortization
Event unless a Responsible Officer of Trustee obtains actual knowledge of
such failure or Early Amortization Event or Trustee receives written
notice of such failure or Early Amortization Event from Servicer, any
Holders of Investor Certificates evidencing not less than 25% of the
aggregate unpaid principal amount of all Investor Certificates (or, with
respect to any such failure that does not relate to all Series, 25% of the
aggregate unpaid principal amount of all Investor Certificates of all
Series to which such failure relates, or the Enhancement Providers, if
any, for all Series to which such failure relates).
(d) Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers hereunder or
thereunder, if there is reasonable ground for believing that the repayment of
such funds or indemnity reasonably satisfactory to it against such risk or
liability is not reasonably assured to it, and none of the provisions contained
in this Agreement shall in any event require Trustee to perform, or be
responsible for the manner of performance of, any of the obligations of Servicer
under this Agreement except during such time, if any, as Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
Servicer in accordance with this Agreement.
(e) Trustee shall have no power to vary the corpus of the Trust, except as
expressly provided in this Agreement.
(f) If the Paying Agent or the Transfer Agent and Registrar shall fail to
perform any obligation, duty or agreement in the manner or on the day required
to be performed by the Paying Agent or the Transfer Agent and Registrar, as the
case may be, under this Agreement, Trustee shall be obligated promptly upon
knowledge of a Responsible Officer thereof and receipt of appropriate records,
if any, to perform such obligation, duty or agreement in the manner so required.
(g) If Credit Card Originator has agreed to transfer any of its
receivables (other than the Receivables) to another Person other than the
Transferor, upon the written request of Credit Card Originator, Trustee will
enter into such intercreditor agreements with the transferee of such receivables
as are customary and necessary to separately identify the rights of the Trust
and such other Person in Credit Card Originator's receivables; PROVIDED that
Trustee shall not be required to enter into any intercreditor agreement which
could adversely affect the interests of the Holders and, upon the request of
Trustee, Credit Card Originator will deliver an Opinion of Counsel relating to
such intercreditor agreement.
SECTION 11.2. CERTAIN MATTERS AFFECTING TRUSTEE. Except as otherwise
provided in Section 11.1:
(a) Trustee may conclusively rely on and shall be fully protected in
acting on, or in refraining from acting in accord with, any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document (whether in its original or facsimile
form) reasonably believed by it to be genuine and to have been signed or
presented to it pursuant to this
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Agreement by the proper party or parties. The Trustee need not investigate any
fact or matter stated in the document;
(b) Trustee may consult with counsel selected by it, and any advice of
such counsel, or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such advice or Opinion of Counsel;
(c) Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Agreement or any Enhancement Agreement, or to
institute, conduct or defend any litigation hereunder or thereunder or in
relation to this Agreement or any Enhancement Agreement, at the request, order
or direction of any of the Holders, pursuant to the provisions of this Agreement
or any Enhancement Agreement, unless such Holders shall have offered to Trustee
security or indemnity reasonably satisfactory to it against the costs, expenses
and liabilities which may be incurred therein or thereby; nothing contained
herein shall, however, relieve Trustee of the obligations, upon the occurrence
of any Servicer Default (which has not been cured) to exercise such of the
rights and powers vested in it by this Agreement, and to use the same degree of
care and skill in its exercise, as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs;
(d) Trustee shall not be personally liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(e) Trustee shall not be bound to make any investigation into the facts of
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing to do so by Holders of Investor
Certificates evidencing more than 25% of the aggregate unpaid principal amount
of all Investor Certificates (or, with respect to any such matters that do not
relate to all Series, 25% of the aggregate unpaid principal amount of the
Investor Certificates of all Series to which such matters relate);
(f) Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys,
custodians or nominees, and Trustee shall not be responsible for any misconduct
or negligence on the part of any such agent, attorney, custodian or nominee
appointed with due care by it hereunder;
(g) except as may be required by SECTION 11.1(a), Trustee shall not be
required to make any initial or periodic examination of any documents or records
related to the Receivables or the Accounts for the purpose of establishing the
presence or absence of defects, the compliance by Transferor with its
representations and warranties or for any other purpose;
(h) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder;
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(i) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel;
(j) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder;
(k) The Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions or agreements on the part
of the Transferor or the Servicer;
(l) The permissive rights of the Trustee to do things enumerated in this
Agreement shall not be construed as a duty and the Trustee shall not be
answerable for other than its negligence or willful default; and
(m) In the event that the Trustee is also acting as Paying Agent or
Transfer Agent and Registrar hereunder, the rights and protections afforded to
the Trustee pursuant to this Article XI shall also be afforded to such Paying
Agent or Transfer Agent or Registrar.
SECTION 11.3. TRUSTEE NOT LIABLE FOR RECITALS IN CERTIFICATES. Trustee
assumes no responsibility for the correctness of the recitals contained herein
and in the Certificates (other than the certificate of authentication on the
Certificates). Except as set forth in SECTION 11.15, Trustee makes no
representations as to the validity or sufficiency of this Agreement or any
Supplement or of the Certificates (other than the certificate of authentication
on the Certificates) or of any Receivable or related document. Trustee shall not
be accountable for the use or application by Transferor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to Transferor or the Holder of the Transferor
Interest in respect of the Receivables or deposited in or withdrawn from the
Collection Account, any Series Accounts or any other accounts hereafter
established to effectuate the transactions contemplated by this Agreement and in
accordance with this Agreement.
SECTION 11.4. TRUSTEE NOT TO OWN CERTIFICATES. Trustee shall not in its
individual capacity, but may in a fiduciary capacity, become the owner or
pledgee of Investor Certificates. If Trustee becomes the owner or pledgee of
Investor Certificates in a fiduciary capacity it shall have the same rights as
it would have if it were not Trustee.
SECTION 11.5. SERVICER TO PAY TRUSTEE'S FEES AND EXPENSES. Servicer
covenants and agrees to pay to Trustee from time to time, and Trustee shall be
entitled to receive, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by it in the execution of the trust hereby created and
in the exercise and performance of any of the powers and duties hereunder of
Trustee, and Servicer will pay or reimburse Trustee (without reimbursement from
the Collection Account or otherwise) upon its request for all reasonable
expenses or disbursements incurred or made by Trustee in accordance with any of
the provisions of this Agreement or any Enhancement Agreement (including the
reasonable fees and expenses of its agents, any co-trustee and counsel) except
any such expense, disbursement or advance shall be determined to have been
caused by its own negligence, willful misconduct or bad faith and except as
provided
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in the following sentence. If Trustee is appointed Successor Servicer pursuant
to SECTION 10.2, the provisions of this SECTION 11.5 shall not apply to
expenses, disbursements and advances made or incurred by Trustee in its capacity
as Successor Servicer. When the Trustee incurs expenses or renders services in
connection with an Insolvency Event or a Servicer Default under Section 10.1(d),
such expenses (including the fees and expenses of its counsel and agents) and
the compensation for such services are intended to constitute expenses of
administration under any bankruptcy law or law relating to creditors rights
generally.
The obligations of Servicer under SECTION 8.4 and this SECTION 11.5 shall
survive the termination of the Trust and the resignation or removal of Trustee.
SECTION 11.6. ELIGIBILITY REQUIREMENTS FOR TRUSTEE. Trustee shall at all
times be a bank, trust company or a corporation organized and doing business
under the laws of the United States of America or any state thereof authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination by
Federal or state authority and maintain any credit or deposit rating required by
any Rating Agency (as of the date hereof Baa3 for Xxxxx'x) that is not an
Affiliate of the Transferor. If such bank or corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
SECTION 11.6, the combined capital and surplus of such bank or corporation shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time Trustee shall cease to be
eligible in accordance with the provisions of this SECTION 11.6, Trustee shall
resign immediately in the manner and with the effect specified in SECTION 11.7.
SECTION 11.7. RESIGNATION OR REMOVAL OF TRUSTEE. (a) Trustee may at any
time resign and be discharged from the trust hereby created by giving written
notice thereof to Servicer. Upon receiving such notice of resignation,
Transferor shall promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition at the expense of the
transferor any court of competent jurisdiction for the appointment of a
successor trustee.
(b) If at any time Trustee shall cease to be eligible in accordance with
the provisions of SECTION 11.6 and shall fail to resign after written request
therefor by Servicer or Transferor, or if at any time Trustee shall be legally
unable to act, or shall be adjudged a bankrupt or insolvent, or a receiver of
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, in which event Servicer shall
remove Trustee and promptly appoint a successor trustee by written instrument,
in duplicate, one copy of which instrument shall be delivered to Trustee so
removed and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted within 30 days of the giving of such
notice of removal, the removed trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
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(c) Any resignation or removal of Trustee and appointment of a successor
trustee pursuant to any of the provisions of this SECTION 11.7 shall not become
effective until acceptance of appointment by the successor trustee as provided
in SECTION 11.8 and any liability of Trustee arising hereunder shall survive
such appointment of a successor trustee.
SECTION 11.8. SUCCESSOR TRUSTEE. (a) Any successor trustee appointed as
provided in SECTION 11.7 shall execute, acknowledge and deliver to Transferor,
to Servicer and to its predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as Trustee herein. Upon payment in full of
all fees and expenses due and owing to it hereunder, the predecessor Trustee
shall deliver to the successor trustee all documents and statements held by it
hereunder, and Transferor and the predecessor Trustee shall execute and deliver
such instruments and do such other things as may reasonably be required for
fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
SECTION 11.8 unless at the time of such acceptance such successor trustee shall
be eligible under SECTION 11.6.
(c) Upon acceptance of appointment by a successor trustee as provided in
this Section, such successor trustee shall provide notice of such succession
hereunder to all Investor Holders and Servicer shall provide such notice to each
Rating Agency and any Enhancement Provider entitled thereto pursuant to the
relevant Supplement.
SECTION 11.9. MERGER OR CONSOLIDATION OF TRUSTEE. Any Person into which
Trustee may be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which Trustee
shall be a party, or any Person succeeding to the corporate trust business of
Trustee, shall be the successor of Trustee hereunder, provided such corporation
shall be eligible under the provisions of SECTION 11.6, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
SECTION 11.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a)
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust may at the time be located, Trustee shall have the power and may
execute and deliver all instruments to appoint one or more Persons to act as a
co-trustee or co-trustees, or separate trustee or separate trustees, of all or
any part of the Trust, and to vest in such Person or Persons, in such capacity
and for the benefit of the Holders, such title to the Trust, or any part
thereof, and, subject to the other provisions of this SECTION 11.10, such
powers, duties, obligations, rights and trusts as Trustee may consider necessary
or desirable; PROVIDED, that Trustee shall exercise due care in the appointment
of any co-trustee. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under SECTION 11.6 and
no notice to Holders of the appointment of any co-trustee or separate trustee
shall be required under SECTION 11.8.
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(b) Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon Trustee shall be conferred or imposed upon and exercised or performed
by Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to
act separately without Trustee joining in such act) except to the extent
that under any laws of any jurisdiction in which any particular act or
acts are to be performed (whether as Trustee hereunder or as successor to
Servicer hereunder) Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed singly
by such separate trustee or co-trustee, but solely at the direction of
Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.
(c) Any notice, request or other writing given to Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this ARTICLE XI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with Trustee or separately, as may
be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, Trustee. Every such
instrument shall be filed with Trustee and a copy thereof given to Servicer.
(d) Any separate trustee or co-trustee may at any time constitute Trustee
its agent or attorney-in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect to this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 11.11. TAX RETURN. If the Trust is required to file tax returns,
Servicer shall prepare or shall cause to be prepared any tax returns required to
be filed by the Trust and shall remit such returns to Trustee for signature at
least five days before such returns are due to be filed; Trustee shall promptly
sign such returns and deliver such returns after signature to Servicer and such
returns shall be filed by Servicer. Servicer in accordance with each Supplement
shall also prepare or shall cause to be prepared all tax information required by
law to be distributed to Investor Holders. Trustee upon written request, will
furnish Servicer with all such information known to Trustee as may be reasonably
required in connection with the preparation of all tax returns of the Trust. In
no event shall Trustee or Servicer (except as provided in SECTIONS 7.4 or 8.4)
be liable for any liabilities, costs or expenses of the Trust or the Investor
Holders arising
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under any tax law, including Federal, state, local or foreign income or excise
taxes or any other tax imposed or measured by income (or any interest or penalty
with respect thereto or arising from a failure to comply therewith).
SECTION 11.12. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
CERTIFICATES. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by Trustee without the possession of
any of the Certificates or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by Trustee shall be brought in its
own name as trustee. Any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
Trustee, its agents and counsel, be for the ratable benefit of the Holders in
respect of which such judgment has been obtained.
SECTION 11.13. SUITS FOR ENFORCEMENT. If a Servicer Default shall occur
and be continuing of which a Responsible Officer of Trustee has received written
notice, Trustee, in its discretion may, subject to the provisions of SECTIONS
10.1 and 11.14, proceed to protect and enforce its rights and the rights of the
Holders under this Agreement by a suit, action or proceeding in equity or at law
or otherwise, whether for the specific performance of any covenant or agreement
contained in this Agreement or in aid of the execution of any power granted in
this Agreement or for the enforcement of any other legal, equitable or other
remedy as Trustee, being advised by counsel, shall deem most effectual to
protect and enforce any of the rights of Trustee or the Holders.
SECTION 11.14. RIGHTS OF HOLDERS TO DIRECT TRUSTEE. Holders of Investor
Certificates evidencing more than 50% of the aggregate unpaid principal amount
of all Investor Certificates (or, with respect to any remedy, trust or power
that does not relate to all Series, 50% of the aggregate unpaid principal amount
of the Investor Certificates of all Series to which such remedy, trust or power
relates) shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to Trustee, or exercising any
trust or power conferred on Trustee relating to such proceeding; PROVIDED that,
subject to SECTION 11.1, Trustee shall have the right to decline to follow any
such direction if Trustee being advised by counsel determines that the action so
directed may not lawfully be taken, or if Trustee in good faith shall, by a
Responsible Officer or Responsible Officers of Trustee, determine that the
proceedings so directed would be illegal or involve it in personal liability and
PROVIDED FURTHER that nothing in this Agreement shall impair the right of
Trustee to take any action deemed necessary by Trustee and which is not
inconsistent with such direction.
SECTION 11.15. REPRESENTATIONS AND WARRANTIES OF TRUSTEE. Trustee
represents and warrants as of each Closing Date that:
(a) Trustee is an Illinois trust company organized, existing and in good
standing under the laws of the State of Illinois;
(b) Trustee has full power, authority and right to execute, deliver and
perform this Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Agreement; and
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(c) this Agreement has been duly executed and delivered by Trustee and is
a binding obligation of Trustee enforceable against Trustee 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).
SECTION 11.16. MAINTENANCE OF OFFICE OR AGENCY. Trustee will maintain at
its expense an office or agency (the "CORPORATE TRUST OFFICE") where notices and
demands to or upon Trustee in respect of the Certificates and this Agreement may
be served in Chicago, Illinois, in the case of Registered Certificates and
Holders thereof. The Corporate Trust Office shall initially be located at 000
Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention Indenture
Trust Administration (facsimile No. (000) 000-0000). Trustee will give prompt
notice to Servicer and to Investor Holders of any change in the location of the
Certificate Register or any such office or agency.
SECTION 11.17. CONFIDENTIALITY. Information provided by the Credit Card
Originator or Transferor to Trustee related to the transaction effected
hereunder, including all information related to the Obligors with respect to the
Receivables, and any computer software provided to Trustee in connection with
the transaction effected hereunder or under any Supplement, in each case whether
in the form of documents, reports, lists, tapes, discs or any other form, shall
be "CONFIDENTIAL INFORMATION." Trustee and its agents, representatives or
employees shall at all times maintain the confidentiality of all Confidential
Information and shall not, without the prior written consent of the Credit Card
Originator or Transferor, as applicable, disclose to third parties (including
Holders) or use such information to compete or assist any other Person in
competing with the Credit Card Originator or Transferor or in any manner
whatsoever, in whole or in part, except as expressly permitted under this
Agreement or under any Supplement or as required to fulfill an obligation of
Trustee under this Agreement or under any Supplement, in which case such
Confidential Information shall be revealed only to the extent expressly
permitted or only to Trustee's agents, representatives and employees who need to
know such Confidential Information to the extent required for the purpose of
fulfilling an obligation of Trustee under this Agreement or under any
Supplement. Notwithstanding the above, Confidential Information may be disclosed
to the extent required by law, statute, rule, regulation or legal process
(including any subpoena, civil investigative demand or similar demand or request
of any court, regulatory authority, arbitrator or arbitration to which the
Trustee or an affiliate or an officer, director, employee or shareholder thereof
is a party), provided that Trustee gives prompt written notice to the Credit
Card Originator or Transferor, as applicable, of the nature and scope of such
disclosure. Notwithstanding anything herein to the contrary, the foregoing shall
not be construed to prohibit (i) disclosure of any and all information that is
or become publicly known, or information obtained by the Trustee from sources
other than the Servicer or the Transferor, (ii) disclosure of any and all
information (A) to any government agency or regulatory body having or claiming
authority to regulate or oversee any aspects of the Trustee's business or that
of its affiliates, (B) in any preliminary or final offering circular,
registration statement or contract or other document pertaining to the
transactions contemplated herein approved in advance by the Servicer or the
Transferor or (C) to any affiliate, independent or internal auditor, or attorney
of the Trustee having a need to know the same, provided that the
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Trustee advises such recipient of the confidential nature of the information
being disclosed, or (iii) any other disclosure authorized by the Servicer or the
Transferor.
ARTICLE XII TERMINATION
SECTION 12.1. TERMINATION OF TRUST. The Trust and the respective
obligations and responsibilities of Transferor, Servicer and Trustee created
hereby (other than the obligation of Trustee to make payments to Investor
Holders as hereinafter set forth) shall terminate, except with respect to the
duties described in SECTIONS 7.4, 8.4 and 12.2(b), upon the earlier of (i)
January 1, 2021, (ii) the day following the Distribution Date on which the
Invested Amount for each Series is zero (PROVIDED that Transferor has delivered
a written notice to Trustee electing to terminate the Trust) and (iii) the date
provided in SECTION 9.2.
SECTION 12.2. FINAL DISTRIBUTION. (a) Servicer shall give Trustee at least
30 days prior notice of the Distribution Date on which the Investor Holders of
any Series or Class may surrender their Investor Certificates for payment of the
final distribution on and cancellation of such Investor Certificates (or, in the
event of a final distribution resulting from the application of SECTION 2.6, 9.2
or 10.1, notice of such Distribution Date promptly after Servicer has determined
that a final distribution will occur, if such determination is made less than 30
days prior to such Distribution Date). Such notice shall be accompanied by an
Officer's Certificate setting forth the information specified in SECTION 3.5
covering the period during the then current Servicer fiscal year through the
date of such notice. Not later than the fifth day of the month in which the
final distribution in respect of such Series or Class is payable to Investor
Holders, Trustee shall provide notice to Investor Holders of such Series or
Class specifying (i) the date upon which final payment of such Series or Class
will be made upon presentation and surrender of Investor Certificates of such
Series or Class at the office or offices therein designated, (ii) the amount of
any such final payment and (iii) that the Record Date otherwise applicable to
such payment date is not applicable, payments being made only upon presentation
and surrender of such Investor Certificates at the office or offices therein
specified (which, in the case of Bearer Certificates, shall be outside the
United States). Trustee shall give such notice to the Transfer Agent and
Registrar and the Paying Agent at the time such notice is given to Investor
Holders.
(b) Notwithstanding a final distribution to the Investor Holders of any
Series or Class (or the termination of the Trust), except as otherwise provided
in this paragraph, all funds then on deposit in the Collection Account, the
Excess Funding Account and any Series Account allocated to such Investor Holders
shall continue to be held in trust for the benefit of such Investor Holders and
the Paying Agent or Trustee shall pay such funds to such Investor Holders upon
surrender of their Investor Certificates (and any excess shall be paid in
accordance with any relevant Enhancement Agreement). If all such Investor
Holders shall not surrender their Investor Certificates for cancellation within
six months after the date specified in the notice from Trustee described in
PARAGRAPH (a), Trustee shall give a second notice to the remaining such Investor
Holders to surrender their Investor Certificates for cancellation and receive
the final distribution with respect thereto (which surrender and payment, in the
case of Bearer Certificates, shall be outside the United States). If within one
year after the second notice all such Investor Certificates shall not have been
surrendered for cancellation, Trustee may take appropriate steps, or may appoint
an agent to take appropriate steps, to contact the remaining such Investor
Holders concerning surrender of their Investor Certificates, and the cost
thereof shall be paid out of the
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funds in the Collection Account or any Series Account held for the benefit of
such Investor Holders. Trustee and the Paying Agent shall pay to Transferor any
moneys held by them for the payment of principal or interest that remains
unclaimed for two years. After payment to Transferor, Investor Holders entitled
to the money must look to Transferor for payment as general creditors unless an
applicable abandoned property law designates another Person.
(c) If the Invested Amount with respect to any Series is greater than zero
on its Series Termination Date or such earlier date as is specified in the
related Supplement (after giving effect to deposits and distributions otherwise
to be made on such date), Trustee will sell or cause to be sold on such Series
Termination Date, in accordance with the procedures and subject to the
conditions described in such Supplement, Principal Receivables and the related
Finance Charge Receivables (or, if a Tax Opinion is obtained, interests therein)
in an amount up to 110% of the Invested Amount with respect to such Series on
such date (after giving effect to such deposits and distributions; PROVIDED that
in no event shall such amount exceed an amount of Principal Receivables (and all
associated Finance Charge Receivables) equal to the sum of (i) the product of
(A) Transferor Percentage, (B) the aggregate outstanding Principal Receivables,
and (C) a fraction the numerator of which is the related Investor Percentage of
Collections of Finance Charge Receivables and the denominator of which is the
sum of all Investor Percentages with respect to Collections of Finance Charge
Receivables of all Series outstanding and (ii) the Invested Amount of such
Series). The proceeds from any such sale shall be allocated and distributed in
accordance with the applicable Supplement.
SECTION 12.3. TRANSFEROR'S TERMINATION RIGHTS. Upon the termination of the
Trust pursuant to SECTION 12.1, Trustee shall assign and convey to the holder of
the Transferor Interest or its designee, without recourse, representation or
warranty, all right, title and interest of the Trust in the Receivables, whether
then existing or thereafter created, all moneys due or to become due and all
amounts received with respect thereto and all proceeds thereof, except for
amounts held by Trustee pursuant to SECTION 12.2(b). Trustee shall execute and
deliver such instruments of transfer and assignment, in each case without
recourse, as shall be reasonably requested by Transferor to vest in Transferor
or its designee all right, title and interest which the Trust had in the
Receivables and such other related assets.
ARTICLE XIII MISCELLANEOUS PROVISIONS
SECTION 13.1. AMENDMENT; WAIVER OF PAST DEFAULTS. (a) This Agreement or
any Supplement may be amended from time to time (including in connection with
(i) adding covenants, restrictions or conditions of Transferor, such further
covenants, restrictions or conditions as its Board of Directors and Trustee
shall consider to be for the benefit or protection of the Investor Holders, and
to make the occurrence, or the occurrence and continuance, of a default in any
of such additional covenants, restrictions or conditions a default or Early
Amortization Event permitting the enforcement of all or any of the several
remedies provided in this Agreement as herein set forth; PROVIDED, HOWEVER, that
in respect of any such additional covenant, restriction or condition such
amendment may provide for a particular period of grace after default or may
provide for an immediate enforcement upon such default or may limit the remedies
available to Trustee upon such default, (ii) curing any ambiguity or correcting
or supplementing any provision contained herein or in any Supplement which may
be defective or inconsistent with any other provision contained herein or in any
Supplement or to surrender any
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right or power conferred upon Transferor, (iii) the issuance of a Supplemental
Interest, (iv) the addition of a Participation Interest or receivables arising
in VISA, MasterCard or any other type of open end revolving credit card account
to the Trust, (v) the assumption by another entity, in accordance with the
provisions of this Agreement, of Transferor's obligations hereunder, or (vi) the
provision of additional Enhancement for the benefit of Holders of any Series) by
Servicer, Transferor and Trustee without the consent of such Holders as provided
for in the applicable Supplement, PROVIDED that (x) Transferor shall have
delivered to Trustee an Officer's Certificate to the effect that Transferor
reasonably believes that such action shall not adversely affect in any material
respect the interests of any Investor Holder, (y) the Rating Agency Condition
shall have been satisfied with respect to any such amendment and (z) a Tax
Opinion is delivered in connection with any such amendment. The designation of
additional or substitute Transferors or additional Credit Card Originators
pursuant to SECTION 2.11 or 2.12 shall be subject to this SECTION 13.1 only to
the extent that the supplement to this Agreement providing for such designation
amends any of the terms of this Agreement.
(b) This Agreement or any Supplement may also be amended from time to time
by Servicer, Transferor and Trustee, with the consent of the Holders of Investor
Certificates (acting for themselves or through any designated agents, as
provided for in any applicable Supplement) evidencing not less than 66-2/3% of
the aggregate unpaid principal amount of the Investor Certificates of all
adversely affected Series and, unless the Rating Agency Condition is satisfied,
of each Class of each such Series, for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or any Supplement or of modifying in any manner the rights of the Holders;
PROVIDED, HOWEVER, that no such amendment shall (i) reduce in any manner the
amount of or delay the timing of any distributions to be made to any Investor
Holders or deposits of amounts to be so distributed or the amount available
under any Enhancement without the consent of each affected Holder (provided that
any amendment of the terms of an Early Amortization Event shall not be deemed to
be within the scope of this CLAUSE (i)), (ii) change the definition of or the
manner of calculating the interest of any Investor Holder without the consent of
each affected Investor Holder (acting for themselves or through any designated
agents, as provided for in any applicable Supplement) or (iii) reduce the
aforesaid percentage required to consent to any such amendment without the
consent of each Investor Holder (acting for themselves or through any designated
agents, as provided for in any applicable Supplement) and, unless the Rating
Agency Condition is satisfied, of each Class of each such Series. Any amendment
to be effected pursuant to this paragraph shall be deemed to adversely affect
all outstanding Series, other than any Series with respect to which such action
shall not, as evidenced by an Opinion of Counsel for Transferor, addressed and
delivered to Trustee, adversely affect in any material respect the interests of
any Investor Holder of such Series. Trustee may, but shall not be obligated to,
enter into any such amendment which affects Trustee's rights, duties or
immunities under this Agreement or otherwise.
(c) Promptly after the execution of any such amendment or consent (other
than an amendment pursuant to PARAGRAPH (a)), Trustee shall furnish notification
of the substance of such amendment to each Investor Holder; and Servicer shall
furnish prior notification of the substance of such amendment to (i) each Rating
Agency and (ii) each Enhancement Provider, if any, entitled thereto pursuant to
the relevant Supplement.
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(d) It shall not be necessary for the consent of Investor Holders 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 Investor Holders shall be subject to such reasonable
requirements as Trustee may prescribe.
(e) Any Supplement executed in accordance with the provisions of SECTION
6.3 shall not be considered an amendment to this Agreement for the purposes of
this Section.
(f) The Holders of Investor Certificates evidencing more than 66-2/3% of
the aggregate unpaid principal amount of the Investor Certificates 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 Investor Certificates 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 Holders, waive any
default by Transferor or Servicer in the performance of their obligations
hereunder and its consequences, except the failure to make any distributions
required to be made to Investor Holders 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.
SECTION 13.2. PROTECTION OF RIGHT, TITLE AND INTEREST TO TRUST. (a)
Transferor shall cause this Agreement, all amendments and supplements hereto and
all financing statements and continuation statements and any other necessary
documents covering the Holders, and Trustee's right, title and interest to the
Trust to be promptly recorded, registered and filed, and at all times to be kept
recorded, registered and filed, all in such manner and in such places as may be
required by law fully to preserve and protect the right, title and interest of
the Holders and Trustee hereunder to all property comprising the Trust Assets.
Transferor shall deliver to 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.
(b) Within 30 days after Transferor makes any change in its name, identity
or corporate structure which would make any financing statement or continuation
statement filed in accordance with PARAGRAPH (a) seriously misleading within the
meaning of Section 9-402(7) (or any comparable provision) of the UCC, Transferor
shall give 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 in the Receivables and the proceeds thereof.
(c) Transferor and Servicer will give Trustee prompt notice of any
relocation of any office from which it services Receivables or keeps records
concerning the Receivables or of its principal executive office and whether, as
a result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any 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. Transferor and Servicer will at all
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times maintain each office from which it services Receivables and its principal
executive offices within the United States.
(d) Transferor will deliver to Trustee and any Enhancement Provider
entitled thereto pursuant to the relevant Supplement: (i) upon the execution and
delivery of each amendment of this Agreement or any Supplement, an Opinion of
Counsel to the effect specified in EXHIBIT E-1; (ii) on each Addition Date on
which any Supplemental Accounts are to be designated as Accounts pursuant to
SECTION 2.8(a) or (b), an Opinion of Counsel to the effect specified in EXHIBIT
E-2, and on each Addition Date on which any Participation Interests are to be
included in the Trust pursuant to SECTION 2.8(a) or (b), an Opinion of Counsel
covering the same substantive legal issues addressed by EXHIBIT E-2 but
conformed to the extent appropriate to relate to Participation Interests; and
(iii) on or before March 31 of each year, beginning with March 31, 1996, an
Opinion of Counsel to the effect specified in EXHIBIT E-2.
SECTION 13.3. LIMITATION ON RIGHTS OF HOLDERS. (a) The death or incapacity
of any Holder shall not operate to terminate this Agreement or the Trust, nor
shall such death or incapacity entitle such Holders' legal representatives or
heirs to claim an accounting or to take any action or commence any proceeding in
any court for a partition or winding up of the Trust, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any of them.
(b) No Investor Holder shall have any right to vote (except as expressly
provided in this Agreement) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Certificates, be
construed so as to constitute the Investor Holders from time to time as partners
or members of an association, nor shall any Investor Holder be under any
liability to any third person by reason of any action by the parties to this
Agreement pursuant to any provision hereof.
(c) No Investor Holder shall have any right by virtue of any provisions of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Investor Holder
previously shall have made, and unless the Holders of Investor Certificates
evidencing more than 50% of the aggregate unpaid principal amount of all
Investor Certificates (or, with respect to any such action, suit or proceeding
that does not relate to all Series, 50% of the aggregate unpaid principal amount
of the Investor Certificates of all Series which such action, suit or proceeding
relates) shall have made written request to Trustee to institute such action,
suit or proceeding in its own name as Trustee hereunder and shall have offered
to Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and Trustee, for 60
days after its receipt of such request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each Investor Holder
with every other Investor Holder and Trustee, that no one or more Investor
Holders shall have any right in any manner whatever by virtue or by availing
itself or themselves of any provisions of this Agreement to affect, disturb or
prejudice the rights of Holders of any other of the Investor Certificates, or to
obtain or seek to obtain priority over or preference to any other Investor
Holder, or to enforce any right under this Agreement, except in the manner
herein provided and for the equal, ratable and common benefit of all Investor
Holders except as otherwise expressly provided in this Agreement. For the
protection and enforcement of the
86
provisions of this Section, each and every Investor Holder and Trustee shall be
entitled to such relief as can be given either at law or in equity.
SECTION 13.4. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 13.5. NOTICES, PAYMENTS. (a) All demands notices, instructions,
directions, consents and communications (collectively, "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 Servicer, to WFN, 000
Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxx 00000, Attention: Xxxxxx Xxxxxx (facsimile no.
614/729-4899), (ii) in the case of Trustee, BNY Midwest Trust Company, 0 Xxxxx
XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention Structured
Finance Services (facsimile No. (000) 000-0000] , (iii) in the case of
Transferor, to WFN Credit Company, LLC, 000 Xxxx Xxxxxxx Xxxx, Xxxxxxxxxxx, Xxxx
00000, (iv) in the case of the Paying Agent or the Transfer Agent and Registrar,
to Trustee at the address above and (v) to any other Person as specified in any
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
Certificates shall be given by first-class mail, postage prepaid, at the address
of such Holder as shown in the Certificate Register. No Notice shall be required
to be mailed to a Holder of Bearer Certificates 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 Investor Holder 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 Investor Holders 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 Certificates are outstanding, any Notice required or
permitted to be given to Investor Holders of such Series or Class shall be
published in an Authorized Newspaper within the time period prescribed in this
Agreement.
SECTION 13.6. RULE 144A INFORMATION. For so long as any of the Investor
Certificates of any Series or Class are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, each of Transferor, Trustee,
Servicer and any Enhancement Provider agree to cooperate with each other to
provide to any Investor Holders of such Series or Class and to any prospective
purchaser of Certificates designated by such Investor Holder, upon the request
of such Investor Holder or prospective purchaser, any information required to be
provided to such holder or prospective purchaser to satisfy the condition set
forth in Rule 144A(d)(4) under the Securities Act.
SECTION 13.7. 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
87
Agreement and shall in no way affect the validity or enforceability of the
remaining provisions or of the Certificates or the rights of the Holders.
SECTION 13.8. CERTIFICATES NONASSESSABLE AND FULLY PAID. It is the
intention of the parties to this Agreement that the Holders shall not be
personally liable for obligations of the Trust, that the interests in the Trust
represented by the Certificates shall be nonassessable for any losses or
expenses of the Trust or for any reason whatsoever and that Certificates upon
authentication thereof by Trustee pursuant to SECTION 6.2 are and shall be
deemed fully paid.
SECTION 13.9. FURTHER ASSURANCES. Transferor and 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 Trustee more fully to effect the
purposes of this Agreement, including the execution of any financing statements
or continuation statements relating to the Receivables for filing under the
provisions of the UCC of any applicable jurisdiction.
SECTION 13.10. NONPETITION COVENANT. Notwithstanding any prior termination
of this Agreement, Servicer, Trustee, each Holder and each Enhancement Provider,
if any, and each Holder of a Supplemental Interest and (with respect to the
Trust only) the Transferor shall not, (i) prior to the date which is one year
and one day after the last day on which any Investor Certificates shall have
been outstanding, with respect to the Trust or (ii) at any time, with respect to
the Trust or the Transferor, petition or otherwise invoke or cause the Trust or
the Transferor to invoke the process of any Governmental Authority for the
purpose of commencing or sustaining a case against the Trust or the Transferor
under any Federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Trust or the Transferor or any substantial part of its
property or ordering the winding-up or liquidation of the affairs of the Trust
or the Transferor; PROVIDED, HOWEVER, that nothing herein shall prohibit the
Trustee from filing proofs of claim or otherwise participating in such
proceedings instituted by any other person.
SECTION 13.11. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and
no delay in exercising, on the part of Trustee or the Holders, 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 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 13.12. 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 13.13. THIRD-PARTY BENEFICIARIES. This Agreement will inure to the
benefit of and be binding upon the parties hereto, the Holders, any Enhancement
Provider (to the extent provided in this Agreement and the related Supplement)
and their respective successors and permitted assigns. Except as otherwise
expressly provided in this Agreement (including SECTION 7.4), no other Person
will have any right or obligation hereunder.
88
SECTION 13.14. ACTIONS BY HOLDERS. (a) Wherever in this Agreement a
provision is made that an action may be taken or a Notice given by Holders, such
action or Notice may be taken or given by any Holder, unless such provision
requires a specific percentage of Holders.
(b) Any Notice, request, authorization, direction, consent, waiver or
other act by the Holder of a Certificate shall bind such Holder and every
subsequent Holder of such Certificate and of any Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done or omitted to be done by Trustee or Servicer in
reliance thereon, whether or not notation of such action is made upon such
Certificate.
SECTION 13.15. 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.
89
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
WFN CREDIT COMPANY, LLC,
as Transferor
By /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Treasurer
WORLD FINANCIAL NETWORK
NATIONAL BANK, as Servicer
By /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Treasurer
BNY MIDWEST TRUST COMPANY ,
not in its individual capacity,
but solely as Trustee
By /s/ Xxxx Xxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxx
Title: Assistant Vice President
S-1
EXHIBIT A
FORM OF ASSIGNMENT OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS
(As required by SECTION 2.8 of
the
Pooling and Servicing Agreement)
ASSIGNMENT No. _______ OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS dated as of
_____________, ___(1) by and among WFN CREDIT COMPANY, LLC, a Delaware limited
liability company, as Transferor ("TRANSFEROR"), WORLD FINANCIAL NETWORK
NATIONAL BANK, a national banking association, as Servicer ("SERVICER"), and BNY
MIDWEST TRUST COMPANY (successor to the corporate trust administration of Xxxxxx
Trust and Savings Bank (successor to The Bank of New York), an Illinois trust
company ("TRUSTEE"), pursuant to the Second Amended and Restated
Pooling and
Servicing Agreement referred to below.
WITNESSETH
WHEREAS Transferor, Servicer and Trustee are parties to the Second Amended
and Restated
Pooling and Servicing Agreement dated as of August 1, 2001 (as may
be amended and supplemented from time to time, the "AGREEMENT");
WHEREAS, pursuant to the Agreement, Transferor wishes to designate
Supplemental Accounts owned by the Credit Card Originator to be included as
Accounts and to convey the Receivables of such Supplemental Accounts, whether
now existing or hereafter created, to the Trust as part of the corpus of the
Trust (as each such term is defined in the Agreement); and
WHEREAS Trustee is willing to accept such designation and conveyance
subject to the terms and conditions hereof;
NOW, THEREFORE, Transferor, Servicer and Trustee hereby agree as follows:
1. DEFINED TERMS. All capitalized terms used herein shall have the meanings
ascribed to them in the Agreement unless otherwise defined herein.
"Addition Date" means, with respect to the Supplemental Accounts
designated hereby, ________, ____.
"Addition Cut Off Date" means, with respect to the Supplemental Accounts
designated hereby, ________, ____.
----------
(1) To be dated as of the applicable Addition Date.
Exhibit A, Page 1
2. DESIGNATION OF SUPPLEMENTAL ACCOUNTS. On or before the Document Delivery
Date, Transferor will deliver to Trustee an Account Schedule containing a true
and complete schedule identifying all such Supplemental Accounts specifying for
each such Account, as of the Addition Cut Off Date, its account number, the
aggregate amount outstanding in such Account and the aggregate amount of
Principal Receivables outstanding in such Account, which Account Schedule shall
supplement any other Account Schedule previously delivered to Trustee pursuant
to the Agreement.
3. CONVEYANCE OF RECEIVABLES. Transferor does hereby transfer, assign, set over
and otherwise convey to the Trust, for the benefit of the Holders, all its
right, title and interest in, to and under the Receivables of such Supplemental
Accounts existing at the close of business on the Addition Date and thereafter
created from time to time until the termination of the Trust, all monies due or
to become due and all amounts received with respect thereto and all proceeds
thereof. The foregoing does not constitute and is not intended to result in the
creation or assumption by the Trust, Trustee, any Investor Holder or any
Enhancement Provider of any obligation of Servicer, Transferor, the Credit Card
Originator 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.
Transferor agrees to record and file, at its own expense, financing
statements (and continuation statements when applicable) with respect to the
Receivables now in Supplemental Accounts, meeting the requirements of applicable
state law in such manner and in such jurisdictions as are necessary to perfect,
and maintain perfection of, the assignment of such Receivables to the Trust, and
to deliver a file-stamped copy of each such financing statement or other
evidence of such filing to Trustee on or prior to the Addition Date. Trustee
shall be under no obligation whatsoever to file or maintain such financing or
continuation statements or to make any other filing under the UCC in connection
with such assignment.
In connection with such assignment, Transferor further agrees, at its own
expense, on or prior to the date of this Assignment, to cause the Credit Card
Originator to indicate in the appropriate computer files that Receivables
created in connection with the Supplemental Accounts and designated hereby have
been conveyed to the Trust pursuant to the Agreement and this Assignment for the
benefit of the Holders.
Transferor does hereby grant to Trustee a security interest in all of its
right, title and interest in and to the Receivables now existing and hereafter
created in the Supplemental Accounts, all monies due or to become due and all
amounts received with respect thereto and all proceeds thereof. This Assignment
constitutes a security agreement under the UCC.
4. ACCEPTANCE BY TRUSTEE. Trustee hereby acknowledges its acceptance on behalf
of the Trust of all right, title and interest to the property, now existing and
hereafter created, conveyed to the Trust pursuant to SECTION 3(a) of this
Assignment, and declares that it shall maintain such right, title and interest,
upon the trust set forth in the Agreement for the benefit of all Holders.
Trustee further acknowledges that, prior to or simultaneously with the execution
and delivery of this Assignment, Transferor delivered to Trustee the Account
Schedule described in SECTION 2 of this Assignment.
Exhibit A, Page 2
5. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR. Transferor hereby represents
and warrants to Trustee, on behalf of the Trust, as of the date of this
Assignment and as of the Addition Date that:
(a) LEGAL, VALID AND BINDING OBLIGATION. This Assignment constitutes
a legal, valid and binding obligation of Transferor enforceable against
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. Each Supplemental 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 Credit Card
Originator or Transferor has occurred and the transfer by Transferor of
Receivables arising in the Supplemental Accounts to the Trust has not been
made in contemplation of the occurrence thereof;
(d) EARLY AMORTIZATION EVENT. Transferor reasonably believes that
(A) the addition of the Receivables arising in the Supplemental Accounts
will not, based on the facts known to Transferor, then or thereafter cause
an Early Amortization Event to occur with respect to any Series and (B) no
selection procedure was utilized by Transferor which would result in the
selection of Supplemental Accounts (from among the available Eligible
Accounts owned by the Credit Card Originator) that would be materially
less favorable to the interests of the Investor Holders of any Series as
of the Addition Date than a random selection;
(e) SECURITY INTEREST. Either this Assignment constitutes a valid
transfer and assignment to the Trust of all right, title and interest of
Transferor in the Receivables and other Trust Assets conveyed to the Trust
by Transferor and all monies due or to become due and all amounts received
with respect thereto and the proceeds thereof, or this Assignment
constitutes a grant of a security interest in such property to the
Trustee, for the benefit of the Investor Holders, 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 security interest in such
property except for Liens permitted under SECTION 2.7(b) of the Agreement;
(f) NO CONFLICT. The execution and delivery by Transferor of this
Assignment, the performance of the transactions contemplated by this
Assignment and the fulfillment of the terms hereof applicable to
Transferor, will not conflict with or violate any
Exhibit A, Page 3
Requirements of Law applicable to 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 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 Transferor, threatened against
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 Transferor,
would materially and adversely affect the performance by Transferor of its
obligations under this Assignment, (iv) seeking any determination or
ruling that would materially and adversely affect the validity or
enforceability of this Assignment or (v) seeking to affect adversely the
income tax attributes of the Trust under the Federal, or applicable state
income or franchise tax systems; and
(h) ALL CONSENTS. All authorizations, consents, orders or approvals
or other actions of any Person or of any court or other governmental
authority required to be obtained by Transferor in connection with the
execution and delivery of this Assignment by Transferor and the
performance of the transactions contemplated by this Assignment by
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 THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Exhibit A, Page 4
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Assignment to be duly executed by their respective officers as of the day and
year first above written.
WFN CREDIT COMPANY, LLC,
as Transferor
By _____________________________________
Name:Xxxxxx X. Xxxxxx
Title: Vice President and Treasurer
WORLD FINANCIAL NETWORK
NATIONAL BANK,
as Servicer,
By _____________________________________
Name:Xxxxxx X. Xxxxxx
Title: Vice President and Treasurer
BNY MIDWEST TRUST COMPANY,
not in its individual capacity, but
solely as Trustee,
By _____________________________________
Name:Xxxx Xxxxxxx
Title: Assistant Vice President
Exhibit A, Page 5
EXHIBIT B
FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
(As required by SECTION 2.9 of
the
Pooling and Servicing Agreement)
REASSIGNMENT No. _______ OF RECEIVABLES dated as of _________, ____(1) by
and among WFN CREDIT COMPANY, LLC, a Delaware limited liability company, as
Transferor ("TRANSFEROR"), WORLD FINANCIAL NETWORK NATIONAL BANK, a national
banking association, as Servicer ("SERVICER"), and BNY MIDWEST TRUST COMPANY
(successor to the corporate trust administration of Xxxxxx Trust and Savings
Bank (as successor to The Bank of New York), an Illinois trust company
("TRUSTEE"), pursuant to the Second Amended and Restated Pooling and Servicing
Agreement referred to below.
WITNESSETH:
WHEREAS Transferor, Servicer and Trustee are parties to the Second Amended
and Restated Pooling and Servicing Agreement dated as of August 1, 2001 (as may
be amended and supplemented from time to time, the "AGREEMENT");
WHEREAS pursuant to the Agreement, Transferor wishes to remove from the
Trust all Receivables in certain designated Accounts owned by the Credit Card
Originator (the "REMOVED ACCOUNTS") and to cause Trustee to reconvey the
Receivables of such Removed Accounts, whether now existing or hereafter created,
from the Trust to Transferor; and
WHEREAS Trustee is willing to accept such designation and to reconvey the
Receivables in the Removed Accounts subject to the terms and conditions hereof;
NOW, THEREFORE, Transferor, Servicer and Trustee hereby agree as follows:
1. DEFINED TERMS. All terms defined in the Agreement and used herein shall have
such defined meanings when used herein, unless otherwise defined herein.
"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 date that is 10 Business
Days after the Removal Date, Transferor will deliver to Trustee an Account
Schedule identifying all Accounts the Receivables of which are being removed
from the Trust, specifying for each such
----------
(1) To be dated as of the Removal Date.
Exhibit B, Page 1
Account, as of the Removal Notice Date, its account number, the aggregate amount
outstanding in such Account and the aggregate amount of Principal Receivables in
such Account, which Account Schedule shall supplement any Account Schedule
previously delivered to Trustee pursuant to the Agreement.
3. CONVEYANCE OF RECEIVABLES. (a) Trustee does hereby transfer, assign, set over
and otherwise convey to Transferor, without representation, warranty or
recourse, on and after the Removal Date, all right, title and interest of the
Trust in, to and under the Receivables existing at the close of business on the
Removal Date and thereafter created from time to time in the Removed Accounts
designated hereby, all monies due or to become due and all amounts received with
respect thereto and all proceeds thereof.
(b) In connection with such transfer, Trustee agrees to execute and
deliver to Transferor on or prior to the date this Reassignment is delivered,
applicable termination statements 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 TRANSFEROR. Transferor hereby represents
and warrants to Trustee, on behalf of the Trust, as of the Removal Date:
(a) LEGAL, VALID AND BINDING OBLIGATION. This Reassignment constitutes a
legal, valid and binding obligation of Transferor enforceable against
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) EARLY AMORTIZATION EVENT. Transferor reasonably believes that (A) the
removal of the Receivables existing in the Removed Accounts will not, based on
the facts known to Transferor, then or thereafter cause an Early Amortization
Event to occur with respect to any Series and (B) no selection procedure was
utilized by Transferor which would result in a selection of Removed Accounts
from among any pools of Accounts of a similar type that would be materially
adverse to the interests of the Investor Holders of any Series as of the Removal
Date; and
(c) LIST OF REMOVED ACCOUNTS. The list of Removed Accounts delivered
pursuant to SECTION 2.9(a)(ii) of the Agreement, as of the Removal Date, is true
and complete in all material respects.
(d) DEFAULTED RECEIVABLES. No selection procedure was utilized by
Transferor with the intent to include a disproportionately higher level of
Defaulted Receivables in the Removed Accounts than exist in the Accounts or to
remove Accounts for the intended purpose of mitigating losses to the Trust.
Exhibit B, Page 2
(e) RECEIVABLES TESTS. The aggregate Principal Receivables in the Removed
Accounts did not exceed the lesser of (i) the excess of the Transferor Amount
over the Minimum Transferor Amount or (ii) the excess of the aggregate amount of
Principal Receivables plus amounts on deposit in the Excess Funding Account over
the Required Principal Balance, all measured as of the end of the most recently
ended Monthly Period.
(f) INVESTED AMOUNTS. Such removal shall not cause a decrease in the sum
of the Invested Amounts for all outstanding Series.
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 THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Exhibit B, Page 3
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Reassignment to be duly executed by their respective officers as of the day and
year first above written.
WFN CREDIT COMPANY, LLC,
as Transferor
By _____________________________________
Name:
Title:
WORLD FINANCIAL NETWORK
NATIONAL BANK,
as Servicer,
By _____________________________________
Name:
Title:
BNY MIDWEST TRUST COMPANY,
not in its individual capacity,
but solely as Trustee,
By _____________________________________
Name:
Title:
Exhibit B, Page 4
EXHIBIT C
FORM OF ANNUAL SERVICER'S CERTIFICATE
(To be delivered on or before the
90th day following the end of the fiscal year
of Transferor beginning with December 31, 1996,
pursuant to SECTION 3.5 of the Pooling and
Servicing Agreement referred to below)
WORLD FINANCIAL NETWORK NATIONAL BANK
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
The undersigned, a duly authorized representative of World Financial
Network National Bank, as Servicer ("WFN"), pursuant to the Second Amendment and
Restated Pooling and Servicing Agreement dated as of August 1, 2001 (as may be
amended and supplemented from time to time, the "AGREEMENT"), among WFN Credit
Company. LLC, as Transferor, WFN, as Servicer, and BNY Midwest Trust Company
(successor to the corporate trust administration of Xxxxxx Trust and Savings
Bank, successor to The Bank of New York), as Trustee, does hereby certify that:
1. WFN is, as of the date hereof, Servicer under the Agreement. Capitalized
terms used in this Certificate have their respective meanings as set forth in
the Agreement.
2. The undersigned is a Servicing Officer who is duly authorized pursuant to the
Agreement to execute and deliver this Certificate to Trustee.
3. A review of the activities of Servicer during the fiscal year ended
__________, ____, and of its performance under the Agreement was conducted under
my supervision.
4. Based on such review, 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.
5. The following is a description of each default in the performance of
Servicer's obligations under the provisions of the Agreement known to me to have
been made by Servicer during the fiscal year ended ___________, _____, which
sets forth in detail (i) the nature of each such default, (ii) the action taken
by Servicer, if any, to remedy each such default and (iii) the current status of
each such default: if applicable, insert "None."
Exhibit C, Page 1
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
this ______ day of ____________, 20___.
WORLD FINANCIAL NETWORK
NATIONAL BANK,
as Servicer,
By _____________________________________
Name:
Title:
Exhibit C, Page 2
EXHIBIT D-1
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). NEITHER THIS CERTIFICATE NOR ANY PORTION
HEREOF MAY BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND ANY
APPLICABLE PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
Exhibit D-1
EXHIBIT D-2
FORM OF UNDERTAKING LETTER
Date
Trustee Bank
Attention:
World Financial Network
National Bank
000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxx 00000
Attention:
Re: Purchase of $___________(1) principal amount of
World Financial
Network Credit Card Master Trust, Class __, __% Floating Rate Asset
Backed Certificates, Series
Dear Sirs:
In connection with our purchase of the above-referenced Asset Backed
Certificates (the "CERTIFICATES") we confirm that:
(i) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), and
are being sold to us in a transaction that is exempt from the registration
requirements of the Securities Act;
(ii) any information we desire concerning the Certificates or any
other matter relevant to our decision to purchase the certificates is or
has been made available to us;
(iii) we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Certificates, and we (and any account for which we are
purchasing under PARAGRAPH (iv)) are able to bear the economic risk of an
investment in the Certificates; we (and any account for which we are
purchasing under PARAGRAPH (iv)) are an "accredited investor" (as such
term is defined in Rule 501(a)(1), (2) or (3) of Regulation D under the
Securities Act); and we are not, and none of such accounts is, a Benefit
Plan;
(iv) we are acquiring the Certificates for our own account or for
accounts as to which we exercise sole investment discretion and not with a
view to any distribution
----------
(1) Not less than $250,000 minimum principal amount.
Exhibit D-2, Page 1
of the Certificates, subject, nevertheless, to the understanding that the
disposition of our property shall at all times be and remain within our control;
(v) we agree that the Certificates must be held indefinitely by us
unless subsequently registered under the Securities Act or an exemption
from any registration requirements of that Act and any applicable state
securities laws available;
(vi) we agree that if at some future time we wish to dispose of or
exchange any of the Certificates (such disposition or exchange not being
currently foreseen or contemplated), we will not transfer or exchange any
of the Certificates unless
(A) (1) the sale is of at least U.S. $250,000 principal amount
of Certificates to an Eligible Purchaser (as defined below), (2) a
letter to substantially the same effect as paragraphs (i), (ii),
(iii), (iv), (v) and (vi) of this letter is executed promptly by the
purchaser and (3) all offers or solicitations in connection with the
sale, whether directly or through any agent acting on our behalf,
are limited only to Eligible Purchasers and are not made by means of
any form of general solicitation or general advertising whatsoever;
or
(B) the Certificates are transferred pursuant to Rule 144
under the Securities Act by us after we have held them for more than
three years; or
(C) the Certificates are sold in any other transaction that
does not require registration under the Securities Act and, if
Transferor, Servicer, Trustee or the Transfer Agent and Registrar so
requests, we theretofore have furnished to such party an Opinion of
Counsel satisfactory to such party, in form and substance
satisfactory to such party, to such effect; or
(D) the Certificates are transferred pursuant to an exception
from the registration requirements of the Securities Act under Rule
144A under the Securities Act; or
(E) The Certificates are not transferred to any Benefit Plan
(as defined below), unless the transferee is an insurance company
general account that represents and warrants that at the time of
acquisition and throughout its holding of the certificate (a) it is
not a service provider to the trust or an affiliate of the
foregoing, and would not otherwise be excluded under 29 C.F.R.
2510.3-101(f)(1), and (b) each of the accounts to which such
certificate is allocated is an insurance company general account (1)
that is eligible for and meets the requirements of Department of
Labor Prohibited Transaction Class Exemption 95-60 and (2) of which
less than 25% of the assets are (or represent) assets of a Benefit
Plan.(2)
----------
(2) This bracketed text should be included only if the Certificate(s) to be
purchased include the legend specified on EXHIBIT D-3.
Exhibit D-2, Page 2
(vii) we understand that the Certificates will bear a legend to
substantially the following effect:
"THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). NEITHER THIS CERTIFICATE NOR ANY
PORTION HEREOF MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND ANY
APPLICABLE PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN."
"THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A BENEFIT
PLAN (AS DEFINED BELOW) UNLESS IT IS AN INSURANCE COMPANY USING THE ASSETS OF
ITS GENERAL ACCOUNT AND, AT THE TIME OF ACQUISITION AND THROUGHOUT ITS HOLDING
OF THE CERTIFICATE (A) IT IS NOT A SERVICE PROVIDER TO THE TRUST OR AN AFFILIATE
OF THE FOREGOING, AND WOULD NOT OTHERWISE BE EXCLUDED UNDER 29 C.F.R.
2510.3-101(f)(1), AND (B) EACH OF THE ACCOUNTS TO WHICH SUCH CERTIFICATE IS
ALLOCATED IS AN INSURANCE COMPANY GENERAL ACCOUNT (1) THAT IS ELIGIBLE FOR AND
MEETS THE REQUIREMENTS OF DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS
EXEMPTION 95-60 AND (2) OF WHICH LESS THAN 25% OF THE ASSETS ARE (OR REPRESENT)
ASSETS OF A BENEFIT PLAN."*
The first paragraph of this legend may be removed if Transferor, Servicer,
Trustee and the Transfer Agent and Registrar have received an Opinion of Counsel
satisfactory to them, in form and substance satisfactory to them, to the effect
that such paragraph may be removed.
"ELIGIBLE PURCHASER" means either an Eligible Dealer or a corporation,
partnership or other entity which we have reasonable grounds to believe and do
believe can make representations with respect to itself to substantially the
same effect as the representations set forth herein. "ELIGIBLE DEALER" means any
corporation or other entity the principal business of which is acting as a
broker and/or dealer in securities. "BENEFIT PLAN" means any "employee benefit
plan" within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (whether or not subject to ERISA and including
foreign and governmental plans), any plan, trust or account (including an
individual retirement plan) described in Section 4975(e)(1) of the Internal
Revenue Code of 1986, as amended, or any collective investment fund, insurance
company separate or general account or other entity deemed to hold plan assets
of the foregoing by reason of any such employee benefit plan's or other plan's
investment in such entity. Capitalized terms used but not defined herein shall
have the
----------
* This bracketed text should be included only if the Certificate(s) to be
purchased include the legend specified on EXHIBIT D-3.
Exhibit D-2, Page 3
the meanings given to such terms in the Second Amended and Restated Pooling and
Servicing Agreement, dated as of [_________], between WFN Credit Company, LLC,
as Transferor, World Financial Network National Bank, as Servicer, and BNY
Midwest Trust Company (successor to the corporate trust administration of Xxxxxx
Trust and Savings Bank, successor to The Bank of New York), as Trustee.
Very truly yours,
________________________________________
(Name of Purchaser)
By: ____________________________________
(Authorized Officer)
Exhibit X-0, Xxxx 0
XXXXXXX X-0
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A BENEFIT
PLAN (AS DEFINED BELOW) UNLESS IT IS AN INSURANCE COMPANY USING THE ASSETS OF
ITS GENERAL ACCOUNT AND, AT THE TIME OF ACQUISITION AND THROUGHOUT ITS HOLDING
OF THE CERTIFICATE (A) IT IS NOT A SERVICE PROVIDER TO THE TRUST OR AN AFFILIATE
OF THE FOREGOING, AND WOULD NOT OTHERWISE BE EXCLUDED UNDER 29 C.F.R.
2510.3-101(f)(1), AND (B) EACH OF THE ACCOUNTS TO WHICH SUCH CERTIFICATE IS
ALLOCATED IS AN INSURANCE COMPANY GENERAL ACCOUNT (1) THAT IS ELIGIBLE FOR AND
MEETS THE REQUIREMENTS OF DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS
EXEMPTION 95-60 AND (2) OF WHICH LESS THAN 25% OF THE ASSETS ARE (OR REPRESENT)
ASSETS OF A BENEFIT PLAN.(1)
----------
(1) The following text should be included in any Certificate in which the
above legend appears:
"The Certificates may not be acquired by or for the account of any
"employee benefit plan" within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (whether or not subject
to ERISA and including foreign and governmental plans), any plan, trust or
account (including an individual retirement plan) described in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended, or any
collective investment fund, insurance company separate or general account
or other entity deemed to hold plan assets of the foregoing by reason of
any such employee benefit plan's or other plan's investment in such entity
(each, a "Benefit Plan"), unless the purchaser or transferee is an
insurance company general account that represents and warrants that at the
time of acquisition and throughout its holding of the certificate (a) it
is not a service provider to the trust or an affiliate of the foregoing,
and would not otherwise be excluded under 29 C.F.R. 2510.3-101(f)(1), and
(b) each of the accounts to which such certificate is allocated is an
insurance company general account (1) that is eligible for and meets the
requirements of Department of Labor Prohibited Transaction Class Exemption
95-60 and (2) of which less than 25% of the assets are (or represent)
assets of a Benefit Plan. By accepting and holding this Certificate, the
Holder hereof shall be deemed to have represented and warranted that it is
not, and is not acting on behalf of, a Benefit Plan unless it is an
insurance company meeting the foregoing requirements. By acquiring an
interest in this Certificate, each applicable Certificate Owner shall be
deemed to have represented and warranted that it is not, and is not acting
on behalf of, a Benefit Plan."
By accepting and holding this Certificate, the Holder hereof shall be
deemed to have represented and warranted that it is not, and is not acting
on behalf of, a Benefit Plan. By acquiring any interest in this
Certificate, each applicable Certificate Owner shall be deemed to have
represented and warranted that it is not, and is not acting on behalf of,
a Benefit Plan.
Exhibit D-3
EXHIBIT E-1
FORM OF OPINION OF COUNSEL WITH RESPECT
TO AMENDMENTS
Provisions to be included in
Opinion of Counsel to be delivered pursuant
to SECTION 13.2(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 Pooling and Servicing Agreement, Supplement,
attached hereto as Schedule 1 (the "AMENDMENT"), has been duly authorized,
executed and delivered by Transferor and Servicer and constitutes the
legal, valid and binding agreement of Transferor and Servicer,
respectively, 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 or the rights of creditors of
national banking associations. The enforceability of the respective
obligations of Transferor and Servicer 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 13.1 of the Pooling and Servicing Agreement.
Exhibit E-1
EXHIBIT E-2
FORM OF OPINION OF COUNSEL WITH RESPECT
TO ADDITION OF SUPPLEMENTAL ACCOUNTS
Provisions to be included in
Opinion of Counsel to be
delivered pursuant to
SECTION 13.2(d)(ii) or (iii)
The opinions set forth below may be subject to appropriate qualifications,
assumptions, limitations and exceptions. PARAGRAPHS 1-3 are not required if the
opinion is being delivered solely under SECTION 13.2(d)(iii).
1. The Receivables arising in such Supplemental Accounts constitute
accounts.
2. The Pooling and Servicing Agreement creates in favor of the Trust a
security interest in Transferor's rights in the Receivables in such Supplemental
Accounts and the proceeds thereof (the "SPECIFIED ASSETS").
3. The security interest in the Specified Assets created by the Pooling
and Servicing Agreement will be perfected by the filing of the Financing
Statements as described and defined in such opinion. Based solely upon our
review of the UCC Searches as described and defined in such opinion, we hereby
confirm to you that no Person other than Trustee has filed any financing
statement with the Filing Offices as described and defined in such opinion that
covers the Specified Assets and that would have priority over the security
interest, if any, of the Trustee by virtue of such filing.
4. No further filings or actions are required under the UCC or other Ohio
law prior to _______, ____ , in order to maintain the perfection and priority of
the security interest created by the Pooling and Servicing Agreement in favor of
the Trust in Transferor's rights in the Receivables and the proceeds thereof.
