EXHIBIT 4.4
EXECUTION COPY
________________________________________________________________________________
HOUSEHOLD AFFINITY CREDIT CARD
MASTER NOTE TRUST I
TRUST AGREEMENT
HOUSEHOLD AFFINITY FUNDING CORPORATION III,
Transferor
and
WILMINGTON TRUST COMPANY,
Owner Trustee
Dated as of February 14, 2003
________________________________________________________________________________
TABLE OF CONTENTS
ARTICLE I DEFINITIONS ..................................................... 1
SECTION 1.01 CAPITALIZED TERMS ........................................ 1
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS ............................ 3
ARTICLE II ORGANIZATION .................................................... 4
SECTION 2.01. NAME ..................................................... 4
SECTION 2.02. OFFICE ................................................... 4
SECTION 2.03. PURPOSES AND POWERS; TRUST TO OPERATE AS A SINGLE
PURPOSE ENTITY ........................................... 4
SECTION 2.04. APPOINTMENT OF OWNER TRUSTEE ............................. 4
SECTION 2.05. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE ............. 5
SECTION 2.06. DECLARATION OF TRUST ..................................... 5
SECTION 2.07. TITLE TO TRUST ESTATE .................................... 5
SECTION 2.08. SITUS OF TRUST; PRINCIPAL OFFICE OF OWNER TRUSTEE......... 5
SECTION 2.09. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR ............. 5
SECTION 2.10. LIABILITY OF HOLDERS OF THE CERTIFICATES ................. 6
SECTION 2.11. PAYMENTS AND DISTRIBUTIONS. .............................. 6
SECTION 2.12. FISCAL YEAR. ............................................. 7
SECTION 2.13. CLOSING. ................................................. 7
SECTION 2.14. BOOKS AND RECORDS. ....................................... 7
SECTION 2.15. LIMITATION ON LIABILITY OF TRANSFEROR AND OTHERS ......... 7
ARTICLE III CERTIFICATES .................................................... 8
SECTION 3.01. INITIAL OWNERSHIP ........................................ 8
SECTION 3.02. FORM OF CERTIFICATES ..................................... 8
SECTION 3.03. AUTHENTICATION OF CERTIFICATES ........................... 8
SECTION 3.04. RESTRICTIONS ON TRANSFER ................................. 8
SECTION 3.05. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATE ......... 8
SECTION 3.06. ISSUANCE OF NEW TRANSFEROR CERTIFICATES .................. 9
ARTICLE IV ACTIONS BY OWNER TRUSTEE ........................................ 11
SECTION 4.01. PRIOR NOTICE TO TRANSFEROR WITH RESPECT TO CERTAIN
MATTERS .................................................. 11
SECTION 4.02. RESTRICTIONS ON POWER .................................... 11
ARTICLE V AUTHORITY AND DUTIES OF OWNER TRUSTEE ........................... 12
SECTION 5.01. GENERAL AUTHORITY ........................................ 12
SECTION 5.02. GENERAL DUTIES ........................................... 12
SECTION 5.03. ACTION UPON INSTRUCTION .................................. 12
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TABLE OF CONTENTS (cont'd.)
SECTION 5.04. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT
OR IN INSTRUCTIONS ..................................... 13
SECTION 5.05. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS ........................................... 13
SECTION 5.06. RESTRICTIONS ........................................... 13
ARTICLE VI CONCERNING THE TRUST COMPANY AND THE OWNER TRUSTEE ........... 14
SECTION 6.01 ACCEPTANCE OF TRUST AND DUTIES ......................... 14
SECTION 6.02. FURNISHING OF DOCUMENTS ................................ 15
SECTION 6.03. REPRESENTATIONS AND WARRANTIES ......................... 15
SECTION 6.04. RELIANCE; ADVICE OF COUNSEL ............................ 15
SECTION 6.05. NOT ACTING IN INDIVIDUAL CAPACITY ...................... 16
SECTION 6.06. OWNER TRUSTEE NOT LIABLE FOR CERTIFICATES,
NOTES OR RECEIVABLES ................................... 16
SECTION 6.07. OWNER TRUSTEE MAY OWN NOTES ............................ 16
SECTION 6.08. PAYMENTS FROM TRUST ESTATE ............................. 17
ARTICLE VII COMPENSATION OF TRUST COMPANY ................................ 18
SECTION 7.01. TRUST COMPANY'S FEES AND EXPENSES ...................... 18
SECTION 7.02. INDEMNIFICATION ........................................ 18
SECTION 7.03. PAYMENTS TO THE OWNER TRUSTEE .......................... 18
SECTION 7.04. NON-RECOURSE OBLIGATIONS ............................... 18
ARTICLE VIII TERMINATION OF TRUST AGREEMENT ............................... 19
SECTION 8.01. TERMINATION OF TRUST AGREEMENT ......................... 19
ARTICLE IX SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES ....... 20
SECTION 9.01. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE ............. 20
SECTION 9.02. RESIGNATION OR REMOVAL OF OWNER TRUSTEE ................ 20
SECTION 9.03. SUCCESSOR OWNER TRUSTEE ................................ 20
SECTION 9.04. MERGER OR CONSOLIDATION OF OWNER TRUSTEE ............... 21
SECTION 9.05. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE .......... 21
ARTICLE X MISCELLANEOUS ................................................ 23
SECTION 10.01. SUPPLEMENTS AND AMENDMENTS ............................. 23
SECTION 10.02. NO LEGAL TITLE TO TRUST ESTATE IN TRANSFEROR ........... 24
SECTION 10.03. LIMITATIONS ON RIGHTS OF OTHERS ........................ 24
SECTION 10.04. NOTICES ................................................ 24
SECTION 10.05. SEVERABILITY ........................................... 24
SECTION 10.06. SEPARATE COUNTERPARTS .................................. 24
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TABLE OF CONTENTS (cont'd.)
SECTION 10.07. SUCCESSORS AND ASSIGNS ................................. 24
SECTION 10.08. NONPETITION COVENANTS .................................. 25
SECTION 10.09. NO RECOURSE ............................................ 25
SECTION 10.10. HEADINGS ............................................... 25
SECTION 10.11. GOVERNING LAW .......................................... 25
SECTION 10.12. [RESERVED] ............................................. 25
SECTION 10.13. ACCEPTANCE OF TERMS OF AGREEMENT ....................... 25
SECTION 10.14. INTEGRATION OF DOCUMENTS ............................... 25
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TABLE OF CONTENTS (cont'd.)
EXHIBITS
EXHIBIT A FORM OF TRANSFEROR CERTIFICATE ................................. A-1
EXHIBIT B CERTIFICATE OF TRUST OF HOUSEHOLD AFFINITY CREDIT CARD
MASTER NOTE TRUST I ............................................ B-1
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HOUSEHOLD AFFINITY CREDIT CARD MASTER NOTE TRUST I TRUST AGREEMENT, dated
as of February 14, 2003, between HOUSEHOLD AFFINITY FUNDING CORPORATION III, a
Delaware corporation, as Transferor, and WILMINGTON TRUST COMPANY, a Delaware
banking corporation, as Owner Trustee.
ARTICLE I
DEFINITIONS
Section 1.01 Capitalized Terms. For all purposes of this Agreement, the
following terms shall have the meanings set forth below:
"Agreement" shall mean this Trust Agreement relating to the Household
Affinity Credit Card Master Note Trust I, as the same may be amended, modified
or otherwise supplemented from time to time.
"Certificate of Trust" shall mean the Certificate of Trust of the Trust in
the form attached hereto as Exhibit B which has been filed for the Trust
pursuant to Section 3810(a) of the Delaware Statutory Trust Act.
"Certificates" shall mean, unless otherwise indicated, the Transferor
Certificate and any Supplemental Certificates.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Corporate Trust Office" shall mean, with respect to the Owner Trustee, the
principal corporate trust office of the Owner Trustee located at Xxxxxx Square
North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, Attention:
Corporate Trust Administration; or such other address as the Owner Trustee may
designate by notice to the Transferor, or the principal corporate trust office
of any successor Owner Trustee (the address of which the successor Owner Trustee
will notify the Transferor).
"Delaware Statutory Trust Act" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C.(S)(S)3801 et seq., as amended from time to time, and
any successor statute thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Expenses" shall have the meaning specified in Section 7.02.
"Foreclosure Remedy" shall have the meaning specified in the Indenture.
"Indemnified Parties" shall have the meaning specified in Section 7.02.
"Indenture" shall mean the Master Indenture, dated as of February 18, 2003,
between the Issuer and The Bank of New York, as Indenture Trustee, as the same
may be amended, supplemented or otherwise modified from time to time.
"Indenture Trustee" shall mean The Bank of New York, not in its individual
capacity but solely as Indenture Trustee under the Indenture, and any successor
Indenture Trustee under the Indenture.
"Issuer" shall mean the Trust.
"Owner" shall mean Household Affinity Funding Corporation III, and its
successors and permitted assigns, in its capacity as holder of the Transferor
Certificate and beneficial owner of the Trust hereunder.
"Owner Trustee" shall mean Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as owner trustee under
this Agreement (unless otherwise specified herein).
"Plan" shall mean (i) an employee benefit plan (within the meaning of
Section 3(3) of ERISA) that is subject to Title I of ERISA or (ii) a plan
(within the meaning of Section 4975(e)(2) of the Code) that is subject to
Section 4975 of the Code.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Supplemental Certificate" shall have the meaning specified in subsection
3.06(b).
"Transaction Documents" shall mean, with respect to any Series of Notes,
the Receivables Purchase Agreements, the Transfer and Servicing Agreement, the
Indenture, the related Indenture Supplement, the Transferor Certificate, the
Certificate of Trust and such other documents and certificates delivered in
connection herewith and therewith.
"Transfer and Servicing Agreement" shall mean the Transfer and Servicing
Agreement, dated as of February 18, 2003, among the Issuer, the Transferor and
Household Finance Corporation, as Servicer, as the same may be amended,
supplemented or otherwise modified from time to time.
"Transferor" shall mean Household Affinity Funding Corporation III, in its
capacity as Transferor hereunder and its successors and assigns in such
capacity.
"Transferor Certificate Supplement" shall have the meaning specified in
subsection 3.06(b).
"Transferor Certificate" shall mean the Transferor's uncertificated
beneficial interest in the Trust as set forth in Section 3.06; provided,
however, if the Transferor elects to evidence such beneficial interest in
certificated form pursuant to Section 3.06, the certificate shall be executed by
the Trust and authenticated by or on behalf of the Owner Trustee, substantially
in the form of Exhibit A.
"Trust" shall mean the statutory trust created by this Agreement and the
filing of the Certificate of Trust with the Secretary of State.
"Trust Company" shall mean Wilmington Trust Company, a Delaware banking
corporation.
"Trust Estate" shall mean all right, title and interest of the Trust in and
to the property and rights assigned to the Trust pursuant to Section 2.05 of
this Agreement and Section 2.01 of the Transfer and Servicing Agreement, all
monies, investment property, instruments and other property on deposit from time
to time in the Collection Account, the Series Accounts and the Special Funding
Account and all other property of the Trust from time to time, including any
rights of the Owner Trustee and the Trust pursuant to the Transaction Documents.
"Trust Termination Date" shall have the meaning specified in Section 8.01.
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Section 1.02. Other Definitional Provisions. Capitalized terms used herein
and not otherwise defined have the meanings assigned to them in the Transfer and
Servicing Agreement or, if not defined therein, in the Indenture.
(a) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(b) As used in this Agreement and in any certificate or other document made
or delivered pursuant hereto or thereto, accounting terms not defined in this
Agreement or in any such certificate or other document, and accounting terms
partly defined in this Agreement or in any such certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles or regulatory accounting principles, as
applicable and as in effect on the date of this Agreement. To the extent that
the definitions of accounting terms in this Agreement or in any such certificate
or other document are inconsistent with the meanings of such terms under
generally accepted accounting principles or regulatory accounting principles in
the United States, the definitions contained in this Agreement or in any such
certificate or other document shall control.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; references to any subsection,
Section, Schedule or Exhibit are references to subsections, Sections, Schedules
and Exhibits in or to this Agreement unless otherwise specified; and the term
"including" means "including without limitation."
(d) The definitions contained in this Agreement 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.
[End of Article I]
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ARTICLE II
ORGANIZATION
Section 2.01. Name. The Trust created hereby shall be known as "Household
Affinity Credit Card Master Note Trust I," under which name the Trust or the
Owner Trustee, on behalf of the Trust, may conduct any activities and business
of the Trust contemplated hereby, execute contracts and other instruments and
xxx and be sued.
Section 2.02. Office. The office of the Trust shall be in care of the Owner
Trustee at the Corporate Trust Office or at such other address in the State of
Delaware as the Owner Trustee may designate by written notice to the Indenture
Trustee and the Transferor.
Section 2.03. Purposes and Powers; Trust to Operate as a Single Purpose
Entity. The purpose of the Trust is and the Trust and the Owner Trustee, on
behalf of the Trust, shall have the power and authority to engage in the
following activities:
(i) to execute, deliver and issue the Notes pursuant to the
Indenture and to issue the Certificates pursuant to this Agreement;
(ii) with the proceeds of the sale of the Notes and the Certificates,
to acquire the Receivables and related property and to pay the Transferor
the amounts owed pursuant to Section 2.01 of the Transfer and Servicing
Agreement;
(iii) to assign, grant, pledge, transfer, convey and mortgage the
Collateral pursuant to the Indenture and to hold, manage and distribute to
the Transferor and the Noteholders pursuant to the terms of this Agreement
and the Transaction Documents any portion of the Collateral released from
the lien of, and remitted to the Trust pursuant to, the Indenture;
(iv) to execute, deliver and perform its obligations under the
Transaction Documents to which it is to be a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith;
(vi) to own preferred stock in the Transferor; and
(vii) subject to compliance with the Transaction Documents, to engage
in such other activities as may be required in connection with conservation
of the Trust Estate and the making of payments to the Noteholders and
distributions to the Transferor.
The Trust shall not engage in any activity other than in connection with
the foregoing or other than as required or authorized by the terms of this
Agreement or the Transaction Documents.
Section 2.04. Appointment of Owner Trustee. The Transferor hereby appoints
the Trust Company as Owner Trustee of the Trust effective as of the date hereof,
to have all the rights, powers and duties set forth herein and in the Delaware
Statutory Trust Act.
4
Section 2.05. Initial Capital Contribution of Trust Estate. The Transferor
hereby assigns, transfers, conveys and sets over to the Owner Trustee, as of the
date hereof, the sum of $1 and one share of preferred stock of the Transferor.
The Owner Trustee hereby acknowledges receipt in trust from the Transferor, as
of the date hereof, of the foregoing contribution, which shall constitute the
initial Trust Estate and shall be held by the Owner Trustee. The Transferor
shall pay organizational expenses of the Trust as they may arise or shall, upon
the request of the Owner Trustee, promptly reimburse the Owner Trustee for any
such expenses paid by the Owner Trustee.
Section 2.06. Declaration of Trust. The Owner Trustee hereby declares that
it will hold the Trust Estate in trust upon and subject to the conditions set
forth herein for the use and benefit of the Owner, subject to the obligations of
the Trust under the Transaction Documents to which it is a party. It is the
intention of the parties hereto that the Trust constitute a statutory trust
under the Delaware Statutory Trust Act and that this Agreement constitutes the
governing instrument of such statutory trust. It is the intention of the parties
hereto that, for income and franchise tax purposes, the Trust and its assets
shall be treated as a security device and disregarded as an entity and its
assets shall be treated as owned in whole by the Transferor. The parties hereto
agree that they will take no action contrary to the foregoing intention.
Effective as of the date hereof, the Owner Trustee shall have all rights, powers
and duties set forth herein and, to the extent not inconsistent herewith, in the
Delaware Statutory Trust Act with respect to accomplishing the purposes of the
Trust.
Section 2.07. Title to Trust Estate. Legal title to all of the Trust Estate
shall be vested at all times in the Trust as a separate legal entity except
where applicable law in any jurisdiction requires title to any part of the Trust
Estate to be vested in a trustee or trustees, in which case legal title shall be
deemed to be vested in the Owner Trustee, a co-trustee and/or a separate
trustee, as the case may be.
Section 2.08. Situs of Trust; Principal Office of Owner Trustee. The Trust
will be located and administered in the State of Delaware. All bank accounts
maintained by the Owner Trustee on behalf of the Trust shall be located in the
State of Delaware or the State of New York. The Trust shall not have any
employees in any state other than Delaware; provided, however, that nothing
herein shall restrict or prohibit the Owner Trustee from having employees within
or without the State of Delaware. Payments will be received by the Trust only in
Delaware or New York, and payments will be made by the Trust only from Delaware
or New York. The only office of the Trust will be at the Corporate Trust Office
in Delaware.
Section 2.09. Representations and Warranties of Transferor. The Transferor
hereby represents and warrants to the Owner Trustee that:
(a) The Transferor is a Delaware corporation duly organized and validly
existing in good standing under the laws of the State of Delaware and has full
corporate power and authority to own its properties and to conduct its business
as such properties are presently owned and such business is presently conducted,
and to execute, deliver and perform its obligations under this Agreement and any
other document related hereto to which it is a party and to perform its
obligations as contemplated hereby and thereby.
(b) The Transferor is duly qualified to do business and is in good standing
(or is exempt from such requirement) in any state required in order to conduct
its business, and has obtained all necessary licenses and approvals with respect
to the Transferor, in each jurisdiction in which failure to so qualify or to
obtain such licenses and approvals would have a material adverse effect on its
ability to perform its obligations under this Agreement or any other document
related hereto to which the Transferor is a party.
5
(c) The execution and delivery by the Transferor of this Agreement and the
consummation by the Transferor of the transactions provided for in this
Agreement and in the other Transaction Documents to which the Transferor is a
party have been duly authorized by the Transferor by all necessary corporate
action on its part and each of this Agreement and the other Transaction
Documents to which the Transferor is a party will remain, from the time of its
execution, an official record of the Transferor; the Transferor has the power
and authority to assign the property to be assigned to and deposited with the
Trust pursuant to Section 2.05 of this Agreement and Section 2.01 of the
Transfer and Servicing Agreement.
(d) The execution and delivery by the Transferor of this Agreement, the
performance by the Transferor of the transactions contemplated by this Agreement
and the fulfillment of the terms hereof 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 the Transferor is a party or by which it or any of its properties are
bound (other than violations of such indentures, contracts, agreements,
mortgages, deeds of trust or other instruments which, individually or in the
aggregate, would not have a material adverse effect on the Transferor's ability
to perform its obligations under this Agreement).
(e) The execution and delivery by the Transferor of this Agreement, the
performance by the Transferor of the transactions contemplated by this Agreement
and the fulfillment by the Transferor of the terms hereof will not conflict with
or violate any Requirements of Law applicable to the Transferor.
(f) There are no proceedings or investigations pending or, to the best
knowledge of the Transferor, threatened against the Transferor before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality having jurisdiction over the Transferor (i) asserting the
invalidity of this Agreement or any of the Transaction Documents to which the
Transferor is a party, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any of the Transaction Documents
to which the Transferor is a party, (iii) seeking any determination or ruling
that, in the reasonable judgment of the Transferor, would materially and
adversely affect the performance by the Transferor of its obligations under this
Agreement or the Transaction Documents to which the Transferor is a party, or
(iv) seeking any determination or ruling that would materially and adversely
affect the validity or enforceability of this Agreement or the Transaction
Documents to which the Transferor is a party.
Section 2.10. Liability of Holders of the Certificates. The holders of the
Certificates shall not be personally liable for the debts or other obligations
of the Trust except to the extent provided otherwise in the Transaction
Documents.
Section 2.11. Payments and Distributions.
(a) Any amount held by the Trust with respect to the Trust Estate which is
not, and will not be, allocable to the Indenture Trustee to be applied in
accordance with the Indenture, and which is otherwise available for
distribution, shall be applied on the first Business Day following each
Distribution Date in the following order:
(i) to the extent not otherwise paid, to pay any other operating or
administrative expenses of the Trust; and
(ii) to distribute any remaining amounts and other property to the
holders of the Certificates.
6
The Servicer shall deliver a statement to the Owner Trustee setting forth the
amounts to be applied pursuant to such clauses (i) and (ii), which the Owner
Trustee may rely upon in making any payment.
(b) All payments and distributions required to be made to the holders of
the Certificates pursuant to this Section 2.11 shall be made to the holders of
the Certificates by wire transfer of immediately available funds or by such
other means as are acceptable to the Owner Trustee to the extent the Owner
Trustee receives all necessary payment information from the holders of the
Certificates at least five Business Days prior to such payment or distribution;
provided that, payments and distributions to the Holders of the Certificates
will only be made under this Section 2.11 to the extent that (i) the value of
the assets of the Trust exceed the value of the liabilities of the Trust and
(ii) following any such payment and distribution, the Trust will have sufficient
assets to satisfy all probable liabilities of the Trust and provided further
that the Owner Trustee shall assume that the provisions of clauses (i) and (ii)
are satisfied unless the Indenture Trustee informs the Owner Trustee otherwise.
Section 2.12. Fiscal Year. The fiscal year of the Trust will end on the
last day of December of each year.
Section 2.13. Closing. The transfer, assignment, set-over, pledge and
conveyance of the Trust Estate and the initial issuance of Notes shall take
place on February 18, 2003 at the offices of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
Section 2.14. Books and Records. The Transferor agrees to authorize, record
and file, at its own expense, any financing statements (and amendments with
respect to such financing statements when applicable) required to be filed with
respect to the Trust Estate assigned by the Transferor pursuant to this
Agreement and the Transfer and Servicing Agreement, meeting the requirements of
applicable law in such manner and in such jurisdictions as are necessary under
the applicable UCC to perfect the transfer, assignment, set-over, pledge and
conveyance of the Trust Estate to the Trust, and to deliver a file-stamped copy
of such financing statements or amendments or other evidence of such filings to
the Trust (excluding such amendments, which shall be delivered promptly after
filing).
Section 2.15. Limitation on Liability of Transferor and Others. The
Transferor and any director or officer or employee or agent of the Transferor
may rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. Except to the extent specifically set forth in the
Transaction Documents, the Owner shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
[End of Article II]
7
ARTICLE III
CERTIFICATES
Section 3.01. Initial Ownership. Upon the creation of the Trust, the
Transferor shall be the Owner of the Trust.
Section 3.02. Form of Certificates. (a) The Transferor or any Additional
Transferor may elect at any time, by written notice to the Owner Trustee, to
have its interest in the Trust be (i) an uncertificated interest or (ii)
evidenced by a certificate. The Transferor Certificate, if certificated, will be
issued in registered form, substantially in the form of Exhibit A, and shall
upon issue, be executed and delivered by the Transferor to the Owner Trustee for
authentication and redelivery as provided in Section 3.03. If the Transferor or
any Additional Transferor elects to have its interest in the Trust be
uncertificated, it shall deliver to the Owner Trustee for cancellation any
Transferor Certificate or Supplemental Certificate, as the case may be,
previously issued and the Owner Trustee shall make appropriate entries in its
books and records to evidence such uncertificated interest in the Trust. The
Owner Trustee shall keep with the books and records of the Trust a register, in
book-entry form, of each Person owning any uncertificated interest in the Trust.
(b) The Certificates, if certificated, shall be executed on behalf of the
Trust by manual or facsimile signature of the Owner Trustee. The Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures shall have been affixed, authorized to sign on behalf of
the Trust, shall, when duly authenticated pursuant to Section 3.03, be validly
issued and entitled to the benefits of this Agreement, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
authentication and delivery of the Certificates or did not hold such offices at
the date of authentication and delivery of the Certificates.
Section 3.03. Authentication of Certificates. The Owner Trustee shall
authenticate and deliver the Certificate, if certificated, upon the written
order of the Transferor, signed by its chairman of the board, its president, any
vice president, secretary, any assistant treasurer or any authorized signatory,
without further corporate action by the Transferor. No Certificate shall be
entitled to any benefit under this Agreement, or be valid for any purpose,
unless there appears on such Certificate a certificate of authentication
substantially in the form provided for herein, executed by or on behalf of the
Owner Trustee by the manual signature of a duly authorized signatory, and such
certificate upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. Each Certificate shall be dated the date of its authentication.
Section 3.04. Restrictions on Transfer. To the fullest extent permitted by
applicable law, the Certificates (or any interest therein) may not be sold,
transferred, assigned, participated, pledged or otherwise disposed of to any
Person; provided, however, that a Certificate (or any interest therein) may be
sold, transferred, assigned, participated, pledged or otherwise disposed of if
the transferor thereof has provided (a) the Owner Trustee and the Indenture
Trustee with (i) a Tax Opinion relating to such sale, transfer, assignment,
participation, pledge or other disposition and (ii) a representation letter from
the transferee to the effect that the transferee is not a Plan and is not acting
on behalf of or investing the assets of a Plan and (b) each Rating Agency
written notice (unless such notice requirement is otherwise waived by the Rating
Agency) ten days prior to such transfer.
Section 3.05. Mutilated, Destroyed, Lost or Stolen Certificate. If (a) any
mutilated Certificate is surrendered to the Owner Trustee, or the Owner Trustee
receives evidence to its reasonable satisfaction of the destruction, loss or
theft of any Certificate, and (b) there is delivered to the Owner Trustee such
security or indemnity as may be required by it to hold the Owner Trustee
harmless, then, the Owner
8
Trustee on behalf of the Trust shall execute, and the Owner Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a replacement Certificate of like tenor
(including the same date of issuance) and denomination. Upon the issuance of any
replacement Certificate under this Section, the Owner Trustee may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other reasonable expenses connected
therewith. Every replacement Certificate issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Certificate shall
constitute complete and indefeasible evidence of an interest in the Trust, as if
originally issued, whether or not the mutilated, destroyed, lost or stolen
Certificate shall be found at any time.
Section 3.06. Issuance of New Transferor Certificates. (a) The Transferor
Certificate shall represent an undivided beneficial interest in the Trust Estate
subject to the lien of the Notes, including the right to receive Collections
with respect to the Receivables and other amounts at the times and in the
amounts specified in the Indenture and any Indenture Supplement to be paid to
the Transferor on behalf of all holders of the Transferor Certificates.
(b) At any time, a Transferor may surrender its certificated Transferor
Certificate to the Owner Trustee or request in writing that the Owner Trustee
transfer an uncertificated Transferor Certificate on the books and records of
the Trust in exchange for a newly issued certificated or uncertificated
Transferor Certificate and a second certificated or uncertificated interest in
the Transferor's interest (a "Supplemental Certificate") in the Trust, the terms
of which shall be defined in a supplement (a "Transferor Certificate
Supplement") to this Agreement (which Transferor Certificate Supplement shall be
subject to Section 10.01 to the extent that it amends any of the terms of this
Agreement); to be delivered to or upon the order of the Transferor (or the
Holder of a Supplemental Certificate, in the case of the transfer and exchange
thereof); provided, however, notwithstanding anything contained herein, any
exchange of a certificated Transferor Certificate for an uncertificated
Transferor Certificate or an uncertificated Transferor Certificate for a
certificated Transferor Certificate by the Holder of such Transferor Certificate
shall not be subject to the conditions set forth in clauses (i) through (vi)
below. Except as set forth in the proviso to the immediately preceding sentence,
the issuance of any such Supplemental Certificate shall be subject to
satisfaction of the following conditions:
(i) on or before the fifth day immediately preceding the Transferor
Certificate surrender and exchange, the Transferor shall have given the
Owner Trustee, the Servicer, the Indenture Trustee and each Rating Agency
notice (unless such notice requirement is otherwise waived) of such
Transferor Certificate surrender and exchange;
(ii) the Transferor shall have delivered to the Owner Trustee and the
Indenture Trustee any related Transferor Certificate Supplement in form
satisfactory to the Owner Trustee and the Indenture Trustee, executed by
each party hereto (other than the Owner Trustee, the Indenture Trustee and
the Holder of the Supplemental Certificate, if any);
(iii) the Rating Agency Condition shall have been satisfied with
respect to such Transferor Certificate surrender and exchange;
(iv) such surrender and exchange will not result in any Adverse
Effect and the Transferor shall have delivered to the Owner Trustee and the
Indenture Trustee an Officer's Certificate, dated the date of such
surrender and exchange to the effect that the Transferor reasonably
believes that such surrender and exchange will not, based on the facts
known to such officer at the time of such certification, have an Adverse
Effect and that all other conditions to the issuance of such Supplemental
Certificates have been satisfied;
9
(v) the Transferor shall have delivered to the Owner Trustee and
Indenture Trustee (with a copy to each Rating Agency) a Tax Opinion, dated
the date of such surrender (or transfer) and exchange with respect to such
surrender and exchange; and
(vi) the aggregate amount of Principal Receivables plus the principal
amount of any Participation Interest theretofore conveyed to the Trust as
of the date of such surrender and exchange shall be greater than the
Required Minimum Principal Balance as of the date of such surrender and
exchange after giving effect to such surrender and exchange.
(c) Any Supplemental Certificate held by any Person may be transferred or
exchanged only upon the delivery to the Owner Trustee and the Indenture Trustee
of a Tax Opinion dated as of the date of such transfer or exchange, as the case
may be, with respect to such transfer or exchange.
[End of Article III]
10
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
Section 4.01. Prior Notice to Transferor with Respect to Certain Matters.
With respect to the following matters, unless otherwise instructed by the
Transferor, the Trust shall not take action unless at least thirty (30) days
before the taking of such action the Owner Trustee shall have notified the
Transferor:
(a) the initiation of any claim or lawsuit by the Trust (other than an
action to collect on the Trust Estate) and the settlement of any action, claim
or lawsuit brought by or against the Trust (other than an action to collect on
the Trust Estate);
(b) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Transferor; or
(d) the appointment pursuant to the Indenture of a replacement or successor
Note Registrar or Indenture Trustee, or the consent to the assignment by the
Note Registrar or Indenture Trustee of its obligations under the Indenture.
Section 4.02. Restrictions on Power. The Owner Trustee shall not be
required to take or refrain from taking any action if such action or inaction
would be contrary to any obligation of the Trust or the Owner Trustee under any
of the Transaction Documents or would be contrary to Section 2.03.
[End of Article IV]
11
ARTICLE V
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 5.01. General Authority. Each of the Trust and the Owner Trustee,
in the name and on behalf of the Trust, shall have the power and authority, and
is hereby authorized and directed to execute and deliver the Transaction
Documents to which the Trust is a party and each certificate or other document
attached as an exhibit to or contemplated by or in connection with the
Transaction Documents to which the Trust is to be a party, including, without
limitation, a filing authorization authorizing the filing of a financing
statement with the Secretary of State on the date hereof in connection with the
Indenture, the Certificates and the Notes, or any amendment thereto or other
agreement, in each case, in such form as the Transferor shall approve as
evidenced conclusively by the Owner Trustee's execution thereof and the
Transferor's execution of the related documents. In addition to the foregoing,
the Owner Trustee, in the name and on behalf of the Trust, is authorized, but
shall not be obligated, to take all actions required of the Trust pursuant to
the Transaction Documents. The Owner Trustee, in the name and on behalf of the
Trust, is further authorized from time to time to take such action as the
Transferor or the Servicer directs in writing with respect to the Transaction
Documents.
Section 5.02. General Duties. It shall be the duty of the Owner Trustee to
discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and the other Transaction Documents to which it is a
party and to administer the Trust in the interest of the Owner, subject to the
Transaction Documents and in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have
discharged its duties and responsibilities hereunder and under the other
Transaction Documents to the extent the Servicer has agreed in the Transfer and
Servicing Agreement or other Transaction Document to perform any act or to
discharge any duty of the Owner Trustee or the Trust under any Transaction
Document, and the Owner Trustee shall not be liable for the default or failure
of the Servicer to carry out its obligations under the Transfer and Servicing
Agreement.
Section 5.03. Action Upon Instruction.
(a) The Owner Trustee shall not be required to take any action hereunder or
under any other Transaction Document if the Owner Trustee shall have reasonably
determined, or shall have been advised by counsel, that such action is likely to
result in liability on the part of the Owner Trustee or is contrary to the terms
of any Transaction Document or is otherwise contrary to law.
(b) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of any Transaction
Document, the Owner Trustee shall promptly give notice (in such form as shall be
appropriate under the circumstances) to the Transferor requesting instruction as
to the course of action to be adopted, and to the extent the Owner Trustee acts
in good faith in accordance with any written instruction of the Transferor
received, the Owner Trustee shall not be liable on account of such action to any
Person. If the Owner Trustee shall not have received appropriate instruction
within ten (10) days of such notice (or within such shorter period of time as
reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action, not in violation of the Transaction Documents, as it shall
deem to be in the best interest of the Transferor, and shall have no liability
to any Person for such action or inaction.
(c) In the event that the Owner Trustee is unsure as to the application of
any provision of any Transaction Document or any such provision is ambiguous as
to its application, or is, or appears to be, in conflict with any other
applicable provision, or in the event that this Agreement permits any
12
determination by the Owner Trustee or is silent or is incomplete as to the
course of action that the Owner Trustee is required to take with respect to a
particular set of facts, the Owner Trustee may give notice (in such form as
shall be appropriate under the circumstances) to the Transferor requesting
instruction and, to the extent that the Owner Trustee acts or refrains from
acting in good faith in accordance with any such instruction received, the Owner
Trustee shall not be liable, on account of such action or inaction, to any
Person. If the Owner Trustee shall not have received appropriate instruction
within ten (10) days of such notice (or within such shorter period of time as
reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action, not in violation of the Transaction Documents, as it shall
deem to be in the best interests of the Transferor, and shall have no liability
to any Person for such action or inaction.
Section 5.04. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Trust or the Trust Estate, or to otherwise take or
refrain from taking any action under, or in connection with, this Agreement or
any document contemplated hereby to which the Trust is a party, except as
expressly provided by the terms of this Agreement or in any document or written
instruction received by the Owner Trustee pursuant to Section 5.03; and no
implied duties or obligations shall be read into any Transaction Document
against the Owner Trustee. The Owner Trustee shall have no responsibility for
any filing or recording, including filing any financing or continuation
statement in any public office at any time or to otherwise perfect or maintain
the perfection of any security interest or lien granted to it or to the Trust
hereunder or to prepare or file any Commission filing for the Trust or to record
any Transaction Document. The Trust Company nevertheless agrees that it will, at
its own cost and expense, promptly take all action as may be necessary to
discharge any liens on any part of the Trust Estate that result from actions by,
or claims against, the Trust Company that are not related to the ownership or
the administration of the Trust Estate or the transactions contemplated by the
Transaction Documents.
Section 5.05. No Action Except under Specified Documents or Instructions.
The Owner Trustee shall not manage, control, use, sell, dispose of or otherwise
deal with any part of the Trust Estate except (a) in accordance with the powers
granted to and the authority conferred upon the Owner Trustee pursuant to this
Agreement, (b) in accordance with the Transaction Documents and (c) in
accordance with any document or instruction delivered to the Owner Trustee
pursuant to Section 5.03.
Section 5.06. Restrictions. The Owner Trustee shall not take any action (a)
that, to the actual knowledge of the Owner Trustee, would violate the purposes
of the Trust set forth in Section 2.03 or (b) that, to the actual knowledge of
the Owner Trustee, would result in the Trust's becoming an association (or
publicly traded partnership) taxable as a corporation for federal income tax
purposes. The Transferor shall not direct the Owner Trustee to take action that
would violate the provisions of this Section.
Section 5.07. Notwithstanding anything to the contrary herein or in any
Transaction Document or other document, the Owner Trustee shall not be required
to execute, deliver or certify on behalf of the Owner Trustee, the Trust or any
other Person any filings, certificates, affidavits or other instruments required
by the SEC or required under the Xxxxxxxx-Xxxxx Act of 2002. Notwithstanding any
Person's right to instruct the Owner trustee, neither the Owner Trustee nor any
agent, employee, director or officer of the Owner Trustee shall have any
obligation to execute any certificates or other documents required by the SEC or
required pursuant to the Xxxxxxxx-Xxxxx Act of 2002 or the rules and regulations
promulgated thereunder, and the refusal to comply with any such instructions
shall not constitute a default or breach under any Transaction Document.
13
[End of Article V]
14
ARTICLE VI
CONCERNING THE TRUST COMPANY AND THE OWNER TRUSTEE
Section 6.01 Acceptance of Trust and Duties. The Trust Company accepts the
trust hereby created and agrees to perform its duties hereunder with respect to
such trust, but only upon the terms of this Agreement. The Trust Company also
agrees to disburse all moneys actually received by it constituting part of the
Trust Estate in accordance with the terms of the Transaction Documents. The
Trust Company shall not be answerable or accountable under this Agreement or any
Transaction Document under any circumstances, except (i) for its own willful
misconduct or negligence or (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 6.03 expressly made by the Owner
Trustee in its individual capacity. In particular, but not by way of limitation
(and subject to the exceptions set forth in the preceding sentence):
(a) the Trust Company shall not be personally liable for any error of
judgment made in good faith by an authorized officer of the Owner Trustee so
long as the same will not constitute willful misconduct or negligence;
(b) the Trust Company shall not be personally liable with respect to any
action taken or omitted to be taken by the Owner Trustee in accordance with the
instructions of the Servicer or the Transferor;
(c) no provision of this Agreement or any other Transaction Document shall
require the Trust Company to expend or risk its personal funds or otherwise
incur any financial liability in the performance of any of its rights or powers
hereunder or under any other Transaction Document, if the Trust Company shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or provided
to it;
(d) except for Section 6.03 of this Agreement, under no circumstances shall
the Trust Company be liable for any representation, warranty, consent or other
indebtedness evidenced by or arising under any of the Transaction Documents,
including the principal of and interest on the Notes;
(e) the Trust Company shall not be responsible for or in respect of the
validity or sufficiency of this Agreement or for the due execution hereof by the
Transferor or for the form, character, genuineness, sufficiency, value or
validity of any of the Trust Estate or for or in respect of the validity or
sufficiency of the Transaction Documents, other than the genuineness of
signatures on the Certificate of Trust and the certificate of authentication on
the Certificates, and the Trust Company shall in no event assume or incur any
liability, duty, or obligation to any Noteholder or to the Owner, other than as
expressly provided for herein or expressly agreed to in the other Transaction
Documents;
(f) the Trust Company shall not be liable for the default or misconduct of
the Transferor, the Owner, the Servicer or the Indenture Trustee under any of
the Transaction Documents or otherwise, and the Trust Company shall have no
obligation or liability to perform the obligations of the Trust under the
Transaction Documents that are required to be performed by the Indenture Trustee
under the Indenture or the Servicer under the Transfer and Servicing Agreement;
(g) the Trust Company shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation under this Agreement or otherwise or in relation to this
Agreement or any other Transaction Document, at the request, order or direction
of the Transferor, unless the Transferor has offered to the Trust Company
security or indemnity satisfactory to it against the costs, expenses and
liabilities that may be incurred by the Trust Company
15
therein or thereby. The right of the Trust Company to perform any discretionary
act enumerated in this Agreement or any other Transaction Document shall not be
construed as a duty, and the Owner Trustee shall not be answerable for, other
than its negligence or willful misconduct in the performance of, any such act;
and
(h) Notwithstanding anything contained herein to the contrary, the Trust
Company shall not be required to take any action in any jurisdiction other than
in the State of Delaware if the taking of such action will (i) require the
registration with, licensing by or the taking of any other similar action in
respect of, any state or other governmental authority or agency of any
jurisdiction other than the State of Delaware by or with respect to the Trust
Company; (ii) result in any fee, tax or other governmental charge under the laws
of any jurisdiction or any political subdivisions thereof in existence on the
date hereof other than the State of Delaware becoming payable by the Owner
Trustee; or (iii) subject the Trust Company to personal jurisdiction in any
jurisdiction other than the State of Delaware for causes of action arising from
acts unrelated to the consummation of the transactions by the Owner Trustee
contemplated hereby. The Trust Company shall be entitled to obtain advice of
counsel (which advice shall be an expense of the Transferor) to determine
whether any action required to be taken pursuant to this Agreement results in
the consequences described in clauses (i), (ii) and (iii) of the preceding
sentence. In the event that said counsel advises the Trust Company that such
action will result in such consequences, the Transferor shall appoint an
additional trustee pursuant to Section 9.05 hereof to proceed with such action.
Section 6.02. Furnishing of Documents. The Owner Trustee shall furnish to
the Transferor and the Indenture Trustee, promptly upon written request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Owner Trustee with respect to the Trust or the Trust Estate.
Section 6.03. Representations and Warranties. The Trust Company hereby
represents and warrants to the Transferor that:
(a) It is a banking corporation duly organized and validly existing in good
standing under the laws of the State of Delaware. It has all requisite corporate
power and authority to execute, deliver and perform its obligations under this
Agreement.
(b) It has taken all corporate action necessary to authorize the execution
and delivery by it of this Agreement, and this Agreement will be executed and
delivered by one of its officers who is duly authorized to execute and deliver
this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this Agreement, nor the
consummation by it of the transactions contemplated hereby nor compliance by it
with any of the terms or provisions hereof will contravene any federal or
Delaware law, governmental rule or regulation governing the banking or trust
powers of the Trust Company or any judgment or order binding on it, or
constitute any default under its charter documents or by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or by which
any of its properties may be bound.
(d) The Trust Company complies with all of the requirements of Chapter 38,
Title 12 of the Delaware Code relating to the qualification of a trustee of a
Delaware statutory trust.
Section 6.04. Reliance; Advice of Counsel.
(a) The Owner Trustee shall incur no liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order, certificate,
report, opinion, bond or other document
16
or paper reasonably believed by it to be genuine and reasonably believed by it
to be signed by the proper party or parties. The Owner Trustee may accept a
certified copy of a resolution of the board of directors or other governing body
of any corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of the determination of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer
or other authorized officers of the relevant party, as to such fact or matter,
and such certificate shall constitute full protection to the Owner Trustee for
any action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trust hereunder and in the
performance of its duties and obligations under this Agreement or the other
Transaction Documents, the Owner Trustee (i) may act directly or through its
agents or attorneys pursuant to agreements entered into with any of them, and
the Owner Trustee shall not be liable for the conduct or misconduct of such
agents or attorneys if such agents or attorneys shall have been selected by the
Owner Trustee with reasonable care, and (ii) may consult with counsel,
accountants and other skilled Persons to be selected with reasonable care and
employed by it. The Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the written opinion
or written advice of any such counsel, accountants or other such Persons.
Section 6.05. Not Acting in Individual Capacity. Except as expressly
provided in this Article VI, in accepting the trust hereunder, the Trust Company
acts solely as Owner Trustee hereunder and not in its individual capacity, and
all Persons having any claim against the Owner Trustee by reason of the
transactions contemplated by any Transaction Document shall look only to the
Trust Estate for payment or satisfaction thereof.
Section 6.06. Owner Trustee Not Liable for Certificates, Notes or
Receivables. The recitals contained herein and in the Certificates (other than
the genuineness of the signature and counter-signature of the Owner Trustee on
the Certificates and the Trust Company's representations and warranties in
Section 6.03) shall be taken as the statements of the Transferor, and the Owner
Trustee assumes no responsibility for the correctness thereof. The Owner Trustee
makes no representations as to the validity or sufficiency of this Agreement,
any other Transaction Document or the Certificates (other than the genuineness
of the signature and counter-signature of the Owner Trustee on the
Certificates), the Notes or related documents. The Owner Trustee shall at no
time have any responsibility or liability for or with respect to the legality,
validity and enforceability of the Receivables or the perfection and priority of
any security interest in the Receivables or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
Estate or its ability to generate the payments to be distributed to the
Noteholders under the Indenture, including, without limitation: the existence,
condition and ownership of the Receivables; the existence and contents of the
Receivables on any computer or other record thereof; the validity of the
assignment of the Receivables to the Trust or of any intervening assignment; the
completeness of the Receivables; the performance or enforcement of the
Receivables; the compliance by the Transferor with any warranty or
representation made under any Transaction Document or in any related document or
the accuracy of any such warranty or representation or any action of the
Servicer or the Indenture Trustee taken in the name of the Owner Trustee.
Section 6.07. Owner Trustee May Own Notes. The Owner Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may deal with the Transferor, the Servicer and the Indenture Trustee in banking
transactions with the same rights as it would have if it were not Owner Trustee.
17
Section 6.08. Payments from Trust Estate. All payments to be made by the
Owner Trustee or any Paying Agent under this Agreement or any of the Transaction
Documents or, with respect to Certificates, any Series Supplement or any Series
related document to which the Trust or the Owner Trustee is a party shall be
made only from the income and proceeds of the Trust Estate and only to the
extent that the Owner Trustee shall have received income or proceeds from the
Trust Estate to make such payments in accordance with the terms hereof.
Wilmington Trust Company, or any successor thereto, in its individual capacity,
shall not be liable for any amounts payable under this Agreement or any of the
Transaction Documents or, with respect to the Notes, the Certificates or any
Series related document to which the Trust or the Owner Trustee is a party.
[End of Article VI]
18
ARTICLE VII
COMPENSATION OF TRUST COMPANY
Section 7.01. Trust Company's Fees and Expenses. The Trust Company shall
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between the Transferor and the
Trust Company, and the Trust Company shall be entitled to be reimbursed by the
Transferor for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as the Owner Trustee may employ in connection with the
exercise and performance of its rights and its duties hereunder; provided,
however, that the Owner Trustee's right to enforce such obligation shall be
subject to the provisions of Section 10.08.
Section 7.02. Indemnification. To the fullest extent permitted by law, the
Transferor shall be liable as primary obligor for, and shall indemnify the Trust
Company and its successors, assigns, agents, employees and servants
(collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits, and
any and all reasonable costs, expenses and disbursements (including reasonable
legal fees and expenses) of any kind and nature whatsoever (collectively,
"Expenses") which may at any time be imposed on, incurred by, or asserted
against the Owner Trustee or any Indemnified Party in any way relating to or
arising out of the Transaction Documents, the Trust Estate, the acceptance and
administration of the Trust Estate or the action or inaction of the Owner
Trustee hereunder; provided that the Transferor shall not be liable for or
required to indemnify any Indemnified Party from and against Expenses arising or
resulting from any of the matters described in the third sentence of Section
6.01; provided further, that the Transferor shall not be liable for or required
to indemnify an Indemnified Party from and against expenses arising or resulting
from (i) the Indemnified Party's own willful misconduct, bad faith or
negligence, or (ii) the inaccuracy of any representation or warranty contained
in Section 6.03 made by the Indemnified Party. An Indemnified Party's right to
enforce such obligation shall be subject to the provisions of Section 10.08. The
indemnities contained in this Section 7.02 shall survive the resignation or
removal of the Owner Trustee or the termination of this Agreement. In the event
of any claim, action or proceeding for which indemnity will be sought pursuant
to this Section 7.02, the Owner Trustee's choice of legal counsel shall be
subject to the approval of the Transferor, which approval shall not be
unreasonably withheld.
Section 7.03. Payments to the Owner Trustee. Any amounts paid to an
Indemnified Party pursuant to this Article VII shall be deemed not to be a part
of the Trust Estate immediately after such payment.
Section 7.04. Non-recourse Obligations. Notwithstanding anything in this
Agreement or any Transaction Document or, with respect to the Certificates or
Notes, any Indenture Supplement or any Series related document, the Trust
Company agrees in its individual capacity and in its capacity as Owner Trustee
for the Trust that all obligations of the Trust to the Trust Company,
individually or as Owner Trustee for the Trust, shall be recourse to the Trust
Estate only and specifically shall not be recourse to the assets of any
Certificateholder, Noteholder or Owner.
[End of Article VII]
19
ARTICLE VIII
TERMINATION OF TRUST AGREEMENT
Section 8.01. Termination of Trust Agreement.
(a) The Trust shall dissolve and commence winding-up of its affairs upon
the earlier of (i) dissolution of the Trust in accordance with applicable law
and (ii) at the option of the Transferor, the day on which the right of all
series of Notes to receive payments from the Trust Estate has terminated (the
"Trust Termination Date"). After satisfaction of liabilities of the Trust as
provided by Section 3808 of the Delaware Statutory Trust Act, any money or other
property held as part of the Trust Estate following such dissolution shall be
distributed to the Owner. The bankruptcy, liquidation, dissolution, termination,
death or incapacity of the Transferor shall not (x) operate to terminate this
Agreement or the Trust, or (y) entitle the Owner's legal representatives or
heirs to claim an accounting or to take any action or proceeding in any court
for a partition or winding up of all or any part of the Trust or Trust Estate or
(z) otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) Except as provided in subsection 8.01(a), neither the Transferor nor
the Owner shall be entitled to revoke or terminate the Trust.
(c) Upon completion of the winding up of the Trust in accordance with the
Delaware Statutory Trust Act, the Owner Trustee shall cause the Certificate of
Trust to be canceled by filing a certificate of cancellation with the Secretary
of State in accordance with the provisions of Section 3810 of the Delaware
Statutory Trust Act and thereupon the Trust and this Agreement (other than
Article X) shall terminate.
[End of Article VIII]
20
ARTICLE IX
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 9.01. Eligibility Requirements for Owner Trustee. The Owner Trustee
shall at all times be a Person satisfying the provisions of Section 3807(a) of
the Delaware Statutory Trust Act authorized 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 authorities; and having (or
having a parent which has) a long-term unsecured rating of at least Baa3 by
Moody's, at least BBB- by Standard & Poor's and, if rated by Fitch, at least
BBB- by Fitch, or otherwise satisfactory to each Rating Agency. If such Person
shall publish 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, the combined capital and surplus of such Person shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Owner Trustee shall
cease to be eligible in accordance with the provisions of this Section 9.01, the
Owner Trustee shall resign immediately in the manner and with the effect
specified in Section 9.02.
Section 9.02. Resignation or Removal of Owner Trustee. The Owner Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Transferor; provided, however, that such
resignation and discharge shall only be effective upon the appointment of a
successor Owner Trustee. Upon receiving such notice of resignation, the
Transferor shall promptly appoint a successor Owner Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Owner Trustee and one copy to the successor Owner Trustee. If no
successor Owner Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Owner Trustee may petition any court of competent jurisdiction for the
appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of Section 9.01 and shall fail to resign after written
request therefor by the Transferor, or if at any time the Owner Trustee shall be
legally unable to act, or shall be adjudged bankrupt or insolvent, or a receiver
of the Owner Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Owner Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Transferor may, but shall not be required to, remove the Owner Trustee. If the
Transferor shall remove the Owner Trustee under the authority of the immediately
preceding sentence, the Transferor shall promptly (i) appoint a successor Owner
Trustee by written instrument, in duplicate, one copy of which instrument shall
be delivered to the outgoing Owner Trustee so removed and one copy to the
successor Owner Trustee and (ii) pay all fees owed to the outgoing Owner
Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 9.03 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Transferor shall provide notice of such
resignation or removal of the Owner Trustee to each Rating Agency.
Section 9.03. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 9.02 shall execute, acknowledge and deliver to the
Transferor and to its predecessor Owner Trustee an instrument accepting such
appointment under this Agreement, and thereupon the resignation or removal of
the predecessor Owner Trustee shall become effective and such successor Owner
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties, and obligations of its predecessor under
this Agreement, with like effect as if originally named as Owner Trustee. The
predecessor Owner Trustee shall upon payment of its fees and expenses deliver to
the
21
successor Owner Trustee all documents and statements and monies held by it under
this Agreement; and the Transferor and the predecessor Owner 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
Owner Trustee all such rights, powers, duties, and obligations. Upon acceptance
of appointment by a successor Owner Trustee pursuant to this Section 9.03, such
successor Owner Trustee shall promptly file an amendment to the Certificate of
Trust with the Secretary of State identifying the name and principal place of
business of such successor Owner Trustee in the State of Delaware.
No successor Owner Trustee shall accept appointment as provided in this
Section 9.03 unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 9.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Transferor shall mail notice of such acceptance of appointment
including the name of such successor Owner Trustee to the Indenture Trustee, the
Noteholders and each Rating Agency. If the Transferor shall fail to mail such
notice within ten (10) days after acceptance of appointment by the successor
Owner Trustee, the successor Owner Trustee shall cause such notice to be mailed
at the expense of the Transferor.
Section 9.04. Merger or Consolidation of Owner Trustee. Notwithstanding
anything herein to the contrary, any Person into which the Owner Trustee may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Owner
Trustee shall be a party, or any Person succeeding to all or substantially all
of the corporate trust business of the Owner Trustee, shall be the successor of
the Owner Trustee hereunder (provided that such Person shall meet the
eligibility requirements set forth in Section 9.01), without the execution or
filing of any instrument or any further act on the part of any of the parties
hereto; provided, further that (a) the Owner Trustee shall mail notice of such
merger or consolidation to each Rating Agency and (b) the Owner Trustee shall
file any necessary amendments to the Certificate of Trust with the Secretary of
State.
Section 9.05. Appointment of Co-Trustee or Separate Trustee.
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 Estate may at the time be located, the Transferor and the Owner
Trustee acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by each of the Transferor
and the Owner Trustee to act as co-trustee, jointly with the Owner Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Estate,
and to vest in such Person, in such capacity, such title to the Trust Estate, or
any part thereof, and, subject to the other provisions of this Section, such
powers, duties, obligations, rights and trusts as the Transferor and the Owner
Trustee may consider necessary or desirable. If the Transferor shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, the Owner Trustee alone shall have the power to make such appointment.
No co-trustee or separate trustee under this Agreement shall be required to meet
the terms of eligibility as a successor trustee pursuant to Section 9.01 and no
notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 9.03.
Each separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties, and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed
by the Owner Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized
to act separately without the Owner Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any particular
act or acts are to be performed, the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in
22
which event such rights, powers, duties, and obligations (including the
holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement;
and
(iii) the Transferor and the Owner Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Owner 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. 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 the Owner Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Owner Trustee. Each such instrument shall be filed with the Owner Trustee and a
copy thereof given to the Transferor.
Any separate trustee or co-trustee may at any time appoint the Owner
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 of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
[End of Article IX]
23
ARTICLE X
MISCELLANEOUS
Section 10.01. Supplements and Amendments. This Agreement may be amended
from time to time, by a written amendment duly executed and delivered by the
Transferor and the Owner Trustee, with the written consent of the Indenture
Trustee and 10 days prior written notice to the Rating Agencies, but without the
consent of any of the Noteholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or modifying in any manner the rights of the Noteholders;
provided, however, that such amendment will not (i) as evidenced by an Officer's
Certificate of the Transferor addressed and delivered to the Owner Trustee and
the Indenture Trustee, materially and adversely affect the interest of any
Noteholder or the Owner and (ii) as evidenced by an Opinion of Counsel addressed
and delivered to the Owner Trustee and the Indenture Trustee, cause the Trust to
be classified as an association (or a publicly traded partnership) taxable as a
corporation for federal income tax purposes; provided further that Section 2.03
of this Agreement may be amended only with the consent of the Holders of Notes
evidencing more than 50% of the Outstanding Amount of the Notes. Additionally,
notwithstanding the preceding sentence, this Agreement will be amended by the
Transferor and the Owner Trustee without the consent of the Indenture Trustee or
any of the Noteholders to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable all or a portion of the Trust (i) to
qualify as, and to permit an election to be made to cause the Trust to be
treated as, a "financial asset securitization investment trust" as described in
the provisions of Section 860L of the Code, and (ii) to avoid the imposition of
state or local income or franchise taxes imposed on the Trust's property or its
income; provided, however, that (i) the Transferor delivers to the Indenture
Trustee and the Owner Trustee an Officer's Certificate to the effect that the
proposed amendments meet the requirements set forth in this subsection, (ii)
each Rating Agency will have notified the Transferor, the Servicer, the
Indenture Trustee and the Owner Trustee in writing that the Rating Agency
Condition is satisfied with respect to such amendment and (iii) such amendment
does not affect the rights, duties or obligations of the Owner Trustee
hereunder. The amendments which the Transferor may make without the consent of
Noteholders pursuant to the preceding sentence may include, without limitation,
the addition of a sale of Receivables.
This Agreement may also be amended from time to time by a written amendment
duly executed and delivered by the Transferor and the Owner Trustee, with prior
written notice to each Rating Agency, with the consent of the Indenture Trustee
and, the Holders of Notes evidencing more than 50% of the Outstanding Amount of
the Notes, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Noteholders; provided, however, that without the
consent of all Noteholders, no such amendment shall (a) increase or reduce in
any manner the amount of, or accelerate or delay the timing of distributions
that are required to be made for the benefit of the Noteholders or (b) reduce
the aforesaid percentage of the Outstanding Amount of the Notes, the Holders of
which are required to consent to any such amendment; provided further such
amendment shall be subject to delivery to the Indenture Trustee of a Tax
Opinion.
Promptly after the execution of any such amendment or consent, the
Transferor shall furnish written notification of the substance of such amendment
or consent to the Indenture Trustee and each Rating Agency.
It shall not be necessary for the consent of the Noteholders pursuant to
this Section to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof.
24
Promptly after the execution of any amendment to the Certificate of Trust,
the Owner Trustee shall cause the filing of such amendment with the Secretary of
State.
The Owner Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an officer's certificate of the Transferor to the
effect that the conditions to such amendment have been satisfied.
The Owner Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Owner Trustee's own rights, duties or immunities
under this Agreement or otherwise.
Section 10.02. No Legal Title to Trust Estate in Owner. The Owner shall not
have legal title to any part of the Trust Estate. No transfer, by operation of
law or otherwise, of any right, title, and interest of the Owner to and in its
undivided beneficial interest in the Trust Estate shall operate to terminate
this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Trust
Estate.
Section 10.03. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Owner Trustee (as such or in its
individual capacity), the Transferor, the holder of any Certificate and, to the
extent expressly provided herein, the Indenture Trustee and the Noteholders, and
nothing in this Agreement, whether express or implied, shall be construed to
give to any other Person any legal or equitable right, remedy or claim in the
Trust Estate or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.
Section 10.04. Notices. Unless otherwise expressly specified or permitted
by the terms hereof, all notices shall be in writing and shall be deemed given
upon receipt by the intended recipient or three Business Days after mailing if
mailed by certified mail, postage prepaid (except that notice to the Owner
Trustee or Indenture Trustee shall be deemed given only upon actual receipt by
the Owner Trustee or Indenture Trustee), if to the Owner Trustee, addressed to
the Corporate Trust Office; if to the Indenture Trustee, addressed to The Bank
of New York, 000 Xxxxxxx Xxxxxx, Xxxxx 0 Xxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Asset-Backed Securities Unit; if to the Transferor, addressed to
Household Affinity Funding Corporation III, 0000 Xxxx Xxxxxx Xxxxx, Xxx Xxxxx,
Xxxxxx 00000, Attention: Manager-Compliance, if to Fitch, addressed to Fitch,
Inc., Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: ABS
Surveillance, if to Moody's, addressed to Xxxxx'x Investors Service Inc., 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: ABS Monitoring Group, if to
Standard & Poor's, addressed to Standard & Poor's Ratings Group, 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Credit Card ABS or, as to each
party, at such other address as shall be designated by such party in a written
notice to each other party.
Section 10.05. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 10.06. Separate Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 10.07. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the Owner
Trustee (as such or in its individual capacity) and its successors and the
Transferor and its successors and permitted assigns, all as herein provided. Any
25
request, notice, direction, consent, waiver or other instrument or action by the
Transferor shall bind the successors and assigns of the Transferor.
Section 10.08. Nonpetition Covenants. To the fullest extent permitted
by applicable law, notwithstanding any prior termination of the Trust or this
Agreement, the Owner Trustee (not in its individual capacity) shall not at any
time with respect to the Trust or the Transferor, acquiesce, petition or
otherwise invoke or cause the Trust or the Transferor to invoke the process of
any court or 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, conservator,
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 this Section 10.08 shall not operate to
preclude any remedy described in Article V of the Indenture.
Section 10.09. No Recourse. Each Person owning or holding a Certificate
by accepting the Certificates (other than the Trust) acknowledges that the
Certificates do not represent interests in or obligations of the Servicer, the
Owner Trustee, the Indenture Trustee or any Affiliate thereof (other than the
Trust), and no recourse may be had against such parties or their assets, or
against the assets pledged under the Indenture, except as expressly provided in
the Transaction Documents.
Section 10.10. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
Section 10.11. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, 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 10.12. [Reserved].
Section 10.13. Acceptance of Terms of Agreement. THE RECEIPT AND
ACCEPTANCE OF THE TRANSFEROR CERTIFICATE BY THE TRANSFEROR, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE TRANSFEROR OF ALL THE TERMS AND PROVISIONS OF THIS AGREEMENT,
AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST THAT THE TERMS AND PROVISIONS OF
THIS AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST
AND THE TRANSFEROR.
Section 10.14. Integration of Documents. This Agreement constitutes the
entire agreement of the parties hereto and thereto with respect to the subject
matter hereof and thereof and supersedes all prior agreements relating to the
subject matter hereof and thereof.
[End of Article X]
[Signature Page to Follow]
26
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers hereunto duly authorized, as of the
day and year first above written.
WILMINGTON TRUST COMPANY
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Financial Services Officer
HOUSEHOLD AFFINITY FUNDING CORPORATION III,
as Transferor
By: /s/ X. X. Xxxxx
------------------------------------
Name: X. X. Xxxxx
Title: Vice President and Assistant Treasurer
27
EXHIBIT A
Form of Transferor Certificate
THIS TRANSFEROR CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS TRANSFEROR CERTIFICATE NOR ANY
PORTION HEREOF MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE REGISTRATION
PROVISIONS OF SUCH ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH
REGISTRATION PROVISIONS.
THIS TRANSFEROR CERTIFICATE IS NOT PERMITTED TO BE TRANSFERRED,
ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN COMPLIANCE WITH
THE TERMS OF THE TRANSFER AND SERVICING AGREEMENT REFERRED TO HEREIN.
No. R-__ One Unit
HOUSEHOLD AFFINITY CREDIT CARD MASTER NOTE TRUST I
TRANSFEROR CERTIFICATE
THIS CERTIFICATE REPRESENTS AN INTEREST
IN THE ASSETS OF THE
HOUSEHOLD AFFINITY CREDIT CARD MASTER NOTE TRUST I
Evidencing a beneficial interest in a trust, the corpus of which
consists primarily of an interest in receivables generated from time to time in
the ordinary course of business in a portfolio of revolving credit accounts
transferred by Household Affinity Funding Corporation III (the "Transferor").
(Not an interest in or obligation of the Transferor
or any affiliate thereof)
This certifies that HOUSEHOLD AFFINITY FUNDING CORPORATION III is the
registered owner of an undivided beneficial interest in the assets of Household
Affinity Credit Card Master Note Trust I (the "Trust") subject to the lien of
the Noteholders pursuant to the Master Indenture, dated as of February 18, 2003
(as amended and supplemented, the "Indenture"), between the Trust and The Bank
of New York, as Indenture Trustee, and not allocated to the interest of any
Holder of a Supplemental Certificate pursuant to the Trust Agreement, dated as
of February 14, 2003 (as amended and supplemented, the "Trust Agreement"),
between Household Affinity Funding Corporation III, a Delaware corporation, as
Transferor, and Wilmington Trust Company. The corpus of the Trust consists of
(a) a portfolio of certain receivables (the "Receivables") existing in the
revolving credit accounts identified under the Transfer and Servicing Agreement,
dated as of February 18, 2003 (the "Transfer and Servicing Agreement"), among
the Transferor, Household Finance Corporation, as Servicer (the "Servicer"), and
the Trust, as Issuer from time to time (the "Accounts"), (b) certain Receivables
generated under the Accounts from time to time thereafter, (c) certain funds
collected or to be collected from accountholders in respect of the Receivables,
(d) all funds which are from time to time on deposit in the Collection Account,
Special Funding Account and in the Series Accounts, (e) the benefits of any
Series Enhancements issued and to be issued by Series Enhancers with respect to
one or more Series of Notes and (f) all other assets and interests constituting
the Trust, including Interchange and Recoveries allocated to the Trust pursuant
to the Transfer and Servicing Agreement. Although a summary of certain
provisions of the Transfer and Servicing Agreement, the Trust Agreement and the
Indenture (collectively,
B-1
the "Agreements") is set forth below, this Certificate does not purport to
summarize the Agreements and reference is made to the Agreements for information
with respect to the interests, rights, benefits, obligations, proceeds and
duties evidenced hereby and the rights, duties and obligations of the Owner
Trustee. A copy of the Agreements may be requested from Wilmington Trust
Company, as Owner Trustee (the "Owner Trustee"), by writing to the Owner Trustee
at the Corporate Trust Office. To the extent not defined herein, the capitalized
terms used herein have the meanings ascribed to them in the Agreements.
This Certificate is issued under the Trust Agreement and is
subject to the terms, provisions and conditions of the Agreements, to which
Agreements, as amended and supplemented from time to time, the Transferor by
virtue of the acceptance hereof assents and is bound.
The Receivables consist of Principal Receivables which arise
generally from the purchase of merchandise and services and amounts advanced to
cardholders as cash advances and Finance Charge and Administrative Receivables
which arise generally from Periodic Finance Charges, Late Fees and other fees
and charges with respect to the Accounts.
This Certificate is the Transferor Certificate, which
represents the undivided beneficial interest in the assets of the Trust, subject
to the lien of the Notes, including the right to receive a portion of the
Collections and other amounts at the times and in the amounts specified in the
Indenture. In addition to the Transferor Certificate, (a) Notes will be issued
to investors pursuant to the Indenture, which will represent obligations of the
Trust, and (b) Supplemental Certificates may be issued pursuant to the Trust
Agreement.
Unless otherwise specified in an Indenture Supplement with
respect to a particular Series the Transferor has entered into the Transfer and
Servicing Agreement, and this Certificate is issued, with the intention that,
for federal, state and local income and franchise tax purposes, (a) the Notes of
each Series which are characterized as indebtedness at the time of their
issuance will qualify as indebtedness of the Transferor secured by the
Receivables and (b) the Trust shall not be treated as an association (or a
publicly traded partnership) taxable as a corporation. The Transferor, by
entering into the Transfer and Servicing Agreement and by the acceptance of this
Transferor Certificate, agrees to treat the Notes for federal, state and local
income and franchise tax purposes as indebtedness of the Transferor.
Subject to certain conditions and exceptions specified in the
Agreements, the obligations created by the Agreements and the Trust created
thereby shall terminate on the Trust Termination Date.
A-2
Unless the certificate of authentication hereon has been
executed by or on behalf of the Owner Trustee, by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement or be valid
for any purpose.
A-3
This Certificate shall be construed in accordance with the
laws of the State of Delaware, without reference to its conflict of law
provisions and the obligations, rights and remedies of the Transferor shall be
determined in accordance with such laws.
IN WITNESS WHEREOF, the Trust has caused this Certificate to
be duly executed.
HOUSEHOLD AFFINITY CREDIT CARD
MASTER NOTE TRUST I
By: WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as
Owner Trustee
By
---------------------------
Name:
Title:
Dated: [_________ __, ____]
A-4
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Transferor Certificate described in the within-mentioned
Agreement.
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By:
---------------------------
Authorized Signatory
A-5
EXHIBIT B
CERTIFICATE OF TRUST OF
HOUSEHOLD AFFINITY CREDIT CARD MASTER NOTE TRUST I
THIS Certificate of Trust of Household Affinity Credit Card Master Note
Trust I (the "Trust") has been duly executed and is being filed by Wilmington
Trust Company, a Delaware banking corporation, as owner trustee, to create a
statutory trust under the Delaware Statutory Trust Act (12 Del. C., (S) 3801 et
seq.).
1. Name. The name of the statutory trust created hereby is Household
Affinity Credit Card Master Note Trust I.
2. Delaware Trustee. The name and business address of the owner trustee
of the Trust in the State of Delaware are Wilmington Trust Company, Xxxxxx
Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000,
Attention: Corporate Trust Administration.
3. Effective Date. This Certificate of Trust shall be effective on
February 14, 2003.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Trust in accordance with Section 3811(a) of the Delaware Statutory Trust Act.
WILMINGTON TRUST COMPANY, not
in its individual capacity but
solely as Owner Trustee
By:
----------------------------
Name:
Title:
B-1
