EXHIBIT 4.3
================================================================================
TRANSFER AND SERVICING AGREEMENT
Dated as of [ ], 2002
----------
FIRST NATIONAL FUNDING LLC,
Transferor,
FIRST NATIONAL BANK OF OMAHA,
Servicer,
and
FIRST NATIONAL MASTER NOTE TRUST,
Issuer
================================================================================
FIRST NATIONAL MASTER NOTE TRUST
================================================================================
ARTICLE I
DEFINITIONS
Section 1.01. Definitions................................................................................1
Section 1.02. Other Definitional Provisions..............................................................1
ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01. Conveyance of Receivables..................................................................2
Section 2.02. Acceptance by Issuer.......................................................................4
Section 2.03. Representations and Warranties of Transferor Relating to Transferor........................4
Section 2.04. Representations and Warranties of Transferor Relating to Transaction Documents and
the Receivables............................................................................6
Section 2.05. Covenants of Transferor...................................................................12
Section 2.06. Addition of Accounts......................................................................17
Section 2.07. Removal of Accounts.......................................................................20
Section 2.08. Discount Option Receivables...............................................................21
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 3.01. Acceptance of Appointment and Other Matters Relating to Servicer..........................22
Section 3.02. Servicing Compensation....................................................................24
Section 3.03. Representations, Warranties and Covenants of Servicer.....................................24
Section 3.04. Reports and Records for Indenture Trustee.................................................28
Section 3.05. Annual Servicer's Certificate.............................................................29
Section 3.06. Annual Independent Accountants' Servicing Report..........................................29
Section 3.07. Tax Treatment.............................................................................30
Section 3.08. Notices to Transferor.....................................................................30
Section 3.09. Adjustments...............................................................................30
Section 3.10. Transfer of Receivables in Defaulted Accounts.............................................31
Section 3.11. Reports to the Commission.................................................................31
ARTICLE IV
OTHER MATTERS RELATING TO TRANSFEROR
Section 4.01. Liability of Transferor...................................................................32
Section 4.02. Merger or Consolidation of, or Assumption of the Obligations of, Transferor...............32
Section 4.03. Limitation on Liability of Transferor.....................................................33
Section 4.04. Transferor Indemnification ...............................................................33
ARTICLE V
OTHER MATTERS RELATING TO SERVICER
Section 5.01. Liability of Servicer.....................................................................35
Section 5.02. Merger or Consolidation of, or Assumption of the Obligations of, Servicer.................35
Section 5.03. Limitation on Liability of Servicer and Others............................................36
Section 5.04. Servicer Indemnification..................................................................37
Section 5.05. Servicer Not To Resign....................................................................39
Section 5.06. Access to Certain Documentation and Information Regarding the Receivables.................39
Section 5.07. Delegation of Duties......................................................................39
Section 5.08. Examination of Records....................................................................39
ARTICLE VI
INSOLVENCY EVENTS
Section 6.01. Rights upon the Occurrence of an Insolvency Event.........................................40
ARTICLE VII
SERVICER DEFAULTS
Section 7.01. Servicer Defaults.........................................................................40
Section 7.02. Indenture Trustee to Act; Appointment of Successor........................................42
Section 7.03. Notification to Noteholders...............................................................44
ARTICLE VIII
TERMINATION
Section 8.01. Termination of Agreement..................................................................44
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Amendment; Waiver of Past Defaults........................................................44
Section 9.02. Protection of Right, Title and Interest to Issuer.........................................46
Section 9.03. GOVERNING LAW.............................................................................47
Section 9.04. Notices; Payments.........................................................................47
Section 9.05. Severability of Provisions................................................................47
Section 9.06. Further Assurances........................................................................48
Section 9.07. No Waiver; Cumulative Remedies............................................................48
Section 9.08. Counterparts..............................................................................48
Section 9.09. Third-party Beneficiaries.................................................................48
ii
Section 9.10. Actions by Noteholders....................................................................48
Section 9.11. Rule 144A Information.....................................................................48
Section 9.12. Merger and Integration....................................................................49
Section 9.13. No Bankruptcy Petition....................................................................49
Section 9.14. Rights of Indenture Trustee...............................................................49
Section 9.15. Rights of Owner Trustee...................................................................49
Section 9.16. Assignment................................................................................49
Section 9.17. Headings..................................................................................49
EXHIBIT A PROVISIONS TO BE INCLUDED IN OPINION OF COUNSEL WITH RESPECT TO AMENDMENTS
EXHIBIT B FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL ACCOUNTS
EXHIBIT C FORM OF MONTHLY SERVICER'S CERTIFICATE
EXHIBIT D FORM OF ANNUAL SERVICER'S CERTIFICATE
EXHIBIT E PROVISIONS TO BE INCLUDED IN OPINION OF COUNSEL WITH RESPECT TO ADDITION OF ACCOUNTS
EXHIBIT F PROVISIONS TO BE INCLUDED IN ANNUAL OPINION OF COUNSEL
EXHIBIT G FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
SCHEDULE 1 LIST OF ACCOUNTS--COMPUTER LIST OR MICROFICHE DELIVERED SEPARATELY
iii
TRANSFER AND SERVICING AGREEMENT (this "Agreement"), dated as of
[ ], 2002 among FIRST NATIONAL FUNDING LLC, a
Nebraska limited liability
company, as Transferor, FIRST NATIONAL BANK OF OMAHA, a national banking
association, as Servicer, and FIRST NATIONAL MASTER NOTE TRUST, a business trust
organized under the laws of the State of Delaware, as Issuer.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties, the Noteholders and any
Enhancement Provider to the extent provided herein, in the Indenture and in any
Indenture Supplement:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. Capitalized terms used herein and not
otherwise defined herein are defined in Annex A to the Master Indenture, dated
as of the date hereof, between First National Master Note Trust, as Issuer, and
The Bank of New York, as Indenture Trustee.
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS. All terms defined directly
or by reference in this Agreement shall have the defined meanings when used in
any certificate or other document delivered pursuant hereto unless otherwise
defined therein. For purposes of this Agreement and all such certificates and
other documents, unless the context otherwise requires: (a) accounting terms not
otherwise defined in this Agreement, and accounting terms partly defined in this
Agreement to the extent not defined, shall have the respective meanings given to
them under GAAP; (b) terms defined in Article 9 of the UCC as in effect in the
State of
Nebraska and not otherwise defined in this Agreement are used as
defined in that Article; (c) any reference to each Rating Agency shall only
apply to any specific rating agency if such rating agency is then rating any
outstanding Series; (d) references to any amount as on deposit or outstanding on
any particular date means such amount at the close of business on such day; (e)
the words "hereof," "herein" and "hereunder" and words of similar import refer
to this Agreement (or the certificate or other document in which they are used)
as a whole and not to any particular provision of this Agreement (or such
certificate or document); (f) references to any Section, Schedule or Exhibit are
references to Sections, Schedules and Exhibits in or to this Agreement (or the
certificate or other document in which the reference is made), and references to
any paragraph, Section, clause or other subdivision within any Section or
definition refer to such paragraph, subsection, clause or other subdivision of
such Section or definition; (g) the term "including" means "including without
limitation;" (h) references to any law or regulation refer to that law or
regulation as amended from time to time and include any successor law or
regulation; (i) references to any Person include that Person's successors and
assigns; and (j) headings are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01. CONVEYANCE OF RECEIVABLES.
(a) By execution of this Agreement, Transferor does hereby
transfer, assign, set over and otherwise convey to Issuer, without
recourse except as provided herein, all its right, title and interest
in, to and under (i) the Collateral Certificate and (ii) effective on
the Certificate Trust Termination Date, (A) the Receivables existing at
the opening of business on the Certificate Trust Termination Date, and
thereafter created from time to time until the termination of Issuer,
all Collections and Recoveries allocable to Issuer as provided herein
and the right to any Enhancement with respect to any Series, in each
case together with all monies due or to become due and all amounts
received or receivable with respect thereto and all proceeds thereof
and Insurance Proceeds relating thereto and (B) without limiting the
generality of the foregoing or the following, all of Transferor's
rights, remedies, powers and privileges under the Receivables Purchase
Agreement and (C) all proceeds of any of the foregoing. Such property,
together with all monies and other property credited to the Collection
Account, the Series Accounts and the Excess Funding Account (including
any subaccounts of any such account) and the rights of Issuer under
this Agreement and the Trust Agreement shall constitute the assets of
Issuer (the "Trust Assets"). The foregoing does not constitute and is
not intended to result in the creation or assumption by Issuer, Owner
Trustee, Indenture Trustee or any Noteholder of any obligation of any
Credit Card Originator, Servicer, Transferor or any other Person in
connection with the Accounts or the Receivables or under any agreement
or instrument relating thereto, including any obligation to Obligors,
clearance systems or insurers.
(b) On or prior to the Initial Closing Date, Transferor shall
deliver to Issuer a registered certificate representing the Collateral
Certificate. On or prior to the Certificate Trust Termination Date,
Transferor agrees to record and file, at its own expense, financing
statements (and continuation statements when applicable) with respect
to the Receivables conveyed by Transferor existing on the Certificate
Trust Termination Date and thereafter created meeting the requirements
of applicable state law in such manner and in such jurisdictions as are
necessary to perfect, and maintain the perfection of, the transfer and
assignment of its interest in such Receivables to Issuer, and to
deliver a file stamped copy of each such financing statement or other
evidence of such filing (which may, for purposes of this Section 2.01
consist of telephone confirmation of such filing promptly followed by
delivery to Owner Trustee of a file-stamped copy) to Owner Trustee as
soon as practicable after the Certificate Trust Termination Date, and
(if any additional filing is so necessary) as soon as practicable after
the applicable Addition Date, in the case of Receivables arising in any
Additional Accounts. Owner Trustee shall be under no obligation
whatsoever to file such financing or continuation statements or to make
any other filing under the UCC in connection with such transfer and
assignment.
(c) Transferor further agrees, at its own expense, (i) on or
prior to (w) the Certificate Trust Termination Date, (x) the applicable
Addition Date, in the case of
2
Additional Accounts and (y) the applicable Removal Date, in the case of
Removed Accounts, to indicate in the appropriate computer files that
Receivables created (or reassigned, in the case of Removed Accounts) in
connection with the Accounts owned by FNBO have been conveyed to Issuer
pursuant to this Agreement (or conveyed to Transferor or its designee
in accordance with Section 2.07, in the case of Removed Accounts) by
including in such computer files the code identifying each such Account
(or, in the case of Removed Accounts, either by including a code
identifying the Removed Accounts or by deleting the code identifying
such Account) and (ii) on or prior to the Certificate Trust Termination
Date, to deliver to Issuer an Account Schedule, specifying for each
such Account, as of the most recent calendar month end, its account
number and, the aggregate amount outstanding in such Account and the
aggregate amount of Principal Receivables outstanding in such Account.
Such Account Schedule, as supplemented from time to time to reflect
Additional Accounts and Removed Accounts, shall be in the form of
computer files or microfiche lists and shall be marked as Schedule 1 to
this Agreement and is hereby incorporated into and made a part of this
Agreement. Once the code referenced in clause (i) of this paragraph has
been included with respect to any Account, Transferor further agrees
not to alter such code during the remaining term of this Agreement
unless and until (A) such Account becomes a Removed Account, or (B)
Transferor shall have delivered to Issuer at least 30 days' prior
written notice of its intention to do so and has taken such action as
is necessary or advisable to cause the interest of Issuer in the
Receivables and the other Trust Assets to continue to be perfected with
the priority required by this Agreement.
(d) The parties intend that the transfer made herein shall be
deemed to be a sale, but if, and to the extent that, such transfer is
not deemed to be a sale, Transferor shall be deemed to have granted,
and does hereby so grant, to Issuer, effective on the Certificate Trust
Termination Date, a first priority perfected security interest in all
of Transferor's right, title and interest, whether owned on the
Certificate Trust Termination Date or thereafter acquired, in, to and
under the Receivables and the other Trust Assets conveyed by
Transferor, and all money, accounts, general intangibles, chattel
paper, instruments, documents, goods, investment property, deposit
accounts, certificates of deposit, letters of credit and advices of
credit consisting of, arising from or related to the Trust Assets, to
secure Transferor's obligations hereunder, and that this Agreement
shall constitute a security agreement under applicable law.
(e) On or prior to each Determination Date following the
Certificate Trust Termination Date, Transferor shall cause FNBO to
notify Servicer of the amount of Interchange to be included as
Collections of Finance Charge Receivables allocable to the Accounts
with respect to the Related Monthly Period, which amount shall be equal
to the product of:
(i) the total amount of Interchange paid or payable
to FNBO with respect to such Related Monthly Period; and
(ii) a fraction the numerator of which is the volume
during the Related Monthly Period of sales net of cash
advances on the Accounts and the
3
denominator of which is the amount of sales net of cash
advances during the Related Monthly Period on all VISA and
MasterCard accounts owned by FNBO.
On each Transfer Date following the Certificate Trust Termination Date,
Transferor shall pay to Servicer, or cause FNBO to pay to Servicer, and Servicer
shall deposit into the Collection Account for each outstanding Series, in
immediately available funds, each Series pro rata share of such Interchange, as
specified in the applicable Indenture Supplement.
SECTION 2.02. ACCEPTANCE BY ISSUER.
(a) Issuer hereby acknowledges its acceptance of all right,
title and interest to the property, now existing and hereafter created,
conveyed to Issuer pursuant to Section 2.01. Owner Trustee shall
maintain a copy of Schedule 1, as delivered to it from time to time, at
its Corporate Trust Office.
(b) Owner Trustee hereby agrees not to disclose to any Person
any of the account numbers or other information contained in the
Account Schedule marked as Schedule 1 and delivered to Owner Trustee or
Issuer, from time to time, except (i) to a Successor Servicer or as
required by a Requirement of Law applicable to Owner Trustee, (ii) in
connection with the performance of Owner Trustee's or Issuer's duties
hereunder, (iii) to Indenture Trustee in connection with its duties in
enforcing the rights of Noteholders or (iv) to bona fide creditors of
Servicer or Transferor for the limited purpose of enabling any such
creditor to identify Receivables or Accounts subject to this Agreement
or the Receivables Purchase Agreement. Owner Trustee agrees (i) to take
such measures as shall be reasonably requested by Transferor to protect
and maintain the security and confidentiality of such information and,
in connection therewith, shall allow Transferor or its duly authorized
representatives to inspect Owner Trustee's security and confidentiality
arrangements as they specifically relate to the administration of
Issuer from time to time during normal business hours upon prior
written notice and (ii) not to use any Account Schedule information to
compete, directly or indirectly, with Transferor or FNBO. Owner Trustee
shall promptly notify Transferor of any request received by Owner
Trustee to disclose information of the type described in this Section
2.02(b), which notice shall in any event be provided no later than five
(5) Business Days prior to disclosure of any such information unless
Owner Trustee is compelled pursuant to a Requirement of Law to disclose
such information prior to the date that is five (5) Business Days after
the giving of such notice.
SECTION 2.03. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR RELATING TO
TRANSFEROR. Transferor hereby represents and warrants to Issuer as of each
Closing Date and the Certificate Trust Termination Date and, with respect to
Additional Accounts, the related Addition Date that:
(a) ORGANIZATION AND GOOD STANDING. Transferor is a limited
liability company validly existing in good standing under the laws of
the State of
Nebraska, and has full power, authority and legal right to
own its properties and conduct its business as presently owned and
conducted, to execute, deliver and perform its obligations under each
Transaction Document to which it is a party.
4
(b) DUE QUALIFICATION. Transferor is duly qualified to do
business and is in good standing (or is exempt from such requirements)
in any state required in order to conduct business, and has obtained
all necessary licenses and approvals with respect to Transferor
required under federal and
Nebraska law; provided, however, that no
representation or warranty is made with respect to any qualifications,
licenses or approvals which Indenture Trustee would have to obtain to
do business in any state in which Indenture Trustee seeks to enforce
any Receivable.
(c) DUE AUTHORIZATION. The execution, delivery and performance
by Transferor of this Agreement and each other Transaction Document to
which Transferor is a party and the consummation by Transferor of the
transactions provided for in this Agreement and each such other
Transaction Document have been duly authorized by Transferor by all
necessary limited liability company action on its part.
(d) NO CONFLICTS. The execution and delivery of this Agreement
and each other Transaction Document to which Transferor is a party, the
performance of the transactions contemplated by this Agreement and each
such Transaction Document and the fulfillment of the terms hereof and
thereof, will not conflict with, result in any breach of any of the
material terms and provisions of, or constitute (with or without notice
or lapse of time or both) a material default under, any indenture,
contract, agreement, mortgage, deed of trust, or other instrument to
which Transferor is a party or by which it or any of its properties are
bound.
(e) NO VIOLATION. The execution and delivery of this Agreement
and each other Transaction Document to which Transferor is a party, the
performance of the transactions contemplated by this Agreement and each
such Transaction Document and the fulfillment of the terms hereof and
thereof, will not conflict with or violate in any material way any
Requirements of Law applicable to Transferor or FNBO.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the best knowledge of Transferor, threatened against
Transferor, before any court, regulatory body, administrative agency,
or other tribunal or governmental instrumentality (i) asserting the
invalidity of the Notes or any other Transaction Documents, (ii)
seeking to prevent the issuance of the Notes or the consummation of any
of the transactions contemplated by the Notes or any other Transaction
Documents, (iii) seeking any determination or ruling that, in the
reasonable judgment of Transferor, would materially and adversely
affect the performance by Transferor of its obligations under any
Transaction Document, (iv) seeking any determination or ruling that
would materially and adversely affect the validity or enforceability of
the Notes or any other Transaction Document or (v) seeking to affect
adversely the income tax attributes of Issuer under the federal or any
applicable state income or franchise tax systems.
(g) ALL CONSENTS REQUIRED. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental
body or official required in connection with the execution and delivery
by Transferor of this Agreement and each other Transaction Document to
which Transferor is a party, the performance by Transferor of the
transactions contemplated by this Agreement and each such other
5
Transaction Document, and the fulfillment of the terms hereof and
thereof, have been obtained; provided, however, that no representation
or warranty is made as to state securities or blue sky laws regarding
the distribution of the Notes.
(h) INSOLVENCY. No Insolvency Event with respect to Transferor
has occurred. Transferor did not (i) execute the Transaction Documents,
(ii) grant to Issuer the security interests described in Section 2.01,
(iii) cause, permit, or suffer the perfection or attachment of such a
security interest, (iv) otherwise effectuate or consummate any transfer
to Issuer pursuant to any Transaction Document or (v) acquire its
interest in Issuer, in each case: (A) in contemplation of insolvency;
(B) with a view to preferring one creditor over another or to
preventing the application of its assets in the manner required by
applicable law or regulations; (C) after committing an act of
insolvency; or (D) with any intent to hinder, delay, or defraud itself
or its creditors.
The representations and warranties set forth in this Section 2.03 shall survive
the transfer and assignment by Transferor of the respective Receivables and
other Trust Assets to Issuer and the pledge thereof to Indenture Trustee
pursuant to the Indenture. Upon discovery by Transferor, Servicer or Owner
Trustee of a breach of any of the representations and warranties set forth in
this Section 2.03, the party discovering such breach shall give prompt written
notice to the others and each Enhancement Provider, if any, entitled thereto
pursuant to the relevant Indenture Supplement. Transferor agrees to cooperate
with Servicer and Owner Trustee in attempting to cure any such breach. For
purposes of the representations and warranties set forth in this Section 2.03,
each reference to an Indenture Supplement shall be deemed to refer only to those
Indenture Supplements in effect as of the date of the relevant representation or
warranty.
SECTION 2.04. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR RELATING TO
TRANSACTION DOCUMENTS AND THE RECEIVABLES.
(a) REPRESENTATIONS AND WARRANTIES. Transferor represents and
warrants to Issuer as of each Closing Date, the Certificate Trust
Termination Date and, with respect to Additional Accounts, the related
Addition Date that:
(i) Enforceability. Each Transaction Document to
which Transferor is a party constitutes and, in the case of
Additional Accounts, the related Assignment, when executed and
delivered on behalf of Transferor, will constitute, a legal,
valid and binding obligation of Transferor, enforceable
against Transferor in accordance with its terms, except as
such enforceability may be limited by applicable Debtor Relief
Laws now or hereafter in effect and by general principles of
equity (whether considered in a suit at law or in equity).
(ii) Accurate Account Schedule. As of the Certificate
Trust Termination Date, as of each Addition Date with respect
to Additional Accounts, and as of the applicable Removal Date
with respect to Removed Accounts, the Account Schedule
delivered pursuant to this Agreement, as supplemented to such
date, is an accurate and complete listing in all material
respects of all the Accounts as of each such date (or, with
respect to the Account Schedule delivered on the Certificate
Trust Termination Date, as of the then most recent month end)
6
and the information contained therein with respect to the
identity of such Accounts and the Receivables existing
thereunder is true and correct in all material respects as of
such specified date.
(iii) No Liens. (A) On and after the Certificate
Trust Termination Date, Transferor is the legal and beneficial
owner of all right, title and interest in each Receivable and
Transferor has the full right, power and authority to transfer
such Receivables to Issuer pursuant to this Agreement, and (B)
each Receivable conveyed to Issuer by Transferor pursuant to
this Agreement has been conveyed to Issuer free and clear of
any Lien (other than Liens permitted under Section 2.05(b))
and in compliance, in all material respects, with all
Requirements of Law applicable to Transferor and/or FNBO.
(iv) Consents. All approvals, licenses,
authorizations, consents, orders or other actions of any
Person or registrations or declarations with any Governmental
Authority required to be obtained, effected or given by
Transferor or FNBO in connection with the conveyance of the
Collateral Certificate and the Receivables to Issuer pursuant
to this Agreement have been duly obtained, effected or given
and are in full force and effect.
(v) Collateral Certificate. The transfer and
assignment of the Collateral Certificate herein contemplated
constitutes either (A) a sale of the Collateral Certificate,
(B) a grant of a perfected security interest therein from
Transferor to Issuer or (C) a grant of a perfected security
interest therein from Transferor to Indenture Trustee. The
Collateral Certificate has not been sold, transferred,
assigned or pledged by Transferor to any Person other than
pursuant to this Agreement. Immediately prior to the transfer
and assignment herein contemplated, Transferor had good and
marketable title to the Collateral Certificate, free and clear
of all Liens and rights of others except for Liens permitted
by Section 2.05(b) and, immediately upon the transfer thereof,
Issuer shall have good and marketable title to the Collateral
Certificate, free and clear of all Liens and rights of others
or a first priority perfected security interest therein except
for Liens permitted by Section 2.05(b); and the transfer has
been perfected, by the filing of appropriate financing
statements pursuant to the UCC, under the UCC. Transferor has
no knowledge of any current statutory or other non-consensual
liens to which the Collateral Certificate is subject. All
actions necessary under the applicable UCC in any jurisdiction
to be taken (A) to give Issuer a first priority perfected
security interest or ownership interest in the Collateral
Certificate except for Liens permitted by Section 2.05(b), and
(B) to give Indenture Trustee a first priority perfected
security interest in the Collateral Certificate (including,
without limitation, UCC filings with each of the Delaware
Secretary of State (Issuer as debtor) and
Nebraska Secretary
of State (Transferor as debtor)), in each case subject to any
statutory or other nonconsensual liens with respect to the
Collateral Certificate, have been taken. The representations
made in this subsection (v) shall not be made on or after the
Certificate Trust Termination Date.
(vi) Perfection. This Agreement or, in the case of
Additional Accounts, the related Assignment, constitutes
either a valid sale, transfer and
7
assignment to Issuer of all right, title and interest of
Transferor in the Receivables and other Trust Assets conveyed
to Issuer by Transferor hereunder or thereunder or a grant of
a security interest in such property to Issuer, which, (A)
with respect to Receivables existing on the Certificate Trust
Termination Date and the proceeds thereof, is enforceable upon
the Certificate Trust Termination Date or (B) with respect to
the then existing Receivables in Additional Accounts added
after the Certificate Trust Termination Date, as of the
applicable Addition Date, and which will be enforceable with
respect to such Receivables thereafter created and the
proceeds thereof upon such creation, in each case except as
such enforceability may be limited by applicable Debtor Relief
Laws, now or hereafter in effect, and by general principles of
equity (whether considered in a suit at law or in equity). All
actions necessary under the applicable UCC in any jurisdiction
to be taken to give Issuer a first priority perfected security
interest in such property and proceeds, except for Liens
permitted under Section 2.05(b), have been taken.
(vii) Accounts. Except as otherwise expressly
provided in this Agreement or any other Transaction Document,
neither Transferor nor any other Person has any claim to or
interest in the Collection Account, the Excess Funding
Account, any Series Account or any Enhancement.
(viii) Eligible Accounts. With respect to Additional
Accounts added after the Certificate Trust Termination Date,
each such Account is classified as an Eligible Account as of
the relevant Addition Date and no selection procedures adverse
to the Noteholders have been employed in selecting the
Accounts from among the Eligible Accounts.
(ix) Eligible Receivables. On the date each
Additional Account added after the Certificate Trust
Termination Date becomes an Account, each Receivable contained
in such Additional Account is an Eligible Receivable. As of
the date of the creation of any new Receivable in an Account,
such Receivable is an Eligible Receivable.
(x) Subsequent Receivables. On each day after the
Certificate Trust Termination Date on which any new Receivable
is created, Transferor represents and warrants to Issuer that
the representations and warranties made in Section 2.04(a)(i),
(iii), (iv), (vi) and (ix) are true and correct with respect
to each such Receivable as of such day of creation.
(xi) Additional Perfection Representations and
Warranties. Debtor hereby makes the Perfection Representations
and Warranties to Secured Party. For purposes of this Section
2.04(a)(xi): Debtor shall mean Transferor, Secured Party shall
mean Issuer, and Specified Agreement shall mean this
Transfer
and Servicing Agreement. The rights and remedies with respect
to any breach of the Perfection Representations and Warranties
made under this Section 2.04(a)(xi) shall be continuing and
shall survive any termination of the Specified Agreement.
Secured Party shall not waive a breach of any Perfection
Representation and
8
Warranty. In order to evidence the interests of Debtor and
Secured Party under the Specified Agreement, the Debtor and
Servicer shall, from time to time take such action, and
execute and deliver such instruments (including, without
limitation, such actions or filings as are requested by the
Secured Party and financing statements under the UCC as
enacted and then in effect in any other jurisdiction in which
the Debtor is organized, has its principal place of business
or maintains any books, records, files or other information
concerning the Receivables) in order to maintain and perfect,
as a first priority interest, the Secured Party's security
interest in the Receivables. Debtor hereby authorizes Servicer
and Indenture Trustee to file financing statements under the
UCC without Debtor's signature where allowed by applicable
law.
(b) As of the Certificate Trust Termination Date, Transferor
agrees that (i) all representations and warranties made by it in its
capacity as Transferor under the Pooling and Servicing Agreement with
respect to any Account or Receivable pursuant to Section 2.04 of the
Pooling and Servicing Agreement and (ii) all of the covenants made by
it under Section 2.05 of the Pooling and Servicing Agreement, in each
case, shall be deemed for all purposes (including the reassignment
obligations under Section 2.04(d)) to have been made by Transferor to
Issuer pursuant to this Agreement as of the day when each was made or
deemed made, as if this Agreement had been in effect on that day.
(c) NOTICE OF BREACH. The representations and warranties of
Transferor made pursuant to this Section 2.04 shall survive the
transfer and assignment by Transferor of the Collateral Certificate and
Receivables to Issuer and the pledge thereof to Indenture Trustee
pursuant to the Indenture and the Certificate Trust Termination Date.
Upon discovery by Transferor, Servicer or a Responsible Officer of
Owner Trustee of a breach of any of the representations and warranties
by Transferor made pursuant to this Section 2.04, the party discovering
such breach shall give prompt written notice to the others and to each
Enhancement Provider, if any, entitled thereto pursuant to the relevant
Indenture Supplement. Transferor agrees to cooperate with Servicer and
Owner Trustee in attempting to cure any such breach. For purposes of
the representations and warranties made pursuant to this Section 2.04,
each reference to an Indenture Supplement shall be deemed to refer only
to those Indenture Supplements in effect as of the date of the relevant
representations or warranties.
(d) TRANSFER OF INELIGIBLE RECEIVABLES.
(i) Automatic Removal. From and after the Certificate
Trust Termination Date, in the event of a breach with respect
to a Receivable of any representations and warranties set
forth in subsection 2.04(a)(iii)(B), or in the event that a
Receivable is not an Eligible Receivable as a result of the
failure to satisfy the conditions set forth in clause (d) of
the definition of Eligible Receivable, and any of the
following three conditions is met: (A) as a result of such
breach or event such Receivable is charged off as
uncollectible or Issuer's rights in, to or under such
Receivable or its proceeds are impaired or the proceeds of
such Receivable are not available for any reason to Issuer
free and clear of any Lien, except Liens permitted under
subsection 2.05(b); (B) the Lien upon the subject Receivable
(1) arises in favor of the United States of America or any
State
9
or any agency or instrumentality thereof and involves taxes or
liens arising under Title IV of ERISA or (2) has been
consented to by Transferor or the applicable Credit Card
Originator; or (C) the unsecured short-term debt rating of
FNBO is not at least "P-1" by Xxxxx'x and the Lien upon the
subject Receivable ranks prior to the Lien created pursuant to
this Agreement, then, upon the earlier to occur of the
discovery of such breach or event by Transferor or Servicer or
receipt by Transferor of written notice of such breach or
event given by Indenture Trustee, Receivables of the Account
containing such ineligible Receivable shall be automatically
reassigned to Transferor on the terms and conditions set forth
in subsection 2.04(d)(iii).
(ii) Removal After Cure Period. In the event of a
breach of any of the representations and warranties set forth
in subsection 2.04(a) other than a breach or event as set
forth in subsection 2.04(d)(i) above, and as a result of such
breach the related Account becomes a Defaulted Account or
Issuer's rights in, to or under the Receivable or its proceeds
are impaired or the proceeds of such Receivable are not
available for any reason to Issuer free and clear of any Lien,
except Liens permitted under subsection 2.05(b), then upon the
expiration of 60 days (or such longer period as may be agreed
to by Indenture Trustee in its sole discretion, but in no
event later than 150 days) from the earlier to occur of the
discovery of any such event by either Transferor or Servicer,
or receipt by Transferor of written notice of any such event
given by Indenture Trustee, the Receivables of the Account
containing such ineligible Receivable shall be reassigned to
Transferor on the terms and conditions set forth in subsection
2.04(d)(iii); provided, however, that no such removal shall be
required to be made if, on any day within such applicable
period, such representations and warranties with respect to
such Receivable shall then be true and correct in all material
respects as if such Receivable had been created on such day.
(iii) Procedures for Reassignment. When the
provisions of subsection 2.04(d)(i) or (ii) above require
reassignment of a Receivable, Transferor shall accept
reassignment of such Receivable (an "Ineligible Receivable")
by directing Servicer to deduct the principal balance of each
such Ineligible Receivable from the Aggregate Principal
Receivables in the Trust and to decrease Transferor Interest
by such amount. On and after the date of such reassignment,
each Ineligible Receivable shall be assigned a principal
balance of zero for the purpose of determining the Principal
Receivables on any day. In the event that the exclusion of an
Ineligible Receivable from the calculation of the Aggregate
Principal Balance would cause Transferor Interest to be
reduced below the Minimum Transferor Interest or would
otherwise not be permitted by law, Transferor shall
immediately, but in no event later than 10 Business Days after
such event, make a deposit in the Excess Funding Account in
immediately available funds prior to the next succeeding
Transfer Date in an amount equal to the amount by which
Transferor Interest would be reduced below the Minimum
Transferor Interest. The portion of such deposit allocated to
the Notes of each Series shall be distributed to the
Noteholders of each Series in the manner specified in Article
IV, if applicable, on the Distribution Date relating to the
10
Monthly Period in which such deposit is made. Upon the
reassignment to Transferor of an Ineligible Receivable, Issuer
shall automatically and without further action be deemed to
transfer, assign, set over and otherwise convey to Transferor,
without recourse, representation or warranty, all the right,
title and interest of Issuer in and to such Ineligible
Receivable, all moneys due or to become due with respect
thereto and all proceeds thereof and Insurance Proceeds
relating thereto and Interchange (if any) allocated to such
Ineligible Receivable pursuant to any Indenture Supplement.
Such reassigned Ineligible Receivable shall be treated by
Issuer as collected in full as of the date on which it was
transferred. Issuer and Indenture Trustee shall execute such
documents and instruments of transfer or assignment and take
other actions as shall reasonably be requested by Transferor
to evidence the conveyance of such Ineligible Receivable
pursuant to this subsection 2.04(d)(iii). The obligation of
Transferor set forth in this subsection 2.04(d)(iii), or the
automatic reassignment of such Receivable from Issuer, as the
case may be, shall constitute the sole remedy respecting any
breach of the representations and warranties set forth in the
above-referenced subsections with respect to such Receivable
available to Issuer or Indenture Trustee on behalf of
Noteholders.
(iv) Proceeds Held by Servicer. For the purposes of
subsections 2.04(d)(i) and (ii) above, proceeds of a
Receivable shall not be deemed to be impaired hereunder solely
because such proceeds are held by Servicer (if Servicer is
FNBO or Transferor) for more than the applicable period under
Section 9-315 of the UCC.
(e) REASSIGNMENT OF TRUST PORTFOLIO. From and after the
Certificate Trust Termination Date, in the event of a breach of any of
the representations and warranties set forth in subsections 2.03(a),
(b) or (c) or subsection 2.04(a)(i), (vi) or (vii) which has a material
adverse effect on the Receivables or the availability of the proceeds
of the Receivables to Issuer, then Indenture Trustee or the Majority
Holders, by notice then given in writing to Transferor (and to
Indenture Trustee and Servicer, if given by the Majority Holders), may
direct Transferor to accept reassignment of an amount of Principal
Receivables (as specified below) within 60 days of such notice (or
within such longer period as may be specified in such notice), and
Transferor shall be obligated to accept reassignment of such Principal
Receivables on a Transfer Date specified by Transferor (as to such
Transfer Date, the "Reassignment Date") occurring within such
applicable period on the terms and conditions set forth below;
provided, however, that no such reassignment shall be required to be
made if, at any time during such applicable period, each such
representation and warranty shall then be true and correct in all
material respects. Transferor shall deposit in next-day funds on the
Reassignment Date an amount equal to the reassignment deposit amount
for such Receivables in the Collection Account or the applicable Series
Account, as provided in the related Indenture Supplement, for
distribution to the Noteholders pursuant to this Indenture and the
applicable Indenture Supplement. The reassignment deposit amount with
respect to each Series for such reassignment, unless otherwise stated
in the related Indenture Supplement, shall be equal to (i) the
aggregate outstanding Note Principal Balance of such Series at the end
of the day on the last day of the Monthly Period preceding the
11
Reassignment Date, less the amount, if any, previously allocated for
payment of principal, or paid as principal to such Noteholders on the
related Distribution Date in the Monthly Period in which the
Reassignment Date occurs, plus (ii) an amount equal to all interest
accrued but unpaid on the Notes of such Series at the applicable Note
Interest Rate through such last day, less the amount, if any,
previously allocated for payment of interest or paid as interest to the
Noteholders of such Series on the related Distribution Date in the
Monthly Period in which the Reassignment Date occurs (the "Portfolio
Reassignment Price"). Payment of the reassignment deposit amount with
respect to each Series, and all other amounts in the Collection Account
or the applicable Series Account in respect of the preceding Monthly
Period shall be considered a prepayment in full of the Receivables. On
the Reassignment Date on which such amount has been deposited in full
into the Collection Account or the applicable Series Account, the
Receivables and all moneys due or to become due with respect thereto
and all proceeds of the Receivables and Insurance Proceeds relating
thereto and Interchange (if any) allocated to the Receivables pursuant
to any Indenture Supplement shall be released to Transferor after
payment of all amounts otherwise due hereunder on or prior to such
dates and Issuer and Indenture Trustee shall execute and deliver such
instruments of transfer or assignment, in each case without recourse,
representation or warranty, as shall be prepared by and as are
reasonably requested by Transferor to vest in Transferor, or its
designee or assignee, all right, title and interest of Issuer and
Indenture Trustee in and to the Receivables, all moneys due or to
become due with respect thereto and all proceeds of the Receivables and
Insurance Proceeds relating thereto and Interchange (if any) allocated
to the Receivables pursuant to any Indenture Supplement. If Indenture
Trustee or the Majority Holders give notice directing Transferor to
accept reassignment as provided above, the obligation of Transferor to
accept reassignment of the Receivables and pay the reassignment deposit
amount pursuant to this subsection 2.04(e) shall constitute the sole
remedy respecting a breach of the representations and warranties
contained in subsections 2.03(a), (b) or (c) or subsections 2.04(a)(i),
(vi) or (vii) available to the Noteholders, Issuer or Indenture
Trustee.
SECTION 2.05. COVENANTS OF TRANSFEROR. Transferor hereby covenants
that:
(a) RECEIVABLES TO BE ACCOUNTS. Transferor will take no action
to cause any Receivable to be evidenced by any instrument (as defined
in the UCC). Each Receivable shall be payable pursuant to a contract
which does not create a Lien on any goods purchased thereunder.
Transferor will take no action to cause any Receivable to be anything
other than an "account" (as defined in the UCC).
(b) SECURITY INTERESTS. Except for the conveyances hereunder
and under the other Transaction Documents, Transferor will not sell,
pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien on any Receivable or the
Collateral Certificate, whether now existing or hereafter created, or
any interest therein; Transferor will immediately notify Issuer,
Indenture Trustee and each Enhancement Provider entitled to such notice
pursuant to the relevant Indenture Supplement of the existence of any
Lien on any Receivable or the Collateral Certificate; and Transferor
shall defend the right, title and interest of Issuer and Indenture
Trustee in, to and under the Receivables and the Collateral
Certificate, whether now existing or
12
hereafter created, against all claims of third parties; provided,
however, that nothing in this subsection 2.05(b) shall prevent or be
deemed to prohibit Transferor from suffering to exist upon any of the
Receivables or the Collateral Certificate any Liens for taxes if such
taxes shall not at the time be due and payable or if Transferor shall
currently be contesting the validity thereof in good faith by
appropriate proceedings and shall have set aside on its books adequate
reserves with respect thereto; and, provided further, that nothing in
this subsection 2.05(b) shall be deemed to prohibit the transfer of
Transferor Interest in accordance with this Agreement and the Trust
Agreement.
(c) CREDIT CARD AGREEMENTS AND ACCOUNT GUIDELINES. Transferor
shall enforce the covenant in the Receivables Purchase Agreement
requiring FNBO to comply with and perform its obligations under the
Credit Card Agreements relating to the Accounts and the Credit Card
Guidelines and all applicable rules and regulations of VISA USA, Inc.
and MasterCard International Incorporated, except insofar as any
failure to comply or perform would not materially and adversely affect
the rights and interests of Issuer, Indenture Trustee or the
Noteholders under any Transaction Documents or the Notes. Except as
expressly provided in any Indenture Supplement, Transferor may permit
FNBO to change the terms and conditions of the Credit Card Agreements
or the Credit Card Guidelines in any respect (including, without
limitation, the reduction of the required minimum monthly payment, the
calculation of the amount, or the timing, of charge-offs and the
Periodic Finance Charges and other fees to be assessed thereon) only if
such change (i) would not, in the reasonable belief of Transferor,
cause a Pay Out Event to occur, and (ii) is made applicable to a
substantial portion of the comparable segment of the revolving credit
card accounts owned and serviced by FNBO which have characteristics the
same as, or substantially similar to, the Accounts that are the subject
of such change, except as otherwise restricted by an endorsement,
sponsorship, or other agreement between FNBO and an unrelated third
party or by the terms of the Credit Card Agreements; provided, however,
with respect to FNBO, that clause (ii) shall be deemed to be satisfied
at any time that Transferor Interest exceeds 14% of the Aggregate
Principal Receivables; and provided, further, that for purposes of
FNBO's debt deferral and debt cancellation program, the requirements of
subsection 2.05(c)(ii) shall be deemed to be satisfied if the
opportunity to initiate the change is made available to a substantial
portion of the comparable segment of the revolving credit card accounts
owned and serviced by FNBO which have characteristics the same as, or
substantially similar to, the Accounts to which such opportunity is
made available.
(d) ACCOUNT ALLOCATIONS. In the event that Transferor is
unable for any reason to transfer Receivables to Issuer in accordance
with the provisions of this Agreement (including, without limitation,
by reason of the application of the provisions of Section 6.01 or an
order by any federal governmental agency having regulatory authority
over Transferor or FNBO or any court of competent jurisdiction that
Transferor not transfer any additional Principal Receivables to Issuer)
then, in any such event, (i) Transferor agrees to allocate and pay to
Issuer, after the date of such inability, all Collections with respect
to Principal Receivables, all Discount Option Receivables Collections,
and all amounts which would have constituted Collections with respect
to Principal Receivables and Discount Option Receivables Collections
but for Transferor's inability to transfer such Receivables (up to an
aggregate amount equal to the amount of
13
Principal Receivables and Discount Option Receivables in the Trust on
such date); (ii) Transferor agrees to have such amounts applied as
Collections in accordance with Article VIII of the Indenture; and (iii)
for only so long as all Collections and all amounts which would have
constituted Collections are allocated and applied in accordance with
clauses (i) and (ii) above, Principal Receivables and Discount Option
Receivables (and all amounts which would have constituted Principal
Receivables or Discount Option Receivables, as the case may be, but for
Transferor's inability to transfer Receivables to Issuer) that are
written off as uncollectible in accordance with this Agreement shall
continue to be allocated in accordance with Article VIII of the
Indenture, and all amounts that would have constituted Principal
Receivables or Discount Option Receivables, as the case may be, but for
Transferor's inability to transfer Receivables to Issuer shall be
deemed to be Principal Receivables or Discount Option Receivables, as
the case may be, for the purpose of calculating the applicable
Allocation Percentage with respect to any Series. If Transferor is
unable pursuant to any Requirement of Law to allocate Collections as
described above, Transferor agrees that it shall in any such event
allocate, after the occurrence of such event, payments on each Account
with respect to the principal balance of such Account first to the
oldest principal balance of such Account and to have such payments
applied as Collections in accordance with Article VIII of the
Indenture. The parties hereto agree that Finance Charge Receivables,
whenever created, accrued in respect of Principal Receivables that have
been conveyed to Issuer, or that would have been conveyed to Issuer but
for the above described inability to transfer such Receivables, shall
continue to be owned by Issuer notwithstanding any cessation of the
transfer of additional Principal Receivables and Discount Option
Receivables to Issuer and Collections with respect thereto shall
continue to be allocated and paid in accordance with Article VIII of
the Indenture.
(e) DELIVERY OF COLLECTIONS. Transferor agrees to pay to
Servicer all payments received by Transferor in respect of the
Receivables as soon as practicable after receipt thereof by Transferor
but, in any event, no later than two Business Days after the Date of
Processing.
(f) CONVEYANCE OF ACCOUNTS. Transferor covenants and agrees
that, except as provided in Section 2.05(b), it will not convey,
assign, exchange or otherwise transfer the Accounts to any Person prior
to the termination of this Agreement pursuant to Article VIII;
provided, however, that Transferor shall not be prohibited hereby from
conveying, assigning, exchanging or otherwise transferring the Accounts
in connection with a transaction complying with the provisions of
Section 4.02.
(g) RECEIVABLES PURCHASE AGREEMENT. Transferor, in its
capacity as purchaser of Receivables from RPA Seller under the
Receivables Purchase Agreement, shall enforce the covenants and
agreements of RPA Seller as set forth in the Receivables Purchase
Agreement, including its agreement to designate Additional Accounts as
and when required in order for Transferor to fulfill its undertakings
in Section 2.06. Transferor shall not amend, waive or otherwise modify
the Receivables Purchase Agreement except in accordance with its terms.
14
(h) OFFICIAL RECORDS. The resolutions of the Board of
Directors of Transferor's Managing Member approving each of the
Transaction Documents and all documents relating thereto are and shall
be continuously reflected in the minutes of the Board of Directors of
Transferor's Managing Member and in the official records of Transferor.
Each of the Transaction Documents and all documents relating thereto
are and shall, continuously from the time of their respective execution
by Transferor, be official records of Transferor.
(i) TRANSFEROR INTEREST. Except as otherwise permitted in
Section 3.04 of the Trust Agreement or Section 4.02 of this Agreement,
Transferor agrees not to transfer, assign, exchange or otherwise convey
or pledge, hypothecate or otherwise grant a security interest in
Transferor Interest (or any interest therein) or any Supplemental
Interest (or any interest therein) and any such attempted transfer,
assignment, exchange, conveyance, pledge, hypothecation or grant shall
be void.
(j) PERIODIC FINANCE CHARGES AND OTHER FEES. Transferor hereby
agrees that, except as otherwise required by any Requirement of Law, or
as is deemed by FNBO to be necessary in order for it to maintain its
credit card business, based upon a good faith assessment by FNBO of the
nature of the competition in the credit card business, it shall not at
any time permit FNBO to reduce the Periodic Finance Charges assessed on
any Receivable or other fees on any Account if, as a result of such
reduction, Transferor's reasonable expectation of the Portfolio Yield
for any Series as of such date would be less than the then Base Rate
for that Series.
(k) COVENANTS REGARDING OPERATIONS. Transferor shall:
(i) Not incur, assume or guarantee any indebtedness
other than Transferor's obligations with respect to or
contemplated by the Transaction Documents.
(ii) Not engage in any business or activity other
than as permitted in its articles of organization.
(iii) Not consolidate or merge with or into any other
entity or convey or transfer its properties and assets
substantially as an entirety to any entity, except as
specifically permitted by the Transaction Documents.
(iv) Not dissolve or liquidate, in whole or in part.
(v) Not commingle its funds or assets with those of
any other individual or entity.
(vi) Not hold itself out as being liable for the
debts of any other party and not pay from its assets any
obligations or indebtedness of any other individual or entity.
(vii) Pay from its assets all obligations and
indebtedness of any kind incurred by Transferor.
15
(viii) Not form, or cause to be formed, any
subsidiaries.
(ix) Not file any voluntary petition or consent to
the filing of any petition in or institute any bankruptcy,
reorganization, arrangement, insolvency or liquidation
proceeding or other proceeding under any federal or state
bankruptcy or similar law on behalf of itself without the
prior unanimous written consent of all of its members,
including the Independent Member (as defined in its Operating
Agreement).
(x) Not permit its managing member to withdraw.
(xi) At all times have at least one managing member
which shall have each of the characteristics of the
Independent Member as set forth on Appendix A to its Operating
Agreement.
(xii) Act solely in its name and through its duly
authorized agents in the conduct of its business, and shall
conduct its business so as not to mislead others as to the
identity of the entity with which they are concerned.
(xiii) Transact business with any Affiliate, if at
all, on an arms length basis and pursuant to enforceable
agreements. For purposes of this covenant and the definition
of the term "Affiliate", the term "control" means the
possession, directly or indirectly, of the power to direct or
the cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by
contract or otherwise.
(xiv) Maintain separate records and books of account
and shall not commingle its records and books of account with
the records and books of account of any entity.
(xv) Make no asset distributions, including, without
limitation, any distribution of dividends, except to the
extent of cash on hand in excess of that needed to cover the
expected cash needs of Transferor.
(xvi) Observe all organizational formalities in its
relations with its members.
(xvii) Notwithstanding any other provisions of this
Agreement, not terminate, dissolve or liquidate while owing
any amount under the Transaction Documents despite the
occurrence of any event which might terminate the continued
membership of a member in Transferor, including the following:
(A) a member:
(1) makes an assignment for the
benefit of creditors;
(2) files a voluntary petition in
bankruptcy;
16
(3) is adjudged bankrupt or
insolvent, or has entered against it an
order for relief, in any bankruptcy or
insolvency proceeding;
(4) files a petition or answer
seeking for itself any reorganization,
arrangement, composition, readjustment,
liquidation, dissolution or similar relief
under any statute, law or regulation;
(5) files an answer or other
pleading admitting or failing to contest the
material allegations of a petition filed
against it in any proceeding of this nature;
(6) seeks, consents to or
acquiesces in the appointment of a trustee,
receiver or liquidator of the member or of
all or any substantial part of its
properties; or
(B) 120 days after the commencement of any
proceeding against the member seeking reorganization,
arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any statute, law
or regulation, if the proceeding has not been
dismissed, or if within 90 days after the appointment
without the member's consent or acquiescence of a
trustee, receiver or liquidator of the member or of
all or any substantial part of its properties, the
appointment is not vacated or stayed, or within 90
days after the expiration of any such stay, the
appointment is not vacated.
(l) SALE TREATMENT. Transferor agrees to treat the conveyance
hereunder of the Collateral Certificate and the proceeds thereof and
the Receivables and the proceeds thereof as a sale for accounting
purposes.
(m) AMENDMENT OF THE ORGANIZATIONAL DOCUMENTS. Transferor
shall not amend in any material respect its certificate of formation or
its limited liability company agreement without providing the Rating
Agencies with notice no later than the fifth Business Day prior to such
amendment (unless the right to such notice is waived by the Rating
Agency) and satisfying the Rating Agency Condition.
SECTION 2.06. ADDITION OF ACCOUNTS.
(a) If, during any Monthly Period ending on or after the
Certificate Trust Termination Date, Transferor Interest averaged over
that period is less than the Minimum Transferor Interest (calculated
using the Average Principal Receivables for such Monthly Period as the
Aggregate Principal Receivables on the date of determination),
Transferor shall designate additional eligible MasterCard or VISA
accounts ("Additional Accounts") to be included as Accounts in a
sufficient amount such that the average of Transferor Interest as a
percentage of the Average Principal Receivables for such Monthly
Period, computed by assuming that the amount of the Average Principal
Receivables of such Additional Accounts shall be deemed to be
outstanding in the Trust during each day of
17
such Monthly Period, is at least equal to the Minimum Transferor
Interest. For purposes of the preceding sentence, the terms "Transferor
Interest" and "Minimum Transferor Interest" shall have the meanings
assigned to such terms in the Pooling and Servicing Agreement with
respect to any day prior to the Certificate Trust Termination Date.
Receivables from such Additional Accounts shall be transferred to
Issuer on or before the tenth Business Day following such Monthly
Period; provided, however, that to the extent Transferor designates
Additional Accounts with Principal Receivables substantially in excess
of the amount of Principal Receivables required under this subsection
2.06(a), such excess shall be deemed to be optional Additional Accounts
under subsection 2.06(b) below and will be permitted to be so
designated solely to the extent permitted by subsection 2.06(b).
(b) In addition to its obligation under subsection 2.06(a),
Transferor may, but shall not be obligated to, designate from time to
time certain Additional Accounts (the "Automatic Additional Accounts")
to be included as Accounts, provided that Transferor shall not make
more than one such designation in any one Monthly Period; and provided,
further, that such Automatic Additional Accounts shall not exceed the
Maximum Addition Amount or include Financial Institutions Accounts
unless Transferor shall have received the notice from the Rating
Agencies required by subsection 2.06(c)(vii) below.
(c) Transferor agrees that any such transfer of Receivables
from Additional Accounts under subsection 2.06(a) or (b) shall satisfy
the following conditions (to the extent provided below):
(i) on or before the fifth Business Day prior to the
Addition Date with respect to additions pursuant to subsection
2.06(a) and on or before the tenth Business Day prior to the
Addition Date with respect to additions pursuant to subsection
2.06(b) (the "Notice Date"), Transferor shall give Issuer,
Indenture Trustee, each Rating Agency and Servicer written
notice that such Additional Accounts will be included, which
notice shall specify the approximate aggregate amount of the
Receivables to be transferred;
(ii) on or before the Addition Date, Transferor shall
have delivered to Indenture Trustee, a written assignment
(including an acceptance by Issuer) in substantially the form
of Exhibit B (the "Assignment") and Transferor shall direct
Servicer to indicate in its computer files (and to cause FNBO
to indicate in its computer files) that the Receivables
created in connection with the Additional Accounts have been
transferred to Issuer and, within five Business Days
thereafter, Servicer shall have delivered to Issuer, with a
copy delivered to Indenture Trustee, a computer file or
microfiche list containing a true and complete list of all
Additional Accounts, identified by account number and the
aggregate amount of the Receivables in such Additional
Accounts, as of the Addition Date, which computer file or
microfiche list shall be as of the date of such Assignment,
shall be incorporated into and made a part of such Assignment
and this Agreement, and shall be subject to the
confidentiality obligations under Section 2.02 hereof;
18
(iii) Transferor shall represent and warrant that (A)
each Additional Account is, as of the Addition Date, an
Eligible Account, and each Receivable in such Additional
Account, is, as of the Addition Date, an Eligible Receivable,
(B) no selection procedures believed by Transferor to be
materially adverse to the interests of the Noteholders were
utilized in selecting the Additional Accounts from the
available Eligible Accounts (or, in the case of Financial
Institutions Accounts, from the available Financial
Institutions Accounts constituting Eligible Accounts) and (C)
as of the Addition Date, Transferor is not insolvent;
(iv) Transferor shall represent and warrant that, as
of the Addition Date, the Assignment constitutes either (A) a
valid transfer and assignment to Issuer of all right, title
and interest of Transferor in and to the Receivables then
existing and thereafter created in the Additional Accounts,
and all proceeds (as defined in the UCC) of such Receivables
and Insurance Proceeds relating thereto and such Receivables
and all proceeds thereof and Insurance Proceeds relating
thereto will be held by Issuer free and clear of any Lien,
except for (1) Liens permitted under subsection 2.05(b), (2)
the interest of the Holder of Transferor Interest and (3)
Servicer's right, if any, to receive interest accruing on, and
investment earnings in respect of, the Finance Charge Account,
the Collection Account, the Principal Account, or any Series
Account as provided in the Indenture and any related Indenture
Supplement or (B) a grant of a first priority perfected
security interest (as defined in the UCC) in such property to
Issuer, which is enforceable with respect to then existing
Receivables of the Additional Accounts, the proceeds (as
defined in the UCC) thereof and Insurance Proceeds relating
thereto upon the conveyance of such Receivables to Issuer, and
which will be enforceable with respect to the Receivables
thereafter created in respect of Additional Accounts conveyed
on such Addition Date, the proceeds (as defined in the UCC)
thereof and Insurance Proceeds relating thereto upon such
creation;
(v) Transferor shall deliver an Officer's Certificate
substantially in the form of Schedule 2 to Exhibit B to Issuer
and Indenture Trustee (with a copy thereof to each Rating
Agency); it being understood that Issuer and Indenture Trustee
may conclusively rely on such Officer's Certificate, shall
have no duty to make inquiries with regard to the matters set
forth therein and shall incur no liability in so relying;
(vi) Transferor shall deliver an Opinion of Counsel
with respect to the Receivables in the Additional Accounts to
Issuer and Indenture Trustee (with a copy to any of the Rating
Agencies which shall have requested in writing such copies)
substantially in the form of Exhibit E; and
(vii) with respect to Financial Institutions Accounts
or Accounts in excess of the Maximum Addition Amount,
Transferor shall have received notice from each Rating Agency
that the inclusion of such accounts as Additional Accounts
pursuant to subsection 2.06(b) will not result in the
reduction or withdrawal of its then existing rating of any
Series of Notes then issued and outstanding.
19
SECTION 2.07. REMOVAL OF ACCOUNTS.
(a) Subject to the conditions set forth below, on or after the
Certificate Trust Termination Date Transferor may, but shall not be
obligated to, designate Receivables from Accounts to be reassigned to
it or its designee ("Removed Accounts"); provided, however, that
Transferor shall not make more than one such designation in any one
Monthly Period. On or before the fifth Business Day (the "Removal
Notice Date") prior to the date on which the designated Removed
Accounts will be reassigned by Issuer to Transferor (the "Removal
Date"), Transferor shall give Issuer, Indenture Trustee and Servicer
written notice that the Receivables from such Removed Accounts are to
be reassigned to Transferor.
(b) Transferor shall be permitted to designate and require
reassignment to it of the Receivables from Removed Accounts on or after
the Certificate Trust Termination Date only upon satisfaction of the
following conditions:
(i) the removal of any Receivables of any Removed
Accounts on any Removal Date shall not, in the reasonable
belief of Transferor, (A) cause a Pay Out Event to occur;
provided, however, that for the purposes of this subsection
2.07(b)(i), the Receivables of each Removed Account shall be
considered to have been removed as of the Removal Date, (B)
cause Transferor Interest as a percentage of the aggregate
amount of Principal Receivables to be less than the Minimum
Transferor Interest on such Removal Date, or (C) result in the
failure to make any payment specified in the related Indenture
Supplement with respect to any Series;
(ii) on or prior to the Removal Date, Transferor
shall have delivered to Issuer and Indenture Trustee for
execution a written assignment in substantially the form of
Exhibit G (the "Reassignment") and, within five Business Days
thereafter, Transferor shall have delivered to Issuer a
computer file or microfiche list containing a true and
complete list of all Removed Accounts identified by account
number and the aggregate amount of the Receivables in such
Removed Accounts as of the Removal Date, which computer file
or microfiche list shall as of the Removal Date modify and
amend and be made a part of this Agreement;
(iii) Transferor shall represent and warrant as of
each Removal Date that (x)(i) Accounts (or administratively
convenient groups of Accounts, such as billing cycles) were
chosen for removal randomly or otherwise not on a basis
intended to select particular accounts or groups of accounts
for any reason other than administrative convenience and (ii)
no selection procedure was used by Transferor which is
materially adverse to the interests of the Noteholders or (y)
Accounts were identified for removal because of a third-party
cancellation, or expiration without renewal, of an affinity,
private-label, agent bank or similar arrangement;
(iv) on or before the tenth Business Day prior to the
Removal Date, each Rating Agency shall have received notice of
such proposed removal of the
20
Receivables of such Accounts and Transferor shall have
received notice prior to the Removal Date from such Rating
Agency that such proposed removal will not result in a
downgrade or withdrawal of its then current rating of any
outstanding Series;
(v) on any Removal Notice Date, the amount of the
Principal Receivables of the Removed Accounts to be reassigned
to Transferor on the related Removal Date shall not equal or
exceed 5% of the Aggregate Principal Receivables on such
Removal Date, provided that if any Series has been paid in
full, the Principal Receivables in such Removed Accounts may
equal the Initial Collateral Amount of such Series; and
(vi) Transferor shall have delivered to Issuer and
Indenture Trustee an Officer's Certificate confirming the
items set forth in clauses (i) through (v) above. Issuer and
Indenture Trustee may conclusively rely on such Officer's
Certificate, shall have no duty to make inquiries with regard
to the matters set forth therein and shall incur no liability
in so relying.
Upon satisfaction of the above conditions, Issuer and
Indenture Trustee shall execute and deliver the Reassignment to
Transferor, and the Receivables from the Removed Accounts shall,
without further action, be deemed to be transferred, assigned and
conveyed to Transferor or its designee, effective as of the Removal
Date, without recourse.
SECTION 2.08. DISCOUNT OPTION RECEIVABLES.
(a) On or after the Certificate Trust Termination Date,
Transferor shall have the option to designate a percentage (the
"Discount Percentage") of the Principal Receivables in all or certain
of the Accounts created on and after such date of designation to be
treated as Finance Charge Receivables ("Discount Option Receivables")
in accordance with the provisions of this Section 2.08. The Discount
Percentage shall not apply to Finance Charges, or any other fees and
charges (other than Insurance Proceeds) or to Receivables in or
recoveries of Defaulted Accounts. The Discount Percentage may be fixed
or variable and shall not exceed 4%.
(b) Discount Option Receivables shall be considered Finance
Charge Receivables for all purposes hereunder, including for the
purposes of allocating Collections pursuant to the Indenture.
(c) Transferor shall have the option to increase the Discount
Percentage to a percentage not greater than 4%, to reduce the Discount
Percentage, to apply the Discount Percentage to Principal Receivables
created in Accounts not previously subject to the Discount Percentage
and to cease to apply the Discount Percentage to Principal Receivables
created in Accounts previously subject to the Discount Percentage;
provided, however, that Transferor shall not change any existing
Discount Option Receivables into Principal Receivables and Transferor
shall not increase the Discount Percentage during
21
any Rapid Amortization Period (as defined in any Indenture Supplement)
or if such increase would cause Transferor Interest to be less than the
Minimum Transferor Interest.
(d) Transferor shall provide to Servicer, Issuer, Indenture
Trustee and each Rating Agency 30 days' prior written notice of any
designation, increase or reduction of the Discount Percentage, and such
designation, increase or reduction shall become effective on the date
specified in such notice if such designation, increase or reduction in
the reasonable belief of Transferor, as set forth by Transferor in an
Officer's Certificate delivered to the Indenture Trustee, would not
cause a Pay Out Event, or an event which, with notice or the lapse of
time or both, would constitute a Pay Out Event, to occur; provided,
however, that the Rating Agency Condition shall have been satisfied.
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
Prior to the Certificate Trust Termination Date, the Receivables shall
be serviced as provided in the Pooling and Servicing Agreement, and this Article
III will have no effect. On and after the Certificate Trust Termination Date:
SECTION 3.01. ACCEPTANCE OF APPOINTMENT AND OTHER MATTERS RELATING TO
SERVICER.
(a) FNBO agrees to act as Servicer under this Agreement. The
Noteholders of each Series by their acceptance of the related Notes
consent to FNBO acting as Servicer.
(b) Servicer shall service and administer the Receivables and
shall collect payments due under the Receivables and shall charge off
Receivables as uncollectible, in accordance with its customary and
usual servicing procedures for servicing credit card receivables
comparable to the Receivables and, subject to subsection (d) below, in
accordance with the Credit Card Guidelines and shall have full power
and authority acting alone or through any party properly designated by
it hereunder, to do any and all things in connection with such
servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing and subject to Section
7.01, Servicer is hereby authorized and empowered (i) to make
withdrawals from the Collection Account, the Excess Funding Account or
any Series Account to the extent and as set forth in this Agreement,
the Indenture or any Indenture Supplement, (ii) unless such power and
authority is revoked on account of the occurrence of a Servicer Default
pursuant to Section 7.01, to instruct Indenture Trustee to make
withdrawals and payments, from the Collection Account, the Excess
Funding Account and any Series Account, in accordance with such
instructions as set forth in this Agreement, the Indenture or any
Indenture Supplement, (iii) unless such power and authority is revoked
on account of the occurrence of a Servicer Default pursuant to Section
7.01, to instruct Indenture Trustee in writing, as set forth in this
Agreement, the Indenture or any Indenture Supplement, (iv) to take any
actions required or permitted under any Enhancement, (v) to execute and
deliver, on behalf of Issuer for the benefit of the Noteholders, any
and all instruments of satisfaction or cancellation, or of partial or
full
22
release or discharge, and all other comparable instruments, with
respect to the Receivables and, after the delinquency of any Receivable
and to the extent permitted under and in compliance with applicable law
and regulations, to commence enforcement proceedings with respect to
such Receivables and (vi) to make any filings, reports, notices,
applications, registrations with, and to seek any consents or
authorizations from, the Commission and any state securities authority
on behalf of Issuer as may be necessary or advisable to comply with any
federal or state securities or reporting requirements. Indenture
Trustee agrees that it shall promptly follow the instructions of
Servicer to withdraw funds from the Collection Account, the Excess
Funding Account or any Series Account and to take any action required
under any Enhancement at such time as required under this Agreement,
the Indenture or any Indenture Supplement. Each of Owner Trustee and
Indenture Trustee shall execute at Servicer's written request such
documents prepared by Transferor and acceptable to Owner Trustee or
Indenture Trustee (as applicable) as may be necessary or appropriate to
enable Servicer to carry out its servicing and administrative duties
hereunder.
Owner Trustee shall furnish Servicer with any powers of
attorney and other documents from Owner Trustee and Indenture Trustee
necessary or appropriate to enable Servicer to carry out its servicing
and administrative duties hereunder.
(c) In the event that Transferor is unable for any reason to
transfer Receivables to Issuer in accordance with the provisions of
this Agreement (including by reason of the application of the
provisions of Section 6.01 or the order of any federal governmental
agency having regulatory authority over Transferor or any court of
competent jurisdiction that Transferor not transfer any additional
Principal Receivables to Issuer) then, in any such event, Servicer
agrees to allocate in accordance with the provisions of Section
2.05(d).
(d) Servicer shall comply with and perform its servicing
obligations with respect to the Accounts and Receivables in accordance
with the Credit Card Agreements relating to the Accounts and the Credit
Card Guidelines and all applicable rules and regulations of VISA USA,
Inc. and MasterCard International Incorporated, except insofar as any
failure to so comply or perform would not materially and adversely
affect Issuer, Indenture Trustee or the Noteholders.
(e) Servicer shall not be obligated to use separate servicing
procedures, offices, employees or accounts for servicing the
Receivables from the procedures, offices, employees and accounts used
by Servicer in connection with servicing other credit card receivables.
(f) Servicer shall maintain fidelity bond coverage insuring
against losses through wrongdoing of its officers and employees who are
involved in the servicing of credit card receivables covering such
actions and in such amounts as Servicer believes to be reasonable from
time to time.
(g) The relationship of Servicer (and of any successor to
Servicer as servicer under this Agreement) to Indenture Trustee under
this Agreement is intended by the
23
parties to be that of an independent contractor and not that of a joint
venturer, partner or agent of Indenture Trustee.
SECTION 3.02. SERVICING COMPENSATION. As compensation for its servicing
activities hereunder and reimbursement for its expenses as set forth in the
immediately following paragraph, Servicer shall be entitled to receive a monthly
servicing fee in respect of any Monthly Period or portion thereof after the
Certificate Trust Termination Date (with respect to each Monthly Period, the
"Monthly Servicing Fee"). The share of the Monthly Servicing Fee allocable to
each Series of Notes with respect to any Monthly Period (or portion thereof)
shall be payable on the related Distribution Date and, with respect to each
Series (unless otherwise provided in the related Indenture Supplement), shall be
equal to one-twelfth of the product of (a) the applicable Series Servicing Fee
Percentage per annum and (b) the Collateral Amount of such Series as of the last
day of the Monthly Period preceding such Distribution Date (the "Noteholder
Servicing Fee") and shall be paid to Servicer pursuant to the applicable
Indenture Supplement. The servicing fee payable by the Holder of Transferor
Interest shall be equal to the product of one-twelfth of the product of (i)
Transferor Interest and (ii) the weighted average of the Series Servicing Fee
Percentages with respect to each Series of Notes then outstanding (the
"Transferor Servicing Fee"). The Monthly Servicing Fee for each Monthly Period
shall equal the sum of (A) the aggregate amount of Noteholder Servicing Fees for
such Monthly Period with respect to each Series then outstanding and (B)
Transferor Servicing Fee for such Monthly Period. The Noteholder Servicing Fee
with respect to any Series is payable in arrears on the related Transfer Date
(unless otherwise provided in the related Indenture Supplement) and Transferor
Servicing Fee is payable in arrears no later than the last Transfer Date with
respect to any Series occurring in a Monthly Period. Transferor Servicing Fee
and, unless otherwise provided in an Indenture Supplement, each Noteholder
Servicing Fee, shall be calculated on the basis of actual days elapsed and a
year of 365 days or 366 days, as the case may be. The compensation payable to
Servicer hereunder, including the Monthly Servicing Fee, may not be transferred
except to a Successor Servicer. In no event shall Issuer, Indenture Trustee, the
Noteholders of a Series or any Enhancement Provider be liable for Transferor
Servicing Fee.
Servicer's expenses include the amounts due to Owner Trustee pursuant
to Article VII of the Trust Agreement and the reasonable fees and disbursements
of Indenture Trustee, Administrator, any Paying Agent, any Transfer Agent and
Registrar, independent public accountants and all other expenses incurred by
Servicer in connection with its activities hereunder, including expenses related
to the enforcement of the Receivables and all other fees and expenses that are
not expressly stated in this Agreement or any other Transaction Document to be
payable by Issuer, the Noteholders of a Series or Transferor, including the
costs of filing the UCC continuation statements and the costs and expenses
relating to obtaining and maintaining the listing of any Notes on any stock
exchange. Servicer shall not be liable for any liabilities, costs or expenses of
the Trust or the Noteholders arising under any tax law, including without
limitation any federal, state or local income or franchise taxes or any other
tax imposed on or measured by income (or any interest or penalties with respect
thereto or arising from a failure to comply therewith). Servicer shall be
required to pay such expenses for its own account and shall not be entitled to
any payment therefor other than the Monthly Servicing Fee.
SECTION 3.03. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SERVICER.
FNBO, as initial Servicer, hereby makes, and any successor Servicer by its
appointment hereunder shall
24
make (with such changes as shall be applicable to such Successor Servicer), on
each Closing Date (and on the date of any such appointment) the following
representations and warranties and covenants to Issuer on which Owner Trustee
has relied in executing the Notes and Indenture Trustee has relied in
authenticating Notes:
(a) ORGANIZATION AND GOOD STANDING. Servicer is a national
banking association (or with respect to such Successor Servicer, such
other corporate entity as may be applicable) duly organized, validly
existing and in good standing under the laws of the United States, and
has full corporate power, authority and legal right to own its
properties and conduct its business as such properties are presently
owned and as such business is presently conducted, and to execute,
deliver and perform its obligations under this Agreement and the other
Transaction Documents to which it is a party.
(b) DUE QUALIFICATION. Servicer is not required to qualify nor
register as a foreign corporation in any state in order to service the
Receivables as required by this Agreement and the other Transaction
Documents to which it is a party, other than such states as to which
Servicer has so qualified and is in good standing or failure to so
qualify and maintain good standing would not have a material adverse
effect on Servicer's ability to perform its obligations hereunder or
the interests of Noteholders, and has obtained all licenses and
approvals necessary in order to so service the Receivables as required
under federal and
Nebraska law.
(c) DUE AUTHORIZATION. The execution, delivery and performance
of this Agreement and the other Transaction Documents to which it is a
party have been duly authorized by Servicer by all necessary corporate
action on the part of Servicer and this Agreement, and each such other
Transaction Document, will remain, from the time of its execution, an
official record of Servicer.
(d) BINDING OBLIGATION. This Agreement and each other
Transaction Document to which Servicer is a party constitutes a legal,
valid and binding obligation of Servicer, enforceable in accordance
with its terms, except as enforceability may be limited by applicable
Debtor Relief Laws now or hereinafter in effect, affecting the
enforcement of creditors' rights in general and the rights of creditors
of national banking associations and by general principles of equity
(whether considered in a suit at law or in equity).
(e) NO VIOLATION. The execution and delivery of this Agreement
and each other Transaction Document to which Servicer is a party by
Servicer, and the performance of the transactions contemplated by this
Agreement and each such other Transaction Document and the fulfillment
of the terms hereof and thereof applicable to Servicer, will not
conflict with, violate, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse
of time or both) a default under any Requirement of Law applicable to
Servicer or any indenture contract, agreement, mortgage, deed of trust
or other instrument to which Servicer is a party or by which it is
bound.
25
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the best knowledge of Servicer, threatened against
Servicer before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality seeking to prevent the
issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement and the other Transaction Documents,
seeking any determination or ruling that, in the reasonable judgment of
Servicer, would materially and adversely affect the performance by
Servicer of its obligations under this Agreement or any other
Transaction Document to which it is a party, or seeking any
determination or ruling that would materially and adversely affect the
validity or enforceability of this Agreement or any other Transaction
Document.
(g) COMPLIANCE WITH REQUIREMENTS OF LAW. Servicer shall duly
satisfy all obligations on its part to be fulfilled under or in
connection with each Receivable and the related Account, will maintain
in effect all qualifications required under Requirements of Law in
order to properly service each Receivable and the related Account and
will comply in all material respects with all other Requirements of Law
in connection with servicing each Receivable and the related Account,
the failure to comply with which would have a material adverse effect
on the interests of the Noteholders or any Enhancement Provider.
(h) NO RESCISSION OR CANCELLATION. Servicer shall not permit
any rescission or cancellation of a Receivable except as ordered by a
court of competent jurisdiction or other Governmental Authority or in
the ordinary course of its business and in accordance with the Credit
Card Guidelines. Servicer shall reflect any such rescission or
cancellation in its computer file of revolving credit card accounts.
(i) PROTECTION OF HOLDERS' RIGHTS. Servicer shall take no
action which, nor omit to take any action the omission of which, would
materially impair the rights of Holders in any Receivable or Account,
nor shall it, except in the ordinary course of its business and in
accordance with the Credit Card Guidelines, reschedule, revise or defer
Collections due on the Receivables, except as permitted in subsection
3.03(h).
(j) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES.
Except in connection with its enforcement or collection of an Account,
Servicer will take no action to cause any Receivable to be evidenced by
any instrument, other than an instrument that, taken together with one
or more other writings, constitutes chattel paper and, if any
Receivable is so evidenced (whether or not in connection with the
enforcement or collection of an Account), it shall be reassigned or
assigned to Servicer as provided in this Section.
(k) ALL CONSENTS REQUIRED. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental
body or official required in connection with the execution and delivery
by Servicer of this Agreement and each other Transaction Document to
which it is a party, the performance by Servicer of the transactions
contemplated by this Agreement and the other Transaction Documents and
the fulfillment by Servicer of the terms hereof and thereof have been
obtained; provided
26
that Servicer makes no representation or warranty as to state
securities or "blue sky" laws.
(l) MAINTENANCE OF RECORDS AND BOOKS OF ACCOUNT. Servicer
shall maintain and implement administrative and operating procedures
(including the ability to recreate records evidencing the Receivables
in the event of the destruction of the originals thereof), and keep and
maintain all documents, books, computer records and other information,
reasonably necessary or advisable for the collection of all the
Receivables. Such documents, books and computer records shall reflect
all facts giving rise to the Receivables, all payments and credits with
respect thereto, and, to the extent required pursuant to Section 2.01,
such documents, books and computer records shall indicate the interests
of Issuer in the Receivables.
(m) TRANSACTION DOCUMENTS. Servicer shall observe and perform
each and every obligation of Servicer under any other Transaction
Documents.
(n) DELINQUENCIES. Receivables will be charged off at the
earlier of (a) the date they become 180 days Delinquent, or (b) when
required pursuant to the Credit Card Guidelines.
As of the Certificate Trust Termination Date, Servicer agrees that all
representations and warranties made by it in its capacity as Servicer under the
Pooling and Servicing Agreement with respect to any Account or Receivable
pursuant to Section 3.03 of the Pooling and Servicing Agreement shall be deemed
for all purposes to have been made by Servicer to Issuer pursuant to this
Agreement as of the day when each was made or deemed made, as if this Agreement
had been in effect on that day.
After the Certificate Trust Termination Date, if any of the
representations, warranties or covenants of Servicer contained in paragraph (g),
(h), (i) or (j) of this Section 3.03 or paragraphs (g) (h), (i) or (j) of
Section 3.03 of the Pooling and Servicing Agreement with respect to any
Receivable or the related Account is breached, and as a result of such breach
Issuer's rights in, to or under any Receivables in the related Account or the
proceeds of such Receivables are materially impaired or such proceeds are not
available for any reason to Issuer free and clear of any Lien, then no later
than the expiration of 60 days (or such longer period, not in excess of 150
days, as may be agreed to by Indenture Trustee) from the earlier to occur of the
discovery of such event by Servicer, or receipt by Servicer of notice of such
event given by Indenture Trustee, all Receivables in the Account or Accounts to
which such event relates shall be reassigned or assigned to Servicer as set
forth below; provided that such Receivables will not be reassigned or assigned
to Servicer if, on any day prior to the end of such 60-day or longer period, (i)
the relevant representation and warranty shall be true and correct, or the
relevant covenant shall have been complied with, in all material respects and
(ii) Servicer shall have delivered to Indenture Trustee an Officer's Certificate
describing the nature of such breach and the manner in which such breach was
cured. Indenture Trustee will have no duty to monitor for such events, but will
provide notice to Servicer only upon its receipt of notice from another party.
Servicer shall effect such assignment by making a deposit into the
Collection Account in immediately available funds prior to the next succeeding
Business Day in an amount equal to the
27
aggregate amount of such Receivables, which deposit shall be considered a
Collection with respect to such Receivables and shall be applied in accordance
with Article VIII of the Indenture and each Indenture Supplement.
Upon each such assignment to Servicer, Issuer and Indenture Trustee
shall automatically and without further action be deemed to transfer, assign,
set over and otherwise convey to Servicer, without recourse, representation or
warranty all right, title and interest of Issuer and Indenture Trustee in and to
such Receivables, all moneys due or to become due and all amounts received with
respect thereto and all proceeds thereof. Issuer and Indenture Trustee shall
execute such documents and instruments of transfer or assignment and take such
other actions as shall be reasonably requested by Servicer to effect the
conveyance of any such Receivables pursuant to this Section. The obligation of
Servicer to accept assignment of such Receivables, and to make the deposits, if
any, required to be made to the Collection Account as provided in the preceding
paragraph, shall constitute the sole remedy respecting the event giving rise to
such obligation available to Issuer, Owner Trustee, Holders (or Indenture
Trustee on behalf of the Noteholders) or any Enhancement Provider.
SECTION 3.04. REPORTS AND RECORDS FOR INDENTURE TRUSTEE.
(a) DAILY REPORTS. On each Business Day, Servicer, with prior
notice, shall prepare and make available at the office of Servicer for
inspection by Indenture Trustee a record setting forth (i) the
aggregate amount of Collections processed by Servicer on the preceding
Business Day and (ii) the aggregate amount of Receivables as of the
close of business on the preceding Business Day.
(b) MONTHLY SERVICER'S CERTIFICATE. Unless otherwise stated in
the related Indenture Supplement with respect to any Series, on each
Determination Date Servicer shall forward to Indenture Trustee, Paying
Agent, any Enhancement Provider and each Rating Agency a certificate of
a Servicing Officer substantially in the form of Exhibit C (which
includes any Schedule thereto specified as such in the applicable
Indenture Supplement) for each Series setting forth the following
information for the preceding Monthly Period: (i) the aggregate amount
of Collections processed for Issuer, (ii) the aggregate amount of
Collections of Principal Receivables processed, (iii) the aggregate
amount of Collections of Finance Charge Receivables processed, (iv) the
aggregate Allocation Percentage of Collections of Principal
Receivables, (v) the aggregate Allocation Percentage of Collections of
Finance Charge Receivables, (vi) the aggregate amount of Principal
Receivables in Accounts which became Defaulted Accounts, (vii) the
aggregate Allocation Percentage of Principal Receivables in Accounts
which became Defaulted Accounts, (viii) the Interchange allocated to
Issuer, (ix) the aggregate amount of Recoveries for Issuer, (x) the
aggregate Adjustment Amount for Issuer, (xi) the aggregate amount of
Receivables in Issuer at the end of the Monthly Period, (xii) the
aggregate amount of the Collections of Principal Receivables allocated
to such Series, (xiii) the aggregate amount of Collections of Finance
Charge Receivables allocated to such Series, (xiv) the aggregate
amount, if any, of withdrawals, drawings or payments under any
Enhancement, if any, for such Series required to be made pursuant to
the related Transaction Documents, (xv) the sum of all amounts payable
to the Noteholders of each Series on the succeeding Distribution Date
in respect of principal and interest,
28
(xvi) for months during which Servicer is required to make deposits of
Collections after the Distribution Date, the balance on deposit in the
Collection Account or any Series Account (not covered elsewhere in the
certificate) applicable to any Series outstanding on such Determination
Date with respect to Collections processed by Servicer during the
preceding Monthly Period, (xvii) the portfolio yield and the base rate
for each Series then outstanding and (xviii) such other matters as are
set forth in Exhibit C or the applicable Indenture Supplement. The
monthly Servicer's certificate shall be in substantially the form of
Exhibit C, with such changes as Servicer may determine to be necessary
or desirable; provided, however, that no such change shall serve to
exclude information required by this Agreement or any Indenture
Supplement. Servicer shall, upon making such determination, deliver to
Indenture Trustee and each Rating Agency an Officer's Certificate to
which shall be annexed the form of Exhibit C as so changed. Upon the
delivery of such Officer's Certificate to the Trustee, Exhibit C, as so
changed, shall for all purposes of this Agreement constitute such
Exhibit. The Trustee may conclusively rely upon such Officer's
Certificate in determining whether Exhibit C, as changed, conforms to
the requirements of this Agreement.
[(c) TRANSFERRED ACCOUNTS. Servicer shall deliver to Indenture
Trustee, within a reasonable time period after any Transferred Account
is created, but in any event not later than 15 days after the end of
the month within which the Transferred Account is created, a notice
specifying the new account number for any Transferred Account and the
replaced account number.]
SECTION 3.05. ANNUAL SERVICER'S CERTIFICATE. On or before March 31 of
each calendar year, Servicer will deliver to Indenture Trustee, Owner Trustee,
any Enhancement Provider and each Rating Agency an Officer's Certificate
substantially in the form of Exhibit D stating that (a) a review of the
activities of Servicer during the 12-month period ending on December 31 of the
prior calendar year, and of its performance under this Agreement was made under
the supervision of the officer signing such certificate, (b) to the best of such
officer's knowledge based on such review, Servicer has fully performed all its
obligations under this Agreement throughout such period, or, if there has been a
default in the performance of any such obligation, specifying each such default
known to such officer and the nature and status thereof, (c) during such period,
for each outstanding Series, Servicer prepared the monthly reports required by
Section 3.04(b) of this Agreement and each other monthly report required by the
applicable Indenture Supplement in accordance with Section 3.04(b) of this
Agreement and the applicable provisions of each such Indenture Supplement, (d)
the amounts included in such reports agree with the computer records of Servicer
and (e) the calculated amounts included in such reports are mathematically
correct and made in accordance with the applicable definitions in this Agreement
and the other applicable Transaction Documents. A copy of such certificate may
be obtained by any Noteholder by a request in writing to Indenture Trustee
addressed to the Corporate Trust Office.
SECTION 3.06. ANNUAL INDEPENDENT ACCOUNTANTS' SERVICING REPORT.
(a) On or before March 31 of each calendar year, beginning
with March 31, 2003, Servicer shall provide to Indenture Trustee, Owner
Trustee, any Enhancement Provider and each Rating Agency a copy of the
report required by 12 C.F.R. Section 363.3(b)
29
(or any comparable successor regulation) from a firm of nationally
recognized independent certified public accountants (who may also
render other services to Servicer or Transferor) to the effect that, in
accordance with attestation standards established by the American
Institute of Certified Public Accountants, such firm has examined
Servicer's assertion that it maintained effective internal accounting
controls during the preceding calendar year, and that such firm is of
the opinion that Servicer's assertion is fairly stated in all material
respects, based on the criteria established in "Internal
Control-Integrated Framework" issued by the Committee of Sponsoring
Organizations of the Xxxxxxxx Commission. Unless otherwise provided
with respect to any Series in the related Indenture Supplement, a copy
of such report may be obtained by any Noteholder by a request in
writing to Indenture Trustee addressed to the Corporate Trust Office.
(b) On or before March 31 of each calendar year, beginning
with March 31, 2003, Servicer shall cause a firm of nationally
recognized independent certified public accountants (who may also
render other services to Servicer or Transferor) to furnish a report
(or reports) to Indenture Trustee, prepared using attestation standards
established by the American Institute of Certified Public Accountants,
to the effect that they have examined Servicer's assertions for each
outstanding Series made pursuant to subsections 3.05(c), (d) and (e)
above, and have concluded that such assertions are fairly stated in all
material respects, except for such exceptions as shall be set forth in
such report. Servicer shall also provide copies of the report for each
Series to each Rating Agency, the Owner Trustee and Enhancement
Provider. A copy of such report may be obtained by any Noteholder by a
request in writing to Indenture Trustee addressed to the Corporate
Trust Office.
SECTION 3.07. TAX TREATMENT. Transferor has structured this Agreement
and the Notes to facilitate a secured, credit-enhanced financing on favorable
terms with the intention that the Notes will constitute indebtedness of
Transferor for federal income and state and local income and franchise tax
purposes. Transferor, Servicer, each Holder of Transferor Interest and each
Noteholder by acceptance of its Note (and each Note Owner, by its acceptance of
an interest in the applicable Note) agree to treat and to take no action
inconsistent with the treatment of the Notes (or beneficial interests therein)
as indebtedness of Transferor for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by income.
Each Holder of Transferor Interest, each Noteholder, by acceptance of its Note,
and each Note Owner, by acquisition of a beneficial interest in a Note, agrees
to be bound by the provisions of this Section 3.07. Each Noteholder agrees that
it will cause any Note Owner acquiring an interest in a Note through it to
comply with this Agreement as to treatment as indebtedness under applicable tax
law, as described in this Section 3.07.
SECTION 3.08. NOTICES TO TRANSFEROR. In the event that FNBO is no
longer acting as Servicer, any Successor Servicer appointed pursuant to Section
7.02 shall deliver or make available to Transferor each certificate and report
required to be prepared, forwarded or delivered thereafter pursuant to Sections
3.04, 3.05 and 3.06.
SECTION 3.09. ADJUSTMENTS. For each Monthly Period, Servicer shall be
obligated to reduce, on a net basis, the Aggregate Principal Receivables used to
calculate Transferor Interest (a "Credit Adjustment") with respect to any
Principal Receivable (i) which was created in respect
30
of merchandise refused or returned by the Obligor thereunder or as to which the
Obligor thereunder has asserted a counterclaim or defense, (ii) which is reduced
by Servicer by any rebate, refund, charge-back or adjustment (including Servicer
errors), (iii) which was created as a result of a fraudulent or counterfeit
charge or (iv) which was credited pursuant to a debt cancellation or debt
deferral program and not recovered during such Monthly Period from Collections
from insurance proceeds or reserves funded by fees generated through such
programs. In the event that the inclusion of the amount of a Credit Adjustment
in the calculation of Transferor Interest would cause Transferor Interest to be
an amount less than the Minimum Transferor Interest, Transferor shall make a
deposit, no later than the earlier of (A) the Business Day following the Date of
Processing of such Credit Adjustment, and (B) the last day of the Monthly Period
in which such Date of Processing occurs, to the Excess Funding Account in
immediately available funds in an amount equal to the amount by which Transferor
Interest would be reduced below the Minimum Transferor Interest. Any amount
deposited into the Excess Funding Account in connection with the adjustment of a
Receivable as specified above shall be applied in accordance with Article VIII
of the Indenture and each Indenture Supplement. In the event that Transferor
shall fail to pay to Servicer for deposit into the Excess Funding Account any
amount required to be so paid pursuant to this Section 3.09 or subsection
2.04(d)(iii) (an "Adjustment Amount"), and shall not have subsequently paid such
Amount, Collections of Principal Receivables shall not be distributed or
otherwise released to Transferor hereunder, but shall instead be deposited to
the Excess Funding Account until an amount equal to the Adjustment Amount has
been so deposited. The Adjustment Amount shall be reduced to the extent of such
deposits.
In the event that Servicer adjusts upwards the principal amount of any
Receivable, the Aggregate Principal Receivables shall be increased by the amount
of such upward adjustment.
SECTION 3.10. TRANSFER OF RECEIVABLES IN DEFAULTED ACCOUNTS. Unless
otherwise provided in any Indenture Supplement, on the last day of each Monthly
Period, Issuer and Indenture Trustee shall automatically and without further
action or consideration be deemed to transfer, set over, and otherwise convey to
Transferor, without recourse, representation or warranty, all the right, title
and interest of Issuer and Indenture Trustee in and to Receivables in Accounts
which became Defaulted Accounts during such Monthly Period, all moneys due or to
become due with respect thereto, all proceeds thereof (other than Recoveries
relating thereto) and Interchange (if any) allocable to the Trust with respect
to such Receivables.
SECTION 3.11. REPORTS TO THE COMMISSION. Servicer shall, on behalf of
Issuer, cause to be filed with the Commission any periodic reports required to
be filed under the provisions of the Securities Exchange Act of 1934, and the
rules and regulations of the Commission thereunder. Transferor shall, at its own
expense, cooperate in any reasonable request of Servicer in connection with such
filings. Issuer agrees to cooperate with Servicer in connection with such
filings.
31
ARTICLE IV
OTHER MATTERS RELATING TO TRANSFEROR
SECTION 4.01. LIABILITY OF TRANSFEROR. Transferor shall be liable in
accordance herewith to the extent, and only to the extent, of the obligations
specifically undertaken by it in its capacity as Transferor hereunder.
SECTION 4.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, TRANSFEROR.
(a) Transferor shall not consolidate with or merge into, or
convey or transfer its properties and assets substantially as an
entirety to, any other Person, unless:
(i) the corporation formed by such consolidation or
into which Transferor is merged or the Person which acquires
by conveyance or transfer the properties and assets of
Transferor substantially as an entirety shall be, if
Transferor is not the surviving entity, organized and existing
under the laws of the United States of America or any state,
and shall be either (1) a business entity that may not become
a debtor in a proceeding under Title 11 of the United States
Code or (2) a special-purpose entity, the powers and
activities of which shall be limited to the performance of
Transferor's obligations under this Agreement and under the
other Transaction Documents and shall expressly assume, by an
agreement supplemental hereto, executed and delivered to
Indenture Trustee and Owner Trustee, in form satisfactory to
Indenture Trustee and Owner Trustee, the performance of every
covenant and obligation of Transferor, as applicable hereunder
and thereunder, and shall benefit from all the rights granted
to Transferor, as applicable hereunder and thereunder. To the
extent that any right, covenant or obligation of Transferor,
as applicable hereunder, is inapplicable to the successor
entity, such successor entity shall be subject to such
covenant or obligation, or benefit from such right, as would
apply, to the extent practicable, to such successor entity. In
furtherance hereof, in applying this Section 4.02 to a
successor entity, Section 6.01 hereof shall be applied by
reference to events of involuntary liquidation, receivership
or conservatorship applicable to such successor entity;
(ii) Transferor shall have delivered to Indenture
Trustee an Officer's Certificate signed by a Vice President
(or any more senior officer) of Transferor stating that such
consolidation, merger, conveyance or transfer and such
supplemental agreement comply with this Section 4.02 and that
all conditions precedent herein provided for relating to such
transaction have been complied with and an Opinion of Counsel
that such supplemental agreement is legal, valid and binding,
and enforceable against such surviving entity in accordance
with its terms;
32
(iii) Servicer shall have delivered notice to the
Rating Agencies of such consolidation, merger, conveyance or
transfer and the Rating Agency Condition shall have been met;
(iv) Transferor shall have delivered to Indenture
Trustee and each Rating Agency a Tax Opinion, dated the date
of such consolidation, merger, conveyance or transfer, with
respect thereto; and
(v) if Transferor is not the surviving entity, the
surviving entity shall file new UCC-1 financing statements
with respect to the interest of Issuer in the Receivables and
the Collateral Certificate, if any.
(b) This Section 4.02 shall not be construed to prohibit or in
any way limit Transferor's ability to effectuate any consolidation or
merger pursuant to which Transferor would be the surviving entity.
(c) The obligations of Transferor hereunder shall not be
assignable nor shall any Person succeed to the obligations of
Transferor hereunder except for mergers, consolidations, assumptions or
transfers in accordance with the provisions of the foregoing
paragraphs.
SECTION 4.03. LIMITATION ON LIABILITY OF TRANSFEROR. Subject to Section
4.01 and except as provided in Section 4.04, neither Transferor, any Holder of
Transferor Interest nor any of the directors, officers, employees or agents of
Transferor acting in such capacities shall be under any liability to Issuer,
Owner Trustee, the Holders, any Enhancement Provider or any other Person for any
action taken or for refraining from the taking of any action in good faith in
their capacities as Transferor pursuant to this Agreement; provided that this
provision shall not protect Transferor, any Holder of Transferor Interest or any
such Person against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations and duties hereunder.
Transferor and any director, officer, employee or agent of Transferor may rely
in good faith on any document of any kind prima facie properly executed and
submitted by any Person (other than Transferor) respecting any matters arising
hereunder.
SECTION 4.04. TRANSFEROR INDEMNIFICATION. (a) Transferor shall
indemnify and hold harmless Issuer, the Certificate Trust, Certificate Trust
Trustee, Indenture Trustee and Owner Trustee, and their respective officers,
directors, employees and agents (each, an "Indemnified Person"), from and
against any loss, liability, expense, damage or injury (i) suffered or sustained
by reason of any acts or omissions or alleged acts or omissions arising out of
or based upon the arrangement created by this Agreement and the other
Transaction Documents, or (ii) arising from or incurred in connection with Owner
Trustee's administration of Issuer and the performance of its duties pursuant to
this Agreement or any other Transaction Document, including any judgment, award,
settlement, reasonable attorneys' fees and other costs or expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim; provided, however, that Transferor shall not indemnify any such
Indemnified Person if such acts, omissions or alleged acts or omissions
constitute or are caused by fraud, negligence, or willful misconduct by such
Indemnified Person; and provided, further, that Transferor shall not
33
indemnify Issuer, the Certificate Trust or any Noteholder or Note Owner for any
liabilities, costs or expenses with respect to any action taken by Certificate
Trust Trustee at the direction of the Holders of Notes and Investor
Certificates, or by Indenture Trustee at the direction of the Noteholders, in
either case given in accordance with the applicable Transaction Documents; and
provided, further, that Transferor shall not indemnify Issuer, the Certificate
Trust or any Noteholder or Note Owner as to any losses, claims or damages
incurred by any of them as owners of secured notes, for example, as a result of
the performance of the Receivables, market fluctuations, a shortfall or failure
to make payment under any Enhancement or other similar market or investment
risks associated with ownership of secured notes; and provided, further, that
Transferor shall not indemnify Issuer, the Certificate Trust or any Noteholder
or Note Owner for any liabilities, costs or expenses of the Receivables Trust,
Issuer, the Noteholders or the Note Owners arising under any tax law, including,
without limitation, any federal, state, local or foreign income or franchise
taxes or any other tax imposed on or measured by income (or any interest or
penalties with respect thereto or arising from a failure to comply therewith)
required to be paid by Issuer, the Certificate Trust, the Noteholders or the
Note Owners in connection herewith to any taxing authority. Any such
indemnifications under this Section 4.04 shall not be payable from the assets of
the Issuer or the Certificate Trust and shall be subordinated to the Notes. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof.
(a) Transferor shall not be liable under this Section 4.04 for
any settlement of any claim or action effected without its prior
written consent, which shall not be unreasonably withheld.
(b) Promptly after receipt by an injured party under this
Section 4.04 of notice of the commencement of any action or proceeding
for which such injured party is entitled to indemnification under this
Section 4.04, such injured party will, if a claim in respect thereof is
to be made against Transferor under this Section 4.04, notify
Transferor of the commencement thereof; but the omission to so notify
Transferor (i) will not relieve it from any liability under Section
4.04 unless and to the extent that such failure to notify results in
the forfeiture by Transferor, or the material impairment, of
substantial rights and defenses and (ii) will not, in any event,
relieve Transferor from any obligations to any injured party that are
in addition to the indemnification obligation provided in this Section
4.04. If any such action or proceeding is brought that involves any
injured party, the injured party shall promptly notify Transferor of
the commencement thereof and Transferor will be entitled to participate
therein and, to the extent that it may wish, to assume the defense
thereof, with counsel reasonably satisfactory to such injured party;
provided, however, that if (x) the use of counsel chosen by Transferor
to represent the injured party would present such counsel with a
conflict of interest which, if such counsel had been retained, would
have required such counsel to withdraw from such representation, (y)
the injured party shall have been advised by counsel that there may be
one or more legal defenses available to it that are different from or
additional to those available to Transferor or to other indemnified
parties, or (z) Transferor shall not have employed counsel satisfactory
to the injured party to represent the injured party within a reasonable
time after receipt by Transferor of notice of the institution of such
action or proceeding, then, in each such case, (1) Transferor shall not
have the right to direct the defense of such action on behalf of such
injured party or parties, (2) such injured party or
34
parties shall have the right to select separate counsel to defend such
action on behalf of such injured party or parties (provided that, if
more than one injured party is subject to the circumstances described
in clause (y), then, to the extent permitted by the rules of
professional conduct applicable to attorneys, all such indemnified
parties shall be represented by one such separate counsel) and (3) all
costs and expenses of each such injured party in connection with such
action or proceeding shall be paid by Transferor pursuant to Section
4.04(a) above. Transferor may settle any claim for which an injured
party seeks indemnification under this Section 4.04 so long as (A)
Transferor pays the settlement in full and (B) as a result thereof, the
injured party is released from all liability under such claim.
(c) After notice from Transferor to such injured party of
Transferor's election so to assume the defense thereof and approval by
such injured party of counsel appointed to defend such action,
Transferor will not be liable to such injured party under this Section
4.04 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such injured party in
connection with the defense thereof, unless (i) the injured party shall
have employed separate counsel in accordance with the immediately
preceding paragraph or (ii) Transferor has authorized in writing the
employment of counsel for the injured party at the expense of
Transferor. If Transferor assumes the defense of any such action or
proceeding, the injured party shall have the right to employ separate
counsel therein, and to participate in the defense thereof, but the
fees and expenses of such counsel shall be borne exclusively by such
injured party without any right or entitlement to reimbursement by
Transferor or its Affiliates except as otherwise provided in the
preceding sentence and in the preceding paragraph.
(d) The provisions of this Section 4.04 shall survive the
termination of this Agreement and the earlier removal or resignation of
the Owner Trustee.
ARTICLE V
OTHER MATTERS RELATING TO SERVICER
SECTION 5.01. LIABILITY OF SERVICER. Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by Servicer in such capacity herein.
SECTION 5.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SERVICER.
(a) Servicer shall not consolidate with or merge into any
other Person or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) the Person formed by such consolidation or into
which Servicer is merged or the Person which acquires by
conveyance or transfer the properties and assets of Servicer
substantially as an entirety shall be a national banking
association, state banking corporation or other entity
organized and existing under the laws of the United States or
any of its states that is not subject to the
35
bankruptcy laws of the United States of America and, if
Servicer is not the surviving entity, shall expressly assume,
by an agreement supplemental hereto, executed and delivered to
Owner Trustee and Indenture Trustee in form satisfactory to
Owner Trustee and Indenture Trustee, the performance of every
covenant and obligation of Servicer hereunder (to the extent
that any right, covenant or obligation of Servicer, as
applicable hereunder, is inapplicable to the successor entity,
such successor entity shall be subject to such covenant or
obligation, or benefit from such right, as would apply, to the
extent practicable, to such successor entity);
(ii) Servicer shall have delivered to Indenture
Trustee an Officer's Certificate that such consolidation,
merger, conveyance or transfer and such supplemental agreement
comply with this Section 5.02 and that all conditions
precedent herein provided for relating to such transaction
have been complied with and an Opinion of Counsel that such
supplemental agreement is legal, valid and binding with
respect to Servicer and enforceable against such surviving
entity in accordance with its terms;
(iii) Servicer shall have delivered notice to the
Rating Agencies of such consolidation, merger, conveyance or
transfer; and
(iv) either (A) the entity formed by such
consolidation or into which Servicer is merged or the Person
which acquired by conveyance or transfer the properties and
assets of Servicer substantially as an entirety shall be an
Eligible Servicer (taking into account, in making such
determination, the experience and operations of the
predecessor Servicer) or (B) upon the effectiveness of such
consolidation, merger, conveyance or transfer, a Successor
Servicer shall have assumed the obligations of Servicer in
accordance with this Agreement.
(b) This Section 5.02 shall not be construed to prohibit or in
any way limit Servicer's ability to effectuate any consolidation or
merger pursuant to which Servicer would be the surviving entity.
SECTION 5.03. LIMITATION ON LIABILITY OF SERVICER AND OTHERS. Except as
provided in Section 5.04 and with respect to Indenture Trustee, Section 6.07 of
the Indenture, neither Servicer nor any of the directors, officers, employees or
agents of Servicer in its capacity as Servicer shall be under any liability to
Issuer, Owner Trustee, Indenture Trustee, the Holders, any Enhancement Providers
or any other Person for any action taken or for refraining from the taking of
any action in good faith in its capacity as Servicer pursuant to this Agreement;
provided that this provision shall not protect Servicer or any such Person
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. Servicer and
any director, officer, employee or agent of Servicer may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person (other than Servicer) respecting any matters arising hereunder. Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties as Servicer in accordance with this
Agreement and which in its reasonable judgment may involve it in any
36
expense or liability. Servicer may, in its sole discretion, undertake any such
legal action which it may deem necessary or desirable for the benefit of the
Holders with respect to this Agreement and the rights and duties of the parties
hereto and the interests of the Holders hereunder. Servicer shall not be liable
for any settlement of any claim or action effected without its prior written
consent, which shall not be unreasonably withheld.
SECTION 5.04. SERVICER INDEMNIFICATION. (a) Servicer shall indemnify
and hold harmless Issuer, the Certificate Trust, the Certificate Trust Trustee,
Owner Trustee and Indenture Trustee (unless acting as Servicer), and their
respective officers, directors, employees and agents (each, an "Indemnified
Person"), from and against any loss, liability, expense, damage or injury (i)
suffered or sustained by reason of any acts or omissions or alleged acts or
omissions of Servicer with respect to activities of the Certificate Trust,
Issuer, Indenture Trustee, Certificate Trust Trustee or Owner Trustee pursuant
to this Agreement or any other Transaction Document, or (ii) arising from or
incurred in connection with Owner Trustee's administration of Issuer and the
performance of its duties pursuant to this Agreement or any other Transaction
Document, including any judgment, award, settlement, reasonable attorneys' fees
and other costs or expenses incurred in connection with the defense of any
actual or threatened action, proceeding or claim; provided, however, that
Servicer shall not indemnify any such Indemnified Person if such acts, omissions
or alleged acts or omissions constitute or are caused by fraud, negligence, or
willful misconduct by such Indemnified Person; and provided, further, that
Servicer shall not indemnify Issuer, the Certificate Trust or any Noteholder or
Note Owner for any liabilities, costs or expenses with respect to any action
taken by Certificate Trust Trustee, at the direction of Holders of the Notes and
the Investor Certificates, or by Indenture Trustee at the direction of the
Noteholders, in either case, given in accordance with the applicable Transaction
Documents; and provided, further, that Servicer shall not indemnify Issuer, the
Certificate Trust or any Noteholder or Note Owner as to any losses, claims or
damages incurred by any of them as owners of secured notes, for example, as a
result of the performance of the Receivables, market fluctuations, a shortfall
or failure to make payment under any Enhancement or other similar market or
investment risks associated with ownership of secured notes; and provided,
further, that Servicer shall not indemnify Issuer, the Certificate Trust or any
Noteholder or Note Owner for any liabilities, costs or expenses of the
Receivables Trust, Issuer, the Noteholders or the Note Owners arising under any
tax law, including, without limitation, any federal, state, local or foreign
income or franchise taxes or any other tax imposed on or measured by income (or
any interest or penalties with respect thereto or arising from a failure to
comply therewith) required to be paid by Issuer, the Noteholders or the Note
Owners in connection herewith to any taxing authority. Any such indemnifications
under this Section 5.04 shall not be payable from the assets of Issuer or the
Certificate Trust and shall be subordinated to the Notes. The provisions of this
indemnity shall run directly to and be enforceable by an injured party subject
to the limitations hereof. Servicer shall also indemnify Indenture Trustee as
provided in Section 6.07 of the Indenture.
(a) Servicer shall not be liable under this Section 5.04 for
any settlement of any claim or action effected without its prior
written consent, which shall not be unreasonably withheld.
37
(b) Promptly after receipt by an injured party under this
Section 5.04 of notice of the commencement of any action or proceeding
for which such injured party is entitled to indemnification under this
Section 5.04, such injured party will, if a claim in respect thereof is
to be made against Servicer under this Section 5.04, notify Servicer of
the commencement thereof; but the omission to so notify Servicer (i)
will not relieve it from any liability under Section 5.04 unless and to
the extent that such failure to notify results in the forfeiture by
Servicer, or the material impairment, of substantial rights and
defenses and (ii) will not, in any event, relieve Servicer from any
obligations to any injured party that are in addition to the
indemnification obligation provided in this Section 5.04. If any such
action or proceeding is brought that involves any injured party, the
injured party shall promptly notify Servicer of the commencement
thereof and Servicer will be entitled to participate therein and, to
the extent that it may wish, to assume the defense thereof, with
counsel reasonably satisfactory to such injured party; provided,
however, that if (x) the use of counsel chosen by Servicer to represent
the injured party would present such counsel with a conflict of
interest which, if such counsel had been retained, would have required
such counsel to withdraw from such representation, (y) the injured
party shall have been advised by counsel that there may be one or more
legal defenses available to it that are different from or additional to
those available to Servicer or to other indemnified parties, or (z)
Servicer shall not have employed counsel satisfactory to the injured
party to represent the injured party within a reasonable time after
receipt by Servicer of notice of the institution of such action or
proceeding, then, in each such case, (1) Servicer shall not have the
right to direct the defense of such action on behalf of such injured
party or parties, (2) such injured party or parties shall have the
right to select separate counsel to defend such action on behalf of
such injured party or parties (provided that, if more than one injured
party is subject to the circumstances described in clause (y), then, to
the extent permitted by the rules of professional conduct applicable to
attorneys, all such indemnified parties shall be represented by one
such separate counsel) and (3) all costs and expenses of each such
injured party in connection with such action or proceeding shall be
paid by Servicer pursuant to Section 5.04(a) above. Servicer may settle
any claim for which an injured party seeks indemnification under this
Section 5.04 so long as (A) Servicer pays the settlement in full and
(B) as a result thereof, the injured party is released from all
liability under such claim.
(c) After notice from Servicer to such injured party of
Servicer's election so to assume the defense thereof and approval by
such injured party of counsel appointed to defend such action, Servicer
will not be liable to such injured party under this Section 5.04 for
any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such injured party in
connection with the defense thereof, unless (i) the injured party shall
have employed separate counsel in accordance with the immediately
preceding paragraph or (ii) Servicer has authorized in writing the
employment of counsel for the injured party at the expense of Servicer.
If Servicer assumes the defense of any such action or proceeding, the
injured party shall have the right to employ separate counsel therein,
and to participate in the defense thereof, but the fees and expenses of
such counsel shall be borne exclusively by such injured party without
any right or entitlement to reimbursement by Servicer or its Affiliates
except as otherwise provided in the preceding sentence and in the
preceding paragraph.
38
(d) The provisions of this Section 5.04 shall survive the
termination of this Agreement and the earlier removal or resignation of
the Owner Trustee.
SECTION 5.05. SERVICER NOT TO RESIGN. Servicer shall not resign from
the obligations and duties hereby imposed on it except (a) upon determination
that (i) the performance of its duties hereunder is no longer permissible under
applicable law and (ii) there is no reasonable action which Servicer could take
to make the performance of its duties hereunder permissible under applicable law
or (b) as may be required, in connection with Servicer's consolidation with, or
merger into any other corporation or Servicer's conveyance or transfer of its
properties and assets substantially as an entirety to any person in each case,
in accordance with Section 5.02. Any such determination permitting the
resignation of Servicer shall be evidenced as to clause (a) above by an Opinion
of Counsel to such effect delivered to Indenture Trustee. No such resignation
shall become effective until Indenture Trustee or a Successor Servicer shall
have assumed the responsibilities and obligations of Servicer in accordance with
Section 7.02 hereof. If Indenture Trustee is unable within 120 days of the date
of such determination to appoint a Successor Servicer, Indenture Trustee shall
(i) serve as Successor Servicer hereunder until such time as a Successor
Servicer shall have been appointed and assumed the obligations of Servicer in
accordance with Section 7.02 hereunder or (ii) if Indenture Trustee is legally
unable so to act, petition a court of competent jurisdiction to appoint a
Successor Servicer in accordance with Section 7.02 such that the appointment is
made within the 120-day period.
SECTION 5.06. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
THE RECEIVABLES. Servicer shall provide to Indenture Trustee access to the
documentation regarding the Accounts and the Receivables in such cases where
Indenture Trustee is required in connection with the enforcement of the rights
of the Noteholders, or by applicable statutes or regulations to review such
documentation, such access being afforded without charge but only (a) upon
reasonable request, (b) during normal business hours, (c) subject to Servicer's
normal security and confidentiality procedures and (d) at offices designated by
Servicer. Nothing in this Section 5.06 shall derogate from the obligation of
FNBO, Transferor, Indenture Trustee and Servicer to observe any applicable law
prohibiting disclosure of information regarding the Obligors and the failure of
Servicer to provide access as provided in this Section 5.06 as a result of such
obligation shall not constitute a breach of this Section 5.06.
SECTION 5.07. DELEGATION OF DUTIES. It is understood and agreed by the
parties hereto that Servicer may delegate certain of its duties hereunder to any
Affiliate which is wholly owned by Servicer or its parent, First National of
Nebraska, Inc. In the ordinary course of business, Servicer may at any time
delegate any duties hereunder to any Person who agrees to conduct such duties in
accordance with the Credit Card Guidelines and this Agreement. Any such
delegations shall not relieve Servicer of its liability and responsibility with
respect to such duties and shall not constitute a resignation within the meaning
of Section 5.05 hereof. If any such delegation is to a party other than an
Affiliate, as permitted above, notification thereof shall be given to each
Rating Agency, Indenture Trustee and each Enhancement Provider entitled
therefrom pursuant to the applicable Indenture Supplement.
SECTION 5.08. EXAMINATION OF RECORDS. Servicer shall clearly and
unambiguously identify each Account (including any Additional Account designated
pursuant to Section 2.06) in its computer or other records to reflect that the
Receivables arising in such Account have been
39
conveyed to Issuer pursuant to this Agreement. Servicer shall, prior to the sale
or transfer to a third party of any receivable held in its custody, examine its
computer and other records to determine that such receivable is not a
Receivable.
ARTICLE VI
INSOLVENCY EVENTS
SECTION 6.01. RIGHTS UPON THE OCCURRENCE OF AN INSOLVENCY EVENT. If an
Insolvency Event occurs with respect to Transferor, FNBO or any Holder of
Transferor Interest (excluding any Supplemental Interest), Transferor shall on
the day any such event occurs, immediately cease to transfer Principal
Receivables to Issuer and shall promptly give notice to Indenture Trustee, Owner
Trustee and the Rating Agencies thereof. Notwithstanding any cessation of the
transfer to Issuer of additional Principal Receivables, Principal Receivables
transferred to Issuer prior to the occurrence of such Insolvency Event and
Collections in respect of such Principal Receivables, and Finance Charge
Receivables whenever created accrued in respect of such Principal Receivables,
shall continue to be property of Issuer.
ARTICLE VII
SERVICER DEFAULTS
SECTION 7.01. SERVICER DEFAULTS. If any one of the following events
(subject to the last paragraph of this Section 7.01, a "Servicer Default") shall
occur and be continuing after the Certificate Trust Termination Date:
(a) any failure by Servicer to make any payment, transfer or
deposit or to give instructions or notice to Indenture Trustee pursuant
to Article VIII of the Indenture (as modified by any Indenture
Supplement) or to instruct Indenture Trustee to make any required
drawing, withdrawal or payment under any Enhancement on or before the
later of (i) the date occurring 10 Business Days after the date such
payment, transfer, deposit, withdrawal or drawing or such instruction
or notice is required to be made or given, as the case may be, under
the terms of this Agreement, the Indenture or any Indenture Supplement
or (ii) three Business Days after written notice of such failure shall
have been given to Servicer;
(b) failure on the part of Servicer duly to observe or perform
in any respect any other covenants or agreements of Servicer set forth
in this Agreement which has a material adverse effect on the
Noteholders of any Series (which determination shall be made without
regard to whether funds are then available pursuant to any Enhancement)
and which continues unremedied for a period of 60 days after the date
on which written notice of such failure, requiring the same to be
remedied, shall have been given to Servicer by Indenture Trustee, or to
Servicer and Indenture Trustee by the Holders of not less than 50% of
the Outstanding Amount of any Series adversely affected thereby and
continues to materially adversely affect such Holders for such period;
or Servicer shall delegate its duties under this Agreement, except as
permitted by Section 5.07;
40
(c) any representation, warranty or certification made by
Servicer in this Agreement or in any certificate delivered pursuant to
this Agreement shall prove to have been incorrect when made, which has
a material adverse effect on the Noteholders of any Series (which
determination shall be made without regard to whether funds are then
available pursuant to any Enhancement) and which continues to be
incorrect in any material respect for a period of 60 days after the
date on which written notice of such failure, requiring the same to be
remedied, shall have been given to Servicer by Indenture Trustee, or to
Servicer and Indenture Trustee by the Holders of Notes evidencing not
less than 50% of the Outstanding Amount of any Series adversely
affected thereby and continues to materially adversely affect such
Holders for such period; or
(d) Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to Servicer or of or relating to all or substantially all of
its property; or a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings,
or for the winding-up or liquidation of its affairs, shall have been
entered against Servicer, and such decree or order shall have remained
in force undischarged or unstayed for a period of 60 days; or Servicer
shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make any assignment for the
benefit of its creditors or voluntarily suspend payment of its
obligations;
(e) with respect to any Series, any other event specified in
the Indenture Supplement for such Series,
then, so long as such Servicer Default shall not have been remedied or waived,
either Indenture Trustee, or the Majority Holders of all outstanding Series, by
notice then given in writing to Servicer (and to Indenture Trustee if given by
the Majority Holders) and to any Enhancement Provider entitled thereto pursuant
to the applicable Indenture Supplement (a "Termination Notice"), may terminate
all of the rights and obligations (other than unsatisfied obligations for acts
or omissions during its tenure as Servicer) of Servicer as Servicer under this
Agreement. Upon the occurrence of a Servicer Default, the Indenture Trustee
shall promptly notify each Rating Agency of such Servicer Default.
After receipt by Servicer of such Termination Notice, and on the date
that a Successor Servicer shall have been appointed by Indenture Trustee
pursuant to Section 7.02, all authority and power of Servicer under this
Agreement shall pass to and be vested in the Successor Servicer (a "Service
Transfer"); and, without limitation, Indenture Trustee is hereby authorized and
empowered (upon the failure of Servicer to cooperate) to execute and deliver, on
behalf of Servicer, as attorney-in-fact or otherwise, all documents and other
instruments upon the failure of Servicer to execute or deliver such documents or
instruments, and to do and accomplish all other acts or things necessary or
appropriate to effect the purposes of such transfer of servicing rights and
obligations. Servicer agrees to cooperate with Indenture Trustee and the
Successor Servicer in effecting the termination of the responsibilities and
rights of Servicer to conduct servicing hereunder including the transfer to the
Successor Servicer of all authority of Servicer to
41
service the Receivables provided for under this Agreement, including all
authority over all Collections which shall on the date of transfer be held by
Servicer for deposit, or which have been deposited by Servicer, in the
Collection Account or any Series Account, or which shall thereafter be received
with respect to the Receivables, and in assisting the Successor Servicer and in
enforcing all rights to Insurance Proceeds and Interchange (if any) applicable
to Issuer. Servicer shall promptly transfer its electronic records or electronic
copies thereof relating to the Receivables to the Successor Servicer in such
electronic form as the Successor Servicer may reasonably request and shall
promptly transfer to the Successor Servicer all other records, correspondence
and documents necessary for the continued servicing of the Receivables in the
manner and at such times as the Successor Servicer shall reasonably request. To
the extent that compliance with this Section 7.01 shall require Servicer to
disclose to the Successor Servicer information of any kind which Servicer
reasonably deems to be confidential, the Successor Servicer shall be required to
enter into such customary licensing and confidentiality agreements as Servicer
shall deem necessary to protect its interests. Servicer shall, on the date of
any Service Transfer, transfer all of its rights and obligations under the
Enhancement with respect to any Series to the Successor Servicer. Servicer being
terminated shall bear all costs of a Service Transfer, including but not limited
to those of Indenture Trustee reasonably allocable to specific employees and
overhead, legal fees and expenses, accounting and financial consulting fees and
expenses, and costs of amending this Agreement, if necessary.
Notwithstanding the foregoing, any delay in or failure of performance
referred to in Section 7.01(a) for a period of ten Business Days or under
Section 7.01(b) or (c) for a period of 60 days (in addition to any period
provided in Section 7.01(a), (b) or (c)) shall not constitute a Servicer Default
until the expiration of such additional ten Business Days or 60 days,
respectively, if such delay or failure could not be prevented by the exercise of
reasonable diligence by Servicer and such delay or failure was caused by an act
of God or the public enemy, acts of declared or undeclared war, public disorder,
rebellion, riot or sabotage, epidemics, landslides, lightning, fire, hurricanes,
tornados, earthquakes, nuclear disasters or meltdowns, floods, power outages or
similar causes. The preceding sentence shall not relieve Servicer from the
obligation to use its best efforts to perform its obligations in a timely manner
in accordance with the terms of this Agreement and Servicer shall provide
Indenture Trustee, each Rating Agency, any Enhancement Provider entitled thereto
pursuant to the relevant Indenture Supplement and Transferor with an Officer's
Certificate giving immediate notice of such failure or delay by it, together
with a description of the cause of such failure or delay and its efforts to so
perform its obligations.
SECTION 7.02. INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
(a) On and after the receipt by Servicer of a Termination
Notice pursuant to Section 7.01, Servicer shall continue to perform all
servicing functions under this Agreement until the date specified in
the Termination Notice or otherwise specified by Indenture Trustee or
until a date mutually agreed upon by Servicer and Indenture Trustee;
however, the parties acknowledge and agree that the Indenture Trustee
will not be obligated to designate or agree to a date prior to the date
on which a Successor Servicer appointed in accordance with this Section
7.02 is willing to accept its appointment. Indenture Trustee shall, as
promptly as possible after the giving of a Termination Notice, appoint
an Eligible Servicer as a successor servicer (the "Successor
Servicer"), and such Successor Servicer shall accept its appointment by
a written assumption in a form acceptable to Indenture Trustee. If a
Successor Servicer has not been appointed or has not accepted its
appointment at the time when Servicer ceases to act as Servicer,
42
Indenture Trustee without further action shall automatically be
appointed the Successor Servicer. Indenture Trustee may delegate any of
its servicing obligations to an Affiliate of Indenture Trustee or agent
in accordance with Section 3.01(b) and 5.07. Notwithstanding the
foregoing, Indenture Trustee shall, if it is legally unable so to act,
petition a court of competent jurisdiction to appoint an Eligible
Servicer as the Successor Servicer hereunder. Indenture Trustee shall
give prompt notice to each Rating Agency and each Enhancement Provider,
if any, entitled thereto pursuant to the applicable Indenture
Supplement upon the appointment of a Successor Servicer.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to Servicer with respect to servicing
functions under this Agreement and shall be subject to all the
responsibilities, duties and liabilities (except for liabilities
arising during the period of time when the prior Servicer was
performing and acting as Servicer) relating thereto placed on Servicer
by the terms and provisions hereof, and all references in this
Agreement to Servicer shall be deemed to refer to the Successor
Servicer.
(c) In connection with any Termination Notice, Indenture
Trustee will review any bids which it obtains from Eligible Servicers
and shall be permitted to appoint any Eligible Servicer submitting such
a bid as a Successor Servicer for servicing compensation not in excess
of the aggregate Monthly Servicing Fees for all Series; provided,
however, that the Holder of Transferor Interest shall be responsible
for payment of the portion of such aggregate Monthly Servicing Fees
allocable to the Holder of Transferor Interest and that no such monthly
compensation paid out of Collections shall be in excess of such
aggregate Monthly Servicing Fees. Each Holder of Transferor Interest
agrees that, if FNBO (or any Successor Servicer) is terminated as
Servicer hereunder, the portion of the Collections in respect of
Finance Charge Receivables that Holders of Transferor Interest are
entitled to receive pursuant to this Agreement or any Indenture
Supplement shall be reduced by an amount sufficient to pay their share
(determined by reference to the Indenture Supplements with respect to
any outstanding Series) of the compensation of the Successor Servicer.
(d) All authority and power granted to the Successor Servicer
under this Agreement shall automatically cease and terminate upon
termination of Issuer pursuant to the Trust Agreement and shall pass to
and be vested in Transferor and, Transferor is hereby authorized and
empowered to execute and deliver, on behalf of the Successor Servicer,
as attorney-in-fact or otherwise, all documents and other instruments,
and to do and accomplish all other acts or things necessary or
appropriate to effect the purposes of such transfer of servicing
rights. The Successor Servicer agrees to cooperate with Transferor in
effecting the termination of the responsibilities and rights of the
Successor Servicer to conduct servicing on the Receivables. The
Successor Servicer shall transfer its electronic records relating to
the Receivables to Transferor in such electronic form as Transferor may
reasonably request and shall transfer all other records, correspondence
and documents to Transferor in the manner and at such times as
Transferor shall reasonably request. To the extent that compliance with
this Section 7.02 shall require the Successor Servicer to disclose to
Transferor information of any kind which the Successor Servicer deems
to be confidential, Transferor shall be required to enter into such
43
customary licensing and confidentiality agreements as the Successor
Servicer shall deem necessary to protect its interests.
(e) Nothing in this Agreement shall be construed to require
any Successor Servicer to assume or succeed to any duty or obligation
of Transferor.
SECTION 7.03. NOTIFICATION TO NOTEHOLDERS. Within two Business Days
after Servicer becomes aware of any Servicer Default, Servicer shall give notice
thereof to Indenture Trustee, each Rating Agency and any Enhancement Provider
entitled thereto pursuant to the relevant Indenture Supplement and Indenture
Trustee shall give notice to the Noteholders at their respective addresses
appearing in the Note Register. Upon any termination or appointment of a
Successor Servicer pursuant to Section 5.05 or this Article VII, Indenture
Trustee shall give prompt written notice thereof to Noteholders at their
respective addresses appearing in the Note Register and to any Enhancement
Provider entitled thereto under the applicable Indenture Supplement.
ARTICLE VIII
TERMINATION
SECTION 8.01. TERMINATION OF AGREEMENT. This Agreement and the
respective obligations and responsibilities of Issuer, Transferor and Servicer
under this Agreement shall terminate, except with respect to the duties
described in Section 5.04, on the Trust Termination Date.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.01. AMENDMENT; WAIVER OF PAST DEFAULTS.
(a) This Agreement may be amended from time to time by
Servicer, Transferor and Issuer, without the consent of any of
Indenture Trustee or any Noteholder to cure any ambiguity, to correct
or supplement any provisions herein which may be inconsistent with any
other provisions herein or to add any other provisions with respect to
matters or questions raised under this Agreement which shall not be
inconsistent with the provisions of this Agreement; provided, however,
that such action shall not adversely affect in any material respect the
interests of any of the Noteholders. Additionally, this Agreement may
be amended from time to time by Servicer, Transferor and Issuer by a
written instrument signed by each of them, without the consent of
Indenture Trustee or any of the Noteholders; provided that (i)
Transferor shall have delivered to Indenture Trustee and Owner Trustee
an Officer's Certificate, dated the date of any such Amendment, stating
that Transferor reasonably believes that such amendment will not have
an Adverse Effect and (ii) the Rating Agency Condition shall have been
satisfied with respect to any such amendment. Additionally,
notwithstanding the preceding sentence, this Agreement will be amended
by Servicer and Issuer at the direction of Transferor without the
consent of Indenture Trustee or any of the Noteholders or
44
Enhancement Providers to add, modify or eliminate such provisions as
may be necessary or advisable in order to enable all or a portion of
Issuer (A) to qualify as, and to permit an election to be made to cause
Issuer to be treated as, a "financial asset securitization investment
trust" as described in the provisions of Section 860L of the Code and
(B) to avoid the imposition of state or local income or franchise taxes
imposed on Issuer's property or its income; provided, however, that (1)
Transferor delivers to Indenture Trustee and Owner Trustee an Officer's
Certificate to the effect that the proposed amendments meet the
requirements set forth in this Section, (2) the Rating Agency Condition
has been satisfied and (3) such amendment does not affect the rights,
duties or obligations of Indenture Trustee or Owner Trustee hereunder.
(b) This Agreement may also be amended from time to time by
Servicer, Transferor and Issuer, with the consent of the Noteholders
holding more than 66?% of the Outstanding Amount of the Notes of each
Series affected thereby for which Transferor has not delivered an
Officer's Certificate stating that there is no Adverse Effect, for the
purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Noteholders; provided, however, that no
such amendment shall (i) reduce in any manner the amount of or delay
the timing of any distributions to be made to Noteholders or deposits
of amounts to be so distributed or the amount available under any
Enhancement without the consent of each affected Noteholder, (ii)
change the definition of or the manner of calculating the interest of
any Noteholder without the consent of each affected Noteholder or (iii)
reduce the aforesaid percentage required to consent to any such
amendment without the consent of each affected Noteholder.
(c) Promptly after the execution of any such amendment or
consent, Issuer shall furnish notification of the substance of such
amendment to Indenture Trustee and each Noteholder, and Servicer shall
furnish notification of the substance of such amendment to each Rating
Agency and each Enhancement Provider.
(d) It shall not be necessary for the consent of Noteholders
under this Section 9.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Noteholders
shall be subject to such reasonable requirements as Indenture Trustee
may prescribe.
(e) Notwithstanding anything in this Section 9.01 to the
contrary, no amendment may be made to this Agreement which would
adversely affect in any material respect the interests of any
Enhancement Provider without the consent of such Enhancement Provider.
(f) Any Indenture Supplement executed in accordance with the
provisions of Article X of the Indenture shall not be considered an
amendment of this Agreement for the purposes of this Section 9.01.
45
(g) The Noteholders holding 66-2/3% or more of the Outstanding
Amount of the Notes of each Series adversely affected by a default by
Transferor or Servicer in the performance of their obligations
hereunder may, on behalf of all Noteholders, waive any such default and
its consequences, except the failure to make any distributions required
to be made to Noteholders or to make any required deposits of any
amounts to be so distributed, which requires the consent of all
Noteholders of each Series adversely affected by that default. Upon any
such waiver of a past default, such default shall cease to exist, and
any default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon
except to the extent expressly so waived. Upon the occurrence of any
such waiver, Indenture Trustee shall promptly notify each Rating Agency
of such waiver.
(h) Owner Trustee may, but shall not be obligated to, enter
into any such amendment which affects Owner Trustee's rights, duties or
immunities under this Agreement or otherwise. In connection with the
execution of any amendment hereunder, Owner Trustee shall be entitled
to receive the Opinion of Counsel described in Section 9.02(d).
SECTION 9.02. PROTECTION OF RIGHT, TITLE AND INTEREST TO ISSUER.
(a) Servicer shall cause this Agreement, all amendments and
supplements hereto and all financing statements and continuation
statements and any other necessary documents covering Indenture
Trustee's and Issuer's right, title and interest to Issuer to be
promptly recorded, registered and filed, and at all times to be kept
recorded, registered and filed, all in such manner and in such places
as may be required by law fully to preserve and protect the right,
title and interest of Issuer hereunder, and of Indenture Trustee and
Noteholders under the Indenture, to all property comprising the Trust
Assets. Servicer shall deliver to Indenture Trustee file-stamped copies
of, or filing receipts for, any document recorded, registered or filed
as provided above, as soon as available following such recording,
registration or filing. Transferor shall cooperate fully with Servicer
in connection with the obligations set forth above and will execute any
and all documents reasonably required to fulfill the intent of this
paragraph.
(b) Within thirty (30) days after Transferor makes any change
in its name, identity or organizational structure which would make any
financing statement or continuation statement filed in accordance with
paragraph (a) seriously misleading within the meaning of the UCC,
Transferor shall give Issuer and Indenture Trustee notice of any such
change, and Servicer shall file such financing statements or amendments
as may be necessary to continue the perfection of Issuer's security
interest or ownership interest in the Receivables and the proceeds
thereof.
(c) Each of Transferor and Servicer shall give Indenture
Trustee prompt notice of any relocation of its chief principal
executive office or any change in the jurisdiction under whose laws it
is organized and whether, as a result of such relocation or change, the
applicable provisions of the UCC would require the filing of any
amendment of any previously filed financing or continuation statement
or of any new
46
financing statement, and Servicer shall file such financing statements
or amendments as may be necessary to perfect or to continue the
perfection of Issuer's security interest in the Receivables and the
proceeds thereof. Each of Transferor and Servicer shall at all times
maintain its chief principal executive offices within the United States
and shall at all times be organized under the laws of a jurisdiction
located within the United States.
(d) Transferor shall deliver to Indenture Trustee, Owner
Trustee and any Enhancement Provider entitled thereto pursuant to the
relevant Indenture Supplement (i) upon the execution and delivery of
each amendment of this Agreement, an Opinion of Counsel to the effect
specified in Exhibit A; (ii) on each Addition Date on which any
Supplemental Accounts are to be designated as Accounts pursuant to
Section 2.08(a) or (b), an Opinion of Counsel substantially in the form
of Exhibit E; and (iii) on or before March 31 of each year, an Opinion
of Counsel substantially in the form of Exhibit F.
SECTION 9.03. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF
NEBRASKA, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 9.04. NOTICES; PAYMENTS.
(a) All demands, notices, instructions, directions and
communications (collectively, "Notices") under this Agreement shall be
in writing and shall be deemed to have been duly given if personally
delivered at, mailed by registered mail, return receipt requested, or
sent by facsimile transmission (i) in the case of Transferor and
Servicer, to First National Bank of Omaha, [ ], (ii) in the case of
Issuer or Owner Trustee, to the Corporate Trust Office, Attention:
Institutional Trust Services, with a copy to the Administrator, (iii)
in the case of the Rating Agency for a particular Series, the address,
if any, specified in the Indenture Supplement relating to such Series
and (iv) to any other Person as specified in the Indenture or any
Indenture Supplement; or, as to each party, at such other address or
facsimile number as shall be designated by such party in a written
notice to each other party.
(b) Any Notice required or permitted to be given to a Holder
of Registered Notes shall be given by first-class mail, postage
prepaid, at the address of such Holder as shown in the Note Register.
Any Notice so mailed within the time prescribed in this Agreement shall
be conclusively presumed to have been duly given, whether or not the
Noteholder receives such Notice.
SECTION 9.05. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such provisions shall be deemed
severable from the remaining provisions of this Agreement and shall in no way
affect the validity or enforceability of the remaining provisions of this
Agreement or of the Notes or the rights of the Noteholders.
47
SECTION 9.06. FURTHER ASSURANCES. Transferor and Servicer agree to do
and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by Owner Trustee and
Indenture Trustee more fully to effect the purposes of this Agreement, including
the execution of any financing statements or continuation statements relating to
the Receivables for filing under the provisions of the UCC of any applicable
jurisdiction.
SECTION 9.07. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of Owner Trustee, Indenture Trustee, the
Noteholders or any Enhancement Provider, any right, remedy, power or privilege
under this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
provided under this Agreement are cumulative and not exhaustive of any rights,
remedies, powers and privileges provided by law.
SECTION 9.08. COUNTERPARTS. This Agreement may be executed in two or
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
SECTION 9.09. THIRD-PARTY BENEFICIARIES. This Agreement will inure to
the benefit of and be binding upon the parties hereto, Indenture Trustee, the
Noteholders, and any Enhancement Provider. Except as otherwise expressly
provided in this Agreement, no other Person will have any right or obligation
hereunder.
SECTION 9.10. ACTIONS BY NOTEHOLDERS.
(a) Wherever in this Agreement a provision is made that an
action may be taken or a Notice given by Noteholders, such action or
Notice may be taken or given by any Noteholder, unless such provision
requires a specific percentage of Noteholders.
(b) Any Notice, request, authorization, direction, consent,
waiver or other act by the Noteholder shall bind such Holder and every
subsequent Holder of such Note and of any Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done or omitted to be done by Issuer,
Owner Trustee, Transferor or Servicer in reliance thereon, whether or
not notation of such action is made upon such Note.
SECTION 9.11. RULE 144A INFORMATION. For so long as any of the Notes of
any Series or Class are "restricted securities" within the meaning of Rule
144(a)(3) under the Securities Act, each of Transferor, Owner Trustee, Indenture
Trustee, Servicer and any Enhancement Provider agree to cooperate with each
other to provide to any Noteholders of such Series or Class and to any
prospective purchaser of Notes designated by such Noteholder, upon the request
of such Noteholder or prospective purchaser, any information required to be
provided to such holder or prospective purchaser to satisfy the condition set
forth in Rule 144A(d)(4) under the Securities Act.
48
SECTION 9.12. MERGER AND INTEGRATION. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
SECTION 9.13. NO BANKRUPTCY PETITION. Each of Issuer (with respect to
Transferor only), Servicer, each Enhancement Provider, if any, and each Holder
of a Supplemental Interest and Transferor (with respect to Issuer only)
severally and not jointly, hereby covenants and agrees that it will not at any
time institute against, solicit or join or cooperate with or encourage any
institution against Issuer or Transferor of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under any United States federal or state bankruptcy or similar law. Nothing in
this Section 9.13 shall preclude, or be deemed to estop, any of the foregoing
Persons from taking (to the extent such action is otherwise permitted to be
taken by such Person hereunder) or omitting to take any action prior to such
date in (a) any case or proceeding with respect to Issuer or Transferor
voluntarily filed or commenced by or on behalf of Issuer or Transferor,
respectively, under or pursuant to any such law or (b) any involuntary case or
proceeding pertaining to Issuer or Transferor, as applicable under or pursuant
to any such law.
SECTION 9.14. RIGHTS OF INDENTURE TRUSTEE. Indenture Trustee shall have
herein the same rights, protections, indemnities and immunities as specified in
the Indenture.
SECTION 9.15. RIGHTS OF OWNER TRUSTEE. Each of the parties hereto
acknowledges and agrees that this Agreement is being executed and delivered by
Wilmington Trust Company, not individually but solely and exclusively in its
capacity as Owner Trustee on behalf of First National Master Note Trust for the
purpose and with the intention of binding First National Master Note Trust. No
obligations or liabilities hereunder shall run against Wilmington Trust Company
in its individual capacity or against its properties or assets.
SECTION 9.16. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 5.02, this Agreement may not be
assigned by Servicer without the prior consent of the Majority Holders of each
Series.
SECTION 9.17. HEADINGS. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
[Remainder of page intentionally left blank]
49
IN WITNESS WHEREOF, Transferor, Servicer and Issuer have caused this
Transfer and Servicing Agreement to be duly executed by their respective
officers as of the day and year first above written.
FIRST NATIONAL FUNDING LLC, as
Transferor
By
-----------------------------------------
Name
-------------------------------------
Title
-------------------------------------
FIRST NATIONAL BANK OF OMAHA, as
Servicer
By
-----------------------------------------
Name
-------------------------------------
Title
-------------------------------------
FIRST NATIONAL MASTER NOTE TRUST,
Issuer
By Wilmington Trust Company, not in its
individual capacity but solely as
Owner Trustee on behalf of Issuer
By
-----------------------------------------
Name
-------------------------------------
Title
-------------------------------------
TRANSFER AND SERVICING AGREEMENT SIGNATURE PAGE
Acknowledged and Accepted:
THE BANK OF NEW YORK,
not in its individual capacity but
solely as Indenture Trustee
By
--------------------------------------------------
Name
------------------------------------------------
Title
-----------------------------------------------
EXHIBIT A
PROVISIONS TO BE INCLUDED IN OPINION OF COUNSEL
WITH RESPECT TO AMENDMENTS
The opinions set forth below may be subject to all the qualifications,
assumptions, limitations and exceptions taken or made in the Opinions Of Counsel
delivered on any applicable Closing Date.
(i) The Amendment to the
Transfer and Servicing Agreement has
been duly authorized, executed and delivered by Transferor and Servicer
and constitutes the legal, valid and binding agreement of Transferor
and Servicer, respectively, enforceable in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws from time to time
in effect affecting creditors' rights generally or the rights of
creditors of national banking associations. The enforceability of the
respective obligations of Transferor and Servicer is also subject to
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(ii) The Amendment has been entered into in accordance with
the terms and provisions of Section 9.01 of the
Transfer and Servicing
Agreement.
EXHIBIT B
FORM OF ASSIGNMENT OF RECEIVABLES
IN ADDITIONAL ACCOUNTS
(As required by Section 2.06 of the
Transfer and Servicing Agreement)
ASSIGNMENT No.___ OF RECEIVABLES IN ADDITIONAL ACCOUNTS (this
"Assignment") dated as of ______________, by and among FIRST NATIONAL FUNDING
LLC, a
Nebraska limited liability company, as Transferor (the "Transferor"),
FIRST NATIONAL BANK OF OMAHA, a national banking association, as Servicer (the
"Servicer") and FIRST NATIONAL MASTER NOTE TRUST (the "Issuer"), pursuant to the
Transfer and Servicing Agreement referred to below.
WITNESSETH:
WHEREAS, Transferor, Servicer and Issuer are parties to the
Transfer
and Servicing Agreement, dated as of [ ], 2002 (as it may be amended and
supplemented from time to time the "Agreement"); and
WHEREAS, pursuant to the Agreement, Transferor wishes to designate
Additional Accounts to be included as Accounts and to convey the Receivables of
such Additional Accounts, whether now existing or hereafter created, to Issuer
(as each such term is defined in the Agreement); and
WHEREAS, Issuer is willing to accept such designation and conveyance
subject to the terms and conditions hereof;
NOW, THEREFORE, Transferor, Servicer and Issuer hereby agree as
follows:
1. DEFINED TERMS. All terms defined in the Agreement and used herein
shall have such defined meanings when used herein, unless otherwise defined
herein.
"ADDITION DATE" shall mean, with respect to the Additional
Accounts designated hereby, [__________________], 20[____].
"NOTICE DATE" shall mean, with respect to the Additional
Accounts designated hereby, [__________________], 20[____] (which
shall be a date on or prior to the fifth Business Day prior to the
Addition Date with respect to additions pursuant to Section 2.06(a) of
the Agreement and the tenth Business Day prior to the Addition Date
with respect to additions pursuant to Section 2.06(b) of the
Agreement).
2. DESIGNATION OF ADDITIONAL ACCOUNTS. Transferor shall deliver to
Issuer not later than five Business Days after the Addition Date, a computer
file or microfiche list containing a true and complete list of each MasterCard
and VISA account which as of the Addition Date shall be deemed to be an
Additional Account, such accounts being identified by account number and by the
amount of Receivables in such accounts as of the close of business on the
Addition Date. Such list shall be delivered five Business Days after the date of
this Assignment and shall be
marked as Schedule 1 to this Assignment and, as of the Addition Date, shall be
incorporated into and made a part of this Assignment and shall supplement
Schedule 1 to the Agreement as required by Section 2.01(c) of the Agreement.
3. CONVEYANCE OF RECEIVABLES.
(a) Transferor does hereby transfer, assign, set-over and
otherwise convey to Issuer, without recourse, except as set
forth in the Agreement, on and after the Addition Date, all
right, title and interest of Transferor in and to the
Receivables now existing and hereafter created in the
Additional Accounts designated hereby[, all monies due or to
become due and all amounts received or receivable with respect
thereto and the proceeds thereof,] (including all Finance
Charge Receivables) and all proceeds of such Receivables and
Insurance Proceeds and Recoveries relating thereto. The
foregoing does not constitute and is not intended to result in
the creation or assumption by Issuer, Owner Trustee, Indenture
Trustee, any Noteholders or any Enhancement Provider of any
obligation of Servicer, Transferor, the Credit Card Originator
or any other Person in connection with the Accounts, the
Receivables or under any agreement or instrument relating
thereto, including any obligation to Obligors, merchant banks,
merchants clearance systems or insurers.
(b) In connection with such transfer, Servicer agrees to record
and file, at its own expense, a financing statement (and
continuation statements, when applicable) with respect to the
Receivables now existing and hereafter created in the
Additional Accounts designated hereby (which may be a single
financing statement with respect to all such Receivables) for
the transfer of accounts as defined in Section 9-102 of the
UCC meeting the requirements of applicable law in such manner
and such jurisdiction as are necessary to perfect, and
maintain the perfection of, the assignment of such Receivables
to Issuer, and to deliver a file-stamped copy of such
financing statement or other evidence of such filing (which
may, for purposes of this Section 3, consist of telephone
confirmation of such filing) to Indenture Trustee on or prior
to the date of the Assignment.
(c) In connection with such transfer, Servicer further agrees, at
its own expense, on or prior to the date of this Assignment to
indicate in its computer files that Receivables created in
connection with the Additional Accounts designated hereby have
been transferred to Issuer pursuant to the Agreement and this
Assignment.
(d) The parties intend that the transfer shall be deemed to be a
sale, but if, and to the extent that, such transfer is not
deemed to be a sale, Transferor shall be deemed hereunder to
have granted, and does hereby so grant, to Issuer a first
priority perfected security interest in all of Transferor's
right, title and interest in, and under the Receivables now
existing and hereafter created and arising in connection with
the Additional Accounts, all payments on such Receivables
received after the Addition Date, all Insurance Proceeds
relating thereto and all
B-2
proceeds thereof (including Recoveries) and this Assignment
shall constitute a security agreement under applicable law.
4. ACCEPTANCE BY ISSUER. Issuer hereby acknowledges its acceptance of
all right, title and interest in and to the Receivables now existing and
hereafter created, conveyed to it by Transferor pursuant to Section 3(a) of this
Assignment.
5. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR. Transferor hereby
represents and warrants to Issuer as of the Addition Date:
(a) LEGAL VALID AND BINDING OBLIGATION. This Assignment
constitutes a legal, valid and binding obligation of
Transferor enforceable against Transferor in accordance with
its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect affecting the
enforcement of creditors' rights in general and the rights of
creditors of national banking associations and except as such
enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(b) ELIGIBILITY OF ACCOUNTS AND RECEIVABLES. Each Additional
Account designated hereby is an Eligible Account and each
Receivable in such Additional Account is an Eligible
Receivable.
(c) SELECTION PROCEDURES. No selection procedures believed by
Transferor to be materially adverse to the interests of Issuer
or the Noteholders were utilized in selecting the Additional
Accounts designated hereby from the available [Financial
Institutions Accounts] [Accounts owned by FNBO] constituting
Eligible Accounts [and in connection with its acquisition of
Financial Institution Accounts added to the Trust, FNBO has
conducted a due diligence review of the accounts of each
selling third-party financial institution, including a review
of its origination policies and a review of a random sample of
its recently processed account applications. Based on such
diligence reviews, such Financial Institution Accounts were
originated under origination policies which do not differ
significantly from those used by FNBO.]
(d) INSOLVENCY. Transferor is not insolvent and, after giving
effect to the conveyance set forth in Section 3 of the
Assignment, will not be insolvent. No Insolvency Event with
respect for FNBO or Transferor has occurred, and the transfer
pursuant to Section 3(a) has not been made in contemplation of
the occurrence thereof.
(e) SECURITY INTEREST. This Assignment constitutes either (A) a
valid transfer and assignment to Issuer of all right, title
and interest of Transferor in and to the Receivables existing
and hereafter created in the Additional Accounts, and all
proceeds (as defined in the UCC) of such Receivables and
Insurance Proceeds relating thereto [and all monies due or to
become due and all amounts received with respect thereto and
the proceeds thereof] and such Receivables[, monies and
B-3
amounts received or receivable] and all proceeds thereof and
Insurance Proceeds relating thereto will be held by Issuer
free and clear of any Lien, except for (1) Liens permitted
under subsection 2.05(b) of the Agreement, (2) the interest of
the Holder of Transferor Interest and (3) Servicer's right, if
any, to receive interest accruing on, and investment earnings
in respect of, the Finance Charge Account, the Collection
Account, the Principal Account, or any Series Account as
provided in the Indenture and any related Indenture Supplement
or (B) a grant of a first priority security interest (as
defined in the UCC) in such property to Issuer, which is
enforceable with respect to then existing Receivables of the
Additional Accounts, the proceeds (as defined in the UCC)
thereof and Insurance Proceeds relating thereto upon the
execution and delivery of this Assignment, and which will be
enforceable with respect to the Receivables thereafter created
in respect of Additional Accounts conveyed on such Addition
Date, the proceeds (as defined in the UCC) thereof and
Insurance Proceeds relating thereto, upon such creation;
(f) REQUIRED RATING AGENCY REPRESENTATIONS. To the extent this
Assignment constitutes a grant of a security interest, with
respect to existing Receivables in the Additional Accounts:
(i) This Assignment creates a valid and continuing
security interest (as defined in the UCC) in such
Receivables and proceeds thereof and Insurance
Proceeds relating thereto in favor of Issuer, which
security interest is prior to all other Liens (except
Liens permitted under Subsection 2.05(b) of the
Agreement), and is enforceable as such as against
creditors of and purchasers from Transferor;
(ii) Such Receivables constitute "accounts" within the
meaning of the UCC;
(iii) Transferor owns and has good and marketable title to
such Receivables free and clear of any Lien, claim or
encumbrance of any Person (except Liens permitted
under Subsection 2.05(b) of the Agreement);
(iv) Transferor has caused or will have caused, within ten
days, the filing of all appropriate financing
statements in the proper filing office in the
appropriate jurisdictions under applicable law in
order to perfect the security interest in such
Receivables granted to Issuer hereunder;
(v) Other than the security interest granted to Issuer
pursuant to this Assignment, Transferor has not
pledged, assigned, sold, granted a security interest
in, or otherwise conveyed any of such Receivables and
has not authorized the filing of and is not aware of
any financing statements against Transferor that
include a description of collateral covering the
Receivables other than any financing statement (i)
relating to the security interest granted to Issuer
hereunder or (ii) that has been terminated and
Transferor is not aware of any judgment or tax lien
filings against Transferor;
B-4
(vi) The representations made in clauses (i) through (v)
above will be true with respect to Receivables
hereafter created in respect of Additional Accounts
designated hereby upon such creation; and
(vii) Transferor confirms and agrees that the foregoing
representations and warranties shall survive the
execution and delivery of this Assignment and that
any breach thereof may not be waived without prior
written confirmation from each Rating Agency that
none of its ratings on outstanding Notes or related
commercial paper shall be adversely affected by such
waiver.
(g) RAPID AMORTIZATION EVENT. Transferor reasonably believes that
the addition of the Receivables arising in the Additional
Accounts will not, based on the facts known to Transferor,
then or thereafter cause a Pay Out Event to occur with respect
to any Series.
(h) NO CONFLICT. The execution and delivery by Transferor of this
Assignment, the performance of the transactions contemplated
by this Assignment and the fulfillment of the terms hereof
applicable to Transferor, will not conflict with or violate
any Requirements of Law applicable to Transferor or conflict
with, result in any breach of any of the material terms and
provisions of, or constitute (with or without notice or lapse
of time or both) a material default under, any indenture,
contract, agreement, mortgage, deed of trust or other
instrument to which Transferor is a party or by which it or
its properties are bound.
(i) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the best knowledge of Transferor, threatened
against Transferor before any court, regulatory body,
administrative agency or other tribunal or governmental
instrumentality (i) asserting the invalidity of this
Assignment, (ii) seeking to prevent the consummation of any of
the transactions contemplated by this Assignment, (iii)
seeking any determination or ruling that, in the reasonable
judgment of Transferor, would materially and adversely affect
the performance by Transferor of its obligations under this
Assignment, (iv) seeking any determination or ruling that
would materially and adversely affect the validity or
enforceability of this Assignment or (v) seeking to affect
adversely the income tax attributes of Issuer under the
federal, or applicable state income or franchise tax systems.
(j) ALL CONSENTS. All authorizations, consents, orders or
approvals or other actions of any Person or of any court or
other governmental authority required to be obtained by
Transferor in connection with the execution and delivery of
this Assignment by Transferor and the performance of the
transactions contemplated by this Assignment by Transferor,
have been obtained.
6. CONDITIONS PRECEDENT. The acceptance by Issuer set forth in Section
4 and the amendment of the Agreement set forth in Section 7 are subject to the
satisfaction, on or prior to the Addition Date, of the following conditions
precedent:
B-5
(a) OFFICER'S CERTIFICATE. Transferor shall have delivered to
Issuer and Indenture Trustee a certificate of a Vice President
or more senior officer substantially in the form of Schedule 2
hereto, certifying that (i) all requirements set forth in
Section 2.06 of the Agreement for designating Additional
Accounts and conveying the Principal Receivables of such
Accounts, whether now existing or hereafter created, have been
satisfied and (ii) each of the representations and warranties
made by Transferor in Section 5 is true and correct as of the
Addition Date. Issuer and Indenture Trustee may conclusively
rely on such Officer's Certificate, shall have no duty to make
inquiries with regard to the matters set forth therein, and
shall incur no liability in so relying.
(b) OPINION OF COUNSEL. Transferor shall have delivered to Issuer
and Indenture Trustee an Opinion of Counsel with respect to
the Additional Accounts designated hereby substantially in the
form of Exhibit E to the Agreement.
(c) ADDITIONAL INFORMATION. Transferor shall have delivered to
Issuer and Indenture Trustee such information as was
reasonably requested by either of Issuer or Indenture Trustee
to satisfy itself as to the accuracy of the representation and
warranty set forth in subsection 5(d) to this Assignment.
7. AMENDMENT OF THE AGREEMENT. The Agreement is hereby amended to
provide that all references therein to the "Transfer and Servicing Agreement,"
to "this Agreement" and "herein" shall be deemed from and after the Addition
Date to be a reference to the Transfer and Servicing Agreement as supplemented
by this Assignment. Except as expressly amended hereby, all of the
representations, warranties, terms, covenants and conditions of the Transfer and
Servicing Agreement shall remain unamended and shall continue to be, and shall
remain, in full force and effect in accordance with its terms and except as
expressly provided herein shall not constitute or be deemed to constitute a
waiver of compliance with or a consent to noncompliance with any term or
provision of the Transfer and Servicing Agreement.
8. COUNTERPARTS. This Assignment may be executed in two or more
counterparts, and by different parties on separate counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
9. GOVERNING LAW. This Assignment shall be governed by and construed in
accordance with the laws of the State of
Nebraska, without regard to its
conflict of law provisions.
10. RIGHTS OF OWNER TRUSTEE. Each of the parties hereto acknowledges
and agrees that this Assignment is being executed and delivered by Wilmington
Trust Company, not individually but solely and exclusively in its capacity as
Owner Trustee on behalf of First National Master Note Trust for the purpose and
with the intention of binding First National Master Note Trust. No obligations
or liabilities hereunder shall run against Wilmington Trust Company in its
individual capacity or against its properties or assets.
B-6
IN WITNESS WHEREOF, the undersigned have caused this Assignment of
Receivables in Additional Accounts to be duly executed and delivered by their
respective duly authorized officers on the day and year first above written.
FIRST NATIONAL FUNDING LLC,
Transferor
By
------------------------------------
Name
--------------------------------
Title
--------------------------------
FIRST NATIONAL BANK OF OMAHA,
Servicer
By
------------------------------------
Name
--------------------------------
Title
--------------------------------
FIRST NATIONAL MASTER NOTE TRUST,
Issuer
By Wilmington Trust Company, not in
its individual capacity but
solely on behalf of Issuer
By
------------------------------------
Name
--------------------------------
Title
--------------------------------
B-7
SCHEDULE 1
TO ASSIGNMENT OF RECEIVABLES
IN ADDITIONAL ACCOUNTS
ACCOUNT SCHEDULE
(ADDITIONAL ACCOUNTS)
B-8
SCHEDULE 2
TO ASSIGNMENT OF RECEIVABLES
IN ADDITIONAL ACCOUNTS
OFFICER'S CERTIFICATE
(Officer's Certificate Of Transferor)
(i) All requirements set forth in Section 2.06 of the Agreement for
designating Additional Accounts and conveying the Principal Receivables of such
Accounts, whether now existing or hereafter created, have been satisfied and
(ii) each of the representations and warranties made by Transferor in Section 5
of the Assignment is true and correct as of the Addition Date.
B-9
EXHIBIT C
FORM OF MONTHLY SERVICER'S CERTIFICATE
FIRST NATIONAL MASTER NOTE TRUST SERIES [ ]
MONTHLY PERIOD ENDING: __________
The undersigned, a duly authorized representative of First National Bank of
Omaha ("FNBO"), as Servicer pursuant to the Transfer and Servicing Agreement
dated as of __________________ (as amended, the "Transfer and Servicing
Agreement") by and between FNBO, as Servicer, First National Funding LLC, as
Transferor, and First National Master Note Trust, as Issuer, does hereby certify
as follows:
(a) The rights of the Issuer under the Transfer and Servicing Agreement have
been assigned to The Bank of New York, as Indenture Trustee, under the Master
Indenture dated as of [_____________], 2002 (the "Indenture"), by and between
Issuer and the Indenture Trustee, and acknowledged by Transferor and Servicer,
as supplemented by the Series [___] Indenture Supplement, dated as of
[_____________], by and between Issuer and Indenture Trustee, and acknowledged
by Transferor and Servicer (the "Supplement"). Capitalized terms used in this
Certificate have their respective meanings set forth in the Transfer and
Servicing Agreement. References herein to certain sections and subsections are
references to the respective sections and subsections of the Transfer and
Servicing Agreement. This Certificate is delivered pursuant to Section 3.04 of
the Transfer and Servicing Agreement and Article VIII and IX of the Indenture.
(b) FNBO is Servicer under Transferor and Servicing Agreement.
(c) The undersigned is a Servicing Officer.
(d) The date of this Certificate is the Determination Date relating to the
___________________ Distribution Date (the "Distribution Date").
(e) To the knowledge of the undersigned, there are no Liens on any Receivables
in the Trust except as described below:
[If applicable, insert "None".]
(f) To the knowledge of the undersigned, no Series [ ] Pay Out Event and no
Trust Pay Out Event has occurred except as described below:
[If applicable, insert "None"]
(g) As of the date hereof the Available Spread Account Amount equals the
Required Spread Account Amount[, the amount on deposit in the Cash Collateral
Account equals the Required Cash Collateral Amount] and, if the Reserve Account
Funding Date has occurred, the Available Reserve Account Amount equals the
Required Reserve Account Amount.
A. INFORMATION REGARDING THE PERFORMANCE OF THE RECEIVABLES
1. Principal Receivables
(a) Beginning of Monthly Period Principal Receivables
--------------------
(b) End of Monthly Period Principal Receivables
--------------------
(c) Average Principal Receivables
--------------------
2. End of Monthly Period Trust Receivables
--------------------
3. Delinquent Balances
Delinquency Aggregate Account Percentage of
Category Balance Total Receivables
----------- ----------------- -----------------
(a) 30 to 59 days
----------------- ---------------
(b) 60 to 89 days
----------------- ---------------
(c) 90 to 119 days
----------------- ---------------
(d) 120 to 149 days
----------------- ---------------
(e) 150 or more days
----------------- ---------------
Total:
----------------- ---------------
4. Aggregate amount of Collections
---------------
(a) Total Collections
---------------
(b) Total Collections of Principal Receivables
---------------
(c) Total Collections of Finance Charge Receivables
---------------
(d) Aggregate Allocation Percentages for Outstanding
Series
---------------
(e) Aggregate Allocation Percentage of Collections of
Principal Receivables
---------------
(f) Aggregate Allocation Percentage of Collections of
Finance Charge Receivables
---------------
5. Aggregate amount of Principal Receivables in Accounts
which became Defaulted Accounts during the
Monthly Period
---------------
6. Calculation of Interchange allocable to the Issuer for
the Monthly Period
---------------
(a) Sales net of cash advances during the Monthly Period
on all FNBO MasterCard and VISA(1) accounts
---------------
(b) Sales net of cash advances during the Monthly Period
on Accounts designated to the Issuer
---------------
----------
(1) MasterCard and VISA are registered trademarks of MasterCard International
Incorporated and of VISA USA, Inc., respectively.
C-2
(c) Total amount of Interchange paid or payable to FNBO
with respect to the Monthly Period
---------------
(d) Amount of Interchange allocable to the Issuer with
respect to the Monthly Period ([c]/[b/a])
---------------
7. The aggregate amount of Collections of Finance Charge
Receivables for the Issuer for the Monthly Period
(a) Interchange
---------------
(b) Recoveries
---------------
(c) Finance Charges and Fees
---------------
(d) Discount Receivables
---------------
Total
---------------
8. Aggregate Uncovered Dilution Amount for the
Monthly Period
---------------
B. INFORMATION REGARDING THE SERIES [ ] NOTES
1. Collateral Amount at the close of business on the prior
Distribution Date
---------------
(a) Reductions due to Investor Charge-Offs (including
Uncovered Dilution Amounts) to be made on the
related Distribution Date
---------------
(b) Reimbursements to be made on the related
Distribution Date from Available Finance Charge
Collections
---------------
(c) Collateral Amount at the close of business on the
Distribution Date
---------------
2. Note Principal Balance at the close of business on the
Distribution Date during the Monthly Period
(a) Class A Note Principal Balance
---------------
(b) Class B Note Principal Balance
---------------
(c) Class C Note Principal Balance
---------------
Total Note Principal Balance
---------------
3. Allocation Percentages for the Monthly Period
(a) Principal Collections
---------------
(b) Finance Charge Collections
---------------
(c) Default Amounts
---------------
4. Investor Principal Collections processed during the
Monthly Period and allocated to the Series
---------------
5. Excess Principal Collections from other Group I Series
allocated to the Series
---------------
C-3
6. Aggregate amounts treated as Available Principal
Collections pursuant to subsections
[____________________] of the related Indenture Supplement
---------------
7. Reallocated Principal Collections pursuant to Section
[4.06] of the related Indenture Supplement
---------------
8. AVAILABLE PRINCIPAL COLLECTIONS (4+5+6+7)
---------------
9. Principal Accumulation Investment Proceeds
---------------
10. Investor Finance Charge Collections (including
Interchange and Recoveries) processed during the
Monthly Period
---------------
11. Excess Finance Charge Collections from Group I
allocated to the Series
---------------
12. Reserve Account withdrawals pursuant to Section
[4.10(b) or (d)] of the related Indenture Supplement
---------------
13. Distributions of principal and interest to Noteholders
on the Distribution Date:
(a) Class A Noteholders
---------------
(b) Class B Noteholders
---------------
(c) Class C Noteholders
---------------
14. Distributions of principal to Noteholders on the
Distribution Date:
(a) Class A Noteholders
---------------
(b) Class B Noteholders
---------------
(c) Class C Noteholders
---------------
15. Distributions of interest to Noteholders on the
Distribution Date:
(a) Class A Noteholders
---------------
(b) Class B Noteholders
---------------
(c) Class C Noteholders
---------------
16. AVAILABLE FINANCE CHARGE COLLECTIONS (9+10+11+12)
---------------
17. Excess amounts from [Spread Account] [and Cash
Collateral Account] to be treated as Available Finance
Charge Collections pursuant to Section[s] [4.12(c)]
[and 4.11(b) and (c)] of the related Indenture Supplement
---------------
C-4
18. The aggregate amount of all Principal Receivables in
Accounts which became Defaulted Accounts during the
Monthly Period which were allocated to the Series
(a) Default Amount
---------------
(b) Allocation Percentage (B.3.(c) above)
---------------
Total Investor Default Amount (axb)
---------------
19. The aggregate amount of Uncovered Dilution Amount
allocated to the Series for the Monthly Period
(a) Dilutions not covered by Transferor
---------------
(b) Series Allocation Percentage (as defined in the
related Indenture Supplement)
---------------
(c) Total Uncovered Dilution Amount
---------------
20. The aggregate amount of Investor Charge-Offs
(including any Uncovered Dilution Amount not covered by
Transferor) for the Monthly Period
---------------
21. Noteholder Servicing Fee for the Monthly Period
payable to Servicer
---------------
22. Ratings of the Class A Notes
Xxxxx'x
---------------
S&P
---------------
Fitch
---------------
23. Ratings of the Class B Notes
Xxxxx'x
---------------
S&P
---------------
Fitch
---------------
24. Ratings of the Class C Notes
Xxxxx'x
---------------
S&P
---------------
Fitch
---------------
25. Note Interest Rate for the Monthly Period
(a) Class A Note Interest Rate
---------------
(b) Class B Note Interest Rate
---------------
(c) Class C Note Interest Rate
---------------
C. QUARTERLY NET YIELD
1. Base Rate for the Monthly Period
---------------
2. Portfolio Yield for the Monthly Period
---------------
3. Net Yield for the Monthly Period (Portfolio
Yield MINUS Base Rate)
---------------
4. Quarterly Net Yield for the related Distribution Date
---------------
C-5
D. INFORMATION REGARDING THE PRINCIPAL ACCUMULATION ACCOUNT
1. Opening Principal Accumulation Account Balance on the
Distribution Date for the Monthly Period
---------------
2. Controlled Deposit Amount to be deposited to the
Principal Accumulation Account on the Distribution Date
for the Monthly Period
(a) Controlled Accumulation Amount
---------------
(b) Accumulation Shortfall
---------------
(c) Controlled Deposit Amount (a+b)
---------------
3. Amounts withdrawn from the Principal Accumulation Account
for distribution to Noteholders on the related
Distribution Date
(a) Distribution in reduction of the Class A Notes
---------------
(b) Distribution in reduction of the Class B Notes
---------------
(c) Distribution in reduction of the Class C Notes
---------------
4. Principal Accumulation Account ending balance after
deposit/withdrawal on the Distribution Date for the
Monthly Period
---------------
E. INFORMATION REGARDING THE SPREAD ACCOUNT
1. Opening Available Spread Account Amount on the
Distribution Date for the
Monthly Period
---------------
2. Aggregate amount required to be withdrawn pursuant to
Section [4.12(c)] of the related Indenture Supplement
for distribution to Class C Noteholders pursuant to
Section [4.04(a)(iv)] of the related Indenture Supplement
---------------
3. Aggregate amount required to be withdrawn pursuant to
Section [4.12(d)] of the related Indenture Supplement for
distribution in reduction of the Class C Note Principal
Balance
---------------
4. Spread Account Percentage for the Distribution Date for
the Monthly Period
---------------
5. Closing Required Spread Account Amount for the
Distribution Date for the Monthly Period
---------------
6. Amount on deposit in Spread Account after required
withdrawals on the Distribution Date for the
Monthly Period (1-(2+3))
---------------
7. Spread Account Deficiency, if any (5 MINUS 6)
---------------
C-6
8. Amounts deposited pursuant to Section [4.04(a)(vii)
or 4.10(e)] of the related Indenture Supplement
---------------
9. Remaining Spread Account Deficiency, if any (7 minus 8)
---------------
F. INFORMATION REGARDING THE RESERVE ACCOUNT
1. Reserve Account Funding Date
---------------
2. Opening Available Reserve Account Amount on the
Distribution Date for the Monthly Period
---------------
3. Aggregate amount required to be withdrawn pursuant to
Section 4.10(d) of the related Indenture Supplement for
inclusion in Available Finance Charge Collections:
(a) Covered Amount
---------------
(b) Principal Accumulation Investment Proceeds
---------------
(c) Reserve Draw Amount (a MINUS b)
---------------
4. Required Reserve Account Amount
---------------
5. Reserve Account Surplus (4-(2-3))
---------------
G. INFORMATION REGARDING CONTROLLED ACCUMULATION PERIOD
(REQUIRED ON AND AFTER ___ DISTRIBUTION DATE)
1. Accumulation Period Length (months)
---------------
H. AGGREGATE OPENING AND CLOSING BALANCE ON DEPOSIT AND
WITHDRAWALS FROM ANY OTHER ENHANCEMENT ACCOUNTS
1. Opening Balance
---------------
2. Withdrawals pursuant to Section [ ] of the related
Indenture Supplement
---------------
3. Closing Balance
---------------
[I. PRE-FUNDING ACCOUNT]
1. Opening Balance
---------------
2. Withdrawals pursuant to Section 4.18 of the related
Indenture Supplement
---------------
3. Closing Balance
---------------
4. Balance to be distributed as principal to Noteholders
(following end of Funding Period)
---------------
[J. INFORMATION REGARDING THE CASH COLLATERAL ACCOUNT
1. Opening Available Cash Collateral Amount on the
Distribution Date for the Monthly Period
---------------
C-7
2. Required Draw Amount required to be withdrawn pursuant
to Section 4.12(c) of the related Indenture Supplement
---------------
3. Required Cash Collateral Amount
---------------
4. Deposits pursuant to Section 4.04(vii) of the related
Indenture Supplement
---------------
5. Closing Available Cash Collateral Amount
---------------
[L. OTHER ENHANCEMENT]
1. Aggregate amount of drawings on any other Enhancement
for the Series
---------------
2. Amount available under other Enhancement for the Series
---------------
IN WITNESS thereof, the undersigned has duly executed and delivered this
Certificate the ___________ day of _____________, _____.
FIRST NATIONAL BANK OF OMAHA,
Servicer
By
---------------------------------
Name
-----------------------------
Title
-----------------------------
C-8
Schedule To Monthly
Servicer's Certificate*
FIRST NATIONAL FUNDING LLC
----------
FIRST NATIONAL MASTER NOTE TRUST
----------
*A separate schedule may be attached for each Series, with appropriate
changes and additions to reflect the specifics of the related Indenture
Supplement.
EXHIBIT D
FORM OF ANNUAL SERVICER'S CERTIFICATE
----------
FIRST NATIONAL MASTER NOTE TRUST
The undersigned, a duly authorized representative of First National
Bank of Omaha ("FNBO"), as Servicer pursuant to the Transfer and Servicing
Agreement dated as of ____________, 2002 (the "Agreement") by and between FNBO,
as Servicer, First National Funding LLC ("FNF"), as transferor ("Transferor"),
and First National Master Note Trust, as issuer ("Issuer"), does hereby certify
that:
1. FNBO is Servicer under the Agreement. Capitalized terms used without
definition in this Certificate shall have the meanings assigned in or pursuant
to the Agreement.
2. The undersigned is a Servicing Officer who is duly authorized
pursuant to the Agreement to execute and deliver this Certificate to Indenture
Trustee.
3. This Certificate is delivered pursuant to Section 3.05 of the
Agreement.
4. A review of the activities of Servicer, and of its performance under
the Agreement, during the twelve-month period ending on December 31, [ ], was
conducted under my supervision.
5. Based on such review, Servicer has, to the best of my knowledge,
fully performed all its obligations under the Agreement throughout such period
and no default in the performance of such obligations has occurred or is
continuing except as set forth in Paragraph 6 below.
6. The following is a description of each default in the performance of
Servicer's obligations under the provisions of the Agreement, including any
Supplement, known to me to have been made during such period which sets forth in
detail (i) the nature of each such default, (ii) the action taken by Servicer,
if any, to remedy each such default and (iii) the current status of each such
default:
[If applicable, insert "None".]
7. (a) During such period, for each outstanding Series, Servicer
prepared the monthly reports required by Section 3.04(b) of the Agreement and
each other monthly report required by the applicable Indenture Supplement in
accordance with Section 3.04(b) and the applicable provisions of each such
Indenture Supplement, (b) the amounts included in such reports agree with the
computer records of Servicer and (c) the calculated amounts included in such
reports are mathematically correct and made in accordance with the applicable
definitions in this Agreement and the other applicable Transaction Documents,
except as set forth in paragraph 6 above.
IN WITNESS WHEREOF, the undersigned has duly executed this certificate
this ______ day of ______, ____.
FIRST NATIONAL BANK OF OMAHA, as Servicer
By
--------------------------------------
Name
------------------------------------
Title
------------------------------------
D-2
EXHIBIT E
PROVISIONS TO BE INCLUDED IN OPINION OF COUNSEL
WITH RESPECT TO ADDITION OF ACCOUNTS
The opinions set forth below may be subject to certain qualifications,
assumptions, limitations and exceptions taken or made in the Opinions of Counsel
delivered on any applicable Closing Date.
1. The Receivables arising in such Additional Accounts constitute
accounts.
2. The Transfer and Servicing Agreement, as supplemented by the
Assignment, creates in favor of the Trust a security interest in Transferor's
rights in the Receivables in such Additional Accounts and the proceeds thereof
(the "Specified Assets").
3. The security interest in the Specified Assets created by the
Transfer and Servicing Agreement will be perfected by the filing of the
Financing Statements as described and defined in such opinion. Based solely upon
our review of the UCC Searches as described and defined in such opinion, we
hereby confirm to you that no Person other than the Trust has filed any
financing statement with the Filing Offices as described and defined in such
opinion that covers the Specified Assets and that would have priority over the
security interest of the Trust by virtue of such filing.
4. The Receivables Purchase Agreement, as supplemented by the
assignment of the Specified Assets by FNBO to Transferor, creates in favor of
Transferor a security interest in the RPA Seller's rights in the Specified
Assets.
5. The security interest in the Specified Assets created by the
Receivables Purchase Agreement will be perfected by the filing of the Financing
Statements as described and defined in such opinion. Based solely upon our
review of the UCC Searches as described and defined in such opinion, we hereby
confirm to you that no Person other than Transferor has filed any financing
statement with the Filing Offices as described and defined in such opinion that
covers the Specified Assets and that would have priority over the security
interest of Transferor by virtue of such filing.
EXHIBIT F
PROVISIONS TO BE INCLUDED IN
ANNUAL OPINION OF COUNSEL
The opinions set forth below may be subject to certain qualifications,
assumptions, limitations and exceptions taken or made in the Opinion of Counsel
to Transferor with respect to similar matters delivered on the Initial Closing
Date. Unless otherwise indicated, all capitalized terms used herein shall have
the meanings assigned in or pursuant to the Transfer and Servicing Agreement to
which this Exhibit F is attached.
1. [PRIOR TO CERTIFICATE TRUST TERMINATION DATE.] No further filings or
actions are required under the UCC or other Nebraska law prior to _________,
_____, in order to maintain the perfection and priority of the first priority
security interests created by the Transaction Documents in favor of Issuer and
Indenture Trustee in Transferor's rights in the Collateral Certificate and the
proceeds thereof. Based solely upon our review of the UCC Searches as described
and defined in such opinion, we hereby confirm to you that no Person other than
Issuer and Indenture Trustee has filed any financing statement with the Filing
Offices as described and defined in such opinion that covers the Collateral
Certificate and proceeds thereof and that would have priority over the security
interest of Issuer and Indenture Trustee by virtue of such filing.
2. [AFTER CERTIFICATE TRUST TERMINATION DATE.] No further filings or
actions are required under the UCC or other Nebraska law prior to _________,
_____, in order to maintain the perfection and priority of the first priority
security interests created by the Transaction Documents in favor of Issuer and
Indenture Trustee in Transferor's rights and Issuer's rights, respectively, in
the Receivables, Transferor's rights and Issuer's rights, respectively, under
the Receivables Purchase Agreement, and the proceeds of any of the foregoing
(the "Specified Assets"). Based solely upon our review of the UCC Searches as
described and defined in such opinion, we hereby confirm to you that no Person
other than Issuer and Indenture Trustee has filed any financing statement with
the Filing Offices as described and defined in such opinion that covers the
Specified Assets and that would have priority over the security interests of
Issuer and Indenture Trustee by virtue of such filing.
3. Confirmation or update, as applicable, of the FIRREA analysis
delivered on the Initial Closing Date.
EXHIBIT G
FORM OF REASSIGNMENT OF RECEIVABLES
IN REMOVED ACCOUNTS
REASSIGNMENT No. ___ OF RECEIVABLES dated as of ______ , by and among
FIRST NATIONAL FUNDING LLC, a Nebraska limited liability company, as transferor
("Transferor"), FIRST NATIONAL BANK OF OMAHA, a national banking association, as
servicer ("Servicer"), FIRST NATIONAL MASTER NOTE TRUST, as issuer ("Issuer"),
and THE BANK OF NEW YORK, as indenture trustee ("Indenture Trustee") pursuant to
the Transfer and Servicing Agreement referred to below.
WITNESSETH:
WHEREAS Transferor, Servicer and Issuer are parties to the Transfer and
Servicing Agreement, dated as of [ ], 2002 (as it may be amended and
supplemented from time to time the "Agreement");
WHEREAS, Issuer has assigned its rights under the Agreement, and the
Receivables transferred thereunder, to Indenture Trustee;
WHEREAS pursuant to the Agreement, with respect to certain designated
Accounts Transferor wishes to cause Issuer to reconvey the Receivables of such
Removed Accounts, whether now existing or hereafter created, from Issuer to
Transferor; and
WHEREAS Issuer is willing to accept such designation and to reconvey
the Receivables in the Removed Accounts, and Indenture Trustee is willing to
consent to such reconveyance, subject to the terms and conditions hereof;
NOW, THEREFORE, Transferor, Servicer, Indenture Trustee and Issuer
hereby agree as follows:
SECTION 1. DEFINED TERMS. All terms defined in the Agreement and used
herein shall have such defined meanings when used herein, unless otherwise
defined herein.
"Removal Date" means, with respect to the Removed Accounts designated
hereby, _______, ____.
"Removal Notice Date" means, with respect to the Removed Accounts
designated hereby, _______, ____(which shall be a date on or prior to the fifth
Business Day prior to the Removal Date).
SECTION 2. DESIGNATION OF REMOVED ACCOUNTS. Transferor shall deliver to
Issuer and Indenture Trustee, not later than five Business Days after the
Removal Date, a computer file or microfiche list containing a true and complete
list of each MasterCard and VISA account which as of the Removal Date shall be
deemed to be a Removed Account, such accounts being identified by account number
and by the aggregate amount of Receivables, and by the aggregate amount of
Principal Receivables outstanding, in such accounts as of the close of business
on the
Removal Date. Such list shall be marked as Schedule 1 to this Reassignment,
shall be incorporated into and made a part of this Reassignment as of the
Removal Date, and shall supplement any Account Schedule previously delivered
pursuant to the Agreement.
SECTION 3. CONVEYANCE OF RECEIVABLES.
(a) Issuer does hereby transfer, assign, set over and
otherwise convey to Transferor, without representation, warranty or
recourse, on and after the Removal Date, all right, title and interest
of Issuer in, to and under the Receivables existing at the close of
business on the Removal Date and thereafter created from time to time
in the Removed Accounts designated hereby, all Recoveries related
thereto, all monies due or to become due and all amounts received or
receivable with respect thereto and all proceeds thereof.
(b) In connection with such transfer, Issuer agrees to execute
and deliver to Transferor on or prior to the date this Reassignment is
delivered, applicable termination statements prepared by Transferor
with respect to the Receivables existing at the close of business on
the Removal Date and thereafter created from time to time in the
Removed Accounts designated hereby and the proceeds thereof evidencing
the release by Issuer of its interest in the Receivables in the Removed
Accounts, and meeting the requirements of applicable state law, in such
manner and such jurisdictions as are necessary to terminate such
interest.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR. Transferor
hereby represents and warrants to Issuer and Indenture Trustee as of the Removal
Date:
(a) LEGAL VALID AND BINDING OBLIGATION. This Reassignment
constitutes a legal, valid and binding obligation of Transferor
enforceable against Transferor in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general and the rights of creditors of national banking associations
and except as such enforceability may be limited by general principles
of equity (whether considered in a suit at law or in equity).
(b) SELECTION PROCEDURES. No selection procedures believed by
Transferor to be materially adverse to the interests of the Issuer or
the Noteholders were utilized in selecting the Removed Accounts
designated hereby and such Accounts (or administratively convenient
groups of Accounts, such as billing cycles) were chosen for removal
randomly or otherwise not on a basis intended to select particular
accounts or groups of accounts for any reason other than administrative
convenience. [ALTERNATIVE REPRESENTATION: Accounts were identified for
removal because of a third-party cancellation, or expiration without
renewal, of an affinity, private label, agent bank or similar
arrangement.]
SECTION 5. CONDITIONS PRECEDENT. The amendment of the Agreement set
forth in Section 6 hereof is subject to the satisfaction, on or prior to the
Removal Date, of the following condition precedent:
G-2
Transferor shall have delivered to Indenture Trustee an
Officer's Certificate certifying that (i) as of the Removal Date, all
requirements set forth in Section 2.07 of the Agreement for designating
Removed Accounts and reconveying the Receivables of such Removed
Accounts, whether now existing or hereafter created, have been
satisfied, and (ii) each of the representations and warranties made by
Transferor in Section 4 hereof is true and correct as of the Removal
Date. Indenture Trustee may conclusively rely on such Officer's
Certificate, shall have no duty to make inquiries with regard to the
matters set forth therein and shall incur no liability in so relying.
SECTION 6. RATIFICATION OF AGREEMENT. The Agreement is hereby amended
to provide that all references therein to the "Transfer and Servicing
Agreement," to "this Agreement" and "herein" shall be deemed from and after the
Removal Date to be a reference to the Transfer and Servicing Agreement as
supplemented by this Reassignment. As supplemented by this Reassignment, the
Agreement is in all respects ratified and confirmed and the Agreement as so
supplemented by this Reassignment shall be read, taken and construed as one and
the same instrument.
SECTION 7. COUNTERPARTS. This Reassignment may be executed in two or
more counterparts, and by different parties on separate counterparts, each of
which shall be an original, but all of which shall constitute one and the same
instrument.
SECTION 8. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEBRASKA, 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 9. RIGHTS OF OWNER TRUSTEE. Each of the parties hereto
acknowledges and agrees that this Agreement is being executed and delivered by
Wilmington Trust Company, not individually but solely and exclusively in its
capacity as Owner Trustee on behalf of First National Master Note Trust for the
purpose and with the intention of binding First National Master Note Trust. No
obligations or liabilities hereunder shall run against Wilmington Trust Company
in its individual capacity or against its properties or assets.
G-3
IN WITNESS WHEREOF, the undersigned have caused this Reassignment
Agreement to be duly executed and delivered by their respective duly authorized
officers on the day and year first above written.
FIRST NATIONAL FUNDING LLC,
Transferor
By
-----------------------------
Name
-------------------------
Title
-------------------------
FIRST NATIONAL BANK OF OMAHA,
Servicer
By
-----------------------------
Name
-------------------------
Title
-------------------------
FIRST NATIONAL MASTER NOTE
TRUST, Issuer
By Wilmington Trust Company,
not in its individual
capacity but solely on
behalf of Issuer
By
-----------------------------
Name
-------------------------
Title
-------------------------
THE BANK OF NEW YORK,
as Indenture Trustee
By
-----------------------------
Name
-------------------------
Title
-------------------------
G-4
SCHEDULE 1
TO REASSIGNMENT OF RECEIVABLES
IN REMOVED ACCOUNTS
ACCOUNT SCHEDULE
(REMOVED ACCOUNTS)
G-5
SCHEDULE 2
TO REASSIGNMENT OF RECEIVABLES
IN REMOVED ACCOUNTS
OFFICER'S CERTIFICATE
G-6
SCHEDULE 1
ACCOUNT SCHEDULE
[Original list delivered separately
